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Tuesday, 25 June 2013
Page: 7053


Mr BALDWIN (Paterson) (16:46): I rise to support the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013, the Primary Industries (Customs) Charges Amendment (Australian Grape and Wine Authority) Bill 2013 and the Primary Industries (Excise) Levies Amendment (Australian Grape and Wine Authority) Bill 2013. These bills will give effect to the merger of the Grape and Wine Research and Development Corporation, the GWRDC, and Wine Australia. This legislation will create a new wine statutory authority, the Australian Grape and Wine Authority. The authority will commence on 1 July 2014 and will undertake the functions of the GWRDC and Wine Australia without a change in the structure or amounts of levies that currently fund both authorities. The assets, staff and functions of the GWRDC and Wine Australia will transfer into the authority.

I will address a range of issues pertinent to these bills that I have been closely following as a member representing an electorate in the Hunter Valley region, which, without doubt, is the premium wine-producing area in Australia, and as the shadow minister for regional development and the shadow minister for tourism, because wine is critically important to both those portfolio areas.

The merger of these two existing statutory bodies would see the following benefits: an ability to identify and deliver aligned industry strategic imperatives and RD&E goals; management efficiency of program delivery and associated cost savings to government and the industry; streamlined functional relationships between industry and government; genuine accountability to industry at the same time as meeting the government's requirements; and improved communication and strategic alignment between the national associations and the merged entity.

Australia is consistently ranked as one of the world's top 10 wine producers, and the finest Australian wines are amongst the best in the world. Australia is the No. 4 wine-exporting country in the world and the No. 16 wine-drinking country in the world. For Chinese tourists, Australia is the world's No. 2 food and wine tourism destination after France. The United Kingdom imports more wine from Australia than it does from France, and that is thanks, in no small part, to Robert Oatley AM, whose 1980 gold medal in London for his Rosemount Chardonnay really started the UK's obsession with our wines. Australian wines have won medals at almost every major international wine competition and have set records for prices for a single bottle. Around 78 per cent of wineries have cellar doors—no surprise in that. Twenty-nine per cent of those cellar doors have on-site dining, 11 per cent have accommodation and some offer adventure further afield into opera, theatre, musical events and festivals. Without doubt, the wine industry is a critical part of our national tourism fabric.

Recently, when I was in Tasmania, I accompanied the candidate for Bass, Mr Andrew Nikolic AM, who took me to meet another lion of the Australian wine industry, Josef Chromy AM, in Relbia, Tasmania. Joe Chromy Vineyard hosts concerts, runs an excellent restaurant and is even progressing plans to part fund a resumption of the Relbia Wine Train—helping a range of other tourist attractions in the region. Joe Chromy also showed me a mechanical invention of his own design: an improved grape-crushing machine in operation at his winery.

The inventiveness and can-do business thinking of our winegrowers is underpinned by the GWRDC, which has established a plan to invest in research, development and extension programs. It facilitates the dissemination, adoption and commercialisation of the results throughout the industry. This is similar to ABARES, who produced an excellent report in 2010 on Agri-tourism, two years before the UN World Tourism Organisation published their major report on culinary tourism. I received these through the Regional Australia Institute.

Our future wine production and wine tourism success depends on high-quality primary and secondary scientific, economic and consumer preference research. This will be centrally reliant on: the new Australian Grape and Wine Authority, created by this bill; the Commonwealth Scientific and Industrial Research Organisation, CSIRO; Australian Bureau of Agricultural and Resource Economics and Sciences, ABARES; Australian Trade Commission Service, Austrade; Regional Australia Institute; and Tourism Research Australia.

A coalition government, if elected, will also rely on industry groups like Restaurant Catering Australia. Their research into food and wine tourism supported their recommendations to the NSW Visitor Economy Taskforce last year. Tourism Australia also commission useful, actionable research to inform their marketing activities, such as the GFK Blue Moon Development Plan research; and the Euromonitor food and wine tourism research, which is currently underway.

Last year's UNWTO report on culinary tourism stressed the importance of cooperation:

It is necessary for the actors operating in the destination (producers, farmers, ranchers, fishermen, chefs, restaurateurs, public administration, hoteliers etc) to be involved in the definition and management of food tourism offerings …

Last week the coalition outlined our vision to develop Northern Australia, which will do much to reinvigorate debate, interest and research into agriculture nationwide. As my colleague the shadow minister for innovation and science noted on in her 5 September media release, a World Economic Forum global competitiveness report has revealed that Australia is continuing to fall further behind its global competitors in innovation. Since the last global competitiveness report was released one year earlier, Australia has declined further in a number of key indicators, in particular capacity for innovation, where we have dropped from 27th to 32nd globally; and company spending on research and development, where we have dropped from 27th to 30th.

The report cited restrictive labour regulations and inefficient government bureaucracy amongst the most problematic factors for doing business in Australia. It also highlighted very significant concerns over tax regulations and policy instability. The model used by the World Economic Forum was the basis for Regional Australia Institute's [In]Sight modelling, which was publicly released this morning. Australia's wine regions have been done a great service by Regional Australia Institute, and I would like to thank Su McCluskey, Jack Archer and the other staff at RAI for the work that they have done.

[In]Sight is the nation's first online index and interactive map tracking the competitiveness of Australia's 560 local government areas and 55 Regional Development Australia (RDA) regions. [In]Sight spans 10 themes and 59 indicators specifically tailored to reflect the fundamentals of sustainable growth in Australia, capturing the competitiveness of LGAs and RDAs according to current economic performance and drivers of future success. While investment in research, development and extension programs, and the promotion, adoption and commercialisation of the results amongst Australian businesses is vital to secure and retain an edge, this is especially so in agriculture.

I was pleased to attend the Winemakers Federation reception here in Parliament House last week, and spoke with the outgoing CEO of Wine Australia, Mr Andrew Cheesman. I would like to echo the remarks of Wine Australia's chairman who paid tribute to Mr Cheesman's record of service to the industry. The memorandum of understanding signed in January this year between Wine Australia and Tourism Australia on co-location of their offices was a great outcome.

According to the one-time adviser to the Hon. Robert Hill and current CEO of the Winemakers' Federation of Australia:

(1) A confluence of international and domestic financial and market impacts has severely impacted Australian producers …

   …   …   …

(2) Like most primary and value-added industries, the effect of a high dollar, increasingly fierce global competition and high costs compared with other new world producers have created serious challenges for the wine sector.

(3) Domestic demand was flat, meaning most producers had to grow their sales overseas …

   …   …   …

(4) Vineyard profitability continues to be a major concern, with Wine Grape Growers Australia figures showing average vineyard operators have not met the cost of production for the past three years.

(5) "The costs of production are not being met by the prices paid by wine producers who also are under extreme pressure," …

Against this backdrop, the main concern raised in the consultation was ensuring that levy funds collected for research and development would only be spent for research and development by a new authority. This government has a habit of spending other people's money for its own political purposes.

This is a good venture by the government to bring about greater efficiency, but what is critical is that we act in the interests of the wine industry and do what we can through the various agencies available to the industry to build our export markets. We have a glut of grapes in Australia at the moment, and we need to build on those markets. One of the key issues raised in one of the weekend newspapers was that our glut of wine being sent overseas was not at the premium end of the market, and this has affected those areas whose production is solely or primarily at the premium end of the market. Of course, that is the Hunter Valley, which, as I said right at the beginning, without doubt produces the best wines in Australia. It is a source of argument from those less informed—from the Barossa Valley, Tasmania or down in the Riverina. There can only be one premium area and of course, parochially, that is the Hunter Valley. It is recognised that young Neil McGuigan is the international best winemaker in a semillon grape.

We encourage this. We always want to work to grow the industry. It is a good, high-value industry. It suffers from weather. A single session of out-of-character rain can destroy some grapes yet improve other grapes. So all we can do is support them. We wish this organisation well and we encourage further dialogue with the industry to make sure the whole of the industry goes forward.