Bills Digest no. 61 2015–16
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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.
Paul Davidson
Economics Section
1 December 2015
Contents
Purpose
of the Bill
Structure of the Bill
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Date introduced: 12
November 2015
House: House of
Representatives
Portfolio: Agriculture
and Water Resources
Commencement: The
operative provisions of the Bill will commence on the day after Royal Assent,
except for those items that repeal legislative provisions that deal with
existing quota arrangements. These provisions will commence on 1 January
2017 so as to allow existing quotas to run their course under current legislative
arrangements before being phased out.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The purpose of the Export Control Amendment (Quotas) Bill
2015 (the Bill) is to amend the Export Control Act 1982 (the Act)
to consolidate the legislative arrangements for tariff rate quotas, and give
the Secretary of the Department of Agriculture and Water Resources legislative
powers to make orders relating to tariff rate quotas.[1]
The Bill comprises one Schedule with four Parts:
A Department of Agriculture and Water Resources (the
Department) discussion paper reviewing agricultural export regulations was
released on 15 July 2015.[4]
The discussion paper noted that:
Historically, export regulation has been used to guarantee
product integrity and ensure the safety and hygienic preparation of
agricultural products for export. It has expanded over time to include other
elements to increase trade opportunities, including product descriptions,
volume limitations (quotas) and industry requirements. Flexibility in the
export regulation has helped Australian exporters to gain market access.[5]
Against this backdrop, the Government seeks to rationalise
the number of export control regulations, as part of the Government’s reduction
in red tape, and to also provide for synergies in the deployment of government
staff.[6]
Tariff-rate quotas
The main focus of the proposed amendments is to simplify
the entire process of tariff-rate quotas (TRQs). Currently, TRQs are
administered under a number of different Acts. The proposed amendments seek to
ensure that all TRQ processes are covered under the Act, for all relevant
commodities.
TRQs permit exporters access to concessional (and in some
cases, zero) rates of duty under various bilateral and multilateral trade
agreements that have entered into force for Australia. Duties are paid by
Australian exporters to the trading partner country. The total amount of
concessional duty is effectively fixed by a quota, which sets a maximum
permissible quantity of exports. Any exports which exceed the quota do not
receive concessional duties, and typically pay a much higher rate of duty.
The Department’s discussion paper notes that TRQs enable:
...exporters to reduce import taxes on a certain volume of
goods into a particular country—which can result in savings for Australian
businesses. Any exporter that wishes to export product to the same market
without a quota allocation is subject to the full tariff rate.[7]
The Department currently administers 33 export quotas, and
is responsible for allocating the quotas to Australian export businesses.
Specific goods exported to the European Union, the United States, and Japan are
administered by the Department.
The Department’s discussion paper provides that:
Each quota features different rules around who can apply for
that quota, how it is allocated and how past performance is rewarded. These differences
are reflected in the separate legislative instruments underpinning the quotas.
The number of different rules, procedures and pieces of legislation can be
administratively demanding, posing a challenge for exporters.[8]
Such administrative difficulties have been noted by the
Department:
Stakeholders have previously expressed concern over excessive
export regulation and the costs associated in achieving and maintaining
compliance with regulatory requirements. Stakeholders have also expressed
concern about complex, duplicative, inconsistent and overlapping regulatory
requirements.[9]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills had
no comment to make in relation to the Bill.[10]
At the time of writing, the policy position of
non-government parties and independents had not been made publicly available.
Submissions received as part of the Department’s discussion
paper focussed more on biosecurity, research and development matters than
regulatory reform. Nevertheless, submitters did acknowledge that ‘a consistent
approach and outcome to regulations across jurisdictions will enhance
agricultural competitiveness and strengthen the national animal health system’.[11]
Regulatory reform issues were expressed in relation to industry-specific
regulations, rather than the administrative arrangements under the various
export control Acts.[12]
The dairy industry expressed concern that legislative
flexibility may be reduced in the event that all commodities were integrated
under one Act:
Of particular importance to the dairy industry is the
continued separation of arrangements for different export commodities so that
efficiencies gained by the dairy industry are not compromised.[13]
The Northern Territory Farmers Association expressed
concerns about a ‘one size fits all’ approach:
It is also important to understand the farming practices of
farmers in northern Australia are very different to those of our southern
counterparts, we have different seasons, different climatic and geographic
conditions that need recognition, blanket approaches to regulations and reviews
are not helpful, particularly when they are conducted and driven by a southern
Australia mindset.[14]
Teys Australia noted that the ‘past strategy of competing
on a commodity basis is losing currency, as reflected by declining trade
performance in recent years’.[15]
Teys Australia also submitted that the scope of the Act should be expanded to
allow for the coverage of animal production activities, as well as cover food
intended for either domestic or export use.[16]
The Explanatory Memorandum states that the Bill will have no
financial impact.[17]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[18]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise human rights concerns.[19]
Part 1 of the Bill contains the amendments to the Export Control Act 1982
(the Act). Item 1 of the Bill amends the definition of ‘order’ in the Act
to include orders made under the Act (see item 2), as well as
continuing to permit orders made under the regulations.
Item 2 inserts proposed section 23A
in the Act. Proposed section 23A grants the Secretary a broad power to make
orders relating to TRQs for the export of goods. The Secretary already has a
range of powers pursuant to the existing definition of ‘order’.
Proposed subsection 23A(2) permits the Secretary to
make orders pertaining to a range of matters including (but not limited to):
- determining
the amount of TRQ for the export of goods for a period
- methods
for determining TRQ entitlements for the export of goods
- establishing
and maintaining a register of TRQ entitlements
- imposing
various conditions
- auditing
and reporting requirements and
- the
review of decisions.
Proposed subsection 23A(3) provides that the
Secretary may give a written direction to a person or body in relation to an
order that the Secretary has made. Failure to comply with a written direction
does not amount to an offence punishable by penalty (see item 5).
Where such a direction is inconsistent with an order, the direction prevails to
the extent of the inconsistency.[20]
Proposed subsection 23A(5) provides that if orders or directions given
by the Secretary are inconsistent with either the regulations or an order by
the Minister, then those orders or directions have no effect to the extent of the
inconsistency. There is no inconsistency where orders or directions can
concurrently operate with the regulations or an order by the Minister.
Proposed subsection 23A(6) provides that a
direction given pursuant to proposed subsection 23A(3) is not a legislative
instrument. This means that directions made by the Secretary will not be
subject to parliamentary scrutiny.
Item 3 proposes to change the section heading to
existing section 25 to reflect the fact that orders can be made under both the
Act and the regulations pursuant to items 1 and 2.
Item 4 provides that orders or directions made
under proposed section 23A may make provision for TRQs or calculation methods,
as made by the responsible overseas authority or body, and that such TRQs or
calculation methods can be applied, adopted or incorporated (with or without
modification).
Item 5 inserts a note at the end of section 25 that
explains that subsections 25(3)–(9) apply to orders made pursuant to proposed section 23A.
The various subsections provide for a range of matters, including: that an
order shall not be made prescribing any penalty for an offence, that an order
is deemed to be an enactment for the purposes of the Administrative Appeals
Tribunal Act 1975, and that a fee imposed under an order must not be
such as to amount to taxation.[21]
Part 2 of the Bill provides for consequential
amendments to several Acts to ensure that export quota (and associated matters
such as licensing, renewal, cancellation, and appeal) provisions are repealed.
The purpose of the proposed amendments is to ensure that all export quotas for
all covered matters are contained in the (as amended) Act.
Proposed items 6–8 amend the Australian Meat and
Live-stock Industry Act 1997. The items repeal the definition of
‘quota’ in section 3 and references to a quota in existing subparagraph
17(3)(c)(i). Item 8 repeals existing Division 3 of Part 2 (sections
26 to 33), which provides for regulating meat export quotas under the Australian
Meat and Live-stock Industry Act. The purpose of the repeal is to ensure
that the Act—as proposed to be amended—would be the sole source of export quota
provisions. However, section 29 of the Australian Meat and Live-stock
Industry Act provides for Ministerial discretion to make a determination
that, in the event that a quota was cancelled or varied so as to reduce the
rights granted by the quota, it is appropriate that the quota holder be
compensated a specified proportion of the sale price. The Ministerial
discretion is not included in the Bill. However, the Secretary’s broad power to
make orders and issue directions under proposed section 23A of
the Act (discussed above), in particular the ability for orders to make
provision in relation to ‘surrender, transfer, variation, and cancellation of
TRQ entitlements’ (proposed paragraph 23A(2)(d)) would appear to provide
scope for the Secretary to provide compensation if considered appropriate.
Under section 30 of the Australian Meat and Live-stock
Industry Act an application may be made to the Administrative Appeals
Tribunal (AAT) for review of a decision of the Secretary where that decision
cancels all or a part of the quota, or varies a quota, or refuses to vary a
quota on application by the quota holder. The Bill provides that the
Secretary’s TRQ orders may deal with review of decisions (proposed
subparagraph 23A(2)(i)), however, it does not specify any details that must
be included in such orders, such as providing that the AAT is the body to hear
such an appeal.
Item 9 proposes to repeal Part V (sections 51 to 60)
of the Dairy Produce
Act 1986, which covers export controls for dairy produce. The purpose
of the repeal is to ensure that the Act would be the sole source of export quota
provisions. Currently under subsection 53(1) of the Dairy Produce Act a
person is guilty of an offence if they export regulated dairy produce to a regulated
dairy market and that person does not hold a licence to do so. Additionally,
under subsection 53(2), a person is guilty of an offence if they export
regulated dairy produce to a regulated dairy market and the person holds an
approval issued in relation to the export, but the export is not in accordance
with the conditions of that approval. Both offences are classified as civil
offences.[22]
These offences are not in the Bill, nor are they currently in the Act.
Items 10 and 11 propose to repeal and substitute
references to ‘orders’ in the Export Charges
(Collection) Act 2015 to ensure their consistency with proposed section
23A.
Part 3 of the Bill proposes to repeal the entirety
of the Australian
Meat and Live-stock (Quotas) Act 1990 (Meat Quotas Act). The
purpose of the proposed repeal is to ensure that all export quotas for all
covered matters are contained in the (as amended) Act. Under section 4, the Meat
Quotas Act includes an objectives section. The section is not replicated in
the Bill, nor is it in the Act. The Bill does provide more flexibility for the
Secretary when granting quotas, as under the Meat Quotas Act, quotas can
only last two years. However, the Bill does not replicate the explicit ability
of the Secretary to place a limitation on meat or livestock exports to a
specific country, which is currently available under section 5. Under section 7
of the Meat Quotas Act, the Secretary is not obliged to grant a quota
‘if the Secretary is satisfied that it is not in the best interests of the
industry to do so’. This discretion is not explicitly included in the Bill and
does not exist in the Act.
Part 4 provides for relevant transitional arrangements.
Item 13 allows the Minister to make rules that provide for transitional
and savings measures relating to the existing export quota arrangements, due to
the repeal of the existing arrangements pursuant to items 6–9 and 12.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1] Export Control Act 1982,
accessed 27 November 2015.
[2] Australian Meat and
Live-stock Industry Act 1997, Dairy Produce Act 1986,
and Export Charges
(Collection) Act 2015, all accessed 27 November 2015.
[3]. Australian Meat and
Live-stock (Quotas) Act 1990, accessed 27 November 2015.
[4]. Department
of Agriculture, Agricultural
export regulation review: Discussion paper, Department of Agriculture,
Canberra, July 2015, accessed 20 November 2015.
[5]. Ibid.,
p. 9.
[6]. Explanatory
Memorandum, Export Control Amendment (Quotas) Bill 2015, p. 2, accessed 19
November 2015.
[7]. Department
of Agriculture, Agricultural
export regulation review: Discussion paper, op. cit., p. 16.
[8]. Department
of Agriculture, Agricultural
export regulation review: Discussion paper, op. cit., p. 16.
[9]. Ibid.,
p. 23.
[10]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 13, 2015, The Senate, 25 November 2015, p. 28.
[11]. Animal
Health Australia, Submission
to Department of Agriculture and Water Resources, Agricultural export
regulation review: Discussion paper, 2015, p. 3, accessed 20 November 2015.
[12]. See,
for example, Australian Forest Products Association, Submission
to Department of Agriculture and Water Resources, Agricultural export
regulation review: Discussion paper, September 2015, pp. 2–3, accessed 20
November 2015.
[13]. Dairy
Australia, Submission
to Department of Agriculture and Water Resources, Agricultural export
regulation review: Discussion paper, September 2015, p. 5, accessed 20
November 2015.
[14]. Northern
Territory Farmers Association, Submission
to Department of Agriculture and Water Resources, Agricultural export
regulation review: Discussion paper, 2015, p. 1, accessed 20 November 2015.
[15]. Teys
Australia, Submission
to Department of Agriculture and Water Resources, Agricultural export
regulation review: Discussion paper, October 2015, p. 3, accessed 20
November 2015.
[16]. Ibid.
[17]. Explanatory
Memorandum, op. cit., p. 3.
[18]. The
Statement of Compatibility with Human Rights can be found at page 4 of the Explanatory
Memorandum to the Bill.
[19]. The
Parliamentary Joint Committee on Human Rights, Thirty-first
report of the 44th Parliament, November 2015, p. 1.
[20]. Proposed
subsection 23A(4) of the Act.
[21]. Administrative Appeals Tribunal
Act 1975, accessed 27 November 2015.
[22]. The
penalty for breaching subsection 53(1) is 180 penalty units ($32,400). The
penalty for breaching subsection 53(2) is 60 penalty units ($10,800). See
section 4AA (which provides that a penalty unit is equal to $180) and
subsection 4B(3), Crimes
Act 1914.
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