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Wednesday, 29 April 1987
Page: 2166


Mr BEDDALL(12.32) —The Egg Industry Research (Hen Quota) Levy Bill contains arrangements for the collection of levies from producers. This levy is to be imposed under the Egg Industry Research Levy Bill 1987. The levy will be determined each year for a producer. The most important change with the collection process. This will mean that the levy is collected twice a year, in January and July of each financial year. This will improve the cash flow for each producer. Under the present system, collections are made every fortnight. As a result, there will be modest savings to the Commonwealth clerical costs.

I am pleased that the Minister for Primary Industry (Mr Kerin) is responding to concerns from rural areas about the cost of public service to producers. Any savings brought about by greater efficiency will be welcomed by the producers. The levy will be based on the number of quota hens which a person is licensed to keep as at 1 July each year. The rate of the levy per hen is to be prescribed but is limited to a maximum of 10c per hen. The measure involves no new financial commitments for the Commonwealth or the industry. The Minister still has to negotiate provisions for the collections of this levy with the States and Territories. Because the costs of collection incurred by State egg boards will be lower than for the existing hen levy, I expect that the levy will have the support of the State governments.

The levy in this Bill is based on hen quotas because the levy is the cheapest way to collect producer contributions for egg research. All States and the Australian Capital Territory impose hen quotas and issue quota licences to producers. There is a ready mechanism to calculate producers' liability. There is also no scope for evasions of a hen quota levy through unreported hens or egg transactions. At the State level, the levy simplifies collection arrangements and reduces costs. It can be combined with collection of State charges for marketing or administration costs of State boards. From the producers' viewpoint, the hen quota levy avoids the need for investigation or inspection mechanism to check producers' books, records or operations.

The need to have books opened for inspectors is one of the points of contention for any small business operator. Poultry producers are one of the important rural small business people. For those reasons, I believe that a levy on hen quotas is vastly superior to a levy on egg production. A levy on egg production means a higher cost for producers as inspection and investigation staff are needed to verify producer returns. Not all production passes through State egg board control on marketing channels. There is scope for producers to avoid or evade payment because there is an incentive to seek to sell outside normal marketing avenues.

If there is one lesson from Australian history in recent years, it is that all Australians are tired of paying taxes for other people. Ordinary Australian wage and salary earners who are honestly meeting their tax obligations have for years watched while others have walked around the tax system. Just as the taxpayers have grown tired of subsidising the friends of the rich, so too, egg producers do not want to see a levy on egg production because of the scope it would allow for tax avoidance.

There are arguments in favour of deregulation of markets from groups like the National Farmers Federation. The Farmers Federation always suggests this will achieve greater efficiency for wage and salary earners and for manufacturing industry. I have not seen what the attitude of the NFF is regarding hen quotas. However, in keeping with all the policies of the NFF and the New Right, my guess is that the Federation favours the stopping of hen quotas. This Government has shown a willingness to deregulate markets and industries when it is in the public interest to do so. Egg production control through hen quotas is exercised by State governments. Given the New Right stance of the Queensland Premier, I would be interested to see what his policy is on hen quotas now that he is running for Federal politics. So far in his run, he has abandoned every economic line he has had in Queensland. He would need to tell the egg producers what his policies will be in this regard.

It is open to any State to abandon the hen quota system if it chooses to. If the Queensland Premier truly believes in free enterprise, I have no doubt that Queensland will be the first State to abandon it. We are always told that the Premier is a man of his word, that he always does what he says he will do. I challenge him to face the egg producers after he gives them a decent dose of this type of free enterprise.

The likelihood of any State abandoning the quota system would have a varied impact throughout Australia. Abandonment of the levy in the Australian Capital Territory would not cause much of an impact in New South Wales because the production volume would not be sufficient to force New South Wales into a major change. In Western Australia, transport costs may negate any incentive to market product in eastern States. According to media reports, Tasmania was at one stage recently thinking of seceding. According to the Budget Papers, Tasmania receives a freight subsidy. I would hope that if Tasmania decides to secede, the Commonwealth will no longer pay the subsidy. In that case, Tasmania would not be in a competitive enough position to threaten seriously the eastern seaboard States. My guess is that if the hen quotas were removed in other eastern States, it is likely that other States would also remove them to prevent increased production flooding into their States.

The state of the poultry industry for the future is relatively optimistic. The production of poultry meat is expected to rise because of rapid improvements in technical efficiency in both production and marketing. The money raised from this levy will go into research. This research is already showing results in the industry. Poultry production is projected to rise to a peak in about 1991. Profitability should be maintained because of lower feed costs and increased hen productivity, although lower feed costs are unfortunately a result of the depressed world wheat market.

Total egg production is expected to increase in 1986-87 to take advantage of a rise in export demand. Production is forecast to rise by about 3 per cent to around 183 million dozen. In recent years, State boards have had to take measures to reduce surplus production. This has included cutting hen quotas, imposing conditions of licence, acting against illicit producers and varying wholesale prices. To meet the expected increase in export demand, boards may have to vary these restrictions.

Total domestic consumption of commercially produced eggs is expected to increase by 1 million dozen in 1986-87 to 172.5 million. Exports are expected to increase from 7 million dozen in 1985-86 to 9 million dozen in 1986-87. Most of this increase is expected to be in the form of egg product for a recently negotiated sale to Japan. Further increases in exports of Australian eggs seem possible because of the current favourable exchange rate. A floating exchange rate is a deliberate instrument of government economic policy. It reverses the policies of the previous Government which robbed farmers of millions of dollars in export earnings.

One of the fundamental aspects of the Bill is that it will keep the costs to the producers to an absolute minimum. I am pleased to note that many of the pro-farmer policies of this Government have been directed towards reducing the costs for farmers. Many taxes and charges to farmers have been reduced by the Government. The decision to eliminate tariffs on grain harvesters saved farmers $4m; the elimination of tariffs on cultivation machinery saved farmers $17m; and the diesel fuel excise has been fully rebated to farmers at a cost to the taxpayer of $260m. A 2 per cent revenue duty on agricultural chemicals has been removed and the other tariffs on agricultural chemicals have been halved at a saving to farmers of between $5m and $12m.

The net effect of keeping these levies to a minimum means that farm cost inflation will again be lower than under the previous Government when the National Party held the Primary Industry portfolio. The annual rate of farm cost inflation of 7.6 per cent is well below the 11 per cent inherited from the previous Government. Farm cost inflation is well below the overall inflation rate as measured by the consumer price index.

The leaked former coalition document on government expenditure is an horrendous document for farmers. The Queensland Premier's flat rate of tax will cost farmers about $300m dollars a year. The Liberal Party decision will mean that farmers will pay more than $83m a year for fertilisers. The decisions to sell off Telecom Australia will mean that all rural subscribers will have to pay more for their heavily subsidised telephone services. All policies of the previous coalition, which are probably being renegotiated now, and which were supported by the factions in the National Party, contrast strongly with the attitude of the pro-farmer Hawke Government. In this legislation the levy will not add any cost to the farmers. The efficiency in the collection will mean that clerical costs will be reduced.

The Minister for Primary Industry, as a former poultry farmer, has done a marvellous job for this industry. As a Minister, he can hold his head up high. By contrast the National Party certainly has nothing to crow about when it comes to its poultry policies in rural Australia. I commend the Bills to the House.