Monday, July 22, 2024
e-commerce faces Australian hurdles

e-commerce faces Australian hurdles

Australia has stringent Biosecurity controls at its border to protect the island nation from potentially devastating pest and disease outbreaks, safeguarding its national economy, agriculture, fisheries and forestry industries, regional communities and unique environment.

The Australian federal government announced in the 2023-24 Federal Budget a need for “sustainable funding” to strengthen Australia’s biosecurity system. This was planned to be paid for on a “shared responsibility” basis, taking total revenue from AUD $536.2m to AUD $804.6m by the 2024-25 financial year.

This includes the introduction of new levies on Domestic Producers and e-commerce Cargo Reporters from 1st July 2024.

Domestic producer levy

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) provided a detailed submission to the Rural and Regional Affairs and Transport Legislation Committee, including a three-point plan recommending the federal government:

1.     Does not proceed with the complex proposed levy (referred to by the National Farmers Federation as a ‘fresh food tax’) costing Domestic Producers annually AU$47.5m being 6 percent of the budgeted BPL;

2.     Increase the Full Import Declarations (FID) cost recovery paid by Importers to recoup the above AU$47.5m shortfall and additional funds to address interim remedial action to support import processing until additional permanent resources and benefits of modernised systems are realised; and

3.     Offset the increased FID cost recovery impost on importers, by introducing a Mandatory Code (as recommended by the Productivity Commission in their Review of Australia’s Maritime Logistics System) to address the current incontestable Terminal Access Charge (TAC) regime, that costs importers and exporters more than AUD $1.3 billion over the last three calendar years.

The FTA and APSA positions were supported by major producer groups and appear to have been a significant contributing factor to the federal government not progressing to vote on the Agriculture (Biosecurity Protection) Levies Bill 2024 [Provisions] and Related Bills.

While the Domestic Producer levy will not proceed on 1st July 2024, the concept remains alive with the Department of Agriculture, Fisheries and Forestry (DAFF) to progress renewed discussions with FTA, APSA and other peak industry bodies as a part of the recently established Sustainable Biosecurity Funding Advisory Panel. 

e-commerce Cargo Reporter levy

FTA has been advocating for a delay to the proposed 1st July 2024 implementation of the new cost recovery fee for biosecurity clearance of declared low value goods (valued at AUD $1,000 or less) with many unanswered questions posed during May 2024 meetings with representatives of the Department of Agriculture, Fisheries and Forestry (DAFF).

In response, implementation of this new fee has been deferred and will now commence on 1st October 2024 with the intent to provide sufficient time for DAFF to engage with the industry to address outstanding concerns in administering the arrangements.

It is important to note that June 2024 discussions (involving FTA and other representative groups) examining issues relating to the proposed e-commerce Cargo Reporter levy have led to a call for a broader review on alternative collection methodologies to cast a wider net on all low value imports and to ensure a level playing field between logistics providers and postal services. 

Putting this into context, low value consignments entering Australia via the postal system does not require the same level of reporting as those items imported as cargo via freight forwarders and express couriers. This forces labour-intensive processes requiring physical intervention by DAFF officers at the border with existing cost recovery arrangements, costing Australia Post AUD $15.4m per annum in cost recovery fees.

It is understood that Australia Post handles approximately 144 million parcels per year, translating to a cost recovery fee of AUD $0.10 per item; considerably lower than the AUD $0.36 per declaration proposed via the cargo stream.

Watch this space as the next few months will see the e-commerce sector engage with the Australian federal government, seeking a level playing field in terms of the quantum of Biosecurity Protection Levy payable by the sector.

Paul Zalai
Director Freight & Trade Alliance (FTA)

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