AGRICULTURAL levies will be heavily scrutinised during a federal Senate inquiry over the next three months, with beef and grains likely targets of potential changes.
The Senate Rural and Regional Affairs and Transport Legislation Committee inquiry is scheduled to table its inquiry report by November 24 this year.
A motion detailing the inquiry’s terms of reference was agreed by the Senate this week.
It was moved by NSW Liberal Senator Bill Heffernan and co-sponsored by NSW Liberal Democratic Party Senator David Leyonhjelm and Western Australian Liberal Senator Linda Reynolds.
Senator Leyonhjelm achieved amendments to the terms of reference to add the terms “imposed” and an “imposition” in describing the use of industry levies and their governing systems.
Another key amendment underscored Senator Leyonhjelm’s recent push for all agricultural Research and Development Corporations (RDCs) to operate three year plebiscites similar to the WoolPoll.
Senator Leyonhjelm believes levies are taxes on growers but three year plebiscites would achieve the key aim of increasing scrutiny on how the money is spent on R&D and marketing, through a more democratic process.
His addition called for the inquiry to look at “opportunities levy payers have to approve and reapprove the imposition of levies”.
Collaboration on research to benefit multiple industry and research sectors and industry governance arrangements, consultation and reporting frameworks will also come under consideration.
The inquiry has been ignited by Senator Leyonhjelm’s controversial push for a disallowance motion that aims to reverse budgeted increases to the mushroom, onion and mango levies.
A vote on his disallowance was postponed last week as industry groups descended on Canberra to fight against the motion and support levy increases they say growers approved democratically.
The Senate inquiry will also consider what opportunities levy payers have to influence investment of their specific levies.
Senator Leyonhjelm said he would be a participating member on the levy inquiry which would be his first full committee examination since his Senate term started on July 1.
“The thing is I don’t think it will be practical to prescribe how levies are spent to keep everybody happy,” he told Fairfax Agricultural Media.
“To have a generic set of rules for each of the industry sectors would not be practical because they each have their own individual characteristics.
“To me the better way to be accountable to is to have the RDCs or different bodies justify every three years how they spend the levies, to the levy payers.”
In 2012-13, the Grains Research and Development Corporation (GRDC) generated about $200 million in revenue including $118.2m in grower levies and $62.8m in matching government funds, while Meat and Livestock Australia (MLA) collected $93.8m from sheep and cattle producers and $40m in federal funds.
Other groups such as Australian Wool Innovation (AWI), Horticulture Australia, Dairy Australia and the Cotton RDC operate under a similar funding structure.
Senator Leyonhjelm said the committee would meet this week to decide specific details of the inquiry, including whether all levy paying groups would be called to testify at public hearings.
But he said the inquiry would need a “practical limit”, otherwise it would continue on for “donkey’s years”.
However, he indicated he had an “acute interest” in scrutinising the operation and use of the grains and beef industry levies and some horticultural groups.
“I’m aware there’s quite a lot of discontent with the GRDC and MLA,” he said.
Senator Leyonhjelm said his disallowance motion was still listed on the Senate notice paper for a vote on September 24 but he was prepared to withdraw it.
“If everything is looking positive in terms of general indications that nobody is adverse to my plan for levy democracy I’ll withdraw it,” he said.
“But it will sit there for a while yet until I’m satisfied the message is getting through that these issues need to be addressed.”
Federal Agriculture Minister Barnaby Joyce said the inquiry into agricultural levies met a Coalition pre-election promise.
“This fulfils that promise and gives me opportunity as the Minister to hear both sides of the arguments, where they provide evidence under the orders of the Senate,” he said.
“Therefore people are less inclined to stretch the truth.
“I’ve already been talking to some of the key groups about how they see themselves and my message is quite simple.
“You get to read what the other people say about you and they get to read what you say about them in a public forum and I get to reflect on what I do after I hear both sides of the story.”
Mr Joyce anticipated the Senate inquiry would segue with the implementation of key outcomes from the Horticulture Australia Limited review earlier this year, which recommended setting up a more grower-owned and focused RDC.
“This levy space gives us an opportunity to lance this boil which has been around for a long while where people say ‘spending on my levy is not efficacious’,” he said.
“Whether it is or it isn’t, I’m agnostic on that until such time as I read the report.
“In a perfect world you would all agree on improvements and ways people can get a real sense of confidence in the ways in which levies are spent.”
Poking the 'bee hive'
Senator Leyonhjelm said he knew he was “poking a bee hive” by raising the levy issue on his arrival in Canberra.
“I hate using the term 'vested interests' in a general sense but boy there are some vested interests involved in this issue,” he said.
“Nearly all of the voices are the people, levy-spenders, who benefit from the levy money or they’re so close to it that they identify with the benefits.
“But the levy payers are starting to contact me now with some messages of support and I always knew if they got angry the people spending the levies would need to have a good look at themselves.”
Senator Reynolds said she’d been made aware that many primary producers believed flaws exist in the current levy system that need addressing, and an inquiry will enable all sides to have their say on the operation of the system as it stands and provide suggestions on how it can be improved.