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Fisheries Legislation Amendment Bill (No. 1) 1998

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14000 Cat. No. 97 2940 2 ISBN 0644 519851

 

 

 

 

 

1998

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

THE SENATE

 

 

FISHERIES LEGISLATION AMENDMENT BILL (NO. 1) 1998

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Resources and Energy,

Senator the Hon Warwick Parer)



FISHERIES LEGISLATION AMENDMENT BILL (NO. 1) 1998

 

 

GENERAL OUTLINE

 

The Prawn Export Charge Act 1995 (Charge Act), Prawn Boat Levy Act 1995 (Levy Act) and Prawn Export Promotion Act 1995 (Export Promotion Act) came into effect on 1 July 1995.  These Acts give legal force to a Government-industry scheme to promote Australian sea-caught prawns in overseas markets using funds raised from industry by means of the export charge and boat levy.  The Charge Act and Levy Act impose an export charge and boat levy under section 4 of each Act and the Export Promotion Act provides for the collection, management and expenditure of these funds.

 

The purpose of these proposed amendments is to complete the implementation of a decision by the Minister for Resources and Energy to abolish the prawn boat levy and prawn export charge as of 1 January 1998 and to repeal the Acts.

 

The proposed amendments to the Levy Act set the final levy period to begin on 1 July 1997 and end on 31 December 1997.  The proposed amendments to the Charge Act state that export charges only apply to prawns exported on or before 31 December 1997.

 

The repeals are to take effect 3 years after Royal Assent to enable the collection of outstanding monies and to ensure that funds collected can be used.  The proposed amendments also contains savings provisions that continue operation of the Acts after repeal in respect of levies and charges that have already been imposed.

 

The proposed amendment to the Fisheries Management Act 1991 inserts section 15A which will prohibit the commercial taking of black marlin and blue marlin in the Australian fishing zone (AFZ).  Charter boat operators, recreational fishers and holders of scientific permits will be exempt from the prohibition.

 

Section 15A provides a defence to a prosecution so long as any black marlin or blue marlin taken is returned to its natural environment immediately, whether it is dead or alive.

 

FINANCIAL IMPACT STATEMENT

 

The cessation of prawn levies and export charges will reduce the future funding available for promotional activities by the Australian Prawn Promotion Association .

 

There are no direct costs imposed on commercial prawn operators as a result of the proposed amendments and in fact the cessation of levies/charges will reduce administrative and financial costs to small business operators.  There should be minimal to no cost on commercial longline operators of the marlin prohibition because there is already a voluntary prohibition in place.

 

The administrative costs of administering and enforcing the prohibition is estimated to be about $66,000 a year.



 

REGULATION IMPACT STATEMENTS

 

Subject:           Prawn Export Charge Act 1995

                        Prawn Boat Levy Act 1995

                        Prawn Export Promotion Act 1995

 

PROBLEM OR ISSUE IDENTIFICATION

 

In 1989 the Australian Prawn Promotion Association Ltd (APPA) was formed with the objective of increasing the awareness, profile and value of Australian sea caught prawns and the Australian prawn industry on world markets.  APPA membership is not compulsory.

 

The prawn industry has approximately 480 operators, 28 of which are members of APPA.

 

In 1995, the previous Government introduced the Prawn Boat Levy Act 1995 (the Levy Act), the Prawn Export Charge Act 1995 (the Charge Act) and the Prawn Export Promotion Act 1995 (the Export Promotion Act).  This suite of legislation imposes a compulsory prawn boat levy and a prawn export charge, to provide a funding base for the prawn promotion activities of APPA

 

.           the current boat levy for a full levy period is $50 for a ship that is less than 10 metres long; $100 for a ship that is at least 10 metres but less than 15 metres; $200 for a ship that is at least 15 metres but less than 18 metres long; $400 for a ship that is at least 18 metres but less than 20 metres; and $600 for a ship that is at least 20 metres long

 

.           for prawns exported on or before 31 December 1997, the export charge was 2 cents ($0.02) a kilogram net weight of exports of sea-caught prawns, parts of sea-caught prawns and prawn components of sea-caught prawn products, payable by an operator only after the operator reaches a threshold of 5,000 kilograms of prawns.

 

The amount of boat levy collected is approximately $150,000 a year.  The amount of export charge collected is approximately $240,000 a year, which varies depending on the quantity of prawns exported.

 

The Fisheries Research and Development Corporation (FRDC) funds the collection of boat levies and export charges and the amount is then recovered from the levies/charges collected.  The Levies Management Unit (LMU) in the Department of Primary Industries and Energy takes action to recover outstanding levies/charges on a cost recovery basis.

 

Government support for APPA and the compulsory levies/charges was predicated on there being widespread industry support at the time.

 

However, since late 1996 Senator the Hon Warwick Parer, the Minister for Resources and Energy, (the Minister) has been receiving representations from prawn operators, indicating a lack of support for the levies/charges.

 



There was considerable resistance to paying the levies/ charges by a number of operators, for the following reasons:

.                       APPA’s export promotion activities were considered to be ineffective;

.                       the boat levy was seen as double charging (ie exporters and fishers may be required to pay levies on the same prawns);

.                       the annual APPA membership fee was considered to be an impediment to increased industry involvement because a levy/charge payer could not participate in the decision making process unless the levy/charge payer was a member of APPA.

 

As a result of this widespread industry dissatisfaction with compulsory levies/charges, a plebiscite was undertaken to assess the level of support within the prawn industry for their continuation

 

.           85 per cent of those who participated in the plebiscite opposed the continuation of the levies/charges. The response rate, 67%, was extremely high.

 

Following consideration of the results of the plebiscite and discussions with prawn industry operators and representatives of APPA, on 4 November 1997 the Minister announced that the boat levy and export charge would be terminated as of 1 January 1998.

 

In announcing his decision the Minister stated that the Government believed that compulsory primary industry levies should only be imposed on an industry if the levies have substantial industry support, and there is significant market failure, which was not the case in the prawn industry.  This reasoning is also consistent with the broader Government policy statement titled “ General Principles Applying to Proposals for new and changed Primary Industry Levies for R&D, Promotion, Marketing or Fees for Chemical Residue Testing and Animal Health Services ”.

 

SPECIFICATION OF THE DESIRED OBJECTIVE

 

The objective is to implement the Minister’s decision to cancel boat levies under the Levy Act and export charges under the Charge Act from 1 January 1998.

 

IDENTIFICATION OF THE OPTIONS

(REGULATORY AND NON-REGULATORY)

 

There are two ways of implementing the decision.

 

(1)       Amending the Regulations and the Levy Act (Recommended option)

 

Amendment of the Levy Act is necessary because the levy amount applies to a “levy period” which the Levy Act defines as a financial year.  A change to the levy amount during a “levy period” therefore requires a change to the definition of “levy period” in the Levy Act.

 



This option was in fact adopted and the Regulations were amended to:

 

(a)        prescribe a nil charge from 1 January 1998; and

 

(b)       divide levy payments into two within the full levy period:

 

(i)         half of the present prescribed amount levy would be payable in the first half of the levy period - 1 July 1997 to 31 December 1997; and

 

(ii)        the remainder of the levy would be payable in the second half of the levy period - 1 January 1998 to 30 June 1998

 

The option also required that in the Autumn 1998 session of Parliament, prior to the end of the second half of the 1997/1998 levy period, an amendment to the Levy Act would be proposed which would cancel the payment for the second half of the levy period.  The Acts would also be amended so that no levies/charges could be imposed from 1 January 1998 .  No additional financial burden is imposed on levy payers as a result of the proposed retrospective amendments to the Acts.

 

The Acts are to be repealed after 3 years, to enable all outstanding levies and charges to be either collected or written off and to enable expenditure of monies collected.  Repealing the Acts before this may adversely affect recovery action.

 

(2)       Repealing the Acts without amending the Regulations

 

Repealing the Acts would have taken some time and would not have been possible before 1 January 1998.

 

ASSESSMENT OF IMPACTS (COSTS AND BENEFITS)

 

Costs to prawn industry operators

 

Costs

 

The termination of charge/levies will reduce the future funding available for APPA activities such as promotional campaigns for Australian sea-caught prawns and the Australian prawn industry overseas

 

Exporters dependent on APPA will have to organise their own promotional activities and APPA will have to organise its own funding sources.

 

However, the benefits of APPA’s promotional activities are problematic. The removal of the levies and charges will have no impact on the demand and price for prawns on the export market.

 

Benefits

 

There are no direct costs imposed on commercial prawn operators as a result of the cessation of levies and charges.

 

The amendments will terminate levies/charges, thus reducing administrative and financial costs to small business operators.



 

As APPA collects levies/charges, its work load will be reduced as it will no longer have to carry out the task of reconciling data and payments received from levy and charge payers with boat registration and prawn export data.

 

APPA will continue as a private company governed by the decisions of its membership and its Board, with the ability to obtain funds from other sources.

 

Removal of levies/charges will have no impact on consumers, but there will be a direct benefit on the prawn boat owners who will no longer have to pay the boat levy and exporters will no longer have to pay the export charge.

 

Cost to Government

 

Costs

 

Nil.

 

Benefits

 

Nil.

 

Restrictions on competition

 

Nil.

 

Effects on small business

 

The amendment will reduce paperwork and record keeping required of businesses under the scheme .

 

Consultation

 

Those in the prawn industry who pay levies/charges were given the opportunity to have a say as to whether levies and charges should be continued via a plebiscite, which was undertaken to assess the level of support for continuing the levies/charges

 

.           the outcome of the plebiscite showed that 85 per cent of those who participated in the plebiscite opposed the levies/charges. The response rate, 67%, was extremely high.

 

.           the lack of support was also evidenced by the number of direct representations to the Minister by disaffected industry members and by representations from Members of Parliament on behalf of their constituents.



 

Prior to announcing that the levies/charges will be abolished, the Minister considered the results of the plebiscite and had discussions with prawn industry operators and representatives from APPA:

 

.           the primary concern expressed by industry members and Members of Parliament who support the continuation of levies/charges was that termination may cut APPA’s activities “off at the knees”

 

.                       a large number of direct representations by industry members that did not support APPA or the activities of APPA highlighted considerable resistance to paying the levies/charges by a number of operators.

 

There was also consultation with APPA regarding the proposed amendments to the Regulations. At its Annual General Meeting on 12 November 1997, APPA put forward an alternative recommendation to the Minister. The Governor-General took APPA’s recommendation into consideration when he made the Regulations in accordance with subsection 9(2) of the Prawn Boat Levy Act 1995 and subsection 7(2) of the Prawn Export Charge Act 1995 .

 

 

CONCLUSION AND RECOMMENDATION

 

The provisions that set the amounts of levies and charges are contained in the Prawn Export Promotion Levies and Charges Regulations.  In December 1997 the Regulations were amended so that the export charge was reduced to nil.  The amendments to the Regulations also required half of the boat levy to be paid by 28 January 1998, even though under the Levy Act the relevant levy period was 1 July 1997 to 30 June 1998.

 

Amendments to the Acts are now required to ensure that charges are only imposed on prawns exported on or before 31 December 1997 and to also ensure that the final levy period is from 1 July 1997 to 31 December 1997.  These amendments are consistent with the Minister’s announcement that export charges and boat levies would be abolished from 1 January 1998.

 

IMPLEMENTATION AND REVIEW

 

The amendments to the Acts, provide retrospectively that no levy can be imposed from 1 January 1998 and that no charge can be imposed on prawns exported after 31 December 1997 .  This will give final effect to the Minister’s decision to abolish levies/charges from 1 January 1998.

 

Action to collect outstanding levies and charges will be taken by the Levies Unit in the Department of Primary Industries and Energy.

 



 

Subject:          Fisheries Management Act 1991

 

PROBLEM OR ISSUE IDENTIFICATION

 

The proposed legislative amendment is in response to disputes between recreational/charter operators who fish for black marlin and blue marlin and commercial tuna longline operators who take those species as bycatch.  The proposed amendment will prohibit the taking, carrying and processing of black marlin and blue marlin by commercial operators.

 

Although black marlin and blue marlin have little commercial value for commercial operators, those species are the basis for the viability of charter operators.  Recreational/charter operators maintain that the incidental take of black marlin and blue marlin by commercial operators negatively impacts on their activities in that it reduces their catches of marlin and strike rates*.  Charter operators maintain that this has a significant adverse impact on their profitability because it reduces the number of their clients.

 

The commercial and recreational/charter industries recognise that conflict is harmful to them.  The commercial tuna longline industry instituted a voluntary code that required black marlin and blue marlin to be returned to the sea if taken.  However, a small number of commercial operators ignored the voluntary ban.

 

 

*          strike rate is the ratio of the number of times a marlin is caught, compared to the number of times a hook is put into the water.

 

SPECIFICATION OF THE DESIRED OBJECTIVE

 

The objective of the amendment is to enforce the current voluntary code as it applies to the taking of black marlin and blue marlin by commercial operators, so as to provide for a viable recreational/charter industry and minimise resource use conflicts.  A legislative base to the current voluntary code will provide a regulatory framework that will help resolve the resource allocation issue and define respective property rights.

 

In the longer term, the resource allocation issue will be fully addressed by transferring jurisdiction for recreational and charter fishing management to the States/NT.  In order to achieve this goal, on 12 May 1997 the Commonwealth Minister for Resources and Energy, Senator the Hon Warwick Parer, approved the release of a draft policy paper on the management of recreational and charter fishing.  T he Ministerial Council on Forestry, Fisheries and Aquaculture (MCFFA) then agreed to develop a policy to resolve this issue and is committed to implementing the transfer as soon as possible

 

The Government believes that the formalisation of an agreement for day-to-day management of recreational and charter fishing predominantly by State and NT Governments is the most desirable outcome for the Commonwealth and the prohibitions in respect of black marlin and blue marlin will support this longer term initiative.



 

IDENTIFICATION OF THE OPTIONS

(REGULATORY AND NON-REGULATORY)

 

Self-regulation

 

·       Most commercial operators try to avoid taking black marlin and blue marlin by setting their hooks and lines at particular depths and certain times of the day.  As there is no established domestic market for black marlin or blue marlin in Australia, there is little financial incentive for commercial operators to target them.  Commercial operators report that they actively try and avoid hooking black marlin and blue marlin because they tangle the fishing lines.

 

·       The Australian Fisheries Management Authority (AFMA) advises that logbook records show only a small number of operators, very occasionally, have retained black marlin and blue marlin, in some cases for personal consumption or as a trophy fish, while a few are sold.

 

Quasi-regulation

 

·       The current arrangements in the commercial tuna longline fishery are quasi-regulatory.  Since 1988, they have operated under a voluntary code of conduct that requires the release of all black marlin and blue marlin taken.  However, a small number of operators have ignored the code.

 

Non-market - transferable permits or property rights

 

·       Creation of stronger property rights is the longer term objective.  The eventual transfer of day-to-day management to the States/NT will provide a stronger property right for the recreational/charter industry.  The prohibition in respect of black marlin and blue marlin is an important precursor to that step.

 

Legislative amendment

 

·       An amendment to the Act is the simplest and best method of reducing conflict in the fishery.

 

·       There is a perception that the code of conduct has not worked, resulting in continued calls from recreational/charter operators for a “formal” prohibition on the taking of game fish by commercial operators.  The recommendations by the House of Representatives Standing Committee on Primary Industries, Resources and Rural and Regional Affairs highlight the problems with the current code of conduct.  In particular, Recommendation 37 of their report urges AFMA to impose a ban on the take, possession and landing of blue and black marlin in the Australian fishing zone by commercial operators.

 

·       The objectives contained in the Fisheries Management Act 1991 do not allow AFMA to resolve this situation by administrative means.



 

ASSESSMENT OF IMPACTS (COSTS AND BENEFITS)

 

Self regulation/quasi-regulation

 

·       commercial fishing industry

 

Costs

The cost to commercial operators for both self regulation and quasi-regulation is the cost of avoiding taking black marlin and blue marlin

 

Benefits

There are no direct  benefits to commercial operators from either self regulation or quasi-regulation.  Calls continue from the recreational/charter industry for the total exclusion of commercial operators from game fishing areas such as Area E as a result of a perception that they do not avoid taking game fish.

 

·       recreational/charter fishing industry

 

Costs

There are no direct costs to the recreational/charter fishing industry from self regulation by the commercial industry.  However, the viability of the recreational/charter fishing industry could be threatened if tuna longline operators ignored the code of conduct and landed black marlin and blue marlin.

 

Recreational/charter operators maintain that the incidental take of black marlin and blue marlin by commercial operators reduces their catches of marlin and strike rates.  Charter operators maintain that this also has a significant adverse impact on their profitability because it reduces the number of their clients.

 

Benefits

The benefit to the recreational/charter fishing industry of self regulation or quasi-regulation is enhanced viability.

 

Self regulation and quasi-regulation have not worked to resolve the market failure, consequently a legislative amendment is the most effective solution.

 

In the longer term, the transfer of day-to-day management to the States/NT in conjunction with the prohibition on commercial operators will provide a strong system of property rights for the recreational/charter fishing industry and deal with the market failure and resource allocation problems.



 

Amendment to the Act

 

·       commercial fishing industry

 

Costs

There should be minimal to no cost on commercial longline operators because there is already a voluntary prohibition in place, which commercial operators and AFMA claim is being complied with.

 

The administrative costs of administering and enforcing the prohibition is estimated by AFMA to be about $66,000 a year.  The question of whether industry will be required to contribute to these costs, or the extent of their contributions, has not yet been decided.

 

Benefits

There are no direct financial benefits to the commercial fishing industry, but the amendment will provide economic benefits by reducing the potential for conflict and allowing stability for planning and further development of the industry.

 

A legislative prohibition should reduce complaints about commercial operators from the recreational/charter fishing industry, reduce pressure to exclude tuna longliners from game fishing areas and address the perception that commercial operators do not avoid taking black marlin and blue marlin.

 

·       recreational/charter fishing industry

 

Costs

If there is no restrictions on the recreational/charter industry through the legislative amendment then there will be no costs imposed on that sector of industry.

 

Benefits

Recreational/charter operators have been the main proponents for a prohibition on the taking of black marlin and blue marlin by commercial operators.  They argue that the taking of game fish by commercial operators is reducing the charter industry’s capacity to attract tourists, and that greater economic benefits are obtained through tourism and game fishing than through the sale of game fish taken by commercial operators.



 

·       regional economies

 

Costs

Both the commercial fishing industry and the recreational/charter fishing industry are important to regional economies, particularly in the Cairns/Far North Queensland region.  Area E, for example, currently generates an estimated $5 million directly through game fishing, with a significantly higher flow on effect claimed, and nearly $6 million through commercial tuna fishing.  Based on these figures, clearly both sectors are very important to the local economy.

 

As demonstrated above, the proposed amendment should have minimal to no costs for regional economies.

 

Benefits

There are benefits to regional economies in resolving this contentious issue between the commercial fishing industry and the recreational/charter fishing industry, particularly in Area E.  Since both industries are an important part of some regional economies, the proposed amendment should give more stability by providing economic sustainability for both the recreational and charter fishing industries, which are important parts of the tourist industry, as well as for the commercial fishing industry.

 

Cost to Government

 

The administrative costs of administering and enforcing the prohibition should be relatively small if it was limited to commercial operators.  AFMA estimates that an enforcement program would cost about $66,000 a year.  AFMA also advises that there would be considerable industry opposition if it was proposed that the program be industry funded.

 

If the marlin catch by the recreational/charter industry was regulated, then costs would increase.  However if regulation of the recreational/charter industry is deferred until the transfer of day-to-day management to the States/NT, then additional costs are likely to be minimal.

 

Restrictions on competition

 

The amendment will not lead to any restrictions on competition because it is in effect providing legislative force to the voluntary code.

 

Effects on small business

 

There should be minimal to no effect on small business as the amendment will mean no real difference in practice for small business in either the commercial fishing industry or the recreational/charter fishing industry.



 

Consultation

 

There has been extensive consultation through input for the Australian National Audit Office (ANAO) report, Audit Report No. 32 1995-96, Commonwealth Fisheries Management - Australian Fisheries Management Authority and the House of Representatives Standing Committee on Primary Industries, Resources and Rural and Regional Affairs report Managing Commonwealth Fisheries: The Last Frontier, which was in response to the ANAO report.

 

The main parties affected by the amendment are the commercial fishing industry, the recreational fishing industry, the charter fishing industry and the relevant regional economies.  All of these parties have had input to the reports from the ANAO and the House of Representatives Standing Committee. In addition, there has been significant consultation at the Ministerial level.

 

In summary, the view of each of the main parties affected by the amendment are as follows:

 

·       commercial fishing industry

 

The commercial fishing industry has stated that it does not have a problem with a prohibition, so long as it applies only to the taking of black marlin and blue marlin in the Australian fishing zone, since the industry does not target those species of marlin and any catch is incidental.  The commercial fishing industry would strongly oppose the extension of the ban to other species, such as striped marlin. The industry code of practice introduced in 1988 to require the release of all black and blue marlin reflects that position.

 

·       recreational/charter fishing industry

 

The recreational/charter fishing industry has long been pushing for a prohibition on the taking of black marlin and blue marlin by commercial tuna operators.  The proposed amendment has been initiated in response to their concerns, without imposing any additional major impediments to their industry.

 

·       regional economies

 

The Far North Queensland Network, representing Cairns and the local region, which is the area most affected by the proposed amendments, have argued for the need to protect both the commercial and recreational/charter fishing industries as both are equally important to the local economy.

 

Recommendation

 

The preferred option is to accept a legislative amendment to the Fisheries Management Act 1991 to prohibit the commercial taking of black marlin and blue marlin in the Australian fishing zone.



 

IMPLEMENTATION AND REVIEW

 

·       The amendment will be administered by AFMA.

 

·       Enforcement will be undertaken by AFMA.  The penalty for breaching the prohibition will be 125 penalty units.

 

·       Fisheries legislation is to be reviewed in 1998-99 for the purposes of the National Competition Policy.  This amendment will be reviewed along with the other fisheries legislation.

 

·       AFMA will report on the impact of this amendment through its annual reporting process.  In addition MCFFA will progress the transfer of day-to-day management to the States/NT and assess the impact and implications of the prohibition in this context.

 

·       The amendment is very simple to implement and enforce.  The impact on small business will be minimal.



 

NOTES ON INDIVIDUAL CLAUSES

 

Clause 1: Short title.

 

This clause provides for the Act to be called the Fisheries Legislation Amendment Act (No.1) 1998 .

 

Clause 2: Commencement

 

This clause provides for the Act to commence 28 days after the day it receives Royal Assent, except for specified provisions which are taken to have commenced on 1 July 1997 and other specified provisions which commence 3 years after day the Act receives Royal Assent.

 

Clause 3: Schedule(s)

 

This clause provides that the Charge Act, the Levy Act and the Export Promotion Act are to be amended and repealed as set out in the Schedules.

 

Clause 4: Saving - levy and charge collection

 

This clause provides that the Acts to be repealed, including Regulations and agreements made under the Acts, will continue to apply after the repeal in relation to a levy or charge imposed before the repeal as if the repeal had not happened.

 

Schedule 1 - Amendment of the Fisheries Management Act 1991

 

Item 1: At the end of Part 2

 

This item inserts a prohibition against taking black marlin and blue marlin in the Australian Fishing Zone.  Exempt from the prohibition are holders of scientific permits that authorise taking of the fish and persons taking the fish in the course of recreational fishing or using a charter boat for fishing.  The item also provides a defence to a prosecution if the person charged satisfies the court that he or she took steps to return the fish to its natural environment immediately.

 

Schedule 2 - Amendment and repeal of the Prawn Boat Levy Act 1995

 

Part 1 - Amendment that is taken to have commenced on 1 July 1997

 

Item 1: Subsection 5(2)

 

This item substitutes a new subsection which defines each of the three levy periods under the Levy Act.  The final levy period ended on 31 December 1997.



 

Part 2 - Repeal that commences 3 years after the day on which this Act receives the Royal Assent

 

Item 2: The whole of the Act

 

This item repeals the Levy Act.

 

Schedule 3 - Amendment and repeal of the Prawn Export Charge Act 1995

 

Part 1 - Amendment that is taken to have commenced on 1 July 1997

 

Item 1: At the end of section 4

 

This item amends the section so that charges are only imposed on prawns exported from Australia on or before 31 December 1997.

 

Part 2 - Repeal that commences 3 years after the day on which this Act receives the Royal Assent

 

Item 2: The whole of the Act

 

This item repeals the Charge Act.

 

Schedule 4 - Repeal of the Prawn Export Promotion Act 1995

 

Item 1: The whole of the Act

 

This item repeals the Export Promotion Act.