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Thursday, 6 March 2003
Page: 12470


Mr KATTER (11:11 AM) —The Dairy Industry Service Reform Bill 2003 is setting up a body that will be responsible for marketing—but I do not know what that means because it has no marketing powers whatsoever. So I think that is just pollywaffle. The second aspect of the bill is research and development. A body is to be set up to monitor research and development. I have not gone into all the minute detail in the bill, but it seems that the government intends that growers themselves will control it. But when governments talk about `grower control', it usually means that (a) they are going to appoint their own flunkeys from the industry or (b) they will choose elected officials, and the elected officials always seem to be part of the government set-up. It is amazing how unreactive these groups are to their membership base. So I have some suspicions. An electoral college of the various people in the industry seems to me to be the direction in which we should be travelling.

Let me return to the issue of marketing. I spent 20 years of my life in the state house—for nearly half that time as a minister and for a little bit more than half of that time as a backbencher. During such a discussion in the state house in Queensland, the head of the department would be sitting here. In that situation the debate is very meaningful because a major decision maker, the head of the department, is present. If he has done the wrong thing then he must sit there and cop the pain. In this place, the head of the department is hiding out in an ivory tower down the road. He is not here at all. In the state house, the minister is also expected to be here so that he can face up to the destructive elements that he has unleashed on an industry such as this. So he will also have to cop the pain. It seems to me that, compared with the state house, what we are doing here is just making a noise in an empty vessel. The people who really matter are not here listening to this, and they will not listen to this. They will be able to hide because of the procedures in this place. So it is very relevant to this debate that no senior departmental officials are here, let alone the head of the department—and the minister is not here either.

Turning to the issue of milk, I had the privilege of listening to Professor Rod Jensen, from the University of Queensland, which has, I think, the biggest economics faculty of any university in Australia—certainly one of the most distinguished. He said that there were three great shames in Australian history: the way we treated the original inhabitants, the way we treated our soldiers when they came back from Vietnam, and the way we treated the dairy producers of Australia in the deregulation of their industry. I put a tick on each of those three items and added the Boer War and the fact that Prime Minister Curtin—the most over-hyped politician in Australian history and a national disgrace, in my opinion—would not allow a significant number of Jews into this country during the period of Hitler's reign in Europe. Six million Jews died in the gas chambers, and we had the generosity to allow 12,000 of them into this country. So I added those two shames to Professor Jensen's list, which I think is a fair assessment of the great shames this country has to bear.

To demonstrate what it is like in the dairy industry, after the deregulation I was with one of the Queensland state members, Dr John Kingston, and he said, `It had a very bad psychological effect upon me.' That was also true for me. The next morning I lay in bed staring at the ceiling until about 11 o'clock. I just could not bring myself to face the day. I thought that, because I had failed these people, it was my duty to go out and face the music. Unlike in this place, where we have the minister and all of the officials hiding out in coward's castle down the road, I felt it was my duty to go out and face the music because I had let these people down. So I simply got in my car and went. I had to introduce myself to the people; I didn't know who they were. I went from dairy farm to dairy farm on the Atherton Tableland, where I have 200 or 300 dairy farmers whom I am paid to look after and whom I had let down so badly.

I got to about 10 farms that day and at every one of those farms there was no employee at all. There were a husband and wife—the kids had grown up and left—and the husband and wife did the milking themselves; they did all of the work themselves. They had no employees. Most of them were in their late fifties. These people had got up at five o'clock in the morning to do their first milking and finished at half past seven at night. I know that for a fact because I arrived at two of the places after seven o'clock and had to wait until they had finished working. Of course, they have a break during the day.

These people are the hardest working people left in Australia today, and what did this government, this parliament, do to them? It took away their right to collectively bargain. We have damaged the right of the worker in this country to collectively bargain—very badly damaged it. I am ashamed to say that I have voted on a number of occasions for legislation which was a lot worse than I thought it would be.


Mr Sidebottom —Hear, hear!


Mr KATTER —I appreciate the `Hear, hear!' from my colleague, who is much respected and one of the better members of this place, Mr Sid Sidebottom. That was in the reign of Paul Keating. We are talking here about the right of the dairy farmers to collectively bargain and we are purportedly putting a body in place here that is going to have something to do with marketing, which is just garbage pollywaffle—there are no marketing powers in this legislation at all; they have all been removed. The Australian Financial Review said that Mr Keating and Mr Hawke's reign, which Mr Keating dominated, was highlighted by the fact that they had reduced wages in Australia. The Financial Review thought this was a marvellous thing and what a wonderful government it was because wages were dragged down during this period—because real wages fell. And they did fall significantly. Ironically enough, they have risen under the current government. There is no doubt in my mind as to why wages went down, because I saw it happening on the ground. The workers' right to collectively bargain was badly hamstrung. That was not a good thing and it is one of the many reasons why I am sitting where I am sitting in the parliament today.

Let me return to marketing in the dairy industry, since that is what this legislation is about. The shortcoming of this legislation is that there are no marketing powers, no right to collectively bargain in it. They should be in this legislation because, when the tariffs were taken off us in the sugar industry, the Australian Cane Growers' Council—the elected body representing cane farmers in this country—said that they would be prepared to give up the benefits of the tariff if, in return, they were not deregulated.

The review said that it was harmful to Australia if this industry is deregulated. So we gave up the tariffs. For the sugar that we sold on the Australian market—about 20 per cent of our sugar is sold on the Australian market—we lost $112 tariff protection, and all we have been getting is about $250 or $260 a tonne in the period since. You can see the enormous value of $112 a tonne when all you are left with on the sugar you are selling on the Australian market is $250 a tonne! With the abolition of the tariff, we lost almost a third of the income that we were getting off the Australian market. We did that because we had an agreement out of the government that we would not be reviewed until 2006—and what happened? In the year 2002, not three years later, a memorandum of understanding was signed by the Queensland government and the federal government which said that they would deregulate the industry—clauses 8 and 9. That is the way that not only the dairy producers but also other farmers have been treated in this country.

You may ask: who won and who lost? Clearly, the sugar farmers lost—and lost big. They have been on about $260 a tonne and they lost $112 a tonne through the tariff removal. So, clearly, they lost big. But who gained? Did the consumers gain? With the loss of this $112 a tonne, which is 11.2c a kilo, did the consumers gain? No, the price in the supermarkets—surprise, surprise—went up $100 a tonne. The people in the middle, who are principally Woolworths and Coles—they have about 80 per cent of the food market in Australia—picked up $212 a tonne. Since about 800,000 tonnes goes on the Australian market, they picked up $170 million in extra profits. Each and every year they pick up $170 million over the broken backs of the sugar farmers.

Let me turn to eggs. Deregulation occurred on different dates throughout Australia, but I think it is fair to say—most certainly this is the industry claim—that the price farmers were receiving for eggs pre-deregulation was an average of 117c for a dozen eggs. Today farmers receive around 105c for a dozen eggs. So the farmers have had their incomes reduced by 12c a dozen over a 10-year period—and that is not taking into account CPI increases, which have been massive. They have had their incomes reduced by 12c over that period, but did the consumers benefit? No. The retail price for a dozen eggs went from 180c to 293c. So, once again, the people in the middle picked up an extra 115c a dozen. Since there are 240 million dozen eggs sold in Australia, the people in the middle—again, mainly Woolworths and Coles—picked up an extra $300 million out of the deregulation of the egg industry.


Mr Sidebottom —Name them—go on.


Mr KATTER —I do not hesitate to name them. Let me now turn to the dairy industry. ABS catalogue 6403 tells me that the average price for milk pre-deregulation in Sydney was 115c a litre. It is now 154c a litre. So did deregulation help the consumers? Clearly not; there was an increase of almost 50 per cent to the consumers once the brakes were taken off by the government. In Brisbane, the Queensland price went from 116c to 159c. So we had an average price rise to the poor, long-suffering housewife of 41c a litre.

Honourable members interjecting


Mr KATTER —Let me come to the farmers. Obviously, the prices are all over the place, but let me give you the figures for North Queensland. These are the actual Dairy Farmers figures. They wrote a letter to their farmers and said, `You'll no longer be getting 59c. From now on you will be getting 41c.' That is a drop of nearly 20c—a drop of 30 per cent in their income for fresh milk. In southern New South Wales on the Murray border, the price went from 52c to 35c. In Taree, it went from 47c to 30c. In South Queensland, it went from 55c to 31c. So we had an average fall for the farmers of 19c a litre. One-third of their entire income was taken off them by the governments of New South Wales and Queensland and by this parliament—this parliament that very regrettably played a very sad and sorry part in the deregulation of that industry.

The honourable member for Page is with us, and he was one of the people who stridently fought against the deregulation and told this government to stay right out of it. He said that, if those two state governments were determined to destroy their dairy industry, let it be upon their heads. But he was not listened to. The government proceeded down the pathway of facilitating deregulation, though I exclude the Prime Minister from these remarks because I think that he was most certainly heading in the other direction. But the sad fact of the matter is that the parliament of Australia participated in the deregulation of this industry, and the net result has been that the farmers have lost a third of their income—19c—and the consumers are paying an extra 41c.

Without the government intervention that would be an extra 60c. All right, there was government intervention for 11c. Thank you, Mr Government. Thank you for the 11c. But there is no thank you for the fact that, once again, the people in the middle are enjoying an increase of near enough to 50c. Nearly 2,000 megalitres—two billion litres—of milk are sold in Australia. So, if the people in the middle took 19c off the farmers and 40c off the consumer—poor old Mrs Housewife—there is an extra 60c for Mr Woolworths and Mr Coles, who have 80 per cent of the food market in Australia. Even allowing for the 11c, they have made an extra profit of $923 million each and every year, over the broken backs of the farmers.

Do you think that this government or the governments of Queensland and New South Wales have learned their lesson? No way Jose. At this very moment, a memorandum of understanding has been signed by the Queensland government and the federal government to deregulate the sugar industry. Have they learned their lesson? No way Jose. `We only half wrecked the industry last time. We had better go back and complete the job. The fact that we have flagrantly broken the promises and undertakings given to that industry is neither here nor there. We do not care about promises or undertakings. We are the government. We can do what we like.'

This document is very nice, but it is all fairy floss, it is an absolute waste of time and it is a disgrace, because it contains no marketing powers whatsoever. These poor farmers are not allowed to come together collectively, yet two organisations, Woolworths and Coles, are able to take 80 per cent of the Australian food trade—and their share is increasing at the rate of 2.6 per cent each year. In another 10 years, they will have 104 per cent, or something of that nature, of the Australian food market, yet there is nothing that stops them from doing that. We have a duopoly on one side, met by 10,000 or 15,000 dairy farmers on the other. I want to sue the University of Queensland for what they did not teach me about economics, otherwise I would know how the sellers can avoid being utterly destroyed when you have two buyers on one side and 15,000 sellers on the other side. Of course, that is what has happened here. Within two seconds this duopoly manifested itself, and within two years we have this absolutely disgraceful condition.

The previous speaker, who comes from South Australia, got up and said that this industry will now be more efficient. He ran the usual economic rationalist line: we will have big producers producing. He said some farmers are milking 2,000 head of cows—and there are about three or four in that category in Australia. That is how he envisages the industry. He has a vision for his country of a dozen or so dairy producers making a very sizeable income, and having a whole stack of workers who work for nothing—because they have no right to collectively bargain. There were 15,000 proud little Australians who owned their own little blocks of land and did their own thing in their own time. They worked like dogs, but they were happy. They had their own businesses; they had their own farms. But they will be reduced to slave labourers working for very little, I can assure you, and working very hard for the very little that they will be getting.

The other aspect of this is that we have opened our doors to the foreigners. They can now bring their milk and dairy products into this country without being assailed in any way, shape or form. You have long life milk now; it can come in by boat. In an effort apparently to terrify us into deregulation, Mr Rowley told us all that we are all going to be destroyed by New Zealand. (Time expired)