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Wednesday, 3 September 2008
Page: 6973


Ms MARINO (10:56 AM) —I rise to speak against the three proposed bills, namely the Horse Disease Response Levy Bill 2008, the Horse Disease Response Levy Collection Bill 2008 and the Horse Disease Response Levy (Consequential Amendments) Bill 2008. The purpose of these bills is to introduce a levy on the initial registration of horses so that the Australian horse industry, under the terms of the Emergency Animal Disease Response Agreement, can repay the Commonwealth for financial assistance in the event of an outbreak of an emergency horse disease. They provide for the collection of horse disease response levies by persons or bodies that register horses and the liability of horse registration bodies to pay the levy payments to the Commonwealth. They impose penalties for unpaid levies and provide for remission of any penalties. They provide for the gathering and collection of information and documents together with a strict liability offence for failure to comply with an information request. They also aim to amend the Australian Animal Health Council (Live-stock Industries) Funding Act 1996 to enable the Commonwealth to appropriate the horse disease response levies paid to the Australian Animal Health Council to repay the Commonwealth for underwriting the horse industries’ share of the costs involved in dealing with future emergency outbreaks of horse diseases.

These bills will enable the Australian Animal Health Council to utilise any excess horse disease response levies for research and development purposes or the promotion and maintenance of horse health. These bills also provide a mechanism for Australia’s horse industry to become a signatory to the Emergency Animal Disease Response Agreement. The horse industry is presently not a signatory to the agreement as a levy collection mechanism could not be identified. An emergency response to the recent equine influenza outbreak was activated under the provisions of the EADRA without the horse industry being a signatory. Following significant industry and wider political pressure, the government’s decision to pay the costs associated with last year’s equine influenza outbreak was welcome news for the thousands of horse owners and breeders. We are all aware of the financial losses that were experienced by many in the equine industry resulting from the equine influenza outbreak.

As we have heard from the previous speaker, the impact on the horse industry and ancillary operations was massive. The lucrative Australian horse racing industries in the eastern states were closed down, gambling revenue on horse racing was curtailed and betting on alternative racing such as greyhounds also fell, whilst the impact stretched into the recreational and community sphere with campdrafting, polocrosse, gymkhanas and local horse shows postponed or cancelled. Many small professional training businesses faced extreme economic pressure during the quarantine period. The equine industry in Australia is a major employer. That is frequently overlooked. As a result, the impacts were very widespread and compounded.

In addition, the cost of maintaining a strict quarantine regime meant that horses could not be transported and that, in many cases, feed and care had to be maintained at sites away from any home base. This also caused considerable disruption to horse events and to our Olympic team preparation—but they did get a silver medal. The thoroughbred and harness racing industries were deeply affected by the loss of revenue caused by the cancellation of racing events and the impact of quarantine restrictions on breeding programs. Peak horse industry bodies had called for government assistance during the equine influenza outbreak and received both federal and state government assistance at different stages throughout the quarantine program. However, some of this financial assistance did not cover owners of horses from Western Australia who had mares being served in New South Wales or other states.

Mr Rob Witten from Capel in my electorate was one such owner. Mr Witten faced significant costs in extended agistment and veterinary fees whilst his mare was in New South Wales being served because the mare was quarantined at the stud for the duration of the equine influenza. The mare was quarantined in New South Wales for 12 months and it cost an additional $1,000 a month in agistment alone. However, there was no form of financial assistance available to Mr Witten and the many other interstate mare owners in the same position, whilst there was assistance available to other horse owners in New South Wales, administered through the federal government in three rounds. Some people missed out on business assistance.

The government instigated an inquiry into the outbreak, the Callinan inquiry, the report of which was released in June 2008. The investigation found the Australian Quarantine and Inspection Service was culpable in that it failed to ensure diseases did not escape from its Sydney Animal Quarantine Station at Eastern Creek. The Hon. Ian Callinan stated:

The social and economic effects of an outbreak of equine influenza virus in the Australian horse population were predictable and foreseen … the Department of Agriculture, Fisheries and Forestry assured the Minister … that it would not happen here.

But clearly it did happen here, and it had a major financial and social impact on Australia due to the disruptions of employment and the bans on horse movements within the racing industry and the recreational horse industry. It was certainly a wake-up call for the Australian Quarantine and Inspection Service. It was also an expensive lesson for all those associated with such a diverse horse industry that we all have to take responsibility for following and upholding decontamination rules.

The actual cost to the Australian horse industry, estimated to be hundreds of millions of dollars, is still to be determined. More than $342 million in federal funds have been spent eradicating horse flu and helping individuals and organisations. But not all were assisted. Kerry and Darryl Bagley, of Baldivis, south of Perth in Western Australia, are recreational horse owners involved in eventing who were disadvantaged last year when the South Australian government cancelled a three-day event in November. They had already paid for their non-refundable air tickets and accommodation and these were not covered by travel insurance. They thought themselves lucky because they had competed for and won free transportation for their horse to the event, a once-only opportunity that cannot be taken up again. They are concerned that this proposed legislation will expect recreational horse owners to pay levies and yet still be disadvantaged because most of the funds, as we have seen just recently, although spent eradicating equine influenza, have been directed into the racing industry and recreational horse enthusiasts have been left out of any assistance.

Cathy Wood’s operation in the south-west, in my electorate of Forrest, was also affected by the EI outbreak. Cathy is a hobby breeder of standardbreds and thoroughbreds for the racing industry. She was unable to use compatible stallions in the eastern states for her mares. This may affect her yearling sale outcomes in the future yet she comments that she would be unlikely to be granted financial assistance. As a hobby breeder she is unlikely to benefit from future government assistance offered by a levy, the subject of these bills, yet she will be required to contribute to it as she breeds between six and eight foals per year that are registered. Cathy considers the levy to be a knee-jerk policy and proffers that prevention is better than a cure and it starts with quarantine regulations.

The EI outbreak also highlighted the inequalities inherent in the government’s proposed collection methodology. As a result of the EI emergency, Australian horse industry peak bodies have agreed to support federal government legislation to introduce a levy to raise funds for future emergency assistance measures. In the event of a future emergency disease outbreak affecting the horse industry, the Commonwealth government will initially finance assistance measures to the horse industry but that will be repaid from funds collected by the levy over time. Regulations to be made under the Horse Disease Response Levy Act 2008, when passed, will determine the amount of the levy. The coalition opposes these bills as they propose a levy collection method that is not accepted as fair and equitable by the overwhelming proportion of horse owners who would become liable to pay any future levy. The passing of these bills would result in performance and recreational horse owners contributing the largest proportion of the financial levy towards the cost of containing and eradicating diseases such as equine influenza, even though they receive little or no financial income from their horse activity.

Mr Anthony Wood of Boyanup contacted me to say he believes the levy should be applied on all horses crossing borders or seas. He has only one brood mare, which is served on the farm, and does not believe that his operation poses a risk because his horses do not move from his property. More importantly, the bills as proposed will still only result in 50 per cent of all foals born being subject to such a levy. The number of horses in Australia is estimated to be 1.2 million. The total number of horse registrations a year, including pony club registrations, is estimated at 50,000 to 60,000. In the 2005-06 breeding season, 29,070 thoroughbred mares produced 17,854 foals, of which 13,618 were registered. That represents only approximately 20 per cent of total horses registered nationally coming from the largest commercial group in the Australian horse industry.

An analysis of total horse registrations reveals that the majority of horse registrations, approximately 80 per cent, are with breed associations or pleasure and performance riding groups such as pony clubs and cutting, reining and campdrafting groups, with approximately 621,000 registered and 500,000 unregistered horses. Therefore, only a small proportion of the total number of horses would be subject to levy collection. Further, the majority of any liability to be recovered through the levy would fall upon pleasure and performance horse owners, who derive little or no income from their horses and consequently would also receive little or no compensation through the Emergency Animal Disease Response Agreement as a result of a disease event.

The Emergency Animal Disease Response Agreement was put in place in 2002 and included the Commonwealth, states and territories and peak livestock industry councils as parties to the agreement. The EADRA replaced the Commonwealth/States Cost Sharing Agreement. The EADRA was negotiated with the goal of establishing a mechanism to facilitate the making of rapid responses to, and the control and eradication or containment of, certain animal diseases, with the costs of the response shared between governments and industry according to the classification of the disease.

The Australian Horse Industry Council, Harness Racing Australia and the Australian Racing Board are the peak industry representative bodies and the only horse industry bodies that are eligible to become signatories to the EADRA. The government claims that all three of these peak national horse representative bodies support the passage of these bills. This is not totally correct. The president of Thoroughbred Breeders Australia said in a letter to Minister Burke on 13 August 2008:

Thoroughbred Breeders Australia supports passage of the bills 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.

This is conditional support and relies upon the government to review the collection method for fairness and equity. The Australian Horse Industry Council has written in support of the bills even though many of their member organisations strongly oppose the bills. An AHIC survey of their member organisations, reported in July 2008, found that, while a majority of respondents support the industry becoming a signatory to the EADRA, the proposed collection method based upon horse registrations was not supported. Opposition to these bills also extends to the fact that they give no consideration to the potential risk of disease outbreak applicable to each sector of the Australian horse industry. Individual AHIC member groups have also expressed staunch opposition to these bills.

Pleasure horses and hobby horses are not the whole industry. However, they are a sector that supports the wider industry—farriers, feed suppliers, vets, event operators, trainers, breeders and tack and equipment suppliers—who would be liable for the greatest financial burden under the levy proposal. Under the proposed bills, the costs to industry of the EI outbreak would have been passed on, in the majority, to the pleasure, performance and hobby sector. Despite the learnings made possible through the EI outbreak, the government has failed to address any of the concerns raised by all horse owners. The government has also failed to propose an equitable base from which to charge such a levy and how often the levy charge will be reviewed. I would also ask whether international shuttle stallions will be subject to a levy. There are major inequities in the government’s proposed collection methodology. Therefore, I join with my coalition colleagues in opposing these bills.