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Monday, 1 September 2008
Page: 6755

Mr TRUSS (Leader of the Nationals) (7:45 PM) —The Horse Disease Response Levy Bill 2008 seeks to include the horse industry as a party to the Emergency Animal Disease Response Agreement, EADRA, of 2002. It proposes a mechanism for collecting a levy from the horse industry so that industry can participate in the emergency animal disease response arrangements and contribute financially as its obligations may arise.

The Emergency Animal Disease Response Agreement was put in place in 2002 as an agreement between the Commonwealth, the states and territories, and peak livestock industry councils. EADRA replaced the old Commonwealth-states cost-sharing agreement and it provided a role for industry in disease eradication responses  not only in a financial capacity—by sharing the costs of that work—but also by giving them a seat around the table when important decisions were being made about the nature of a response to any kind of disease outbreak.

The negotiations to put in place this agreement were very extensive. I happened to have the privilege of being the minister at the time, and I can vouch for the fact that those negotiations were conducted in good spirit, with a consciousness right around the nation that there needed to be improvements to the way in which state, territory and Commonwealth governments responded to disease outbreaks and the way in which the industry was involved in that process. We needed a better way to address the diseases which also recognised the shared responsibilities that industry and governments had for these kinds of incidents.

The real purpose of the discussions and the negotiations was to concentrate less on who was to blame for an outbreak and more on how we could respond promptly and appropriately to deliver the best possible outcomes. Of course, the decisions that need to be made about a disease outbreak vary. Sometimes it is possible to intervene early and eradicate a disease or pest which has entered the country, and that is clearly the best possible outcome in the event of such an incident. But in some cases it is very difficult indeed to combat a disease once it has entered the country, and a decision might be made that the economic benefits do not justify a large-scale—or even, for that matter, a small-scale—intervention.

We have had some remarkable success stories in Australia in relation to the elimination of diseases, both in the plant sector and in the animal industry. There have been occasions when the experts have suggested it could not be done, but there was a sufficient determination to do it and we have been successful. An obvious example of that is the papaya fruit fly outbreak in North Queensland. I think few would have believed it was possible to eradicate a fruit fly once it had entered the country but, with some of the new technology that was available, that effort was successful. It is a real credit to the industry and to the science in Australia that that objective was achieved. More recently and freshest in people’s memories is the equine influenza outbreak. Again, many thought that it would be impossible to eliminate this disease, but, in a time much shorter than most of those with expertise in the field thought possible, that disease has in fact been eradicated.

From time to time we will have diseases come into this country, and we will need to respond and decide the best way in which to deal with the issues. As I mentioned earlier, sometimes it will not be practical for one reason or another to eradicate the disease or a decision will be made that the economic benefits do not justify the effort. But, in other cases, our pest- and disease-free status, wherever it exists, is a precious asset and we want to maintain it wherever we can. I will always be an advocate of having a go at getting rid of a pest or disease if there is a modicum of scientific evidence that it is achievable. We should try, put in a maximum effort and endeavour to achieve the objective.

Perhaps one example of a pest that has been more difficult than anticipated to eradicate is the fire ant in Queensland. In fact, I suspect that if the other states and even the Commonwealth knew how difficult and costly that exercise would end up becoming, we may not have started it in the first place. But the Queensland minister of the day was very persuasive; he was on television very regularly telling everybody what he was achieving. As the minister at the time, he copped a fair bit of criticism from his state colleagues because they were bearing a share of that cost. But, in the end, the decision was made that we would proceed and, whilst the fire ant has not yet been eradicated, substantial progress has been made. I think most believe now that it is at least possible and that the investment made to date needs to be extended.

There are examples of Australia leading the world in successfully eradicating disease. We should be proud of that. There are occasions when we have been successful where others have failed. Part of our capacity to deal with some of these issues is to do with the quality of our science, but I think, particularly over recent years, there has also been a much better spirit of cooperation between the states, the Commonwealth and industry to achieve that objective. Often there had been an unwillingness by various states—particularly as you go back over past decades, when a lot of these issues were wholly state responsibilities—to work constructively together; therefore, these eradication campaigns would inevitably fail. Frankly, pests and diseases do not know state boundaries. If they are carried in the wind, they can be across a couple of states in a relatively short period of time. For that reason, there does need to be a national focus and a national effort to address these issues.

The Emergency Animal Disease Response Agreement was negotiated with the goal of establishing a mechanism to facilitate rapid responses for the control and eradication of or the containment of certain animal diseases, with the costs for the response then shared between governments and industries according to a formula based on economic and other benefits from the eradication. These formulae have often also been the subject of some degree of criticism and controversy; that is not surprising. Indeed, there will be ongoing debate about how the cost should be weighted in particular instances.

Clearly, in some instances, the major beneficiary of the elimination of a disease is the industry itself. But, in some instances, the industry has little to lose from the introduction of a disease and the real impact falls on other sectors of our biological diversity or, for that matter, the national economy. In those cases, it is reasonable that governments bear a bigger share of the eradication costs.

I think the principle behind both the animal disease eradication program and the plant eradication program is very worthwhile. Both of these programs depend upon a mechanism being in place, in the event there is a cost to be met, to collect the industry’s share through some kind of levy arrangement. In fact, again, if I may revert to my time as minister, I always encouraged industries in good times to put aside a bit of money—kick their levy into place—so that they would have a little bit of a fighting fund for when an outbreak of a disease occurred. Once a disease outbreak occurs, particularly if it is a large-scale event, the industry will be in a weakened state financially at the very time it is expected to collect levies to pay off its share of the costs. So I think the idea of developing reserve funds is a sound one. I regret the fact that more industries have not taken up the opportunity that is provided under both of these programs to have in place some kind of funding that they can use in the event there is an outbreak of disease.

This particular bill is about the way in which the horse industry should be involved in the disease eradication program. The Australian Horse Industry Council, Harness Racing Australia and the Australian Racing Board are the peak horse industry representative bodies; they are the horse industry bodies that are eligible to become signatories to EADRA. Upon commencement of EADRA in 2002, the Australian Horse Industry Council was unable to secure a suitable mechanism to raise funds to cover potential liabilities; thus, it is not currently a party to the agreement. So, whilst there was a degree of support for the industry to be involved, those organisations were not able to agree on an appropriate mechanism.

I think it is beyond doubt that the horse industry should be in EADRA; I think the industry itself recognises that it should be there. The EI outbreak is a demonstration of how it is important for this sector to be a part of a disease eradication program. But this bill is not about whether the horse industry should be in EADRA; it is about the way in which its levy should be collected—and that is what is controversial. The mechanism proposed by this bill for collecting the horse levy has not been warmly received by the industry, and the coalition will be opposing the bill for that reason. We support the involvement of the horse industry in disease eradication programs, but there must be a levy collection system which is fair and equitable and has the overwhelming support of the horse owners who would become liable to pay any future levy.

The bill gives no weighting to the potential risk of outbreak of disease applicable to each sector of the Australian horse industry or, for that matter, their capacity to pay. There is potentially a higher risk associated with the thoroughbred sector. This is associated with imported racehorses and shuttle stallions with the mandatory requirement for live joining as opposed to domestic-use-only horses. Despite the potential risk of exotic disease introduction and spreading being higher with the number of movements, both internationally and domestically, associated with the racing industries, the bill proposes that all registered horses be subject to an equal levy.

The RIRDC did some research on horse numbers in Australia and concluded that there are about 1.2 million. Of those, around 300,000 are feral horses. I am not sure who should be responsible for paying the levy on feral horses, but I suggest that it would be rather difficult to collect, as the responsibility, if it were to belong to anyone, would rest with state governments, who generally pasture these horses on national parks or state reserves and the like.

We should not overlook, however, the significance of feral horses in any disease eradication program—and that applies not just to the horse industry; it is equally true of wild pigs or other wild animals, which can, indeed, be significant conveyers of disease across the country. Had EI, for instance, escaped into the feral horse population, we would have had an uncontrollable problem. I wonder why, therefore, we do not make a greater effort to eradicate many of these feral animals—feral horses and, in particular, feral pigs. They are destructive to our environment and are often enemies of our native wildlife. For that reason, they have little value in the order of things in our environment. I think that, whilst it is a totally separate issue from the bill we are debating today, there does need to be a much more enthusiastic effort, at both the state level and the local level, to get rid of some of these feral animals.

Of the 1.2 million horses in Australia, the total number of horse registrations a year, including pony club registrations, is estimated to be between 50,000 and 60,000. In the 2005-06 breeding season, 29,070 thoroughbred mares produced 17,854 foals, of which 13,618 were registered. Considering that there are 1.2 million horses in Australia, the fact that so few were registered demonstrates what a small proportion of the horse population would be covered by the mechanisms proposed in this bill. Something like 20 per cent of the total number of horses registered nationally are coming from the largest commercial group in the Australian horse industry and yet many other parts of the sector would not be picked up at all by the mechanisms proposed in this bill.

An analysis of total horse registrations reveals that the majority of horse registrations—approximately 80 per cent—are with breed associations or pleasure performance riding groups, such as pony clubs, cutting, reining and campdrafting et cetera. The unfairness of these bills is demonstrated by the fact that 80 per cent of the levy collected would come not from the upper end of the industry—the thoroughbred producers or breeders—but from pony clubs, pleasure and performance horse owners and families that own just one horse. They would be paying 80 per cent of the total levy collection. I have already mentioned that the levy collection itself would cover only a very small proportion of the horse population. So this bill will place a heavy load on just one small sector of the horse owners of Australia.

Let me point out another anomaly in the levy arrangements proposed by the government. The levy would pick up certain thoroughbreds, quarter horses and horses of breed societies et cetera; it would pick up horses that are registered with these groups. However, most of these groups have international registries. So you could simply avoid the levy by registering your Australian born horse in a register somewhere in another part of the world, and there would be economic benefits in so doing. It will be easy for horse owners to get around their levy obligations by registering their animals in another part of the world. The legislation that we have before us is fundamentally defective because it fails to place the burden on the industry equally. It leaves loopholes that will enable most horse owners, except those who own their horse for pleasure purposes, to avoid the arrangements that are proposed to be put in place. It is an ineffective mechanism and, for that reason, it cannot be supported.

The government has claimed that the three peak national horse representative bodies support the passage of this bill, but that is not really correct. The president of the thoroughbred breeders association, in a letter to the minister on 13 August 2008, said:

TBA supports passage of the bill through the parliament in the spring session on the understanding that the government will consult with industry to establish a fair and equitable registration scheme to ensure the burden of the levy does not fall on too few horse sectors.

The reality is that that has not happened, because this bill places the burden on a restricted part of the horse industry.

Mr Burke —They’re not one of the three bodies

Mr TRUSS —I will get to the others. This is conditional support at the very best. It depends upon the government reviewing the collection method—the purpose of the bill—to make it fairer and more equitable. AHIC has written in support of the bill, even though many of their member organisations strongly oppose it. An AHIC survey of their member organisations, reported in July 2008, found that, while the majority of respondents supported the industry becoming a signatory to EADRA, the proposed collection method based on horse registration was not supported. Again, the basic fundamental of the bill was not supported by the peak industry organisations. Individual AHIC members have also expressed strong opposition to the bill. In fact, as little as two out of 16 of their member organisations have indicated support, and both of those have ways in which they can get around paying their fees. They can register their horses internationally and, therefore, avoid their obligations to the Australian levy arrangements.

The Queensland Horse Council general meeting on 15 July 2008 passed the following motion:

The QHC is not in favour of signing an emergency disease response agreement or committing to any associated levy at this time.

The National Campdraft Council of Australia opposes the signing of EADRA due to the financial impost that would be placed upon their members.

Pleasure horses and hobby horses are not the industry. The industry, in this instance, is those who support them—such as the farriers, the feed suppliers, the vets, the events operators and the track equipment suppliers. They would be the ones who would probably bear the greatest financial burden under any disease outbreak.

The recent EI outbreak highlighted that EI caused significant social disruption as well as economic impacts. The EI outbreak also highlighted the inequities inherent in the government’s proposed collection methodology. The Callinan report found that, while the cause of the EI outbreak could not be definitively determined, the most likely cause was a failing within quarantine processes. Under the proposed bill, 80 per cent of the cost to industry of the EI outbreak would have been passed to the pleasure performance and hobby sector, with only 20 per cent to the racing sector, and most horses in Australia would not be covered by the levy collection arrangements at all. The pleasure performance and hobby sector, as the minister would well know, were somewhat critical of the assistance measures that were provided to the industry following the EI outbreak and also of the emphasis that was placed on the racing sector when it came to introducing vaccines to eliminate the disease. So priority for eradicating the disease was given to a sector that will contribute a very small proportion of the levy income.

It can also be strongly argued that some sectors of the industry have a greater capacity to pay than others. We would all recognise that people who own a pony for their children often have a much lower capacity to pay than those in the multimillion-dollar horse racing and thoroughbred breeding sector. This is a major industry. I think it employs 80,000 people. So it has substantial substance. It is one of the great Australian industries. Yet it would contribute the same amount per horse as someone who owns a pet pony. I do not think that those sorts of arrangements can be characterised as being fair.

We have learnt a lot from the EI outbreak, but I do not think that, with this legislation, the government has learnt from that experience. The legislation was brought in some little time ago and, correctly, the government delayed the debate until after the Callinan report. But there have been no changes to the bill as a result of the Callinan report and, clearly, the issues associated with the way in which the levy is to be collected have not been resolved. The government’s only action was for the minister to write to the horse owners on 11 June, where he directly threatened horse owners by refusing further assistance in the event of a disease outbreak such as EI if the industry failed to sign up to the Emergency Animal Disease Response Agreement.

Let me repeat again: I think the industry should be in the agreement, like all other sectors that may face a disease entry at some time. They should be in there, but the mechanism to collect the levy has got to be seen to be fair and equitable. I do not think that what is being proposed in this legislation enjoys any of those characteristics. It is for that reason that the opposition will not be supporting the bill. Instead, it will be our plan in the Senate to refer this matter for further investigation. We want to look particularly at the level of support for the proposed collection mechanism within industry groups. We need to investigate alternative levy collection methods. I have already pointed out that, in my view, this bill does not pass the test. There are other ideas out there. For instance, the concept of a levy on horseshoes was debated and enjoyed quite a degree of support. I acknowledge that it also had some deficiencies. What we are probably going to need is some kind of multitiered collection which also recognises the capacity of an industry to pay. By using a series of collection mechanisms, it might be possible to introduce a greater degree of fairness and equity in the system. We also need to investigate the suitability of the EADRA collection guidelines as they apply to the unique nature of the Australian horse industry. It is clear that we do need to do a lot more work on devising a system that will be successful for the industry, that will be fair to all and that will collect an appropriate amount of funds in the event of there being a requirement to be involved in a disease eradication program. I do not believe that this bill meets those criteria. So, whilst supporting the involvement of the equine industry in the disease eradication agreement, as we support the involvement of other industries, the levy mechanism must be fair. This bill fails that test.

Debate adjourned.