This new tax is unfair, wrongly targeted and highly inefficient. It should be withdrawn.
Shipping Australia Limited is just one of many industry groups that are angry that the Federal Government will not take biosecurity seriously and is trying to double tax the shipping and import industries. This new tax makes imported goods more expensive for all Australians and eats into our export earnings too.
Strong biosecurity is essential for Australia. It supports our economy by protecting our agricultural industries and export earnings from destructive invasive pests. It protects our comfort, lifestyle, gardens and homes.
Biosecurity is part of our national security. It is a public good that benefits all Australians. The Government adequately funds Defence, border security and cybersecurity. It should also adequately fund biosecurity.
Biosecurity is a shared responsibility between government and industry. The services provided are already cost recovered from industry.
The shipping and the import industries already pay a substantial price. They pay for:
• pre-treatment of cargo;
• ballast water treatment systems;
• offshore cleaning of the external parts of containers;
• hull cleaning to reduce biofouling;
• the cost of processing import applications;
• a vessel arrival fee, and
• the full cost of any inspections required at the border and any subsequent cargo treatments.
Included in the vessel arrival fee is $110 to subsidise the management of domestic ballast water even though very few vessels transfer ballast water domestically.
In the 2018 Budget the Federal Government announced a new Biosecurity Levy that claimed to be aimed at improving strategic biosecurity.
Was that spin or a lie?
In that Budget the Government announced $313 million of biosecurity funding over six years, yet the forward estimates confirm that the Coalition Government would continue to reduce appropriation funding to the biosecurity function of the Department of Agriculture, just not by as much as they had foreshadowed in the previous (2017) Budget.
In fact, the $252 million appropriated to biosecurity (Outcome 2 in the Department of Agriculture portfolio budget statements) this year is less than it was in 2012 ($285 million) and will continue to fall to $217 million in 2020-21 according to the forward estimates (all figures in 2018 dollars).
Call it smoke and mirrors, lies or call it spin, since 2012 the Federal Government has harvested nearly $300 million from the biosecurity budget and is now using biosecurity as an excuse for a new tax to prop up consolidated revenue.
The Government sited the IGAB report of 2017 as justification for the new Biosecurity Levy, but the proposed levy is not consistent with that report.
The implementation is similarly flawed. They have not developed a regulatory impact statement. They have not consulted effectively with all affected industry sectors, and over the past 10 months the proposed target industries, costs and collection methods have changed continuously so that everything is confused.
In fact, the IGAB report points out that Government appropriations to the Department of Agriculture “have declined since 2001 and were offset by an even larger increase in ‘externally’ sourced funds”. These ‘externally’ sourced funds are levies and cost recovery from industry.
In simple terms, industry is paying its share, but the Government is not.
The whole Biosecurity Levy concept is unfair, ill-considered and inefficient – if it goes ahead it will cost everyday Australians much more than they would pay if the Government continued to adequately budget fund strategic biosecurity.
Minister for Agriculture David Littleproud’s statement released on 24 February is the smokescreen to cover the lie.
He failed to mention that the shipping and import industries already pay for all the biosecurity services they use. He failed to mention that the reason that the new Biosecurity Levy was introduced was to make up for the shortfall after the Government had siphoned more than $250 million from budget funding for biosecurity over the previous five years.
He failed to mention that the new tax must be passed on to ordinary Australian consumers.
He failed to mention that the new tax is so inefficient, due to the additional administrative charges added down through the supply chain, that ordinary Australians will pay at least twice, and perhaps three or four times as much as the Government will collect through the tax.
His statement implied that industry is not playing its part. We find this offensive.
The fact is that industry has been working hard to play its part over the past 20 years and bearing more of the costs of protecting Australia’s biosecurity.
It is the Government that has failed to play its part, by reducing appropriation funding to biosecurity during a period of increasing trade and risk.
The Australian people don’t expect the Government to withdraw funding from biosecurity. The shipping and import industries don’t accept the transfer of more of the cost burden at a time when industry is already facing massively increased biosecurity compliance costs, such as for Brown Marmorated Stink Bugs.
A lot of the biosecurity compliance costs faced by industry are due to poorly considered biosecurity policy decisions and lack of strategic foresight. This also needs to be fixed.
Now is the time the Government should be increasing appropriation funding to the Department of Agriculture, to enable better analysis and policy development to protect Australia in times of increased trade and biosecurity threat.
The shipping and import industries support strong, effective biosecurity for Australia, but we can’t deliver without sound biosecurity policy.
Biosecurity is a shared responsibility, industry is paying its way, but the Federal Government needs to do its part and restore the budget appropriations funding that it has stripped from the Department of Agriculture across the forward estimates.
In November 2018 the Federal Minister for Agriculture signed a joint statement, together with all State and Territory counterparts, agreeing most of the recommendations of the IGAB report including “to maintain biosecurity funding at 2017 levels”. Yet his Government had already reduced appropriation funding to biosecurity throughout the forward estimates.
The new Biosecurity Levy, if it can be implemented, will not deliver one cent of new money to protect Australia’s biosecurity. This levy doesn’t increase the Government’s commitment to biosecurity. It will simply bolster the Federal Budget with a new tax on industry which is so inefficient that it will cost ordinary Australia many times more than the revenue returned to the Government.
Biosecurity is just as important to Australia as Defence, border security and cybersecurity. These are all ‘public good’ services that benefit every Australian. They all should be adequately funded by Government. It would be far more efficient and far less costly for every Australian if the Federal Government met their funding obligations for biosecurity from their normal taxation revenue.