A Whittlesea mushroom grower will be forced to pay an extra $800,000 a year under a controversial agricultural levy announced by the federal government.
Costa Mushroom Exchange in Mernda produces more than one-third of Australia’s mushrooms.
But from July 1, the company will be forced to pay more than $1.6 million a year under federal budget changes that double the mandatory mushroom spawn levy from $2.16 to $4.32 per kilogram.
The company employs more than 600 workers at its Cookes Road farm and is the largest mushroom producer in the southern hemisphere.
Costa chief operating officer George Haggar said the hefty levy was “unjustified and unnecessary”.
“This is bad news for our business and the horticultural sector,” he said. “[The] levy will mean Costa is unable to spend this money on improving the productive capacity of our mushroom farms.”
In a vote taken by the Australian Mushroom Growers Association (AMGA) before the tax was introduced, more than 60 smaller mushroom suppliers across Australia were in favour of the levy.
But Mr Haggar said despite Costa producing a sizeable slice of Australia’s mushrooms, it was given a single vote in the ballot.
Costa corporate affairs officer Michael Toby said the company feared the levy could be increased again.
He said while jobs were safe for the moment, future increases would create “serious concerns” about the future of the Mernda site.
“Who is to say it won’t be increased again in next year’s budget and we will be paying more than $3 million in levies … that is just not sustainable,” he said.
Mr Toby said a recent Horticulture Australia review recommended changes to how industry levies were collected and spent. “It is disappointing that the federal agricultural minister has chosen to double the levy before the review recommendations have been properly considered,” he said.
McEwen Labor MP Rob Mitchell said the ‘‘devastating’’ levy threatened the economy of Melbourne’s north. “This is a family-owned company which supports our local company, hires local workers and contributes back to our community,” Mr Mitchell said.
Federal Agricultural Minister Barnaby Joyce said the levy was instigated by an AMGA submission which highlighted a need to boost marketing, drive demand and increase profitability of the industry. Mr Joyce said the levy would fund investment, research and development. He said the levy payments of large growers were capped.
