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Cost Recovery Implementation StatementPlant exports certification 2017-18


DRAFT FOR CONSULTATIONCost Recovery Implementation Statement: Plant exports certification, 2017-18

© Commonwealth of Australia 2017

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ISBN 978-1-76003-114-5 (online) This publication is available at agriculture.gov.au/publications.Department of Agriculture and Water ResourcesPostal address GPO Box 858 Canberra ACT 2601Telephone 1800 900 090Web agriculture.gov.au

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ContentsGlossary.................................................................................................................................................... iv

1 Purpose of the cost recovery implementation statement................................................................

1.1 Plant exports.............................................................................................................................

1.2 Why is cost recovery appropriate?............................................................................................

2 Authority to cost recover.................................................................................................................

2.1 Policy approval..........................................................................................................................

2.2 Statutory authority....................................................................................................................

3 Cost recovery methodology.............................................................................................................

3.1 Determining the cost base........................................................................................................

3.2 Activity-based cost model.........................................................................................................

3.3 Activities undertaken for the plant exports cost recovery arrangements.................................

3.4 Volumetric forecasts.................................................................................................................

3.5 Cost recovery reserve...............................................................................................................

4 Plant cost recovery arrangements independent review..................................................................

5 Risk Management.............................................................................................................................

6 Stakeholder engagement...............................................................................................................12

7 Key dates and events.....................................................................................................................13

7.1 Consultation............................................................................................................................13

7.2 CRIS approval process and change register.............................................................................14

Attachment A — Grain exports (including seed products and forestry).................................................15

A.1 Design of cost recovered charges............................................................................................15

A.2 Cost base.................................................................................................................................15

A.3 Financial estimates..................................................................................................................17

A.4 Performance reporting............................................................................................................18

A.5 Grain export stakeholder engagement...................................................................................19

A.6 Grain export fees and levies....................................................................................................20

Attachment B — Horticulture exports....................................................................................................25

B.1 Design of cost recovered charges............................................................................................25

B.2 Cost base.................................................................................................................................26

B.3 Financial estimates..................................................................................................................27

B.4 Performance reporting............................................................................................................28

B.6 Horticulture export fees and levies.........................................................................................31

Attachment C — Description of cost model activities.............................................................................37

Intervention activities.............................................................................................................................37

Incident management activities..............................................................................................................37

Department of Agriculture and Water Resources iiiDRAFT FOR CONSULTATION


Assurance activities.................................................................................................................................37

Programme management and administration activities.........................................................................38

Department of Agriculture and Water Resources ivDRAFT FOR CONSULTATION


GlossaryActivity: any measurable work undertaken by the department to enable exportation of goods. This includes activities, business processes and outputs as described in the Australian Government Cost Recovery Guidelines (CRGs).

Approved Authorised officers: specially trained individuals who are appointed to perform specific export inspection functions in accordance with Australian export legislation.

Charge: a fee or a levy that the department imposes to recover costs. In the CRGs, charges are referred to as cost recovery charges.

Fee: a charge imposed when activities are provided directly to a specific individual or organisation. In the CRGs, fees are referred to as cost recovery fees.

Levy: a charge imposed when activities are provided to a group of individuals or organisations (e.g. an industry sector) rather than to a specific individual or organisation. A levy is legally a taxation charge and needs to be imposed in a separate taxation Act to comply with constitutional requirements. A levy differs from general taxation, as it is earmarked to fund activities provided to the group being charged. In the CRGs, levies are referred to as cost recovery levies.

Department of Agriculture and Water Resources vDRAFT FOR CONSULTATION


Cost Recovery Implementation Statement: Plant exports certification, 2017-18

1 Purpose of the cost recovery implementation statement

This Cost Recovery Implementation Statement (CRIS) provides information on the Department of Agriculture and Water Resources’ (the department’s) cost recovery arrangements provided to exporters of plant products including grain and horticulture products. It also reports financial and non-financial performance information for the delivery of these activities and contains financial forecasts to 2020-21.

1.1 Plant exportsThe export of plants and plant products is a controlled activity and is regulated in accordance with the Export Control Act 1982 and its subordinate legislation. Grain and horticulture products specified in the legislation are:

prescribed grain (any seed or the following grains: barley, canola, chickpeas, dried field peas, faba beans, lentils, lupins, mung beans, oats, nuts, sorghum, soybeans, whole and split vetch and wheat)

fresh fruit and vegetables (including herbs, mushrooms, cured onions, and sprouts)

other plant products (fodder, straw, timber products, nursery stock, tissue cultures, cotton and other grains and seeds not listed above) for which an importing country’s National Plant Protection Organisation requires a phytosanitary certificate or any other official certificate.

Exporters of plants and plant products must obtain an export permit prior to the departure of goods from Australia. Additional export certification may be required by overseas government authorities to verify that the exported products comply with their respective import conditions.

In order to certify a product’s compliance with these conditions the department undertakes a range of activities, including:

the development, implementation and monitoring of operational policy and systems that ensure compliance with Australian export controls and any additional importing country requirements. These activities serve to maintain the eligibility of commodities for export from Australia and ensure that market access is maintained

the provision of inspection and auditing activities to ensure that the production, storage, handling and transportation of grain and horticulture products intended for export comply with the prescribed conditions of the Australian export controls and any additional requirements imposed by an importing country’s national plant protection organisation, including registrations of accredited properties.

the issue of permits, phytosanitary certification and other documentation necessary to confirm compliance with the export control orders and any additional importing country requirements.

A detailed guide on exporting plant and plant products is available on the department’s website.

The grain export and horticulture export cost recovery arrangements are separate, however export certification activities for all plant products, across these two-cost recovery arrangements are undertaken by the department’s Plant Export Operations branch and Service Delivery Division.

These two arrangements are presented in this CRIS. Common information for plant export certification, such as the authority to cost recover and the cost recovery methodology, is in the body

Department of Agriculture and Water Resources 1


http://agriculture.gov.au/export/controlled-goods/plants-plant-products/exportersguide



of the CRIS. Two schedules are attached which provide the specific details, cost base, levies and fees for each of the plant export certification cost recovery arrangements:

Attachment A — Grain (including seed products and forestry)

Attachment B — Horticulture

1.2 Why is cost recovery appropriate?Cost recovery fees and levies fall within the Australian Government’s (the government) broader charging framework. Other charges in this framework include commercial charges and resource charges. The type of charge is determined by the characteristics of the services.

The use of commercial charging is not appropriate as this approach relies on competitive markets. While the private sector can undertake some export certification activities, the government must provide the export certification framework. This is because it relies on negotiated arrangements with other countries. Resource charging is not appropriate, as export certification is not based on the value of the activity to the recipient.

The only viable alternative to cost recovering for export certification is funding this activity through consolidated revenue (general taxation). In most circumstances, however, general taxation is only appropriate for services that are provided to the wider community. Export certification services are provided to a clearly identifiable group—individuals and organisations that participate in the plant export supply chain. If it were not for the business activities of this group, export certification would not be required.

There are additional benefits to funding export certification through cost recovery. When a business pays for the activities it receives, the government has an obligation to justify the prices it charges. Cost recovery also increases the cost consciousness of clients of how much a government activity actually costs.

For these reasons, the government has determined cost recovery to be the most appropriate mechanism for funding export certification. The department has designed cost recovery of export certification services to be consistent with the Australian Government Cost Recovery Guidelines (CRGs). These provide the overarching framework under which government entities must design, implement and review cost recovery.





2 Authority to cost recoverUnder the CRGs, cost recovery requires both policy approval and statutory authority. The following section provides information on the government’s approval of cost recovery for plant export certification and the legislation that enables the collection of cost recovery fees and levies.

2.1 Policy approvalThe department commenced partial cost recovery of export certification activities in 1979 and implemented full cost recovery from 1 January 1991.

The policy authority for continued export certification cost recovery was confirmed in the2015–16 Budget when the government announced a redesign of the department’s biosecurity and export cost recovery arrangements. The redesign ensures the department’s cost recovery arrangements are equitable, financially sustainable and support the efficient and effective delivery of export activities into the future.

The redesign improves the cost recovery of export certification activities by:

recovering the full cost of activities undertaken by the department where appropriate

simplifying the structure of fees and levies where appropriate

achieving greater equity in client contributions to system costs

expanding and enhancing activities to strengthen export certification services.

2.2 Statutory authorityFees and levies for plant export certification are recovered under separate statutory authority.

Cost recovery feesSection 25 of the Export Control Act 1982 provides the power to impose fees in relation to a range of export services. The specific amounts are set out in the Export Control (Fees) Orders 2001.

The Export Control Act 1982 and its subordinate legislation can be obtained at the Federal Register of Legislation website.

Amendments to, or new subordinate legislation will provide for the fees detailed in this CRIS to be established. These and other delegated instruments will include descriptions of the charging points for plant export fees.

Cost recovery leviesPreviously, export certification levies were collected under the following legislation:

Export Inspection (Establishment Registration Charges) Act 1985

Export Inspection (Establishment Registration Charges) Regulations 1985

This legislation can be obtained at the Federal Register of Legislation website.

Export Inspection (Quantity Charge) Act 1985

Export Inspection (Quantity Charge) Regulations 1985


Export Inspection and Grain Charges Collection Act 1985Department of Agriculture and Water Resources 3


https://www.legislation.gov.au/Series/C2004A03065


http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200400317?OpenDocument





Export Inspection and Grain Charges Collection Regulations 1985


Export Inspection (Service Charge) Act 1985

Export Inspection (Service Charge) Regulations 1985


The above legislation is now redundant and has been repealed. The following Acts and regulations currently provide authority for collection of the levies detailed in this CRIS. Legislation can be obtained at the Federal Register of Legislation website.

Export Charges (Collection) Act 2015

Export Charges (Imposition—Customs) Act 2015

Export Charges (Imposition—Customs) Regulation 2015

Export Charges (Imposition—Excise) Act 2015

Export Charges (Imposition—General) Act 2015

Export Charges (Imposition—General) Regulation 2015








3 Cost recovery methodologyThe department has applied a consistent methodology to determine the fees and levies in its biosecurity and export cost recovery arrangements. Determining fees and levies for each cost recovery arrangement is a four-step process.

1. Determine the cost base.

2. Incorporate the cost base into a consistent activity based cost model.

3. Establish charges and forecast volumes.

4. Calculate prices for fees and levies using the cost model and volumes.

The department’s cost recovery model is consistent with the principles and processes set out in the CRGs. The model is based on previous activity based costing models. These models have been developed and improved over the time the department has undertaken cost recovery.

3.1 Determining the cost base The department’s 2016-17 budget has been used as the starting point for determining the cost base. It is drawn from the department’s Financial Management Information System (FMIS) and is made up of three types of costs:

Direct expenses— these can be traced to the provision of an activity, for example inspections. Direct expenses include staff salaries and supplier costs.

Indirect expenses—these are not easily linked to an activity provided by the department. Indirect expenses include corporate employee salaries and overheads such as information technology, finance and human resources cost.

Capital expenses—this includes plant, property and depreciation.

Indirect expenses are allocated to activities using appropriate drivers in the FMIS costing methodology such as the number of full time equivalents (FTE) of staff and technology assets. Effort surveys and the use of department cost drivers provides a consistent approach for allocating expenses into the activity based cost recovery model across all of the department’s cost recovery arrangements.

To project the cost base over the next four years, adjustments are applied to capture expected changes to the costs. Reductions in costs will arise from reforms such as continued service delivery modernisation, while factors such as inflation on supplier expenses and new capital items will increase costs.

3.2 Activity-based cost modelThe department’s cost recovery model consists of 17 activities divided into four groups (as shown in Figure 1). The activities and groups are based on the department’s business service catalogue of activities. The business service catalogue provides consistent descriptions of the department’s activities and underpins a range of reforms across the department. The cost model ensures that fees or levies collect similar costs consistently across all biosecurity and export cost recovery arrangements.





The four groups of activities in Figure 1 determine how the costs of each activity are recovered. The costs associated with programme management and administration, assurance, and incident management activities are recovered through levies. Levies recover costs of activities provided to a group of individuals, businesses or organisations. The costs associated with the intervention activities are recovered through fees. A fee applies to those activities provided directly to an individual, business or organisation. This application of fees and levies aligns with the CRGs.

Figure 1: The department’s activity base cost model

Cost

Rec

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$8.885m

Intervention

Program Management and Administration

Business Resource Mgmt

Business Systems Administration

Stakeholder Enagagement

Policy and Instructional Material

Business Improvement

Assurance

Risk Management

Verification

Surveillance

Incident Management

Incident Management

Investigation Support

Corrective Action

Investment

Assessments Issue Approvals / Certification

Inspections Treatments Husbandry Audit

Investment

3.3 Activities undertaken for the plant exports cost recovery arrangements

Plant exports cost recovery arrangements incur costs in 13 of the 17 activities under the department’s cost model. Charges, volumetric forecasts and revenue projections for the grain exports cost recovery arrangement is provided at Attachment A. Charges, volumetric forecasts and revenue projections for the horticultural exports cost recovery arrangement is provided at Attachment B. A description of the activities relevant to both grain and horticulture export certification is at Attachment C.

3.4 Volumetric forecastsThe demand for the department’s services drives costs and hence the level of revenue required to recover those costs. The forecast volumes of services, such as certificates issued or premises registered, or volumes of exports, are required to calculate the price of fees and levies. To incorporate volume changes into projected prices, the department maintains a volume forecast





model. This uses historical volumes of exports and predicts future market conditions and their likely impact on demand for the department’s activities.

The volumetric model:

uses Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) analysis to forecast the impact of macro-economic drivers on historical volumes

incorporates industry forecasts and the ABARES commodity forecasts

projects the effect of changed business processes on historical trends, such as changes in regulation, service delivery, organisational structure, and charging structures.

External business information, which is provided through established industry consultative committees, is also used to improve and validate the volumetric forecasts.

3.5 Cost recovery reserveCost recovery reserves are used by the department to manage fluctuations in cost recovery arrangement revenue (generally driven by volumetric instability) and expense base (driven by variables such as changes to required resourcing output and changes to policy) over a period of four to five years.

Cost recovery charges are set to ensure reserves remain at between zero and five percent of annual programme expenditure, unless agreed otherwise. Close management of the financial performance of the arrangements may lead to adjustments to charges. Subject to government approval, over recoveries may be managed through remittance, or investment initiatives.

A single reserve is maintained for each cost recovery arrangement.





4 Plant cost recovery arrangements independent review

PwC Australia was engaged to conduct an independent review of the costs and expense base of the plant export certification arrangements in November of 2015. This review ultimately led to the Plant cost recovery review, which has culminated in the development of this document.

The review was tasked to consider:

whether the costs recovered by the department were legitimately costs for industry

the appropriateness of the existing cost recovery model and price settings

how departmental costs are allocated to the plant cost recovery arrangements

whether the existing arrangements were defensible, equitable and consistent with the Australian Government Cost Recovery Guidelines

the merits or otherwise of combining the grain and horticulture arrangements into a single plant cost recovery arrangement.

The approach to the review involved undertaking activities such as analysis of industry concerns, cost allocation model analysis, analysis of the Plant program resourcing underlying the cost model and industry impact analysis. Where the review identified areas of potential concern, PwC proposed recommendations about how to amend the existing models to resolve the identified issues and provide all stakeholders with a constructive and equitable way forward.

PwC Australia provided the final report for the independent review to the department in July 2016 following the release of a draft report in May 2016 to the grain and horticulture export industry consultative committees for their feedback. This report outlined 11 recommendations to improve the cost recovery arrangements for plant export certification. The department carefully considered these recommendations and seven out of the 11 recommendations were agreed to be implemented.

The seven agreed recommendations have been incorporated into the cost recovery methodology underlying the development of the cost model proposed in this document and are as follows:

1. A revised CRIS model to be developed taking into account any material issues identified during the corporate cost allocation review.

2. Implementation of a more detailed allocation methodology that distributes the Program Management and Administration cost pool on a basis that is representative of the consumption of resources by each of the two respective arrangements.

3. The Authorised Officer Program to be modelled and reported on as a separate activity stream.

4. Review of the establishment application levy every two to three years and align the price with the cost of service delivery.

5. Explore greater balance in the allocation of the Program Management and Administration cost pool between the phytosanitary certificate levy and tonnage levies for each arrangement separately.

6. Undertake an analysis of department travel costs when providing services.





7. The Grain and Horticulture cost recovery arrangements to remain separate.

There were four recommendations that the department took into consideration but did not accept.

It was recommended that the overhead expenses associated with the audit, inspection and documentation activity be more appropriately allocated to their respective pools rather than being allocated to program management and administration. The department did not accept this recommendation on the basis that it considers it more appropriate to recover relatively fixed overhead expenses through a combination of upfront and throughput levies.

Another recommendation was for the historical under-recovery of the horticulture export cost recovery arrangement to be incorporated into fees and charges in the future, and for re-pricing to occur to enable recovery in those years. The department considers that inclusion of prior year under recoveries would have a substantial adverse financial impact on the horticulture sector, and noted that there were concerns from industry regarding the equity of current exporters bearing the cost of prior year under-recoveries. As such, the department did not accept this recommendation.

The third recommendation that was not accepted was for the department to undertake more informed impact analysis of the distribution of revenue across charging mechanisms, and that this modelling be shared with industry during pricing discussions. The department did not accept this recommendation, noting that while it is appropriate to consider the impact of charges on individual exporters or commodities, it would be inappropriate to have a tonnage levy model tailored to individual commodities, exporters or business models. In addition, the additional complexity would result in the cost of implementation outweighing the benefits derived. The department made commitments to provide industry with detailed volumetric models and tools to assist industry with modelling the commodity specific impacts of the charging model, and to undertake detailed impact analysis to inform the development and refinement of the charging model.

The fourth recommendation that was not accepted was for further work to be undertaken to deal with potential competitive neutrality issues. For example, that consideration be given to either reprice the additional inspection activity to remove socialised travel cost and charge separately for travel for these services, or explore a contractual type charge for these services on an equivalent basis to industry. The department did not accept this recommendation because, while the competitive neutrality issue was accepted, the impact is considered minor and limited to extremely remote area servicing. The department considers that separately charging for travel could be inequitable across users and could unfairly benefit exporters operating in close proximity to regional offices, noting that the department operates at a national rather than regional level.





5 Risk ManagementThe department completed a Charging Risk Assessment (CRA), then known as a Cost Recovery Risk Assessment, for the redesign of its biosecurity and export certification cost recovery arrangements undertaken in 2015. The CRA’s overall risk rating for the redesign of those arrangements was medium. Under the CRA methodology, an overall rating is high if three or more predetermined criteria are categorised as high across the CRA’s seven implementation risks.

As part of the development of this CRIS, the department has undertaken a CRA for the changes provided in this document for both the grain and seed export cost recovery arrangement and the horticulture export cost recovery arrangement.

The revised grain export cost recovery model has been assessed as having a medium overall risk rating, with four out of eight implementation risks failing into the medium category and four falling into the low category. The risks assessed as medium are that the total annual cost recovery revenue will be between $10m and $20m, there will be a change in the structure of existing cost recovery charges, the arrangement utilises both fees and levies and that stakeholders have raised issued in consultation, though those issues can be addressed. The risks assessed as low are that the proposed change in annual cost recovery revenue for grain export certification is less than 5%, the changes do not require an Act of Parliament, the change does not involve working with other government entities and that there is a low expected impact on industry. No implementation risks fall into the high risk category.

The revised horticulture export cost recovery model has been assessed as having a medium overall risk rating with one implementation risk falling into the high category, four risks falling into the medium category and three risks falling into the low category. The high risk is that the proposed change in annual cost recovery revenue for horticulture export certification is an increase of greater than 10 percent. The risks assessed as medium are that there will be a change in the structure of existing cost recovery charges, the arrangement utilises both fees and levies, there will be a medium level impact on industry and that industry have raised significant issues in consultation that can be addressed. The low risks are that the total proposed annual cost recovery revenue is less than $10m, the changes do not require an Act of Parliament and that the changes do not require working with other government entities.

The department has also considered a number of risks in addition to the CRA associated with cost recovering plant export activities and their management (Table 1).

Table 1: Risks—plant exports cost recovery arrangementRisk Management

Changes over time negatively impact the appropriateness, equitableness and/or legitimateness of plant export certification cost recovery

The department commissioned an independent review to validate the cost recovery model and all costs and prices that are applied to grain and horticulture exports. This review considered whether costs recovered are legitimately costs for industry and whether the existing cost recovery model and price settings are appropriate. It also considered whether the existing arrangement is defensible, equitable and consistent with the relevant guidelines. The reviewer provided a number of recommendations, most of which the department is implementing in order to manage this risk.

Cost of export certification impacts on industry competitiveness.

Analysis by ABARES shows that full recovery of the department’s export certification costs has a small impact on the value of agriculture exports—less than 0.8 percent for each of the





Risk Management

commodities considered. Regular consideration of the impact of cost recovery on industry competitiveness will inform whether a cost recovery review is required.

The fee and levy structure does not support future regulatory reforms.

The fee and levy structure was originally designed taking into consideration future reforms. The structure has been developed to enable it to be adapted to proposed reforms. The changes presented in this document do not inhibit the adaptability of the fee and levy structure.

Government policy changes and activities described are no longer undertaken.

Regular assessments of the arrangement will inform whether a cost recovery review is required.

Importing countries change export certification requirements – the cost of providing certification no longer reflects associated effort.

Regular assessments of the arrangement will inform whether a cost recovery review is required.

Over recovery occurs. Subject to government approval, over recoveries may be managed through remittance or investment initiatives.





6 Stakeholder engagementCommunication with stakeholders is an integral part of reviewing the fee and levy structures, and prices of the department’s cost recovery arrangements for biosecurity and export certification activities. The primary means of stakeholder engagement is through Industry Consultative Committees.

In relation to plant exports, direct engagement has been undertaken with industry and fee payer representatives through the Grain and Plant Products Export Industry Consultative Committee (GPPEICC) and the Horticulture Export Industry Consultative Committee (HEICC).

Throughout this process, industry was consulted on the forecasts of the arrangements’ cost bases and the export volumes, proposed changes to the existing charge structure and prices, and adjustments to assumptions underlying the cost model.

Specific issues raised by the committees include forecasting risk and accuracy, close alignment of revenue with costs and the management of cost recovery outcomes (over or under-recoveries), and striking an equitable balance between the interests of diverse exporters within each arrangement.

Neither GPPEICC nor HEICC have been able to reach consensus with the department on the multiple models presented to them. Fundamentally, a tension exists within these consultative committees between high volume and low volume commodity groups. The relative balance of throughput and phytosanitary certificate charges to each of those commodity groups is therefore difficult to obtain. The department has sought to find the middle ground in its presentation of the charges to recover the costs of delivering plant export certification activities.

Information on the issues raised by industry committee members in consultation with the department can be found in each of the attachments to this CRIS.

On implementation of the new arrangements, quarterly reporting of cost recovery performance will continue to be provided to relevant consultation committees. This provides a mechanism for continual engagement and review of cost recovery arrangements and ensures any unintended consequences or issues are resolved in a timely manner.





7 Key dates and events

7.1 ConsultationThis CRIS is built around consultation that has taken place with stakeholders, primarily members of GPPEICC and HEICC, since the announcement of the Plant cost recovery arrangements independent review in late 2015.

Key dates in the consultation process so far:

November 2015 – Plant cost recovery arrangements independent review announced.

February 2016 – Update on the progress of the independent review provided to members of GPPEICC and HEICC. It was noted that the independent review report had been delayed from its original release date of 18 December 2015 and it was agreed that a draft be circulated among members of the industry consultative committees prior to the final release.

May 2016 – Draft report of the independent review and departmental discussion paper released to GPPEICC and HEICC for feedback.

June 2016 – Discussion of the independent review at the GPPEICC meeting, closure of the industry commentary period, review of the industry submissions made and finalisation of the independent reviewer’s report.

July 2016 – Final report provided to the department and development commenced on the government response to the recommendations of the independent review.

October 2016 – GPPEICC and HEICC updated on the progress of the government response to the recommendations of the independent review.

November 2016 – The department’s position and implementation plan agreed to by the Minister for Agriculture and Water Resources. Cost recovery review of the plant export cost recovery arrangements commenced to address the agreed recommendations of the independent review.

January 2017 – Overviews of the cost recovery process and cost model (forecast expenses) papers for the grain and seed and horticulture arrangements provided to GPPEICC and HEICC members, respectively. Summary of the government response to the independent review provided to members of the GPPEICC finance sub-committee.

February 2017 – Charging model options and volumes model papers presented to GPPEICC members. Summary of the government position on the recommendations of the independent review presented to GPPEICC. Charging model options paper and volumes model paper presented to HEICC members via teleconference.

March 2017 – Government position on the recommendation of the independent review presented to HEICC along with an update of the plant export arrangement cost recovery review.

June 2017 – Additional option presented to the HEICC following feedback received on the original options. It was noted that the committee needed more time to assess the new option and the department agreed to hold a teleconference for that purpose.

July 2017 – Charging model options paper updated for a revised volumetric forecast presented at the GPPEICC meeting. The department held two teleconferences with HEICC members during this month involving discussion of the new option presented at the previous HEICC meeting.

August 2017 – The department held a final teleconference with HEICC members during which members were asked to nominate a preferred option, if any.





October 2017 – The department provided an update on the drafting of the new Plant Cost Recovery Implementation Statement and the next steps in the process at both HEICC and GPPEICC meetings.

7.2 CRIS approval process and change registerThe department will take into consideration stakeholder feedback when preparing the final CRIS. The final CRIS will be certified by the Secretary of the department before being presented to the Minister for Agriculture and Water Resources for approval and the Minister for Finance for agreement. The final CRIS will then be published on the department’s website – currently expected in early 2018.

Table 2 will provide a record of future changes and updates to the final CRIS.

Table 2: Change register

Date of CRIS change CRIS change Approver Basis for change





Attachment A — Grain exports (including seed products and forestry)This attachment describes the proposed changes to the grain export cost recovery arrangement, the cost base, fees and levies as well as additional financial information associated with grain export inspection and certification activities.

A.1 Design of cost recovered chargesThe revised CRIS includes some changes to the current levy and fee structure and prices to reflect the revised cost recovery model. One noteworthy change is the introduction of a separate phytosanitary certificate levies for the two plant cost recovery arrangements, in contrast to the single phytosanitary certificate levy that they previously shared. This provides the department with greater flexibility in balancing equity between diverse business models and commodity types within each arrangement. Another significant change is the introduction of a new documentation fee.

A.1.1 Changes to fee and levy structureThe majority of fees and levies charged under the new CRIS continue to reflect the structure presented in the previous CRIS with the following exceptions:

The introduction of a new fee-for-service charge point for document amendments or resubmissions. This new charge point aims to reduce re-work and incentivises exporters to submit suitably completed documents by ensuring that those using this service appropriately contribute to the cost of providing it.

The following changes in relation to levies:

The introduction of a separate phytosanitary certificate levy for the grain cost recovery arrangement. This allows the department more flexibility in tailoring the arrangement’s charge structure to more specifically suit the range of business models and commodities within the grain and seed export industry.

The grain phytosanitary certificate levy to be set at $51 per document, an increase upon the previous plant phytosanitary certificate levy cost of $38 per document.

The tonnage levy for grain products has increased from 11 cents to 12 cents per tonne or part thereof.

The phytosanitary certificate and tonnage levies, which both relate to throughput, were adjusted in order to ensure exporters pay a share that is proportional to their use of the export certification system. Increasing the price of establishment registrations was considered inappropriate due to the disproportional impact it would have on smaller exporters. The increase in the levies, relative to one another, aims to strike an equitable balance between exporters of small and large consignments, recognising the diversity of business models and commodities within the arrangement.

A.2 Cost baseThe following information on the grain exports arrangement cost base is provided as a four-year average from 2017-18 to 2020-21.





The revised cost recovery model is a resource-based model premised on the efficient utilisation of departmental resources. This is enabled by ongoing improvements to business processes and IT capability systems. It assumes full industry adoption of the authorised officer program, which will lower demand for inspection to be undertaken by the department.

A.2.1 Projected cost baseFigure 1: The department’s activity base cost model presents costs for the grain export arrangement by cost activity, attributed through the cost model presented in Section 3. A detailed description of cost activities is provided in Attachment B.

Figure 2: Cost base – grain exports cost recovery arrangement (four year average 2017-18 to2020-21)

Grain $13.234m

Cost

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ce

-

Intervention







Assurance

Risk Management

Verification

Surveillance

Incident Management

Incident Management


Corrective Action

Investment



$7.340m $0.207m $1.231m

$5.098m

$1.097m

$0.322m

$0.617m

$0.206m

-

-

$0.113m

-

$1.118m

$2.385m - $1.321m - - $0.75m

$0.207m

$4.456m

Investment

Table 3 provides a breakdown of expenses averaged over the next four financial years. Direct expenses can be traced to the provision of an activity, such as staff salaries and supplier costs. Indirect expenses are not easily linked to an activity, such as corporate employee salaries and overheads, including information technology, finance and human resources costs. Capital expenses include plant, property and depreciation.





Table 3: Cost type breakdown—grain exports cost recovery arrangement (four-year average 2017–18 to 2020–21)

Expense Forecast ($ millions)Direct expenses

Direct labour 7.664Direct materials 0.755Capital expenses 0.350Other expenses 0.263

Direct expenses total 9.032Indirect expenses total 4.201Total Expenses 13.234

A.2.2 Inclusions to the cost baseThe total cost base has increased since the previous CRIS. This is mainly due to additional costs associated with the introduction of an end-to-end assurance function across the plant export certification process. This new function provides oversight of all aspects of the plant export certification process to ensure the system continues to meet Australian export legislation and importing country requirements.

Table 4: Changes to cost base, grain exports

Adjustment to cost base Impact on cost baseForecast($’000s)

1 End to end assurance function 287

Total baseline expenditure 12,947Adjusted cost recoverable expenditure (cost base) 13,234Change in expenditure 2%

A.3 Financial estimatesA summary of the annual budgeted operating position for the grain export cost recovery arrangement is provided at Table 5. All cost recovered activities are subject to a detailed semi-annual review as part of departmental budgeting processes.

Table 5: Financial estimates—grain exports cost recovery arrangementFinance element A B C D E

2016-17 2017-18 2018-19 2019-20 2020-21Expenses = X 17,677,678 13,190,303 13,280,056 13,294,050 13,170,321Revenue = Y 24,305,568 13,306,846 13,525,872 13,518,372 13,518,372Balance = Y – X 6,627,891 116,543 245,816 224,321 348,051Forecast Opening Cost Recovery Reserve Bal. 6,736,610 6,853,152 7,098,968 7,323,289

Transfer 116,543 245,816 224,321 348,051Forecast Closing Cost Recovery Reserve Bal. 6,853,152 7,098,968 7,323,289 7,671,340

Materiality is applied as defined by AASB1031 and Division 12 – Materiality and Disclosure of the Finance Minister’s Orders.

In line with existing industry reserves policy, the cumulative balance will be managed to remain consistent with the target range of zero and five percent of program expenditure budget.





A.4 Performance reportingThe following section presents information on the financial and non-financial performance of the grain exports cost recovery arrangement. This is intended to provide stakeholders with an overview of the department’s performance in recovering forecasted revenue and meeting service delivery objectives.

A.4.1 Financial performanceFinancial performance for the grain export cost recovery arrangement is provided at Table 6. The 2017-18 financial year and three forward years will be updated each year as financial information becomes available.

Table 6: Financial performance—grain exports cost recovery arrangementFinance element 2013-14 2014-15 2015-16 2016-17*Expenses = X $25,421,237 $23,119,524 $19,213,386 $17,677,678Revenue = Y $19,249,574 $16,480,738 $16,223,705 $24,305,568Balance = Y – X -$6,171,664 -$6,638,786 -$2,989,682 $6,627,891Finance element 2017-18 2018-19 2019-20 2020-21

Expenses = X Updated in 2018 Updated in 2019 Updated in 2020 Updated in 2021

Revenue = Y Updated in 2018 Updated in 2019 Updated in 2020 Updated in 2021

Balance = Y – X Updated in 2018 Updated in 2019 Updated in 2020 Updated in 2021

*2016-17 reflects record grain export task and unprecedented demand for department staff to undertake intervention activities that were otherwise to be performed by industry Authorised Officers.

A.4.2 Non-financial performanceKey non-financial performance measures are made available in the department’s annual report.

Table 7: Non-financial performance measures—grain exports cost recovery arrangementKPI 2016-17

Performance2017-18 Target

2018-19 Target

2019-20 Target

2020-21 Target

Markets lost as a result of failed departmental certification services

Nil Nil Nil Nil Nil

Export consignments rejected because of failure to meet export certificate requirements.

Less than 1% Less than 1% Less than 1% Less than 1% Less than 1%





A.5 Grain export stakeholder engagement The department first presented industry representatives with an overview of the cost recovery review process, a summary of the government’s response to the Independent Review performed by PwC, and a paper detailing the charging model’s forecast expenses. Representatives requested further detail on the staffing profile of each of the export certification activity streams and this was provided by the department.

A volumetric forecast, broken down by commodity, was provided to industry representatives based on historical volumes. Stakeholders from some commodity groups considered the forecast conservative while others considered it reasonable. The model’s forecast expense were also revised downwards based on the level of demand for inspection and documentation services indicated by volumetric forecast.

Five possible charging model options, including a ‘status-quo’ option for comparative purposes, were presented to grain and seed industry representatives for discussion. Each of the proposed options represented variations of the throughput levy and phytosanitary certificate levy in relation to one another. Considerable diversity of business model and commodity among exporters was observed through the feedback on the proposed options, indicating a need to balance the interests of exporters of both bulk and smaller consignments.

Exporters of commodities that typically had low tonnage consignments relative to others stated that their export certification costs were largely made up of the per consignment charges of the phytosanitary certificate levy and the export permit fee. Low tonnage exporters argued that any increase to the cost per consignment would disproportionately affect their businesses. Industry representatives indicated they would receive little benefit from a reduction in the tonnage levy, noting the current fixed costs of maintaining registered establishments and authorised officers already impacted heavily upon their businesses by way of resulting in a high cost per tonne.

Feedback from high volume exporters indicated a strong preference for the lowest tonnage charge possible, noting that the cost recovery reserve surplus is largely due to over-recovery of tonnage levies. High volume exporters suggested that a reduced tonnage charge would deliver benefits to a majority of stakeholders but acknowledged the varying impact of the proposed options between large and small consignment exporters.

Industry representatives stated that, given the grain and seed arrangements significant cost recovery reserve surplus, it would be difficult for the department to justify an increase in export certification costs. The department acknowledged this argument and outlined its intention of returning over-recovered funds to exporters through implementing remission programs to reduce the phytosanitary certificate levy and tonnage levy. The department notes that approach is not perfect, with some stakeholders’ submissions indicating a preference for policy certainty, preferring charges that will remain relatively stable over the medium to long term.





A.6 Grain export fees and leviesTable 8: Fees, levies and volumes—grain export cost recovery arrangement (2018-19)

Charge title Type Rate Unit Estimated volume

Estimated total revenue

Plant exporter levies Type Rate Unit Estimated volume


Establishment registration—simple Levy $3 000 Annual 485 $1 455 000

Establishment registration—complex Levy $6 000 Annual 28 $168 000

Authorised officer annual charge Levy $750 Annual 977 $732 750

Organic certifying organisation Levy $7 500 Annual 1 $7 500

Export volume—grain and related products rate Levy $0.12 Per tonne

(or part thereof) 37 538 083 $4 504 570

Phytosanitary certificate Levy $51 Per document 47 838 $2 439 738

Establishment application (one-off) Levy $600Per initial establishment application

- -

Audit and Inspection fees Type Rate Unit Estimated volume


Audit Fee $36 Per 15 minutes(or part thereof) 23 914 $860 904

Core inspection Fee $36 Per 15 minutes(or part thereof) 6 652 $239 463

Additional inspection Fee $75 Per 15 minutes(or part thereof) 20 320 $1 524 019

Documentation fees Type Rate Unit Estimated volume


Document-Electronic Fee $12 Per document 95 676 $1 148 112

Document-Manual Fee $100 Per document - -

Replacement certificate Fee $500 Per document 31 $15 500

Amendment / Resubmission Fee $12 Per document 9 568 $114 816

Approved Authorised Officer (AAO) fees Type Rate Unit Estimated

volumeEstimated total revenue







AAO Application Fee Fee $250 per AO application 158 $39 500

AAO Learning and Assessment Fee $1 750per person delivered training

131 $229 250

Additional AAO Learning and Assessment Fee $2 000

per person delivered additional training

7 $14 000

AAO Approval Fee $250 per AO approval 131 $32 750

Table 9: Fees, levies and volumes—grain export cost recovery arrangement (2019-20)










(or part thereof)37 538 083 $4 504 570



- -



Audit Fee $36 Per 15 minutes(or part thereof)

23 914 $860 904

Core inspection Fee $36 Per 15 minutes(or part thereof)

6 652 $239 463

Additional inspection Fee $75 Per 15 minutes(or part thereof)

20 320 $1 524 019

















131 $229 250



7 $14 000


Table 10: Fees, levies and volumes—grain export cost recovery arrangement (2020–21)










(or part thereof)37 538 083 $4 504 570



- -




23 914 $860 904



















131 $229 250



7 $14 000


Table 11: Fees, levies and volumes—grain export cost recovery arrangement (2021–22)










(or part thereof)37 538 083 $4 504 570









- -



Audit Fee $36 Per 15 minutes(or part thereof) 23 914 $860 904













131 $229 250



7 $14 000






Attachment B — Horticulture exportsThis schedule describes the changes to the horticulture export cost recovery arrangement, the cost base, fees and levies as well as additional financial information associated with inspection and certification activities for horticulture exports.

B.1 Design of cost recovered chargesThe revised CRIS includes some changes to the current levy and fee structure and prices to reflect the revised cost recovery model. One noteworthy change is the introduction of a separate phytosanitary certificate levies for the two plant cost recovery arrangements, in contrast to the single phytosanitary certificate levy that they previously shared. This provides the department with greater flexibility in balancing equity between diverse business models and commodity types within each arrangement. Another significant change is the introduction of a new documentation fee.

B.1.1 Changes to fee and levy structureThe majority of fees and levies charged under the new CRIS continue to reflect the structure presented in the previous CRIS with the following exceptions:

The introduction of a new fee-for-service charge point for document amendments or resubmissions. This new charge point aims to reduce re-work and incentivises exporters to submit suitably completed documents by ensuring that those using this service appropriately contribute to the cost of providing it.

The following changes in relation to levies:

The introduction of a separate phytosanitary certificate levy for the horticulture cost recovery arrangement. This allows the department more flexibility in tailoring the arrangement’s charge structure to more specifically suit the range of business models and commodities within the horticulture export industry.

The horticulture phytosanitary certificate levy to be set at $76 per document, an increase upon the previous plant phytosanitary certificate levy cost of $38 per document.

The tonnage levy for horticultural products has increased from $0.65 to $1.70 per tonne or part thereof for exports to non-protocol countries and from $1.30 to $3.40 for exports to protocol countries.

The phytosanitary certificate and tonnage levies, both related to throughput, were adjusted in order to ensure that exporters pay a share that is proportional to their use of the export certification system. Increasing the price of establishment registrations was considered inappropriate due to the disproportional impact it would have on smaller exporters. The proportional increase in the levies, aims to maintain an equitable balance between exporters of small and large consignments, recognising the diversity of business models and commodities within the arrangement.





B.2 Cost baseThe following information on the horticulture exports arrangement cost base is provided as a four-year average from 2017-18 to 2020-21. An overview by cost type is provided in Table 9.

The revised cost recovery model is a resource-based model premised on the efficient utilisation of departmental resources. This is enabled by improvements to business processes and IT capability systems (e.g. national service delivery, tablets enabling a mobile workforce and the new Plant Export Management System). It assumes full industry adoption of the authorised officer program, which will lower demand for inspection to be undertaken by the department.

B.2.1 Projected cost baseFigure 3 presents costs for the horticulture export arrangement by cost activity, attributed through the cost model presented in Section 3. A detailed description of cost activities is provided in Attachment C.

Figure 3: Cost base—horticulture exports cost recovery arrangement (four-year average 2017-18 to 2020-21)

Hort $8.885m

Cost

Rec

over

y Le

vy /

Cha

rge

Fees

for S

ervi

ce

$8.885m

Intervention







Assurance

Risk Management

Verification

Surveillance

Incident Management

Incident Management


Corrective Action

Investment



Investment

$0.285m

-

$0.635m

-

$0.152m

-

$3.135m

$0.778m

$0.150m

$0.101m

$0.247m

$1.654m - $0.437m $0.087m $0.178m $1.045m

$4.412m $0.152m $0.920m

$3.401m





Table 12 breaks down costs for the horticulture exports arrangement into direct, indirect and capital expenses.

Table 12: Cost type breakdown—horticulture exports cost recovery arrangement (four-year average, 2017-18 to 2020-21)

Expense Forecast ($ millions)Direct expenses

Direct labour 4.995Direct materials 0.447Capital expenses 0.211Other expenses 0.474

Direct expenses total 6.127Indirect expenses total 2.758Total Expenses 8.885

Direct expenses can be traced to the provision of an activity, such as staff salaries and supplier costs.

Indirect expenses are not easily linked to an activity, such as corporate employee salaries and overheads, including information technology, finance and human resources costs.

Capital expenses include plant, property and depreciation.

B.2.2 Inclusions to the cost baseThe total cost base has increased since the previous CRIS. This is mainly due to addition costs associated with the introduction of an end-to-end assurance function across the plant export certification process. This new function provides oversight of all aspects of the plant export certification process to ensure the system continues to meet Australian export legislation and importing country requirements.

Table 13: Changes to cost base, horticulture exports

Adjustment to cost base Impact on cost base

Forecast($’000s)

1 End to end assurance function 211

Total baseline expenditure 8,674Adjusted cost recoverable expenditure (cost base) 8,885Change in expenditure 2%

B.3 Financial estimatesA summary of the annual budgeted operating position for the horticulture cost recovery arrangement is provided at Table 14. All cost recovered activities are subject to a detailed semi-annual review as part of departmental budgeting processes.





Table 14: Financial estimates—horticulture exports cost recovery arrangementFinance element A B C D E

2016-17 2017-18 2018-19 2019-20 2020-21Expenses = X 7,054,949 8,671,975 8,837,911 8,953,741 9,077,471Revenue = Y 7,576,457 9,243,636 9,615,044 9,958,506 10,268,500Balance = Y – X 521,508 571,661 777,133 1,004,766 1,191,030

Forecast Opening Cost Recovery Reserve Bal. -3,274,157 -2,702,497 -1,925,364 -920,599Transfer 571,661 777,133 1,004,766 1,191,030

Forecast Closing Cost Recovery Reserve Bal. -2,702,497 -1,925,364 -920,599 270,431

Materiality is applied as defined by AASB1031 and Division 12 – Materiality and Disclosure of the Finance Minister’s Orders.

In line with existing industry reserves policy, the cumulative balance will be managed to remain consistent with the target range of zero and five percent of program expenditure budget.

B.4 Performance reportingThe following section presents information on the financial and non-financial performance of the horticulture exports cost recovery arrangement. This is intended to provide stakeholders with an overview of the department’s performance in recovering forecasted revenue and meeting service delivery objectives.

B.4.1 Financial performanceThe financial performance for the horticulture cost recovery arrangement is provided at Table 15. The 2017-18 financial year and three forward years will be updated each year as financial information becomes available.

Table 15: Financial performance—horticulture exports cost recovery arrangementFinance element 2013-14 2014-15 2015-16 2016-17Expenses = X $8,073,511 $8,481,615 $8,239,014 $7,054,949Revenue = Y $6,585,981 $6,271,646 $7,249,366 $7,576,457Balance = Y – X -$1,487,530 -$2,209,969 -$989,648 $521,508Finance element 2017-18 2018-19 2019-20 2020-21

Expenses = X Updated in 2018 Updated in 2019 Updated in 2020 Updated in 2021

Revenue = Y Updated in 2018 Updated in 2019 Updated in 2020 Updated in 2021

Balance = Y – X Updated in 2018 Updated in 2019 Updated in 2020 Updated in 2021





B.4.2 Non-financial performanceKey non-financial performance measures are made available in the department’s annual report.

Table 16: Non-financial performance measures—horticulture exports cost recovery arrangementKPI 2016-17

Performance2017-18 Target

2018-19 Target

2019-20 Target

2020-21 Target

Markets lost as a result of failed departmental certification services

Nil Nil Nil Nil Nil

Export consignments rejected because of failure to meet export certificate requirements.

Less than 1% Less than 1% Less than 1% Less than 1% Less than 1%

B.5 Horticulture exports stakeholder engagementConcerns from a variety of stakeholders were raised in regard to how increases in throughput levies or per-consignment costs could disproportionately affect their export sector. Given the diversity among horticulture exporters, the department acknowledged the necessity of a balanced cost recovery model in order to maintain a system that is as equitable as possible.

Initially, five charging model options, including a ‘status-quo’ option for comparative purposes, were presented to horticulture industry representatives. Each of the proposed options represented variations of the protocol and non-protocol tonnage levies and the phytosanitary certificate levy. Feedback from industry representatives led to the department developing a sixth option, being the proposed model, with equal proportionate increases in those three levies.

Horticulture export industry stakeholders stated that each of the proposed models represented a significant and unreasonable increase in price. Representatives of exporters to protocol markets voiced concerns that the protocol pathway was already exceedingly expensive and any significant increase to the protocol throughput levy would exacerbate that. The department acknowledged concerns but noted that, given the arrangement’s historical under-recovery, the new charge structure would need to include a comparatively significant increase in price.

A volumetric forecast was proposed to horticulture industry representatives and this forecast was revised based on their feedback. Concerns were raised about the accuracy of the revised forecast, however, it was largely supported as reasonable when industry representatives were asked to review their estimates.

The revised forecast was queried further in regard to why the increase to export tonnage was not reflected in an increase in the volumes of other, related activities, such as phytosanitary certification. The rationale for this perceived irregularity is that the revision of the forecast was an adjustment to the assumptions around the relationships between those activities. For example, assuming that exporters would, on average, export more tonnes per consignment than originally forecast, noting that the revised assumption is better aligned with historical values.

While stakeholders acknowledged the need to avoid future under-recovery, concerns were raised in regard to how over-recoveries would be managed should they occur. The department confirmed its policy that over-recoveries are to be returned to fee payers in an equitable and timely manner. Furthermore, the department advised stakeholders that, if an over-recovery is to be observed for any specific charge item, a remission program will be implemented for that item in order to keep revenue at a level aligned with cost. Any decision to implement such a remission program would include industry consultation.





Concerns were raised by stakeholders in regard to the department’s position on managing over-recoveries. Remission programs were considered potentially inequitable if circumstances arise where the exporters paying the reduced charges are not representative of the exporters from whom the funds were over-recovered. It was also suggested that the need for remission programs should be minimised by the development of a more precise financial model with more accurate forecasting capabilities. The department acknowledges that a more accurate model would be beneficial but notes that the current main constraint is a lack of certainty about the future and that a balance between model accuracy and practicality must be maintained.

Industry representatives expressed concerns that the cost model appeared to have a significant over-recovery built into the model in the documentation activity stream. The department noted that this modelled over-recovery reflects current levels of demand for manual certification (e.g. transfer certificates, calibration certificates and in-transit cold treatment certificates) that is expected to decrease over the next 2-3 years because of the EXDOC system upgrade project currently underway. Due to the level of uncertainty around the timing and impact of the system upgrade, however, this decrease in demand has not been incorporated into the model. The department confirmed that any over-recovery would be managed through a remission program to keep revenue aligned with cost until any decrease in demand eventuated.

Industry representatives questioned the quarter hour rate for inspections performed by departmental officers. Industry considers the rate excessive now that all inspection activities have been released to industry Authorised Officers, and services performed by departmental officers are always charged at the ‘additional inspection’ rate. The department notes that since the inception of the Authorised Officer Program, the department’s capacity to perform inspection services has reduced significantly. The department maintains a base level of capacity in order to provide services in instances of market failure. The higher rate for inspection is appropriate in order to make up for diminished economies of scale increasing the marginal cost to the department of providing services, with a secondary effect of incentivising exporter utilisation of industry Authorised Officers.





B.6 Horticulture export fees and leviesTable 17: Fees, levies and volumes —horticulture exports cost recovery arrangement (2018–19)





Establishment registration—grower/exporter Levy $600 Annual 200 $120 000

Establishment registration—simple Levy $3 000 Annual 218 $654 000




Export volume—non-protocol rate Levy $1.70 Per tonne(or part thereof) 491 925 $836 273

Export volume—protocol rate Levy $3.40 Per tonne(or part thereof) 227 325 $772 905



- -



Audit Fee $36 Per 15 minutes(or part thereof) 29 186 $1 050 696

Core inspection Fee $36 Per 15 minutes(or part thereof) - -

Additional inspection Fee $75 Per 15 minutes(or part thereof) 8 352 $626 400




Document-Manual Fee $100 Per document 8 767 $876 700













19 $33 250



1 $2 000


Table 18: Fees, levies and volumes —horticulture exports cost recovery arrangement (2019–20)










Export volume—non-protocol rate Levy $1.70 Per tonne(or part thereof)

516 521 $878 086

Export volume—protocol rate Levy $3.40 Per tonne(or part thereof)

238 691 $811 550



- -




29 186 $1 050 696



















19 $33 250



1 $2 000


















Export volume—non-protocol rate Levy $1.70 Per tonne(or part thereof) 542 347 $921 990

Export volume—protocol rate Levy $3.40 Per tonne(or part thereof) 250 626 $852 128



- -



Audit Fee $36 Per 15 minutes(or part thereof) 29 186 $1 050 696













19 $33 250



1 $2 000
















Export volume—non-protocol rate Levy $1.70 Per tonne(or part thereof)

569 465 $968 091

Export volume—protocol rate Levy $3.40 Per tonne(or part thereof)

263 157 $894 734



- -




29 186 $1 050 696

Core inspection Fee $36 Per 15 minutes(or part thereof)

- -

Additional inspection Fee $75 Per 15 minutes(or part thereof)

9 666 $724 950

















19 $33 250



1 $2 000






Attachment C — Description of cost model activities The following provides details of the cost model activities undertaken in the plant export cost recovery arrangement.

Intervention activitiesAssessment—involves assessing information to determine if it meets Australian standards and legislation, international conventions and importing country conditions. This includes all preparatory work (such as confirming importing country or export requirements) and post work (such as assessment report preparation) travel and client assistance in relation to the assessment. Examples include assessments of licenses, permits, registrations or accreditations.

Inspection—involves the physical examination and supervision of an export consignment of plants or plant products in order to determine compliance with Australian standards and legislation, international conventions and importing country conditions.

Audit—includes the systematic and functionally independent examination of industry systems and processes to determine whether activities and related results comply with legislative or documented requirements. This includes all pre and post work, travel and client assistance in relation to the audit.

Incident management activitiesIncident management— coordination and management of any incident including post border detection and export incidents. This includes all associated pre and post work, travel and client assistance in relation to an incident.

Corrective action—includes actions taken in response to non-compliance or contravention of legislation that is not required to be reported to enforcement officers. Corrective action activities includes all pre and post work, travel and client assistance in relation to the enforcement process.

Assurance activitiesRisk management—involves assessing and managing the risks posed to Australia’s ability to maintain market access. This includes communicating results of risk analysis, modelling and forecasting to operational areas and the collection, receipt and use of reliable compliance data to meet the department’s compliance objectives. This work also includes any associated travel and client assistance work.

Verification—includes assurance activities to provide stakeholders and the departmental executive with confidence that departmental controls of its systems and processes are operating in accordance with their intended design and associated documentation. This includes assurance activities provided to trading partners.





Programme management and administration activitiesWorkforce and business management—this activity has four categories:

Workforce management activities include staff supervision, allocating workforce resources, managing employee performance, leave, training and other conditions, managing Work, Health and Safety requirements, recruitment and termination.

Business management activities include business planning and continuity; requesting legal advice; procurement and contracts; programme and project administration, assurance, design and management; management of fixtures, facilities, equipment, supplies and logistics.

Financial management activities include billing and accounting, budgeting, charges and payments, collections and receivables, debt management, financial accounts, reporting and policy development.

Information management activities include data management, information and records management, and information sharing and collaboration.

Business systems administration—includes developing, acquiring, testing, implementing and supporting applications and business systems. It encompasses technical support and maintenance of all business systems including information and communications technology.

Stakeholder engagement—involves proactive engagement with any person, business, or organisation including any associated travel. This includes, engaging with peak industry bodies, secretariat support and attendance at industry consultative committee meetings, consultation on new standards and requirements, publishing website content and other information.

Policy and instructional material—includes developing, maintaining and communicating the department’s policy and instructional material, such as operational and corporate policies, scientific advice, departmental guidelines and work instructions, and associated training development and delivery. Examples include responding to changes in importing country requirements developing or revising policy processes and instructional material.

Business improvement—includes assessment, monitoring and development of initiatives to improve performance. Examples include adjustments to improve programme and service delivery, business performance reports against KPIs and similar activities.



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