Bills Digest no. 146 2005–06
Plant Health Australia
(Plant Industries) Funding Amendment Bill
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
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Health Australia (Plant Industries)
Funding Amendment Bill 2006
introduced: 25 May
House: House of Representatives
Portfolio: Agriculture, Fisheries and
To amend the Plant
Health Australia (Plant Industries) Funding Act
2002 to establish a mechanism by which plant industries can
fund their liabilities under the Government and Plant Industry Cost
Sharing Deed in respect of Emergency Plant Pest Responses.
The Plant Health Australia (Plant Industries) Funding Act
2002 (the Act) put in place a levy on plant producers in order
to fund the plant industries share of the running costs of Plant
Health Australia Limited (PHA). PHA was established under
Corporations Law on 27 April 2000 as a non-profit company limited
by guarantee. It is the national coordinating body responsible for
addressing priority plant health issues in Australia, and for
promoting international and domestic confidence in Australia s
The 1996 Nairn Review of Quarantine introduced the idea of a
national coordinating body to deal with plant health, after finding
that there was generally a greater emphasis on animal health
issues.(2) With the majority of plant industries having
or developing a significant export component to their business, the
need for Australia to enhance its plant health status and plant
heath arrangements had become increasingly important. The Nairn
review proposed the formation of a coordinating body between
government and industry to identify and address national priorities
in plant health.(3)
Since late 2000, PHA has been brokering a cost sharing agreement
between plant industry members and the Commonwealth, state and
territory governments in order to meet a potential emergency
response to serious harmful plant pests and diseases. PHA has
argued that successful eradication of emergency plant pests (EPPs)
relies on the ability to respond to threats quickly and
effectively, but that response operations are often hindered by
uncertainty, particularly over funding arrangements.(4)
For example, they say that in the case of the grape vine leaf rust
outbreak in 2003, it took two years for industry to secure funding
and initiate eradication.(5) They therefore argued for a
formal cost sharing arrangement, with a clearly defined,
pre-agreed, responsive and sustainable funding arrangement and a
joint industry/government understanding of their respective roles
and responsibilities that would address this uncertainty, and
minimise both the risks and potential costs of serious plant pests
on both industry and the wider community.
The Government and Plant Industry Cost Sharing Deed in respect
of Emergency Plant Pest Responses(6) (the
Deed) commenced on 26 October 2005 with the Commonwealth, state
and territory governments and plant industries as parties.
According to the Minister s second reading speech, there are now 14
plant industry signatories to the Deed.(7)
The Deed defines an Emergency Plant Pest as:
Any species, biotype or strain of invertebrate pest or pathogen
injurious to plants or plant health but excluding Genetically
Emergency Plant Pests include:
EPPs that are of economic importance to Australia
a variant form of a known plant pest that can be distinguished
by investigative and diagnostic methods
a serious plant pest of unknown or uncertain origin which may,
on the evidence available at the time, be an entirely new plant
pest or one not listed in the Deed, or
a known endemic disease occurring in such a severe outbreak form
that an emergency response is required to prevent a large scale
epidemic of national significance or serious loss of market
Some recent examples might include the fungal Panama disease
that kills banana plants,(10) the fungus Albugo candida
that affects broccoli and cauliflower,(11) or the citrus
canker which was found on a Queensland citrus farm in
The Deed combines a range of responses to combating EPPs
participation and cooperation, risk management, detection and
response, cost sharing, and training.(13) Under the
Deed, all parties commit to contributing funds to meet the costs of
responding to an incident that affects them. Shares of the
government parties and industry parties are capped (clause 9.5.1).
Funds are raised in order to provide an emergency response in a
timely manner. The Deed distinguishes three phases in the
incident definition the purpose of this phase is to define the
incident, determine whether it is capable of being eradicated and
to formulate the Response Plan (clause 5.1)
emergency response this is the phase during which the response
is conducted. It lasts from adoption of the Response Plan to when
the peak decision making body, the National Emergency Plant Pest
Management Group (NMG), determines that the EPP is eradicated, or
any further action under the Deed would be fruitless because the
EPP cannot be eradicated (clause 5.2)
proof of freedom from disease this phase may include research
and/or surveillance activities to demonstrate that the Response
Plan has been successful or that the phase should end (clause
Owners of properties or crops that are subject to a Response
Plan may be eligible for reimbursement (Part 4.4 of Schedule 6).
There is a time limit for making and settling a claim.
The parties have agreed to classify EPPs into four categories,
based on the level of risk to industry and the wider
community.(14) The principles of cost sharing are
contained in the Deed (at clause 9). Costs are shared
proportionally between the government parties and industry parties
according to the category of EPP as follows:
(Very high public
(Mostly if not wholly
The Commonwealth meets half of the government parties share of
costs. The state and territory governments share costs on the basis
of an arrangement that is set out in the Deed.(15) Where
one industry party is affected, it is responsible for the industry
share. A formula is provided to share the costs among various crops
covered by one industry party.(16) Where more than one
industry party represents a plant species affected by an EPP, then
costs are shared by them proportionally on an agreed
The manner of funding cost shares is set out in clause 10 of the
Deed, with details in Schedule 7. Parties are expected to take
reasonable steps to ensure that they can meet their
obligations.(18) However, if an industry party cannot
meet its share, either directly or from industry funds held on its
behalf, the Commonwealth will initially pay the industry party s
cost share obligations. The industry party will repay the
Commonwealth in the manner set out in Part 1 of Schedule 7 of the
Deed. This Bill implements the agreed arrangements. This
legislation does not impose the new Emergency Plant Pest Response
(EPPR) levy or charge on participating plant industry members.
Instead, it directs the Commonwealth to pay certain moneys out of
Consolidated Revenue to PHA on behalf of participating plant
industries. The new EPPR levy and charge will be imposed on plant
producers by regulations under Schedule 27 to the Plant
Industries (Excise) Levies Act 1999 and under Schedule 14 to
the Primary Industries (Customs) Charges Act 1999. The
regulations will only set the maximum amount of the levy and
charge. The operative rate will be determined by the participating
plant industry which will be able to vary it depending on the
decision of their members. Any reserve of funds collected by the
levy and charge will be accumulated and managed by PHA for use by
the participating plant industry according to the industry s
This Bill introduces a special appropriation for the purpose of
industry levies that are prescribed in the Bill. The appropriation
will only occur if a plant industry elects to repay its liabilities
to the Commonwealth through an EPPR levy and will generally only be
necessary for the period of time that it takes an industry to repay
these liabilities. The Deed specifies that this must occur within a
reasonable time, generally expected to be less than ten years.
Items 2 to 9 of
Schedule 1 insert definitions of terms associated
with emergency plant pest responses, including the EPPR Deed and
the EPPR levy and charge. A penalty receipt is defined as an EPPR
late payment penalty collected or received by, or on behalf of, the
Commonwealth in relation to a plant product.
Item 17 inserts a new Part 3
into the Act to provide for the funding of emergency plant pest
responses. Proposed section 10A provides that the
Commonwealth will forward to PHA, amounts collected by the EPPR
levies and charges, together with any penalty receipts. PHA is
required to hold the payments for each participating plant industry
in a separate fund. All levies and charges received by the
Commonwealth must be paid into the Consolidated Revenue Fund.
Amounts equal to the amounts collected by the EPPR levies and
charges will then be payable to PHA out of Consolidated Revenue
(proposed section 10B).
The Bill provides for PHA to hold and manage the funds raised by
the levies and charges in accordance with the priorities set out in
proposed section 10C. The first priority is to
meet the Commonwealth and PHA s costs in collecting and managing
the funds, including the costs of receiving and applying the funds.
The second priority is to discharge any obligations (debts) that a
participating plant industry may incur under the EPPR Deed in
relation to relevant plant product or products on which the EPPR
levy or charge is raised. The third priority is, at the request of
the participating plant industry, to discharge any liability of the
industry in relation to any other EPPR plant product. The fourth
priority is, at the request of a participating plant industry, to
apply the funds for other emergency plant pest related purposes,
such as pest and disease surveillance. Funds may be used for a
lower priority if there is no call on the funds for a higher
Proposed section 10D provides that PHA must
manage an EPPR fund in a way it considers appropriate, subject to
other requirements imposed upon it, for example under its
Constitution, or as a result of a resolution of its members.
According to the Explanatory Memorandum,(19) PHA will be
able to invest money that is in an EPPR fund, and any income on an
investment will form part of the fund. This will be subject to any
provisions or restrictions specified in regulations (new
paragraph 10D(5)(b)). Proposed section
10E sets out PHA s obligations to pay the costs that the
Commonwealth incurs in collecting EPPR levies and charges and in
recovering any penalties. The Commonwealth may recover these costs
directly from the amounts payable to PHA.
Proposed section 10G provides for the Minister
to require PHA to repay an appropriate amount to the Commonwealth
or into the EPPR fund if the Minister is satisfied that PHA has
breached the conditions of payment of EPPR funds. Before taking
action under this proposed section, the Minister must take into
consideration advice received from the relevant participating plant
Plant Health Australia, Who we are . Information from their
(site visited 29/5/2006).
Australian Quarantine Review Secretariat, Australian
quarantine: a shared responsibility, by M.E. Nairn [and
others], Canberra, Department of Primary Industries and Energy,
ibid., p. 173 5.
Plant Health Australia, Business case, Emergency Plant
Pest Response Deed, June 2004, p. 7. Information
available from their website at
(Site visited 29/5/2006)
Government and Plant Industry Cost Sharing Deed in respect of
Emergency Plant Pest Responses [EPPR Deed], Plant Health Australia,
. Available at:
(Site visited 29/5/2006)
Hon. Peter McGauran, Minister for Agriculture, Fisheries and
Forestry, Second reading speech, Plant Health Australia (Plant
Industries) Funding Amendment Bill 2006, House of Representatives,
Debates, 25 May 2006, p. 5.
EPPR Deed, op. cit., clause 1.
ibid., clause 1.1.
Lorelei Fong Lim, Disease isolates 5 farms , Northern
Territory News, 19 August 2004.
Cameron Atfield, Imported disease hits crops ,
Courier-Mail, 10 September 2005, p. 16.
Daniel Knowles, Citrus deal struck: spray allows sales as trees
are destroyed , Sunday Mail (Brisbane), 11 July 2004, p.
EPPR Deed, Explanatory Memorandum, [p. 1]. Available at
(site visited 29/5/2006)
For categories of EPPs, see Table 1, Business case,
Emergency Plant Pest Response Deed, op.
cit., p. 10.
EPPR Deed, op. cit., Part 1 of Schedule 6.
ibid., Part 2 of Schedule 6.
ibid., Part 3 of Schedule 6.
ibid., clause 10.4.1.
Explanatory Memorandum, Plant Health Australia (Plant
Industries) Funding Amendment Bill 2006, p. 5.
31 May 2006
Bills Digest Service
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