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2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NARCOTIC DRUGS (LICENCE CHARGES) AMENDMENT BILL 2022
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Aged Care,
the Hon Mark Butler MP)
NARCOTIC DRUGS (LICENCE CHARGES) AMENDMENT BILL 2022
OUTLINE
The Narcotic Drugs (Licence Charges) Amendment Bill 2022 (the Bill) makes
amendments to the Narcotic Drugs (Licence Charges) Act 2016.
The Narcotic Drugs (Licence Charges) Act 2016 operates to assist the
Commonwealth in recovering the costs of the administration, monitoring and
assessment of compliance with requirements under the Narcotic Drugs Act 1967 after
a licence, and permits associated with the licence, are granted.
The Narcotic Drugs Act 1967 provides, among other things, a licensing and permit
scheme for the regulation of medicinal cannabis cultivation, production and
manufacture for medicinal or scientific purposes. The regulatory scheme is cost-
recovered from industry through fees prescribed in the Narcotic Drugs Regulation
2016 pursuant to the Narcotic Drugs Act 1967, and charges prescribed in the Narcotic
Drugs (Licence Charges) Regulation 2016 pursuant to the Narcotic Drugs (Licence
Charges) Act 2016.
The main purpose of the Bill is to provide greater flexibility for regulations to
prescribe charges that are imposed on a licence holder, and to support the effective
recovery of costs associated with regulating Australia's medicinal cannabis industry.
The Bill makes amendments to:
• clarify that the regulations may prescribe matters that will be the subject of
multiple separate charges, which may be incurred by a licence holder under
the Narcotic Drugs Act 1967 during a particular charging period;
• support greater flexibility in the way charges are prescribed in the regulations
by enabling the regulations to specify an amount of a charge or a method for
working out a charge; and
• include necessary savings provisions, which are consequential to the above
amendments.
Background
An independent review of the Narcotic Drugs Act 1967 was undertaken by
Professor John McMillan AO in 2019 (the McMillan Review) resulting in
26 recommendations to amend and improve the medicinal cannabis licensing and
permits framework in Australia. This included recommendations to introduce a single
licence model for medicinal cannabis regulation, replacing the previous three licence
model, and to simplify the related permits regime. Amendments to the narcotic drugs
legislation commenced on 24 December 2021 to implement recommendations from
the McMillan Review.
However, the Narcotic Drugs (Licence Charges) Act 2016 and Narcotic Drugs
(Licence Charges) Regulation 2016 continue to provide for, and otherwise prescribe,
charges based on the previous iteration of the medicinal cannabis licence and permits
framework. These charges are intended to be revised to align with the legislative
amendments made to implement recommendations from the McMillan Review.
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The amendments in this Schedule are therefore intended to align with the legislative
amendments that commenced on 24 December 2021, specifically to provide sufficient
flexibility for the regulations to appropriately prescribe charges to enable the effective
cost-recovery for the cost of administering the revised regulatory scheme under the
Narcotic Drugs Act 1967.
Financial Impact Statement
The Narcotic Drugs (Licence Charges) Act 2016 provides for the recovery of direct
costs of the administration of the medicinal cannabis regulatory scheme in the
Narcotic Drugs Act 1967. The activities relating to the administration of the medicinal
cannabis regulatory scheme are funded through cost-recovery arrangements, which
are consistent with the Australian Government's Charging Framework. There are no
financial implications for the Government.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
NARCOTIC DRUGS (LICENCE CHARGES) AMENDMENT BILL 2022
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
The Narcotic Drugs (Licence Charges) Act 2016 enables the Commonwealth to
impose a charge on the holder of a licence granted under the Narcotic Drugs Act 1967
as part of the framework for the recovery of costs associated with the administration
by the Commonwealth of the Narcotic Drugs Act 1967.
The main purpose of the Bill is to provide greater flexibility for regulations to
prescribe charges that are imposed on a licence holder, and to support the effective
recovery of costs associated with regulating Australia's medicinal cannabis industry.
The Bill makes amendments to the Narcotic Drugs (Licence Charges) Act 2016 to:
• clarify that the regulations may prescribe matters that will be the subject of
multiple separate charges, which may be incurred by a licence holder under
the Narcotic Drugs Act 1967 during a particular charging period;
• support greater flexibility in the way charges are prescribed in the regulations
by enabling the regulations to specify an amount of a charge or a method for
working out a charge; and
• include necessary savings provisions, which are consequential to the above
amendments.
Human rights implications
The Bill provides for the amendment of the Narcotic Drugs (Licence Charges) Act
2016 to provide greater flexibility for regulations to prescribe charges imposed on a
licence holder, and to support the effective recovery of costs associated with
regulating Australia's medicinal cannabis industry. The provisions in the Bill, to the
extent that those provisions deal with cost recovery for the regulation of Australia's
medicinal cannabis industry, do not directly engage any human rights issues.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
The Hon Mark Butler MP, Minister for Health and Aged Care
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NARCOTIC DRUGS (LICENCE CHARGES) AMENDMENT BILL 2022
NOTES ON CLAUSES
Clause 1 - Short Title
This clause provides that the short title of the Act is the Narcotic Drugs (Licence
Charges) Amendment Act 2022.
Clause 2 - Commencement
This clause provides that the Act will commence on the day after the Act receives
Royal Assent.
Clause 3 - Schedules
This clause provides that each Act specified in a Schedule to this Bill is amended or
repealed as set out in the applicable items in the Schedule concerned, and any other
item has effect according to its terms. This is a technical provision that gives
operational effect to the amendments contained in the Schedules. Schedule 1 amends
the Narcotic Drugs (Licence Charges) Act 2016.
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SCHEDULE 1 -- AMENDMENTS
Narcotic Drugs (Licence Charges) Act 2016
Item 1 - Title
Item 1 makes a minor editorial amendment to the long title of the Narcotic Drugs
(Licence Charges) Act 2016.
Items 2, 5 and 7 - Section 6 (heading), section 7 (heading) and section 8 (heading)
Items 2, 5 and 7 make minor editorial amendments to the headings of sections 6, 7
and 8.
Item 3 - Before subsection 6(1)
Item 3 makes a minor editorial amendment to insert the subheading "Charge on a
licence" before subsection 6(1).
Item 4 - At the end of section 6
Item 4 amends section 6, which relates to the imposition of charges, to include three
new subsections. New subsection 6(3) provides that a charge may be imposed on
matters prescribed by the regulations relating to a licence that is in force. New
subsection 6(4) provides that, without limiting subsection (3), the regulations may
prescribe different matters in relation to different classes of licence and licences of the
same class, which authorise different activities. New subsection 6(5) makes it clear
that subsection 6(3) imposes a charge only so far as that charge is neither a duty of
customs nor a duty of excise within the meaning of section 55 of the Constitution.
Section 55 of the Constitution relevantly provides that laws imposing taxation must
deal only with the imposition of taxation and furthermore with only one subject of
taxation.
The effect of item 4 is to enable, through regulations, the Commonwealth to impose
multiple separate charges for discrete matters on a licence holder within a particular
charging period and clarify that separate charges may be invoiced at multiple times
during a particular charging period.
A practical example is to ensure that a charge for a compliance inspection carried out
under the Narcotic Drugs Act 1967 becomes due and can be invoiced at the time a
compliance inspection occurs, the timing of which will be determined on the basis of
operational requirements during a particular charging period and may be imposed for
each compliance inspection that is carried out.
Item 6 - Section 7
Item 6 makes a minor editorial amendment to section 7 by removing the words
"imposed on a licence".
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Items 8 and 9 - Subsection 8(1) and 8(2)
Items 8 and 9 make amendments to section 8 which provides that the amounts of
charges payable by the holder of the licence may be prescribed by the regulations. The
amendments clarify that the regulations may prescribe amounts of charges or
prescribe different methods for working out the amounts of charges.
The effect of this amendment is to enable greater flexibility in the manner in which
charges are prescribed, so costs may be effectively recovered for the matters the
charges relate to.
Item 10 - Saving of regulations
Item 10 provides that the replacement of subsection 8(1) (pursuant to item 8) does not
affect the validity of regulations in force for the purposes of that subsection
immediately before the commencement of this item.
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