Biosecurity Protection Levy - FTA / APSA proposal for a three point plan

During last week's Senate Estimates hearing (Rural and Regional Affairs and Transport Legislation Committee), The Hon. Murray Watt (Minister for Agriculture, Fisheries and Forestry) announced a revised model of agricultural commodity contributions to be paid towards the broader Biosecurity Protection Levy (BPL).

Public statements from producer groups have been mixed, with some welcoming the changes that now spreads the contribution base across all industry sectors (in contrast to the previous model that added a 10% fee on existing statutory 2020-21 levy rates) whilst many others, such as the National Farmers Federation, outright oppose the plan - refer HERE

So what is the BPL?

As announced in the 2023-24 Federal Budget, a need was identified for "sustainable funding" that goes directly to strengthening Australia's biosecurity system - this will be paid for on a "shared responsibility" basis taking total revenue from $536.2m to $804.6m - refer HERE

By 2024-25, contributions will be made as follows:

• Taxpayers (general revenue) 44%
• Importers ("risk creators") 48%
• Producers ("beneficiaries") 6%
• Australia Post 2% 

The "new and permanently increased funding" will contribute towards:

• providing $845m over four years from 2023-24, and $255m per year ongoing from 2027-28, to maintain biosecurity policy, operational and technical functions on a sustainable basis;
• $40.6m over four years from 2023-24, and $12m per year ongoing from 2027-28, for the Indigenous Ranger Biosecurity Program; and
• $145.2m over three years from 2023/24 for the Simplified Targeting and Enhanced Processing System (STEPS) being a modern digital system to improve the effectiveness and efficiency of biosecurity clearance in cargo pathways. 

Importers (including a new cost recovery fee on low value goods)

In line with the above budget announcements, members will recall that the Department of Agriculture, Fisheries and Forestry (DAFF) adjusted Approved fees and charges for biosecurity and imported food regulatory activity on 1 July 2023. This included a $5 increase in both air and sea Full Import Declarations (FIDs).

The other significant announcement was the introduction of a new cost recovery charge on low value ($1,000 or less) goods imported into Australia by air and sea, effective 1 July 2024 - further detail is available HERE (FTA / APSA MEMBER LOGIN REQUIRED)

It is anticipated that the new low value import charge will raise $27.1m in addition to the existing $363.6m fees and charges, hence contributing 48% of the total BPL as outlined above. 

A need for improved service levels for importers

As members will recall, Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) representatives met with Minister Watt in Canberra on 18 October 2023. 

Some four months later and of serious concern, last week's Senate Estimates revealed that DAFF have had difficulty in their recruitment of assessment officers resulting in service levels not being met.

This prompted FTA / APSA last week to reinforce to the Minister our concerns with the below chart highlighting the recent spike in quantum of FIDs awaiting assessment.

SOURCE: data provided by DAFF and compiled by Freight & Trade Alliance (FTA)  
NOTE: between September and December 2023 was a period whereby DAFF did not provide performance data

FTA and APSA three point plan

As a part of the FTA / APSA approach to the Minister, the following 3 point plan was provided :

1. Do not proceed with the complex levy against producers ($47.5m being 6% of the budgeted BPL);
2. Recover this shortfall from importers (risk creators) via a further increase in FIDs (equates to an extra $11.50 per FID) -  importers could absorb this and potentially more (perhaps round up to $15 per FID) to provide extra funds for DAFF officer overtime until additional resources and benefits of the STEPS initiative are realised; and
3. to offset the increased impost on importers, the federal government to regulate against the scourge of the incontestable Terminal Access Charge (TAC) regime costing importers and exporters an estimated $850m per annum by either forcing stevedores and empty container parks to recover all costs from their commercial client shipping lines OR introduce a "Mandatory Code" as proposed by the Productivity Commission to control and justify any TAC adjustments with oversight by the Australian Competition and Consumer Commission (ACCC).