DAWR – Biosecurity Levy Update - $10.02 per TEU – Major Change to Collection Model

This week, AFIF attended a DAWR Biosecurity Imports Levy Industry Workshop in Canberra.

DAWR provided an update on the work undertaken by the Department following the announcement of the Biosecurity levy (the levy) in the Federal Budget and the proposed ‘stevedore collection model’ outlined at the Industry Workshop on 15 June. (refer AFIF Weekly News June 21)

Stevedore Collection Model proposed in June

The Biosecurity Levy set at $10.02 per incoming twenty-foot equivalent sea container (TEU) and $1 per tonne for non-containerised cargo, is proposed to be collected from ‘port operators (stevedores) – from 1 July 2019.

The Biosecurity Fee would be collected by the stevedore ‘transaction by transaction’ at the time of importation. Whereas DAWR would invoice the stevedore on a quarterly basis.

AFIF and industry participants rejected the stevedore collection model and lobbied DAWR to collect the Biosecurity Levy via an increase to the Formal Import Declaration (FID).

New Collection Model Announced this Week

DAWR advised the Workshop this week, that the ‘stevedore collection model’ has changed to a levy proposed against vessel owners, operators or their agents.

DAWR New Proposed Position

  • be expanded to apply to all commercial vessels, and apply to all containers and cargo that is unloaded at an Australian port.
  • The expanded levy base will result in a reduction in levy rates for bulk cargo.
  • It is also proposed that the levy be imposed on vessel owners, operators and their agents.
Proposed new Levy Rate
  • Containers $ 10.00 per Twenty Foot Equivalent Unit (TEU)
  • Break bulk cargo $1 per metric tonne
  • Bulk cargo $0.50 per metric tonne
  • Commercial vessels $0.027 per volumetric ton of vessel gross tonnage.  

Coastal (domestic) cargo is excluded from the levy. The levy will apply to transhipment and container re-stows.

DAWR advised, the change in the collection model method is due to key issues identified by AFIF and industry stakeholders at the June Workshop -

  • Costs as they are passed through supply chain – ie. cascading administration cost in collecting the levy throughout the supply chain
  • More efficient to use existing systems and process

Levy Uses

  • DAWR forecasts the Biosecurity Levy will collect $325 million over 3 years.
  • DAWR will receive $313 million over 3 years, with the balance retained by Treasury as Consolidated Revenue.
  • DAWR’s portion of the levy has increased from $261 Million over 3 years (advised in June 2018)
  • The levy was proposed to be used for non-regulatory activities - priority pest and disease planning; assurance, verification and enforcement and trialling innovative technologies at the border.

In the Workshop, AFIF called upon DAWR to direct more of the increased share of the Biosecurity levy to frontline regulatory services, particularly responding with adequate resources to outbreaks such as BMSB, White Spot Prawn, etc. DAWR confirmed that a portion of the levy will be allocated to regulatory services

AFIF Comment

The move away from the stevedore collection model is positive for industry.

AFIF voiced concerns at the Workshop that the new levy model based on the gross tonnage of commercial vessels, plus a levy on the cargo on board, imposed on the vessel owner, operator or agent, will  add complexity and uncertainty for industry.

Shipping lines and slot charterers recovering Biosecurity fees from importers will in effect be calculating a portion of the vessel gross tonnage fee to add to the $10.00 per TEU fee.

The Biosecurity Levy (fee) transferred by shipping lines to importers will be opaque and variable depending on the ship size. There is also the potential for ‘administration’ costs to be added, thereby the DAWR government levy (tax without GST) applied by DAWR to shipping lines, becomes an uplifted fee with a potential GST implication when charged to industry.

The new proposed collection model does not remove the potential for costs being added, as the Biosecurity Levy passes through the supply chain.

AFIF opposes the new collection model and will be responding formally to DAWR.

AFIF maintains the Biosecurity Levy is a Government Tax, fixed amount for the 3 years, without GST.

Next Steps

DAWR is to commence drafting legislation in December with consultation on the exposure draft to take place in December 2018 and January 2019.

AFIF and Industry stakeholders objected to the tight time frame and need for further consultation on the proposed new collection model.

DAWR advised they will arrange a further meeting of industry stakeholders this year, to discuss our concerns.

The DAWR Biosecurity Levy Workshop Presentation is available here.

AFIF members who wish to provide feedback to include in AFIF’s formal submission, please forward by email to Stuart@afif.asn.au by Monday 10 December 2018.

AFIF will keep Members informed of progress.