Mrs GASH (10:35 PM) —I rise to speak tonight on behalf of the many residents of the Gilmore electorate who are involved in or depend upon the dairy industry for their livelihood. The dairy industry is one of the major business operations in the electorate of Gilmore, employing several hundred people in milk production and catering for thousands of families in New South Wales. Dairy Farmers Co-op in Bomaderry receives milk from more than 120 producers in the local area. The south coast Illawarra farms produce more than 131 million litres of milk annually worth more than $50 million each year. These farmers spend more than $37.4 million each year on expenditures such as goods and services.

One thing needs to be made very clear: there is no such thing as a level playing field. We believe that the dairy farmers' plight is simple. They say, `We don't want a level playing field. We want the field tilted in our direction to support Australian businesses.'

It interested me to read recently of a study which showed that since 1975 the number of registered dairy farms has declined 53.8 per cent and cow numbers have declined 23.9 per cent. However, average herd sizes have risen from 93 to 139. Davidson's study on the shire of Dungog, a small rural town near Newcastle, told the story of the average dairy farming centre under the changes which have taken place over the past decade or so. Between 1990 and 1995, the number of small herd farms reduced from 21 to six. Medium sized herd farms reduced from 25 to 24 while the larger herd farms increased from 24 to 29. I am sure that this story could be told in many regional areas of New South Wales if similar studies were conducted. Whilst smaller farms have been disappearing, productivity has steadily increased. However, there must be a balance of costs and benefits.

In the submissions to the review of the New South Wales Dairy Industry Act 1979, I read that New South Wales government bureaucrats believed that the arrangements up to 1 July 1998 were at a cost of up to $100 million to taxpayers—yet industry representatives believed that those same arrangements benefited the public to the tune of more than $50 million. With the 1 July reforms, the farm gate price has been reduced to 3.3c per litre and vendors' and processors' operations have been deregulated. The immediate results of this have been to make dairy farmers once again tighten their belts—yet the cost of a litre of milk has not dropped the 3.3c supermarkets are saving on the farm gate price. The benefits are not being passed on to the consumers.

There has been a lot of talk about the Hilmer report and the benefits of national competition policy. From my own point of view, the Hilmer report should not have been as wholeheartedly embraced as it was. My view is based on what I have seen of how the recommendations of the Hilmer report have impacted on local businesses. While there are great benefits of competition, particularly for consumers and business, this needs once again to be balanced with the needs of local industry. The direct benefits of competition are lower prices for consumers and increased productivity; these work to reduce input costs for other industries and increase employment opportunities for more Australians.

Labor took a hardline approach to competition policy, noting that they had not `exempted sectors from the national competition rules'. According to the agreement with the states and territories, each political party is free to determine its own agenda for the reform of legislation that restricts competition.

The coalition's priorities are to take a commonsense approach to competition policy, and I am delighted that the government will commission a Productivity Commission inquiry into `the extent to which the benefits of competition are flowing to rural and regional Australia'. This is a major step, and one which I fully endorse. Regional areas and rural industries must receive the benefits of the competition policy if it is to be considered in the national interest.

The employment of so many individuals in the dairy industry in my electorate of Gilmore has spin-offs for the rest of the community in terms of service provision and further jobs. Recent action on behalf of community residents to boycott the major supermarkets in favour of the local dairy co-op store for milk is indicative of the level of support for this industry in our local area.

The impact of the New South Wales government's decision to deregulate the industry beyond the farm gate without price monitoring has resulted in huge losses for farmers but no benefits for consumers. Threats to the viability of this industry, particularly to the many small family owned farms, are threats to major employment opportunities for many local residents. The impact of unmonitored deregulation as a result of competition policy has been to provide such a threat to the livelihoods of many people as well as to an efficient, important industry in my electorate. I look forward to the outcomes of the Productivity Commission inquiry so that we may be able to answer the question asked by my constituents—that being: what's in it for us?