Opinion: Grassfed restructure against spirit of Senate recommendations

Ashley McKay, 07/11/2017

This opinion article on the grassfed cattle industry restructure process has been submitted by Central Queensland cattle producer and member of the grassfed cattle industry restructure Implementation Committee, Ashley McKay


Ashley McKay

Given that Australians in general, and mum and dad cattle producers in particular, will not trustingly buy something, or enthusiastically support something that they cannot see, cannot understand when the cost is unknown, the rules are uncertain, and no one can accurately describe the animal; I am somewhat surprised that (Cattle Council of Australia president) Howard Smith and (Implementation Committee independent chair) Troy Setter, both of whom share duties with me on Barnaby Joyce’s Implementation Committee (IC), have been quoted urging support for the new Cattle House, when at this stage it ticks all of the above boxes of unknowns and uncertainties.

When Minister Joyce formed the Implementation Committee there were seven Senate Recommendations on the table, which included three critically important concepts:

  • The new body would directly receive all of the $60 million plus grassfed levy;
  • Every grassfed levy payer would be identified;
  • Every grassfed levy Payer would automatically receive voting entitlements.

Later, page 97 of a Senate record confirms that the Government would determine whether the new body would receive all or part of those levy funds.

The same page of that report confirms that “the new body would primarily be funded through the statutory grassfed levy”.

Unfortunately, the government in its wisdom has retreated and tell us that the new “Cattle House” will not receive any direct levy funds at all.

This Government decision means that “Cattle House”, instead of being financially powerful, independent and secure, as was originally envisaged, will now have to exist on handouts from the likes of MLA, RMAC, perhaps sponsorship from corporations and as recently mooted, membership fees.

Remember the $500,000 the Government has provided only gets us through the next 12 months or so establishment phase and does not provide ongoing funding for “Cattle House”.

Some IC members have made the point that the processors and live exporters already receive and control all of their levies through a two-company system and to deny that same right to cattle levy payers is not only a gross and obscene discrimination, but betrays the spirit of the Senate Recommendations.

So far, the quest to identify all of the levy payers has been met with a mixture of resistance and indifference.

Likewise, the issue of automatic voting entitlements to all levy payers, which many of us believe is the holy grail, essential element, for “Cattle House” to succeed, must continue to be loudly demanded by every mum and dad cattle producer, or some forces will push for all members to pay a separate fee to join up.

The IC has made progress, much of it delayed by the failure of Government to fund the task, but much more has to happen before “Cattle House” can become reality.

MLA gets some $60 million plus per year of grassfed cattle levies and RMAC holds some $40 million of accumulated levies in a fund.

These are the same two entities that the Senate Committee judged as failing the levy payers.

It is time for all producers to become vocal and demand that the Government reconsider its decision that gives our levies to MLA and RMAC to spend as they see fit, while “Cattle House” has to beg for money when MLA has $108.2 million in retained earnings with a surplus this year of $7.5 million.

The IC needs grassfed producers’ support to deliver the organisation the Senate Report envisaged.

The funding, the levy payer identification and automatic voting entitlements were all part and parcel of that Senate Report, and it would be a brave person who argued that these elements were not justified entitlements to the people who had contributed the money,

The politicians need to be lobbied by phone and email to express concern of the back flip.

That decision not only severely impacts “Cattle House”, but it also allows other bodies that the levy payers cannot hold to account, to continue down the same path that the Inquiry found had failed the cattle industry.


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  1. John Gunthorpe, 10/11/2017

    Thank you all for an interesting and informed debate. The Australian Cattle Industry Council is calling for members to demonstrate that CCA does not have the support of Australian cattle producers due to their past failures. We are holding meetings across Australia seeking this support.

    I understand Rod that there are fewer members of the Pork, Feedlot and Live Exports than grass-fed cattle producers but they are legally entitled to have their own service companies to collect and distribute levies from members as outlined in the Red Meat Memorandum of Understanding which I understand is part of the legislation establishing the collection and use of the levy funds.

    If it is good enough for these members to enjoy this entitlement why not grass-fed cattle producers?

    ACIC has established a body Australian Cattle Producers Corporation to be the service provider to ACIC in the same way Australian Meat Processors Corporation is the service provider to the Australian Meat Industry Council.

  2. Rod Dunbar, 10/11/2017

    Ashley; re the constitution – there are quite a few federal Politicians who had that opinion re their citizenship status and the High Court struck them out!!
    The pork model has only 25 Producers … a far cry from the 220,000 cattle producers (source ABS). The groups to whom you refer would on our advice not sustain a challenge; however we will challenge any such construction for the cattle industry.
    I have in meetings with the Minister’s office explained our position regarding the funding from consolidated revenue of agri-political groups and they then changed their rhetoric.

    Re the Levy: we respect your right to attempt to allow your supporters to “decide how those levies are best spent to support their business interests.” – Like a free hand.
    We on the other hand are advocating that the democratic process first and foremost is to decide if we want to continue to pay the levy/tax at all, per se. Your side of this political debate denies us that democratic right, and you can do so because your group(s) operates with Ministerial approval.

    Re democratic voice: Somehow reality has become fuzzy here – there is nothing stopping your group(s) from forming an agri-political group right now; but you want to;
    1) obtain tax money from the federal Government to fund the agri-political group, and
    2) replicate the taxpayer data base as your membership!!!
    We will never agree to that.
    It is a fact of life that your committee must obtain support both by voluntary membership and voluntary financial contributions in order to establish the institution your supporters’ desire in order “decide how those levies are best spent to support their business interests.” It does appear that kind of voluntary support is not forthcoming.

    With regard to CTL payer ID for the purposes of MLA; we have already told the Minister we support that, as long as the Identifier used is fair and just (the ABN system and operated by the ATO) and nothing to do with LPA/MLA/Levies Collection Unit; we have also told the Minister that once the CTL payer database is established it must be managed by the Department in accordance with the Privacy Act (C’wth) with no third party disclosure accept with written consent by each individual CTL payer.

    We also told the Minister that once the database is complete and up to date then there is no need for CCA or any other representative group as the Department can simply communicate direct with the levy payer on all Policy matters and obtain a decisive vote if necessary. We firmly believe that for this reason alone the Department will never implement a database of the CTL payers.

    We have also told the Minister we want the Structure repealed and the Levy scrapped; this was suggested when the Department expressed concern re enormous cost of the establishment and the ongoing cost of maintenance of the database.

    Ashley, the only reason your group(s) are here debating on Beef Central, engaging the United Stockowners of Australia and agitating in the media generally is that you do not command the support you all seek amongst the 220,000 cattle owners nationally.

    We hear constantly that cattle producers generally are fed up with it all and have had enough – they will not support CCA or any other clone that must be prescribed as a Government public service agency which is currently the Law of the Land (AMLI Act).

    We would like to hear for what purpose MLA has quarantined nearly $120 million out of the CTL funds and did the Minister approve that action? Is there already a plan with secret Ministerial approval to finance the new CCA using these funds? If he does, it will be in direct breach of the Deed of Agreement between MLA and the Federal Government which prohibits expenditure on Agri-political activities and will certainly enrage many CTL payers.

    That is why we advocate a simple “opt out” registration process to obtain a Certificate to present to the ATO to cease paying the CTL Levy; support for the structure is in rapid decline.

  3. John Michelmore, 09/11/2017

    I think it would be useful for all to reread the first Senate Recommendations from the Inquiry into Cattle Transaction Levies:-
    There are 7 recommendations and these are what the majority of cattle producers and Senators wanted; because the Minister and Agricultural Department have done nothing, most of the majority are now disengaged.
    For any group to suggest spending levy money, a tax and consolidated revenue to fund the formation of a new group is doomed to failure, as well as being unconstitutional. One could say that being unconstitutional does not prevent breaches of the Constitution that remained unchallenged in the courts. We need only look at the Section 44 issue at the moment.
    It would be remiss of me to not point out that this levy, tax, collected by the Agriculture Department and bypassing the ATO cannot be collected fairly with reference to LPA numbers. The only really valid way for taxes to be collected are via the ATO, and it would be simplicity to add the levy collection to this ATO documentation and be certain that every one of the 220,000 cattle producers are accounted for when the document their levy paid.
    Minority groups ignoring the other Senate recommendations really do a dis service to all those in the cattle industry that want resolution of the problems that have existed since the AMLI Act of 1997 came into force. For example ignoring the recommended ANAO audit will ensure that many of the existing problems remain hidden and are never resolved.
    If this type of taxation funding is to become the norm, then every political organisation should be funded from consolidated revenue and we all know that is a nonsense!

  4. Ashley Mc Kay, 09/11/2017

    Rod, You are entitled to your Constitutional opinions, but the reality is that three Groups already receive and manage their funds. They are the two Groups I previously mentioned plus the Pork Industry setup.
    Every one knows the Levy is compulsory. My intent is that people who pay that Levy are identified, so that they can decide how those levies are best spent to support their business interests.
    We hold reports that some 170,000 people exist on the L.P.A. Data Base.
    What is wrong with giving those 170,000 people a democratic voice as the Senate Committee recommended.

  5. Cameron McIntyre, 08/11/2017

    I was with another four people at a meeting in Townsville with Barnaby Joyce when he said he would organise a Senate review into how well the existing representative system served the grass fed cattle producers in Australia.
    At the conclusion of the meeting he looked Linda Hewitt and myself squarely in the eye and said “realise you will have to accept the Senate’s findings”. The recommendations from the Inquiry were what many producers had been calling for over the previous eight years.
    For whatever reasons there has been very little push from the Minister’s office to implement the changes recommended, whilst there has certainly been a great deal of resistance from some of the old guard who wont even acknowledge producers are entitled to elect representatives who can be held directly accountable to our industry for their decisions.
    Please contact a politician and ensure they are aware of the Senate’s findings.

  6. Joanne Rea, 08/11/2017

    Paul Franks the only reason that nothing will change will be down to two things, producers not becoming engaged and verbalising what they do and don’t want, or funding. It really is obcene to see the waste in the system (and retained earnings) but see any cattle advocacy organisation needing a “begging bowl”. This new organisation is an attempt to change the status quo.
    As pointed out by Rod Dunbar, the government can spend the money any way it sees fit so it needs commitment from them also. A rebadged CCA will only be the outcome if producers do not become involved and let their preferences for a transparent and democratic organisation be known. The opponents of change have not been backward in raising the roadblocks.

  7. Joanne Rea, 08/11/2017

    Thank you Asley for clarifying how much we don’t know.
    One of the known unknowns is what register of members will be used. As we wanted all PIC holders to have a vote the logical step was to have the LPA register. That, it appears has been denied so there have been suggestions that we default to, for example, the list of transaction levy payers and elections be conducted by MLA to save on costs. Some of us are not prepared to accept MLA involvement. If we are to make a statement about independence and strength we need to not have them involved.
    Then there is the voting system itself. Will it be one man one vote or based on some weighted system such as cattle numbers or levies or will we use a combination of the two. The combination of the two is what AMPG has been a long time supporter of but Cattle Council are not sharing their preferred method with the public.
    When will our beef industry organisations listen to the realities of family grassfed cattle producers. (I will not call them levy payers because the largest of the levy payers are processors or corporates.) They are sick of being told “trust me” and having various schemes thrust upon them whose finer details and pitfalls only reveal themselves as they are put into action and the collective of organisations refuse to acknowledge that there is opposition, as is the case with JBAS.

  8. Paul Franks, 08/11/2017

    Nothing will change, the bureaucracy will grow ever larger. There is way too much easy money out there to take off producers to maintain all these groups.

    While these organisations do do some good, they also appear at least to me to make sure they look after themselves. Over the past twenty years I have never seen so much regulation come into this industry.

    The beef industry is very fractured and is why such things are happening. As well the producers are out trying to make a living growing beef and have little time for the politics, which sadly seems to have been taken up by those some of which are not up to the task, and the few good ones do not have the backing to make real change. So we end up with he current situation.

  9. Rod Dunbar, 08/11/2017

    With respect, we do not think there is widespread support for compulsory tax funding, compulsory membership and compulsory ID for all persons or entities breeding, growing or dealing in cattle nationally at this point in time.

    Any agri-politicial organization cannot be funded by Consolidated Revenue which is what the Levy is, as it is a breach of the Constitution – that’s why the federal government has “in its wisdom … retreated” from its original statement of funding from Taxation.

    As far back as 2006 Minister McGauran replied to me in writing saying “the Levy is a Tax and once collected can be spent in any way the Commonwealth Government sees fit”.

    It is an incorrect assertion to say the Levy is a “contribution” – that attempts to justify the whole structure as being some sort of a voluntary institution that we all contribute to and agree with – nothing can be further from the truth, it is a Government public service agency funded by a Tax and this proposal seeks to allow voting rights on a compulsory tax, but denies the tax payer the right to say “no” in paying the Tax, so there is nothing voluntary about it.

    In times past it has been a catch-cry to have each levy-payer identified; that notion has, it would seem now passed, and alternatively we support a proposal put to the Senate Inquiry of exemption, whereby Producers can apply to be become exempt from paying the CTL by obtaining a Certificate. We would like to see that implemented very soon.

    So there is “retained earnings” in the MLA bank account!! And a further $7.5million this year!!! That begs the question then – why is the Levy still at $5? Why has it not been reduced?

    There will never be widespread support for any private cattle representative organization as long as the current levy MLA/RMAC structure is in place, and any Australian Cattle representative group must, according to the AMLI Act become “Prescribed” and a Public Service entity. The structure has been operating for 22 years and we the majority have seen no economic benefit at all – all we have seen is huge amounts of regulation and red tape, and very significant compliance costs. Vertically integrated/processor entities have benefited financially, however in those cases we advocate an ANAO investigation as to the legality of the expenditure and the application of the principal of the proper Administration of Government.

    Proposing no change to the structure at all except a renamed CCA, which is what our subscribers see this as, is unacceptable; what we need is total deregulation and the return to free trade and the privatisation of our businesses.

  10. Rod Barrett, 07/11/2017

    Go hard Ashley McKay. This is do or die.
    I vividly recall the implementation of the current MLA and the falsehoods pedalled to we producers by John Andersen, leader of the National Party, supposedly OUR political party.
    The vision was a skills based service & marketing organisation MLA, to report to and be answerable to we producers, where producers would select board representatives, where we could levy ourselves to collect whatever monies we required etc.
    Turned out to be weasel words and the CCA of the day (I was there) was skewered by the people who should have empowered us.
    There is no trust any more.

    There can be no independence and empowerment for producers of grass fed product without financial independence and transparent responsibility from our “service” organizations.
    Taking our begging bowl to MLA to simply exist just does not cut it..

    Vote NO unless the details you specify are crystal clear.
    So given the lessons of history, where is the outrage from producers at being set up for another skewering 2017 style?
    It behoves we producers to get active and vocal, get in the face of our federal politicians and in strong support of Ashleys stance.
    If we do not learn the lessons of history, the repeat will be more of the same. I do not believe our northern producers can survive a repeat shafting .

  11. John Gunthorpe, 07/11/2017

    We fully agree with and support your concerns Ashley.

    The Australian Cattle Industry Council formed the Australian Cattle Producers Corporation for the purpose of receiving the levy monies and performing the duties of ACIC’s primary service provider to distribute the levies to achieve marketing and research objectives of our industry. This is identical to the structure that operates in the beef processing industry and the live export industry. As you say Ashley, it should be easy enough to replicate what already exists in related industries.

    We are also concerned about push back by CCA during the next 12 months resulting in a structure similar to the Sheepmeat Council who require that board nominees must be approved by State Farming Organisations (SFOs) before they can join the ballet paper. Today the SFOs own CCA and appoint directors from their number – jobs for the boys/girls. This is undemocratic and contrary to your IC strategic plan.

    Under the Red Meat Memorandum of Understanding, CCA are supposed to negotiate and agree the projects to be funded by MLA on marketing and research, and then measure their success or otherwise. As was discussed in the meeting with Barnaby Joyce in December 2015 CCA fail in this work and this is the primary cause of their ineffectual leadership of our industry.

    ACIC continues its push to agitate for levy payers to be the members of Cattle Australia and for 15 cattle producers from the 15 cattle regions across Australia to be directly elected by the members from each region. Cattle Australia must be owned directly by levy paying cattle producers and advocate policies to advance our industry.

    Our next meeting is being organised by concerned producers at West Tamworth Leagues Club at 2pm on Thursday 23rd November. As we are meeting in Barnaby Joyce’s New England electorate, Barnaby has agreed to speak at the meeting about his experiences since he championed the restructure of our industry and called for the senate enquiry that led to the report and recommendations you mention.

    We invite all concerned grass-fed cattle producers to attend this meeting and hear about the matters that currently concern us including Johne’s disease, J-BAS, Biosecurity Plans, declining domestic beef consumption, the continuing uncompetitive operating costs of our processing sector and the high level of debt producers carry today. We will also discuss a better way forward for our industry representation.

  12. Peter James McHugh, 07/11/2017

    ” CHAPTER 5 ” Senate Review Note 5.72 states
    ” It would be a tremendous disservice to levy-paying producers if the new representative body has to contend with the same resourcing issues, and face the same obstacles as the current PIC. However , the committee is also acutely aware that any reform effort will face resistance from those in the industry who have a vested interest in the status quo. to avoid at least some of these difficulties , the committee is firmly of the view the funding source for the new body needs to be independent of both CCA & MLA.
    The Senate note 5.36 goes on to say ” That the new body would primarily be funded through the statutory grass -feed levy.
    again I request the editor to release “Chapter 5” , to the grass fed producers & other readers.

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