Bills Digest No. 86   1997-98 Cattle Transactions Levy Bill 1997


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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

Cattle Transactions Levy Bill 1997

Date Introduced: 1 October 1997
House: House of Representatives
Portfolio: Primary Industries and Energy
Commencement: On the same day as Part 3 of the proposed Australian Meat and Live- stock Industry Act 1997, that is, on Proclamation or nine months and one day after Royal Assent, whichever is first.

Purpose

To impose a levy on sales of cattle, delivery of cattle to a processor and the slaughter of certain cattle.

Background

Under existing law a levy is imposed by the Cattle Transactions Levy Act 1995 on:

  • each transaction, entered into on or after 1 February 1991, involving the transfer of ownership of cattle from one person to another;
  • the delivery of cattle to a processor, on or after 1 February 1991, otherwise than because of a sale to the processor;
  • the slaughter by a processor of cattle, on or after 1 February 1991, bought by the processor and held for more than 60 days before slaughter; or
  • the slaughter by a processor of cattle, on or after 1 February 1991, in respect of which levy would not be payable under the circumstances specified above.

A number of exemptions from the levy apply, including:

  • dairy cattle sold for dairying purposes;
  • sale of cattle at auction to the vendor;
  • sale or delivery of cattle to a processor where the cattle, at the time of sale or delivery, are not fit for human consumption; and
  • bobby calves on which levy has already been paid.

The levy is payable by:

  • in the case of cattle which have changed ownership, the person owning the cattle immediately before the change of ownership;
  • in the case of cattle delivered to a processor otherwise than because of a sale to the processor, by the person owning the cattle immediately before the delivery; and
  • in the case of cattle slaughtered by a processor which were bought by the processor and held for more than 60 days before slaughter:

    the processor, if the slaughter occurred before 1 July 1995, or

    otherwise by the person who owned the cattle at the time of slaughter;

  • in the case of cattle slaughtered by a processor in respect of which levy would not be payable in the circumstances specified above:
  • the processor, if the slaughter occurred before 1 July 1995, or
  • or otherwise by the person who owned the cattle at the time of slaughter.

The Primary Industries Levies and Charges Collection Act 1991 provides for the collection of the levy. Proceeds raised by the levy are disbursed between the Meat Industry Council (MIC), Australian Meat and Live-stock Corporation (AMLC), Meat Research Corporation (MRC), the National Cattle Disease Eradication Trust Account (NCDE) and Australian Animal Health Council Limited (AAHC).

The Cattle Transaction Levy Act 1995 is being repealed by item 1 of Schedule 4 of the Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Bill 1997.

This Bill forms part of a package of 17 Bills restructuring the regulatory framework of the Australian meat and live-stock industry. Under existing levy and charge arrangements, funds raised primarily go towards funding the MIC, AMLC and MRC. Under the proposed arrangements the government intends that industry contributions will be sourced on a statutory and non-statutory basis. The collection of statutory levies is intended to be based on the current system but with changes providing for a transaction levy on sheep, lambs and goats, replacing the current livestock slaughter levy, and a separate transaction levy on grain fed cattle.

The rationale given by the Minister in the Second Reading Speech to the Australian Meat and Live-stock Industry Bill 1997 for the transaction levy approach is:

The transaction levy approach for sheep, lambs and goats was adopted at the request of a clear majority of industry whose submission met all of the requirements of the government's levy principles. A similar request was also submitted by the grain fed cattle industry sector for a separate cattle transaction levy. Again this submission met each of the Government's levy principles.

The existing levy and charge imposition Acts have been modified to provide for clear sectoral ownership.(1)

In relation to non-statutory contributions, the government is setting the processor and exporter levies at zero. It should be noted that the Minister in the Second Reading Speech to the Bill issues a warning in respect of such contributions, that is:

Should the non-statutory contributions by processors and livestock exporters fail to meet agreed funding levels for joint industry functions, and as specifically agreed by these two sectors, the Government has their prior agreement to maintain levies at a required level to ensure there is adequate funding.(2)

Under the proposed arrangements, the Government intends that decisions on levels of levies and charges be the responsibility of peak industry councils.

In respect to this Bill, the Minister in the Second Reading Speech to the Australian Meat and Live-stock Industry Bill 1997 provides a rationale for the repeal of the Cattle Transaction Levy Act 1995, that is:

The new Act replacing the Cattle Transaction Levy Act 1995 will provide for the imposition of separate levy components for grass fed and grain fed cattle producers to support their individual contributions to the new service delivery company, as well as continued funding to the NCDE and AAHC.(3)

Main Provisions

Clause 6 imposes a levy on:

  • each transaction entered into involving the transfer of ownership of cattle from one person to another;
  • the delivery of cattle to a processor otherwise than because of a sale to the processor;
  • the slaughter by a processor of cattle bought by the processor and held for more than 60 days before slaughter; or
  • the slaughter by a processor of cattle in respect of which the levy would not be payable under the circumstances specified above.

Clause 6 also sets out a number of exemptions from the levy, including:

  • dairy cattle sold for dairying purposes;
  • sale of cattle at auction to the vendor;
  • sale or delivery of cattle to a processor where the cattle, at the time of sale or delivery, are not fit for human consumption; and
  • on a bobby calf on which the levy has already been paid.

Clause 7 provides that the rate of levy on each head of cattle, other than a head of lot-fed cattle or a leviable bobby calf,will be:

  • $2.16, or a prescribed amount up to $6.50, for payment to the marketing body (see clauses 60-66 of the Australian Meat and Live-stock Industry Bill 1997);
  • 72 cents, or a prescribed amount up to $2.00, for payment to the research body (see clauses 60-66 of the Australian Meat and Live-stock Industry Bill 1997);
  • 17 cents, or a prescribed amount up to $4.00, for payment to the NCDE; and
  • 13 cents, or a prescribed amount up to 50 cents, for payment to the AAHC.

The rate of levy on each head of cattle that is a leviable bobby calf will be:

  • 48 cents, or a prescribed amount up to $1.90, for payment to the marketing body;
  • 16 cents, or a prescribed amount up to 40 cents, for payment to the research body;
  • a prescribed amount up to 20 cents, if any, for payment to the NCDE; and
  • a prescribed amount up to 50 cents, if any, for payment to the AAHC.

The rate of levy on each head of lot-fed cattle will be:

  • $2.16, or a prescribed amount up to $6.50, for payment to the marketing body;
  • 72 cents, or a prescribed amount up to $2.00, for payment to the research body;
  • 17 cents, or a prescribed amount up to $4.00, for payment to the NCDE; and
  • 13 cents, or a prescribed amount up to 50 cents, for payment to the AAHC.

The term 'bobby calf' is defined by clause 3 to mean a bovine animal, other than a buffalo or head of lot-fed cattle, which:

  • has been slaughtered and has a dressed carcase weight not exceeding 40kg;
  • which has not been slaughtered but at the time of the leviable transaction or other dealing had or has a liveweight not exceeding 80kg; or
  • which has not been slaughtered or had its liveweight determined at the time of the leviable transaction or other dealing, but which would if slaughtered at that time have a dressed carcase weight not exceeding 40kg.

Clause 8 provides that the levy is payable by:

  • in the case of cattle which have changed ownership, the person owning the cattle immediately before the change of ownership;
  • in the case of cattle delivered to a processor otherwise than because of a sale to the processor, by the person owning the cattle immediately before the delivery; and
  • in the case of cattle slaughtered by a processor, by the person who owned the cattle at the time of slaughter.

Endnotes

  1. Second Reading Speech, Australian Meat and Live-stock Industry Bill 1997:10
  2. Ibid: 11
  3. Ibid: 16

Contact Officer and Copyright Details

Ian Ireland
4 November 1997
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
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.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 12 November 1997

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