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Tuesday, 25 February 2014
Page: 853


Mr HUTCHINSON (Lyons) (20:34): I rise also to speak on the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. The dairy industry is a very important industry not only in my electorate but also in the state of Tasmania. I note the contributions by the previous speakers. Like the member for Wannon, I also associate myself with the comments made more generally by the member for Brand about the importance of farmers. They were most appropriate. I note also the comments by the member for Page about the total Australian dairy production. Based on the figures he provided, it suggests that dairy production in Tasmanian is something akin to 10 per cent of the total national production. Given that Tasmania's land mass only makes up two per cent of the nation's total, it emphasises the importance of the industry to the state of Tasmania. It may also be relevant to know that about 12 per cent of the nation's rain falls on that two per cent. That is probably the link to the production of milk in our state.

In my largely rural electorate of Lyons, in Tasmania, nothing is more important than protecting our domestic livestock from the threats posed by exotic diseases. In fact, as an island continent Australia has a natural competitive advantage in regard to biosecurity. The island status of Tasmania also gives us a distinct advantage in many respects as far as biosecurity is concerned, though I acknowledge there are some disadvantages having a piece of water between us and Victoria. Anything that this government can do to help keep our state disease free will certainly be supported wholeheartedly by me.

This amendment bill seeks a redistribution effectively of the funds from the existing levy on dairy farmers so that the Australian Animal Health Council can secure a small increase in the existing levy. I note that it is supported by Australian Dairy Farmers, which recommended and asked for this increase to be introduced. The Australian Animal Health Council is a not-for-profit public company managing more than 50 national projects that improve animal and associated human health, biosecurity—the focus of this bill—market access, livestock welfare, productivity, food safety and food quality. The Australian government is a shareholder in the Australian Animal Health Council. This amendment bill does not increase the overall levies on dairy farmers, but it will enable the country's peak dairy industry body to lift the cap on rates with the existing levy money going into animal health.

In respect of biosecurity, Tasmanian farmers are already on the front foot. A new livestock biosecurity office has just been appointed to work out of the Tasmanian Farmers & Graziers Association office in Launceston to better educate farmers about the threat posed by exotic diseases. Jess Coad was appointed with the help of existing dairy levy funds to help farmers become proactive in responding to the possibilities of diseases like foot-and-mouth and mad cow disease and their effects on all livestock industries. I note also the work done by the state department in the past few years in trials and responses to deal with such outbreaks were they to happen. The Tasmanian Farmers & Graziers Association CEO, Jan Davis, is a firm believer in prevention rather than cure and she supports this amendment bill, as it allows more money to go into biosecurity education. Those involved in this fast-growing Tasmanian industry agree with Jan Davis.

We need to be careful not to generalise about the state of the dairy industry in this country. I note comments by the member for Calare in respect of competition and the challenges faced by many farmers, particularly fresh milk suppliers. I note also examples given by the member for Hume in relation to an example of an industry at its height, as is the case in New Zealand. The New Zealand industry is a shining light in dairy production, but the Tasmanian dairy industry is performing well. In fact, return on capital and return on capital including capital depreciation in Tasmania are much higher than the national averages. Importantly, the cost of production in Tasmania was recently measured at about three cents per litre below the national average. This is largely due to innovation in investment made by farmers and downstream processors in Tasmania. Also, Tasmania has a natural competitive advantage in producing high-quality, high-protein feed owing to its high rainfall.

We are also experiencing an expansion of irrigation, most recently on the north-west coast in the Dial Blythe scheme in the electorate of my colleague the member for Braddon. In this electorate there was also a welcome development on the historic Woolnorth property, which will increase Tasmanian dairy production with an additional 14,000 cows. This is part of what is required to fill the stainless steel equipment that already exists in Tasmania. Tasmania faces the challenge of filling stainless steel equipment already invested in by local and international investors and we need approximately 70,000 dairy cows to fill that existing capacity—what a wonderful problem to have. This year's Tasmanian Dairy Conference in Burnie will be held on 26 March. Convenors are aware of the need for vigilance in the industry regarding biosecurity and the prevention of exotic diseases. Biosecurity is one of the nine topics up for discussion.

I note also the tragic figures announced this week for youth unemployment. Tasmania is at the bottom of the pile on youth unemployment: one in five Tasmanians aged between 15 and 24 is unemployed. It is a crisis of confidence as a result of 14 years of Labor-Greens state governments, and the next election, on 15 March, cannot come soon enough. The south-east corner of my electorate has the fourth worst figure in Australia, which to me is unacceptable. The dairy industry offers one of the very few opportunities for employment now and in the future to young people with a range of skills.

There are very few industries or sectors in our country in which a young person can start as a labourer and within 10 years have an asset backing of more than $1 million. There are many examples of this on the north-west coast in the form of share-farming. It is a fantastic opportunity and I encourage young people, even those from non-agricultural backgrounds, to look at the opportunities within the dairy sector in Tasmania. This sector offers an opportunity to build a career in a range of different areas. The industry is the backbone of local communities. It is nothing for a dairy farmer to spend more than $1 million annually with suppliers in the local community, be they electricians or rural merchandise suppliers.

The key point that I would like to make about dairy is one that is true of the challenges that face agriculture in our country and more broadly. I digress, but I came out of the wool industry, having bought and sold wool and exported wool out of Australia for many years. Wool is an industry that has virtually no local processing capacity left in this country. But in the case of dairy, we do, and we are seeing investment in this country in an industry in which we have a natural competitive advantage.

All of Tasmania's milk is value added, with the small exception of local fresh milk production. There are cheese factories at Burnie—my colleague the member for Braddon went through a number of acknowledgements of awards that that particular business has received, and I will touch on that a little bit further; there is the Tasmanian Dairy Products milk powder factory at Smithton, which is producing dairy milk powder that is being exported all around the world, particularly focusing on the opportunities that are opening up in Asia, not least of all China; there is yoghurt production in Launceston; and there is chocolate production in Hobart.

I would also like to particularly mention two perhaps smaller but more diverse businesses that are within my electorate. One is the Pyengana Dairy Company. Just for the member for Braddon's reference, it has recently won not only the 2014 but also the 2013 Australian Grand Dairy Champion Award for cheddar cheese. The other is the Ashgrove family business located on the Bass Highway between Deloraine and Devonport. It is an example of an award-winning business that has diversified its traditional milk production business into one based around tourism and is now employing 80 people within the local area. It is a fantastic success story. The knock-on benefits of value adding, such as in the businesses I have described, are significant.

The Tasmanian dairy industry is small in so many respects. The mere 445 dairy farmers last year at farm gate accounted for 40 per cent of the total value of agriculture in my state. People like Grant Archer and people like Grant Rogers, albeit a New Zealander. We are working hard to make him an Australian, although he tells me he will never support the Wallabies! There is Paul Bennett, who comes from the Ashgrove business I mentioned before. These people are doing wonderful things to encourage the expansion of the dairy industry in our state that is needed to fill the processing capacity that exists already within the state.

The Tasmanian dairy industry's mission is to focus on the long term. That will be by maintaining a low on-farm cost of production. This is the natural competitive advantage that we have in Tasmania because of our rainfall, because of the investment that we are making in irrigation and also because of the climate that we have that can produce high-quality ryegrasses. The long term will be secured by the business management improvements that are being undertaken in maintaining and also developing strong supply chain relationships with those businesses that are investing in that part of the industry in Tasmania. It will also be secured by supporting efficient, innovative and responsive processing capacity. Having the processing capacity locally is such an important reason why the dairy industry in Tasmania is successful at the moment.

Confidence in such an important thing in so many industries. Get rid of the carbon tax and you will see this sector in my state expand even further. I commend the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 because it will improve the health and wellbeing of the Tasmanian dairy herds and biosecurity within my state and also provide confidence within the dairy industry, which is so important to the state of Tasmania.