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Tuesday, 20 August 2002
Page: 3327

Senator O'BRIEN (3:55 PM) —by leave—Mr Deputy President, I take this opportunity to congratulate you on taking on this very important position fundamental to the functioning of this chamber. I move:

That the Senate take note of the document tabled earlier today.

I refer to the Australian Meat and Livestock Industry Act Australian Meat and Livestock Industry Beef Export to the United States of America Order 2002. This document arises following a great many events, including consideration by the Rural and Regional Affairs and Transport Legislation Committee of the Senate prior to the Senate rising at the end of June. It was the subject of recommendations made unanimously by all members of that committee—that is, government, opposition and crossbench senators—which supported a recommendation designed to ameliorate proposals made by the Minister for Agriculture, Fisheries and Forestry in May to manage the quota, which so outraged sectors of the Australian beef industry and the farming community that we saw some of the most critical statements ever made about a minister for agriculture in this parliament. Perhaps there have been others more so, but it was certainly unusually so in the sense that this was a National Party minister being roundly criticised by a constituency that he would consider to be his own.

The recommendation of the committee was to give effect to the minister's proposals but with a significant discretionary amount taken from the quota. I should say that Australia has a 378,000-odd tonne quota entitlement to the United States which attracts a 4.4 per cent tariff. Anything exceeding that attracts a tariff of 26.4 per cent, so clearly shipments within quota entitlement have a distinct advantage over outside of quota shipments. The committee heard evidence that various abattoirs would wind down and close and that there would be thousands of job losses in regional Australia arising from the minister's proposals. So the Senate committee was minded to make recommendations to vary the minister's proposal to allow for some discretionary allocations to keep abattoirs operating, to keep jobs in regional Australia and to keep the beef industry as functional as possible.

Quite remarkably, in discussions leading up to the time that the minister made his statement on 15 May this year, he advised the industry that any shipments which had been dispatched prior to the promulgation of the order would not be considered to have been shipped outside of quota entitlement. But then when the order was initially advised following the rising of the Senate, in a way of course that was designed to make it impossible for a member of this Senate to move to disallow it—and it is being produced only today—the minister announced that shipments on the water after 15 May would not necessarily be considered to have been shipped within quota.

The result was that American beef importers, those who had purchased shipments from Australia on the understanding that those imports would fall within quota entitlement and would not attract a punitive tariff, were finding that they had paid for shipments once on board a ship only to find that they would be liable potentially for a 26.4 per cent tariff. Naturally, they were outraged and immediately sought to have that matter rectified.

I have been given to understand that the minister, who set up an advisory panel to deal with this discretionary quota allocation matter, used that body to overturn his original decision so that shipments which were on the water between 15 May and 1 July would not attract the punitive tariff and would be considered to have been shipped within quota. That was an important change, but it is just a measure of the incompetent way in which this minister has handled this matter and a further example of how he has lost touch with the needs of the industry in a way which, frankly, could well have prejudiced our trading arrangements in terms of those very important beef importers in the United States. It is a very important sector. In excess of 40 to 45 per cent of our beef exports go to the United States of America, so it is certainly a very important export market, and the way the minister has handled this is nothing short of atrocious.

Currently, the same Senate committee is considering the question of the appropriate means for managing the quota allocation next year and in the future, amongst other things. Last night this committee heard evidence from some very significant beef processing companies including the largest company, Australian Meatholdings. There was also evidence from the Cattle Council of Australia and a number of other producers. It is fair to say, without pre-empting the views of the committee, that a significant number of witnesses—and certainly some of the larger and, dare I say it, more influential members of the beef community, if I can put it that way—remain extremely critical of the quota management arrangements and are adamant that the arrangements need to change for next year.

I do not intend to canvass the options, because that is a matter properly before the committee and the committee will consider those arrangements when the evidence before it has properly been taken. But at last night's hearing I asked some questions of Mr Sutton from Agriculture, Fisheries and Forestry Australia, AFFA, with regard to the department's view on quota management for the future, given that the department has obviously been advising the minister about this issue for some time and has taken a fairly key role in the management of the quota until now. I asked Mr Sutton about one of the key issues for quota management—that is, which base year of trading history the department used, subject to the method they were using, of course, to determine the quota entitlement a particular exporter would have. I asked:

Is there a view within the department that the base year for the next year of quota management should be 2001?

This is an important issue. Mr Sutton replied:

We do not have a view. As you know, that is an issue for the panel—

that is, the independent panel that the minister set up—

and for the government to take a decision on report from the panel.

I asked again:

So the department does not have a view?

Mr Sutton replied:

We do not have a view that is relevant.

It seems to me that the department no longer have the confidence of the minister in terms of the advice that they may have given in relation to quota management. The minister appears, on Mr Sutton's advice, to have charged an independent panel with providing advice to government and not the department on this very important issue. I hope that the minister will also listen to the views of the Senate committee, and I am hopeful that on this occasion as well the committee will come to a common view as to the appropriate system to manage the quota in the future. We cannot have the chaos which has been caused by this minister on this issue arising again next year. The industry is too important.

Question agreed to.