Introduction
4.1
Traceability systems can be designed in a number of ways, depending on the rationale for which they are introduced. However, the diversity and fragmented nature of the horse industry poses a challenge for the industry to find a common ground for agreement on the rationale and function of a national horse traceability register.
4.2
This chapter details key considerations and challenges identified by stakeholders that need to be addressed if a national horse traceability register is proposed. These challenges include:
establishing a clear rationale for a register;
navigating the fragmented nature of the horse industry;
determining what role existing horse registers may play in the development of a central database, the accuracy of this data, required information and coverage;
preferred method of identification;
the costs, funding and fees of establishing and accessing a national register;
privacy, access and oversight considerations; and
compliance, enforcement and education frameworks needed to support a national register's success.
4.3
Finally, this chapter considers options on how to progress a national traceability register, including jurisdictional considerations, the need for further consultation across industry, legislative requirements, the prospect of a pilot program and a review of the United Kingdom's (UK) Central Equine Database (CED).
Key considerations and challenges
4.4
The committee received evidence on a wide range of factors to be considered in the design of any future traceability system. These factors ranged from coverage and identification, to the use of existing registers and matters of privacy and compliance. The views of submitters are summarised below.
Rationale for livestock
4.5
As identified in Chapter 3, there are a large number of potential functions that a national horse traceability may serve. Despite having a large number of potential functions, the committee received evidence that argued a clear rationale is needed for any successful traceability system.
4.6
In Europe, this clear rationale was driven by food safety concerns, mandated by EU food safety legislation. In Australia, the National Livestock Identification System's (NLIS) rationale is driven by economic drivers, biosecurity, food safety and access to markets, which all serve as a means to support the traceability of cattle, sheep, goats and pigs. This point was recognised by the Integrity Systems Company (ISC), which spoke of the importance of an adequate value proposition to support compliance across all sectors of the industry.
4.7
According to Dr Roger Paskin, the success of the cattle traceability system was due to four key factors:
as an economic driver, which supports the tracing of disease and food safety to gain market access, particularly for the export market;
a system that supports the ease of operation, with mass-produced, affordable ear tags that upload data en masse to a national database when animals are moved;
a very strong public good element that addresses food safety concerns and has export industry support, which in turn is supported by government legislation to reinforce compliance with the system; and
unanimous support across the cattle industry that a traceability system is not only necessary but 'imperative if the sector was to survive'.
4.8
However, Dr Paskin suggested there may not be such a clear rationale for horse traceability. He noted a strong economic driver exists within the horse racing industry, along with there being a broad welfare driver in terms of locating animals during emergencies and identifying stray horses. Otherwise, Dr Paskin was of the view that economic and good public elements were lacking, which was further compounded by the high cost of microchipping.
4.9
Of the potential functions proposed, biosecurity appeared to be the primary rationale suggested to the committee for a horse register. Indeed, pre-existing work conducted by the NSW Department of Primary Industries (DPI) has been primarily driven by improvements to biosecurity arrangements for horses. Mrs Judi Tainsh, who identified biosecurity and food safety as a good starting point for traceability, highlighted that:
Once people understand that there's a benefit, and they have some input into what benefits we could get out of it, it could then be expanded.
Fragmented industry
4.10
Further compounding the issue of establishing a clear rationale for horse traceability is the fragmented nature of the horse industry. There were numerous references by stakeholders about the broad spectrum of interest groups that make up the horse industry. These include the sporting associations, equestrian, campdrafting, backyard ponies, stock horses and the recreational arm. All of these groups use horses differently, have different mobility requirements, and potentially all envisage a different purpose for traceability and associated funding arrangements. As explained by Mr Mark Waugh:
You've got so many groups and they have different needs and wants. Somebody who runs a huge property in Far West or North Queensland and has a herd of horses to essentially work their business is going to have completely different needs to somebody from…Equestrian New South Wales who's moving around eventing locations in New South Wales.
4.11
Animal Health Australia (AHA) recognised that the fragmented nature of the industry is what has held back the development of traceability. Whilst the AHA recognised that good initiatives have been implemented, the 'complexity of the industry itself' has created a unique challenge that differs from the food-producing-industries. For this reason, the biggest problem in relation to this disparate groups was:
…getting them all in a room to agree to…what are the key things we must all agree to? Yes, we all agree that all these things are important, but what are the key things that we must do right now?…If they could organise themselves to be very clear on what that is and how they need that helping hand through some seed funding to get this off the ground, I think it would be a lot easier for government as well. There's also the problem that we live in a federation and every jurisdiction has slightly different regulations regarding livestock and horses and where they fall into that.
4.12
Compounding the disparate nature of the horse industry was the lack of an national industry body to bring stakeholders together. The committee was informed that the Australian Horse Industry Council (AHIC) was the closest the industry has to a peak body. Mrs Tainsh observed that AHIC had played a key role in garnering support across the industry for a number of national initiatives, including the AHIC's Safe Code of Practice campaign and the Emergency Animal Disease Response Agreement (EADRA). Mrs Tainsh's experience both exemplified the complexities of forming agreement across the horse industry, as well as the key role played by the AHIC throughout the process:
…the horse industry is a bit quirky and everybody thinks that their little sector of it is the most important sector, and then other people don't want to work with that sector. We had a lot of that even through EI. That came to the fore where we had people complaining to us that Equestrian Australia or this one was trying to take over, or the campdrafters wouldn't talk to whoever. It didn't matter—everybody. That's where AHIC really came into its own, because it was seen as the independent body that gave independent information. I think that is the only way you'll get the system up and running: people have to have faith and trust in the body that's running the system.
4.13
The current President of the AHIC, Mr Mark Burnell, reinforced the central role played by the AHIC as a unifying entity across the industry 'to garner support and develop strategies for future improvements'; but noted that it had had difficulty maintaining membership in the past due to the lack of consensus on some issues. Presently, the AHIC has six registered member groups representing 34,000 horses.
Existing registers
4.14
Horse industry groups generally operate their own horse registers and identification systems. As outlined in Chapter 2, these registers vary, based on how they operate and the type of data they collect. The committee heard that these groups are likely to capture a significant number of horses; Equestrian NSW stated that '70 per cent of horse owners are part of some sort of association'. These horse industry groups and their pre-existing databases provide a potential starting point for the development of a national database.
4.15
The committee received numerous offers from a range of organisations to incorporate the information on existing horse registers into a central national register. The primary rationale for consolidating existing registers was that it would reduce cost, duplication of data and administrative and compliance burdens.
4.16
Submitters and witnesses did, however, express some concern about the risk of duplication of systems and data. The DPI was particularly cognisant of this risk because:
…we don't want to duplicate systems that are already in Australia. Government gets hit all the time for coming over the top of things that are already in place by industry that have gone ahead of the norm, and then by going to a common denominator we impose reg burden on those industries. The horseracing industry, for instance, has a very advanced system of chipping identification.
4.17
Racing Australia, whilst supportive of a data-sharing approach recommended that Australia look at overseas models, and argued that:
…if you're recommending a national register you should seek to design it as it exists in Britain, Ireland and France, where existing stud books can operate beside it and where there is an upload of the relevant data to the Central Equine Database, in the case of Britain, on a daily basis, but where you don't interfere with the way in which we use our database across our industry or the commercial activities we use our database for.
4.18
The UK's CED uses blockchain technology to interlink approved non-government bodies, including studbooks, to provide regular transfers of relevant information securely and easily from their own database to a national register. Equestrian NSW explained how such an approach could be applied to the Australian context, explaining that:
…modern IT systems don't rely on all the data to be collected and stored in one database. As long as the data is recorded in a consistent way, the databases can be quite easily linked and interrogated by having an overarching database management system. We could make all of our data about our 22½ thousand horses available to a service, through some security firewall process, and that would be a really good start.
4.19
The committee also heard that horses are classified as both a companion animal and as livestock, depending on each jurisdiction. Because of this, a number of stakeholders called for horses to be integrated into state and territory companion animal legislation. Arguments for and against this proposal were largely held by the Australian Equine Unification Scheme (AEUS) and the RSPCA.
4.20
The AEUS argued that companion animal legislation had the necessary enforcement and regulatory mechanisms needed for a horse traceability system, and the data found in these companion animal databases, which were held by local councils, could be integrated into a national database.
4.21
In response to AEUS's proposal, the RSPCA re-iterated its view that a database must be established at a national level, rather than at a local council level. Through the RSPCA's experience of investigative matters relating to dogs, it had to separately integrate registration databases across Victoria's 79 local government areas, which 'can be difficult and it doesn't give you a really good overarching picture about what's happening'.
4.22
Although there was general support for an integrated and interlinked national database, stakeholders identified three primary challenges:
the accuracy of existing databases;
determining what information is required for a traceability register; and
creating a register that captures the recreational sector and remote horse populations.
4.23
A final challenge discussed during the inquiry was whether a national horse traceability register holds the potential to address the problem of Australia's wild horse population.
Accuracy of data
4.24
The issue of accuracy was raised with the committee in two respects: in terms of the number of times a horse could be registered; and in terms of the information on a register itself.
4.25
Currently, each database operates in isolation, siloed according to particular sectoral needs. As a consequence, the committee received numerous examples that demonstrated the ease and legitimacy of one horse being registered across multiple databases. To demonstrate the complexities of horse registration, the AHIC provided an example of how a horse can be registered across numerous databases:
I'm a hobbyist breeder of thoroughbreds. I rehomed a mare who was an okay racehorse. She had four foals. I retired her as a thoroughbred broodmare and put her in foal to a section A Australian riding pony—a little palomino. I could register that thoroughbred mare as a section B riding pony. The subsequent foal was a registered Australian riding pony. It is also registered as a part Welsh and a part Arabian. It's now registered with Equestrian Australia and the Show Horse Council as a show horse. It's currently the Australian champion Arab derivative, and it's got a fantastic life as a show horse. Its mother is still alive and well and cared for, and still breeding a foal every two or three years. If the owner starts to take up dressage—for which the horse is broken in to ride as well—and she joins the local dressage club and maybe goes trail riding, there's one horse that has seven different registrations.
4.26
A further concern was the variable quality of the registers and the accuracy of the data. The Australian Continental Equestrian Group (ACEG) highlighted a number of issues in this area. It advised there were individual breeders who issued their own identification and pedigree birth certificates with no verification of accuracy. In addition, many of the registering organisations were small and run by volunteers, with varying capacity for ensuring accuracy of data. Often these registers were reliant upon the goodwill of horse owners to report a change in their horses' status, for example, when a horse dies.
4.27
In contrast, other registers were regarded as of sufficiently high integrity. The Australian Stud Book, Equestrian Australia (through its member organisations), and the ACEG, amongst many others are recognised internationally for their quality. The committee heard of the robust registration systems around Stock, Arabian and Quarter horses.
4.28
To overcome issues of accuracy, the AHIC suggested each register would have to undergo an evaluation against a set criterion before decisions were made on whether it could be incorporated into any national register. Further, incorporating information on existing registers would require the development of a national set of traceability standards for all registers to adopt. The ACEG stated that the system must be developed to recognise multiple registrations of the same horse across registers. Equestrian Australia spoke of the challenge of ensuring horse owners kept their registration information updated.
4.29
Mr Mark Waugh's evidence suggested issues with the accuracy of data were unavoidable, but as demonstrated by the UK's CED, the data integration process enabled the horse industry to identify errors with source data and update their databases. It was also put forward that a central database could address inefficiencies in administrative processes across the horse industry.
Required information
4.30
The information required for a national traceability register varies, depending on what function the register intends to serve. Establishing a clear rationale for a horse traceability register will assist with the development of the parameters needed to populate a national database.
4.31
Stakeholders provided a broad range of potential information requirements, including:
ownership, location and contact details;
breeder and breeding information;
silhouette details (height, colour and markings);
membership of show associations, clubs and breed registers;
veterinary records including vaccinations, tests, illnesses and injuries;
microchip, universal equine life number and Property Identification Code (PIC);
whether the horse had been involved in any incidents and whether it was suitable for certain purposes such as beginner riders or people with disability; and
the reasons for a horse's retirement from a certain activity.
4.32
Depending on the rationale and function of any traceability system, the information required of horse owners could potentially be onerous and overly complicated. For this reason, a number of stakeholders called for a simple register. The DPI's online survey found that 91 per cent of participants supported a national database recording a horse's place of residence, the owner's contact details and identification details. The DPI identified that these few datasets would provide the necessary information that would be of use during a disease outbreak, or natural disaster events. Further, this information would contribute to:
…a reduction in theft, a reduction in the misrepresentation of a horse's history, and better rehoming of lost horses and identification of owners of horses that may have been treated inhumanely.
4.33
The committee heard a number of arguments in favour of a simple register. The ISC emphasised this point, stating that the system should not be:
…complex, for producers or whoever to be a part of it; it needs to be seamless and integrated as part of their business management.
4.34
Animal Care Australia was of the view that unless a register was simple, it would not be adhered to and would not achieve its objectives. Equestrian NSW also called for the system to 'be as simple as possible', with the minimum data required that could achieve the desired outcomes of the register.
4.35
For a simple register to occur, the committee heard of five data requirements:
a microchip number (which includes a universal equine life number);
owner's contact details and location; and
4.36
The information requirements listed above would meet the biosecurity requirements listed by the Department of Agriculture as needed to monitor and control a disease outbreak.
Additional information requirements
4.37
Various stakeholders called for additional information requirements beyond the limited data requirements listed above. AEUS argued all information was required including training history, medical information, age, previous owner details and an image of the horse. Mrs Judi Tainsh stated that in an ideal world the register would also include the entire history of the horse, including its medical history or history of use; however, she equally recognised this would be huge task and as a first step, horse ID, location and ownership details would be required.
4.38
Horse SA encouraged the maximisation of benefits to horse owners by allowing a register that integrates and allows for:
free apps for stewards and on-course veterinarians at events;
the generation of data, maps, images, and graphics to ascertain the extent and value of the horse industry;
templates to support the purchase/sale of horses and agistment;
educational functionality; and
4.39
The ACEG called for a system that allowed for the uploading of breeding information, movement and performance reports.
4.40
The committee also heard that the register should be designed with capability for additional information requirements being integrated, if required. The DPI explained:
Increasingly, we are opening up databases that independent developers can take and add to if there's a need. That's where you do get the benefit. To drive the compliance we were talking about before, you need either a commercial driver or something that someone sees some value in. More information on it would add value and people would say, 'Okay. I can see a benefit in that.' Would we require it? No, because I think you start getting into realms outside of biosecurity and it also adds a lot of requirements that not everyone would want.
4.41
A flexible design for the register was also called for by AHA. It supported a database with general entry level base information, and beyond that:
…it will be up to the horse industry itself as to how it value-adds to that. There are animal welfare considerations, and there are work health and safety considerations as well, but it would be up to the horse industry to drive that.
4.42
The Department of Agriculture spoke of the minimum data requirements for a national register to fulfil a biosecurity function, and suggested that any additional information could be provided on a voluntary basis. As outlined in Chapter 3, a system designed on this basis would be similar to the UK's CED.
Coverage
4.43
The majority of stakeholders supported a comprehensive horse traceability register covering all horses across all industries, including non-commercial horse breed societies and associations of all breeds in Australia, and across the entire lifetime of a horse. However, questions were raised about how a register would encompass the recreational sector, people living in remote areas and the wild horse population.
Recreational sector
4.44
The committee heard that 70 per cent of horse owners across Australia were registered with an association, leaving an estimated 30 per cent of horse owners not captured by existing registers. According to the AHIC, there are potentially many thousands of horses not recorded on any existing register and, for this reason, existing registers were only a starting point for the development of a national register.
4.45
Incorporating the recreational sector into a national register was referenced by many as a particular challenge. The ACEG pointed out that a national register should be designed to encourage owners of a non-registered horse to engage with the system. As highlighted by the ISC, a value proposition needed to be established across sectors, and in the case of the horse industry, this value proposition must extend to the recreational horse sector.
4.46
The committee heard of a number of ways to develop a system that is considerate of the unique needs of the recreational horse sector. The DPI recognised that exemptions could exist in the system for those horses categorised as companion animals, which never leave the property (at which they reside). Mrs Judi Tainsh proposed that individual identification of such horses (through microchipping) may not need to occur until they are sold or taken off a property. Instead, horse owners in these situations could potentially register the number of horses held on a property, rather than individually microchipping each horse.
4.47
However, the RSPCA challenged proposals that exempted recreational horses that do not leave their properties. It asserted that investigations into horse welfare issues occur at properties where horses have been housed for their entire lives, and any exemption that prevents the individual identification of a horse and its owner would undermine the system. The AHIC pointed out that from a biosecurity perspective, even horses that remain on properties are at risk of coming in contact with diseases through the service providers who come into contact with those horses.
Remote populations
4.48
An additional consideration concerning the coverage of a national horse traceability register is for horses found in remote locations. Similar to the recreational sector, these horses may not leave the property at which they are located. Further, horse owners found in remote locations may not have the same level of access to veterinarians for microchipping and could be burdened by higher costs.
4.49
The Coalition for the Protection of Racehorses was supportive of potential exemptions to be applied to horse owners found in remote areas. It proffered that an alternative identification processes could be used to identify horses, or an extended buffer period for joining a register could be applied to horses in remote areas. This buffer period would allow for horses to be microchipped during a regular veterinarian visit.
4.50
Horse SA spoke of utilising technology, and in particular, a function to allow for photographs to be uploaded onto a database for horses found at remote properties. More broadly, AHA highlighted the importance of the horse industry being a part of any system design process, to ensure that all sectors of the horse industry, whether large or small (including remote horses and the recreational sector) were integrated into the rules and standards of the system.
Wild horse populations
4.51
There were also discussions about whether a national horse traceability register could assist with the management of Australia's wild horse population. The Australian Brumby Board indicated its support for traceability to cover wild horses, stating there was insufficient recording of wild horses that were captured, transported, slaughtered or rehomed. Horse SA spoke of the potential for developing a traceability system that incorporated the use of drones to photograph and geographically link wild horse populations.
4.52
The Department of Agriculture remarked that a national horse register should not track wild horses; however, Racing Australia was of the view that if wild horses were captured and domesticated, then they can be integrated into national register.
Method of identification
4.53
The committee heard of numerous methods of identification available for a national horse register. These include freeze branding, silhouette, DNA testing, microchipping and biometrics. Of these methods, microchipping and biometrics were primarily discussed.
Microchipping
4.54
The committee received significant support for the mandatory microchipping of all horses, supported by regulation on microchip standards. In addition, of all the identification techniques available, microchips were the most widely used identifying tool in the horse industry, including the equestrian and racing industries.
4.55
Dr Roger Paskin explained that horse microchipping involves implanting a microchip encased in a hypoallergenic capsule into the nuchal ligament (the ligament running along the top of the horse's neck). A trained person, typically a veterinarian, is required to implant the chip. It was also suggested to the committee that mandatory microchipping and registration might occur through veterinarians or through local councils.
4.56
The Australian Veterinarian Association's (AVA) formal policy states that '[h]orses must be permanently identified, and preferably by radiofrequency identification (i.e. microchip), for management, registration and identification purposes'. The RSPCA communicated that microchipping individual horses would be a vital first step to develop a national register, and it would support its investigators by providing a:
…tool to easily determine a horse's identity and owner details, which allows them to get in touch with the owner in a timely manner. Microchipping would also allow inspectors to easily identify individual animals where repeat visits are required and without the risk of misidentification.
4.57
Conversely, the committee heard opposing views about the viability of microchipping horses, in particular conflicting views about cost and reliability. Equestrian NSW made note of the comparable cost of microchipping a horse to other expenses of horse ownership, expressing the view that:
…all horses in Australia should have a microchip. To put that into context, to shoe a horse costs about $100 to $150, depending on where you are. To put a microchip in a horse costs $100. So it is a relatively low-cost option, and that provides a unique identifier for that horse throughout the land. You can track that horse with microchip readers and an app to list its location and any change of use.
4.58
The committee heard concern about the costs of microchipping horses, in particular for those in rural areas. Dr Paskin warned implantation can run to hundreds of dollars in rural areas, which is significantly higher than tagging technologies used for cattle traceability. He suggested the cost of microchipping could prove prohibitive for many recreational horse owners, particularly those in rural areas, and industry should examine alternative means of identification such as biometric imaging.
4.59
As previously noted, the Coalition for the Protection of Racehorses called for a delayed rollout of any microchipping requirements to reduce the financial burden on horse owners in rural locations. This would allow for the procedure to be incorporated into a standard veterinarian check-up. As noted in Chapter 3, this approach has been adopted by the UK by allowing horse owners to microchip their horses by October 2020.
4.60
Some stakeholders also expressed concern about the reliability of microchips; however, Equestrian NSW made clear that these issues:
…are very, very minor in the scheme of things. Microchips, as a piece of technology, are very reliable, they're very easy to insert and they are very easy to read, and I would suggest that the incidence of malfunctions is quite low, and if a microchip does malfunction for whatever reason then it's a relatively straightforward process to replace it.
4.61
A further issue brought to the committees attention was the failure by governments and industry to rationalise the microchipping guidelines and regulations. When queried by the committee, the Department of Agriculture explained while there had been an intention to develop a voluntary standard that would harmonise microchipping across jurisdictions, this proposal was met with some resistance. The proposed voluntary standard would have harmonised:
…the type of microchip that would be used and where it would be placed, so that you had a standard set of requirements. There were considerable resources put into that. I think trying to get agreement actually went over four years. At the end of the day, all the jurisdictions needed to agree, because there were changes to legislation that would have needed to occur. Unfortunately, we couldn't get agreement from everyone. They had concerns, and it depended on the jurisdiction. Many were in support of it, but of course you need all. There were things just about the resourcing and compliance—the practical issues with it.
Biometrics
4.62
The committee heard of alternative technologies which could be incorporated into a register, such as biometric imaging (facial recognition technology). Using a mobile-phone-based application, a photograph of a horse could be uploaded, along with related information, to a national database. This would be a low-cost alternative to microchipping. However, according to Dr Paskin, whilst the development of biometric imaging for cattle is advanced, it is yet to be developed for horses and would require significant research and development financing.
4.63
The committee was informed that a number of countries have commenced using biometrics as means to identifying animals, including horses. The DPI stated that the UK had started to integrate biometric data into its CED. Whilst the AVA advocated for microchips, it acknowledged the progress made to develop biometric technology, and that it 'could well be something that is brought to the fore'.
Costs, funding and fees
4.64
A vital component of establishing a successful national horse traceability register is sufficient funding, as demonstrated by the failure of the AHIC's register established after the equine influenza outbreak in 2007. In that circumstance, once seed funding had run out and with no prospect of additional funds being allocated for its operations, the AHIC was forced to close the system.
4.65
The evidence throughout the inquiry centred on how much a national horse register would cost to establish, who would pay for its creation and what fee structure should be in place once a register was established. Each of these considerations are summarised below.
Cost of a national register
4.66
The committee received little evidence on the actual cost of establishing a national horse traceability register. The DPI was not able to provide the committee with an estimated cost of a national horse traceability register; however, it was in process of developing a model to estimate the cost. The modelling would include the average cost to have a horse microchipped across different sectors of the industry. Further, the DPI's working group was in the process of developing a cost-benefit analysis to determine:
…the cost benefits of horse identification against the model of an EI outbreak today—plus using those other reasons around figures around stock theft, injuries and that type of thing.
4.67
The purpose of the cost-benefit analysis was to demonstrate to national and state regulators 'that there are more benefits than the cost of regulation itself', and 'that there are increased benefits' with traceability. However, DPI made note that a unique challenge for the horse industry was the size of its export market, which paled in comparison to other livestock industries.
4.68
The committee expressed concern about the cost and logistics of microchipping a potential horse population of up to, or in excess of, one million horses. In response, the DPI acknowledged that state jurisdictions were concerned about how this activity would be resourced, but remained optimistic. Mr Peter Day of the DPI told the committee that:
I think it can be done over time. You would find that if you introduced it over a period of time and had a very good information and communications package with it to explain the benefits and the merits, most people would comply. If horses are moving, they are normally going to a show, a club or an event. Once again, those shows are already scanning cattle and other animals for show there, so it's not an unknown situation. I'd have to take advice from the AVA…about the capacity of the veterinary fraternity to chip them over time. I think it would take some time, because I'd imagine not every vet does horses these days. They can be quite a difficult animal to deal with.
So I fully accept that there are some real implementation issues and some real cost issues. Once again, care would need to be taken with how we would roll that out, given that most state agencies these days are decreasing resources in biosecurity areas or putting resources into other priorities in that area. This would be seen as maybe putting a lot of effort into an area that is not generally seen as a production animal. They're not a valuable export commodity for Australia either.
4.69
Other stakeholders provided estimates of the potential cost to roll out a national horse traceability register. Mr Mark Waugh suggested the establishment of a register would cost anywhere between $2 million and $10 million, based on the UK's CED costing between one to three million pounds. Ms Robyn Lawrie argued the cost of development and implementation would be considerable, with ongoing costs for administration and maintenance, a view shared by the AHIC.
4.70
Insight into the potential cost of a national traceability register can be derived from existing traceability registers for livestock. The committee heard that the NLIS database was:
…funded through a combination of industry levies and matching government funds for R&D levy investment. The total investment in the NLIS database and associated support services for the 12-year period between 2006 and 2017 by ISC…was around $65 million, and annual operating costs for NLIS over that 12-year period were approximately $5.4 million.
4.71
Ongoing ISC investment into red-meat integrity programs for the 2017–18 financial year was $12.3 million and $11.8 million for 2018–19. The gross economic benefit to the industry, from 2015 to 2020, was estimated at $316.7 million. The ISC also highlighted that investment was needed for both the 'central database and the supporting infrastructure to underpin the system'. Producer costs were largely due to identification itself, due to the costs associated with identification technology (ear tags) and its application to their animals, along with reading equipment.
Funding for a national register
4.72
A further issue about the cost of a national traceability register concerned which stakeholders would be required to pay for the system. A common response observed by the DPI was that 'everyone saw the benefits but no-one wanted to pay for it'. This type of commentary was also communicated to the committee.
4.73
Equestrian Australia asserted that its members would not pay for the system. However, Equestrian NSW opposed Equestrian Australia's stance, and instead thought it would be reasonable to expect horse owners to pay for the microchip and have government pay for the overarching service. Similarly, the Welsh Pony and Cob Society stated it did not support a model funded by the pleasure or breeding horse industry due to existing financial difficulties experienced by many in those industries.
4.74
Racing Australia offered to 'pay for the cost to upload [data] to the national system'; however, it opposed any requirement for its members to pay for access to a national register because they have already paid for the privilege of accessing the Australian Stud Book. Racing Australia added that it supported a cost-recovery measure, relative to the racing industry's horse population of ten per cent:
…there is an unequivocal recognition within the sport—that a national traceability register would be implemented on a cost recovery basis. The reality is, thoroughbreds represent 10 per cent of the Australian horse population. If there was any suggestion that thoroughbred racing should subsidise other leisure sports—and I come from equestrian and stockhorse society backgrounds, so I understand there's a vast lot of horses out there—our view is that cost recovery is a measure that should be undertaken proportionate to the horse population that thoroughbreds comprise within Australia.
4.75
The committee was made aware of a wide range of views on how a traceability system might be funded. It was emphasised that the costs for horse owners would affect support for a register, and there was significant variation in the financial capacity of horse owners.
4.76
The NSW Farmers' Association submitted that it would not support a significant cost burden being placed on industry as this would likely lead to noncompliance; however, it added that based on the experience of the productive livestock sector, a co-investment model would work:
If you trade sheep, if you trade cattle, you have to invest in that system, as well as government investing in it, because we want continued trade market access. If you make a decision to have an animal that could pose a risk to another animal or to human health, from our perspective we think that you probably need to chip some money into that. That's why we have EADRA and AUSVETPLAN and cost-sharing programs in the case of a large outbreak of a disease.
4.77
The committee heard this co-investment/hybrid model would require initial seed funding from government or industry, with ongoing operation potentially funded on a user-pays basis. Mrs Judi Tainsh summarised the primary issue concerning who would pay for the register on an ongoing basis:
…it's definitely going to need some seed funding from government to get it up and running. The horse industry, as you've heard before, hate having to pay for things if they can't see a benefit at the other end, and it's really hard to sell the benefit of such a system to the average horse owner. It is an industry-pay initiative, really. If industry want to improve and be able to get with the rest of the world, they've got to be prepared to put their hands in their pockets. So I think perhaps it needs a lead from government, but there needs to be a commitment from industry that they'll fund it going forward.
4.78
This view was also shared by AHA, who stated that the NLIS was created through:
…seed funding provided to the red meat industries for the development of their own integrity systems. I think that government can play a role in providing some seed funding, but that also, like in the red meat industry, needs to be matched to a certain degree by the industry itself. And the industry needs to have ownership of that database, because it's the industry that is going to have the ownership of it and drive it.
4.79
The ACEG highlighted that before any determination is made about who should pay, consideration needs to be made about why the system is being built. As an example, if the system was built purely for compliance purposes, then government should be made financially responsible for the system. However, if:
…you're building the system to try to grow and develop an industry which could contribute much more to Australia's economy than it does, then I think the person who pays would be a different person. Now, somewhere in the middle of that there may be a combination. But I think it's important to understand what the purpose of the system is.
4.80
The committee raised the argument that financial responsibility for horse traceability register should be carried by industry, which was calling for its implementation. In response, Equestrian NSW reminded the committee that the equestrian non-thoroughbred industry contributed approximately $1.3 billion to the NSW economy each year; however, biosecurity itself was a shared obligation between government and the community. For this reason, Equestrian NSW believed it was 'reasonable for government, industry and the community to share the cost of having a new system, because we'll all benefit from what it's going to achieve'.
4.81
AHA expressed the view that the question about ongoing funding required to maintain a national register would need to be answered by industry. The AHA pointed out that:
There are a number of representative industry bodies in there; some of them are more affluent than others, and those affluent ones have a greater value attached to that database too.
4.82
Other submissions supported funding through taxation on gambling revenue, or contributions from the racing industry. The Coalition for the Protection of Racehorses called for funds to be extracted from unclaimed winnings from gambling in each state, or a levy being applied to all betting turnover made by the industry and by horse breeders. It was also suggested fines might be a source of revenue, subject to a register having a compliance function.
4.83
The committee was advised of a Department of Agriculture Horse Industry Consultation Committee meeting where it was disclosed that the biosecurity arrangement was anticipated to have 'a surplus of just under $21 million for the period 1 July 2018 to 31 March 2019'. The committee was later informed that this surplus was through cost recovery (Cost Recovery Reserve) from across the whole biosecurity space. On notice, the Department of Agriculture clarified that whilst the overall biosecurity cost recovery reserve as of 30 June 2019 was $36.319 million, the balance for horses was in a deficit of $0.689 million. Due to the deficit in the horse arraignment reserve, there was no surplus funding available for horse related activities in accordance with the Biosecurity Cost Recovery Implementation Statements.
4.84
The committee queried the Department of Agriculture whether the agricultural research program holds seed funding potential. In response, the Department explained the system is funded through co-contributions from levy payers (producers) and matching co-contributions from the Commonwealth. These funds are allocated to:
…research and development corporations that are independently run by industry associations. So the department doesn't manage those research investments; the industry does.
Fee structure
4.85
Various stakeholders suggested a user pays model. Fees might be charged, for instance, on initial registration, ownership transfers, alterations or updates to registration, addition of veterinary information, and access to information.
4.86
Some submitters who supported a user pays model suggested fees might be differentiated—modest for recreational horse owners, higher for breeders, and higher for the registration of stallions and colts. Fees might be waived for rescued or adopted horses.
4.87
ACEG advocated for a system offered for free to upload baseline information (for example, meeting biosecurity requirements) and then offering a user-pays system for any additional functionality created over time:
…for the initial user to put his name and his horse's name down, because, if you start charging, they won't. If they go further into the system and they get more information out of it, they will have to become a member and they will have to pay for it.
4.88
Racing Australia reminded the committee that its members are already paying for the privilege of accessing the Australian Stud Book, and for this reason, any fee attached to a national horse traceability register would be effectively charging its members twice. Harness Racing Australia explained its members' perspective, who have:
…already paid registration fees and for [a] lot of activity on the way through. We've maintained and held together the integrity of a database and would be more than happy to offer that information into whatever the traceability register looks like. We wouldn't expect that there would be a cost in terms of moving them off one database or one system and into another. So that was where we were coming from in terms of the expectation, should this occur.
Access, privacy and oversight
4.89
An effective national horse traceability register requires stakeholder access to data contained within the system. However, access and the data contained within a database must be protected from misuse and adhere to privacy laws.
4.90
The committee received a range of views concerning access to a horse traceability register's data. Various stakeholders called for information on the register to be made available so the public could search for horses, breeders and owners, and understand the history of a horse. The AEUS and the Coalition for the Protection of Racehorses made clear that people need access to the register to make an informed choice prior to purchasing a horse and to address fraud within the industry.
4.91
Alternatively, others called for a more restrictive model. The Townsville City Council suggested access to the database should be restricted to government, authorised organisations and veterinary professionals. The DPI proposed that:
Some societies and some stud books may have the base data and could add to it and then, as an attraction to membership, they could provide that data publicly so that people could print it off as a certificate to show the background of a horse and the type of thing.
4.92
The committee heard that the UK's CED provides a working model designed to accommodate privacy laws with access to the system. Mr Mark Waugh explained that the CED requires users to identify themselves with an official identification document, such as a driver's licence, a passport or some other form of photo ID. Once verified, users are able to access entitled information across the system. Mr Waugh is of the view that a similar system could be designed in Australia to adhere to the Privacy Act 1988.
4.93
Concerning ownership of the database, the RSPCA raised a concern that privately owned databases can be difficult to access. For this reason, the RSPCA advocated for a government-run national register that allowed for authorised officers to have access to the database's information.
4.94
Animal Care Australia suggested the establishment of a new government department and industry ombudsman. Bitless Inc also argued for a new department to take on the task of registering and tracing horses, and ensuring compliance. It could also be responsible for national animal welfare standards.
4.95
It was also suggested that whilst the government might create the standards and regulations, the database itself and its management could be outsourced to an independent authority.
4.96
The ISC informed the committee that it would certainly look at hosting a horse traceability register, if established. However, the DPI pointed out that horse traceability cannot simply be tacked onto existing traceability systems for livestock. DPI spoke of opposition from the livestock industry that invested in establishing the NLIS and that the intended purpose of horse traceability differs from other livestock systems.
Compliance, enforcement and education
4.97
There was general support for a compliance and enforcement regime to accompany a traceability register. Various submitters suggested the need for active enforcement, including penalties reflecting the importance of a register to biosecurity, disease prevention and animal welfare. The AHIC reminded the committee that 'compliance could be difficult', whilst the DPI warned that the:
…level of resources that would be required to enforce compliance of any horse ID scheme should not be underestimated and is of concern.
4.98
The importance of compliance, enforcement and education was exemplified through the experience of the ISC. As noted in Chapter 2, the ISC made reference to the importance of defining the roles of industry and government concerning compliance and enforcement, as well as ensuring adequate resources are available over time to buttress ongoing compliance. The erosion of resources subsequently impacted on the ISC's ability to educate stakeholders, which ultimately undermined compliance.
4.99
The committee heard that the value of compliance within a national register would influence its design, funding and stakeholder engagement. The ACEG expressed the view that if the system was designed purely for compliance purposes, then the government should be held financially accountable for the register. Further, a compliance-orientated system could impact on stakeholder engagement with the system. The ACEG was of the view that the UK's CED is a compliance-orientated system, and for this reason, 'people immediately try to find a way to avoid them'.
4.100
The DPI linked the value of traceability to compliance, highlighting the importance of people needing to see value in the system or a commercial incentive to drive compliance. However, the DPI added that it would not be a case of tough enforcement, rather most people in the industry already do the right thing and a traceability register would be 'one other additional requirement, which I think most people would comply with'.
4.101
With reference to the NLIS, the ISC informed the committee that it was not directly responsible for ensuring compliance; rather it provided the data to government to monitor compliance with record keeping of movements and traceability.
4.102
Of equal importance is education. This point was emphasised by the ISC, when asked what were the key lessons learnt from the NLIS:
…in terms of communication, education and training, it makes it a lot easier if you've got a consistent message and package that you are delivering. In terms of the communication and education, you cannot underestimate the requirements in that space. There was a lot of investment when the systems were initially implemented, and that investment needs to continue over time. We have so many new entrants into the industry that raising awareness around the requirements for and the importance of traceability is an ongoing effort. You can't underestimate the time and the cost associated with that education program.
Going forward
4.103
The committee's inquiry into a national horse traceability register did not occur in a vacuum. Rather, the committee received an overview of existing work that has gone into consideration of a national register and advice on the next steps needed to progress this issue.
4.104
As previously discussed in Chapter 1, the DPI's working group into a national horse traceability register contains members from across state and territory jurisdictions. This working group is due to report its finding to the Agriculture Senior Officials Committee in March 2020. This report may make the case for horse traceability, including a cost-benefit analysis. Based on the report's recommendations, consensus on how to proceed would need to be reached between Commonwealth, state and territory representatives.
4.105
The need for consensus and collective action across government was emphasised by the DPI. It explained that without consensus and agreement across all jurisdictions, a national horse traceability register would be rendered impossible because:
It would be very difficult for New South Wales to bring the scheme in by itself—horses, by their nature, are owned by people who are moving over state boundaries. We don't want to have a system where we have to have inspectors on the state border. It can't happen in the modern era. I can't see it moving ahead unless we get support for a national scheme, which is why we keep hammering away at the national committees.
4.106
If agreement is achieved, the committee heard that further actions are likely to include the need for extensive consultation and engagement with all sectors of the horse industry, including a full industry survey to quantify the economic benefit of the horse industry; investigate the effectiveness of the current PIC system; and obtain other meaningful information.
4.107
In addition, considerable effort would be needed to establish consensus across the horse industry about what purpose and rationale a national horse traceability register would serve. And once agreement is established between industry and governments, then attention would then be directed to establishing legislative and regulatory alignment across the all jurisdictions. The AHA and Department of Agriculture forewarned that establishing legislative consensus would be difficult and could take a considerable period of time. Further, the legislative role of the Australia Government is limited due to the relevant legislation existing under states and territories respective legislation, through the Council of Australian Governments.
4.108
Finally, consideration would also need to be made on how to proceed with a national horse traceability register. Namely, whether a pilot program is established prior to a national rollout, by sector or jurisdiction. Although there was overall support for a pilot program, the DPI warned that a pilot would be difficult because '[t]here would be a lot of issues with implementation', a point also made by ISC through its experience rolling out the NLIS. Whilst the ISC identified a number of challenges with a pilot rollout of NLIS, it also recognised:
…you can stage an implementation. I think the key is that that implementation is consistent. So, wherever possible, you try to minimise differences between jurisdictions. It may still be of benefit and necessary to do it in a staged way, but trying to do it in a consistent way is probably the key.
4.109
The committee also received numerous references to the UK's CED, with many stakeholders arguing that the UK's system would provide valuable insights into the creation and implementation of a national horse traceability register.