Chapter 1Report
Referral and conduct of the inquiry
1.1On 16 November 2023, the Senate referred the provisions of the Primary Industries (Excise) Levies Bill 2023 and related bills (the bills) to the Rural and Regional Affairs and Transport Legislation Committee (the committee), for inquiry and report by 5 February 2024.
1.2The committee called for submissions by advertising the inquiry on its website and by writing to several relevant stakeholders to invite them to make a submission by 12 December 2023.
1.3In total, 15 submissions were received by the committee and published on the committee’s website. A list of all submissions can be found at Appendix 1. The committee did not conduct any public hearings for the inquiry.
1.4The committee thanks everyone who contributed to the inquiry.
Structure of the report
1.5This report has one chapter and covers the referral and conduct of the inquiry, provides background to the bills, provides an outline of the provisions and purpose of the suite of bills, and includes a summary of the consideration of the bills by the SenateStanding Committee for the Scrutiny of Bills. The first chapter also outlines the support for the bills and discusses key issues raised by submitters to the inquiry. This chapter also includes the committee’s view and recommendation.
Background
1.6The agricultural levy system is a partnership between industry and the Australian Government to fund industry priorities, including: research and development; marketing; biosecurity activities; emergency responses; and national residue testing.
1.7The Department of Agriculture, Fisheries and Forestry (DAFF) is responsible for collecting levies on behalf of industry. DAFF is also responsible for paying out the levy funds to levy recipient bodies. These recipient bodies include 15research and development corporations (RDC), Animal Health Australia (AHA), Plant Health Australia (PHA), and the National Residue Survey, which is administered by DAFF.
1.8The 15 RDC recipient bodies include:
five Commonwealth statutory bodies: Cotton Research and Development Corporation; Fisheries Research and Development Corporation; Grains Research and Development Corporation; Rural Industries Research and Development Corporation (trading as AgriFutures Australia); and Wine Australia; and
ten industry-owned companies: Australian Eggs Limited; Australian Livestock Export Corporation Limited (LiveCorp); Australian Pork Limited; Australian Wool Innovation Limited; Dairy Australia Limited; Forest and Wool Products Australia; Horticulture Innovation Australia Limited; Meat and Livestock Australia; and Sugar Research Australia Limited.
1.9Each year these recipient bodies receive approximately $600 million in levies from farmers, producers, processors, and exporters to these bodies, as well as approximately $300million from the Australian Government to RDCs in matched funding for research and development (R&D).
1.10The Hon. Kristy McBain, Minister for Regional Development, Local Government and Territories emphasised the importance of investing in R&D:
ABARES tells us that for every dollar invested in agricultural R&D, there is close to an eight-fold benefit to farmers …Continuing to invest in R&D will be even more important in coming years as we ramp up efforts to reduce emissions and adapt to a changing climate.
1.11The RDCs model was established under the Primary Industries and Energy Research and Development Act 1989 (and amended in 2013 to the Primary Industries Research and Development Act 1989) and has evolved according to industry needs and government policy.
1.12The enactment of the Rural Research and Development Legislation Amendment Act2013 allowed statutory RDCs to undertake marketing activities, provided that the relevant funding levy included a marketing component.
1.13The current agricultural levies legislation has expanded as industries have chosen to establish statutory levies on more commodities. At present, there are more than 50 pieces of legislation governing over 110 levies across 75commodities and 18 levy recipient bodies, with some provisions out of date and/or redundant.
1.14Although the current agricultural levies legislation is fit for purpose, the legislation has become complex and inconsistent which has placed a burden on stakeholders.
Purpose and provisions of the bills
1.15The purpose of the bills is to reduce complexity and inconsistencies, and to increase flexibility through subordinate legislation for the imposition, collection and disbursement of agricultural levies and charges. This section of the report will expand on the suite of six bills and outline the proposed changes.
Imposition Bills
1.16The Imposition Bills are a collection of three bills that aim to establish a clear and consistent framework under which the various aspects of the levy system can operate. These bills include:
the Primary Industries (Excise) Levies Bill 2023 (Excise Bill);
the Primary Industries (Customs) Charges Bill 2023 (Customs Bill); and
the Primary Industries (Services) Levies Bill 2023 (Services Bill).
1.17These three bills would replace the following Acts:
Primary Industries (Excise) Levies Act 1999;
Primary Industries (Customs) Charges Act 1999;
National Residue Survey (Excise) Levy Act 1998;
National Residue Survey (Customs) Levy Act 1998; and the
Horse Disease Response Levy Act 2011.
1.18The Imposition Bills would enable current excise levies and customs charges in the agricultural levy system to be re-established in regulations, as well as enabling levies to be imposed on certain agricultural services. All R&D, marketing, biosecurity activity, biosecurity response, and the National Residue Survey levies would also be re-established in regulations under the relevant Imposition Bill.
1.19The Imposition Bills would enable the following levies and charges:
the Excise and Customs Bills would enable excise levies and customs charges on primary industry produce products, such as grains and other crops, horticultural products, fibre products, red meat, poultry and eggs, pigs, game animals, forestry products, turf and farmed prawns;
the Excise and Customs Bills would also allow levies and customs charges on goods consumed by, or used in the maintenance or treatment of animals, plants, fungi, or algae. Additionally, the Excise Bill would contain detailed provisions enabling the existing nursery products excise levy to be remade; and
levies on specific agricultural services would be enabled under the Services bill, which would be a new type of levy. An example of this levy includes a levy that would be imposed on bee pollination services provided commercially for crops.
1.20New and emerging industries would be supported under the Imposition Bills. In addition to existing levies, these bills would include the following products under the agricultural levy system:
cultivation and harvest of algae and seaweed;
crops grown in soilless growing systems; and
the harvest of plants, fungi or algae from the wild.
1.21Under the new imposition bills, current biosecurity levies that are imposed under the agricultural levy system—AHA, PHA, emergency animal disease response (EADR), and emergency plant pest response (EPPR) levies—would be remade. Existing AHA and PHA levies would be remade in regulations and renamed the ‘biosecurity activity’ component of a levy, and existing EADR and EPPR levies would be remade in regulations, and would be renamed the ‘biosecurity response’ component of a levy. These levies would continue to be disbursed by AHA and PHA despite the name change.
1.22In a submission to the inquiry, DAFF clarified the reason behind the name change:
The new terminology would create consistency within the draft framework for how these levies are named and improve the future flexibility of the legislation. Naming the levies after their intended purpose, rather than specific organisations, or specific response deeds, allows the legislation to be more responsive to evolving industry needs, such as the establishment of an aquatics emergency response deed. The Bills have also been drafted broadly enough to enable existing biosecurity response arrangements to continue …
Collection Bill
1.23The Primary Industries Levies and Charges Collection Bill 2023 (Collection Bill) aims to establish a streamlined and modernised agricultural levy collection framework that is easier to understand and comply with. The Collection Bill would replace the following acts:
Primary Industries Levies and Charges Collection Act 1991; and the
Horse Disease Response Levy Collection Act 2011.
1.24The Collection Bill would enable the Secretary of DAFF to set out rules regarding collection details for each levy and charge, which aims to improve flexibility for when collection settings change in response to a levy proposal.
1.25Offences and penalties for non-compliance would be included in the Collection Bill, which is a change from the current legislation. The Collection Bill would provide access to compliance and enforcement tools by activating the RegulatoryPowers (Standard Provisions) Act 2014, with the aim of ensuring levies and charges are collected efficiently, and compliance costs remain minimal.
1.26DAFF further justified this change in its submission:
This would make the department’s compliance and enforcement powers consistent with other Commonwealth regulatory schemes that levy payers, charge payers and collection agents participate in.
1.27The Collection Bill would provide more thorough information management provisions, which aim to provide clear guidance on how information collected through agricultural levies or charges is to be used and disclosed. The Collection Bill would retain several existing functions under the current legislation, including:
RDCs using levy and charge payer information for their functions and obligations, and the maintenance of levy and charge payer registers;
the continuance of industry representative bodies using collection agent information to conduct consultation in relation to levy settings; and
the Australian Bureau of Statistics using levy and charge payer information to conduct statistical research that supports industry.
1.28Additionally, the Collection Bill would enable the Australian Bureau of Agricultural and Resource Economics (ABARES) division within DAFF to access levy and charge payer information for statistical policy and agricultural research purposes.
Disbursement Bill
1.29The Primary Industries Levies and Charges Disbursement Bill 2023 (Disbursement Bill) would enable the disbursement of levy and charge components to support strategic investment into activities that benefit levied industries. These activities include:
levies and charges raised for R&D and marketing would be paid to RDCs for investment into R&D and marketing activities;
levies and charges raised for biosecurity activities and responses would be paid to PHA and AHA to support responses to disease and pest outbreaks; and
levies and charges raised by residue testing would be credited to the National Residue Survey account within DAFF, to provide support for monitoring, testing and reporting of contaminants and chemical residues.
1.30The Disbursement Bill would replace disbursement provisions and related provisions in the following 11 Acts:
Australian Meat and Live-stock Industry Act 1997;
Dairy Produce Act 1986;
Egg Industry Service Provision Act 2002;
Forestry Marketing and Research and Development Services Act 2007;
Horticulture Marketing and Research and Development Services Act 2000;
Pig Industry Act 2001;
Sugar Research and Development Services Act 2013;
Wool Services Privatisation Act 2000;
Australian Animal Health Council (Live-stock Industries) Funding Act 1996;
Plant Health Australia (Plant Industries) Funding Act 2002; and the
National Residue Survey Administration Act 1992.
1.31Disbursement related provisions from the Primary Industries Research and Development Act 1989 and the Wine Australia Act 2013 would be consolidated and modernised under the proposed Disbursement Bill and other subordinate legislation. However, these two acts would continue to provide other functions for statutory RDCs and would be retained under the new framework.
1.32The Disbursement Bill would also provide a mechanism for the Commonwealth to contribute matching payments for R&D. The Disbursement Bill would make minor changes to matching funding with the aim to reduce complexity and increase funding certainty for RDCs. The minor changes include the removal of total levy limits as one of the limits on matching payments. The limit being removed relates to the amounts of certain levies and charges disbursed and intends to reduce complexity and inconsistences across industries.
1.33Additionally, the Disbursement Bill would also enable an earlier determination of the gross value of production (GVP) limit. The GVP limit would be based on data from the previous three financial years, rather than the existing arrangement. The existing arrangement is based on the current and past two financial years. This change would allow RDCs funding certainty at the beginning of each financial year.
Consequential Amendments and Transitional Provisions Bill
1.34The Primary Industries Levies and Charges (Consequential Amendments and Transitional Provisions) Bill 2023 (C&T Bill) would facilitate the transition to the new agricultural levies legislation, including levy collection, compliance, disbursement arrangements and the payment of the Commonwealth’s matching payments to RDCs.
1.35The C&T Bill would repeal existing acts that are, or would become redundant upon the commencement of the proposed Bills. In addition to the Acts already mentioned above, the C&T Bill would repeal the following redundant Acts:
Dairy Adjustment Levy Termination Act 2008;
Dairy Industry Adjustment Act 2000;
Egg Industry Service Provision (Transitional and Consequential Provisions) Act2002;
National Cattle Disease Eradication Account Act 1991;
National Residue Survey (Consequential Provisions) Act 1992; and the
National Residue Survey Levies Regulations (Validation and Commencement of Amendments) Act 1999.
1.36In its submission to the inquiry, DAFF emphasised the importance of a smooth transition to the modernised agricultural levy system:
The transition from the current agricultural levies legislation to the modernised legislation would be managed to ensure that levy payers, collection agents, the RDCs, AHA and PHA experience minimal impacts, and the levy system continues to operate uninterrupted under the modernised legislative framework.
Consultation process
1.37Extensive stakeholder consultation was conducted by DAFF when developing and considering the new agricultural levy framework. The consultation process commenced in 2017, and is ongoing.
1.38During the consultation process DAFF engaged with industry representative bodies (IRBs), RDCs, AHA, PHA, state and territory governments, Commonwealth agencies, levy payers, collection agents and the general public.
1.39In its submission DAFF highlighted the following consultation steps it took as part of its consultation process:
as a result of the impending sunsetting of multiple levy related instruments in 2017–18, DAFF engaged with IRBs, RDC, PHA, and AHA to provide information towards a review into the legislative framework for agricultural levies;
in 2019–20, public consultation was undertaken on the early assessment regulation impact statement, and DAFF received 66 submissions from industry stakeholders. DAFF also held targeted discussions with RDCs, AHA and PHA;
DAFF continued discussions in 2021–22 and spoke to approximately 70IRBs in relation to the intended approach of translating the current excise levies and customs charges into draft legislation. DAFF also wrote to 7500 collection agents, providing information about the intended approach to the new legislation;
between May and June 2023, exposure draft consultation was held with industry stakeholders and members of the public to seek and provide feedback on the draft legislation; and
a second exposure draft consultation is planned for 2024. This consultation will provide an opportunity to see and offer feedback on the draft regulations and rules containing imposition, collection and disbursement details for levies and charges that were not available during the previous consultation.
Commencement of bill provisions
1.40The commencement date for the suite of six bills is 1 January 2025, however there are a few notable exceptions. The exceptions are set out below:
Table 1.1Commencement information
| |
Collections Bill |
Sections 1, 2, 10 and 12 | The day this Act receives the Royal Assent |
Disbursement Bill |
Sections 1, 2, 28 and 42 | The day this Act receives the Royal Assent |
C&T Bill |
Sections 1–3 | The day this Act receives the Royal Assent |
Schedule 2, item 123 | The day this Act receives the Royal Assent |
Schedule 3, item 1 | The day this Act receives the Royal Assent |
Source: Primary Industries Levies and Charges Collection Act 2023, s. 1; Primary Industries Levies and Charges Disbursement Act 2023, s. 2; Primary Industries (Consequential Amendments and Transitional Provisions) Act2023, s. 1.
Scrutiny of Bills Committee consideration
1.41The Senate Standing Committee on the Scrutiny of Bills (Scrutiny of Bills Committee) reviewed the Imposition, Collection and Disbursement Bills and raised a number of scrutiny concerns in its report.
1.42The Scrutiny of Bills Committee expressed scrutiny concern with clause16 of the Excise Bill, clause 13 of the Customs Bill, and clause 10 of the Services Bill, which all seek to provide that the rate of a levy is set out in regulations. The Scrutiny of Bills Committee considers that it is for the Parliament, rather than the makers of delegated legislation to set rates of tax.
1.43Further to this, the Scrutiny of Bills Committee highlighted its expectations regarding the inclusion of levy rates under delegated legislation:
At a minimum, some guidance in relation to the amount of a fee that may be imposed in delegated legislation should be included in the enabling Act. Where a bill leaves the setting of the rate of a fee to delegated legislation, the committee expects the explanatory memorandum to the bill to address why it is appropriate to do so. Further, if there is no limit on the amount of the fee that may be imposed, the explanatory memorandum should include why it would not be appropriate to include such a limitation on the face of the bill. The committee also expects that the bill will include a provision clarifying that the fee must not be such as to amount to taxation.
1.44The Scrutiny of Bills Committee acknowledged that the Explanatory Memorandum (EM) for the Imposition Bills includes a safeguard, which is that there is a requirement for consultation with industry regarding levy rates. The Scrutiny of Bills Committee remained concerned that the rate of a levy or charge may be set by the makers of delegated legislation without any limits or guidance as to the amount on the face of the bill.
1.45The Scrutiny of Bills Committee expressed concerns with the Collection Bill regarding: coercive powers; infringement notices; the broad delegation of administrative powers; privacy; the reversal of the evidential burden of proof; automated decision-making; vicarious liability; and parliamentary oversight.
1.46In its report, the Scrutiny of Bills Committee highlighted that the Collection Bill allows the delegation of administrative powers to a relatively large class of persons, and lacks any specificity of qualifications or attributes. The EM does not further clarify or justify that a compliance officer could be any Australian Public Service (APS) employee within DAFF, regardless of position, skills, experience, or qualifications. It is the preference of the Scrutiny of Bills Committee that a limit be set either on the scope of powers that might be delegated, or on the position to whom those powers might be delegated.
1.47In a response to the Scrutiny report, Senator the Hon Murray Watt, Minister for Agriculture, Fisheries, and Forestry and Minister for Emergency Management, stated that he does not consider it necessary to amend the bill to specifically require that an officer have specific skills, and made the following statement:
Consistent with existing practice, it is intended that the Secretary would appoint APS employees who have relevant experience and training or are required to undertake appropriate training prior to exercising powers under the legislation. Compliance officers that are currently appointed by the Secretary are specialised staff who carry out compliance activities in relation to the levy system … There are no existing training or qualification requirements in levies legislation. However, consistent with best practice, the longstanding practice of the department is that these officers are provided with appropriate training in relation to investigation and monitoring powers. This practice will be continued in order to ensure that powers are exercised in accordance with legislative requirements.
1.48A subclause of the Collection Bill would allow the Secretary to arrange for the use of computer programs:
… for specified purposes for which the Secretary may, under the Act or the rules, make a decision. The decision would need to be of a kind specified in the rules for the purposes of this subsection.
1.49The Scrutiny of Bills Committee noted that administrative law requires decision makers to engage in an active intellectual process in relation to the decisions they are required to make. If a decision was made by a computer and not a person, it would count as a failure to engage in this process and may lead to legal error.
1.50The Scrutiny of Bills Committee acknowledged that the legislation does provide rules that identify which decision made under the bill will be subject to automated decision-making. However, the Scrutiny of Bills Committee noted the following:
In light of the potential effects on administrative decision-making outlined above, the committee is of the view that none of the decisions listed in clauses 48 and 49 may be appropriate for automated decision-making.
1.51The Minister for Agriculture, Fisheries and Forestry provided further clarification on the bills’ automated decision making. The Minister argued that there are appropriate safeguards in place and clarified that any decision would be specified under a legislative instrument and therefore subject to parliamentary scrutiny. Further, the Senate Standing Committee for the Scrutiny of Delegated Legislation could closely examine any decisions.
1.52Under clause 59 of the Collection Bill, the Secretary of DAFF would be empowered to make rules under the bill via legislative instruments. Additionally, the EM states the following:
Subsection 59(4) would provide that the rules may confer instrument making powers on the Minister or the Secretary. This power could be exercised for procedural matters, for example, enabling approved forms under the rules. This provision would also allow for future collection rules to be made as Australia’s agricultural, fisheries and forestry sectors grow and change.
1.53The Scrutiny of Bills Committee highlighted that notifiable instruments are not subject to tabling, disallowance or sunsetting requirements that are normally applied to legislative instruments. Consequently, the notifiable instrument would not be subject to parliamentary scrutiny.
1.54In response, the Minister for Agriculture, Fisheries and Forestry provided the following justification for the inclusion of a power for the Minister or Secretary to make notifiable and other written instruments that are not of a legislative character:
The ability for rules to provide for the making of non-legislative instruments enables the Government to ensure that the levies system remains transparent, accountable, and responsive to industry needs. Limiting the power to provide for instruments that are not legislative in character by amending the Bill would inhibit the ability for the scheme to respond to evolving industry needs. Any new powers specified in the rules to make non-legislative instruments would be subject to appropriate parliamentary scrutiny, including disallowance and close examination by the Senate Standing Committee for the Scrutiny of Delegated Legislation.
1.55The Scrutiny of Bills Committee acknowledged and thanked the minister for his response, however, stated that it still holds concerns. The Scrutiny of Bills Committee reemphasised that a notifiable instrument is not subject to the same scrutiny requirements, that it considers this kind of provision unusual and that it does not feel that its inclusion has been adequately justified.
1.56Under subclause 39 of the Disbursement Bill, the Minister could declare a body to be a recipient body, and therefore receive money from the Commonwealth. The Scrutiny of Bills Committee suggested that it may be appropriate for the bill to specifically include a consultation requirement prior to the establishment of a new recipient body.
1.57The Minister for Agriculture, Fisheries and Forestry, clarified that the declaration of a new recipient body requires the imposition of a levy and charges, a funding agreement, and the designation in rules under the Distribution Bill, of a designative primary industry sector in relation to the body. These requirements all necessitate appropriate consultation to be undertaken before further steps are taken.
1.58The Scrutiny of Bills Committee did not report on the C&T Bill.
Human rights consideration
1.59At the time of writing, the Parliamentary Joint Committee on Human Rights had not examined any of the six bills. The committee recommends any analysis provided by the Parliamentary Joint Committee on Human Rights be taken into account when the Senate considers the bills.
Key issues
1.60The committee received submissions from several organisations and groups with a direct interest in the suite of bills. Most submitters were supportive of the bills and welcomed the modernisation and streamlining of the levies legislative and regulatory system.
1.61This section of the report outlines submitters’ views on the bills, including the future benefits for the agricultural levy system. This section will also expand on key issues raised by submitters, such as:
uncertainty around the proposed legislation;
the proposed Biosecurity Protection Levy;
the absence of organic products; and
human rights implications.
1.62 The chapter finishes with the committee’s views and recommendation.
Benefits and support for the bills
1.63DAFF stated in its submission that the ‘agricultural levy system would remain a partnership between industry and government’ and emphasised that the bills would support the levy system to better meet industry’s present and future needs.
1.64DAFF highlighted the following improvements that the bills would have on the agricultural levy system:
reduced complexity and inconsistencies that aim to make it easier for IRBs to seek amendments to existing levies and create new levies;
increased flexibility to support efficient and effective levy collection; and
the standardisation of the disbursement of levy funds, and the clarification of matched funding arrangements. This aims to give RDCs more clarity and certainty.
1.65Dairy Australia emphasised the importance of a clear and consistent definition of R&D, R&D activities, and marketing activities for RDCs, and expressed that ‘the wording in the current bills is an improvement and is practical and workable for RDCs’.
1.66The National Farmers Federation (NFF) and Horticulture Innovation Australia expressed support for the desired outcome to modernise and streamline the agricultural levies legislation. The NFF emphasised the importance to levy payers and their IRBs that the agricultural levy system operates ‘effectively, efficiently and with integrity’.
Uncertainty
1.67PHA remarked that although it had participated in numerous consultations with DAFF regarding the bills, there remained several areas of uncertainty. PHA noted that due to the current absence of operational details, which are to be stipulated in the regulation and rules, it is uncertain about the following:
the amount of levies and charges to be paid to PHA;
which agricultural products these levies and charges would be imposed upon; and
who would collect the levies and charges and pay them to PHA.
1.68The Plant Industry Forum was uncertain about whether changes in the bills would alter the current agricultural levy system’s core features and functions. In a response to Grain Producers Australia, DAFF provided the following assurances that the bills would not result in any substantive changes to the agricultural levy system—‘existing levy rates won’t change, nor will the bodies that receive levies, or the purposes for which levies can be established and used’.
1.69PHA also said it is unable to fully consider the impact of the bills on the agricultural levy system and consequently on PHA’s operation requirements, until the subordinate legislation is provided.
1.70Dairy Australia echoed this statement, saying it was difficult to fully consider the bills as RDCs have yet to be provided the associated subordinate legislation with the bills. However, it did note that this subordinate legislation will be provided to RDCs for consideration as part of the ongoing consultation process with DAFF.
1.71DAFF confirmed that further consultation with industry stakeholders will take place in early 2024 and will give stakeholders the opportunity to provide feedback on the draft regulations and rules.
Use of notifiable legislation
1.72In line with matters raised by the Scrutiny of Bills Committee, one stakeholder was concerned that the legislation would grant excessive power to the Minister for Agriculture, Fisheries and Forestry to change or impose levies without appropriate consultations with industry.
1.73Ms Julie Newman, a retired farmer and agricultural policy academic, expressed concern regarding the minister’s power to set levy rates through regulations, and said this could potentially disadvantage levy payers:
[The] bills permit the Minister to support levy recipients and beneficiaries setting the rate and purpose of a tax … with no purpose to benefit those funding the levy.
1.74Ms Newman’s concerns echoed those raised by the Scrutiny of Bills Committee. In responding to that committee, the minister argued the use of notifiable legislation in this context will enable the Australian Government to ensure that the levies system is responsive to industry needs now and in the future.
Biosecurity Protection Levy
1.75A number of submitters expressed concern regarding the association between the proposed Biosecurity Protection Levy (BPL), which was announced as part of the May 2023 Budget, and the bills this inquiry is examining.
1.76In its submission to the inquiry, WoolProducers Australia noted DAFF’s continual assurances that the BPL will be established through separate legislation and is not related to the bills:
DAFF have provided numerous assurances throughout the consultation process that the BPL will be established through separate legislation and not through the Bills in which this Inquiry is focusing on. Given these repeated assurances, WoolProducers expects that this will be the case going forward.
1.77This separation was confirmed by DAFF, which stated that the ‘package does not establish the biosecurity protection levy’, and that policy is not being considered as part of this reform.
1.78Although it has been established that the proposed BPL will be separate legislation to the bills, the NFF expressed there is a real risk that producers will not be able to distinguish between the BPL and the agricultural levy system.
1.79WoolProducers Australia echoed this concern, and highlighted the consequences of industry confusion regarding the BPL:
There is a real risk that woolgrowers will not make the distinction between the proposed BPL and current levy system, which will in turn undermine the confidence that woolgrowers have in the established levy collection system.
1.80The Department of Natural Resources and Environment in Tasmania emphasised the need for strong communication campaigns, guidance materials, and industry engagement to improve the understanding and implementation of the modernised agricultural levy system.
Absence of organic produce
1.81Australian Organic Limited (AOL), noted in its submission that, due to the organic industry’s separate production principles and requirements, it is currently not covered under the agricultural levies system. AOL further highlighted that there is an absence of any reference to organics in the proposed bills.
1.82 As such, AOL proposed that organics should be included in future updates to agricultural levy legislation.
Human rights implications
1.83Ms Newman was also concerned about the bills’ potential impacts on industry profitability, and argued this was a human rights issue for producers. Ms Newman noted that in subpar seasons, levies can exceed net income, resulting in producers seeing a reduced profit for their business:
As farmers do not make a profit in below average seasons, GRDC levies alone often exceed net income, effectively denying farmers the profit from their business, a major human rights issue.
Committee view
1.84The committee acknowledges the importance of the agricultural levy system and its long-standing partnership between the Australian Government and industry.
1.85To better support the needs of industry and Australia’s agricultural levy system, the committee supports the modernisation and streamlining of the current levy system. The suite of six bills aims to reduce complexity and inconsistencies, and to increase flexibility through subordinate legislation.
1.86The committee notes the extensive stakeholder consultations that have been ongoing since 2017. The committee heard evidence that industry is eager to participate in future consultation processes, specifically on the draft regulations and rules containing imposition, collection and disbursement details for levies and charges. It is critical that industry is consulted at every step to ensure the levy system is fit-for-purpose and well‑supported.
1.87The committee acknowledges the concerns raised by the Scrutiny of Bills Committee and Ms Newman regarding the use of notifiable legislation to set rules and regulations. However, the committee finds the mechanisms set out in the bills fit-for-purpose, as this model can ensure the levies system is responsive to industry needs now and in the future.
1.88The committee notes issues raised by the organics industry. However, it further notes that the industry’s observations are not related to the bills, as the opportunity to introduce new levies will remain unchanged if the bills are passed. The bills do not make any changes to the levies framework, including the addition of new levies.
1.89The committee notes stakeholder concerns regarding a perceived correlation between the proposed BPL and the modernised levy legislation. However, the committee understands that the proposed BPL would be established under separate legislation, and is satisfied that this policy is not directly relevant to the bills under examination.
1.90The committee urges DAFF to continue its consultation process, and provide industry further information to improve understanding of the modernised agricultural levy system.
1.91The committee recommends that the Senate passes the bill.
Senator Glenn Sterle
Chair