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Wednesday, 3 September 2008
Page: 6997

Mr BURKE (Minister for Agriculture, Fisheries and Forestry) (12:39 PM) —in reply—I want to thank all honourable members for their participation in this debate on the Horse Disease Response Levy Bill 2008 and related bills. I have managed to be in the House for a good part of it, although some pre-existing commitments meant I was not here for some of the speeches last night and for part of this morning’s debate as well. I understand from comments made by the member for Kennedy that at least one time when I was not here my officials were not here either. As minister I take responsibility for that and I apologise to the House. I take my responsibilities as a legislator very seriously.

This is not easy policy by any stretch of the imagination. What we are dealing with here is something which has been worked through in all the other livestock sectors. Be it cattle, sheep, pigs or the chook market, all have levy systems in place. In each of those cases that was a much easier thing to set up because the common point is that these animals are being raised for slaughter. So it makes sense to impose a levy and it is very easy to find the point where you would impose a levy. At the same time, while there are differences in value from beast to beast, you do not get the extent of variation that you find in the horse industry. That means that, in trying to come up with a way to implement a levy system in the horse industry, getting everybody in agreement is a good deal more difficult than it is in any other sector of the livestock industry.

I want to address a number of presumptions which have characterised parts of the debate. A number of members opposite—not all—have run the argument that, because of the disproportionate value of horses, only the racing sector, or primarily the racing sector, should be levied. There are two points I want to make on that. The first is that, depending on the disease, the cost of managing a disease outbreak is basically a cost per animal, so the expenditure of the money, whether a horse has a higher value or not, does not make that much difference to the cost of the emergency response. The second presumption in a couple of the speeches, particularly by the honourable member for Cowper, is that somehow everyone in the racing sector is made of money. There is no doubt that when you go to the track there are some pretty wealthy people there, but there are also a whole lot of people whom you would never describe as wealthy. When we look at the wealthiest people in the racing sector and the people in the pony club, I think it is dangerous for us to presume that we have made a fair comparison across industries.

The worst option of all would be for the horse industry not to become part of the Emergency Animal Disease Response Agreement. If they were not part of it, there would be only two paths. Some members opposite have criticised me for writing to the peak bodies and saying that, while the government was prepared to wear the cost of the EI outbreak and not impose a levy—because we decided it would be wrong to do that retrospectively—there was an expectation that if the industry wanted to be part of the assistance that comes from the EADRA then they would have to sign up to it as well. That was taken as a horrible thing for me to say and a terrible threat to make to the industry. Can I just suggest that if we were to do what some members opposite have suggested—that is, not say to the industry that it has to sign up if it wants these sorts of protections to be in place in the future—the whole EADRA process would unravel. What justification would there be for the cattle industry, the sheep industry or the pig industry to continue with their levy systems if there was a view that if you are not part of it the government will always foot the bill anyway? The whole system would unravel. It does not matter which levy system you end up with, the horse industry is so vast and diverse that there will be a way of saying, ‘You’re not actually catching everybody,’ or ‘Maybe you could do it a better way.’ What we have here is a point where the three peak bodies have found a levy system that they believe they can all wear.

Other suggestions have been put forward, such as having a differential levy. These concepts were in part alluded to by the Leader of the National Party when he led for the opposition. If those opposite think for a minute that we would get the harness racing and ARB groups to sign up to that—because without them signing up we would not get there—when they put the argument quite forcefully that the cost of managing a disease outbreak is a cost per animal, not a cost related to the value of the animal, I do not think the opposition have thought through where it would land. It is not enough for just the parliament to agree; we need the peak bodies to reach agreement as well. I suspect what is proposed in the parliament today is not the ideal outcome, if any part of the horse industry could say, ‘We’re going to get an answer that’s just for us,’ because of course there will always be requests that the burden be placed on someone else. But I do not think there is a better option that will be able to get support from the three peak industry bodies. The members of those three peak bodies are not unanimously in support. Of course that is the case; you never get wild enthusiasm when a levy is involved. But we have to make sure that the sector is protected into the future.

We also need to understand EI is not the only threat here. Because so many people—whether they are involved in pony clubs, harness racing or general racing at the track—have been through a terrible time with EI, that has, understandably, characterised much of the debate, but we have to remember that this legislation is about protecting the industry if there is another outbreak of something. Hopefully there will not be another outbreak of something. If there is, would it be EI or something else? Who knows? I think we have all had it at the front of our minds—with the tragedies in recent weeks related to the impact not just on the horses but on the people and vets working with horses with respect to Hendra—that there are many diseases which can wreak havoc on those working in the horse industry or working with horses. The worst option would be for there to be no levy put in place.

Something which was, I think, well explained by the Leader of the Nationals in his opening remarks was the concept that, if this legislation passes, these levies will start at zero—there will be no immediate impost and levies will only come into place after discussions between the minister and those peak bodies. I agree with the comment of the Leader of the Nationals that it is a good idea for many livestock industries to build up a very nominal contingency fund over time, whether that be with a $10 levy or however that be done. I suspect that in the horse industry that is something that there would be no appetite to do in the immediate term, and that is understandable—they have been through a dreadfully hard time. In the absence of a contingency fund, the levy will remain at zero, but it will mean that we will not be in the situation we were in 12 months ago, when an outbreak occurred and there was no formal mechanism in place to protect the industry.

In March this year I announced that debate on these bills would be postponed until after I had received the Callinan inquiry report. After considering Commissioner Callinan’s findings, on 11 June I announced the government would not levy the horse industry to repay its share of the cost of eradicating the EI outbreak of 2007. I note that a year earlier, in 2006, the horse industry had proposed to the previous government a levy arrangement to protect the horse sector against the impacts of emergency animal disease outbreaks. So, for those members opposite who have argued that it is outrageous to impose a levy on the industry at all—and there have been a couple, neither of whom are in the chamber at the moment—that certainly was not the position of the previous government. I suspect it is not even the position of the executive of the opposition. While the intention at the time was for the horse industry and the government to share the costs of the emergency response following the outbreak last year, the new government decided that it would not be fair to ask the industry to make those payments.

Looking to the future, this package of bills will give the horse sector the certainty that other livestock sectors have when responding with government to emergency animal disease incursions. These bills will enable the horse sector to become a party to the EADRA, the Emergency Animal Disease Response Agreement—something that they have wanted for years and have been right to want. In short, this package of bills provides certainty for resourcing emergency responses to future horse disease outbreaks. These bills provide a mechanism to impose, collect and appropriate a new levy for the initial registration of horses. The levy will be payable only once and appropriated through Animal Health Australia. It will be paid once on the occasions when it is set at something other than zero. I am very pleased to note that this legislation is supported by those peak groups that make up the horse sector but I acknowledge that among their membership it is not a unanimous view and suspect there would never be a unanimous view on any proposal.

There have been quotes from the Chairman of the Racing Board saying, ‘I’m happy to extend my organisation’s wholehearted agreement’; from Harness Racing Australia’s chair saying, ‘Harness Racing Australia supports the bills currently before parliament, which will establish a zero rate levy’; and from the Horse Industry Council’s President saying, ‘The board of the AHIC advises that it supports the passage of these three bills.’ In recent days, this support has been reconfirmed by all organisations.’ They are the peak bodies that we need to be signatories to EADRA.

Before I get to my concluding remarks, I want to talk to some points that were raised by the member for New England. I have covered the issues he referred to of the division among groups and some of the equity concerns. He also raised questions concerning registration and noted that it is not compulsory for the owner of a horse to register that horse. That is true, and it does mean that, when you focus on registration, not every horse in existence is going to end up being subject to a levy. There were some bizarre comments, which I presume were included only for humour value, in speeches earlier saying: ‘What are we going to do about the feral horses?’ I think the answer to that is: the same thing that we do with respect to the levy on feral cattle—we acknowledge that there are some areas where numbers cannot be counted. Certainly, feral animals are viewed as pests rather than something the government would seek to profit from. The issues were raised a number of times so I respond to them, but I presume a big part of that has been in jest.

The registration bodies can refuse to register horses unless the owner has provided the necessary funds to pay the levy. I know the concern of the thoroughbred industry about this is that, because they have a higher percentage of registration, the registration process would put a higher burden on them. The pony club argument is often put that, because thoroughbreds have the option of registering overseas, the higher proportion of the levy would be put on the pony clubs. There is never going to be a perfect solution. I hope that, over time, the industry looks to a very nominal contingency fee because if it is a small amount of money a lot of these arguments become a good deal less significant. But the worst of all worlds will be if in a few weeks time the horse industry has not signed up to EADRA, not because of the lack of willingness of the peak bodies but because of the lack of willingness of the opposition when it comes to vote in the Senate. The implementation of any levy, if it were to change from zero, would happen only with the consultation of those peak bodies.

I am mindful that the Australian horse sector is still suffering from the devastating impact of EI and I want to give the industry breathing space as it fully recovers before even raising a new levy arrangement, notwithstanding that I think a very nominal contingency fee would be a way forward to build up some money in the event of future outbreaks. But, as I say, they are discussions to have into the future and I have no doubt that there is no appetite in the industry right at this point to start building up the contingency fund so soon after the pain of EI. Any money so collected would be administered at arm’s length from government and could not be used without industry’s approval. So, for those who have described it as a tax, it is not. It is not a tax when the government is not allowed to spend it. The money can be spent only with the approval of industry and would provide the horse sector certainty in the event of a disease outbreak under the EADRA.

There have been a lot of comments from members on each side and particularly from my side of the House about what might have been done to avoid the devastation of EI. There is no doubt in my mind, when I hear the figure of $1 billion quoted in terms of total damage to the national economy over EI, that we will actually never know the full extent of the damage of EI, because it was not just the people who were technically employed by the industry. It went to all the add-on parts of it, from the person selling meat pies at the side of the track to the people involved in transport and logistics through to the Spring Racing Carnival being cancelled and a whole lot of milliners not being able to sell any hats. There were businesses torn apart at every level during that time. The industry had not been prepared, and to some extent I appreciate that the then government had the challenge that there is no easy way of implementing a levy for this sector. I think that is why, when in their arguments those opposite have tried to find as many holes as they could in this process, with the exception of the member for O’Connor, members opposite generally have been very reluctant to put up what the alternative ought to be. I think there is a simple call on working out what the alternative ought to be and that is: you work it out based on what industry is willing to agree on. That means every industry group goes a little bit away from their ideal model and they end up with something—which we now have—which they say they can all work with, which they say gives them a way forward.

It would be devastating neglect if, when this bill goes through to the Senate—if I can work on the basis that we will get through here—the decision of the Australian parliament ends up being to leave the horse industry in the same position it was in at the beginning of EI. Taking responsibility and making a decision on these issues, where there are so many different interest groups, is always complex and always tough. For every objection that has been offered to these bills before the House, I offer one suggestion and that is to say that the alternative of being outside EADRA is so much worse. We have something here that the industry can agree on. I look forward to the Senate inquiry process, which I understand is being advanced. No doubt that will be able to look to the technicality of the bills. I appreciate that that is an appropriate process to follow, but I would remind all members of this House and of the Senate that we do not need something that we can agree on just on a political level; the reason for this levy being put forward is that, while there is a divergence of views among their membership, for the three peak bodies with which we are expected to negotiate, this is a system which they believe they can all work with. I commend the bills to the House.