Monday, 24 June 2013
Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013; First Reading
That this bill be now read a second time.
The Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013 creates the Australian Grape and Wine Authority. The new authority will commence its operations on 1 July 2014. It will take the roles and functions of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation.
This is a reform that has been raised and discussed a number of times over the last 20 years, and it is with great pleasure that I introduce this bill to make the reform a reality.
The government agreed to merge the two wine statutory corporations following an industry proposal from the Winemakers' Federation of Australia and Wine Grape Growers Australia.
The proposed merger is widely supported by industry. A single wine industry statutory authority will support the industry by providing links between the investment initiatives and functions of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation. The merger will provide further benefits through improving administrative efficiency and service delivery to the industry.
The merger aligns with the Australian government's 2012 Rural Research and Development Policy Statement. In particular, the statement noted that combining research and development and marketing functions in one organisation can lead to administrative savings as well as synergies.
On 19 June 2013 the government introduced the Rural Research and Development Legislation Amendment Bill 2013 to implement the policy statement. Once this bill has been considered by parliament the government will amend the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill to ensure consistency between the two pieces of legislation.
The merger of the two statutory authorities is in also accordance with a broader policy goal to reduce the number of government statutory corporations.
This bill proposes amendments to the Wine Australia Corporation Act 1980 to establish the new authority and renames the act as the Australian Grape and Wine Authority Act 2013.
Although the bill amends the existing Wine Australia Act, these amendments are significant and the merger is not a takeover of the Grape and Wine Research and Development Corporation by Wine Australia. This is a strategic merger of the two statutory corporations.
This bill is divided into two schedules. Schedule 1 amends the Wine Australia Act to create the authority itself. Schedule 2 covers matters arising from the transition from two statutory corporations to the authority. It covers matters such as the transfer of staff to the authority.
Schedule 1 is divided into two parts. Part 1 of schedule 1 commences on the day after Royal Assent. This part amends the Wine Australia Corporation Act 1980 to establish a selection committee to select and nominate to the Minister for Agriculture, Fisheries and Forestry possible members of the board of the authority. The bill gives the Minister for Agriculture, Fisheries and Forestry an alternative option of appointing a first board of the authority for a 12-month period without reference to the selection committee.
Part 2 of schedule 1 commences on 1 July 2014. This part provides amendments to the Freedom of Information Act 1982 and the Wine Australia Corporation Act 1980. This part establishes the authority and provides the governance framework for its operation.
Schedule 1 provides the research and development functions, including provisions for the Commonwealth to match research and development levy funding dollar for dollar.
The authority will be required to spend research and development levy money and government matching funds on research and development activity. Industry has highlighted the importance of this issue for the new authority. It is also important to the government to ensure that Australian government money appropriated for research and development is used for this purpose.
The bill does not include any changes to the structure or the amounts of the levies that currently fund both statutory corporations, or to the existing regulatory, marketing and compliance roles of the Wine Australia Corporation.
The bill transfers definitions of research and development from the Primary Industries and Energy Research and Development Act 1981. It establishes an authority with a skills-based board of five to seven directors selected and nominated by a statutory selection committee and appointed by the minister. The board is led by a chair appointed by the minister following consultation with industry.
The authority is required to prepare a five-year corporate plan to outline the authority's strategies, policies and priorities to achieve the objectives. The authority is also required to prepare an annual operation plan but this plan unlike those of the two statutory corporations, is not required to have the minister approve it.
Schedule 2 provides for the transition of the Grape and Wine Research and Development Corporation and Wine Australia to the authority, including that the operations, assets, liabilities and staffing conditions are transferred to the authority. Of particular note is that schedule 2 provides that the minister may engage consultants to assist with preparations for establishing the authority, and preparations to appoint a chief executive for the authority.
The bill allows the Minister for Agriculture, Fisheries and Forestry to reappoint the first board after Royal Assent. The board will commence on 1 July 2014. Between the date of appointment and 1 July 2014, the minister can engage the future board directors as consultants to prepare for the authority's commencement and to assist it in becoming fully operational on 1 July 2014.
Before 1 July 2014 the future directors, in their role as consultants, could not make decisions that would bind the authority. However, it can be expected that any recommendations they make would be ratified by the board at its first meeting.
The costs of the consultants will be met by the Commonwealth through the Department of Agriculture, Fisheries and Forestry. Once the authority commences any and all Commonwealth funding provided for the purpose for engaging consultants will be refunded by the authority.
As the consultants are the future board directors acting in the interests of the authority, it is reasonable for the authority to reimburse the Commonwealth for the costs of the consultants.
The bill ensures that all employees of the Grape and Wine Research and Development Corporation and Wine Australia are transferred to the Australian Grape and Wine Authority along with all employee entitlements. The bill also provides for a number of amendments to be made to outdated sections of the Wine Australia Corporation Act 1980 and also introduces modernised language to bring it up to date with current terms.
The wine industry has a unique regulatory structure, with the Wine Australia Corporation enforcing the Label Integrity Program, licensing exporters and maintaining Australia's wine geographical indications system. These important roles are not affected by the merger. The Australian Grape and Wine Authority will therefore have a strong focus on controlling exports and developing domestic and international markets for Australian grape products, along with investigating, coordinating and funding grape and wine research and development. The authority will be responsible to report on these to the parliament or minister and representative organisations.
The government has introduced amendments to the Commonwealth Authorities and Companies Act 1997 and the Financial Management and Accountability Act 1997. If these amendments are passed, this bill will be amended to ensure consistency with the new legislation before being reintroduced following the election.
The merger of the wine industry statutory corporations is being undertaken at the request of industry and continues to have the support of industry. This is a reform that will help the industry to function better. It will improve linkages between marketing and research and development and achieve these benefits at no additional cost to winemakers and grape growers.
Two companion bills are being introduced alongside this bill proposing minor amendments to the Primary Industries (Excise) Levies Act 1999 and the Primary Industries (Customs) Charges Act 1999 to enable levies collected to be paid to the new authority.
I commend the bill to the House.