Levy inquiry sees Leyonhjelm's point

21 May, 2015 02:00 AM
Senator David Leyonhjelm. Photo: Jessica Hromas
Clearly, it is not about the system itself but how we can bring it into the 21st century
Senator David Leyonhjelm. Photo: Jessica Hromas

SINGLE collection points and increased online administration would improve the transparency and management of agricultural levies, says the federal Department of Agriculture.

The Senate Rural and Regional Affairs and Transport References Committee’s inquiry into agricultural marketing and research and development (R&D) levies continued last week with a half-day hearing in Canberra.

The Department, Horticulture Innovation Australia Limited (HIAL) and the Grains Research and Development Corporation (GRDC) all faced questions, mostly focussed on ways to improve levy transparency and accountability.

Ahead of the hearing, NSW Liberal Democratic Party Senator David Leyonhjelm said the Department was the first witness to appear at the inquiry’s first public hearing last November.

He said the Department’s initial position at the time was essentially ‘there is no problem, nothing to see here, we don’t really know what the concern is’.

But ahead of last Friday’s hearing, he said he hoped the Department had now devised their own ideas, to help inform the inquiry which is due to report by June 30.

“We’ve had a stream of witnesses pointing out, black and white, this is an unaccountable taxation without representation system,” he said.

“If the Department have been paying attention you’d hope they would say ‘yes, we understand what the point of this inquiry is now and now we see why it was established and the problems seeking to be solved’.”

Opaque and unaccountable

At the hearing, Western Australian Liberal Senator Linda Reynolds said - as an ex Auditor-General - she had a “particular passion” for compliance auditing for assurance purposes.

But she said if the most complicated, difficult, opaque and unaccountable process possible was developed to deliver the levy process, “I think we now have it”.

“Clearly, it is not about the system itself but how we can bring it into the 21st century, streamline it and make it easier,” she told Department officials.

Speaking about underlying principles to improve the levy system, Department agricultural policy division first assistant secretary Fran Freeman said there was “no magical wand that we can wave”.

“The issue for us is complex,” she said. “On the one hand we have a lot of responsibility using the taxation powers to collect a lot of money.

“The Commonwealth government's contribution is a quarter of a billion dollars.

“All the way through the system, probably three quarters of a billion dollars comes through, so there is a real need to have proper checks and balances in a system that is responsible for those funds.

“Equally, we are trying to decrease the regulatory burden on people and that is a good principle to follow but at the same time it is a bit of a balancing act.”

Ms Freeman said, “I think we would all safely say that no one size fits all”.

“Even if you took one industry and look at the issues where things are collected for R&D, marketing, animal or plant health, the National Residue Survey or whatever, there is a reason why those funds are used for a range of different purposes,” she said.

“It is hard to just say, 'tick a box, put it in and away you go’.

“Equally, there are enormous complexities involving the role of industry, and the industry representative bodies and how they bring forward what they want and how they can demonstrate that they have actually consulted (and) it is accountable, information is two-way etcetera.

“So there are some real issues along the food chain, if you like, at what you might look at to streamline it I think.”

An artefact

Department Assistant Secretary, Industry Support Branch, Matt Ryan said complexities in the levy-collection system were “an artefact of a number of years” – but the system could be improved, through a redesign, by having a single collection point.

He said a single collection point already existed in some industries because the market constricted in a certain place, as did the supply chain.

Mr Ryan said returns and payments which are submitted online also simplify the task for his department.

But he said for different industries, the only potential single collection point was at the producer level.

“There are lots of producers so there are a lot of people that we need to cover, educate and get information out to, to make sure the levy is being collected and they understand their roles and responsibilities,” he said.

ATO option

Senator Reynolds said one suggestion - met with mixed response during the inquiry - was for growers to pay levies through their business activity statements (BAS) which went direct to the Australian Tax Office (ATO).

Mr Ryan said he had no opinion on that option but said the tax department already collected a lot of information that may be relevant to the purpose.

“But again would it be simpler?” he said.

Senator Reynolds said to achieve genuine accountability, a link was needed between those who pay the levies - whether they be individual growers or the taxpayer - and how they are spent.

“It is clearly a broken system and I think one thing that needs to be fixed,” she said.

“I understand the Department has no way of knowing who the growers are and every commodity has a different process and different visibility.

“Some of it is retained by commercial collectors and is commercial-in-confidence.”

Department Agricultural Policy Taskforce assistant secretary Cathrine Stephenson said dairy and wool were the only two industries where the Department currently had true visibility of who the growers are.

She said that was because the legislative framework for those industries allowed the Department to collect levy payer information - including the levies they paid - from the intermediaries, and pass it onto the relevant research and development corporations.

Those two industries also conduct polls, she said.

“We do not have that visibility for the others because our role, as it is currently prescribed in legislation, is purely to collect the levy from the intermediaries and pass the levy on but not to pass on information about who the levy payers are or what they pay,” she said.

Ms Stephenson said the Department was starting to work with GRDC, HIAL and Meat & Livestock Australia to look at options to potentially set up a levy payer register or registers on a general premise of the model being set up according to what industry wants.

Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
Date: Newest first | Oldest first


Hilda Hereford
21/05/2015 10:24:49 AM

The bureaucrats and the government will go out of their way to ensure levy payers have no say, while continuing to collect billions of dollars. I'm questioning whether all these Senate Inquiries actually achieve anything; just look at the activity (NONE) from Joyce in adopting the excellent Senate recommendations from the grass fed cattle transaction levy inquiry. If this is the example of our democracy Australia is stuffed.
Hilda Hereford
21/05/2015 10:35:11 AM

If I were the Senators I would be tiring of all these Inquiries that the government just allow to sit on shelves gathering dust. Surely Senators have better things to do than waste all this time and money for no progress!! Resolution would soon be achieved if they brought on disallowance motions for a few of these taxes without representation!!!
21/05/2015 11:17:21 AM

The issue has been raised because some of the biigger growers in some ag industries dont want to pay. They are content getting all of the benefits but are looking at the considerable sums they have to pay and claiming that it is inequitable and they want out. Senator Leyonhjelm has jumped on this cry from a select few and is demanding that changes be made. Let the industry bodies sort it. If government intervention is the outcome, then less money will be available for the particular industries to utilise, aand decide themselves on spending. Lost $$ to pay someone to have a job.
Hilda Hereford
21/05/2015 12:28:25 PM

gecko, when the industry bodies are elected by the actual levy payers then I'll agree, otherwise it is taxation without representation!
21/05/2015 2:18:28 PM

Hilda it is taxation without representation.... if one is so damn apathetic as a levy payer that you are ok with not being represented! If you want representation, join your SFO, get involved and use the system! Wouldn't it be farcical to spend millions to redevelop a system for the very people who don't care / or aren't engaged now? It is simple, join your SFO and work within it to help set the agenda of peak bodies, exert your influence within the existing system!
21/05/2015 2:21:22 PM

"The bureaucrats and the government will go out of their way to ensure levy payers have no say, while continuing to collect billions of dollars..." (a) Why would the government do that? The government doesn't get to keep the money, so what would be the advantage? (b) When the government changed the horticulture R&D body from an industry body owned company (HAL) to the new levy payer owned company (HIAL), how was that ensuring levy payers will have no say?
Jock Munro
21/05/2015 8:06:30 PM

The GRDC directors are appointed by a selection committee and the levy paying producers don't get a say-the Marxists amongst us would love this system
The Serf
22/05/2015 5:19:44 PM

Oscar; there can be no change within the SFO structure, they are the ones the nationalized us in the first instance; the 10%ers of which i suppose you are one. You have a queer way of interpreting Democracy, its very much like the Chinese style!!! the SFO's are the problem as well as being the 10%ers they are also National Party stalwarts and the last 18 years have proved that your brand of politics are no good in rural business. Besides your idea about the "free loaders" is a wrong, you have not achieved any economic benefit for the 90% but they are subsidizing your 10%ers regardless!!
big farm
22/05/2015 6:36:42 PM

RR the trouble is the government doesnt know who the levy payers are. Should they be taxing someone they dont know? How does HIAL even know who its owners are if they dont know who pays the levy? The people fighting for the levy are the train riders
Northern Exporter
24/05/2015 10:33:24 AM

RR; how do you know the gov doesn't keep some of the Money? They use it within the the Dept of Ag they have a mini-ATO that gathers millions and then they decide how they allocate it - you should read the Hansard of Dept Mr Koval at the Senate hearing on 28/11/14. I am concerned about is the political dabbleings of the Dept, investigating individuals and groups voicing objections to levies as a purely political exercise; and a misguided assertion that levies are here forever controlled by Dept and Prescribed Bodies regardless of our rights. This Karl Marx style democracy at its best!
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