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Thursday, 11 October 1984
Page: 1658


Senator GARETH EVANS (Attorney-General)(3.15) —I move:

That the Bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-

DRIED VINE FRUITS (EQUALIZATION AMENDMENT) BILL 1984

The purpose of this Bill is to make certain minor amendment to the provisions of the Dried Vine Fruits Equalization Act 1978. The amendments are essentially of an administrative nature, and concern the timing of payment of the equalisation levy. Together with the associated Dried Vine Fruits Equalization Levy Act 1978, this Bill provides a statutory scheme for equalising the returns received from domestic and export sales of dried sultanas, dried currants and dried raisins. The Scheme is designed to prevent destructive competition within the industry on the domestic market during periods when prices in Australia are above those obtainable from export markets. Under the Scheme a levy is imposed on dried fruit sold on the Australian market. The levy proceeds from each season's crop are then redistributed to producers pro rata to their total production in that season. The levy is payable by the packer of the dried fruit.

The Act presently provides that the levy becomes due for payment three months and 14 days after the month in which the leviable fruit 'ceased to be in the custody of the packer'. This time lapse was provided at the request of the industry to provide time for the packer to receive the proceeds of a sale before being required to pay levy on that sale. In particular it was designed to cover situations where a packer sent fruit to another firm for re-packing or for storage by an agent prior to sale.

The Australian Dried Fruits Association, on behalf of the industry, has requested an amendment to the due date provisions aimed at speeding up levy collections and disbursements while still allowing reasonable time for packers to receive sales proceeds before levy is due. The Association claims that under present arrangements there are many instances where packers receive the proceeds of domestic sales well in advance of the due date for levy payment. The Association is anxious that there should be no undue delays in disbursement of equalisation payments especially when so many producers in the industry are in desperate financial straits.

The Government has agreed to the ADFA request and accordingly proposes that the levy due date provisions be amended in two ways. The first element of the amendment is to provide that the levy is to become due for payment one month and 14 days after the month in which the fruit leaves the packer's custody. That is to replace the present provision for a delay of three months and 14 days. The second element is to provide that dried fruit shall be taken to continue to be in the custody of the packer so long as it is in the custody of or is in transit to an agent appointed by the packer to sell the dried fruit or a person to whom the dried fruit is sent by the packer for re-packing on behalf of the packer.

Provision is made in the Bill for the new arrangements to apply from 1 December 1984. In selecting that commencement date we have in mind that liability for levy is related to movement of fruit in discrete calendar months, and that levy payers should desirably be given reasonable notice of their liability for levy under the new arrangements. The amendments are to apply only to fruit that was in the custody of the packer immediately before 1 December, or came into the custody of the packer on and after that date. The existing arrangements will apply to fruit that ceased to be in the custody of the packer before 1 December. The proposed amendments will expedite payments of levies into the Consolidated Revenue Fund, and the consequent redistribution of equalization monies to the industry. The amendments will have no other effect on Government revenue and expenditure. I commend the Bill to honourable senators.

CANNED FRUITS MARKETING AMENDMENT BILL 1984

The purpose of the Bill is to extend the marketing provisions of the Canned Fruits Marketing Act 1979 for three years ending 31 December 1987, and to implement a number of changes to the Act which are designed primarily to improve the operation and commercial flexibility of the Australian Canned Fruits Corporation. The Bill will come into effect on 1 January 1985. Honourable senators will know that the canning fruit industry is important to the social and economic well-being of the Goulburn Valley in Victoria, the Murrumbidgee Irrigation Area in New South Wales and the Riverland area of South Australia. The industry comprises four co-operative owned canneries and some 950 orchards employing 2,300 persons full time and a similar number seasonally. The industry is a major employer in the towns of Shepparton, Mooroopna, Leeton and Berri.

Since 1 January 1980 the marketing of canned deciduous fruit produced in New South Wales, Victoria and South Australia has been controlled through the Australian Canned Fruits Corporation under the terms of agreements between canners and within the legislative framework provided by the Commonwealth Canned Fruits Marketing Act 1979 and complementary State legislation in New South Wales , Victoria, South Australia and Queensland. Under these arrangements, the Corporation acquires and arranges the marketing of canned deciduous fruit, sets minimum selling prices, equalises returns to canners from domestic market sales and sales to certain export markets and arranges for the provision of seasonal finance to canners. In addition to the extension of existing marketing arrangements, this Bill provides for a number of changes to the Australian Canned Fruits Corporation which are designed to improve its operational performance and to enhance its commercial flexibility.

The Bill provides for Corporation membership to be strengthened by the appointment of two additional specially qualified members and for the Corporation to draw up plans of its activities over the three year extension period. Presently, apart from the Chairman, the Corporation has four canner members, three grower members, a government member, and one member with special qualifications in commerce, finance or economics. This Bill provides for the addition of two more members with special qualifications to strengthen the opportunities for independent business judgment in Corporation decisions. The selection of the extra members will be on the basis of their professional qualifications, expertise and ability to make a positive contribution to the workings of the Corporation. The overall performance of the Corporation and its ability to assist the industry to adjust to changing market circumstances will be enhanced by its being required to develop a corporate plan setting out its objectives, including its marketing strategy, for the three years ending 1987 and for this to be supplemented by annual operational plans. These plans are to be submitted for approval by the Minister and, once approved, significant variations from them are also to be approved by the Minister.

The Minister for Primary Industry attaches particular importance to the development of these plans. They will enable the Corporation to address the strategy, structure and programs for the marketing of canned fruit appropriate for the market circumstances that are likely to develop over the next few years.

The Corporation's powers are also to be changed in a number of ways to improve its commercial operations. The Bill expands the borrowing powers of the Corporation by ensuring that it may raise finance by the use of more contemporary financial instruments, such as the discounting of commercial bills and the issue of promissory notes, as well as from more traditional borrowing methods. In line with consultative arrangements agreed between the Treasurer and the Minister for Primary Industry, the Bill provides that all Corporation financial raisings are to be subject to approval by the Minister and not of the Treasurer as provided under the current Act.

The Bill enables the Corporation to undertake in its own right hedging operations on foreign exchange and financial futures markets subject to any guidelines approved by the Minister. In addition it provides for more flexibility for the Corporation to decide on the extent to which it is fully covered by insurance. Subject to any guidelines approved by the Minister, the Corporation will have flexibility to arrange for its insurance needs in respect of the canned fruit it has acquired. However, the Corporation will be required to establish an insurance account for the purpose of making adequate provision against risks to the extent that these are not covered by insurance. It is understood that the changes to the insurance provisions could reduce significantly the costs to the Corporation and the industry of protection against risks or loss or damage of the canned fruits.

The Bill provides the Corporation with increased flexibility to allow canners and marketing agents to retain premiums obtained from the sale of canned fruit. As a general principle, it is considered appropriate that premiums realised above the Corporation's minimum prices be retained by the canners and marketing agents who earn them. These arrangements have worked well. A greater measure of stability in marketing has returned to the industry compared with the late 1970s . The industry has met a particularly difficult period of adjustment with a substantial cut in production having occurred and with one major cannery ceasing to process deciduous fruits. Sales to overseas markets are forecast to continue to decline, indicating there will be continuing pressure on the industry to adjust progressively the amount and composition of is production to meet the changing market requirements.

The Government recognises the adjustment pressures faced by the canned fruits industry and the need for continued stability in marketing to allow this adjustment to occur in an orderly manner. The Government had decided last year, following its review of the Industries Assistance Commission report on the industry, that the statutory marketing arrangements needed to be extended for a further period beyond 1984. This Bill now provides for there to be a three year extension to December 1987. The Government is of the view that by that time the industry would be in a position to manage its own marketing without the benefit of statutory arrangements.

The legislation has no financial implications for the Commonwealth. The Corporation's marketing and related costs are met from the proceeds of sales of canned fruit. Its administrative and promotional costs are met by a levy on canned fruit production.

Continuation of the marketing arrangements requires legislative action not only by the Commonwealth but also by the States of New South Wales, Victoria, Queensland and South Australia to extend their State Acts which are complementary to the Commonwealth's Canned Fruits Marketing Act 1979. The States are expected to put into place complementary legislation.

Finally, the opportunity has been taken to update the Marketing Act in a number of ways including describing members in non-sex-specific terms, adjusting the membership of the Australian Canned Fruits Industry Advisory Committee, providing that the Deputy Chairperson of the Corporation shall be the Chairperson of the Advisory Committee and act as Corporation Chairperson when required, and adjusting the sizes of penalties in the Act. Overall, the proposed changes to the Australian Canned Fruits Corporation are part of a general program of review and restructuring of statutory marketing authorities within the Primary Industry portfolio. Changes are being made progressively to these authorities to ensure that the commercial operations they conduct are more effective in a competitive market environment and to make them more accountable to both industry and government. I commend the Bill to honourable senators.

CANNED FRUITS LEVY AMENDMENT BILL

The purpose of this Bill is to redefine the term 'season' in the principal Act so that it is more closely aligned with the actual canning season for deciduous fruits. The existing legislation provides for a calendar year season for the imposition of levy to fund the operations of the Australian Canned Fruits Corporation. However, cannery intake and the canning of apricots begins in early December. As a result, it is possible that levy may be imposed on apricots at two different rates for the one canning season. The Bill re-defines 'season' as the period 1 December to 30 November. This will ensure that one standard rate of levy is applied to all canned deciduous fruit production of a canning season. The legislation has no financial implications for the Commonwealth. I commend the Bill to honourable senators.

CANNED FRUITS LEVY COLLECTION AMENDMENT BILL 1984 [No. 2]

The purpose of this Bill is to change the due dates for payment of a levy imposed under the Canned Fruits Levy Act 1979 on canned deciduous fruits produced in Australia. Under the existing legislation, levy currently becomes due and payable on 15 July and 15 January. In compiling its financial statements , the Australian Canned Fruits Corporation has followed the practice of including expected January levy receipts in its calendar year accounts on accrual accounting grounds and queries have been raised as to whether this is strictly appropriate. The Bill overcomes this problem by providing for levy to be due on 15 June and 15 December and payable by 15 July and 15 January respectively. In addition, the opportunity has been taken to update penalty provisions and procedures relating to appeals to the Administrative Appeals Tribunal in the Principal Act. The legislation has no financial implications for the Commonwealth. I commend the Bill to honourable senators.

Debate (on motion by Senator Collard) adjourned.