Introductory Info
Date introduced: 25
November 2021
House: House of
Representatives
Portfolio: Agriculture
and Northern Australia
Commencement: on 1
July 2022.
Purpose of
the Bill
The primary purpose of the Animal
Health Australia and Plant Health Australia Funding Legislation Amendment Bill
2021 (the Bill) is to amend the Australian Animal
Health Council (Live-stock Industries) Funding Act 1996 (AHA Act)
and the Plant Health
Australia (Plant Industries) Funding Act 2002 (PHA Act) so as to:
- insert
provisions that enhance efficiency and better facilitate future levy
arrangements, as well as improving consistency between the Acts ‘regarding the
spending of emergency response levies’[1]
- repeal
redundant provisions.
Proposed amendments in the Bill relating to the AHA Act
include:
- amending
the AHA Act to facilitate the funding of emergency responses under
emergency biosecurity response deeds other than the Emergency Animal Disease
Response Agreement (EADR Agreement)[2]
- empowering
the Governor-General to make Regulations, which is consistent with the
regulation making power under the PHA Act.
Proposed amendments in the Bill relating to the PHA Act
include:
- Expanding
the scope of permissible uses for Emergency Plant Pest Response (EPPR) levies
in the PHA Act to include the promotion or maintenance of the health of
an EPPR plant, so as to provide PHA industry members with greater flexibility
in meeting industry biosecurity needs. This is consistent with permissible uses
for the equivalent Emergency Animal Disease Response (EADR) levies under the AHA
Act.
- Empowering
the Secretary of the Department of Agriculture, Water and the Environment
(DAWE), or a delegate of the Secretary, to determine that a body is a ‘relevant
Plant Industry Member’ by notifiable instrument.
The Bill also makes minor amendments to the Horticulture
Marketing and Research and Development Services Act 2000 and the Primary Industries
Research and Development Act 1989, as a consequence of particular
amendments made to the PHA Act.
Background
Levies and the levy system
For a number of years, ‘Australian primary industries
(agriculture, fisheries and forestry producers and their representatives) have
asked the [Federal] Government to impose levies and charges on their rural
commodities and products that are produced within Australia—using its taxation
power under the Constitution’.[3]
Levies and charges are taxes imposed on producers and are
initiated by the relevant primary industry body to fund and allow for key strategic
industry issues to be addressed, and activities to be undertaken by pooling
industry resources. These activities are usually beyond the scope of small,
scattered rural enterprises to put in place on their own. The need for a levy
is usually identified by a peak industry body in response to a problem or an
opportunity that needs collective industry funding to address effectively. Levies
are taxes imposed on domestic rural commodities and products while charges are
taxes on imports and exports. Unlike other taxes, these levy funds are directed
to levy recipient bodies to invest in the strategic activities they were imposed
to fund.
According to the Department ‘Primary industries drive all
aspects of their levy—whether they need one, how it will be charged and
collected, what the rate is, and when to review the levy.’[4]
Types of levies and charges
‘There are five purposes for which agricultural levies are
established’ and the ‘levies must be used for the purpose for which they were
collected.’[5]
In Australian the agricultural levy system[6]
provides significant funding for: research and development, marketing,
biosecurity activities, biosecurity emergency responses, and residue survey[7]
function for the benefit of Australian agriculture and the greater society.
Levy recipient bodies (intermediaries):[8]
- are
responsible for managing and investing levies in line with industry priorities.
- receive
and invest the matching funding that government provides for eligible research
and development activities up to set limits.
There are 18 levy recipient bodies, including five statutory RDCs,
10 industry-owned RDCs, Animal Health Australia (AHA) and Plant Health Australia (PHA), and the National
Residue Survey (NRS).[9]
Biosecurity may be thought of as a panoply of policy
responses to the risks posed by disease, pests and other threats to plant,
animal and human health. The elements involved in the biosecurity policy
response depend on the nature of the biosecurity hazard, however common
elements include preparedness, prevention, management through containment and
surveillance, post incursion responses (for example, eradication and
containment of outbreaks) and adaptation.[10]
It is generally recognised that there are benefits to be
gained in placing emphasis on upstream biosecurity activities such as
preparedness, prevention and containment, and reduce reliance on – and costs
associated with – response measures. The use of cost recovery mechanisms through
levies and charges create incentives for behaviours that preference such upstream
activities by signalling the ‘price’. A cost recovery mechanism for funding ‘intervention
readiness’ exists through the PHA and AHA, as well as for industry biosecurity
plans and other upstream activities developed by these bodies.
The Second Reading Speech explains that:
Industry investment in biosecurity is most often funded
through four kinds of biosecurity levies. These levies provide an equitable way for all producers to contribute
to the cost of biosecurity activities and eradication responses that benefit
their industry.[11]
Biosecurity activity levies:
Are collected to fund industry member contributions to Plant
Health Australia (PHA) and Animal Health Australia (AHA).
AHA and PHA facilitate a national approach to enhancing
Australia’s animal and plant health status, through government and industry
partnerships for pest and disease preparedness, prevention, emergency response
and management.[12]
Biosecurity emergency response levies:
- are collected to
repay to the Australian Government, over a period of time, an industry’s share
of the costs of a response to a pest or disease incursion under the Emergency
Plant Pest Response Deed (EPPRD) and the Emergency Animal Disease
Response Agreement (EADRA), where the government has underwritten the
industry’s contribution in the first instance.
- are often set at nil, and only activated if an
emergency response is required. Alternatively, they can be set at a low rate to
raise funds pre-emptively for use during an emergency response.
…
New emergency response agreements developed to cover pest and
disease incursions not currently covered by existing agreements will include
similar provisions to the EPPRD and EADRA to enable the use of biosecurity
emergency response levies to repay the costs of emergency responses.[13]
Since 2005, PHA has been the custodian of the EPPRD, a
formal, legally binding cost sharing agreement between PHA, the Australian
Government, all state and territory governments and plant industry signatories,
covering the management and funding of responses to Emergency Plant Pest incidents.
The Deed binds industries and governments to a formal
incursion response, sharing the responsibility and costs, based on a pre-agreed
assessment of the relative private and public benefits of eradication.
The EADR Agreement commenced in 2002. It sets out the
roles and responsibilities/activities of the affected Parties (government and
industry signatories) providing certainty in funding for emergency animal
disease threats to Australia and provides for rapid and effective responses
aimed at containment and eradication. Currently, the Parties include the
Australian Government, the state and territory governments and a broad range of
peak national animal industry parties representing the major livestock
industries including cattle, dairy, sheep meat, wool, poultry, pork, lot
feeders and honey bee.
PHA and the PHA Act
PHA was established in 2000 as an independent
not-for-profit public company, to service its members and is the national
coordinator of the government-industry partnership for plant biosecurity in
Australia tasked to minimise pest impacts on Australia, enhance market access
and contribute to industry and community sustainability.[14]
The PHA Act is the disbursement Act under which the
Commonwealth pays levies and charges that are collected from certain plant
industries to PHA, and enables Animal
Health Australia to coordinate the government-industry partnership for
animal biosecurity security in Australia. The Act also sets out the priorities which
must be used to inform spending of the EPPR levies. The Explanatory Memorandum
states:
These priorities ensure that the Commonwealth’s primary
purposes for the spending of EPPR levies are met. These purposes include cost
recovery for collection of these levies and funding industry contributions to relevant emergency responses under the
Emergency Plant Pest Response Deed (EPPRD).[15]
AHA and the AHA Act
Animal Health Australia Council Limited, also known as
Animal Health Australia (AHA) is an independent not-for-profit public company established
in 1996 by the Australian, state and territory governments and national
livestock industries. It is the national coordinator brokering arrangements for
government and industry partnerships and collaborations to strengthen and
evolve animal health and biosecurity in Australia. Its ‘members include the
Australian Government, state and territory government, the peak national
councils of Australia’s livestock industries and various key research,
veterinary and educational organisations.’[16]
AHA acts as the conduit for distributing levies and
charges collected by the Commonwealth from certain animal industries, pursuant
to the Australian Animal Health Council (Live-stock Industries) Funding
Act 1996 for animal health related activities.[17]
Similar to the PHA Act, the AHA Act sets priorities that must be
used to inform spending of EADR Agreement levies.
The Explanatory Memorandum states:
These priorities ensure that the Commonwealth’s primary
purposes for EADR levies are met. These purposes include cost recovery for
collection of these levies and funding industry contributions to relevant
emergency responses under the Emergency Animal Disease Response Agreement
(EADRA).[18]
Committee
consideration
The Scrutiny of Bills Committee has not reported on the
Bill at the time of writing.
Policy
position of non-government parties/independents
Non-government parties and independents do not appear to
have commented publicly on the Bill to date.
Position of
major interest groups
According to the Explanatory Memorandum of the Bill:
Consultation has been undertaken with PHA [Plant Health
Australia], all PHA industry members and AHA [Animal Health Australia] (noting
that the proposed changes would not impact AHA's existing industry members). A
four-week period for submissions ended on 8 October 2021 and eleven submissions
were received. All submissions were supportive of the proposed amendments.[19]
At the time of writing, the submissions were not publicly available.
Financial
implications
The Explanatory Memorandum to the Bill states that it ‘would
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]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights reported
that it had no comment in relation to the Bill.[22]
Key issues
and provisions
The Bill has one Schedule.
Australian Animal Health Council
(Live-stock Industries) Funding Act 1996
Subsections 4(1), 4(2) and 4(2A) of the AHA Act
provide for Commonwealth payments to the Australian Animal Health Council,
otherwise known as Animal Health Australia (AHA), for levies and charges other
than the horse disease response levy, and the conditions of those Commonwealth
payments.
Subsection 4(3) of the AHA Act, requires that any
payment by the Commonwealth made under subsection 4(2) to AHA, is subject to
the condition that AHA apply the Commonwealth payment in accordance with the
priorities in subsections 4(3A) to 4(6) and subject to terms of subsections
4(7) and (8) of the AHA Act.
Subsection 4(5) of the AHA Act currently stipulates
that the third priority is to apply the Commonwealth payment in making, on
behalf of the non-government body that is a party to the Emergency Animal
Disease Response Agreement (EADR Agreement) and is concerned with the
production of the animal product, a payment to the Commonwealth for the purpose
of discharging a liability of the body to the Commonwealth that arises under
the EADR Agreement (paragraph 4(5)(a)). Alternatively, if the animal product is
honey, the payment may be made to the Commonwealth or Plant Health Australia
Limited (PHA) for the purpose of discharging a liability of the body to the
Commonwealth relating to the Commonwealth’s costs connected with a plant
disease that is, may be or may have been spread by honey bees (paragraph
4(5)(b)).
Thus, currently there is no mention in those priorities (in
subsections 4(3A) to 4(6)) of an emergency biosecurity response deed
which is necessary to enable funding to be applied in making a payment to the
Commonwealth that relates to an emergency biosecurity response and is
prescribed by the Regulations.
An emergency response deed is:
[a] formal legally binding agreement between the Australian
Government, all state and territory governments, Plant Health Australia or
Animal Health Australia and plant and animal industry signatories covering the
management and funding of responses to pest and disease incursions.
The deeds provide a formal role for industry to participate
and assume a greater responsibility in decision making in relation to emergency
plant and animal pest responses.[23]
Making provision for an ‘emergency
biosecurity response deed’
Section 3 of the AHA Act provides definitions of
key terms in the Act. Item 1 will insert a definition of emergency
biosecurity response deed to mean:
- the EADR agreement, or
- a deed
- that both relates to an emergency
biosecurity response and
- that is prescribed by the Regulations
(see item 3).
Item 2 replaces the reference to EADR Agreement with
a new subsection 4(5) which provides that the third priority is to apply the
Commonwealth payment in making, on behalf of a non-government body that is a
party to an emergency biosecurity response deed and is concerned with
the production of the animal product, a payment to the Commonwealth for the
purpose of discharging a liability of the body to the Commonwealth that arises
under that deed.
The Explanatory Memorandum states that this amendment
provides for flexibility in relation to:
Future levy arrangements for industry signatories by allowing
funding to be applied in making a payment to the Commonwealth in relation to a
deed other than the EADRA that relates to an emergency biosecurity response and
is prescribed by the Regulations. For example, a new response deed, the Aquatic
Deed, is currently being developed for exotic aquatic animal diseases. It is
intended that this proposed deed, if signed, would be so prescribed.[24]
This amendment (repeal of existing subsection 4(5)) also
has the effect of removing the reference to honey in existing paragraph 4(5)(b)
of the AHA Act because it is redundant. This is because as a practical
matter ‘responses affecting, or affected by, honey bees are plant-related due
to many crops relying on bees for pollination’.[25]
The Australian Honey Bee Industry Council in 2002, and since 2002, ‘the AHA Act
has allowed AHA to pay Plant Health Australia (PHA) on behalf of an AHA
industry member for purposes relating to emergency responses involving honey
bees.’[26]
[I]n 2015, AHBIC ceased its AHA membership. The EADR levy on
honey was also ceased, PHA/EPPR levies on honey were introduced and any
remaining honey industry reserves were transferred over to PHA.[27]
Item 3 will insert proposed section 8 into
the AHA Act, which empowers the Governor-General to make Regulations prescribing
matters required or permitted by the Act to be prescribed by the Regulations,
or necessary or convenient to be prescribed for carrying out or giving effect
to the Act. This amendment would enable a deed to be prescribed for
subparagraph (b)(ii) of the definition of emergency biosecurity response deed
proposed by item 1 of this Bill.
The Explanatory Memorandum states this amendment would ‘support
the effective administration of the AHA Act, as it would provide a
discretionary power for the Governor-General to make other Regulations, where
appropriate.’[28]
It also points out that the PHA Act similarly ‘provides a discretionary
power for the Governor-General to make Regulations.’[29]
Plant Health Australia (Plant
Industries) Funding Act 2002
Item 10 inserts a new definition of relevant
Plant Industry Member in proposed section 3A, to mean a body
determined in an instrument under subsection (2) in relation to that EPPR plant
product. Proposed subsection 3A(2) provides that the Secretary of the
Department may, by notifiable instrument, determine one or more bodies in
relation to one or more specified EPPR plant products.
However, proposed subsection 3A(3) provides that
the Secretary of the Department must not determine a body in relation to an
EPPR plant product unless:
- the body is a Plant Industry Member and
- the Secretary is satisfied that the body represents
the industry for that EPPR plant product in the body’s role as a Plant Industry
Member.
Funding
Item 12 substitutes an amended section 4 which
would according to the Explanatory
Memorandum to the Bill:
… provide that the Commonwealth is to pay to PHA an amount
that is equal to the total PHA levy or charge receipts from each PHA plant
product for a PHA year. Section 4 would also provide for the Commonwealth to
pay to PHA an amount equal to the total PHA penalty receipts from each PHA
plant product for a PHA year.[30]
Currently, Section 4 of the PHA Act provides for
payment of PHA levies on plant products that attract a primary levy or charge,
and section 5 provides for funding to PHA if there is no primary levy or charge
on a PHA plant product.
Item 14 repeals section 7 of the PHA Act,
and consequent items, to remove the arrangement for excess levies or charges to
be redirected to the industry’s prescribed Research and Development
Corporations. The Explanatory
Memorandum to the Bill states that repealing section 7 of the PHA Act
would remove the administrative burden associated with its operation.[31]
Funding for emergency plant pest responses
Section 10 of the PHA Act deals with funding for
emergency plant pest responses, with Section 10C setting out the order of
priority for payments out of EPPR funds, which are currently:
- First
priority: administrative and other costs
- Second
priority: meeting liabilities under EPPR Deed for the plant product
- Third
priority: meeting liabilities under EPPR Deed for other plant products
- Fourth
priority: other emergency plant pest response purposes
Items 24 and 25 amend the second and third
priorities to replace references to payments to the Commonwealth, on behalf of ‘the
relevant Plant Industry Member’, with ‘a relevant Plant Industry Member
[…]’. This is designed to accommodate circumstances where more than one body
represents a particular plant product as a Plant Industry Member.
Item 26 proposes a new subsection 10(6) with
a revised fourth priority that replaces ‘other emergency plant pest response
purposes’ with promotion or maintenance of plant health.
The Explanatory Memorandum states that this proposed
amendment would allow for a broadening of the range of permissible uses of EPPR
levies.[32]