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Wednesday, 29 November 2000
Page: 20093

Senator FORSHAW (11:23 AM) —The horticultural industry is of great importance to the Australian economy both domestically and with respect to the revenue earned from exports. Indeed, in the latest figures I have available to me, the total value of the horticultural industry in 1999-2000 was in the order of $5.6 billion and the net export value was around $1.2 billion, a not insignificant amount in terms of our export earnings. The industry comprises some 80,000 growers, many of them small family enterprises and businesses, and of course there are a substantial number of employees in the value adding sectors. It is a group of industries, because `horticultural' encompasses quite a range of different products, various fruits, vegetables, and so on. The industry has been going through some difficult times over recent years—not unlike other agricultural areas of course. Horticulture has been hit hard through such difficulties as problems with prices. We have seen the closure of some of the canneries in the fruit area. There are the ongoing difficulties associated with the importation of concentrates from overseas and the impact that that has upon prices received by Australian growers. We also are aware of the difficulties of trade barriers and protectionism that exist in other countries, which we are constantly endeavouring to break down through the WTO, the Cairns Group, and so on.

Issues related to quarantine and disease prevention have been prominent in the news in recent times. The Senate Rural and Regional Affairs and Transport Committee, of which I am a member, will be undertaking an inquiry early next year into the issues surrounding the draft risk assessment by Biosecurity Australia on the importation of apples from New Zealand. I notice Senator Calvert in the chamber. I think he moved the motion to hold the inquiry; he managed to get in first before quite a few others did. Senator Calvert is aware, as we all are, of the very serious concern regarding the potential introduction of fire blight into our industry. Equally, there are other potential difficulties that the industry may face. One that has also been drawn to our attention is the problem associated with Pierce's disease in the California citrus industry.

I say all that by way of background because we need to understand that, when we are discussing the Horticulture Marketing and Research and Development Services Bill 2000 and the Horticulture Marketing and Research and Development Services (Repeals and Consequential Provisions) Bill 2000 that are before the chamber now, we are dealing with areas of research and development and of marketing for horticultural products now and in the future. If we as a nation and the industries are going to progress, then it is important that we examine closely the arrangements for research and development and marketing of our horticultural products. These two bills are the end product of an ongoing process over a couple of years essentially to privatise the research and development corporations that have hitherto existed. This is not a new feature. Indeed, it appears that these days I am on my feet in this chamber reasonably regularly making speeches, as are other members of our Senate committee, on the processes of privatisation of various statutory R&D corporations. I think we are going to come to one in the next couple of days in the wool industry, but at the moment we are dealing with horticulture.

The legislation that is before the chamber establishes a new horticultural services company to be known as Horticulture Australia. It will be the result of the amalgamation of the two major industry umbrella bodies that currently exist. They are the Australian Horticultural Corporation, or the AHC, and the Horticultural Research and Development Corporation. The other major body is the Australian Dried Fruits Board. Under the legislation, that board will be abolished and its functions incorporated into the new company, Horticulture Australia. However—and I will come back to this later—there will be a specific trust account established to hold the approximately $2 million in funds of the Australian Dried Fruits Board for that industry to access for R&D and promotional activities.

The charter of the new company is to provide marketing and research and development programs to industry—in effect, to carry on the work that has been done or was the responsibility of the two corporations that I mentioned a moment ago. This new company will be an industry owned or member owned company, a not-for-profit company, and therefore will no longer be a statutory organisation. The members of the new company will be the industry representative bodies, who are, in turn, made up of individual growers throughout the horticultural sector. The funds for the new company will be provided by way of the member contributions through statutory levies and voluntary contributions that exist and will continue to exist under the new arrangement. The voting rights for individual members and bodies will be allocated according to the level of funds contributed by each entity.

As I said, the legislation has been some time in the making, and that has been because of the need to bring about industry consensus across the various sections or products groups within the horticultural industry. I understand that there are at least 29 such groups that currently have grower members or companies paying levies and in turn contributing to the corporations. I am advised that it has not been a simple process to bring all of these groups together and to negotiate with government on the new structure, but we are assured—and I note that in his second reading speech the Minister for Agriculture, Fisheries and Forestry made some comment about this—that there has been a substantial amount of consultation with industry, and also subsequent detailed assessment by government, to bring about this new single company structure. That is an important element because, as we have found in each of the privatisation exercises that have gone on in various industries—in the pork industry, the red meat industry, the wheat industry and now the wool industry, just to name a few—the critical factor has been to get industry consensus. If industry is going to take on more of the ownership and control of these organisations, there is a need for consensus to prevail.

I am advised that the net assets of the two existing corporations amount to some $20 million. Those assets will be transferred to the new company, along with liabilities. Further, I am advised that all existing staff will be transferred to the new company, retaining their rights and conditions, as should be the case. I mentioned earlier that the Australian Dried Fruits Board will be abolished and integrated into the new Horticulture Australia company. They have some $2 million, I understand, in existing funds and they will be placed into a special trust fund earmarked for R&D for the members of that industry.

The position of the opposition is that we support the process. We recognise that it has been brought about through consultation and negotiation with industry, and it is in line with the general principle that is being implemented across various other agricultural and rural industries. Our support is not unqualified, because there are some important issues that we believe need to be referred to and further pursued during the committee stage of the debate, but in principle our position is that we do not oppose the legislation. We do wish to raise a few matters, and, as I said, we will come to these in more detail in the committee stage. I am sure my colleagues Senator O'Brien and Senator Woodley—maybe even Senator Calvert—will have some questions to ask. Let me mention just a couple of matters.

Firstly, one of the specific functions or powers that will exist under this legislation is that the Minister for Agriculture, Fisheries and Forestry can declare the company to be the industry services body and also the export control body for the industry. It is not necessarily the case that the one company would be declared to be both entities or take on both functions, but as I understand it that is certainly the proposal at this point in time. Indeed the minister, in his second reading speech, referred to this at page 4; but he also drew attention to the fact that there were a range of conditions to be met, one of which included that the company sign a deed of agreement with the government to fulfil industry and public accountability requirements. He then goes on:

If the company changes its constitution in a manner considered unacceptable to the government, becomes insolvent, or fails to comply with the legislation or the deed of agreement, the legislation provides for the government to retain the right to declare another body as the industry services body or the export control body or to retransfer the assets and liabilities to another suitable body.

This is a substantial power that the minister will have and is something that we need to explore a bit further during the committee stage. But it leads me to a very important issue, which is the whole question of accountability for funds. Until now, the R&D corporations have existed as statutory bodies and, accordingly, each year on a couple of occasions through the estimates process we have the opportunity to examine the accounts of the R&D corporations and to raise matters with the minister and with the public servants present at estimates. We also, of course, have the same opportunity through the parliament because the portfolio budget statements are tabled, as are the annual reports of each of the corporations. Under the new arrangements, I understand that that will no longer be the case because this will be a private company.

Nevertheless, it will be a company that will be receiving matching funds from government. At the moment, that is of the order of $14 million per annum. We have no problem with the provision of matching funding from government or from the taxpayer—from the public purse—to this industry or indeed to other agricultural industries to help in the promotion of R&D, marketing and so on. That has been a longstanding practice in these industries. But we are concerned that the new companies be accountable for how they spend that money. They should be accountable to the government and more so to the parliament. We will be looking for some further clarification from the government in the committee stage as to just how that is going to be the case. I note that in the explanatory memorandum on the Horticulture Marketing and Research and Development Services Bill this issue of accountability is referred to, but it is of course by way of a deed of agreement rather than any specific obligations in the legislation.

The final point I would make at this stage, as I draw my remarks to a close, is another issue of some concern—that is, the powers vested in the minister under section 29 of the Horticulture Marketing and Research and Development Services Bill. Section 29 of that bill deals with the power of a minister to make ministerial directions. I will not read the entire section because the parliamentary secretary and others would of course have this in front of them. Of particular interest and concern is that it states in subsection (3):

The Minister must cause a copy of the direction to be laid before each House of the Parliament within 15 sitting days of that House after direction is given, unless the Minister makes a written determination that doing so would be likely to prejudice:

(a) the national interest of Australia; or

(b) the body's commercial activities.

We are concerned that it is up to the minister ultimately here to decide whether or not such a direction is a disallowable instrument. We would particularly like to get some further clarification on that issue in the committee stage. I will leave my remarks at that. As I said, we are supportive of the legislation in principle but there are a range of issues that we would wish to get some further clarification on in the committee stage. Hopefully, if they are clarified to our satisfaction, we can proceed further. (Time expired)