The federal budget delivered on 9 May 2023 announced plans for the introduction of a new 10 per cent Biosecurity Protection Levy (BPL). HERE
This new levy was part of the Federal Government’s moves to try to deliver a long-term, sustainable funding model, to strengthen Australia’s biosecurity system and ensure ‘risk-creators’ (importers) can make a fairer contribution to biosecurity costs and shared responsibility. HERE
The budget papers say the levy on Australian producers of agricultural, forestry and fishery products (from 1 July 2024) will be set at a rate equivalent to 10pc of the 2020–21 industry-led agricultural levies. This is estimated to increase receipts by $153.0 million over 3 years from 2024–25. “The levy recognises the benefits that primary producers derive from Australia’s biosecurity system, including detection, identification and response associated with invasive pests and diseases, maximising trade opportunities, and enhancing access to premium overseas markets.”
This 10pc levy increase was described by Agriculture Minister, Murray Watt, as a “modest” 6pc of the overall budget revenue needed to meet this promised sustainable biosecurity funding model.
In addition to the additional grower levy, importers will contribute 45pc ($363m, up from $318m) and taxpayers 44pc including increased passenger movement charge ($350m, up from $202m). HERE
Australian grain producers already pay more in compulsory levies than any other farm sector. HERE
These levies represent 1.02 per cent of a growers’ net crop sales comprising: 0.99pc to Grains Research and Development Corporation (GRDC); 0.01pc to Plant Health Australia (PHA) (Emergency Plant Pest Response Deed (EPPRD) responsibilities); 0.015pc for National Residue Survey (NRS) testing; and the balance to emergency plant protection response.
Based on the value estimated for last year’s grain crop ($28 billion), the total levies potentially collected (at the current rate of 1.02pc of total grain sale value) would be $285.6m.
At the new rate of 1.122pc (1.02 + 0.102), the total levies collected, based on the $28b crop, would be $314.16m. This is an added $28.56m from the 10pc levy, contributed by grain producers.
This represents an increase of $28.56m – more than 60pc of the $47.5m to be raised by the 10pc levy, Across all agricultural sectors.
With 21,000 levy-paying grain producers, at this 10pc added rate, the grower average will rise from about $13,600 each to about $15,000 each.
GRDC’s investment in biosecurity has averaged $35m per year over the last five years.
The Biosecurity Activity Levy that’s paid by Australian grain producers also funds the Grains Farm Biosecurity Program and website ($970,000 average per year over last five years) and PHA membership ($418,000 average per year over last five years). HERE
The Biosecurity Emergency Response Levy is used to fund the costs of emergency responses in relation to plant pests and diseases. This fund has intentionally accumulated funds over a number of years in order to pay for future emergency responses. On 30 June 2023, this will have an estimated balance of about $7m. Emergency response expenditure over the five years to 30 June 2023 will total about $3.1m. Responses contributed to include Khapra beetle, Varroa jacobsoni, Brown Marmorated Stink Bug and Red witchweed. * future expenditure will be incurred related to the Varroa destructor emergency response which is currently being undertaken.
GPA and other plant industry groups have advocated for a levy on imported sea containers so ‘risk-creators’ can make a fairer contribution to biosecurity protections. Minister Watt says this container levy is “still on the table”, but international trade law issues need to be worked through.
This 10pc levy increase undermines and contradicts the spirit and intent of the existing levies system, whereby growers work in partnership with levy-investment bodies – GRDC and PHA – on targeted projects. And also, that industry representative groups have oversight processes i.e. where growers can vote/have a say on levy-rates, levy-investments and governance, such as board appointments.
Whilst the Government is proposing a new levy on Australian grain producers, the budget also included $127m from “consolidated revenue”, provided to the Department of Agriculture, Fisheries and Forestry (DAFF), for a one-off payment in 2022-23 “to ensure the viability of the Department”.
There are no specific details on how the 10pc levy increase will be spent, other than that the funding will be going to the Department. In particular, there are no details on whether it’ll deliver grains specific outcomes i.e. preventing Khapra beetle, or working in partnership with PHA (i.e. to bolster the Grains Farm Biosecurity Program on-farm actions) or targeted GRDC investments/projects.
Ahead of the 1 July 2024 proposed deadline, DAFF will run an “industry consultation” process to ensure implementation is “appropriate for industry”. Whether the levy-rate is set at 10pc permanently in the new regulations, or if it can be increased by a future government, or if the regulations can be amended for other purposes, is to be addressed in these consultations.
This process will allow GPA to provide input for growers to answer other key questions such as the value proposition of this funding i.e. split between biosecurity prevention and eradication activities.
GPA has been working with PHA and other stakeholders e.g. GRDC to develop the National Grain Biosecurity Plan. A Grains Biosecurity Implementation Table, which focusses on strategies and activities to strengthen biosecurity preparedness and response capacity/capability, is being finalised.
This includes initiatives to strengthen biosecurity protections, such as the Grains Biosecurity Officers managed by PHA and funded through the grower biosecurity levy (over seen by GPA), which improves on-farm biosecurity capacity and preparedness – and in biosecurity response phases.
The Department says this budget announcement of a 10pc levy does not affect the current process that’s underway for the draft modernising agricultural levies legislation. HERE
Minister’s budget speech: HERE
Biosecurity Levy Webpage and Webinar: HERE