Mr Campbell asked the Minister for Primary Industries and Energy, upon notice, on 25 August 1997:

(1) Will registration fees for export abattoirs be increased from $35,000 per annum to $122,000 per annum; if so, with the imposition of monthly audit charges of $2000, will this represent a 400% increase in operating costs.

(2) Is it a fact that at the moment a small abattoir operating for 8 months a year and killing 800-900 sheep each day, employing 60 persons plus an Australian Quarantine and Inspection Service (AQIS) vet and meat inspector, is presently faced with a per unit cost of $1.12 per sheep against a larger abattoir killing 5000-6000 each day which has costs of 35 cents per sheep unit.

(3) Will the AQIS costs per sheep unit rise to about $1.80 for the small abattoir referred to in part (2) and approximately 45 cents for the larger abattoir.

(4) Is it a fact that the smaller export abattoirs are largely Australian owned and the larger export abattoirs are foreign owned.

(5) What is the justification for the proposed cost increase and how does it assist small business.

(6) Is it his intention to eliminate small export abattoirs.

(7) Would it be more equitable to impose the charges on a stock throughput or a per kilogram basis.

(8) How does the proposal enhance export competitiveness.

(9) Will the cost be recouped by lowering the price to farmers.

(10) How will farmers absorb the costs.

Mr Anderson —The answer to the honourable member's question is as follows:

(1) Registration fees for export abattoirs will not increase from $35,000 per annum to $122,000. Registration charges for small to medium size abattoirs will remain at their existing rate of $30,350. The charge for large abattoirs will increase to $70,700, while medium to large establishments will increase to $60,700 from $30,350. New categories of small, medium and large have been introduced to ameliorate the impact on smaller establishments in the industry.

(2) The statement that small abattoirs face a huge per unit cost per sheep compared to larger abattoirs is not correct. Exercises conducted by AQIS on the impact of the reform of the meat inspection service, including fee adjustments, indicate that the AQIS cost per unit varies from plant to plant regardless of size. The relative efficiency of production at each establishment dictates the cost per sheep or cattle unit flowing from AQIS's fees and charges. For example, many smaller establishments actually have a lower cost per unit of production than larger plants.

(3) The costs per sheep unit will not increase significantly for either small or large establishments. It is important to note that the larger establishments will have considerable scope to reduce their costs, as they will require less inspection units due to the outcomes being pursued under the reform agenda.

(4) It is not true that the smaller export abattoirs are largely Australian owned and the large abattoirs foreign owned. Approximately 30 of the 73 export registered abattoirs are foreign owned. Of the top ten abattoirs in terms of volumes slaughtered for export, I understand that five are Australian owned and five are foreign owned.

(5) The justification of the fee adjustments is that they are one component of the Government's reform agenda for AQIS meat inspection services. Other reforms have already commenced and for many participants in the export meat industry their combination with the fee changes will result in net reductions in payment to AQIS. The reforms, including the move to company-based inspection, will deliver significant savings and flexibility for the meat industry which will ultimately assist small business.

(6) It is not the intention to eliminate small abattoirs, indeed the new fee structure will assist in maintaining the viability of the smaller operators within the industry. The fee adjustments will, in the main, affect larger abattoirs.

(7) It would not be more equitable to impose the charges on a stock throughput or a per kilogram basis. The fees structure is designed to recover the fixed infrastructure costs through a registration charge and the inspection costs on a fee for service basis. All operators in the industry benefit from the inspection infrastructure in place to facilitate the export of meat, and as such, are required to contribute their share of the cost.

(8) The reform agenda for AQIS meat inspection services is part of an overall betterment of the red meat industry. The Government is committed to delivering a substantial reform agenda for the industry, including substantial savings for processors through the restructuring of the Australian Meat and Livestock Corporation (AMLC), Meat Research Corporation (MRC) and Meat Industry Council (MIC). The full package of reforms will ultimately enhance export competitiveness.

(9) The quantum of revenue collected by AQIS from industry in 1997-98 will not increase. The AQIS fee adjustments should therefore have no impact on prices being paid to farmers.

(10) Prices paid to farmers, should not be affected by the AQIS fee adjustments.