Ag Dept reports a $60m black hole

The Department of Agriculture expects to record a $60 million shortfall in cost recovery this financial year as it bans staff training and travel and sacks contractors in an attempt to make ends meet.

The Department of Agriculture, Fisheries and Forestry expects to record a $60 million shortfall in cost recovery this financial year as it bans staff training and travel, and sacks contractors in an attempt to make ends meet.

The entity’s financial position is so dire that Agriculture Minister Murray Watt has sought a quick fix from the finance department while waiting for a hike in service fees and charges to kick in to help balance the books.

DAFF is the only government department that relies on a cost-recovery model to pay for the services it provides to industry, rather than taxpayer funding to perform its functions.

Its cost recovery position in 2019-20 was a $32.7m loss. It recorded a $9.5m surplus in 2020-21 and an $18.6m loss in 2021-22.

Federal Agriculture Minister Murray Watt. Picture: NCA NewsWire / Gary Ramage

Mr Watt said a “substantial gap” existed between the funding government provides the department, what it recoups from industry and ongoing expenses.

“We are in active discussions with the Department of Finance now about how we manage that for the rest of the year,” he said.

The department said its current modelling was unable to keep pace with the nation’s burgeoning demand on biosecurity resources, as it opened consultation on across-the-board biosecurity cost-recovery charges to be introduced on July 1.

These costs have remained static since 2015, while the cost of biosecurity activities has increased by 20 per cent.

In 2015–16, biosecurity cost recovery was $226 million; it is forecast to hit $348.8 million in 2023-24, or a 53 per cent increase.

The looming fee increase is forecast to recover an additional $36.4 million above the revenue of $312.4m that would have been collected at today’s rates.

Mr Watt said biosecurity staff had continually been asked to do more with less, “but our biosecurity system is facing growing threats.”

“We need to lock in sustainable ongoing funding rather than temporary funding injections that we have seen over the past few decade, something that farmers have been asking for, for years now,” he said.

Mr Watt slated blame for the department’s woes to the previous government’s failure to implement a sustainable funding model, while Nationals leader David Littleproud, a former Morrison Government Agriculture Minister, claimed the department had an $88.4m operating surplus in 2021-22.

It comes after biosecurity officers this week seized 38 tonnes of illegally imported products, including turtle and frog meat, pork, beef and raw prawns, in a major biosecurity operation.

Meanwhile, NSW Farmers president Xavier Martin said the commercial-scale meat-smuggling operation pointed to “a major problem with our biosecurity system”.

“The very fact that seven twenty-foot shipping containers filled with illegal products slipped through our system is a big cause for concern,” he said.