Andrew Gee (Calare, Independent) Share this | Link to this | Hansard source

I will be opposing the Agriculture (Biosecurity Protection) Levies Bill 2024 and the other legislation which ushers in a new tax for Australia's farmers. Our farmers make an extraordinary contribution to the life of our nation. They feed and clothe Australians and many people around the globe. They battle drought, floods, bushfires, plagues and way too much government red tape. Agricultural production has been a crucial plank in the economic success of Australia. In 2022-23 the value of agricultural exports reached $79.9 billion, which was a record high. Given this extraordinary contribution, it is outrageous that our farmers should be slugged with a new tax to pay for biosecurity, which is the responsibility of all Australians, not just farmers. It's also concerning that, in the midst of a cost-of-living crisis, the government is going to add to agricultural production costs, which will end up making this crisis even worse.

I note that the agricultural sector has strongly opposed the introduction of this new tax on our farmers. Barry Large, Chair of Grain Producers Australia and a WA grower, said:

Australian producers take biosecurity seriously on our farms every single day …

That's why we already pay significant amounts to fund biosecurity protections directly within our own businesses.

We also pay directly through other compulsory industry levies that raise hundreds of millions of dollars—including biosecurity levies.

We've been calling for increased funding and protections to make the system better and fairer for producers with increased accountability and shared responsibility, but this proposal in its current form is grossly unfair and fundamentally flawed and needs to be reversed.

WoolProducers Australia CEO Jo Hall has said:

Farmers are facing ever increasing pressures to produce food that's affordable, and the highest quality in the world, whilst others rake-in record profits …

This move by the Federal Government will only amplify these production pressures by hitting farmers with another tax that's nothing more than double dipping and cost-shifting on biosecurity.

To those organisations you can add NSW Farmers, which points out that this new tax:

… would impose additional costs on the very farmers who already paid significant levies for biosecurity efforts, and bore the cost of dealing with previous biosecurity failures such as Varroa mite and Red Imported Fire Ant.

NSW Farmers Biosecurity Committee chair Ian McColl also points out:

… there is no container levy imposed on importers, despite the threats to our national biosecurity coming from overseas.

It beggars belief that you would hit farmers up with a new biosecurity tax and not the importers who represent the biosecurity risk.

It's not just NSW Farmers who oppose this new tax. The Victorian Farmers Federation has been vocal in its opposition to the new tax, as have the National Farmers Federation and a host of other farming organisations. I had a recent conversation with Orange area orchardist Guy Gaeta about this issue. He didn't varnish his words when he said:

It's disgusting. These people are off their rocker. I'm not going to pay it.

I should add that that quote is the part of the conversation that is suitable for printing in Hansard. Farmers around our nation would agree with Guy. This new tax is a very poor way to treat the farmers who have done so much for our country and is a very clumsy and ill-conceived way to fund biosecurity measures. I will be opposing it, and I urge all members of the crossbench in the Senate to join me in voting against it. I also urge other members of the House of Representatives to vote against it. Our hardworking farmers simply deserve better.

Allegra Spender (Wentworth, Independent) Share this | Link to this | Hansard source

I rise to make it be contribution on the Agriculture (Biosecurity Protection) Levies Bill 2024 and the related bill. There are some genuine concerns with what the government is doing with this package, concerns which I don't think are resolved by the material we've been provided with, and so I'd like to indicate that I will be opposing the bill.

As I understand it, the background here is that the government has decided to increase revenue for biosecurity through two channels: expanding cost recovery for low-value imports and putting a special levy on domestic primary producers. I have three concerns with the government's approach and these are shared, obviously, by a number of my colleagues in this place. The first mirrors those concerns raised by the Productivity Commission in their 2023 paper on Commonwealth industry levies. That paper demonstrated the incredible growth in industry levies in recent years and how they represent a form of microtaxation, which can be an inefficient revenue source that impairs broader efforts to support private sector investment, innovation and productivity growth. That paper provided a framework for testing the case for industry levy proposals, to ensure that they target a public good effectively and aren't simply imposed as a revenue-raising measure. Of the 11 tests, the biosecurity proposal passes just three of them. This suggests that the department has not worked through the framework or considered how the proposal could be redesigned or improved to address concerns.

The second concern reflects issues raised by Sasa Vanek and Robert Breunig at the ANU Tax and Transfer Policy Institute. Their paper, which was published last month, notes that the proposed approach is not a suitable way of dealing with a negative externality, such as a biosecurity threat. Instead, they proposed two alternative approaches, both of which reflect policies which are grounded in economic science and are already used by the Commonwealth in various portfolios. One approach is to charge those who create the externality—in this case, importers and international travellers—by taxing those who create the greatest biosecurity risk and aligning their private costs with the social costs. The other approach is to recognise biosecurity as a public good and fund it accordingly through consolidated revenue. Both of these approaches resolve the problem and do so in a more efficient way than that proposed by the government.

The third concern reflects the process by which this legislation was developed and consulted on. I understand that there's significant concern in the industry about this issue, but my particular concern is the failure of the government to follow its own processes and best practices in policy development. The government launched the Office of Impact Analysis back in November 2022, with some fanfare about collaboration, transparency and ensuring sound, evidence-based policy. But it's clear that departments haven't got the message, as the OIA assessment of the biosecurity levy proposal makes clear. It was rated as 'adequate' and fell short of the good practice standard which is expected of legislative proposals due to the lack of analysis of impacts, including properly quantifying the costs and qualitative impacts of the policy, and also its approach to consultation.

There's a clear lesson here for government about the need to take its own processes seriously, and I do mean that this is a lesson for the whole of government. The problems with this policy are similar to the problems seen in other portfolios, and it's a worry that these problems are becoming more common over time. Surely we should see lessons being learned and practices improving, rather than the opposite?

In conclusion, this bill falls far short of what the community expects of the government and so I will be joining with my good friends in the National Party in opposing its passage.

Kristy McBain (Eden-Monaro, Australian Labor Party, Minister for Regional Development, Local Government and Territories) Share this | Link to this | Hansard source

We all understand the importance of a world-class biosecurity system, and the role it plays in protecting our people, our economy, our unique environment and our way of life from devastating exotic pests and disease outbreaks. Maintaining a robust system is fundamental to protecting our agriculture, fisheries and forestry industry sectors, forecast to be worth $86 billion in 2023-24, and the 1.6 million jobs they support across the nation. Our world-class system also supports almost $80 billion worth of exports each year. Australia has one of the best-regarded biosecurity systems in the world. We are free of many of the crippling diseases and pests which impact other countries, such as foot-and-mouth disease, lumpy skin disease, khapra beetle and the devastating Xylella, which has wiped out generations of vineyards in Europe.

But a strong biodiversity system doesn't just happen; a strong system cannot maintain itself. Australia has 25,760 kilometres of coastline to monitor and protect, with an increasing focus on our most northern borders. There is an increasing volume of mail, cargo and travellers arriving from overseas. All of these pathways are biosecurity risks. The vigilant effort and operations required to monitor and keep our borders protected is costly and ever present. Fundamentally, that is why the government is investing an extra $1 billion over the next four years and an extra $267 million every year after that to make our biosecurity system stronger and more sustainable. This investment is locked in. It is permanent, now and every year into the future. This is something that has never happened before. These bills are an important part of our sustainable funding model, along with more funding from taxpayers and significantly increased contributions from importers. The bills are underpinned by the principle that strong biosecurity is a shared responsibility, and so is paying for it.

The government is taking consultation on the biosecurity protection levy seriously. It's not just a box-ticking exercise. We took time after the May budget to listen to the industry feedback. We have addressed industry concerns about levy and charge design, the imposition of the levy and the charge, and the transparency and accountability of biosecurity funding. The government heard industry's concerns about the initial design. In response, we have acted. Rates will be set using a common and equitable basis for industry sector products and goods and be calculated on a proportional share of total gross value of production. Details of each commodity's levy rates will be set out in regulations and subject to consideration by the Governor-General in Federal Executive Council.

To give context, the proposed rate of biosecurity protection levy imposed on the sale of bananas would be in the order of 0.0958c per kilogram of bananas. That's 1c for every 10.4 kilograms of bananas produced. We anticipate that the proposed rate of biosecurity protection levy imposed on the slaughter of pigs at an abattoir in Australia would be in the order of 18½c per head, against an average price of around $250 per head for a bacon pig.

The final proposed levy rates are dependent on consultation with industry on the proposed imposition points for levied products. Government has listened to feedback from industry that they want the interruption to their business operations to be as minimal as possible. They have said loud and clear that they want imposition and collection arrangements to be as simple as possible. Taking this on board, imposition points will mirror agricultural levy arrangements as far as possible to minimise business impacts. We also listened to feedback that imposition points should be streamlined so that the levy is only applied once throughout the supply chain. This will be particularly important for the cattle sector, where, without any streamlining of imposition points, an animal could be levied multiple times throughout its life. We are working to develop the most appropriate arrangements with industry to support industry, businesses and farmers.

Perhaps most significantly, the government has listened to industry's feedback about improving confidence in how biosecurity funding, including from the biosecurity protection levy, will be used. We have taken this feedback on board, and we have announced a new sustainable biosecurity funding advisory panel. The panel will give our producers, for the first time ever, a say on biosecurity priorities and transparency on how biosecurity funding is spent. Importantly, this oversight is not just for the $50 million to be raised through the biosecurity protection levy but for the $800 million annual biosecurity budget as a whole. This has never been done before, and it responds to longstanding industry concerns about priority setting. The panel is in addition to the government's earlier commitment to annual public reporting on biosecurity funding expenditure and outcomes.

While biosecurity protection levy funds will not be directly appropriated to the Department of Agricultural, Fisheries and Forestry, the additional contribution to consolidated revenue means that we can provide the permanent increases in ongoing appropriation funding announced in last year's budget. More specifically, this funding will support the Department of Agriculture, Fisheries and Forestry to continue to undertake biosecurity activities as part of a risk based approach to managing the risks of pests and disease entering Australia.

It is not just down to producers to contribute more. Under the changes we have introduced, risk creators, like importers and travellers, are also contributing much more to biosecurity funding. Under our sustainable funding model, the contribution from importers will increase by more than 35 per cent, or more than $102 million, per year between the former government's last year of office and 2025-26. We are raising the same amount from importers as the National Party said it raised through its failed container levy, where it did not raise a single cent.

By doing the right thing and making importers pay their fair share for the first time since 2015, we have already raised $256 million since 1 July 2023. This includes $33 million extra compared to what would have happened under the National Party's failed funding model. These funds go directly to our biosecurity system, protecting agriculture and the community from harmful pests and diseases that threaten trade and our way of life.

From 1 July 2024, a new cost recovery charge on low-value goods imported into Australia by air or sea will be introduced and is expected to recover around $27 million annually. Up to now, taxpayers have borne this cost, diverting crucial resources away from other biosecurity functions.

We achieve this where the previous government and the previous minister, the member for Maranoa, comprehensively failed. The Liberals and Nationals thought it was a good idea to provide short-term terminating funding for our essential biosecurity services. They thought they could do biosecurity on the cheap, locking in biosecurity funding cuts of $100 million a year. That is funding cuts of $100 million a year. It has been well documented that the former minister's financial incompetence almost broke the Department of Agriculture, Fisheries and Forestry. It was the Albanese Labor government that put a stop to that by locking in permanent long-term funding at a sustainable level to ensure our protection from pests and diseases remains strong.

Even now the member for Maranoa, through his second reading amendment, which we oppose, has demonstrated his complete lack of understanding of how our biosecurity system works and how it is funded. The member likes to talk a big game about making importers pay more towards the cost of biosecurity, but fails to acknowledge that his government did nothing and our government has done just that—made importers pay more. The member lives in a fantasy when he says that all that the incoming government had to do after the election was sign a piece of paper and it would have all been fixed. In fact, the complete opposite was true. We had to provide a financial bailout to the department last year to ensure it remained sustainable—a direct result of the member's budget failure. The member completely denies reality, in which he had over 1,300 days as agriculture minister but did nothing to make importers pay their fair share. Nothing changed between 2015 and 2022.

The member for Maranoa's silver bullet, the so-called container levy, which he still thinks is the answer, was first announced by him as minister in May 2018. It was supposed to raise more than $100 million a year to fund our biosecurity. It did not raise a single cent—not a single cent. You can't make that up.

The member continues to demonstrate that he has zero understanding of what the independent Craik review said about biosecurity funding, even though he was the responsible minister at the time. The Craik review recommended introducing a container levy or increasing cost recovery through the full import declaration, or FID, charge. The government has already done this, increasing the FID charge for sea cargo from $49 to $63 in the past year. This is more than was recommended in the Craik review, which suggested a $10 increase for sea cargo FID in lieu of a container levy.

The member for Maranoa also continues to demonstrate that he has no understanding of how the agricultural levy system works. Levies paid by industry to Animal Health Australia and Plant Health Australia do nothing to fund the critical biosecurity services at our borders. These levies are important, but they do not fund Commonwealth biosecurity operations at mail centres, airports or seaports, nor do they fund the technical, scientific and surveillance work that is funded through the Australian government biosecurity budget.

The sustainable biosecurity funding package is a new era for biosecurity in Australia. It recovers more than ever before from biosecurity risk creators, whether they be importers, international parcels and mail, or international travellers. Australia has never had sustainable and predictable biosecurity funding, despite this being recommended in multiple reviews and continually sought by industry and environment groups.

To finish, I'll make this point. The National Party's amendments seek to criticise the government for changing its mind on how the biosecurity protection is calculated, but that is the result of genuine consultation with industry. We listened to feedback from industry and are making our new biosecurity protection levy more equitable, more proportionate and more transparent. For the first time ever, the government is also giving industry a say on biosecurity priorities and how the Commonwealth biosecurity budget is used, through our sustainable biosecurity funding advisory panel. As a former president of Cattle Council of Australia, Markus Rathsmann, put it:

Biosecurity has been underfunded for the last twenty years.

…   …   …

The recent proposal for industry to have a seat at the table and address Biosecurity concerns has real merit and is a positive step forward.

…   …   …

We can argue about fairness and the prospect of a new tax year after year till the cows come home.

…   …   …

As a cattle producer I am happy to contribute more via a levy if we can help build a stronger properly funded biosecurity system that properly protects our livestock and plant industries NOW and into the future.

Bridget Archer (Bass, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Maranoa has moved an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.

Question unresolved.

As it's necessary to resolve this question to enable further questions to be considered in relation to this bill, in accordance with standing order 195 the bill will be returned to the House for further consideration.