PLEASE READ THIS WILL EFFECT YOU IF YOU OWN A HORSE

11TH JUNE, 2010.

THE HORSE INDUSTRY AND AN EMERGENCY ANIMAL DISEASE RESPONSE AGREEMENT (EADRA) .

Further to our earlier communication of the 5th May, members of horse organizations throughout Australia and individual horse owners who are not members of any society need to be aware of the decision of the recent Primary Industries Ministerial Council (PIMC) that a deadline of 1 December 2010 has been set for the industry to show that it is prepared to support an EADRA.

The proposed timeline for finalizing an EADRA submission is :

1. Define and choose the funding (cost recovery) options    [30 June]

2. Undertake industry consultation process

- Organisational and regional levels

- Use of websites, possibly press advertisements, ‘road shows’

- Obtain letters of support from all relevant organisations, regional and national

- Identify any ‘pockets’ of dissention/disagreement      [31 August]

3. Prepare final draft of industry submission      [mid-October]

4. Obtain industry sign-off to final submission to Minister     [mid-November]

5. [DAFF undertakes the assessment process, including legal advice, then providing advice to Minister]

6. Formal advice to PIMC                                                  [I December]

This agreement between all Australian governments (Federal, State and Territory) and the horse industry brings with it a certainty of a properly coordinated response to any disease outbreak listed in the agreement. There are 22 diseases listed. Most are going to have a far more dramatic impact on affected horses than seen with Equine Influenza (EI). Signing the EADRA also means that the industry has a role in deciding how a response is managed including monitoring of costs involved.

The EADRA also involves a cost sharing arrangement between Governments and industry. The proportion of the share depends on the nature of the disease in its impact on human health, the socio-economic consequences, and the affect on horses’ health and production losses.

Category 1   

An example is Rabies. The Government share is 100% of costs.

Category 2

An example is Hendra virus. The Government share is 80% and industry 20%.

Category 3

An example is African horse sickness. The Government and industry have an equal 50% share.

Category 4

An example is EI. The Government share is 20% and the industry pays 80%.

Before the Government will sign EADRA they need to be convinced that any costs incurred in managing the disease outbreak can be recouped. This is done through a levy mechanism. The levy will initially be set at zero dollars and remain so until a disease occurs. Once the disease has been eradicated and proof of freedom established the costs are tallied.

Once the industry’s share of the costs are known a levy figure is established and the levy collection process put into play. An industry is usually given 10 years in which to pay their share of costs. The interest charged and the audit costs have to come out of the levy monies. If it is a relatively small amount to repay the industry may wish to pay over a shorter period than 10 years.

LEVY OPTIONS

On behalf of the horse industry the Australian Horse Industry Council (AHIC) has been liaising with the Department of Agriculture, Fisheries and Forestry (DAFF) to seek levy options that can legally be used. Constitutional advice has recently been sought from the Australian Government Solicitor but that advice is not yet available.

SOME GENERAL PRINCIPLES.

1. A levy may be applied to a horse on multiple occasions.  Eg; when each new set of shoes is fitted or at each event a horse attends.

2. More than one levy may be applied to the same horse. Eg; a wormer levy and a horse shoe levy could be applied to the same horse.

3. It is possible to have differential levies. Eg; the levy for racing plates might be $3.00 and that for all other shoes $1.00.

The use of smaller multiple levies will help keep the costs to individuals to a minimum.

The Levies.

1. A levy can be applied via “wormers”.

If 600,000 of the reported 1 million horses are wormed 4x/year then 2.4million units of wormers will have been used.

If a levy of 50 cents was applied to each unit then $1.2M would be collected in year one and $12M over 10 years. 

2. A levy can be applied via horse shoes.

Approximately 800,000 sets of shoes are used each year with approximately 200,000 of them racing plates.

If the levy was $3.00 for racing plates and $1.00 for all other shoes then $1.2M would be collected in year one. This is made up of 600,000 sets of shoes at $1.00 and 200,000 sets of shoes at $3.00. In 10 years this would raise $12M.

3. A single event levy can be applied each time a horse participates in an event. This could be a race start, a horse show, a competition or a rally. No definition has been reached on the number of horses needing to be present to constitute an event nor has a decision been made on a full list of events.  The horse would only be levied once at any one event, regardless of the number of classes it attended at that event.   For Example :

-  The Thoroughbreds have approximately 200,000 starts a year.

-  The Horse Riding Clubs Association Of Victoria has approximately 11,000 starts a year.

At a levy of $3.00 the Thoroughbreds would raise $0.6M in one year and the HRCAV levy of $1 would raise $0.01M. In 10 years this would raise $6.1M from these two bodies. This figure would markedly increase if all organizations running events were included.

4. A levy can be applied via “hard feed”.

An estimated figure of hard feed used by horses in a year is 165M kgs.

This is approximately 7M bags of feed.

At a levy of 50 cents/bag this would raise $3.5M in one year and $35M over 10 years.

At a levy cost of 2 cents/kg this would raise $3.3M in one year and $33M in 10 years.

5. A horse registration levy can be applied. This may be done directly to lists of horse registrations or it may be done indirectly where membership of an organization is linked to horse ownership.

This will greatly increase the number of horses included compared to the numbers used at the failed Senate session.

At a levy cost of $3.00 for a thoroughbred x 100,000 = $0.3M

At a levy cost of $2.00 for a harness horse x 33,000 = $0.06M

At a levy cost of $1.00 for non-racing horses x 320,000 = $0.32M

This gives a total of $0.68M in one year and $6.68M in 10 years.

Your input is needed now!

All these levy options are only examples of the ways in which a levy might be collected. Although the figures used are not unreasonable they have been used to explain how each of the levy options might work and to give some indication of how much money they might raise. They indicate that it should be possible to raise the monies required relatively easily if a couple of options were chosen. All options are up for consideration with a view to coming up with the options that will capture the majority of horses for the least amount.

As an organization or an individual horse owner some thought needs to be given to the levies that you might consider fair and worthy of support from the list provided above.

We need your feedback and your ideas as soon as possible, with your reasons why you think particular options would or would not work.  Once we have received your feedback a further discussion paper will circulated setting out the advantages and disadvantages of the different options. 

Please email your comments to secretary@horsecouncil.org.au

post to The Secretary, Australian Horse Industry Council,

PO Box 802,

GEELONG, VIC. 3220,

as soon as possible.

Roger Lavelle

President

Australian Horse Industry Council

Contact  : 03 54 291 682

Copyright 2005 Australian Horse Industry Council