1998

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE

WHEAT MARKETING LEGISLATION AMENDMENT BILL 1998

SUPPLEMENTARY EXPLANATORY MEMORANDUM

Amendments to be Moved on Behalf of the Government

(Circulated by authority of the Minister for Primary Industries and Energy,
the Hon John Anderson MP)

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WHEAT MARKETING LEGISLATION AMENDMENT BILL 1998

GENERAL OUTLINE

1.	The amendments to this Bill to be moved on behalf of the Government relate to the removal of the time limit of 1 July 2004 on the legislated export monopoly arrangements. They are being brought forward in response to representations to the Government and the report of the Senate Rural and Regional Affairs and Transport Committee on the Bill.

2.	The Bill provides for the establishment of the Wheat Export Authority (WEA) which will be the successor body to the Australian Wheat Board (AWB) from 1 July 1999. Its functions will be to control exports of wheat, to monitor the grower company Pooling subsidiary's (Company B) performance in relation to the export of wheat and to examine and report on the benefits accruing to growers from the performance of Company B. The Bill also provides for the monopoly to be given to Company B for five years from 1 July 1999.

3.	The proposed amendments to the Bill will remove the five year limit on the Company B holding the export monopoly for wheat. They will also require the WEA to conduct a review and report to the Minister by the end of 2004 on the export rights given to company B by the legislation.

4.	The overall export monopoly arrangements will be reviewed under National Competition Policy (NCP) in 1999‑2000. The WEA would operate until any different outcome arising from the NCP review was implemented.

5.	Assuming that the NCP Review in 1999‑2000 recommends continuation of the export monopoly, a review will be held by the WEA before the end of 2004 on the export monopoly performance of company B. Specifically, the review would assess the performance of the pooling subsidiary of the grower company in its use of its wheat export rights and report to the Minister on the future operation of the export monopoly, including whether that company should continue to have special export rights. It would be up to the Government to decide from time to time who would receive any special export rights and for Parliament to amend the legislation as necessary.

FINANCIAL IMPACT STATEMENT

6.	The proposed amendments to the Bill have no direct financial implications for the Commonwealth. The WEA will be initially funded from money of the AWB retained for this purpose when other AWB assets are transferred to the grower owned parent company (Company A).

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7.	However it is expected that the retained funding would only cover the first five years of the WEA's operations. Provisions for continued funding of the WEA will be developed in consultation with industry.

REGULATION IMPACT STATEMENT

8.	The proposed amendments to the Bill will have no additional regulatory impact to that in the Bill and do not alter the Government's obligation under the Competition Principles Agreement to review and assess the export monopoly in 1999‑2000.

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NOTES ON AMENDMENTS

Amendment (1): Schedule 1, Item 9, page 14 (line 12)

9.	This amendment removes the provision in the proposed new subsection 57(1A) of the Wheat Marketing Act 1989 (the Act) which would have required the pooling subsidiary (Company B) to obtain the consent of WEA to export wheat after 1 July 2004. Company B's right to export wheat without a consent from the WEA will continue indefinitely unless the Act is further amended.

Amendment (2): Schedule 1, Item 11, page 14 (lines 23 and 24)

10.	This amendment omits the proposed new subsection 57(3C) which would have terminated from 1 July 2004 the requirements for the WEA to consult Company B about all requests for consent to export wheat, and to not issue a consent for bulk exports without Company B's approval. These requirements support Company B's right to export wheat without a consent and will continue for as long as Company B holds that right.

Amendment (3): Schedule 1, Item 13, page 15 (after line 12)

11.	This amendment requires the WEA to conduct a review of company B's right to export wheat without the consent of WEA and that company's role in the giving of consents by the WEA to other person for the export of wheat in bulk or otherwise. The report of review must be given to the Minister before the end of 2004.