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Monday, 18 March 2013
Page: 2314

Mr JOHN COBB (Calare) (12:42): I rise to speak on the Agricultural and Veterinary Chemicals Legislation Amendment Bill 2012. Let me start by saying that I support, in fact the whole coalition supports, the stated objectives of the Minister for Finance and Deregulation, Senator Wong, on the agricultural and veterinary chemicals reform to reduce regulatory compliance costs for businesses and to improve competitiveness.

On the Department of Agricultural, Fisheries and Forestry website it says the reform aims are to improve efficiency and effectiveness. Again, these are goals the coalition and I support. But—and it is a big but—that is not what this alleged ag vet chemical reform is all about. This reform is a smokescreen for the Labor government to deliver an election promise made to the Greens that will further cripple agricultural communities and farmers and those who work, need and live around them. This promise was made as far away from farming communities as possible by the then minister for agriculture, one week before the 2010 election, but not explained in Labor's pre-election statement on agriculture, so as to hide its impact on the agriculture industry.

This bill is a hoax. It is completely about winning favour with the Greens by making it cost-prohibitive to register chemicals and more costly to conduct agriculture. Who was the minister who announced this one week prior to the election without explaining the true motive behind it? It is the man who is now the Minister for Sustainability, Environment, Water, Population and Communities and who is charged with responsibility for agriculture in this House. Or should I say charged with the job of making far harder and more expensive to conduct. He will respond by, in his relaxed manner, laughing it off as a joke. But this, make no mistake, is the smiling assassin to agriculture. Let there be no doubt that this government, via the Greens, is intent on putting our agricultural business if not out of business then damn close to it.

I was the first minister or shadow minister in Australia to have 'Food Security' in my title. It was to highlight the damage to our industries and our long-term food security from irresponsible policies like this. There is a huge risk for our long-term food security, a huge risk for the standard we set not just for Australia but for the world on how to produce good food from having ambitious politicians using the agricultural sector as a sacrificial lamb to feed a ravenous green lobby. Myths are perpetuated and balanced reporting is ignored as ambitious politicians see this as an easy way to win favour with their electorate without having to solve the real issues of government in health, education, jobs, economic development and helping farmers make a quid. There are classic examples like Labor using the 457 visa issue to placate unions while towns and industries in rural and remote Australia are in genuine need of workers. It is a bit like doctors: in regional New South Wales—and I suspect probably in Western Australia as well—half the doctors out in the bush are foreign doctors who have had to come in, not because we do not have doctors but because it is very hard to get city based doctors out where they are needed. It is the same issue when it comes to agriculture and mining.

So this bill is not about reform for the chemical registration process to improve efficiency. This bill is about Labor's promise to the Greens or—now that the coalition is all over between the Greens and Labor—about competing with the Greens to feed the green lobby. This bill is seen as an easy way to win favour without causing any major distress to Labor electorates—where they have very few prospects, I would suggest to the House, in the coming election.

I did speak earlier about how the finance minister said this bill was about efficiencies and improvements. I can see this bill does fiddle around the edges to improve efficiency but this is a side-effect, not the purpose of the bill. Let me tell you: industry and chemical retailers—the people who spend millions of dollars registering new products—are far more concerned about the changes to data protection that make the re-registration so expensive.

Changes make the initial registration of chemicals somewhat more economical with the ability of the APVMA to recognise similar international health and safety systems and data, so the APVMA will not have to start from scratch with lengthy, excessive, expensive assessments paid for by industry when they have already been done. There are countries like Canada and the USA, which have damn good systems. They do not actually want to kill their populations with bad chemicals either. This will allow the APVMA to use their work. It does not say they have to or they should. I think that is not the way we should go. We should tell them that, where it is obvious the work has already been done by countries like Canada or the USA, they should use it.

However, the bill is designed to first and foremost implement a re-registration system to raise the cost of chemical registration and make the registration of many chemicals economic. It is to give the green lobby designated time frames to concentrate on campaigns to have chemicals removed. For example, the campaigners will run a campaign on a chemical because of a tenuous link with a disease that is unscientific and force the APVMA to withdraw registration because of political pressure, not because of scientific fact. The re-registration system does not introduce—and this is a big point—any new triggers; it just forces the APVMA to run a costly recheck of existing triggers. In the same way they had the super-trawler ban, they will wear down industry and make it too difficult to continue instead of using science based reviews triggered by genuine issues.

The coalition will not support this bill in its current form and will be moving amendments in the third reading stage. Let us look at the issues. The current system is not efficient—that is a given. These views were widely expressed in submissions to the bill development, in submissions to the Senate and House inquiries and hearings. For example, CropLife stated during the House Standing Committee on Agriculture, Resources, Fisheries and Forestry hearing:

We would agree with the WWF that a greater responsiveness from the regulator in this space would be a very good thing, and something that is supported by our members.

This is further supported by the Australian National Audit Office's inquiry into the APVMA, which demonstrated that it is not as efficient in the way that it conducts its work as it could be. The APVMA is also not meeting its obligation to finalise all applications within statutory time frames and this obviously increases the cost of regulation for both the APVMA and applicants, and impacts on users' access to pesticides and veterinary medicines. It amazes me that you can have statutory time frames and then not meet them. While all stakeholders, both industry and environmental lobby groups, involved in the process agreed that reform was needed to improve efficiency and to speed up the review of high-risk chemicals, this bill does very little to address them. In fact, the bill actually increases regulatory burden on industry and ties up resources which will detract from the authority's ability to process high-risk chemical reviews.

When you talk about safeguards—and certainly they are needed—the ANAO's inquiry into the APVMA confirmed that we have a reliable and scientific regulatory system for effective management of risk. In other words, the ANAO said the current safeguards are adequate and work well. The ANAO report found it was not the triggers for the review that was the issue; it was the time taken for the process of a review once chemicals were identified.

I was perplexed that Minister Ludwig, who has long been campaigning on the need for reforms to increase efficiency on the chemical registration system, has now changed his tune. At the recent ABARES conference the minister proclaimed the reform to ensure the health and safety of the farmer and consumer. It is apparently not about efficiency at all anymore, despite this claim being made endlessly for the last couple of years, almost since the last election.

The truth is that the minister was sold a pup by the former minister—the current Minister for Sustainability, Environment, Water, Population and Communities—the member for Watson. This is the same minister who put in place the rules to manage the fisheries that invited the supertrawler to Australia, and then backflipped as minister for the environment to undermine the agriculture minister's authority. The major flaw in the argument that the re-registration system is for health and safety is that the retract check of the triggers under the re-registration process will actually reduce resources available to the APVMA, reducing their ability to process the reviews of high-risk chemicals in a timely manner.

The department have acknowledged that there will be at least $2 million in increased costs, while industry have calculated that the cost—and they did not do this on the back of a postage stamp; they paid Deloittes to do an in-depth costing of what this means to industry—will be more likely in the vicinity of $8 million annually, a massive increase of 30 per cent. This is extra red tape—in this case it is probably green tape—of 30 per cent to the system each year. The department acknowledged during Senate estimates that they did not take into account the cost to the chemical companies and others who would have to produce the data for the re-registration. They obviously did pretty much a 'back of a postage stamp' costing on the general costing of having to process some 9,000 products. This is despite Finance and Deregulation minister Penny Wong listing ag and vet chem reform as the second key area where the government would reduce regulatory compliance costs for businesses and improve competitiveness.

Internationally, our registration process is already struggling to compete, and that is one of the key reasons the industry and the coalition supported reform to make it more efficient. Increasing the cost will further reduce our competitiveness and force international companies to evaluate whether costs and returns will justify the expense. In the last 30 or 40 years Australia has gone from being the place where every company around the world wanted to come and test their chemicals and go through an initial registration process to the last place they want to do it. Now the Greens support the re-registration process as they claim it will help new products, as getting rid of the old products will encourage new products onto the market. Let's just have a look at that for a second. The government has deregistered dimethoate and is trying to get rid of the last fruit fly control chemical on the market. Is there any sign of a new product? Deputy Speaker Adams, as a member representing agriculture, you would know there is not.

There is the time and the cost. There is a sheep drench that was developed in Australia for Australian conditions which is still not available for Australian farmers, despite New Zealand having registered and having access to that same chemical for over two years. It was developed here, has been used in New Zealand for two years, but has still not got through the registration process here in Australia. Does this new efficiency, this new compliance the government wants to bring upon agriculture do anything to help this drench get registered? No, it does not.

There is a third example I have as to how it does not help the process, and that is the new sheep dip based on tea tree oil. Last week we went with some tea tree growers in Tweed Heads at the invitation of the Nationals candidate, and what a candidate Matthew Frazer is. You can never have enough successful small business people in this parliament, and he is certainly one of those and will add to the skills if he is successful, as I am sure we all hope he is. Getting back to the tea tree grower, he has been using his initiative and has come up with an innovative way to use natural tea tree oil as a basis for a sheep drench. However, it is going to cost about $3 million to generate the data, such as toxicity tests. But, with very limited data protection for such a product, there would be no way that the company could get a return on investment in a small market such as Australia. Will the legislation make it more attractive to get this registered? No, it will not.

This legislation does nothing to improve the ability for these products to be transitioned to market more cost effectively, and if they are brought to market they will now have expensive seven to 15 year reviews on their products, adding to the costs and making them even less viable. It is clear that the re-registration system is being used to force products off the market by making them too costly. The agricultural department has acknowledged that the European re-registration system has led to products being lost because it is not viable for companies to re-register—not because the products are dangerous; simply because the costs of re-registration to a competent, safe product are too high. Well, here we go in Australia.

The department claim that our system is less expensive than the European system. However, they have admitted that it does add costs—and, as industry has pointed out, there are already products in Australia that are uneconomic to register and the increase in costs can only further exacerbate that situation. The department have played down the extra costs and, in the House committee hearing, pushed the WWF line that the maximum was $100 a year. That is so far from what the actual cost is, and does not even begin to account for the fact that the chemical companies—those who are responsible for the chemicals—will have to come up with the data. It has been estimated by Deloittes that each one could be as much as $300,000. However, as the industry explained in the same hearing, there are many more costs than that on industry from this re-registration process.

The APVMA's own documentation indicates that we are looking at an increase in the cost of the system for the proposed legislation. In fact, the 30 per cent number is the interim. Equally, the costs that DAFF were referring to are the straight-up application fees, and that does not even approach the issue of the cost to the industry to provide the regulator with the data they will require.

Aside from that, the administrative processes, while simple, come at a cost. If you have the regulator about to have hundreds upon hundreds of re-registrations—that is what it is, and I will come to that shortly—just to manage, file and respond to those re-registrations costs money and it takes resources and time away from the core inputs. The bill in its current form will, however, deliver a net loss in efficiency and cannot be said in any way to address the system's failure to function within statutory time frames. It will exacerbate the situation.

Surprisingly the department also conceded that the regulatory impact statement failed to quantify the financial costs and financial impacts on industry. Instead it based its decision on:

… benefits outweighed the costs of the system. But it was done in a qualitative sense and not a financial sense.

So surprise, surprise: no cost-benefit analysis was done on the system.

Just like the carbon tax, like the mining tax, like the ban on live exports and like the super-trawler ban, this government has shown their disregard for the primary industry sector on which this nation was built. The coalition will stand up and be counted for agriculture and will stop the burdensome regulation designed to drive our industries out of business. We will move amendments to the bill to remove the mandatory registration system, to ensure this bill has a net increase in efficiency as initially outlined by the government itself. We will do the job of government and not allow them just to change the spin to suit their agenda to remove large numbers of chemicals from the market irrespective of whether they can be used safely. The re-registration system adds no triggers but just another expensive recheck of the triggers funded by industry.

These are the facts: the seven to 15 year timeframe is unrealistic for re-registration of the 1,900 active constituents—of which 780 are unique and each one would have to be treated totally separately—of the 9,900 currently registered agvet chemicals. This process will tie up staff and resources in APVMA and cause an economic burden on registrants, and parent companies, of active constituents. Will these costs be taken up by the government? Will they be passed on to end users, such as land managers and producers? Yes, of course they will—once again, 'Ah, they'll be right.'

Contrary to the government's claims that the re-registration process will increase the scrutiny on suspect chemistries, the increase in the administrative workload of the APVMA staff will reduce regulatory body resources available to deal with critical registrations and permits.

We will move amendments that delay commencement by 12 months. Commencement of the bill is 1 July 2013. There are only 17 evaluators and some 9,000 products that may be up for the re-registration process; a CEO who has only just come on board; and nothing from the APVMA on how it will manage the changes and the increased workload. The APVMA needs time to establish its processes and time to consult with industry on how they will manage the new legislative requirements. Currently it takes up to 15 years to review some chemicals, so it is important that we give them time to adjust or the whole organisation will just go into meltdown.

The delay in commencement will allow time to develop a risk-management framework clearly detailing the application requirements, which is essential to support other efficiency measures such as 'shut the gate' and 'elapsed time frame' reforms. Registrants agreed to work with the APVMA to road test the risk framework to ensure that it operated as intended. This has not occurred to date. No consultation on the risk framework has occurred. The current manual of requirements and guidelines is insufficient, with significant gaps that need to be addressed. Without a comprehensive risk framework to deliver high-quality applications to the APVMA, it may struggle with applications that do not have all the information required, resulting in more applications being denied, longer time frames for decisions and a higher refusal rate.

The consequence of a poorly handled transition will be to amplify the problems identified by farmers and industry—that is, that fewer safe products will remain on the market, diminishing the competitiveness of the Australian industry. This will increase costs for farmers as the price of pesticides increases. Some generic products will be lost from the market. Products are also less likely to be introduced as regulatory risks and regulatory costs increases.

We need to be leaders in sustainable health, environmental and animal welfare standards, and not absent from the field because of the overreach of lobby groups. Our support for this bill will be contingent on the government supporting our amendments. This will show whether the government is genuine in wanting to introduce reforms that do improve efficiency and reduce costs to industry or is just trying to spin their way through another promise to the Greens and the green lobby.

I urge the government to support these sensible amendments to show that they understand the industry and to show that the split with the Greens, which most government members seem to be happy with, is real and not just talk. But we know that these alleged jilted lovers will be back together to sacrifice agriculture once again.