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Wednesday, 26 June 2002
Page: 4385


Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) (9:58 AM) —I move:

That this bill be now read a second time.

This bill will enable new levies and charges to be paid to Plant Health Australia Limited (PHA) through the normal appropriation from consolidated revenue. The bill also provides a mechanism for moneys collected in excess of a plant industry's liability to PHA to be appropriated for research and development activities.

PHA was established in April 2000 as a Corporations Law company responsible for coordinating national plant health matters. The Commonwealth, all states and territories and a number of plant industries are members. PHA's running costs of approximately $1.5 million per annum are shared between its members. The purpose of the bill is to help plant industries fund their share of PHA's costs.

Industry members of PHA cover the grains, cotton, vegetable and potato, sugar, wine grape, nursery, apple and pear, rice, banana, fresh stone fruit, nut, honey and strawberry industries.

To date, as an interim measure pending the development of these new arrangements, industry members of PHA have been funding their share of PHA's costs either directly from industry association moneys or through their industry's research and development corporation. When these arrangements are in place, industry funding of PHA using research and development funds will no longer be necessary.

Plant industries' share of PHA's costs is approximately $500,000 per annum. Under PHA's constitution, these costs are shared between its plant industry members based in part on the value of production of the various crops.

The legislative mechanism was developed in consultation with PHA plant industry members. It is designed to limit the appropriation made to PHA to exactly that of each plant industry member's share of PHA's annual costs.

Given seasonal variations in crop production levels and revenue from sales, it is impossible to set operative levy and charge rates that will collect a fixed sum of money, whereby the levy and charge burden is shared equitably by levy and charge payers.

Accordingly, once an industry's share of its annual contributions to PHA have been met, the bill provides for moneys collected in excess of this amount to be redirected to that industry's R&D corporation and be deemed to be an R&D levy or charge. This R&D component will be matched by the Commonwealth, as is currently the case. The new PHA levies and charges component will not be matched.

Clearly, the benefit of returning any excess levy contributions to research activities is that the industries will benefit from the government's matching dollar for dollar research and development funding.

The bill also contains measures that will enable a plant industry member to raise additional funds for special projects that the member wishes to be undertaken by PHA on its behalf. In accordance with PHA's constitution, PHA's members have to agree to these before the start of the year.

While the plant industries have sought to pay for their yearly contribution to PHA from a new PHA levy and charge, there will be no increase in the overall levy and charge burden on industry members. This is because the proposed operative rate of PHA levy or charge for initial participants will be exactly offset by a corresponding decrease in that industry's existing R&D levy and charge rate.

In addition, the impact on business will be minimised as existing levy and charge collection arrangements are to be used with no change to the paperwork required of businesses/producers already paying levies and charges.

This legislation has the full support of industry groups and producers. It establishes arrangements for the long-term funding of PHA's plant health activities. It facilitates plant industry members of PHA contributing to the development of an internationally outstanding plant health management system that enhances Australia's plant health status and the profitability and sustainability of plant industries.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Cox) adjourned.