Bills Digest no. 164 2006–07
Agriculture, Fisheries and Forestry Legislation
Amendment (2007 Measures No. 1) Bill 2007
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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Agriculture, Fisheries and Forestry
Legislation Amendment (2007 Measures No. 1) Bill
23 May 2007
House: House of Representatives
Portfolio: Agriculture, Fisheries and
To give effect
to the meat processor sector s request to introduce levies on the
slaughter of cattle, sheep and goats and for the levy funds to be
directed to that sector s existing services body.
Marketing arrangements for Australia s
red-meat marketing industry were restructured in 1997. The main
statutory element of the restructure was the Australian Meat
and Live-stock Industry Act 1997 (the AMLI Act). The main
purpose of the restructure was to:
establish Meat and Livestock Australia (MLA) as
a producer-owned industry services company responsible for the
provision of marketing and research and development (R&D)
services to the red-meat industry, and
provide for MLA to be funded via industry
levies and matching Commonwealth contributions.
A short policy history of red-meat marketing
before 1997 is provided in the Bills Digest prepared for that
legislation.(2) The Digest also canvassed the fractious
relationships which existed between parts of the red-meat industry
at that time, and noted that both the processing and live-export
sectors were not to be subject to compulsory levies to fund
marketing and R&D activities. Instead these sectors had agreed
to a system of voluntary contributions to their respective industry
Another significant element of the 1997
restructure was the Red Meat Industry Memorandum of Understanding
(the MOU) which was primarily an agreement between the meat
industry s peak bodies and the Commonwealth Government. It
contained a statement of principles and supporting schedules
outlining the new arrangement to which industry sectors had
The MOU included the processing sector s
collective R&D and marketing arrangements. These operate on the
basis that processors voluntary contributions will fund the
Australian Meat Processors Corporation (AMPC) to finance marketing
and R&D services and that AMPC will also run jointly-funded
programmes with the Red Meat Advisory Council. Total revenue raised
by processors since 1998 has been in the order of $14.3 million and
this has largely been invested through MLA.
Under the MOU, processors are required to
contribute to industry R&D and other activities and were asked
every three years to continue their voluntary contributions.
However, the scheme failed in the AMPC poll in May 2006, with an
insufficient number of red-meat processors opting to continue their
contributions to maintain long-term funding of MOU obligations. The
current contribution period for processor levies expires in June
Failure of the voluntary scheme meant that the
whole MOU would fail unless a statutory levy scheme was
established. Failure to agree on the format of statutory levies
also left open the possibility of the Commonwealth reactivating the
pre-1998 statutory levy, which had been suspended while the
voluntary scheme was active. Had this happened, levy revenue
collected from processors would have been considerably greater than
under the current levies.
A ballot of meat-processor establishments was
conducted by the Australian Electoral Commission was held in
December 2006. The proposal put to processors read as follows:
That the Minister for Agriculture, Fisheries and
Forestry be requested to amend relevant legislation to enact a new
statutory levy for red meat processors with the following
(a) that the moneys collected from such a levy
are administered by the Australian Meat Processor Corporation
(b) that the rate of the levy be as
Cattle (per kg HCW)
Sheep (per head)
Lamb (per head)
Goats (per head)
The result of the ballot was 72.5% in favour,
Selected meat industry statistics are
presented in the following tables.
Australian Bureau of Agricultural and Resource Economics,
Australian Commodity Statistics 2006, p. 157.
Australian Bureau of Agricultural and Resource Economics,
Australian Commodity Statistics 2006, p. 160.
Department of Agriculture, Fisheries and Forestry, Australian
Food Statistics 2006, p. 54.
The Explanatory Memorandum states that the
proposals in the bill will not result in additional Commonwealth
expenditure, and that existing industry and Commonwealth structures
will be used to collect and disburse the funds involved, namely the
levy proceeds and matching Commonwealth contributions. The latter
reflect the standard long-term arrangements for Commonwealth
support of agricultural R&D, whereby the proceeds of industry
levies are matched dollar-for-dollar up to a limit of 0.5 per cent
of the annual gross value of production for the red-meat industry.
This limit is set under subsection 66(3) of the AMLI Act and will
not change. Further, the matching funds are for agreed research
projects managed by MLA.
Associated administrative costs to the
Commonwealth will be met from the levies on a fee-for-service
Item 4 empowers the Minister
to declare a body to be the meat processor marketing body or the
meat processor research body. These declarations will be
disallowable by either House of Parliament in the usual manner.
Item 6 enables the same body to perform both the
marketing and research functions for the meat-processing sector,
but a body may not represent sectors of the red-meat industry other
than its own (item 7). There can be only one
research body and one marketing body (item 8).
Item 10 outlines the
pre-conditions for declaration of a marketing body or a research
body for the meat-processing sector. The pre-conditions are the
same as for other such bodies: that the body must be a company
limited by guarantee, it must be able to represent the
meat-processing sector, and it must have consented to the
Items 16 and 17 end the
payment of the proceeds of live-stock slaughter and beef slaughter
levies to the industry marketing body and the industry research
body, both of which roles are currently held by MLA. Item
18 moves these same funds to the meat processor marketing
body and the meat processor research body. In additional to
covering administrative costs, item 23 authorises
the meat processor marketing body and research body to expend the
levy funds they receive only for marketing and research purposes
respectively or other allowable payments prescribed in regulations.
The new paragraphs are similar to those that authorise such
spending by similar bodies.
Item 26 authorises the
various industry bodies operating under the AMLI Act to use
information about levy payers, received under the Primary
Industries Levies and Charges Collection Act 1991, in order to
maintain their membership and perform their functions.
Items 28 41 replace
references to the industry marketing body and industry research
body with references to the meat processor marketing body and the
meat processor research body in the Primary Industries (Excise)
Levies Act 1999. These amendments permit the levy funds to be
directed to the new meat processor research body and meat processor
marketing body. Four spent provisions are also repealed.
In sum, the industry proposes that under
statutory arrangements the current program of R&D and marketing
investments will be maintained and, if approved by AMPC members,
widened to include animal welfare, expanded environment and
resource management and some economic aspects to improve
profitability and enhance issues management. It further envisages
no change to the industry services model which is based on a
consultative approach to development of investment plans by AMPC,
MLA and the Australian Meat Industry Council and existing financial
The only real change expected as a result of
this bill is that all red-meat processors will, in effect be
members of AMPC, providing the opportunity for greater consultation
processes in that sector.
This section draws heavily on material circulated to
participants in the meat industry ballot which also included
arguments for and against the proposal: Australian Meat Industry
Council and Australian Meat Processor Corporation, Ballot of meat
industry participants ,
accessed on 28 May 2007.
Ian Ireland and Peter Hicks, Australian Meat and Live-stock
Industry Bill 1997 , Bills Digest, no. 79, Department of
the Parliamentary Library, Canberra, 1997 98, http://www.aph.gov.au/library/pubs/bd/1997-98/98bd079.htm.
Explanatory Memorandum, p. 2.
This section also draws heavily on material referred to in
Peter Hicks and Patrick O'Neill
30 May 2007
Bills Digest Service
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