Bringing democracy back to ag levies

Because they are compulsory, levies are a kind of taxation

IN July I moved a motion in the Senate to disallow regulations that would increase compulsory levies on onions, mangoes and mushrooms. My aim is to bring about long overdue reform of all agricultural levies.

Because they are compulsory, levies are a kind of taxation. Hundreds of millions of dollars are collected from primary producers with many careers relying on them. It is important for levy payers to receive value for money.

Despite assertions to the contrary, I have never sought the abolition of agricultural levies. I am sceptical about how well some are used, but my view is that if primary producers vote to impose taxes on themselves, that is their right. The problem is, most levy payers rarely get to vote.

The two reforms for which I seek the Agriculture Minister’s agreement are, firstly, for levy payers to be given a regular vote as to the level of levies they agree to pay, including the option of paying none, and secondly, in industry sectors where there are wide disparities in the size of producers, that there is proportional voting in line with the size of their compulsory levy contribution.

This need not be expensive. A voluntary postal vote supervised by an independent organisation like the AEC, based on a register of growers, is all it would take.

Establishing the register, if none exists already, can itself be based on voluntary enrolment.

Having spent more than thirty years in agriculture, I have lost count of the number of times producers have complained to me about the obligation to pay levies and their inability to discover or influence how they are used.

As the system now operates, the only producers who have a regular vote on whether to continue paying levies are wool growers and dairy farmers. The WoolPoll, conducted every three years, and the dairy industry poll every five years, both give producers multiple levy choices starting at zero.

Although WoolPoll makes no allowance for production size, it is regular and democratic, unlike the dozens of other levies currently in operation. Some have not been voted on for over a decade, denying producers any say in whether they should be adjusted or continued.

Since I began my efforts to bring some democracy to the levy collection system, it has become apparent that there are industry groups very resistant to the idea of allowing their members a regular democratic voice. That begs the question of why this is so.

If industry organisations are confident their marketing campaigns using producer funds will produce good outcomes for their members, they have nothing to fear from seeking their support. The same goes for R&D expenditure; all they need to do is convince levy payers.

Indeed, such a system would focus the minds of those whose livelihood relies on the continuation of levies to produce tangible results. A focus on performance, or value of money, threatens nobody.

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FarmOnline
David Leyonhjelm

David Leyonhjelm

has worked in agribusiness for 30 years and is a Senator for NSW representing the Liberal Democrats.
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READER COMMENTS

Alistair Watson
20/08/2014 11:11:59 AM

You mean 'invites the question' not 'begs the question'!
Gecko
20/08/2014 11:35:20 AM

Senator Leyonhjelm's views on Australian Agricultural industries are well known. He is a threat to every farmer in Australia. The arrangements on how a levy for any particular ag industry RDC should be increased is the problem. It must have more than the majority (75%)support for any increase which then requires the proponents to clearly identify why an increase is justified. In most cases it is and driven by grass-roots farmers. The levy must remain compulsory otherwise it would create inequity and free-loaders.
Fred Haskins
20/08/2014 1:26:54 PM

I don't very often agree with you David, but on this case you are spot on, as a horticultural producer/levy payer, we have no transparency whether the levies collected from us by "agents" has made it through to where it is supposed to go. We as individuals have no input at to where our levy money is spent, and were told at a recent Ausveg grower meeting that some was being spent on GMO research, this is despite no consultation with grass roots growers!
Tim Q
20/08/2014 8:54:19 PM

You are right on the money with this one David. Heaven forbid levy-payer supported bureaucrats had to justify their salaries.
John Hine
20/08/2014 11:51:09 PM

If levies are to be voluntary, those who pay the levy then surely own the research results and those who dont pay the levy would then have to pay to access toe research results? The other option is to halve the levies and allow farmers access to R&D tax concessions like other businesses, so they can do their own research when they want, without having to go to a committee for approval?
Barcoo Battler
21/08/2014 9:00:20 AM

Fred- they're not interested in your input - they take their orders from Ausveg. They used your levy for the holiday in Cairns a month or so ago. Like Barnaby sid - what do they produce in Cairns other than suntans??
angry australian
21/08/2014 11:26:25 AM

The part I find the most amusing about this whole levy argument is the party that is so opposed to compulsory unionism and slush funds is actually jamming a similar system down the throats of our primary producers. Do we need a Royal Commission?
Peter Williams
21/08/2014 1:02:03 PM

I am right with you David ! Taxation with no transparency or consultation is a public service which is self serving and in the case of MLA totally a waste of our money. 10% cut should be a 90% cut. Like A rose bush, this pubic service would perform better after a good pruning.
Deregul8
21/08/2014 1:21:54 PM

How long til levie paying disciples actually realise these levies are worse than a tax because they are deducted whether you have taxable income or not.
argis
22/08/2014 9:11:43 AM

That logic would never apply to you though D8, would it, because you never make a loss. You are such a genius at playing the markets and making a squillion out of derivatives. On that basis you should be doubling the levies you pay.
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Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com

COMMENTS

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You had better check your sources ATB!
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I couldn't think of anything more painful or fruitless than sitting on a board that does not
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I've said this before but if farmers are not happy with their CBH Board they should put up or