"The committee supports compulsory registration for all horses and believes that this, together with the establishment of a national register, would greatly enhance the ability of animal health agencies to respond in the case of an emergency," said Senator Glenn Sterle.
The senator was reporting the findings of the Standing Committee on Rural and Regional Affairs and Transport, which had heard submissions on the Horse Disease Response Levy Bill and two associated bills.
The committee found it is premature to conclude horse ownership will become more onerous or expensive for recreational riders if the bills were passed into law. It recommended the passage of the bills without amendment.
Without the legislation in place, Australia's federal government may not fund disease-containment measures in the event of any future outbreaks.
The legislation would provide the framework for the government to levy horse owners. While the proposal has support, there are concerns it may ultimately place an unfair cost burden on recreational horse owners.
The levy, if the government chooses to collect it, would be imposed when a horse is first registered.
The passing of the law would allow the Australian horse industry to become a signatory to the Emergency Animal Disease Response Agreement (EADRA).
Under the agreement, the cost of responding to emergency disease outbreaks is shared by the affected parties. The government agrees to underwrite the costs of an emergency response to a disease outbreak and in return can levy the industry.
The committee received 33 submissions.
The majority of submissions came from the hobby and pleasure sector of the horse community, the committee said. "Most submissions from recreational organisations and horse breeders were critical of the levy proposals, and this was reflected in the majority of the evidence presented to the committee at its public hearing.
"It is, however, the commonplace experience of committees to receive many more submissions from critics of legislation than from those who support it.
"The committee recognises the concern of community recreational associations like pony clubs over the issue of levies, but points out that owners of horses engaged in these and similar organisations will not be liable to pay a levy.
"Registration of horses is a matter for states and territories, and laws vary considerably.
"The concern of some recreational associations that they will be turned into levy collection agencies needs to be answered in light of their experience. The bill provides for organisations to be so identified or designated, but in the absence of regulations it is not possible to know the scope of what is proposed.
"The committee is confident, however, that regulations will be framed which take into account the wide diversity of horse ownership and riding activity in the community. Negotiation of the regulations will require an intensive level of consultation.
"These bills may be regarded as enabling legislation, allowing for the making of regulations which will spell out the detailed arrangements for levy collection.
"The committee believes that it is premature to conclude that horse ownership will become more onerous or expensive for recreational owners or riders as a consequence of this legislation."
The committee noted that most submissions placed emphasis on distinguishing the recreational from the commercial sector of the horse community.
"Many submissions from the recreational and hobby sector of the horse community emphasised that their horse ownership had no commercial interest, and that most people engaged in this activity did so as volunteers.
The Queensland Horse Council, in its submission, drew attention to the tax deductions available to the commercial horse industry, but not to recreational owners:
"At least 70 per cent of the equine industry does not derive any income from their horses," it wrote, "although collectively they pay millions of dollars in GST which is not reclaimable.
"At least 70 per cent of the equine industry," it continued, "do not benefit from tax deductions on horse related expenditure e.g. feed, fuel, vet expenses, farriers, saddlery and competition entry fees, although these same horse owners are the mainstay of these subsidiary industries."
The committee said that those considered "commercial" in nature argued that, despite the widely different financial means of commercial and recreational horse owners, disease outbreaks do not discriminate between recreational and commercial horses: All horse sectors benefit from the eradication of an emergency pest or disease through lower ongoing disease management costs.
The Australian Horse Industry Council (AHIC) told the committee it recognised the difficulty in achieving a levy decision which would be supported unanimously by the diverse horse community: "We do not see this as a perfect solution by any means," the AHIC said. "It is not universally agreed to. However, we see this as a way that the industry can move forward and have a levy mechanism in place."
The committee felt there were arguments to support the application of a more broadly based levy which would extend beyond the thoroughbred and standardbred owners to include a greater proportion of the wider horse-owning public.
The committee heard evidence and discussion about the merits of compulsory registration.
The AHIC said its key concern was that a levy that applied to the initial registration of a horse by a horse registration body is potentially too narrow and might not extend to the majority of industry participants.
It argued that a levy imposed at the time of initial registration or a horse can only be equitable if applied to the broadest possible contribution base.
The AHIC proposed the mandatory recording of horses, creating a horse database which, in emergencies, could help authorities identify at-risk horses and take appropriate and immediate steps to activate disease eradication efforts. Its submission listed several benefits that of a national horse database, and noted that the idea is being assessed in several states.
"In order to implement some form of national horse database as suggested by the Australian Horse Industry Council, horse registration would need to be compulsory," the committee noted.
"However, only states and territories have the ability to enforce registration of horses. In evidence given to the committee, officers from the Department of Agriculture, Fisheries and Forestry explained that the Commonwealth does not have the constitutional power to mandate national registration of horses."
The Pony Club of Australia pointed out: "Compulsory registration has been in the UK for five years and it is believed that only 75 per cent or less of horses in the UK are registered. Taking into consideration the small area and dense population of the UK, where policing would be much easier than in Australia, this is a very poor result and one can only conclude that any attempt here in Australia would be much less successful."
"The committee appreciates the force of the argument put forward by the AHIC and sees some merit in the implementation of compulsory registration. The committee considers that the establishment of a mandatory universal register of horses in domestic use would enhance the capacity of animal health authorities to act in the event of a horse disease outbreak.
"The committee notes the evidence of the [Agriculture] Department that compulsory registration is not excluded by the arrangements in the Bill and that it could be addressed later.
"The Department advised the committee that the concept of compulsory registration has been referred to the Animal Health Committee of the Primary Industries Ministerial Council for examination."
"It is evident to the committee that the general principle on which this legislation is based is soundly consistent with measures applying to all livestock. This legislation represents an insurance measure to ensure that horse owners will have funds to deal with any future outbreak of equine diseases.
"The committee supports compulsory registration for all horses and believes that this, together with the establishment of a national register, would greatly enhance the ability of animal health agencies to respond in the case of an emergency.
"The committee understands that the establishment of such a register will require consultation and agreement between the states and territories, and is encouraged to note that the concept of a national register has been discussed by the Animal Health Committee which reports to the Primary Industries Ministerial Council.
"The committee notes the concerns of community recreational owners and riders that the measures proposed under this legislation will result in horse ownership becoming more onerous or expensive.
"However, the committee is aware that this is enabling legislation and the policy detail, which has attracted speculation from interest groups, will be contained in regulations which are not yet available. It is too early to condemn the proposed legislation without consideration of the regulations that will follow.
"The committee is confident that the regulations will be drafted in a way that is equitable, and it is equally confident that they will not impose onerous conditions on recreational horse owners.
Opposition Senators John Williams, Bill Heffernan and Nigel Scullion, in a dissenting view, said: "We cannot support the passage of these bills as the proposed levy collection mechanism does not enjoy the support from those who will be liable to pay, does not include horses that pose the greatest risk of disease introduction in the levy collection mechanism, and fails to give consideration to the financial circumstances of horse owners within Australia's horse-associated industries."
The legislation would effectively see the levy imposed on the 50,000 to 60,000 horses registered each year - if registrations continued at that rate.
"Evidence provided to the committee cast doubt upon the willingness to register horses if registration of horses was not compulsory and there was a levy imposed.
"This prescribed collection mechanism excludes all horses previously registered regardless of their purpose or function. The horses that present the greatest risk of disease introduction, including imported race horses and shuttle stud stallions that enter the country will also not be subject to the levy under the provisions contained within these bills."
They continued: "The legislation or regulations cannot be equitable or fair if a backyard hobby breeder or pleasure horse owner who derive no income through their horses pays the same levy as a professional breeder earning or charging considerable sums of money through their activities."
Senators Rachel Siewert and Christine Milne, of the Greens, said: "The Greens believe that compulsory registration of all horses is necessary and would provide a national database which would enhance the capacity of animal health authorities to act in the event of a horse disease outbreak.
"The Greens do not oppose the collection of a levy but we do not share the optimism of the government that all equity issues will be taken care of in the regulations. The devil will be in the detail.
"Without seeing the regulations, we remain to be convinced that the concerns of community recreational owners and riders regarding costs and how onerous the collection of the levy will be, will be addressed in an equitable way."
Senator Julian McGauran said she supported the principle of applying a levy upon the horse industry to meet its obligations under EADRA.
"However, the principle to impose a levy must be supported by the principle of equity between all involved. To this end the Horse Disease Response Levy Bill 2008 does not meet the principle of equity and subsequently I dissent from the majority recommendation."