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Tuesday, 13 September 1983
Page: 672


Mr TUCKEY(4.33) —The previous speaker, the honourable member for Herbert (Mr Lindsay), spent 15 minutes of his time giving us the history of the Export Inspection Service. I thought it could have been reduced by referring to Mr Justice Woodward when he said that the Service:

. . . has proved to be inefficient, costly, poorly managed, overstaffed and . . . in some respects corrupt.

This Government will increase charges for this service by up to 300 per cent and these have to be paid by a beleaguered primary industry. This is probably best evidenced by a statement recently released by the Cattle Council of Australia in which it said:

The beef industry, on its knees following several years of drought and depression and in the process of a major restructuring, has reacted angrily to the Federal Budget decision to treble meat inspection charges.

It is not difficult to ask who pays these fees. They are paid by the processing industry, the abattoirs. But, as we all know, finally the cost is paid by the producer because he is the last person in the chain. He, of course, will be the person who eventually sees his prices reduced. This is most clearly evidenced by Mr Maurice Binstead in that same Press release to which I have referred. In it he said:

. . . the decision would add $18 million a year to the industry's costs.

This is all done without any consultation or contribution or the right to oversee the charges by the people who must pay them. This is probably one of the more important factors relating to the Livestock Slaughter (Export Inspection Charge) Amendment Bill.

Much has been said about a single charge for inspection. Everybody assumes that a single charge would be cheaper. Within my electorate a local works abattoir provides meat for a very large chain of butcher shops in the Perth metropolitan area. It requires the services of 10 meat inspectors and therefore it could not be considered to be a small works, even by export standards. But because of the present laws in Western Australia, the service required by that local works is provided by the local authority, the Shire of Northam. Further, there is no subsidy to that shire. There is no financial assistance. It must extract from the abattoir 100 per cent of the inspection costs. Of course, the fees are set by government-in this case the State Government. Whereas this Government now needs $5.40 to achieve half of the cost of inspecting a beast, one head of cattle, in excess of 90 kilograms, the charge levied by the local authority at Tip Top Abattoirs Pty Ltd in my electorate is $2.80. That is not a comparison of $5.40 and $2.80. It is a comparison of $10.80 and $2.80. It does not matter whether one refers to sheep. The price that it costs the Commonwealth to inspect one sheep is now established at $1.08 and the cost that is paid to the Shire of Northam is 35c.

It is easy to say that export inspection requires additional work. It does. It requires the work of a veterinarian or veterinarians. There are also a few more inspection procedures. The total cost of inspections at the Tip Top Abattoirs in the Shire of Northam is $300,000 per annum. If we bump up that figure to $450, 000 per annum so that the abattoir could use veterinarians-surely it could do this for a total cost of $50,000 a year-plus $100,000 for additional inspection services, an added 50 per cent to the cost would only take the cost up to about $4.20, which is a far cry from $10.80. It is quite clear that the Government has brought to us first the wrong end of the argument. It has increased the charge but it has not improved the service.

It is interesting to know why such difficulties occur. Perhaps one of the reasons is the fact that when the Commonwealth at one stage had an involvement at Tip Top Abattoirs it found it necessary to employ 16 inspectors to do the work done currently by 10 inspectors for the local authority. I add that I know of no occasion where meat substitution or serious health problems have occurred at that abattoir. So we must look at why there is such a huge cost.

A few other factors come to mind. The Northam Shire has an interest in costs because it does not have a monopoly of the business. It is obliged to keep its fees within a reasonable maximum set by government. It is able to get its work force to the site from the Perth metropolitan area each day at a cost of $7,000 per annum. But when there was Commonwealth involvement this figure jumped to $45 ,000 per annum. These are the sorts of costs that this Government has accepted as fair and reasonable for the farming community to pay. It says: 'Pay first, cry later'. But it does not look at the problems first and resolve them. The responsibility, of course, does not stop with the producer. The poor old Australian taxpayer must pay the rest. This Government has made noises in that regard. It is time that it is prepared to accept some of the responsibility for this ridiculously high cost.

The Public Service is by no means, in my opinion, the type of structure to employ meat inspectors. Everybody knows that the slaughter industry is both seasonal and cyclical. How Public Service-type awards and employment conditions can be fitted into such an industry, I will never know. It has been clearly noted by the Royal Commission and the Australian Meat Industry and others that even the working hours and public holidays do not match. These are the issues that should be addressed before the Government increases the burden on a beleaguered industry.

In looking at some of the costs involved it is interesting to note that in the 30 August submission of the Cattle Council of Australia to this Government it was pointed out that, since this new Export Inspection Service has been around, the staff of the Service in Canberra has jumped from 91 to 138. On the same page , in bringing our attention to action to date, the Council said:

However, little if any obvious progress has been made in physically implementing changes listed hereunder.

The Council draws our attention to five or six different changes.

We have decided on the centralised option and by no means is it the cheapest. I choose to refer to it as the 'dearest cheap option'. That is clearly shown in the figures I have already given. This is also the case in the wheat industry. I contacted the Australian Wheatgrowers Federation and some of the quotes I got included 'well, there was no consultation'; 'where does it stop?'; and 'it is a totally non-competitive environment'. Those I spoke to said that this was just another addition to the huge burden of transport charges being imposed by State governments at this time. The charges in the wheat industry have jumped from 9. 6c a tonne to 16.3c a tonne, which is supposed to recoup 50 per cent of the cost . Then we find, further, that the Government has shown a bit of foresight-it does not want this argument again-by lifting the total charge to 33c a tonne so that it can alter the figure when it is ready. Of course, that figure slightly exceeds 100 per cent of the charge. Are we to infer from that that the Government is prepared in the future to levy wheat growers 100 per cent of the charge? On present costs, it certainly has that ability within its grasp.

The cost of export inspection services has risen to $70.1m in 1983-84 from $31. 1m five years ago. That is an increase of over 100 per cent. I have looked at the problems of meat inspection services for quite a long period now because of my close involvement with the industry. In fact right back on 9 February 1981 I put a submission to the Lynch Review of Commonwealth Functions suggesting that it was time for the Federal Government not to have further involvement in this area but for it to get out of the area because in general terms it was not practical. I did not suggest just abandonment. I went before the Royal Commission into the Australian Meat Industry at a later date and suggested the bulk of the cost was in the basic inspection service and that this would be best handled by the abattoirs themselves. Recommendation 9.5 of the Woodward Royal Commission clearly supported my point of view. It stated:

. . . managements should be encouraged to take over responsibilities for work on the chain now performed by meat inspectors. The numbers of meat inspectors should be correspondingly reduced but, on average, their work should become more responsible and call for greater experience and higher personal qualities.

It is further interesting to note that when that report was handed to Price Waterhouse it came down with a major suggestion of the same nature. Quite clearly, that recommendation of mine carried great weight with people who can view the industry dispassionately, which I doubt this Government will ever be able to do considering the influence that the Meat Inspectors Association will have on its decisions. It, of course, being a union. All in all, this is an issue of cost for the people who can least afford to pay. As I have proved quite conclusively, it is a highly inflated charge for a service which has yet to be improved to any great extent. I know that the Minister for Primary Industry (Mr Kerin) has announced publicly that he is now going to talk to the industry and let it have a say in how things go. I have a nasty feeling that that is a sop to the industry. Its representatives will be called into the room and asked to have a meeting.

The only way in which there will be any improvement in costs in this industry is to ensure that the people directly concerned with it, namely, the abattoir operators, who are in competition with each other, have direct responsibility for the cost of employing the basic staff. Commonwealth supervision can be maintained in these circumstances. The Commonwealth should be prepared to supply free of charge a well paid man of high integrity who would act in a supervisory role only. The man's salary should match his abilities and his qualifications. That person, in my opinion, could ensure that the countries to which we export are well looked after and at the same time could reduce these heavy and ridiculous costs being imposed by this centralised operation which has no competition and no yardstick, although there is a yardstick that nobody wants to take any notice of. I thank the House and I conclude my remarks on that note.