Bills Digest No. 52 2002-03
Australian Animal Health Council (Live-stock Industries)
Funding Amendment Bill 2002
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
Endnotes
Contact Officer & Copyright Details
Passage History
Australian Animal Health Council
(Live-stock Industries) Funding Amendment Bill
2002
Date Introduced:
19 September 2002
House: House of Representatives
Portfolio: Agriculture, Fisheries and
Forestry
Commencement:
The measures in
Schedule 1 commence on a day to be fixed by Proclamation. The
remaining provisions commence on Royal Assent.
Purpose
To amend the
Australian Animal Health Council (Live-stock Industries)
Funding Act 1996 to allow for charges and levies to be paid to
Australian Animal Health Council Ltd for expenses and payments
under the Emergency Animal Disease Response Agreement.
Over the last decade there have been a number of
major animal disease outbreaks, both in Australia and overseas,
which have warranted considerable attention and action by
Australian animal health agencies and livestock industries. They
have also attracted strong public interest due to actual and
possible threats to public health.
There have been various examples of major
outbreaks in Australia. Examples include outbreaks of Newcastle
Disease in chickens in 1998. In the mid 1990s there was an outbreak
of Hendra virus (previously called Equine Morbillivirus), a new
horse disease which caused two human deaths as well as some horse
deaths. There have also been deaths in pilchards around the
Australian coastline in 1995 and 1998.
Overseas, outbreaks of Foot and Mouth Disease
(FMD) and Bovine Spongiform Encephalopathy (BSE) (mad cow disease)
in Europe, particularly in the United Kingdom, have had domestic
reverberations even though Australia has been free of FMD for over
a century while BSE, first detected in the United Kingdom in 1986,
has never been found in Australia.
Such has been the concern of Australian
governments and livestock industries about FMD and BSE that the
issue of preparedness for animal disease emergencies has been on
the agenda of high level Ministerial meetings for over eighteen
months. The implications of BSE for Australia were considered by
the Agriculture and Resource Management Council of Australia and
New Zealand (ARMCANZ) in March 2001. This meeting also moved to
strengthen Australia's approach to FMD by agreeing to the
establishment of a National Management Group, among other things,
to examine risk and ensure systems are in place to minimise FMD
risk. In May 2001 a special meeting of ARMCANZ was held to further
discuss FMD/BSE issues. This was in preparation for consideration
of these matters by the Council of Australian Governments in June
2001.
One of the actions undertaken as a result the
deliberations by the Ministerial bodies was a simulated outbreak of
FMD conducted in September 2002. Known as 'Exercise Minotaur', the
simulation was an exercise focusing on testing decision-making and
the integration of Australia s national arrangements to deal with a
large-scale animal disease emergency.(1) Australia's
preparedness to deal with animal disease emergencies centres on the
Australian Veterinary Emergency Plan (AUSVETPLAN), a nationally
agreed arrangement for responding to an outbreak, or suspected
outbreak, of an exotic animal disease.
One of the central elements of AUSVETPLAN is
financial arrangements for funding the initial response to a
disease emergency. The CSCSA had its origins in 1955 when the
Commonwealth and States entered into an agreement to share the
costs of eradicating FMD should an outbreak occur, including
compensation payments to the owners of stock which had to be
destroyed.
Subsequently, the CSCSA was extended to include
a total of twelve serious livestock diseases. Under the terms of
the CSCSA the total cost of eradication is borne 50 percent by the
Commonwealth and 50 percent by the States/Territories with each
State/Territory paying a fixed proportion according to a formula
established for each disease covered.
Although the CSCSA was last revised less than a
decade ago (October 1994), it has been recognised for some years
that the arrangements therein did not adequately address all the
relevant issues including:
-
- how new diseases, such as the Hendra virus, were to be dealt
with and the risks that any uncertainty arising from unresolved
funding concerns may have adverse consequences in terms of the
nature and timing of a response.
-
- concerns by Government that livestock industries, as
beneficiaries of the expenditure, were not contributing to the cost
of services.
-
- failure of the CSCSA to formally include the livestock
industries in decisions about a proposed response to a disease
outbreak.
Consequently, in September 1997, the Australian
Animal Health Council Ltd (AAHC) commissioned the Centre for
International Economics (CIE) to develop an analytical and decision
support model for the funding of emergency animal disease
management responses. The CIE Report, which was completed in March
1998 and endorsed by the AAHC Board, was distributed in April 1998
to AAHC members for their consideration. AAHC members held a
workshop in August 1998 where the proposed framework and principles
for a new agreement were critically examined and accepted in
principle.
Despite this process, several outstanding
concerns remained in relation to the categorisation of diseases,
the management of multi-species diseases, the start and end dates
for outbreaks and the costs to be covered by the proposed new Deed
of Agreement. An Expert Group was subsequently appointed to examine
these concerns and report back with recommendations on how to
proceed. A second workshop was held in April 1999 and the final
report Expert Group Report was received in June 1999.
Meanwhile in March 1999 ARMCANZ endorsed the
following as key principles underpinning a national funding model
for management of animal diseases emergencies:
-
- Key determinants for cost sharing between Government and
industry:
-
- public health
-
- trade impact
-
- animal production benefits, and
-
- environmental impact.
-
- Key principles underpinning the proposed framework for handling
emergency funding arrangements:
-
- immediate reporting of suspected serious diseases and rapid
response
-
- disease incursions capable of being eradicated
-
- beneficiary pays
-
- equitable burden sharing
-
- no one better or worse off as a result of compensation for
immediate losses (as it relates to early reporting)
-
- certainty in funding and compensation
-
- consistency, integration and efficiency
-
- stakeholders who share the cost of emergency management should
have a role in decision making
-
- accountability to stakeholders who fund emergency management,
and
-
- simplicity.
The final outcome of this process has been the
Emergency Animal Disease Response Agreement (EADRA) which was
finalised in March 2002(3) and ratified by all
governments and livestock industries. It replaces the previous
CSCSA and is designed to ensure a rapid and efficient response to
exotic animal disease incursions in Australia's valuable livestock
sector. The agreement is a world first and includes mechanisms for
formal government and industry consultation on resource allocation,
funding, training and risk mitigation.
With regards to funding, EADRA provides
certainty of funding for the initial response to a disease
incursion or outbreak through a partnership of the Commonwealth,
State and Territory governments and major livestock industry
organisations. It specifies 63 diseases classified into four
categories with cost sharing between governments and industries,
depending on which party has the primary interest in control,
measured against the impact on human health and socio-economic
concerns, the environment and livestock production. Categorisation
can be reviewed and new diseases added as circumstances change.
The costs of each party are managed by applying
an 'agreed limit' that ensures intense examination of costs and
benefits before committing to further national resources. The
livestock industry contributions are obtained by means appropriate
to that industry but generally by an agreed zero based levy.
Australian Animal Health Council Limited (AAHC)
is an unlisted public company limited by guarantee. AAHC Limited
was established following agreement on 18 August 1995 by ARMCANZ.
Its objects, as specified in its Memorandum of Association, include
to:
-
- assist the Australian animal health service system in
maintaining acceptable national animal health standards aimed at
meeting consumer needs and market requirements at home and
overseas
-
- advise and advocate action to industry and government on:
strategic national animal health priorities; animal health system
delivery arrangements and resources; and nationally consistent
animal health policy
-
- establish and manage a national animal health information
system
-
- develop, manage and evaluate national animal health
programs
-
- have an involvement in residue related issues as they relate to
animal health and impact on commercial performances
-
- have international status as the national animal health policy
and advisory body
-
- undertake commissioned animal health service projects, and
-
- arrange for, or to assist in, research and development into
matters pertaining to animal health.
The Articles of Association of AAHC provide that
there are three different groups of members of the company, each
with equal status. These are the Commonwealth, the State and
Territories and industry organisations. Industry organisations
include the Australian Chicken Meat Federation, Australian Egg
Industry Association, Australian Dairy Farmers' Federation,
Australian Veterinary Association Limited, Cattle Council of
Australia, Pork Council of Australia Limited, Sheepmeat Council of
Australia, Australian Horse Council and Wool Council of
Australia.(4)
Schedule 1 amends the
Australian Animal Health Council (Live-stock Industries)
Funding Act 1996 (the Act). For background on the Act, see
Bills Digest No. 2 of 1996-97.(5)
Item 3 adds an element to the
existing provision governing payments to AAHC. In the new
arrangements, levies and charges will be imposed under regulations
to the Primary Industries (Excise) Levies Act 1999 and the
Primary Industries (Customs) Charges Act 1999 in order to
support the Emergency Animal Disease Response Agreement
(EADRA).
The EADR levy and EADR charge, and the penalties
for failure to pay, are to be included in the list of amounts
payable to AAHC (proposed subsection
4(2)).
These monies are to be used by AAHC as
follows:
|
first priority
|
-
- expenses incurred by AAHC in the financial year the monies are
received
-
- administrative costs incurred by AAHC over time in relation to
the monies
|
|
second priority
|
-
- payments on behalf of non-government parties(6) for
liabilities under EADRA
-
- payments to or on behalf of Plant Health Australia Ltd
in relation to honey(7)
|
|
third priority
|
-
- payments to animal product research and development
organisations
-
- related payments for the promotion or maintenance of animal
health
|
In relation to 'third priority' payments, a body
may be declared as the designated body for the relevant animal
product under the regulations. AAHC may only make payments at the
request of the body and in accordance with its directions
(proposed subsection 4(8)).
Item 4 deals with refunds. A
refund may be paid if a person pays too much levy or charge.
Where a refund is paid, the refunded amount is
treated as an overpayment to AAHC (proposed
subsection 6(2)) and a debt to the
Commonwealth (proposed subsection
6(3)) which may be set off against future payments
to AAHC (proposed subsection
6(4)). If the future payments may not cover the
refunded amount, there are arrangements to allow the debt to assume
first priority among current year expenses (proposed
subsection 6(5)) and for discharge of the
debt in relation to any of the arrangements made in this
regard.
-
- Exercise Minotaur did not include testing of actual
field operations to combat FMD, such as closing-off roads or
quarantining farms, or involve actual community liaison.
- This section draws heavily on the relevant website http://www.aahc.com.au/eadp/funding.htm
[14/10/02]. Further information on the EADRA can be obtained from
this site.
- Evidence of the complex and exhaustive nature of the process
that has been undertaken is the fact that 1 July 2002 was
originally the target date for a new agreement.
- This text is extracted from Ian Ireland, Australian Animal
Health Council (Live-stock Industries) Funding Bill 1996, Bills
Digest No. 2 1996-97.
- ibid.
- These bodies must be 'concerned with the production of animal
product'.
- These payments relate to plant diseases that are, may be or may
have been spread by bees.
Peter Hicks and Nathan Hancock
16 October 2002
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 2002
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