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Thursday, 6 March 2003
Page: 12466


Mr SECKER (10:51 AM) —In rising to speak on the Dairy Industry Service Reform Bill 2003 and the Primary Industries (Excise) Levies Amendment (Dairy) Bill 2003 I note that it was quite nice for us on this side to hear the member for McMillan's effusive praise for the federal Minister for Agriculture, Fisheries and Forestry, Warren Truss. He noted at one stage that he did not always agree with the minister, but in this case he had worked very closely with him. It may or may not surprise the member for McMillan that we on this side do not always agree with our ministers either. But the fact is that the minister has handled this issue very well.

Just before coming into the chamber I met with representatives of the peak body of the Australian dairy industry to go through the nuts and bolts of how they are going to set up this new corporation. For example, they will have nine members on the board, three retiring every year. We also put to them that at some stage we would like them to be looking at voluntary levies rather than the compulsory levies that they have. It was very interesting to speak with them. Ninety per cent of South Australia's dairy industry is actually in my electorate of Barker. I have always taken a pretty keen interest in the dairy industry; in fact, I grew up milking a few cows. Things have changed a lot in the dairy industry. When I was growing up my parents used to milk four cows and do a whole lot of other things. They had a nice little sideline with four cows—making a bit of butter and scalded cream and selling off the milk and the cream. As there were eight kids in the family, we needed a fair bit of milk anyway.

The dairy industry has changed, and there is no doubt that there is no place in the world these days for small dairies. Thirty years ago we had dairies of 30 or 40 cows. They no longer exist. Basically, if you do not have 100 cows you will not exist in dairy farming. In fact, very few dairies are under 200 these days. The changes in the dairy industry have seen some huge dairies with up to 2,000 cows. They have the efficiencies of scales of economy and because of their work force they are not always milking cows every day. They often have one weekend off in two. That makes it much better for family life. So we have seen some pretty big changes in the dairy industry.

I noted that the member for McMillan was almost accusing the government of letting chances slip through our fingers. I have to say that the dairy industry has not been letting things slip through its fingers. The industry has had the help of the federal government through export development grants and the dairy restructure program. As I said to the representatives whom I spoke with before I came into the chamber, no other industry in Australia's history has received a restructure package as big and as generous as what we had with the dairy restructuring program, which was something like $1.8 billion. That is a lot of money in anyone's terms. Many great things happened as a result of that and it certainly gave a lot of dairy farmers the opportunity to expand their own set-up or make their milking stuff a lot more modern—bring in computers, increase herd numbers and become more professional.

It also helped add-on industries. I know, for example, at Jervois, just below Murray Bridge in my electorate, I was able to help in obtaining a grant of $660,000 for the whey-processing plant. As many people would know, whey has basically been a by-product that was thrown away. They used to feed it to pigs many years ago, until they decided that was not a good idea for health reasons. They have been able to build a plant that will employ hundreds of people and produce exports worth millions of dollars each year. It is a $30 million development, and the help of $660,000 from DRAP has been an enormous help. I know they were very pleased about the involvement of the federal government in that.

In the end, I do not believe that, as a government, we should be telling the dairy industry what to do or holding their hands all the way along. They have to stand on their own two feet. We do help them where we can, but this idea that we have to be actively involved at every step of every development and business deal is nonsense. It shows the big difference between the way some of the members opposite think and the way we think. We believe that the industry should be looking after themselves—that we help where we can, but do not hold their hands all the way.

I rise today to join the debate on the Dairy Industry Service Reform Bill 2003 and the Primary Industries (Excise) Levies Amendment (Dairy) Bill 2003, because, as I said, my electorate of Barker is home to quite a few dairy farmers. In fact, dairy farmers in the lower Murray region of my electorate—which I will talk about a little later, because of some of the problems they are facing there—are responsible for producing 25 per cent of South Australia's milk and provide some of the highest quality cheese-producing milk. I know the member for Braddon has some very important industries of a similar kind on King Island in his electorate. The south-east of my electorate is also home to some of Australia's top quality dairy farmers and very large dairy farms.

These two regions in my electorate certainly have a huge impact on South Australia's economy. All in all, 90 per cent of South Australia's milk is produced in the electorate of Barker. Therefore I think it is understandable that I take a pretty close interest in the issues which impact on the dairy industry. Of course, another reason is my own small personal involvement while I was growing up—hand milking cows. I think I could still squeeze a bit of milk out as well as anyone else in this chamber.


Mr Sidebottom —So I have heard.


Mr SECKER —That is right. The Dairy Industry Service Reform Bill 2003 seeks to reform the Australian Dairy Corporation, or the ADC, and the Dairy Research and Development Corporation, which I shall refer to as DRDC, and establish one peak body—that is, Dairy Australia Ltd. Dairy Australia Ltd will be responsible for the delivery of research and development promotion services for the dairy industry, as well as for the administration of the Dairy Structural Adjustment Fund. The company, through the conversion processes, will assume all the liabilities and assets of the current Australian Dairy Corporation and will have the assets—including staff I might add, which is very important in this whole changeover—and the liabilities of the DRDC transferred to it.

The Primary Industries (Excise) Levies Amendment (Dairy) Bill 2003 seeks to establish one single levy—the dairy service levy—to replace the three existing levies. We are getting rid of three levies and bringing in one. The three existing levies—the dairy promotion levy, the dairy research levy and the dairy corporation levy—which are currently being paid in the industry will all be brought into one sole levy. The company will, in keeping with its legislation, maintain a register of all members and levy payers—we are talking about something like 18,000 dairy farmers—and will ensure that a periodic poll of all dairy levy payers is undertaken to determine the rate of the levy to be recommended to the Minister for Agriculture, Fisheries and Forestry and, of course, ultimately the parliament of Australia. I went through a lot of those issues with the representatives before I came into the chamber. The company will receive levy funds, and it will remain accountable for the funds to both levy payers and the parliament.

What I have just presented to this chamber is an overview of what both pieces of legislation seek to achieve. This is pretty good news for the whole dairy industry—particularly for the dairy industry in my electorate of Barker, but certainly throughout the whole country. It is a very appropriate time for me to be speaking on this bill, because the dairy industry in my electorate of Barker—in the lower Murray in the north and parts of Fleurieu Peninsula, and in the upper, but mostly lower, south-east and south—is going through pretty tough times at the moment. So it is pleasing to see that this legislation introduced by my coalition colleague the Hon. Warren Truss, the minister, seeks to provide this industry with some stability in these troubled times.

Dairy farmers in these regions are facing some very serious sustainability project problems and—I have to say this—are having trouble in getting the South Australian Labor government to provide adequate support to help them through this rough patch. The dairy farmers in my electorate cannot win. In South Australia, we have a Labor government that thinks that real South Australia begins at the outskirts of the CBD and stops at the Adelaide Hills. From the exceptional circumstances application debacle to assisting dairy farmers in South Australia, these mostly urban based politicians simply have no-one to stand for, and they simply do not seem to have any concern or respect for what should be a very strong, rural based industry. It is not only a huge employer in regional South Australia, but it is also a big contributor to the South Australian economy. In fact, we even had the Premier launch the 20-year dairy plan in South Australia. It was a visionary document, but I doubt whether he knew or understood what he was doing and what his government is doing now.

For example, the Lower Murray flat dairy farmers are worse off. The former state Liberal government identified that approximately $40 million from the state government was needed for a restructuring and rehabilitation scheme to make the industry sustainable. The scheme was designed to assist in reducing the run-off of cow manure, chemicals and fertilisers into the river, thereby improving the environment in the Murray River, which I am sure we all want to see. It was also about improving the efficiency of the dairy industry with such things as laser levelling for their irrigation. Despite the fact that this is essential to maintaining both the environment and the dairy industry in this region, the state Labor government, in its urban wisdom, decided to cut the allocation of funds to this project by $10 million and only offer $30 million.

The dairy farmers in the region accept that they need to change their ways and do things better for environmental reasons and for efficiency reasons in their own industry—they had agreed to meet new water use efficiency and environmental targets. They are willing to do what it takes to get the industry and the environment working together but they definitely need help, and they should get help. It is a wish of the general community to improve the environment, so it is only fair that they be asked to contribute quite soundly to it. There has been a policy—certainly in my state—with the rehabilitation areas all along the Murray River that the funding is 40 per cent federal, 40 per cent state and 20 per cent by the farmers. That has been the generally accepted model. But, because of the cost to change the way things are done and the cost to improve the environment, the Labor government has now, in its wisdom, proceeded to further cut the funding for this project from $30 million to $18 million, with only $12 million actually being made available for work on the ground and $6 million worth of bureaucracy and red tape in the departments. This is turning cost shifting into an absolute art form. We are not seeing the work on the ground and the dairy farmers there will actually be asked to contribute between 50 per cent and 70 per cent of the total cost—and they simply will not be able to afford it.

We are talking about a $100 million rural industry which employs nearly 2,000 rural South Australians, and they are offering just $12 million to rectify this situation. In doing so, they are forcing dairy farmers to pick up more than half of the projected cost of the scheme, forcing them to pay approximately $8,000 per hectare with very little return. The farmers were probably willing to pay $2,000 a hectare for virtually no return because they wanted to see a sustainable industry in the long term, but the idea that they can somehow afford $8,000 per hectare is just so far over the top—and they are not getting any benefit from it. These are the same farmers who have suffered through the drought and have had to pay higher feed costs and operational costs because of the drought, and now the Premier of South Australia, Mike Rann, wants them to pay $8,000 a hectare as well and get virtually no return. This move will force a large number of dairy farmers out of the industry on the lower Murray irrigation flats, and that will leave many unemployed and a large hole in South Australia's economy. This whole shemozzle—what they are trying to force through—is putting at serious risk the milk processing plants at Murray Bridge, the cheese factory and the new multimillion dollar whey-processing plant at Jervois that I spoke about earlier.

Unfortunately, these people are not getting any support from their local member, the illustrious Peter Lewis MP, whom I have spoken about before in this House, who hopped into bed with the Labor government after the last state election in exchange for the speakership—not a bad job if you can get it. In fact it has been rumoured, and even quoted in the local newspaper, that he called these farmers `whingers who should get out of the industry if they could not hack it'. He has now decided he had better go into damage control about that and is now denying he actually said it, but I assure you that the reporters I have dealt with in the local paper there have never made up stories like that. He also said that there would be a definite funding model of 40 per cent federal, 40 per cent state and 20 per cent farming, only to be told by the relevant minister that that is not the case at all. So he not only calls the local dairy farmers whingers but also does not even know what is going on with the funding model. So much for a great local member!

Instead, these farmers have been trying to get some satisfaction by holding public rallies and getting federal politicians involved to try to make the state Labor government see the error of its ways. I will certainly be out there trying to resolve this issue. Yesterday I had a meeting with Environment Australia to try to work out whether anything can be done to help these two regions, and before I came in here, as I said, I had a meeting with dairy representatives on this very bill.

I am sorry to have spent so long giving background information, but I feel very strongly about this issue. It makes me mad that a bunch of city based so-called leaders can make decisions on issues on which they have absolutely no understanding—issues which affect the livelihoods of hundreds of farmers and countless more workers. It certainly makes me mad and it makes the industry mad. That is why I am happy to be here supporting the pieces of legislation that we are talking about today. This legislation is designed to provide stability and some simplicity to an industry which is suffering at the moment, but which I believe has enormous potential. Having only one peak body looking after this industry will make it easier to administer it and to monitor its progress. It will enable Dairy Australia Ltd to enter into a contract with the Commonwealth so that it can receive the levy payments and be responsible for the expenditure of these levy payments following the establishment of accountability and reporting requirements. This is good news for dairy farmers in my electorate—and we all know that they need some of that. With the stability that these pieces of legislation will provide, I hope that dairy farmers in the Barker electorate can band together and fight the state government's mind-set. It will not be easy, but it must be done. I commend this bill to the House. (Time expired)