12 March 2015
The Department of Agriculture (the department) is redesigning its cost recovery arrangements as part of a funding strategy for its biosecurity and export certification activities. The aim is to streamline existing frameworks to address inequities, ensure all costs are recovered and reduce the complexity of the department’s fees and charges.
Consultation to date has focused on the context for the redesign of the frameworks, a standardised cost recovery model, establishing the cost base and proposing standardised treatment for elements such as travel and out of hours services.
Information and concerns raised at these meetings have assisted in informing the development of the redesigned framework for each industry’s arrangement and gauging industry’s views on a series of discussion papers developed by the department on various aspects of the redesign.
The initial discussions on the draft cost base explained how the department has allocated costs against a consistent set of activities the department undertakes. This has been achieved through a detailed survey of staff and managers about time spent on particular cost recovered activities. Surveys were undertaken in October 2014 and February 2015 to refine the allocations to be used in the final cost recovery model.
The cost base forms the main component of the standardised cost recovery model which allowed stakeholders to see how costs could be proportioned against various charging points along the biosecurity and export certification chain. Feedback on the model will help inform the redesign of the cost recovery frameworks.
As part of the redesign of the cost recovery frameworks, the department has held its initial rounds of consultation through industry consultative committees. There have been 42 meetings held to date with over 220 organisations being represented. The department has also conducted 12 presentations at six different industry conferences updating stakeholders on the progress on the cost recovery redesign.
Feedback from these consultations has been constructive and positive. While many industry consultative committees have welcomed the redesign, there is particular interest in future prices and how efficiencies will be reflected in costs. The department is currently working through the government policy process for the cost recovery redesign. Following this the department will recommence discussions on costs and pricing.
Further consultation is anticipated to occur in April 2015. This will include more meetings with industry consultative committees as well as a broader range of stakeholders and clients. The next round of consultation will include discussions on current cost recovery performance, additional key model inputs, finalised cost base, volume forecasts and prices.
Implementation of the redesigned cost recovery arrangements will commence as soon as practical from 1 July 2015, subject to government approval and legislative processes.
The department is happy to discuss any aspect of the cost recovery review with you or members of your committee throughout the process. If you have any questions or would like to provide feedback please contact us at Cost Recovery.