Bills Digest No. 52 2002-03
Australian Animal Health Council (Live-stock Industries) Funding Amendment
Bill 2002
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
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Australian
Animal Health Council (Live-stock Industries) Funding Amendment Bill 2002
Date Introduced:
19 September 2002
House:
House of Representatives
Portfolio:
Agriculture, Fisheries and Forestry
Commencement:
The measures in Schedule 1 commence on a day
to be fixed by Proclamation. The remaining provisions commence on Royal
Assent.
Purpose
To amend the Australian Animal
Health Council (Live-stock Industries) Funding Act 1996 to allow for
charges and levies to be paid to Australian Animal Health Council Ltd
for expenses and payments under the Emergency Animal Disease Response
Agreement.
Over the last decade there have been a number of major
animal disease outbreaks, both in Australia and overseas, which have warranted
considerable attention and action by Australian animal health agencies
and livestock industries. They have also attracted strong public interest
due to actual and possible threats to public health.
There have been various examples of major outbreaks in
Australia. Examples include outbreaks of Newcastle Disease in chickens
in 1998. In the mid 1990s there was an outbreak of Hendra virus (previously
called Equine Morbillivirus), a new horse disease which caused two human
deaths as well as some horse deaths. There have also been deaths in pilchards
around the Australian coastline in 1995 and 1998.
Overseas, outbreaks of Foot and Mouth Disease (FMD) and
Bovine Spongiform Encephalopathy (BSE) (mad cow disease) in Europe, particularly
in the United Kingdom, have had domestic reverberations even though Australia
has been free of FMD for over a century while BSE, first detected in the
United Kingdom in 1986, has never been found in Australia.
Such has been the concern of Australian governments and
livestock industries about FMD and BSE that the issue of preparedness
for animal disease emergencies has been on the agenda of high level Ministerial
meetings for over eighteen months. The implications of BSE for Australia
were considered by the Agriculture and Resource Management Council of
Australia and New Zealand (ARMCANZ) in March 2001. This meeting also moved
to strengthen Australia's approach to FMD by agreeing to the establishment
of a National Management Group, among other things, to examine risk and
ensure systems are in place to minimise FMD risk. In May 2001 a special
meeting of ARMCANZ was held to further discuss FMD/BSE issues. This was
in preparation for consideration of these matters by the Council of Australian
Governments in June 2001.
One of the actions undertaken as a result the deliberations
by the Ministerial bodies was a simulated outbreak of FMD conducted in
September 2002. Known as 'Exercise Minotaur', the simulation was an exercise
focusing on testing decision-making and the integration of Australia’s
national arrangements to deal with a large-scale animal disease emergency.(1)
Australia's preparedness to deal with animal disease emergencies centres
on the Australian Veterinary Emergency Plan (AUSVETPLAN), a nationally
agreed arrangement for responding to an outbreak, or suspected outbreak,
of an exotic animal disease.
One of the central elements of AUSVETPLAN is financial
arrangements for funding the initial response to a disease emergency.
The CSCSA had its origins in 1955 when the Commonwealth and States entered
into an agreement to share the costs of eradicating FMD should an outbreak
occur, including compensation payments to the owners of stock which had
to be destroyed.
Subsequently, the CSCSA was extended to include a total
of twelve serious livestock diseases. Under the terms of the CSCSA the
total cost of eradication is borne 50 percent by the Commonwealth and
50 percent by the States/Territories with each State/Territory paying
a fixed proportion according to a formula established for each disease
covered.
Although the CSCSA was last revised less than a decade
ago (October 1994), it has been recognised for some years that the arrangements
therein did not adequately address all the relevant issues including:
- how new diseases, such as the Hendra virus, were to be dealt with
and the risks that any uncertainty arising from unresolved funding concerns
may have adverse consequences in terms of the nature and timing of a
response.
- concerns by Government that livestock industries, as beneficiaries
of the expenditure, were not contributing to the cost of services.
- failure of the CSCSA to formally include the livestock industries
in decisions about a proposed response to a disease outbreak.
Consequently, in September 1997, the Australian Animal
Health Council Ltd (AAHC) commissioned the Centre for International Economics
(CIE) to develop an analytical and decision support model for the funding
of emergency animal disease management responses. The CIE Report, which
was completed in March 1998 and endorsed by the AAHC Board, was distributed
in April 1998 to AAHC members for their consideration. AAHC members held
a workshop in August 1998 where the proposed framework and principles
for a new agreement were critically examined and accepted in principle.
Despite this process, several outstanding concerns remained
in relation to the categorisation of diseases, the management of multi-species
diseases, the start and end dates for outbreaks and the costs to be covered
by the proposed new Deed of Agreement. An Expert Group was subsequently
appointed to examine these concerns and report back with recommendations
on how to proceed. A second workshop was held in April 1999 and the final
report Expert Group Report was received in June 1999.
Meanwhile in March 1999 ARMCANZ endorsed the following
as key principles underpinning a national funding model for management
of animal diseases emergencies:
- Key determinants for cost sharing between Government and industry:
- public health
- trade impact
- animal production benefits, and
- environmental impact.
- Key principles underpinning the proposed framework for handling emergency
funding arrangements:
- immediate reporting of suspected serious diseases and rapid response
- disease incursions capable of being eradicated
- beneficiary pays
- equitable burden sharing
- no one better or worse off as a result of compensation for immediate
losses (as it relates to early reporting)
- certainty in funding and compensation
- consistency, integration and efficiency
- stakeholders who share the cost of emergency management should have
a role in decision making
- accountability to stakeholders who fund emergency management, and
- simplicity.
The final outcome of this process has been the Emergency
Animal Disease Response Agreement (EADRA) which was finalised in March
2002(3) and ratified by all governments and livestock industries.
It replaces the previous CSCSA and is designed to ensure a rapid and efficient
response to exotic animal disease incursions in Australia's valuable livestock
sector. The agreement is a world first and includes mechanisms for formal
government and industry consultation on resource allocation, funding,
training and risk mitigation.
With regards to funding, EADRA provides certainty of
funding for the initial response to a disease incursion or outbreak through
a partnership of the Commonwealth, State and Territory governments and
major livestock industry organisations. It specifies 63 diseases classified
into four categories with cost sharing between governments and industries,
depending on which party has the primary interest in control, measured
against the impact on human health and socio-economic concerns, the environment
and livestock production. Categorisation can be reviewed and new diseases
added as circumstances change.
The costs of each party are managed by applying an 'agreed
limit' that ensures intense examination of costs and benefits before committing
to further national resources. The livestock industry contributions are
obtained by means appropriate to that industry but generally by an agreed
zero based levy.
Australian Animal Health Council Limited (AAHC) is an
unlisted public company limited by guarantee. AAHC Limited was established
following agreement on 18 August 1995 by ARMCANZ. Its objects, as specified
in its Memorandum of Association, include to:
- assist the Australian animal health service system in maintaining
acceptable national animal health standards aimed at meeting consumer
needs and market requirements at home and overseas
- advise and advocate action to industry and government on: strategic
national animal health priorities; animal health system delivery arrangements
and resources; and nationally consistent animal health policy
- establish and manage a national animal health information system
- develop, manage and evaluate national animal health programs
- have an involvement in residue related issues as they relate to animal
health and impact on commercial performances
- have international status as the national animal health policy and
advisory body
- undertake commissioned animal health service projects, and
- arrange for, or to assist in, research and development into matters
pertaining to animal health.
The Articles of Association of AAHC provide that there
are three different groups of members of the company, each with equal
status. These are the Commonwealth, the State and Territories and industry
organisations. Industry organisations include the Australian Chicken Meat
Federation, Australian Egg Industry Association, Australian Dairy Farmers'
Federation, Australian Veterinary Association Limited, Cattle Council
of Australia, Pork Council of Australia Limited, Sheepmeat Council of
Australia, Australian Horse Council and Wool Council of Australia.(4)
Schedule 1 amends the Australian Animal Health
Council (Live-stock Industries) Funding Act 1996 (the Act). For background
on the Act, see Bills Digest No. 2 of 1996-97.(5)
Item 3 adds an element to the existing provision
governing payments to AAHC. In the new arrangements, levies and charges
will be imposed under regulations to the Primary Industries (Excise)
Levies Act 1999 and the Primary Industries (Customs) Charges Act
1999 in order to support the Emergency Animal Disease Response Agreement
(EADRA).
The EADR levy and EADR charge, and the penalties for
failure to pay, are to be included in the list of amounts payable to AAHC
(proposed subsection 4(2)).
These monies are to be used by AAHC as follows:
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first priority
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- expenses incurred by AAHC in the financial year
the monies are received
- administrative costs incurred by AAHC over time
in relation to the monies
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second
priority
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- payments on behalf of non-government parties(6)
for liabilities under EADRA
- payments to or on behalf of Plant Health Australia
Ltd in relation to honey(7)
|
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third priority
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- payments to animal product research and development
organisations
- related payments for the promotion or maintenance
of animal health
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In relation to 'third priority' payments, a body may
be declared as the designated body for the relevant animal product under
the regulations. AAHC may only make payments at the request of the body
and in accordance with its directions (proposed subsection 4(8)).
Item 4 deals with refunds. A refund may be paid
if a person pays too much levy or charge.
Where a refund is paid, the refunded amount is treated
as an overpayment to AAHC (proposed subsection 6(2)) and
a debt to the Commonwealth (proposed subsection 6(3)) which
may be set off against future payments to AAHC (proposed subsection
6(4)). If the future payments may not cover the refunded amount,
there are arrangements to allow the debt to assume first priority among
current year expenses (proposed subsection 6(5)) and for
discharge of the debt in relation to any of the arrangements made in this
regard.
- Exercise Minotaur did not include testing of actual field operations
to combat FMD, such as closing-off roads or quarantining farms, or involve
actual community liaison.
- This section draws heavily on the relevant website http://www.aahc.com.au/eadp/funding.htm
[14/10/02]. Further information on the EADRA can be obtained from this
site.
- Evidence of the complex and exhaustive nature of the process that
has been undertaken is the fact that 1 July 2002 was originally the
target date for a new agreement.
- This text is extracted from Ian Ireland, Australian Animal Health
Council (Live-stock Industries) Funding Bill 1996, Bills
Digest No. 2 1996-97.
- ibid.
- These bodies must be 'concerned with the production of animal product'.
- These payments relate to plant diseases that are, may be or may have
been spread by bees.
Peter Hicks and Nathan Hancock
16 October 2002
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 2002
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