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Thursday, 19 September 2002
Page: 6782


Mr BALDWIN (10:10 AM) —The chicken and egg industries are extremely important to people in the Hunter, and nowhere more so than in the area of Paterson. I am particularly pleased to be able to speak on the Egg Industry Service Provision Bill 2002 because it will implement changes for the egg industry that will help it develop into the future. According to the Australian Bureau of Statistics figures for the year ending 30 June 2000, there are over 500 egg producing establishments in Australia. This legislation will give the industry more control over its future and producers will have more of a say in the running of their industry. It will also try to assist the industry to put eggs back on to menus and back into Australian kitchens after a steady decline in egg consumption over the years.

Over the past decade, egg consumption has fallen in Australia from 146 per person each year to 137 per person. This is much lower than in other developed nations, such as New Zealand where 208 eggs per person each year are eaten. The reasons for this decline are varied and include Newcastle disease outbreaks, changes to layer hen housing to meet animal welfare requirements, and changes to state marketing arrangements in the 1980s. Through this steady decline, the industry has been limited in its ability to adopt a whole of industry approach to issues and has been unable to communicate to consumers the health benefits of eggs as well as the benefits to industry from research and development. Over the last 10 years there has been a negative consumer perception about eggs and the message about their nutritional value has not been getting through. We have also seen a major shift in lifestyle and the industry has been fighting to retain eggs as a preferred food category. As a result of declining consumption, some producers have left the industry and others have been left wondering about their viability. Granted, there are some large producers who have the capacity and the capital to develop marketing initiatives, but for the industry as a whole this has not been the case. The industry tried to implement voluntary levies to help with the marketing of the industry but this ultimately failed. There is also the issue that the cost of promoting the industry and promoting egg consumption should be shared by all.

In 2001 the industry came to government to discuss these problems, with a proposal to establish a new promotional levy. Money from this levy would be used to fund generic promotions and to establish a single industry owned company to manage those promotions and industry research and development. The proposal also involved a new statutory promotional levy of 32.5c on each laying chick purchased from a hatchery. This is equivalent to 1.7c per dozen eggs sold. It is estimated that in the first year the levy will raise around $3.1 million. The industry proposal spreads the cost of generic promotion across the industry according to the size of each operation. So large operators will pay a larger levy than smaller producers.

The Egg Industry Service Provision Bill 2002 will create an egg industry company called the Australian Egg Corporation Ltd. All egg producers who pay the statutory promotional levy will be eligible to become registered members of the company. This means that they will have a direct input into how their levies are spent; they will have voting rights and rights in relation to the appointment of board members; they will have input into the company's policy development and planning activities; and there will be increased accountability for the company board. These reforms will mean that the industry will be more responsive to challenges in the future and they will allow greater flexibility. The company will also improve communications within the industry, with consumers and with government. In New Zealand this type of generic promotion has turned around an industry that was failing. In the five years since they set a statutory levy at around the same rate as the Australian proposal, consumption has increased by about 12 eggs per year to an average of 208 eggs per person per year. These levies have also been used successfully in the United States and Canada. They work because they do not promote just one producer; they promote the entire industry. As a result, the levy has no impact on competition because everyone is set to benefit. If passed, the levy rate and the performance of the reforms will be reviewed in two years time to determine whether the levy should remain in place, be adjusted or be removed.

Accountability plays a large part in these reforms. Under the Egg Industry Service Provision (Transitional and Consequential Provisions) Bill 2002 a contract to establish a company can be entered into only if the minister is satisfied that accountability measures are in place, including in the company's constitution. These measures include comprehensive planning and reporting requirements, with copies of the plans and reports to be made available to the Minister for Agriculture, Fisheries and Forestry; regular performance reviews to assess the company's efficiency and effectiveness in meeting planned priorities; regular meetings between the chair of the industry company and the minister for agriculture to discuss industry issues and ensure that the government's priorities for research and development are being addressed; a mix of producer and specialist skills based directors on the board of the company, including specialists in corporate governance; and a requirement that the company remain separate from any industry agripolitical activities, which should be conducted by the industry's peak body.

These measures are designed so that the levies are used for their intended purposes of promoting the industry. They will also ensure the efficient running of companies. These reforms will bring about a new era for the egg industry, one that will hopefully put eggs back in favour with consumers. It is a bold move for the industry itself to take this initiative and to take responsibility for its success, and it is pleasing to see such a partnership developing between government and producers. As I have said, this bill stands to serve the members of the industry in my electorate well. I commend the bill to the House.