Thoroughbred R&D Levy Proposal
A Discussion Paper
6. Why a Statutory R&D Levy?
TBA believes a statutory (compulsory) production based levy mechanism is a cost-effective method of collecting the necessary funds to deliver industry benefits through R,D&E projects aimed at solving pressing industry problems. In contrast to current voluntary funding arrangements, all Thoroughbred breeders will contribute equitably under the proposed statutory levy scheme based on their level of participation within the Thoroughbred breeding industry.
Statutory industry levies are considered by Government to be most appropriate where “market failure” exists, that is where the benefits of collective action and co-operative behaviour cannot be met by individuals. Currently, Thoroughbred R,D&E activity is increasingly limited, sporadic, and undertaken or funded by a dedicated few.
Many of the issues that currently limit the development and profitability of the Australian Thoroughbred Industry are common to all breeders, but expensive to deal with as individual business entities. It is also important for the competitiveness of the industry that all breeders have access to up-to-date R,D&E outcomes so that they can maintain adequate standards and follow proper procedures that enhance the reputation and sustainability of the whole industry.
The Australian Thoroughbred industry remains one of the few primary industries of significance that does not have a statutory levy to fund essential research projects.
In summary, the proposed statutory Thoroughbred R&D Levy package is to compulsorily collect:
A charge of $10 per mare covered per season and paid by the stallion owner, and
A charge of $10 per mare returned per season and paid by the broodmare owner.
If supported by Thoroughbred breeders, and subsequently approved by the Australian Government, the proposed statutory R&D levy will be payable by Thoroughbred broodmare and stallion owners, to be compulsorily collected by the Australian Stud Book (ASB) on all registered broodmare returns and coverings commencing 1st August 2014, or as otherwise approved by The Minister.
A statutory R&D Levy will place the Thoroughbred R,D&E Program’s funding on a more secure footing than previously existed, with the added benefit of attracting Australian Government matching funds.
Q3: Do you have any comments on the need for a statutory Thoroughbred R&D Levy?
Please refer to Attachment 2: Thoroughbred Levy Feedback Form, where you are able to record your responses to the questions raised in this discussion paper.
Included with this discussion paper are: