Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

PRIMARY INDUSTRIES (CUSTOMS) CHARGES AMENDMENT (TEA TREE OIL) REGULATIONS 2017 (F2017L00580)

Explanatory Statement

Issued by Authority of the Deputy Prime Minister and Minister for Agriculture and Water Resources

Primary Industries (Customs) Charges Act 1999

Primary Industries (Customs) Charges Amendment (Tea Tree Oil) Regulations 2017

The Primary Industries (Customs) Charges Act 1999 (the Charges Act) provides for the imposition of charges, which are customs duties, on the products of primary industries. This includes the imposition of charges on exporters of tea tree oil.

Section 8 of the Charges Act provides that the Governor-General may make regulations: prescribing matters required or permitted by the Charges Act, or necessary or convenient to be prescribed for carrying out or giving effect to the Charges Act.

The purpose of the Primary Industries (Customs) Charges Amendment (Tea Tree Oil) Regulations 2017 (the Regulations) is to establish a charge of $0.25 per kilogram of tea tree oil exported to fund research and development activities for the tea tree oil industry, and an emergency plant pest response (EPPR) charge that will allow the tea tree oil industry to re-pay the government in the event of an emergency pest or disease incursion. The EPPR charge rate will initially be set at $0.

R&D activities to support the tea tree oil industry are currently funded from voluntary contributions from tea tree oil producers, and the industry's R&D program is administered by the Rural Industries Research and Development Corporation (RIRDC). The program has contributed to a doubling of plantation yield, efficacy research, market access, and increased efficiency in harvesting, distillation and storage. RIRDC proposes to continue to administer the R&D program using an industry-based advisory panel to make recommendations on the investment of available funds.

Rather than relying on voluntary industry contributions to R&D, establishing a statutory tea tree oil R&D charge ensures that all tea tree oil producers invest equitably in R&D. A statutory charge also provides the tea tree oil industry with greater certainty about the amount of revenue that would be collected and enable forward-year planning to deliver priority R&D for the benefit of the whole industry. The overall increase in investment in R&D allows industry to receive the benefits of additional Commonwealth matching payments for R&D expenditure.

The Australian Tea Tree Industry Association (ATTIA), the national tea tree oil industry representative body, proposed a statutory charge at a rate of $0.25 per kilogram of tea tree oil exported. Based on estimates of future tea tree oil production in Australia, the R&D charge rate of $0.25 per kilogram of oil will allow for sufficient funds to be collected from the tea tree oil industry, along with funds from levy set at the same rate, to ensure that priority R&D projects can continue over the long term. Investment in R&D aims to improve the profitability, sustainability and international competitiveness of Australia's tea tree oil industry. In July 2015, the Australian Government announced in the Agricultural Competitiveness White Paper that it would provide matched Commonwealth funding for a new statutory R&D charge and levy on Australian tea tree oil.

In addition to the R&D charge on tea tree oil exports, ATTIA proposed a statutory EPPR charge (introduced at a nil rate) to contribute to emergency responses to pest and disease incursions. The tea tree oil industry may choose to raise the EPPR charge to a positive rate in future, where there is a need for the tea tree oil industry to make a financial contribution to an agreed emergency response to a pest or disease incursion. Without emergency responses, incursions could result in substantial costs to the industry and risk its biosecurity status. Government action to implement an EPPR charge, as sought by the industry, would provide a contingency mechanism to share the industry's responsibility for the cost of an eradication response.

ATTIA and the majority of potential charge payers support the introduction of an R&D charge and an EPPR charge. ATTIA undertook a detailed consultation process on the levies and charges in 2016, including an independent postal ballot, to consult all known and potential levy and charge payers. Ninety-six per cent of voters supported the introduction of an R&D charge, and ninety-four per cent of voters supported the introduction of an EPPR charge.

The Office of Best Practice Regulation (OBPR) was consulted on the introduction of a tea tree oil R&D and EPPR export charge and assessed the Regulation Impact Statement (RIS). On 31 March 2017, the OBPR assessed the RIS as being compliant with Government requirements. The OBPR reference number for this assessment is 21687.

Details of the proposed Regulations are set out in Attachment A.

The Regulations are compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

Attachment A

Details of the Primary Industries (Customs) Charges Amendment (Tea Tree Oil) Regulations 2017

Section 1 - Name

This section provides that the name of the Regulations are the Primary Industries (Customs) Charges Amendment (Tea Tree Oil) Regulations 2017.

Section 2 - Commencement

This section provides for the Regulations to commence on 1 July 2017.

Section 3 - Authority

This section provides that the Regulations are made under the Primary Industries (Customs) Charges Act 1999.

Section 4 - Schedules

This section provides that the Regulations are amended as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1 - Amendments

Item 1 inserts a new Part 7 relating to tea tree oil into the Primary Industries (Customs) Charges Regulations 2000. Notes on the individual clauses are set out below.

Part 7 - Tea tree oil

7.1  Definitions

This clause provides for tea tree oil to have the same meaning as in clause 13.2 of Part 13 of Schedule 37 to the Primary Industries Levies and Charges Collection Regulations 1991 (Collection Regulations). Tea tree oil is defined in the Collection Regulations as oil that is distilled from Melaleuca alternifolia, in accordance with Australian Standard AS 2782-1997, as in force at the commencement of Part 13 of the Collection Regulations.

7.2  Imposition and rate of charge

This clause imposes a charge on tea tree oil that is exported from Australia at a rate of 25 cents per kilogram of tea tree oil.

7.3  Imposition and rate of EPPR charge

The EPPR charge is imposed on tea tree oil on which a research charge is also imposed. The rate of the EPPR charge on tea tree oil is initially set at nil.

The payment of the EPPR charge to Plant Health Australia is provided for under the Plant Health Australia (Plant Industries) Funding Act 2002.

7.4  Who pays charge imposed by this Part

The charge imposed on tea tree oil is payable by the producer of the tea tree oil.

7.5  Exemption from charge imposed by this Part

Charge is not imposed on tea tree oil if levy under Part 11 of Schedule 27 to the
Primary Industries (Excise) Levies Regulations 1999 has already been imposed on the
tea tree oil.

Attachment B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Primary Industries (Customs) Charges Amendment (Tea Tree Oil) Regulations 2017

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Primary Industries (Customs) Charges Amendment (Tea Tree Oil) Regulations 2017 are to establish a customs charge of $0.25 per kilogram of tea tree oil exported to fund research and development activities for the tea tree oil industry, and an emergency plant pest response (EPPR) charge on tea tree oil exports that will allow the tea tree oil industry to re-pay the government in the event of an emergency pest or disease incursion. The EPPR charge rate will initially be set at $0.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

The Hon. Barnaby Joyce MP

Deputy Prime Minister and Minister for Agriculture and Water Resources