Biosecurity protection levy under farmer fire in Senate hearing

Producer groups appearing before the inquiry in Canberra last week also raised concerns that significant operational details remained unclear, particularly around the levy's collection, just 68 days from its proposed July 1 introduction.

Nationals Senator for Queensland Matt Canavan also repeatedly raised the rapidly-approaching deadline, asking whether the levy's implementation should be delayed as it was "remarkable that producers do not yet understand how it is going to work".

Industry representatives agreed that the levy should be shelved for at least six months to take the "pressure out of the process", while remaining optimistic that it will be removed from the table together.

Meanwhile, Greens senator Peter Whish-Wilson said it was a "good point" that farmers were the only group paying a new levy as "beneficiaries" of biosecurity.

The inquiry was told that players not only along the agriculture supply chain but across the national economy, from major supermarkets to Kakadu 4WD tourist operators, were not only benefiting from Australia's disease-free status but the levies and fees already paid by farmers.

Senator Whish-Wilson also echoed industry concerns that a container levy had not yet been finalised despite a 2017 report recommending that government proceed with developing the setting.

Other issues raised ranged from the levy potentially jeopardising rural innovation investment and existing industry levies, including the unique WoolPoll, to a lack "adequate" industry impact analysis.

Independent senator for the ACT David Pocock asked the Department of Agriculture, Fisheries and Forestry if they had recommended that the government "chip in" the $50m from general revenue, given the new administrative burdens being created, that biosecurity is something all Australians benefit from and in the absence of a container levy.

"It seems like a small amount of money to go through all of this effort, the government recently announced it was spending $40m on advertising to explain the Stage 3 tax cuts," he said.

In response, DAFF said the government was keen that its "principle" of biosecurity being a shared responsibility be reflected in the sustainable biosecurity funding model.

However, WoolProducers Australia chief executive Jo Hall said the levy "completely disregards" the "significant" contribution farmers already make to the nation's biosecurity system.

"It is clearly policy on-the-run and we know that never delivers good outcomes for anybody," she said.

"I think the government has underestimated how difficult it is to levy all ag producers, as we keep being drip-fed more information from government... it is clear that this is a really complex process and has been underestimated by the government."

The levy legislation was referred to a Senate committee on March 21 after Coalition, Greens and other lower house crossbench MP's took aim at the policy, including calling for a container levy to be introduced to help fund the national biosecurity response.

Cattle Australia chief executive Dr Chris Parker told the inquiry that he "could not urge (the Senate) strongly enough" that a special levy account be created instead of the funds being directed into consolidated revenue as intended to head-off transparency issues and discussions around how the government proposed to manage the "over collection" and "under collection" of levy funds.

Meanwhile, all groups expressed concerns that they were "still in the dark" around how, when and where the levy would be collected. Only 58 of the 84 commodities to contribute to the BPL have an existing levy.

Australian Livestock Exporters Council representative Scott Kompo-Harms said the situation was particularly problematic for export commodities with multiple levies through the system and, in the case of livestock, multiple levies placed on a single animal as it moves through the supply chain.

"The government has said there will only be a single collection point, but we don't know how that is going to work for our sector. We have no idea where the actual collection point is going to be," he said.

The sheep industry operates under a transactional levy system and Sheep Producers Australia chief executive Bonnie Skinner said uncertainty around the collection mechanism, with it unknown if could be at the point of slaughter or export, "cuts to the chase" in issues surrounding the establishment of the levy.

"We are yet to hear any advice on what this will look like and it is something that has plagued the development of this policy from the moment it was announced," she said.

"It's rushed, it is unrealistic, industry is still trying to comprehend let along prepare for the impost of the biosecurity protection levy."

Ms Skinner added that the BPL is also "at odds" with a well-established existing agricultural levy system, "underpinned by really solid principles around equity, efficiency and transparency and (a) willingness of producers to co-invest with governments in priorities that drive things like growth and competitiveness."

"We are yet to see any of that good faith come from government, particularly on that transparency piece," she said.

And while National Farmers Federation chief executive Tony Mahar welcomed the government's implementation of a sustainable biosecurity system, he the organisation retained several concerns over the BPL, including the potential impact of bolting a new outlier cost to the nation's existing levy system, fearing that it could "blow-up" the collaborative process.

Producers also said a model where the levy might be spent on things like preventative measures around biosecurity would be more digestible than funds going into consolidated revenue.

Dairy Australia suggested the levy could take away from on-farm biosecurity programs and suggested it would only become "a true levy" if some of the collected funds were carved out and put back through initiatives like Animal Health Australia.

Mr Mahar added that while farmers were open to contribute to the biosecurity system, they were objecting to "poor, clumsy, lazy" policy.

Meanwhile, Dr Parker said under the new gross value of production levy model, cattle producers will contribute $9m to the $51m levy.

However, he said on his reading it would cost more to collect the levy from industries being asked to pay under $100,000 than the government would bank and that, while government predicted it will only cost $800,000 a year for it to administer the levy, "it will cost the industry collecting the information for them another $1m."

He also said CA do not want the levy implemented "until all industries have a mechanism to pay and the costs of the collection are clearly understood."

The Senate was also told of the "economic burden" the levy would place on smaller industries, such as smaller fisheries, that have not previously paid levies.

While Ausveg general manager of public affairs Lucy Gregg said farmers were "already shouldering the burden of prevention" with existing levies and costs of prevention management being absorbed by growers.

Meanwhile, GrainGrowers suggested that it must be a separate line item and differentiated from other levies supported by farmers used for research and development and marketing.

GrainGrowers policy and advocacy general manager Zach Whale also said a formal annual review process must be legislated to "provide a valuable assessment of the mechanism's costs and efficiency" and to provide confidence to contributors.

While Grain Producers Australia chief executive Colin Bettles said the government had so far failed to establish why the funds were not coming from general tax revenue or fully identified any value proposition the levy held for farmers.

DAFF also told the inquiry that it had held over 70 consultation sessions with groups and that the sustainable biosecurity system was a "very positive" measure in meeting community and industry expectations.

They also said that while the department was currently planning for the levy to begin on July 1, they would not be collecting the levy until all collection points had been settled, including the most practical point in supply chains to collect it.

The committee must report by May 10.