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Wednesday, 29 November 2000
Page: 20142

Senator TROETH (Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry) (3:46 PM) —Senator O'Brien posed some questions just before we broke at lunchtime—

Senator Faulkner —Very good questions, too.

Senator TROETH —They were very good questions, Senator Faulkner, and I have devoted considerable time to seeking answers for him. I can only proffer them for his inspection and then see where we go. First of all, I will deal with clause 9, where he questioned the wording `the Minister may declare a body to be the industry services body'. That clause needs to be read in its entirety. It is designed to provide discretion to the minister to declare the body to be the industry services body or the export control body only if conditions (a) to (d) are met and if, in particular, the constitution is appropriate and if the body has signed the deed of agreement.

You also asked what factors the minister would take into consideration in deciding if the constitution is appropriate. Certainly, the minister needs to be satisfied that the agreement reached between industry and government in the MOU, the memorandum of understanding, is fully reflected in the constitution of the company. Particular areas of scrutiny for the minister are the objects of the company, the different classes of membership, the agreed voting allocation, processes for the appointment and composition of the board, the establishment of industry advisory committees and their operation, provision for the annual levy payer meetings, the fact that no agripolitical activity is to be carried out and the fact that the company does not undertake commercial trading of horticultural product.

In relation to section 9(2)(c), the minister would have regard to whether the constitution of the body is considered appropriate for the administration of export control powers. Factors to be considered would include: that the company does not have a trading function which would place it in conflict with export licenses, that the company continues to deliver marketing services to the industry as outlined in its constitution, and that the government is satisfied that circumstances exist which require export control powers to apply—that is, that public benefits will be provided by the use of export control powers.

Senator O'Brien's next question was: what processes are required for the minister to sign off on the constitution, and who does he consult with? The constitution has been developed with full industry consultation, as I indicated in my second reading speech, to reflect the interests of industry and the government. It has been drafted by independent legal advisers to comply with the Corporations Law and the government's requirements in terms of the scope and intended operation of the company to deliver marketing, research and development services and export control functions to the industry. It will be a registered document held by the Australian Securities and Investments Commission and will be publicly available.

Another question from Senator O'Brien was: why are the declarations under clauses 9 and 10 not directly scrutinised by parliament? The declaration or cessation of declaration of the industry services body and the export control body are administrative decisions to be taken by the minister under clauses 9 and 10. The decisions must be made by the minister on the criteria set out in clauses 9(1), 9(2) and 10(2). A decision by the minister under these provisions will be subject to judicial review. Provision is made for public notification of these decisions in the Gazette within 14 days so that the industry, the parliament and the public generally are kept fully informed of the minister's decisions. The parliament is in a position to question the minister about these administrative decisions through the normal parliamentary processes should this be considered necessary. The normal parliamentary processes referred to would include questions in the parliament, letters to the minister, direct representation to the minister and committee inquiries, including Senate estimates.

Senator O'Brien also asked what form of judicial review the minister had in mind in references to clauses 9 and 10. The reply to the Senate Scrutiny of Bills Committee indicated that decisions by the minister under these provisions will be subject to judicial review. The judicial review provided for under the bill will be done under the Administrative Decisions (Judicial Review) Act 1977 in the Federal Court to test the legality of the decision making process. This judicial review will satisfy the question of whether the minister's decision is lawful under the act.

Senator O'Brien also asked: will the parliament have access to the documents covered in clauses E4 to E8 of the deed of agreement? These clauses provide for accountability to the government for corporate planning, performance review, records and access, audit reporting and accountability, as per schedule 8 of the agreement. This is in accord with the current arrangements whereby the three current statutory bodies must provide their corporate planning documents to the government of the day. The corporate planning documents will be distributed widely throughout the industry for use in their planning investment decisions in marketing and research and development through the industry advisory committees. While there are no formal requirements for regular performance reviews with the current bodies, the government has built this requirement into the new company's operations. Full and accurate records are a requirement of the current bodies under the companies and corporations act, which applies to all statutory authorities. Because the new company will not be a statutory body, the government has built in this additional layer of accountability. An annual audit report is required, as per Corporations Law, and would be published in the annual report, which will be publicly available.

Senator O'Brien also asked: with regard to clause 10(2)(h), on what basis would the secretary require a change to the deed? This clause allows the government of the day to change the deed of agreement with the company to meet any future changed circumstances that the government believes should be taken into account by the company, for example, if there were a change in government policy concerning government funding or levy collections. With regard to section 16 and expenditure and funding of the industry services body, which was also a question from Senator O'Brien, this reflects the current arrangements that are in place under the Horticulture Research and Development Corporation Act which have been in practice since 1987. There is no intent by the government to change the matching arrangements or the method of payment to the company. That is, the government will match the levies collected from the industry and paid to the company up to a limit of 0.5 per cent of GVP. It should be noted that, under the deed of agreement, there are additional accountability requirements built in to ensure that marketing and research and development funds are kept separate.

As well, there was a question as to how the government will determine the GVP. Clause 16(4) allows for a regulation to be set to determine the amount. It has been a longstanding practice of governments to request ABARE to calculate the GVP of the whole industry each year as an aggregate amount to be used for matching purposes. This is deemed the most practical arrangement, given the many small and variable commodity groups within horticulture where it is difficult to obtain accurate figures. Senator O'Brien's question which he asked just before we finished at 12.45 p.m. was: why does clause 16(5)(b) make provision for amounts not payable? This clause is to protect the government from being required to make double payments to an industry services body for marketing or research and development should there be a change from one declared industry services body to another during the course of the financial year.