David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

Taxation without representation sucks. It is inherently unfair to be required to pay for a system but have no say in how the system works. This is currently the world of agricultural levies. A levy may sound more benign than a tax. But make no mistake, R&D levies, marketing levies and biosecurity levies are all taxes on production. In fact, compulsory levies paid by producers each year amount to about $500 million. At various times, the amount paid in levies can be more than the profit made by individual producers, and numerous producers pay hundreds of thousands of dollars per year in levies. By any measure, levy payments are a significant impost and should be fully justified. In many cases, farmers who pay the levies are happy to continue doing so. I suspect most believe, perhaps innocently, that the levies are put to good use and should be paid. The problem is very few levy payers are ever actually asked whether they are happy. If they are not happy, there is nothing whatsoever that most of them can do about it.

In the previous parliament, two Senate inquiries recommended that this should change. I was an active participant in the second inquiry which examined the levy system across all agricultural and horticultural sectors. By the end of the first hour of evidence at the first hearing, it was apparent the system is broken. What the committee heard is that a number of farmer groups have never been consulted as to whether they want to pay levies. They were not asked when the levy was first imposed and they have never been asked if they want to keep paying. Some had the opportunity to vote to impose a levy the first time, but decades later have not been able to vote on whether to keep paying it, not even when the money has been poorly spent. Some had the opportunity to vote for an increase in a levy but found the votes so rigged it was laughable. We saw this in the last parliament with mushrooms, mangoes and onions, based on ridiculous notions of what is a representative vote.

Until about four months ago, two sectors were standout exceptions to this antidemocratic, unrepresentative taxation. Tens of thousands of dairy farmers and wool producers were polled every few years to determine the rate of the levy. Quite appropriately, they were offered a zero option, which if adopted would mean levy payments would cease and various people in the RDCs—that is, the research and development corporations—would lose their jobs. So far, this has never been chosen, but the possibility that it might be the preferred option focused the minds of those who spent the money, the organisations and RDCs responsible for marketing, research and development. They knew they needed to continually demonstrate to levy payers the value they were getting for their money. It is called accountability.

Unfortunately, on the last sitting day before parliament rose, the government rammed through a bill that removed the requirement by the dairy industry to conduct regular votes. I was the only senator to oppose it. It would have been dealt with in the non-controversial session, but for my opposition. Dairy Australia, and the other dairy industry groups that promoted this, should be ashamed of themselves. It was a nakedly obvious move to reduce, indeed avoid, accountability. The cost argument they claimed was utter garbage. The supposedly high cost of the dairy poll was merely attributable to campaign costs.

With dairy prices currently at rock bottom, there are dairy farmers incurring huge losses, while at the same time paying tens of thousands of dollars in levies. As a result of the bill, a vote will only be held if there is a proposal by Dairy Australia to vary the dairy levy, or, in a catch 22 situation, if enough dairy farmers vote, to conduct a vote. So, now, only the wool industry has levy democracy. It is a disgrace. We all get to vote for a government every three years, and we can choose a party that promises higher or lower taxes. In agriculture, such a basic right does not exist. This bill will go some of the way towards rectifying that. What it will allow is for each industry body to establish a database of levy payers.

I support the bill, although clearly it does not go far enough. It will not oblige the industry bodies to establish databases of levy payers. It merely gives them the legal authority if they choose to do so. It will also not ensure the RDCs use their databases for any constructive purpose, such as a periodic vote on the payment of levies. Indeed, I believe there is a distinct possibility that some RDCs will not want levy payers to be asked whether they want to continue paying levies, especially if they suspect they might not like the answer. I can assure those RDCs that I will be watching with considerable interest whether they actually go ahead and establish a levy payer database. If they do not, I will assume the worst about them.

A database of levy payers is the first step in introducing accountability, and a semblance of democracy, to the levy system. I am quite sure most producers do not begrudge paying a levy if they see value in it. But they deserve to be asked. In fact, they deserve to be asked about how the money is spent, too, such as whether to fund marketing as well as R&D—but I do not expect to see that any time soon. As for giving levy payers a vote, in this age of the internet secure online polls can be undertaken at very low cost, and even a postal vote is not expensive. But to conduct a poll you obviously need a list of voters. It is time we gave primary producers some say over their hard-earned money. This bill is a step in the right direction.