By GPA Chair and WA grain producer, Barry Large
SUBMISSIONS to the consultation process on the Federal Government’s 10 per cent biosecurity tax demonstrate a rare form of collective strength and solidarity of views across Australian agriculture stakeholders.
Farm representatives have consistently objected to this flawed policy proposal – be it grains, livestock, horticulture, seafood or forestry – that’s trying to impose an additional 10pc charge on agricultural levy-paying producers, by July 1 next year.
Most contributors to the ‘Have your Say’ process have called it a tax that severely contradicts and undermines trust and confidence in the existing ag-levy system. A system where most producers already make significant, direct financial contributions – as do Grain Producers Australia’s members.
Producers who already do the heavy lifting on biosecurity will be further penalised due to the inequities of a flawed taxation proposal that’s merely a glorified cost-shifting mechanism.
Agriculture Minister, Murray Watt, and senior officials from his department answered questions at Senate estimates hearings in Canberra recently, and admitted to the consistency of industry’s opposition towards this new 10pc levy/tax.
This questioning showed 92 responses have been received so far, and 61 meetings held, during the consultation process.
Of these 92 submissions; 19 are from individual producers; 58 from industry representative bodies; seven from biosecurity interest groups; and eight from the general public.
GPA’s evaluation of the 30 published submissions on the department’s website shows farmer representatives share common views and collective concerns about the proposal’s flaws, including;
· re-directing funding into consolidated government revenue through a non-hypothecated levy means it’s just another tax on producers, designed to recover costs attributed to the Agriculture Department’s poor financial performance and management.
· Calling it a ‘modest’ 6pc on producers is disingenuous, given these budget calculations don’t account for the direct contributions producers make already to biosecurity through other cost mechanisms e.g emergency management levies, state-based biosecurity levies, RD&E levies, on-farm management, other taxes etc.
· producers want better outcomes to safeguard their livelihoods, but this proposal doesn’t guarantee or transparently demonstrate how the biosecurity system will be strengthened; it only proposes to increase government funding, from a new levy/tax.
· inequalities within existing levy-collection system will be perpetuated allowing free riders (ie those without levies in place) to continue gaining a free ride, whilst those producers already doing the right thing with established levies, will be forced to pay more.
· hobby farmers, backyard and recreational operators etc are also biosecurity beneficiaries and risk-creators, but they don’t pay any levies to help cover costs; including emergency management, prevention and eradication.
· trust and confidence in existing levy-systems (including RD&E) is being severely undermined by the policy proposal, risking the long-term shared social and economic benefits these collaborative partnerships create and deliver – including producers reducing these levies.
· producers pay compulsory levies to enable research investments that have boosted farm productivity over the past 30-years (ie grains going from $4 billion in 1990 to more than $31 billion in value last year) and therefore increasing overall tax revenue for the nation – any added biosecurity costs should be drawn from this increased taxation revenue, and can be.
· other supply chain participants are also beneficiaries, but will continue to be free-riders under this funding proposal, whilst producers will pay another 10pc levy/tax.
· if the system was re-designed to effectively capture all supply chain participants, they would pass this additional 10pc impost back onto producers anyhow, who are price takers.
Given this proposed 10pc levy/tax will ultimately be debated and voted on in federal parliament, with new legislation required, Agriculture Minister Murray Watt now has the opportunity to read the room and kill off the tax proposal, before it gets too far out of hand.
This will show he’s listening to the clear majority of farmers, whilst delivering on the election promise his government made, and the Prime Minister, to bring back a spirit of cooperation into Federal Parliament, politics and government, as one of their key legacies.
In doing so, he’ll also avoid instigating a political brawl over farm policy that’s not been witnessed in Canberra since the Backpacker Tax debacle saw a horse-trading feeding frenzy from opportunistic Senate cross-benchers.
This policy reversal would also fulfill a commitment the Minister gave in his speech at the Hort Connections conference, only a few short weeks after this appointment following the 2022 Federal Election, to work closely and in partnership with the farm sector.
“I think we’ve all seen over recent years there’s been so much conflict, there’s been so many fights, and I think everyone’s had a gutful frankly and I think people just want to work together a little bit more, whether it be in ag or many other sectors, and that’s certainly the approach that I’m going to be taking in working with your sector,” he said at the time.
Reading between the lines of these submissions – stakeholders are also extremely anxious that if a tax disguised as a biosecurity levy can be imposed on agricultural producers, what else can the government potentially do, including increasing it from 10pc to who knows what and when?
If Minister Watt truly values the integrity of stakeholder consultations, he’d also do well to acknowledge nobody asked to pay any more in levies, when submitting their views to the Senate Biosecurity inquiry, held shortly after the election and his appointment. Nor was it a recommendation of that inquiry.
If $150 million can’t be raised over the next three years from other areas of the federal budget to improve biosecurity protections, Murray Watt’s credibility – and the government’s trustworthiness – is the real price that will ultimately be paid.
· This article was first published in Farmonline on 12 November 2023