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Wednesday, 17 October 1984
Page: 1909

Senator MACKLIN(9.28) —We are debating cognately some 20 primary industry Bills. In the half hour allowed to debate the Bills it is obviously not possible to cover all the matters one would wish to raise about each of these areas. Some of the commodity areas we are dealing with are of importance to the entire national economy. Others are of a much more local economic value, but nevertheless they are of grave concern to individuals in those commodity areas and to the surrounding regional structures. I wish to go through each of the major areas, to make some brief comments and, in the Committee stage, to expand on those areas where they require it.

I refer first of all to the Wheat Marketing Bill 1984. I congratulate the Minister for Primary Industry (Mr Kerin) and the Government on the work that the Minister and his Department have done on this Bill. Long and detailed discussions have been held with various groups in the wheat industry. This Bill is a culmination of a great deal of work, discussion and co-operation between all sectors of wheat marketing. It is a radical breakthrough, a radical change, in the structures of wheat marketing. Now we have a much freer marketing operation than we have had for many years. It is something that certainly in recent years growers have been looking forward to and have been urging on successive governments. It is to the credit of the Labor Government that it has taken up the challenge and come forward with this Bill.

I do not want my subsequent remarks on certain sections of the Bill to be taken as withdrawing in any way from the praise I would like to offer to the Minister for getting this Bill together, into the Parliament and through the Parliament in such a way as to receive almost unanimous support from within the industry. As is the case with almost any Bill that comes into this place which affects an industry the size of the wheat industry, there will be a number of factors with which the industry does not agree. One of those factors which did not have anything to do with the substance of the Bill was the composition of the Wheat Board. The composition of the Board that the Government had determined will take away from the growers effective control of that Board. This was a matter of concern to the Australian Wheatgrowers Federation and to the Australian Democrats. Since our policy was first formulated seven years ago it has been that there should always be grower control of commodity boards. Unfortunately this became a matter of some controversy in the House of Representatives.

I think it is worth while briefly outlining what occurred. The Australian Wheatgrowers Federation approached both the Opposition parties and the Australian Democrats with a number of concerns, one of which was the composition of the Board. The Wheatgrowers Federation made it very clear that it wished the legislation dealing with the marketing arrangements to go through. But at the same time its policy was that the Board ought to remain under effective grower control. The number of grower representatives in each of the States being reduced from two to one and the additional expertise coming on to the Board would deny growers that effective control. The Federation put those two points to me at the meeting I had with it. There is obviously a dilemma there.

I saw the Minister on this matter and suggested that one way we may be able to accommodate that approach and fit in what the Minister had already announced in the House of Representatives about a review on this matter would be to put off the changeover of the Board to a later time in the year and to have a sunset clause on that matter. Later that day the Australian Wheatgrowers Federation saw the Minister and reinforced the proposition that I, on behalf of the Australian Democrats, had put to the Minister. The Minister accepted that proposition and moved such amendments in the House of Representatives. Unfortunately in that circumstance, the Opposition parties sought to make a great deal of political play about the matter. I find that activity is not helpful in these types of negotiations. The negotiations are not ones about which one is trying to win a point. We are dealing with a very vital industry. It should not be one which is put in jeopardy-whether or not it be at election time-by people seeking to win cheap political points. I think it is poor that this occurred.

I hope that when the review on this Bill takes place the propositions that the Australian Wheatgrowers Federation is putting up and those that other interested parties will undoubtedly put up will show that the grower majority on that Board is not at a disadvantage. I accept the notion that we need additional expertise, but I do not see why that additional expertise necessarily has to be on the Board. I do not see why the Board cannot have access to that expertise in some other way. The Australian Democrats hope that that will be the outcome of the review. In any case, the Parliament will have a chance next year to debate that issue separately. I believe that it should have been a separate issue in the first place and I am glad to see that the Minister has changed the Bill to make it a separate issue and that we will debate that at some length and probably with some fervour in the next sittings of this Parliament.

There were some subsidiary matters connected with the Board that were matters for State legislation. There were particular problems in my own State of Queensland and also in Western Australia because of the timing of the State Wheat Board elections. Those elections are relevant to this Bill because a person must be on a State Wheat Board before he can become a member of the Australian Wheat Board. In Queensland, the members are also by cognate legislation members of other boards, such as grain handling, silos, and the like . If the Bill had stood as it was originally introduced into the House of Representatives we would have a turnover, at least in my own State of Queensland , of the grower representative once every 18 months. Obviously that would have been a bad thing. It would have meant a lack of continuity which is required to represent each of the States adequately at that level. I am glad that the Minister and his Department have been able to sort out those problems as well. There are a couple of other matters but I would wish to leave those to a later stage.

I move now to the dried vine fruits legislation. The substance of the Dried Vine Fruits Equalization Amendment Bill 1984 was introduced originally at the request of the Australian Dried Fruits Association. The Bill is an attempt by the Government to speed up the disbursement of equalisation payments when many of the people in the industry are in dire trouble. In the Minister's second reading speech he said:

The Association is anxious that there should be no undue delays in disbursement of equalisation payments, especially when so many producers in the industry are in desperate financial straits.

Almost certainly they are in desperate financial straits but it is odd that we have had to wait 18 months before seeing any activity in this area, particularly when industries along the Victoria-New South Wales border are being sold up by banks and many people are being forced into bankruptcy.

The activity that has been taking place in this area is the reference to the Industries Assistance Commission and I believe that its report is questionable to a large extent. The particular point that I find questionable in the IAC's draft report-and it must be acknowledged that it is only a draft report-is that there seems very little attention paid to the integration between the dried vine fruits industry and the regional economies in which that industry sits. In many ways it seems that the IAC has plucked the industry out of the air and not taken cognisance of the fact that many communities are dependent on its viability. If one looks at the wider social effects that the IAC's recommendations undoubtedly would have, one could also be looking at downstream effects-for example, increased unemployment in those areas, increased payments in terms of social security costs which would be required on an ongoing basis and the social consequences of materially affecting the community welfare in an isolated regional economy, such as the ones that are typical in these growing areas. It is one of the items to which I hope the Industries Assistance Commission will pay much more attention in its final report on this matter. If we take into account downstream effects in the regional economies, we may very well find that the savings that might be made to consolidated revenue by following through some of the IAC's recommendations would be lost by payments out of consolidated revenue in other forms.

The last point I mention on this matter is that dried vine fruits have traditionally been used in Australia as an alternative source of income in bad wine grape harvest years. With the wine tax, the possibilities of that occurring in future are likely to be fairly small. So the dried vine fruits industry has suffered a couple of blows this year-the IAC report, and the wine tax. The movement in this Bill will be useful. It is something for which the Association has been looking. The Australian Democrats will be supporting it.

Senator Robert Ray —What will the Nationals do? They are not even here.

Senator MACKLIN —We will find out. I shall be speaking at greater length in the Committee stage on the canned fruits Bills, when we propose to move a series of amendments relating to the corporation's existence. The legislation will put a corporation into existence and take it out of existence within a time frame that we believe is totally impossible. The time frame of the corporation under the Bill means that it will spend most of its time drawing up the corporation plan and wondering what will happen after the corporation disappears, instead of getting on with the very important job that is required of it at present. So I shall be moving a series of amendments in the Committee stage seeking to regularise and extend the existence of the corporation. In particular, we would seek to extend it from three years to five years, because that would give it at least two and possibly three years' work before it had to look at the winding down phase. That would be a reasonable situation.

The second group of amendments, which have been circulated, deal with the Minister's authority over the corporation. In relation to the wheat legislation, I have already expressed the Australian Democrats' view about grower control on corporations. This is another corporation which would come under government control, and the Democrats will be moving amendments to try to rectify that situation.

I come to the Meat Export Charge Bill 1984 and the Meat Export Charge Collection Bill 1984. Essentially, we are here dealing with an industry which has gone through very difficult times. Undoubtedly now the prices being gained in this area are some of the best that we have had for many a year, but there are still significant problems in the industry. The Government has, by and large , adopted the types of recommendations in the report presented to it by the Interim Inspection Policy Council, with one very significant and, I suggest, fatal disagreement-the moratorium on the export inspection charges. The proposition that the Council put up must be accepted as being the rational way in which to move forward in this area. That is, that one dissociates the costs in the abattoirs from the costs of export. The problem that we have had in the past is that we have been putting one cost on everyone, and so the pork producers, for example, 99 per cent of whose production is consumed by the domestic market, have nevertheless been paying a significant margin over and above that on the export inspection charges. Undoubtedly, that was a matter of inequitable payment. It is a payment which persisted under the previous Government. It is a payment which has stayed on until now. It is a payment which undoubtedly ought to be changed. The suggestion which the Interim Inspection Policy Council came up with, which the Government has adopted, was to separate these two charges. That is the rational solution to the problem.

The difficulty is that the Interim Inspection Policy Council actually presented a package in regard to these costs. In its report it made some excellent points which I think bear repeating. This is really the hub of the point regarding inspection charges. I think it is something that this Government, like the previous Government, really has not grasped. The costs we are talking about in terms of the new charges proposed by the Government would amount to of the order of 2c a kilogram. A 2c a kilogram charge may not seem very much to most people in the community. Page 7 of the report gives the exact amount as follows:

The added costs for export meat inspection are the equivalent of 1.89 cents/kg.

Recently a large meat exporter in Australia lost an export consignment on fractions of a cent a kilogram. That is the fine balance that one is talking about in the export market. As the Interim Inspection Policy Council says:

With profit margins of a fraction of a cent per kilogram, Australia's ability to compete in a very tight and competitive international market place is severely restricted by the export inspection charge which puts us at a distinct disadvantage compared with our major competitors, who either do not charge for inspection-

a la a place, such as Canada--

or provide levels of assistance which counteract the effects of the charge.

Our major competitors are the other major producers; for example, New Zealand, Argentina and, to a lesser extent in this commodity area, the European Economic Community. We are up against an extraordinarily tight export market. As I suggested in relation to the dried vine fruit area, we really have to do our sums very carefully. If we do not put on those charges we will provide our industry within the next two years-that is what we are talking about; a two-year moratorium-with an increased opportunity of penetration into export markets. Getting into the markets is the difficulty; holding them is not so difficult. Unless we become competitive with our competitors in this area we will lose consignment after consignment. The effect that that will have on Australia will be much more extensive than I think people in the cities and towns tend to realise, because it is on the basis of export of primary commodities that we are able to keep domestic food prices reasonable in this country. If we decide, as a matter of government policy, that we will have export incentives for manufacturing industry and export disincentives for primary industry I believe we are going about the matter in quite the wrong way.

I maintain, as I maintained when we debated these Bills under the previous Government, that it is an economic absurdity to link recovery charges to the cost of the Export Inspection Service. There is absolutely no reason why the cost of the Export Inspection Service should bear any relationship to the export price. Hence there is no reason why it should bear any relationship to the profit margin that a producer can get. Theoretically there is absolutely no reason why the cost-even at a 50 per cent level of recovery-could not exceed the profit margin. They are two independent moving calculations. There is no reason why they should mesh.

Unless we find a rational method, if we must persist in putting our producers at a disadvantage, of recovering export charges and unless those charges are linked in some way to profit margins, we are in cloud cuckoo land with regard to exports. We are not giving Australian producers a fair go. I am not the only person who thinks this is the case. The Minister for Primary Industry (Mr Kerin) believes it too. I wish to quote, using a transcript made from a tape, an answer that Mr Kerin gave to the Cattle Council of Australia on 5 September. It is quite a long answer but amongst other things he referred to the two-year moratorium and said:

The recommendation that I didn't take to Cabinet was that there be a two year moratorium on the export component, or retrospectivity. Now, the word was getting 'round' that I had been rolled in Cabinet on that and I did confess in Tasmania that 'no, I wasn't rolled in Cabinet, I didn't take the recommendations forward', and I will go through the reasoning for that.

The Minister in his answer explained how things go before Cabinet and then said:

There was no way that they-

that is the Cabinet-

would wear a two year moratorium as well as this the saving would have been in the order of about $14m a year-$28m. The Cabinet submission went up in terms of consideration of the Budget overall. If I was to put up a proposition to save $ 14m I would have had to offset that within my primary industry budget and I could not find any place to offset the $14m. So there were those problems.

So I quite happily admit it. It has become quite a tangle, quite a mess. It is a decision that I have to live with. I think people who say that this isn't really facilitating exports are perfectly correct.

The Minister said that those people who say that this decision is not really facilitating exports are perfectly correct. Surely what we should be about in this Parliament in passing Bills of this type through the House is trying to facilitate exports, not trying to do the very opposite. Another Bill we are discussing cognately is the Livestock Slaughter (Export Inspection Charge) Validation Bill, which has been around on at least two prior occasions. It is becoming one of those hoary Bills that we discuss from time to time. It seeks essentially to validate payments that ought to have been made under the previous Bill before it was amended by this Parliament last year.

In regard to this Bill, I am interested in seeking a response from the relevant Minister to this question: If this Bill is passed, as I assume it will be because I understand the National Party is going to vote for it, when will the relevant regulations come into operation? One of the things I find exceedingly galling is to receive regulations in the mail 15 sitting days after they have been promulgated. Thousands of regulations are promulgated, and I think it would not be a bad idea if on occasions we could actually receive them a little more promptly from the departments rather than having to wade through thousands of regulations in other places. I want to look at the regulations relevant to this Bill and that is why I seek to know specifically when it is proposed that they come into operation.

The last Bills on which I have time to direct my comments are the egg Bills. It is interesting that the Government has introduced only three of these Bills at this stage. On 2 August the Minister for Primary Industry announced that the Commonwealth hen levy was to be phased out on 1 July 1987. We do not have any Bill in this package in relation to this levy. Presumably the reason is that such a Bill would be the only Bill amongst this package which would actually be objected to quite strongly by the industry. I will not go so far as to suggest that the Government might be chickening out on introducing that matter in the months before an election. The industry wants the Commonwealth hen levy to continue so that the very important market research which has been taking place can continue. It certainly would enable the industry to meet the Australia-wide marketing strategies which I believe are important in this area, particularly given the virtual collapse of our export market in eggs.

The Australian Democrats believe that it is a reasonable proposition. Indeed, it is in line with the types of support that have remained in other Bills for research levies. I would be very interested to get a response from the Minister, either now or during the Committee stage on the egg Bills, as to what precisely the Government has in mind in terms of its phasing out operation and the market research strategies which must necessarily continue in this vital area. The other Bills which I am unable to comment on as I have run out of time concern dairy products and fishing. I hope to contribute to the debate on those Bills during the Committee stage.