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.
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Geoff Capper
27/10/2015 7:21:02 AM

I had to laugh at this, it sounds just like our political system, notwithstanding David's claims to the contrary. Yes, we get to vote every 3 years, but then the pollies generally go off and do what they want anyway...
Rob Moore
27/10/2015 7:37:47 AM

BRAVO-David L. Go to the RRATsubs on Govt hansard site. Pull up Rob Moore's sub & you will see that from the Roma Red Meat sen INQ- I tabled4 items that proves that the 4 biggest meat processors DON"T pay a levy BUT have the controlling voting block in the MLA (so called "producer co"). Their ONLY legit way would be to pay a grainfed levy out of their OWN f'/ots to their own works.The ACT exempts this & half a mill cattle exempt /yr tends to confirm my theory. See the LRS evidence that I TABLED. Any journalist worth feedingMUSTfollow up on this. I demand a ruling from the Aust govt sol on act!
John Carpenter
27/10/2015 7:39:00 AM

At least there is one person in the Australian parliament who has the courage to stand up for freedom and democracy.
27/10/2015 8:30:02 AM

Well said David. Wages for those spending my money must be linked to their performance, based on return to levy payers. No increase in wool, meat etc, no increase in wages. You have to ask why won't Govt change, so those paying have a say and get a return? You can understand those profiting from the levies not wanting to change. What are the rest of the pollies getting from doing nothing? The satisfaction in keeping farmers poor and without a voice? What is the NFF doing, nothing. There is more freedom and democracy in China than AU.
Rob Moore
27/10/2015 8:31:59 AM

Barnaby Joyce is a disgrace for not acting on all these senate inquiries. I have put abt a 1000hrs into getting reform in last 2 yrs & Joyce wouldn't have even read any of it. Every day is "mile high" for a photo shoot,pr, hand out a bit of money to all these trough dwellers. Spruiking free trade ,motherhood lines while our production base turns extinct!The NP-Scott ,Truss,BJ- no wonder we are near done for!
John Michelmore
27/10/2015 8:59:13 AM

David, We wrote to many Senators requesting their support for a disallowance motion should Barnaby not adopt the Senate recommendations re the grass fed levy inquiry. We got one gobbledegook response and then nothing. The Senate is not serious when they do these inquiries, they are just playing politics and costing us all money in inquiry submissions. Their intention must therefore be the same as the government, that is taxation without representation. This is SOCIALISM and Government prescribed bodies with assigned constituencies that do not represent the tax payer!!!
John Michelmore
27/10/2015 9:14:46 AM

If the existing Senate political parties make recommendations that are not adopted even when they are bipartisan and better, and nothing is done by the government, and Barnaby Joyce, to fix the broken system, then why wouldn't those disaffected disappointed farmers join the Liberal Democratic Party? David is the only one supporting democracy here, the Senate has the power to bring the lot down using disallowance motions and they do nothing to restore democracy. How can we continue to support their party?
Hands Off My CAsh
27/10/2015 10:59:36 AM

David, as is your custom, another well-considered and articulated article. One key aspect not mentioned is transparency. The root of the levy problem is legislation that enables entities higher in the supply chain to deduct levy costs from grower returns. Hence the majority of growers do not understand either the quantum of the levy, nor the impact on their net returns. Many growers support an industry-wide contribution towards future sector profitability. However analysis of the grains sector shows failure to achieve this goal. Also, 20% of growers pay 80% of sector levy costs.
Rob Moore
27/10/2015 11:55:09 AM

HOMC- the monthly LRS remit form says it all- it is grouped up to 6 headings& totally anon.See handsard- my sub attachs-there-showing it..CCA smith says could take 3yrs to id producers?If the ATO were to collect levy-full transparency+amt's displayed on BAS returns.Voting rights then immediate& accurate.NP,SFO's CCA,NFF,AMIC,AMPC,Ausmeat all benefit NOW in this unaudited SLUSH fund ($100M)& they certainly don't intend to change it. We must flush the parasites away before they kill the beast!Can trace a beast BUT NOTtheir owner.Surely CCA can't be serious although there contemp for us boundless
27/10/2015 1:17:09 PM

So, David's opinion is that levy payers are required to fund a system and yet have little or no say in who controls the expenditure of the funds beyond that payment? I do wonder if he sees any irony in his comments, given he's a Senator for NSW representing the Liberal Democrat Party. Anyone here vote for them?
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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