Bills Digest No. 3 2004-05
Agriculture, Fisheries and Forestry Legislation
Amendment Bill (No.2) 2004
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
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Agriculture,
Fisheries and Forestry Legislation Amendment Bill
(No.2) 2004
Date
Introduced: 23 June 2004
House: House
of Representatives
Portfolio: Agriculture, Fisheries and Forestry
Commencement: The operative provisions of the Bill commence on Royal Assent.
Some technical provisions commence retrospectively.
The purpose of this Bill is to amend the Australian
Meat and Live-stock Industry Act 1997 (the AMLI Act) to allow the
declaration of a marketing body and a research body dedicated to the live-stock
export sector of the live-stock industry. These bodies would then be
able to receive revenue derived from compulsory charges applied to the
live-stock export industry from time to time. This will give effect to
a recommendation of the Livestock Export Review (Keniry Report).
The live-stock export industry reached a value of over $1 billion in
2002. Activity has eased subsequently due to a number of factors, but
the industry remains of significance.(1) In 2002-2003 live-stock
exports represented about 3% of the gross value of agricultural production.
In gross value terms the industry was similar to sugar cane and worth
slightly more than the poultry and cotton industries.(2)
It is also significant to note the relative importance of the live-stock
export industry as an aspect of the red meat industry. In the 5 years
to 2002, the total value of red meat exports averaged around $5 billion
each year. All live cattle, sheep and goat exports combined constituted
around $1 billion on average each year.(3)
A review of the livestock export industry (the Review) was announced
on 10 October 2003 by the Minister for Agriculture, Fisheries and Forestry.
This followed the events surrounding the voyage of the Cormo Express
and its cargo of 54,000 live sheep. The shipment was rejected in Saudi
Arabia and eventually unloaded in Eritrea at a cost to the Government
of about $10 million.(4)
A number of recommendations were made by the Review. On 30 March 2004
the Minister for Agriculture, Fisheries and Forestry announced that the
Government had accepted most of the recommendations in full and the remainder
with modification. Most of the legislative changes required to give effect
to the Government’s response to the Review are contained in the Agriculture,
Fisheries and Forestry Legislation Amendment (Export Control) Bill 2004.(5)
The amendments contained in this Bill are designed to give effect to
the second aspect of Recommendation 2 of the Review, that is:
Industry should be responsible for research and development
and management of quality assurance systems to support its members translate
best practice standards into outcomes consistent with best practice:
-its activities should be funded by compulsory levies.(6)
Section 60 of the AMLI Act currently allows the Minister to declare a
body to be the marketing body for the meat and live-stock industry and
to declare a body to be the research body for the meat and live-stock
industry. Subsection 60(3) permits the Minister to declare the same body
to be both the marketing body and the research body, but expressly prohibits
the declaration of more than one marketing body or more than one research
body at any one time. The amendments made by this Bill to the AMLI Act
will allow the declaration of a marketing body or a research body for
the live-stock export sector of the industry in addition to the marketing
body or research body for the meat and live-stock industry generally.
This will enable the live-stock export sector of the industry to take
more responsibility for marketing and research relating to the requirements
of that sector of the industry.
The research body for the meat and live-stock industry currently receives
funding on two bases (under sections 64 and 66 of the AMLI Act). Funding
under section 64 of the AMLI Act relates to compulsory charges imposed
on the industry under customs and excise legislation. Funding under section
66 relates to the Commonwealth ‘matching’ funds expended by the research
body on specified purposes (principally research and development).
Under section 64 of the AMLI Act the Commonwealth is required to pay
to the research body amounts equal to levies received by the Commonwealth
under various provisions of the Primary Industries (Excise) Levies
Act 1999 and charges received by the Commonwealth under various provisions
of the Primary Industries (Customs) Charges Act 1999 (the Customs
Charges Act).
The live-stock export sector is currently not required to pay compulsory
levies. Provision for charges under the Customs Charges Act has been
made but the rate has been set at zero.(7) Instead funding
for research and marketing has been obtained from voluntary contributions.
The recommendation of the Keniry Report that activities of the live-stock
export research body be funded by compulsory charges is to be given effect
through amendment of the relevant regulations.
Section 66 of the AMLI Act requires the Commonwealth to pay amounts to
the research body that are determined by reference to the amounts paid
by that body for industry research and development purposes and other
specified purposes. These are referred to in the industry as ‘matching
funds’ (the amounts to be paid by the Commonwealth are one-half of the
amounts paid out by the research body for research and other specified
purposes, so ultimately one-half of the total cost is met by the research
body and one-half by the Commonwealth).
Under the Bill matching funds will continue to be directed to the industry
research body (and not to the live-stock export research body). The Explanatory
Memorandum states that this:
reflects an industry position that the most appropriate
body for coordinating the delivery of research activity on behalf of
the industry remains MLA [Meat and Live-stock Australia]. The Bill
will therefore provide that MLA, or the body determined to be the industry
research body, will be the only body eligible to receive Commonwealth
matching funds for research.(8)
Items 1 to 4 of Schedule 1 insert in section 58
of the AMLI Act definitions of ‘industry marketing body’, ‘industry research
body’, ‘live-stock export marketing body’ and ‘live-stock export research
body’. These facilitate the distinction between the body or bodies that
will deal with marketing and research for the live-stock industry generally
and the body or bodies that will deal with marketing and research for
the live-stock export sector of the industry.
Item 7 of Schedule 1 inserts provisions in section 60 of
the AMLI Act that allow the Minister to declare a body to be the live-stock
export marketing body or the live-stock export research body. The Minister
can declare a body to be both the live-stock export marketing body and
the live-stock export research body. However, the Minister cannot declare
one organisation to be not only the live-stock export marketing body and/or
the live-stock export research body, and also the industry marketing body
and/or the industry research body.
Item 10 of Schedule 1 inserts criteria of which the Minister
must be satisfied in order to declare a body to be the live-stock export
marketing body or the live-stock export research body. These mirror the
criteria that currently apply to the declaration of a body as the marketing
body or the research body for the overall live-stock industry.
Item 21 of Schedule 1 inserts new sections 64A and
64B into the AMLI Act. These provide for amounts of charge received
by the Commonwealth from the live-stock export industry (under the Customs
Charges Act) to be paid to the live-stock export marketing body and the
live-stock export research body.
Item 23 of Schedule 1 converts references in section 66
of the AMLI Act to the ‘research body’ to references to the ‘industry
research body’.
Item 26 of Schedule 1 inserts new subsections 67(3)
and 67(3B) into the AMLI Act. These provisions restrict the purposes
for which the live-stock export marketing body and the live-stock export
research body may spend money received from the Commonwealth under sections
64A and 64B. These restrictions mirror those currently imposed on the
marketing body and the research body for the industry generally.
Items 31 to 64 of Schedule 1 amend the Customs Charges
Act to reflect the fact that amounts collected by the Commonwealth under
this Act that were previously paid to the marketing body for the industry
and the research body for the industry will now be paid to the live-stock
export marketing body and the live-stock export research body.
New section 64A will provide for amounts of charge received by the Commonwealth
from the live-stock export industry to be paid to the live-stock export
research body. Section 66 of the AMLI Act currently provides for payment
by the Commonwealth to the research body for the industry of additional
amounts (‘matching funds’) determined primarily by reference to the amounts
expended by the research body on research. Under the Bill matching funds
will be payable only to the industry research body. That is, they will
not be payable to the live-stock export research body for amounts expended
by that body on research. This will have the effect that if the live-stock
export research body expends moneys on research directly (rather than
via the industry research body) the Commonwealth will not be required
to pay matching funds in relation to that research. The Explanatory Memorandum
appears to suggest that there is an expectation that the live-stock export
research body would arrange for research through the industry research
body;(9) however this is not required by the legislation.
Where the live-stock export research body arranges for research through
the industry research body, the amounts payable by the Commonwealth will
be determined by reference to amounts paid out by the industry research
body, not by reference to amounts paid by the live-stock export research
body to the industry research body. It is not clear what, if any, difference
this distinction would make in practice.
-
The scope and nature of the live animal export industry are outlined
in Peter Hicks and Jerome Davidson, ‘Agriculture, Fisheries and Forestry
Legislation Amendment (Export Control) Bill 2004’ Bills Digest,
no.165, Parliamentary Library, Canberra, 2003-04. http://www.aph.gov.au/library/pubs/bd/2003-04/04bd165.pdf
(site visited 20 July 2004).
-
ibid p. 1.
-
J Keniry et al Livestock Export Review A Report to the Minister
for Agriculture, Fisheries and Forestry, 23 December 2003 p. 13.
http://www.daff.gov.au/content/publications.cfm?Category=Animal%20fixand%20Plant%20Health&ObjectID=056153D8-2885-4ACD-9A0BF0E15B1B6DDB
(site visited 20 July 2004).
-
The events surrounding the voyage of the Cormo Express are summarised
in Hicks and Davidson, op. cit. pp. 3-4.
-
The Digest in respect of this Bill (Hicks and Davidson, op.
cit.) is available at http://www.aph.gov.au/library/pubs/bd/2003-04/04bd165.pdf
(site visited 20 July 2004).
-
Keniry op. cit. p. 38.
-
ibid. pp. 2-3.
-
Explanatory Memorandum p. 3.
-
ibid. p. 3.
Jennifer Nicholson
28 July 2004
Bills Digest Service
Information and Research Services
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