The federal government has announced it will not levy the horse industry to repay its share of the cost of eradication.
Agriculture Minister Tony Burke said the former government had failed to make arrangements for the horse industry's emergency disease preparedness, despite sitting on an industry proposal for more than a year.
He said the Labor government would not be asking the industry to pay for "the former government's failures".
Burke said he had met with various sectors of the horse industry to discuss the issue of cost recovery and had listened to their concerns.
As early as 2006, the horse industry proposed a levy to protect it against the impacts of emergency disease outbreaks.
This would have brought the industry under Australia's Emergency Animal Disease Response Agreement (EADRA), through which the federal government meets costs and recovers an agreed share from the industry, usually over 10 years.
Burke said it would not be proper to legislate retrospectively to recover costs for the 2007 outbreak, since the industry was not a signatory to the agreement at the time.
Legislation to bring the horse industry into line with these arrangements is before parliament but debate was postponed until the issue of last year's costs was resolved.
It is now expected to pass, but with a levy to remain at zero until agreement is reached with the industry on measures to deal with any future disease outbreak.
"Last year's horse flu outbreak had serious economic and social effects," Burke said.
"The federal government has so far spent more than $A342 million eradicating the virus and in financial assistance to individuals, organisations and businesses.
"We will now work with the industry to deliver what it has wanted for years – to sign up to a national agreement for responding to emergency animal diseases."
Other livestock industries including cattle, wool, sheep meat and dairy, are already signatories to the agreement.
Burke said the 2007 equine influenza emergency response was unique and the decision not to recover costs from the horse industry does not set a precedent.
He urged the industry to agree on future levy arrangements and sign up to the national agreement without delay.