What is the Nursery Products Levy?
The nursery products levy, often known as the ‘pot levy’ was introduced at the request of the Nursery and Garden Industry Australia in 1989 after long and comprehensive consultation with the industry. The levy is based on the “action of putting a plant into a container with growing media” The industry has chosen to manage and measure this by making the levy payable on all containers in which plants are grown for resale.
While it is referred to as the ‘pot levy’ it is also payable on plastic bags, root control bags, degradable pots, punnets and any other container used for pots grown for resale. It is payable for anyone using the pots but it is collected at the point of purchase of the containers and is usually added to the invoice the purchaser of the pots receives. No levy is payable on pots sold to retail customers, such as in garden centres.
The levy can be raised, lowered or removed altogether only at the express request of NGIA after appropriate consultation with the industry. The levy is currently set at 5% of the wholesale value of the container.
Who collects the Levy?
The levy is collected by the Levies Revenue Service [LRS] which is part of the Commonwealth Department of Agriculture, Fisheries and Forestry [DAFF]. The nursery product levy is one of over 60 industry levies that they collect ranging from horticultural crops such as apples and pears, citrus, macadamias and vegetables, to most livestock and cattle, grains, honey, chickens, dairy products and many other primary industries.
The LRS collects the levy from container manufacturers and distributors who add 5% to the invoice to customers. Anyone importing pots is also required to pay the levy on the “final landed” cost price of the containers, which includes the cost of the container plus duty, clearance charges and transport costs to their business. Importers must pay the levy directly to LRS. Recycled pots are also subject to the levy.
Under an arrangement between NGIA and Horticulture Australia Limited HAL, levy collectors are entitled to be reimbursed 2.5% of monies collected to cover their costs. Collectors must apply for this reimbursement and provide the LRS with the details of the amount collected.
In 2009/2010, $2 million was collected. As the levy is linked to the wholesale value of the container, fluctuations in collections are influenced by a number of factors including the price of plastic and other raw materials, the price of the containers themselves and the number of containers sold. It is not a direct measure of the number of plants sold or the level of activity in the industry although it is an indication. It is important to note that there is a lag period between the purchase of pots and the sale of the plant.
Who manages the levy funds?
Once the funds are collected by LRS, they are passed on to HAL. The split between marketing and research and development [R&D] is determined by NGIA. Currently the marketing program receives 2% and R&D receives 3% of the 5% collected. The R&D allocation attracts dollar for dollar matching contribution from the Federal Government.
How are the levy funds invested?
NGIA has developed an Industry Strategic Plan that covers industry marketing and R&D activities. Copies of the Industry Strategic Plan are available on the NGIA website or from the office.
Each year funds are allocated towards implementing the marketing and R&D objectives contained in the Strategic Plan by the Industry Advisory Committee [IAC]. The IAC is a committee set up by HAL consisting of representatives nominated by NGIA with an independent Chair. The prime role of the IAC is to provide direction and advice to HAL on the most appropriate use of funds to ensure maximum industry benefit.
Role of HAL
HAL is a national research, development and marketing organisation for the horticulture industry. It assists industry to grow and sell its products more profitably by investing in programs that create commercial opportunities for Australian horticulture producers and their value chain partners.
THE ROLE OF IAC – ADVISING, ALLOCATING and APPROVING
What is an Industry Advisory Committee?
An industry Advisory Committee [IAC] is a subcommittee of Horticulture Australia limited [HAL]
The main role of the IAC is to provide direction and advice to HAL on the most appropriate use of funds to ensure maximum industry benefit. Specifically, the IAC should:
- Prepare a Strategic Investment Plan [3-5 years] for submission to HAL. This establishes the strategic direction for HAL’s investment of research and development and marketing funds for the industry.
- Prepare an Annual Investment Plan [1 year] for submission to HAL. This plan determines the annual expenditure required to achieve the outcomes detailed in the strategic plan.
- Preparing an Annual Report for submission to industry and HAL that details the outcomes achieved from the expenditure outlined in the annual investment plan.
The role of individual IAC members is to:
- Advise on the direction of industry marketing and R&D plans.
- Ensure HAL programs are in line with industry priorities.
- Provide a channel for industry input on the programs.
Membership of the IAC
The IAC is lead by an independent chair and members are selected to ensure representation of the growing, retailing and allied trade sectors of the industry as well as a national focus. Its membership provides a broad range of expertise encompassing marketing, research and industry development
The representatives on the IAC are appointed by HAL on the recommendation of the NGIA Board. In addition, there are non-voting representatives from NGIA and HAL to assist and provide further guidance.
The term of appointment for the inaugural members is one year. Thereafter the term is three years with a review of one third of the members at the end of May each year. This takes place via an open nomination process conducted by the NGIA Board. Members are able to serve for a maximum of two consecutive terms.
The current IAC members are:
- David Matthews, (Chair) ProteaFlora Nursery
- Josh Byrne, Environmental Consultant, Media representative
- Carole Fudge, Benara Nurseries
- John Patrick, Landscape Architect
- Glenn Fenton, Nationwide Trees
- Craig Norman, Wholesale Plants & Products
- Teena Sandford, Darwin Plant Wholesalers
- Russell Higginbotham, Nursery Consultant.
- Michael Warner, Warners Nurseries
- Ken Bevan, Alpine Nurseries
- Industry Services Manager, HAL [Ex officio]
- Robert Prince, NGIA [Ex officio]
HAL Planning Cycle
The IAC meets at least twice per year, once between June and the end of September, to set their strategic investment priorities for the following financial year, and again between January and March, to assess project submissions, any budget considerations for the following financial year and determine the Annual Investment Plan.
The HAL Industry Call is for projects that have some component funding from industry levies. The General Call is for projects that do not have a levy funding component and do not seek to have industry endorsement.
A proposal assessment Tool has been developed to enable the IAC and HAL to more objectively assess proposals against agreed criteria. Some of the factors considered in the assessment process are:
- Strategic relevance. Is the project aligned with the NGIA Strategic Investment Plan?
- Outcomes address an industry strategic issue. Will it further the aims of a specific strategy within the NGIA strategic plan?
- Project Methodology. How does it rate with regard to hypothesis and experimental design, the milestones and activities and appropriateness of resources?
- Technical transfer and communication integration in proposal. Does it take effective measures to identify and ensure the adoption of appropriate outcomes among the relevant target audiences?
- IP capture/commercialisation. Is there likely to be intellectual property or commercialisation elements resulting from the project and if there are, will they be appropriately managed.
- Funding to undertake the project. Are the costs realistic and competitive and are the budgets well defined and transparent?
- Quality/track record of the research agency. What is the performance of the agency in areas such as quality management, delivery on milestones and collaboration with other professionals?
- Overall impression. What is the general impression of the project, taking into consideration all aspects of the application and the reviewer’s own knowledge of the industry and specific area?
Current Nursery Program,
For more information on the Industry Program please click here.
Want to know more?
If you would like further information on the nursery products levy, how it is managed or how it is spent, contact your state association, NGIA or HAL.