2021-22 Agricultural Export Cost Recovery Implementation Statements
It is Government policy to recover the full cost of delivering export regulatory services. Under the Australian Government Charging Framework, we must regularly document changes to regulatory charging activities through a Cost Recovery Implementation Statement (CRIS).
On 17 February 2021, the department published a 2020-21 CRIS for each of the 7 export certification services. Each 2020-21 CRIS described the impact of the 2020-21 Budget Busting Congestion for Agricultural Exporters package on exports cost recovery. It detailed how fees and charges were frozen in 2020-21, and the approach to reforming all agricultural export industries.
Industry were informed the department would consult on a 2021-22 CRIS for each arrangement including proposals to change fees and charges from 1 July 2021.
Proposed 2021-22 CRIS are now available on Have Your Say for each of the agricultural export industry arrangements. Each 2021–22 CRIS proposes updated prices for 2021–22 to 2024–25. The CRIS describes the stepped annual increases in fees and charges over time from 1 July 2021 to full cost recovery in 2023-24. The government has provided appropriation under the More Efficient and Sustainable Export Regulation measure from the 2020–21 Budget Busting Congestion for Agricultural Exporters package to support stepped increases.
Industry and affected stakeholders are encouraged to provide feedback on the proposed 2021-22 CRIS, including how the proposed arrangement outlined in the CRIS will impact businesses. Stakeholder views will inform the final CRIS. Public consultation opens 14 May to 10 June 2021.
In addition to the proposed CRIS, discussion papers for the dairy, fish and egg, grain and horticulture export arrangements outline an alternative pricing structure.
Industry and stakeholder feedback is also sought on the impacts of the alternative structure outlined in the discussion papers compared to the charges described in the 2021–22 CRIS, and whether one structure is preferred over the other.
Please note that for live animal exports and meat exports, the proposed 2021–22 CRIS already proposes a revised charging arrangement for consideration.
For Non-Prescribed Goods, industry were consulted on a new fee and charge structure in 2019 and 2020. Based on stakeholder feedback and possible reforms to NPG regulatory activities over the next few years, further structural changes have not been proposed in the 2021–22 CRIS. As we engage with industry and exporters on these reforms, we will also consult on potential changes to fees and charges that will better support the changing regulatory services.
How can industry and stakeholders provide feedback?
Industry and stakeholders can provide feedback on the department’s Have Your Say platform where you can respond to a survey and provide a written submission if you have anything to add to your survey response.
These sessions will outline the proposed cost structures, explain the impact of the government’s investments under the Busting Congestion package and provide further opportunities for you to give feedback on these changes and suggest alternatives.
- Consultation on each 2021-22 CRIS from 14 May to 10 June 2021.
- Changes to the prices must be approved by the Minister for Agriculture. Drought and Emergency Management and written into legislation before changes come into effect.
- Implementing the new charging framework proposed to be implemented from 1 July 2021.
Questions and Answers - Export Cost Recovery
What is cost recovery?
The Australian Government’s overarching cost recovery policy is that where appropriate, non-government recipients of specific government activities should be charged some or all of the costs of those activities. It is based on the principles of fairness and equity.
Cost recovery means the costs of government regulation are paid by those that benefit from the service, rather than the general public.
Government entities mandated to use this policy for their regulatory services must document regulatory charging activities in a cost recovery implementation statement.
The Australian Government Charging Framework and Cost Recovery Guidelines provide advice as to how cost recovery arrangements should be established and maintained. For further information see Australian Government Cost Recovery Policy.
What is a Cost Recovery Implementation Statement (CRIS)?
When a decision is made by government to cost recover for regulatory services, fees and charges must be documented in a Cost Recovery Implementation Statement (CRIS).
A CRIS describes the regulatory service being delivered, the cost of delivering those services and how they translate to fees and charges. CRIS should be updated regularly including describing any changes to regulatory services and charges.
Why does industry need to pay for export regulatory services?
The Department of Agriculture, Water and the Environment provides export regulatory services to agriculture and food exporters—such as certifying our produce is fit for export markets.
Aligned with the Australian Government’s overarching cost recovery policy the direct beneficiaries of specific government activities, such as agricultural export industries should be charged the costs of those activities.
The cost recovery activities in the department are consistent with Australian Government Charging Framework. Full details are available on the Australian Government Cost Recovery Policy.
Do industries other than the agriculture export industry pay for regulatory services?
The government cost recovers for regulatory services provides across various industries. For example, costs are recovered in the regulation of therapeutic goods, financial services, communications (eg carrier licence charge), environment (eg emissions and waste) and the provision of meteorological services.
Why will fees and charges increase?
The government is always mindful of the potential impact on agriculture and food exporters when it seeks to recover the cost of its regulatory services.
Regulatory fees and charges for the exporter sector have not increased in a long time, and most export programs have been under-recovering. The last time fees and charges were increased, for some agricultural exports, was in 2018, some prices have stayed the same as far back as 2009, and they are no longer reflective of the true regulatory cost.
The government is now seeking to apply a stepped return to full cost recovery by 2023-24 for its regulatory activities, a stepped return eases the impact for agriculture and food exporters.
Even with increased fees and charges, the cost of regulatory services is less than one per cent of export value in most cases.
What is the government doing to reduce the cost of regulation to industry?
The government recognises the need for gaining, maintaining and expanding market access to achieve industry’s target of $100 billion in farm gate value by 2030.
The government has provided $328.4 million through the Busting Congestion for Agricultural Exporters Package and $72.7 million for the Agri-business Expansion Initiative in the 2020-21 Budget. These measures aim to modernise Australia’s export systems through connected digital services, streamlined regulation and improved service delivery.
The largest reform is the $222.2 million Digital Services to Take Farmers to Market project which will implement a suite of contemporary and connected digital services. This will reduce administrative effort for industry and the department by streamlining the current multiple manual processes needed to be completed. It will also improve the security of export information and the export system.
These reforms will benefit all exported agricultural commodities, with some commodities including meat and plant, funded to undertake additional projects to improve specific issues and processes for those commodities. For further information on the package see Busting Congestion for Agricultural Exporters.
Aside from busting congestion measures, the government provided exporters further assistance through the International Freight Assistance Mechanism. For further information see International Freight Assistance Mechanism.
Will the new charges cover previous years’ deficits?
No. Increased fees and charges are not modelled to recover the previous year deficits.
What regulatory activities does the department charge industry for?
The department provides services such as program administration, inspection, assessment and audit. These are all detailed in Chapter 4 and Appendix A of each CRIS.
How often will the department review prices and release CRIS?
In accordance with the Australian Government Charging Framework, the CRIS will be updated annually to report on financial and non-financial performance and revise the 4-year forecasts. Where necessary, this update could also review whether fees and charges should be revised, for instance if revenue and expense are not aligned, there is a change in policy or there is a change in industry behaviour.
Reviews are expected to be more frequent during the next few years of reforms. Industry will always be informed and provided the opportunity to participate in reviews.
What is the purpose of the discussion paper?
The department has also released discussion papers for the Horticulture, Grain, Fish and egg and Dairy agriculture export arrangements,
These discussion papers describe alternative charging structures the department commenced consulting on in 2019‑20. The expense base is identical to the expense base in the 2021- 22 CRIS for each arrangement.
Through consultation stakeholders may provide feedback on whether these pricing structures would better suit their business and advise government if these pricing models would be preferred.
Discussion papers have not been released for the Live Animal Exports, Meat or Non-Prescribed Goods arrangements.
How can I or my industry have a say?
Your views on the cost recovery approach, total cost and fees and charges will inform the final Cost Recovery Implementation Statement. Changes to the fees and charges must be approved by the Minister for Agriculture, Drought and Emergency Management before changes come into effect.
You or your industry can provide comments and feedback on the CRIS on our Have Your Say platform. You can respond to our survey about the CRIS and discussion paper and provide a written submission should you have anything to add to your survey response.