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Wednesday, 24 August 1983
Page: 148


Mr KERIN (Minister for Primary Industry)(10.59) —I move:

That the Bill be now read a second time.

The purpose of the Bill is to allow for an increase in the maximum charge imposed on the slaughter of livestock in export establishments. This charge was first imposed on 1 July 1979 in order to recoup 50 per cent of the cost to the Commonwealth of inspecting meat for export. This Government has carefully reviewed the policy of charging for export inspection and has concluded that there are good grounds for re-endorsement and implementation of the existing policy.

It is the Government's view that cost recovery principles should apply for commercial type activities, especially where major beneficiaries of export inspection services are overseas consumers. However, in setting a recovery rate of 50 per cent from industry for the provision of export inspection for all primary produce commodities, the Government has been mindful of the fact that further efficiencies in the delivery of these services are possible of being achieved and therefore considers that industry should not be expected to pay the full cost of operating the current service. The Government is aware that despite initiatives taken to date in the Meat Export Inspection Service which have enabled us in 1982-83 to increase productivity, there are still changes in policy that, subject to acceptance by overseas countries, may be made to improve efficiency and reduce costs. It has been decided that the cost of special training programs for inspection staff and other costs associated with achieving efficiencies in inspection practices will be excluded from the cost base on which the levy is determined.

Since 1979 the fees charged have fallen far short of recovering half of the costs of export inspection due to inflation, changes in the services provided and reduced throughput. It is now estimated that, in 1983-84 the current rate of charge based on $1.80 for adult cattle would recover only $13m or 17 per cent of costs. Accordingly, it has been decided to lift the effective rate for each class of livestock to the equivalent of $5.40 for adult cattle, which would recoup 50 per cent of costs in a full year. In fact, because the new rate will apply for only part of the year, the recovery will be in the order of $30.9m representing 39 per cent of the costs of operating the meat inspection service.

The current maximum rates of charge specified in the Live-Stock Slaughter ( Export Inspection Charge) Act 1979 prevent operative rates of meat inspection charges being increased to a level which would allow 50 per cent recovery. Accordingly, it is proposed that the maximum rates of charge for slaughter of livestock for export be set as follows: Cattle, including buffalo, $10.80 per head; calves 40 to 90 kilograms dressed weight, and pigs, $3.60 per head; bobby calves to 40 kilograms dressed weight, sheep-that is lambs-and goats, $1.08 per head; and other, for example, horses, donkeys and mules, $10.80 per head.

The maximums have been set at twice the operative rate. Operative rates will be established by amendments to the Live-Stock Slaughter (Export Inspection Charge) Regulations, effective from 1 October 1983. This will allow for amendments from time to time of the amounts charged on the slaughter of livestock in export establishments in accordance with changes in the cost of the service provided. I commend the Bill to honourable members.

Debate (on motion by Mr McVeigh) adjourned.