Australia appears on track to continue with a levy set at “zero” on commercial horse feeds and wormers as part of the equine industry’s commitment to fight incursions of exotic diseases, but not everyone is happy with the status quo.
The zero-based levy is one of the consequences arising from the 2007 equine influenza outbreak in Australia, which cost authorities hundreds of millions of dollars to eradicate.
The federal government later indicated that its response to any future disease incursions would depend on the horse industry’s willingness to sign up to the Emergency Animal Disease Response Agreement (EADRA).
EADRA allows the government to charge a levy to recover a share of the cost of fighting any future disease incursions by imposing a levy.
The current levy on wormers and commercial horse feeds is set at zero. The law requires that it be reviewed every five years.
A levy review consultation report released by federal officials in April recommended continuation of the current levy targets of commercial horse feeds and wormers.
However, both targets remains controversial in some industry sectors.
The report acknowledged general support for the levy targets from major industry sectors, on the basis that extensive consultation had previously been undertaken in this area. The current setup, it said, was still considered most appropriate.
Those opposing the levy targets were concerned that if the levy was activated, there would be a lack of transparency in levy payments due to the complexity of the supply chain in both the stockfeed and animal pharmaceutical industry.
There was concern that wholesalers or distributors would effectively become the levy payers, as the majority of feed was sold direct to these outlets, who then sold-on to stores, which sold to individual horse owners.
Opponents were also concerned that there were significant administration costs and resources required for businesses to implement and report on the levy, particularly with the requirements for the levy to be GST free.
The report said: “It is the department’s view that, while the imposition of a levy does impose some level of administrative burden, applying a levy at first disposal generally ensures the lowest number of collection points with the lowest possible ‘red tape’ impact.
“Collecting a levy at first disposal has in the past not undermined, and would not be expected to undermine, transparency and accountability requirements.”
There was concern, too, that some horse owners may reduce their feeding rates or the frequency of worming as a result of the increased price of the products.
Horse owners could also potentially avoid paying the levy by purchasing their own raw materials to make up a feed mix that does not meet the definition of manufactured feed. There was also the potential for them to use wormers sold for other species, such as sheep and cattle, with the same active ingredients.
The Department of Agriculture and Water Resources said the issues and concerns raised about the current levy collection targets were valid.
“However, it is not possible to quantify these concerns in comparison to other levy collection point options without further data and analysis.”
Other levy options considered previously included registrations of horses or owners, vaccines, horseshoes, event fees, a transit import levy applied to all imported horses, foal registration, a slaughter levy, purchase of equipment, microchips, and wagering revenue.
“The most supported proposed alternative for levy collection points was the establishment of a national horse registration scheme. Stakeholders who suggested this stated that the horse industry has a biosecurity responsibility to understand the horse population,” the report said.
“It was proposed that by establishing a national database, a levy collection point could be established at the point of registration.
“Currently, a number of the horse industry organisations have breed-specific, discipline-specific and organisation-specific registration systems, but there is no overarching national scheme that covers all horses.”
The department, in its findings, said the horse industry generally supported the current levy collection points of manufactured feed and horse wormers.
“The horse industry view is that this is currently the most equitable option available that provides the broadest coverage.”
However, it was acknowledged there was strong opposition to the current collection points from stakeholders who would be responsible for collecting the levy should it ever be lifted from “zero”.