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Wednesday, 29 April 1987
Page: 2160

Mr HUNT(11.56) —The Egg Industry Research (Hen Quota) Levy Bill 1987 and the Egg Industry Research (Hen Quota) Levy Collection Bill 1987 are important to the egg industry and consumers generally. This Parliament is dealing with legislation governing millions of dollars. The Bills apply new rules to industry research valued at some $6m over the past two decades. Honourable members will be surprised and dismayed to learn that the Government did not advise the peak industry body representing egg producers that these Bills had come into this place. The Australian Council of Egg Producers did not know the Bills were in this House until my office contacted it. It seems incredible that the coalition, not the Government, is breaking the news to industry bodies that are affected by legislation. I do not know who is to blame for it, but I hope that the office of the Minister for Primary Industry (Mr Kerin), or at least the Department, will make sure that in future there is proper contact with the industries concerned.

I must say that I am tired of watching legislation come into this place, often with major implications for farmers, only to find that the industry leaders are being kept in the dark. I must say that that has not happened to the wool industry. Co-operation between the Minister, his Department and the industry itself has been very good. I have heard only good reports about the negotiations taking place there. I think that someone in the system needs to make sure that that applies in every case. I have been asked to raise this matter on numerous occasions on behalf of industry organisations and I have done so. Therefore, I have suggested in a positive manner that the Minister consult more adequately with the people he serves, or at least his Department should make sure that that is done.

By late last year I felt that the attitude was changing and that farmers were getting more of a hearing. But now it seems that we are going back to the bad old days of treating farmers as what is sometimes called `a mushroom club'. The snubbing last December by the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) of the National Farmers Federation President, Mr Ian McLachlan, when he tried to put a positive, constructive economic submission to the Government to try to bring down interest rates and inflation was a very bad example for the Prime Minister to set his ministerial colleagues and the departments generally. I think that it is a very unfortunate state of affairs and I hope that bridges are built, because those people whom I and others represent in this place are concerned about the state of the economy in so many of our rural areas. The Government cannot go on ignoring the voice of representatives of those groups which are so badly afflicted at present.

In the case of these Bills I point out that some talks were held earlier last year between Government and producer representatives to iron out details of commendable research initiatives. Yet when it came to parliamentary action, the Minister, his office and the Department could not find the time to make that telephone call. With millions of dollars riding on these Bills, the Government's action is quite unacceptable. The farm industries should be kept informed of progress with such Bills, but they are not getting the consideration they deserve. The National Party-indeed, the Opposition-does not oppose this legislation and offers it prompt passage through both chambers. But the Bills raise a number of questions, and I would seek the Minister's response before debate is concluded.

The chief purpose of the legislation is to continue the hen research levy beyond its sunset date of 30 June this year. Honourable members will recall that two years ago the old Commonwealth hen levy was divided into two components-a levy for equalising losses among producers from the disposal of surplus eggs; and a research levy. The equalisation mechanism is no longer required in view of industry rationalisation and is being phased out, having been cut from $1.95 per bird in 1984-85 to $1.30 in 1985-86. The research levy is set at a maximum of 10c per hen per annum, and I anticipate a recommendation shortly from the Australian Council of Egg Producers to set the initial levy at 3.25c. Payments will be made every six months instead of fortnightly, reducing Federal administration costs, which is an admirable idea, and sharply cutting State egg board collection costs. Special arrangements are made for the Northern and Australian Capital Territories, which do not have egg boards, to administer a quota system. By gazettal notice producers will be deemed holders of a quota licence for the purpose of striking the levy.

One matter of concern is planned `fall-back' legislation expected later this session. These Bills suspend the levy across Australia should one State withdraw. The foreshadowed legislation would provide an alternative levy on chickens hatched for egg production, but this would be left unproclaimed until activation was needed. Producers are increasingly concerned over the degree of control they would retain over their levies, given the recent consolidation of the processing sector into two main companies.

In view of the uncertainty among producers I wish to place the Minister on notice that, unless he negotiates this matter with all sectors of the industry to a satisfactory conclusion, he cannot expect ready passage of such Bills. He would be aware that in March 1986 the ACEP rejected the standby proposals but subsequently rescinded this objection on the basis that the standby Bills remain unproclaimed unless specific instruction is received from that Council. In view of the $250,000 levy contribution each year, this would seem a reasonable stipulation. No such `safety valve' has yet been guaranteed. Again, it is up to the Minister to promptly settle the issue. I seek leave to table a message from the Council to the Department of Primary Industry, dated 20 May 1986, outlining the producers' request.

Leave granted.

Mr HUNT —I would like to read from that message to Mr G. E. Pettit, Assistant Secretary, Department of Primary Industry, Canberra, from David Dean, Executive Officer, Australian Council of Egg Producers. It reads:

Re your telex Y85/143 concerning egg industry research funding arrangements.

I wish to advise that I have requested State organisations to reconsider their objection to standby arrangements regarding collection of the levy. On the basis that it be written into the Act that the unproclaimed legislation could only be enacted upon the recommendation from this Council, together with the rate of levy, then this Council rescinds its objection to the standby legislation.

Could you please advise that the Act will incorporate this request and if so could you please forward relevant copies of the Act when they become available.

I turn to a further matter of growing importance-use of the Torrens Island quarantine station as a transit point for imported breeding stock. A healthy industry will require access not only to domestic breeds and genetic material but also to a range of foreign bloodlines. It is anticipated that such imports will be exclusively in shell form, for hatching in Australia. There is uncertainty over government plans for such imports, especially costings. Fees must be set in a way which does not shut Australian producers out of the import market, leaving them dependent on a relatively few domestic breed suppliers.

My view is that domestic stock is of excellent quality and well worthy of support from our producers-but I strongly defend their right to choose the source of their breeds and to import genetic material that they think is necessary to improve the overall efficiency of their operation. As any livestock farmers are aware, bloodlines are critical in building up quality farm stock. Fears over costings are no doubt generated by increases announced last September for sheep and goats held on Torrens Island. Fees rose in one hit from $75 to $311 per head, with further rises anticipated this year. Whilst these charges were introduced on the basis of cost recovery, I find it difficult to justify such sharp rises over a brief period.

I hope some questions are asked in the various Estimates committees about why these costs are rising so quickly. Are there any ways and means for the Government or the Department to improve the efficiency of these operations? There is no justification for increases of that magnitude, from $75 to $311 a head in one year, with further anticipated rises in this year. I hope that when the opportunity arises in the Senate Estimates committees members of those committees will really go into this in a big way. I will certainly be asking some committee members to pursue this issue and get information as to why these increases are taking place at this rate.

Any action by the Government with regard to egg industry breed stocks must not be so severe that they prevent fair and reasonable competition between domestic and overseas suppliers. The producers must have `ground floor' access to talks over the future Torrens Island services, and I call upon the Minister to ensure their interests are fairly heard.

The Minister deserves a word of commendation over the spin-off effects of introducing the permit system for stockfeed wheat. This has reduced the cost of wheat feed to egg producers by as much as 20 per cent, and feed is of course a major production input. The price has dropped further in light of the disastrous world market price structure, affecting seriously our export oriented wheat growers and grain growers, although I am sure all in our community would wish a speedy recovery to a more profitable market price before we lose thousands of efficient producers from the wheat and cereal industries which are so necessary.

I hope that the delegation that will be leaving Australia some time in May will be able to get the Australian message across once again to the United States congressmen that any extension of the export enhancement program-any extension of its duration or any extension of the funds available to it-will have only a very serious effect upon the trading relationships between our countries and the economic capacity of this country to make a worthwhile contribution towards the stability and the security of the Pacific Basin. Having said that, I know there has been a spin-off benefit to the poultry industry and certainly to the pig meat industry and so on, but it has been at a very high price to the Australian wheat growers.

By easing feed costs we have seen a marginal improvement in profitability, despite the fact that retail prices have on average remained virtually static over the past four years. The egg industry makes an important primary contribution to the national economy, with annual production now running at 178 million eggs valued at just under $200m.

Export opportunities are interesting. In recent years they have been marked by sharp fluctuations in the small but significant export volumes. Previously exports have been no more than a way of disposing of surplus production, usually at a net loss, and for this reason the levels of domestic production have contracted over recent years.

There are growing opportunities to develop an export trade, highlighted by the recent negotiation of a viable contract with Japan. Regrettably Australia's trade in coal and iron ore has been contracting as a result of several factors, not the least of which is the present industrial rationalism taking place throughout Japan. There is no doubt that industrial rationalisation will continue. Very substantial sections of the heavy manufacturing industry will be closed down or phased out. If Australia wants to maintain its present trading benefits with Japan, clearly we will have to do more to try to sell Japan other products, including agricultural and poultry products.

It is important that we now take full advantage of the demand for increased purchases of Australian farm products. I believe the opportunity is there if the quality is right, if our promotion is good, and if our contacts with the Japanese authorities are maintained at a high level. Although the principal commodity we discussed when I was there was beef, I have no doubt that, now we have achieved this viable export contract for eggs, more can follow if the right approach is adopted. These exports concentrate on manufactured egg product and therefore are not restricted by the shelf life of shell egg.

Whilst there are positive signs on the horizon for a continued increasingly profitable egg industry, it should be borne in mind that these producers, along with most other farmers, rely heavily on capital investment. Almost 500 Australian poultry farms, many of them in my electorate, have a flock size of more than 5,000 birds, while some 86 farms each carry more than 20,000 birds. This requires heavy capital investment and it involves high operating costs. Once again, we find the chief bugbears are excessive inflation and sustained high interest rates. These two factors-the twin devils-of interest rates and inflation are bearing heavily on the egg industry, the poultry industry and, indeed, the farm sector generally.

I reiterate what I have said before in this House, namely, that the Hawke Government cannot expect any credit for measures such as these research Bills if it continues to slug farmers where it hurts most, and that is on the costs lines of the balance sheet. With inflation four to five times the average of other Western nations, the prime interest rate now 10 per cent or more higher than the United States prime rate, and with wage rises running 60 per cent faster than the rest of the field, any export advantage gained from the crash of the Australian dollar will be quickly eroded. Our nation as a whole will continue its disastrous economic slide and accumulate immense debt with no real prospect of improving our balance of trade position.

Unless our export industries are able to operate in a competitive environment and unless farmers and others in those industries are able to obtain loans from their lending institutions at competitive interest rates and to operate in a market-place in which our inflation rates are no greater than those of our competitors, we will see our export industries languish and the Australian living standard slump. One can quarantine the effects of Australia's economic situation away from the wage earning sector for a limited period, but no government and no economic device yet known is able to quarantine the whole community from the economic statistics that are bugging Australia at present. These matters must be redressed if the egg industry and other industries are to survive in a competitive and profitable manner. It is up to the Minister for Primary Industry to ensure that egg producers are fully briefed on Government actions affecting their industry. To do otherwise would be an unacceptable slight on these producers. The National Party-and the Opposition-endorses these research Bills and offers them uninterrupted passage through both chambers of Parliament.