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Thursday, 8 September 1983
Page: 606


Mr McVEIGH(5.50) —On behalf of the Opposition, I move:

That all words after 'That' be omitted with a view to substituting the following words:

'whilst not opposing the Bill, the House is of the opinion that:

(1) rural industries, which are struggling to emerge from the worst drought in history, are not at this time able to bear the burden of such massive increases in charges;

(2) industries should not be expected to contribute 50 per cent of the costs of Commonwealth inspection until the Export Inspection Service restructuring is completed and the service is as efficient and cost-effective as possible;

(3) there is inadequate industry participation in inspection procedures, and

(4) there has regrettably not been full consultation with industry on all aspects of development of the Export Inspection Service and inspection charges'.

These Bills yet again demonstrate this Government's total lack of understanding and sensitivity about the rural sector. Our agricultural industries are struggling to emerge from the worst drought in history. Economically speaking, they are still in a very critical situation. Yet this Government proposes in these pieces of legislation massive cost increases to the rural sector. Worst hit is the export meat industry where it is proposed that inspection charges for adult cattle be trebled from $1.80 to $5.40 per head. How the Government can expect the industry to bear such a massive cost impost is simply beyond comprehension.

It was the policy of the previous Government to move to 50 per cent cost recovery from industry for the provision of export inspection services. No one denies this and, indeed, we still maintain support for that policy. What we do not agree with is the Australian Labor Party Government's timing in moving for full 50 per cent cost recovery now. Quite apart from the fact that rural industries are simply not economically strong enough to bear such a burden at this time, largely because of the drought, it is also totally inequitable to expect industries to pay increased charges for an inspection service which is yet to be proved. It is a classic example of trying to put the cart before the horse.

The Minister for Primary Industry (Mr Kerin) the day after the Budget made a lengthy statement to the Parliament on the Commonwealth Export Inspection Service. That statement demonstrated that while considerable progress has been made there is still a great deal of work in the pipeline before the service can be regarded as fully-fledged, cost-effective and efficient. For example, the Minister said in his statement that new inspection procedures for products such as wheat and other grains, wool, dairy products, fish and fresh and processed fruit and vegetables would take full effect from July 1984-a full year away. Similarly, he told us that under the Export Control Act the total legislative framework for export inspection is being fundamentally rebuilt and that, over the next 12 months, comprehensive ministerial orders relating to inspection practices and controls will be issued for all commodities under the control of the inspection service.

The Opposition does not disagree with any of these developments. Indeed, as I stated last week, virtually all the work that is under way was instigated by the previous Government and the previous Minister for Primary Industry, the Hon. Peter Nixon. What I am highlighting is simply the fact that there is a lot of work still to be done before inspection procedures and controls, and the overall service, are fully operational in their intended form. One of the major reasons for industries, particularly meat and livestock industries, opposing the move towards full 50 per cent cost recovery at this stage is that the inspection service is not yet proved to be as cost-effective and efficient as possible. They claim, and with some justification, that the Government, by increasing the charges now, is calling on them to help prop up a continuing inefficient and costly organisation.

So, the first question the Government has not justifiably answered is: How can it impose on industry such massively increased charges when the nuts and bolts of the inspection service, procedures and ministerial orders are still being worked out? The Minister, on National Farm Report the day after the Budget, answered a question about the increased export inspection charges by saying:

Well the problem I had there to argue against this was that it was the policy of the previous Government.

That is a lame duck excuse, if ever I heard one. His Government, in forming its Budget and policy on these charges, concluded that there are good grounds for re -endorsement and implementation of the existing policy. Those are the very words of the Minister in his second reading speech. Yet the day after the Budget he tried to squirm away from the issue saying that he could not fight it because it was the policy of the previous Government. No wonder he gets rolled all the time , be it inside or outside Cabinet.

Another question that is left completely up in the air by the Government in these amendments is whether the cost recovery stops at 50 per cent. To farmers this is a most important issue. The Budget Papers and the supplementary paper provided by the Minister simply state the decision to increase the proportion of the export inspection charge to 50 per cent from 1 October 1983. But the Minister, in his statement to Parliament the day after the Budget, said that an examination of the basis for the Department's present charging arrangements for all inspection services is being undertaken by a firm of consultants. He further said:

There will be consultation with industry and other relevant bodies before the Government takes a final decision on any revised charging arrangement.

Exactly what is meant by 'a final decision on any revised charging arrangement'? The Minister has further clouded this area in his second reading speeches concerning charges for livestock and eggs. In those he said:

. . . In setting a recovery rate of 50 per cent from industry for the provision of export inspection for all primary produce commodities, the Government has been mindful of the fact that further efficiencies in the delivery of these services are possible of being achieved and therefore considers that industry should not be expected to pay the full cost of operating the current service.

Undeniably implicit in that statement, which I stress relates to export inspection for all primary produce commodities, is the fact that when the further efficiencies are achieved industries will be required to pay the full costs. This is a matter of major importance. The Minister has made this a totally clouded issue and I call on him, here and now, to clear it up once and for all. In so doing I point out to him that if it is the Government's intention that the cost recovery be 50 per cent and no more-I and all other members of the National Party and members of the Liberal Party who have as our policy 50 per cent as a maximum sincerely hope that this is the case for farmers under this Government, which hates farmers-I suggest that he has effectively misled the Parliament and he has undoubtedly misled industry by his ministerial statement of 24 August which stated:

There will be consultation with industry and other relevant bodies before the Government takes a final decision on any revised charging arrangement.

There was no consultation with industry prior to the announcement of the revised arrangements to achieve 50 per cent cost recovery, revised arrangements which I understand to be a final decision. Apart from the extraordinarily bad timing in trying to increase these charges on rural industries now; apart from the fact that the inspection service has not yet proved itself to be cost-effective and efficient; and apart from the confusion as to whether 50 per cent cost recovery is the policy, there are several other reasons why industries are opposed to these Bills. I will refer in further detail to the meat and livestock industries in a moment. But, firstly, let me outline some of the concerns that are common to all industries affected by these Bills.

A prime concern is that growers are being asked to pay 50 per cent of the costs but will have no say in ensuring that those services are being provided as economically and efficiently as possible. It seems to me to be a perfectly legitimate and very significant concern. The Minister is strong on assurances that things are proceeding in full consultation with industry. But wheat growers argue that they have no say in the way the inspection services are operated and that they should have far greater control over the management of the services. Egg producers tell me that the inspection procedure is not yet known and will not be implemented until 1984. They say that current inspection procedures are far from satisfactory and that the industry requires a full review of their cost effectiveness. Barley producers believe inspection services could be provided at a significantly lower cost by greater use of commercial organisations. Quite clearly, industries want far more input into the development of inspection services, and this is an area where I would hope the Government will place considerably more emphasis and consultation.

In this context, I was interested to see that the Minister, addressing the annual conference of the Cattlemen's Union of Australia in Caloundra this morning, announced that an interim inspection policy council is to be set up in connection with moves towards a single national inspection system. It is proposed that the interim council be made up of a chairman appointed by the Minister, a producer representative nominated by the National Farmers Federation , a processor representative, a consumers' representative, a fishing industry representative, a representative of the Australian Council of Trade Unions, a member with special qualifications, delegates from the New South Wales and South Australian governments, the Secretary of the Department of Primary Industry, and the Director of the Export Inspection Service. The question that arises about all this is: Why did the Minister make absolutely no mention about it at all in his ministerial statement just two weeks ago?

The answer, of course, is that two weeks ago the idea was not even in the Minister's head. He suddenly tumbled to the fact that he was going to get a tough time over the increased inspection charges from the Cattlemen's Union this morning in Caloundra. But everyone knows that Queenslanders would not give anyone a tough time. So he dreamed up this interim council so that he could promise them consultation and involvement. The Minister insulted the Parliament. He would not come here and tell us. He treated this Parliament with contempt. He has no respect for it. He just uses it for his own convenience. He has gone up to Queensland, to Caloundra, and has bypassed the Parliament and made a public statement, when he could have made it on two occasions to this Parliament, the supreme representative of the Australian people and industries. I know how it concerns you, Mr Deputy Speaker, that a Minister would bypass the national Parliament for cheap political gain.


Mr Fisher —Shame!


Mr McVEIGH —I can understand how National Party members are enraged, because they are men of quiet dignity and simple courtesy who would not do that sort of thing. I fully endorse greater industry involvement in the development of the national inspection service. But I totally reject the way that this Minister is plucking ideas out of the air willy-nilly, just so that he can look good in public, because it is a totally different story back here; when he has to convince his colleagues, and where the real show matters, he gets bowled for a duck.

The cattle and sheepmeat councils of Australia have placed a submission before the Government seeking a review of the inspection charge decision. Specifically, the two councils have requested: Firstly, that the Government review the proposed increases in export meat inspection charges with a view to increasing charges by no more than $1 per head of cattle slaughtered; secondly, that the current maximum rates of charge specified in the Live-stock Slaughter (Export Inspection Charge) Act 1979 be increased to a charge no greater than $3.60 per head of adult cattle slaughtered; thirdly, in view of the industry contribution to funding inspection, that far greater opportunity exists for industry to participate in an effective way in the development of broad policy within the Export Meat Inspection Service; and, fourthly, that the Government give a commitment to consult, in future, with the industry before deciding on increases in export inspection charges. I stress those last two requests because they prove that the Government, certainly up until this morning's announcement of this interim council, has fallen down badly on its oft-stated commitment to consultation. Even the Prime Minister (Mr Hawke) hardly ever uses the word ' consensus' any more.

The cattle and sheepmeat councils have yet to receive the benefit of an official response to their submission. The Government is not interested. It does not concern the Government. It is not treating this matter as one of urgency. It wants to get the increased charges in by 1 October. But if the Minister's answer to my question in Parliament yesterday is accurate, the response to their proposals is in the negative; and that is certainly consistent with the attitudes expressed by the leaders of those two organisations when they emerged from a meeting with the Minister on 30 August. The President of the Cattle Council, Mr Maurice Binstead, said in a statement that the Minister appeared ' powerless' to do anything about the decision or to represent the industry further. It obviously does not have much confidence in the Minister. The President of the Sheepmeat Council, Mr Ralph James, said that the meeting had been 'no joy'. On National Farm Report on 31 August, when Mr James was asked whether the Minister indicated that he was not able to persuade Cabinet about the true facts of the matter, he replied:

Yes, I think that came out. He believed that. His--

That is, the Minister's-

very words were 'Well, I lost'.

The Minister seems to know those words and to repeat them a lot.


Mr Lloyd —'They are all dills'.


Mr McVEIGH —I understand that he said that to some people, but he denied that in the Parliament. Mr Binstead was also reported in the Canberra Times on 31 August as saying that the Minister indicated that he would talk to the Prime Minister about it, but that the councils 'didn't receive a lot of hope'. In other words, the Minister could not perform any more where it really counted-in convincing his colleagues. Perhaps he would be good enough to tell the House-not people outside the House; come clean here-whether he even bothered to see the Prime Minister and whether there was any serious consideration of the cattle and sheepmeat council's submission.

Another point that needs to be made about this Minister's performance is that the National Farmers Federation, the Cattle Council of Australia and the Sheepmeat Council of Australia are all on record as saying that there is a total lack of understanding of rural issues in the Government's senior decision making body, the Cabinet. What a massive indictment that is of this Minister. Let me just point to some of the reasons why the meat industry is so much up in arms about these proposed increased charges. The increases will add more than $25m to industry costs in a full financial year.


Mr Lloyd —How much?


Mr McVEIGH —$25m.


Mr Lloyd —That is disgraceful.


Mr McVEIGH —That is disgraceful, as the honourable member for Murray says, and he knows where that $25m will come from. It will not come from the Government. It will not come from the workers in the industry. They will just strike and look for increased wages. It will come from the rural people. I do not believe that it is right for this Government, firstly, to reflect on farmers, but equally important to treat farmers' wives and children in the cavalier way in which they do.


Mr McGauran —That is right. The Government hits the families.


Mr McVEIGH —The Government does not like the wives and families of farmers. That disappoints me and I know that it upsets my colleagues in the National Party. In the coming 12 months, the Australian meat and livestock industry will be placed at a $40m disadvantage compared with competitors for international meat sales. Overseas countries pay for these meat inspections and other services themselves. For the common good, all people participate. But here the Government expects the Australian farmers to pick up a $40m disadvantage on world markets. The increased inspection charges amount to a massive hike of 200 per cent; in other words, they have been trebled. The cost to the sheepmeat industry will be $5m in the next 12 months. Total levy charges, including meat inspection fees, will have risen by a massive 600 per cent, from $1.56 to $10.98 a head on cattle slaughtered. Just think of the disastrous result on farmers' incomes of an increase from $1.56 per head to $10.98 per head on cattle slaughtered.


Mr O'Keefe —Think of Aberdeen and Gunnedah.


Mr McVEIGH —The honourable member for Paterson-a man with great experience in the cattle industry, a man who established an abattoir to create employment and to give a service-knows and is concerned about workers in the slaughterhouses at Aberdeen and other places in his electorate.


Mr O'Keefe —And Gunnedah.


Mr McVEIGH —Gunnedah. The honourable member is concerned for everyone-unlike the Government, which is not concerned about the farmers but is just looking for jobs for people. We are concerned about everyone. I just wish that the honourable member would tell the Minister for Primary Industry-


Mr Hunt —Where is John Kerin? He is not here.


Mr McVEIGH —The honourable member for Gwydir says that the Minister is not here. He is not even interested enough to stay here for the debate.


Mr Duffy —He has had to go for a television interview.


Mr McVEIGH —I know. The Minister is nervous. He had to go to the dry cleaners. If the Minister wants to find out anything about the meat industry, he should not go to the academics or to his Labor Party Caucus for information. Let him ask the honourable member for Paterson, who will take him through some abattoirs and explain the industry to him. He will take him out to see a few farmers, and he will just indicate to the Minister, this academic Minister who does not really know about things that matter-


Mr DEPUTY SPEAKER (Hon. Les Johnson) —Order! I ask the honourable member to return to the Bill.


Mr McVEIGH —All of this adds up to a massive penalty against a major export industry. The Government, in its wisdom, seems to be blissfully unaware that the beef industry is trying to recover not only from the drought but also from several years of severely depressed prices. The sheepmeat industry is currently experiencing severely depressed prices. Furthermore, as the Meat Exporter and Abattoir Consultative Group told the Minister on 31 August:

. . . the speed of its introduction (that is, the increased charges), coming without warning, has left many in the industry with forward commitments that now will have to bear the additional cost in a period when trading is extremely difficult. Industry has been presented with this fait accompli without any discussion on the matter by your Government, which has, above all else, contended that consultation is the basis of consensus.

In other words, the Government, again in its ignorant wisdom, has placed the industry in even greater difficulty than it was already facing. Mr Deputy Speaker, I know that you will understand this: An exporter of meat does not slaughter meat today and sell it tomorrow; he sells it months ahead. Maybe you can raise this matter in Caucus, because the Minister would not understand and would not care. The simple fact is that the producer, in his costing procedure, has allowed a cost for slaughtering of $1.56 per head, but due to the action of this Government and this Minister it has gone up to $10.98 per head. Mr Deputy Speaker, you can see that a charge like that, thrust upon somebody in this way- it is like a thief in the middle of the night-can lead to bankruptcy. I hope you can take that matter to Caucus and thereby bring some sense into this situation and help those people who are placed in that position.


Mr Hunt —John Brown ought to know better.


Mr McVEIGH —He is not here either. I have not seen him all week. The Government is trying to hike up inspection charges massively despite the fact that several central improvements to the efficiency of the inspection service have yet to be implemented and despite the fact that a single national meat inspection service is not yet established. This morning the Minister gave us a statement. He did not say anything about what is happening in Queensland. He talked about New South Wales and everywhere else. He goes around the country mouthing platitudes and repeating meaningless words about a national meat inspection service. Why not tell us what is happening in Queensland? He did not say anything about that matter in the legislation. This rise in inspection charges is despite the fact that the total cost of Commonwealth export inspection services has soared from $ 33.6m in 1977-78 to over $70m in 1983-84. I suggest that that $40m is better in the pockets of Australian primary producers than in the coffers of the socialists. The rise in charges is also despite the fact that, far from achieving a strong decentralised management system, the Export Meat Inspection Service staff numbers in Canberra have actually grown. The previous Minister wanted to set up a decentralised system. What happened under these socialists? The system has grown but all its staff have been placed in Canberra. We know how many cattle they kill here. So, by moving for 50 per cent cost recovery at this time, the Government is merely asking industry to pay a far greater contribution towards maintaining a costly and inefficient service. The Cattle and Sheepmeat Councils' submission states:

The current inspection system is still inefficient and costly-the major changes designed to improve its cost effectiveness are yet to be implemented.

The Minister, in his address to the Rural Press Club in Perth on 31 August, noted that the previous Government, in its May 1981 Review of Commonwealth Functions, set out a timetable to achieve 50 per cent cost recovery from all industries by July 1983. He said that had the previous Government stuck to its timetable, there would have been no products on which 50 per cent of export inspection charges were not already being recovered. What this Minister and this Government have not recognised is that the previous Government, while still adhering to the policy, accepted that it would be inequitable to seek to achieve 50 per cent recovery from industry under present circumstances. The Minister would love to be able in this House and around Australia to blame us for something. He must blame himself. Strangely, he does not like it.


Mr Duffy —The Minister is back, Tom.


Mr McVEIGH —I am glad he came back. We always know that when somebody cannot stand the heat in the kitchen he leaves. Indeed, the previous Minister last year agreed with the Cattle Council of Australia that it would be inappropriate to move to full 50 per cent recovery until the inspection service had fully got its act together.

This Government, in its usual way, has blundered into a decision without giving any consideration to its implications on industry, on employment, on export potential, on producer returns and on the national economy. It has chosen to try to slug industry with these increased charges at the worst possible time. There is no justifiable reason why the Government should move to full 50 per cent cost recovery in one hit. It could, and should, have announced its policy intentions and then staggered increases in line with the industry's capacity to pay, in line with improvements in the inspection services, and in full consultation with industries. It is the blundering, ill-considered and totally unfair way in which the Government has gone about this issue that the Opposition objects to so strongly. That is the reason for the amendment we have put forward.


Mr DEPUTY SPEAKER —Is the amendment seconded?


Mr Tuckey —I second the amendment and reserve my right to speak.