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EXPORT INSPECTION AND MEAT (ESTABLISHMENT REGISTRATION CHARGES) AMENDMENT REGULATIONS 1999 (NO. 1) 1999 NO. 148EXPLANATORY STATEMENT
STATUTORY RULES 1999 NO. 1
Issued by Authority of the Minister for Agriculture, Fisheries and Forestry
Export Inspection (Establishment Registration Charges) Act 1985
Export Inspection and Meat (Establishment Registration Charges) Regulations (Amendment)
Section 9 of the Export Inspection (Establishment Registration Charges) Act 1985 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the proposed Regulations is to add a new annual charge for the registration of game meat establishments.
Details of the Regulations are as follows:
Regulation 1 - Name of regulations
Regulation 1 provides that the Regulations are the Export Inspection and Meat (Establishment Registration Charges) Amendment Regulations 1999 (No. 1).
Regulation 2 - Commencement
Regulation 2 provides for proposed Regulations to commence on gazettal.
Regulation 3 - Amendment of Export Inspection and Meat (Establishment Registration Charges) Regulations
Regulation 3 provides amendments to Schedule 1.
Item 1 substitutes the name of the regulations to Export Inspection and Meat (Establishment Registration Charges) Regulations 1985.
Item 2 amends the imposition of charges to include game meat as a prescribed commodity.
Item 3 amends the definitions of notional charge for processing establishment and total charge for processing establishments to exclude Schedule 3 - Registration Charges for Meat Establishments Registered in the Financial Year Commencing on 1 July 1993.
Item 4 inserts the new annual registration charge for game meat establishments of $5000.
AQIS MEAT PROGRAM: CHARGING ARRANGEMENTS
REGULATION IMPACT STATEMENT
The Australian Quarantine and Inspection Service's (AQIS) Meat Inspection Division is responsible for providing policy and technical expertise to the export meat industry through provision of inspection staff, quality systems and technical reform. International market access is maintained through the provision of essential inspection and certification services on a fully cost recovered basis. Australian meat exports are facilitated and the country's competitive position as a dominant supplier of safe meat products is enhanced through the provision of expert advice and the maintenance of the highest standards of food safety.
This Regulation Impact Statement details the proposal to introduce a new registration charge for the game meat industry in the Export Inspection and Meat (Establishment Registration Charges) Regulations.
In 1998/99 the Meat Inspection Division received a Government subsidy to alleviate the need for fee increases of $1.4 million as part of meat industry reform. The major beneficiaries of the subsidy were smaller, primarily game meat operations.
In 1999/2000 the subsidy will cease. The Meat Inspection Division will be required to operate as a fully cost recovered program. This means that in any one year, the program must fully recover operating expenditure from export fees. If a loss is recorded in any year there is an agreement between the Department of Finance and Administration and AQIS, that AQIS will recover all budgeting deficits in the following financial year.
AQIS's establishment registration charges are designed to recover the fixed overhead costs required to support the export inspection field activity. All registered premises currently contribute except for game meat.
AQIS seeks, in consultation with industry, to meet their commitment to the Department of Finance and Administration to recover the Meat Inspection Division's operational costs in a manner that is fair and equitable to both AQIS and industry.
Option 1: reduce meat inspection services to a level consistent with current
Option 2: introduce an annual $5000 registration charge for the game meat
Option 3: increase the level of fees for meat companies already paying an annual
5. Impact Analysis
Option 1: To reduce the program's meat inspection services to a level consistent with the current revenue is not an option favoured by the meat industry.
The Meat Inspection Division closely monitors its budget each accounting period. In 1998/99 alone, the Meat Inspection Division has reduced total staffing (FTEs) from 795 to 618 as part of major meat industry reforms. Reductions in expenditure are also expected to continue as part of the reforms, but these are not expected fully recover expenditure in 1999/2000 without this new charge.
Levels of export inspection and certification are determined by the requirements of overseas importing authorities. Service frequencies are therefore not discretionary.
The implementation of this option will not enable the Division to equitably recover its costs from those businesses who use AQIS services in 199912000.
Option 2: To introduce an annual $5000 registration fee for the game meat establishments is the preferred option. Industry representative bodies through the AQIS/Industry Task Force and the Meat Industry Charging Review Committee concurred that the game meat sector be required to pay an annual registration fee. All other businesses in the meat industry pay an annual registration charge with the exception of the game meat industry. This fee will make the charges more equitable within the industry and will share the burden more evenly between businesses. The sum of $5000 is in line with registration charges for similar export sectors such as emu and poultry. This fee is expected to affect approximately 12 establishments.
The $5000 fee will assist in ensuring that the Meat Inspection Division meets its financial obligations to the Department of Finance and Administration.
Option 3: To increase the registration establishment fees for businesses currently paying registration charges. This option would ensure AQIS fully recovered the costs of its operations in line with its agreement with the Department of Finance and Administration, but it is not consistent with the user pays principle as not all those benefiting from the provision of AQIS Meat Inspection services would contribute to the cost of providing those services.
OBJECTIVE: To meet AQIS's commitment to the Government's reform agenda to
recover the Meat Inspection Division's operational costs in a manner that is fair and
equitable to both AQIS and industry.
Alternative IMPACT ON Likely
Industry Department of AQIS - Meat
Finance and Inspection
Option 1: Industry does Enough money The program's The vast majority
reduce meat not receive the is recovered to debt will not of stakeholders
inspection level of service meet the Meat increase as the would suffer from
services to a that it requires Inspection operating costs this option.
level consistent and their Division's will be
with the options for current recovered;
current export are operation. however, the
revenue limited. program
Option 2: Industry's The inter- AQIS is able to The benefits are a
Introduction of preference. agency meet its fairer and more
a $5000 The game meat agreement will obligations to equitable fee
registration industry would be met. the Department structure than that
charge for the be paying more of Finance and currently in place.
game meat annually; Administration The game meat
industry however, this industry would be
is a fairer and contributing to
more equitable the costs of
for the entire making it a more
meat export equitable
industry. arrangement for
the entire meat
Option 3: The majority The inter- AQIS is able to The costs are a
Increase the of the meat agency meet its less fair and
annual industry will agreement will obligations to equitable fee
registration be paying more be met. the Department structure than that
charges for for services of Finance and currently in place.
establishments already Administration The game meat
already paying provided by industry would
registration AQIS. These continue not
fees. meat sectors contributing to
will continue the costs of
to subsidise the registration and
game meat export inspection
industry. field activity.
In January 1999, an AQIS/Meat Industry Taskforce met to consider the implementation of a registration fee for those in the industry currently not charged, such as game meat establishments. The Australian Meat Council and the National Meat Association of Australia agreed that the current registration charges were inequitable and accepted the proposal to charge a registration fee for game meat establishments.
On 6 May 1999, the Meat Industry Charging Review Committee met to discuss, inter alia, the charging regime proposed by the Meat Inspection Division for 199912000. The proposal to introduce a registration fee for game meat establishments was accepted. The Australian Game Meat Producers Association were invited to this meeting and were provided with agenda papers but did not attend. The individual operators have been formally advised in writing of the proposed change. The Australian Game Meat Producers Association, together with some game meat establishments, have expressed their objections to the proposed fee adjustments.
7. Conclusion and Recommendation
Option 1, involving reducing the Meat Inspection Division's services to a level consistent with the current revenue is not consistent with industry's expectations for AQIS to continue to maintain the current level of service.
Option 2, to introduce a $5000 annual registration fee to the game meat industry is the option agreed to overall by the meat industry. This option is seen as the most fair and equitable across industry.
Option 3, to increase the annual registration charge for companies already paying this fee would ensure AQIS met its cost recovery target. However it would not ensure that the beneficiaries of AQIS inspection services made an equitable contribution to the cost of providing those services.
AQIS's agreement with the Department of Finance and Administration to fully recover all Meat Division costs creates a situation in which AQIS must implement measures to recoup registration costs and debt immediately after industry endorses these measures. As a result, AQIS intends to implement Option 3 at the start of the new financial year.
8. Implementation and Review
In accordance with the strategy agreed by the meat industry, implementation of the fee amendments will commence at the start of AQIS's financial year beginning 1 July 1999. An explanation of the new arrangements will be circulated to AQIS staff. Industry will also be advised of the new arrangements.