Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES (EXCISE) LEVIES AMENDMENT REGULATIONS 2002 (NO. 12) 2002 NO. 324

EXPLANATORY STATEMENT

Subject:        Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 12)

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 by that Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act. Schedule 3 to the Act imposes levies relating to cattle transactions. Funds corresponding with the amounts of levies revenue are appropriated for various purposes including marketing and research.

Subclause 8(1) of Schedule 3 to the Act provides that the Minister may declare an industry body to be the body for the purposes of subclause 8(2). Subclause 8(2) 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.

No declarations have been made under subclause 8(1) of Schedule 3 to the Act. In any event, the amending regulations implement recommendations from the peak industry body that represents the lot fed cattle production sector, namely the Australian Lot Feeders' Association (ALFA).

The purpose of the amending regulations is to alter, in respect of adult lot fed cattle, the marketing levy rate from $2.27 per head to $1.77 per head and the research levy rate from $0.61 per head to $1.11 per head.

Before the commencement of the amending regulations, the total current make-up of the levy imposed in respect of lot fed cattle is shown in the following table

Destination	Amount $	Where rate is prescribed
Marketing	2.27	Clause 2(1) of Schedule 3 to the Primary Industries (Excise)
		Levies Regulations 1999
Research	0.61	Clause 2(2) of Schedule 3 to the Primary Industries (Excise)
		Levies Regulations 1999
Animal Health	0.30	Clause 2(4) of Schedule 3 to the Primary Industries (Excise)
Australia		Levies Regulations 1999
National	0.32	Clause 3(1)(ca) of Schedule 1 to the National Residue
Residue Survey		Survey (Excise) Levy Act 1998
total	3.50

By paying the cattle transactions levy in respect of lot fed cattle, the lot fed cattle production sector contributes to those destinations listed in the above table, including Meat & Livestock Australia Limited (MLA) in the areas of marketing and research.

ALFA in association with MLA have developed programs and projects being undertaken by MLA, which clearly reflect industry needs and wishes and are based on maximum potential return to levy payers.

ALFA has recommended that the funding allocation, as between marketing on the one hand and research on the other, requires adjustment to reflect those agreed MLA programs and projects.

The adjustment calls for a levy rate of $1.11 per head in respect of the research component, and a levy rate of $1.97 per head in respect of the marketing component. This is being implemented in a two-stage process.

Stage 1: from 1 January 2003 -

•       the marketing levy rate decreases from $2.27 per head to $1.77 per head; and

•       the research levy rate increases from $0.61 per head to $1.11 per head.

Stage 2: from 1 March 2003 -

•       the marketing levy rate increases from $1.77 per head to $1.97 per head.

A separate alteration sought by ALFA in respect of the National Residue Survey (NRS) component is expected to commence on 1 March 2003

•       NRS levy rate decreases from $0.32 to $0.12.

The amending regulations implement stage 1.

Stage 2 will not commence until the NRS alteration because the NRS alteration needs to coincide with the commencement date, anticipated to be 1 March 2003, of the of $0.20 per head decrease in the NRS levy rate in respect of grass fed cattle. In the meantime, the marketing levy rate will be $0.20 below its final level of $1.97 so as to maintain the overall levy rate at $3.50 per head. Maintenance of an overall rate of $3.50 per head for the period 1 January 2003 to 1 March 2003 will cause less disruption in administration and collection. The revenue loss in the period 1 January 2003 to 1 March 2003 for marketing will be relatively small and within acceptable limits.

It is expected that regulations in respect of stage 2 and the NRS alteration will be made in due course.

The amending regulations commence on 1 January 2003.