FEES AND LEVIES
On Wednesday 11 December 2019, the Minister for Agriculture publicly responded to the committee's eight (8) recommendations - available HERE
In doing so, the Minister officially declared that the Biosecurity Import Levy, as announced in the 2018-19 Budget, will not proceed.
As outlined in our accompanying member notice, we explained that this does mean that the levy has gone away, simply that it will be replaced by an "alternate biosecurity levy". We stated that members should "stay tuned" for more - we now have preliminary detail in response to the numerous questions posed by members since the release of last weeks' announcements.
Why is a Biosecurity Import Levy required on top of an increase in existing Cost Recovery fees?
As explained to industry bodies at Department of Agriculture Cargo Consultative Committee (DCCC) meeting on Thursday 12 December 2019, the federal government is imposing a requirement on industry to pay for more of the biosecurity task rather than funds coming from general revenue (i.e. the tax payer). This appears to align with the broader government mandate to deliver a surplus budget including the decision to further rationalise government departments and implementation of cost saving measures.
In accordance with this direction, the department advised that the increase in existing cost recovery fees will fund activities previously paid for from general revenue. Other activities that need to paid for, but do not fall in line within established cost recovery guidelines, will be collected via a new mechanism being the alternate biosecurity levy.
COMMENTARY - in summary, at some stage next year, importers will most likely be paying two fees – an increased cost recovery fee from 1 January 2020 and a new / separate alternate biosecurity levy at date to be advised.
Are the African swine fever measures being funded by the expanded cost recovery or alternate biosecurity levy?
No
A Ministerial media release on 11 December 2019 referred to $66.6M being committed to arrest the threat posed to Australia by the global advance of African swine fever (ASF). FTA followed up with the Minister's office who confirmed that this is "new government funding" and will not be recovered via the expanded cost recovery or alternate biosecurity levy.
ALTERNATE BIOSECURITY LEVY
What activities will be covered in the alternate biosecurity levy?
We do not have complete detail at this stage.
FTA will continue its advocacy for funds to be used to support importers in terms of increased and highly trained frontline officers (document assessments, inspections) and improved systems capabilities (including inspections booking system with a dashboard giving transparency on service levels). The department has previously been restricted by government in increasing their staffing levels. FTA will advocate for this cap to be altered in line with the need for appropriate resources to meet acceptable service standards ensuring the legitimate movement and release of international trade.
COMMENTARY - a scenario that we are extremely conscience of avoiding is a "double-whammy" of increased fees with no commensurate improvement in service levels to industry.
What will be the quantum of the alternate biosecurity levy?
We do not have any detail at this stage.
What will be the collection method of the alternate biosecurity levy?
We do not have any detail at this stage.
When will the alternate biosecurity levy take effect?
We do not have any detail at this stage.
The alternate biosecurity levy will be subject to a Parliamentary Act. Realistically it is highly unlikely until this would take effect before mid-2020.
Will industry be consulted on the alternate biosecurity levy?
Yes.
Unlike the previously proposed Biosecurity Import Levy, the Minister has this time committed to commissioning a Regulatory Impact Statement for the alternate biosecurity levy. FTA sees this as an important and necessary step.
We have also been advised that there will be a formation of new committee to support the department in developing the structure of the new alternate biosecurity levy. FTA, along with other DCCC members, have given a commitment to be a participant on this new committee and will privide further detail once details are confirmed.
COST RECOVERY
What activities will be covered in the increased cost recovery fee?
In terms of activities covered under the fee increase, the Cost recovery implementation strategy: biosecurity 2019-20 (CRIS) states at 2.1. that this will pay for:- assurance and verification activities;
- increased analytical and intelligence activities;
- provision of technical scientific advice; and
- import pest and disease risk mitigation planning.
What will be the quantum of the increased cost recovery fee?
In terms of the fee increase, the Cost recovery implementation strategy: biosecurity 2019-20 (CRIS) states the following at 4.4.:
"The amounts payable are shown in Table 4. The effect of the government's decision to expand cost recovery for biosecurity activities is to increase the following 4 charges:- Full Import Declaration charge—air was $33, modelled at 37.34, rounded to $38.
- Full Import Declaration charge—sea was $42, modelled at 48.45, rounded to $49.
- Vessels greater than or equal to 25 metres—arrival charge was $920, modelled at $1053.09, rounded to $1054.
- Vessels less than 25 metres—arrival charge was $100, modelled at $119.79, rounded to $120."
As advised at the recent DCCC meeting, the above increase is budgeted to return an additional $11M for the remainder of this financial year and an additional $23M in 2020/ 2021.
What will be the collection method of the increased cost recovery fee?
As outlined above, importers will see an increased Full Import Declaration (FID) cost recovery fee for both air and sea. Importers may also see a commensurate increase of fees passed through the supply chain as a result of the increased vessel charges imposed on shipping lines.
When will the new cost recovery fees take effect?
1 January 2020.
Was industry consulted on the increased cost recovery fee?
NO
In terms of import stakeholder engagement, the Cost recovery implementation strategy: biosecurity 2019-20 (CRIS) states the following at 4.3.1.:
"In November 2019 the Australian Government decided to expand cost recovery for biosecurity activities, from 1 January 2020 (see section 2.1). This CRIS implements this decision.
As announcement of the measure is only a few weeks out from implementation of the new charges, we have not undertaken our customary industry engagement on a draft CRIS or proposed charging models prior to publishing this document. Industry have been informed of the price increases through public announcement and the issuing of Industry Advice Notices (IANs).
The department will engage with the relevant industry representatives through established consultative forums, such as the Department's Cargo Consultative Committee (DCCC), as soon as possible following publishing of this CRIS.
To provide opportunity for stakeholders to provide their views on this CRIS and future charges, we will conduct a full review of regulatory charging for biosecurity in 2020-21."
FTA will continue to be at the forefront of related reforms and will keep members up to date on ongoing developments. |
|