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Wednesday, 25 May 2005
Page: 157

Mr GAVAN O’CONNOR (9:57 AM) —The Primary Industries (Excise) Levies Amendment (Rice) Bill 2005 amends the Primary Industries (Excise) Levies Act 1999, and the opposition will be supporting its passage through the parliament. The bill increases the maximum allowable levy at which the operative rate of the rice levy can be set from $2 per tonne to $3 per tonne. It requires that the operative levy be set by regulation instead of by ministerial declaration, and it requires that the levy on rice varieties be declared by regulation rather than by ministerial declaration.

This measure has the support of the industry. It was requested by the industry and the government is complying with that request, with the rider that the levy moneys be allocated and used in accordance with the levy guidelines that the Commonwealth imposes on all rural industries that raise research moneys through levies and the Commonwealth makes a contribution. It is very important that these levies are put on production to sustain over time a research effort that in return brings considerable economic benefits to the industry.

This is an industry that has been quite clever in the way that it has raised and used its research funds. Indeed, some of the outputs from that research effort are quite staggering. This is an industry that is somewhat misunderstood by the general community, and I note the presence in the debate today of the honourable member whose electorate covers the Leeton and Griffith area. I was in her electorate quite recently and I do apologise for not popping in for a cuppa, but we had a full program and I am sure that she was as busy as I was. Certainly it is an industry that is somewhat misunderstood generally by the Australian community, and I think it is important that when these larger debates on water and environmental issues occur in the community they are conducted from an informed perspective so that people are in command of the facts of the matter and that the industry’s achievements are acknowledged. Nobody doubts that we have significant environmental issues, and water is front and centre, but it is important that when those debates take place they occur in a climate in which people do understand the importance of these particular industries to rural and regional Australia. As I understand it, some 8,000 people are employed in this industry and most of those are employed in rural and regional Australia in electorates such as that of the honourable member for Riverina. The important thing to understand is that this is an industry that has grown to a productive out-turn of about $800 million. Significantly, about half of that, $400 million, is from exports. That is a sizeable and significant contribution by one industry to Australia’s export efforts. We have heard a lot of debate recently about the state of Australia’s level of international debt, and of course the particular industries that are largely export focused play a very important role in the overall export effort.

The interesting statistics on the rice industry give us some insight as to where the research dollars have been spent, being in line with community expectations that industries become more water efficient. Over the last 10 years this particular industry has achieved some 60 per cent savings in water efficiency. That is a quite staggering statistic when you think about it. The industry has been asked by government and the community to walk down a particular path, so it has levied its production, turned its research effort to improving water efficiencies and delivered to government and the community. That fact ought not be lost on those who engage in environmental debates in this country. I note, from the research programs that the industry has put on the table, that over the next 10 years it is hopeful of achieving a further 40 per cent gain in water efficiency. That is to be commended. We are now in the era of smart farming and if you are going to farm smart you need information, you need research and you certainly need support from government. I am pleased that this industry has received support from previous Labor governments and from this one.

I note another important point, particularly when we talk about the clean food debate—that is, that this is a particularly nutritious product. If I can lay my hands on the information, I have a statement that I came across that I think many people in this parliament might care to take on board. From a health point of view, rice is low in sugar, total fat and saturated fat. It is cholesterol free, contains negligible amounts of salt and has no additives or preservatives. It is suitable to include in a diet for those watching their weight or on cholesterol-lowering diets. I am not a walking advertisement for the rice industry, let me tell you.

Mrs Hull —You should be!

Mr GAVAN O’CONNOR —In the position that I hold, I have to be quite impartial in these matters. The honourable member for Riverina, who has rice growers in her electorate, can be a little more partisan! There would be a few people around this place who ought to read that statement and change their diets to rice. We are entering an era where the Australian community is becoming more conscious of its health. It is becoming more demanding and it requires clean food. Of course, this is an industry that is delivering in that way. For example, chemical usage on rice in Australia is the lowest in the developed world, thanks to a ‘unique rotation system utilising natural biological controls’. That is a statement from the rice industry itself. It was published in the International Year of Rice 2004.

When we discuss the role of food in nutrition and indeed health, you do not have to be a genius to understand that getting into nutritional foods will, at the end of the day, improve the health status of Australians and lead to a lower burden on the health budget. It seems fairly logical to me. When we start talking about the value of industries to the Australian people then perhaps we ought to start factoring in some of these sorts of issues because the Australian consumer does have a choice in this era, when we trade in rural commodities around the world. It does have a choice between a product that might be grown in another environment overseas where producers are not so stringent about the use of chemicals and an Australian product where chemical usage has been reduced progressively over time to deliver clean food and a better environmental outcome.

Direct investment in research and development by this industry is around $18 million, and it is largely directed to maintaining the industry’s competitive advantage in areas such as irrigation, crop protection, continuing product development and crop breeding. The product development issue is an interesting one because this is an industry that has really taken to innovating and putting innovative products that consumers have obviously taken to into the marketplace. You can go into the supermarket and get a bag of rice—perhaps you might not look at the label to see where it comes from—or you can get a specialised product, value added and packaged in rural and regional Australia, that meets your consumption needs. It is a very innovative industry with regard to its marketing and the strategic use of these research and development funds to get better outcomes for the industry.

There is another statistic that I found very interesting, and that is the return on investment. The net benefit of investment of $11 million to the triple bottom line was estimated at $292 million. Of this return, 59 per cent came directly to rice producers and 41 per cent reflected the share of benefits estimated to flow to a range of measurable environmental and social dimensions of rice production. So here we have a triple bottom line assessment that indicates that from an $11 million input some quite staggering economic benefits flow.

The honourable member for Riverina is here and she will follow me in this debate. In her electorate there are whole rural communities dependent on this industry, and they have been hard hit by the drought. As I understand it, some of those areas are in their third season of drought, and this has impacted quite significantly on production. The normal rice crop has historically been about $1.3 million tonnes. This year, as a direct result of the drought, that will reduce to 358,000 tonnes. That has already led to a drop in the industry’s rural and regional work force of 8,000 people. Some 200 workers have lost their jobs overall. The latest job losses were in February when 75 people lost their jobs. The industry has been able to keep the mills operating in the face of this drought situation but, as in all industries and enterprises, these resources are being stretched to the limit.

Mr Deputy Speaker Causley, being a former minister for agriculture and coming from a rural and regional area, you would appreciate that the drought not only impacts on farmers but extends into the value-adding chain. In that situation, the livelihoods of many rural and regional Australians—not just farmers but people in the towns—are severely affected by the flow-on effects when the mill is not able to put through the volume of production and process the rice, and people lose their jobs.

In making these comments I appeal to the wider community to not engage in hysterical debate when these issues of water are discussed. We do have a very important debate in Australia on water, but let us not lose sight of the fact that that debate has to be honest and has to acknowledge the contribution that industries are making to the conservation of the productive land base and the efficiencies that have been achieved in the usage of water. Any industry in Australia over the last 10 years that has improved its efficiency and achieved a 60 per cent reduction in water usage ought not to be pilloried for that effort. I would like to go into some households in urban Australia and look at their water usage over time. There would be many households that have not achieved 10, 20 or, at the outside, 30 per cent reduction, let alone the 60 per cent achieved in the rice industry, with a goal of a further 40 per cent improvement over the next 10 years. That is a substantial achievement.

The interesting thing about this industry is that we are dealing with very enterprising and innovating farmers. The industry, like other rural industries—I will not mention them—is able to take its research effort and get it onto the ground quickly. That is, farmers are quick on the uptake because they understand that they need to make these efficiencies. Their industry survival in the long term depends upon it. At the heart of their long-term survival is the research and development effort. There will not be an activation of this maximum research limit that they are lifting from $2 to $3—the subject of this bill at this point—but when the industry does recover and the rains come and production does increase it will enable the industry to replenish its research and development resources and stay on the front foot. The opposition will be supporting this legislation through the parliament.