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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Primary Industries (Excise) Levies (GST Consequential
Amendments) Bill 2000
Date Introduced: 16 February 2000
House: House of Representatives
Portfolio: Agriculture, Fisheries and Forestry
Commencement: Immediately after the
commencement of the A New Tax System (Goods and Services Tax)
Act 1999 which is expected to be 1 July 2000
To amend the Primary Industries (Excise)
Levies Act 1999 so that the sale price used to calculate the
amount payable for the Deer Velvet Levy and the Goat Fibre Levy
does not include the GST.
Levies on agricultural, livestock and forestry
products are imposed by the Commonwealth at the request of the
relevant industry. Funds raised by the levies are matched by the
Commonwealth up to a maximum of 0.5 per cent of the relevant
industry's gross value of production. The principal uses of the
proceeds raised by agricultural, livestock and forestry levies
include the funding of research and development, statutory
marketing authorities and health and safety monitoring. These
activities are usually beyond the scope of small, scattered rural
enterprises to organise and to put in place on their own.
The Primary Industries (Excise) Levies Act
1999 (the Principal Act) consolidated 27 levies into one Act.
The Schedules to the Principal Act impose levies on specific
agricultural, livestock and forestry products. Schedule 8 of the
Principal Act imposes the Deer Velvet Levy and Schedule 11, the
Goat Fibre Levy.
Deer Velvet Levy
A levy is imposed on the value of deer velvet
produced and sold in Australia, and deer velvet used by or on
behalf of a producer in the production of other goods. The rate of
the levy is 5 per cent of the sale value of deer velvet. It is
payable by the producer of deer velvet.(1) 'Sale value'
is defined in the Principal Act as the price paid for deer
velvet.
Goat Fibre Levy
A levy is imposed on the value of goat fibre
produced and sold in Australia. The proceeds of the levy go to the
Rural Industries Research and Development Corporation, under the
provisions of the Primary Industries and Energy Research and
Development Act 1989. The rate of the levy is 1.5 per cent of
the sale value of goat fibre.(2) 'Sale value' is defined
in the Principal Act to include the price paid for the fibre.
Goods and Services Tax
Section 9-75 of the A New Tax System (Goods
and Services Tax) Act 1999 (GST Act) defines 'price' as an
amount that includes the GST. In other words, the cost of the goods
and services tax is 'embedded' in prices rather than identified
separately.(3) Section 177-12 of the GST
Act(4) deals with the GST implications of references to
price, value etc. in other Acts. Subsection 177-12(1) states that
in any Act, unless the contrary intention appears, a reference to
price would mean including GST.
The amendments in this Bill provide that, for
the purposes of calculating the applicable levy, the 'price' of
deer velvet and the 'price' of goat fibre, will be the 'price'
excluding GST.
Item 1 of Schedule 1 adds two
new subclauses to clause 1 of Schedule 8 (Deer Velvet Levy). The
proposed subclauses will have the effect of allowing the Deer
Velvet Levy to be calculated on the sale value of deer velvet,
excluding GST.
Item 2 adds two new subclauses
to clause 1 of Schedule 11 (Goat Fibre Levy). The proposed
subclauses will have the effect of allowing the Goat Fibre Levy to
be calculated on the sale value of goat fibre, excluding GST.
- The deer industry was established in Australia in the early
1970s when interest in the farming of deer spread here from New
Zealand and its commercial value was recognised. Deer farmers have
three potential sources of income:
- sale of slaughtered deer for venison
- sale of velvet antler and other by-products
- sale of breeding stock, which in recent years has included
export of live deer.
Velvet antler is the complete antler
harvested from male deer at a precise stage when it is soft and
vascular before it calcifies and hardens. All male deer grow and
shed their antlers in an annual cycle. Not all species of deer
farmed in Australia are used for velveting. Deer velvet is a highly
prized substance in the practice of Asian medicine and it is also
being increasingly used in western communities. Recent research at
Royal North Shore Hospital has demonstrated the value of powdered
deer velvet in ameliorating certain types of arthritis. Deer velvet
is frozen on farm after harvest and is sold either through the
industry-run velvet pools or direct to Asian buyers. Traditionally
the velvet market has been volatile but in recent years prices have
been relatively stable at around $120/kg for top grades. Good
quality mature red stags can yield up to 3kg or more. Most
Australian-produced velvet is processed and used locally, but the
major world markets for velvet are China, Korea, Hong Kong, Taiwan
and Singapore. The Australian Bureau of Statistics estimated that
there were about 160,000 deer in Australia in 1996-97. Australia's
major competitor on the world market is New Zealand which farms
around 1.2 million deer. (Information from The new rural
industries: a handbook for farmers and investors, edited by
Keith Hyde, Rural Industries Research & Development
Corporation, Canberra, 1998, p. 32-38.)
- Mohair and cashmere are the principle goat fibres produced in
Australia. Both are textile fibres used in the production of luxury
garments. Fibre-producing goats also benefit pasture and help to
control many weeds such as blackberries, thistles and serrated
tussock. Australian-grown mohair has been sold on international
markets for over 25 years. Traditionally the major producing
countries of mohair have been South Africa, USA (principally Texas)
and Turkey. Australian production of mohair is valued at
approximately $2 million a year. Australian greasy mohair is sold
at auction by several brokers, and most is exported. Mohair is
generally exported in a greasy state to Europe, India, Taiwan and
Japan. In past years, Australia has processed up to 40 per cent of
its mohair, and some finished knitwear was produced. (Information
from The new rural industries: a handbook for farmers and
investors, edited by Keith Hyde, Rural Industries Research
& Development Corporation, Canberra, 1998, p. 50-54.)
Cashmere production was first
recognised as a possible industry for Australia in the early 1970s.
Feral goats mainly from pastoral areas of Australia were used as
the initial stock. Cashmere is recognised as a luxury fibre,
commanding some of the highest prices in the world for textiles.
The finer portion of the cashmere goes into luxury knitwear,
sometimes as a blend with silk. The coarser products are used in
the weaving trade for items such as scarves, travel rugs and cloth
for luxury coats and suits. Unlike mohair, which is more subject to
the vagaries of fashion, cashmere has a high proportion of
perennially loyal consumers. China is the major producer of
cashmere. (Information from The economics of a commercial
cashmere goat enterprise, by Lloyd Davies and Geof Murray,
Rural Industries Research and Development Corporation Research
paper series no. 97/10, January 1997.)
- Sydney Morning Herald, 26 June 1998, p. 1.
- Inserted into the GST Act by the A New Tax System (Indirect
Tax and Consequential Amendments Act (No. 2) 1999.
Rosemary Bell
13 March 2000
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 2000
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