2002

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

AUSTRALIAN ANIMAL HEALTH COUNCIL (LIVE-STOCK INDUSTRIES) FUNDING AMENDMENT BILL 2002

EXPLANATORY MEMORANDUM

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

AUSTRALIAN ANIMAL HEALTH COUNCIL (LIVE-STOCK INDUSTRIES) FUNDING AMENDMENT BILL 2002

GENERAL OUTLINE

The purpose of the amendments to the Australian Animal Health Council (Live-stock Industries) Funding Act 1996 is to enable levies and charges to be appropriated to the Australian Animal Health Council (AAHC) known as Animal Health Australia (AHA) to be used to repay the Commonwealth for underwriting livestock industries’ share of the costs of responding to emergency animal diseases.  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 or the promotion or maintenance of the health of animals.

The Government approved the Emergency Animal Disease Response Agreement (EADRA) in March 2002.  The Government decision states that industry can repay any amounts paid for by the Commonwealth on behalf of industry under the agreement, via a statutory levy or charge.  To allow the repayment arrangements via a levy to come into law, it is necessary to amend the Australian Animal Health Council (Live-stock Industries) Funding Act 1996.  New emergency animal disease response levies and charges will be imposed on participating animal industry signatories 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.  At this stage, the new levy will be set at zero, with the exception of the honey-bee industry.  For all current signatories, except the honey industry, this means that there will be no increase in the levy burden from the outset.  However, should an outbreak occur, there could be an increased levy burden on levy payers in the affected industry.

Under the terms of the EADRA, the AAHC will co-ordinate, collate and maintain financial information in respect of any animal disease emergency.  Livestock industries agreed that the AAHC will receive and disburse levy funds to be used to repay the Commonwealth for the costs underwritten by the Commonwealth on behalf of industry.  Several payments of levy or charge may be made to the AAHC in any period.  Relevant livestock industries will be advised of their total debt to the Commonwealth by the AAHC and repayment arrangements will be implemented in accordance with Schedule 7 of the Agreement.  Once a debt is known, industries will activate their emergency animal disease levy with all levy funds initially flowing to the Consolidated Revenue Fund and subsequently disbursed to the AAHC.  The AAHC will manage the levy funds on behalf of the relevant industry or industries in order to repay that industry’s debt to the Commonwealth.  The honey industry, however, has set an operative levy rate for the emergency animal disease response levy and collection of this levy should commence on the effective date of the regulations.  Initially the honey bee industry will establish a contingency fund with the AAHC into which all animal disease levies will be deposited.  The Amendment Bill allows for payments to be made to Plant Health Australia on behalf of the Australian Honey Bee Industry Council for plant disease emergencies/contingencies.

It will be impossible to time the termination of the levy or charge at the precise moment the debt to the Commonwealth has been fully paid.  For this reason the Amendment Bill makes provision for any excess funds to be re-directed to fund the promotion or maintenance of the health of animals including through research and development activities as requested by industry.

FINANCIAL IMPACT STATEMENT

There are no direct financial implications for the Commonwealth as the intention of the Bill is to facilitate the disbursement of levies and charges to Animal Health Australia. However, indirectly the arrangements will allow the repayment of monies to the Commonwealth expended on behalf of animal industries under agreed cost sharing arrangements for responses to emergency animal diseases.  The impact on Commonwealth contributions to industry research and development arrangements is expected to be minimal.

NOTES ON CLAUSES

Clause 1:	Short title

This clause provides for the Act to be called the Australian Animal Health Council (Live-stock Industries) Funding Amendment Act 2002.

Clause 2:	Commencement

This clause provides for Sections 1 to 3 of the Act (ie the commencement information) to come into effect on Royal Assent and that the Schedule 1 (or the amendments to the existing Act) will take effect on a date to be proclaimed as the precise timing will depend on when changes to the Australian Animal Health Council’s company Constitution will be made, which is expected to occur in November 2002.

Clause 3:	Schedule(s)

This clause specifies that amendments will be made to the Act or Acts mentioned in the schedule which is provided.  In this case amendments will be made to the Australian Animal Health Council (Live-stock Industries) Funding Act 1996.

Schedule 1:	Amendments relating to emergency animal disease response

Item 1 – Section 3

This item inserts a new definition into Section 3 of the Australian Animal Health Council (Live-stock Industries) Funding Act 1996 and provides a description of the Emergency Animal Disease Response (cost sharing) Agreement.

Item 2 – Paragraph 4(b)

This item repeals the existing paragraph because the words in the text indicate a reference to non-payment penalties.  The clause then inserts amended words which correctly refer to late payment penalties. 

Item 3 – At the end of section 4

This item adds a new clause under the existing Section 4 of the Australian Animal Health Council (Live-stock Industries) Funding Act 1996 and provides for the payment of Emergency Animal Disease Response (EADR) levies and charges as well as late payment penalties to be made to the Australian Animal Health Council.  The inserted Clause also specifies that the Levies Revenue Service can deduct the cost of collecting the EADR levies and charges and administering the levy arrangements before levy and charge funds are paid to the Australian Animal Health Council.

The Clause also provides for levies and charges to be paid to the Australian Animal Health Council in order to discharge livestock industries’ debt to the Commonwealth.  The subsequent subclauses (4), (5) and (6) describe how the Australian Animal Health Council will apply the levies and charges.  The application of the levies and charges is set out as priorities and obliges the Australian Animal Health Council to apply the funds to meeting the expenses of the Australian Animal Health Council in administering the emergency arrangements and payments, acquittal of the industries debt to the Commonwealth arising under the EADR agreement and paying any excess levy or charge collected to an organization that is concerned with research and development or to the promotion or maintenance of the health of animals to which the animal product relates.

Sub-clause 5(a) applies to whether the animal product is honey or anything else.

Item 3 - At the end of the Act

This item provides for situations where refunds of levies charges or penalty are applicable.

Subclause 6 refers to the Treatment of Refunds.  This clause sets out that, if the Commonwealth refunds levy or charges, which has been overpaid by industry, then the Australian Animal Health Council must also pay the equivalent amount back to the Commonwealth.

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

Subclause 6 (4) also provides for the Commonwealth to set off any refunds due to the Commonwealth from future payments to the Australian Animal Health Council.