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Wednesday, 15 March 2000
Page: 12864

Senator WOODLEY (4:18 PM) —One usually begins a speech such as this by saying, `I welcome the opportunity to speak in this particular debate on these bills,' but I do not welcome that opportunity. I really believe that this is a disaster that we are facing. The bills that we are debating now—which I know most members will vote for—will nevertheless be simply like giving someone who is about to be shot the opportunity to take a pill so that they might survive for another eight years, but in the end their demise is certain. I know that is a very negative way to begin a speech, but that is how I feel about it.

The Democrats remain implacably opposed to deregulation. Let me give you the reasons for that. There will be a loss of farmers from rural Australia—according to ABARE, between another 3,000 and 5,000 farmers. I do not know what this chamber thinks about that, but as far as I am concerned there is no way that rural Australia can continue to sustain those kinds of losses. They are the ABARE figures. Some weeks ago in estimates, I asked the Department of Agriculture, Fisheries and Forestry what their calculation was, and they admitted that there are probably 4,000 farmers who are `vulnerable'—that was their word. `Vulnerable' is a softer word than saying that 4,000 farmers are about to `cop it in the neck', but `vulnerable' was their word. They indicated to me that they do not believe that all of those 4,000 will go, but if we take either ABARE's or DAFF's figures, then we are facing a disaster in rural Australia. That is a disaster which will happen in spite of the package which we are voting into legislation now. If we did not have the package, there may have been more farmers. This is devastating to rural Australia, and it continues policies which guarantee the continuation of a loss of people and services from the bush and a loss of income amongst rural industries.

I am not pointing the finger at anyone, because I believe no political party has yet taken account of this issue. We continue policies which will guarantee the continuation of the loss of people and services, yet we all wring our hands and are good at the rhetoric. But where are the policies which in fact will reverse this trend? They are not in place in any political party. I am doing my best within my party to make sure they take account of this, but even there it is a bit of a battle at times.

The Prime Minister recently did a trip around rural Australia. I commend him for that; I am not going to criticise him. In fact, I believe that was a very genuine attempt to listen to people in rural communities. He made a promise to rural Australia—again, I believe his promise was completely genuine; he meant it—but it is impossible to keep a promise not to take services out of rural Australia if we continue to see this exodus of people from those communities. At the end of the day, how can you deliver services to communities that do not have any people in them? That is why I say to the Prime Minister: I believe that you are concerned, but all of us are going to have to develop policies that will reverse the trend which is going on, or it will simply continue.

The second reason why I remain implacably opposed to the deregulation of the dairy industry is that deregulation means a loss of income for dairy farmers. I do not know if there are any exceptions. There may be one or two, but all of the indications, all the evidence we received and everything that we have been told indicates that there will be a loss of income for dairy farmers, but not for processors, not for manufacturers and not for supermarkets. In fact, all of the money which will be lost to dairy farmers will be transferred to the pockets of those who are in charge of processing, manufacturing and supermarkets. The evidence we were given was not denied at any point. That is what will happen. I am opposed to that. I do not believe that we can continue to fatten those in the middle while farmers continue to lose income in this country.

Let me give you what the explanatory memorandum says. This is what the government itself has written and it uses the ABARE figures. I know that there is some dispute about those figures, but I can only accept what the government itself puts in its own legislation. The ABARE figures say that the average restructure payment will be $118,192 over eight years. That equals an average payment to each farmer of $14,774 per year. But ABARE also calculates—and it is in the explanatory memorandum—that the average fall in income per year to each farmer will be $28,350. Even with the package and an average payment of some $14,000, to each farmer who receives that package there will be a loss of $28,000-odd. If you would like it in exact figures, it is a loss of $13,576 per year.

Averages are deceptive, but let me give you some real examples. Dairy Farmers, which is one of the large cooperatives in Queensland, in the Courier-Mail on 1 March 2000 announced that the increase in the price of milk at the retail outlets would be another nine cents a litre. This follows an increase of 6c and 8c a litre in a little over 12 months—a total of 23c a litre increase in the retail price of milk since deregulating post-farm gate last year. That was on 1 March 2000. The next day, on 2 March 2000, a letter was sent to farmers in Queensland telling them the price they would be receiving on 1 July 2000 for their milk. Farmers in North Queensland—and that is the letter I have—were advised that the price per litre for market or liquid milk would drop on 1 July 2000 following deregulation to 41.5c per litre, a drop of around 17c a litre for market or liquid milk. So the next day after the processor was announcing there would be a further increase in the retail price, bringing the retail increases in a little over 12 months to 23c a litre, it was telling farmers that they are going to get a drop of 17c a litre in the price they get for their milk. That is outrageous. It is a scandal and there is no way I can endorse that kind of market power being used in a bullying way towards the people at the bottom of the heap.

Let me tell you about a real farmer. This farmer was in favour of deregulation. He is a very efficient farmer with a high-tech farm. He has actually been overseas on a number of occasions to study genetics and farm technology in order to improve his farming. He told me that six months ago he was in favour of deregulation. He has now done the sums for his farm. He got briefings from his bank and a whole lot of different sources. He gave me a written briefing on his situation. The briefing is backed up by a number of pieces of information. He says:

Current farm situation

546 acre dairy farm supporting four families—

and I will not give you the names—

and farm worker. Milking 260 cows in a 50 stand rotary dairy. Supplementing feeding cows maize silage, grain, whole cottonseed and molasses. Pastures are tropical grasses in summer and rye grass clover in winter, which is planted every year. Annual production of 1.8 million litres supplied to Dairy Farmers operation in Malanda on the Atherton Tablelands. Current lifestyle is getting up at 4.00am in the morning, milking cows, seeing the children half an hour before they go to school, working all day, milking cows again at 4.00pm and getting home about 6.30pm. Every second Sunday afternoon is free. Annual holidays are taken sporadically. Time spent with family is extremely limited.

The farm has been in that family for three generations. He continues:

The farm was gearing up to milk 300 cows in July moving closer to 330 in late December with a target production of 2 million litres. The farming enterprise had the ability to lease land close by and expand its operations further with a potential to milk 400 cows as the infrastructure is already established to milk those numbers.

We are not talking about a struggling farmer with little prospect of expanding. We are talking about someone who is right up there at the very top of the farming enterprise. This is what he has decided to do:

This family enterprise is going to move out of the dairy industry over the next 12 - 18 months. This decision has been arrived at after attending Dairying Beyond 2000 workshops, discussions with our bank manager, financial adviser and accountant. As we see no future in the dairy industry and the ability for us to get a reasonable return on our capital investment and to have a reasonable lifestyle there is no future for this farming family. It would also mean that the farm workers employment would have to cease, therefore bringing to bear a larger workload and pressure on family members.

Then he goes on and talks about some of the issues that brought him to this decision. He says:

It is imperative to this farming family that we get the compensation package so that we can restructure our lives and move on. Although you will see from the guide—

and he has a lot of other papers attached to this letter—

that our income will drop approximately $90,000,00, the compensation will give us roughly $50,000,00, which is a shortfall of $40,000,00 a year in income.

You can understand why he will take the restructure package, but in fact it will only help him to get out of dairying. This is not a struggling farmer, not somebody who would have exited farming anyway because he was becoming very marginal, but somebody who was expecting in fact to take advantage of deregulation until he did the sums for himself. When he did, this was the decision he made about it.

Like Senator Forshaw, there is an awful lot I would like to say. I want to refer briefly to the Senate Rural and Regional Affairs and Transport References Committee report which, as Senator Forshaw said, was a unanimous report. There are a number of recommendations in that report, but it is interesting that the only phrase I ever heard used by the UDV, the ADIC and many other groups pushing deregulation was one single phrase: `The committee believes that deregulation is inevitable.' They quoted that ad infinitum, but never once did they quote the recommendations of that inquiry; never once did they say that we absolutely slammed the review done in Victoria by the National Competition Policy Review Group. None of that was ever mentioned. I find that very interesting.

As a matter of fact, last Friday at the hearing I asked a member of the ADIC, who is also an employee or a representative of Bonlac—not of the farmers—about that. I said, `Well, you've just told us,' as he did, `that you commend the report.' I said, `Do you also agree with all the recommendations?' He said, `Which one?' I said, `The one which talks about investigating the accountability and transparency of cooperatives'—meaning Bonlac and Goulburn. All of a sudden he was in retreat. The report we had made was not so attractive after all when he heard what some of the recommendations really were. I could say a lot of things about what I think about that but I can see my time is running out.

I turn my attention to the package. I agree that the package is very large. It will raise in the vicinity of $1.8 billion and it will go some way to helping those farmers who will receive a drop in income in Queensland, New South Wales and Western Australia—they will also lose real property rights in the sense of losing their quotas. It will do something for them, so obviously I have to support it. But that package is inadequate. It will be paid for by farmers at the end of the day. It will be paid for by farmers, because the 11c a litre levy will be all taken up by the fact that farmers will lose somewhere between 11c a litre and, in the case I quoted, 17c a litre. So let us not make any mistake: this package is being paid for by the farmers themselves. That is why, in the second reading amendment I am moving, I have actually picked up some of the recommendations from the Senate report and made them into second reading amendments. I know that that does not have a lot of force, but I want to remind the government of what that Senate report said.

One of the important things the government have picked up at the last moment—and let me give them perhaps half a tick for that—is the issue of regional assistance. We have had overwhelming evidence that the impact on some communities that are heavily dependent on dairying for their income will be seriously affected by deregulation. I want to pay a tribute here—it has not been done before, and I apologise to him for that—to Henry Palaszczuk, the agriculture minister for Queensland in the Labor government. He has done a lot of work on this whole issue of the impact on regional communities. I pay tribute to him that he took to the ARMCANZ meeting a proposal which was not taken up—or I thought it wasn't. I sought to put that into an amendment, but late yesterday afternoon the government came to me and said they agreed that Minister Palaszczuk's idea should be taken up. They have proposed an additional $45 million which will be taken out of the money collected by the levy, because it is not all going to be spent on reimbursing farmers. I pay tribute to Henry Palaszczuk, because he did a lot of work on this because of his concern not only for farmers but for all the other people in these communities who depend upon farming, who give all of the support services. His proposal was worked out in great detail and was a very rational one. I do not know if the government want to recognise the work he did, but I certainly do. I apologise to him that when I was drafting the amendment I had not notified him of that or given him as much credit for it as perhaps I should have. I am glad that the government have agreed themselves to amend the legislation and that that amendment will put another $45 million back into those communities which will be so seriously affected by deregulation.

At the end of the day, I know that the Labor Party and the government will vote for this package. I must say I really felt so angry about this that I was going to vote against the package, but my vote would have been irrelevant and, certainly, I want to support the package in the sense that if there is no other way of helping farmers we would want to at least help them to the extent that the package will. But I register again that both the Democrats and I are opposed to the proposition that we deregulate an industry and transfer millions of dollars from farmers straight to processors, manufacturers and probably supermarkets as well and the fact that consumers will get no benefit from that deregulation. Although I know there are some people sort of saying perhaps they will benefit, the cow might fly over the moon. (Time expired)