Biosecurity protection levy passes House of Representatives

It now faces rigorous examination in the upper house after last week being referred to the Senate Standing Committee on Rural and Regional Affairs and Transport.

The senate committee has been asked to report by May 10 and stakeholders have until April 10 to make a submission with the levy set to begin on July 1, it is not yet known if there will be public hearings.

The last week was a gruelling one for the architects of the Agriculture (Biosecurity Protection) Levies Bill 2024 [Provisions] and related bills as the Coalition and crossbenchers took aim at the legislation in second readings speeches in the lower house.

There were also repeated calls for Labor to slap a container levy on importers, a move it has so far resisted.

The vote was some reward for the more than a dozen agriculture advocacy groups that were "lobbying the crossbench hard" in recent weeks to prime the Senate as the final battleground to reject the Bills.

The groups, ranging from peak to commodity representatives, overwhelmingly requested a hard block of the legislation while some have suggested palatable amendments to give the senate room to move.

A compounding factor for stakeholders is the black and white legislation has only been available for dissection since late February.

With the Coalition certain to vote against the Bill in the upper house, the Greens will then hold the balance of power.

National Farmers' Federation President David Jochinke said while the organisation was disappointed the levy legislation will now progress to the Senate, it was encouraged that MPs had validated industry concerns.

"This was a very lonely vote for the Government, and we thank every member who voted against this bad idea. It's an important demonstration to farmers that their concerns are being heard," he said.

About $50 million a year will be collected from primary producers through the levy as part of the government's new $1 billion sustainable biosecurity funding model.

Leader of The Nationals David Littleproud said Labor's legislation will "force farmers to pay for the biosecurity risks of international importers."

He was also critical that debate on the levy was held in the Federation Chamber.

"That an issue of such significance was moved out of the House of Representatives demonstrates Labor's regard for our farmers and regional and rural communities," he said.

Three Labor MPs debated the Bills while 20 Coalition speakers and the Greens and several crossbenchers, including Member for Wentworth Allegra Spender, Centre Alliance MP Rebekha Sharkie and Independent Federal Member for Indi Helen Haines, refused to support legislation that "needs work."

Greens MP Elizabeth Watson-Brown said the party was particularly concerned with the funnelling of collected levy funds into consolidated revenue, instead of the Biosecurity Imported Food and Exports Certification special account, and how the money would be allocated and dispersed.

Meanwhile, Ms Spender said the government was increasing revenue for biosecurity by expanding cost recovery for low-value imports and putting a special levy on domestic primary producers.

In referring to a Productivity Commission review of the levy, Ms Spender highlighted a framework for testing the case for industry levy proposals, "to ensure that they target a public good effectively" and aren't simply imposed as a revenue-raising measure.

"Of the 11 tests, the biosecurity proposal passes just three of them. This suggests that the department has not worked through the framework or considered how the proposal could be redesigned or improved to address concerns," she said.

She was also critical of the "failure of the government to follow its own processes and best practices in policy development."

The government last month made two significant announcements it hoped would assuage criticism following the Productivity Commission report and stakeholder consultation into the legislation that had repeatedly raised issues around equity and transparency.

Firstly, it shifted from the originally proposed 10 per cent rate on top of all existing levies collection formulation, to one based on the gross value of production to draw in those commodities currently not paying levies.

It also created an advisory panel comprised of agricultural industry representatives to help oversee the transition of funds through the process, however the terms of reference for that panel are yet to be made public.

Meanwhile, Agriculture Minister Murray Watt said the passage of the Bills was another step forward in the government delivering Australia's first $1 billion sustainable biosecurity funding model.

"We achieved this where the previous government comprehensively failed," he said.

"We have a range of threats on our doorstep, things like foot and mouth disease and lumpy skin disease which would decimate our ag sector and cost our nation $80 billion if they ever breached our defences."

He said importers will pay "the lion's share" under the modelling, or about $390 million in additional funding, while for a banana farmer, for example, "the levy equates to about a tenth of a cent for every kilogram of bananas produced."

"For a pig farmer it equates to about 18.5 cents per head for a bacon pig worth on average $249," he said.

He said while the architecture is still being bedded down, it is proposed that details of each commodity's levy or charge rates would be set out in regulations and subject to consideration by the Governor-General in Federal Executive Council.

The final proposed levy or charge rates may also be dependent on consultation with industry on the proposed imposition points for levied products.

Katter's Australian Party MP Bob Katter said farmers were at the bottom of the supermarket supply chain and already battling increased production costs from input price hikes.

He said the cost burden for biosecurity protection should be a core and fundamental obligation of the Australian Government.

"This responsibility should not be delegated to primary producers that have long borne the costs of successive government decisions in increasing biosecurity risks by allowing unnecessary and unjustified fresh produce imports into Australia," he said.

Grain Producers Australia chief executive Colin Bettles said the independent scrutiny of parliamentarians and lower house voting numbers had raised some "serious red flags."

"The strength of this opposing vote clearly demonstrates the true value of independent scrutiny and policy evaluation based on merit - and the benefits of political representatives engaging with producers and taking the time to listen and understand the concerns of those directly impacted by such government policies," he said.

"GPA also urges cross-bench Senators to follow the example set by their Lower House colleagues and meet with producers and their representative groups to understand the reasons why they strongly oppose this flawed proposal - including why it still remains unfair and inequitable, despite recent changes.

"This is not about the rates charged to producers no matter how big or small - it's about core policy principles, standards and integrity."