Bloated disease compensation fund: Holds $40m in livestock stamp duty

In 2015 Victoria’s livestock disease compensation funds held $19.68m, now that’s reached $40.2m. Why?

Less than half the $7.7 million livestock producers paid in stamp duty in 2020-21 flowed back out again to subsidise ear tags and fund industry projects.

Cattle, sheep and pig producers have poured more than $40 million of stamp duty payments into Victoria’s bloated disease compensation funds, with beekeepers also contributing to the pool via registration fees on their hives.

Key industry sources say the bulk of the money has accumulated in the cattle compensation fund, but less than $10m was needed to deal with the limited number of diseases against which producers could claim compensation, such as anthrax.

Up until 2019 Victoria’s Agriculture Minister was only allowed to spend the interest earned on money held in each fund for industry development, on the advice of industry nominated advisory committees overseeing the funds.

But in December 2019 amendments to the Livestock Disease Control Act were proclaimed, giving the minister the power to draw down the capital of the funds, which had reached $31.75 million by July of that year.

Since then producers have poured another $17m into the funds, but the minister has released just $8.7m, with trust account details tabled in Parliament last week showing that as of July 1 this year there was $40.2m squirrelled away in the compensation accounts.
In 2015 there was just $19.68m sitting in the four funds.

Agriculture Minister Mary-Anne Thomas told The Weekly Times “a total of $9.5 million was awarded in the last annual round of livestock biosecurity grants in 2020”.

However, the Department of Jobs, Precincts and Regions annual report released last week shows a total of just $3m was released from the four compensation funds.

Why more money is not being released remains a mystery.

Victorian Cattle Compensation Advisory Committee chairman Ron Harris said its members had been looking at reviewing and perhaps reducing the amount of the levy producers paid.

“We’ve been looking at it, but the department has bigger priorities,” Mr Harris said.

One issue he said needed addressing was the “crazy” structure of the cattle levy, which created major discrepancies in how much producers paid, based on whether they sold through the saleyard or over the hooks.

Cattle producers selling through the saleyards are charged stamp duty of 0.05 cents per $20 of an animal’s value, up to a maximum of $5 on an animal that sells for $2000 or more.

In contrast stamp duty on livestock over the hooks is a flat 90 cents up to 250kg in weight or $1.30 for those weighing more.

Sheep and Goat Compensation Committee chairman Michael Craig said he hoped more of the funds would be used to fund industry projects, but “we don’t have that much available”.