Appendix 4
Chapter Three - Conclusions and Recommendations
Rural
Affairs and Transport References Committee Report – Biosecurity and
quarantine arrangements – Interim report: the management of the removal of the
fee rebate for AQIS export certification functions
3.1
As noted in the previous chapter, the Rural and Regional Affairs and
Transport References Committee (RRAT References Committee) examined DAFF's
implementation of the Export Certification Reform Package (ECRP) during its
2009 inquiry into the Management of the removal of the rebate for AQIS
export certification functions.
3.2
Throughout the 2009 inquiry, the RRAT References Committee noted that
overall, industry organisations were of the view that the reform process –
particularly the consultation process – had been poorly designed. The RRAT
Reference Committee's report also concluded that:
-
whilst industry is prepared to engage in discussions with DAFF
regarding the reform agenda, it is not prepared to pay what amount to
significant additional costs for the Government to become more efficient
(particularly when there is limited confidence that specific efficiencies can
be delivered);
-
the Government's decision to return to full cost recovery for
AQIS services has the potential to have a significant negative impact on small
to medium exporters – particularly in terms of regional exports and business
development;
-
whilst reforms to the AQIS Export Certification program may be
necessary, they should be phased in, with additional funding provided where
needed.
3.3
The committee notes that several of the concerns raised during the 2009
inquiry, and the conclusions reached by the RRAT References Committee, continue
to be relevant, and a number of these issues have been re-examined during the
committee's current inquiry process.
Consultation process
3.4
Evidence to the committee indicated that the efficacy of the Ministerial
Task Force (MTF) model of consultation varied between sectors. For some sectors
it has been successful, while for others, the model was not flexible or
inclusive enough to allow for effective consultation with all stakeholders.
Evidence also indicated that the level of consultation during the process has
continued to vary dramatically from sector to sector.
3.5
The committee acknowledges the concerns of those industry
representatives who indicated that they had been requested to maintain
confidentiality regarding the MTF consultation process. The committee is
concerned that this type of emphasis on confidentiality is not appropriate in
these circumstances. The committee believes that requesting MTF members to
maintain confidentiality has the effect of stifling debate and wider discussion
across industry sectors.
3.6
The committee notes that in maintaining its commitment to the sole use
of the MTF process, DAFF is now facing the situation of undertaking one-on-one
consultations with a number of industry sectors, organisations and small
businesses that were not included in the primary negotiations or represented by
peak industry bodies.
3.7
The committee received evidence to suggest that one of the reasons these
small businesses and organisations were overlooked during the consultation
process, is that DAFF currently does not have an appropriate system for
communicating with all key stakeholders. The committee regards this as
problematic, given that AQIS is moving toward becoming a more commercially
focused operation and there will be a continual requirement to consult with
industry and provide updates and advice regarding changes to policy, fees and
charges etc.
3.8
The committee also believes that DAFF's current inability to quickly
contact all members of a specific industry sector, brings into question DAFF's
ability to respond to a potential disease outbreak. The committee is seriously
concerned that in the event of an emergency – such as an outbreak of Foot and
Mouth Disease – DAFF does not have the means to contact all stakeholders
quickly and provide advice in a timely manner.
Recommendation 1
3.9
The committee recommends that DAFF develop and maintain a comprehensive
database (which includes current email addresses) and provides the means of
contacting all relevant stakeholders.
3.10
The committee notes that DAFF has previously given an undertaking to
refine and review the current MTF consultation process – including the terms of
reference and the scope of their membership. The committee is disappointed to
note that, to date, it would appear that this review has not been conducted.
Recommendation 2
3.11
The committee recommends that DAFF review its current consultation
model, with a view to developing a more flexible, more inclusive model that can
be used into the future.
Small operators
3.12
The committee notes that it has been following AQIS' management of the
removal of the fee rebate for AQIS export certification functions for some
considerable time. From the beginning of the reform process, the committee has
had specific concerns about the impact these changes will have on smaller
operators, including smaller abattoirs, exporters and cold storage export
facilities.
3.13
The committee also notes that it has voiced its concerns about the
impact on small operators in various forums, including hearings for the 2009
inquiry, several Senate Estimates hearings and throughout its current inquiry.
3.14
The committee believed that consultation was taking place across all
industry sectors. The committee also believed that all parties who would be
impacted by reforms would be able to raise specific issues of concern during
the primary consultation process and have time to make the necessary adjustment
to their operations. The committee is therefore disappointed to learn the
reforms (including increased fees and charges) appear to have come as a
complete surprise to a number of companies and small businesses.
3.15
The committee notes AQIS' offer to meet with individual businesses to
discuss their specific biosecurity and export certification requirements and
negotiate possible reductions in fees and charges. The committee is concerned,
however, that this commitment has been made only after there has been much
angst created for the smaller, non-processing businesses.
3.16
The committee is concerned that AQIS' proposal to conduct one-on-one
consultations with these smaller businesses may have come too late. The
committee is also mindful that there is a possibility some businesses may
experience financial difficulties – or be forced to close export premises –
before they become aware that assistance is available.
3.17
The committee will continue to monitor the progress of these one-on-one
discussions and negotiations to ensure that AQIS continues to consult
effectively with all industry sectors. The committee believes that AQIS should
accept responsibility for negotiating with all industry groups and individuals
and find solutions before these businesses incur any additional costs.
Efficiencies
3.18
The committee recognises the concerns raised regarding the reform of
export certification fees and charges prior to AQIS identifying substantial
efficiencies or cost savings. The committee also notes evidence which suggested
that the move to full cost recovery for export certification (without improvements
to AQIS systems and processes) would significantly impact exporters.
3.19
The committee shares the concerns raised regarding the extent to which
AQIS has been able to identify efficiencies and cost saving measures. The
committee also shares the concerns of those who question whether there is
currently sufficient incentive for AQIS to do so.
3.20
The committee notes, for example, the proposal put forward by Cherry
Growers Australia (CGA). CGA suggested that an independent committee be
appointed to review AQIS' structure and costs and make recommendations to
industry and government on actions to increase efficiency and reduce costs.[1]
CGA also argued that the proposed AAO model should be 'put on hold' until DAFF
has completed negotiations and the model has been accepted by the governments
of key export markets.[2]
3.21
The committee strongly believes that it is preferable, and more
equitable, to negotiate cost savings and efficiencies before businesses are
charged additional fees.
Certification rates for small consignments
3.22
The committee notes that some industry sectors – particularly those that
supply small, niche markets – frequently export small volumes of product via
air freight. The committee also acknowledges the argument put by small
exporters regarding the lack of flexibility within the new fee structure and
the negative impact this is likely to have on users of air freight.
3.23
The committee notes the proposal put forward by small businessman Mr
Greg Darwell. Mr Darwell suggested that the Government, through AQIS, should
investigate the possibility of reducing the costs associated with Health
Certificates and Halal Certificates where the quantity of product is less than
1,400 kg. Mr Darwell also suggested that, for small shipments, the fees should
remain at the old levels.[3]
Recommendation 3
3.24
The committee recommends that DAFF investigate and report to the
committee on the feasibility of the proposal put forward by Mr Greg Darwell to
reduce the costs associated with multiple certifications for small air freight
consignments. The investigation should define the eligibility criteria for
'small air freight consignments' and include a cost analysis for each of the
Ministerial Task Forces to ensure equitable treatment across commodity groups.
Extension of transitional
arrangements
3.25
The committee notes the views put forward by a number of submitters and
witnesses who proposed that the 40 per cent rebate should continue, to allow a
longer transitional period or until unresolved issues have been addressed.
3.26
The committee notes the suggestion from the Commonwealth Fisheries
Association (CFA) who argued that the Australian Government should consider
extending the rebate for another two years on either full or part of the 40 per
cent.[4]
3.27
The committee also notes the views put forward by the following
organisations regarding the extension of transitional arrangements:
-
The Cattle Council of Australia (CCA): who suggest that the 40
per cent contribution to export certification fees should be maintained until
the efficiencies and productivity gains of the reform process have been
delivered;[5]
-
AHEA: who argued that either the 40 per cent levy should be
continued or all central office functions (including EXDOC and market access
maintenance functions of AQIS) should be paid for by the Government;[6]
and
-
The South Australian Department of Primary Industries and
Resources: who noted that Biosecurity SA supports the principle of cost
recovery at a national level, but also recommend that cost recovery for export
certification should be extended to apply equitably to all risk creators and
beneficiaries, and to include importers as well as exporters.[7]
Recommendation 4
3.28
The committee recommends that the 40 per cent rebate for AQIS export
certification functions remain in place, and fee increases not be passed on,
until negotiations with all industry sectors have been finalised and
consultations with individual businesses have taken place.
Feedback
3.29
The committee is aware that there are some stakeholders who are
reluctant to raise concerns, or voice complaints, regarding AQIS services and
processes. The committee notes that one witness actually suggested that there
were some stakeholders who feared some form of retribution on the part of AQIS
should they 'speak up'.[8]
3.30
The committee is aware of several government agencies which have
developed mechanisms for providing confidential feedback. The Australian
Transport Safety Bureau (ATSB), for example has the Aviation Confidential Reporting
Scheme which allows people to report safety related issues on a confidential
basis.
Recommendation 5
3.31
The committee recommends that DAFF explore the possibility of developing
a mechanism whereby stakeholders can submit suggestions or complaints
confidentially or anonymously.
Watching brief
3.32
As noted previously, the committee acknowledges that negotiations across
some industry sectors are working toward (or have already reached) agreements
that are claimed to be acceptable to all stakeholders.
3.33
However, the committee notes with some concern, for example, that the
relationship between AQIS, AHEA and the Horticulture MTF appears to have broken
down. The committee also notes that a second advisory group has been formed –
Senior Horticultural Advisory Group (SEHAG) – and there appears to have been no
overlap or communication between this new group and the MTF. As a result,
negotiations in relation to the reform process for the horticulture industry
have not progressed and agreement on key issues of specific importance to the
horticulture industry has not been reached.
3.34
The committee intends to maintain a watching brief while negotiations
and work plans for each of the six industry MTF's are finalised and reforms
implemented.
Senator the Hon. Richard
Colbeck
Acting Chair
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