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Thursday, 6 March 2003
Page: 12476


Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) (11:40 PM) —I thank members who have contributed to this debate for their wide-ranging comments in relation to dairy industry issues and—in the case of certain other members—other extraneous matter. Nonetheless I can understand that when legislation associated with the dairy industry is before the House it provokes considerable interest. It is an important Australian industry that contributes enormously to our national economy and our exports. I noticed that the comments of one honourable member suggested that amongst our industries it has perhaps the greatest potential for boosting exports. Other industries would contest that claim. Nonetheless it is certainly a recognition of the fact that the dairy industry has contributed and will continue to contribute significantly to our nation.

It is also an industry that is going through a period of monumental change, and that is certainly having an enormous impact on individual farmers. Especially now, with the impact of lower world prices and drought, the costs and the returns are putting enormous pressure on many individual operators and the dairy industry. The government is certainly conscious of that, and our drought assistance programs are providing enormous assistance to dairy farmers across the nation and helping them through these difficult times. But, ultimately, the only solution is widespread rain and a return to more normal seasonal conditions. Hopefully world prices, which are moving up a little now, will also continue to move up. Those are the best long-term solutions for the industry.

But it has been a tough time. There has been substantial change within the industry. Naturally, that has caused substantial hardship and difficulty for those farmers who are making major decisions about their future in the industry. That is the reason the Dairy Structural Adjustment Program was put in place. Communities were also affected, and that is why the Dairy Regional Adjustment Program was put in place. The last round of projects under the Dairy Regional Adjustment Program should be announced within the next few weeks. I think all of those projects have made a real difference to communities in helping to adjust to the changes in relation to dairy deregulation.

I notice that there have been all sorts of attempts to make claims that Dairy RAP funding has favoured particular electorates. It would not be surprising if it favoured dairy electorates, because that is what it was intended to do. It was intended to provide funding for those areas that have been most adversely affected by dairy deregulation. Therefore, those areas that have a significant dairy industry that has been particularly adversely affected by deregulation are likely to have received larger amounts of money. That will be especially true in New South Wales, Queensland and Western Australia—which were the states that were most affected—and areas where there was a greater concentration on the domestic sector, because that is where a lot of the price impacts have been greatest.

There has been frequent reference to my electorate as one that has received funding under Dairy RAP. That is perhaps not surprising, because three out of the five shires in Australia where the impact of dairy deregulation was identified as greatest are in my electorate. The other two are in the electorate of the honourable member for Paterson. I might add that considerable funding was devoted to the electorate of Paterson when it was held by the other side, because it was recognised as a priority area. I am also told that in my electorate 56 per cent of Dairy RAP applications received have been successful. That is precisely the national average. In fact, there have been a large number of applications from the region. Some of them have been very worthwhile projects and have, therefore, been funded.

I will also make a couple of comments about drought funding because a number of members have raised it. I have to say that I am amazed that any member opposite could come into the House and seek to defend the performance of the states in relation to drought relief during the current situation. Indeed, I am sure many of them must be embarrassed about the performance of state governments. How could a Victorian member come in here and seek to justify or defend the performance of the Victorian government in slashing drought aid as soon as the election was over? The Victorian government, to its credit, had put in place the best scheme of any of the states. Yet, immediately after the election—in an appalling exercise in cynicism—the measures were axed for those who were worst affected.

In states such as New South Wales and Queensland there have been plenty of announcements but very little real money. Indeed, the overwhelming load associated with helping farmers through this drought is, for the first time, being borne by the Commonwealth. Well over $900 million is already committed, and that number is rising. That compares with less than $50 million—if you add up the total promises of all the states—in measures to provide assistance to farmers through the drought.

A number of issues have been raised in relation to this legislation. I note the comments from the opposition that they have not yet got access to the proposed constitution of the new company and the memorandum of understanding. I acknowledge that. I do not have a copy of it either; it is in preparation. As the shadow minister indicated in his remarks, that is the way in which these sorts of measures have progressed in the past—the legislation is progressing through the House while the constitution and MOU are being developed, and that has pretty much been standard procedure in relation to these matters.

It is our intention, again in common with previous legislation of this nature, to have the draft of those available to the Senate at the time that they are dealing with their inquiry into this legislation. To the best of my knowledge, there are no significant issues but it is reasonable that the House should have access to those sorts of matters in the context of dealing with the legislation, and it is certainly our intention that that would happen. Issues are being resolved with the industry on a day-by-day basis, and I am not aware of there being any matters that are likely to cause substantial controversy in relation to those issues. The House is entitled to a look at those documents, and it is certainly our intention to deliver in that regard.

I noticed some of the comments of the honourable member for Kennedy, who has left the chamber. It was the usual exercise of voodoo economics and distortions of history to support assumptions and outcomes that simply have no credibility whatsoever. Many of the statements he made are simply inaccurate and could not be accommodated with any degree of stretching of a fair-minded imagination. But we have become a bit used to that, and so I will not waste the time of the House in giving a line-by-line critique of his comments, particularly those on economic policy.

This bill, as members have mentioned, is to deliver a conversion of the Australian Dairy Corporation into a company under the Corporations Act and for all the assets and liabilities of the Dairy Research and Development Corporation to be transferred to this new company. The new company, to be known as Dairy Australia Ltd, will, in effect, merge the R&D and marketing arms of the dairy industry. Dairy Australia is to be a Corporations Act company, limited by guarantee with membership comprising voting members drawn from dairy levy payers, group A members and non-voting members made up of the peak dairy farmer and processing bodies, who are referred to as group B members. Dairy Australia will be responsible for undertaking functions on behalf of the dairy industry similar to those currently undertaken by the ADC and DRDC. Levy moneys collected by the Commonwealth will flow to the new company. Matching Commonwealth R&D contributions for eligible R&D expenditure will also be directed to Dairy Australia. The intention of this privatisation process is to hand responsibility for these services to the new company, which will be accountable to its members.

While these levy payments and matching contributions continue, it is appropriate for the government to monitor the expenditure of these moneys. Therefore, the bill provides for a number of mechanisms by which the government will maintain a relationship with the company, including the establishment of a statutory funding agreement between the Commonwealth and the company. The bill provides for the current promotion levy, research levy and corporations levy currently directed to the ADC and the DRDC to be rolled into one levy known as the dairy services levy. The separate Primary Industries (Excise) Levies Amendment (Dairy) Bill 2003 imposes this new dairy services levy.

The advantage of combining the old levies into one is that the industry services body will have greater flexibility in determining its expenditure breakdown but will remain accountable for this expenditure through the statutory funding arrangement. Combining these levies will also facilitate the conduct of future periodic polls of levy payers to determine the rate of the dairy levy. Therefore, farmers will be able to determine for themselves the amount of levy that they believe should be expended on services to the industry and will in broad terms make judgments about the direction of that levy.

Dairy Australia will also administer the Dairy Structural Adjustment Fund, currently administered by the ADC. For this reason, the dairy adjustment levy, which applies to all retail sales of milk, will also flow to the industry services body but will be quarantined from other levy amounts. This is because the DAL is to continue to be used exclusively for making payments into the DSAF for the purposes of funding the dairy industry adjustment package and related matters.

Importantly, the DSAF is to be administered by the industry services body in the form of a trust. The bill makes no substantial change to the operation of the DSAF from its current administration by the ADC other than that it is to be kept and treated as a trust.

The Dairy Industry Service Reform Bill 2003 is the result of a dairy industry and government process aimed at providing the industry with greater ownership and control over dairy industry service arrangements. I would encourage all dairy farmers to examine the benefits of the new arrangements for them and consider becoming active members of Dairy Australia. It will be important for growers to exercise their rights of control over their new company to ensure that it remains close to their needs and aspirations. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that the bill be reported to the House without amendment.