Under the Federal Government’s new Biosecurity Tax, Australian grain producers are being forced to pay 10 times more than the existing biosecurity levies that they already contribute towards emergency responses and other proactive initiatives, investments and partnerships.
These levies are established by growers themselves and hypothecated for specific purposes. But this new levy/tax will be taken directly off growers’ incomes – and then redistributed into consolidated government revenue – without any consideration of their actual production costs and risks.
Figures released yesterday show the change in calculations from the original 10 per cent tax rate as announced in last year’s Federal Budget, which blindsided all Australian agricultural producers.
The Department’s numbers reveal grains will be paying $12.25 million (23.644pc) of the total $51.8 million to be collected off Australian agricultural producers each year, under the new GVP rate.
Grains will pay the most of all farm commodities hit by this new levy/tax scheme; including 30pc of the GVP proportion in 2021-22.
Pic: Biosecurity signs distributed free to farmers under the GPA and PHA grains levy-funded Grains Farm Biosecurity program.
In contrast to this $12.25 million, an average of about $1.2 million has been collected from current grains levies in the past five years to fund biosecurity, as per GPA’s responsibilities for all levy-paying growers under Plant Health Australia, including Varroa Mite and other emergency responses.
In addition, about $500 million was collected off Australian grain producers in two recent harvests – but GPA, as the representative organisation with responsibilities for all levy-paying producers, including biosecurity, was not consulted on the Biosecurity Tax, before it was announced.
GPA Chair and WA grain producer, Barry Large, said the government’s policy was fundamentally flawed and born out of a substandard ‘consultation’ process which, if judged against normal terms, would represent a loss of social licence.
“This is not about how much the levy rates are per tonne or per kilogram of farm produce – it’s all about the principle of this policy and real failures to get it right and win any support,” he said.
“There’s a vast range of fundamental flaws in its 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.
“These policy design failures are why all Lower House MPs, except Labor, stood up and did what’s right and voted against the bills that are trying to implement this new tax on farmers, by July 1.
“Our submission to this Senate Inquiry calls on the government and urges other Upper House MPs to heed the sage advice of Independent MP, Helen Haines, provided in her speech during Lower House debates, after scrutinising this policy independently on merits and listening to farmers. She said:
“You can't get good policy without good consultation and, when in government, you must gain the trust of the people that will be impacted by your policy or your levy.”
GPA’s submission to the Senate Committee inquiry reinforces and strengthens calls for the Biosecurity Tax to be immediately scrapped, highlighting these flaws in the policy design, which have also seen virtually all farmers and their representative groups oppose it, in one shape or another.
“Australian farmers should not be used as sacrificial lambs to fill budget black holes in government departments,” Mr Large said.
“Despite recent adjustments, the proposed policy still fails to pass the fairness and equity tests and the serious concerns we’ve raised such as ‘free riders’ have still not been addressed or resolved.
“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.”
GPA Chair, Barry Large, says grain producers are price takers and therefore a new levy/tax can't be passed on to other supply chain participants who are also beneficiaries of existing grower levy investments, not just biosecurity.
Mr Large said many producer groups opposed the new tax based on sound policy principles, including the Plant Industry Forum’s 39 members, which represents a combined contribution to the national economy of more than $43.2 billion.
He said many farmers are also price takers and coming under increasing pressure from the major supermarkets and other large commercial players that control different supply chains.
“The government’s new Biosecurity Tax places another cost of business on farmers that we can’t pass on and does not align with other policy promises to try to ensure farmers can get a fair share of the retail dollar, to protect them from price gouging,” he said.
“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.”
Mr Large said GPA’s submission shows how these other agricultural supply chain participants also benefit greatly from strong biosecurity – and the hundreds and millions of dollars generated by other compulsory levies that producers already pay; including those hypothecated for RD&E.
“These levies deliver multiple shared benefits, including for the environment, communities and the national economy with increased productivity and tax generation over decades, but the government’s policy fails to recognise or account for these existing contributions,” he said.
Mr Large 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.
The Department’s figures have been released days before a Senate Inquiry hearing is due to be held into the bills, and almost a week after the deadline for submissions closed.
Mr Large said GPA’s submission provided a comprehensive list of sound reasons why the Biosecurity Tax needed to be scrapped immediately – and why producers should be treated fairly, with basic democratic rights allowed, on their levy rates.
“At the very least Australian grain producers should be allowed to have a say on our existing levy-rates. It’s only fair be able to ask if we can spend our own levies better first, rather than being blindsided with one that’s only providing funds for consolidated government revenue,” he said.
“The clear message at the recent Lower House vote also shows this levy/tax is fatally exposed at the next election, if Labor loses their majority in the Lower House and there’s another hung parliament.”
ENDS