Your Levy at Work
THE NURSERY PRODUCTS LEVY
What is the nursery products levy?
The nursery products levy, sometimes called the 'pot levy', was introduced at the request of Nursery & Garden Industry Australia after long and comprehensive consultation with the industry across Australia. The nursery products levy funds ongoing marketing and research and development programs for the Australian nursery industry carried out via Horticulture Australia Limited (HAL). The levy is payable on all containers in which plants are grown for resale.
The levy can be raised, lowered or removed altogether only at the express request of Nursery & Garden Industry Australia (NGIA) after appropriate consultation with the industry. The levy is currently set at 5% of the wholesale value of the container.
Who pays the levy?
While it is commonly referred to as the 'pot levy' it is payable on plastic bags, root control bags, degradable pots, punnets and any other container used for growing plants for resale. It is payable by anyone using the pots but is collected at the point of purchase of the containers and is usually added on to the invoice the purchaser of the pots receives. It is also payable on imported pots and, in theory, recycled and reused pots although the wholesale value is difficult to determine here and the grower would be the collection point. No levy is payable on pots sold to retail customers, such as in garden centres.
The levy is not payable on bulbs, cut flowers or in ground grown plants or on any 'dry' nursery goods.
Effective from 1 January 2007, producers who purchase containers from overseas and use those imported containers to produce potted plants for sale or use in the production of other goods, are liable to pay levy to the Levies Revenue Service (LRS). The Important Industry Notice below, issued by LRS on behalf of Hon Sussan Ley MP, the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, amends the collection regulations to more clearly define the levy collection process where nursery containers (prescribed goods) are imported from overseas sellers.
Click here to read the Important Industry Notice issued by Leview Revenue Service (January 2007). (0.04 Mb)
Why is there a levy on nursery products?
A levy is payable on Nursery Products to provide funding for promotion and research and development programs carried out via Horticulture Australia Limited (HAL). The Levies Revenue Service (LRS) receives the funds and forwards them to HAL, in addition to distributing the Australian Government’s matching research and development (R&D) contributions. Levies and export charges are introduced and administered by the Australian Government at the request of Industry.
What is the rate of levy?
The rate of levy for Nursery Products is calculated as follows:
Nursery Products 5% of sale price# of the container
Nursery Products 5% of the landed cost* price of the container
#Note: Sale price of the container is taken not to include GST.
The levy is a separate calculation, exclusive of GST consideration.
*For a definition of 'landed cost' see General Information and Definitions in the LRS Nursery Products Levy Fact Sheet below.
Who collects the levy?
The levy is collected by the Levies Revenue Service (LRS), which is part of Commonwealth Department of Agriculture, Fisheries and Forestry (DAFF). The nursery products levy is just 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, most 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 required to pay LRS directly. 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 amounts 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 remember that there is a lag period between the purchase of pots and the sale of the plant.
Levy collection costs have two components; those paid to the LRS and those paid to collectors. The LRS collection costs are principally determined by the number of collection points.
When is the levy due for payment?
Quarterly returns with payment must be submitted to LRS on or before the 21st day after the end of the quarters of March, June, September and December. For example the return and payment for the quarter ending 30 June (i.e., for the months of April, May and June) is due on or before the 21July.
Who holds the levy funds?
Once the funds are collected, they are passed on to HAL. The split between marketing and research & 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 $ for $ matching contributions from the Federal Government.
How is the levy invested?
The Nursery & Garden Industry has developed a strategic plan that covers industry marketing and R&D initiatives. Click here to find out more about the Nursery & Garden Industry Strategic Plan 2006 - 2008.
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. 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.
Horticulture Australia Limited (HAL) publishes a comprehensive annual report detailing the levy funded activities and projects undertaken in the previous 12 months to benefit the industry .
Click here to read the latest Nursery Industry Report from HAL
Marketing and promotion
NGIA undertakes a number of activities and projects aimed at promoting the nursery and garden industry to government, media and the Australian public.
In 2006, NGIA launched the nationwide Life is a Garden campaign, which highlights gardening as a great way for Australians to enjoy their outdoor space. This is the most significant marketing campaign ever undertaken by the nursery & garden industry and has been very positively received by both the industry and consumers.
Information on the promotional program funded by the levy is provided regularly in NGIA's electronic newsletter, E-CommPost, NGIA Clippings and the Nursery Papers which are available free of charge to industry members.
Research and development
Funds provided to HAL for R&D are matched by the Federal Government $ for $. Information on the research and development program is regularly published in NGIA's electronic newsletter, E-CommPost, NGIA Clippings and the Nursery Papers which are available free of charge to industry members.
About HAL and the IAC
Horticulture Australia Limited (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.
HAL is commissioned by the Federal Government with the task of managing the funds collected from the nursery products levy or ‘pot levy’ and overseeing the matching of Commonwealth research and development funding arrangements. To enable the nursery and garden industry to have input into this process, HAL has set up an Industry Advisory Committee (IAC) that consists of representatives nominated by Nursery & Garden Industry Australia (NGIA).
Click on the 'more' button below for further information about HAL and the IAC.
Want to know more?
Click here to read the Levy Revenue Service Fact Sheet on the Nursery Products Levy (0.47 Mb). This document has answers to the most Frequently Asked Questions relating to the nursery products levy as well as further general information and definitions.
If you would like any further information on the nursery products levy, how it is managed or how it is spent, contact your State Association, NGIA or HAL.
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