Coalition Senators' dissenting report
1.1Of the 15 written submissions received, the majority are steadfastly supportive of the agricultural levies system being maintained, and the legislation streamlined and operating to meet the current intent. GrainGrowers stated in its submission that it ‘strongly supports the principles under which the agricultural levies system operates, and it is critical that the integrity of this system is maintained’.[1]
1.2Coalition Senators note the extensive commentary and concerns raised by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) in its consideration of these bills.[2] These concerns included clause16 of the Primary Industries (Excise) Levies Bill 2023 (Excise Bill), clause13 of the Primary Industries (Customs) Charges Bill 2023 (Customs Bill), and clause 10 of the Primary Industries (Services) Levies Bill 2023 (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.[3]
1.3These concerns have largely been dismissed by the Minister and the Department of Agriculture, Fisheries and Forestry (the department), with this report pointing to the Explanatory Memorandum for the Excise Bill, Customs Bill, and Services Bill (Imposition Bills), which includes a safeguard—that 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.[4]
1.4These concerns were borne out in submissions from the National Farmers’ Federation (NFF), WoolProducers Australia and GrainGrowers which stated their respective support ‘for the process to modernise and streamline the levies legislative and regulatory system’, on the understanding that:
The principle[sic] intent of the bills is to simplify and streamline the existing levies legislative and regulatory framework, and not to enact change of the levies framework or its existing operation. To this end, the bills do not seek to, or enable, functional change of the levies system that is not otherwise supported, or directed by, the relevant impacted industries; and the bills are not intended to allow for the introduction of the Government’s proposed Biosecurity Protection Levy.[5]
1.5Dairy Australia commented that it was difficult to consider the bills holistically without being provided the associated subordinate legislation associated with the bills.[6]
1.6Along similar lines, Plant Health Australia (PHA) noted:
… absence of the operational details that are to be prescribed in these rules and regulations, which have not yet been released…PHA is currently unable to determine what impact the proposed new agricultural levy system might have on PHA’s current operational arrangements.[7]
Recommendation 1
1.7That the Minister tables an addenda to the explanatory memoranda for the Primary Industries Levies and Charges Collection Bill 2023[8] and the Primary Industries Levies and Charges Disbursement Bill 2023,[9] as a matter of urgency.
1.8While generally expressing qualified support for the proposed changes, some submitters highlighted that it was critical to ensure that regulatory reforms (such as those currently proposed to modernise the levy system) do not increase costs or regulatory burden.
1.9The Department of Natural Resources and Environment Tasmania noted:
It is important that operational matters are carefully considered to ensure regulatory implications of the proposed changes, particularly where there is the potential for additional imposition of pass-through levy costs, on top of existing levies, are recognised at the farmgate.[10]
1.10NSW Farmers noted:
All these bills have the ability to negatively impact upon the businesses of primary producers in New South Wales, if unintended consequences are not managed … consequences could include diminished value of, and confidence in, the existing agricultural levy system, impacts to business viability and compromised biosecurity.[11]
1.11Grain Producers Australia (GPA) stated:
Any changes through this process, and these Bills … which significantly impact the key responsibilities GPA holds for our grower, levy-paying members and practical operations partnering with vitally important agencies such as Plant Health Australia … should be made without full and proper, transparent disclosure, to enable industry to understand the intent of such changes, during consultations.Any such changes would require separate consultation processes dedicated to engaging and including the impacted representative groups such as GPA or PHA, to fully understand their views on these matters.[12]
1.12These views were shared by Melons Australia, which stated:
The changes in the proposed Disbursement Bill have introduced uncertainties and confusion surrounding the use of the PHA Levy and [Emergency Plant Pest Response (EPPR)] Levy. The lack of clarity on how the Disbursement Rules will align with the existing definitions of PHA Levy and EPPR Levy raises concerns about the allocation and utilization of funds by PHA as a levy recipient body.[13]
1.13NSW Farmers sought an assurance that the reforms are ‘not intended to change the existing agricultural levy system functionality and settings, inclusive of levy rates components and disbursements to the 18 recipient bodies.’[14]
Recommendation 2
1.14That the Australian Government undertakes a further consultation process on the subordinate legislation with key stakeholders, including Plant Health Australia, Animal Health Australia, Research and Development Corporations (RDCs) and associated peak industry organisations.
1.15While not formally part of the consideration of this inquiry, more than half of the submitters referenced concerns about the proposed Biosecurity Protection Levy (BPL) and the potential for the Australian Government to seek to introduce this new levy through the legislative change process around these bills. NSWFarmers suggesting that ‘the proposed BPL must be considered by the inquiry… with a focus on the cumulative impact of current reforms proposed to the levy system … and the BPL … should they come into force as currently proposed.’[15]
1.16Several stakeholders reiterated the importance of maintaining a distinction between the BPL and the Primary Industries (Excise) Levies Bill 2023. The NFF affirmed that its support for the process is ‘predicated on the understanding that … the Bills are not intended to allow for the introduction of the government’s proposed Biosecurity Protection Levy’.[16] And its expectation, ‘grounded in repeated assurances that have been provided to industry by the Department’, that the BPL ‘is enacted through separate legislation and not through the bills which are the focus of this inquiry.’[17]
1.17GPA emphasised how it too has ‘taken this process on trust’ seeking ‘assurances and clarifications from the Federal Agriculture Department and levy partner agencies, that under the proposed drafting—as presented to key stakeholders for their feedback—the core features and key functions/operations of the levy system will remain unchanged and continue to be industry owned and led.’[18]
1.18GPA went on to state:
An urgent need to clarify the intent and purpose of these Bills has been prompted by recent conflation with other proposed changes to this trusted levy-payer system. This conflation is causing significant confusion among representative groups—and major loss of trust and confidence in the system.[19]
1.19WoolProducers stated:
This confusion is understandable because the policy directly connects the amount of levied funds to the contributions made by producers for their industry levies. The funds will be collected through the current levies collection channels and the term ‘levy’ is already well-established in the context of the agricultural industry.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.[20]
1.20GrainGrowers outlined a number of concerns about the proposed changes, including interaction with the proposed BPL. These concerns are centred around the ‘integrity of the agricultural levies system’, stating that the proposed BPL ‘does not align with the principles of the agricultural levies system’, and highlighting the ‘potential for confusion between levies established under the agricultural levies system and the proposed Biosecurity Protection Levy'.[21]
1.21GrainGrowers stated that it, along with several other industry bodies, has raised concerns that the resulting confusion between the proposed BPL and the agricultural levies system will have the impact of reducing industry willingness to raise industry levy rates for industry good activities, including research and development (through the Grains Research and Development Corporation), and biosecurity activities (through PHA). This is a significant frustration and has the potential to stall additional investment in industry good activities.[22]
1.22To ensure a clear understanding of the proposed changes, and compliance with these measures, the Department of Natural Resources and Environment Tasmania emphasised the ‘need for strong communication campaigns with carefully considered guidance materials, industry engagement and capacity building of levy payers along the agri-food chain.’ The Department warned that ‘without this, the desired benefits in reducing costs to businesses could be compromised’.[23]
Recommendation 3
1.23That the Australian Government properly consult on biosecurity funding mechanisms, with consideration of:
a full cost recovery basis for managing biosecurity risks of both passengers and produce entering Australia to ensure biosecurity standards are maintained; and
an import container levy to increase a shared responsibility and accountability by risk creators.
1.24The Imposition Bills propose to rename the existing PHA and Animal Health Australia (AHA) levies to the ‘biosecurity activity’ levy, and the emergency animal disease response (EADR) and EPPR levies to the ‘biosecurity response’ component of the levy.[24]
1.25AHA was established in January 1996 and was based on Australian Government and industry recognition of the need for high-level decisions on strategic policy for future planning and funding of national animal health service programs.[25] PHA was established in April 2000 based on the 1996 Nairn Review of Quarantine to establish a national coordinating body to deal with plant health.[26]
1.26The Department clarified in its submission that the bill would create consistency for how these levies are named within the draft framework and improve the future flexibility of the legislation. The department indicates that 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.[27]
1.27The introduction of the BPL is causing confusion with the industry-imposed levies for biosecurity and putting the biosecurity system at risk.
1.28The industry-imposed levies contribute funding to PHA and AHA. PHA and AHA facilitate a national approach to enhancing Australia’s plant and animal health status, through government and industry partnerships for pest and disease preparedness, prevention, emergency response and management. PHA has 39 industry members and AHA has 14 industry members.[28] This bill will remove references to the PHA levy and the AHA levy and it will be renamed—the ‘biosecurity activity levy’.[29]
1.29Once the Biosecurity Protection Levy comes into force there will three types of biosecurity levies:
Biosecurity Protection Levy—to be introduced by the Labor Government to pay for departmental biosecurity functions (compulsory);
Biosecurity Activity Levy—for biosecurity projects identified by industry as priorities undertaken by PHA and AHA (voluntary);
Biosecurity Response Levy—colloquially referred to as EADR or EPPR levies. These levies provide certainty for the industry and the Commonwealth that a payment (including repayment) mechanism is in place if required in an event of an incursion of an exotic pest or disease in Australia.[30]
1.30Removing the references to PHA and AHA loses transparency of where the levy funds are going. The levy payer will likely become confused when paying three biosecurity levies. It is important that levy payers understand exactly where their funds are going.Therefore, it is important that PHA and AHA are formally referred to in these bills, and not referred to as the ‘biosecurity activity levy’ and the ‘biosecurity response levy’.
1.31The introduction of the Biosecurity Protection Levy potentially puts the future of PHA and AHA at risk, as levy payers might not want to pay three biosecurity levies. These organisations are important for industry and governments to lead a partnership approach to biosecurity, and are custodians of the EADR and EPPR, which are important components of Australia’s biosecurity infrastructure.[31]
1.32Not only does this lack of transparency and clarity, and put the coordination of biosecurity activities through these organisations at risk, but it also risks the withdrawal of signatories to the emergency response deeds.This could lead to disastrous biosecurity outcomes for government and industry, as either governments pay for the response or decide not to respond to an exotic disease or pest outbreak, and the agriculture industry could lose its biosecurity status, leading to decreased production and lose of export markets.
1.33The NFF maintaind disappointment that the proposed BPL has the potential to cause impact on the modernising agricultural levies process, and stood firm in their call that it is that policy which should be reconsidered to address such issues.[32] The NFF also indicated it is important to have flexibility and future adaptiveness, and strongly encouraged the committee to consider the views of AHA and PHA industry forums, to seek more specific advice on this matter from the directly impacted industries, as they are best placed to advise on specific amendments this nature.WoolProducers also indicated the committee would benefit from speaking to the Animal Health Australia Industry Forum.[33]
1.34The amendments referred to were those introduced into the House of Representatives on 15 November 2023, by the Shadow Agriculture Minister, the Hon. David Littleproud MP:
We are doing this because we believe removing references to the AHA and PHA have the potential to cloud transparency of the levy framework. It's important that levy payers, farmers and producers have a proper line of sight into where their levy funds are going. These amendments will do this. Also, for the biosecurity response levy, our amendments will recognise that the levy funding will go to expenditure under the emergency animal response deed managed by the AHA or the emergency plant response deed managed by the PHA. These deeds are activated in the event of a pest or disease incursion into Australia. Another reason we are moving this set of amendments is that they will help minimise confusion among levy payers by inserting clarity into the framework. When combined with the government's proposed biosecurity protection levy, the creation of the broadly named 'biosecurity activity levy' under this bill will eventually bring the number of security levies to three. Having Animal Health Australia and Plant Health Australia appropriately recognised in the biosecurity activity levy and the biosecurity response levy will give confidence and assurance to the agricultural industry. With this change, farmers can feel secure about where they levies are being directed to without causing disruption to a system that has worked well over many years.[34]
1.35The Plant Industry Forum represents a combined annual value to the Australian economy in excess of $43.2 billion. The Forum’s submission indicated a specific concern is the removal of the PHA identifier and inserting the generic biosecurity activity and response identifiers. As signatories to the EPPRD and being the Plant Industry Members of PHA this creates significant concern for the Plant Industry Forum in that we now have no assurance that the levies collected and disbursed will continue to be used under the current arrangements for the PHA Levy and EPPRD Levy. In the view of the Plant Industry Forum, the risk that the levies will be collected and used elsewhere, under the generic term of ‘Biosecurity Activities’ and ‘Biosecurity Responses’, is unacceptable.[35]
1.36Melons Australia indicated that ‘moreover, the shift from the PHA identifier to the generic terms “Biosecurity activities” and “Biosecurity responses” adds and additional layer of ambiguity.’[36]
1.37NSW Farmers were supportive of the need for amendments proposed in November 2023.[37]
1.38In its submission, PHA noted its members' concerned ‘about the unintended consequences of the combination of the proposed Primary Industries Bills and the Biosecurity Protection Levy on critical funding for biosecurity, and further impost on plant industries and PHA to support them in biosecurity related activities’.[38]
1.39As mentioned by the department in its submission, if there is a need for flexibility to include an additional Emergency Response Deed, such as for aquatics, an amendment can be made in Parliament for inclusion.[39] The development of the aquatic deed referred to by the department commenced prior to June 2017—more than six years ago.To the best of our knowledge no other deeds are under development. The deeds are formally binding agreements between AHA or PHA, the Australian Government, all state and territory governments, and national industry bodies that formalise the roles of industry participation in decision-making, as well as their contribution towards the costs related to approved responses. These are landmark agreements which should be recognised by Parliament.
Recommendation 4
1.40That the Senate supports amendments to the Imposition Bills to:
formally acknowledge Animal Health Australia and Plant Health Australia levy instead of a ‘biosecurity activity’ levy; and
formally acknowledge the Emergency Animal Disease Response or Emergency Plant Pest Response Levies instead of ‘biosecurity response’ levy.
Senator the Hon Matthew Canavan
Deputy Chair
LNP Senator for Queensland
Senator Gerard Rennick
Member
Footnotes
[1]GrainGrowers, Submission 10, p. 1.
[2]Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee), Scrutiny Digest 13 of 2023, 8 November 2023, pp. 18-35; Scrutiny of Bills Committee, Scrutiny Digest 15 of 2023, 29November 2023, pp. 44-61; Scrutiny of Bills Committee, Scrutiny Digest 1 of 2024, 18January2024, pp. 41-48.
[3]Scrutiny of Bills Committee, Scrutiny Digest 13 of 2023, 8 November 2023, p. 18.
[4]Scrutiny of Bills Committee, Scrutiny Digest 13 of 2023, 8 November 2023, p. 19.
[5]National Farmers’ Federation (NFF), Submission 1, p. 2; WoolProducers Australia, Submission 4, p.4.
[6]Dairy Australia, Submission 7, [p. 1].
[7]Plant Health Australia, Submission 12, p. 3.
[8]Senator the Hon Murray Watt, Minister for Agriculture, Fisheries, and Forestry and Minister for Emergency Management, Ministerial Responses to Scrutiny of Bills Committee Scrutiny Digest 15 of 2023, p. 2 (accessed 31 January 2024).
[9]Senator the Hon Murray Watt, Minister for Agriculture, Fisheries, and Forestry and Minister for Emergency Management, Ministerial Responses to Scrutiny of Bills Committee Scrutiny Digest 1 of 2024, p. 7 (accessed 31 January 2024).
[10]Department of Natural Resources and Environment Tasmania, Submission 5, p. 2.
[11]NSW Farmers, Submission 13, p. 1.
[12]Grain Producers Australia (GPA), Submission 2, [p. 2].
[13]Melons Australia, Submission 11, p. 1.
[14]NSW Farmers, Submission 13, p. 1.
[15]NSW Farmers, Submission 13, p. 3.
[16]NFF, Submission 1, p. 2.
[17]NFF, Submission 1, p. 3.
[18]GPA, Submission 2, [p. 2].
[19]GPA, Submission 2, [p. 3].
[20]WoolProducers Australia, Submission 4, p. 2.
[21]GrainGrowers, Submission 10, p. 2.
[22]GrainGrowers, Submission 10, p. 3.
[23]Department of Natural Resources and Environment Tasmania, Submission 5, p. 2.
[24]Department of Agriculture, Fisheries and Forestry (DAFF), Submission 6. p. 5.
[25]Animal Health Australia, About, https://animalhealthaustralia.com.au/about/.
[26]Plant Health Australia (PHA), Submission 12, [ p. 1].
[27]DAFF, Submission 6. p. 5.
[28]PHA, Submission 12, [p. 1].
[29]Department of Agriculture, Fisheries and Forestry (DAFF), Submission 6. p. 5.
[30]Mr Sam Birrell MP, Member for Nicholls, House of Representatives Hansard, 15 November 2023, pp. 8266–8267.
[31]Refer to DAFF, Australian Government Biosecurity and Agricultural Response Plan (AUSBIOAGPLAN) version 3.0, 27 July 2022.
[32]NFF, ‘The NFF reminds Government, new biosecurity levy has zero support‘, Media Release, 30January 2024 (accessed 1 February 2024).
[33]WoolProducers, Submission 4, p. 3.
[34]The Hon David Littleproud, Member for Maranoa, House of Representatives Hansard, 15November2023, p. 8270.
[35]Plant Industry Forum, Submission 3, p. 2.
[36]Melons Australia, Submission 11, p. 1.
[37]NSW Farmers, Submission 13, [p. 3].
[38]PHA, Submission 12, [p. 5].
[39]DAFF, Submission 6, p. 5.
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