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Thursday, 2 April 1987
Page: 1937

Mr PETER MORRIS (Minister for Transport and Minister for Aviation)(10.35) —I move:

That the Bill be now read a second time.

The Sugar Cane Levy Bill and the associated Sugar Cane Levy Collection Bill will provide the basis for the establishment of a sugar research fund. The sugar industry will thereby join other major rural industries in the Commonwealth's rural research program. The introduction of this scheme will also complete the Commonwealth's package of measures to assist the sugar industry. The Bill is to provide for the imposition of a levy on sugar cane produced in Australia for the purpose of funding sugar industry research. The associated Sugar Cane Levy Collection Bill 1987 will provide the machinery for collecting the levy. Expenditure of the moneys raised through the levy will be matched dollar for dollar by the Commonwealth. Administrative and organisational arrangements for the research scheme, including the establishment of a trust fund and research council will be provided pursuant to the Rural Industries Research Act 1985.

The sugar industry is an important contributor to our national wealth. Total gross return in 1985 was about $800m; over $600m of that was earned as export income. The industry both in Queensland and in New South Wales has an established basis for research but in recent years these problems have proven inadequate to cover the range of issues the industry needs to address to remain efficient and competitive in a hostile world market. The Commonwealth supported program is intended to complement existing arrangements and provide scope for the industry's research effort to be expanded beyond production into areas such as economic and marketing research.

The legislation provides for an initial levy rate of 5c per tonne of sugar cane delivered and accepted by a raw sugar mill for milling, contributed 50 per cent by the grower and 50 per cent by the miller. Provision exists for the rate to be varied by regulation up to a maximum of 10c per tonne and for the split between the grower and the miller to be varied. Provision is also made for any recommendations arising from consultation between the Minister for Primary Industry and sugar industry organisations to be taken into account prior to any adjustment to the operative rate of the levy or the grower-miller split.

Amounts equal to the levy collected will be paid into a trust fund established under the Rural Industries Research Act. The Commonwealth's matching contribution will be up to a maximum level equal to 0.5 per cent of the average gross value of sugar production. It is expected that given normal seasonal conditions the levy will raise about $1.25m. The research council will therefore have scope for an annual research program approaching $2m.

The commencement date of the legislation is to be set by proclamation but it is intended that the levy be imposed on sugar cane produced on or after 1 June 1987. A full year research program under the scheme cannot begin until 1988-89, essentially because of the need to build up reserves. However, the actual level of expenditure on research will be determined by the research council and it is possible that some research could be funded in 1987-88. I commend the Bill to honourable members and present the explanatory memorandum.

Debate (on motion by Mr Cadman) adjourned.