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Wednesday, 8 February 2017
Page: 260

Senator XENOPHON (South Australia) (11:55): I indicate my support for the Competition and Consumer Amendment (Country of Origin) Bill 2016. This has really been a long and winding road. Back in 2008, in my first few months in the Senate, I managed to convince my then colleague Senator Bob Brown, the Leader of the Australian Greens, and Senator Barnaby Joyce from the Nationals to co-sponsor a bill on truth in country-of-origin labelling. We produced a minority report—it was effectively a dissenting report—when the major parties effectively said, 'We don't want to go down this path.' I think it says something about the nature of the issue when you can have both the Greens and the Nationals on a unity ticket co-sponsoring legislation, co-writing a minority report about the need for truth in labelling in this country. It has been a long time coming, but we have seen some real improvements in the system. However, I believe there is scope for more significant improvements, and I will speak to amendments in relation to that.

It is very clear that Australians want to buy Australian. In fact, a survey published in The Sydney Morning Herald a couple of days ago indicated overwhelmingly that Australians favour Australian made goods, things made here in Australia, and that sentiment is even stronger when it comes to the food that we eat. Multiple surveys have shown that Australians want to buy Australian products, products which use ingredients grown in Australia and which contribute to the Australian economy through jobs and the clean, green produce that Australia is so justifiably famous for. We know this through surveys going back many years. Back in 2005 an Auspoll survey found that 97 per cent of Australians wanted to have clear information on the country of origin of their foodstuffs. A 2009 survey found that 82.5 per cent of supermarket shoppers checked most of the time whether their foodstuffs, including fruit and vegetables, were Australian in origin. In other words, consumers are aware of this. We must have clear, simple, straightforward country-of-origin labelling laws so that consumers can make an informed choice when they are rushing through the supermarket. If they have toddlers or other children with them and they are in a mad rush, they want to get in and out of the supermarket, but they want to be able to make an informed choice as easily as possible.

I also think it is important to put into perspective that the 50 per cent production cost test, the substantial transformation test, has inherently been a failure. You can claim a product was made in Australia even though the majority of ingredients could have come from overseas. I am very grateful to my friend and constituent Ron Gray, a former citrus grower from Loxton in the Riverland, who has been a tireless campaigner on the issue of food labelling and the impact that poor food labelling has had on the citrus industry, which has shrunk over the years rather than expanded, as it should have, with so much of our citrus juice coming from Brazilian concentrate. Ron Gray made the point that the laws were actually killing off the citrus industry. You could have a fruit juice with 70 per cent Brazilian concentrate and a minority of Australian juice and you add the water and do the packaging, and that easily passes the 50 per cent substantial transformation test—and that is a disgrace. Ron Gray told me not so long ago, as he was winding up his citrus production in Loxton, that he sent fruit to a processing plant in Mildura across the border. The money he received for that fruit barely covered the cost of the transport. In other words, he got a zero net return for his fruit. That is a disgrace, and I hope this bill goes some way to rectifying it.

We know that in 2012, the inquiry by Senate Select Committee on Australia's Food Processing Sector, chaired by former senator, Senator Colbeck, showed a number of anomalies that occur with food labelling in this country. Seafood labelling is an issue that is particularly prone to abuse. There are serious concerns about our current labelling regime, which allow foreign imports to be classified as 'Made in Australia'.

In its submission to this bill, the Australian Made Campaign Limited stated that overall it 'supports the removal of the 50 per cent cost test'. However, it noted some concerns that 'it may result in adverse consequences for some Australian suppliers of inputs'. It noted:

This will occur where a manufacturer opts to source cheaper inputs offshore, knowing that it will not affect their capacity to make a Made in Australia claim. An example of this is a manufacturer of soft gel capsules who currently purchases gelatin from an Australian manufacturer because it assists them to meet the 50 per cent threshold. The local packaging industry may also be impacted adversely by this change.

These are issues that ought to be fairly raised in the committee stages of this bill.

This issue was recognised in the committee report, and I think there is a need for greater guidance as to what does or does not constitute substantial transformation. The committee noted the concerns of the AMCL and that there was currently no mechanism by which manufacturers could obtain a definitive answer regarding country-of-origin claims and that this could result in companies being hesitant to make a claim for fear that competitors would challenge its validity. Whilst not making a submission on this bill, the consumer group CHOICE stated:

Unfortunately, the new system looks less useful for consumers wanting information about any of the 195 countries that are not Australia. For example, claims such as 'Made in Australia from imported ingredients' will still have you wondering where your food comes from …

That is one of the big flaws of this bill.

It is also important to ensure there is a mechanism to give manufacturers the ability to apply for a ruling on country-of-origin labelling claims. There is no such mechanism in the current bill. It is something that needs to be prosecuted or explored in the committee stages. I will be moving a second reading amendment standing in my name, which adds, at the end of the motion, 'but the Senate calls on the government to undertake an analysis of the benefits of establishing an administrative mechanism to give manufacturers the ability to apply for a ruling on country-of-origin labelling claims'. If we do not do that, this bill will only to half a job. It will be nowhere near as effective as it ought to be to give the truth in labelling and to give certainty to our food manufacturing sector.

We are seeing the decimation of manufacturing jobs in this country. In our auto sector, when Holden closes down on 20 October in South Australia and when Toyota closes down at about the same time and as car makers close down in Victoria, there will be tens of thousands of jobs lost. We need to have a plan B, and the food-processing sector has enormous potential to absorb a significant number of those job losses. It is also important, in the definition of 'substantial transformation', that we have an administrative mechanism similar to what exists in the United States, which will give manufacturers the ability to obtain a ruling on country-of-origin claims. That is something that, as I said, with the second reading amendment, needs to be explored.

I believe that this bill, on balance, does advance the issue of certainty in food labelling, but there is one other issue that I raised in my additional comments to this bill. There ought to be a mechanism for manufacturers to regularly disclose the percentage and country of origin of specific ingredients to the department of industry, for publication on its website. A lot of manufacturers will say, 'We can't do this. It's too complex. It's too difficult because we have to change our labels all the time.' There is a thing called the internet. If they are required to publish online to the department so that, every six months, consumers can establish exactly what the percentage of whatever ingredients are in there is from Australia or elsewhere then that will empower consumers. It will also give a lot of useful information to the media that can be publicised about which manufacturers are making every possible effort to deal with these issues. That is why I will be moving an amendment in that regard. If there is political will, it can and should be done to really strengthen the framework of this bill.

There is one final issue I wish to raise—that is, the Food Standards Amendment (Fish Labelling) Bill 2015. Senator Lambie famously kissed a barramundi—

Senator Lambie: It was very sweet!

Senator XENOPHON: a very sweet barramundi, in the context of raising awareness of that bill—as well as the awareness of a number of other crossbenchers! This bill relates to the labelling of seafood products. What is interesting is that if you buy seafood in a supermarket, it tells you which country it comes from. But if you buy seafood that has been cooked and prepared in the fish and chip shop or restaurant right next to the supermarket, you have no idea where it comes from; there is no requirement to label it.

The Northern Territory moved on this a number of years ago and it has been a great success. It has boosted jobs in the Territory, and we heard in evidence to the Rural and Regional Affairs and Transport Legislation Committee that literally thousands of jobs will be created in our agriculture and seafood industries if this bill will—

Senator Ian Macdonald: You could say who brought it into the supermarkets.

Senator XENOPHON: I think that was the coalition. Was that you?

Senator Ian Macdonald: Well, I am not looking for personal praise.

Senator XENOPHON: I will acknowledge Senator Macdonald's passionate advocacy for the seafood sector.

Senator Ian Macdonald: I will sing my own praises later!

Senator XENOPHON: He will sing his own praises—I am sure I wouldn't do justice for him!

What is interesting here is that it was a unanimous decision of the committee. It was a decision of crossbenchers, of the coalition and of the opposition to support this law. They actually said that we should just get on with it. The committee recommended that, with the bill being passed into law, the Commonwealth encourage the states and territories to comply with and enforce the revised standard.

This bill does not deal with that. It is something I have had discussions on with the Deputy Prime Minister, with the relevant minister and with Minister Nash. And I have been very disappointed that it has not been advanced. So, that is another reform that needs to be brought about.

With those comments, I support this bill, but I urge my colleagues to seriously consider the amendment for greater transparency every six months—which would not carry an unreasonable administrative burden—to get a commitment from the government to actually advance this, because if it does not then I think you will find that consumers will still feel that they are not getting the information they deserve. That is why this bill is so important, particularly in the context of Australians wanting to know what they are eating and where it comes from and also in the context of the impact it has on Australian jobs and our food processing sector and on Australian agriculture.

I move the second reading amendment standing in my name, which I foreshadowed in relation to the issue of standards and getting appropriate rulings from an administrative mechanism for food manufacturers:

At the end of the motion, add "but the Senate calls on the Government to undertake an analysis of the benefits of establishing an administrative mechanism to give manufacturers the ability to apply for a ruling on Country of Origin Labelling claims".