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Monday, 21 June 2004
Page: 30968

Mr McGAURAN (Minister for Science) (6:59 PM) —I wish to thank the members who have contributed to this debate on the Excise and Other Legislation Amendment (Compliance Measures) Bill 2004. The member for Kennedy has broadened the dimensions of the particularities of the bill before the House to take into account the decline of the tobacco industry of North Queensland. Debate on a bill that deals more specifically with protecting the revenue and giving powers to the Australian Taxation Office of control over tobacco and to regulate any unauthorised movement of these goods has been expanded by the honourable member into a wider debate and discussion about issues of free trade, protection and the like. Time will not allow me to engage with him in as fulsome a manner as that with which he has projected his views this evening.

There are a few facts, though, that do need to lie on the table, I feel. The tobacco industry in Queensland has been in decline for several decades. In 1970 there were 822 tobacco quota holders; 10 years later, in 1980, the number had fallen to 690; by 1993, some 13 years later, it was down to 371; and it was down to 150 tobacco quota holders by the year 2000. The tobacco growing industry in Australia is a comparatively small industry, concentrated in the Myrtleford area in Victoria and the Atherton Tableland in North Queensland. I am told—at the risk of angering the honourable member for Kennedy—that the Victorian producers produce higher quality tobacco for a much lower price than the Queensland producers.

Mr Katter —You are right about my getting angry.

Mr McGAURAN —By way of interjection he does agree that I have angered him. British American Tobacco Australia ceased purchasing tobacco from North Queensland growers at the end of the 2002 growing season; Philip Morris Ltd ceased purchasing at the end of the 2003 season. The Department of Agriculture, Fisheries and Forestry advises that there are currently 124 tobacco growers in Queensland. The 118 growers in North Queensland, who are the responsibility of their local member, the honourable member for Kennedy, sadly no longer have a legal market. The six growers in south Queensland still have a market for their tobacco. In the absence of a market for your tobacco and, given that if a crop were allowed to be grown there would be a risk of diversion to an illegal market, licences have not been granted to the 118 growers in North Queensland, so the honourable member accurately and fairly states the decline of the tobacco industry of North Queensland. The reasons for it, I have to impress on the honourable member, are a great deal more complex and longstanding than an issue of liberalised trade alone. The two companies that purchased tobacco leaf in North Queensland say they have withdrawn for commercial reasons.

Mr Katter —It's cheaper overseas.

Mr McGAURAN —To a large extent that is true, but I would not want anyone to be left with the impression that the government have abandoned the North Queensland tobacco growers. We have given significant assistance to encourage them to adjust in what has been the inevitable downsizing of their industry. Under the government's Farm Help program, financial assistance is available to tobacco growers choosing to leave farming. Farm Help provides income support and professional advice. Since 1994, Queensland tobacco growers have also had access to two state-funded adjustment packages, totalling over $42 million; and the $18 million Atherton Tableland Sustainable Regions Program from the federal government has been in place since August 2001. That program recognises the historical importance of tobacco to the area and the structural adjustment issues facing the region.

None of this is of comfort to the honourable member—he will see it as bandaid solutions to overall economic policies that have stripped the tobacco industry of North Queensland of its viability. I do believe that the government's measures are responsible and necessary to help the tobacco growers adjust. Clearly, if there is no legal market then licences cannot be granted to the growers for fear of illegal usage of that product. But I cannot accept that this situation is due only to policies of liberalised free trade and so on. There are a great many of Australia's commodity groups, organisations and grassroots farmers who want as free trade as possible—sheep, wool, grains, dairy, beef and many others. So there are differences of opinion about free and liberalised trade even within the agricultural sector as a whole. The speech that the honourable member for Kennedy has just given should be tried out at some of the forums involving those very large, very significant export earners for Australia and for Australian farmers.

It is a complicated and difficult issue at the best of times. Without direct subsidies—and cash payments even—to the North Queensland tobacco growers, it is hard, if not impossible, to see how they could remain viable against even the Victorian tobacco growers, let alone tobacco growers in other countries. Australia enjoys low-cost production relative to many other countries in many commodity areas—coal and liquid natural gas come readily to mind. If we cannot be the world's lowest-cost producer in each and every commodity, nor can any other country. A government, where an industry or a sector of an industry is in decline, has a moral as well as an economic responsibility to assist the transition, and I believe this government has discharged that responsibility.

Question agreed to.

Bill read a second time.