EXPLANATORY STATEMENT Issued by Authority of the Deputy Prime Minister and Minister for Agriculture and Water Resources Primary Industries (Excise) Levies Act 1999 Primary Industries (Excise) Levies Amendment (Avocados) Regulations 2017 Legislative Authority Section 8 of the Primary Industries (Excise) Levies Act 1999 (the Excise Levies Act) provides that the Governor-General may make regulations prescribing matters required or permitted by that Act to be prescribed for carrying out or giving effect to that Act. The Act provides for the ability to impose levies on avocados. Part 4 of Schedule 15 to the Primary Industries (Excise) Levies Regulations 1999 sets out details for imposition of the avocado levy. Purpose The purpose of the Primary Industries (Excise) Levies Amendment (Avocados) Regulations 2017 (the Regulations) is to amend the avocado levy to establish a Plant Health Australia (PHA) levy on fresh avocados, set at 0.1 of a cent per kilogram, and reduce the existing avocado research and development (R&D) levy rate to 2.9 cents per kilogram. The Regulations will apply to returns for quarters and financial years that start on or after 1 April 2017. Background Levies and charges are introduced, administered and collected by the Australian Government, usually at the request of industry. The Department of Agriculture and Water Resources (the department) disburses the levy collected to the relevant recipient body. The peak industry body for avocado growers, Avocado Australia Limited (AAL) has requested to establish a new PHA levy set at 0.1 of a cent per kilogram and reduce the existing avocado R&D levy rate to 2.9 cents per kilogram. The levy will raise funds to meet a number of biosecurity commitments for the avocado industry, as agreed between PHA and AAL, including: ? To enable avocado industry participation in biosecurity management ? The avocado industry's costs associated with membership of PHA and participation in PHA and Emergency Plant Pest Response Deed decision making processes are currently covered by AAL. Through the changes proposed, all levy payers would share this cost equitably. ? To fund essential avocado biosecurity management activities ? Biosecurity planning for high priority pests ? Biosecurity response training and education to ensure that AAL has the capacity to respond effectively on behalf of the industry in the event of an incursion ? Supporting the Avocado Nursery Voluntary Accreditation Scheme ? Biosecurity risk analysis to allow a clear understanding of the biosecurity risk associated with potential imports of fresh avocados from countries such as Mexico, Chile and Peru. ? To cover the avocado industry commitment to the Exotic Fruit Flies in the Torres Strait Response Plan. Impact and Effect The overall rate of the levy on avocados would not alter, remaining at a rate of 7.5 cents per kilogram. The levy would be applied as follows: ? R &D levy (fresh avocados): 0.1 cents per kilogram (from 3 cents per kilogram) ? M arketing levy (fresh avocados): 4.5 cents per kilogram (current rate) ? P HA levy (fresh avocados): 0.1 cents per kilogram (from 0.0 cents per kilogram) ? E mergency plant pest response levy: nil (current rate). Consultation Consistent with the Australian Government Levy Principles and Guidelines, the AAL conducted a thorough consultation campaign with all known existing and potential levy payers. This campaign included information being distributed at industry meetings, through mail outs, a media release and on an e-bulletin. In April 2016, the AAL also undertook an independent ballot of all avocado growers seeking support for the change. Results indicated that: a. 606 levy payers were sent the survey directly b. 40 per cent of the national production area voted and 96.92 per cent of the votes supported the change (3.08% indicated that they did not support the change) c. Those who completed the survey represented 3,005 hectares and those who voted no represented 18 hectares. In accordance with the Australian Government's Levy Principles and Guidelines a six week period for prospective levy payers to lodge objection to the levy submission was open from 13 October 2016 to 24 November 2016. No objections were received. The department consulted the Departments of the Prime Minister and Cabinet and Treasury in preparing the Regulations. The Office of Best Practice Regulation has agreed that a regulation impact statement is not required (ID 21620). Details / Operation Details of the Regulations are set out in the Attachment A. The Regulations is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in the Attachment B. The Regulations is a legislative instrument for the purposes of the Legislation Act 2003. ATTACHMENT A Details of the Primary Industries (Excise) Levies Amendment (Avocados) Regulations 2017 Section 1 - Name of Regulations This Section provides that the name of the Regulations is the Primary Industries (Excise) Levies Amendment (Avocados) Regulations 2017. Section 2 - Commencement This Section provides for the Regulations to commence on 1 April 2017. Section 3 - Authority This Section provides that the Regulations is made under the Primary Industries (Excise) Levies Act 1990. Section 4 - Schedule This Section provides for the Primary Industries (Excise) Levies Regulations 1999 to be amended as set out in Schedule 1. Schedule 1 - Amendments Item 1 amends paragraph 4.4(a) of schedule 5 to change the current charge from 3 cent to 2.9 cent. Item 2 amends part 4 of schedule 15 to add: 4.7 PHA Levy (1) For clause 2 of Schedule 27 to the Excise Levies Act, PHA is imposed on fresh avocados on which levy is imposed by Schedule 15 to the Excise Levies Act. (2) For clause 6 of Schedule 27 to the Excise Levies Act, the rate of the levy for fresh avocados is 0.1 cents per kilogram. (3) For clause 11 of Schedule 27 to the Excise Levies Act, PHA levy imposed on fresh avocados. ATTACHMENT B Statement of Compatibility with Human Rights Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Primary Industries (Excise) Levies Amendment (Avocados) Regulations 2017 This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Overview of the Legislative Instrument The purpose of the Primary Industries (Excise) Levies Amendment (Avocados) Regulations 2017 (the Regulations) is to amend the avocado levy to establish a Plant Health Australia (PHA) levy on fresh avocados, set at 0.1 of a cent per kilogram, and reduce the existing avocado research and development (R&D) levy rate to 2.9 cents per kilogram. Human rights implications This Legislative Instrument does not engage any of the applicable rights or freedoms. Conclusion This Legislative Instrument is compatible with human rights as it does not raise any human rights issues. The Hon. Barnaby Joyce MP Deputy Prime Minister and Minister for Agriculture and Water Resources 3