Bills Digest No. 3,
2018–19
PDF version [578KB]
Dinty Mather
Economics Section
1 August 2018
Contents
Purpose of
the Bill
Background
Committee
consideration
Position of
major interest groups
Financial
implications
Statement of
Compatibility with Human Rights
Key issues
and provisions
Date introduced: 28 March
2018
House: House of
Representatives
Portfolio: Agriculture
and Water Resources
Commencement: On the
day after 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
August 2018.
Purpose of
the Bill
The purpose of the Primary Industries Levies and Charges
Collection Amendment Bill 2018 (the Bill) is to amend the Primary Industries
Levies and Charges Collection Act 1991 (the Act) to:
-
allow the Secretary of the Department of Agriculture and Water Resources
(the Secretary) to determine where levies and charges are collected in the
supply chain by allowing the Secretary to determine certain acts which, when
performed, would make a person liable to collect and report levies and charges[1]
-
support the effective operation of levy registers by facilitating Research
and Development Corporations (RDCs) to engage directly with the levy payers
-
allow for the collection of commodity specific information in addition
to basic levy payer information in limited circumstances and
-
allow the Department of Agriculture and Water Resources (the Department)
to publish statistics about levies and their collection to inform industry
about the cost effectiveness of individual levies and the system generally.
Background
About RDCs
Australia’s RDCs are the main way the Australian government
and primary producers co-invest in research and development for industry and
community benefits.
There are currently 15 RDCs—five Commonwealth statutory
bodies and 10 industry-owned companies (IOCs). All the RDCs manage research and
development services, with most IOCs also providing other industry services,
mainly marketing.[2]
The RDCs are funded primarily by statutory research and
development levies (or charges) on various commodities, with matching funding
from the Australian Government. To expand Australia’s rural research and
development efforts, the government matches expenditure on eligible research
and development, generally up to 0.5 per cent of the determined industry gross
value of production. RDCs are accountable to both industry and government.[3]
Legislative basis for levies and
charges
The Act establishes the legal framework for the collection
of levies and charges on primary products. The Minister’s second reading speech
noted:
Levies are collected by the Department of
Agriculture and Water Resources and disbursed to 18 levy recipient bodies.
These bodies invest in research and development, marketing, residue testing and
biosecurity for the benefit of levied industries and the broader economy. By
value of production, about 92 per cent of agricultural industries have chosen
to have a levy. There are currently 113 levies collected across 77 commodities.[4]
In 2015, the Senate Rural and Regional Affairs and
Transport References Committee tabled a report titled Industry structures and systems
governing the imposition and disbursement of marketing and research and
development (R&D) levies in the agriculture sector. The report
recommended a number of changes to the Act and the collection of levies.[5]
This included that the Act be amended to ‘enable the collection and
distribution of levy payer information which will allow the creation of levy
payer databases for all agricultural industries that pay agricultural levies’.[6]
The Australian Government response to the report was supportive of a number of
the Committee’s recommendations.[7]
Subsequently, the Primary
Industries Levies and Charges Collection Amendment Act 2016 amended the Act to establish levy payer registers by allowing the
Department to disclose levy payer information to the Council of Rural
Research and Development Corporations (the Council) and the
Australian Bureau of Statistics (ABS).[8]
The amendments allowed the RDCs which receive levy funds to identify and
consult with levy payers.[9]
The purpose of those amendments was to give primary producers a greater say in
how levies are used. In this regard, a pilot project was successfully completed
in partnership with the Grains Research and Development Corporation.[10]
Intermediaries
Currently, the Act refers to intermediaries
who are required to pay levy or charge amounts on behalf of producers. The
Explanatory Memorandum states that the Act needs to be updated to reflect
‘modern business practices’ including leviable commodities being traded on
online marketplaces:
The Bill will provide clarity for agricultural industries by
allowing 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 levies and charges. This will allow the
efficient and effective collection of levies and charges at the optimal point
in the supply chain, regardless of the arrangement used to facilitate the
transaction. This will ensure the policy intention of the Act and industry
needs continue to be met.[11]
Committee
consideration
Senate Rural and Regional Affairs
and Transport Legislation Committee
The Bill was referred to the Senate Rural and Regional
Affairs and Transport Legislation Committee for inquiry and report by 13 June
2018. The Committee recommended that the Bill be passed. Details of the inquiry
are at the Committee
website.
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills (Scrutiny
Committee) considered the Bill in Scrutiny Digest 5 of 2018.
Secretary to make legislative
instruments
The Scrutiny Committee raised concerns regarding the insertion
of a proposed section 7A which would allow the Secretary to determine,
by legislative instrument, additional acts that, when performed, would make a
person liable to collect levies and charges. The Scrutiny Committee’s view was
that ‘... significant matters, such as the types of acts in relation to which a
person will be liable to collect a levy or charge, should be included in
primary legislation unless a sound justification for the use of delegated
legislation is provided’.[12]
Further, it considered that ‘... if the secretary is to be
granted the power to determine additional acts by legislative instrument, the
committee considers it would be appropriate for consideration to be given to
including specific consultation requirements on the face of the bill’.[13]
The Scrutiny Committee sought Minister’s advice on these matters.
Government response
The Minister responded to the Scrutiny Committee stating:
Since the Act was introduced in 1991, levies and charges have
been collected on behalf of Australian producers at the most efficient point in
the supply chain ...
Australian producers continue to be liable for levy and
charge under the Act, however, the intermediaries they now deal with were not
contemplated in 1991. Those intermediaries may therefore not be clearly
described in the legislation, or aware of the requirement to collect levy and
submit levy returns on the Australian producer's behalf.
Without the proposed amendments to the Act, Australian producers will
face additional red-tape, as they will have to submit their own returns. This will mean that as new business practices
continue to emerge, collection and reporting of levies and charges will become
less efficient and cost effective ...
Delegated legislation is necessary to allow the collection
mechanisms, which are unique to each industry, to be agile to realise the
benefits of increased efficiency and reduced cost recovery
charges.[14]
Secretary may issue non-statutory
guidelines
The Scrutiny Committee also noted that proposed section
7A provides that the Minister ‘may’ issue guidelines (which must be ‘put’
on the Department’s website) to which the Secretary must have regard in
exercising the power to determine intermediaries. It sought the Minister’s
advice as to:
- why
the bill does not positively require the Minister to issue guidelines with
respect to the secretary's power and
- why
it is considered appropriate to state that these guidelines will not be
legislative instruments (and therefore not subject to any Parliamentary
scrutiny)’.[15]
Government response
According to the Minister, the guidelines:
... should not have legislative character because the material in
the guidelines will not determine or alter the content of the law or create or
affect a privilege, interest or right. The guidelines would be specific
operational guidance material, designed to assist the Secretary to make a
legislative instrument that determines which acts are those of intermediaries.[16]
Position of
major interest groups
The submissions
made to the Senate inquiry into the Bill indicate major interest groups are
largely supportive of the proposed amendments. For example, the Council stated:
The Council of Rural RDCs supports the intent behind this
Bill to improve the collection and reporting and agricultural levies and
charges, ensure consistency between the legislation and industry changes, and
the effective operation of levy payer registers ...
The Council of Rural RDCs supports the intent behind this
Bill to improve the collection and reporting and agricultural levies and
charges, ensure consistency between the legislation and industry changes, and
the effective operation of levy payer registers ...
We understand that over time, as the dataset become more
robust and comprehensive, that there may be some potential for the information
collected to be used for statistical analysis to give further insights into
rural industries in Australia. This would be a positive outcome, and one which
is allowed under the legislation.[17]
The National Farmers Federation also expressed its support
for the Bill on the grounds that ‘it builds further transparency into the levy
system and presents an opportunity for representative organisations to more
effectively engage and consult with the levy payers they represent’.[18]
Of concern to the Council, however, was the potential
burden on RDCs in complying with privacy requirements including for the potential
disclosure of information from a register to third parties. It noted that there
was ‘limited advice to date from the Department regarding third party data
release’.[19]
Financial
implications
The Explanatory Memorandum states that the Bill will have
no financial impact on the Australian Government Budget.[20]
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.[21]
Parliament Joint Committee on Human
Rights
The Parliament Joint Committee on Human Rights considered
the Bill did not raise human rights concerns.[22]
Key issues
and provisions
Secretary’s determination of
intermediaries
Currently section 7 of the Act sets out the circumstances in
which an intermediary is liable to pay an amount of levy or
charge.
The Bill does not amend the formal definition of intermediary
in section 4 of the Act. Instead,
item 5 inserts proposed section 7A so that the Secretary may, by
legislative instrument, determine certain acts ‘which, when performed, would
make a person liable to collect and report levies’.[23]
The legislative instruments, made under proposed subsection 7A(1), will
be subject to disallowance and sunsetting in accordance with the Legislation Act 2003.[24]
The Explanatory Memorandum states:
Section 7 of the Act does not describe all modern methods for
buying, selling, importing or exporting agricultural produce as being relevant
acts of intermediaries. This item will ensure that these acts can be covered by
the legislative framework and ensure levies and charges can continue to be
collected at the most efficient point in the supply chain.[25]
Proposed subsection 7A(3) of the Act provides that the
Minister may, by written instrument, issue guidelines for the purposes of the
section. The Secretary, in determining certain acts of intermediaries
under proposed section 7A, must have regard to any guidelines issued by
the Minister.[26]
The guidelines are not legislative instruments and so are not disallowable or
subject to sunsetting.[27]
According to the Explanatory Memorandum, the guidelines will ‘include
provisions that ensure that only relevant organisations’ are captured in
determinations.[28]
In addition, the guidelines will include ‘considerations such as Australia’s
obligations as a Member of the World Trade Organization relating to importation
and exportation’.[29]
The guidelines must be put on the Department’s website.[30]
That requirement is intended ‘to provide transparency and accountability for
participants in the levy and charge system’.[31]
Section 7 of the Act deals with the liability of intermediaries.
Items 1 and 2 insert proposed paragraphs 7(1)(ca) and 7(2)(ba)
of the Act respectively to insert references to ‘a person who does an act,
determined in an instrument under subsection 7A(1)...’. Existing subsection
7(1) relates to intermediaries that buy or sell products on behalf of a
producer and those which buy products from a producer other than through a
buying or selling agent. Subsection 7(2) relates to processing intermediaries. The
amendments operate to allow the Secretary to determine that additional acts are
the acts of those intermediaries in order to better secure the payment of levy.
Item 3 of the Bill repeals and replaces subsections
7(3) and 7(3A) of the Act which deal with the liability of intermediaries who
are exporting agents and importing agents respectively. Under the Bill, the
relevant subsections incorporate references to the ‘a person who does an act,
determined in an instrument under subsection 7A(1)...’ and ‘have been redrafted
for consistency’ with subsections 7(1) and 7(2).[32]
Currently, subsection 7(6) of the Act provides a list of
intermediaries who are not liable for a levy or charge to the extent it has
already been paid. Item 4 of the Bill inserts proposed paragraph
7(6)(f) into the Act so that the Secretary may determine that a person who
does an act determined in an instrument made under proposed subsection 7A(1)
is not liable to pay a levy or charge.
Publication and use of levy payer information
Currently sections 27–27B of the Act set out the legal
framework for the giving of levy payer information to RDCs and the use of that
information as follows:
- an
authorised person[33]
is empowered to provide levy payer contact information, and details of the levy
paid or payable, to an eligible recipient[34]
- an
eligible recipient is an RDC or the Australian Bureau of
Statistics (ABS)[35]
- the
information provided to the eligible recipient can be used for, amongst other
things:
-
the development and maintenance of levy payer or charge payer registers
-
making public any statistical information
-
allocating voting rights for industry polls more efficiently and
accurately and
- any
functions required of the recipient under Commonwealth laws or under a funding
agreement between the RDC and the Commonwealth.[36]
Importantly, the Act limits secondary disclosure of the information
included in a levy payer register, except in limited circumstances and where
expressly permitted by the Secretary in writing.[37]
Items 6, 7 and 9 of the Bill make minor changes to the
heading and text of section 27 of the Act to ensure consistency in terminology
so that references to publishing of information become references to the giving
of information.
Item 8 of the Bill omits the ‘or’ between paragraphs
27(1)(a) and (b) to enable an authorised person to give both sets of
information prescribed by those paragraphs rather than one or the other.
Item 14 of the Bill inserts proposed subsections
27B(4A)–(4D) which aim to further protect the privacy and security of levy
payer information. In particular, proposed subsection 27B(4A) provides
that the Secretary may make a secondary disclosure approval subject to
conditions. In that case, proposed subsection 27B(4B) permits the
Secretary to revoke an approval if he, or she, is satisfied that the holder of
the approval has breached a condition. Where the Secretary revokes an approval,
proposed subsection 27B(4C) requires the Secretary to give notice of the
revocation to the holder.[38]
Publication of statistical
information
Item 15 of the Bill inserts proposed section 27C
to clarify that an authorised person may publish statistics that relate to
levies or charges received or receivable by the Commonwealth. According to the Explanatory
Memorandum:
... [d]ata is anonymised and individual levy payers are not
identified in statistical publications
The publishing of this information to industry stakeholders,
representative organisations, levy and charge payers and the Australian
taxpayer will facilitate an assessment of the cost-benefit aspects of the levy
and charge system, and provide an overview of the effectiveness, use and scale
of the system.[39]
Review of decisions
Existing subsection 28(1) of the Act provides that a person
affected by a relevant decision who is dissatisfied with the
decision may, within 28 days after the day on which the decision first comes to
the notice of the person (or within such further period as the Minister allows),
request the Minister to reconsider the decision. Subsection 28(9) of the Act
lists those decisions which are relevant decisions.
Item 16 of the Bill inserts proposed paragraphs
28(9)(b), (c) and (ca) into the Act to expand the existing list
to include decisions made by the Secretary in relation to giving
approvals, specifying conditions in an approval and revoking an approval under
subsection 27B(4). This applies the reconsideration and review process in
section 28 to those decisions by the Secretary.
Returns
Section 30 of the Act contains Regulation making powers.
In particular subsection 30(2) provides for the making of Regulations:
- requiring
producers of collection products,[40]
intermediaries in relation to such producers, and any other persons prescribed,
to give returns or information for the purposes of the Act[41]
and
- requiring
persons who produce prescribed goods or provide prescribed services, and any
other persons prescribed in relation to such goods or services, to give
returns or information for the purposes of the Act.[42]
Item 20 of the Bill inserts proposed section 32
into the Act. Proposed subsection 32(1) provides that, where a return is
required to be lodged under the Regulations in relation to a collection
product, the return must contain details relating to the production or
processing of that collection product that have been determined in an
instrument under proposed subsection 32(3). Proposed subsection 32(3)
empowers the Secretary to make a legislative instrument, which determines the
additional information to be included in a levy or charge return. Proposed
subsection 32(2) clarifies that the additional details required in a return
under the Secretary’s determination are in addition to the information already
required to be included in a return under the Regulations.
The Explanatory Memorandum elaborates on the additional
details which may be required in returns:
In some limited cases, additional commodity-specific
information may be required to be collected in a return lodged under the
Regulations for the purposes of levy payer registers. For example, this could
include information on the area of production, inputs or processing methods
used in relation to a particular commodity.[43]
Delegation of powers
Subsection 29(1) allows the Secretary to delegate his, or
her, powers under the Act to other departmental officers except for certain specific
sections.
Item 18 of the Bill inserts a reference to proposed
section 32 (discussed above) to the list of powers in subsection 29(1)
which the Secretary cannot delegate.
Existing subsection 29(1A) of the Act allows the Secretary
to delegate his or her power under subsection 27B(4) to senior departmental
officers. Item 19 extends this power to delegate to the whole of section
27B. The Explanatory Memorandum states:
This will allow the Secretary to delegate the powers
introduced at Item 14 to impose conditions on an approval and to revoke that
approval if conditions are breached. It maintains the Secretary’s ability to
delegate the existing power in the Act to give an approval to an eligible
recipient to disclose levy payer information to a third party. This further
supports the efficient operation of levy payer registers.[44]
[1]. Explanatory
Memorandum, Primary Industries Levies and Charges Collection Amendment Bill
2018, p. 1.
[2]. Department
of Agriculture and Water Resources (DAWR), ‘Rural
research and development corporations’, DAWR website.
[3]. Ibid.
[4]. D
Littleproud,‘Second
reading speech: Primary Industries Levies and Charges Collection Amendment Bill
2018’, House of Representatives, Debates, 28 March 2018, p. 3047.
[5]. 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, report,
The Senate, Canberra, June 2015, pp. 71–77.
[6]. Ibid.,
p. 74.
[7]. B
Joyce (Minister for Agriculture and Water Resources), Australian
Government response to the Senate Rural and Regional Affairs and Transport
References Committee, Inquiry on industry structures and systems governing
the imposition and disbursement of marketing and research and development
(R&D) levies in the agriculture sector, May 2016.
[8]. Parliament
of Australia, Primary
Industries Levies and Charges Collection Amendment Bill 2016 homepage,
Australian Parliament website.
[9]. Explanatory
Memorandum, op. cit., p. 2.
[10]. D
Littleproud, ‘Second
reading speech: Primary Industries Levies and Charges Collection Amendment Bill
2018’, op. cit.,
p. 3047.
[11]. Explanatory
Memorandum, op. cit. p. 2.
[12]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 5, 2018, The Senate, 9 May 2018, p. 44.
[13]. Ibid.,
p. 45.
[14]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 6, 2018, The Senate, 20 June 2018.
[15]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 5, op. cit., p. 46.
[16]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 6, 2018, op. cit.
[17]. Council
of Rural Research and Development Corporations, Submission
to the Senate Rural and Regional Affairs and Transport Committee, Inquiry
into the Primary Industries Levies and Charges Collections Amendment Bill 2018,
25 May 2018, p. 2.
[18]. National
Farmers Federation, Submission
to the Senate Rural and Regional Affairs and Transport Committee, Inquiry
into the Primary Industries Levies and Charges Collections Amendment Bill 2018,
n.d.
[19]. Council
of Rural Research and Development Corporations, Submission
to the Senate Rural and Regional Affairs and Transport Committee, Inquiry
into the Primary Industries Levies and Charges Collections Amendment Bill 2018,
25 May 2018, p. 2.
[20]. Explanatory
Memorandum, op. cit., p. 3.
[21]. The
Statement of Compatibility with Human Rights can be found at page 11 of the Explanatory
Memorandum to the Bill.
[22]. Parliament
Joint Committee on Human Rights, Human
rights scrutiny report, 4, 2018, 8 May 2018, p. 96.
[23]. D
Littleproud,‘Second
reading speech: Primary Industries Levies and Charges Collection Amendment Bill
2018’, op. cit. Note that item 17 of the Bill inserts a
reference to section 7A into subsection 29(1) of the Act so that the Secretary
cannot delegate this power to a person who holds an office in the Department.
[24]. Section
42 of the Legislation Act allows for the disallowance of legislative
instruments by Parliament. A legislative instrument can be subject to
disallowance if either a Senator or Member of the House of Representatives
moves a motion of disallowance within 15 sitting days of the day that the
legislative instrument is tabled. The motion to disallow must be resolved or
withdrawn within a further 15 sitting days of the day that the notice of motion
is given. However, it should be noted that if there is no notice of motion to
disallow a legislative instrument, then there is no debate about its contents.
[25]. Explanatory
Memorandum, op. cit., p. 6.
[26]. Primary
Industries Levies and Charges Collection Act, proposed subsection 7A(2).
[27]. Primary
Industries Levies and Charges Collection Act, proposed subsection 7A(4).
[28]. Explanatory
Memorandum, op. cit., p. 2.
[29]. Ibid.,
p. 6.
[30]. Primary
Industries Levies and Charges Collection Act, proposed subsection 7A(5).
[31]. Ibid.,
p. 6.
[32]. Explanatory
Memorandum, op. cit., p. 5.
[33]. An
authorised person is a person appointed by the Secretary of the
Department of Agriculture and Water Resources under section 26 of the Act.
[34]. Primary
Industries Levies and Charges Collection Act, subsection 27A(1).
[35]. Primary
Industries Levies and Charges Collection Act, subsection 27A(2).
[36]. Primary
Industries Levies and Charges Collection Act, subsection 27B(1).
[37]. Primary
Industries Levies and Charges Collection Act, subsection 27B(4).
[38]. Explanatory
Memorandum, op. cit., p. 8.
[39]. Ibid.
[40]. Under
section 4 of the Primary Industries Levies and Charges Collection Act, collection
products means products on which levy or charge is imposed.
[41]. Primary
Industries Levies and Charges Collection Act, paragraph 30(2)(c).
[42]. Primary
Industries Levies and Charges Collection Act, paragraph 30(2)(c).
[43]. Ibid.,
p. 9.
[44]. Ibid.,
p. 9.
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