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Wednesday, 5 October 1983
Page: 1341


Mr McGAURAN(11.56) —As the honourable member for Darling Downs (Mr McVeigh) has pointed out, there is a serious question involved in the Dairy Industry Legislation Amendment Bill 1983 relating to the proposed section 24A. Of particular concern to me and to Victorian dairy farmers is the question of how any losses that might occur with PT Australia Indonesian Milk Industries Inc . are to be covered. As I understand it, this Bill provides for any such losses to be covered from the relevant export pools. Further, the Minister may direct the Australian Dairy Corporation to credit or debit, as the case may be, surpluses or deficits to the most appropriate production year pool or pools. The dairy industry is very strongly of the view that, if any losses should occur in regard to PT Indomilk, those losses will not simply be trading losses, but rather losses incurred in supporting the total investment of the enterprise. Under these circumstances the industry believes it would be totally inappropriate for the export pools to be used.

The Minister for Primary Industry (Mr Kerin) would no doubt be aware of the concern that his recent decisions to withhold payment from the butter and skim milk powder pools have caused among dairy farmers, especially in Gippsland, my electorate. He declined to authorise these payments last July, with the result that dairy companies have had their deferred payments to suppliers completely thrown up in the air. This situation of confusion is continuing. I hope the Minister will correct me if I am wrong, but I understand that he has still not authorised the payments from these pools, even though the recommendation that they be made has again been placed before him.

Victorian dairy farmers are quite naturally deeply concerned. They want to know what is going on and the Minister is not informing them. Now we have this legislation before the House. It is obviously pertinent to the Minister's withholding payment from the butter oil and skim milk powder pools-extremely pertinent. It seems to me that the Minister went ahead with this legislation without seeking prior advice from the industry. In a nutshell, he is stuck with the legislation on the table, knowing full well that the industry does not agree with it because it does not adequately cover the possible situation of a loss developing in the operations of PT Indomilk. The Minister has been told that the industry does not accept proposed section 24A. He has further been told that the industry will not accept a situation, which this legislation proposes, whereby any losses incurred by PT Indomilk, which would be overall investment losses, will be covered by the export pools.

I am aware of a number of varying views within the industry as to how best any such losses should be covered. One view, for instance, is that, should PTI default on payment to Asia Dairy Industries (Hong Kong) Ltd and therefore the ADC, ADI should be put into liquidation and all other shares in other partnerships should be liquidated prior to the Dairying Industry Stabilisation Fund being used. That is one view from within the dairy industry. Others may differ from that view, but everyone, at least in Victoria, seems to be unanimous in the view that the export pools should be touched only as an absolute last resort. There is nothing within this legislation which will ensure that that concern is properly protected. I am not trying to suggest whether the Stabilisation Fund should be used first, whether the assets of ADI should be used first, or what. I agree with the Opposition's foreshadowed amendment, which seeks to ensure, firstly, that the export pools are used as an absolute last resort and, secondly, that the Minister consults with the industry and examines all options available for paying out any such losses. This is the obvious course that the Government should have adopted in the first place. Together with my colleagues the honourable member for Darling Downs and the honourable member for Murray (Mr Lloyd), I am at an absolute loss to know why this Minister has not properly consulted with the dairy industry of Victoria as my colleagues and I have.

The Government came into office strong on its promise of consultation. Its action to date has been less promising. Regrettably, there has been virtually no demonstration of any worthwhile government consultation with industry organisations. This is a classic example to be added to the other examples that are well known to and deeply resented by the industry. All the dairy industry is saying to the Minister in effect is: 'We are aware of and concerned about the deteriorating financial situation of PT Indomilk. We seek your assurance that no action will be taken relating to product pools until full consultations have taken place and all other options full canvassed'. That is all the dairy industry, in its most reasonable manner, is putting to the Minister. I call on the Minister to give those assurances at the conclusion of this debate and, moreover, to accept the Opposition amendment, which enshrines them. Otherwise his assurances will not be backed up by legislation. It is not good enough for him to say: 'I will speak with the dairy industry'. He must amend proposed section 24A. Surely, that is not too much to ask.

The amendment that the Opposition has suggested will meet the requests of the industry. I therefore hope that the Minister will also see the merit of the amendment and accede to it without hesitation. If he refuses to accede to the amendment, let him place on public record his reasons for not acceding to it so that those within the dairy industry and the electorate of Gippsland will be able to judge for themselves this Minister's true commitment to consultation. My colleague the very distinguished honourable member for Darling Downs has raised specific concerns about PT Indomilk. I am pleased that they are also now on the public record for answer by the Minister.

I remind the Minister that it is incumbent upon him to provide the Parliament, the industry and the public with the answers to the specific concerns raised by the honourable member for Darling Downs. He must demonstrate that he is committed to correcting the PT Indomilk situation and not merely picking up the losses. As proposed section 24A stands, it is the easy option; it is putting the problem to one side. There has been nothing to date in either administrative or legislative form to show that this Minister and this Government are committed to correcting a most unhappy situation, a situation which is of increasing concern to the dairy industry and dairy farmers of Victoria. My colleagues have raised a number of points for the Minister to answer. We raise them on behalf of the dairy industry and we wait expectantly for the Minister to provide these answers . We realise that it is a difficult and complicated situation. We certainly do not attempt to make political gain. We seek only to correct an unhappy situation that ought not to be allowed to continue any longer.