This chapter considers the levy collection system across agricultural
levies generally, with a primary focus on probity and transparency. In tracing
the levy process, it explores the levy calculation and collection systems, requirements
to approve and re-approve levies, modification of levy allocations and leakage
Levy calculation and collection
The Department of Agriculture – Levies (formerly Levies Revenue Service)
administers, collects and disburses levies and charges on rural commodities and
products under the authority of Commonwealth legislation.
After recovering costs, it disburses levy funds to the relevant levy recipient
body. These bodies include RDCs as well as AHA, PHA and NRS.
The Department of Agriculture (department) deals primarily with levy
collection agents who lodge the levy returns and remit funds to the department.
The department therefore has limited contact with levy payers themselves.
The vast majority of levy payments are collected through intermediaries such as
There are approximately 18,000 agricultural levy collection points across
the country of which 9,000 are discrete levy collection points.
However, as R&D and marketing levies are captured at different points in
agricultural production, the levy collection points vary considerably across
the agricultural sector. Whereas there are only 15 collection points for the
sugar levy, there are 2907 collection points for the wine levy and 5461
collection points for the horticulture levy.
The department undertakes record inspections of levy collectors across
the agricultural sector by way of regular audits undertaken on a random basis.
Mr Noel Robson, Director, Levies Section, Industry Support Branch, Finance and
Business Support at the department explained the process:
When we carry out, for example, record inspections of levy
agents to ensure they pay correctly, we follow all of the transactions for the
period we have chosen back to the original levy payer records—that is, the source
documents for the levy—to ensure that that levy payer has been advised of the
levy collected and that there is a proper process to ensure that levy payer's
levy has been passed on to the department. But we only deal with levy payers
directly if they are also the person who has to lodge the return and make the
Departmental administrative charges and payment of levy collectors
As the agency responsible for administering agricultural levies, the
department retains a portion of the levy to meet its administration expenses. As
a case in point, the dairy industry contributes approximately $34.5 million in
levies annually, of which the department's levy unit retains $96,000 per annum
to cover its administrative costs.
The department explained that its costs are based on the effort required
to administer the levy rather than on the amount of revenue collected.
It noted that the key driver of cost was the number of collection points. Other
cost drivers include levy payer compliance, complexity of levy arrangements,
frequency of returns, and uptake of electronic transactions.
Cost recovery as a percentage of levies disbursed for each RDC varies
considerably, therefore, from 0.1 per cent for SRA and CRDC to 7.7 per cent for
Some industries expressed satisfaction with the cost-effectiveness of their
levy collection systems. For example, the Australian Macadamia Society noted that
it is in a fortunate position, in that levy collection costs and administration
charges for the macadamia R&D and marketing levies, represents less than
one per cent of the value of the levies collected.
However, relatively high collection costs were highlighted by other
industries. The wine industry raised concerns regarding the levy collection
costs for the grape and wine levy. Mr Anthony Battaglene, General Manager of
Strategy and International Affairs with the Winemakers' Federation of Australia
(WFA) informed the committee that it pays over $1 million a year in levy
administration charges from levy revenue amounting to $14 million.
The department noted that its cost recovery as a percentage of levy disbursed
to that industry was 11 per cent.
While WFA acknowledged that a process was underway to lower the cost of levy
collection (which would permit a greater portion of levy funds to be directed
into R&D investment), it argued that for major cost savings to be realised,
a complete review of the levy structure and collection mechanism was required.
Concerns in relation to levy collection costs were also raised by producers
in the horticultural sector and specifically cherry, apple and pear and
pineapple growers. Cherry Growers Australia (CGA) explained that when the
department implemented a cost recovery model, the Australian cherry industry experienced
a 450 per cent increase in collection fees. CGA indicated that in the 2011–12
financial year, collection fees amounted to $21,779 – a figure which rose to
$102,262 in the 2012–13 season. Since then, the industry has lobbied to have levy
collection costs reduced for its 336 collection points. With the collection fees
for the 2014–15 season forecast at $47,800, the industry is engaged in efforts
to reduce this figure to approximately $40,000.
CGA noted that a reduction should be achieved through the increased use of electronic
platforms for levy declarations and payments. CGA has also raised with the
department the possibility of having levies collected by one organisation.
Apple and Pear Australia Ltd (APAL) also raised concern with the levy
collection and administration costs in relation to the horticultural levy, noting
that such costs for horticulture were comparatively high when compared with
other agricultural commodities. According to APAL, 3.7 per cent of horticulture
revenue was consumed in levy collection costs. It noted that, in comparison,
the specific rate for apples of 1.73 per cent and pears at 2.88 per cent were
considerably lower. Noting that the relatively higher costs of collection were
related to factors such as the number of collection points, APAL proposed that
HIAL negotiate with the department on ways to reduce these costs.
Similarly, pineapple grower, Mr Les Williams informed the committee that
collection costs were a concern to pineapple producer levy payers.
Another matter on which there is variation across agricultural
industries concerns the payment of collection agents. In the nursery and garden
industry, whereby up to 90 per cent of the levy is collected by one provider,
levy collection agents are paid.
Such agents are paid at a rate of 2.5 per cent of levies collected while the
department retains approximately 3 per cent for administering the levy.
For other industries, agents that collect agricultural levies are not
paid. They can hold the levies and collect interest on them until they submit
their levy returns to the department. The department noted that intermediaries
have expressed concerns about the burden this responsibility places on them,
particularly where the levies are complex, multiple levies have to be
collected, and costs cannot be shifted back to producers or onto processors or
those further along the supply chain.
The Australian Chamber of Fruit and Vegetable Industries (Australian
Chamber) also argued in favour of rationalising the levy collection and
administration system. It raised concern that while businesses act as the first
point of sale and collect levies, they are not reimbursed for the costs
incurred. The Australian Chamber informed the committee that market wholesalers
have continually argued that they should be paid for the work they perform,
that the levies collection system should be made simpler or that levies should
be collected in another way. Noting that approximately 15,000 growers supply
central markets, the Australian Chamber concluded that the red tape burden on
market wholesalers is significant, and it needs to be addressed.
To add to the complexity, there are different collection systems in
place for state-based levies. Remittance for the agents also varies from state
to state. As the agents responsible for the collection of livestock levies, the
Australian Livestock & Property Agents Association (ALPA) informed the
committee that in one state, agents who collect the state-based levy are paid a
handling fee. In another, however, agents are fined if they do not remit the
levy on specified days as required.
Mr Andrew Madigan, CEO of ALPA continued:
For a mum and dad business, which a lot of stock and station
agents are, there is a lot of time spent doing the levies and for no benefit to
the agent. We have also had different people at times saying, 'Yes, but you get
to keep the money so you get the interest on the money.' Our reply is, 'If it
is that good, you collect it.' So there is a little bit of work to be done on
Evidence suggested that the levy collection system was made even more
complex when producers pay more than one levy, operate as producers and serve
as the collection agent. Moraitis Group noted in regard to the Australian
potato levy that it could, at any one time, serve as the producer, intermediary
agent, exporter, retailer and processor in relation to the levy. It argued
The financial administration time required to reconcile
levies on each transaction for each quarter and the requirement to then input
these transactions into the Levy Revenue Service's online submission system,
DAFF "Levies", is both onerous, time consuming and requiring of significant
manpower resource to input.
Moraitis Group argued in favour of streamlining departmental deductions,
reconciliations and payments to facilitate a one-touch levy appropriation
mechanism that could be applied across horticultural products. It favoured
administration of such a mechanism through the Australian Taxation Office (ATO)
as a government appropriation authority.
Another concern raised in relation to the collection of agricultural
levies related to the situation whereby collection agents have gone into
liquidation. Nursery & Garden Industry Australia (NGIA) raised concerns
that on two separate occasions, collection agents had not paid the levy to the
department, having gone into liquidation. The industry, through NGIA, was
required to pay the department the outstanding $500,000 on the grounds that it
is the responsible body to the involved levy payers.
ALPA informed the committee that a similar incident occurred in the livestock
sector whereby a collection agent failed to transfer collected levies to the
department and then went into liquidation.
Identification of levy payers and a levy payer database
The department does not have records for all levy paying producers
across the agricultural industry. For most industries, the department liaises
with levy agents who remit to it a lump sum in levies payments. The
department's levy unit will then disperse the funds to the respective RDC, AHA,
PHA and the NRS, less the costs of administering the levy.
As noted previously, during this process, the department does not ordinarily
come into contact with levy payers themselves.
Where the department has direct contact with producers in industries such
as the turf industry, where there is no other point in the market chain to
obtain levy returns, it knows who the levy payers are. It does not, however,
systematically collect information directly from these levy payers beyond the
provision of the returns by producers.
Furthermore, for the substantial majority of levy payers across agricultural
commodities, the department cannot identify who pays the levies.
Mr Robson explained the department's role:
Our legislation allows us to require information to be
provided by a person in relation to our work to collect levies, and it is a
compulsory provision of that information. However, the legislation prescribes
that it is only in relation to our work in administering the levies. Every time
we do that, the intermediaries have an additional cost in providing that
information, and one of the concerns is the reg cost.
When a levy agent or intermediary deducts the levy from the proceeds of
sale or recovers the levy from the producer, they must provide the producer
with a receipt or written statement acknowledging the payment of the levy.
Under respective levy legislation, levy collectors are required to keep records
of all levy payers they collect the levy from. The collection agents are
required to provide these records to departmental officials during record
inspections. The focus of the inspection is to ensure that the levy is
collected correctly and remitted accordingly.
While the levy collection agents have their own lists of levy payers,
such lists cannot serve as a point of comparison as no other list is retained
by the department, RDC or representative industry body. It is at the collection
point, therefore, where information regarding levy payers is diluted.
Some RDCs and representative bodies have databases of their own levy payer, producer
members. However, respective membership does not comprise 100 per cent of all levy
payers for each industry and there remains no comprehensive, valid record
available of all agriculture levy payers.
In the few industries where levy payers are documented, some are very
small industries. Levy payers of the agaricus mushroom levy are known to the
respective grower representative organisation, the Australian Mushroom Growers'
Association (AMGA). There are 57 growers who pay the levy and AMGA matched its
membership data with the growers, having directly contacted each levy payer to
put the numbers together.
In other industries where the levy payers are known, such as the chicken meat
industry, levy payers also serve as the levy collection points.
In other instances, such as the nursery and garden industry, a
confidential letter of agreement exists between the prescribed body and levy
collectors whereby the latter provides the names and addresses of those who pay
This arrangement is made simpler for the nursery and garden industry as one
provider collects up to 90 per cent of the levy.
Similarly, grain-fed cattle producer levy payers are known to their prescribed
peak industry body through an approval from AUS-MEAT, which provides access to
National Feedlot Accreditation Scheme information and enables ALFA to contact
levy payers under certain circumstances.
Dairy farmer levy payers are known to Dairy Australia Ltd (DA) because it has
an agreement with the department's levies unit whereby it is provided the list
of levy payers and their levy contributions.
The department explained that the only true visibility that it has in
relation to levy payers is of producers engaged in the wool and dairy
industries. The legislative framework for those two industries allows the
department to collect levy payer information, including the levies paid, from
the intermediaries and to pass it on to the respective RDC in order to conduct
a poll. Specifically, subsection 27(3) of the Primary Industries Levies and
Charges Collection Act 1991 (PILCC Act) states that an authorised
person (who is appointed by the secretary of the department to serve as a
collection authority) may provide to an eligible recipient the following:
the name, address and ABN of any person who has paid, or is
liable to pay, the wool levy; and
details relating to the amount of the wool or dairy levy that the
person has paid, or is liable to pay.
Under this provision, the names and details of the 55,964 woolgrower
levy payers are provided to Link Market Services (LMS). LMS collects their
details from the department which collected and collated that information (from
wool brokers who collect the levy). The department provides that information to
LMS which is a corporate share registry company.
Mr Stuart McCullough, Chief Executive Officer (CEO) of Australia Wool
Innovation (AWI) explained the role of LMS:
Their contribution is important because the data is collated,
and certainly in terms of voter entitlement they are the group that we ask to
go out and calculate the voter entitlement per eligible levy payer in the case
of WoolPoll, and per shareholder in the case of an AGM. They oversee the
process of that information coming back and adjusting those entitlements if
they are ever questioned.
Similarly, subsection 27(3A) of the Collection Act provides that an
authorised person may provide the same details regarding dairy levy payers to
the industry services body. Once a year, dairy processors as the intermediaries
for the industry provide a return of information about all the producers that
they have collected the levy from for that year. The department then passes
that information on to DA.
The department informed the committee that in terms of the costs for the
respective wool and dairy databases, the costs involved vary from one year to
another. However, management of the wool database requires one full-time
equivalent (FTE) officer. The dairy database requires less than 0.1 per cent of
a FTE because the department do not do the data management reconciliation but
rather pass on the information to DA.
However, there is no list or database of levy payers in the pork, sugar,
grain, egg and cotton industries, to name a few.
Yet, the need to identify levy payers by way of establishing an electronic database
(to facilitate industry feedback and increase accountability to levy payers)
was recognised in a number of reviews and reports.
It was also raised as an issue by submitters to this inquiry,
of whom some argued that such a database was the fundamental starting point on
which to build effective levy structures.
Noting that identifying the levy payers is the foundation on which
accountability in the levy system should be built, the NSW Farmers' Association
(NSW Farmers) recommended that all RDC's develop mechanisms that identify levy
payers and allocates to them rights applicable to that RDC.
Similarly, the National Farmers' Federation (NFF) made the point that the
development of a levy payer database could underpin a range of producer
engagement strategies, particularly with the aim of improving accountability to
levy payers in the investment of their levy contribution.
NSW Farmers noted, however, that any levy payer identification system should be
appropriate for the commodity the levy is paid upon.
ALPA is required under the Primary Industries (Excise) Levies Act
1999 to serve as the levy collector for the livestock industry.
ALPA's CEO, Mr Andrew Madigan informed the committee that with a little
'jiggling of computer systems', it would not be hard to report the names of
levy payers and how much they pay in levies.
He further noted that it would be straightforward to establish a computerised
database of levy payers in relation to the livestock industry:
It can be done, because the accounting system has to work out
how much it is going to take from your account sales based on the number of
head—so that sits into that journal of account. We sell 500 cattle on the day,
and there is the money there. We know exactly where it came from. It is the
same as collecting the money from you as a vendor and paying the council for
how many dollars a head they want for the weighing fee, the yard dues or
whatever it is. 
Some witnesses argued that leakage remained a sizeable problem, and that
a levy payer database may assist in addressing leakage. According to the
Australian Chamber, with the stated value of horticulture production at $9
billion and levy receipts amounting to $41 million (or less than 0.5 per cent
of this total figure), the estimated level of levy leakage in the horticultural
industry could be between 20 to 30 per cent.
Under its PigPass system, Australian Pork Limited (APL) is able to
contact every pig producer (for purposes such as disease traceability) but not
necessarily every levy payer.
Under the current arrangements, it has no way of knowing whether some small and
backyard operators are paying the levy or not. At the same time, it does not
know whether smaller producers such as hobby farmers are on its PigPass system.
Challenges in establishing a levy
While the need to establish a database of levy payers was recognised
across most industries, the challenges in establishing such a system were also articulated.
Challenges include the reality that in some industries, such as that of
rubus (cane berries including raspberries, blackberries and boysenberries),
growers can be in the industry one day and out of it the next.
This is a particular challenge in the horticultural sector where HIAL is required
to establish a register of horticulture levy payer members by November 2015.
The register is expected to provide information regarding a levy payer's ABN
number, crop grown, levy history, name, address and property.
While there are between 25,000 to 35,000 horticulture producers in Australia,
HIAL has so far registered 1000 voting members and has set itself a target of
registering 3000 voting members by the end of the year.
Another challenge raised in regard to identifying levy payers and the
involved costs was exemplified in relation to the beef industry. Australian
Bureau of Statistics (ABS) statistics reveal that there are 81,000 beef farms
or operations in Australia, of which 34,000 or (42 per cent) have a value of output
which is less than $50,000, (amounting to less than 50 steers). Mr Michael Keogh,
Executive Director of the Australian Farm Institute (AFI) explained that these
farmers are effectively part-time operators as they are running small numbers
of cattle. The ramifications for the establishment of a database were that:
...the effort of contacting all of those when they probably
account, by estimate, for about four per cent of total levies paid, is quite a
Mr Keogh noted that a similar situation applied in horticulture whereby
45 per cent of horticulture producers have less than $50,000 worth of output a
year. He explained that about half of these producers probably contribute about
five per cent of total levies paid.
At the other end of the spectrum, the top four or five per cent of producers would
produce nearly a third of the total levies paid.
The long tail effect of this and other industries also brought to the fore the question
of representation with some submitters arguing in favour of proportionate
representation in regard to levy matters.
Notwithstanding these challenges, the committee recognised that without
a comprehensive register of levy payers, it would remain unclear as to the
extent to which producers (whether smaller or larger) are engaged in levy
investment decision making processes. Further, the consolidation of many such
industries simply exemplified the need for a cost-effective data collection
method which utilises existing information at the point of levy collection.
The committee was informed that in the past, the industry considered a
mechanism to identify all levy payers but found that the involved costs were
too prohibitive. A number of bodies are currently investigating methods to cost-effectively
generate such a list, taking into account privacy and other considerations. One
such option is for levy collection agents, at least as a first step, to provide
their lists of levy payers. This initiative would impose a cost burden on each collection
agent but which would ultimately be passed on.
However, it would not place further onus on levy payers to register.
The Council of Rural Research and Development Corporations (CRRDC) noted
that most RDCs had raised concerns regarding the difficulties in obtaining levy
payers' details. Mr Selwyn Snell, Chairman of CRRDC noted in this regard that a
mandatory system of property identification could be considered which would
also serve biosecurity control and traceability purposes.
Mr Tim Lester, CCRDC Operations Manager highlighted that as service providers
accountable to levy payers, the provision of levy payers' lists to RDCs would
bolster their accountability requirements.
HIAL noted that, not only would government assistance be required to develop
a database of all levy payers, but that ultimately, registration should be
Similarly, AFI held the view that without a compulsory registration or mandatory
system, participation in a levy payer register would reflect the modest levels
of levy payer participation in levy decision making processes including polls,
surveys and Annual General Meetings (AGMs).
Sugar Research Australia (SRA) noted that restrictions under the Privacy
Act 1988 prevented it from directly accessing levy payer details from the
milling companies. SRA's inability to identify sugar levy payers and the amount
of sugarcane produced or processed by levy payers was problematic when it came
to undertaking a sugar poll in 2012. At that time, SRA could only identify
those levy payers who registered for membership of SRA. The lack of direct
access to levy payers was noted as a significant issue for SRA, particularly,
its ability to:
effectively consult with all levy payers on the appropriate
investment of their levy payments;
identify levy payers for voting in sugar polls; and
identify new and current levy payers for issuing Plant Breeder's
Another challenge in relation to developing and maintaining a list of
levy payers relates to the method by which the levy is collected. GRDC noted
that the grain levy is collected at the first point of sale from the buyer, not
the seller. While it is deducted from the seller, it is actually collected by
Another consideration is the reality that many levies are collected by
state governments for various purposes. Levies vary in value and remittance
times from state to state and in relation to the way they are calculated. While
some are calculated as a percentage of the value, others are on a per head
value basis with some on a sliding scale associated with the value.
ALPA voiced its support for a mechanism to identify levy payers which
incorporated all levies paid both on a state and federal basis in order to
ascertain a true picture of how many livestock are sold.
It argued in favour of a register of all levies paid which would include
information such as vendor identification, number of livestock sold, type of
livestock sold and the amount of levy paid. In relation to the livestock
sector, ALPA stated that:
This information is presently required to calculate and
deduct levies, but is not reported. This valuable statistical information will
aid with MLA voting rights amongst other beneficial possibilities for the
entire livestock industry.
Notwithstanding the various challenges to establishing meaningful lists
of levy payers, many submitters to the inquiry supported efforts to establish
and maintain such lists.
NGIA argued that if levies are a tax then it should be lodged with the GST
Another view was that lodgement of levies should be attached to business
activity statement returns, which would also mean compliance through the ATO.
In terms of responsibility, some submitters argued that it was the role
of the department to identify levy payers. Mr Robert Prince, CEO of NGIA made
the point that as the secretary of the department assigns the responsibility to
levy agents to collect the levy, that responsibility should also include
keeping all relevant details including: who pays the levy, where they are from
and the value of the levy that is collected.
Similarly, ALPA argued that a levy payer register should be maintained by the
department's levies unit and that a nationally-based register include vendor
identification, number of livestock sold, type of livestock sold and amount of
levy paid for each levy payer. It noted that all this information is 'presently
required to calculate and deduct levies, but is not reported'.
United Stockowners of Australia made the following observation:
The 'Levies Collection Unit' assumes an administrative role
similar to that of the Australian Taxation Office (ATO) in the collection of
taxation revenue. Given that the ATO use an identification number – Tax File
Number (TFN) – to identify and record individual(s) and business(es) in
relation to their activities and obligations under the Tax Act it is therefore
inconceivable that the ‘Levies Collection Unit’ has no such mechanism or
process in place that would achieve the same outcome as the ATO. This apparent
and discernible system flaw, we would argue, is in urgent need of correction.
The need for a levy payer database was identified across many industries
not only as a fundamental mechanism to provide for accountability, but also to
assist in establishing membership and voting rights of relevant RDCs. The
latter is further considered in the following chapter.
Levy rates and arrangements
While many levies are set at a percentage of farm gate value, others are
flat dollar rates. While some are based on weight, a few are calculated on the
basis of boxes or cartons, runners and square centimetres.
The way in which agricultural levies are applied, therefore, varies across
commodities as indicated below:
the pork levy is calculated at $3.125 per head;
the coarse grain levy is calculated as a percentage of farm gate
the stone fruits levy is calculated at 1 cent per kilo;
the mushroom levy is set at $4.32 per kilogram of mushroom spawn;
the cotton levy is calculated at $2.25 per 227-kilogram bale;
the turf levy is applied on square metres of turf;
the sugar levy is applied on tonnage (70 cents per tonne) with
both grower and milling businesses each contributing 35 cents
per tonne of cane;
the cattle levy is paid on a per head basis while the sheep levy
is paid on a percentage basis.
ALPA informed the committee that as levy agents for the livestock
industry, the fact that there are different collection methods across livestock
make the current system expensive, cumbersome and at times, frustrating.
Mr Andrew Madigan, CEO of ALPA, noted that in addition to the cattle levy being
calculated on a per-head basis and sheep on a percentage basis, state levies
also vary. While some state-based levies are calculated on a percentage basis
and some on a per-head basis, others are calculated on a certain amount of
Mr Madigan held the view that a review into levies collection needs to
take place across the livestock sector. He suggested a system whereby the
states and federal agencies establish one levy, which is transmitted to a
central agency from which the states can obtain their portion. To make his
point regarding the complexity of the current arrangements, Mr Madigan informed
the committee that:
If sheep or cattle are sold out of Victoria or New South
Wales there is no levy to be paid in New South Wales. But if someone from New
South Wales sells sheep in Victoria they have to pay the Victorian levy for no
benefit to them, so they can claim it back. It is just a red-tape disaster.
APAL argued that the high cost burden imposed upon the horticultural
sector in terms of substantial levy collection costs reflected the complexity
of the horticulture levy system whereby there are at least 40 different bases
or rates used in relation to each of the 50 horticultural levies varying from a
cents per kilogram method, to per square meter to an ad valorem rate.
The ACIL Allen review of Horticulture Australia Ltd (HAL) also highlighted the
complex levy arrangements in the horticulture industry resulting from levies
applied to nine different units (including cents/kg, $/tonne, cents/box, ad
valorem) and in excess of 40 different active rates being applied. The ACIL
Allen review further noted that the complexities were in part a function of the
number of peak industry body/HAL members making decisions about the levies and
the administrative process by which levies were conceived, implemented and
Evidence to the committee suggested that the complexity in levy rates
and arrangements, particularly where state and federal levies are paid, led to
confusion on the part of growers regarding levies paid. According to WA Grains
Group, some farmers are not receiving statements of their levies to reconcile what
they have paid and recorded, and complex arrangements had led to concerns
regarding overcharging. Mr Douglas Clarke, Chairman of WA Grains Group, suggested
that the overcharge had arisen because farm gate prices were not taken into
account by the traders when determining levy charges.
Mr Duncan Young, President of the WA Farmers Grain Council within the WA
Farmers Federation, made the point that the complexities of the system should
be addressed by way of identifying the simplest way to predetermine where the
farm gate price is.
NSW Farmers noted that ACIL Allen's review of HAL had recognised the benefits
of moving some commodities which attract the horticulture levy to an ad
valorem rate, on the grounds of reduced collection costs through simpler
administration processes. NSW Farmers further argued that application of the ad
valorem rate would also provide an automatic stabiliser, whereby the rate
of levy contributions – and therefore levy revenue – was maintained, given that
prices fluctuate in relation to production. However, evidence to the committee was
divided on the efficiency of an ad valorem rate with submitters such as
the NGIA suggesting that the application of such a rate for the nursery
industry would result in a significant increase in collection costs from the
current three to four per cent to that of 40 per cent.
NSW Farmers maintained that further consultation with relevant peak
industry bodies should be undertaken before any amendments to specific
horticultural levies were considered. Similarly, APAL raised several concerns,
including the need for industry consensus for such reform. It also cautioned that
a move to an ad valorem rate for horticultural levies may disadvantage
some industries within the sector and fail to reduce levy collection costs.
Another issue raised in evidence was the confusion regarding levy
application in the red meat sector. ALFA argued that amendment of the Primary
Industries (Excise Levies) Act 1999 was required to provide greater
clarity in relation to the payment of grain-fed cattle transaction levies. The association
described the current arrangements as 'ambiguous, confusing, inconsistent with
industry practice and inequitable'. ALFA also told the committee that the
matter had been raised with the department, which had acknowledged the flaws in
the current statute.
The point was also made that the diverse systems and means by which
levies are paid have implications for the capacity of industries to undertake
levy payer identification. NSW Farmers argued that this reality made it more
important that all RDCs develop levy payer identification mechanisms 'with a
preference for the automated recognition and grading of applicable rights from
the point of levy payment'.
The establishment of such a mechanism could provide the opportunity to review
levy collection with a view to streamlining the process and reducing
duplication, particularly in relation to state-based levies.
Approval and modification of levies
The government assesses all proposals to increase a levy against the
same principles applicable to a new levy.
The Levy Principles and Guidelines require industry bodies to demonstrate that
a proposed levy addresses a market failure and is equitable, efficient and
supported by the industry involved. Principle 2 concerns the introduction of a
new levy while Principle 12 details the process to amend an existing levy.
Beyond meeting the principles laid out in the guidelines, the manner in
which an industry works together to agree on the need for a levy or a change to
an existing one is a matter for each industry. In some industries including the
cattle, sheep and goat industries (and others operating under an industry-owned
RDC structure) levies can only be imposed or changed under legislation at the
request of industry, with a significant majority of producer votes in favour of
change, and approval by the minister.
Under SRA's constitution, levy changes require a majority positive vote
obtained through a formal Sugar Poll. Under its system, a poll is conducted
when the SRA board and/or member delegates recommend a change to the sugarcane
levy on the basis of an independence performance review.
The first such poll was undertaken in August 2012 to form SRA and fund it by
way of a single statutory sugarcane levy. The wool and dairy industries also
utilise a poll as the means to approve and re-approve respective levies.
One of the key roles of the representative bodies such as the prescribed
industry body (PIB) in relation to agricultural levies is that they make
recommendations regarding levy rates to levy payers in advance of levy payer
ballots. It was emphasised in evidence to the committee that this role cannot
be undertaken by RDCs as there would be a considerable conflict of interest if
RDCs were required to make recommendations about their own future revenue to
While all industries must meet the requirements under the levy
guidelines, levy changes are a matter for each industry. Therefore, there is no
consistently applied means of engaging levy payers across agricultural
commodities in the approval or re-approval of levies.
Similarly, while the responsibility for improving efficiency of the levy system
rests with the prescribed industry bodies and the Australian Government, there
is no regular mechanism to review levies individually or as a whole.
The opportunities for levy payers to engage in these various mechanisms are
considered further in the following chapter, in the context of accountability
to levy payers.
Demonstrating industry support
Under the levy guidelines, industries must demonstrate that there is
producer support for a new or modified levy. An industry must prove that it
engaged in consultation with as many potential or existing levy payers and
intermediaries involved in the collection of the levy as possible.
For a levy proposal to be considered by government, industry must show that
there is majority support from actual and/or potential levy payers. Further,
Principle 5 requires the initiator of the proposal to demonstrate that there is
majority agreement on the levy imposition/collection mechanism or that despite
objections, the proposed mechanism is equitable.
In regard to demonstrating industry support, the guidelines that that:
At present the Government interprets 'demonstrated industry
support' as support from those who choose to participate in a ballot and/or
A majority is defined as follows:
- 50% plus one of the voting allocations of those producers
who choose to vote in a levy ballot
- 50% plus one of producers who choose to vote in a one vote
per producer ballot
- 50% plus one of production of producers who vote in a
production based ballot
- 50% plus one of those who vote for all other types of
In terms of industry support, the primary factor is whether more than 50
per cent of levy payers vote in favour of a levy or levy change. When asked how
this was possible for industries that did not know who their levy payers were,
Mr Peter Otterson, Assistant Secretary at the department explained:
They have to be able to demonstrate that they have been out
there to identify potential levy payers and they can prove to us, through the
evidence they provide, that they know what the population is, that they have
contacted those people, that they have consulted with them and have had the
opportunity to have a say, that an independent voting process has been
undertaken and that the numbers they put forward demonstrate support. The question
about this is: how much more than 50 per cent is important? That is always the
Mr Otterson continued that while the 50 per cent related in the first
instance to enterprise, other matters that would be taken into consideration
included the amount of production represented by that 50 per cent of producers.
The levy guidelines state, however, that where an industry elects to
conduct a ballot for a new levy or levy amendment, voting allocation can be
based on either one vote per producer (business entity system) or that votes
can be allocated based on the amount of levy paid (or payable). It is for an
industry body to determine the type of voting most appropriate to its industry.
The guidelines further note that:
Historically, most industries that have conducted a ballot to
show acceptance for a new levy have opted to use the ‘one vote per producer’
option. The production-based model is generally not recommended for new levies
because it can be difficult to reliably identify levels of production and
producers are sometimes reluctant to reveal their production details.
To ensure that a ballot is representative of all potential or
actual levy payers, the Government will consider:
- if all producers have the opportunity to participate in the
- if a levy proposal has sufficient support from a reasonable
proportion of the industry’s production.
Sufficient support would be achieved by ensuring there is a
strong, participative consultation process.
The consultation process itself can be a complex one given the many
stakeholders that may be involved in the development and imposition of a levy.
An industry may have one or multiple peak industry councils. There may be one
or several recipient bodies for the levy. The producers of the product subject
to the levy can be widely disbursed and there may be a range of intermediaries
responsible to collect the levy.
Determining adequate industry support and how it is measured was a
reoccurring theme throughout the inquiry. It was exemplified in the mango industry.
At the 2011 poll to determine whether to increase the mango levy, questions
were raised in relation to the voting weightage. This was highlighted in
relation to the Emergency Plant Pest Response (EPPR) component of the mango
For the EPPR component of the levy/charge, of the 135 mango
grower enterprises which voted, 74 were in favour, and 61 were opposed. On a
production-weighted basis (capped at 20 votes per enterprise) out of the total
380 votes, 285 were in favour and 95 were opposed to the change to the EPPR
component of the levy/charge.
There was a low rate of participation in the ballot of 17.0 per
cent (135 valid grower votes versus an estimated 793 eligible voters).
The levy guidelines state that where no formalised industry voting
arrangements exist, 'it is the Government's intention' that the initiator
should conduct a vote of the relevant actual or potential levy payers to
demonstrate that a majority of the industry support the proposal.
Further, Principle 11 states that a review of levies should be conducted after
a specified period of time 'in the manner determined by the Government and the
industry when the levy was first imposed'.
The PC noted that the department had strongly encouraged industry
representative bodies to use electoral commissions and to conduct producer
polls in order to demonstrate support for a proposed new levy or a changed levy
However, only two industries are currently required to conduct a regular review
by way of a poll on levy rates – the wool industry must engage in a wool poll
every three years, while the dairy industry must review the dairy services levy
every five years. Both industries are required to provide three to five options
with regard to the future rate of the levy, one of which must be the capacity
to approve a zero levy.
Some submitters supported the introduction of a poll to introduce or
modify a levy. NSW Farmers argued that as levies take the 'form of a tax that
has been voluntarily consented to by a majority of the industry', producers
impacted by the imposition of a new or amended levy should have to demonstrate
support for or against the levy by way of a poll.
Notwithstanding this position, it also clarified that a balance should be
struck to ensure that the review processes associated with levy rates remain an
effective use of levy funds.
The point was made that, without a comprehensive list of levy payers,
there was considerable risk of such a process being discredited and of the
industry involved being brought into disrepute.
This threat applies to both industries which engage in a poll as well as those
for which a poll is prohibitively expensive and must, therefore, demonstrate
majority industry support in other ways. Evidence suggested that, either way,
the starting point to strengthen any such process and thereby alleviate the
risk of it being discredited, was that of the establishment of a grower or
producer database. The provision of such a database would enable industry
bodies to actually understand who and where levy payers are.
According to Australian Pork Limited (APL), employing the Australian
Electoral Commission (AEC) to conduct the poll was the most expensive aspect of
the process aside from the related costs of advertising, mail outs and
AMGA highlighted that polls amount to the diversion of valuable levy funds from
more useful investment which was outside the financial capacity of all but the
Furthermore, on top of the expenses in running a poll, evidence to the committee
indicated that preparing a levy proposal is time consuming. The PC noted that
on average, it takes industries around twelve months to put together a proposal
for a new or changed levy that complies with the Levy Principles.
WoolPoll costs $718,000 a year in actual project costs. The cost to AWI
totals $1.4 million per year, including the time and energy involved in
managing the poll. To put these costs in context: according to a 2014 audit,
AWI expended $82.7 million that year with levies received amounting to $43.3
AWI noted a series of downsides in relation to WoolPoll, including the
fact that it is a significant resource burden on AWI, in terms of costs and
demands on staff. It also submitted that the timeframe between polls was too frequent
and that discussions had been initiated with government to reduce the frequency
from every three years to every four or five.
WoolProducers Australia made the point that WoolPoll had been in place for 14
years and was due for specific review; to ensure that it is in line with best
practice principles, the expectations of growers, and provides an efficient
spend of levy funds. It noted in this regard that as wool growers continued to
express a strong desire for a more cost-effective and robust consultation
process, it was time for a specific and targeted review of WoolPoll.
DA held polls in 2007 and 2012 with the next due in early 2017.
The 2012 poll and independent performance review (required to be completed six
months prior to the poll) cost DA $720,000.
Of the total, the poll roadshow comprised $140,000 and the independent review
Following its 2012 levy poll, in response to feedback that the poll
process was 'costly, inefficient, time consuming and could have been done
better', DA set up an independent panel to review the poll process.
Some industry members raised concerns during the inquiry that the dairy poll
process was cumbersome and inflexible; requiring a considerable investment of
time and resources by both DA and levy payers.
Mr Ian Halliday, Managing Director of DA, informed the committee that the RDC
was required to send out a paper-based information memorandum, a paper-based
ballot paper, and demonstrate that levy payers had been consulted. He noted
that the consultation process with levy payers, which included 52 presentations
around the country and on-farm regional visits, took approximately six months.
Mr Halliday explained that, while there was a requirement to demonstrate that
DA had consulted levy payers, the level of farmer participation in relation to
some activities was very low. At one roadshow, for example, DA presented to only
A number of submitters raised concern with the cost of the dairy poll and
wool poll, and offered alternative solutions. Australian Dairy Industry Council
(ADIC) argued that a regular review of the dairy levy should be mandated with
five year intervals but that a poll should only be conducted when the review
recommended a change to the levy.
The South Australia Dairyfarmers' Association (SADA) suggested that as a
cost-effective alternative to the dairy poll, a vote could be conducted at DA's
AGM to confirm that the levy rate remain unchanged. If the vote were lost, a
full poll could then be taken within 18 months of the AGM. SADA further argued
in favour of a poll conducted by way of both electronic means and mail.
A similar proposition was made by the Western Australian Farmers Federation
(WAFF) in relation to Woolpoll. WAFF took the view that voting on the rate of
the wool levy could be undertaken by way of a special resolution at the AGM at
the same time as separate votes on R&D and marketing.
The use of AGMs raised questions regarding the distinction between members and
levy payers which is further explored in the following chapter.
Another matter raised in relation to the prospect of a regular poll was
the fluid nature of some industries which sees producers dip in and out of
production. AUSVEG made the point that the fluid nature of horticulture farming
meant that while a grower may produce leviable vegetables one year, they may
rotate to a non-leviable crop the next season or the following year. Therefore,
any list of levy payers produced in the horticulture sector may be redundant
within a single voting cycle. Efforts to engage them in a poll may also be
futile, given that they may not be levy payers by the time the poll is
Mr Richard Mulcahy, AUSVEG CEO concluded that:
Whilst we have historically supported, and continue to
support, a democratic and open process for levy imposition and investment, the
time and resources required to administer regular plebiscites would be onerous,
expensive and unlikely to receive a high voter turnout from growers. Given the
government does not have a definitive list of levy payers, the results would
also be difficult to validate or verify.
Notwithstanding the logistical complexities in managing a levy poll,
other concerns were raised regarding the appropriateness of a poll as a
mechanism of RDC accountability. AMGA made the point that a mandatory
(three-year or five-year) poll imposed on industries or RDCs amounted to a
'blunt instrument' that could do more damage than good as levy management
should not be reduced to a matter of turning the funding on or off.
It emphasised that polls are generally focused on past performance rather than
on the objectives of the new strategic plan and its potential impact. It
suggested that poor performance of RDCs should not be dealt with via a poll but
rather was a matter for government in conjunction with PIBs, on behalf of levy
Similarly, the Victorian Farmers Federation (VFF) made the point that a poll is
a mechanism to set the levy amount and that it does not actually set the
objectives of the RDC or its KPIs, to which an RDC should be held accountable.
AWI noted that wool growers could potentially respond to a negative independent
review of its performance by voting in favour of a zero levy and thereby
closing down the RDC. It stated that this occurred in 2009 when the independent
review was 'extremely negative' about AWI's performance. However, at the 2009
Woolpoll, growers chose not to vote zero but rather 'there was wholesale change
of the AWI Board'.
Periodic levy review
As previously noted, industries are obliged to periodically review their
levies. Principle 11 of the levy principles and guidelines requires that after
a specified period, 'levies must be reviewed against these principles in the
manner determined by the Government and the industry when the levy was first
One of the key discussions in relation to levies was that of the
regularity of levy reviews, the method of review with particular focus on polls,
and complementarity with the R&D cycle.
Some submitters were in favour of a review undertaken every five years.
Of them, submitters such as Citrus Australia specified that the review should
comprise a ballot where the vote is counted as a proportion of production.
APAL made the point that as research projects are generally about five years in
duration, if levies were subject to sunset at five years, the challenge would
be to address concerns that research projects which begin later in the cycle
would only have guaranteed funding for some, but not all, of the research period.
AWI argued that a business cycle longer than three years would be more
conducive to the investment and delivery of strategic R&D.
This three year or 'triennial business cycle'... in which AWI
is required to operate also creates an ongoing tension between balancing AWI's
responsiveness to its industry and government stakeholders, with its reason for
being – to invest in strategic RD&M. A three year business cycle is very
short and vulnerable to the winds of change which can invariably occur.
Others supported a review every six to nine years.
Mr Les Williams, a pineapple grower, argued that greater flexibility
would allow industry to be more efficient and responsive. He suggested that
levies should be subject to periodic review at least every five years as long
as the review did not require a full voting procedure without a clear desire to
Similarly, AECL and ALFA argued that there should not be an imposed and mandated
levy review and poll timeframe, on the grounds that such a review was not
necessary if it was not called for by levy payers, or because of the involved
In light of these concerns, AECL made the following recommendation:
That the Government does not automatically mandate the need
for RDCs to commission a poll among levy payers at set time intervals with zero
being an option unless a large proportion of levy payers has formally and
expressly requested this to occur.
However, during the lead up to its 2011 levy increase, the APL Board
recognised there would never be a 'right' time to go to the industry regarding
a levy increase. APL explained that:
The process takes time, during which attitudes, confidence
and unseen circumstances can always shift priorities. Cost pressures on
producers make it hard for some to see the value of further cost increases. An
affordable, staged approach to a levy increase was presented as an option and
this staged approach was supported by the Australian pork industry.
APAL argued that a call for a reduced or zero levy should only be
introduced at least five years subsequent to the previous vote with reserves
maintained to ensure that contracted projects are funded to their completion.
...research agencies and service providers would be very
reluctant to commit resources and effort to any project that has a life span
that exceeds the timing of a periodic election. They would perceive financial
flows to be tenuous at best, with real possibilities that funding could
through a project. This would be especially detrimental to agencies that engage
new PhD students and post‐doctorate
researchers as well as those that attempt to attract and maintain high calibre
agricultural and scientific expertise, both nationally and internationally.
This would be to the disadvantage of Australia’s horticultural sector which
already suffers from skilled labour shortages, especially in agronomy and
While some submitters supported the introduction of a mandatory poll,
others urged caution. NFF argued that the time and costs involved in polling
can detract from the level of funding that is available for use, and otherwise
invested in R&D. In this regard, Mr Tony Mahar, NFF Deputy CEO, made the
point that if you are 'constantly navel gazing and looking at how things are
being done then perhaps you are not having enough of a longer-term view to be a
bit more strategic about the investment in R&D that you are making'.
Modification of levy allocations
Revenue generated through levies can vary considerably. As a case in
point, CRDC noted that it was dependent upon annual cotton production which is
highly variable. In the last ten years CRDC has managed its operations through
cycles in annual revenue that varied from $8 to $31 million.
CRDC made the point that the ability to respond to these financial
circumstances, whilst continuing to drive R&D led industry improvements,
has been in no small part due to the flexibility enabled by the RDC model for
accountable but independent governance arrangements.
ALFA informed the committee that the current legislative framework makes
it extremely difficult to adjust and transfer levies between one or more of the
four grass- or grain-fed cattle levy streams (AHA, NRS, R&D and marketing).
It explained that as each levy is enshrined in several pieces of regulation,
any adjustment or transfer requires regulatory change. ALFA noted in this
For any regulatory amendment process to be successful, peak
industry councils must embark on an arduous, exhaustive and expensive consultation
process as set out in the Levies Revenue Service's Levy Principles and
ALFA made the point that there was limited flexibility under the
legislation that would otherwise allow levies to be more effectively managed.
This lack of flexibility is demonstrated by the fact that some levy streams
have high reserves while others have 'dangerously' low reserve levels, and yet
funds cannot be readily transferred between them.
Similarly, AFI noted that greater flexibility was required when some industries
still have a levy on the statutes but don't want to collect it and are not sure
what to do with the funds while others want to make modifications but are
stymied in making those changes. 
The Cattle Council of Australia (CCA) focused on the National Livestock
Identification System (NLIS) and Cattle Disease Contingency Fund (CDCF) to
highlight the need for greater flexibility in relation to levy allocations. It
informed the committee that the red meat industry had agreed that NLIS should
be transferred to AHA from MLA as AHA is viewed as a more appropriate
organisation for the system for reasons including its disease management
responsibilities. However, the transfer was complicated by the need to continue
funding NLIS with the simplest method available being a reapportionment of the
levy funds. However, under the current arrangements, the industry cannot do
this without undergoing an extensive consultation process – despite the fact
that the levy amount and usage has not changed.
The Sheepmeat Council of Australia (SCA) argued in favour of greater
legislative flexibility to allow for adjustment of levy allocations between
AHA, NRS and MLA (including both the R&D and marketing components). It
noted that under the current legislative framework, it was extremely difficult
to adjust and transfer levies between their streams because 'each levy is
enshrined in several pieces of regulation and hence any adjustment or transfer
requires regulatory change'. Further:
For any regulatory amendment process to be successful, peak
industry councils must embark on an arduous, exhaustive and expensive
consultation process as set out in the Levies Revenue Service's Levy Principles
and Guidelines document. The lack of flexibility is readily demonstrated when
one levy stream has imprudently high reserves whilst another has dangerously
low levy reserve levels, yet funds cannot be readily transferred between them
(even when the 'purpose' or use of funds is extremely similar or identical).
A primary case which exemplified the fundamental question of
representation (and whether it should be based on production or democratic
means) and the need to demonstrate adequate support for a levy change was that
concerning chicken meat levy. The Australian Chicken Meat Federation (ACMF)
informed the committee of the complexities involved in efforts to raise a
component of the levy from zero to pay back the chicken meat industry's share
of an emergency animal disease response. Dr Andreas Dubs, Executive Director of
ACMF, explained that the industry wanted to increase the zero-based levy to 3
cents per 100 birds to pay back the costs for the last three avian influenza
outbreaks (in the layer industry and the duck industry). However, as he
We have been really surprised at the red tape that had to be
cut through to do this. Here we have a levy which is pre-agreed by all
concerned as a condition of entering into the EADRA, which is the agreement
with the Commonwealth—the Emergency Animal Disease Response Agreement. However,
when we want to make it operational, the guidelines currently in place for
levies require us to provide the same type of submission and go through the
same type of consultation as is required for a brand-new levy to be put in
place. We believe that this is absolutely unnecessary and should be changed.
Dr Dubs made the point that meeting the guidelines in relation to
modifying a pre-existing levy included demonstrating industry support. The
point was made that this was an understandable requirement in relation to a new
levy, but that it appeared to be a cumbersome process when it comes to a
pre-existing levy which entails paying back a debt.
He argued that the only question should be whether levy payers have been
consulted in relation to the length of time of the spread of the payback and
supported a system in relation to the emergency disease response whereby
demonstrating the existence of the emergency disease should be sufficient to
trigger the levy.
Dr Dubs concluded that one such solution would be to have a special case in the
guidelines for an increase of a levy that relates to EADRA.
When it came before the committee on 15 May 2015, the department gave
its assurance that the chicken meat case had been resolved and that efforts
were underway to reduce the requirements in relation to biosecurity levies.
According to the department, the levy guidelines are undergoing revision to
streamline work around biosecurity levies in order to reduce the compliance
burden on industries.
Notwithstanding these efforts, the point remains that the underlying
principle of the guidelines is that changes to levies cannot take place without
demonstrated levy payer support. Therefore, the biosecurity levy raised
important questions regarding the balance between accountability and
representation with that of flexibility and responsiveness as Mr Peter
Otterson, Assistant Secretary at the department explained:
It raises an interesting question, because part of this
reasoning is that levy payers must have a say around striking a levy—in this
case it is striking it at zero—because it is very important; it is a tax. The
next thing is: what role should they have in the decision of raising it from
zero to some other number? What level of say should they have? Do you go back
and have the same test as the level of say or do you have a diminished say?
Challenges in achieving levy changes
In its 2011 report, the PC noted that whilst in a general sense,
periodic review is encouraged by Principle 11, in practice, the department:
... does not appear to monitor whether industries adhere to
their stated levy review plans, and the effectiveness and adequacy of most
levies has not been formally reviewed for many years.
Further, the PC suggested that as part of a proposed new annual
monitoring report – and to ensure that levy rates are adjusted if changing
circumstances dictate – the department be explicitly required to comment on
levy review plan matters.
Concerns were raised across a number of industries regarding the
flexibility of levy arrangements, in terms of changing the quantum of levies,
establishing a new levy, or changing the respective allocations across a single
The complexities and cumbersome administrative process involved in seeking such
changes, particularly with regard to departmental involvement, was raised as a
specific concern. Similarly, the ACIL Allen review of HAL noted of the levy
The associated processes are perceived to be cumbersome,
burdensome and risky. This means opportunities to rationalise levies, reduce
collection costs and confirm who the appropriate prescribed industry body
should be are not realised.
In its 2011 inquiry report on RRDCs, the PC observed that the relative
rarity of changes to levy rates was possibly due to the time and effort
required to adjust the levy rates.
It noted that some rates had not changed since the current levy system was
introduced in 1989. In its report on RRDCs, the PC noted the experience of
industries in seeking to change a levy rate or introduce a new levy as one in
which the process was slow, difficult and costly.
It recommended (recommendation 10.2) the introduction of an indicative time
limit of six months for the implementation of new levies, and changes to the
rates of existing levies, following receipt of a complying proposal. It further
recommended that as part of a proposed annual monitoring report on RRDCs, the
department should report on its performance against this requirement.
The PC's observations and recommendations were supported in evidence.
For instance, the levy rate for the grains industry has not been changed in 16
Mr Selwyn Snell, Chairman of Horticulture Innovation Australia Ltd (HIAL) told
the committee that changing the horticulture levy rate was difficult, and made
the point that upholding the 12 principles was demanding:
Actually I think it is so arduous that it puts people off
going to increase or decrease their levies, because sometimes it can be a
two-year process, and that is even before it gets to the minister's office.
Similarly, ALFA noted that while it is more easily able to adjust the
R&D and marketing levy allocations compared to the grass-fed cattle sector
(because of its direct membership model), the levy principles and guidelines
process 'makes this a costly and burdensome process'.
AMGA submitted that while the levy principles and guidelines provided a
useful framework for the imposition of levies, time constraints should be
imposed around the decision making process once levy applications are submitted
to the department. In the case of the process to increase the Agaricus Mushroom
levy, the process from development of the strategic plan through to final
government approval took over four years. AMGA noted that in its final
administrative review stage, the proposal was in the hands of the department,
two governments and three ministers over a period of two-and-a-half years.
AMGA's General Manager, Mr Gregory Seymour argued that in order to keep
industries informed, the decision making process should be more transparent.
He surmised that there were probably other industries which wanted to increase
their levy rates and enjoy higher R&D investment levels but which were not
prepared to endure the cost and invest the time required to undertake the
In July 2013, members of Thoroughbred Breeders Australia voted to
support the introduction of a statutory levy. The industry's formal request for
a levy was provided to government in November 2013. According to the Rural
Industries Research and Development Corporation (RIRDC):
Unfortunately, despite appearing to have met the requirements
for introducing a levy, the Thoroughbred industry is still waiting for final
approval and the required legislation. There is no indication of when this
might be forthcoming and until it occurs, the industry is unable to progress
its R&D investment plans. It is likely that there will be no horse-related
R&D funded during 2014-15 and it is unclear when they will be in a position
to move forward.
According to RIRDC, the difficulties experienced by the thoroughbred
industry were 'flowing through to the decisions of other industries'. It noted
that the fodder and tea tree industries were interested in moving towards a
statutory levy. However, they were reluctant to invest the time and energy into
developing a proposal while uncertainty remained as to whether it would be
RIRDC noted that certainty was required about the current R&D model, not
only for existing levy-paying industries but also for potential-paying
The Australian Fodder Industry Association (AFIA) noted in this regard
that while there was general agreement across its industry for a dedicated
fodder levy, there was a need for a system to create or impose a levy which is
thorough, yet simple enough to ensure that it is not an 'inhibiting factor to
an industry'. Further, it argued that the system should be simple and
cost-effective with the exact process reflective of the size and needs of the
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