Mr O'CONNOR(11.37 a.m.) —The opposition has no substantial objections to the substance of the Wine Export Charge Bill 1997 or the Wine Export Charge (Consequential Amendments) Bill 1997, which are now proceeding through this House. The essential feature of the Wine Export Charge Bill 1997 is to introduce a charge on the export of Australian wines to support the export promotion activities of the Australian Wine and Brandy Corporation. This is an industry driven proposal to support the promotion program of the corporation, as grant funding for the generic promotion of Australian wines overseas from state and federal sources is coming to an end.

The compulsory export charge is expected to raise around $1 million per year, which will be used to fund part of the promotional program which will include the generic wine promotion, the wine labelling integrity program and wine export control measures. It is pleasing to note that widespread support for this proposal is coming from producers from within the industry itself. At the last meeting of the corporation, support for the proposal ran at some 96 per cent. That support was drawn from large producers, as well as the many small and medium producers who are very important to this particular industry. It is not always the case in rural industries that a proposal such as this can get widespread support within the industry itself.

This is an industry with a vision, and the key to that vision is the effective promotion of Australian wines in overseas markets. These activities are vital if Australian wines are to hold their own against strong competition, which is expected to come from producers in South Africa, the emerging producers in South America and producers in central Europe.

If there is one exciting story in Australian agricultural exporting today it would have to be the Australian wine industry. If we were to go back only 30 years, Australian table wine consumption amounted to little more than two bottles per head. As I was raised in a low-income rural household, with my father being a teetotaller, the consumption of alcohol beverages was not a priority in our household. That was the time that we bottled our own ginger beer on the farm. My only taste of wines was of the fortified kind around Christmas time when the sherries and brandies made their way to the table. As a youngster I used to scoot around after the adults had had their fill, making some very potent cocktails from which I suffered considerably later on. It was only in my teenage years that I became introduced to—well, I would not say an exotic alcoholic beverage in beer—

Mr Ted Grace —You're past that now.

Mr O'CONNOR —Of course, I paid dearly for that. As the honourable member for Fowler interjects, I have passed through all of these phases and I have now reached the stage where I am one of those consumers who indulges in excellent Australian table wines. I guess it was only in the 1970s that many of our families got into the consumption of the superb wines that are being produced here in Australia.

Indeed, how things have changed over those 30 years, so that per capita consumption of table wines is now around 24 bottles. I acknowledge the contribution of the honourable member for Fowler in that particular statistic because I know he is a particular wine buff, along with the honourable member for Maribyrnong (Mr Sercombe) who is sitting beside him in the chamber today.

The factors which have contributed to this growth have been the rising population and rising income levels of Australians. Wine is a particular product that is not so much price elastic in economic terms but income elastic. That is, as the income of the nation rises so does domestic consumption, and overseas consumption as well. Australia's long-term export performance in this particular industry is predicated on certain growth assumptions that we hope will be evident in overseas countries and major markets. That overseas export performance will be determined by rising incomes in our major markets—the USA, Japan, the United Kingdom and Sweden.

Another factor which has contributed to the growth in domestic wine consumption and production has been the postwar migration boom which has changed our diet and our patterns of wine consumption. Also, with rising disposable incomes, our entertainment and leisure patterns have changed considerably. Accompanying that change has been an increasing incidence of dining out and this has obviously stimulated the domestic consumption of wines.

There are many other factors that have contributed to this burgeoning growth, among them being the fact that the Australian population is becoming increasingly health conscious and, of course, a good glass of wine a day puts a bit of the cream on the cake, if I can use that term, as far as one's health is concerned. The stimulus has also come from within the industry itself, which has been able to increase productivity enormously through the introduction of innovative processing technologies and with improved growing practices.

We are indeed a nation that is blessed with many natural advantages which have given us those competitive advantages which we now enjoy in certain international markets. Among those natural advantages have been the productivity of our land base and the availability of suitable land in Australia in regional areas of the nation for wine production. We have developed over time a very skilled human resource with a long tradition that goes back to the 1800s in wine production and processing. More recently, we have become world leaders in the production and distribution of innovative technologies involved in the processing of wines. We have established ourselves, not as a large player in the international export arena, but as an influential and significant player.

The history of Australian winemaking goes back to the first European settlements in this nation. Wine production was introduced to Australia by Captain Arthur Phillip in 1788. The gold rushes in the 1850s were accompanied by an influx of European immigrants. It was that influx which laid the foundation of the vines and the expertise on which Australia's wine industry is currently built. As I have mentioned, the wave of European immigrants after World War II laid a further foundation for the development of the industry which has taken place in the 1970s, 1980s and 1990s in such a dramatic fashion.

This industry is very important and critical to the development of many regional areas around Australia, including my own. It has been a significant stimulator of employment in those regions and a major source of investment back from the metropolitan areas into the regions of this nation. We are used to hearing a great deal about the drain of investment funds out of regional areas in the form of superannuation that is paid by the rural work force which eventually finds its way into the commercial construction industry in major metropolitan centres. It is very important for regional areas to have industries that attract significant investment out of metropolitan areas back into the regions. The dairy industry is one good example of that. In the debate on the Dairy Produce Levy Bill in this chamber in the budget session, many speakers alluded to the very important fact of that investment and the importance to regional areas for it to take place. The wine industry is another example of the importance of that flow of investment into regional areas. With the spectacular export growth that is predicted for this particular industry, we will see an ever increasing investment taking place in regional areas.

The wine industry has contributed greatly to the growth of regional tourism and the job growth in related industries that service that particular growth. It is the linkage between the wine industry and tourism which offers great domestic potential. Apart from the consumption of wine itself in its various forms, it is the combination of these two particular industries that is going to deliver some very real benefits to regional areas. This particular industry has the added advantage of being a reasonably environmentally friendly form of productive activity, and that aids in stimulating consumption and encouraging investment as well.

Let me put in a plug for the wine growing areas around Geelong because, historically, the Geelong region was an important wine growing area in the state of Victoria in the 1800s and 1900s. Disease, unfortunately, wiped out many of the older vineyards, but we have seen in the last 20 years a resurgence in wine producing activities in the region. I do not profess to be an expert in this industry, or in the production of wine, but I am told that the limestone soil formations in the Geelong region are ideal for wine production. Of course, with the general growth in domestic and export demand, along with the various techniques that have been developed in the industry to control pests and disease, this has stimulated the resurgence in the industry in the Geelong region.

Many of the region's wineries are now household names among Australian wines, while others in the region are cutting the mustard very well in the export arena. I would like to mention a few of those wineries because I am sure, Mr Deputy Speaker, that as you go out to dine, not only in this fair city but in your own city and throughout the length and breadth of Australia, you might come across Idyll wines or wines that are produced at Scotchman's Hill, the Bannockburn wines and the Anakie wines. They are all excellent wines coming out of the region and they mix it with the best that are produced in the Barossa Valley and in the Hunter region.

I am very impressed with the vision that the Australian wine industry has developed which is encapsulated in its strategy 2025 document. It also establishes a strategic framework for the industry over the next five years, from 1997 to 2001. I would like to run through some of the objectives of this particular vision statement. It is very rare indeed within Australian agriculture today that you see an industry prepare such a detailed and comprehensive strategic plan that is going to guide its development, not only in the medium five-year term but right out to the year 2025.

The wine industry has identified a number of key objectives which it says will be important in the development of this industry. Those objectives are to enhance the image and reputation of Australian wines. I would say that that process is really under way, because internationally our wines are recognised as being very good wines in quality and very attractively priced.

I am reminded of my first term in this parliament. A French delegation came to this parliament, we had dinner in Parliament House and served them some very good Australian wines. The comment that they made was not only on the excellent quality of the wines, but also the attractive price. Bottles of superb quality wine that you were able to pick up in Australia then for about $A15 to $A20 would cost you the equivalent of $40 to $50 to $60 in France itself. They really regarded Australia as one of the hidden treasures of the world as far as wine production was concerned. I think that was an extraordinary compliment coming from the French for the Australian wine growing industry.

Another of the objectives that are listed in the vision statement is to entrench innovation as the growth driver of the industry's competitive advantage. I wish a lot of other agricultural industries would enshrine this particular objective in their practices. If there is one thing that is going to keep Australian agriculture ahead of the pack in the international marketplace it is its capacity to innovate—not only to produce new products, but also to produce new ways of producing those particular products. We are a very innovative nation, and Australian agriculture is extremely innovative, but there are very few industries in the agricultural sector that have prepared a plan such as this and have enshrined that sort of objective in it.

Another objective that has been mentioned in the 2025 vision statement is to enhance wine style in quality, purity, uniqueness and diversity. Another is to establish global leadership in specific branded market price segments. Interestingly, when you tie this objective to the plan this particular element does not come to fruition until some 25 to 30 years out. That is what I call real vision. Here is an industry that is prepared to look at its future 20 to 30 years out and set a strategic planning framework in which it will muster not only the human resources, but the productive and financial resources, to give effect to the dramatic growth which it expects over that particular period of time.

Another objective listed is to capitalise on market growth opportunities by expanding industry capacity. What this statement touches on is the importance of enlarging that productive capacity as the first platform for really expanding the growth of exports and getting to that position where the industry is a global leader in branded market price segments.

Another objective which has been listed is to extend the scope of industry participation in complementary business sectors. Here the wine industry is attempting to link itself to other industry sectors—that is, in the research and development areas, in manufacturing generally, in the construction of the innovative processing equipment it has being able to develop, and with the financial sector in providing the funds that are going to propel this development according to this plan, and with the tourism industry. Here is an industry that not only sees itself as an important player domestically in improving its production and, in an export sense, in expanding its export opportunities, but also sees itself linking not only with other agricultural industries but with other industries throughout the Australian economy.

The vision statement sets out clear directions for the development of the industry. Over the next five years, there will be a period of rapid vineyard expansion. That will mean an expansion of the productive base, and that will set the scene for a growth in the value of production which is expected from the years 2002 to 2015. That will build on the brand strength of Australian wines and cultivate greater market share. The plan goes to the years from 2015 to 2025, when Australia will seek to establish brand leadership in certain market segments.

The eventual goal of this plan is to expand production to achieve some $4.5 billion worth of sales by the year 2025. That is an extremely ambitious program of expansion for any industry. But it is coming off the back of a vision; it is coming off the back of a collective will of the industry to achieve; and it is coming off the back of an industry that sees itself at the forefront of agricultural industry development in this country.

The wine industry will require some $5 billion to finance that expansion. Obviously, some of that will come from within the industry itself, but it will have to rely on investment from private investors and new entrants into the industry who are prepared to commit money for this expansion, and from financial institutions in this country which in the past have not been great supporters of new industries and those primary producers in industries that are not top of the shelf, as we say, in an agricultural sense and are not the big powerhouse industries like wheat, sheep and wool. Nevertheless, this industry is a significant one. In the past, it has not been adequately serviced by the financial sector. It is pleasing to see now that many of the major banks are very keen to lend in regional areas because they understand that a lot of the innovation in Australian agriculture is being propelled out of the regions and a lot of the private investment is taking place there.

Many other rural industries could take a real leaf out of the wine industry book in its strategic planning. The growth of this industry is really reflected in the dramatic export performance which has been achieved in recent years. It has been quite staggering and it is projected to continue on its growth path. Australian wine exports are expected to double between 1996-97 and 2001-02. In 1996, exports were valued at around $471 million and they are expected to increase to around $896 million by 2001. That growth has been driven by rising incomes in domestic markets which have propelled demand and also rising incomes in overseas markets. It has been propelled by an expansion of Australia's wine production base and by the changing preferences in wines, moving from the fortified wines more into the table wines, in this country and overseas.

It is a very interesting and innovative industry; one which is export orientated, one which has demonstrated capacity to innovate, one which sees itself linking with other areas of economic activity, and one which I wish other industries in this country would take heed of. This bill will seek to generate revenues to consolidate and expand the promotional efforts of this industry in overseas markets.

We are going to come under increasing threat from other excellent wine producing nations throughout the world—in South America, South Africa and Europe. The industry is going to need this generic promotion which is going to establish its leadership position over the life of this strategic plan in certain market segments. So it is a very important piece of legislation from that point and it has the support of growers from within the industry. I congratulate the industry for its vision, its export drive and performance. Let us hope that the great and ambitious targets that are set in its industry plan are achieved over the life of that plan.