Chapter 2 - The legislation
Background
2.1
The bills are the result of an initiative by the Australian forest and
wood products industry. In late 2002, the Forest and Wood Products Council
established a Steering Committee to consider the options available to address
the challenges faced by the forest and wood products industry. As a result, the
Steering Committee released a report proposing the creation of a new company to
deliver not only research and development but also marketing and promotion services
for the industry.[1]
2.2
The current body, Forest and Wood Products Research and Development
Corporation (FWPRDC), is a Commonwealth statutory authority established under
the Primary Industries and Energy Research and Development Act 1989.
Under this legislation the FWPRDC provides research and development services,
but cannot undertake marketing and promotion activities.[2]
2.3
Industry largely approved the Steering Committee proposal through a
ballot held between March and April 2006. Consequently, the four major industry
associations, Australian Plantation Products and Paper Industry Council (A3P),
Australian Forest Growers (AFG), Australian Timber Importers Federation (ATIF)
and the National Association of Forest Industries (NAFI), approached the
Minister for Fisheries, Forestry and Conservation to proceed with the
legislation necessary to implement the proposal.[3]
Forestry Marketing and Research and Development
Services Bill 2007
Purpose of the bill
2.4
This bill provides for the establishment of a new, not-for-profit,
industry owned company which will provide marketing and promotion, research and
development and other industry services to the forestry industry. The new
company will replace and augment the functions of the current Commonwealth
statutory authority, the FWPRDC.[4]
2.5
The bill also gives the minister the authority to enter into a funding
contract with a company, enabling the Commonwealth Government to make payments
to that company.[5]
Provisions of the bill
2.6
The main provisions of the bill, as explained in the Explanatory Memorandum
(EM), are set out below:[6]
Part 1 - Preliminary
2.7
Part 1 provides background information regarding the bill, including the
date of commencement, definitions of terms, and provides that the Act will
apply both within and outside of Australia, and will extend to all external
territories.
Part 2 – Funding contract
2.8
Clause 7 outlines the two kinds of payments that the Commonwealth may
make to a company under an agreed funding contract, as follows:
- Forestry service payments- to be spent on marketing, promotions,
research and development and other activities to benefit the Australian
forestry industry, and/or, to repay the Commonwealth for administrative
expenses incurred relating to the collection of levies, charges and related
payments from industry.
- Matching payments- to only be spent on research and development
activities to benefit the Australian forestry industry, and/or, to repay the
Commonwealth for administrative expenses incurred relating to the collection of
levies, charges and related payments from industry.[7]
2.9
Clause 8 provides for the minister to enter into, or vary, a contract
with a company, thereby allowing the Commonwealth to make forestry service and
matching payments (see paragraph 2.7) to that company, provided that the
minister is satisfied that the funds are spent appropriately. A new or varied
contract must be tabled by the minister in each House of Parliament within 15
sitting days of that House.
2.10
Clause 9 appropriates the Consolidated Revenue Fund so payments can be
made to the industry services body under the funding contract, and sets overall
limits on the appropriation of funds for forestry service and matching
payments. The clause also sets annual limits on the amount that can be paid to
the industry services body. The annual limit is defined as:
...the lesser of either 0.5% of the gross value of production
(GVP) of the Australian forestry industry for the financial year or 50% of the
amount spent by the industry services body on research and development
activities that qualify under the funding contract in that financial year.[8]
2.11
Clause 9 also allows research and
development expenditure that is not matched because of the limits on funding in
a particular financial year (unmatched research and development excess), to be
carried forward into later years.
Part 3 –Industry services body
2.12
Clause 11 provides that once a contract is made with a company under part
2 of the bill, the minister may declare that company to be the 'industry
services body', while clause 12 outlines the circumstances under which the
minister can declare that a company ceases to be the industry services body.
Part 4 – Miscellaneous provisions
2.13
Clause 13 allows the minister to give written direction to the industry
services body if the direction is deemed to be '...in Australia’s national
interest because of exceptional and urgent circumstances...' and '...for a purpose
that is within the Commonwealth's legislative power.'[9]
The minister must give the directors of the body an opportunity to discuss the
direction before it is made. Directions are binding, and must be tabled in
Parliament and included in the body's annual report.[10]
2.14
Clause 16 makes provision for the Governor-General to make regulations
under the bill.
Forestry Marketing and Research and Development Services (Transitional and
Consequential Provisions) Bill 2007
Purpose of the bill
2.15
This bill provides for the abolition of the FWPRDC, the transfer of
assets, liabilities and staff to the new company, and other transitional
arrangements. The bill also provides for the repeal of some legislation and
consequential amendments to other legislation.[11]
Provisions of the bill
2.16
The main provisions of the bill, as explained in the EM, are set out
below:[12]
Schedule 1 – Transitional
provisions
2.17
Part 1 provides definitions of terms, and states that the Act will apply
both within and outside of Australia, and will extend to all external territories.
2.18
Clauses 4 and 6 provide that upon the cessation of FWPRDC, its assets
and liabilities will immediately become the assets and liabilities of the new industry
services body (the new body), without any conveyance, transfer or assignment,
and that these processes will be exempt from stamp duty and any other taxation.[13]
Clause 8 further states that registrations of assets are also transferred.[14]
2.19
Clause 5 notes that any pending proceedings in any court or tribunal
regarding the assets and liabilities of FWPRDC will also be transferred to the new
body.
2.20
Clause 7 provides that upon the cessation of
FWPRDC, 'any references to the FWPRDC in instruments are to be construed as
references to the new industry services body.'[15]
2.21
Clauses 9 and 10 provide for the transfer of all FWPRDC staff to the new
body on the cessation of FWPRDC. These staff will be employed by the new body
under the same terms and conditions and with equivalent accrued entitlements to
benefits. The service of these employees will be considered continuous with
their prior service as employees of FWPRDC. Under clauses 20 to 25, this
includes accrued long service leave benefits and credits, however, transferred
employees are not entitled to receive payment for ceasing to be employed in the
public service.
2.22
Clause 11 notes that after the cessation of FWPRDC, the terms and
conditions of a transferred staff member's employment may be varied in
accordance with applicable laws, rewards, agreements and procedures.
2.23
Clause 14 provides that the Commonwealth will be liable to pay the Comcare
premium in relation to employees with workers compensation claims arising from
their employment with FWPRDC prior to its cessation.
2.24
The EM notes that under clauses 17 and 18,
[t]he new industry services body is not an
'approved authority' for the purposes of Commonwealth public sector
superannuation legislation, so private superannuation arrangements will apply
to employees from the cessation date...[16]
2.25
Under clause 27, the FWPRDC is required to produce a final annual report
on its operation and financial status up until the cessation date.
2.26
Clause 28 provides that any unmatched research and development
expenditure from the FWPRDC is to be carried over to the new industry services
body upon cessation, and provides a formula for calculating this research and
development excess.
2.27
Clause 32 allows the Governor-General to make regulations on any matter
contained in the bill.
Schedule 2 – Consequential provisions
2.28
Schedule 2 provides for consequential amendments to the following Acts
to enable the operation of the bill: Primary Industries and Energy Research
and Development Act 1989, Primary Industries (Customs) Charges Act 1999,
Primary Industries (Excise) Levies Act 1999, and Primary Industries
Levies and Charges Collection Act 1991.
Consideration by the Senate Scrutiny of Bills Committee
2.29
The Senate Standing Committee for the Scrutiny of Bills has a standing
brief to consider all bills as to whether they trespass unduly on personal
rights and liberties, and related matters.
2.30
The Scrutiny of Bills Committee noted that under clause 8 of the Forestry
Marketing and Research and Development Services Bill 2007, the minister is
required to table a contract entered into with a company, but queried whether
this constituted sufficient parliamentary scrutiny.[17]
2.31
The Scrutiny of Bills Committee also raised concerns about
non-reviewable decisions, noting that the Forestry Marketing and Research and
Development Services Bill 2007 endows the minister with discretionary power to
terminate the contract between the Commonwealth and the industry services body,
and to issue a direction to the body, without providing grounds to challenge
either of these decisions. The Scrutiny of Bills Committee has consequently
sought the minister's advice as to whether it may be appropriate to incorporate
some mechanism of review regarding the exercise of these discretionary
decisions into the bill.[18]
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