The biosecurity protection levy: Principles for design

Authors: Saša Vanek and Robert Breunig

The 2023 federal budget announced a $1 billion increase in Commonwealth biosecurity funding, part of which is to be made up by the new Biosecurity Protection Levy (BPL). The proposed Levy has faced significant opposition from primary producers, and bodies including the Productivity Commission have identified weaknesses in the policy case for the Levy. From a first principles perspective, the Tax and Transfer Policy Institute (TTPI) believes this resistance is justified. Biosecurity threats can be viewed as a negative externality associated with the free movement of goods and people. While the later is a good thing, there are potential negative impacts to people outside the markets which determine the free movement of goods and people. In such cases, there are two economic approaches to externalities, neither of which align with the strategy to derive payments from “those who receive significant benefits” (Department of Agriculture, Fisheries and Forestry (DAFF) 2023). Fortunately, there are policy alternatives to ensure Australia’s biosecurity remains protected.

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