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Thursday, 18 October 1984
Page: 1933


Senator MacGIBBON(10.36) — This morning the Senate is debating 20 primary industry Bills cognately. I would like to make an observation on that before I move on to debate the Bills proper. The first salient point is that this debate on a block of 20 Bills in the dying days of this Parliament reflects very accurately the management practices of the Australian Labor Party in government. Of course, it has always been the practice of the Labor Party to treat Parliament just as a rubber stamp for whatever the boys in the Caucus and the back rooms-the unelected members of the Labor Party-decide. The second salient point about that block of 20 Bills is that they are all Bills dealing with rural industry and this reflects the priority that the Labor Party accords the great rural industries of Australia. As Senator Archer said, these are the industries that provide $9 billion of export earnings and that keep up the standard of living in this country. These 20 Bills have all been lumped together in an unmanageable and undebatable form to be run through in the dying days of this Parliament before an unnecessary and premature election.

I do not want to talk about all of the Bills simply because I do not have time. I would like to talk about the wheat Bills but will confine my comments to the Meat Export Charge Bill 1984, the Meat Export Charge Collection Bill 1984 and the Live-stock Slaughter (Export Inspection Charge) Validation Bill 1983. That latter Bill has to be considered only because it is a procedural Bill which validates some legislation deficient at the time it was passed. My main concern relates to the two meat Bills. These are iniquitous Bills. One Bill provides for an export levy to be imposed on beef and the other Bill provides for the collection of that levy.

Very simply what is going on is that the Labor Government is taxing heavily the export of beef; the industry cannot stand that export levy; we are selling in tough markets in the face of great competition and no other country in the world competing with us on international markets imposes that levy on export beef. They are the points involved in this legislation. They reflect that great Labor belief in tax gathering, the mania that if we have a tax, make it heavier and if we do not have a tax on a property, put a tax on it. That is why we will get a capital gains tax, death duties and all the rest if by any misfortune this Government is re-elected in the new year.

There has been no Bill in recent years which has aroused such controversy from the groups affected as this piece of legislation has done. In preparation for this debate I went to the Parliamentary Library and got some Press comment on the matter. I will read the headlines from reputable Australian newspapers. The Australian Financial Review's headline read: 'Meat export levy will keep industry row simmering'. The Australian headline read: 'New export meat tax shocks rural industry'. The West Australian headline stated: 'Kerin draws fire on new meat fees'. The Australian Meat Exporters Federal Council stated: 'Meat exporters say Kerin betrayed industry'. The Australian Financial Review headlined another article: 'An end to Kerin's smooth run'. The Age stated: ' Kerin misled abattoirs on health fees: exporters'. The Australian Financial Review headed an article: 'Meat industry headache: Kerin feels the pain too'. As well, all the interested groups in the industry such as the Australian Meat Exporters Federal Council have publications condemning this legislation. The interesting and relevant point is that there is not one word of praise from any informed commentator for this legislation. At the outset of this debate I declare my personal interest. I derive income from the production of beef, and have for some years.

I now move to the main features of the Meat Export Charge Bill. It provides for the imposition of a flat charge of $2.55 per head on home and export killed beef in Australian abattoirs where there is Commonwealth inspection plus a specific export component to a maximum rate of 4.8c per kilogram, which is expected to operate as a levy of 2.4c per kilogram on export meat. It is alleged that that levy will return to the Government 50 per cent of the cost of providing the inspection service. For an industry in difficulties, as the beef industry is, an industry which the Industries Assistance Commission in 1983 described as being seriously depressed and likely to remain so for some time, this is an iniquitous imposition.

I take honourable senators back through the recent history of export levy charges on beef. When the Hawke socialist Government came into power there was a livestock slaughter export inspection charge of $1.80 per head. That charge remained until 1 October 1983 when it was raised by the Australian Labor Party to $5.40 per head-a huge increase-and in the face of protest from the industry it was lowered in July of this year to an interim figure of $4.35 per head. This legislation alters that again to a figure of $2.55 for all cattle killed plus a figure which is expected to be around 2.4c per kilogram of the boned-out beef in the carcass. The Government and the Labor Party have taken great praise upon themselves because they say that this represents a reduction in the levy. That is a blatantly dishonest claim. They raised the charges in the first place; only a year ago it was $1.80 per head. It went from there to $5.40, then to $4.35 and now it is running at $2.55 per head plus 2.4c per kilogram. In percentage terms that means an increase initially of 200 per cent in the cost of the export kill and an interim increase, when we take the lowered figure of $4.35, of 142 per cent. To claim that the present figure is a reduction is cynical, dishonest propaganda because in fact many of the large export beasts from my State of Queensland, which produces 50 per cent of beef for the export market, will be of such carcass weights that we will be looking at a killing cost as an export levy of around $10 per beast-an increase of over 500 per cent on the rate that existed before.

There have not been many successful Ministers in this Labor Administration and I think that the present Minister for Primary Industry (Mr Kerin) would rival the Attorney-General (Senator Gareth Evans) and the Minister for Immigration and Ethnic Affairs (Mr West) for the incompetence with which they have discharged their duties in administering their departments. If one goes around rural Australia and talks to producers, people on the land, one cannot be unconscious of the great bitterness and disappointment at the priority the Labor Government is according them. One cannot be unconscious of the disappointment of being at the bottom of the totem pole of Labor's priorities because rural Australia, with defence, would have to rank at the bottom of Labor's interests. There are no votes for the Labor Party in rural Australia from the time it promised in the election campaign last year to lower the price of fuel by 3c a litre but put it up by almost the same amount within a matter of weeks after the election.

I return to the history of this meat export levy. The rapacious increase last year came about after no discussion at all with the industry. Not one person was consulted by the Minister on what should be done. It was a diktat laid down on high. So much for the Labor Party consensus in government. Because it was laid down in such a rapacious and high-handed way, there were protests from everybody involved in meat production. An Interim Inspection Policy Council had to be set up to defuse the issue, after the abattoirs refused to pay the charges. That committee took advice all over Australia. It was a well-constituted and responsible committee. Amongst its many recommendations were that there should be a two-year moratorium on export charges and that the new carcass charge when it came in should be retrospective to last October. The committee pointed out that the average profitability on beef for export was around 2.2c per kilogram, which in the light of the current export levy of 2.4c per kilogram means there is no profit in it for the industry on the average basis.

The views of the committee were not considered by the Minister for Primary Industry, the Cabinet or the Labor Government. The Minister, who is an expert in making excuses, originally made the excuse that rural industries were getting a raw deal because he was not in Cabinet when the Government first came in. Since then he has got into Cabinet and the situation has been no different. The Minister then put round the story that he was overruled in Cabinet. Later the truth came out that the Minister did not even take the submission into Cabinet; he did not take in the findings of the expert committee that there be a two-year moratorium. Is it any wonder that the Minister does not go too well in the bush today?

The industry is faced with the imposition of this heavy charge when it is in no condition to support it. The rural industry is coming out of one of the longest droughts in history and herd numbers of beef cattle are down from about 33 million to 22 million. As Senator Archer said, since 1979 in excess of 40 abattoirs have closed and over 10,000 jobs have been lost in the industry. Nor is the future very good for the rural industry, particularly the beef industry. The front page of the Australian yesterday carried the headline 'Rural production faces a grim year with 29 per cent decline'. That article dealt with the prospects for rural Australia next year and in part dealt with the fall in beef production.

Markets in beef are being lost every day and Australia cannot afford to tax itself out of those markets. One honourable senator yesterday said that holding on to markets was not so difficult but that getting access to them was very difficult. That is very true. If a country is out of a market, it is very hard to get in because of the bargaining that take place between countries. I would qualify that part of that statement to the effect that holding on to markets is not so difficult. It should not be difficult for a competent government, but it is almost impossible for the Hawke socialist Government to retain the market shares of our export industries. The Government does not understand that because commodity prices are down it does not mean that market shares have to be down. Because commodity prices are down, we get less for each unit of beef or coal that we sell. That is one aspect. The area in which the Government is falling down is that it is giving away, through negligence and incompetence, our present share of the market. Mr Kerin and Mr Bowen have a record of indolence which is reflected in an inability to maintain Australia's position. Yesterday's Australian Financial Review contained the headline 'South Korea buying less Aussie beef'. Some 63 per cent of the Korean beef market tenders for 1984 went to Australia whereas once upon a time this country got 95 per cent. Nearly 30 per cent of that market has been given away by Mr Kerin and Mr Bowen between them. The same story applies to Japan, the United States of America and South East Asia.

I said at the outset that this draconian levy aims to recover 50 per cent of the alleged cost of providing this meat inspection service. The meat industry has no say in the level of service provided for it. The Government has an open cheque here. It puts on the people it wants, runs the type of service it wants, and then tries to bill the industry for 50 per cent of the cost. It puts in an inefficient system and the producers and the abattoirs have to pay for it without any check or balance on the operations of that government authority. Forty meat works at least have closed in the last five years. Cattle numbers going through meat works in Australia during the same period have declined by 20 per cent, but the number of inspectors employed by this Government is the same as or greater than the number employed five years ago.

It is time this country examined very carefully the user pays doctrine which is so dear to the Labor Party's heart. We saw it introduced with disastrous results in the Department of Aviation under the Whitlam Government. The user pays doctrine is the doctrine that applies to the industry paying for the meat inspection charges, but it is a fallacious argument unless two terms are met. The first requirement is for the Government to be able to demonstrate that the user, and not another party in the community, should pay for the service. The second requirement for making a user pays doctrine work is that the user be given some control or at least an effective audit over the service for which he is being charged. That is not done at all in any of the matters I have been talking about this morning.

This impost will have a great effect on the beef industry in Australia. The beef industry is very important. We earned roughly $2 billion last year for export beef and 50 per cent of it came from my State of Queensland. There are 30 ,000 jobs involved in export meat works alone. In this international market where we earned that $2 billion last year, we are facing increased competition from the United States of America, Canada, New Zealand and other producers. In the face of that intense competition the Australian producer is the only beef producer in the world being slugged by an export levy on his commodity.

On Tuesday night I was talking about the bizarre coal export levy that the Labor Party has put upon the country. I made the point that it was a sectional tax because it affected only one coal company in Australia and that affected the operations of coal producers in only one State, namely Queensland. We have a parallel situation with beef, because beef is the only primary product which is subjected to an export levy. Most other rural industries get some degree of support, although not very much. We are talking in terms of 2 per cent, 3 per cent or 5 per cent. Wool certainly gets support with the wool promotion scheme. Of course, the fat cats of protected manufacturing industry have protection levels averaging 30 per cent to 35 per cent but running up to about 150 per cent in some cases. None of this applies to the beef export industry or to beef production. I believe, and my Party believes, that the export levy charge should be borne by the whole community out of Consolidated Revenue because of the benefits that exports bring to the Australian community. We cite in support of that claim the fact the the United States, Canada and New Zealand, our great competitors on the international market, take the same view.

This is bad legislation. It is bad because it is directed against a small but very efficient section of Australia's rural industries. It is bad because it acts against Australia's export earnings. It is bad because it puts those earnings at hazard and must inevitably reduce them, if not eliminate them. If we lose $2 billion of export earnings, the ability of Ministers such as Senator Grimes to pay for pension and other welfare payments will be very severely curtailed, if not eliminated entirely.