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Monday, 22 March 2004
Page: 26849

Mr CAMERON THOMPSON (8:28 PM) —It is a real pleasure to speak in the debate on the Dairy Produce Amendment Bill 2003. I have been struck by some of the comments made by the two previous speakers and I am interested in reflecting a little on their comments. In the last week or so, we have seen a concerted protest by one of the dairy organisations, the Australian Milk Producers Association. It has been around knocking on the doors of the offices of members of parliament, including most notably in Queensland, the door of the member for Fisher, who I think unfairly copped a real spray from that association.

I am very proud of the efforts that I and my colleagues on this side of the House have genuinely taken, to do the best we possibly can by the Australian dairy industry at a time when huge changes are occurring in the dairy industry. By way of background, people in the dairy industry in my electorate who are listening to this should reflect on some of the words that the member for Flinders just had to say, because he represents an electorate in Victoria which the dairy industry covers a lot of.

Quite a lot of nonsense is being put forward by some people in Queensland who are determined to say that the dairy industry is on its knees Australia wide and that there are great difficulties with it. I do not doubt that there are many traumas in the dairy industry and that people are facing some absolutely tough decisions, but the comments we heard from the member for Flinders show that there are dairy farmers not only in Victoria but also in many other parts of Australia—certainly in my home state—who are working flat out to build a better industry, who are as efficient as they can possibly be in their production, who are focused not only on building a better industry here in Australia but also on looking at export potential, and who represent the future of this industry. There are others who are working just as hard but, through no fault of their own, are facing great difficulty. Those are the people who really have tough decisions ahead of them. These are not easy decisions, and for many of them it can mean the end of a lifetime of work—not only their lifetime but also that of their family, their father and, in some cases, their father before that. These are family traditions that we are talking about here, so when we come to a situation where people are forced into a position of change, it is incredibly traumatic.

So on the one hand you have in the industry incredible dynamism, tremendous change and tremendous ability to manage and control change. On the other hand, you have people who are struggling just to keep their head above water. I raise these two cases because those people who have to make the tough decision about whether they are going to continue struggling on in an industry where they are only just surviving do, at the end of the day, have to make a living, and if they are not making a living then they do have to change. That has been the subject of a whole compensation scheme put together by this government, at the request of the industry, to manage the process of change and to provide funds whereby people, if they are being forced out of the industry, have options that are a heck of a lot broader than they would have otherwise been. If there were no compensation package, there would be no options. There would basically be a scorched earth outcome for those people.

But an effective compensation package was put together. Indeed, we have had two of those. The second one combined with the first meant not only that we focused in broad terms on the Australian industry but also that we then zeroed in and focused on some of the most affected people—some of those who really had their backs to the wall and who were facing difficult circumstances. We did both those things, and we did produce a system whereby they were assisted. Not only that, as the member for Forde pointed out, through the Dairy Regional Assistance Program we also sought to assist the communities that those dairy industries had been supporting. That program provided funds for other industries to be able to take up the slack—to fill the chasm left by the departure of dairy producers from a region.

I know that is incredibly galling, because at the weekend I had a very long heart-to-heart chat with a dairy producer from the north-eastern part of my electorate, who was telling me just how tough it has been for her, her husband and her two sons, who are trying to make their way through this industry. The fact is that they do have tough choices to make, and without the kind of assistance that the government has put together they would have no options at all. As it is, they have chosen to stick with dairying and to try and bolster their base by providing additional irrigation to support their farm. That has been, to some extent, a contribution, but of course it is yet to come to grips with the basic underlying problem. If you are, as she said they are today, making a daily income of only $5, that really is a very tough life that you are talking about. I hope that through their efforts they are able to fight their way through, but if they have to make that decision to get out then I would urge them to think clearly and to take those steps. So much weighs on you when you are talking about a change like that. This is land which could be suitable for horticulture or some other use, but when you do not have the equipment and your capital is run down it is very hard to make such a choice. But they are brave and are doing the best they can in difficult circumstances, and my heart really goes out to them.

However, the dairy industry in Australia is growing. It is growing strongly, and it will get bigger. The comments of the member for Flinders bear me out on that. One of the uncomfortable facts that are being faced by dairy producers in Queensland is that, in many respects, sometimes it is not possible for them to get down to the cost of production that allows them to be competitive on the same level of cost of production as other producers in Victoria. I am not talking about other producers in New Zealand or any other country. I am talking about producers here in Australia—in the state of Victoria in particular. If you are not able to be competitive at that cost of production then, as every small business operator in this country knows, you do not have a business. Unless you can compete effectively you do not have a business. That is the tough issue that we are talking about.

As I said, the member for Flinders pointed out the opportunities coming with the free trade agreement. Today in my electorate, Stephen Deady, the chief negotiator of the free trade agreement, supporting Australia's trade minister, Mark Vaile, spoke to a roomful of concerned farmers and other producers, as well as students from the local schools who are concerned about these issues, about the outcomes of the free trade agreement. A large part of the discussion was about agriculture and, within that, significantly about dairy.

The point was made by the member for Flinders that we are facing a situation where, from day one of the free trade agreement, we go to a much greater quantity of dairy products into the United States—nearly three times as much. In year one it is worth an additional $55 million to Australian dairy farmers and dairy processors—to the dairy industry as a whole. Today there is a very limited range of dairy products that Australia is able to send to the US. But, as soon as the free trade deal comes into force, there will be a significant improvement. For all of those people who are doing it tough, who are fighting their way through these changes in the dairy industry, this represents a huge new incentive, a huge new opportunity and something that I am very pleased that I am here to see, because I know how tough they have done it. We as a government must always be looking for ways to encourage them in their endeavours, and the free trade agreement with the United States is certainly something that will provide that encouragement.

I looked at the speaker's list this morning, because out there in the community quite a debate has been raging about the dairy industry. I was pleased to see that I was listed to speak immediately after the member for Flinders in the debate on the Dairy Produce Amendment Bill 2003. Just ahead of him was listed the member for Kennedy, who was due to have spoken by now on this bill in this House, and I wish he would come into the House and do it. In this place and out in the community, when issues like the pain in the dairy industry come along, the member for Kennedy leaps into these debates with incredible vigour and personal zeal, but without regard to the facts and without regard to the pain that some of his false protestations on these issues cause. And what happens after that? We have to come along and clean up.

We on this side of the House care about the facts and care about the aid that has been given to the dairy industry—and the aid that will always need to be given to Australian primary production when it gets into difficult circumstances, because we are still an economy that derives much of its benefit from the farming community. I am afraid that the member for Kennedy is a person who makes his living off the misery in this. That is my view, and I know it is a controversial view. There are many people who laud him and say that the member for Kennedy is speaking up for these farmers. I see it as exactly the opposite. I do not think he would have a living if he were not flapping his trap on these questions.

We on this side of the House, in the government, have to find policies that can work for farmers and provide the best way forward for them, whether by way of trade agreements, such as the US free trade deal, or whether through programs of assistance such as the dairy support package and the subsequent package that followed on that—I think it was a total of $2 million in support that went in there—or the Dairy RAP, which supports the community where those dairy farmers have been. These things are the responsibilities of a government that cares about farming in our country.

We care deeply about farming in our country, and we are doing everything we can to advance it in the world today. The world does not owe you a living. The world does not, by some holy writ, provide to you a free lunch. You have to constantly change. Any farmer and businessperson knows that you have to constantly change, you have to be constantly on your game and you have to be constantly improving the way you farm. And, at the end of it all, if there is a problem, if you do not have the cost of production you need, you know that you are going to have to get out, you are going to have to find a new source of income and you are going to have to make those changes. Today, many Australians are making those changes.

That brings me back to the central point about the changes contained within this bill. This bill, once again, provides an important support mechanism for the Australian dairy industry. Dairy Australia Ltd is the industry services body that took over from the Australian Dairy Corporation as at 1 July 2003. This bill encourages the prudent management and protection of the industry services body of this great Australian dairy industry, Dairy Australia Ltd. The key stakeholders are the dairy farmers and the peak industry bodies. More than 53 per cent of dairy farmers nationally are members of the industry services organisation. That is 5,693 dairy enterprises and 11,111 members. In my state, Queensland, we have one of the highest rates of membership, with nearly 64 per cent.

This bill provides indemnification arrangements for Dairy Australia, and it is appropriate that this industry services body be properly indemnified. The changes restore to Dairy Australia arrangements that were available to its predecessor and they encourage prudent management for the benefit of the dairy industry of this country. The aims of Dairy Australia are set out on the Dairy Australia web site. They are:

1. To promote the development of Australian dairy resources

2. To contribute to the promotion and development of the Australian dairy industry and Australian dairy produce by:

Carrying out research, development and extension activities for the benefit of the Australian dairy industry and the Australian community generally

Carrying out activities to develop the Australian national market for, and international trade in, Australian dairy produce

Providing information and other services

Carrying out other activities for the benefit of the Australian dairy industry

3. To act as industry services body ...

So this is an important structural support for the dairy industry, and it is important that as a government we make sure there is adequate support and that bodies such as this do have mechanisms by which they can carry out their affairs and work more effectively in support of the dairy industry. Australia now exports more than 55 per cent of its annual milk production. I think that is a very good record. The inward-looking criticisms that have come from people such as the member for Kennedy, which I referred to earlier, would negate that and try to gainsay the effectiveness of our industry in export markets. It is a backward-looking philosophy that says that dairying today is basically about doing what your father did et cetera and that, somehow or other, by doing that you should be able to make your way in the world and that, somehow or other, support should be given for you to be able to do that, whether or not it is viable anymore and whether or not it is realistic. The lady with whom I had that long heart-to-heart over the weekend about the future of that industry recognises all these things. She recognises that you can only fool people with sugar for so long.

Of that 55 per cent of our milk production that is exported, 66 per cent of the total is concentrated in Japanese markets; Japan alone accounts for nearly one-fifth by value of our exports. The Australia-US free trade agreement means the opening up of access to US markets for an additional 7.5 million litres, which will continue to expand. I think the member for Flinders said it will expand at five or six per cent a year. That is something that farmers in Australia can really do something with. It is something that their industry bodies can work effectively to capitalise on, and Dairy Australia plays a key role in that process. Australian now ranks third in terms of world dairy trade, making up 16 per cent of all the dairy product exports in the world. That is our industry; that is this wonderful industry which is providing employment, innovation and wealth in communities right around this nation.

There are many opportunities in the dairy industry in Australia at present and they are getting stronger as the days go by and as the changes that had to work their way through the system become evident and have their impact. There is no doubt that the dairy industry is becoming stronger by the day because of those changes. As I said, I feel very impassioned about the need for us to continue to monitor progress in that industry and to continue to provide it with incentives, support and guidance and all those important things that will help to develop its place in export production and on the domestic market as well. But we cannot allow continued backward thinking to interrupt and to downplay the great value of this important Australian industry. (Time expired)