Introduction
Referral of the inquiry
1.1
On 10 May 2018, the Senate referred the provisions of the Primary
Industries Levies and Charges Collection Amendment Bill 2018 (the bill) to the
Rural and Regional Affairs and Transport Legislation Committee (committee) for
inquiry and report by 13 June 2018.[1]
1.2
The bill seeks to amend the Primary Industries Levies and Charges
Collection Act 1991 (the Act) to improve the collection and reporting of
agricultural levies and charges, ensure consistency between legislation and
industry changes, and further support the effective operation of levy payer
registers. The bill makes minor amendments to support the effective operation
of levy payer registers, including measures to further protect the privacy of
levy payer information.
Conduct of the inquiry
1.3
The committee advertised the inquiry on its website, and wrote to a
range of stakeholders inviting submissions by 25 May 2018.
1.4
The committee received 7 submissions, as listed in Appendix 1. The
submissions were published on the committee's inquiry webpage.
Acknowledgement
1.5
The committee thanks the organisations and individuals that made
submissions to the inquiry.
Structure of the report
1.6
The report consists of three chapters. The remainder of this chapter sets
out the purpose of the bill and provides background information on the
operation of levies in the agricultural sector. This chapter also discusses the
issues and recommendations made in previous committee reports.
1.7
Chapter 2 provides an overview of the bill, and Chapter 3 discusses the concerns
raised in evidence, concluding with the committee's views and recommendations.
Purpose of the bill
1.8
The purpose of the bill is to amend the Act to improve the collection
and reporting of agricultural levies and charges. The amendments would enable:
- the Secretary of the Department of Agriculture and Water
Resources (the Secretary) to determine certain acts which, when performed,
would make a person liable to collect and report on levies and charges;
- an authorised person (appointed by the Secretary under section 26
of the Act to serve as a collection authority) to publish statistical
information collected under the Primary Industries Levies
and Charges Collection Regulations 1991 (the Regulations);
- the Secretary to, by legislative instrument, provide for the
collection of production or processing information relating to a collection
product;
- the Australian Company Number of a person who has paid, or is
liable to pay, levies or charges in respect of a collection product to be
disclosed by an authorised person under section 27A of the Act to an eligible
recipient;[2]
- the Secretary to impose conditions on the disclosure of
information about levy and charge payers by eligible recipients to third
parties under section 27B of the Act;
- the Secretary to revoke the approval for an eligible recipient to
disclose information about levy and charge payers to a third party under
section 27B of the Act if conditions of the approval are breached;
-
a person dissatisfied with a decision of the Secretary regarding
the provision of levy payer information to seek review of that decision under
section 28 of the Act.[3]
Background
Levies in the agricultural sector
1.9
The Department of Agriculture and Water Resources (department) collects,
administers and disburses agricultural levies and charges on behalf of
Australia's primary industries.[4] Revenue collected from a levy or charge is directed to a range of research and
development activities. In many cases, the Australian Government matches the
research and development component of levies on a dollar for dollar basis. In
2016–17, the department disbursed $790.8 million in levies, charges and
Commonwealth-matched payments to 18 levy recipient bodies.[5]
1.10
There are four key participants in the Australian levy system: levy
payers, intermediaries, levy recipient bodies, and the Department. These participants,
and their respective roles, are set out in Table 1.1 below:
Table 1.1—Levy system participants [6]
Participant |
Role |
Levy payers |
Producers of agriculture products who are responsible, usually
through representative bodies, for proposing the establishment of a levy. |
Intermediaries |
Agents usually responsible for lodging levy returns and passing on
the levy to the Department on behalf of levy payers. |
Levy recipient bodies |
The 15 research and development corporations, Animal Health
Australia, Plant Health Australia and the National Residue Survey, who are
responsible for investing levies in line with the purpose for which the levy
was collected. |
Department of Agriculture and Water Resources |
Government department responsible for processing levy returns,
inspecting collection agents' records, and providing levy disbursements to
levy recipient bodies. |
1.11
Before levies and charges can be invested by levy recipient bodies, they
must first be collected by an intermediary. An intermediary is an individual or
organisation that is regulated through the Act to collect and report levies and
charges from levy payers and pass them on to the department. They are
identified as 'narrow points in the supply chain' through which most, if not
all, levied products flow. Examples include stock and station agents, fruit and
vegetable market operators, abattoirs, exporters, or grain pools.[7]
1.12
Once collected and reported, levies and charges are provided to levy
recipient bodies. As levy recipient bodies, research and development
corporations (RDCs) derive the majority of their funding from statutory levies.
RDCs are either statutory bodies (statutory RDCs) established under the Primary
Industries Research and Development Act 1989 (with the exception of Wine
Australia), or industry-owned corporations (industry-owned RDCs) declared as
industry services bodies under specific legislation.
1.13
Statutory RDCs are government entities with a board of directors
appointed by the Minister of the Department of Agriculture and Water Resources
(minister) based on recommendations from a selection committee. Since 2013,
statutory RDCs have also been able to undertake marketing activities at the
request of industry, where supported by a statutory marketing levy.[8]
1.14
Industry-owned RDCs are independent corporate entities with
expertise-based boards. While established under specific legislation, they must
also comply with provisions of the Corporations Act 2001, which sets out
the obligations on companies and their boards of directors.[9]
1.15
RDCs facilitate and fund scientific research for Australian rural
industries to improve the profitability, productivity, competitiveness and
long-term sustainability of Australia's primary industries.[10]
1.16
A list of the current statutory and industry-owned RDCs, and their
enabling legislation, is provided in Table 1.2 below:
Table 1.2—Research and Development Corporations [11]
Statutory RDCs |
Wine Australia |
Wine Australia Act 2013 |
Cotton Research and Development Corporation |
Primary Industries Research and Development Act 1989 |
Fisheries Research and Development Corporation |
Primary Industries Research and Development Act 1989 |
Grains Research and Development Corporation |
Primary Industries Research and Development Act 1989 |
Rural Industries Research and Development Corporation (AgriFutures
Australia) |
Primary Industries Research and Development Act 1989 |
Industry-owned RDCs |
Australian Egg Corporation Limited |
Egg Industry Service Provision Act 2002 |
Australian Livestock Export Corporation Limited (LiveCorp) |
Australian Meat and Live-stock Industry Act 1997 |
Australian Meat Processor Corporation |
Australian Meat and Live-stock Industry Act 1997 |
Australian Pork Limited |
Pig Industry Act 2001 |
Australian Wool Innovation Limited |
Wool Services Privatisation Act 2000 |
Dairy Australia Limited |
Dairy Produce Act 1986 |
Forest and Wood Products Australia |
Forestry Marketing and Research and Development
Services Act 2007 |
Horticulture Innovation Australia Limited |
Horticulture Marketing and Research and Development
Services Act 2000 |
Meat and Livestock Australia |
Australian Meat and Live-stock Industry Act 1997 |
Sugar Research Australia Limited |
Sugar Research and Development Services Act 2013 |
Committee inquiries 2015–16
1.17
On 30 June 2015, the Senate Rural and Regional Affairs and Transport References
Committee (References Committee) tabled its inquiry report on Industry
structures and systems governing the imposition and disbursement of marketing
and research and development levies in the agriculture sector. In its
report, the committee made several recommendations pertaining to the
establishment of a cost-effective, automated agricultural levy system in which
levy payer information could be collected for the purpose of levy payer
engagement.[12] The References Committee noted that the introduction of an automated levy
collection system would:
- provide for transparency in terms of levy collection;
- provide an accurate mechanism to record levy payers' details;
- enable the rapid settlement of levy payment and timely transfer
of levy revenue to the department;
- provide a mechanism to determine voting entitlements;
-
be subject to regular independent auditing and verification; and
- provide an accurate audit trail.[13]
1.18
In March 2016, the committee was referred the Primary Industries
Levies and Charges Collection Amendment Bill 2016 for inquiry and report. The
purpose of the bill was to enable the collection and distribution of levy payer
information. The committee conducted an inquiry into the bill, noting that it
sought to implement the 2015 Reference Committee's first recommendation to
amend the Act in order to:
...enable the collection and distribution of levy payer information
to allow the creation of levy payer databases for all agricultural industries
that pay agricultural levies.[14]
1.19
The committee endorsed the bill and further recommended that the department
continue to consult with RDCs on implementing the regulatory and administrative
framework associated with the measures contained in the bill.[15] The bill was passed by both houses of Parliament in September 2016.[16]
Levy Payer Registers
1.20
Australian Wool Innovation Limited and Dairy Australia Limited have
mechanisms in place under their respective legislation to allow for the
collection and distribution of levy payer information.
1.21
The 2016 amendments to the Act allowed the department to provide levy
and charge payer information to additional RDCs and to the Australian Bureau of
Statistics (ABS). The changes enabled these recipients to use the information
for purposes including developing levy payer registers and publishing
statistics.
1.22
Consequential changes were also made to the Australian Meat and
Live-stock Industry Act 1997 and the Dairy Produce Act 1986 to
repeal equivalent limitations on the use of levy payer information by the dairy
and meat and livestock RDCs.[17]
1.23
Under the 2016 provisions, registers can hold information about
individuals and organisations who pay levies and/or charges, including:
- the levy payer's name, address, contact details;
- Australian business or company number;
- the amount of levy or charge paid; and
-
the commodity that the levy or charge was paid against.[18]
1.24
A pilot levy payer register was conducted with the Grains Research and
Development Corporation in 2017. In March 2018, the department noted that the
pilot program was successful, and confirmed that it could build on its existing
levy collection system to collect grain levy payer data through 'system
enhancements'.[19]
1.25
The department further informed the committee that the infrastructure
for levy payer registers will be in place by 1 July 2018. Levy recipient bodies
(RDCs) will be able to utilise the platform to establish their own levy payer
register, following consultation with industry and government. Once the
platform is operational, the RDCs will be able to access levy payer information
and data of relevance to them through the web-based portal. The 'enhanced'
system will also be open to both the wool and dairy industries to use, to
replace their existing levy payer databases.[20]
Collection and use of levy payer
information
1.26
According to the department, only eligible recipients (statutory and
industry‑owned RDCs) may request the establishment of an automated levy
payer register. Once established, only the eligible recipient body may receive
levy payer information on the register. Eligible recipients can use levy payer
information for the purpose of:
- maintaining a register of who has paid a levy and/or charge;
- maintaining a register of persons eligible to vote in a poll
conducted by the eligible recipient;
- publishing aggregated and de-identified data of a statistical
nature;
- determining whether a person is, or remains eligible to be, a
member or shareholder of an eligible recipient; and
-
performing its functions under a law of the Commonwealth or under
contract/agreement with the Commonwealth.
1.27
As the department is bound by the Australian Privacy Principles, it will
introduce protocols to ensure that any personal information is kept
confidential and used only for the purposes specified in legislation.[21] This includes the implementation of a number of security measures which will
limit access to the information retained in the portal.
1.28
Third parties may at times be granted access to levy payer register
information. However, this access is subject to written approval from the
Secretary, who also has the power to impose conditions on the approval. This is
a practice already in place in the dairy industry, whereby Dairy Australia
engages a third party service provider to calculate the levy payer voting
entitlements for its dairy poll which takes place every five years.[22] The department advised the committee that the purposes for which information
from the register may be disclosed to a third party are:
- for a research and development activity (within the meaning
defined in the Act);
-
for marketing purposes (within the meaning contained in the Act);
- for biosecurity reasons;
- for National Residue Survey purposes; and
-
in connection with any activity carried out, or proposed to be
carried out, by an RDC for the benefit of producers in the relevant industry.[23]
1.29
Any third party that is granted approval to access levy payer
information from a register must also act in accordance with Australian Privacy
Principles. The department informed the committee that this requirement would
be set out in a binding agreement between the RDC and the nominated third party
relating to the access, use and protection of levy payer information.[24]
1.30
In addition to third parties that may be granted access to levy payer
information, the Australian Government's Public Data Policy permits the
government to securely share data between Australian Government entities in
order to:
...improve efficiencies, and inform policy development and
decision‑making; and uphold the highest standards of security and privacy
for the individual, national security and commercial confidentiality.[25]
1.31
Under the current legislation, levy payer information can only be shared
with the Australian Bureau of Statistics, for the purpose of statistical
analysis.[26]
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