CONCERNS are being voiced about a fresh federal levy on famers and it’s not only primary producers and coalition politicians who are speaking up.

Both the Productivity Commission (PC) and Australian National University (ANU) have criticised the Federal Government’s Biodiversity Protection Levy (BPL) which was lodged in parliament on February 28 with three bills dealing with its set-up and administration.

The BPL is a new model for raising additional funding for biosecurity, being based on the concept of “shared responsibility”.

It is proposed that primary producers will contribute six per cent of Commonwealth biosecurity funding through the BPL.

The BPL will, if enacted, raise $50 million per annum from farming, forestry and commercial fishing.

The amount of the levy to be borne by each sector will depend upon its proportion of “Gross-Value-Product” which in layman’s language is gross sales, averaged over three years.

The policy is scheduled to be implemented by July 1.

Heywood district beef and lamb producer, Georgina Gubbins OAM told The Spectator, “The government is going for an easy target … farmers are a minority (electoral) base for them”.

She then asked, “What about importers of food?  The cost should be spread across the whole community.”

In a similar vein, Wannon MP, Dan Tehan said, “Our farmers compete with food produced overseas … why isn’t the levy being imposed on food importers or on the general population?”

While one might expect farmers and the Opposition to oppose the levy, the position of the Productivity Commission and ANU is notable and needs to be scutinised, but first some explanation.

The biosecurity risks which are being considered are imported pests, plants, pathogens and diseases (both animal and human) which could pose a threat to Australia in general.

There are a myriad of biosecurity failures in Australia’s history such as rabbits, foxes, cats, blackberries and European carp.

Some have been devastating to agriculture (think rabbits) and some have been devastating to native fauna but not agriculture (think cats).

The most recent biosecurity failures have been the varroa mite and the fire ant.

The varroa mite is devastating to beekeeping (primary production), while the fire ant impacts agriculture, tourism and human health (hideous bites leading to pustules) in other words, a broad-based impact.

Thus, one can see that biosecurity is not an exclusively primary producer concern but rather, it is one which affects Australia in general.

Now to the PC and ANU where we find two recent publications: Towards Levyathan (PC December 2023) and the more prosaically titled, The biosecurity protection levy: Principles for design (ANU February 2024).

Both of these specifically analysed the levy and come to the same conclusion: it won’t work.

Biosecurity risks are identified as being a negative influence or “externality” which can damage the working of a market.

Australia has a long history of levies being employed in an attempt to adjust for these negative influences, the first being the Wine Grape Levy in 1929.

The PC observed that, in recent decades, levies have burgeoned from 26 in 1980 to 248 today.

In order to analyse levies, the Productivity Commission imposed an eleven-question scoring test to ascertain whether a levy is economically sound.

The PC specifically selected the Biosecurity Levy as a case study and it failed on eight out of the 11 criteria.

ANU’s Tax and Transfer Policy Institute endorsed the PC’s findings and they proffered two viable alternatives for funding biosecurity risk, writing:

“The first approach is to charge those who create the externality (problem),” they said.

“Biosecurity threats can cause harm to the environment, animal or plant health, and human health on a nationally significant scale, and usually arise as a result of the activities of parties such as importers and travellers… a tax on those who create the most biosecurity risk could be introduced.

“Alternatively, biosecurity can be viewed as a public good, with biosecurity protection representing a benefit to all Australians through environmental protection, food-security and, disease risk mitigation. If viewed as such, biosecurity protection activities can be justifiably funded through general revenue, i.e. through all of the members of Australian society.”