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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Primary Industries Legislation Amendment (Vegetable
Levy) Bill 2000
Date Introduced: 21 June 2000
House: House of Representatives
Portfolio: Agriculture, Fisheries and Forestry
Commencement: The Bill commences
retrospectively on 1 March 1996.
To amend the Primary Industries Levies and
Charges Collection (Vegetable) Regulations in order to adjust
retrospectively the amount of levy payable by certain vegetable
growers between 1 March 1996 and 30 June 1999.
A levy payable by producers of vegetables was
introduced on 1 March 1996 to fund research and development
activities in the vegetable industry. The levy was imposed under
the Horticultural Levy Act 1987. The rate of the levy was
set by the Primary Industries Levies and Charges Collection
(Vegetable) Regulations.(1) The rate of levy
for vegetables was set at 0.5% of the amount paid for the
vegetables at the first point of sale.(2)
Australian Vegetable Industry
Vegetables, including potatoes, make up the
largest sector of Australia's horticulture industry. According to
information published by the Australian Bureau of Statistics (ABS),
the gross value of vegetable production increased by 9% to $1.8
billion in 1997-98 with all states recording an increase. Victoria
was the major contributor with a gross value of $487.2 million or
27% of the total, slightly more than Queensland with a value of
$471.1 million.(3) Potatoes, mushrooms, carrots, onions
and tomatoes have the highest production values.(4)
It is estimated by the National Farmers'
Federation that there are about 15 000 vegetable growers
operating in all states.(5) ABS statistics indicate that
about 5 000 establishments are primarily involved in vegetable
growing. The total workforce engaged in vegetable growing in 1998
was 22 390 people, comprising working proprietors and
partners, and paid employees. The following table shows the number
of paid employees in vegetable growing, compared with other
agricultural industries.
Employment in Agricultural Industries,
1994-1998
|
Description
|
1994
no.
|
1995
no.
|
1996
no.
|
1997
no.
|
1998
no.
|
|
Fruit
|
14 201
|
12 353
|
16 121
|
17 312
|
15 615
|
|
Vegetables
|
26 586
|
20 796
|
13 982
|
12 659
|
16 280
|
|
Grain growing
|
7 442
|
8 626
|
9 120
|
10 999
|
10 067
|
|
Grain-sheep/beef cattle farming
|
9 144
|
9 706
|
9 434
|
11 481
|
12 041
|
|
Sheep-beef cattle farming
|
8 712
|
7 473
|
8 167
|
4 896
|
4 182
|
|
Sheep farming
|
7 125
|
7 969
|
8 835
|
9 231
|
7 518
|
|
Beef cattle farming
|
14 789
|
13 705
|
12 288
|
12 008
|
10 929
|
|
Dairy cattle farming
|
7 884
|
9 592
|
7 040
|
8 327
|
9 744
|
|
Pig farming
|
2 292
|
2 658
|
2 251
|
3 139
|
3 550
|
|
Sugar cane growing
|
4 431
|
4 991
|
4 510
|
5 620
|
5 612
|
|
Cotton growing
|
2 162
|
2 516
|
2 980
|
4 296
|
4 283
|
|
Other agriculture
|
20 306
|
17 470
|
19 709
|
16 585
|
17 619
|
|
All agriculture
|
125 074
|
117 855
|
114 437
|
116 553
|
117 440
|
Source: Australian Bureau of Statistics,
Agriculture 1997-98, (ABS catalogue no. 7113.0), p.
12.
The average vegetable farm size is about 25
hectares, producing vegetable worth about $230 000 per annum
at the first point of sale.(6) In some areas, such as
the Riverland of South Australia, the Murray Valley and the
Murrumbidgee Irrigation Area, there has recently been a change to
broad acre vegetable production for crops such as potatoes,
tomatoes, lettuce and broccoli.
While there is a strong demand for regular
supplies of fresh produce, the processing of vegetables offers a
number of advantages, particularly by reducing the perishability of
the product and allowing the producer to manage marketing in
accordance with supply and demand. In recent years a small number
of growers have begun to process the vegetables they grow.
Vegetable growers are organised through local
and regional grower groups that are affiliated with state vegetable
grower organisations. Each state vegetable grower organisation is a
member of the Australian Vegetable and Potato Growers Federation
Inc. (AUSVEG) which represents the industry at the national level
in generic policy issues.(7)
The change which this Bill introduces was
requested by the peak industry body, AUSVEG, at the request of
members who are both vegetable growers and processors. The change
which is proposed applies only to people who are both growers and
self-processors, and according to AUSVEG, will apply to only a
small number of people.(8)
Proposed change
On 1 July 1999 the Primary Industries (Excise)
Levies (Vegetable) Regulations 1999 were made under the Primary
Industries (Excise) Levies Act 1999.(9) Regulation
6 (Rate of Levy) provides that, where vegetables are first sold
after being processed, then the rate of levy is set at 0.5% of the
amount that would have been paid for the vegetables if they had
been first sold before processing. The change that is proposed by
this Bill is to apply the same criteria to the levy paid by growers
who are self-processors from the period 1 March 1996 (when the levy
was introduced) to 30 June 1999 (when the current requirements
commenced). The change will have a beneficial effect on the few
people to whom it applies.
Assuming that the growers who sold their
vegetables after processing sought to recoup the cost of the levy,
where possible, in the price they charged, it might be asked
whether the beneficiaries of this legislative change will receive a
windfall gain, with none of the benefits being passed to those who
may have paid higher prices for the processed vegetables. In
similar circumstances, where the sales tax on in situ
pools was found to be invalid, refunds were only provided where the
manufacturer could show that the benefits would be passed back to
the consumers.(10)
This Bill proposes to implement the change by
repealing Regulation 7 of the Primary Industries Levies and Charges
Collection (Vegetable) Regulations which sets the rate of the levy
and substituting a new regulation which uses the same words as the
1999 Regulation. The process of using principal legislation to
amend subordinate legislation is unusual. The Amending Forms
Manual prepared by the Office of the Parliamentary Counsel in
February 1999 says that:
Acts should not amend regulations except for
compelling reasons.... One such compelling reason would be the need
to amend a regulation retrospectively in a way that adversely
affects a person's rights or imposes new liabilities. Subsection
48(2) of the Acts Interpretation Act 1901 prevents such
provisions being made by regulations.(11)
Proposed subsection 4(1) provides that the
amendments made by Schedule 1 are restricted to vegetables either
sold or processed by the grower between 1 March 1996 and 30 June
1999. The effect of proposed subsection 4(2) is to
ensure that the retrospective regulation is not continued in force
after 1 July 1999, which is the date on which the Primary
Industries (Excise) Levies Act 1999 commenced. This Act
imposes the vegetable levy after 1 July 1999.
Item 1 of Schedule 1 repeals
Regulation 7 of the Primary Industries Levies and Charges
Collection (Vegetable) Regulations and substitutes a new Regulation
7 which uses the same words as the Primary Industries (Excise)
Levies (Vegetable) Regulations 1999. This has the effect of
ensuring that the assessment of the levy on vegetables that are
processed before being first sold is consistent since the
commencement of the levy.
-
- Statutory Rules 1996, No. 18.
- Primary Industries Levies and Charges Collection (Vegetable)
Regulations. Regulation 7.
- Australian Bureau of Statistics, Agriculture, 1997-98,
(ABS catalogue no. 7113.0), p. 62.
- ibid., p. 75-76.
- Newman, Brian, 'The Vegetable Industry', Australian
Agriculture, Sixth edition, 1997/98, National Farmers'
Federation, 1997, p. 285.
- ibid., p. 285.
- ibid., p. 285.
- Mr Brian Newman, Executive Director of AUSVEG. Personal
communication 20 June 2000.
- Statutory Rules 1999, No. 306.
- Mutual Pools and Staff Pty. Limited v The Commonwealth of
Australia (1994) 179 CLR 155; (1994) 94 ATC 4103; (1994) 119
ALR 577; (1994) Aust Sales Tax Cases 85-181; (1994) 27 ATR 357;
(1994) 68 ALJR 216 F.C. 94/005.
- Office of the Parliamentary Counsel, Amending Forms
Manual, February 1999, paragraph 38 and footnote 7, p. 8. At
http://www.opc.gov.au/about/documents.htm
[27 June 2000].
Rosemary Bell
26 June 2000
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
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