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Horticultural Levy Amendment Bill 1994



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House: House of Representatives

Portfolio: Primary Industries and Energy

Commencement: Proclamation, but no later than six months after Royal Assent

Purpose

To broaden the basis of levy imposed on certain horticultural products by the Horticultural Levy Act 1987 by imposing levy on prescribed amounts of leviable horticultural products of a prescribed class presumed to be produced in Australia.

Background

Levies and charges are imposed on the following horticultural products:

- Apples;

- Pears;

- Avocados;

- Chestnuts;

- Cherries;

- Macadamia nuts;

- Nursery Products (potted plants);

- Grapefruit and other Citrus fruit;

- Potatoes;

- Onions;

- currants;

- sultanas; and

_ raisins.

Levies and charges are imposed on the above horticultural products by the Horticultural Levy Act 1987 and the Horticultural Levy Export Charge Act 1987. For the main part, the levies and charges are payable by the producer. However, in the case of:

- apples, pears, grapefruit, citrus fruit and nursery products exported from Australia, it is payable by the owner of the fruit at the time of export; and

- processing potatoes and potatoes exported from Australia, it is payable by the processor and the exporter.

The Primary Industries Levies and Charges Collection Act 1991 (the PILCC Act 1991) provides for the collection of the levies and charges. Proceeds raised by the imposition Acts are apportioned between the Australian Horticultural Corporation, under the provisions of the Australian Horticultural Corporation Act 1987, the Horticultural Research and Development Corporation, under the Horticultural Research and Development Corporation Act 1987.

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

- Apples other than juicing or

processing apples per stand $0.22 per standard box;

- Pears (not Nashi) other than

juicing or processing pears $0.25 per standard box;

- Juicing pears $2.20 per tonne;

- Juicing pears (not Nashi) $2.50 per tonne;

- Processing apples $4.40 per tonne;

- Processing applies (not Nashi) $5.00 per tonne;

- Apples (export charge) $0.22 per standard box;

- Pears (not Nashi) export charge $0.25 per standard box;

- Nashi other than juicing or

processing Nashi $0.20 per single layer tray;

- Cherries $0.01 per kg;

- Juicing Nashi $1.80 per tonne;

- Processing Nashi $3.60 per tonne;

- Nashi export charge $0.20 per single layer tray;

- *Avocados $0.18 per tray (6kg);

- *Avocados (in bulk) $30.00 per tonne;

- *Chestnuts $0.10 per kg;

- *Macadamia nuts $0.04 per kg;

- *Unprocessed potatoes $0.50 per tonne;

- *Processed potatoes $0.50 per tonne;

- *Nursery products 2.5% sales value of containers;

- *Grapefruit in bulk $3.00 per tonne;

- *Grapefruit not in bulk $0.06 per box;

- *Citrus (other than grapefruit)

in bulk $0.06 per box;

- *Onions $0.40 per tonne;

- Currants, sultanas raisins 1991 earlier seasons - $30.00 per tonne; 1992 later seasons - $19.00 per tonne.

[*=same rate applies to both domestic and export levy/charge types] 1

The levies/charges were imposed by the Commonwealth at the request of the horticultural 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. The principal uses of proceeds raised by the levies include the funding of research and development and health and safety monitoring.

Production of the major horticultural products 2 totalled 4 991kt (valued at $2 959m) in 1991- 92, is estimated to total 5 014kt (valued at $2 903m) in 1992- 93, and forecast to total 4 975kt (valued at $3 103m) in 1993- 94. 3 Exports of the principal horticultural products 4 totalled 258kt (valued at $302m) in 1991- 92, are estimated

to total 257kt (valued at $279m), and are forecast to total 302kt (valued at $338m) in 1993- 94. 5

The purpose given in the Explanatory Memorandum for the amendments proposed by this Bill is to enable the levy to be imposed on an amount of leviable horticultural products or a class of products that is presumed to be produced in Australia. In effect, the proposed amendments will broaden the basis of levy imposition to include presumed production. No explicit reason is given by the Government in the Explanatory Memorandum to this Bill or its companion Bill, the Primary Industries Levies and Charges Collection Amendment Bill 1994 for the proposed amendments. However, it may be inferred from the "Financial Impact Statement" sections of Explanatory Memorandum to this Bill and the Primary Industries Levies and Charges Collection Amendment Bill 1994 that the reason for the amendments is that the existing basis of levy imposition (see outline of section 6 of the Horticultural Levy Act 1987 below) has discouraged additional horticultural industries in becoming levy paying members of the Australian Horticultural Corporation and the Horticultural Research and Development Corporation.

Main Provisions

Imposition of levy

Section 6 of the Horticultural Levy Act 1987 (the Principal Act) imposes a levy on specified horticultural products produced in Australia that are sold by the producer or used by the producer in the production of other goods.

The effect of new subsection 6(2), which will be inserted into the Principal Act by clause 3, will be to broaden the basis of levy imposition by imposing levy on prescribed amounts of leviable horticultural products of a prescribed class presumed to be produced in Australia.

Rates of levy

Section 7 of the Principal Act provides for the rate of levy to be the sum of the rates prescribed under sections 8- 10, up to a maximum of 5% of the average gross value of production of the products. Sections 8- 10 provide for the fixing, by regulation, of the rates of levy destined for the Australian Horticultural Corporation, the Horticultural Research and Development Corporation and for other purposes.

New subsection 7(3), which will be inserted into the Principal Act by clause 4, provides that the rate of levy in respect to a class of horticultural products, in the current financial year, must not exceed 5% of the average gross value of production of the first three years of the immediately preceding four financial years. Proposed subsection 7(3) will only operate if the Australian Statistician has published an annual gross value of production in relation to the class of horticultural products for the first three of the four immediately preceding financial years.

Regulations

Clause 5 provides for the insertion of a new 5(2A) into the Principal Act which will allow for the making of regulations prescribing the way the amount of leviable horticultural products of a prescribed class presumed to be produced in Australia is to be determined. The amount may be determined by reference to any one or more of the following:

* the area under cultivation;

* the number or quantity of trees, shrubs, plants, bulbs, corms or tubers used or to be used; or

* the maturity of trees, shrubs or plants under cultivation for the above products.

Endnotes

1. Apples; pears; peaches; apricots; citrus; bananas; pineapples; dried vine fruit (dried weight); wine grapes; table grapes; potatoes and other vegetables (for human consumption).

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

3. Fresh apples; fresh pears; canned peaches; fresh citrus; fresh grapes; and dried vine fruit.

4. Australian Bureau of Agricultural and Resource Economics, Australian Commodities, Vol. 1, No. 1, March 1994, pp. 141 and 144.

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

Ian Ireland (Ph. 06 2772438)

Bills Digest Service 20 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.