Volume 19 - Export finance
- Cost Recovery Arrangements
- Income Equalisation Reserve Account
- Full Cost Recovery of AQIS Export Certification
- Fees and Charges
- Related Legislation and Guidelines
- The Electronically Lodged Service Advice (ELSA) Application system
- Relevant eLearning Module
AQIS has a vital role in delivering inspection certification and documentation to verify that importing country requirements are met to maintain export markets.
This volume provides an overview of the guidelines that regulate the fees and charges associated with the export of grain and horticulture commodities from Australia as covered under the Export Control (Fees) Orders 2001 (as amended).
AQIS’s export certification services are provided to industry under a fully cost recovered arrangement.
The fees and charges applied recover the direct and indirect costs associated with management and delivery of those services.
As an agency that utilises the Cost Recovery Policy under the Financial Management and Accountability Act 1997, AQIS must comply with the Australian Government Cost Recovery Guidelines. The guidelines provide a framework to assist agencies to design and implement cost recovery arrangements that comply with the cost recovery policy.
Cost recovery broadly encompasses fees and charges related to the provision of government goods and services (including regulation) to the private and other non-government sectors of the economy.
Cost recovery is the recovery of some or all of the costs of a particular activity. Australian Government cost recovery charges fall into two broad categories:
- Fees for goods and services
- Cost recovery taxes — Primarily levies, but also some excises and customs duties.
Income Equalisation Reserve (IER) accounts enable AQIS and industry to overcome unforeseen downturns in the recovery of expenditure within industry over a period of years.
The IER account is designed to reduce the need for constant changes to fee/charging levels to accommodate unforeseen and often uncontrollable circumstances.
Examples of unforeseen circumstances include:
- results of severe climatic changes on production and exports
- loss of major markets.
IER accounts are established with the agreement of industry through the program consultative committees. The maximum in the account must be equal to or less than 10 percent of the overall expenditure for the program.
In November 2001, the federal Government initiated a 40% contribution towards AQIS’s export fees and charges. In accordance with Government policy, the costs of the services provided by the Plant Export Program were 60% cost recovered from industry and 40% from Government contribution.
In early 2008, the Australian Government commissioned an independent review of quarantine and biosecurity arrangements to identify any areas for improvement. In September, the Minister for Agriculture, Fisheries and Forestry released the report of an independent Quarantine and Biosecurity Review Panel, known as the ‘Beale Review’.
In line with recommendations of the Beale Review, the 40% Government contribution lapsed on 30 November 2009. The recommendation was implemented and the 40 per cent government contribution provided to the grain and horticulture export industries were removed as a result of the recommendation that the AQIS export certification function should return to 100 per cent cost recovery.
On 1 December 2009, new export fees and charges came into place, returning the industry to full cost recovery.
The government funded the Export Certification Reform Package (ECRP), which included a range of activities to improve efficiencies in export certification. As part of the ECRP, fee rebates were provided to assist exporters to transition to the new fees and charges. This funding was to provide a 40 percent offset of the full cost impact on export industries until 30 June 2011.
Along with the outcomes of these efficiencies a new set of export fees and charges were introduced on 1 July 2011 to return industry to full cost recovery.
General principles of setting fees and charges
Fees and charges are set to cover costs, not to make a profit. The main principles of setting fees and charges are:
- Equity: To recover the full costs of providing inspection services to the relevant user group
- Efficiency: To enable the efficient collection of revenue and minimise the risk of ‘bad debt’
- Price stability: Fees and charges are set on the basis of achieving full cost recovery while minimising the frequency and level of price variations.
Expenditure and revenue information will be provided to industry representatives with an appropriate level of detail. Consultation with Industry Consultative Committees (ICC) is undertaken before any changes to the fee and charging structures are made.
The Charging Guidelines for the Grain and Horticulture Programs specify details relating to fees and charges payable for services provided by authorised officers.
The Grain and Seed Exports Program fee structure is applied to the following export commodities:
- prescribed grain (any seed or grain of any of the following kinds: barely, canola, chickpeas, dried field peas, faba beans, lentils, lupins, oats, sorghum, soybeans, split vetch, whole vetch and wheat)
- mung beans
- plants or plant products (other than fresh and dried fruits, fresh vegetables) for which a phytosanitary certificate or any other government certificate is required by an importing country authority.
The Horticulture Exports Program fee schedule is applied to the following export products:
- Fresh and Dried Fruits
- Fresh Vegetables
- Fresh and Dried Cut Flowers/Foliage
- Nursery Stock, Bulbs and Tubers
Details of the current fees and charges for each sector are available on the AQIS website where they are updated regularly to capture new developments under the ECRP and the MTFs.
There are a number of parameters under which authorised officers must apply fees and charges accurately and consistently.
Some of the legislation and guidelines relevant to the financial aspects of exporting horticulture and grain products from Australia including the:
- Financial Management and Accountability Act 1997: The main purpose of the Financial Management and Accountability Act 1997 (FMA) is to provide a framework for the proper management of public money and public property i.e. money or property that is owned or held by the Commonwealth. As an organisation that collects money from the public for the delivery of services, AQIS must adhere to the requirements of the FMA.
- Export Control (Fees) Orders 2001 (as amended): The Export Control (Fees) Orders 2001 establishes laws concerning service fees and payments including, types of services that attract fees e.g. inspection and certification, and fee rates applicable to services. The Export Control (Fees Orders) 2001 is periodically amended to reflect changes to fees as required.
Authorised officers are required to collect fees for services provided and have a responsibility to collect fees only in line with the Export Control (Fees) Orders 2001.
Varying charges or providing concessions impacts on the program budget and may result in clients taking legal action against the Commonwealth.
AQIS Charging Guidelines – Horticulture Export Program: The Charging Guidelines for the Horticulture Export Program specify details relating to fees and charges payable for services provided by authorised officers. These are located in the “AQIS Fees and Charges — Horticulture Charging Guidelines” on the internet.
AQIS Charging Guidelines – Grain Export Program: The Charging Guidelines for the Grain Export Program specify details relating to fees and charges payable for services provided by authorised officers. These are locate in the “AQIS Fees and Charges — Grain Charging Guidelines” on the internet.
The Electronically Lodged Service Advice (ELSA) was developed as a replacement for the paper based process that can be used to record service details. ELSA allows the entry of service information at the source as well as a transcription function to permit later entry of paper-raised services.
In addition, ELSA allows service advice information to be recorded on a tablet-computing device at the time of inspection.
ELSA is used to:
- operate and generate ELSA services advices
- search for existing service advices
- locate client records
- update/cancel existing service advices
- explain the key steps to printing services advices.
ELSA is used to ensure a secure and accurate transfer of data from the AQIS officer to the customer through to the corporate financial systems. ELSA contains all the necessary data needed for creating a service advice including:
- client details
- service (item) codes, quantities and associated costs
- payment methods and details.
ELSA is used by:
- AQIS inspectors to create service advices, provide invoices, receipts or collect cheques and credit card payment details
- The Collector of Public Monies to acknowledge the cheque reconciliations and deposit the cheques
- The Accounts Receivable staff to process payments and add/update client details. Data is electronically synchronised between the relevant areas.
- Export Finance Part A
- Export Finance Part B
- You can contact your Regional Plant Export Program Manager to clarify any aspects of this volume in the first instance.
- You can also direct a specific question or provide feedback to Plant Exports Training