Commonwealth Numbered Regulations - Explanatory Statements

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WHEAT INDUSTRY FUND REGULATIONS (AMENDMENT) 1991 NO. 315

STATUTORY RULES 1991 No. 315

Issued by Authority of the Minister of State for Primary Industries and Energy

WHEAT MARKETING ACT 1989

WHEAT INDUSTRY FUND REGULATIONS (AMENDMENT)

The Wheat Industry Fund (the Fund), established under the Wheat Marketing Act 1989 (the Act), is made up of levies paid on all wheat sold or processed plus earnings on Fund monies. The Fund is used by the Australian Wheat Board (AWB) as an asset base to finance a range of commercial activities such as trading in grains and associated activities. The use and management of Fund monies is determined by the provisions of the Act and the associated Wheat Industry Fund Regulations (Statutory Rules 1990 No 28 as amended), which give the Grains Council of Australia (GCA) a controlling role over the use of the Fund and any revolvement of monies, and ensure that levy payers hold equity in the Fund and its assets.

Following the introduction of these Regulations the Senate Standing Committee on Regulations and ordinances questioned whether a right of external review could be provided in respect of decisions by the AWB in determining a person's equity and in making repayments to equity holders from the Fund.

The Attorney-General's Department has since indicated that review by the Administrative Appeals Tribunal would not be appropriate in relation to either determining equity (Regulation 8) or repayment from the Fund (Regulation 10). This is because such decisions involve the apportionment of a finite amount of money to a number of recipients and the outcome of review of these decisions for any individual could impact on a number of others. Furthermore it was noted that the AWB, in making determinations on Fund repayments, is in effect merely implementing a decision of an outside body, viz the GCA.

However a course of action was proposed by the AttorneyGeneral's Department which met the Senate Committee's concerns. This involves incorporating, in the Regulations, the principles of the relevant internal operational rules for the Fund, which have been developed by the AWB. These measures should eradicate the possibility of arbitrariness in the exercise of the AWB's powers and ensure that the procedures to be adopted (in determining equity in and revolvement of the Fund) are apparent on an examination of the Regulations.

In accordance with the requirements of the Act, a report from the GCA requesting amendment of the Regulations to implement this approach has been considered by the Minister and formed the basis of the Regulations.

The amendments provide for net Fund earnings to be allocated to individual equity holders based on equity balances carried forward from the previous financial year plus levy contributions on a pro rata basis depending upon when levy contributions were received during the particular financial year. Any revolvement payment or transfer of equity is also to be taken into account, and in the latter case the allocation to be in the name of the transferee.

Furthermore, the Regulations will require that any determination by the AWB to revolve payments out of the Fund must be based upon a nominated percentage of equity held in the Fund at a specified date and there must be a stipulated repayment period. Repayments from the Fund can only be made if such provision is included in the Business Plan which is subject to approval by the GCA.

Details of the Regulations are attached.

ATTACHMENT

DETAILS OF THE WHEAT INDUSTRY FUND REGULATIONS (AMENDMENT)

Regulation l - Provides for amendment of the Wheat Industry Fund Regulations.

Regulation 2 - omits the provision (subregulation 8(2)(d) whereby the AWB had unlimited discretion in the factors to take into account in determining a person's equity in the Fund.

The new subregulation 8(2) sets out the factors to be taken into consideration by the AWB in determining equity each financial year viz. levy contributions, transfer of equity and any revolvement payments from the Fund. The allocation of earnings or losses of the Fund and the change in the value of the Fund's assets at the end of the previous financial year is to be based on the equity holder's balance carried forward from the previous year, pro-rata contributions of levy and whether or not any transfer of equity or revolvement has been made. The new subregulation 8(3) specifies that in the case of equity transfers, the allocation of equity must be assigned to the transferee once the transfer has been processed.

The new subregulation 8(4) sets out the composition of a person's equity in the Fund at the end of a financial year following allocation, so as to remove the possibility of discrimination against any particular person.

Regulation 3 - Inserts a new subregulation (2A) which requires that, in determining a repayment of monies to equity holders, the AWB must fix the rate as a percentage of each person's equity at the end of the previous financial year, to apply equally to each person. This is to remove the possibility of discrimination. Also a date by which repayments are to commence is required to be set by the AWB and the new subregulation 10(6) provides that all payments must be made within 30 days from that date.

The subregulation 10(5) requires the AWB to notify equity holders in writing of a determination to make a repayment and to give them the opportunity to decline receiving such payment.