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Bills Digest No. 79 1997-98
Australian Meat and Live-stock Industry Bill 1997
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have any
official legal status. Other sources should be consulted to determine the
subsequent official status of the Bill.
CONTENTS
Australian Meat and Live-stock Industry Bill 1997
Date Introduced: 1 October 1997
House: House of Representatives
Portfolio: Primary Industries and Energy
Commencement: Part 1 of the Bill (clauses 1-6) commence
on Royal Assent, the remainder (clauses 7-74) on Proclamation or
nine months and one day after Royal Assent, whichever is first.
This Bill forms part of a package of 17 Bills restructuring the regulatory
framework of the Australian meat and livestock industry. The major provisions
of this Bill provide:
- for the continuation of existing exporting licensing, quota, and enforcement
provisions under the administration of Department of Primary Industries
and Energy, rather than the Australian Meat and Live-stock Corporation;
- the Minister with power to declare a body to be either the industry
marketing or research body for the purposes of receipt of levy/charge
amounts or eligible to receive Commonwealth matching research and development
funds.
This Bill is forms part of a package of 17 Bills restructuring the regulatory
framework of the Australian meat and live-stock industry. The other Bills
in the package include:
- Australian Meat and Live-stock Industry (Repeal and Consequential
Provisions) Bill 1997;
- Beef Production Levy Amendment Bill 1997;
- Buffalo Export Charge Bill 1997;
- Buffalo Slaughter Levy Bill 1997;
- Cattle (Exporters) Export Charge Bill 1997;
- Cattle (Producers) Export Charges Bill 1997;
- Cattle Transactions Levy Bill 1997;
- Live-stock (Exporters) Export Charge Bill 1997;
- Live-stock (Producers) Export Charges Bill 1997;
- Live-stock Slaughter (Processors) Levy Bill 1997;
- Live-stock Transactions Levy Bill 1997;
- National Residue Survey (Buffalo Slaughter) Levy Bill 1997;
- National Residue Survey (Cattle Export) Levy Bill 1997;
- National Residue Survey (Cattle Transactions) Levy Bill 1997;
- National Residue Survey (Sheep, Lambs and Goats Export) Levy Bill
1997; and
- National Residue Survey (Sheep, Lambs and Goats Transactions) Levy
Bill 1997.
Industry Characteristics
Table 1: Summary Livestock Statistics
Livestock numbers at 31 March (million)
1995 1996 1997
Cattle
Breeding cows 11.2 11.7 11.6
Other cattle 11.8 11.9 11.7
Total meat 23.0 23.6 23.3
cattle
Sheep
Breeding ewes n.c. 57.2 58.6
Other sheep - 63.9 64.7
Total sheep 120.9 121.1 123.3
n.c. not counted
Source: Australian Bureau of Statistics, Selected Agricultural Commodities
1996-97; Australia, Preliminary, cat. no. 7112.0
Current livestock numbers are well below record levels of 31 million
head of meat cattle in 1976 and 174.3 million sheep in 1970. During the
1990s sheep numbers have fallen dramatically from the near record level
of 173.6 million in 1990 to 121 million in 1995 and 1996. This was due
to the collapse of the Reserve Price Scheme for wool and the severe and
extended downturn in wool prices. It has been more than forty years since
sheep numbers were so low.
Current beef cattle numbers are a little above the average for the last
ten years of 22 million. Herd size has been fairly stable during this
period.
There is a definite regional focus to Australia's beef industry with
nearly half the herd located in Queensland and the Northern Territory.
Another quarter is found in New South Wales and 10 per cent in Victoria.
77 per cent of Australia sheep industry is located in three states: NSW
(35 per cent), Western Australia (23 per cent) and Victoria (19 per cent).
Table 2: Value of livestock industries
($ billion)
1994-95 1995-96 1996-97
Slaughterings
Cattle and calves 4.2 3.6 3.4
Sheep and lambs 0.8 1.0 1.1
Total 5.0 4.6 4.5
Exports
Beef and veal 2.8 2.4 2.1s
Sheep meat 0.4 0.4 0.4s
Total 3.2 2.8 2.5s
s = estimate
Sources: Australian Bureau of Statistics, Value of Principal Agricultural
Commodities Produced, Australia 1996-97, Preliminary, cat. no. 7501.0;
Australian Bureau of Agricultural and Resource Economics, Australian
Commodities, vol. 4, no.3, September 1997.
Apart from the regional characteristics of the Australian meat industry
described above, other key industry features are evident from Table 2.
These are that beef and veal account for firstly, around 80 per cent of
the meat industry in value terms, and secondly about 85 per cent of exports.
In addition Table 2 also shows that exports contribute about 60 per cent
of the value of meat produced in Australia.
Given the significance of the geographic, species and market attributes
referred to, it can therefore be concluded that the beef export industry
in Queensland is the largest single component of the Australian meat industry.
Farm Performance(1)
According to ABARE's 1995-96 farm survey, specialist beef producers,
that is farms engaged mainly in running beef cattle, represent nearly
30 per cent of all broadacre farms. Sheep-beef farms comprise a further
14 per cent of farms while about one quarter are mixed livestock-crop
enterprises.
Specialist beef farms carried nearly three quarters of the beef cattle
on broadacre farms and accounted for 67 per cent of their beef cattle
sales. The mixed livestock-crops and sheep-beef sectors contributed a
further 14 per cent and 13 per cent of sales respectively.
There are two distinct groups of enterprises in the beef industry. The
first are small producers mostly found in the high rainfall and wheat-sheep
zones of southern Australia. Almost half of these carry fewer than 300
cattle and account for only 12 per cent of the cattle on specialist beef
farms.
The second group are larger producers located mostly in Northern Australia.
Almost half are located in Queensland where average farm area is around
32,000 ha and herd size is nearly 1200 head. Feedlots, the majority of
which are located in the wheat-sheep zones of NSW and Queensland are included
in this group. The capacity of the Australian feedlot sector has doubled
over the last six years, causing a major change in the pattern of cattle
finishing and turnoff.
Selected physical and financial measures for recent years for beef industry
farms are shown in Table 3.
Table 3: Australian beef farms: selected measures
(average per farm)
1994-95 1995-96p 1996-97s
Area (ha) 13 179 12 711 na
Beef herd 704 741 na
Beef cattle sold 282 227 na
Cash receipts
- beef cattle 136 678 105 100 na
- other livestock enterprises 3 748 4 510 na
- cropping 6 628 7 930 na
- other cash receipts 17 736 18 610 na
Total cash receipts ($) 164 790 136 150 117 800
Total cash costs 136 923 120 540 107 100
Farm cash income 27 868 15 610 10 800
Farms with negative farm cash 37 45 45
income (%)
Farm business profit -15 044 -17 620 -28 400
Farm capital ($ million) 1.3 1.2 na
Farm business debt 110 936 117 280 115 300
Farm business equity ratio 92 90 na
p = preliminary,s= estimate
Source: Australian Bureau of Agricultural and Resource Economics, Australian
Farm Surveys Report 1997
There is considerable variation in performance between beef
farms as highlighted in Table 4 which provides an analysis of farm performance
by receipt class. One fact of particular note is that about two-thirds
of beef producers have gross receipts of under $100,000 but only account
for 22 per cent of the industry's gross value of production (GVP) whereas
14 per cent of farms have gross receipts of over $200,000 and account
for nearly 60 per cent of GVP.
Of all the sectors in Australia's broadacre agriculture the beef industry
has the "worst" share of industry population to share of GVP ratio in
the under $100,000 gross receiptscategory. This is significant from a
policy perspective because if beef industry policy is targeted at the
main group of producers it may only have a small effect on the industry.
Conversely, if it is targeted at the major production component of the
industry, it may not have much effect on the bulk of producers.
Table 4: Australian beef farms: selected measures by receipt class
1995-96
Gross receipts
under $100 000 $100 000 to $200 over $200 000
000
Area (ha) 1 735 10 810 83 751
Beef herd (no.) 324 811 3 197
Beef cattle sold (no.) 95 279 1 148
Total cash receipts ($) 43 040 138 220 613 690
Total cash costs ($) 46 050 118 950 501 540
Farm cash income ($) -3 010 19 260 112 150
Farm business profit -30 240 -18 710 59 380
($)
Rate of return (%) -2.8 -0.4 3.0
Farm capital ($ 0.8 1.6 3.5
million)
Farm debt ($) 58 780 118 730 456 280
Farm business equity 93 93 85
ratio (%)
Off-farm income ($) 20 200 15 040 20 910
(average per farm)
Source: Australian Bureau of Agricultural and Resource Economics, Australian
Farm Surveys Report 1997
Policy History
Despite its share of crises the meat industry has been the least regulated,
at the Federal level, of Australia's major agricultural industries. This
is due to several reasons. Meat production was not important as a specialist
activity until the 1970s thus there was not the pressure for orderly marketing
arrangements as existed in the wool and wheat industries. Furthermore,
meat is not well suited to a home consumption price scheme because of
the problem of physically separating product for different markets.(2)
Thus the meat industry has always been based on private trading compared
to the statutory monopoly arrangements in the wheat industry and the buffer
stock scheme which operated in the wool industry for many years.
Following is a selected history of policy developments in the meat industry.
The Australian Meat Board (AMB) was first established under the Meat
Export Control Act 1935 and reconstituted under the Meat
Industry Act 1964 with membership being reduced from twelve
to nine. The new Act also contained provisions for meat market development
and diversification. This was in response to proposals from producer organisations.
The AMB had the power to regulate overseas marketing of meat and achieved
this through a licensing system under which the AMB was empowered to control
the kinds of meat exported and the destinations to which sales could be
made. It also had the power to buy and sell meat for the purpose of administering
international agreements and as part of activities to promote and develop
export markets. Prior to 1967 the Board administered the fifteen year
meat agreement with Great Britain and was associated with the development
of access to the United States market.
The Australian Meat and Live-stock Corporation (AMLC) replaced the AMB
on December 1 1977. It was established under the Australian Meat and
Live-stock Corporation Act 1977. It also had limited trading powers,
mainly for trading with centrally planned economies. The AMLC was also
given responsibilities for livestock similar to those exercised for meat.
Also in 1977 the Government introduced the direct subsidy scheme known
as the Beef Industry Incentive Payments. Assistance was paid in proportion
to output, however, with the upturn in beef prices in mid-1978, the initial
reason for the intervention had ceased to exist by the time the scheme
was fully operational.
The next major reforms to meat marketing occurred in 1984 with new legislative
arrangements taking effect from 1 July. Along with changes to the AMLC,
legislation also established the Australian Meat and Live-stock Industry
Policy Council (AMLIPC), the Inspection Policy Council and the Australian
Meat and Live-stock Research and Development Corporation. The rationale
for the creation of this organisational structure was to allow the AMLC
to concentrate on, and confine its efforts to, commercial activities associated
with market development and protection, improved marketing methods and
the promotion of meat and livestock sales. Consequently, responsibility
for general policy advice was removed from the AMLC's functions. This
model was later adopted for the statutory organisation of other agricultural
industries.
The 1984 amendments also introduced a strong corporate/commercial focus
to AMLC operations with requirements for it to prepare Corporate and Operational
Plans and hold Annual General Meetings. Further amendments in 1986 sought
to enhance the statutory structure by removing unnecessary impediments
to the AMLC's commercial effectiveness. The AMLC's requirement for detailed
Ministerial approvals was reduced and replaced by provisions allowing
the Minister to give it general directions with respect to the performance
of its functions or exercise of its powers. The requirement for specific
prior Ministerial approval for a number of functions, such as purchase
of property, staff terms and conditions and borrowings up to $5 million,
was removed.
In December 1994 the Government announced major changes to statutory
arrangements for the meat and livestock industries. The most significant
of these was the establishment of a new statutory body, the Meat Industry
Council (MIC) to take over from the AMLIPC as the peak policy body. Under
the Meat and Livestock Industry Act 1995, which came into
effect on 1 July 1995, the MIC's key functions are to:
- develop a vision and strategic direction for the industry;
- formulate broad industry policy to be followed by the AMLC and Meat
Research Corporation (MRC);
- approve the strategic plans of these organisations;
- set funding levels to be approved at industry AGMs;
- develop directions for industry self regulation;
- evaluate the AMLC's and MRC's programs;
- nominate people for appointment to selection committees; and
- develop a united approach to issues affecting the industry.
The Government stated in the Second Reading Speech to the legislation
that:
the principle behind the reforms is to phase the government out of
the statutory arrangements, through a staged approach of transferring
greater responsibility for industry decision making to itself, and eventually
moving to a non-statutory environment.
Accordingly the legislation included a sunset clause to the statutory
structures of June 30 1998. In addition the legislation removed some significant
functions and powers from the AMLC. These were:
- funding of bodies for consultation purposes;
- the power to trade in meat and livestock; and
- the power to set conditions on the shipping of meat and livestock
from Australia.
The government also stated its intention for a further review commencing
not later than 1 July 1997.
Reform for the Future
This review was brought forward by the incoming Coalition government
which established the Meat and Livestock Industry Reform Steering Committee
and Task Force in May 1996. This body was asked to:
- review the meat and livestock industry's current operational arrangements,
including the costs and delivery efficiency of services provided by
the AMLC, MRC and MIC;
- develop options for future structures; and
- and propose key meat and livestock industry policy and program actions
to facilitate a more internationally competitive red meat industry
in Australia.
This body presented its report, Australian Meat and Livestock Reform
for the Future to the Minister in October 1996. The main principles
behind its recommendations were that the Australian meat industry:
is moving inextricably towards more self-regulation and free market
operations. The role of government is moving to more clearly defined
core functions, but with improved strategic alliances with industry
in delivering these functions. Competition policy has changed the means
by which government functions are performed and will continue to do
so.(3)
The major changes proposed were the separation of regulatory and industry
service functions and the move to a non-statutory structure, with corporations
limited by guarantee under Commonwealth Corporations Law. The report short-listed
three options for the industry's corporate structure.
- Two corporations based on a split between beef and sheepmeat but with
close voluntary operational linkages (the species split approach).
- A single meat corporation with four separate beef marketing, sheepmeat
marketing, research and development and quality systems operational
units.
- A single meat corporation with two separate beef and sheepmeat units
(with research and development quality systems as components of the
species units).
A majority of members of the Steering Committee and Task Force supported
option (a) but a minority preferred option (b).
Another significant feature of the report was the proposal that under
the corporate model, answerability for the levies and taxes would shift
from specific statutory provisions to a combination of provisions in the
Appropriation Act, Corporations Law, a Deed of Agreement between the Commonwealth
and the relevant corporation, and the provisions of the Memorandum of
Association and Articles of Association.
On the meat industry regulation front the report proposed the establishment
of a new national agreement between the Commonwealth and States to co-ordinate
regulatory policy, harmonise standards, and determine the level and structure
of fees and charges for all non-contestable regulatory activities.
Note: Since the release of the report most debate appears to
have centred on the institutional structures, control issues and size
and use of levies. This is somewhat ironic and disconcerting given the
report's observation that institutional structures are of much less
economic and commercial significance than the returns to the industry
from establishing the best possible policies and programs for the future.
Proposed Arrangements - Key Features
Note: The information contained in the following outline was
extracted from Media Releases of the Minister for Primary Industries
and Energy of 18 March 1997 and the Second Reading Speech to the Australian
Meat and Live-stock Industry Bill 1997.
The reader should recognise that there is much about Australia's future
meat marketing arrangements which is not provided for in the current legislative
package and arrangements outlined by the Government. Many of the specific
details will be contained in the MOU, the Deed of Grant and the Memorandum
and Articles of Association of the Producer Corporation, Processor Corporation
and Livestock Exporter Corporation. These will not be subject to Parliamentary
attention but will be critical in determining the success of the policy.
Of particular concern is the MOU, which is central to sectoral co-operation
and hence the success of the Government's policy, but unenforceable.
Memorandum Of Understanding (MOU)
- The MOU will consist of a statement of principles and supporting schedules
outlining the new arrangement to which industry sectors have agreed
to.
- The MOU will commit all industry sectors to:
- the principles laid down in the meat industry strategic plan;
and
- co-operative and co-ordinated activities in respect of food
safety and quality, product integrity, and the AUSMEAT language.
- The MOU will also cover those aspects of promotion and market services
which are of mutual benefit to all sectors of the industry.
- The MOU will outline intended joint function areas, core function
areas, and set out the guiding principles for the operation of the Red
Meat Advisory Council.
- The MOU will primarily be an agreement between industry peak bodies
and the federal Government.
Deed Of Grant
- The Deed of Grant is an agreement between the federal Government and
the Producer Corporation which will set out the conditions upon which
levy monies and matching funds are passed to the Producer Corporation
and how they may be applied.
- The Deed of Grant will specify accountability requirements.
Producer Corporation
- Establishment of a Producer Corporation.
- The Producer Corporation will provide a range of services to the Australian
meat and live-stock industry including professional guidance, service
delivery and advice. The Producer Corporation will also develop initiatives
and proposals and advise industry and government on key industry issues.
- All sectors of the industry will independently enter into contracts
with the Producer Corporation for specific services.
- The Producer Corporation will have discrete operating units with responsibilities
for research and development, food safety, integrity of description
and eating quality, maintenance of AUSMEAT language, and marketing and
promotion. There will be separate operating units for beef and sheepmeat
marketing and promotion.
- The Producer Corporation will be funded through cattle, sheep and
goat producer levies.
- The Producer Corporation will be administered by a single board. Initially
the board will be nominated by a selection committee drawn from nominees
of producer organisations. Future selections will be determined by levy
payers and the Minister. The Board will have responsibility for all
jointly funded research and development, food safety and quality activities,
including grading and maintenance of the AUSMEAT language and a range
of related market access issues. The Board will be accountable to an
Annual General Meeting (a 66% majority of votes will be sufficient to
dismiss the Board) and through external audits.
-
Red Meat Advisory Council
- Establishment of a Red Meat Advisory Council.
- The proposed functions of the Red Meat Advisory Council are:
- to provide advice to the Minister;
- to be the custodian of the MOU and Meat Industry Strategic Plan;
- co-ordinate, develop and assess the performance of the Meat Industry
Strategic Plan;
- to be the trustee (within a deed of trust) for industry reserves
currently held by the statutory corporations and ensure the investment
of those monies; administer arrangements to fund peak industry councils,
including the distribution of funds (from investment reserves) to
peak councils; and
- to provide an interface for resolving sectoral differences or problems.
- The framework in which the Red Meat Advisory Council will operate
will be agreed to in the MOU.
- The Red Meat Advisory Council will be funded by peak industry organisations.
- The membership of the Red Meat Advisory Council will comprise peak
industry organisations. The Directors of the six peak industry councils
will be voting members of the Red Meat Advisory Council and representatives
of processor and livestock exporter corporations will be participants.
Peak Industry Councils
- Peak industry councils will carry responsibility for decisions on
levels of levies and non-statutory funding for the Producer Corporation.
- Peak industry councils will carry responsibility for the development
of their sector of the Australian meat and live-stock industry's input
into the Meat Industry Strategic Plan and implementation.
- Peak industry councils will receive certain funds from investment
of industry reserves.
Processor Corporation
- Establishment of a Processor Corporation.
- The role of the Processor Corporation will be to negotiate and co-ordinate
participation in collective core functions to be carried out in partnership
with the Producer Corporation.
- Processor involvement in industry activities will be through a system
of willing partnerships.
- In respect to funding, processors will contribute agreed amounts to
core collective function funding, but will not be obliged to fund all
promotional or other projects which they perceive to be of no benefit
to them.
- The Government will re-impose levies to fund agreed activities if
processor contributions fail to materialise.
Livestock Exporter Corporation
- Establishment of a Livestock Exporter Corporation.
- The role of the Livestock Exporter Corporation will be to negotiate
and co-ordinate participation in collective core functions to be carried
out in partnership with the Producer Corporation.
- Livestock exporter involvement in industry activities will be through
a system of willing partnerships.
- In respect to funding, processors will contribute agreed amounts to
core collective function funding, but will not be obliged to fund all
promotional or other projects which they perceive to be of no benefit
to them.
The federal Government will re-impose levies to fund agreed activities
if processor contributions fail to materialise.
Control of meat and live-stock exports
Definitions
Clause 7 provides definitions of certain of the terms used in
proposed Part 2. Major definitions include:
- cattle producer - a person engaged in raising or fattening
cattle;
- exporter - a person engaged in exporting meat or live-stock;
- live-stock producer - a person engaged in raising or fattening
live-stock; and
- premises - any place, vehicle, vessel or aircraft.
Note: The above definitions are identical to those in section
52 of the Meat and Live-stock Industry Act 1995 which will be
repealed by the Australian Meat and Live-stock Industry (Repeals and
Consequential Provisions) Bill 1997.
Clause 8 provides a definition of meat or live-stock
export business. Basically, a person will be taken to be a participant,
or who would be a participant, in the management or control of a meat
or live-stock export business, or proposed meat or live-stock export business,
of another person if:
- they have or would have the power to direct the operations, or an
important or substantial part of the operations, of the business or
proposed business; or
- they have or would have the power to direct someone who has the power
to direct the operations, or an important or substantial part of the
operations, of the business or proposed business.
The meat export business of a person includes operations connected with
the slaughtering of animals, dressing of carcases, or the treatment, packing,
carriage, handling or storage of meat (including meat unfit for human
consumption) that either are, or are proposed to be, carried out wholly
or partly in connection with the business.
Note:The above definition of meat or live-stock business is
identical to that contained in section 60 of the Meat and Live-stock
Industry Act 1995 which is being repealed by the Australian Meat
and Live-stock Industry (Repeals and Consequential Provisions) Bill
1997.
Export licences
Division 2 of Part 2 of the Bill (clauses 10-25) deals
with meat and live-stock export licences. The major provisions:
- Provide the Secretary (ie. the Secretary of the Department of Primary
Industries and Energy) with power to grant an export licence (clause
10).
- Require that the Secretary not grant an export licence unless satisfied
that certain requirements are satisfied, including that the person or
corporation seeking the licence is of integrity, competent to hold a
licence and of sound financial standing (clause 12).
- Provide, where a grant is refused, that notice of the decision be
given to the applicant and such decision be reviewable by the Administrative
Appeals Tribunal (clauses 13-14).
- Provide the Secretary with power to make and give certain orders and
directions that must be complied with by export licence holders. Orders
and directions may be made with respect to matters including the quality,
standard and grading of meat and live-stock, the terms and conditions
of the sale of meat and live-stock, and the sale and distribution of
meat and live-stock after export. Orders and directions may prohibit
or require certain actions of export licence holders, including not
exporting, or offering for sale for export, meat or live-stock, or requiring
export licence holders to obtain prior approval from the Secretary for
each export, or each export of a particular kind (clause 17).
This provision is subject to disallowance by the Parliament (clause
19).
- Where the Secretary considers it necessary or desirable to ensure
that Australian producers receive a fair return for their produce, he/she
may prohibit, either absolutely or unless particular conditions are
complied with, the export, or sale for export, of meat or live-stock
to a monopoly importer (clause 18). These powers may also be
exercised where the Secretary is satisfied that use of the powers would
be good for the development, or further development, in a foreign country,
of a market for meat and live-stock and would be in the best interest
of the meat and live-stock industry. This provision is subject to disallowance
by the Parliament (clause 19).
- Provide the Secretary with power to cancel or suspend export licences
in certain circumstances, including where the export licence holder
has ceased to be a person or corporation of integrity, or have breached
a condition of an export licence. A notice of suspension of cancellation,
must include reasons for the decision and be given to the export licence
holder. Decisions to suspend or cancel an export licence are subject
to review by the Administrative Appeals Tribunal (clauses 23-24).
Note: Power in relation to export licences is currently vested
in the Australian Meat and Live-stock Corporation. Under the proposed
amendments this power will vest in the Secretary. Apart from this major
difference, the effect of the provisions is identical to those contained
in subdivision B of Part 3 of the Meat and Live-stock Industry Act
1995, which is being repealed by the Australian Meat and Live-stock
Industry (Repeals and Consequential Provisions) Bill 1997.
Export Quotas
Division 3 of Part 2 of the Bill (clauses 25-33) deals
with meat and live-stock export quotas. The major provisions:
- Provide the Secretary with power to establish and administer export
quotas, including in relation to the body that is to administer the
quotas, the time for which quotas are to operate, the way quotas are
to be allocated, the transfer of quotas, or parts of quotas, and the
surrender or cancellation of quotas, or parts of quotas (clause 27).
- Provide the Secretary with power to cancel a quota, or part of a quota,
and vary the period of validity of a quota, the quantity or description
of goods covered by a quota, and the condition or conditions attaching
to a quota (clause 28).
- Provide that where a quota was bought and subsequently cancelled,
or varied, so as to reduce the rights granted by the quota, the Commonwealth,
at the Ministers discretion, can reimburse the holder a proportionate
amount of the sale price (clause 29).
- Provide that decisions of the Secretary cancelling a quota or part
of a quota, varying a quota, or refusing to vary a quota on application
of a quota holder, are subject to review by the Administrative Appeals
Tribunal (clause 30).
- Require holders of export licences to comply with subsection 5(2)
of the Australian Meat and Live-stock (Quotas) Act 1990. That
subsection requires export licence holders to comply with a notice limiting
the amount of goods, or a specified class of goods, that may be exported
to a specified country (clause 31).
Note: Power in relation to export quotas is currently vested
in the Australian Meat and Live-stock Corporation. Under the proposed
provisions this power will vest in the Secretary. Apart from this major
difference, the effect of the provisions is largely identical in effect
to those contained in subdivision C of Part 3 of the Meat and Live-stock
Industry Act 1995, which is being repealed by the Australian Meat
and Live-stock Industry (Repeals and Consequential Provisions) Bill
1997.
Enforcement
Division 4 of Part 2 of the Bill (clauses 34-57) contains
standard compliance monitoring provisions relating to the powers of inspectors
to search premises, seize things and require the giving of information
or production of documents. Proposed Division 4 of Part 2 contains
a number of significant offence provisions including:
- It is an offence, punishable by a maximum term of five years imprisonment,
for a person who is not the holder of a meat or live-stock export licence
to intentionally, and without reasonable excuse, to export meat or live-stock
from Australia (clause 54).
- It is an offence, punishable by a maximum term of twelve months imprisonment,
for a person who is not the holder of a meat or live-stock export licence,
without reasonable excuse, to intentionally or recklessly hold themselves
out as a licence holder or as someone who can export meat or live-stock
from Australia. The same penalty will apply to non-licence holders who
without reasonable excuse, intentionally or recklessly contract to export
meat or live-stock (clause 56).
Note: The effect of the proposed provisions is largely identical
to those contained in Division 7 of Part 3 of the Meat and Live-stock
Industry Act 1995, which is being repealed by the Australian Meat
and Live-stock Industry (Repeals and Consequential Provisions) Bill
1997.
Industry Marketing and Research Bodies, and Approved Donors
The Minister is accorded power under clauses 60-61 to declare
a body to be either the industry marketing body, industry research body,
both a marketing and research body, or an approved donor. Declarations
are subject to certain pre-conditions, including:
- that the body or donor is a corporation limited by guarantee under
the Corporations Law;
- after regard to the body or donor's membership, company documents
and any undertakings it has given, agreements or arrangements it has
entered into, whether it can appropriately represent the industry's
marketing, promotion, and research and development interests; and
- that the body or donor has consented to the declaration.
Ministerial declarations are subject to disallowance by the Parliament.
Note: The declaration of a body to be either the marketing
or research body is important because only declared bodies will be recipients
of levy/charge amounts or be eligible to receive Commonwealth matching
research and development funds.
Division 3 of Part 3 of the Bill (clauses 63-68) deals
with the financing of the marketing and research body and the purposes
funds can be put to.
Marketing body funds comprise amounts of levy and charge receipts received
by the Commonwealth. Research body funds comprise:
- levy and charge receipts received by the Commonwealth; and
- amounts, from the Commonwealth up to 50% of research body expenditure
on industry research and development and amounts received from approved
donors for industry research and development, or up to 0.5% of the gross
value of production of the meat and live-stock industry, which ever
is less (clauses 63-64 & 66).
Marketing and research body funds can only be used for particular purposes,
including payments to the Commonwealth for costs relating to the collection
of levies and charges, industry marketing and promotion, research and
development, and such other purposes as are prescribed. Prescribed allowable
purposes are subject to disallowance by Parliament (clause 67).
Ministerial directions
Clause 69 provides the Minister with power to direct a prescribed
body (ie. a marketing or research body, or an industry body prescribed
by regulations made under the proposed Australian Meat and Live-stock
Industry (Repeals and Consequential Provisions) Act 1997 while
it holds money paid it in accordance with that proposed Act) to do certain
specified things. Directions can only be given where the Minister is satisfied
it is in the national interest to do so, and prior to giving the direction,
the Minister has given the directors of the body an adequate chance to
discuss the matter with him/herself. Directions must relate to one or
more of the following:
- trade and commerce with other countries, and among the States;
- quarantine;
- foreign corporations, or trading or financial corporations formed
within the Commonwealth;
- external affairs; or
- any matters with respect to which the Parliament has constitutional
power.
A direction must not require the body to incur expenses greater than
amounts paid to it under this proposed Act and the proposed Australian
Meat and Live-stock Industry (Repeals and Consequential Provisions) Act
1997.
Directions must be tabled in each House of the Parliament within 15
sitting days of the directions being given, except where the Minister
determines that tabling would, or would be likely to, prejudice the body's
commercial activities, or would, or would be likely to, prejudice the
national interest.
Note: While clause 69 has substantially the same effect
as the current section 221 of the Meat and Live-stock Industry Act
1995, it may be noted that it is proposed to increase the
period within which directions must be tabled in the Parliament from
6 sitting days to 15 sitting days. No rationale is provided in either
the Explanatory Memorandum or the Second Reading Speech to the Bill
for this increase.
Above all is the need for industry to develop a shared vision for
the future which enables all segments to pull together and take advantage
of the opportunities that have been identified.(4)
On aspect where there is no dispute is that there is not unity within
the meat and live-stock industry on these changes. Not only was their
division between members of the Steering Committee and Task Force but
the Minister has readily expressed regret that industry has not been able
to reach full consensus on the new structures. Further, these proposals
have attracted strong criticism from the former Chairman of the AMLC and
a number of other industry leaders. These have been widely reported in
the rural media.
It needs to be remembered that the meat marketing scheme now being proposed
had its genesis in the 1995 arrangements described above. It is doubtful,
however, that anyone in the industry envisaged then the system now being
proposed.
One somewhat curious element is the contribution ascribed to the 1994
Industry Commission (IC) report into Meat Processing. Both in 1995 and
currently this report is cited as a factor in the announced changes. However,
the report primarily dealt with the processing sector and the only change
recommended by the IC in relation to the industry's statutory bodies was
the establishment of a Meat Industry Review Authority under the AMLIPC
to evaluate AMLC and MRC programs. While a merger of the AMLC and MRC
was suggested as a way of producing savings and closer coordination, it
was also acknowledged that there were valid reasons for them not to be
merged.
There is much about Australia's future meat marketing arrangements which
is not provided for in the current legislative package. Many of the specific
details will be contained in the MOU, the Deed of Grant and Memoranda
and Articles of Association. These will not be subject to Parliamentary
attention but will be critical in determining the success of the policy.
Of particular concern is the MOU, which is central to sectoral cooperation
and hence the success of the Government's policy, but unenforceable.
- This section is based closely on ABARE's Australian Farm Surveys,
Report 1997.
- Watson A.S. and R.M. Parish, Marketing Agricultural Products in
Agriculture in the Australian Economy, D.B. Williams (Ed), 2nd
edition, 1982
- Australian Meat and Livestock Reform for the Future: xix
- Dr Geoff Miller (then) Secretary of the Department of Primary Industries
and Energy, writing in the foreword to Australian Beef.
Ian Ireland and Peter Hicks
4 November 1997
Bills Digest Service
Information and Research Services
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contained in this paper is provided for use in parliamentary debate and
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and their staff but not with members of the public.
ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library, 1997.
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Last updated: 11 November 1997
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