Chapter 1Introduction
1.1On 21 March 2024, the Senate referred the provisions of the Agriculture (Biosecurity Protection) Levies Bill 2024 and the Agriculture (Biosecurity Protection) Charges Bill 2024 (Imposition bills), as well as the Agriculture (Biosecurity Protection) Levies and Charges Collection Bill 2024 (Collection bill) to the Rural and Regional Affairs and Transport Legislation Committee (thecommittee) for inquiry and report by 10 May 2024.
Structure of the report
1.2This report comprises two chapters. This chapter provides background information, outlines the key elements of the bills, and looks at their consideration by other parliamentary committees. Chapter 2 examines the key issues raised by submitters and sets out the committee view and recommendation.
Background
1.3Under the existing agricultural levy system, several types of levies and charges are imposed to facilitate investment in research and development, marketing and biosecurity responses, as well as residue testing. These investments are managed by the 15 research and development corporations, Plant Health Australia, Animal Health Australia, and the National Residue Survey which sits in the Department of Agriculture, Fisheries and Forestry (the department).
1.4In July 2017, the final report of the Independent Review of the Intergovernmental Agreement on Biosecurity (Craik Review) made 42recommendations for strengthening Australia's national biosecurity system. This included the proposed introduction of a container levy, increasing the passenger movement charge, and more widespread implementation by states and territories of land-based levies. The Craik Review noted that an alternative to the introduction of a container levy would be to supplement the charge on Full Import Declarations with a levy to collect a similar amount to the proposed container charge.
The biosecurity protection levy
1.5In the 2023–24 Budget, the Australian Government (the government) announced the biosecurity levy and charge (the BPL) as one of the funding sources for its election commitment to strengthen Australia's biosecurity system through a new sustainable funding model. Under the new model, funding of the biosecurity system would be more broadly based and 'shared across general taxpayers, importers, and Australia Post, as well as a modest contribution from domestic producers via the proposed new BPL' (Figure 1.1).
Figure 1.1Sustainable Biosecurity Funding package: 2024–25
Under the Sustainable Biosecurity Funding package, in 2024–25 importers including those of low value goods, will contribute 49 per cent of the Commonwealth’s biosecurity funding. Source: Department of Agriculture, Fisheries and Forestry, Submission 34, p. 3.
1.6The fact sheet on the department's website titled Sustainable funding for a strong biosecurity system shows that operating base funding for biosecurity was projected to decline by close to $100 million over the forward estimates—from $597 million in 2022–23 to $491.6 million in 2025–26. However, the introduction of the sustainable biosecurity funding model will permanently increase biosecurity funding to around $805 million per year from 2024–25.
1.7According to the department, the proposed BPL would 'help meet the cost of sustainably funding the Commonwealth biosecurity system through a new levy and charge generally payable by producers of agricultural, forestry and fisheries goods and products, whether produced for domestic or overseas markets'.
1.8It is estimated the BPL would collect around $50 million per year—equivalent to six per cent of the Commonwealth biosecurity funding in 2024–25—and around 10 per cent of total industry agricultural levy contributions. TheImposition bills' Explanatory Memorandum (EM) noted that the levy would 'supplement much larger contributions from taxpayers and importers, that between them will contribute more than nine out of every ten dollars needed to fund our biosecurity system'.
Consultation process
1.9Between August and October 2023, the department undertook a public consultation process on the proposed new levy, including meetings with industry representative bodies and stakeholders. In its submission, the department highlighted the steps it took following this process:
As a result of this consultation, the BPL will no longer be set by reference to 2020–21 agricultural levy rates (as originally announced in Budget 2023–24). Instead, rates will be calculated based on each industry's proportionate share of the total gross value of production (GVP) for the agriculture, fisheries and forestry sector. The government has also responded to concerns about multiple imposition points across some product's supply chain. The BPL is intended to be tailored to individual products and goods to remove multiple imposition points across a product's supply chain, subject to further consultation with relevant industries which is currently underway.
1.10In February 2024, the Minister for Agriculture, Fisheries and Forestry announced a new Sustainable Biosecurity Funding Advisory Panel (Panel) to provide transparency of biosecurity expenditure and give biosecurity stakeholders input into biosecurity priorities, including the implementation of the proposed BPL.
Purpose and overview of the bills
1.11The package of three bills would establish a new legislative framework for the imposition of the BPL, which would be payable by certain producers of agricultural, forestry and fisheries products within Australia. The following section provides a summary of the key elements of the bills.
Imposition bills
1.12The Imposition bills would impose a new levy or charge—or enable the imposition of such a levy or charge—on certain producers of agricultural, forestry and fisheries products in Australia. The bills would enable the imposition of the BPL in relation to:
animal products, plant products, fungus products or algal products that are produce of a primary industry; or
goods that are for use in the production or preparation of nursery products for sale or for use in the commercial production of other goods.
1.13The Imposition bills would also:
provide for the rate of BPL to be specified or worked out in accordance with regulations to ensure that the rate can be set, and where appropriate, be changed to account for existing circumstances;
enable the specification of the relevant levy or charge payer for the PBL; and
set out other matters relating to how the imposition provisions apply.
Collection bill
1.14The Collection bill would provide for the collection of levies and charges imposed by, or under, the Imposition bills—including the collection of equivalent amounts from collection agents. The Collection bill would also:
trigger the Regulatory Powers (Standard Provisions) Act 2014 to allow certain enforcement actions, including:
monitoring and investigation powers; and
the issuing of infringement notices as part of a flexible compliance approach that reserves criminal penalties for serious offences; and
provide for the appropriate use and disclosure of information, while ensuring effective safeguards for sensitive information.
1.15According to the department, in order to 'streamline collection and administrative arrangements with Primary Industries Legislation arrangements, the BPL would be aligned with the proposed Primary Industries Levies and Charges Collection Act 2024, where possible'.
Financial implications
1.16According to the Imposition bills' EM, the new BPL would 'increase receipts by $153million over the three years from 2024–25'. The Collection bill's EM noted that the 'costs associated with the establishment, collection and administration of the BPL would be funded by appropriation as outlined in the 2023–24 Budget papers with $0.8 million in administration costs per year'.
Consideration by other parliamentary committees
1.17When examining a bill or draft bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
Scrutiny Committee consideration
1.18In its Scrutiny Digest 4 of 2024, the Scrutiny Committee raised concerns that the Imposition bills seek to provide that the rate of the BPL may be set through the making of delegated legislation.
1.19Concerns were also expressed about the Collection bill regarding the broad delegation of administrative powers, coercive powers, infringement notices, the reversal of the evidential burden of proof, automated decision making, and the incorporation of external materials from time to time.
1.20The Scrutiny Committee drew to the attention of senators and leaves to the Senate the appropriateness of allowing rates of charges and levies in the Imposition bills to be specified in, or worked out, in accordance with the regulations. It also drew attention to the provision for a broad delegation of administrative power without a requirement that compliance officers exercising such power have appropriate skills, experience, or training on the face of the bill, noting the coercive nature of the powers that may be exercised.
1.21The Minister's advice was sought as to whether material incorporated from time to time would be made freely available to all persons interested in the law, including individuals not in the industries concerned. In addition, advice was requested concerning the issues raised in relation to the reversal of the burden of proof and automated decision making.
1.22The Minister provided a response to the Scrutiny Committee on 15 April 2024, but at the time of writing the response was not publicly available.
Human rights compatibility
1.23The Human Rights Committee did not comment on the bills. However, the statement of compatibility with human rights contained in the EMs concluded that the bills are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Conduct of the committee's inquiry
1.24The committee advertised the inquiry on its website and invited relevant stakeholders to provide submissions by 10April2024. The committee received 60 submissions, as well as additional information and answers to questions on notice, which are listed at Appendix 1.
1.25The committee also held a public hearing in Canberra on Tuesday, 23 April 2024. A list of witnesses who gave evidence at the hearing is included in Appendix 2.
1.26Links to public submissions, Hansard transcripts of evidence and other information published by the committee for this inquiry are available on the committee's website.
Notes on references
1.27References to the committee Hansard transcript in this report is to the proof Hansard; page numbers may vary between the proof and official Hansard transcript.
Acknowledgment
1.28The committee thanks those individuals and organisations who contributed to the inquiry by preparing written submissions and giving evidence at the public hearing.