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Wednesday, 21 September 1983
Page: 1095


Mr KERIN (Minister for Primary Industry)(4.35) —I move:

That the Bill be now read a second time.

This Bill contains amendments to three Acts, the first of which is the Dairy Produce Act 1924. That Act establishes the Australian Dairy Corporation and also contains the legislative framework for the dairy products export return pooling scheme. The other Acts affected by the Bill are the Dairy Industry Stabilization Act 1972 and the Dairying Industry Research and Promotion Levy Collection Act 1972. These Acts contain the administrative procedures for collecting, disbursing and accounting for receipts under the Dairy Industry Stabilization Levy Act 1977 and the Dairying Industry Research and Promotion Levy Act 1972 respectively. I have explained the purposes of these Acts in my earlier second reading speeches on amendments to the Acts.

The amendments to the Dairy Produce Act 1924 are intended to bring up to date the Corporation's powers over contracts for the carriage of dairy products by sea to places beyond Australia, to provide a legislative basis for the manner in which the Corporation administers certain provisions of the export return pooling scheme and to make other minor adjustments to the scheme, to require the Corporation to credit any surplus or debit any deficit incurred by it in respect of its export sales of dairy produce to accounts maintained under the export return pooling scheme, and to bring into line with current levels the penalties for offences under the Act.

The first clause of note is clause 4. This clause substitutes a new section 19 dealing with conditions relating to contracts for the shipment of dairy produce overseas. Under the existing section 19 it was necessary either for the Corporation to determine conditions relating to contracts for the shipment of dairy produce or for such contracts to be made only by the Corporation on behalf of exporters.

It recently came to attention that the Corporation had not approved any conditions, yet exporters were entering contracts directly, not through the Corporation. The Corporation indicated that it did not wish, at this stage, to involve itself in the making of shipping contracts. As the Corporation might, at a later date, need to be able to impose conditions, for example in relation to freight rates as part of an agreement with a shipping conference, it was decided that a revised section 19 providing the Corporation with discretionary powers in relation to shipping contracts should be inserted in the Act, rather than simply repealing the existing section 19.

Accordingly, proposed new sub-section 19 (1) provides that the Corporation may approve conditions relating to contracts for the carriage of dairy produce by sea to a place beyond Australia. Proposed new paragraph 19 (2) (a) requires the Corporation officially to notify licensees of any such conditions. Incidentally, all persons wishing to export prescribed dairy produce from Australia must be licensed to do so by the Corporation. Proposed new paragraph 19 (2) (b) requires licensees to comply with any such conditions while proposed new sub-section 19 ( 3) makes failure to comply with the conditions grounds for revoking a licence to export dairy produce.

Proposed new sub-section 19 (4) makes it clear that failure to comply with conditions approved by the Corporation does not mean that a contract so made will be void or unenforceable. This is in direct contrast to the existing section 19 which provides as a sanction for failing to comply with conditions that such contracts are void. Such a sanction has proven not to be effective, and in any event, if relied upon, could have undesirable consequences for the international marketing of dairy products. The new sanction of cancellation of a licence is considered to be more appropriate and effective and is consistent with the approach taken in such provisions in other similar legislation.

Clause 5 of the Bill is concerned with revisions of the export return pooling scheme established by section 20AB of the Act. New sub-sections (4AA) and (4AB) will require more detailed notification arrangements where the assessed export price or the minimum export price is fixed or varied. These prices are part of the mechanism by which the amount that is to be contributed by or paid to the exporter under the export return pooling scheme is determined.

The amendments made to section 20AB (5) by paragraphs 5 (B), (C) and (D) of the Bill will correct an anomaly which arises from the fact that the Act is silent as to pooling requirements at times when an export sale takes place at a price which obtains a return below the minimum return in circumstances where the minimum return exceeds the assessed return. As a result, it is presently possible for an exporter selling at the minimum price to receive a lower net- after contribution to pool-return than an exporter who sells below the minimum price. Current administratively desirable practices of the Australian Dairy Corporation in relation to the export return pooling scheme will be given legislative authority by the amendments effected by paragraph 5 (E) of the Bill.

In essence the amendments will provide, in contrast to the existing legislation which is administratively unworkable, that exporters will receive direct the proceeds of their export sales and will then have to remit to the Corporation any required contribution to the export return pooling scheme. Proposed section 20AB (8A) will facilitate the recovery from exporters of amounts which they are required to pay under the export return pooling scheme but which they have not forwarded to the Corporation at the required time. Honourable members may be aware that the Corporation, acting pursuant to the power conferred on it by section 15 of the Dairy Produce Act 1924 to buy and sell dairy produce, is a significant trader in dairy products on the export market.

Clause 6 inserts section 24A into the Act. This section will provide legislative authority for a current, appropriate, practice of the Corporation by requiring it to credit any surplus made by it in a particular financial year as a trader on the export market to accounts kept under the export return pooling scheme. Similarly the section will require the Corporation to debit any deficit incurred by it in a financial year as a trader on the export market to those accounts. The basic requirement will be to credit or debit amounts to pools maintained in the production year to which the exported product relates; that is , if product produced in 1981-82 is sold and exported in 1982-83 any surplus or deficit resulting from the export sale is to be credited to or debited from the appropriate 1981-82 product pool, not the 1982-83 pool.

However, it may not always be appropriate or administratively feasible for the Corporation to carry out the transfer as required. For example, should a deficit occur on a sale of a product produced in 1981-82 but sold in 1983-84, at the time the deficit comes to light insufficient funds may remain in the 1981-82 pool to fully meet the deficit. A mechanism has therefore been included in proposed section 24A whereby the Minister may direct the Corporation to credit or debit surpluses or deficits to the most appropriate production year pool or pools. It should be noted that equity considerations may also influence any such directions as individual manufacturers may not contribute equally to the same export pools each year.

Proposed section 24A(7) provides that in making a decision on this matter the Minister may receive advice from the Corporation which in turn is required to consult with the Australian Dairy Industry Advisory Committee, the body established under the Dairy Produce Act 1924 to advise the Corporation in the performance of its functions or the exercise of its powers.

Proposed section 24A(6) provides for the Corporation to take into account amounts, if any, credited to the export pooling scheme as a result of its trading activities-the Corporation is regarded as an ordinary exporter for the purposes of the scheme and thus must contribute or receive payments accordingly- in ascertaining whether a surplus has been made by it or a deficit incurred. This provision does not affect costs which would normally be taken into account, such as ordinary costs associated with exporting such as storage, insurance and shipping costs; and payments to producers in the nature of premiums in respect of dairy products which the Corporation purchases made pursuant to section 20AB( 4A).

Clause 8 inserts a new section 8A into the Dairy Industry Stabilization Act 1977. The proposed section provides explicit legal standing for an already established procedure by requiring proprietors of factories who obtain a refund of levy to pass on the benefit to the exporter. The background to the provision is that the price paid for leviable dairy products takes into account the amount of levy payable on those products, including where the purchaser intends to export the products rather than sell them on the domestic market. Where a leviable product is sold on the export market it is appropriate to refund the levy and the person who is legally entitled to the refund is the person who has paid the levy. However, if exporters did not in turn receive the benefit of this amount they would be obliged to pass on the cost in their prices and the export competitiveness of the products concerned would be reduced accordingly. This amendment will ensure that this does not occur.

The amendments to section 21 of the Dairy Industry Stabilization Act 1977 made by clause 10 and those to section 10 of the Dairying Industry Research and Promotion Levy Collection Act 1972 made by clause 15 insert a standard provision requiring warrants to contain a date on which they will cease to have effect and omit the offence of obstructing an officer in the course of his duty as the offence is adequately covered by section 76 of the Crimes Act 1914. Clauses 7, 12 and 17 provide for the revision, in accordance with current standards, of penalties for offences under the Dairy Produce Act 1924, the Dairy Industry Stabilization Act 1977 and the Dairying Industry Research and Promotion Levy Collection Act 1972 respectively.

Clause 14 brings up to date section 7 of the Dairying Industry Research and Promotion Levy Collection Act 1972 by increasing the amount of penalty for late payment of levy that may be remitted by an authorised person from $10 to $100. Clause 16 provides that an appeal from a decision to refuse to remit an amount of penalty may be made to the Administrative Appeals Tribunal and inserts a provision requiring notice of appeal rights to be given at the time the original decision is notified. Clause 11 inserts a similar appeal provision in section 24A of the Dairy Industry Stabilization Act 1977, which will apply to section 6, the section in that Act dealing with penalty payments and their remission. It is worth noting that an appeal will lie not only from a decision of an authorised person, but also from a decision of the Minister, who is authorised to remit any amount of penalty. Clause 11 also inserts a notification of appeal rights provision in relation to the existing appeal mechanism applying to determination of production quotas under section 11A of the Dairy Industry Stabilization Act 1977.

I point out that the amendments contained in this Bill have no direct financial implications for the Commonwealth. The proposed section 24A of the Dairy Produce Act 1924 concerning the transfer of surpluses and deficits resulting from the Corporation's trading activities to relevant export pools will have implications for the dairy industry. It is not possible to quantify that impact as it will depend on future surpluses or deficits resulting from the Corporation's trading activities. I commend the Bill to honourable members.

Debate (on motion by Mr McVeigh) adjourned.