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Tuesday, 25 February 2014
Page: 829


Mr JOHN COBB (Calare) (18:42): Thank you, honourable Deputy Speaker. I am speaking on the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. As far as the amendments in this legislation go, like most of my colleagues I have always taken the view that if the bulk of the industry agree with these things then it is not our job to stand in their way. In this case it is somewhat forced on them by the actions of all governments back in the late 1990s, when they brought the act into being when state and federal governments stopped funding for the sorts of pestilences that might be visited on the various industries. So they really do not have a lot of choice and we are not going to stand in their way on this.

The dairy industry in general has had some tough times. Drought, whether it is down in Victoria or in Queensland or wherever it may be, has played the most recent part in all that, not to mention the high dollar and most certainly the high cost of production. Then we have a few man-made problems as well, and I am sure I am not the first one to mention the carbon tax. I do not have a lot of dairy in my electorate—we are more into high-level dryland farming of one type or another, although I do have dairies—but I have been to an awful lot of dairies in my time, whether it be down in Gippsland and south-eastern Victoria, or the Murray, Tasmania, Western Australia or whoever it might be. But, in all that, the biggest single whack that the dairy industry has copped, in my experience, was a totally deliberate one by an Australian government. It was called a carbon tax. I will never forget hearing the previous Prime Minister of Australia, Julia Gillard, saying that that agriculture will just pass these things on, like everyone else.

It is quite incredible, because agriculture are price-takers; they were very seldom price-setters. The only time agriculture is a price-setter is, for example, when there is a cyclone in Northern Queensland and there are no bananas except for the few that survive. Then the boys have their day and they deserve it!

However, let us just talk about the effect, the very serious effect, that the carbon tax has had on the dairy industry. We did the figures and we found it is somewhere over $7,000 a farm. It cost Murray-Goulburn, for example, one of the big ones, a great deal. They figured well on that list that came out this month on what people had to pay by way of the carbon tax. We worked out the cost of processing is about $7,000 for every one of the dairy farms that supply them. On top of that, of course, it is somewhere between $3,000 or $5,000 or more at least. It can be a lot more for a big farm like Lexington Farm in Western Sydney where the carbon tax is costing in the order of $80,000 a year—though that is not a small farm. So we are talking around $10,000 a farm.

I actually did the figures on a 200-cow herd once. It was about a week's production that they are doing for the government of the day now—though it was the Labor government that then existed. It was costing the farm a week's work for nothing and they still had the cost of that production for that week. It is a huge issue. There are a lot of things that agriculture needs, and dairy is not very different from the rest. I have mentioned the carbon tax. The government can help dairy in the same way they can help most of agriculture. Agriculture makes no money out of a press conference. What they will make money out of is us saving them money.

What we need to do is not to take the bureaucrats' word when they say, 'We cannot help you with chemicals. There are certain laws and it is also bigger and more involved and you have just got to wear whatever the APVMA comes up with.' That is rubbish. If we do our work and individually deal with every chemical that comes through, when one is banned simply because that seems to be the thing to do at the time, we should sit down and work out whether it is really necessary. Do not listen to the bureaucrats saying, 'There is a procedure whereby this all happens and we cannot do anything about it.' That is rubbish. It is gutless and we are not doing our job.

Let me tell you that the dairy industry in particular has been built by the supermarkets and by Wesfarmers in particular. Coles have no board. They are owned lock, stock and barrel by Wesfarmers, who do have a board. Wesfarmers is a company that started off as an agricultural supply company. That is what they were. Wesfarmers employed people and told them to just increase their market share and it did not matter how they did it.

I do agree with those who say that the dollar for milk thing—and all the other supermarkets obviously followed suit—has been a disaster for those who actually produce milk. The supermarkets have brought this review of the Trade Practices Act on themselves. They may not break the law, but they employ very, very good barristers to tell them how close they can go to the Trade Practices Act and not break it. So probably they have not broken it—and maybe they have not—but, by heavens, they go close.

The best way to handle them is for us to make sure the bureaucracy in trade and the bureaucracy in agriculture do every damn thing they can to help producers get markets. Do bilateral trade deals and do them well. The best way to make the supermarkets pay for milk or any other agricultural product—be it horticulture or whatever—is simply not to have to supply them. The greatest thing that agriculture in Australia can have is a viable export market for everything we produce. Make the supermarkets No. 2, not the best or the first place to sell your product. We have to do our job to absolutely ensure that every possible thing that can be done will be done. The red tape and the procedures are mind-boggling for a small producer. A small horticulturalist, or a niche market area that wants to sell their product overseas, needs every bit of help that we can give them. It is hard work. It is not stuff to do on TV. It is minute and piece by piece, but it needs to be done. That is the best way for Australian agriculture to free itself of the shackles of the duopoly—and it is soon going to be a 'fouropoply' or whatever you call it! But let me tell you, competition outside Australia is the greatest thing that can happen to all Australian agriculture, and dairy is no different.

I am happy to say that dairy has had a lift in recent times. Rain will help that a lot, and certainly the world price of milk products has gone up. Queensland, more than any other state, is totally dependent upon the domestic market and does need somebody to put a processing plant up there. If they did, I believe they would get a very high proportion of the milk in that state.

Tasmania and Victoria, which are centres for milk processing and the milk product market, have certainly in recent times been in a much better state than the other states. New South Wales has some processing but is still mainly locked into the domestic milk market. I was over in WA not long after Wesfarmers pulled their dollar-a-throw: we will sell you water which is much more expensive than milk you want to buy it individually. The previous speaker mentioned Harvey Fresh. I remember going there. At that time they were not sourcing either of the supermarkets and I asked why not. 'We are not going to cripple ourselves by tendering for that. In fact we are looking at expanding various products into Asia,' was their answer. I said, 'How good is this? The more you do that and the more others do that, finally, when they run short'—and they will run short of fresh milk in WA—'they will have to pay more to the locals to get them expanding their industry instead of contracting it.' I had barely got back to eastern Australia when I heard that Harvey Fresh had just taken a contract with one of the two duopolies, which was a pity because it really took away the power of not having to supply them. That is why exports have to be what our future is.

Food security in Australia, be it dairy or any other industry, is not about having enough to eat. This is not Somalia; it probably is there and in Ethiopia from time to time, but it is not about food security in Australia. It is about having the best product in the world for our own consumers. But we actually set a standard around the world for what agricultural products should be. Our greatest marketing tool in the world is our clean, excellent image of product. It is the greatest marketing thing we have. People will pay more because of it.

It is no accident that the Chinese people with money would rather buy ours than their own. That is because they know ours is pretty much guaranteed and theirs—well, you know, make your own mind up about that. But be in these markets, whether you are a middling-sized company or a small one. I have spoken to horticulturalists, for example, and niche dairy producers around Mildura and the Sunraysia, and they are nearly driven berserk by having to meet all these different criteria because we do not always have a straight-out situation determined with China, India and other countries. So, it is a big job we have to do to get those little trade things sorted out.

We need to remember that the bureaucracy will not change anything that it does not have to, whether it is about chemicals, AQIS or whatever it is. Has it ever crossed government's mind to make AQIS inspections contestable and local? Having someone trained locally who can charge a local fee instead of having someone come from Melbourne or Brisbane would reduce the cost of exports one heck of a lot.

There is a lot we can do. It is hard work; it is not all stuff to get you in front of TV cameras. It does not make you a hero but, by God, it relieves the pressure and the cost of doing business for the first industry that ever existed in Australia and one that is thought well of around the world. Thank you.