Wednesday, 14 September 2016
Narcotic Drugs (Licence Charges) Bill 2016; Second Reading
That this bill be now read a second time.
There is no existing medicinal cannabis industry as cannabis is currently an illegal narcotic drug. Allowing for the creation and existence of a legitimate industry provides a benefit to that industry by opening a new market for commercial cultivation, manufacture and sale of medicinal cannabis products.
It is appropriate to seek to recover the direct costs that government incurs in regulating the medicinal cannabis industry through both direct fee recovery and through the imposition of levies.
Direct fee recovery for services specific to a holder of a licence for cultivation, production or manufacture will be implemented by way of regulations made under the Narcotic Drugs Act 1967. The imposition of charges, typically on an annual basis, to capture the indirect costs associated with regulating this industry do, however, require separate legislation, thus the Narcotic Drugs (Licence Charges) Bill.
Charges (or levies) under this bill include those where costs cannot otherwise reasonably be assigned directly to a particular licence holder. For example, the annual charges will fund risk based inspections across industry. While direct fees will be applied for standard and regular inspections of cannabis cultivation and production facilities (such as those required to provide an initial licence), risk based inspections are typically unannounced and will vary in frequency. They are designed to target licence holders where there are concerns over their compliance with licence conditions, regulations or the legislation.
Through this, all licensees participating in the new cannabis cultivation industry will benefit, as the Department of Health is able to ensure that none gain an advantage that might otherwise eventuate if a company were about to breach the strict conditions placed on its licence; conditions designed to ensure that Australia prevents the diversion of cannabis to illicit purposes and fulfils its obligations under the Single Convention on Narcotic Drugs, 1961.
This bill establishes the legal authority to develop regulations that will contain the actual proposed charges. The scheme for the cultivation of cannabis for medicinal purposes commences on 30 October 2016. It is important that the government is able to communicate on the full regulatory costs of this scheme as soon as possible in order to allow potential applicants to plan their businesses and complete their applications.
I commend the bill to the House.