A fundamental economic question about the Australian Government's decision-making process governing the import of animals, plants and their products is posed in this chapter. Does the process generate measures that not only reduce quarantine risk but are also consistent with the best possible use of Australia's resources? In other words, is Australia as a whole getting value for money from import decisions?

The chapter looks at import risk analysis (IRA) – the analytical tool that underpins quarantine decisions – as well as cost/benefit analysis (CBA) – an analytical tool of economists. It then examines the scope for incorporating CBA in import decision-making under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). The determination of the acceptable level of risk, and of risk conservatism.

Import risk analysis

The decision-making process that currently applies to requests to import animals, plants and their products is illustrated in Figure 12.1. It is administered by Biosecurity Australia within the Department of Agriculture, Fisheries and Forestry – Australia (AFFA). (Until recently, the Australian Quarantine and Inspection Service (AQIS) was the administrating agency.) It distinguishes between routine and non-routine matters, involves the establishment of a risk analysis panel in non-routine matters, includes public consultation at particular stages, and sets out an appeal mechanism. It is distinct from the determination of the Government's response to any industry adjustment effects from allowing imports; that matter is handled separately (and independently) by another part of AFFA (DPIE 1997, p. 41).