Senate inquiry recommends biosecurity protection levy should be passed

While acknowledging the concerns of farm lobby groups around the design and effectiveness of the proposal, a Senate Standing Committee on Rural and Regional Affairs and Transport said in a report tabled on Friday that the BPL would not replace or duplicate the efforts of producers but help manage the risks of pests and diseases entering Australia.

The committee acknowledged that producers already made biosecurity contributions, such as levies paid to Animal Health Australia and Plant Health Australia, but said that they currently did "not fund the Commonwealth's biosecurity functions at the border".

It said border functions, along with policy and technical market access, the Indigenous Rangers Biosecurity Program, and supporting neighbouring countries to strengthen their biosecurity, "are wholly funded by the government and not by agricultural producers".

"While primary producers are currently a beneficiary, they don't contribute directly to biosecurity efforts to manage the risks," it said.

Under the existing agricultural levy system, several types of levies and charges are imposed to facilitate investment in research and development, marketing and biosecurity responses, as well as residue testing.

The report also found that the option of a container levy raised by industry as an alternative to the BPL was likely unnecessary given the government had increased Full Import Declartion charges last year, "a decision that effectively returned importer fees and charges to full cost recovery for the first time since 2015".

The committee also noted comments made by the Department of Agriculture, Fisheries and Forestry in a public hearing that a sea-freight import charge could have implications for Australia's international trade obligations.

Central considerations for the viability of a container levy are believed to be China's reaction to what it would likely view as a new tariff placed on its exporters and the potential for another nation to challenge any new levy at the WTO as an unfair tariff.

Any new levy would also need to satisfy requirements under the General Agreement on Tariffs and Trade and Free Trade Agreements.

Friday's report also suggested that DAFF had addressed "many of the concerns" raised by industry during a period of consultation, including the establishment of the Sustainable Biosecurity Funding Advisory Panel and changing the basis on which the levy was determined from industry levies to a percentage of gross value of production.

The committee was also satisfied the levy would be tailored to individual products to remove multiple imposition points across supply chains.

The levy legislation was referred to a Senate committee on March 21 after Coalition, Greens and other lower house crossbench MP's took aim at the policy, including calling for a container levy to be introduced to help fund the national biosecurity response.

The levy will collect about $51.8 million from producers per annum as part of the government's new $1 billion sustainable biosecurity funding model.

The package of three bills would establish a new legislative framework for the imposition of the BPL that is due to become operational on July 1.

According to the Imposition bills' explanatory memorandum, the new BPL would 'increase receipts by $153 million over the three years from 2024-25.

The committee acknowledged industry views around limited consultation on the bills; impact on the existing levy system; transparency regarding the use of funds; hypothecation of revenue; short timeframe for policy development, impact analysis and implementation of the BPL; and potential alternative or additional revenue sources.

Despite this committee chair and Labor Senator for Western Australia Glenn Sterle signed off on the document that said, on balance, the committee was satisfied that the BPL would "support the government's commitment" to provide sustainable, predictable, and permanent biosecurity funding.

"It therefore recommends that the bills be passed," it said.

However, in response to revelations that DAFF had not spoken with all 84 commodities to be captured by the levy, it "urged" the department to "engage those industries who have not yet been consulted".

In its submission to the inquiry, DAFF said hitting the advertised start date was contingent on the passage of the Bills, Governor-General approvals and collection processes to be finalised by Agriculture Minister Murray Watt.

It also said an information campaign for industry must commence before it begins.

However, the submission added that planning the campaign could not begin immediately as the information required "will not be able to be confirmed until the legislation is in place".

Meanwhile, Coalition Senators' Matthew Canavan and Gerard Rennick said in a dissenting report that the Senate should not pass the he Agriculture (Biosecurity Protection) Levies Bill 2024 [Provisions] and related bills.

They suggested that the government should "properly consult" on the sustainable funding mechanism, including a full cost recovery basis for managing biosecurity risks of both passengers and commodities entering Australia and an import container levy to pay for the biosecurity risk created.