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Thursday, 11 September 2003
Page: 19928

Mr FITZGIBBON (9:59 AM) —The National Residue Survey (Customs) Levy Amendment Bill 2002, National Residue Survey (Excise) Levy Amendment Bill 2002, National Residue Survey (Customs) Levy Amendment Bill (No. 2) 2003 and National Residue Survey (Excise) Levy Amendment Bill (No. 2) 2003 before the House amend legislation that underpins the National Residue Survey program, a critical program that is designed to protect markets for a range of agricultural products by ensuring agricultural products comply with maximum residue levels. The NRS was established in the early 1960s as the Commonwealth's response to growing concerns about pesticide residues in major meat export markets. Since then the range of commodities covered by NRS monitoring surveys has expanded and now about 15 animal, 14 plant and selected fisheries and aquaculture products are monitored.

The primary function of the NRS is to monitor chemical residues and environmental contaminants in the products of participating industries. Residue monitoring is an important part of an overall strategy to minimise unwanted residues and environmental contaminants in food. It serves to identify potential problems and indicates where follow-up action is required. Surveys for chemical residues are also important as a measure of overall product quality, particularly for exporting countries such as Australia. The National Residue Survey Administration Act and 17 individual imposition acts were enacted in December 1992 and came into effect on 1 July 1993. The NRS Administration Act was amended in 1994 to include animal feed and fibre products.

To meet industry needs and the requirements of the Financial Management Accountability Act 1997, further administrative changes were made in 1998 to combine the 17 individual imposition acts into the National Residue Survey (Excise) Levy Act 1998 and the National Residue Survey (Customs) Levy Act 1998. The World Trade Organisation agreement on sanitary and phytosanitary measures, which came into effect in 1995 following the conclusion of the Uruguay Round of multilateral trade negotiations, provides for measures implemented by member countries to safeguard human, animal and plant life and health to be subjected to scientific scrutiny. The WTO SPS agreement also requires such standards to be based, as far as possible, on international standards. Measures that provide a higher level of protection must be scientifically justifiable and not be a disguised restriction of trade.

This change to the trading environment for Australian agricultural industries has focused attention on the need for residue standards to be scientifically based and for data from residue testing programs, such as those conducted by NRS, to be capable of withstanding scientific scrutiny. The NRS has adjusted to meet this challenge by giving a higher priority to ensuring the proficiency and performance of its participating laboratories. The data collected facilitates certification of commodities for export, when this is required, and compliance with requirements for domestic consumption. The surveys assist participating industries to maintain long-term access to and competitive advantage in important markets. They also support agricultural and food promotions in new and potential markets and serve as a yardstick against which industry operated quality assurance schemes can be validated.

Funds for the NRS are provided from five sources. The first is direct funding by fees recovered through statutory collection mechanisms. This is the main source of income. The second is direct payments by other means—for example, for survey work undertaken under contract. The third is interest earned on short-term investments of funds held in reserve. The fourth is payments for proficiency testing, sale of services and from fees charged for the supply of information. The fifth is funding appropriated by government for NRS government business activities under community service obligations. The basic policy underlying cost recovery for the NRS program is that, within an accounting period, expenses must be equal to the revenue received. It is not a function of the NRS reserve to generate profit, sustain a loss or subsidise the activities of a particular industry or government; nor can industry programs be subsidised from appropriations. NRS funds are not used to cross-subsidise between participating industries, and each industry program is operated as a separate cost centre.

These bills make changes that relate to pears and honey. They simply restate the operative and maximum rates for the National Residue Survey excise and customs levies on pears and apples from a per box rate to a per kilogram rate. These bills also change the maximum levy rate allowable for honey for the purposes of the act from the present rate of 0.3 per cent per kilogram to 0.6 per cent per kilogram. In relation to honey, these levies cover the cost of the honey industry's residue monitoring program that is required for market access. The current operative rate of the National Residue Survey Levy is set in the regulations at the maximum allowable rate of 0.3 per cent per kilogram and is used for residue monitoring on honey sold in Australia. These amendments are part of a package of strategies being put in place on behalf of the honey industry and will give the industry scope to expand the operative rate of these levies through subordinate legislation. Any further increase in the rate of these levies would be at the behest of the industry and, of course, would be subject to separate approval processes. Labor supports these bills. The increase in the maximum levy rate is strongly supported by the honey industry and will facilitate its efforts to build export markets, particularly into Europe. The amendment relating to pears is a simple administrative amendment.