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Oilseeds Levy Amendment Bill 1994



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House: House of Representatives

Portfolio: Primary Industries and Energy

Commencement: Royal Assent

Purpose

To ensure that oilseeds used by a producer on- farm for commercial purposes are not exempt for the purposes of levy payment.

Background

A levy is imposed on the following oilseeds:

- Sunflower,

- Linseed,

- Soybean,

- Safflower, and

- Rapeseed.

Sunflowerseed production totalled 84kt (valued at $28m) in 1991- 92, is estimated to total 38kt (valued at $16m) in 1992- 93, and forecast to total 176kt (valued at $27m) in 1993- 94. 1 Sunflowerseed exports totalled 49kt in 1991- 92, are estimated to total 1kt in 1992- 93, and forecast to total 28kt in 1993- 94. 2

Soybean production totalled 63kt (valued at $22m) in 1991- 92, is estimated to total 49kt (valued at $21m) in 1992- 93, and is forecast to total 72kt (valued at $31m) in 1993- 94. 3

The levies are imposed on oilseeds by the Oilseeds Levy Act 1977 and are payable by the grower. The Primary Industries Levies and Charges Collection Act 1991 provides for the collection of the levies. Proceeds raised by the levies go to the

Grains Research and Development Corporation, under the provisions of the Primary Industries and Energy Research and Development Act 1989.

The levies on oilseeds were imposed by the Commonwealth at the request of the oilseeds industry, and funds raised are matched by the Commonwealth up to a maximum of 0.5% of the relevant industry's gross value of production. Oilseed levy receipts are estimated to total $1.858m in 1993- 94 and $2.077m in 1994- 95. 4

The operative rates of levy, as at 1 February 1994, are:

- Sunflower 1.00% ad valorem, 5

- Linseed 1.00% ad valorem,

- Soybean 1.00% ad valorem,

- Safflower 1.00% ad valorem, and

- Rape Seed 1.00% ad valorem. 6

Under section 8 of the Oilseeds Levy Act 1977, levy is not payable in the following circumstances:

* if leviable oilseeds are delivered by the producer to a particular person and the amount of levy payable would be less than $50.00 or a prescribed amount 7 [subsection 8(1)];

* if leviable oilseeds are processed by or for the producer, and he/she uses the oilseeds, or all of the products and by- products of the processing, for domestic purposes on his/her farm [ subsection 8(2)]; and

* if leviable oilseeds are processed by the producer for commercial purposes on his/her farm and the amount of levy payable would be less than $50.00 or a prescribed amount [subsection 8(3)].

The purpose given in the Explanatory Memorandum for the amendments proposed by this Bill is to ensure that oilseeds used by a producer on- farm for commercial purposes are not exempt for the purposes of levy payment. The reason for the proposed amendments is that subsection 8(2) of the Oilseeds Levy Act exempts from levy, for example, a sunflower producer who establishes a margarine processing facility on- farm and sources his/her raw material requirements internally. It can be inferred from the Explanatory Memorandum that the Grains Council of Australia, which is the industry representative organisation under the legislation, considers this exemption to be inappropriate.

Main Provisions

Under the amendment proposed by clause 3 to subsection 8(2), levy will not be payable if leviable oilseeds are processed by or for the producer, and he/she uses the oilseeds, or all of the products and by- products of the processing, for domestic purposes but not for commercial purposes on his/her farm.

Endnotes

1. Australian Bureau of Agricultural and Resource Economics, Australian Commodities, Vol. 1, No. 1, March 1994, pp. 134 and 137.

2. ibid., p. 141.

3. ibid., pp. 134 and 137.

4. The Commonwealth Public Account 1994- 95, Budget Paper No. 2, p. 40.

5. The term "ad valorem" means a surcharge based on a percentage of the value of the product.

6. The rates of levy specified in this Digest have been obtained from the Levies Management Unit of the Department of Primary Industries and Energy and relevant principal legislation and regulations.

7. No amount has been prescribed.

Ian Ireland (Ph. 06 2772438)

Bills Digest Service 23 June 1994

Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1994.

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1994.