2002

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

PLANT HEALTH AUSTRALIA (PLANT INDUSTRIES) FUNDING BILL 2002

EXPLANATORY MEMORANDUM

(Circulated by Authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, Senator the Hon Judith Troeth)

PLANT HEALTH AUSTRALIA (PLANT INDUSTRIES) FUNDING BILL 2002

GENERAL OUTLINE

The purpose of the Plant Health Australia (Plant Industries) Funding Bill 2002 is to enable levies and charges to be appropriated to Plant Health Australia Limited (PHA) to be used to fulfil PHA plant industry members’ yearly contribution obligations. The Bill also provides a mechanism for any excess levies and charges that are collected to be appropriated to relevant industry research and development bodies for research and development activities.

PHA was established in April 2000 as a Corporations Law company responsible for coordinating national plant health matters. Its members consist of plant industries and all State, Territory and Commonwealth governments. Each year, the costs of PHA’s activities are shared between its members. Industry members of PHA cover the grains, cotton, vegetable and potato, sugar, winegrape, nursery, apple and pear, rice, banana, fresh stone fruit, nut, honey and strawberry industries. 

The proposed arrangements will facilitate plant industry members of PHA funding their share of PHA’s costs. For those plant industries that choose to use these arrangements, the legislation provides for the Commonwealth to pay the amount of the plant industry member’s PHA costs to the extent that a new levy and charge provides the Commonwealth with sufficient funds to pay those amounts. The Commonwealth will make the payments directly to PHA. The new PHA levy and charge will be imposed on participating plant industry member products by regulations under Schedule 27 to the Primary Industries (Excise) Levies Act 1999 and under Schedule 14 to the Primary Industries (Customs) Charges Act 1999.

The legislative changes proposed give effect to plant industries’ request not to increase the overall levy and charge burden on producers. It is proposed that the operative rate of PHA levy or charge for initial participants will be exactly offset by a corresponding decrease in that industry’s existing R&D levy and charge rate.

As it is difficult to set a levy rate that will collect a precise amount of money and no more, those plant industry members expected to use these arrangements are intending to seek the imposition of operative levy and charge rates at a level that will comfortably collect funds in excess of their liability to PHA. The Bill makes provision for these excess funds to be re-directed to fund research and development activities.

If all industry members of PHA used these arrangements, approximately $500,000 would be collected by the new levy and charge representing plant industries’ one third share of PHA’s current running costs. 

Some industry members of PHA represent more than one plant commodity; for example, the grains industry is a member of PHA representing producers of wheat, coarse grains, grain legumes and oilseeds. The Bill makes provision for PHA to advise the Minister of the portion of the grain industry’s share of PHA’s costs attributable to the wheat, coarse grains, grain legumes and oilseeds sectors based on their share of production for a relevant year. In order to provide certainty about the apportionment between relevant plant products and how much levy and charge needs to be collected from each sector to fund the plant industry member’s share of PHA’s costs, the Minister must publish those apportionments in the Gazette.

FINANCIAL IMPACT STATEMENT

There will be a slight reduction in Commonwealth contributions to research and development because of the diversion of some industry funds to PHA that would otherwise have been matched dollar for dollar by the Commonwealth if used for research and development purposes. As the intention of the Bill is to facilitate the disbursement of levies and charges to PHA, there are no other financial implications for the Commonwealth.

NOTES ON CLAUSES

Clause 1:	Short title

This clause provides for the Act to be called the Plant Health Australia (Plant Industries) Funding Act 2002.

Clause 2:	Commencement

This clause provides for Clauses 1 and 2 of the Act to come into effect on Royal Assent and that the remaining clauses and Schedules will take effect on the first day of a quarter on or after the day of Royal Assent.

Clause 3:	Definitions

This clause defines PHA, PHA funding levy or charge, PHA funding levy or charge regulations, PHA plant product, PHA year, Plant Industry Member; primary levy or charge; relevant late payment penalty; relevant Plant Industry Member, total Commonwealth receipts and yearly contribution for the purposes of this Act.

Clause 4:	Funding to PHA if there is a primary levy or charge on a PHA plant product

This clause specifies that, where there is an existing industry research and development levy or charge, that is, a primary levy or charge, the Commonwealth must pay PHA all the levies and charges that it receives in respect of PHA levies and charges to the limit of the individual industry’s yearly contribution as well as any late payment penalties imposed on those industries for paying their levies late. Where excess funds are collected, the provisions of Clause 7 apply. 

If the Commonwealth does not receive enough levies or charges to cover an individual plant industry’s yearly contribution, then the Commonwealth must pay to PHA whatever amounts it has received through the levy and charge arrangements in respect of those yearly contributions.

The Clause also provides a condition on payments made to PHA that they be used to discharge to the extent possible, relevant plant industries’ liabilities to PHA. 

Clause 5:	Funding to PHA if there is no primary levy or charge on a PHA plant product

Plant industries that only have a PHA levy or charge, and no research and development levy or charge, will have all PHA levy and charge funds directed to PHA. In these cases, excess funds cannot be diverted to fund research and development activities as the plant industry has no research and development arrangements in place funded by Commonwealth statutory levies and charges. 

The Clause also provides a condition on payments made to PHA that they be used to discharge to the extent possible, relevant plant industries’ liabilities to PHA. 

Clause 6:	Appropriation

This clause provides for PHA levies to be paid from Consolidated Revenue.

Clause 7:	Payment of any remaining balance for research and development purposes

The clause specifies that any levy or charge received by the Commonwealth in excess of the plant industry’s yearly contribution must be redirected to the industry’s prescribed research and development body, unless the relevant plant industry body does not have existing research and development levy or charge arrangements in place.

Clause 8:	PHA to pay Commonwealth certain costs

This clause provides for the Commonwealth to be paid for any costs associated with the collection and administration of the levies and charges on behalf of PHA.

Clause 9:	Treatment of Refunds

This clause sets out that, if the Commonwealth refunds levy or charges, which has been overpaid by industry, then PHA must also pay the equivalent amount back to the Commonwealth.

The clause then refers to associated legislation that will apply if this situation arises.

Clause 10:	What happens if 2 or more PHA plant products have the same designated body?

Some industry members of PHA represent more than one plant product. In such cases, the provisions of this clause apply. This clause specifies that PHA will advise the Minister the proportion of the individual plant industry’s yearly contributions attributable to each of the plant products that are being levied. 

The Bill makes provision for PHA to advise the Minister of the portion of the grain industry’s share of PHA’s costs attributable to the wheat, coarse grains, grain legumes and oilseeds sectors based on their share of production for a relevant year
The clause also provides that the Minister gives effect to the apportionment by publishing each plant products’ yearly contribution through a written notice in the Gazette. Publication provides certainty about the apportionment between relevant plant products. 

While the Bill grants the Minister the authority to publish the proportion of the individual plant industry yearly contributions in relation to each of the plant products that are being levied, the Bill makes no provision for disallowance. This is the case because the Minister has not made the determination of the apportionment. PHA makes the decision about the value of the apportionment in consultation with its industry members.

Clause 11:	What happens if there are 2 or more representative organisations for the same PHA plant product?

This clause allows for any relevant regulations made under this act to give effect to the situations or matters that may arise under this clause with respect to the circumstance(s) of where there are 2 or more representative organisations for the same PHA plant product.

Clause 12:	Regulations.

This clause provides for the Governor-General to make any regulations required or permitted by the Act where such regulations are needed to give effect to the Act.

Clause 13:	Schedules

This clause sets out, by way of schedules, the legislation that is amended by the introduction of this Act.