Primary Industry Funding Schemes (SA Grape Growers Industry Fund) Regulations 2021

The central concept is the mandatory levy on "SA grapes", defined as any variety of grapes grown in South Australia and used or intended to be used for wine (regulation 3(1)). This excludes table grapes, dried fruit grapes, or grapes for juice or other non-wine purposes. "SA grape grower" means a person who grows SA grapes and is not an SA winemaker. An "SA winemaker" is a person who carries on a business of making wine and processes SA grapes for that purpose. The regulations thus distinguish between the producer of the raw input and the processor, with the machinery of the levy operating through the winemaker as a compulsory collector.

"Delivered" is defined as when the winemaker takes possession of the grapes (regulation 3(3)). This is important because the obligation to deduct contributions arises at the point of physical possession, not at point of contract, payment, or transfer of title.

"Prescribed period" means each twelve-month period commencing on 1 June, starting from 1 June 2022, plus the transitional period under the revoked regulations running from 1 June 2021 to 31 May 2022 (regulation 3(1), as amended in 2023). This creates a consistent annual cycle for calculation, reporting, and payment. Contributions are payable on or before the last day of the month immediately following the prescribed period (regulation 5(2)). So for the period from 1 June to 31 May, contributions are due by 30 June.

"Default in relation to contributions to the Fund" has a specific meaning under regulation 3(2). A person is in default if, within the immediately preceding two prescribed periods, either (a) all or some contributions payable have not been paid, or (b) the person has been refunded contributions under these or the revoked regulations. Note that a single refund claim puts the grower in default for two full years, even if they later pay all contributions promptly. This is a strong disincentive to seek a refund.

The "Fund" is the South Australian Grape Growers Industry Fund, continuing from the 2007 regulations. It is not a separate legal entity; it is administered by the Minister and consists of money held under the Public Finance and Audit Act 1987. The fund is not a trust in the private law sense, and the Minister has discretion over its application within the purposes listed in regulation 7, subject to the exclusion of those in default.

The "revoked regulations" are the 2007 regulations, which are continued in force for the transitional period by Schedule 1. The regulations also use the term "body" to refer to the organisation that receives payments out of the fund. That body must be, in the opinion of the Minister, representative of SA grape growers. There is no requirement that the body be a prescribed industry body or be democratically elected by growers. The Minister alone determines representativeness.

The regulations directly affect three classes of persons in the South Australian wine grape supply chain: SA grape growers, SA winemakers, and the representative body that receives fund payments. Indirectly, the regulations affect consumers of South Australian wine, vineyard workers, and the broader wine industry, but we must be careful not to overstate the regulation's scope.

SA grape growers are the nominal payers of the contribution. The levy is deducted from the price the winemaker pays for the grapes, so the effective burden falls on the grower's gross revenue. Small growers, who may already operate on thin margins, face a direct reduction in income. Growers who are also winemakers are explicitly excluded from the definition of SA grape grower (regulation 3(1)), so vertically integrated operations do not pay the levy on their own grapes. This creates a competitive distortion: a pure grower bears the levy burden, while a grower-winemaker does not, unless the integrated operation sells grapes to another winemaker.

SA winemakers bear the entire administrative and compliance burden of the scheme. They must deduct the contribution from payments to growers, keeping "proper records" relating to tonnage delivered, grower identities, and contributions required (regulation 5(6)). They must make those records available for inspection at any reasonable time by a person authorised by the Minister. They must furnish a financial statement in a form required by the Minister (and in electronic form if they have the necessary equipment) by the last day of the month after the prescribed period, and forward the contributions with that statement (regulation 5(7)). There is no provision for reimbursement of the winemaker's costs of collection, record-keeping, or reporting. This is a classic "unfunded mandate" on a private business, imposed by subordinate legislation. The cost of compliance is not trivial; it requires systems to track tonnage per grower, calculate the levy at the Gazette rate (which may change mid-period), and submit timely statements.

The representative body that receives payments from the fund is the intended beneficiary. The body must be, in the Minister's opinion, representative of SA grape growers. It can use the money for its reasonable operating and management expenses, promotion of growers, research and development, information dissemination, affiliation fees, communication programs between winemakers and growers, and "other purposes of the body". The last category is particularly open-ended. The body can potentially steer fund money towards advocacy, lobbying, or other activities that may not directly benefit all growers equally. There is a risk of rent-seeking: the body has an incentive to seek higher levy rates to increase its funding, while the cost is dispersed across all growers. The Minister controls the rate and the body's eligibility, creating discretion that may be subject to political or industry influence.

Growers who are in default (either by non-payment or by having claimed a refund in the prior two periods) are excluded from direct benefits or services funded by the fund (regulation 9). This affects growers who choose to opt out of the scheme by seeking a refund, or who are unable to pay. They lose access to industry services they indirectly funded, but they do not get a proportionate reduction in the levy if they later sell grapes (the levy still applies). This creates a perverse incentive: a grower who disagrees with the fund's expenditure cannot simply refuse to pay without also forfeiting access to services they might need.

The regulations impose specific duties on SA winemakers and SA grape growers, and confer limited rights on growers to claim refunds.

Duties of SA winemakers:

• Deduct the levy from payments to growers. The language is mandatory: "Contributions payable by an SA grape grower must be paid on behalf of the grower by the SA winemaker who purchases the grapes out of the amount payable by the winemaker to the grower" (regulation 5(3)). There is no scope for a grower to opt out or to pay the Minister directly.
• Keep proper records relating to the tonnage of SA grapes delivered, the growers of those grapes, and the contributions required (regulation 5(6)(a)). The term "proper records" is not defined; it likely means records sufficient to enable verification of the amounts deducted and remitted.
• Make records available for inspection at any reasonable time by a person authorised by the Minister (regulation 5(6)(b)). No warrant or court order is required; the Minister's authorisation suffices.
• Furnish the Minister with a financial statement relating to contributions payable, in the form and containing the information required by the Minister (regulation 5(7)(a)(i)). If the winemaker has the necessary equipment, the statement must be in an electronic form acceptable to the Minister (regulation 5(7)(a)(ii)).
• Forward the required contributions with the financial statement by the last day of the month after the prescribed period (regulation 5(7)(b)).

Duties of SA grape growers:

• Pay contributions for each tonne of SA grapes delivered to an SA winemaker during the prescribed period (regulation 5(1)). This duty is performed automatically by the winemaker's deduction, but the grower is the ultimate liable person if the winemaker fails to deduct or remit (the regulations do not explicitly state who bears the risk of non-collection, but the duty is framed as the grower's).
• Not make false or misleading statements in any information provided or record kept for the purposes of these regulations (regulation 10). This is a general prohibition with a maximum penalty of $5,000; it applies to both growers and winemakers.

Rights of SA grape growers:

• Claim a refund of contributions paid on their behalf within six months following the prescribed period (regulation 6(1)). The refund is claimed by written notice to the Minister. The claimant must supply evidence acceptable to the Minister of the contributions (regulation 6(2)).
• If the Minister is satisfied that the claimant is entitled to a refund, the Minister must refund the amount plus interest at the RBA cash rate prevailing on the date of lodgment of the claim (regulation 6(3)). Interest runs from the date of payment to the Minister (the date the winemaker forwarded the contributions) to the date of lodgment of the claim. Note that interest does not run during the period between lodgment and refund; the provision only requires interest up to lodgment. This is a limited right: the grower bears the administrative burden of proving entitlement, and the interest period stops at claim lodgment, not refund payment.
• The right to refund is qualified by the default provisions: if a grower claims a refund, they are put in default for two prescribed periods and lose eligibility for direct benefits or services funded by the fund (regulation 9 and regulation 3(2)(b)). So the right to a refund comes with a material cost: exclusion from the very services the fund is meant to support.

The regulations do not confer a right on growers to approve the levy rate, to vote on the representative body, or to access the fund's accounts. The Minister's discretion is broad and subject only to the requirement to publish notices in the Gazette.

The regulations contain only one explicit penalty provision. Regulation 10 makes it an offence for a person to make a statement that is false or misleading in a material particular (whether by inclusion or omission) in any information provided or record kept for the purposes of the regulations. The maximum penalty is $5,000. This is a relatively modest fine compared to similar industry levy schemes. The offence applies to both growers and winemakers, and covers statements in financial statements, records, refund claims, and any other information submitted to the Minister.

There is no specific penalty in these regulations for a winemaker who fails to deduct contributions, fails to keep records, fails to furnish a statement, or fails to forward contributions on time. Nor is there a penalty for a grower who fails to pay contributions (though the grower's obligation is largely passive, as the winemaker deducts). Enforcement for non-compliance with those duties would likely rely on the general enforcement provisions of the Primary Industry Funding Schemes Act 1998, which is not reproduced in these regulations. The Act may provide for offences, recovery of unpaid contributions as debts, or other enforcement mechanisms. However, a strict reading of the regulations alone shows a gap: the only directly enforceable obligation is the prohibition on false statements.

The regulations do include a quasi-penalty through the default mechanism. Regulation 3(2) defines default as non-payment of contributions (in whole or in part) "within the immediately preceding 2 prescribed periods". Regulation 9 then provides that a person in default "is not entitled to receive direct benefits or services funded by payments from the Fund". This is an administrative exclusion rather than a criminal or civil penalty. It applies to both growers who have not paid and growers who have been refunded contributions. The effect is that a grower who, for example, withholds payment in protest, or who claims a refund because they do not support the body's activities, loses access to any industry services paid for by the fund. This may include research results, extension services, promotion campaigns, or other benefits. The exclusion lasts for two years (two prescribed periods). There is no mechanism for reinstatement earlier than that, even if the grower later pays all arrears.

Enforcement powers are vested in the Minister, who may authorise persons to inspect records at any reasonable time (regulation 5(6)(b)). The regulations do not specify the consequences of obstructing an authorised person or refusing access. Again, this would likely be covered by the Act.

The Minister also has discretion in deciding whether to accept evidence for refund claims (regulation 6(2): "evidence acceptable to the Minister"). This creates a risk that a refund claim could be denied or delayed if the Minister is not satisfied, with no prescribed review mechanism within these regulations. A grower refused a refund would have to challenge the Minister's decision under administrative law, incurring time and legal costs.

These regulations are made under the Primary Industry Funding Schemes Act 1998 (SA) (the Act). The Act provides the enabling framework for industry funding schemes generally, including powers to establish funds, fix contributions, and make regulations. The Act is not reproduced in the regulations, but its provisions govern matters such as the enforcement of unpaid contributions, the Minister's delegation of powers, and administrative review of decisions. Practitioners should consult the Act to understand the full legal context, including any rights of appeal or obligations that are not repeated in the regulations.

The regulations require contributions to be paid into the Fund, which is administered by the Minister. The Fund's financial management is subject to the Public Finance and Audit Act 1987 (SA). Regulation 7(d) specifically allows payments from the Fund to the Consolidated Account or a special deposit account established under section 8 of that Act, to repay advances made to the representative body under an agreement. This means the fund may temporarily lend money to government accounts, but repayments are mandated.

The regulations also interact with the Taxation Administration Act 1953 (Cth) indirectly, though not explicitly. The levy imposed by these regulations is not a Commonwealth tax; it is a state-imposed contribution. However, winemakers may need to consider whether the levy is deductible for income tax purposes or whether it forms part of the cost base of grapes. These regulations do not address tax treatment; that is a matter for Commonwealth tax law.

The regulations replaced and revoked the Primary Industry Funding Schemes (SA Grape Growers Industry Fund) Regulations 2007. The 2021 regulations continue the same fund and largely replicate the earlier scheme. Transitional provisions in Schedule 1 ensure continuity for the 2021/22 period, allowing the old regulations to operate for that period with a modified refund window. Instruments under the old regulations, such as Gazette notices fixing levy rates, may have been superseded by new notices under the 2021 regulations.

The regulations do not purport to override any other state or federal laws. They operate alongside the Fair Trading Act 1987 (SA) and competition laws, but they do not exempt participants from those laws. The mandatory nature of the levy may raise questions under the Competition and Consumer Act 2010 (Cth) regarding price fixing or compulsory deductions, but state regulations made under valid state law would generally be immune from Part IV of the CCA to the extent they are force of law. This is not resolved in the regulations themselves.

The regulations are silent on privacy laws. However, regulation 8 allows the Minister to provide the representative body with information identifying growers and winemakers who have paid or been refunded contributions. This disclosure may engage the Privacy Act 1988 (Cth) or South Australian privacy principles, though the regulations arguably authorise the disclosure. The representative body is not a government agency, so its handling of that information is subject to its own privacy obligations.

The Primary Industry Funding Schemes (SA Grape Growers Industry Fund) Regulations 2021 were made on 2 September 2021 and published in the South Australian Government Gazette on that date. They commenced operation on the same day, except for the short title regulation (regulation 2) which was omitted later. The principal regulations revoked the 2007 regulations and continued the fund.

The only substantive amendment to date is the Primary Industry Funding Schemes (SA Grape Growers Industry Fund) Variation Regulations 2023, numbered 17 of 2023, published on 30 March 2023 and commencing the same day. The variation amended the definition of "prescribed period" in regulation 3(1). The amendment altered the text of the definition to reflect that the transitional period under the revoked regulations was coming to an end and to clean up the language so that the prescribed period now clearly means (a) the transitional 2021 period (now concluded) and (b) each 12-month period commencing on 1 June 2022 and on 1 June in any subsequent year. This was a machinery amendment to remove obsolete references and ensure the scheme continued seamlessly.

The variation regulations also omitted regulation 2 (the short title was already provided in the principal regulations, but the original had a separate provision fixing the commencment of certain sections). Under the Legislation Revision and Publication Act 2002, that was omitted as unnecessary. Similarly, Part 1 of Schedule 2 was omitted under the same Act, presumably because it dealt with transitional provisions that were spent.

The legislative history notes show that the principal regulations were originally published as Gazette 2.9.2021 p3453. The variation was Gazette 30.3.2023 p631. No other amendments have been made.

The revoked 2007 regulations had their own amendment history, but that is not relevant to the current instrument beyond the fact that any rate notices fixed under the 2007 regulations for the 2021 transitional period continued to have effect under the transitional provisions.

The regulations are subject to the Legislation Revision and Publication Act 2002 (SA), which governs the format and republication of subordinate legislation. The omission of spent provisions under that Act does not affect the operative content.

There is no indication of any pending amendments or sunset clauses. The regulations do not have a fixed expiry date. They continue in force until revoked or replaced.

The text of the regulations contains no reference to any litigation. No cases are cited in the regulations or in the legislative history notes. As a subordinate legislative instrument that has been in force for a relatively short period (since 2021), it may not have been the subject of reported court decisions.

However, litigation could arise in several potential scenarios. A grower might challenge the Minister's fixing of the contribution rate if the rate is alleged to be unreasonable, beyond power, or set without proper consultation (though the Act does not require consultation). The regulations give the Minister unguided discretion to fix the amount per tonne; the only constraint is that it must be published in the Gazette. An aggrieved grower could seek judicial review of the Minister's decision under the South Australian Judicial Review Act 1991, arguing that the discretion was exercised for an improper purpose or was unreasonable. The broad purposes for which fund money may be spent (including "other purposes of the body" and "other purposes for the benefit of SA grape growers") could invite challenge if the Minister applied the fund to an activity that does not genuinely benefit growers.

A winemaker could challenge an inspection demand if the authorised person is not acting at a reasonable time or if the record-keeping obligation is too onerous. But there is no specific right of appeal in the regulations.

The refund provisions could generate disputes. The Minister must be "satisfied" of entitlement and may require "evidence acceptable to the Minister". A decision to reject a refund claim could be challenged. The interest calculation (cash rate at date of lodgment, not date of refund) could also be disputed if there is delay.

The default provisions could be challenged if a grower is excluded from benefits based on a refund claim that was later found invalid, or if the two-period lookback is applied unfairly.

No litigation history is recorded in the source, but practitioners should be aware of these potential grounds for challenge. The absence of case law means the interpretation of key terms such as "proper records", "reasonable time", "other purposes of the body", and "evidence acceptable to the Minister" has not been tested in court.

The regulations contain several traps that can catch the unwary practitioner. The most significant is the interaction between refund claims and default status. A grower who claims a refund of contributions is automatically in default for two prescribed periods (regulation 3(2)(b)). That default means the grower is excluded from receiving any "direct benefits or services funded by payments from the Fund" (regulation 9). So a grower who disagrees with how the fund is spent and wants their money back must accept that they will be locked out of industry services for up to two years. This is a potent deterrent and could be characterised as an indirect restraint on the right to a refund. It also means the refund is not a clean opt-out; it comes with a penalty disguised as a disqualification.

The contribution rate is not set in the regulations. The Minister may fix a rate by Gazette notice for each 12-month period, and may vary it mid-period (regulation 5(4)). A winemaker or grower who does not monitor the Gazette may use an outdated rate. The variation can apply only to the part of the period after the variation takes effect, but if the Gazette notice is published close to the end of the period, compliance may be difficult. There is no upper limit on the rate; it could be set at any amount.

The refund claim period is only six months after the prescribed period (regulation 6(1)). There is no discretion to extend that period. If a grower misses the deadline, the contribution is permanently forfeited. This is tight, especially for growers who may not have immediate access to the winemaker's records or who rely on the winemaker to inform them of contributions made.

The interest payable on refunds only runs to the date of lodgment of the claim, not to the date of actual repayment (regulation 6(3)). The Minister could delay processing the refund without incurring interest for the delay. The interest rate is the RBA cash rate prevailing on the date of lodgment, which is currently low. A grower effectively loses the time value of money for the period between lodgment and receipt.

The definition of "SA grape grower" excludes a person who is an SA winemaker (regulation 3(1)). So a vertically integrated producer who both grows grapes and makes wine does not pay the levy on grapes used in their own winery. This creates an uneven playing field between specialised growers and integrated operations, and may incentivise vertical integration to avoid the levy.

Winemakers bear the full cost of compliance without compensation. They must keep records, provide statements, deduct and remit, and allow inspection. There is no provision for a handling fee or reimbursement. Small winemakers with limited administrative capacity may find the burden disproportionate.

The fund's expenditure purposes are vague. The representative body can receive money for "other purposes of the body" (regulation 7(a)(vi)), and the Minister can make payments for "other purposes for the benefit of SA grape growers" (regulation 7(b)). These are essentially blank cheques. There is no requirement for the body to demonstrate member support for specific expenditures. A grower has no say in how the fund is spent, and the Minister has broad discretion to decide what benefits growers.

The default definition looks back two prescribed periods. If a grower fails to pay contributions for one period, they are defaulting for that period and the next, even if they pay promptly thereafter. The two-year window means a single year's non-payment (or refund) disqualifies the grower from benefits for two years.

Compliance with these regulations requires action from both winemakers and growers, with the heavier burden falling on winemakers.

For winemakers:

• Determine the applicable contribution rate for each prescribed period. Monitor the South Australian Government Gazette for notices fixing or varying the rate under regulation 5(1) and (4). The rate is expressed per tonne of SA grapes delivered. Note that a variation during a period applies only from its date; you may need to apply two different rates within one period.
• At the time of taking possession of grapes from each grower, identify whether the grower is an SA grape grower (not also an SA winemaker for those grapes). If the grower is also a winemaker but is selling grapes to your winery, they are still a grower for those grapes and the levy applies.
• Deduct the contribution from the amount payable to the grower. The deduction is mandatory; the grower cannot opt out. The amount deducted must be held and later remitted.
• Keep proper records: for each delivery, record the tonnage, the grower's identity, the levy rate applicable at delivery, and the contribution deducted. Also maintain a summary for each prescribed period showing total tonnage per grower and total contributions required. These records must be available for inspection at any reasonable time by a person authorised by the Minister (regulation 5(6)). There is no prescribed retention period, but it should be at least long enough to cover the refund claim period (six months after the end of the prescribed period) plus the default lookback period (two prescribed periods).
• Prepare a financial statement for each prescribed period in the form required by the Minister. The Minister may specify the content. If your business has the necessary equipment, the statement must be in an electronic form acceptable to the Minister (regulation 5(7)(a)(ii)). This likely means a spreadsheet or other digital file.
• Forward the completed financial statement and the required contributions to the Minister by the last day of the month immediately following the prescribed period (regulation 5(7)(b)). For the 1 June to 31 May period, the deadline is 30 June. Late remittance is not penalised in these regulations, but the Act may impose interest or penalties.
• When dealing with grower refund claims: if a grower requests information to support a refund claim, provide it promptly. You are not responsible for processing refunds; the grower claims directly from the Minister. However, you may need to confirm contributions paid to the Minister if asked by the grower or the Minister.

For growers:

• Understand that the levy is deducted automatically by the winemaker. You should verify that the deduction is correct by checking the Gazette rate and the reported tonnage. If you have multiple winemakers, ensure each uses the same rate.
• If you disagree with the fund's purposes or believe the levy is excessive, you may claim a refund within six months after the prescribed period (regulation 6(1)). Submit a written notice to the Minister with evidence of the contributions (e.g., a statement from the winemaker showing the deduction). Be aware that claiming a refund will put you in default for two prescribed periods, excluding you from direct benefits or services from the fund. Weigh the refund amount against the value of industry services you might otherwise receive.
• If you choose not to claim a refund, monitor the fund's activities to ensure the representative body is using the money for legitimate purposes. You have no direct control, but you can make representations to the Minister, who controls expenditure and can change the recipient body.
• Avoid making false or misleading statements in any communication with the Minister or winemakers regarding contributions. The penalty is $5,000.

For all parties:

• Keep records of all communications and transactions related to contributions. Even though the regulations do not require it, maintaining a paper trail protects against disputes.
• If the Minister requires information or requests inspection, cooperate. Failure to do so may be an offence under the Act, even if not under these regulations.
• Consider the interaction with other obligations: the levy is a business expense for growers and a deduction for winemakers; consult a tax adviser regarding deductibility and GST treatment. The levy is applied to the price before GST? Not addressed in these regulations; seek advice from the ATO.