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Thursday, 24 May 2001
Page: 27083

Mr O'CONNOR (9:58 AM) —The purpose of the Dried Vine Fruits (Rate of Primary Industry (Customs) Charge) Validation Bill 2001 and the Dried Vine Fruits (Rate of Primary Industry (Excise) Levy) Validation Bill 2001 is to retrospectively validate regulations made on 29 August 2000 to reduce the rate of the levy and export charge on dried vine fruits from $10 to $7 per tonne as of 1 January 2000. This legislation has become necessary because the Attorney-General's Department has advised the government that the regulation may be invalid. Subsection 48(2) of the Acts Interpretation Act 1901 provides that a regulation will have no effect if it takes effect before the date of notification and has had an adverse impact on a person other than the Commonwealth.

In the second reading speech, the minister claimed that the Attorney-General's Department had originally advised that the regulation would be valid and that new legislation would be unnecessary. But of course that advice has subsequently changed and that is the reason for this legislation being debated at this time in this House. It is a legitimate question to ask what is really going on in the government at this point in time. We know the Howard government is disintegrating and in a terminal state of decay. Despite that situation there is really no reason why we should be debating this sort of legislation today. If the advice and scrutiny had been provided by the government in the first place I suspect the tidying up legislation that we now have before us here would not be necessary. This is not the first time that this tardy government has come into this House to backtrack and cover its tardiness.

Having said that, in the context of the House debate on these bills today I would like to make some comment on this industry, which has undergone significant changes in recent years. It is an industry of real importance to the economies of the Sunraysia and Riverland regions of Australia. The issues affecting the dried fruits industry are similar to those that affect all rural industries around Australia—both smaller and larger ones. Market access, the returns to growers, the way in which quality assessment and assurance procedures are instituted within the industry, the considerations of food safety and the structural relationships between industry bodies are all important issues facing the industry today.

I do not think the Australian community really has an appreciation of the complexities of the production environment for many rural producers, and I want to take the opportunity in this debate today to comment on some of the skills that producers require to produce a quality product and get it into a demanding domestic and international marketplace. The management of a vineyard requires a range of quite sophisticated skills that are also mirrored in the dried fruits value adding chain.

Producers in this industry grow a sensitive product in a variable climate that can play havoc with its production. For example, heavy rain storms in mid-February 1999 and in the year 2000 season caused significant damage to crops and losses in production. In the growing task in this industry, growing grapes with particular skin strength and quality is important in reducing damage in the storage, handling and processing stages of production. Producers also need considerable skill in the use of new mechanical and computer technologies. They need skill in the application of chemicals to the production process and in the control of contaminants. They need skills to understand grading systems and to ensure that quality products make it to ever demanding markets, and also in implementing best practice when it comes to the management of wastes and producing in a sustainable manner. There are other skills typically displayed by producers that I will not elucidate here, but I mention this whole skill issue because I do not believe the wider community really appreciates the sophisticated nature of rural production today. Dried fruit producers along with farmers in other industries are faced daily in their enterprises with challenges that require this impressive array of skills.

The consumer in a typical Australian household today demands a quality food product, free from contamination, that is reasonably priced and can be accommodated within limited and constrained household budgets. With the GST putting significant strain on household budgets and the government failing to adequately compensate households for its impact, the above issues are even more important today than they have been before. Indeed, the commercial environment faced by producers in this industry puts demands upon them to reap greater cost savings, to improve fruit quality, to better target the research effort, to develop new products and processes, to put a continuing emphasis on the skilling of producers and, of course, on the more rapid adoption of new technologies. So even in a relatively small industry such as this one in the rural sector these demands on producers are quite significant. I pay tribute today to those producers in this industry for their persistence and their commitment to the further development of their industry. It is really only through their direct efforts at self-improvement that the industry has been able to survive in an increasingly difficult commercial environment.

The dried fruits industry in Australia has quite an interesting history and has undergone significant adjustment over time as a result of many commercial pressures. The industry became established in Australia in the 1890s from vines that were grown in England and South Africa. The origins of the industry indeed can be traced back to Iran over 1,000 years ago. There were two areas in Australia, for climatic reasons, that became the focal point for plantings: the Sunraysia district around Mildura and the Riverland district in New South Wales. Output in this industry is dominated by dried sultanas but over the years we have seen important tonnages of raisins and currants produced as well.

As I have mentioned, the industry has undergone significant change in recent years as a result of direct commercial pressures, new innovations in plant varieties and handling systems as well as important changes to the industry's marketing environment. For example, in the 1990s producers switched their production to premium wine grape varieties as the market for Australian wine developed rapidly. Indeed, the growth of the wine industry has been quite spectacular. Australian wine exports, for example, edged into new records for both volumes and values in the year ended November 2000. The volume of wine exported in the last year grew 21 per cent over that of the previous year to reach 307 million litres, and the value grew 24 per cent to reach $1.46 billion. We have seen record amounts of red wines exported. With the development of this particular industry has come an increase in the supply of sultanas for wine production.With falling prices, the diversion of produce back to dried fruit production has accelerated slightly because of the oversupply in grape production which is occurring at the moment.

Production in the early 1990s stood at around 95,000 tonnes. With the developments in the wine industry, production declined to around 22,000 tonnes in 1999. However, this year we have seen a slight recovery in production. It is estimated to be around 30,000 to 35,000 tonnes at the present time.

Innovation in this industry has been an important source of increased returns to growers. It demonstrates in a very specific way the importance of research and development and innovation to the whole of agriculture, including this important regionally based industry. It is clear to me, as it is to producers in this industry, that the future of the whole rural sector will only be secured if we maintain our investment in research and development, in innovation and in skills training in this sector.

In a recent speech to the National Farmers Federation in Canberra, I made specific reference to the necessity to create a knowledge agriculture; that is, advanced production and marketing systems that have innovation and sustainability at their core. It is a cause of some disappointment to me when I ponder the five wasted years of coalition governments in this country and the missed opportunity to sustain our position at the front of a pack of developed nations that are gathering pace in their quest to create knowledge based industries and societies.

Government member interjecting

Mr O'CONNOR —I see the honourable member opposite me queries the statement that I have made, but it is a fact that investment in private research and development and in innovation, education and training has substantially declined since the coalition came to power.

Fran Bailey —That's nonsense.

Mr O'CONNOR —The honourable member for McEwen wants to dispute the statistics. She can ponder that on the beach in Queensland after the next election when we retire her from her seat. It is a statistical fact which you want to deny. We are quite happy on this side of the Main Committee to have you, in the language of the President of the Liberal Party, remain in a state of being out of touch with reality, because that is what you are on this issue. You deny the basic statistical facts of your own performance. That is why your Liberal president made the statement that he did. He said that you are members of a mean and tricky government—and I accept that—and, more importantly, he said that you are out of touch. Here the honourable members, disputing the points that I have made, demonstrate once again why the President of the Liberal Party, not the Labor Party, said you are out of touch.

The statistical fact is that you have squandered five years in office in failing to position this nation, along with other industrialised nations, at the forefront of the research and development effort as well as education and training and innovation. Most belatedly, having ripped $5 billion out of that particular task, you want to put back $3 billion and you want us to now congratulate you. You want us to congratulate you for taking out $5 billion, putting Australia behind the eight ball and then putting $3 billion back in to save your political skins. I find this quite an extraordinary position for you to adopt. I would prefer some of the breathtaking honesty the President of the Liberal Party gave you when he wrote that very accurate memo saying that you are out of touch. Your statements here today indicate simply how out of touch you are.

Even producers in this small industry—who live day to day with the task of producing a product in very difficult circumstances and getting it to the marketplace in a state of quality in order to extract a premium out of it—acknowledge the fact that their livelihoods depend on research, development and innovation. These are things that you have squandered over the past five years.

The benefits of R&D and the adoption of new technologies and innovative practices are not new to the dried fruits industry. For example, we have seen the development and planting of new grape varieties which have produced important gains for growers. New handling and storage systems have improved productivity in this industry. The adoption of trellis drying systems is progressively being adopted and local innovations, such as the Shaw designed swing arm trellis, have been introduced to reduce harvesting costs. The important point to note in this case is the role of local innovation in improving production systems within this industry. I have long held the view that Australian agriculture is a powerhouse of innovative practice. There is a very important role to be played by government, in cooperation with producers and industry, in unlocking that innovative potential to ensure that the benefits of home-grown innovation are realised in each individual industry within the rural sector.

We have also seen dramatic changes to the marketing structures and institutional type frameworks that have been embraced by the industry over the past 10 to 15 years. I am proud of the role of previous Labor governments and ministers such as Kerin and Crean in opening up the industry and producers to market signals more directly. Of course, the process of institutional reform has been continued by the government. That has been a process that we in opposition have not obstructed at all.

The legislation that we are debating here today—while not substantial in the sense of many other pieces of legislation that might be considered by the House; basically it is a technical bill—does give us all the opportunity to say a few words about some of the industries in Australian agriculture that do not perhaps get the credit that they deserve. This is an important regionally based industry. The people who grow in it are innovative. They are very skilful. They do produce in difficult climatic and marketing circumstances. It is important for the Australian community to appreciate the skills and effort that are put in by primary producers in these and other industries. The opposition will be supporting the passage of this legislation through this Committee and the House.