Levy system must be accountable

Not only are most levy payers never consulted, nobody even knows who most of them are.

TAXATION without representation sucks.

It is inherently unfair to be required to pay for a system but have no say in how the system works.

Welcome to the world of agricultural levies.

A levy may sound more benign than a tax but make no mistake: R&D levies, marketing levies and biosecurity levies are all taxes on production.

And even if it is accepted that each of these levies is useful and should be paid by agricultural producers, very few levy payers are ever actually asked.

Earlier this year two Senate inquiries recommended to the Agriculture Minister that this should change.

I was an active participant in the second inquiry, which examined the levy system across all agricultural and horticultural sectors.

By the end of the first hour of evidence at the first hearing, it was apparent the system is broken.

Not only are most levy payers never consulted, nobody even knows who most of them are.

But changing this does not suit government, most industry bodies or the levy spenders.

They do not want genuine accountability, but prefer the current system in which the well-connected have a small say while fundamental questions, such as whether to impose the levies in the first place, are never raised.

In reality, government is only listening to peak industry bodies and R&D organisations, whose main interest is in spending the levies, and not the producers who pay the levies.

Lest the scale of the problem be misunderstood, compulsory paid by producers each year amount to $500 million.

In some sectors the amount paid in levies is more than the profit made by individual producers, and numerous producers pay hundreds of thousands of dollars per year.

By any measure, levy payments are a significant impost that should be fully justified.

And in reality, most producers do not actually begrudge paying a levy if they see value in it.

Two sectors have moved in the right direction.

Tens of thousands of dairy farmers and wool producers are polled every few years to determine the rate of the levy.

Quite rightly, this includes a zero option, which if adopted would mean levy payments ceased and various people would lose their jobs.

So far, this has never been chosen.

Other levy payers are occasionally given an opportunity to vote on a levy when it is first introduced, but never asked again.

And, as the inquiry heard, there are many sectors in which levy payers have never had an opportunity to express a view despite paying levies for decades.

And now we hear the dairy industry suggesting it should abandon its poll, blaming excessive cost.

To this I have a four word response: over my dead body.

The argument that it is too expensive to give producers a democratic say in raising and spending levies is disingenuous.

The real fear is that, given the option, levy payers might choose the zero option.

The only absolute requirement for democracy is a database of levy payers.

In this age of the internet, secure online polls can be undertaken at very low cost, and even a postal vote is not expensive.

Most of the cost attributed to the wool and dairy polls is a result of the inclusion of campaign costs by levy spenders seeking to convince producers to vote for a particular option.

Counting this in the overall cost is false and deceptive.

Setting up a database of levy payers was a key recommendation of the Senate inquiry.

Both the Minister and Department need to get busy making it happen.

Yes, it might require a change in legislation to allow the collection and aggregation of levy payer details, but this would have bipartisan and crossbench support.

Sure there may be some teething problems, but developing a database is hardly rocket science.

And of course, a database of levy payers would also be very useful in managing future biosecurity issues.

It is interesting to observe the enthusiasm of peak industry and R&D bodies for collecting and spending producer levies, but then see their enthusiasm dissipate when the discussion turns to giving levy payers a say on whether to pay the levies in the first place and how their money should be spent.

This same problem does not confront the general community.

We all get to vote for a government every three years, and can choose a party that promises higher or lower taxes.

It is time we gave primary producers a similar say over their hard earned money.

THE report on the Senate Rural and Regional Affairs and Transport References Committee inquiry into agricultural marketing and research and development (R&D) levies was handed down in June. It recommended making legislative changes, on the collection and distribution of agricultural levy-payer information, to help create more detailed and accurate databases to increase transparency and accountability. However, the federal government is yet to respond to the report’s seven recommendations.

David Leyonhjelm

David Leyonhjelm

has worked in agribusiness for 30 years and is a Senator for NSW representing the Liberal Democrats.
Date: Newest first | Oldest first


John Michelmore
27/10/2015 2:02:33 PM

Mike you need to read the article carefully, that is not what David said at all, in fact he said the opposite! the existing system is taxation without representation, David is saying that system is broken!!
27/10/2015 8:19:14 PM

At the very least, farmers should be able to choose who gets their marketing or R&D levy!
27/10/2015 10:06:06 PM

Well said Senator. The prescribed Ag industries brain’s trust must now give thought to their collective market access roles & tax funding now that the Dept of Trade did their job for them, or whether there is actually any further need for their existence and their tax-eating producer sycophants given that the Trans Pacific Partnership (TPP), the China Free Trade Agreement, the US Free Trade Agreement, the South Korean Free Trade Agreement and the Japan Free Trade Agreement are all about to be enacted into law for the CHfta and TPP and is already law for the USfta, SKfta and Jfta ??
28/10/2015 8:03:50 AM

Mike; given that the National party no longer represents the bush only the industry bodies and the levy spenders, the 10%ers, then why should we continue to support the NP? The Liberal Democrats are the only ones fighting for the average farmer - exercise your democratic right when you vote next time and vote down the NP. Get involved with the Liberal Democrats!!
The Serf
28/10/2015 8:48:54 AM

David, thank you for your support you are the only politician in Canberra interested in our rights and in our democratic future; every word you say is true, unfortunately Joyce and NP will not support the majority view and our rights that we requested during the Senate inquiries they simply acquiesced to the industry bodies and the levy spenders – the same groups that instigated the levy structure in 1997 – we were not consulted then and nothing has changed. We want a Plebiscite to determine that there is majority support for the Levy structure in the first instance!!
Angry australian
28/10/2015 8:49:46 AM

The user pays levy system has already all but destroyed one industry,the fishing industry , I seriously doubt whether farming can hold on.Successive governments have been conned by the Sir Humphreys.There is only so much money you can take out of a kg of beef or lamb or a tonne of grain before the farmer doesn't feel financial stress.the claim is its for the betterment of farmers,the question is after 24 odd years where are our financial gains? The only winners from this system are bureaucrats, government and industry and research institutions. This "fraud" needs cleaning up!
28/10/2015 9:42:46 AM

this guy is part of the problem and none of the solution and prattles on about all and sundry. Get out of the way and let governments govern and get the economic settings right. Whining on about levies achieves nothing.
Rob Moore
28/10/2015 12:30:47 PM

Given that no journo's got the guts to use my evidence on hansard now-I will go to the Fed police & file it when next in Bris(MLAagm).It will prove that the worlds biggest multinationals have had voting control over our producersfunds for LAST 18yrs. EVERY subsequent change -nlis,lpa,heavy trimming , dark cutting ,post weighing/extended o/night feedlot curfewing HAS come at the cost to PRODUCER=vast gain to p'cessor.China has Kilcoy now& will have rest of Bindaree in no time +Kidman.Competition will be the usual ZERO Joyce's office has ignored this for 12mths=offence re tax/levypayers $'sgov!
28/10/2015 3:05:02 PM

Rob, just go to 4 Corners.
28/10/2015 7:35:09 PM

freetradeessential - 28/10/2015 9:42:46 AM - yes free trade is essential but essentially useless if domestic regulation and taxes remove any gain provided by any abolished trade restrictions which increases our competiveness. The Senator understands this, pity you don’t. Best you change your name to – haventgotaclue.
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Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com


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Sorry did i get it wrong..? Rankins Springs is still open..?!
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No doubt a few frosted Freddies out there who will wish they had taken a closer look at the AGC
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Matthew, I was wondering if you had followed up this story with the farmer after the whole