Bill Pulver and the ARU's plans for the community to fund Australian rugby haven't been well received © Getty Images

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The NSW Suburban Rugby Union has labeled the Australian Rugby Union as arrogant and will not support its controversial plan to raise revenue via a player levy.

In a strongly worded letter, sent to both the ARU and NSW Rugby Union on Wednesday, the organisation, which runs the largest centrally administered rugby competition in the world, said the ARU plans were a 'disgrace.'

Several weeks ago ESPN first revealed the ARU 'tax', where every rugby player in Australia will pay an individual registration fee and insurance levy. ARU chief executive Bill Pulver and chairman Michael Hawker recently told Sydney Rugby Union representatives that the ARU faced 'economic disaster' in 2016 if the clubs did not support its national funding model.

Instead of getting backing, the ARU scheme has caused widespread anger at club and junior level - both in the city and rural regions, and at provincial level. Support and confidence of the ARU among its constituents is at an all-time low. The concerns of many have been voiced in the official letter from the NSW Suburban Rugby Union, better known as the Subbies. A copy of the letter has been obtained by ESPN.

The letter, written by Subbies chairman and NSWRU board member Paul Timmins, explained that 'rugby has always been an inclusive game where 'registration to the ARU/State' was free.' "There was no disincentive to register, whether you were a regular player, irregular player, new player to the game or someone that just wanted to try it once.' Clubs could also charge accordingly on a pro-rata basis as they saw fit. There is now a $93 ($60 plus $33 per player) disincentive to register," the letter says.

"This surely must be contrary to ARU's own recruitment and retention strategies. For the ARU to introduce a scheme that leads to a reduction in registered players is a disgrace and this Union cannot be part of it. Our team numbers have been dropping steadily since 2005, with 2014 seeing the biggest drop off in team numbers in our history.

"Our Union has been working hard to ensure that numbers stabilise through restructuring of competitions, length of season and a new amateur policy. However, the new National Insurance Levy (NIL) and National Participation Fee (NPF) undermines all this hard work.

"It is simply wrong and naïve to suggest that the players will now be liable to cover these new per person charges through the on-line registration and payment system, when by your own admission only 10-15 per cent of participants will sign up and pay in this fashion. This will leave clubs with a larger insurance liability than in 2014, as it is the clubs - not the individual - that will ultimately receive the invoice to cover the insurance premiums not settled online.

"I cannot stress to you enough how strongly my Board feels about this point. Take it from a Board with a combined experience of hundreds of years of direct, on-the-ground club administration that this will result in fewer players registering and/or players and clubs attempting to circumvent the registration/insurance system."

Sydney's Shute Shield clubs are just as upset with the ARU's funding plans © Karen Watson Photography

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The Subbies oppose the NPF for numerous reasons.

"Reduction in community rugby grants nationally is naturally disappointing, although understandable given the ARU's much publicised financial woes. However, to impose such a large 'tax' nationally on all players as a way of covering the grant cuts is arrogant in the extreme.

"To assume that players, but in reality the clubs, can afford to shoulder the burden where the ARU cannot is the wrong assumption. The questions now being asked are: what is the ARU doing for grass roots rugby? Does the ARU realise where the future Super Rugby and Wallabies come from? Do they realise where the supporters of the game come from? Does the ARU have any idea of what the volunteers already put into the game for no financial reward?

"This Union, and others, already subsidise clubs that cannot afford the current financial commitments involved in playing rugby. Similarly clubs subsidise players that are in the same position. It is the clubs that are best suited to assessing an individual's capacity to pay and to set an appropriate player fee- it should not be Head Office unilaterally setting a National Levy."

After being notified last December of a club participation levy, not to hear until November 19 this year 'about the greatest changes that community rugby has ever experienced is unacceptable and unprofessional.'

The Subbies said it would not pay the NPF 'until a full and transparent disclosure has been made as to how the NPF funds are to be spent and what value this will provide to NSWSRU.'

"It is concerning that even though ARU's funding of the Shute Shield has been reduced to zero, Shute Shield's 2015 funding has reportedly been quarantined and guaranteed through the payment of the NPF. NSWSRU cannot and will not agree to pay a NPF where out players/clubs are subsidising the operations of the Shute Shield competitions. If the ARU cannot see the value of supporting the Shute Shield why should we?"

"We are instructing our clubs to not attend RugbyLink training courses, nor will we be encouraging clubs to pass on bank details. We will be advising clubs not to register their players on-line in this new system until such time as the above matters have been satisfactorily resolved.

"NSWSRU prides itself on being quiet achievers and self sufficient- we are not agitators or renegades and we have never previously considered taking such drastic action. However, we cannot sit idly by and simply roll out National Policy that will have serious and detrimental impacts on grassroots rugby which will then have an impact on the future of rugby at all levels."

ESPN has also received correspondence from numerous country clubs and regions, which are as vehemently opposed to the ARU's scheme.

The position of a high ranking NSWRU official is also under serious question due to concerns he may have been aware of the ARU player levy plans for many months but had failed to inform his NSW colleagues.