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2016
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NARCOTIC DRUGS (LICENCE CHARGES) BILL 2016
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Aged Care/Minister for Sport,
the Hon Sussan Ley MP)
NARCOTIC DRUGS (LICENCE CHARGES) BILL 2016
OUTLINE
The main purpose of this Bill is to enable the Commonwealth to collect a charge on a
licence granted under that Narcotic Drugs Act 1967 and that is in force within a
specified period.
There are three types of licence granted under that Act - medicinal cannabis licences,
cannabis research licences and manufacture licences. These licences authorise
activities in relation to drugs within the meaning of the Single Convention on Narcotic
Drugs, 1961. Stringent requirements apply to the holders of these licences to
minimise the risk of diversion of these drugs for illicit purposes.
For manufacture licences, meeting these requirements is a joint responsibility between
the Commonwealth and the states/territories. These activities have been undertaken
for nearly 5 decades without any cost-recovery. Because the states and territories bear
the greater burden of direct monitoring/post-licence inspections, it is not proposed to
impose Commonwealth cost-recovery, at this time.
The medicinal cannabis and cannabis research licences authorise the cultivation of
cannabis plants and/or the production of cannabis and cannabis resins, which are new
activities under the Act and are the exclusive responsibility of the Commonwealth.
Monitoring, post-licence inspections and the imposition of conditions such as strict
reporting requirements are activities that will need to be carried out by the Department
in relation to the licences to ensure compliance with Australia's Single Convention
obligations.
The imposition of a charge on a licence that is in force assists the Commonwealth in
recovering the costs of the administration, monitoring and assessment of compliance
with the requirements under the Narcotic Drugs Act 1967 after the licence and permits
associated with the licence are granted.
Any charge that will be imposed on these licences or particular classes of licences will
be consistent with the Commonwealth cost recovery guidelines. The amount of the
charges will be set out in regulations to be made under the Narcotic Drugs (Licence
Charges) Act.
Financial Impact Statement
The regulation of the cultivation of cannabis plants, the production of cannabis and
cannabis resins and the manufacture of drugs and narcotic preparations will create
administration costs for the Government. The imposition of a charge and the
collection of fees prescribed in Regulations made under the Narcotic Drugs (Licence
Charges) Act will provide for the recovery of direct costs of the administration of the
licensing framework by the Commonwealth.
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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) BILL 2016
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 main purpose of this Bill is to enable the Commonwealth to collect a charge on a
licence granted under the Narcotic Drugs Act 1967 and that is in force within a
specified period. As these licences authorise activities in relation to drugs within the
meaning of the Single Convention on Narcotic Drugs, 1961, stringent requirements
apply to the holders of these licence to minimise the risk of diversion of these drugs
for illicit purposes. Monitoring, post-licence inspections and the imposition of
conditions such as strict reporting requirements, are activities that will need to be
carried out by the Department to ensure compliance with Australia's Single
Convention obligations.
Administration of manufacture licences is and existing function and a joint
responsibility of the Commonwealth and the states/territories, with the
states/territories holding the direct responsibility for compliance monitoring. As such,
the Commonwealth does not propose to cost recover from this sector, at this time.
Medicinal cannabis licences and cannabis research licences authorise new activities
and, because of the wording of the Single Convention and the operation of the
Australian Constitution, are an exclusive activity of the Commonwealth. There is
direct and considerable administration costs to the Commonwealth that it is proposed
to recover.
The imposition of a charge on a licence that is in force assists the Commonwealth in
recovering the costs of the administration of licences and permits issued in relation to
a licence.
Human rights implications
The Bill primarily provides for the imposition of a charge on licences granted under
the Narcotic Drugs Act 1967. It also provides for amounts and the periods for the
payment of a charge by a licence holder to be prescribed by the regulations. The
provisions in the Bill do not engage any human rights issues.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
The Hon Sussan Ley MP, the Minister for Health and Aged Care/Minister for
Sport
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NARCOTIC DRUGS (LICENCE CHARGES) BILL 2016
NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 provides for the short title of the Act to be the Narcotic Drugs (Licence
Charges) Act 2016.
Clause 2 - Commencement
Subclause 2(1) provides that each provision of the Act specified in column 1 of the
table set out in the subclause commences or is taken to have commenced in
accordance with column 2 of the table. Any other statement in column of that table
has effect according to its terms
This clause provides that sections 1 and 2 and anything in the Bill not elsewhere
covered by the table will commence on the day on which the Act receives the Royal
Assent.
Sections 3 to 9, which contain the substantive provisions, will commence on the later
of the following periods, immediately after the commencement of Schedule 1 to the
Narcotic Drugs Amendment Act 2016 (which contain the provisions in relation to the
granting and holding of licences and permits, and associated provisions) and the day
the Act receives the Royal Assent. Schedule 1 to the Narcotic Drugs Amendment Act
2016 will commence on 30 October 2016.
Subclause 2(2) provides that any information in column 3 of the table is not part of
the Act. It also clarifies that any information may be inserted in column 3, or
information in it may be edited, in any published version of the Act.
Clause 3 - Definitions
Section 3 provides for useful definitions in the interpretation of the provisions of the
Bill such as 'charge' and 'licence'. A charge means a charge imposed by the Narcotic
Drugs (Licence Charges) Act 2016. Licence is defined as a licence granted under the
Narcotic Drugs Act 1967 (the ND Act), which are medicinal cannabis licences,
cannabis research licences and manufacture licences.
There is no proposal to impose a manufacture licence charge for the time being.
Clause 4 - Crown to be bound
Section 4 provides that the Act binds the executive governments of each of the States,
and the Territories. The Act does not bind the Commonwealth. Thus no charge
would be payable by a Commonwealth government agency that holds a licence that is
in force under the Narcotic Drugs Act 1967.
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Clause 5 - Extension to external Territories
This clause creates section 5, which provides that the Act extends to every external
Territory. It is possible that activities that are licensed under the ND Act may be
carried out in Australia's external territories.
Clause 6 - Imposition of charge
This clause provides for section 6, which relates to the imposition of charge.
Subsection 6(1) provides that charge is imposed on a licence that is in force at
specified times. The charge can be imposed on a licence that is in force at any time
during a financial year or any period (such as by calendar year or a period longer than
a year) as prescribed in the regulations to be made for the purposes of paragraph
6(1)(b).
Subsection 6(2) provides that without limiting subsection 6(1), regulations may be
made prescribing different periods in relation to different classes of licence or licences
of the same class that authorise different activities. Thus, the period in which a charge
is payable in relation to a cannabis research licence that is in force may be different to
the period in which a charge is payable in relation to a medicinal cannabis licence that
is in force.
This will allow, through regulations, the Department of Health to assess whether
imposition of a charge on a cannabis research licence would act to stifle or prevent
research into the medicinal properties of cannabis. Supporting such research is a key
policy intent of the amendments of the Narcotic Drugs Act 1967.
Clause 7 - By whom charge is payable
By reason of section 7, the charge is payable by the holder of the licence.
Clause 8 - Amount of charge
Section 8 provides that the amount of charge payable by the holder of the licence will
be set out in the regulations.
Subsection 8(1) provides that the amount of charge for a specified or applicable
period is the amount set out in the regulations to be made for this subsection.
Subsection 8(2) provides that without limiting the effect of subsection 8(1), different
charges for different classes of licence, or licences of the same class that authorise
different activities will be set out in the regulations to be made for this subsection.
Thus the applicable charge for a medicinal cannabis licence may be set at a different
amount compared to that of a cannabis research licence for the reasons set out above.
Subsection 8(3) provides that the amount of charge under the regulations may be set
to nil, as the amount includes a nil amount.
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Note that the provisions relating to refunds, waiving, remission or pro-rating will be
provided for in regulations made under the Narcotic Drugs Act 1967.
Clause 9 - Regulations
Section 9 is a regulation-making power relating to matters that are required or
permitted to be made by the Narcotic Drugs (Licence Charges) Act 2016 to be
prescribed and matters that are necessary or convenient to be prescribed for carrying
out or giving effect to that Act.
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