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Thursday, 6 March 2003
Page: 12474


Mr CAUSLEY (11:31 AM) —The member for Kennedy's is a difficult act to follow. It is also difficult to stick to the bill when you follow the member for Kennedy, but he raises some interesting points. I am keen to speak on this bill. I have limited time because the minister has an urgent meeting, but he is not here yet—which gives me an opportunity to say a few things. Having been the minister for agriculture in New South Wales for a few years, I suppose I should. There is no doubt that I support the Dairy Industry Service Reform Bill 2003. I congratulate the industry on rationalising the levies and putting forward one single corporation which will deal with the marketing and the research in the dairy industry. They are probably falling into line with a lot of other rural industries that have done it before. It is very important, because there is federal government funding for research as long as those industries contribute as well. Obviously, the dairy industry will make sure that they can take full advantage of that.

Research and development is very important. No doubt many of our great rural industries have managed to stay at the forefront of marketing around the world because of the research that has been done and the fact that our products are competitive throughout the world markets. Research is very important to make sure that those markets are maintained and that we are at the cutting edge of technology not just in production but in the manufacturing of products. Research into some of the products that come from these agricultural areas is important. There is a lot of research going into many of our agricultural products and what was normally considered to be the product is no longer the product. In fact, when you break it into its constituent parts you can make very interesting pharmaceuticals and other things out of these products, which can get a higher price. Many of our agricultural industries desperately need that niche market, that higher value market, so that they can obtain a better income than they have at the present time.

The member for Kennedy is quite right: the dairy industry at the present time is doing it tough. I do not think anyone will deny that. In any deregulation there is always a time when many of the producers in that industry, unless they adjust, will find it very difficult to continue. I dare say only time will tell the full extent of the deregulation of the dairy industry. But there is no doubt that I do agree on one particular point that the member for Kennedy has raised, and that is the lack of power of the producer in the marketplace. I think it is a very serious situation at the present time because effectively there are only two buyers. You have two large supermarket chains, Woolworths and Coles, and it is really a take it or leave it situation: either you accept the price that they offer or you walk away.

The thing that worries me most at present is that if the manufacturers—there are several manufacturers in the industry—continue to miss out on these large contracts, sooner or later they will go under and you will have a lessening of competition in that particular field, which will be of no advantage to the producer and no advantage to the consumer that I can see. I have raised with the Prime Minister before today the need to look very closely at the Trade Practices Act. While there are some very strong clauses in the Trade Practices Act, these two powerful players in the field seem to be able to manipulate the process when it comes to the ACCC. I think that the power of that act needs to be strengthened so that the ACCC does have some ability to put pressure on these players. It seems to me that there is an argument for this, when producers come to me and say, `This is what we get and this is what you buy it for on the supermarket shelf.' There is a huge disparity there and you have to say to yourself, `Where is it?' This applies not just to milk but to many agricultural products. If you look at the beef industry and the lamb and mutton industry you can see these disparities that are very hard to explain. We need to look closely at that, because the industry should not be disadvantaged in that way. I know that the government has moved to try to allow collective bargaining. That is a step in the right direction. There is a need for some power in the marketplace for the producers to help them out in that area.

I want to comment on a couple of things the honourable member for Braddon raised. He was rather uncharitable about the minister on a couple of occasions—and that is unlike him. He said that the minister had `sat back and fiddled while the drought raged'. That is a little unfair because, as the member for Braddon would know, in these instances the states have to move before the Commonwealth can get involved in exceptional circumstances relief. I have had some involvement in this. In my own state of New South Wales—and I can only speak for that state—the state government has been very tardy in coming forward with the recommendations for exceptional circumstances, to the extent that the Commonwealth minister had to pre-empt it and say, `We will give an interim exceptional circumstance across the state until we can get some of these through.' I think that the minister has done all he possibly could in this drought situation. The Premier of New South Wales has been running around the state talking about drought—he has made some 50-odd announcements about drought—but he has not spent anything. The last figure I had was that that state has spent about $15 million on the drought. When I was the minister we spent a lot more than that on drought, I can assure you—something like $60 million in a drought of similar circumstances. The Commonwealth has put up something like $560 million for New South Wales alone. So I think it is a little uncharitable to accuse the minister of fiddling while the drought was raging across the country.

Mention was also made of the quota systems in the states. It needs to be put on record that one of the problems in New South Wales is the fact that the state government has refused to recognise quotas as property rights. That was a huge kick in the teeth for the dairy farmers, because that was their asset. The banks accepted it as collateral. Then tens of thousands—up to almost $100,000—of the value of their asset was undermined overnight. All of a sudden the banks were saying, `We don't know whether these people are viable because their asset has just been undermined so much.' It is absolutely disgraceful that the states run away from their responsibilities. They say that they are not governed by the Constitution, which says that you cannot take away a property right without due compensation; they hide and say, `No, we're an independent state,' and they refuse to accept that if something is traded in the marketplace it is obviously an asset. If a bank accepts it as collateral, it is obviously an asset. The New South Wales government just confiscated that, and that has caused a tremendous amount of trouble for the dairy farmers in New South Wales.

I know the minister is busy and needs to sum up, so I will not take any more of his time. I hope to have an opportunity to speak on some of these issues at a later date, because I think it is important that we put on the record some of the issues that I see as being important in this area.