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Tuesday, 14 October 2008
Page: 9064


Mr KATTER (4:54 PM) —I thank both sides of the chamber for previously enabling me to give an MPI speech, which has got massive publicity. This very morning on the Sunrise program they were quoting the price growers were being paid for pumpkins and the price Woolworths and Coles were charging for pumpkins. For the benefit of the chamber, it was $2 that the growers were being paid—my growers are paid less than that—or 18.5c a kilogram, and customers were being charged $8 a kilogram inside the retail stores. I am sifting out the figures now on meat, because they look to be worse than eggs, milk, sugar and potatoes. We just picked six items that everyone will use over the next two days. We are asking what is going to happen with this 11c on milk. Mr Burgess said he will pass it on, but for how long is he going to pass it on? They said when the industry was deregulated that they would pass on the savings to the public. They did. It was 116c and it went down to 113c for four months, and then it went up to 157c. So, yes, they passed it on for a few months until after the government inquiry was over and then shot the price up to 157c a litre for the Australian consumers.

I would ask the minister while he watches this 11c go back to the consumers, under the Dairy Adjustment Levy Termination Bill 2008, as I know he will, to read the dairy inquiry report. Maybe he has not got time to do the research needed. I am not using any spot figures—I used a three-year average for milk so that we were not dealing with peaks and troughs. The three-year average price for the consumers was 116c and the three-year average paid to the farmers was 53c. That is about a 100 per cent mark-up. Within an indecent two years of deregulation the price to consumers went up 40c to 157c and the price to the farmers went down 30 per cent; from 53c it fell 19c a litre. So the consumers paid 41c a litre more and the farmers got paid 19c a litre less. If you ask where does this come from, look for the money trail. Ever since the Phoenicians invented money, you can rest assured that the reasoning behind this is the gold trail. The money leads back to Woolworths and Coles. That 60c a litre extra profit they made, less the 11c, translates into many millions of dollars of extra profit.

It is mind-boggling what they did. But the worst part about this was the deceit by the ACCC. There were really only two months in which you could have taken the prices so that it looked good for Woolworths and Coles, and they were the exact two months that the ACCC used. If they had gone back a month before or gone a month in advance, it would have been different. It is impossible to look at that report without saying, ‘This report was doctored up.’ It just is impossible. In 35 years I do not think I have ever used the word ‘conspiracy’, and I would not raise the issue except that Mr Samuel brought out another report and, God bless Sunrise, every time Mr Samuel said, ‘Oh, there is a huge chain from the farmer through to the shelf. They have to be processed; they have to be packaged. This is very expensive,’ Kochie on that program would flash up a picture of the potatoes with the price they were charging and the price that the farmer was getting, which was a 400 per cent difference. They just kept flashing it up. What sort of chain have you got with the potato? You put it on the back of a truck, you take it out and you put it on the shelf.

Again, the minister’s attention really needs to be focused on the fact that three of those items that I mentioned—eggs, milk and sugar—were the subject of arbitration. There was a fairness tribunal, and in each of those cases the difference was around 80 or 90 per cent. When the fairness tribunal operated, there was an 80 or 90 per cent difference. When the fairness tribunal was removed and we went into the wonderful free market situation that has brought us subprime, the mark-up went to 270 per cent. It went from about 80 per cent to 270 per cent on those three items. There is just no justification for that. I can tell you: my family have been retailing in Australia on my father’s side for about 140 years, and you cannot justify those sorts of mark-ups.

When we take the 11c off milk, yes, I would hope that that the government monitors, and monitors ruthlessly, that 11c going back to the consumer but that, in so doing, the government takes into account the difference between what the farmers are being paid and what the retailer is taking from the consumer. That has got to colossal proportions. It is no reflection upon you, Minister—it has built up in the period prior to you coming to this position—but we need action on this. As to the proposal going forward that we have a maximum difference between the farm price and the retail price, it is very crude, but, really, after giving this many, many years of thought, I cannot see any other way of attacking this problem than to go at it in that crude manner. It would be wonderful if the government would force capping and divestment on Woolworths and Coles, but, after my screaming for that for seven or eight years and having no movement at all on it, that may be a journey too far away. But, clearly, if you are after a competitive market, competition should be put in there.

Anyone can read the transcript of the committee of inquiry on fair trading, referred to as the Woolworths and Coles inquiry or the Baird inquiry, and have a look at all the other countries on earth. There is no other country on earth where the top two companies have 25 per cent of the retail market. The English are screaming at the moment because three companies have nearly 40 per cent of the market, but no two of them have over 25 per cent of the market in Great Britain. What we are saying here is that no other country brooks this—and the United Kingdom is far worse than any other country on the planet, including America, I might add, in spite of Walmart’s very significant position.

We are saying that two companies have 86 per cent of the market. Mr Samuel said 70 per cent, and I would point out to the minister that, when Mr Samuel said 70 per cent, it is very hard to say that that was an unconscionable and conscious untruth, because his own previous report on the industry showed 68 per cent. This was in 2003 or 2002—one of those years. ACNielsen said 74 per cent, the ABS series said 68 per cent, and there was a third series which was in between the other two. It was a series formulated for a government inquiry. But if you add the two per cent annual growth rate that they have had and sustained since 1991 then you have to come up with a figure of 86 per cent. They had over 74 per cent back in 2003, and their own annual reports skite about their market growth. If you take their market growth figures, which they themselves are skiting about, then you have a figure of over 86 per cent. It is naive and stupid to talk about free competition if you have two companies holding 86 per cent. They would have to be stupid and brainless not to take advantage of that situation. In fact, they probably would not be doing the right thing by their shareholders if they did not take advantage of that situation.

In the sugar industry deregulation they handed themselves a rise of some $300 million, when you add the extra the consumers paid and the diminution to the farmers, which was about 50 per cent in that case. So they made about $300 million there. In the egg deregulation they made about $400 million a year, and out of the dairy deregulation they made $1,000 million a year. Those profits have been eaten up in their untrammelled determination to wipe out a little tiny bit of competition that is still out there. They will put out an awful lot of money, and they do not show huge profits because that might get them into a bit of trouble with the trade unions and with the government. It is not a good idea to show profits in a profit and loss statement.

If you charge the consumers 41c a litre more for the milk, and pay the farmers 19c a litre less for the milk, and you multiply that by the litreage in Australia you have over $1,000 million of extra and unconscionable profit. The price that was paid within two years of dairy deregulation was a farmer committing suicide every four days in Australia. As I have said in this place on many occasions, we are the government of Australia. This parliament is the government of Australia. It was not penguins in Antarctica that caused that huge increase in farm suicides. It was decisions taken in this place that caused that massive blow-out in suicides in Australia—the shame of this nation.

I attended a lecture from the long-serving Dean of the Faculty of Economics at the University of Queensland—probably the most distinguished faculty of economics in Australia. He said that this country had three great shames: the way we treated the first Australians; the way we treated the men that came home from Vietnam; and what we did to the dairy farmers. I added to that what we did to the Jews, in not allowing any of them to come to Australia when Hitler was persecuting them. We allowed 15,000 in, and six million of them died in Europe—and we can be very ashamed of ourselves there—and 28,000 women and children died in the concentration camps under the British in the Boer War. I would add those two great shames to this nation, but there was no doubt that the dean of the faculty was talking about a great shame to this nation.

I remember vividly, and I will to the day that I die, when Julian McGauran came into our party room and said: ‘I have heard people talking about the deregulation of the dairy industry. That would be the worst smash in Australian agricultural history. Mr Leader, we want to put this to rest straight away.’ Some two hours later, after Mr Causley, Mr Anthony, another member and I had all spoken at great length and with great passion, it became rapidly obvious that the frontbench not only was not going to oppose deregulation but was actually going to facilitate it. The National Party says it was the fault of the Labor government, and Mr Truss put out the infamous press release and said that every farmer would get $150,000 on condition that every state deregulated. Whether Mr Amery was going to do it or not do it, we do not know, but within two hours Mr Amery had his hand over his heart, saying, ‘I did not want to do it, but the federal government has forced me to do it.’ That was a fair call. Within two days, Mr Palaszczuk had his hand over his heart, saying, ‘I did not want to do it, but the federal government has forced our hand; I could not deprive my poor farmers,’ et cetera.

If you want to sheet the blame home, I think the leadership of the industry has something to say. We have counselled the minister on many occasions not to listen to peak bodies, but I was just speaking to one of my dairy leaders in North Queensland, and he said, ‘Yeah, we note the part that Pat Rowley played.’ It does not excuse you in this place if you say, ‘A farm leader gave me this advice.’ God gives you a brain to think with. You must know that, if you deregulate this industry and there are only two people to sell to, you are going to be slaughtered. And of course they were.

It is interesting to reflect upon the fact that Julian McGauran said as he walked out—I do not think he would object to me saying this—‘That is the finish of us.’ And it was. The National Party held 19 seats then. They are now down to nine seats. Julian joined the Liberal Party. I became an Independent. Ian Causley resigned from parliament. Larry, because he was in the cabinet and was a man of very great honesty and decency, did not go public, as some of the others of us did. He was in cabinet, he had to take his pain and he lost his seat in parliament. There is another member—his name will come to me shortly. Really, the party was never going to come to that dreadful blow. But an interesting reflection upon the National Party in this place is that their now leader is Warren Truss. It fascinates me. Then they wonder why they have gone down to nine seats.

I do not come in here to make a political point, much as I enjoy making it. I attended many rallies, and copped a hiding, and in some centres my vote went down badly as a result of taking a stand. But it would be the height of hypocrisy for me to fight against the deregulation of the sugar and dairy industries by the previous government and to fight against the deregulation of the egg industry, the tobacco industry and the maize industry and then not fight on behalf of employees for the same right to collectively bargain. We think we should get so much. What we were asking for might have been a bit outrageous—as a one-time, for a short time, trade union representative. The employer says: ‘That is ridiculous. I will go broke if I pay that.’ Then you sit down and you have an arbitration commission, a fairness tribunal, that says what is fair—what the workers should get and what the employers should get.

The current Prime Minister gave an absolutely brilliant speech here on IR. He was quoting, at St Arnaud’s, the founder of the arbitration commission in Australia when he said, ‘A contract made by one person is not a contract; it is simply a determination by one person what he thinks he is going to pay the others.’ If the income for the cobbler goes down, so will the income of the shearer. I am quoting verbatim from his speech—and I might add that the Prime Minister quoted from that speech.

I feel that without arbitration we are not quite a civilised people. We are in a savage world where dog will eat dog and the most powerful will dominate—Darwinism, survival of the fittest, which reached its crest of course with that evil man Adolf Hitler. But we also saw the failure of that as a philosophy. It might be a law of nature, but it is not a philosophical point of view to have. Our society has retreated into a dog-eat-dog world, and Woolworths and Coles are the biggest dogs out there, so they get to chew up all the rest of us. That is not the way that it should be. There should be a fairness tribunal in there. I put up with preaching about competition for the last 20 years—listening to Mr Keating and then, later on, Mr Costello telling us all about competition. Well, it has been a wonderful success story! This subprime crisis has cost this country $600 million, I think, in the first two months of its collapse. We have now gotten ultimate judgement upon where they are going. (Time expired)