Concerns about the timing, implementation, fairness and transparency of the Biosecurity Protection Levy (BPL) were aired by red meat representatives at a sitting of the Senate, Rural, Regional Affairs and Transport Legislation Committee on Tuesday.
Just 69 days from the proposed July 1 start date, Department of Agriculture, Fisheries and Forestry (DAFF) Deputy Secretary Biosecurity and Compliance, Justine Saunders, led the department’s representation to the committee, and reaffirmed an intent for the BPL to start from July 1, 2024.
Senators repeatedly questioned whether the mammoth task of setting up BPL collection for 84 separate industries, 26 which have no levy system in place at all, could be done on that timeframe. Just 21 industries have had their collection mechanisms finalised so far.
DAFF staff raised the ire of senators when they revealed an impact study had been conducted on the BPL as a “concept” but had not been redone since the GVP calculation method was introduced earlier this year.
During questioning from Queensland Senator Matt Canavan, DAFF representatives also revealed that levy obligations were intended to start accruing on July 1, but that collection of the levy may occur at a later time.
These details are yet to be worked out.
“I just keep coming back to this point, I honestly don’t think you guys are ready. You're asking us to vote on something, within weeks presumably, you really are I think, I’m sorry to be blunt, not convincing me, struggling to convince me, if we sign off on this legislation that gives the minister and the government enormous powers. Once it goes from Parliament there’s nothing we can do about it. You’re struggling to convince me that you actually have a proper plan within 70 days to resolve a problem of charging very small amounts to 26 industries that don’t have a levy," Senator Canavan said.
Ms Saunders noted the Senator’s concerns but assured him that DAFF had a plan to engage with the industries they haven’t had a chance to yet and continue conversations with industries it has already spoken with in the next two to three weeks, with a view to finalise those levies by July 1.
Cattle Australia (CA) Chief Executive Dr Chris Parker echoed evidence to the committee from across the red meat supply chain when he said there was still no clarity on how the levy would be collected or how much the collection activities would cost – which simply wasn’t good enough with the impending start date so close.
The cattle and calves industry is slated to contribute the second highest value of any industry, only behind grains, to the $50,000,000 to be collected by the levy annually.
It will be asked to pay more than $9,000,000 annually according to the Gross Value of Production (GVP) calculations by industry released by government last week.
| Industry | Average GVP proportion (2019-20 to 2021-22) | BPL contribution |
| 1. Grains | 23.6438% | $12,247,504.293 |
| 2. Cattle and calves | 18.0042% | $9,326,198.400 |
| 3. Milk | 5.9906% | $3,103,124.992 |
| 4. Sheep and lamb | 5.8644% | $3,037,740.987 |
Source: DAFF
“They have industries on their lists that they’re going to try collect $88,000 from, it’s going to cost them more than that to collect it,” Dr Parker told the committee.
“There’s other industries where they want to collect $250,000. It’s going to cost them quite a bit to collect that too. This has not been thought out clearly.
“One of the points we have made in our submission, Senator, is that we, Cattle Australia, do not want to see this implemented until all industries have a mechanism to pay it and the costs of the collection are clearly understood and neither of those things are in place at the moment.
“We will not accept starting to pay a levy on 1 July that not everyone else is paying simply because it’s easy to collect from a big player in the economy that has a levy system in place."
Dr Parker said CA was keen to work with the government to make sure the levy was implemented in the most fair and equitable way, considering the government had made it clear it wanted to implement it.
During the proceedings Senator Canavan questioned whether the government could collect the levies with the $800,000 budget they had allocated for the task.
Dr Parker suggested that it may only cost the government $800,000, but costs to the industry for collection were not yet known.
“What’s the cost to industry to collect it? So not only are we paying it (the levy), but members of our supply chain like saleyard owners, processors, like live exporters even, might have extra costs associated to collect it and account for it, which isn’t entirely equitable either,” he said.
Later in evidence, DAFF confirmed that the department does not subsidise collection agents, for example livestock agents, for collecting levies.
Independent Senator David Pocock said: “We’re talking $50m here. The government recently announced they were spending $40m on advertising to explain the stage 3 tax cuts. In the scheme of the budget, I’m just trying to understand why we’re going down a path with administrative burden for $50m.”
Dr Parker said that biosecurity was important, but that the agricultural industry should not have to pay for it three times – with current levies, with taxes and now the BPL.
Australian Livestock Exporters Council (ALEC) Deputy CEO Scott Kompo-Harms expressed concern about how the levy could be collected from just one collection point, considering cattle are sold on average three times in the supply chain.
ALEC's Scott Kompo-Harms speaking at Tuesday's committee hearing.
DAFF acknowledged that cattle had multiple imposition points and was a particularly complex commodity in regards to the BPL - yet it still intended for the collection of the BPL to begin for cattle from July 1.
Sheep Producers Australia Chief Executive Officer Bonnie Skinner said the sheep meat industry was also in the dark about how the levy would be applied and collected.
“We’re yet to hear back any advice on what this looks like,” Ms Skinner said.
“It’s rushed, it’s unrealistic, industry is still trying to comprehend let alone prepare for the impost of the Biosecurity Protection Levy and that’s really at odds with what we have with the agricultural levy system which is well established and has solid principles around equity, efficiency and transparency.”
The government's package of three bills seeks to impose a new biosecurity protection levy to be payable by producers.
They are the: Agriculture (Biosecurity Protection) Levies Bill 2024, Agriculture (Biosecurity Protection) Charges Bill 2024, Agriculture (Biosecurity Protection) Levies and Charges Collection Bill 2024.
Two of the bills seek to implement a biosecurity protection levy or charge to be inflicted on Australian farmers to pay for biosecurity activities which are undertaken by the Department of Agriculture, Fisheries and Forestry.
The third bill, the Agriculture (Biosecurity Protection) Levies and Charges Collections Bill 2024, will enable the collection of the levy.
The levy is slated to commence on July 1, 2024.
Labor will set the tax rate as a proportion of an industry’s average gross value of production over a three-year period.
The legislation lacks any detail of the cost to farmers or how the levy will be collected. It is not yet clear what industry will have to pay.
More than 50 agricultural representative groups previously signed a joint letter to Prime Minister Anthony Albanese expressing unified opposition about the new tax.
The Bills passed the House of Representatives on March 27. The government forced through the Bills, 74 votes to 67, with only Labor MPs’ support.
The Bills will have a harder time in the Senate, where the Labor Party does not have sufficient numbers and is reliant on The Greens or minor parties and independents to get it through.
There are only three Senate sitting days, starting May 14, before the apparent July 1 implementation date, which could be in jeopardy due to this scrutiny.
The Bills have been referred to the Senate Rural and Regional Affairs and Transport Legislation Committee and a report due is due on May 10.