Agriculture, Fisheries and Forestry Legislation Amendment Bill (No.2)
2004
Agriculture,
Fisheries and Forestry Legislation Amendment Bill (No.2) 2004
Date Introduced:
17 November 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.
To amend the Australian Meat and
Live-stock Industry Act 1997, the Primary Industries (Customs)
Charges Act 1999, and the Primary Industries (Excise) Levies
Act 1999 to allow an industry organisation representing live-stock
exporters to be declared as a marketing body and as a research body
for the purpose of receiving revenue raised by compulsory levies applied
to the live-stock export industry. The amendments will give effect to
a recommendation of the Livestock Export Review (the Keniry review).
This Bill is the same as the Bill of the same name
introduced into the House of Representatives on 23 June 2004, with the
following two additions:
-
Item 28 adds a new Division 4 ‘Reporting to Parliament in
relation to live-stock export bodies’, and
-
Schedule 2 deals with ‘Prescribed animals for purposes of
certain definitions in the Australian Meat and Live-stock Industry
Act’.
The original Agriculture, Fisheries and Forestry Legislation
Amendment Bill (No.2) 2004 was introduced into the House of Representatives
on 23 June 2004 and passed on 12 August. It was introduced into the
Senate on 30 August 2004.
On 4 August 2004 the Bill was referred for inquiry
to the Senate Rural and Regional Affairs and Transport Committee on
the recommendation of the Selection of Bills Committee. The Selection
of Bills Committee gave as its reason for referral:
The Bill will establish a regime that will provide
LiveCorp with funding from an industry levy and consolidated revenue
for marketing and research and development. An inquiry is required
to ensure that accountability arrangements imposed on LiveCorp in
relation to these funds is adequate.(1)
The Rural and Regional Affairs and Transport Committee
presented its report on 2 September 2004 and recommended that the Bill
be amended to improve the arrangements by which the livestock export
industry might be accountable to Parliament. The wording of the Committee’s
two recommendations is as follows:
Recommendation 1: The Committee therefore recommends
that the bill be amended to place a statutory requirement on the Minister
to table in both Houses of Parliament, within 14 days of the signing
of the statutory funding agreement, the funding agreement between
the Commonwealth and LiveCorp, any subsequent variation to the agreement
and an annual statement of LiveCorp’s compliance with the provisions
of the statutory funding agreement.
Recommendation 2: The Committee also recommends
that the bill be amended to place a statutory requirement on the Minister
to table in both Houses of Parliament the annual report provided by
LiveCorp.(2)
The reintroduced Bill includes additional provisions
to give effect to these recommendations. The reintroduced Bill also
includes amendments to the definitions of ‘meat’, ‘live-stock’ and ‘edible
offal’ in section 3 of the Australian Meat and Live-stock Industry
Act 1997 (the AMLI Act) so as to separate the definition of ‘live-stock’
from the definitions of ‘meat’ and ‘edible offal’.
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.(3)
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.(4)
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.(5)
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.(6)
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.(7)
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.(8)
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.(9)
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.(10)
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.
Item 28 adds a new Division 4 ‘Reporting
to Parliament in relation to live-stock export bodies’. The new Division
provides that when the Minister enters into any funding agreement with
the live-stock bodies under the Act (either or both the live-stock export
marketing body or the live-stock export research body), he or she is
required to report to Parliament and to table a copy of the funding
agreement, or a copy of a variation to an agreement, within 14 sitting
days. In addition, the Minister has to arrange for a report on the
compliance of the live-stock export body with the funding agreement
to be tabled in Parliament after the end of each financial year. Thirdly,
the Minister is to table a copy of the annual report of the live-stock
export body in both Houses of Parliament, if the live-stock export body
gives the Minister a copy of its annual report. However, there appears
to be no provision in either the amendment or the principal act to require
the live-stock export body to give the Minister a copy of its annual
report.
Items 32 to 65 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 Schedule 2 amends the definitions of ‘edible
offal’, ‘live-stock’ and ‘meat’ that appear in section 3 of the AMLI
Act. The effect of these amendments will be to separate the definition
of edible offal from the definition of live-stock and link the definition
of edible offal with the definition of meat.
A key issue in the privatisation of government owned
entities is the shift from the ‘public’ accountability requirements
under legislation such as the Commonwealth Authorities and Companies
Act 1997 (CAC Act) to the ‘private’ reporting regime under the Corporations
Act. Instead of CAC Act requirements such as the tabling of annual
reports in Parliament and an obligation to keep the responsible Minister
informed of significant developments, a privatised entity is ‘accountable’
through annual financial and director’s reports that are sent to members,
tabled at company meetings and lodged with the Australian Securities
and Investment Commission (ASIC). While reports lodged with ASIC are
obtainable by members of the public, the privatisation process removes
the element of enforced parliamentary scrutiny.
The amendments in this Bill will include in legislation
the requirement for the Minister to table any statutory funding agreement
with LiveCorp, to report annually on LiveCorp’s compliance with the
terms of the statutory funding agreement, and to table a copy of LiveCorp’s
annual report, if LiveCorp provides it. Similar requirements for public
accountability are included in the terms of the statutory funding agreements
between the Minister and Dairy Australia,(11) and the Minister
and Australian Wool Innovation.(12)
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;(13)
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.
-
Selection of Bills Committee Report no. 10 of 2004, Senate, Debates,
4 August 2004, p. 25650.
-
Senate Rural and Regional Affairs and Transport Legislation Committee,
Provisions of the Agriculture, Fisheries and Forestry Legislation
Amendment Bill (No. 2) 2004, September 2004.
-
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.
-
Dairy Australia website at www.dairyaustralia.com.au (About
Us/Membership/Funding). Site visited 22 November 2004.
-
AWI website at http://www.wool.com.au
(About Us/Company funding). Site visited 25 November 2004.
-
Explanatory Memorandum p. 3.
This paper has been prepared to support the work of the Australian Parliament
using information available at the time of production. The views expressed
do not reflect an official position of the Information and Research Service,
nor do they constitute professional legal opinion.
Published by the Parliamentary Library, 2004.
