Mr VAILE(5.02 p.m.) —On behalf of the Standing Committee on Communications, Transport and Microeconomic Reform, I present the committee's report on an inquiry into air freight exports of perishable and time sensitive products entitled Jet fresh: paddock to plate , together with the minutes of proceedings and evidence received by the committee.

Ordered that the report be printed.

Mr VAILE —by leave—I am pleased to present the report of the Standing Committee on Communications, Transport and Microeconomic Reform entitled Jet fresh: paddock to plate . This reference was first referred to this committee in the previous parliament and re-referred by the Minister for Transport and Regional Development (Mr Sharp) to the committee in the 38th Parliament. The committee received over 100 submissions and 38 exhibits. It conducted five public hearings in Adelaide, Melbourne, Sydney and Canberra. Evidence was received from 59 witnesses representing 31 organisations. The report contains 16 recommendations.

In this report, Jet fresh: paddock to plate, the key messages are the need to export products valued by the foreign market, target markets, target high value products and get the quality right to meet the needs of overseas customers. For Australia to succeed further as an exporter of perishable and time sensitive products, a cultural change is needed throughout the export chain and the incentive for change must be commercially based.

With regard to cargo terminal operations, during the inquiry the committee inspected the cargo terminals at Sydney (Kingsford Smith) Airport. Evidence suggested that competition should be encouraged in the cargo terminal operations sector to provide choice to airlines and forwarders, to encourage improvements in service and because competition has the potential to lower prices. The committee has recommended that the government and Federal Airports Corporation facilitate effective competition in the CTO sector and that the FAC should allow off-airport CTOs as long as Customs and AQIS standards are met.

The committee received evidence on the need for better marketing skills. Mr Peter Pokorny, National Merchandise Manager Produce with Woolworths, said that Australian exporters needed to visit foreign markets, target suitable sectors in the foreign market and produce appropriate products. Other evidence highlighted the need to supply the direct amount of product, design appropriate packaging and be able to negotiate successfully with foreign buyers. The committee recommended:

. . . the Federal Government initiate action to improve the export business and marketing skills of producers who produce, or are capable of producing, high value perishable and time sensitive products in accordance with export market requirements. Particular attention should be given to:

.   improving skills related to market research, promotion and negotiation; and

.   facilitating strategic alliances and partnerships.

The committee also recommended:

. . . the Federal Government, in consultation with business, initiate action to facilitate industry support for research and development projects to develop appropriate packaging of exports of perishable products, including packaging which:

.   maintains product quality throughout the handling process;

.   is supermarket-ready; and

.   extends the shelf life of the product.

The success of the Western Australian Air Freight Export Council in improving export performance shows the value of an industry-driven and export-focused group.

The committee has recommended that the government assess the feasibility of establishing groups based on the APEC model and that the government provide seed funding, if such groups are feasible, conditional on dollar for dollar contributions from state governments and/or industry, and subject to review.

On the issue of freight capacity, the committee found Australian air freight rates for exports are some of the lowest in the world. They are sustained by passenger services and inbound freight rates. This has allowed low value products to continue to be exported.

The amount of capacity available to exporters will be determined by the demand for passenger services and inbound freight. Exporters wishing to use dedicated freight services may have to pay a premium. There are some problems on a few routes—such as Japan, Hong Kong and Thailand—where air freight capacity is tight and, in particular, when peak harvest and holiday periods coincide in November and December.

Impediments to the export of perishable and time sensitive products do not lie primarily with the transport sector. Forwarders can obtain capacity from the airlines for exporters who are able to coordinate regular loads over extended periods or who can anticipate capacity needs well in advance. Vanessa Fanning, Group Manager Public Policy, TNT, told the committee:

If the demand is there and we have a quality product to satisfy it, then the transport solutions will be found.

Quality assurance handling agreements are a significant milestone in creating a successful export culture because the correct handling of products is important to export success. The Australian Seafood Industry Council is devel oping assurance handling agreements. These agreements specify the requirements for appropriate handling as products move through the export chain. The committee has recommended that the Department of Primary Industries and Energy widely disseminate information concerning quality assurance handling agreements and that the government facilitate the further development of such agreements.

The provision of additional infrastructure at airports, such as air-side cold stores, needs to be determined on a commercial basis. Exporters need to be willing to pay for this high level of service. The committee received proposals to create international air freight hubs, for example at Avalon, Balranald, Dubbo, Griffith, Narrandera-Leeton, Parkes and Wentworth. Decisions on substantial infrastructure projects such as building or upgrading airports need to be made on sound commercial bases. On the limited evidence provided to the committee, proposals for inland international air freight hubs are unlikely to be commercially viable. The committee recommended:

. . . the Federal Government should make no decision to fund the construction of inland international air freight hubs without extensive further assessment into such proposals.

The committee's recommendations contain important initiatives to improve the export of perishable and time sensitive products. The committee's final recommendation asks that the government, through the Minister for Transport and Regional Development, report to the parliament on the progress of these initiatives by 31 October 1997.

In closing, the conduct of the inquiry would not have been possible without the help of the air freight exporting community and my colleagues on the committee in the 38th Parliament. Of course, I acknowledge the members of the committee in the 37th Parliament. I thank them for their contribution. I note in particular the work done by the Hon. Peter Morris, the chairman of the previous committee. In addition, I thank the secretariat: Dr John Carter, the inquiry officer; Ms Meg Crooks, the committee secretary; Ms Fiona Cornwell; Mrs Suzanne Stanfield; and Mrs Annette Fischer. I commend the report to the House.