On 1 July 2024, a new biosecurity levy is set to take effect in Australia. The stated purpose of the levy is to bolster defenses against agricultural pests and diseases by providing funding to maintain and enhance Australia’s biosecurity infrastructure. However, the policy has garnered a critical reception from agricultural industry stakeholders, with many expressing concerns over its potential economic impact.
What is the Biosecurity Protection Levy?
The Biosecurity Protection Levy (BPL) is a government-mandated tax on imported goods that are deemed to pose a biosecurity risk. Its primary objective is to fund biosecurity measures that protect Australia’s agriculture and environment from invasive species, pests, and diseases. According to the Department of Agriculture, Fisheries and Forestry’s fact sheet the levy will apply to a wide range of imported products and is set to raise $1 billion over the next four years, and $267 million per year thereafter. Under the levy, primary producers will be required to pay 6% of biosecurity costs, while importers contribute 48%, taxpayers pay 44%, and Australia Post pay 2%.
Economic Implications for Farmers and Agribusinesses
The introduction of the biosecurity levy has raised alarms among Australian farmers and agribusinesses. The Department of Agriculture, Fisheries and Forestry outlines the varying levels of charges different sectors will face, depending on the nature and volume of the imported goods they rely on.
Many hold that the levy places an undue financial burden on local producers, who are already facing challenges such as drought, fluctuating market prices, and rising input costs. Additionally, there is concern that the levy could reduce the competitiveness of Australian agricultural products on the global market by increasing production costs.
Industry Reactions
Industry bodies including the National Farmers’ Federation (NFF), Cattle Australia, and Australian Grape & Wine, emphatically oppose the levy, arguing that it places an unfair financial burden on farmers without providing proportional benefits.
The NFF have criticised the levy as poorly designed and question its efficacy in enhancing biosecurity measures. Cattle Australia echo these concerns, highlighting a lack of transparency and consultation in the levy’s development.
Australian Grape & Wine have also voiced strong objections, emphasising that the levy fails to consider the unique challenges faced by grape and wine producers. They stress that the additional costs imposed by the levy could hinder the competitiveness of Australian wine, among other exports, on the global market.
The collective stance of agricultural industry groups is clear: they argue that the levy ignores expert recommendations and does not align with the industry’s needs. Agriculture industry representatives have urged the government to reconsider the implementation and instead work closely with the agricultural sector to develop a fair and effective biosecurity framework that supports and protects Australian producers.
Sources:
- Department of Agriculture, Fisheries and Forestry. Fact Sheet on the Biosecurity Protection Levy. Government of Australia. https://www.agriculture.gov.au.
- National Farmers’ Federation. Position on the Biosecurity Protection Levy. https://nff.org.au.
- Cattle Australia. Response to the Biosecurity Protection Levy. https://cattleaustralia.com.au.
- Australian Grape & Wine. Analysis of the Biosecurity Protection Levy’s Impact on Wine Producers. https://www.agw.org.au.
- Rabobank. Economic Challenges for Australian Farmers. https://www.rabobank.com.au.