Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES (EXCISE) LEVIES AMENDMENT REGULATIONS 2001 (NO. 1) 2001 NO. 6

STATUTORY RULES 2001 No. 6

Issued by Authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry

Primary Industries (Excise) Levies Act 1999

Primary Industries (Excise) Levies Amendment Regulations 2001 (No. 1)

Section 8 of the Primary Industries (Excise) Levies Act 1999 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted to be prescribed by the Act, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the Primary Industries (Excise) Levies Amendment Regulations 2001 (No. 1) (the Amending Regulations) is to amend the Primary Industries (Excise) Levies Regulations 1999 (the Principal Regulations) to increase the adult cattle levy rate for animal health purposes from 13 cents to 30 cents per head and to decrease the adult cattle levy rate for national cattle disease eradication reserve purposes from 17 cents to nil per head. The overall levy rate (including that imposed under the National Residue Survey (Excise) Levy Act 1998) for adult cattle will remain at $3.50 per head until 1 March 2003 when it will change to $3.33 per head.

The exercise of the power under section 8 of the Act to make regulations for the purposes of Schedule 3 (relating to cattle) must be done in accordance with conditions specified in that Schedule.

Clause 8 of Schedule 3 to the Act provides that if a declaration is in force under subclause 8(1), then, before the Governor-General makes regulations for the purposes of the paragraph to which the declaration relates, the Minister must take into consideration any relevant recommendation made to the Minister by the body specified in the declaration in relation to that paragraph. There are no bodies declared under subclause 8(1) of Schedule 3 to the Act.

In any event, the Amending Regulations implement recommendations from the peak cattle industry bodies which have demonstrated wide industry consultation regarding the changes.

The Amending Regulations implement recommendations from the industry regarding two components of the revenue(1) raised by way of both Schedule 3 to the Primary Industries (Excise) Levies Act 1999 and Schedule 3 to the Primary Industries (Customs) Charges Act 1999. Those two components are the Australian Animal Health Council (AAHC) component and the National Cattle Disease Eradication Reserve (NCDER) component. Essentially the proposed Regulations will decrease the NCDER component from 17 cents per head to nil and increase the AAHC component from 13 cents per head to 30 cents (Schedule 1). This arrangement will remain in place from 1 March 2001 to 1 March 2003 at which date the AAHC component will revert to 13 cents per head (Schedule 2).

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(1)       There are around $41 million per year raised for the cattle industry of which more than 95% is raised by way of excise legislation being the Primary Industries (Excise) Levies Act 1999 and the National Residue Survey (Excise) Levy Act 1998 with the balance raised by way of customs legislation being the Primary Industries (Customs) Charges Act 1999 and the National Residue Survey (Customs) Levy Act 1998. In addition to these Amending Regulations, contemporaneous amendments are being made to regulations under the Primary Industries (Customs) Charges Act 1999.

The NCDER has been used to fund primarily the Tuberculosis Freedom Assurance Program (TFAP). After over twenty five years of the tuberculosis eradication program, the TFAP is gradually drawing to a close. The trust account into which the NCDER component is being put has sufficient funds to last until the program finishes, expected to be 31 December 2002. The National Cattle Disease Eradication Reserve Act 1991 governing the expenditure of the NCDER is very restrictive in that it only allows for expenditure from the NCDER for the purpose of the eradication of any cattle disease that is endemic in Australia (section 6 of the National Cattle Disease Eradication Reserve Act 1991). As the TFAP draws to a close, calls on the NCDER to fund the eradication of endemic diseases are declining, while the funding priorities for disease programs other than the eradication of endemic diseases is increasing. The industry currently has insufficient funds to meet these new challenges in the absence of an increase in the AAHC component of the levy and charge. An increase by 17 cents per head in the AAHC component of the levy and charge for two years should address this need, estimated to be $15 million. This is because around $5 million will be raised over two years as a result of these amendments. When the TFAP draws to a close, the transfer (requiring parliamentary approval) can be made of unused NCDER funds (possibly around $10 million) to the AAHC.

Details of the Amending Regulations are set out in the Attachment A. A summary of the changes arising from the Amending Regulations is at Attachment B.

The Amending Regulations (apart from Schedule 2) commence on 1 March 2001. Schedule 2 will commence on 1 March 2003.

Attachment A

Details of the Amending Regulations

Regulation 1 - Name of Regulations

This provides a citation for the Amending Regulations.

Regulation 2 - Commencement

This specifies when the amendments as specified in Schedules 1 and 2 to the Amending Regulations will commence.

Regulation 3 - Amendment of the Principal Regulations

This provides that Schedules 1 and 2 to the Amending Regulations amend the Principal Regulations.

Schedule 1 to the Amending Regulations

In broad terms, Schedule 1 to the Amending Regulations alters, for adult cattle, the NCDER component of the levy on adult cattle from 17 cents per head to nil and the AAHC component from 13 cents per head to 30 cents. Schedule 1 will commence on 1 March 2001.

Details of each of the 4 items contained in Schedule 1 of the Amending Regulations are as follows.

Item 1. This inserts after clause 1 of Schedule 3 to the Principal Regulations new clause 1A entitled "Amounts of levy for cattle other than bobby calves and lot-fed cattle". Prior to the insertion of this clause, the levy rates have been specified in the Act. New subclause 1A(1) will reduce the NCDER component of the levy rate in respect of adult cattle other than lot-fed cattle from 17 cents per head to nil per head. New subclause 1A(2) will increase the AAHC component of the levy rate in respect of adult cattle other than lot-fed cattle from 13 cents per head to 30 cents per head. A note in new subclause 1A(2) explains that the AAHC component of 30 cents per head will be in force until 1 March 2003 and refers the reader to Schedule 2 to the Amending Regulations. In this way, the reader will be able to find out that the AAHC component of the levy rate will change on 1 March 2003 from 30 cents per head to 13 cents per head, meaning that the overall levy rate will change from $3.50 per head to $3.33 per head on that date.

Item 2. This corrects a citation error in the note in subclause 2(1) of Schedule 3 to the Principal Regulations so that the reference to Australian Meat and Live-stock Act 1997 (sic) is changed to Australian Meat and Live-stock Industry Act 1997.

Item 3. This amends subclause 2(2) of Schedule 3 to the Principal Regulations by deleting the notes appearing in that clause and inserting a new note. The information in the deleted notes will appear in new notes in new subclause 1A(2) of the Principal Regulations.

Item 4. This amends clause 2 of Schedule 3 to the Principal Regulations by inserting new subclauses 2(3) and 2(4). Those two new subclauses do for lot-fed cattle what new subclauses 1A(1) and 1A(2) (see above under Item 1) do for adult cattle other than lot-fed cattle.

Schedule 2 to the Amending Regulations

In broad terms, Schedule 2 to the Amending Regulations will alter, for adult cattle, the AAHC component of the levy on adult cattle from 30 cents per head to 13 cents. Schedule 2 will commence on 1 March 2003.

Details of each of the 2 items contained in Schedule 2 of the Amending Regulations are as follows.

Item 1. This will effectively repeal, on 1 March 2003, subclause 1A (being inserted by Schedule 1 to the Amending Regulations) of Schedule 3 to the Principal Regulations and replace it with new clause 1A. In this way, the NCDER component of the levy rate in respect of adult cattle other than lot-fed cattle will remain at nil per head. Also, the AAHC component of the levy rate in respect of adult cattle other than lot-fed cattle will revert from 30 cents per head to 13 cents per head. This is because in the absence of a levy rate for the AAHC component being specified in regulations, the levy rate for the AAHC component is as specified in the Act. The amount specified in section 6(1)(d) of the Act is 13 cents per head.

Item 2. This applies to lot-fed cattle in the same way that Item 1 applies to adult cattle other than lot-fed cattle, (except that section 6(3)(d) of the Act specifies the rate of the AAHC component rather than section 6(1)(d)).

Attachment B

Summary of changes arising from the Amending Regulations

Current levy rates for adult cattle

Destination	Amount
Marketing, R&D, NRS	$3.20
NCDER	$0.17	prescribed in clauses 6(1)(c) and 6(3)(c) of Schedule 3 to the Primary Industries (Excise) Levies Act 1999
AAHC	$0.13	prescribed in clauses 6(1)(d) and 6(3)(d) of Schedule 3 to the Primary Industries (Excise) Levies Act 1999
	Total $3.50

(Note:       'Marketing' component is destined for Meat and Livestock Australia Limited (MLA)

       'R&D' component is destined for MLA

       'NCDER' is destined for the National Cattle Disease Eradication Reserve

       'AAHC' is destined for the Australian Animal Health Council

       'NRS' is destined for the National Residue Survey)

Levy rates for adult cattle to apply from 1 March 2001 to 1 March 2003

Destination	Amount
Marketing, R&D, NRS	$3.20
NCDER	$0.00	to be prescribed* in clauses 1A(1) and 2(3) of Schedule 3 to the Primary Industries (Excise) Levies Regulations 1999
AAHC	$0.30	to be prescribed* in clauses 1A(2) and 2(4) of Schedule 3 to the Primary Industries (Excise) Levies Regulations 1999
	Total $3.50

Levy rates for adult cattle to apply from 1 March 2003

Destination	Amount
Marketing, R&D, NRS	$3.20
NCDER	$0.00	to be prescribed* in clauses 1A(1) and 2(3) of Schedule 3 to the Primary Industries (Excise) Levies Regulations 1999
AAHC	$0.13	reverting* to the amount prescribed in clauses 6(1)(d) and 6(3)(d) of Schedule 3 to the Primary Industries (Excise) Levies Act 1999
	Total $3.33

* by way of the Amending Regulations.