Introduction and background to the inquiry
Terms of reference
On 23 June 2010, the Senate referred the following matter to the Senate Standing
Committee on Rural and Regional Affairs and Transport for inquiry and report by
22 November 2011:
(a) the adequacy of current biosecurity and quarantine arrangements,
(b) projected demand and resourcing requirements;
(c) progress toward achievement of reform of Australian Quarantine and
Inspection Service (AQIS) export fees and charges;
(d) progress in implementation of the 'Beale Review' recommendations and
their place in meeting projected biosecurity demand and resourcing; and
(e) any related matters.
The inquiry was subsequently re-adopted by the Senate Rural Affairs and
Transport References Committee (the committee) in the 43rd
On 22 November 2010, the Senate granted an extension of time for
reporting until 28 April 2011. This reporting date was subsequently extended
until 21 March 2012.
The inquiry was advertised in The Australian on 30 June 2010 and
13 October 2010. The committee also sought submissions from interested
organisations, agencies and individuals. Notice of the inquiry was also posted
on the committee's website. The committee received 79 submissions, including
twelve supplementary submissions and two confidential submissions. A list of
submissions is provided at Appendix 1.
As noted above, part of the terms of reference for the inquiry involved
the examination of the 'progress toward achievement of reform of Australian
Quarantine and Inspection Service (AQIS) export fees and charges'. Given the
timing of these reforms, the committee resolved to inquire into the issues
raised in term of reference (c) separately and table an Interim Report on its
As part of its inquiry, the committee followed the progress of the AQIS reforms
through the Senate Estimates process. In addition, the committee wrote directly
to a number of key stakeholder groups, organisations and individuals seeking
submissions in relation to term of reference (c).
On 7 and 8 July 2011 and 29 November 2011, the committee conducted
public hearings specifically to take evidence regarding the impact of the
removal of the fee rebate for AQIS export certification functions. A list of
the witnesses who attended these hearings is provided at Appendix 2.
Since 2001, the Australian Government has provided a contribution toward
the cost of providing export inspection and certification services to the meat,
grain, fish, dairy, live animal and horticultural export industries. In
accordance with Government policy, the costs of the services provided were met
through 60 per cent cost recovery from industry and a 40 per cent government
In early 2008, the Government commissioned an independent review of
quarantine and biosecurity arrangements which was conducted by a panel and
chaired by Mr Roger Beale, AO. The final report, One Biosecurity: A Working
Partnership (the Beale report) was released in December 2008. The Beale
report proposed significant changes to Australia's biosecurity system and
recommended a significant package of reforms, including that:
Export certification functions should return to 100 per cent
cost recovery as scheduled at the beginning of July 2009, noting that this
would require an early decision and announcement by the Government to allow
businesses to prepare for the additional costs as well as for the necessary
consultation on revised fee structures.
The Beale report noted that the policy objectives of the 40 per cent
subsidy of the costs of export inspection and certification (introduced in
2001) were 'unclear, and are unlikely to qualify as a community service
obligation'. The report stated that:
[T]his change should be accompanied by greater use of
co-regulatory arrangements, such as compliance agreements, to reduce the cost
of the regulatory service wherever possible. In addition, the Commonwealth
should enhance efforts to defend Australia's export systems and gain additional
market access, including through technical market access and multilateral,
regional and bilateral negotiations.
The Beale report also noted that there were both efficiency and equity
dimensions to the principle of cost recovery:
Efficiency considerations...mean that exporters must consider
the costs of meeting biosecurity regulations imposed by importing countries,
some of which are incurred in Australia. These costs may influence exporters to
decide which export markets they should target. They also provide a motivation
for those paying the relevant fees (such as customs agents, shippers or
exporters) to probe the basis of cost recovery determinations and advocate more
efficient ways of reducing costs and risks...
Equally, it means that Australian exporters who earn income
from overseas markets because of regulatory services provided by the Australian
government are not asking Australian taxpayers to fund the health and
biosecurity protection of the citizens of other countries.
Regulations and Export
Certification Reform Package
The Senate Rural and Regional Affairs and Transport References Committee
examined these issues as part of its 2009 inquiry into the removal of the rebate
for AQIS export certification functions. The committee's report (tabled in
September 2009) recommended that the Senate move to disallow the Export Control
(Fees) Amendment Orders 2009 (No. 1).
These regulatory changes were intended to facilitate the implementation of full
cost-recovery for export certification.
Following the disallowance of the Orders on 15 September 2009, a series
of negotiations resulted in the Government putting forward a $127.4 million Export
Certification Reform Package (ECRP) to support the reform process. The
Government also reinstated the 40 per cent rebate until 30 June 2011.
Specifically the ECRP provided:
- $85.3 million for fee rebates to assist exporters to transition
to the new fees and charges;
- $16.1 million for reform of the regulatory and export supply
- $26 million for meat inspection reform.
The disallowance of the Export Control (Fees) Amendment Orders 2009 was
rescinded on 25 November 2009.
As part of the reform process, the Department of Agriculture, Fisheries
and Forestry (DAFF) has worked with the commodity export industry through six Ministerial
Taskforces (MTFs): meat, horticulture, grains, dairy, seafood and live animals.
The MTFs are required to develop work plans with the aim of introducing
efficiencies into the export certification process, primarily by reducing
Mr Greg Read, DAFF, described the objective of the reform process in the
The mantra, if you like, at the onset of this process was to
ensure the lowest regulatory cost model possible while not putting market
access at risk. At the commencement of this, the drive was around the most
effective and efficient model that did not require one dollar more of
industry's resources than necessary while still meeting the requirements of
The committee appreciates the time and effort of all those who provided
submissions and attended public hearings. Their work has assisted the committee
A note on references
References in this report are to individual submissions as received by
the committee, not to a bound volume. The Hansard transcripts of the
committee's hearings are available on the Parliament's website at www.aph.gov.au.
References to the Hansard throughout the report are to the proof transcript.
Page numbers may vary between the proof and the official transcript.
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