PRIMARY INDUSTRIES LEVIES AND CHARGES COLLECTION AMENDMENT (MELONS) REGULATION 2016 (F2016L01823) EXPLANATORY STATEMENT

Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES LEVIES AND CHARGES COLLECTION AMENDMENT (MELONS) REGULATION 2016 (F2016L01823)

Explanatory Statement

 

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

 

Primary Industries Levies and Charges Collection Act 1991

 

Primary Industries Levies and Charges Collection Amendment (Melons) Regulation 2016

 

Legislative authority

The Primary Industries Levies and Charges Collection Act 1991 (the Collection Act) relates to the collection of primary industry levies and charges imposed by various Acts. Section 30 of the Collection Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed or that are necessary or convenient for carrying out or giving effect to the Act.

 

Purpose

The purpose of the Primary Industry Levies and Charges Collection Amendment (Melons) Regulation 2016 (the proposed Regulation) is to authorise the Australian Government Department of Agriculture and Water Resources to collect statutory levies and charges on melons and enable any funds raised by the levy and charges to be paid to Horticulture Innovation Australia Limited (HIA Ltd) or to Plant Health Australia (PHA).

 

Background

Historically, R&D for the melon industry was funded by voluntary contributions made by supply chain partners and only a negligible number of committed melon growers. These contributions were not made on an equitable basis nor were the contributions able to meet the total cost of the melon industry's research and development and biosecurity preparedness programmes.

On two occasions, February to September 2005 and October 2010 to October 2011, the AMA sought to establish melon biosecurity levies, however, both attempts were unsuccessful in the ballot and majority support was not received from the industry. The driving force behind the most recent attempt by the AMA to explore the statutory levy and export charge option with growers was again to establish melon biosecurity levies, made more pressing by the incursion of Cucumber Green Mottle Mosaic Virus (CGMMV), and the broader benefits that would be available to all melon growers by the implementation of the levy. The melon industry's reluctance to consistently contribute funding for national biosecurity activities further highlights the high level of risk that the industry would face to manage further incursion of plant pests and diseases such as CGMMV. The AMA's submission argues that these risks can be minimised by collectively investing in nationally coordinated R&D and biosecurity activities.

Impact and Effect

Melon growers will be required to pay 0.4 of a cent per kilogram of melons, however, a clear majority of melon growers who voted supported the introduction of statutory levies and charges on melons.

Establishing statutory R&D, PHA and EPPR levies and charges would raise approximately $1.4 million annually. This figure is based upon average production figures of 200,000 tonnes of melons per annum. An R&D levy on melons at a rate of .3 of a cent per kilogram is expected to raise $600,000, which could attract up to $600,000 of Australian Government matched funds, subject to the prescribed cap for matched R&D funds set at 0.5 per cent of the gross value of production of the horticulture industry. PHA membership at a rate of .1 of a cent per kilogram is expected to raise $200,000 in unmatched revenue.

 

The Regulation would provide for R&D charge revenue to be paid to Horticulture Innovation Australia Limited (HIA Ltd), the prescribed industry services body for horticulture under Section 9 of the Horticulture Marketing and Research and Development Services Act 2000. R&D charge funds would ensure continued funding is provided to expand melon research and development programmes that the industry has identified as priorities. These include: boosting productivity and adding value to rural production; effective operation of market chains for existing and new products; and building resilience to climate variability and change.

 

The Regulation also provides for the melon industry to equitably fund its membership costs to PHA and the employment of a biosecurity development officer at 0.5 the full time equivalent. As a member of PHA, the industry has access to melon biosecurity programmes and resources to conduct surveillance activities In the event of a biosecurity incident affecting the melon industry, and following direct consultation with all affected industries, the EPPR charge is activated to a rate that enables the government to reasonably recover the biosecurity response costs.

 

The Regulation will also define who is a producer and what must be included in a return. The Regulation will set out record keeping provisions and that offences against those provisions is an offence of strict liability. The inclusion of a strict liability offence for record keeping is in line with the principles set out in 'A guide to framing Commonwealth offences, infringement notices and enforcement powers'. This provision would be likely to enhance the effectiveness of the enforcement regime, as record keeping would be essential to ensure that the levy and charge is paid by the producers at the correct rate.


Strict liability for this purpose will ensure that the charge is collected on an equitable basis, which is a key objective of imposing statutory levies and charges on melons to fund industry R&D, PHA and EPPR activities. The offence would be 10 penalty units, and would therefore meet the requirement that the fine does not exceed 60 penalty units for an individual. Producers will be advised of the record keeping requirements so they can guard against the possibility of any contravention.

 

Consultation

Consistent with the Australian Government's Levy Principles and Guidelines, the AMA conducted a thorough consultation campaign with all known potential levy payers, over a three month period from August 2015 to the commencement of the ballot period in October 2015. The AMA's consultation campaign included 4 grower meetings across the major melon-growing regions, including a teleconference with growers in Western Australia; one-on-one telephone conversations with 172 of the 180 growers on the AMA's registration list; information package mail-outs to regional grower organisations; industry publications including updates to the AMA's website, e-newsletters, media releases and advertisements in relevant journals, magazines and newsletters.

During the consultation period some growers raised concerns with the AMA about the amount of revenue the PHA levy and charge could collect. To address grower concerns, the proposed PHA levy and charge rate was revised from 0.2 of a cent per kilogram down to 0.1 of a cent per kilogram, representing a total levy and charge of 0.4 of a cent per kilogram.

The ballot was conducted from 7 October 2015 to 6 November 2015. An independent Levy Returning Officer was employed by the AMA to scrutineer and tally the votes received in response to the levy proposal. Only businesses with an Australian Business Number (ABN) were eligible to vote. On occasion, multiple growers align with one business and were therefore only eligible for one vote on behalf of the business. Ballot packs were sent by post to individual businesses registered with the AMA and additional voting packs were sent out on request. A total of 166 ballot packs were issued. A total of 89 votes were received representing 55 per cent of eligible voters. 8 votes were deemed invalid. Of the 81 valid votes received, 57 supported the establishment of a PHA and EPPR levy and charge, representing 70 per cent; and 55 supported the R&D levy and charge, representing 68 per cent. 

On 19 February 2016, the department commenced the six-week objection period for prospective levy payers to lodge their concerns about the levy submission. The objection period closed on 1 April 2016 and 5 objections were received, to which the department is satisfied the AMA adequately responded.

The AMA consulted with Horticulture Innovation Australia about the recommendation to establish a statutory levy and charge on melons, prior to making the recommendation to the Minister for Agriculture and Water Resources. The proposed Regulation would give effect to the recommendations of HIA Ltd, which are consistent with the AMA’s written submission of December 2015 to establish a statutory levy and charge on melons.

 

The Office of Best Practice Regulation was consulted in the preparation of the Regulation and a Regulatory Impact Statement (RIS) was prepared (OBPR ID 20458). The RIS was assessed as best practice and will be available on the Best Practice Regulation Updates website. The Department of Agriculture and Water Resources also consulted the departments of the Prime Minister and Cabinet, Treasury, and Finance in the preparation of the Regulation. The AMA's proposal reflects the government's support of industry through charges and levies that facilitate collective industry investment in R&D, plant health management and marketing to improve competitiveness and biosecurity preparedness.

Details of the Regulation are set out in Attachment A.

 

The Regulation is 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 Regulation is a legislative instrument for the purposes of the Legislation Act 2003.

 

The Regulation commences on 1 January 2017.

Attachment A

Details of the Primary Industries Levies and Charges Collection Amendment (Melons) Regulation 2016

 

Section 1 - Name

 

This section provides that the name of the Regulation is the Primary Industries Levies and Charges Collection Amendment (Melons) Regulation 2016.

 

Section 2 - Commencement

 

This section provides for the Regulation to commence on 1 January 2017.

 

Section 3 - Authority

 

This section provides that the Regulation is made under the Primary Industries Levies and Charges Collection Act 1991.

 

Section 4 - Schedules

 

This section provides that the Primary Industries Levies and Charges Collection Regulations 1999 is amended as set out in Schedule 1.

 

Schedule 1 - Amendments

 

Volume 2

Schedule 22 - Horticultural Products

Part 31 - Melons

31.1  Definitions for the purposes of this Part

This section defines melon as any of the following:  

                     (a)  Citrullus lanatus, commonly called watermelon;

                     (b)  Cucumis melo, commonly called rockmelon;

                     (c)  Cucumis melo var. cantalupensis, commonly called charentais melon;

                     (d)  Cucumis melo var. inodorus, commonly called honeydew or piel de sapo;

                     (e)  Cucumis melo var. makuwa, commonly called Korean melon;

                      (f)  Cucumis melo var. reticulatus, commonly called galia melon or hami melon;

                     (g)  Cucumis metuliferus, commonly called horned melon.

This section also defines retail sale of melons as a sale by the producer of melons to a purchaser other than a first purchaser (including an exporter) or through a selling agent, a buying agent or an exporting agent.

31.2  What is a levy year

This section refers to subsection 4(1) of the Collection Act, which prescribes a levy year as a fiscal year in which the levy or charge is imposed.

31.3  Who is a producer

This section refers to subsection 4(1) of the Collection Act, which defines a producer of melons as a person who:                

a)      owns melons immediately after they are harvested; or

b)      would have owned melons apart from a law that vests them in another person or body or in the Crown in right of a State at or before the time the melons are harvested.

c)      exports melons on which charge is imposed under paragraph (g) of that definition.

31.4  Liability of intermediaries--exporting agents

This section prescribes an exporting agent as liable for the export charge on behalf of the person for whom they are exporting melons. The rate of charge and any late payment penalty is the same regardless of who is exporting the melons.

31.5  When levy or charge is due for payment--people lodging quarterly returns

This section prescribes that the levy or charge on melons for those lodging quarterly returns is due for payment on the day the return is lodged or within 28 days after the end of the quarter. The penalty for late payment is prescribed at Section 15 of the Collection Act.  

31.6  Who must lodge a quarterly return

This section prescribes who must lodge a return for a quarter.

These include:

a)      a first purchaser who buys melons in the quarter;

b)      a buying agent who buys melons in the quarter;

c)      a selling agent who sells melons in the quarter;

d)     an exporter who exports melons in the quarter;

e)      an exporting agent who exports melons in the quarter.

 

These exclude:

f)       a person who has applied for an exemption or continued exemption and has not received notice of the Secretary's decision

g)      a person who has been granted an exemption or continued exemption by the Secretary

 

Offences relating to returns are provided for at Section 24 of the Collection Act.

31.7  When a quarterly return must be lodged

This section prescribes the due date for quarterly returns as 28 days after the end of the quarter.              

 

Offences relating to returns are provided for at Section 24 of the Collection Act.

 

31.8  When levy or charge is due for payment--people lodging annual returns

This section prescribes that the levy or charge on melons for those lodging annual returns is due for payment on the day the return is lodged or within 1 month and 28 days after the end of the quarter. The penalty for late payment is prescribed at Section 15 of the Collection Act.         

31.9  Who must lodge an annual return

This section prescribes who must lodge an annual return. These include:     

a)      a first purchaser who buys melons in the levy year;

b)      a buying agent who buys melons in the levy year;

c)      a selling agent who sells melons in the levy year;

d)     an exporter who exports melons in the levy year;

e)      an exporting agent who exports melons in the levy year.

f)       a person who is exempt from lodging quarterly returns for the levy year

g)      a producer who sells more than 20 tonnes of melons by retail sale in the levy year.

 

Offences relating to returns are provided for at Section 24 of the Collection Act.

31.10  When an annual return must be lodged

This section prescribes the due date for an annual return as on or before 28 August in the following levy year.

 

Offences relating to returns are provided for at Section 24 of the Collection Act.

31.11  What must be included in a return

This section prescribes the information that must be included in a quarterly or annual return for melons on which the levy or charge is imposed. This includes:

a)      the quantity of the melons, in kilograms; and

b)      the amount of levy or charge payable for the melons; and

c)      the amount of levy or charge paid by the person for the melons.

                         

31.12  Application for exemption from lodging a quarterly return

This sections prescribes for an exemption from lodging quarterly returns in a levy year if the applicant believes the sum of the levy or charge and any liability payable by the applicant under subsection 7(1) or (3) of the Collection Act will be less than $500.

31.13  Form of application for exemption

This section prescribes the information that must be included in an application for an exemption from lodging quarterly returns in a levy year. This includes:

             (1)  the applicant's personal details.

             (2)  a statement to the effect that:

a)      the applicant will, or may, incur a liability of not more than $500 under subsection 7(1) of the Collection Act in respect of the levy year to which the application relates if the applicant is a first purchaser, buying agent or selling agent;

b)      the applicant will, or may, be liable to pay charge of not more than $500 in respect of the levy year to which the application relates if the applicant is an exporter other than an exporting agent;

c)      the applicant will, or may, incur a liability of not more than $500 under subsection 7(3) of the Collection Act in respect of the levy year to which the application relates if the applicant is an exporting agent.

             (3)  An application must be sent to the Secretary's postal address.

31.14  Grant or refusal of exemption

This section prescribes the bases upon which the Secretary, within 14 days of receiving an application, must grant or refuse an exemption from the requirement to lodge quarterly returns for the levy year in writing. When deciding whether to grant an exemption the Secretary must consider the amount of levy or charge payable, or liable to be paid, by the applicant in the years preceding and succeeding the levy year to which the application relates.

31.15  Continuation of exemption


This section prescribes the bases upon which the Secretary, within 14 days of receiving an annual return, must decide whether to continue the exemption from the requirement to lodge quarterly returns for the next levy year in writing. When deciding whether to grant an exemption the Secretary must consider the amount of levy or charge payable, or liable to be paid, by the applicant in the years preceding and succeeding the levy year to which the application relates.

31.16  When quarterly return must be lodged if exemption refused or not continued

This section prescribes that a quarterly return that has been refused exemption or refused continued exemption is due for payment 28 days after the end of the quarter, or if the quarter has ended before the person receives the notice - within 28 days of receiving the notice.

 

Offences relating to returns are provided for at Section 24 of the Collection Act.

31.17  What records must be kept

This section prescribes the information that must be kept by a producer of melons must keep with respect to a levy year. Melon producers must keep records setting out for the year:

 

a)      the quantity of the melons, in kilograms the producer bought, old or exported; and

b)      the amount of levy or charge payable by the producer for the melons; and

c)      the amount of levy or charge paid by the producer for the melons

d)     the personal details of everyone to whom the producer sold melons, except by retail sale; or from whom they bought melons or to whom they exported melons and the total quantity in kilograms of melons sold, bought or exported.

Failure to meet the requirement to keep records is to commit an offence of strict liability and can incur a penalty of 10 penalty units.

 

The inclusion of a strict liability offence for record keeping is in line with the principles set out in 'A guide to framing Commonwealth offences, infringement notices and enforcement powers'. This provision would be likely to enhance the effectiveness of the enforcement regime, as record keeping would be essential to ensure that the levy and charge is paid by the producers at the correct rate.

31.18  Review of decisions

This section prescribes the circumstances under which applications may be made to the Administrative Appeals Tribunal for review. These include a decision by the Secretary to refuse to grant an exemption or refuse to continue an exemption.

 

The wording of this clause differs slightly to that appearing in other clauses of Schedule 22 of the Collection Regulations. This is to better match the terminology used in subsection 25(1) of the Administrative Appeals Tribunal Act 1975.


 

Statement of Compatibility with Human Rights

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

 

Primary Industries Levies and Charges Collection Amendment (Melons) Regulation 2016

 

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 Regulation is to introduce a statutory levy and charge on melons to meet the industry's research and development priorities and Plant Health Australia membership.

 

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

 

 

 

 


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