SUGAR RESEARCH AND DEVELOPMENT SERVICES (CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL 2013 Explanatory Memorandum
SUGAR RESEARCH AND DEVELOPMENT SERVICES (CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL 2013
2010 - 2011 - 2012 - 2013
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
Sugar Research and Development Services (Consequential Amendments and
Transitional Provisions) Bill 2013
REVISED EXPLANATORY MEMORANDUM
THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY
THE HOUSE OF REPRESENTATIVES
TO THE BILL AS INTRODUCED
(Circulated by authority of the Minister for Agriculture, Fisheries and Forestry,
Senator the Hon. Joseph Ludwig)
SUGAR RESEARCH AND DEVELOPMENT SERVICES
(CONSEQUENTIAL AMENDMENTS & TRANSITIONAL
PROVISIONS) BILL 2013
OUTLINE
This bill, the Sugar Research and Development Services Bill 2013 and the Sugar
Research and Development Services (Consequential Amendments-Excise) Bill 2013
provide the mechanism to implement key elements of reforms to sugar research and
development (R&D) arrangements.
Under the reforms, the Sugar Research and Development Corporation (SRDC) and
BSES Limited will be wound-up and their assets and R&D functions, along with the
research coordination activities of Sugar Research Limited, transferred to the industry
owned company, Sugar Research Australia Limited (SRA). SRA is a company limited
by guarantee operating under the Corporations Act 2001.
The industry owned company will be funded by a statutory levy of 70 cents per tonne
of sugar cane that is processed, or sold for processing, to be paid equally (35 cents per
tonne each) by growing and milling businesses. The new levy will replace the existing
sugar R&D statutory levy of 14 cents per tonne and incorporate existing voluntary
contributions that fund the industry owned BSES Limited.
The Sugar Research and Development Services Bill 2013, which comes into effect the
day after it receives Royal Assent, provides the Minister for Agriculture, Fisheries and
Forestry with the power to enter into a funding contract with an eligible company to
enable it to receive and administer levies collected by the Commonwealth for R&D. It
will also allow it to receive the Commonwealth's matching funding for eligible R&D
expenditure. Once the company has entered into the contract, and the minister is
satisfied that the company will comply with its contractual and statutory obligations,
the minister can declare the company to be the industry services body.
The Sugar Research and Development Services (Consequential Amendments-Excise)
Bill 2013 amends the imposition of the levy to ensure that all future uses of processed
sugar cane will be captured by the levy and the possibility of avoiding payment of the
levy will be eliminated. It also increases the levy rate. These amendments will take
effect from 1 July 2013 so that industry will be provided with certainty about the
imposition of the levy and when the increase to the levy rate will come into effect.
This bill ensures the new arrangements operate as intended in respect of the collection
of the levy. It also covers matters arising from the transition to a new industry services
body such as the transfer of assets and liabilities from SRDC to the industry services
body and the wind-up of SRDC.
2
The changes are implemented by consequential amendments to the Primary Industries
Levies and Charges Collection Act 1991, the Primary Industries Levies and Charges
Collection Regulations 1991 and the Sugar Research and Development Corporation
Regulations 1990.
The R&D activities of SRDC, and 75 per cent of its assets, will be transferred to the
industry services body on the date it is declared as such. The remaining assets will be
held by SRDC to cover wind-up costs until it is abolished on 30 September 2013. Any
remaining SRDC assets and liabilities will be transferred to the industry services body
on 1 October 2013. The last amendments to come into effect relate to the introduction
of an instalment system for payment of the levy to correspond more closely with how
sugar cane payments are made in the industry. This will occur on 1 March 2014 so
that all levy payers are treated equitably during the current harvesting season.
FINANCIAL IMPACT STATEMENT
There will be a small financial impact with Commonwealth matching contributions to
R&D expected to increase because of the higher levy rate. The financial impact over
the financial years to 2016/17 is estimated at $3.6 million.
13/14 14/15 15/16 16/17
$1.0m $1.0m $0.8m $0.8m
Industry owned assets, including proceeds of the statutory levy held by SRDC, will be
transferred to the new industry services body.
3
HUMAN RIGHTS STATEMENT
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011
Sugar Research and Development Services (Consequential Amendments
and Transitional Provisions) Bill 2013
This Bill 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 Bill/Legislative Instrument
This Bill, the Sugar Research and Development Services Bill 2013 and the
Sugar Research and Development Services (Consequential Amendments-
Excise) Bill 2013 provide the mechanism to reform sugar research and
development (R&D) arrangements.
Under the reforms, the Sugar Research and Development Corporation (SRDC)
and BSES Limited will be wound-up and their R&D functions, along with the
research coordination activities of Sugar Research Limited, transferred to the
industry owned company, Sugar Research Australia Limited (SRA). SRA is a
company limited by guarantee operating under the Corporations Act 2001.
This Bill ensures the new arrangements operate as intended in respect of the
collection of the levy. It also covers matters arising from the transition to a
new industry services body such as the transfer of assets and liabilities from
SRDC to the industry services body and the wind-up of SRDC. The changes
are implemented by consequential amendments to the Primary Industries
Levies and Charges Collection Act 1991, the Primary Industries Levies and
Charges Collection Regulations 1991 and the Sugar Research and
Development Corporation Regulations 1990.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights
issues.
Minister for Agriculture, Fisheries and Forestry,
Senator the Hon. Joseph Ludwig
4
SUGAR RESEARCH AND DEVELOPMENT SERVICES
(CONSEQUENTIAL AMENDMENTS AND
TRANSITIONAL PROVISIONS) BILL 2013
NOTES ON CLAUSES
Section 1: Short title
This section provides for the Act to be called the Sugar Research and Development
Services (Consequential Amendments and Transitional Provisions) Act 2013.
Section 2: Commencement
This section provides that the bill commences upon Royal Assent with the following
exceptions:
Schedule 1, Part 1 of the Act will come into effect on 1 July 2013. This provides
industry with certainty about the collection arrangements for the levy. .
Schedule 1, Part 2 of the Act will come into effect on 1 October 2013. This part
will abolish the Sugar Research and Development Corporation (SRDC).
Schedule 1, Part 3 of the Act will come into effect on 1 March 2014. This part
deals with the payment of levies in instalments. It is necessary for this change to
occur at the beginning of a harvesting season for administrative efficiency and so
that all levy payers are treated equitably during the current harvesting season.
Schedule 2 to the Act will come into effect immediately after the commencement
of Section 2 of the Sugar Research and Development Services Act 2013. This
schedule sets out SRDC's functions during the transitional period (from the date
of declaration of the industry services body until 30 September 2013), and
transitional matters that SRDC must complete before it is abolished on
1 October 2013.
Section 3: Schedules(s)
This section is the formal enabling provision for the Schedules to the bill, providing
that each Act specified in a Schedule is amended or repealed in accordance with the
applicable items of the Schedule. In this bill, the Act being amended is the Primary
Industries Levies and Charges Collection Act 1991.
This section also provides for each set of regulations specified in a Schedule to be
amended or repealed in accordance with the applicable items of the Schedule. The
amendment of any regulation does not prevent it (as amended) from being amended
or repealed by the Governor-General. In this bill, the regulations being amended or
repealed are the Primary Industries Levies and Charges Collection Regulations 1991
and the Sugar Research and Development Corporation Regulations 1990.
5
Schedule 1 - Consequential amendments
Primary Industries Levies and Charges Collection Act 1991
Item 15: Subsection 4(1) (after paragraph (hb) of the definition of producer)
This item inserts a sugar specific definition of producer into the Primary Industries
Levies and Charges Collection Act 1991 (Collection Act). This definition will ensure
that the correct person is identified as the producer in determining who will be
responsible for payment of that half of the levy.
This item provides that where a processing establishment grows the sugar cane that it
processes, then it is to be considered both a producer and a processor (for the
definition of processor refer clause 4 of Schedule 33 to the Primary Industries Levies
and Charges Collection Regulations 1991, as amended by this bill).
This item provides that where sugar cane is not sold but is processed on behalf of the
owner of the sugar cane, then that owner is considered to be the producer.
This item also provides that where a person sells sugar cane to a processing
establishment then that person is the producer.
This definition should be read in conjunction with the imposition of the levy in Clause
3 of Schedule 24 to the Excise Levies Act, as amended by Item 6 of Schedule 1 to the
Sugar Research and Development Services (Consequential Amendments-Excise) Bill
2013.
Item 16: At the end of subsection 15(1)
This item will insert a note to direct the reader to subsection (5).
Item 17: At the end of section 15
This item will add subsection (5) to section 15 of the Collection Act to allow for a
collection product to be prescribed by the regulations so that subsection 15(1) has
effect as if a reference to the producer was also a reference to the processor.
This will ensure that despite the amended definition of `producer' that will now
appear in subsection 4(1) of the Collection Act, a sugar cane processor will still be
subject to penalty for late payment for their half of the levy. The amended definition
of `producer' was required to ensure that the correct person is identified as the
producer in determining who will be responsible for payment of that half of the levy
that the producer is liable to pay.
The addition of subsection (5) will also enable other products with similar
arrangements to be prescribed in the future, if required.
6
Primary Industries Levies and Charges Collection Regulations 1991
Item 18: After regulation 3
This item provides for sugar cane to be prescribed in the Primary Industries Levies
and Charges Collection Regulations 1991 (Collection Regulations) for the purposes of
the new subsection 15(5) of the Collection Act, as inserted by this bill. This will
ensure that the processor is subject to penalty for late payment for their half of the
levy.
Item 19: Clause 2 of Schedule 33 (definition of accepted sugar cane)
This item will repeal the definition of `accepted sugar cane' in the Collection
Regulations. This repeal is consistent with the changes made to the Excise Levies Act
and the Collection Act by this bill and the Sugar Research and Development Services
(Consequential Amendments-Excise) Bill 2013. The term `accepted sugar cane' does
not cover all potential scenarios under which the levy will be imposed and retaining it
may allow for avoidance of the levy.
Item 20: Clause 2 of Schedule 33 (definition of sugar cane)
This item provides for the Collection Regulations to apply the new meaning of sugar
cane, as set out in Clause 1 of Schedule 24 to the Excise Levies Act as amended by
Item 4 of Schedule 1 to the Sugar Research and Development Services (Consequential
Amendments-Excise) Bill 2013.
Item 21: At the end of clause 2 of Schedule 33
This item inserts a note at the end of Clause 2 of Schedule 33 to the Collection
Regulations to clarify that the producer of sugar cane on which levy is imposed by
clause 3 of Schedule 24 to Excise Levies Act, is defined by paragraph (hc) of
subsection 4(1) of the Collection Act, as inserted by Item 15 of Schedule 1 to this bill.
Item 22: Clause 3 of Schedule 33
This item repeals Clause 3 of Schedule 33 to the Collection Regulations, which
specifies `what is a levy year' for subsection 4(1) of the Collection Act. A defined
levy year is not necessary for the sugar cane levy as annual returns are not required.
Item 23: Clause 4 of Schedule 33
This item amends Clause 4 of Schedule 33 to the Collection Regulations. It provides
that sugar cane is a product to which paragraph (b) of the definition of processor in
subsection 4(1) of the Collection Act applies.
This means that a processor is the proprietor of the processing establishment that
processes the product.
7
If the product is owned by the proprietor of another processing establishment
immediately prior to delivery to an establishment, then the proprietor of the other
processing establishment will be the processor. This is a generic provision that is
already included in the Collection Act which will now apply to sugar cane. This will
ensure that, in the unlikely event that sugar cane is processed by a number of
processing establishments, the first processing establishment after the sugar cane is
sold by the producer is responsible for payment of that half of the levy for which the
processor is liable.
Item 24: Clause 4 of Schedule 33 (note)
This item substitutes a new note for Clause 4 of Schedule 33 to the Collection
Regulations, which reflects the new definition of processor (see Item 23 of Schedule 1
to this bill).
Item 25: Clause 5 of Schedule 33
This item will repeal the definition of `producer' in Schedule 33 to the Collection
Regulations as a new sugar specific definition of producer will now be included in
subsection 4(1) of the Collection Act (see Item 15 of Schedule 1 to this bill).
Item 26: Clause 8 of Schedule 33
This item will replace the term `accepts sugar cane' with `buys or processes sugar
cane' in Schedule 33 to the Collection Regulations to be consistent with the
imposition of the levy in Clause 3 of Schedule 24 to the Excise Levies Act, as
amended by Item 6 of Schedule 1 to the Sugar Research and Development Services
(Consequential Amendments-Excise) Bill 2013.
Item 27: Clause 10 of Schedule 33
This item substitutes a new Clause 10 in Schedule 33 to the Collection Regulations.
This reflects the change from the use of the term `sugar mill' to the term `processing
establishment'. It also reflects the move away from sugar cane being `accepted for
processing' to sugar cane being `sold to, or processed at, the processing
establishment', as per the imposition of the levy in Clause 3 of Schedule 24 to the
Excise Levies Act, as amended by Item 6 of Schedule 1 to the Sugar Research and
Development Services (Consequential Amendments-Excise) Bill 2013.
Item 28: Paragraphs 11(1)(a) and (b)
This item substitutes new paragraphs 11(1)(a) and (b) of Schedule 33 to the
Collection Regulations. The new paragraphs reflect the move away from sugar cane
being `accepted for processing' to sugar cane being `sold by, or processed for, each
producer' as per the imposition of the levy in Clause 3 of Schedule 24 to the Excise
Levies Act, as amended by Item 6 of Schedule 1 to the Sugar Research and
Development Services (Consequential Amendments-Excise) Bill 2013.
8
Part 2 - Amendments commencing on 1 October 2013
Sugar Research and Development Corporation Regulations 1990
Item 29: The whole of the Regulations
This item will repeal the entire Sugar Research and Development Corporation
Regulations 1990 on 1 October 2013. This will abolish the Sugar Research and
Development Corporation (SRDC).
Part 3 - Amendments commencing on 1 March 2014
Primary Industries Levies and Charges Collection Regulations 1991
Item 30: Clause 7 of Schedule 33
This item will substitute a new Clause 7 of Schedule 33 which deals with when levy is
due for payment. The new clause provides for a payment system by instalment which
would operate as follows:
Levy is paid on sugar cane sold to or purchased by a processing establishment.
A processor who buys or processes sugar cane in a month must lodge a return
for the month.
The return is due 28 days after the month in which the sugar cane was bought
or processed. The full quantity of sugar cane bought or processed in that
month is reported.
Payment is then made in two instalments:
o 60% of the amount of levy payable for the month is due on the same
date as the return due date (i.e. 28 days after the end of the month to
which it relates, as per Clause 9 of Schedule 33 to the Collection
Regulations).
o 40% of the amount of levy payable for the month is due on
28 February in the following calendar year. In effect, the second
instalment for all returns for all months within a specific calendar year
would be due on the same date in the following calendar year.
Item 31: Paragraph 10(d) of Schedule 33
This item substitutes a new paragraph 10(d) in Schedule 33 so that the amount of levy
paid which is included in a return for a month under this paragraph, will be 60% of
the amount of levy payable.
9
Schedule 2 - Transitional provisions
Part 1 - Preliminary
Item 1: Definitions
This item provides for terms of the Act to be defined.
The term funding contract is defined as a contract, deed or agreement entered into
between SRDC and another person or body for the purpose of funding R&D activities
relating to sugar cane by the other person or body. The investment of levy funds, and
Commonwealth matching payments, for R&D will be the responsibility of the
industry services body from the moment it is declared.
Part 2 - SRDC's functions during transitional period
Item 2: SRDC to wind up operations during transitional period
This item provides for SRDC's functions during the transitional period.
Subsection (1) provides that, during the transitional period, SRDC's main role will be
to take such steps as may be necessary to wind it up.
Subsection (2) provides for a number of functions that are currently conferred on
SRDC by the Primary Industries and Energy Research and Development Act 1989 to
be removed. These functions relate to the funding of R&D activities or to activities
that SRDC will not need to undertake during the transitional period. As the industry
services body will also be operating from the date of its declaration, removal of these
powers and functions ensures that there is no conflict between the functions of the two
bodies during that part of the transitional period. It is envisaged that SRDC and the
industry services body will work together to resolve any administrative issues, and to
share relevant corporate knowledge, relating to the transfer of any functions from
SRDC to the new industry services body.
Item 3: Final annual report and financial statements for SRDC
This item provides that despite SRDC being abolished, Subdivision A of Division 2
of Part 3 of the Commonwealth Authorities and Companies Act 1997 (the CAC Act),
which relates to the preparation of annual reports and financial statements, continues
to apply. This item provides that the final reporting period (from 1 July 2013 to
30 September 2013) should be considered a financial year and that the directors of
SRDC, immediately before 1 July 2013, should be considered to have continued to be
directors of SRDC for the purposes of preparation of, and signing off on, the annual
report.
This item does not limit section 7 of the Acts Interpretation Act 1901.
10
Part 3 - Assets, liabilities and legal proceedings
Item 4: Transfer of property, money and liabilities
This item provides for the transfer of SRDC's assets and liabilities in two tranches:
the first on, or near, the declaration day; and the second on 1 October 2013. This is to
allow appropriate resources for SRDC during the transitional period (the date of
declaration of the industry services body until 30 September 2013), so that it can take
the necessary steps to wind itself up.
Transfers on or near the declaration day
As soon as possible after the declaration day, SRDC must pay 75 per cent of its cash
assets to the industry services body. This will allow the industry services body
sufficient funds to continue the delivery of R&D services to the industry whilst also
providing SRDC with appropriate funds to conduct its wind-up activities during the
transitional period.
The investment of levy funds, and Commonwealth matching payments, for R&D will
be the responsibility of the industry services body from the moment it is declared. All
funding contracts will be transferred to the new industry services body on that day and
SRDC will no longer be responsible for funding any R&D activities. Any references
to SRDC, or the directors of SRDC, in these funding contracts become references to
the industry services body, or the directors of the industry services body, respectively.
Sub-item (3) provides that to the extent to which a funding contract relates to an asset
or liability of SRDC, then those assets or liabilities become assets or liabilities of the
industry services body without any conveyance, transfer or assignment.
Sub-item (4) provides that the industry services body becomes SRDC's successor in
law in relation to any assets and liabilities associated with the funding contracts.
Transfers on 1 October 2013
On 1 October 2013, the remaining assets and liabilities of SRDC become assets and
liabilities of the industry services body without any conveyance, transfer or
assignment.
Sub-item (6) provides that the industry services body becomes SRDC's successor in
law in relation to these assets and liabilities. Sub-item (7) provides that this item has
effect despite section 145 of the Primary Industries and Energy Research and
Development Act 1989 which would normally provide for all assets on cessation of an
R&D Corporation to transfer to the Commonwealth.
Item 5: Substitution of parties to proceedings
This item provides for the industry services body to be substituted for SRDC as a
party to any proceedings to which SRDC was a party, that were pending in any court
or tribunal immediately before 1 October 2013, and which related, in whole or in part,
to an asset or liability of SRDC.
11
Item 6: Exemption from stamp duty and other State or Territory taxes
This item ensures that the transfer of SRDC assets or liabilities to the industry
services body will not give rise to stamp duty or tax liability under any State or
Territory law.
It provides that the minister may certify in writing that `a specified matter' is exempt
from stamp duty or other taxes payable under State or Territory law. The minister
may also certify that a `specified thing' was done in connection with a specified
exempt matter, and that this `specified thing' is also exempt from stamp duty or other
taxes.
Item 7: References in certain instruments
This item provides for any instrument to which SRDC is a party, which favours or
refers, or which accrues any right or liability to SRDC at the time of its cessation, to
continue to have effect after the cessation time as if any reference to SRDC were a
reference to the industry services body as the successor body.
Sub-item (3) provides that this item has effect despite section 147 of the Primary
Industries and Energy Research and Development Act 1989 which would normally
provide that on cessation of an R&D Corporation, the Commonwealth would be
substituted for the R&D Corporation in any instruments.
Item 8: Certificates relating to vesting of assets
This item allows for the registration of an asset that is transferred to the industry
services body. It provides for the lodgement of an appropriate certificate signed by the
minister and for an assets official to register that transfer in accordance with the
certificate. The item may apply, for example, to registered patents and trademarks.
Part 4 - Miscellaneous
Item 9: Industry services body's liability for amounts in relation to levy collected
before the declaration day
This item applies to amounts that may be recovered by the Commonwealth as debts
due to the Commonwealth, under section 17 of the Collection Act. These amounts
relate to levy attached to SRDC before the declaration day and include: amounts of
levy that are due for payment; amounts of levy due for payment by an intermediary;
or late payment penalties.
This item provides that if one of these amounts is overpaid, and the Commonwealth
has refunded the amount, then the Commonwealth can recover the refunded amount
from the industry services body. This would apply, for example, where a person
overpaid levy prior to the declaration day and the Commonwealth had refunded the
amount to the person but had not been compensated by SRDC.
12
This item also provides for the Commonwealth to recover from the industry services
body any expenses incurred by the Commonwealth in relation to the collection or
administration of the levy that was attached to SRDC before the declaration day.
Item 10: SRDC's expenditure and funding treated as industry services body's
This item has effect for purposes of working out, under section 7 of the Sugar
Research and Development Services Act 2013, the limit on the appropriation for
matching payments for a financial year.
This item provides for any unmatched R&D excess for SRDC to be carried over to the
successor body at the time of transfer of R&D activities (the declaration date).
If the declaration date of the industry services body is after the start of a financial
year, this item also provides for the amount (if any) spent by SRDC in that part of the
financial year to be part of the amount spent by the industry services body that
qualifies under the funding contract as R&D activities. Therefore, any unmatched
R&D excess for the industry services body for that financial year will be dependent
on the amount of funds expended by SRDC during that financial year before the
industry services body took over R&D activities.
Item 11: Operation of the Archives Act 1983
This item states that this Schedule does not authorise a Commonwealth record to be
transferred or otherwise dealt with, except in accordance with the provisions of the
Archives Act 1983. If any Commonwealth records are to be transferred to the industry
services body, permission will be needed from the National Archives of Australia
under paragraph 24(2)(b) of the Archives Act 1983.
Item 12: Constitutional safety net - acquisition of property
This section provides for compensation to be paid by the Commonwealth to a person
from whom property is acquired on other than just terms as a result of the operation of
the bill. This section is included to ensure the constitutional validity of the bill and
ensure that the legislation does not give rise to an acquisition of property other than
on just terms, by enabling reasonable compensation to be paid to the affected party.
If the Commonwealth and the person in question cannot agree on the amount of any
such compensation to be paid, the Federal Court may, on application by the person
from whom the property was acquired, determine what is a reasonable amount.
Item 13: Certificates taken to be authentic
This item provides that a certificate or document issued under this Schedule is taken
to be authentic unless the contrary is established.
Item 14: Delegation by Minister
This item provides for the minister to delegate, by writing all or any of his or her
powers under this Schedule to the Secretary of the department or an SES employee
13
(or acting SES employee) in the department. The delegate must comply with any
directions of the minister.
Item 15: Regulations
This item provides that the Governor-General may make regulations prescribing
matters required or permitted by this Schedule to be prescribed, or that are necessary
for carrying out or giving effect to this Schedule.
It also provides that the Governor-General may make regulations prescribing matters
of a transitional nature (including prescribing any saving or application provisions)
relating to the amendments or repeals made by Schedule 1 (Consequential
amendments) to this Act. This will allow for any unforseen issues that occur as a
result of the amendments or repeals made by Schedule 1, to be dealt with.
14