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Monday, 18 March 2013
Page: 2322

Mr BALDWIN (Paterson) (13:16): I rise today to speak on the Agricultural and Veterinary Chemicals Legislation Amendment Bill 2012. As my colleague the shadow minister for agriculture and food security has indicated, the coalition will move amendments to this bill: firstly, to remove the re-registration processes to ensure there is a net gain in efficiency; and, secondly, to delay commencement for 12 months to allow proper consultation processes and to minimise the disruption and cost to industry. A key point is that the coalition will engage and consult with industry to better understand the needs of industry, as opposed to those who sit behind a desk and just deliver ultimatums to the government. I remind this government that consultation means working with the industry, not against the industry.

One of the reasons we will be moving our amendments is that this is absolutely in line with the coalition's commitment to cut unnecessary red tape, something this Labor government promised to do prior to the election; instead, it has thrived on delivering more regulation rather than cutting regulation. Businesses are drowning in it.

The bill before the House today was supposed to improve the efficiency and effectiveness of the current regulatory arrangements and provide for greater certainty for the wider community that chemicals approved for use in Australia are safe. But from the outset let me say it has failed in most of its measures. This bill was designed to enhance the consistency, efficiency and transparency of agvet chemical approvals, registrations and reconsiderations through development, publication and implementation of a risk framework the APVMA must have regard to, and to introduce legislative amendments to align regulatory effort with chemical risk. It was designed to ensure the ongoing safety of agvet chemicals and improve the efficiency and effectiveness of current agvet chemical reconsideration arrangements by implementing a mandatory re-approval and re-registration regime designed to identify any potentially problematic chemicals while minimising negative impacts on affected businesses. It was supposed to have been designed to improve the efficiency and effectiveness of the assessment process for agvet chemical applications for approval, registration and variation and improve the timeliness of agvet chemical approvals, registration and reconsiderations. It was supposed to be designed to improve the ability of APVMA to enforce compliance with its regulatory decisions by providing the APVMA with a graduated range of compliance enforcement powers and introducing a power to apply statutory conditions to registrations and approval. This bill was supposed to be designed to improve consistency in data protection provisions and remove disincentives for industry to provide data in support of ongoing registrations of agricultural and veterinary chemicals. It was supposed to have addressed perceptions of a conflict of interest by providing for an agency other than APVMA to collect the chemical products levy should it be cost effective to do so. The bill also includes other amendments to remove redundant provisions and amend out-of-date provisions.

It is clear to me, clear to the coalition and clear to the industry that this bill in its current form will not deliver the efficiencies that are needed for industry. I have real dialogue with the industry—as well as representing an agricultural base I have people who are in the business of producing veterinary products and chemicals. In making a contribution to this debate, I reflect on the experiences of my constituents John and Gwen O'Brien, whose business premises are currently in the electorate of the member for Hunter at Rutherford but when the business was first established it was in the electorate of Paterson.

I want to reflect on the risks taken and the investment made by people like John and Gwen O'Brien. They purchased the little business Jurox, which was a small business at Riverstone employing two people with an annualised turnover of around half a million dollars. That was back in 1992. This family-owned business has developed great product, spent money on research and development—it has made the investment—and, today, it is a company that has sales of $36 million per annum and employs 120 people in Australia. John and Gwen are what you call people with skin in the game. They have to live by the regulations and the anticompetitive nature of those regulations in an international market.

I said that this company has grown from two to 120 employees. Originally when they came to the seat of Paterson, when Rutherford was in Paterson, they invested $3 million in a new complex. Currently they are spending another $12 million to grow the business even further. This is a state-of-the-art, world-class facility that focuses on research and development as much as it does on marketing. These are people who understand that they need to spend about 13 per cent of their sales on research to make sure their products are first and foremost in the market.

Three-quarters of their product range of over 70 products are sold to the veterinary profession. Their No. 1 product, Alfaxan, is a cat and dog anaesthetic. Their No. 2 product is Q-drench, a worming product for sheep. These are leading products in the industry—products which they are working to get approval for overseas so they can move into US markets, for example, dealing with all the regulations required. These are people who understand how red tape reduces business efficiency and the competitive nature of businesses. In the bill being proposed by the government we see an increase in red tape and bureaucratic burden.

If the government gets the regulation of this industry wrong, all businesses will be directly impacted. I want to see businesses—particularly small, home-grown businesses like Jurox—grow and succeed, not just in the Australian market but on an international basis. This is a family business that could easily have sold out to a multinational but has made the decision to keep things in-house, in-family, and invest their own money and grow the business not only for their benefit but for the benefit of all Australians.

Local enterprises do not have the massive internal departments that multinationals do—they cannot afford the burden of Labor's red tape and massive bureaucracies. Nor should they have to. If it comes to me as a member of this House to stand up and fight against bad regulation to ensure the jobs at thriving enterprises such as Jurox are protected, I am prepared to do so. The government should be focused on supporting and driving industry forward—not drowning them in red tape.

I have been advised that throughout the industry there is a view that the APVMA should be split: animal health should be separate from pesticides and herbicides, as the Veterinary Medicines Directorate or VMD does in the UK, or as it is done in the US and Canada, where animal health products are monitored by the human health regulator. This is seen in the cooperative relationship between the Food and Drug Administration and the Therapeutic Goods Administration. Veterinary products have more in common with human medical products than they do with pesticides. It is my understanding that no other major regulator, except New Zealand, tries to manage pesticides and veterinary products under the same model.

Australian-owned companies like Jurox, who are looking to export to markets in North America and Europe, face regulatory disjoins between those countries' regulators and the APVMA, which creates inefficiencies, delays and multiple assessment and accreditation. Even though compliance is granted in Australia by the APVMA, Europe and Canada do not accept inspections by non-government inspectors such as the APVMA, so products have to be tested yet again by the TGA and by the FDA in the United States.

Similar legislation was enacted in Europe in the 1990s requiring re-registration. Many agricultural chemicals were never re-registered because their market share was too small and the cost burden too high. As a result, those markets lost the efficiencies and effectiveness of certain chemicals for their agricultural pursuits. The effect on agricultural production was enormous, with fewer options available to growers, which led to resistance issues with pests and products not reaching market.

Australia's agricultural sectors are largely concerned about the re-registration and re-approval process surrounding different treatments. If treatments are not registered, farmers cannot use them. The legislation will create higher levels of uncertainty in a sector that has already suffered at the hands of this government, with unwarranted over-regulation and short-sighted reactionary policy. At every corner this government demonstrates its ineptitude and lack of understanding of what the agricultural industries need. There is a distinct difference in dealing with those who have skin in the game and those who simply sit behind a desk and drive bureaucracy.

The agricultural industry has suffered enough from this government, including, most spectacularly—and I remind the House—from Labor's handling of the live cattle trade debacle. Safe and effective chemicals, which are not widely used in industry, are under threat of being withdrawn from the market due to the net loss they will face directly under this bill because of the volumes. In fact, the Deloitte Access Economics report commissioned by CropLife stated that there would be an increase of some $8 million per year to product registrants that will be passed on to users. According to industry peak bodies like Ausveg, a similar expectation is expected here in Australia, particularly to the horticultural industry. Under the new legislation, agricultural chemicals will be required to be re-registered every seven to 15 years. The mandatory registration of 1,900 active constituents from the 9,900 currently registered agvet chemicals is simply unrealistic. The financial and resource impost for both regulatory bodies, manufacturers and end-users will be damaging.

The increases in administrative workload on APVMA staff will reduce their ability to deal with priority registrations and permits. This bill will simply lead to a net loss in the efficiency of the regulator and, contrary to the stated aims, it will reduce its ability to identify and review suspect chemistries. This is despite Finance and Deregulation Minister Penny Wong listing agvet chemical reform as the second key example of where the government would reduce regulatory compliance costs for businesses and improve competitiveness.

In evidence to the parliamentary inquiry, Mathew Cossey, the CEO of CropLife Australia, said:

In its current form, this bill will only serve to hinder agricultural productivity.

According to the coalition senators' dissenting report there has not been adequate cost-benefit analysis of mandatory re-registration processes and there are big jumps in the expected cost of the re-registration process from between $2 million and $8 million that could turn into $20 million. Those costs will, of course, come back to the farming and agribusiness community and ultimately to the consumer.

What this government does not understand is that a lot of people in the agriculture business are not price setters; they are price takers. That cost will end up being absorbed by those businesses because of international competition coming into this marketplace. Understand that some people are not price setters; they are price takers.

Low-risk agvet chemicals with multiple uses have had no consideration under this bill. I say to the government: go back, rethink and re-engage with the industry. You need to deliver an outcome that is for the benefit of the industry and the community alike. Clearly, you have failed in that. Your government is addicted to over-regulation, and that over-regulation will be to the detriment of our agricultural community, not just to the individual businesses like Jurox but all the way through, as the processes continue.

How can the industry cope? One stakeholder told me there are only 17 evaluators and some 9,000 products that will need to be re-registered, if this bill is passed, by 1 July 2013. That sort of workload is simply unrealistic. Not enough thought has been given to the process, so it will deliver negative outcomes for all of Australia.

I cannot support the bill in its current form. I look forward to the amendments that will be moved by my colleague John Cobb. We need to make sure that we put industry, outcomes and people before the bureaucratic madness of this government.