BILLS DIGEST NO. 102, 2015–16              23 March 2016

Primary Industries Levies and Charges Collection Amendment Bill 2016

Robert Dolamore
Economics Section 

Date introduced: 3 March 2016

House:  House of Representatives

Portfolio: Agriculture and Water Resources

Commencement:  The formal provisions of the Bill commence on the day of Royal Assent. The operative provisions of the Bill commence the day after the Bill receives Royal Assent.

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 Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at March 2016.

Purpose of the Bill

The purpose of the Primary Industries Levies and Charges Collection Amendment Bill 2016 (the Bill) is to amend the Primary Industries Levies and Charges Collection Act 1991 (the Act) to allow the Department of Agriculture and Water Resources (DAWR) to provide levy payer information to rural research and development corporations (RDCs) and the Australian Bureau of Statistics (ABS). The provision of this information is primarily intended to facilitate RDCs developing levy payer registers with a view to pursuing engagement strategies which would give primary producers a greater say in how the levies they pay are used.

Background

There are 15 RDCs—five Commonwealth statutory bodies and 10 industry-owned companies—through which the Australian Government and primary producers co-invest in rural research and development (R&D).[1] Currently DAWR, which is responsible for administering, collecting and disbursing the levies paid by primary producers, can only pass levy payer information to two of the RDCs, namely Australian Wool Innovation Limited and Dairy Australia Limited.[2] The Bill removes the legislative impediment to DAWR similarly passing on levy payer information to the remaining 13 RDCs subject to certain specified safeguards.

The National Farmers’ Federation (NFF) is of the view that developing levy payer databases could underpin a range of engagement strategies, which have the potential to improve the accountability of RDCs to levy payers in the investment of their levy contributions.[3] It would also enhance and strengthen Australia’s rural R&D system, including by facilitating better alignment of ‘research investments to industry priorities—improving returns to primary producers and contributing to a more profitable, competitive and sustainable agricultural sector.’[4]

The Bill does not make it mandatory for RDCs to develop levy payer registers, rather, it leaves this decision with the RDCs. In his second reading speech the Deputy Prime Minister and Minister for Agriculture and Water Resources outlined:

The bill removes the legislative impediment to the development of levy payer registers. However, recognising that a ‘one size fits all’ approach would not be appropriate given the diversity of Australian agricultural industries, the Bill allows for the distribution of levy payer information to an RDC to occur only where an RDC, in consultation with industry, requests it, and that request is approved by the minister. The department would then work with the RDC on the administrative design and development of a register. This is consistent with the government’s approach to the broader R&D levy system, which is centred on industry support.[5]

Enabling the distribution of levy payer information to RDCs was recommended in a report by the Senate Rural and Regional Affairs and Transport References Committee (the Committee) following its inquiry into Industry Structures and Systems Governing the Imposition and Disbursement of Marketing and Research and Development (R&D) Levies in the Agriculture Sector.[6] The Committee was of the view:

As the levy system is extremely complex and opaque for many levy payers, the provision of information on levy payers would enable industry bodies (including relevant RDCs) to target and tailor the information they provide to levy payers. The committee takes the view that if used appropriately, information gleamed vis-à-vis the database will provide for voting entitlements of levy payers and enable levy recipients to demonstrate to levy payers where and how their levies are invested.

The committee further considers the collection of such data would assist relevant authorities and industry to communicate timely information to levy payers in the event of biosecurity emergencies, and assist authorities in better identifying risks in such emergencies.[7]

The Committee made six further recommendations to improve the flexibility and responsiveness of the levy system. These matters are not dealt with in this Bill.

The Bill also permits DAWR to pass levy payer information to the Australian Bureau of Statistics (ABS). In relation to this, the Deputy Prime Minister and Minister for Agriculture and Water Resources noted in his second reading speech:

This is consistent with the government’s public data policy statement, which commits to securely share data between Australian Government entities to improve efficiencies, and inform policy development and decision-making.[8]

A copy of the Australian Government’s Public Data Policy Statement is available here.[9]

Safeguards

The Bill includes a number of measures to safeguard the integrity of levy payer information:

•       DAWR can only release levy payer information to the RDCs and ABS[10]

•       RDCs will only be allowed to use the levy payer information for certain specified purposes including: maintaining a levy payer register, publishing statistical de-identified information and determining eligibility to be a member or shareholder of the RDC[11] and

•       the Bill prohibits secondary disclosure of levy payer information by an RDC except in limited circumstances and subject to the approval, in writing, of the Secretary of DAWR.[12] In cases where such approval is granted, the information may only be used for R&D related activities, marketing activities, biosecurity purposes or National Residue Survey purposes.[13]

Committee consideration

Selection of Bills Committee

The Bill has been referred to the Rural and Regional Affairs and Transport Legislation Committee for inquiry and report by 12 May 2016.[14] Details of the inquiry are available here.[15]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills had no comment on the Bill.[16]

Policy position of non-government parties/independents

Australian Labor Party

During the second reading debate the Shadow Minister for Agriculture, Fisheries and Forestry, Joel Fitzgibbon, indicated the Opposition supports the Bill but is seeking greater clarity about the protection of levy payer information and how the proposed protections will work in practice. He stated:

We need to be sure that all the intentions of these changes are as stated and that there will not be an opportunity for levy payments to be misused, deliberately or otherwise, especially by peak industry bodies or councils, which might see an opportunity in using the information to promote their own views about the industry or to canvas other people's views or to run a political campaign. This information would be very powerful in the hands of a peak body, as it is something that has not been available to them before. It could dramatically change the dynamic of any particular sector and it might allow a peak body to advocate increases in levy charges directly to levy payers. These are legitimate questions and we will be seeking to have them answered in the Senate. I am sure that the secretary of the department will be able to help us out in that regard.[17]

Other parties/independents

At the time of writing, the policy positions of other non-government parties and independents were not yet known.

However, the Senate Rural and Regional Affairs and Transport References Committee’s inquiry report Industry Structures and Systems Governing the Imposition and Disbursement of Marketing and Research and Development (R&D) Levies in the Agriculture Sector was endorsed by all the members of the Committee. This included the recommendation that the Act be amended to enable the collection and distribution of levy payer information for the purposes of allowing the creation of levy payer databases for all agricultural industries that pay agricultural levies.[18]

In additional comments to the Committee’s report, Senator David Leyonhjelm, who supports RDCs being more accountable to levy payers, observed:

Once the identities of levy payers and the amount of levies paid are known, it would be a relatively simple matter to consult levy payers on a regular basis as to the level of levies to be paid and their preferences as to how the revenue is spent.[19]

Position of major interest groups

A number of organisations representing the views of primary producers have indicated they support DAWR being able to pass on levy payer information to RDCs for the purposes of developing levy payer registers:

•       the Cattle Council of Australia (CCA) argues the proposed changes will have multiple benefits including greater transparency of industry voting systems, improved disease management and prevention, improved extension services and more targeted communication with levy payers[20]

•       NSW Farmers has a short statement on its website noting that the legislation will empower RDCs to allocate levy payers with voting rights and develop more accountability to primary producers.[21] NSW Farmers supports the creation of levy payer registers[22]

•       the Sheepmeat Council of Australia (SCA) has stated that the amendments will allow it to have better engagement with levy payers and therefore provide for more effective oversight of levy expenditure.[23] The SCA also indicated that it supports the proposed safeguards for levy payer information.

Financial implications

The Explanatory Memorandum states that this Bill has no financial impact.[24]

Statement of Compatibility with Human Rights

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.[25]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights considers that the Bill does not raise human rights concerns.[26]

Key issues and provisions

Parliament is being asked to approve amendments to the Act that remove a legislative impediment to DAWR providing levy payer information to all the current RDCs and the ABS, with a view to the RDCs developing levy payer registers.

The key provisions of the Bill are:

•       Item 2 repeals subsections 27(3), (3A) and (4) of the Act. Subsections 27(3) and (3A) provide the legislative authority for DAWR to provide the wool and dairy industry bodies with levy payer information. These bodies will now receive this information by virtue of proposed section 27A. The repeal of subsection 27(4) removed definitions that are no longer needed or are replaced by new definitions in item 3

•       Item 3 inserts two new sections, 27A and 27B after section 27. Proposed subsection 27A(1) sets out what information DAWR may provide an eligible recipient about a levy payer, the levies and charges the person has paid and production or processing information of a product subject to a levy (determined by instrument under proposed subsection 27A(3)). Proposed subsection 27A(2) defines eligible recipient as all current RDCs and the ABS. Proposed subsection 27A(4) defines Australian Business Number (ABN), which may be released under proposed paragraph 27A(1)(a), as having the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999

•       Proposed subsection 27B(1) sets out the purposes for which an RDC may use levy payer information, namely to: maintain a levy payer or charge payer register; maintain a register of those eligible to vote in any poll conducted by the RDC; publish statistical de-identified information; and perform any of its functions under a Commonwealth law or a contract between itself and the Commonwealth. Proposed subsection 27B(2) allows the RDC to use levy payer information to determine whether a person is, or remains eligible to be, a member or shareholder of the body. Proposed subsection 27B(3) allows the ABS to use levy payer information to perform any of its functions. Subsection 27B(4) prohibits RDCs from providing the levy payer information they receive from DAWR to any other person or body except with the approval, in writing, of the Secretary of DAWR. Subsection 27B(6) restricts the use of information released under subsection 27B(4) to: an R&D activity; marketing activities; biosecurity purposes or National Residue Survey purposes

•       Item 5 inserts proposed subsection 29(1A) which allows the Secretary of DAWR to delegate, in writing, to a Senior Executive Service employee in the Department (who is at or acting at Band 1 or 2 level) the power to authorise an RDC to release levy payer information to another person or body under subsection 27B(4).

Other provisions

The Bill makes a number of consequential amendments to the Australian Meat and Live-stock Industry Act 1997, the Dairy Produce Act 1986 and the National Residue Survey Administration Act 1992.

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[1].              Department of Agriculture and Water Resources (DAWR), ‘Rural research and development corporations’, DAWR website, last reviewed 23 September 2015.

[2].              Primary Industries Levies and Charges Collection Act 1991, subsections 27(3) and (3A).

[3].              National Farmers’ Federation, Submission to the Senate Rural and Regional Affairs and Transport References Committee, Industry structures and systems governing the imposition and disbursement of marketing and research and development (R&D) levies in the agriculture sector, December 2014, p. 28.

[4].              B Joyce, ‘Second reading speech: Primary Industries Levies and Charges Collection Amendment Bill 2016’, House of Representatives, Debates, (proof), 3 March 2016, p. 2.

[5].              Ibid., p. 1.

[6].              Senate Rural and Regional Affairs and Transport References Committee, Industry structures and systems governing the imposition and disbursement of marketing and research and development (R&D) levies in the agriculture sector, The Senate, Canberra, June 2015.

[7].              Ibid., p. 74.

[8].              B Joyce, ‘Second reading speech: Primary Industries Levies and Charges Collection Amendment Bill 2016’, op. cit., p. 1.

[9].              M Turnbull (Prime Minister), Australian Government public data policy statement, policy statement, Department of Prime Minister and Cabinet, 7 December 2015.

[10].              Primary Industries Levies and Charges Collection Act, proposed subsection 27A(2) inserted by item 3 of the Bill.

[11].              Ibid., proposed subsections 27B(1) and (2) inserted by item 3 of the Bill.

[12].              Ibid., proposed subsection 27B(4) inserted by item 3 of the Bill.

[13].              Ibid., proposed subsection 27B(6) inserted by item 3 of the Bill. The National Residue Survey (NRS) is part of Australia’s system for managing the risk of chemical residues and environmental contaminants in Australian food products. It was established by the Australian Government in the early 1960s and since 1992 has been an industry-funded activity. The NRS is primarily focused on facilitating the testing of animal and plant products for pesticide and veterinary medicine residues, and environmental contaminants. More information about the NRS is available on DAWR’s website.

[14].              Selection of Bills Committee, Report, 4, 2016, The Senate, Canberra, 17 March 2016.

[15].              Senate Rural and Regional Affairs and Transport Legislation Committee, ‘Primary Industries Levies and Charges Collection Amendment Bill 2016’, Australian Parliament website.

[16].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 4, 2016, 17 March 2016, p. 8.

[17].              J Fitzgibbon, ‘Second reading speech: Primary Industries Levies and Charges Collection Amendment Bill 2016’, House of Representatives, Debates, 16 March 2016, p. 88.

[18].              Senate Rural and Regional Affairs and Transport References Committee, Industry structures and systems governing the imposition and disbursement of marketing and research and development (R&D) levies in the agriculture sector, op. cit., p. 74.

[19].              Ibid., p. 80.

[20].              Cattle Council of Australia (CCA), CCA closer to direct membership with levy expenditure legislation, media release, 3 March 2016.

[21].              NSW Farmers, ‘Legislation to create levy payer database introduced’, NSW Farmers website.

[22].              Ibid.

[23].              Sheepmeat Council of Australia (SCA), Sheep meat industry welcomes levy payer register legislation, media release, 3 March 2016.

[24].              Explanatory Memorandum, Primary Industries Levies and Charges Collection Amendment Bill 2016, p. 4.

[25].              The Statement of Compatibility with Human Rights can be found at page 5 of the Explanatory Memorandum to the Bill.

[26].              Parliamentary Joint Committee on Human Rights, Thirty-sixth Report of the 44th Parliament, The Senate, Canberra, 16 March 2016, p. 1.