By Grain Producers Australia Chair and WA Grain Producer Barry Large
CRUNCH time is looming fast for the Federal Government’s biosecurity tax that’s suffered unprecedented industry backlash and unified opposition, putting the proposal in serious jeopardy.
This week a Senate Committee inquiry hearing is examining the fine print of the bills that are aiming to establish this new levy/tax, to be taken directly off all Australian farmers and redirected into consolidated government revenue, from July 1.
This inquiry was initiated due to the myriad of concerns raised when the bills were presented to the Lower House last month and debated, exposing fundamental design flaws and subsequent failures to achieve fairness or equity, despite recent changes.
All MPs – except those on the Labor side – joined forces to vote against the tax, after taking time to speak with the impacted producers and assessing the policy’s details on merit.
This opposition has also been reinforced by independent experts who’ve analysed the policy details and warned about its shortfalls, contradictions and unintended consequences.
The strong voices standing against this new levy/tax also poses a genuine political risk that needs to be considered, given this vocal opposition won’t disappear after July 1.
With all crossbench independent MPs, the Australian Greens and minor parties voting with the Coalition against these bills, it’s now in the direct firing line of being scrapped after the next election.
With a hung parliament appearing more and more likely by the day, this levy/tax will be subject to the negotiations needed to form the next government.
This is especially true, given independent representatives spoke out against who also represent key rural seats that’ll be needed to form a majority, in order to govern.
This election is really only a few months after the July 1 deadline with time ticking fast.
The last thing Labor needs during an election campaign is to face continued scrutiny and commentary for hitting Australian farmers with an unfair new levy/tax that they never asked for, whilst our food producers endure other significant pressures, such as dry conditions in WA.
Whether it’s 10 per cent or not, this levy/tax on farmers is all about principles.
It’s also coupled with the impacts many farmers face in relation to the cost-of-living crisis and not receiving fair prices for what they produce due to fundamental supply chain competition inequities; especially major supermarkets holding the whip hand over them.
A taste of this future was provided during a recent interview on 2GB in Sydney where host Chris O’Keefe was unable to be swayed by the political rhetoric.
He said: “this feels like a lazy cash grab to prop up a budget that generates more than enough money through our taxes”.
“The principle is the principle…..our taxes pay for biosecurity, because it's for the good of the community. I just don't understand why you need to lump another tax on to raise what is a pretty paltry figure, 50 million bucks.”
Witnesses giving evidence at this Senate inquiry includes GPA, speaking about the inability to address these serious policy flaws which really can’t be reversed, at the last minute.
This includes the policy’s failure to account for the many other beneficiaries of existing producer levy investments, including the environment and major supermarkets.
This all stems from the substandard consultation process and failure to reveal that this new levy-tax was actually being considered, before it was announced as a complete shock to everyone, in the 2023 budget.
This failed ‘consultation’ was another key issue identified by the elected representatives who voted against it in the Lower House.
They also have questions about the container levy that’s long been promised, but not delivered.
This container levy was meant to make the system fairer and more equitable for risk-creators, as per the 2017 Craik review’s recommendations, but is MIA.
This strength of opposition to the biosecurity tax is also clearly demonstrated in about 60 submissions to the Senate inquiry, with producer representative groups showing why they remain staunchly opposed to it, despite recent changes.
Another major roadblock for the government is the challenge of establishing the many new collection points needed to take this income off producers.
This inquiry is due to table a report on May 10, with the federal budget announced the week after.
Given this new levy tax has failed to win any support, including after being tested in the federal parliament, and in independent policy analysis and metropolitan media commentary, Agriculture Minister, Murray Watt, now has the opportunity to do the right thing and scrap this proposal before it becomes even more politically vexed.
This will show his government is in fact listening to the farmers that mostly all oppose it, in one shape or another, after reading the fine print.
Taking the biosecurity tax off the table can also start the process of regaining trust with the farmers who are being forced to pay this new levy-tax, against their will. But the future of the ‘sustainable’ biosecurity funding process appears fatally wounded by this deeply flawed proposal.
This article was first published on Farmonline, 4 February 2024: HERE