Under the Deed, each party will be required to meet the minimum commitments in the Deed and the organisation’s share of readiness and response costs. To confirm that an industry organisation is eligible to sign the Deed, the Minister must be satisfied that:

• the organisation has arrangements in place to fund its commitments under the GIA  or 

• the organisation has an adequate plan to put these arrangements in place.

  Readiness cost sharing commences when an Operational Agreement is signed, with transitional discounts applying until June 2020. Response cost sharing commences from 1 July 2017, with transitional discounts applying until June 2023. Minimum commitments are not eligible for costsharing or transitional discounts.

  Due to the high uncertainty associated with responses, section 100Z(4)(d)(iii) of the Biosecurity Act enables the industry organisation to set a fiscal cap.

Minimum funding arrangements for the purposes of demonstrating eligibility to enter the GIA

An industry organisation does not have to commit to any cost-shared activities for joint readiness work until it signs an Operational Agreement (OA). For joint responses, cost sharing begins in 2017. Specific costs are agreed in the Operational Agreements, so cannot be determined until the negotiation is completed.  From 1 July 2017, should a biosecurity response be initiated and no Operational Agreement is in place for that specific unwanted organism, then the MPI and the industry Signatories to the Deed who are directly impacted by the unwanted organisation would enter into a Rapid OA process to agree cost shares and the response fiscal cap

Therefore, proposed funding arrangements for the purposes of demonstrating eligibility only needs to outline at a high level how:

• funding would be obtained (e.g., state the intent to progress a Biosecurity Act levy to fund GIA readiness and response obligations)

• sector participants’ views will be taken into account when decisions are being made that have financial implications (for example during operational agreement negotiations).

  To satisfy the requirements to sign the Deed, an organisation must provide evidence to demonstrate that its proposed funding mechanisms are reasonable and realistic. For example, if an industry organisation is intending to use cash reserves for readiness and does not currently have any, what is the plan for building these reserves up? If the intention is to set a Biosecurity Act levy, then who will be paying it and how?

Summary of options

The attached document below provides examples of different funding mechanisms that could be used by industry organisations to fund joint activities. These examples are not intended to be prescriptive. Alternative funding sources can be put forward if an organisation has access to other funds that can be made available to meet commitments under the GIA.

An industry organisation could choose different funding options for readiness and response activities. The sector must be consulted on funding arrangements as part of the industry organisation obtaining mandate to sign the Deed.

Specific guidance on using levies for the GIA purposes is in the paper MPI guidance on levies and Crown loans.