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Tuesday, 19 October 2010
Page: 828

Mr JOHN COBB (7:08 PM) —I rise to speak to the Primary Industries (Excise) Levies Amendment Bill 2010. The bill before the House is another example of where an agricultural industry itself has driven sensible, practical measures for reform to ensure that our industries continue to use sustainable production methods and best practice to keep ahead of the game. This bill amends the Primary Industries (Excise) Levies Act 1999 to increase the cap on the research and development, or R&D, component of the laying chickens levy from 10c to 30c per laying chicken. It may seem minor, but it is a major win for the industry and a shining example of how a proactive industry can drive change.

The proposed levy cap increase to 30c will enable increases in the operative levy rate above 10c. It does not mean it will go to 30c. It gives the industry and the minister the ability to raise the levy progressively up to that amount as the industry and the minister see fit. It is in response to the egg industry requesting that the operative levy rate be increased beyond the current 10c levy that is in place. This increase would enable the Australian Egg Corporation Ltd, AECL, on behalf of the egg industry, to meet the core R&D objectives that it and the industry have, as outlined in its 2008-12 strategic plan. The 30c cap will allow industry to seek future levy rate increases within that 30c cap by amendments to the Primary Industries (Excise) Levies Regulations, without any need to amend the act, as I said.

As with other primary industry R&D corporations, AECL has taken a methodical and systematic approach to the evaluation of the impact of R&D. The fact is that with that R&D the Australian agricultural industry in general, but in this case the laying chicken industry in particular, meets its objectives, is on top of the game and continues to set world standards. To assist the consideration of an increase in the levy by the egg industry, it developed a compelling business case which included an independent cost-benefit analysis. That analysis provides the strong support that the parliament needs for increasing the levy.

R&D investment through AECL has totalled in excess of $3½ million in the four years from 2003 to 2007. Independent analysis of the R&D investment showed that there is demonstrable return on that investment, as indeed did the inquiry into R&D held recently, which looked at matching levy funds between government and industry. It showed that the Australian taxpayer is very, very well serviced by the levy, as it is by levies in the other major agricultural industries around Australia. The estimated return on egg R&D of $12.60 for every levy dollar invested is not inconsistent with estimates from other industries. The analysis reveals that 72 per cent of the investments have delivered benefits for egg producers and 65 per cent have also delivered outcomes to the Australian community. That is good, and we are totally in accord with the government in wanting to see this bill go through the House so that the changes can be implemented.

It is also timely to note that, while industry is more than pulling its weight to fund research and development in the national interest, this government has done a real job of slashing and burning this important component of any national food security plan in recent years. Investment in agricultural R&D at the state and federal level has dropped dramatically. Certainly, the federal scene is not as guilty as the state in withdrawing from R&D funding, but at the federal level the then Rudd government cut $63 million from the CSIRO agricultural research budget in its first year in office. It abolished Land and Water Australia. It cut $12 million from the IRDC. It continues to look hard at ways to cut funding. The recent inquiry into the level of R&D funding that the federal government invests to match industry funding was an example of that. That inquiry recommended that 50 per cent of the current matching dollar for dollar by government be withdrawn. The government wants to put it into what I can only refer to as political R&D rather than productive R&D.

This concerns me greatly, because the inquiry I just mentioned showed without a doubt that the taxpayer gets extraordinarily good value for money out of what the Commonwealth puts in through matching funds with industry. If the current government wants to start political R&D—in other words, looking into climate change et cetera—rather than combining with industry to do productivity R&D, all well and good, but do not throw the baby out with the bath water and take away the funding; continue to do the other. If the government wishes to go into separate forms of research and development without industry, all well and good, but do not take away what is working.

Mr Adams —A slightly related process.

Mr JOHN COBB —Madam Deputy Speaker Bird, I hope the member for Lyons can prevail upon his colleagues to see this does not happen because I am sure he knows, as I do, that it is the best money the Commonwealth spends.

As with other primary industry R&D corporations, and as I said, AECL took a methodical and systematic approach to the valuation of the impact of R&D investments to assist consideration of an increase in the levy by the egg industry. They developed a compelling business case that includes an independent cost-benefit analysis, and that analysis provides strong support for increasing the levy. Thank you.