Bills Digest no. 78 2007–08
Horse Disease Response Levy Bill 2008
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
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
-
introduce a levy on the initial registration of
horses so that the Australian horse industry, under the terms of
the Emergency Animal Disease Response Agreement (EADRA), can repay
the Commonwealth for financial assistance in the event of an
outbreak of an emergency horse disease.
-
provides for the collection of horse disease
response levies by persons or bodies that register horses and the
liability of horse registration bodies to pay the levy payments to
the Commonwealth.
-
imposes penalties for unpaid levies and
provides for remission of any penalties.
-
provides for the gathering and collection of
information and documents together with a strict liability offence
for failure to comply with an information request.
The Bill amends the Australian Animal Health Council (Live-stock
Industries) Funding Act 1996 to:
In August 2007 the Australian horse industry was thrown into
chaos with the detection of equine influenza at stables in Sydney.
Australia had previously been free of the equine influenza
virus.
Despite initial attempts at quarantine, the highly contagious
horse virus spread throughout much of the eastern states of
Australia at an alarming rate. The impact on the horse industry and
ancillary operations was huge. The lucrative Australian horse
racing industries in the eastern states were closed down, gambling
revenue on horse racing was curtailed, betting on alternative
racing such as greyhounds also fell, whilst the impact stretched
into the recreational and community sphere with gymkhanas and local
horse shows postponed or cancelled. Moreover, the cost of
maintaining a strict quarantine regime meant that horses could not
be transported and that in many cases feed and care had to be
maintained at sites away from any home base.
The thoroughbred and harness racing industries were deeply
affected by the loss of revenue caused by the cancellation of
racing events and with the impact of quarantine restrictions on
breeding programmes. Peak horse industry bodies had called for
government assistance during the equine influenza outbreak and had
received both federal and state government assistance at different
stages throughout the quarantine programme. The total amount of
Commonwealth funding so far has been $352.9 million, including the
$255.7 million announced by
the government on 15 February. The Appropriation (Drought
and Equine Influenza Assistance) Act No 1 2008 assented to on
18 February 2008 appropriated $255.7 million for financial aid to
the horse industry as a result of the equine influenza outbreak.
The Appropriation (Drought and Equine Influenza
Assistance) Act (No.2) 2008 assented on the 18 February
2008 appropriated an amount of $97.2 million to reimburse the
States, the Northern Territory and the Australian Capital Territory
for costs associated with the national response to eradicating
equine influenza. Most of this funding $86.4 million will be
recovered from the horse industry.[1]
The Commonwealth government has
extended equine influenza financial assistance until 14 March
2008 in a range of programmes.
The actual total cost to the Australian horse industry,
estimated to be hundreds of millions of dollars, is still to be
determined.
In the light of the equine influenza emergency, Australian horse
industry peak bodies have agreed to support federal government
legislation to introduce a levy to raise funds for future emergency
assistance measures. In the event of a future emergency disease
outbreak affecting the horse industry, the Commonwealth government
will initially finance assistance measures to the horse industry
but will be repaid from funds collected by the levy over time.
Regulations to be made under the Horse Disease Response Levy Act
2008, when passed, will determine the amount of the levy.
The history of nationally coordinated responses to the dangers
of the spread of animal diseases in Australia goes back to the 1990
s when according to AnimalHealth s website it became apparent that
consumers and national and international trading partners required
increased accountability for animal health and welfare. It was
agreed that there needed to be high level decisions by governments
and industry groups on strategic policy for future planning and
funding of national animal health service programs. [2]
The Australian Animal Health Council was formed in 1996 and in
1996 the Australian Animal Health Council (Live-stock
Industries) Funding Act was passed. The Minister for
Primary Industries and Energy, Mr John Anderson, stated at the
time
There is a need for as national approach to deal
with animal health services to ensure coordination, cooperation and
consistent policy and service delivery. This is especially so in an
age when, for example, livestock are regularly moved from one state
to another and in an age when, increasingly those consumers of our
product, who are to be found in foreign lands those countries that
take our exports expect to be able to deal with us as a nation
rather than on a state by state basis. For example, in the case of
a problem with residue, as we have seen a couple times in Australia
s meat industries, there needs to be a capacity to handle the
situation on a nationally coordinated basis.
[3]
The Council was incorporated under Australian Corporations Law
in January 1996 and commenced operating under the business name of
AnimalHealth Australia in February 2000.
The Emergency Animal Disease Response Agreement (EADRA) is a
world-first industry/government cost-sharing agreement that will
boost Australia s ability to respond quickly and efficiently to
animal disease outbreaks. The Agreement sets out cost-sharing
arrangements between the Commonwealth, state and territory
governments and Australia s livestock industries for the control,
containment and eradication of 63 specific animal diseases. The
management of the agreement is the responsibility of AnimalHealth
Australia.[4]
According to the Explanatory Memorandum, Commonwealth became a
party to the Agreement in March 2002.
The EADRA provides for industry repaying any amounts paid for by
the Commonwealth on behalf of industry under the agreement, via a
statutory levy. To do this a new horse disease response levy will
be imposed on the industry under the new Horse Disease Response
Levy Act.
Under the terms of the EADRA, the AAHC
co-ordinates, collates and maintains financial information in
respect of any animal disease emergency. Livestock industries
agreed that the AAHC will receive and disburse levy funds to be
used to repay the Commonwealth for the costs underwritten by the
Commonwealth on behalf of industry.
[5]
The Howard Government announced on 2 September 2007 that a
comprehensive and independent inquiry would by conducted by the
Honourable Ian Callinan to establish how equine influenza got into
Australia and subsequently spread. The inquiry will examine the
circumstances that have contributed to the outbreak of equine
influenza in Australia and any need for strengthened procedures and
processes to make sure the highest standards of biosecurity are
maintained for horses in post-arrival quarantine. [6]
Considering the seriousness of the situation and
the impact on the horse industries, I have asked Justice Callinan
to review all the evidence and report to me on the likely cause of
the incursion and what measures are needed to maintain the
integrity of Australia s quarantine system, Mr McGauran said.
Justice Callinan will undertake a full
independent inquiry and have wide-ranging powers under the
Quarantine Act 1908, which allows him to subpoena witnesses and
hold public hearings.
I have asked Justice Callinan to examine the
findings of the investigation currently being undertaken by the
Australian Quarantine and Inspection Service (AQIS) into the
outbreak, as well as the epidemiological investigations and any
other relevant matters.
I have also asked Justice Callinan to take into
account the views of interested individuals and
organisations.
The inquiry will examine the circumstances that
have contributed to the outbreak of EI in Australia and any need
for strengthened procedures and processes to make sure the highest
standards of biosecurity are maintained for horses in post-arrival
quarantine.
[7]
Media reports suggest that Mr
Callinan s findings are due to be handed down by 25 April
2008.[8]
The Explanatory Memorandum advises that peak horse industry
bodies such as the Australian Horse Industry Council, the
Australian Harness Racing Council, and the Australian Racing Board
support the introduction and application of a horse disease
response levy.[9]
The Chief Executive of the Equestrian Federation of Australia
told the ABC on 22 February 2008 that he had concerns with the levy
as the outbreak was not the fault of the owners.
"At the present we are actually applying for a
recategorisation of the disease to make sure the industry has to
pay less of any outbreak and we are really banking on that the
fault lies with the Commonwealth and the agencies and that they
should pick up the tab," he says.
[10]
The Explanatory Memorandum states that there is no financial
impact on the Commonwealth Government. However, in practice there
will be monies paid and then refunded to the Commonwealth as a
consequence of an outbreak of an emergency horse disease and
subsequent horse industry payments made under the Emergency Animal
Disease Response Agreement.
The key issue revolves around the structure and application of a
levy on horse registrations as a method of generating funds for the
Australian horse industry to repay Commonwealth payments in the
event of an emergency horse disease outbreak. Emergency assistance
measures are provided for under the Emergency Animal Disease
Response Agreement, although until this Bill is passed, the horse
industry remains alone in not providing levy funding as do other
livestock and plant industries.
Introduction of a Levy
Proposed subsection 4(1) imposes a horse
disease response levy at the time when a horse is first registered
with a horse registration body. No levy is imposed for any
subsequent registrations of the horse even if it registered with a
separate organisation (proposed subsection 4(2)). Proposed
section 5 provides that the rate of the levy will be fixed
by regulation. The owner is responsible for paying the levy
(proposed section 6). Proposed section 8 provides
that the levy is not a tax on property of any kind belonging to a
State. Such a tax is prohibited by section 114 of the Commonwealth
Constitution. The reference to a State in section 114 includes the
Australian Capital Territory and the Northern Territory
(proposed subsection 8(3)).
Proposed section 3 defines horse registration
body as a person or body with whom a horse can be registered or a
person or body specified as such in the regulations.
Proposed subsection 7(1) provides that the
Minister may declare a body be a horse industry body if he
considers that the body represents the horse industry
nationally.
Part 2 Liability for horse disease response levy and
penalties
Proposed section 6 provides that a horse
registration body is liable to pay the Commonwealth for levies paid
to the body by horse owners as the registration levy and also any
penalties incurred as a result of late payment of the levy.
Proposed subsection 7(1) provides that a horse
must not be registered until the horse owner has paid the levy to
the horse registration body. The body must issue a receipt to the
horse owner when the levy is paid.
Proposed section 10 provides that the horse
registration body will pay a penalty if the levy remains unpaid to
the Commonwealth when it was due for payment. The penalty accrues
at the rate of 2% per month on the levy and for each subsequent
month the accrued amount for that month and the previous month at
the rate of 2% per month. The Minister retains some discretion to
remit any such penalty (proposed section 11).
Part 3 Information gathering powers
Proposed subsection 14(1)
provides that an authorised person, appointed under
proposed subsection 19(1), may give notice that
specified information or documents relevant to the operations of
the Act are required. A statutory declaration may be required to
verify the information provided (proposed subsection
14(2)). Note that the definition in section 3 of
authorised person requires amendment as it should refer to
a person appointed under subsection 19(1) and not subsection
18(1).
Offences in relation to returns etc
Proposed subsection 15(1) provides that a
person who refuses or fails to give a return, information or a
document required by the Act commits an offence. The maximum
penalty is 60 penalty units ($6600). Subsection 15(1) does not
apply if the person is able to prove they had a reasonable excuse
in accordance with subsection 13.3(3) of the Criminal Code
(proposed subsection 15(2)). Proposed subsection
15(3) provides that an offence under subsection 15(1) is
an offence of strict liability in accordance with section 6.1 of
the Criminal Code. This means that the offence does not require any
proof of fault, but the defence of honest and reasonable mistake of
fact applies.
A person is not excused from giving information or documents
because it may incriminate the person or expose them to a penalty
(proposed subsection 15(4)). However,
proposed subsection 15(5) provides that any
information or documents provided, or any further information
obtained directly or indirectly as a result of the giving of that
information is not admissible as evidence in criminal proceedings
other than proceedings related to this Act or proceedings for the
recovery of an amount payable by way of a penalty under section 10.
Proposed subsection 15(6) provides that a court
may direct, if a person is convicted under subsection 15(1), to
give the information required by the Act or regulations and to do
so within a specified time.
Item 4 (proposed subparagraph 4(2)(c)) provides
that the Commonwealth can transfer funds to the Australian Animal
Health Council (AAHC) collected as penalties under section 10 of
the Horse Disease Response Levy Collection Act 2008.
Item 5 (proposed subsection 4(3)) replaces the
existing subsection and provides that the AAHC has an obligation to
apply a Commonwealth payment in accordance with priorities in
subsections (4), (5) and (6) and subject to (7), (7A) and (8).
Under existing subsection 4(4), the First priority is to reimburse
the AAHC for costs that the Council incurs. Under Item 6
proposed subsection 4(5) the Second
priority is to discharge liabilities by non-government bodies to
the Commonwealth under the EADR Agreement. Under proposed
subsection 4(6) the Third priority is the ability to make
payments to research and development organisations or to promote
and maintain the health of animals. Existing subsection 4(7)
provides that a body is a declared body under the relevant schedule
as a designated body for the animal product. Proposed
subsection 4(7A) provides the AAHC is to apply a
Commonwealth payment on request by a non-government body who is a
party to the EADR agreement. Existing subsection 4(8) provides that
the AAHC does not contravene any condition if it makes a payment in
accordance with a lower priority if it cannot make a payment in
accordance with a higher priority.
The huge financial cost of an outbreak of disease in the
Australian horse industry has already been illustrated with the
equine influenza experience in 2007. The proposed legislation
enables funds to be raised directly from the horse industry in
order to repay the Commonwealth Government for financial assistance
under the EADRA in the event of any future emergency horse disease
outbreak.
Moira Coombs
Brad Hinton
12 March 2008
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