Cost-recovery model dropped

HUGE price hikes for fruit, vegetable, nut and flower exports have been scrapped after the Federal Government caved to pressure from horticulture industries that argued the fees would make overseas trade unfeasible.

The fees were due to come into effect on July 1 and would have over-recovered more than $3.5 million over the next four years.

But a united campaign from eight industry associations — Apple and Pear Australia, Australian Horticultural Exporters’ and Importers’ Association, Australian Mango Industry Association, Australian Table Grape Association, AusVeg, Cherry Growers Australia, Citrus Australia and Summerfruit Australia — successfully campaigned for the Federal Government to go back to the drawing board and come up with a new cost-recovery model.

In an email circulated last week the department said it would not be implementing revised cost-recovery arrangements for horticulture exports in 2018-19, and existing fees and charges would remain unchanged.

It will now undertake a full review of the current scheme, with any new changes to take effect from July 1 next year.

Australian Horticultural Exporters’ and Importers’ Association chief executive Dominic Jenkin said he was elated the industry was able to work together to secure a commitment from the Federal Government to consult more closely with growers and exporters to draw up a new scheme.

“We really have to go back to the drawing board now, conduct a thorough review of the services the department is offering, determine whether those services are indeed relevant to the industry, and whether they’re being efficiently delivered or not,” Mr Jenkin said.

“Then following agreement, to determine the equitable distribution of those costs in accordance with the cost-recovery guidelines.”

Earlier this year the department released a draft outlining new levies for 2018-19, including a doubling of the phytosanitary certificate levy from $38 a document to $78.

It included an increase to the horticultural products levy to non-protocol countries of 160 per cent, from $0.65 to $1.70 a tonne, and to protocol countries from $1.30 to $3.40 a tonne.

Horticulture groups labelled the costs “fundamentally flawed” and were concerned the Federal Government was seeking to recover considerably more than the cost of providing export certification services.

The department had stated in its draft document it would not seek to recoup years of under-recovery. But the forecast opening cost recovery reserve had a negative balance of $3.8 million, and the proposed model would have recaptured this deficit, beginning in 2018-19.

ALEXANDRA LASKIE, The Weekly Times
June 27, 2018

Source: https://www.weeklytimesnow.com.au