As we recall, the levy was first announced in the 2018 Federal Budget with an aim to collect $325M over 3 years from a commencement date of 1 July 2019.
Since that time there has been significant controversy surrounding 1) how the levy funds will be utilised; and 2) how the levy will be collected.
Use of the levy funds
Industry representatives have expressed serious concerns that the levy is in fact a tax with funds going into general revenue.
Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) continue to advocate that revenues collected translate to more frontline resources for the Department of Agriculture, better service levels for our importers, exporters and logistics service providers, as well as delivering real biosecurity outcomes.
In the event that we are left with the imposition of the levy, the next question remains as to what is the most effective method of collection?
The Department of Agriculture received widespread criticism for initial proposals ultimately leading to the former Minister for Agriculture and Water Resources announcing the formation of the Biosecurity Levy Steering Committee tasked with recommending the possible scope and design for the levy.
FTA was appointed to the committee and were joined by other leading representative bodies – Ports Australia, the Australian Institute of Petroleum, Cruise Lines International Association, the Australian Federation of International Forwarders, the National Farmers Federation, Shipping Australia, Qube Ports and the Cement Industry Federation.
To allow the steering committee adequate time to report and as outlined in this year’s Federal Budget, the government announced a new proposed date of 1 September 2019 and a relatively small loss of revenue associated with this deferred commencement.
Report by the Committee
In line with the Steering Committee’s responsibilities, a final report was provided to government on 31 May 2019.
• that the Biosecurity Levy should be subject to a Regulatory Impact Statement;
• the creation of a Biosecurity Advisory Council; and
• an annual Budget-related paper which would provide a full reconciliation of biosecurity-related revenue and expenditure and thereby assist in clarifying how funds are collected and appropriated, and where they are spent.
There was also an overwhelming response from industry (steering committee members and respondents to our discussion paper) to move away from the models originally proposed by the Department of Agriculture to a simple administrative collection model against the Full Import Declaration (FID) receipt – the clear underlying message being that if importers have to pay a new levy, they have the right to pay it at a net rate – something that is best achieved via the FID process.
The Ministerial formed steering committee has not received any feedback on its findings nor has industry been given any rationale for the failure to meet the 1 September 2019 deadline.
In follow up engagement with the Minister’s office last week, FTA stated that depending on how the levy is to be collected and passed on through the supply chain, adequate notice (suggesting a minimum of 3 months) is required to allow industry participants time to implement systems and to have discussions with customers about potential cost increases.
You will be kept up to date on developments as they come to hand.