Minister for Agriculture, Fisheries and Forestry Tony Burke said the horse industry had sought this mechanism for years to close a loophole in its emergency disease preparedness.
"We remain committed to delivering on industry's wish to adopt the same measures as many other major livestock industries, including cattle, wool, sheep, dairy, poultry and goats," Mr Burke said.
"These other industries have already joined the states, territories and Federal Government as signatories to the important Emergency Animal Disease Response Agreement, established in 2002.
"The horse industry decided to join the agreement some time ago and the former Coalition Government began the process of drafting the legislation well before the recent equine influenza outbreak.
"Until this legislation is passed, the horse industry is unable to join the agreement, meaning there could be a slower, more costly and less effective response to a future disease outbreak.
"However, I am also aware that there is a significant level of misinformation about the purpose of the legislation, which is causing concern among many horse owners.
"I've spoken to some concerned owners myself, including at the Community Cabinet in Brisbane last weekend.
"The intention was always to set a levy at zero and to only consider the appropriateness of a levy to cover industry's share of the response to the current outbreak after the Callinan Inquiry reported to me.
"To provide more clarity for horse owners, given the high level of misinformation, we will postpone debate on the legislation altogether until after the Callinan Inquiry reports.
"In the meantime, the Rudd Government will continue to fully fund assistance measures, consistent with guidelines, including Business Assistance Grants, the Commercial Horse Assistance Payment Scheme, the wage supplement and grants for non-profit community groups.
"The Government will continue working with the horse industry to plan for its long-term future."