Senator REYNOLDS (Western Australia) (20:58): I too rise to speak in support of the Primary Industries Levies and Charges Collection Amendment Bill 2016. I first became involved in the issue of levies shortly after I was sworn into this place. Not coming from a rural background, I first became aware of significant issues in relation to levies after visiting our horticulturalists in the south-west of Western Australia. It soon became very clear to me in talking to the horticulturalists that there were very significant and very profound flaws and issues with the current levy system as is stood and as it still stands today.

In conjunction with my colleague Senator Leyonhjelm and other senators, I co-sponsored an inquiry to investigate compulsory marketing and research levies faced by growers in Australia’s $50 billion agricultural industry. Under the current research and development corporation model, primary producers are required to pay an annual fee to bodies which carry out research and development in their specific commodity industry. Research and development feeds into agricultural productivity and into our economy. Collective investment by producers into research absolutely makes sense, but I came to the belief very quickly and very early on in this place that a lot needed to be done to make the system more effective for growers and for the organisations themselves, and that there was very little transparency or accountability in the whole system.

The inquiry was designed to enable all sides to have their say on the operation of the levy system as it stood and to provide suggestions on how it could be improved. I was quite stunned by a lot of the evidence I heard through the inquiry over the course of 2014 and into 2015. One of the first observations that I had was around the overwhelming evidence from across commodities and growers and organisations: if somebody had tried to design a worse system I do not think they could have succeeded in making one any worse than the one that we found in this inquiry.

One of the things that particularly alarmed me throughout the inquiry and on reviewing the submissions, was that there was almost zero accountability across many of the commodity levies. You have the growers across the 60, 70 or 80 different commodities. They all have a completely different levy payment system which is calculated and paid differently. Sometimes there are intermediaries and brokers. There is very little accountability across all of those different commodity systems in terms of who has paid, how much they have paid, whether they have paid the right amount and whether the right amount has actually gone through to the department.

But it was actually a lot worse than that. What we found in this inquiry was that there was, in some commodities, almost no accountability whatsoever between the growers who paid the various levies and the people who spent the levies on marketing and research activities. These organisations were happily spending the money, sometimes on very laudable projects, and doing their annual reports—nice glossy reports that showed that they were doing a lot of things, sometimes over and over again—but a number of organisations had very little accountability to the growers who paid the levies. This was particularly so in a number of commodities in Western Australia. For example, with avocados and other commodities, we had a lot of evidence where they were paying the lion’s share of the levies but little, if any, of the marketing and, particularly, the R&D money was actually going into the particular circumstances of growing avocados and other commodities in Western Australia.

One of the first things in the report was that this issue of accountability needed to be fixed. Hundreds of millions of dollars are paid every year by Western Australian farmers, by growers across all commodities, but few of them actually have any idea or any say into where their money is going and, across many commodities, many of them do not ever see any tangible benefit for the money they are paying. Indeed, many of them have had no confirmation that the money they pay actually goes to where it is supposed to go. We had many stories of money disappearing among intermediaries and elsewhere. It is clearly a system that is badly in need not only of accountability and transparency but also of reporting back to the growers whose money is being paid to those levies.

I am very happy to rise to speak tonight on this bill because, while it does not yet address all of the recommendations that the Senate inquiry made, it is certainly a fantastic first start. What does this bill actually do? The bill reintroduces a bill which was presented to the previous parliament and which passed the House with bipartisan support. This bill was supported by a Senate committee inquiry but, unfortunately, did not pass through this chamber before parliament was dissolved. The bill amends the Primary Industries Levy and Charges Collection Act 1991 and allows for the creation of levy payer registers and for the distribution of levy payer information to rural R&D corporations. Again, it is a great first step in the process of providing accountability and transparency between the growers who pay the levies and those who spend the money.

Currently, levy payer information is only distributed to the RDCs for two commodities: Australian Wool Innovation and Dairy Australia. This bill enables that information to go to all 13 RDCs. This bill is the first step. RDCs will then need to talk with industry and decide whether to fund the development of a register. They will need to apply to the minister for approval and they will need to work with the department on the design of the system so that it meets the department’s requirements. The Department of Agriculture and Water Resources is already talking to those RDCs and to industry on what they need to do to collect the data efficiently. Once all of those details are settled, the government will amend the regulations to formally mandate the collection of the data.

This bill also enables the secretary of the department to agree to provide levy payer register information to industry representative bodies, such as the Cattle Council of Australia and Grain Producers Australia et cetera—for example, for the purposes of consulting with all levy payers on R&D priorities and levies. So these organisations, the RDCs spending the money, will be able to go back and consult the growers, the people whose interests they are there to look after and to do research behalf of. They will be able to ask growers: what do you actually want and what you actually need? It is quite astounding that this system has been in place for so long and we still do not have those basic accountability and transparency mechanisms, so this bill is a very good thing.

Why is the bill needed? The bill makes it possible for RDCs to identify and connect directly with primary producers, who, after all, fund their work, pay their bills and employ their staff. Numerous reviews and inquiries have identified improved consultation with levy payers as important, if not critical, for the ongoing strength of Australia’s rural R&D system. Several of these inquiries recommended establishing levy payer registers as a way for RDCs to consult more effectively with the primary producers, who, as I said, pay their wages.

The government agrees that levy payers should have more of a say in how their levy funds are spent. In fact, personally, I think they should have more than just say; it should be up to them how their money is spent in their own commodity industries. Levy payer registers will provide RDCs with the ability to identify and consult directly with levy payers on research priorities and levy expenditure and to accurately and efficiently allocate voting entitlements where useful. Again, I think it is critically important for all of the RDCs to look at allocating voting entitlements so that their growers actually have a fair say in the operations of the RDCs. As it currently stands, the legislation does not allow for levy payer information to be distributed by the department to RDCs where they have collected it, as I said, with the exception of two industries—the wool and the dairy industries. This bill remedies this situation by making it possible to provide the information to the other 13 RDCs.

What more does this bill do? The bill amends the Primary Industries Levies and Charges Collection Act 1991 to allow the department to distribute levy and charge payer information to all RDCs. The information that will be provided includes the name, the address, the contact details and the ABN of levy and charge payers as well as the amounts of the levy or charges paid. The bill also allows levy payers’ information to be used by the ABS in performing its functions. This is consistent with the Australian government’s Public data policy statement, which commits to securely sharing data between Australian government entities to improve efficiencies and inform policy development and decision making. The bill also allows the Secretary of the Department of Agriculture and Water Resources to approve the disclosure of information by an RDC under limited circumstances also to a third party, such as to a ballot provider for a levy vote, for example.

The bill in and of itself does not create levy payer registers. The distribution of levy payer information to an RDC for a levy payer register will only occur where the RDC makes that decision in consultation with industry. As I said, the department has already started consulting with RDCs, which is a very welcome development. It is also consulting now with industry representative bodies and levy collection agents on their requirements, such as IT systems and other administrative matters. Once the department understands the system requirements there will be subsequent amendments to the regulations under the bill to formally mandate the collection of this data.

How is this of benefit to the RDCs? When we went through this inquiry it almost did my head in and bogged my brain to think that most RDCs did not have a list of their levy payers or any access at all to their contact details. Just think about that in any private company when you have shareholders or somebody who has invested their money and you do not even know who is paying the money, and you certainly have no accountability to get back to them to advise them how their money is being spent and to consult. The fact that most RDCs did not have a comprehensive list of their levy payers was a real surprise and not a very welcome one.

Access to levy payer information will provide RDCs with the ability to identify and consult directly with levy payers. Again, when we are talking about levy payers, we are talking about farmers; we are talking about those primary producers around the country who are spending a lot of money—some of it is quite significant margins—on these levies and who really have never had a say in how that money gets spent. Through greater levy payer engagement, RDCs will be able to better align research investments to industry priorities. As I said, the bill allows levy payer information to be used by the ABS, which again is also a welcome change.

In relation to privacy considerations, obviously the logical question is: who will have access to this information and how will the information be used? I can assure the Senate that the government is committed to upholding the highest possible standards of security and privacy for individual and commercial confidentiality. The bill provides for levy payer information to be disclosed to and used by the RDC and by the ABS. The use of personal information is of course subject to the relevant privacy legislation, including the Australian Privacy Principles.

The bill also limits the purpose to which levy payer information can be used: to maintain levy payer registrations, to maintain a register of eligible voters for polls that are conducted by the RDC, to publish statistical information, and to fulfil the RDC’s functions under its funding agreement with the Commonwealth. Further protections include the fact that the bill does not allow for disclosure of levy payer information by an RDC or by the ABS to a third party, except where approved directly by the Secretary of the Department of Agriculture and Water Resources in writing. This is to protect the integrity and security of levy and charge payers for personal information. This measure will allow RDCs to employ the services of an information technology company for data management and allow an industry representative body to consult with industry on a levy proposal, as one example.

Where an RDC is permitted to disclose levy payer information to a third party, that person or body may only use the information for activities relating to research and development, to marketing, to biosecurity and to the National Residue Survey or other activities of the RDC that directly benefit the producers, the farmers of this country. It will not be compulsory for the RDCs to set up these levy payer registers, although after going through the inquiry and hearing the overwhelming weight of evidence, it is my personal and very sincere hope that all the RDCs do set up these levy registers and do ensure they have contact with all growers who pay their levies—and not just have contact with those growers but also consult and engage and give them the voting rights in the organisation.

Levy payer registers will only be established when an RDC, in consultation with industry, chooses to fund the development of the register and puts a request to the minister and the request is approved. As I said, I hope that all RDCs embrace this process, not only because it is the right thing to do by the growers who pay the levies but also because it is simply good governance. It is not just grower money; it is also funded by the Australian taxpayer. Where this money is spent should be clearly transparent and be able to be seen by those who pay it, including the Commonwealth.

There are, however, a number of steps in the process, and it is expected to take some time for each levy payer register to be established. Levy payer data is not currently collected by the department, except, as I said, in the wool and dairy industries.

So, while it is a good thing that some RDCs have expressed an interest in establishing this register, the department’s advice is that it might take them some time to build this register and also do it in a staggered approach, industry by industry. Developing a fit-for-purpose, cost-effective system to deliver levy payer information is, unquestionably, a complex process, simply because it is such a mess. Every single one of these commodities has different processes; they have different procedures, different methods of payment, different rates of payment—I think the colloquial way to put it is that it is a complete shemozzle. So it is not surprising that it will take the department some time to work through, commodity by commodity, with each of the RDCs. But they have to start somewhere, and I think this is a great start—developing a new, fit-for-purpose system.

The bill has no financial implications, and the bill does allow the Department of Agriculture and Water Resources to provide this payment information. The bill does not alter existing arrangements currently in place for the collection and distribution of levy payment information to Dairy Australia and to Australian Wool Innovation.

The bill will also allow the secretary of the department to approve the disclosure of levy payer information by an RDC to a third party, such as an industry representative body. But the department is also developing guidelines under which that will be able to occur.

Again, inquiry after inquiry has made similar recommendations—that these reforms need to occur. Extensive consultation on the agricultural levy system was undertaken by the Senate rural and regional affairs committee in, as I said, the inquiry that I cosponsored in 2014 that reported in 2015. The committee itself received 151 submissions, and we held seven public hearings across Canberra, Sydney, Melbourne and Perth. As I said, the evidence to these inquiries was consistent, and overwhelmingly damning of the current system. Few, if any, of the people who made submissions were saying that levies should not be paid for marketing and for R&D, but it all boiled down to making the system transparent, to making it sensible, and to making sure that the money spent by Australian taxpayers and the money spent by growers was actually going to give some benefit and that they had a say in the process.

In conclusion, the bill will help allow levy payers to have more of a say in how their levies are spent. That is an overwhelmingly good thing, because it is not just growers, as I have said, but also Australian taxpayers who put hundreds of millions of dollars into these organisations every year. If the bill is not passed, an opportunity to improve consultation between RDCs, levy payers and the department will be lost.

I am also very happy to see that the bill is compatible with human rights. The measures proposed in the bill are consistent with the right to protection against arbitrary and unlawful interference with privacy, and I commend this bill to the Senate.