Research and Development

WoolProducers persists in levy waive call despite legal hurdle

Terry Sim, July 6, 2020

WOOLPRODUCERS Australia is persisting in its call for the Federal Government to consider subsidising the temporary waiving of wool and sheep levies despite a lack of enabling legislation.

The peak grower body wants wool and sheep transaction levy collection halted for 12 months from August this year to help producers recover from the COVID-19 pandemic.

The suggestion – including that a government contribution to the research and development corporations Australian Wool Innovation and Meat & Livestock Australia make-up for the resulting shortfall levy income — was made by the body after an online survey of wool growers.

The survey found most wool growers believed the pandemic has reduced their income, and made farm input and labour access difficult. The growers also believed the decline in wool prices meant many had withheld or withdrew their wool from sale at auction, leading to reduced cash flows.

A Department of Agriculture, Water and the Environment spokesperson has told Sheep Central that agricultural levies are a small, predictable cost of doing business, paid at the time of transaction and imposed at the request of industry to fund industry priorities.

“There is currently no mechanism in the agricultural levies legislation that provides discretion to defer or waive levy or charge liability.

“Amending the legislation would be a lengthy process and would not provide immediate support to levy payers or collection agents,” the spokesperson said.

“The Department of Agriculture, Water and the Environment is able to work with collection agents and levy payers who are having difficulty paying their levies on time.

“Those who are concerned about meeting deadlines or incurring penalties, can contact the department.”

The spokesperson said government matching funds for eligible research and development undertaken by a R&D corporation are paid on expenditure.

All options should be considered – WPA

However, WPA chief executive officer Jo Hall said WoolProducers undertook the COVID-19 impacts survey to understand the range and depths that the response to the pandemic was having on these enterprises, including if the government support measures on offer were assisting wool growers.

“The survey respondents indicated that they have been significantly impacted with an estimated 32.6 percent financial loss to wool-growing businesses and that there is some confusion over the current support measures and what is and isn’t applicable to wool growing enterprises.

“WoolProducers have made a number of recommendations to the government based on the findings of the survey, particularly in terms of short-term cash flow, whilst also assisting government in providing targeted measures that are unique to wool growers,” Ms Hall said.

“The temporary suspension to levies would be something that could assist with cash flow and whilst acknowledging that there would be a legislative change required, given the unique and extraordinary situation that we find ourselves in, all options should be up for consideration.”

Ms Hall said WoolProducers looked forward to discussing the survey outcomes and recommendations with the Department of Agriculture, Water and Environment this week.

Sheep meat income is offsetting wool levy losses – SPA

Sheep Producers Australia chief executive officer Stephen Crisp said SPA understood where WPA is coming from in looking at financial relief through the few mechanisms available.

“The Sheep Transaction Levy (STL) is probably a difficult proposition at present due to the high price of sheep and lamb, which would be offsetting differing proportions of the losses (depending on your type of enterprise) from the wool sector at present.

“Naturally, there are those that gain a much higher proportion of income from the finer wools than sheep and lamb sales, and others who produce first and second cross lambs that could derive around half their income from wool, and half from sheep and lambs, and yet more who will be derive a much higher proportion (even all) of income from sheep and lamb sales,” he said.

“Where and how you would make the distinction could be a difficult process.

He said with a record low sheep flock and many areas hopefully emerging from drought, the STL revenues are expected to be down whilst the flock rebuilds,” Mr Crisp said.

“With the current programs the RDCs are running, some of which are cooperative ventures for AWI and MLA, it is vital that they continue to be funded if we are to reach our goals for sheep and wool producers and the wider ag sector.

“SPA for its part will be willing to work with the wool sector and government if a sensible methodology is being considered to relieve the pressures now being placed on the wool supply chain.”

An MLA spokesperson said transaction levies for cattle, sheep and goat are charged and collected by the Australian Government – and are facilitated under federal legislation.

“Any consideration around amendments to transaction levies are matters for the government in consultation with industry.”

WoolProducers is seeking a range of assistance measures

WoolProducers Australia has recommended a number of short, medium and long-term assistance measures to the Federal Government.

Short-term assistance measures

WoolProducers advocates that the Australian Government:

  • Improves communications and information on COVID-19 financial and employment support measures for woolgrowers, to ensure better understanding of the assistance measures that are available.
  • Considers expanding the eligibility criteria of JobKeeper Payment Scheme for employees who have been employed on a full-time basis for less than six-months.
  • Funds local mental health support so that people are not referred to mental health services in regional centres (unless these are the nearest town) or state capital cities, that require significant travel from their nearest town.
  • Continues drought support measures for affected woolgrowers.
  • Improves the efficiency of the application process, and provides expedited access to, efficient the Farm Household Allowance for eligible participants.
  • Enables direct access to Farm Management Deposits for companies and agribusiness trusts.
  • Retains the accelerated depreciation arrangements for primary producers in perpetuity.
  • Suspends wool and transaction levies for wool producers for a 12-month period (i.e. 1 August 2020 to 1 August 2021) and increases the government contribution to the Rural Research and Development Corporations to make-up for the shortfall occurring due to the suspension of collection of transaction levies.
  • Expedite the approval of visa applications for shearers and shedhands travelling to Australia for Spring wool harvesting employment.

Medium-term recovery measures

WoolProducers advocates that the Australian Government:

  • Maintains and strengthens existing trade relationships and explores market diversification opportunities that will build new export market opportunities for Australian wool.
  • Increases support for industry-led market access initiatives, such as trade delegations and support for exporters and other Australian businesses through Austrade initiatives, that foster strengthened industry-to-industry partnerships.
  • Fulfil recommendation 13 of the House of Representatives Trade and Investment Growth Committee report: Trade Transformation: Supporting Australia’s export and investment opportunities, which is that ‘The Committee recommends that the Australian Government conduct an assessment of Australian export industries that are over-exposed to a single market and work with industry towards diversification’.
  • Fulfil recommendation 14 of the House of Representatives Trade and Investment Growth Committee report: Trade Transformation: Supporting Australia’s export and investment opportunities, which is that ‘The Committee recommends the Department of Agriculture, Water and the Environment, in collaboration with state and territory governments, conduct an audit of the regulatory arrangements for agricultural exports (including seafood) and identify and implement actions in order to:

o Harmonise export regulation across local, state and federal jurisdictions, with an aim of achieving a best-practice outcome;

o Increase competitiveness for the agricultural industry, including assessing whether cost-recovery arrangements and export registration costs are deterring exports, and a comparison between Australia and its international competitors; and

o Assess the impact of red and green tape (at the state and federal levels) on the ability of the sector to reach its goal of growing Australian agriculture to $100 billion by 2030.

  • Provides support measures to assist farmers who choose to exit farming, such as recognised prior learning resulting in qualifications through TAFE for skills used on-farm (e.g. animal husbandry, welding, equipment licensing (such as forklift, tractor, firearms licences).

Long-term recovery measures

WoolProducers has advocated that the Australian Government:

  • Prioritise the EU-FTA and the UK-FTA and commits to ensuring that the agreements enhance market access for wool.
  • Prioritise the Regional Comprehensive Economic Partnership, with or without India. If India does not enter into the agreement:

o WPA advocates that an Australia-India Free Trade Agreement be explored by the Australian Government, and

o That the Australian Government continue to assist industry with the development of a textile memorandum of understanding with Indian textile industries and the Indian Government, as was commenced in early 2020.

A copy of the full WPA survey report can be found here or at the WoolProducers Australia website here.


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Sheep Central's news headlines emailed to you -