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Labor sticks biosecurity levy on farmers as foreigners dodge capital gains tax on water

In estimates, I asked the Agricultural Minister why grain farmers have to pay a biosecurity levy when they already pay Income tax and the consumer pays GST/alcohol on beer and Weetbix. 

Biosecurity levy’s should be paid by importers as they are the ones potentially bringing in the disease. Instead we tax the farmers who export. 

Unbelievable. 

It has to asked why Universities don’t have to pay a levy on all the income they earn from foreign students as they use essential services. Same again for foreign owners of water. They pay no capital gains tax on any profit they make from the sale of water. 

Once again it’s Australian workers and producers that get hit hardest by Labor instead of foreign investors and inner city elites.

Rural and Regional Affairs and Transport Legislation Committee
13/02/2024
Estimates
AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO
Department of Agriculture, Fisheries and Forestry

Senator RENNICK: Can we talk about the biosecurity levy?

CHAIR: You can talk about that if you wish, yes.

Senator RENNICK: I met with the Grain Producers Australia last week. They’re still not obviously happy with the increase in the levy from one per cent to 1.1 per cent. As I mentioned earlier today, the turnover, the amount of revenue that the grain industry now generates, is over $30 billion. Can you explain why it’s needed to lift the levy from one per cent to 1.1 per cent, which is another—

Senator Watt: Senator Rennick, just confirming: you’re definitely talking about the Biosecurity Protection Levy? There is a range of other levies as well.

Senator RENNICK: Yes, the biosecurity levy/tax, which is going from one per cent to 1.1 per cent.

Senator Watt: I don’t know if you heard my opening statement this morning, but we have listened to feedback received from the industry about this levy and we’ve made a decision to change the way it will be calculated. It wouldn’t be, what did you say, 1.1 per cent?

Senator RENNICK: Yes.

Senator Watt: It’s a different methodology now.

Senator RENNICK: What are you going to do?

Senator Watt: I can get the officials to take you through the detail, but—

Senator RENNICK: Aren’t you around the detail? You are the minister and you’re responsible for regulation.

Senator Watt: As I was saying, I can get the officials to take you through the detail.

Senator RENNICK: I’d like you to take me through the detail.

Senator Watt: I said the word ‘but’, and I was about to give you some information about it. In short, we have decided to base the levy on what’s known as the gross value of production of a particular industry. A particular industry’s share of overall agricultural production will determine the share of the additional Biosecurity Protection Levy that they pay. The methodology that we announced when we first announced the new levy was that it was going to be essentially around 10 per cent extra on top of the levies that particular industries were already paying. That’s why I think you’re probably thinking about 1.1 per cent or whatever the figure you said was. We’re no longer going down that path because of feedback we received from GPA and others. We’ve gone with a different methodology. But if you’d like any more detail than that—

Senator RENNICK: So, could you walk me through that methodology, please?

Senator Watt: Why don’t I get the officials to take you through it?

Senator RENNICK: Can you do it?

Senator Watt: I’ve tried to give you the headline details, but to give you an example, the barley industry, between 2019-20 and 2021-22, was about 4.7 per cent average share of agriculture, fisheries and forestry production. Under the new methodology, the barley industry or barley producers will pay in total 4.7 per cent of the $50 million that was expected to be raised by the levy. So, that works out to $2.3 million contribution towards that levy from barley producers.

Senator RENNICK: So, is it going to be capped at $50 million every year?

Senator Watt: That’s the plan. This was all part of the sustainable biosecurity funding package that we announced at the last budget. We significantly increased money from taxpayers for biosecurity and locked in a stable funding level year to year, which Australia has never had before. We also increased levies and fees and charges on importers—

Senator RENNICK: That was an issue these guys had. They wanted a container levy—

Senator Watt: I’m well aware of that.

Senator RENNICK: Is that going to happen or not?

Senator Watt: We are still making a decision about that. But as I have told that group, the GPA, and many other farmers groups, but unfortunately they have not yet recognised, we have increased the levies and fees and charges on importers that they pay when they bring things into the country in a way that no government has ever done. Importers are already paying more to bring things in and make a contribution towards biosecurity, and that was something, I have to say, the former government didn’t do. The former government wasn’t charging importers the full cost of biosecurity services that the department was providing. Now importers are. They’ve already chipped in something like $30 million extra just this financial year so far more than what they were paying. But we did also say that we thought it was reasonable for producers, as primary beneficiaries of strong biosecurity—that their livelihoods depend upon—to make a modest contribution. Originally the proposal was that they would effectively pay about 10 per cent more on the levies they were already paying. There was a lot of feedback that people thought that wasn’t a fair way to calculate it; it wasn’t equitable, because some industries charge their producers higher levies than others. Some industries don’t charge their producers levies at all. What we’ve settled on, based on that feedback, is that we will charge producers basically the share of $50 million that their industry contributes towards production.

Senator RENNICK: With that in mind—thanks for the answer, by the way—

Senator Watt: Was that enough detail for you?

Senator RENNICK: Given that farmers already pay tax, income tax, and they pay GST on top of that, why do we even charge levies at all? Why do agricultural sectors have to pay levies and other sectors don’t? Why don’t universities, for example, pay a levy on their foreign student income? They don’t pay any tax.

Senator Watt: You’re going to levies more broadly now, and it’s been a well supported, on both sides of politics I thought, system since probably back to John Kerin’s days as agriculture minister—40 years.

Senator RENNICK: I accept that. You won’t have any argument on that point.

Senator Watt: A long time ago there was a system that was devised between government and the ag industry that things like marketing of commodities would be jointly funded between government and industry; things like research and development in agriculture would be jointly funded between government and industry. The research and development corporations, some of which are going to be here tonight, charge their particular producers or industries a levy to help fund that research and development and marketing.

Senator RENNICK: Does this levy include marketing?

Senator Watt: No.

Senator RENNICK: I thought there was a separate levy?

Senator Watt: That’s what I was trying to clarify.

Senator RENNICK: I can live with a levy for marketing. Obviously you’re doing big trade deals and you’re going to sell bulk tonnage, and you can’t ring up, say, for India every farmer or wholesaler in India. I don’t know why when it comes to biosecurity farmers have to pay a third time over.

Senator Watt: I don’t know we’re getting the third time over.

Senator RENNICK: Income tax, GST—

Senator Watt: I’d forgotten, Senator Rennick, you’re from Chinchilla originally?

Senator RENNICK: Yes. That’s the town where the maternity ward was shut down. I think you were part of the state Labor government for a while.

CHAIR: Lucky it wasn’t shut down 55 years ago; Senator Rennick, you would not be here to argue with the minister.

Senator Watt: Let’s take an example that you’re familiar with, Chinchilla. A shopkeeper in Chinchilla or a school cleaner in Chinchilla or a truckie in Chinchilla—anyone in Chinchilla—pays towards biosecurity through their taxes.

Senator RENNICK: That’s right.

Senator Watt: As does a farmer. I think it’s reasonable to ask—

CHAIR: It is 6.30. I’ll let you finish.

Senator Watt: Just very quickly, I think it’s reasonable to ask a farmer in Chinchilla, who is benefiting from biosecurity more than a school cleaner, the truckie and the others in Chinchilla, to pay a very small contribution towards biosecurity services that protect their livelihoods.

Senator RENNICK: That’s right. So, you collect $50 million. One per cent of $30 billion; you’re going to collect $300 million—

CHAIR: Gentlemen, you can continue this after.

Senator RENNICK: We won’t be much longer, Chair. That $50 million is hardly worth the administrative costs of collecting the levy? It’s not a lot in the overall—

Senator Watt: If that was your view, you’d probably say that it’s not worth collecting money from importers either. I think it’s fair that importers contribute to this.

Senator RENNICK: They’re the ones bringing the risk in.

Senator Watt: Yes, and that’s why they’re paying a huge amount more than producers. Under the new system we’ve got in place, from 2024-25 taxpayers will bear 44 per cent of the cost of our biosecurity protection services; importers will contribute 48 per cent; producers six per cent; and people who send stuff through Australia Post, two per cent. Importers are paying eight times as much.

Senator RENNICK: Just under 50 per cent.

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