In the dark on mushroom levy

16 Aug, 2014 02:00 AM
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SHADOW Agriculture Minister Joel Fitzgibbon has warned all agricultural Research and Development Corporation (RDC) levies are at risk if the mushroom levy increase is reversed by federal parliament.

NSW Liberal Democratic Party Senator David Leyonhjelm has tabled a disallowance motion in the Senate which aims to claw back three intertwined motions that have increased the mushroom, hard onion and mango levies.

The mushroom levy’s doubling has upset the nation’s biggest producer, Costa, which is set to pay $1.6 million per year - up from $800,000 - sparking concentrated lobbying to reverse the move.

Senator Leyonhjelm said contrary to some media reports, his disallowance motion (set for a vote on August 26) “is likely to succeed”.

He has also used the controversial vote to call on Federal Agriculture Minister Barnaby Joyce to commit to reviewing the levy system. The Senator's objective is to change the system to allow growers a vote on their specific RDC levy every three years, similar to the WoolPoll, based on their volume of production and not one vote one value.

“Levies are a tax by any other name,” he said.

“Until such time as Mr Joyce agrees to a review of this situation, there will be uncertainty about the passage of levy increases through the Senate.”

Senator Leyonhjelm’s disallowance motion also appears to be supported by Tasmanian Palmer United Party Senator Jacqui Lambie.

Senator Lambie said she raised the “contentious” mushroom levy issue in budget discussions with Federal Treasurer Joe Hockey during his recent visit to her home State. She also raised it during discussions about bumblebee pollination trials for local primary producers, which she believed could lift production 13 per cent for certain crops.

“I think we can reach a win-win solution for the federal government and the local Tasmanian companies,” she said.

Senator Lambie also warned the mushroom levy increase threatened Tasmanian workers and the profitability of local businesses.

But the eight minor and independent crossbench Senators can be sidelined with the Greens to defeat the disallowance motion, if the ALP and Coalition vote against it together.

Asked if the ALP was likely to support that outcome, Mr Fitzgibbon said his party was yet to have a formal collective discussion or make a decision on the issue. He said as a general principle he did not pre-empt the outcomes of those discussions.

Mr Fitzgibbon also fiercely rejected a statement from Senator Leyonhjelm saying Labor had given “some indications” of its support for the disallowance motion.

“I’ve given Senator Leyonhjelm no such indication and the ALP has not yet come to any collective conclusion on this issue,” he said.

“I have no idea where Senator Leyonhjelm gets that impression from or what his source is, but I can say that is not Labor’s formal position.

“We haven’t yet made a collective decision on the issue but I’ve been hopeful that Senator Leyonhjelm will come to see the inherent risk in his disallowance motion and that this could become a threat to the R&D system as we know it, across all commodities.”

Mr Fitzgibbon said agricultural R&D and marketing was underpinned by the compulsory levy system across all commodities. Knocking off one levy in the Senate “might indicate to other people that knocking off the lot of them is a good idea”, he said.

Mr Fitzgibbon said levy increases would always be unpopular with some stakeholders, but as a general rule, once the industry itself had democratically determined a levy increase was necessary (as occurred with the mushroom, onion and mango levies) and the Agriculture Minister had approved that increase, “then the parliament should be very, very cautious and have very good reason to use the parliament to reject that levy increase”.

**

“Other than his publicly stated ideological opposition to levies generally, Senator Leyonhjelm really hasn’t set out a case to block this particular increase,” he said.

Mr Fitzgibbon, who was Agriculture Minister for two and a half months heading into last year’s federal election, said his statements waring about the fate of agricultural levies, if the disallowance motion succeeded, were also relevant to Senator Lambie.

“Again, I have not seen Senator Lambie clearly articulate her reasons for knocking back these three levy increases,” he said.

“But there will nervousness everywhere in agriculture - across every commodity - if these three levy increases are knocked over by Senator Leyonhjelm’s disallowance motion.”

Minister Joyce said the three levies were all amended at the request of industry.

He said a democratic vote, overseen by the Australian Electoral Commission (AEC) in the case of the mango and onion ballots, and an independent ballot provider in the case of the mushroom industry, supported increasing the levies to fund marketing, R&D and plant biosecurity work.

“People should not forget that levies are put in place at the request of industry and are paid to the appropriate industry body in full to undertake work to ensure a strong and expanding market for their produce,” he said.

“The mushroom, onion and mango levies are no different.

“All growers had an opportunity to vote with the respective industry associations conducting a thorough consultation campaign with levy payers.

“The votes resulted in majority support for each levy proposal.

“This was, in the case of the mushroom proposal, for example, 75 per cent support for the increase in the marketing levy to $3.24 per kilogram of mushroom spawn and the research and development levy to $1.08 per kilogram of mushroom spawn.”

Mr Joyce said the Australian Mushroom Growers’ Association estimated the current levy would cost growers less than 2pc of the wholesale price they received for their product - about 8 cents per kilogram of mushrooms sold.

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Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

Archibald
17/08/2014 10:23:19 AM

The decision to pay levies or not should be a democratic decision of levy payers, not government dictation. This applies right across the levy system
angry australian
18/08/2014 12:42:04 PM

Both the Minister and the Opposition spokesman can spin what they like, while it's compulsory it's a tax, The Dept. of Finance,National Auditor or Productivity Commission should review all the organisations and have a look at their cost/benefit. Has the amount of industry funds that have been poured into these R&D Corps had a positive return on profits or are they, as I suspect just another junket for the research lobby
victor
18/08/2014 2:06:37 PM

A levy is not a tax. A levy is used for the benefit of those levied. A tax goes into general revenue with no specific benefit. Giving people votes based on their production is outrageous and allows the dominant vested interests to dictate where money is spent. Leyonhjelm hates taxes period despite Australia being a relatively low taxed economy. Without taxes you can expect declining services, particularly in rural Australia.
angry australian
18/08/2014 2:40:07 PM

Sorry to disagree with you Victor. While its compulsory,while it fails to look at the ability to pay,while is pays for a "new" bureaucracy that the primary producer doesn't need i.e. the R&DC,while it doesn't have any KPI's that have to be met against producer profitability and while the producers don't have full say on how their money is spent, i can only call it a tax! What this country needs is a Boston Tea Party, a full on revolution against how OUR money is spent. They have all the other taxes, what will be the straw that breaks the camel's back?
TFO
18/08/2014 2:54:40 PM

I am not a supporter of the current levy system. However, I agree with Victor that calling an industry levy a tax is incorrect. It is like calling a donation to the Salvation Army a tax. While it may be compulsory, it is designated for a specific organization to use as the donors wish to improve the status of their industry. The emerging problem is that the donors no longer seem to be getting a say in how they should be used. And management are wasting them on unsupported and non returning projects. That is why I no longer favor them.
angry australian
19/08/2014 11:38:00 AM

Really Minister where did you get your adviser from, the ALP? As an ex accountant how many 2% do you need to take off your gross profit before you go into a loss? I'd suggest there are some at mushroom Growers Assn. who aren't prepared to give up the empire. Minister have they told you how much this levy translates into pre tax profit? In a market place where the grower has little control over price I doubt whether the grower benefits at all.

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