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Wednesday, 20 June 2001
Page: 28039


Mr NAIRN (10:17 AM) —The clear difference between the Labor Party and the coalition in this, as in so many other things, is that the Labor Party is full of hot air and rhetoric while the coalition actually acts. The Dairy Produce Legislation Amendment (Supplementary Assistance) Bill 2001 is an example of that. It provides for additional assistance to be made available to Australian dairy farmers and dairy communities, as announced by the Minister for Agriculture, Fisheries and Forestry, Warren Truss, on 20 May this year.

This extra $140 million comes on top of the federal government's largest ever assistance package for rural Australia, that being the $1.78 billion Commonwealth dairy industry adjustment package that was announced last year to compensate for the removal of market milk pricing regulations by the Australian states last June. The original $1.78 billion package provides quarterly Dairy Structural Adjustment Program payments for eight years. It also provides a lump sum payment of up to $45,000 tax free to those dairy farmers wishing to leave agriculture and provides $45 million over three years under the Dairy Regional Assistance Program to assist dairy dependent communities affected by deregulation—the original package that I referred to.

The implementation of this package is well advanced. Virtually all people with an interest in a dairy farm on 28 September 1999 have applied to the Dairy Adjustment Authority for payments under DSAP, 99 per cent have been notified of their entitlements and 95 per cent are now receiving payments. The remaining applicants are essentially only those whose entitlement is under appeal or who are involved in legal action of one kind or another. Farmers in the Bega Valley and Eurobodalla in Eden-Monaro have used their payments for a variety of purposes, including to improve farm productivity and profitability in the new market environment. Some have reduced their farm debt, while others have invested in new farm capacity and other means of improving farm productivity. Some have chosen to leave the industry and are using their payments to re-establish.

Bega Valley dairy farmers have also benefited from the Dairy RAP, most notably through the $660,645 provided to the Bega Cheese Co-op to purchase, install and commission a new shredded cheese processing line. The South East Area Consultative Committee endorsed the project as a beneficial employment generating project for the local community, with the federal assistance helping Bega Cheese to maintain direct responsibility for the production of shredded cheese products. With the sales of shredded cheese currently very popular in export markets, and with significant growth of the market expected in the next few years, this means jobs in the Bega Valley. In fact, it was estimated that the shredded cheese line would generate 11 immediate full-time positions with a further 12 full-time positions after 12 months. Also, with the line being installed by local contractors, further employment opportunities were available to local businesses.

There is also a possibility of further help for the Bega Valley under Dairy RAP as the Bega Cheese Co-op is to undergo a massive expansion due to a restructuring of the business alliance between Bega Cheese, Bonlac Foods Ltd and the New Zealand Dairy Board. The restructuring, which received unanimous support from the Bega Cheese shareholders, will see a major injection of business from Bonlac and the New Zealand Dairy Board into Bega's cutting, packing and processing plant, as well as an injection of $35 million cash. Of that money, approximately $16 million will be invested in new plant and equipment and there will also be a special cash and share distribution to members, to the dairy farmers, of approximately $16 million.

The deal includes the national licensing of the Bega Cheese brand to a consumer company to be jointly owned by Bonlac and NZDB. NZDB will buy a 25 per cent share in Bonlac and bring together businesses in Australia worth more than $1 billion. Overall it gives Bega shareholders certainty and greater security for the future, with a real deal worth millions to Bega Cheese through royalties from national sales, the $35 million cash injection and greatly expanded output at the company's plant. Bonlac will close its Melbourne based cheese cutting and processing plant and transfer that production to Bega, thereby nearly trebling Bega's production. It will take 12 to 18 months to build up the production level. However, the new alliance will also mean around 200 new jobs, not just for Bega but for the whole Bega Valley Shire. This is the kind of project that fits perfectly within the intentions of Dairy RAP, those being to generate employment and encourage growth through support for new business investment and establishment of community infrastructure, and so I am working closely with the co-op and the minister for further funding to help with the expansion.

Overall, things have been looking pretty good for Bega Cheese lately. Only late last year the Minister for Trade announced that the export volume of Australian cheese had almost doubled over the last five years, with 222,000 tonnes exported in the last financial year. Figures compiled by the Australian Dairy Corporation revealed that our cheese exports in 1994-95 stood at just over 111,000 tonnes and since then they have also expanded in value from $355 million in 1994-95 to $752 million in 1999-2000. With Bega Cheese exporting around 60 per cent of production and leading the way in exporting to many new countries, they are now in a position to continue that lead at a higher level.

Despite the successful take-up of the $1.78 billion Commonwealth dairy industry adjustment package, the federal government is aware that many producers are still experiencing very difficult circumstances as farm gate price reductions following deregulation have been greater than many farmers expected. The Bega Valley dairy farmers could have been helped even further, but it is most disappointing that the New South Wales state Labor government failed to provide any compensation following dairy deregulation. And it is disappointing to note that the only state government to provide any compensation has been the former Liberal government in Western Australia. I actually find it amazing that the New South Wales state government made worthless the state based quota system that many farmers had depended on, and provided absolutely no compensation. While Bob Carr and his New South Wales Labor government have a clear responsibility to provide compensation for the lost value of quotas, it is becoming increasingly obvious that dairy farmers are just not on their agenda.

Because of our concern, the federal government in November 2000 asked the Australian Bureau of Agricultural and Resource Economics to investigate the impacts of deregulation to get to the facts of the adjustment situation facing dairy farmers and their communities. The ABARE report, released in January, confirmed that market milk price declines had been greater than the industry anticipated, particularly in the former quota states of New South Wales, Queensland and Western Australia. The report clearly indicated the magnitude of the challenge facing the dairy industry, particularly those operating in the former quota states where the proportion of market milk to manufacturing milk in the total production of the dairy enterprise was significantly greater.

So, as the state governments do not really seem to believe that they should take any responsibility for their actions, the federal government has again stepped in to provide practical assistance. The additional package includes $100 million in supplementary market milk payments to dairy farmers who were most heavily dependent on market milk production; $20 million for eligible farmers who, because of extraordinary circumstances, were excluded, or their entitlements were significantly lower than normal under the government's DSAP; and a $20 million expansion of Dairy RAP. This additional assistance was praised by the executive committee of the New South Wales Dairy Farmers Association and by local dairy farmers.

In contrast to the federal government's massive assistance package, let us ponder on the actions of the Australian Labor Party which have actually involved a lot of pondering and very little doing, if any at all. Labor's dairy statement, released in February this year, provided no substance or practical assistance. There was no policy at all. If Beazley were serious about helping Australian dairy farmers, he would have approached his Labor colleagues in Queensland and New South Wales and insisted that they compensate farmers for the loss of value of their milk quotas. Let me make it clear: the states introduced milk quotas, the states administered the milk quotas and the states abolished the milk quotas. Farmers who had previously bought state milk quotas in order to sell milk now have a worthless asset, and the Labor states, instead of giving them any compensation, simply turned their backs on them.

Labor wants to take $20 million out of Dairy RAP to finance so-called training programs, but the government is already providing assistance for training and reskilling. It is done under FarmBis, and so far around 6,000 dairy farmers have been helped under this program. Due to the success of FarmBis, in last year's budget the government committed a further $167.5 million to continue it for another four years. The question that begs to be answered is: is Labor going to abolish FarmBis, or is it going to deny dairy farmers access to it? Labor's plan for Dairy RAP has no logic and farmers would actually be worse off as they would have fewer funds for new job creating prospects, such as the additional assistance that I am working on for the Bega Cheese expansion—as I said before, an expansion that looks like creating over 200 jobs.

Labor's other plan is to give extra resources to the Dairy Adjustment Authority—an exercise which would be wasteful and bureaucratic. The DAA was given extra resources last year and will begin downsizing when its task nears completion. And, finally, Labor's proposed changes to the dairy structural adjustment payments were rejected by the industry itself when the scheme was designed. The aforementioned ideas are the only ones that Labor have come up with through all their talkfests. All they plan to do is set up committees and fiddle at the edges of the existing program.

It is also pretty obvious that those in the know—the dairy farmers themselves—have very little faith in Labor. At a typical Labor talkfest in the Bega Valley in late April this year, a grand total of nine people showed up—that is, in the Bega Valley nine people showed up for this great talkfest to solve all the problems. If that is any indication of what happened elsewhere, what we heard from the member for Corio earlier was nonsense and had absolutely no substance, because it means that they have listened to probably about 0.5 per cent of dairy farmers, if lucky, and have assumed that that refers to 100 per cent. From a dairying community of the size and stature of the Bega Valley, with around 150 dairy farms and with big names like Bega, Tilba, Bodalla and Kameruka, and including also the Eurobodalla, Labor could only pull an audience of nine. The most hypocritical thing about their Bega Valley talkfest was the timing. Dairy deregulation occurred in June 2000, and there were eight years of talking about deregulation before it actually happened, and yet it took until the end of April 2001 for Labor to show any concern. During the deregulation debate, it was very easy for the Labor candidate to fire press releases out of his Canberra base, but to tackle the situation face to face required far too much work.

In light of requests from the industry and after the ABARE report revelations, the federal government has moved promptly to address the concerns of vulnerable dairy farmers and their communities by providing this additional $140 million of assistance. Payments under the Supplementary Dairy Assistance Scheme will be largely based on DSAP entitlements and information already largely available to the DAA. Notification of the additional market milk entitlements will be made shortly after passage of this bill, and payments can be made promptly on completion of acceptance processes. It is therefore vital that the Labor Party does not delay the passage of this bill. Its support of the passage of this legislation is necessary to ensure that payments can be made to those most vulnerable dairy farmers and dairy dependent communities as soon as possible. I urge all members to support this bill.