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Friday, 1 June 1984
Page: 2323


Senator BUTTON (Minister for Industry and Commerce)(9.06) —I move:

That the Bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-

Australian Meat and Live-stock Corporation Amendment Bill 1984

The purpose of the Bill is to change the structure, functions, and powers of the Australian Meat and Live-stock Corporation. There are five Bills being introduced with the object of restructuring the administration of the live-stock and meat industry.

These Bills constitute an integrated package of measures designed to produce an organisational structure that will improve the industry's ability to work cooperatively to develop policies to resolve its problems.

This legislation will also clarify the functions and powers of the AMLC, with particular attention to increasing its accountability to the Parliament, and to those in the industry whose levy payments provide the source of its finance.

In addition to the restructuring of the AMLC, these Bills provide for the establishment of a new Australian Meat and Live-stock Industry Policy Council and an Australian Meat and Live-stock Industry Selection Committee. There are also consequential changes to the Live-stock Slaughter Levy Act 1964 and the Live-stock Export Charge Act 1977.

This package does not include proposed arrangements for restructuring future administration of meat and live-stock research and development. The final details of this measure are the subject of further development and discussion with industry. A Bill on this matter will be brought before the Parliament during the 1984 Budget sittings.

Honourable senators will be aware that the live-stock and meat industries have been through a prolonged economic recession, and the capacity of producers to respond to the economic changes that continually buffet them has been well demonstrated. However, there is no adequate mechanism to enable industry organisations representing processors, exporters, public abattoirs and other groups to join with producers to develop a coordinated approach to the analysis and discussion of industry problems, or to formulate new industry policies.

For example the industry has been discussing over a number of years such important initiatives as single meat inspection, objective product description, AMLC sole trading and industry stabilisation or rationalisation measures. There has been slow, inconclusive and often divisive debate on such issues. The industry's poorly structured policy and decision making processes have prevented clear advice reaching Government on required actions that would have the full support of the industry.

The AMLC-primarily a market development, promotion and export control body-has attempted to fill this void through its producer and processor consultative groups. This approach has tended to heighten industry divisions and draw the corporation unnecessarily into agro-political industry debates, although many of the industry's problems cover matters that lie totally outside the Corporation's charter.

In its seach for an effective leadership structure the production sector of the industry has pressed for industry problems to be addressed by the Corporation. There has been a general lack of understanding that the Corporation's ability to exercise industry leadership is restricted not only by the State's constitutional responsibilities for the regulation of domestic meat marketing, but also because matters concerning, for example, animal health, welfare and hygiene, research, abattoir construction and legislation are the responsibilities of other bodies.

This situation is clearly unsatisfactory. In presenting these Bills the Government is fulfilling its election commitment to introduce new administrative arrangements to reform the policy and operational arms of the Australian meat and live-stock industry.

The details of these Bills have been developed from the continuous consultations the Minister for Primary Industry has had with leaders of the key industry organisations since the Government first came to office. The final package was negotiated with the industry last August. In October the Government endorsed the principles underlying the new arrangements, and empowered the Minister to establish an Industry Selection Committee and Industry Policy Council on an interim basis, pending the introduction of this legislation.

In future the Industry Policy Council will be the body responsible for the examination of all broad industry policy issues. This will require a shift in the industry's present expectation for industry leadership on all issues to come from the Corporation.

The proposed functions for the Australian Meat and Live-stock Corporation will remove its responsibility for general policy advice and require it to be more directly concerned with, and confined to, commercial activities associated with market development, the promotion of meat and live-stock sales, and finally the regulation of export trading.

The more commercial role of the AMLC will require a different approach to the selection of its Board. The interim Industry Selection Committee is already at work to choose members of the new Board on the basis of their professional qualifications and work experience in the fields of cattle production, sheep production, live-stock exporting, meatworks operation, meat exporting, product promotion, finance, international commodity marketing, business management and industrial relations.

To select highly competent people in these specialised fields is a demanding exercise. Board members will, in future, be recruited from a wider spectrum of Australian business sources. They will not be selected, as in the past, on the basis of their industry 'representation' but for their expertise and direct ability to contribute to a professional team. Whilst this formula guarantees producers a place on the Board it recognises that a wider balance of commercial experience is essential if the Board is to effectively perform its commercial role.

I now turn to specific clauses and provisions in the Australian Meat and Live- stock Corporation Amendment Bill 1984.

Under Clause 4 of the Bill honourable Senators will note that the Australian Meat and Live-stock Corporation will no longer have a broad policy-advising function. The removal of this responsibility is a deliberate move on the part of the Government to ensure that the Industry Policy Council becomes the primary focus for overall industry policy development activity. Nevertheless, the Corporation will be expected to develop policies as required on areas concerned with its commercial functions, as well as contribute to policy development for the industry as a whole by means of the AMLC Chairman's membership of the Policy Council.

In order to help foster better consultation, Clause 7 of the Bill gives the Corporation power to arrange consultations, as necessary with relevant industry groups, on matters concerned with its operational responsibilities, and to be responsible for the costs of meetings that it arranges.

It is not intended to retain the present formal Consultative Groups which have not achieved as much as had been expected. Instead this operational Corporation is to be given the greater flexibility it requires to develop a more direct and meaningful consultative process with producer and processor/trader organisations , according to its actual operational needs. Such meetings can be expected to be irregular, possibly shorter and more directly concerned with technical matters. Industry organisations can be expected to give more attention in the future to the consultative and analytical needs of the Industry Policy Council, which is also expected to require considerable assistance from industry in its examination of industry problems.

A number of other modifications to the powers of the Australian Meat and Live- stock Corporation are included in the Bill. They are designed to upgrade the Corporation's commercial powers, and place the day to day responsibility for commercial decisions within these heads of power more squarely on the Corporation Board.

The Bill provides for the removal of the restriction that the Corporation can only trade in live-stock and meat that it owns. This will enhance the Corporation's flexibility and allow it, as an agent, to co-ordinate the trading activities of competing Australian exporters in the exercise of its overseas trading powers.

The Australian Meat and Live-stock Corporation will now have increased power to engage in sole trading to a particular market where, in the opinion of the Corporation, such action would be beneficial in developing the market for Australian meat or live-stock.

Honourable senators will note that, under the Bill, the Corporation is required to develop criteria for deciding to exercise this additional power. Such criteria will require Ministerial approval only as a part of the five year corporate plan, not for specific actions as a sole trader.

Consistent with this principle it is proposed that the Corporation will no longer be required to secure specific Ministerial approval in exercising its power to act as a sole trader to a market where a monopoly import situation exists. Criteria for such action are well defined in the existing provisions of the legislation.

It is hoped that the broadening of the Corporation's trading powers that has been outlined will move the focus of the industry debate away from the limits of those powers to a conscious examination of the trading policies that best serve the commercial interests of the industry. It is expected that the meat and live- stock industry would play a big part in setting the industry's policies in this area.

The financial powers of the Australian Meat and Live-stock Corporation have also been expanded under the Bill in line with the more commercial role expected of the Corporation. The scope for the raising of moneys by the Corporation, which will require the approval of the Minister for Primary Industry, will be widened to the issuing of securities.

A provision has been made in the Bill for the making of regulations to enable the Corporation to charge fees for the licensing of exporters and to recoup the costs of the services it provides to industry, in keeping with the user pays principle.

Under clause 25 of the Bill the Australian Meat and Live-stock Corporation is to assume responsibility for meeting the costs associated with the Policy Council's industry conferences. The Corporation is also to be responsible for all costs and expenses of the Industry Selection Committee.

The rationale for this is that the Corporation, funded as it is from industry levy and export charge contributions, is the convenient point from which these other industry endeavours can be funded and so avoid the need to establish separate industry funding arrangements.

Honourable senators will recall that it was indicated earlier that Corporation members will be chosen on the basis of their professional qualifications and work experience. Under the Bill, the Corporation is to consist of 11 members, namely a chairman, a government representative, the Managing Director of the Corporation and 8 other members. The part-time chairman and the Government representative are to be appointed by the Minister for Primary Industry. The Managing Director is to be appointed by the Corporation and will become an ex- officio voting member of the Board. The 8 other members with the special professional skills and experience already outlined will be selected, for the Minister's appointment, by the Australian Meat and Live-stock Industry Selection Committee.

The Bill contains a number of requirements of the Corporation to increase its accountability to the industry and to Parliament through the Minister.

The main provision to make the Corporation more accountable to industry members who are affected by its activities, and who contribute to its annual income through payment of slaughter and live-stock export levies, is the requirement for the Corporation to convene an annual general meeting of industry members who meet particular eligibility requirements. Voting entitlements of live-stock producers will be determined by live-stock ownership.

The Bill allows wide ranging powers for the AGM. The AGM can comment on or query any aspect of the Corporation's annual report or general activities. The AGM can vote on resolutions, with the Australian Meat and Live-stock Industry Policy Council to be notified of the outcome. Under the Bill the Corporation is required to put as a motion to the AGM any planned variation to levies or charges. The AGM will also have the power to decline any proposed increases in levies to fund the Corporation. Finally, the AGM under clause 22 will have the power to cause the removal of the Corporation's Chairman or Board.

The Bill defines the actions required of the Minister for Primary Industry in the event that the AGM passes a vote of no confidence in the Chairman, or Board. Their appointments are to be terminated within one month of the AGM.

Such a vote would only be carried if 75% of the votes of persons registered in each of the live-stock producer and processor/exporter categories are cast at the AGM in support of the motion, either in person or by proxy.

Other arrangements to ensure the Corporation carries out its responsibilities in a business like manner are included in clause 22 of this Bill which also provides the basis for its relationship with the Minister.

Thus under clause 22, the Corporation will be required to prepare a five year corporate plan to apply from a date no later than 1 July 1985. The corporate plan is to set out the objectives, key programs and priorities of the Corporation to provide the framework for the Corporation's administration of its functions and powers for the five year period.

Complementary to the five year plan is the requirement under clause 22 for an annual operational plan to set out the Corporation's objectives and programs for the relevant 12 month period ahead. Honourable senators will note that the Bill requires both the five year corporate plan and the annual operational plan to be submitted to the Minister for Primary Industry for approval. These obligations provide an accountability arrangement which focuses the Minister's and Corporation's attention on the strategies of the AMLC and the basic directions and policy approaches it will be following.

Approval of both the corporate and the annual operational plan provides the Minister with overall supervision of the Corporation's activity, but enables the Corporation to get on with its functions without constant reference to the Minister for detailed approval of each major activity.

The development of the annual operational plan and the five year corporate plan are of particular importance as they will provide an opportunity for better definition of the Corporation's functions and strategies within the broader functions allowed under the Bill. Hopefully, this will remove some of the confusion of the past.

It is anticipated that the highlights of the Corporation's corporate plans would be made widely known within industry. However, the Corporation may wish to keep some elements confidential for trading purposes.

With regard to the financial implications of this Bill and the four companion Bills, costs of the marketing corporation and the selection committee will be met by the industry.

It is estimated that cash costs for the Australian Meat and Live-stock Industry Policy Council will amount to $48,000 in the current financial year. This covers remuneration of the chairman, the meetings expenses of Council members and the provision of secretariat services by the Department of Primary Industry. Approval for an increase of two in the Department's average staffing levels is presently being sought. This is justified by the considerable value of the Council's advice to the Government, and provision of the secretariat will ensure that the Council's policy proposals are practicable and based upon full industry consultation and endorsement.

It is expected that the Council's operating costs, including secretariat salaries, will amount to around $215,000 in a full financial year. In seeking this financial assistance, the industry has drawn comparisons with the manufacturing industry's advisory councils, and pressed strongly for equity in treatment. It is claimed that in each case, the councils provide similar assistance in the development of government policy.

I commend the Bill to honourable senators.

Australian Meat and Live-stock Industry Policy Council Bill 1984

The purpose of the Bill, which is complementary to the Australian Meat and Live -stock Corporation Amendment Bill 1984, is to provide for the establishment of an Australian Meat and Live-stock Industry Policy Council.

Honourable senators will recall that the broad role of the Australian Meat and Live-stock Industry Policy Council was outlined earlier in the second reading speech on the Australian Meat and Live-stock Corporation Amendment Bill 1984.

The main object of establishing the Australian Meat and Live-stock Industry Policy Council is to facilitate the participation of the industry in the development and formulation of industry policies. It will provide a forum for consensus building between its different sectoral interests and provide opportunities, through its working groups, for all interested parties to work together on factual examination of industry problems, and to present practical proposals to government for their solution.

A main task of this Council will be to provide a forum for resolving industry differences, and with the assistance of an independent chairman and a small professional secretariat, to develop industry consensus on the action necessary to deal with its problems.

Its establishment with statutory status is necessary to provide a binding charter and to help the Minister to ensure its accountability.

I now turn to the specific provisions of this Bill.

Clause 9 states that the Policy Council will be established with a membership of 14, including an independent chairman. Eight of its members will be the leaders and other nominees of livestock and meat industry organisations. These 8 members will comprise 4 representatives of livestock producers drawn from the Cattle and Sheepmeat Councils of Australia, and 4 representatives of meat processors and exporters drawn from the major organisations in that sector of the industry.

The other members of the Policy Council will include the chairmen of the main operational arms of the industry, namely, the Australian Meat and Live-stock Corporation, and the Australian Meat Research Committee pending the establishment of the proposed new Research and Development Corporation. Finally, there will be 3 members to represent respectively, the interim Inspection Policy Council, the Australian Council of Trade Unions and State meat authorities.

There are a number of industry groups that are not included on the Council as it was considered essential to keep it to a manageable size if it is to operate effectively. However, if experience indicates the necessity for additional membership there is provision in the Bill for this development. It is expected, however, that the Council will ensure that specific industry interests will be given every opportunity to contribute to the Council's work, and indeed the Bill specifies this as an obligation of the Council.

Clause 5 requires the Council to ensure that the views of all interested parties are taken into account. Clause 18 of the Bill allows for the establishment of working groups to provide advice to the Council. The working groups can play an important role in terms of developing concepts into practical propositions, and for advising Council on topics for which a wider viewpoint is desirable. Under clause 7 a report of the working group may be adopted as the report of the Council.

Reports from the Council will be made to the Minister. The Bill requires that the Minister release such reports publicly unless he judges it is not in the public interest to do so.

Clause 6 of the Bill requires the holding of an industry conference at intervals not exceeding 2 years. The purpose of the Conference is to assist the Council in identifying matters of concern to the industry, to promote a better understanding of problems within the industry and to foster a consensus on policy. The widest industry participation can be achieved at the Conference.

It is envisaged that the Council will meet about 4 times per year depending upon needs, with the additional terminating working groups being established and reporting to the Council as necessary.

The Council will have the resources required to exercise its responsibilities as provided under clauses 20 and 21. A small professional Secretariat, reporting directly to the Council and responsible to it is to be provided by the Department of Primary Industry. In addition the Council will have the ability to draw on the expertise and resources of member bodies and other organisations as required.

Under Clause 22 of the Bill the Council is required to provide an annual report to the Minister for tabling in Parliament.

I commend the Bill to honourable senators.

Australian Meat and Live-stock Industry Selection Committee Bill 1984

The purpose of this Bill, which is complementary to the Australian Meat and Live-stock Corporation Amendment Bill 1984, is to provide for the establishment of an Australian Meat and Live-stock Industry Selection Committee.

Honourable senators will recall that I earlier outlined, under the Australian Meat and Live-stock Corporation Amendment Bill 1984, the broad role of the Australian Meat and Live-stock Industry Selection Committee. Its task is to seek out highly competent people who can meet the demands and responsibilities for appointment to the Board of the Australian Meat and Live-stock Corporation.

Following the Government's decision to establish this Selection Committee on an interim basis, pending introduction of the legislation, the Minister for Primary Industry announced in February the appointment of Mr Frederick Millar, CBE, to the position of independent, part-time Chairman of the Interim Selection Committee, together with the names of three representatives of cattle and sheep producers and those of three representatives of meat processors/exporters.

This Committee has already met a number of times. With the assistance of a consulting firm it is currently reviewing a wide range of candidates for recommendation to the Minister of 8 future members of the new Australian Meat and Live-stock Corporation.

I now refer to specific clauses and provisions in the Australian Meat and Live- stock Industry Selection Committee Bill 1984.

Under clause 5 of the Bill the Committee is required to select and nominate persons to the Minister for Primary Industry for appointment to the Australian Meat and Live-stock Corporation. Clause 8 of the Bill provides that a person is not entitled to be nominated for appointment unless the person possesses qualifications or experience relevant to one or more of the following fields of activity: cattle production, sheep production, live-stock exporting, meatworks operation, meat exporting, product promotion, finance, international commodity marketing, business management and industrial relations.

The Bill requires the Committee to make its selection to best ensure that the Corporation Board collectively possesses this full range of skills.

The composition of the Selection Committee ensures that the meat and live-stock industry is closely involved in the selection of board members. The Bill provides for a Committee of 7 part-time members. A chairman selected and appointed by the Minister, 2 members appointed on the nomination of the Cattle Council of Australia, 1 member appointed on the nomination of the Sheepmeat Council of Australia and 3 members appointed on the nomination of the Australian Meat Exporters' Federal Council.

Unlike current arrangements where the Minister makes his own selections for appointment to the Board from a short list of two or three names provided by the consultative groups, under the new arrangements the Selection Committee's nominations will be the only names presented for appointment but the Minister may reject a nomination and call for another.

Clause 22 of the Bill provides for the engagement of staff and consultants. Honourable members will recall that under the Australian Meat and Live-stock Corporation Amendment Bill the funds required for staff, consultants and the general operation of the Committee are to be met by the Corporation. I commend the Bill to honourable senators.

Debate (on motion by Senator Reid) adjourned.