Grains bodies slam biosecurity consultation process

Both Grain Producers Australia (GPA) and GrainGrowers have grave misgivings about the tax, highlighted in submissions to the Department of Agriculture, heavily criticising the government's consultation with industry throughout the process.

The grains industry will play a pivotal role in funding the proposed new tax.

Modelling shows the grains industry will be the single largest contributor by commodity to the new tax, with GPA saying department figures showed levies of $12.25 million out of a proposed total $51.8 million to be raised by the biosecurity tax would come from the grains sector.

GPA chair Barry Large said this would represent a ten-fold increase in biosecurity levies for grain growers - without the certainty of knowing the money was definitely going towards the biosecurity effort.

"The current levies are established by growers themselves and kept for specific purposes," Mr Large said.

"But this new levy or tax as we call it will be taken directly off growers' incomes - and then redistributed into consolidated government revenue - without any consideration of their actual production costs and risks."

He slammed the government's process in trying to bring in the tax.

"There's a vast range of fundamental flaws in the proposal's design and the most glaring fact is virtually all producers don't trust it."

"A failure to conduct open and transparent consultation with the actual producers who are now being forced to pay this added levy, can't be reversed at the last minute."

GrainGrowers also heavily criticised the consultation process, saying it framed the implementation of the tax as a fait accompli and did not address industry concerns about how it would work in practice.

"The current have-your-say consultation has focused on implementation of the levy and does not clearly address these broader concerns raised by GrainGrowers," the organisation said in its submission.

It said more effort had been put into streamlining the levy collection process than assessing whether it was the best method to help bolster the nation's biosecurity response.

"The consultation has highlighted that the biosecurity protection levy mechanism has limited regard to principles commonly used when developing a revenue raising measure, such as efficacy, equitability, or effectiveness, and appears to have focused on ease of implementation rather than considering the outcome of the policy."

Mr Large called on government to swallow its pride and scrap the plans for the tax, saying virtually all farmer representative groups opposed the proposal.

"Australian farmers should not be used as sacrificial lambs to fill budget black holes in government departments," Mr Large said.

"However, the Federal Government is persisting with this move to hit farmers with another tax and raise funds for consolidated government revenue at a time when we're also dealing with a multitude of production challenges; including extremely dry conditions in my area of Western Australia."

Both GPA and GrainGrowers said the issue of a fair split of funding the new tax was being swept under the carpet.

"Since the announcement of the biosecurity funding measures GrainGrowers has been

seeking a resolution to the outstanding issue of a risk creator or container levy and clarity over the value of the charge to be applied to grain crops under the biosecurity protection levy," the GrainGrowers submission said.

Mr Large said it was hard to fathom there was not more being done to ensure risk creators paid an equitable share.

"Farmers are being told we're the 'beneficiaries' of biosecurity and so therefore we should be the only ones paying this added new tax, whether we like it or not.

"However, these other major supply chain participants have not even been considered in this policy discussion; despite the fact we've requested economic modelling from Treasury, to show why we've been hit with this new levy/tax, and all these other big players are not."

He said GPA had long supported a container levy to make the biosecurity system fairer and more equitable, with risk-creators contributing more to shared responsibilities and accountability.

"Despite the repeated promises, since it was first recommended by experts in 2017, the container levy remains unresolved - and instead the government is moving full steam ahead to hit producers with another new levy/tax that we never actually asked for," he said.

Meanwhile, even if the government does get the legislation to implement the tax through parliament doubt has been cast as to whether industry will be ready to start collecting payments come July 1.

Grain Trade Australia chief executive Pat O'Shannassy said the scheduled July 1 introduction date for the levy remained "ambitious" given a range of design, process and collection issues around the biosecurity protection levy implementation remaining in the air.

"GTA members will require time," he said.

"Systems updates and enhancements to support change will need to fit within current priorities and workloads of individual companies."

The Department of Agriculture Fisheries and Forestry (DAFF) submission regarding the tax said while it was working towards the July 1 kick-off, this was contingent on the passage of the Bills, their approval by the Governor-General and processes for how the levy will be collected to be finalised by Agriculture Minister Murray Watt.

It also said an information campaign for industry on the new levy charge rates and how to pay them must commence before July 1.

However, it added that it could not start planning the campaign as the information required "will not be able to be confirmed until the legislation is in place."

Adding to the potential delays, DAFF said the levy must also 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."