Commonwealth Numbered Regulations - Explanatory Statements Commonwealth Numbered Regulations - Explanatory Statements[Index] [Search] [Download] [Related Items] [Help]
FOOD STANDARDS AUSTRALIA NEW ZEALAND AMENDMENT REGULATIONS 2010 (NO. 1) (SLI NO 103 OF 2010)
EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 103
Food Standards Australia New Zealand Act 1991
Food Standards Australia New Zealand Amendment Regulations 2010 (No. 1)
Food Standards Australia New Zealand (the Authority) is a body corporate continued in existence by section 12 of the Foods Standards Australia New Zealand Act 1991 (the Act). The primary function of the Authority is to develop, vary and review food regulatory measures, being food standards and codes of practice for industry. Food regulatory measures are developed or varied by the Authority, either as a result of an application from a body or person, or as a result of a proposal prepared by the Authority on its own initiative.
Section 153 of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Section 146 of the Act provides that the Food Standards Australia New Zealand Regulations 1994 (the Principal Regulations) may fix charges to be paid to the Authority by a body or person for services and facilities the Authority provides to the body or person. A charge may be fixed if it relates to an application to develop or vary a standard, and the development or variation of the standard will confer an exclusive capturable commercial benefit on the applicant, or the applicant has elected to have consideration of their application expedited.
In 2009, the Authority undertook a review of the cost recovery arrangements in the Principal Regulations. The review was based on the Australian Government’s 2005 Cost Recovery Guidelines. A key finding of the review was that the rate per hour used to calculate the charge payable by an applicant should be increased in accordance with the increased costs sustained by the Authority in assessing applications. The review also brought to light large variations in the complexity of applications within the general procedure, which is the default assessment procedure and applies to the majority of applications. The review concluded that it was appropriate to adjust the general procedure classification to consist of four levels instead of two. Finally, the review recommended that a new flat charge be introduced to cover costs incurred by the Authority on behalf of applicants, to comply with legislation, for example, in relation to newspaper notifications, gazettal and the Federal Register of Legislative Instruments.
The purpose of the Regulations is to amend the Principal Regulations to implement the recommendations of the cost recovery review. The Regulations will:
· increase the hourly rate for the application consideration process from $107 to $115;
· introduce two new levels within the general procedure classification;
· adjust the estimates of the number of hours an application is likely to take within each classification, and each level within the general procedure classification;
· clarify the charge applicable for each classification and each level within the general procedure classification;
· allow applicants to pay the charge in two instalments if their application is classified as a general procedure level 3 or 4 application;
· introduce a flat charge of $10,000 to reimburse the Authority for incurring costs on behalf of applicants as required under legislation, for example, for mandatory newspaper notifications of the approval and gazettal of an application, for gazettal of an amendment to the Australia New Zealand Food Standards Code, and for registration of a legislative instrument and compilations on the Federal Register of Legislative Instruments; and
· maintain the current refund system in circumstances where the number of hours estimated for a paid application have not been used by the Authority, and apply the refund mechanism to the new $10,000 charge.
The impact of the Regulations is to:
Details of the Regulations are set out in the Attachment.
On 23 September 2009, the public was notified of the availability of a consultation paper on FSANZ’s cost recovery review, and inviting comment by 4 November 2009. The announcement was also made in FSANZ Notification Circulars. Over 4 000 subscribers and a further 500 stakeholders with a special interest in the application process were advised via email alert of the call for public comment.
Five submissions were received: four from industry, and one from the New Zealand Food Safety Authority.
Three submitters supported the options proposed by FSANZ for amendment to the existing Regulations. The remaining two submitters supported some of the options, but not all. The proposed increase in the hourly rate to $115 was not opposed by the submitters. The proposal to maintain the refund mechanism was supported. Three submitters made comments about the proposed $10 000 charge, but did not directly oppose the introduction of such a charge. None of the submitters commented on the proposed amendments to the classification levels or descriptions.
The Office of Best Practice Regulation advised a Regulatory Impact Statement was not required as the proposed changes would not substantially alter existing arrangements.
The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on 1 July 2010.
ATTACHMENT
DETAILS OF THE FOOD STANDARDS AUSTRALIA NEW ZEALAND AMENDMENT REGULATIONS 2010 ( No. 1)
Regulation 1 – Name of Regulations
Regulation 1 provides that the name of the Regulations is the Food Standards Australia New Zealand Amendment Regulations 2010 (No. 1).
Regulation 2 – Commencement
Regulation 2 provides that the Regulations commence on 1 July 2010.
Regulation 3 – Amendment of Food Standards Australia New Zealand Regulations 1994
Regulation 3 provides that Schedule 1 amends the Food Standards Australia New Zealand Amendment Regulations 1994 (the Principal Regulations).
Regulation 4 – Transitional
Regulation 4 provides that applications made before 1 July 2010 continue to be dealt with under the Principal Regulations as in force before 1 July 2010.
Schedule 1 – Amendments
Item [1] – Regulation 2
Item [1] replaces the existing regulation heading (Interpretation), renames the heading as ‘Definitions’ and omits the words unless the contrary intention appears. This is in line with current drafting practice.
Item [2] – Subregulation 2(1) after definition of application
Item [2] establishes and defines a new term, application consideration process, and provides a definition for it. The purpose of the new term is to consolidate the varying descriptions of the process undertaken by the Authority in the Principal Regulations, such as ‘full assessment’, ‘fully assess’ and ‘assessing the application’. Except for the Authority’s dealings with the Australia and New Zealand Food Regulation Ministerial Council (the Ministerial Council), the term application consideration process describes the whole process of the Authority’s consideration of an application under Part 3 (Food regulatory measures) of the Food Standards Australia New Zealand Act 1991 (the Act), as well as any steps or requirements imposed on the Authority under any other Commonwealth law (for example the Legislative Instruments Act 2003).
The application consideration process includes the steps under the provisions in the Act related to the publication of a standard or variation to a standard, where it applies to a particular application.
If an application is urgent, and assessed as such under Division 4 of Part 3 (Urgent applications) of the Act, the application consideration process includes the steps under Subdivision B of Division 4 (Assessing the resulting standard or variation) of Part 3 of the Act, excluding those steps involving the Ministerial Council.
The application consideration process also includes the required steps under section 24 (Withdrawal of applications) or section 110 (Rejecting an application) of the Act, if either section is applicable to a particular application.
Item [3] – Regulations 7 and 8
Item [3] replaces regulations 7 (Charges) and 8 (Refunds) of the Principal Regulations, with regulations 7 (Charges – General), 7A (Charges – instalments for general procedure level 3 and 4 applications), 7B (Charges – instalments for major procedure applications) and 8 (Refunds).
Charges – general
Regulation 7 contains the same requirement as the existing subregulation 7(1), for a body or person to pay the Authority the charges mentioned in Schedule 3 (see item [5] below).
Regulation 7 of the Principal Regulations currently allows applicants to pay the charge by way of two instalments if their application is classified as a major procedure application. Item [3] extends the option to pay in instalments to applicants whose applications are classified as a general procedure level 3 or 4 application.
Charges – instalments for general procedure level 3 and 4 applications
Regulation 7A (Charges – instalments for general procedure level 3 and 4 applications) provides the following fee structures:
· The first instalment is the total of 75 per cent of the charge mentioned in item 1 of Schedule 3 in addition to the $10,000 charge, and is payable within 20 business days of the application being accepted by the Authority under section 27 of the Act;
· The second instalment is 25 per cent of the charge mentioned in item 1 of Schedule 3, and ordinarily is payable as soon as practicable after the day the public notice is given under section 31 of the Act, but before the end of the public submission period.
However, if an application is withdrawn by an applicant or rejected by the Authority before any public notice is given under section 31 of the Act, the second instalment is calculated by multiplying $115 by each hour that the time taken for the application consideration process exceeded 75 per cent of the hours estimated for the application. The second instalment is then payable within 20 business days of the Authority notifying the applicant of the amount of the second instalment owing, in accordance with either subregulation 7A(3) (if the applicant has withdrawn the application) or, subregulation 7A(4) (if the Authority has rejected the application).
Charges – instalments for major procedure applications
Regulation 7B (Charges - instalments for major procedure applications) outlines the process for major procedure applications as follows:
· Because, in general, a much smaller percentage of the application consideration process is undertaken within the first instalment period for a major procedure application, the first instalment for this type of application is the total of 25 per cent of the charge mentioned in item 1 of Schedule 3 in addition to the $10,000 charge. This instalment is payable within 20 business days of the application being accepted by the Authority under section 27 of the Act;
· The second instalment is equal to 75 per cent of the charge mentioned in item 1 of Schedule 3, and is ordinarily payable as soon as practicable after the day the public notice is given under section 44 of the Act, but before the end of the submission period mentioned in section 44.
However, if a major application is withdrawn by an applicant or rejected by the Authority, before the day the public notice is given under section 44 of the Act, the second instalment is calculated by multiplying $115 by each hour that the time taken for the application consideration process exceeded 25 per cent of the hours estimated for the application. This instalment is payable within 20 business days of the Authority notifying the applicant of the amount of the second instalment owing, in accordance with either subregulation 7B(3) (if the applicant has withdrawn the application) or, subregulation 7B(4) (if the Authority has rejected the application).
Refunds
Item [3] also consolidates all the provisions relating to refunds into regulation 8 (Refunds).
Regulation 8 of the Principal Regulations currently requires the Authority to, when the number of hours taken to assess an application is less than the hours estimated for the category of application, refund the applicant for the hours paid for, but not used. Regulation 8 imposes a new requirement on the Authority to also refund the balance, if any, of the $10,000 charge. The Authority is also required to refund the $10,000 charge to applicants who have either withdrawn their application under section 24 of the Act, or have had their application rejected under subsection 110(3) of the Act.
Item [3] also replaces the example with an updated example of the refund process which incorporates the $10,000 charge.
Item [4] – Paragraph 9(2)(b)
Regulation 9 of the Principal Regulations requires the Authority, if it accepts an application, to classify the application in accordance with the procedure classification in section 25 of the Act and Schedule 4 of the Principal Regulations.
Item [4] imposes an additional requirement on the Authority in the case of an application classified as general level 4 or major procedure. For general procedure level 4 applications, the Authority is required to work out how many hours the application consideration process is likely to take. For major procedure applications, the Authority is required to work out if the application consideration process is likely to take more than 1,200 hours (increased from 1,050 hours in the existing regulations), and if so, how many hours are likely to be taken.
Item [5] – Schedule 3, table
Section 146 of the Act provides that regulations may fix charges to be paid to the Authority by a body or person for services and facilities the Authority provides to the body or person. Schedule 3 to the Principal Regulations sets out the charge payable for each procedure, as classified in relation to an application to develop or vary a standard. These charges are based on the cost to the Authority of processing each category of application. Schedule 3 specifies the charge applicable for a minor procedure, a major procedure, and the two existing levels of general procedure.
Item [5] replaces the existing Schedule 3 with a new Schedule 3 which specifies the charge applicable to the two new levels within the general procedure classification, as well as update the charges payable to the Authority as a consequence of the hourly rate being increased to $115 per hour (from $107 per hour).
The charge for an application assessed as general procedure level 4 is calculated by adding a base fee of $115,000 for the first 1,000 hours, to a fee of $115 for each hour the application consideration process is estimated to exceed 1,000 hours. The charge for an application assessed as major procedure is calculated by adding a base fee of $138,000 for the first 1,200 hours, to a fee of $115 for each hour the application consideration process is estimated to exceed 1200 hours.
Schedule 3 also imposes the new $10,000 charge on all applications, regardless of classification, and provides two examples of the required steps for which the charge is designed to cover.
The first example of a ‘required step’ is the Authority’s obligation to publish a notice in a newspaper in accordance with paragraph 34 (1) (c) of the Act. The second example is the Authority’s responsibility to register a new standard under the Legislative Instruments Act 2003.
Item [6] replaces the heading of Schedule 4 to note the regulations which refer to the Schedule.
Schedule 4 of the Principal Regulations provides for procedure classification. Schedule 4 contains examples of those matters which typically satisfy the classification of each procedure and those factors which the Authority may take into account when considering as to which procedure an application should be classified. These examples are provided as guidance only. Though not contingent on the number of hours likely to be required to undertake the application consideration process, each classification does provide an indication of the likely number of hours which are required.
The Regulations amend Schedule 4 to the Principal Regulations to update the terminology in line with use of the new term application consideration process and to update the description of each procedure, and each level within the general procedure.
Item [7] replaces existing sections 1.2 (general procedure level 1) and 1.3 (general procedure level 2) of Schedule 4 with substituted sections, and add two new sections 1.4 (general procedure level 3) and 1.5 (general procedure level 4).
Section 1.2 (general procedure level 1) provides that an application is classified as general procedure level 1 if the application consideration process is likely to take ‘a maximum of 350 hours’ (replacing the existing maximum of 500 hours). Section1.2 provides updated examples to reflect the new range of expected applications at this level.
Section1.3 (general procedure level 2) provides that an application is classified as general procedure level 2 if the application consideration process is likely to take ‘more than 350 hours, to a maximum of 650 hours’ (replacing the existing maximum of 850 hours). Section 1.3 provides updated examples to reflect the new range of expected applications at this level.
Section 1.4 (general procedure level 3) provides that an application is classified as general procedure level 3 if the application consideration process is likely to take ‘more than 650 hours, to a maximum of 1000 hours’.
Section 1.5 (general procedure level 4) provides that an application is classified as general procedure level 4 if the application consideration process is likely to take more than 1,000 hours.
Sections 1.4 and 1.5 also provides examples of those matters which typically satisfy the classification of their respective general procedure levels. The examples are intended to provide guidance only.
Item [8] – Schedule 4, section 2.1, examples, paragraphs (d) and (e)
Item [8] makes a minor amendment to the list of examples provided for minor procedure applications. This amendment does not limit the types of applications that could be classified as minor procedure applications.
Item [9] – Schedule 4, section 2.2
Item [9] replaces section 2.2 of Schedule 4 of the existing regulations with a new section 2.2. Section 2.2 provides that an application is classified minor procedure if the application consideration process is likely to take a maximum of 100 hours (replacing the existing maximum of 175 hours).
Item [10] – Schedule 4, sections 3.1 and 3.2
Item [10] replaces sections 3.1 and 3.2 of Schedule 4 of the Principal Regulations with new sections 3.1 and 3.2. New section 3.1 differs from the current section 3.1 in its adoption of the term ‘application consideration process’, instead of the term ‘assessment’. New section 3.1 also provides updated examples of the kinds of applications that comes within the major procedure classification. These examples are intended to provide guidance only.
New section 3.2 provides that an application is classified as major procedure application if the application consideration process is likely to take more than 1200 hours.