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Tuesday, 30 August 1994
Page: 607

Senator PANIZZA (6.23 p.m.) —Before Senator Margetts leaves the chamber, I congratulate her on picking up the real issues here. One issue is the way that Western Australia has been ignored by federal bodies—bodies that have been set up by the industry but which then ignore their own constituents when they decide to impose levies or use funds accumulated by these levies.  Another point I wish to point out to Senator Margetts is that a lot of those federal bodies that are created by state sections of industry then do the reverse and play the government line rather than do what their state bodies tell them to do.

  The Horticultural Levy Amendment Bill 1994 seeks to raise a levy on certain horticultural products by a different method. I have no problem with the raising of a levy for research so that the government can meet its 0.5 per cent contribution towards research. What worries me is the way it is intended to go about raising this levy. In this case, also, Western Australia was totally ignored. I did a ring-around of all the bodies in Western Australia and I found that they were not consulted on this levy or the method of implementing it. I know that when Senator Margetts said she consulted with a Western Australia body I unkindly called out, `You were probably talking to Peter Sumich of AFLO.', but obviously she has been speaking to others and has picked up their points.

  Basically, there are three acts that provide the means of raising industry funds to support national marketing and promotion through the Australian Horticultural Corporation. As Senator Margetts said, the Western Australian bodies wanted to pull out. They were dragged in and held there against their own wishes and they would like to get out, but they are certainly not agin paying levies towards research.

  As Senator Tambling has pointed out already, the coalition will support the bill for the good reasons that he gave. What worries me is the way the government is going to go about it. These bills amend the Horticultural Export Charge Act 1987 and the Primary Industries Levies and Charges Collection Act 1991 to enable levy to be collected on the basis of the area under cultivation or other horticultural inputs to the production process such as the number of trees, shrubs and plants. Then we have the presumed yield for those horticultural products to be specified in regulations. In other words, in regulations we are going to have a specified yield of crop. The explanatory memorandum states:

. . . regulations to be made to determine the presumed yield of leviable horticultural products or a class of products, presumed to be produced in Australia, by reference to several factors including:

  .the area under cultivation; the number of quantity of trees, shrubs, plants, bulbs, corms or tubers used or to be used;

  .the maturity of trees, shrubs or plants under cultivation for the production of those leviable horticultural products.

Madam Acting Deputy President, you originally came from the country in New South Wales. I think you would understand that, when one plants a crop, one has no idea of what it is going to yield, even in the best of years, especially in northern New South Wales and southern Queensland with the wheat crop and the drought that is on now. No-one has an idea of yield when planting, let alone the presumed yield. Presumed yield is something like we had in this chamber with presumed income from pensioners' assets—that if they have so much money in the bank or have a house that they rent out, it is presumed that such assets yield eight per cent. We know that these days the yield on most such investments is around four per cent not eight per cent. I find it astonishing that anyone should work on a presumed yield.

  I presume furthermore—it was stated somewhere along the line, and I queried it with the shadow minister for primary industry—that the industry wants it. If the industry wants it, I question that more than if the government wants it. Because these so-called representative bodies that we in the field have set up in Canberra with our hard earned money do not necessarily reflect the wishes of the industry at all times, I question it more when they want something. I was told that the industry wants it rather than the people out in the field and certainly not the horticultural growers in Australia.

  When I look again at the explanatory memorandum and at the financial impact of this bill, I see that there is no financial impact. There is no extra income; there is no extra money going out. I ask the minister at the table: if there is a presumed yield on these variables which I have already mentioned—the number of trees, acres or whatever—how are we going to know how much is to be collected and whether the grower is telling the right story? Are we are going to have a team of inspectors going around counting trees, measuring up the land that is presumed to be seeded?

  I see one of the advisers smiling, but the difference between me and the advisers in this place is that I have had a vast amount of practical experience in agriculture. I have been in agriculture all my life. I have also spoken to colleagues of mine who are potato growers in the south-west of Western Australia and have to deal with the Western Australia Potato Marketing Authority.

Senator Sherry —What is your policy on the Western Australian Potato Marketing Authority?

Senator PANIZZA —What is my policy?

Senator Sherry —What is the party's policy?

Senator PANIZZA —I am talking about my policy and my policy is to eliminate it. I will get back to some of the problems. The levy will be on the number of trees planted. The age of the trees then has to be taken into consideration. Will an inspector have to go out there to see how many trees there are and what age those trees are? Will the farmer or horticulturalist have to make a statutory declaration as to the number and age of the trees? They will probably have to send a photo with a statutory declaration on the back to state that that is the case. Will satellite imagery be used?

Senator Sherry —That's not a bad idea.

Senator PANIZZA —It is not a bad idea to see whether they are telling the truth. I go back to the Western Australia Potato Marketing Authority. We had the case of that authority's inspectors turning up and measuring how much was planted. Then of course we had potatoes planted under big, shady trees. I do not know how they would grow without the sun on them, but it used to be done. Potatoes were planted between rows of maize and corn.

Senator Sherry —We do not do that in Tasmania.

Senator PANIZZA —They do not do that in Tasmania, but I know that it happened. Inspectors were turning up to see whether that was happening. Are we going back to that situation? The financial impact statement says that no extra staff will be put on. I ask the minister to tell me how he will see that the act is being adhered to? I did not speak on this bill this afternoon just to waste time; I spoke to express a few more fears.

  I do not think that what I did for a living, and still do to a certain extent, is any secret to anyone in this place. I worked in the wheat industry. I am sure bank managers and those sorts of people would not mind a system of presumed yield when their customers were planting a crop. If they had lent money to farmers to plant a crop I am sure they would like a presumed or guaranteed yield. Unfortunately, in Australia in this day and age we cannot do that.

  My biggest fear is that this system may spread to other industries. Some secretariat minders of our interests in Canberra may think it is a good idea to come into the wheat industry or the wool industry and extract a levy on the number of sheep being run. Then of course we would have someone out counting the number of sheep or using satellite imagery to see how many sheep are being run. The idea is fraught with danger.

  Let us say a person agrees with having a presumed yield on wheat—plants 10,000 acres and presumes it is going to yield so much. What happens when there is a drought like the one presently affecting the eastern states and the south-east of Western Australia? That person has had all those other costs and then has the levy on top. There is that to worry about. There may be a crop ready to take off and then there is a good hail storm which wrecks it altogether. At present, if the farmer is prudent, the crop is insured against fire and hail and if it is destroyed insurance is paid. To my knowledge, if there is an insurance payout a levy is not paid on what has been received as compensation. But here the levy has been paid, yet the crop may be destroyed.

  There are other sorts of problems. Even on this side of the country, people probably saw that, because of the extent of the drought in the pastoral areas of Western Australia, the emus are running down the emu fence, crossing over into the southern areas, getting amongst the crops and destroying them. All of those things can happen.

  I have probably given enough examples of what can happen to a crop after it is planted. But another problem is that the price of the product may collapse. In 1991 the export enhancement program virtually halved the wheat price overnight. There was also the wool collapse of 1989. I think we are playing with fire in relation to presumed yields and a rate being paid on that.

  This could make it easier for some people—those sitting up in their kings' castles in Canberra—to simply put the levy on production costs rather than on the yield from a crop. What is wrong with the good old system of paying levies ad valorem? I certainly hope that neither this nor any other government would get the idea of levying tax on presumed income. That could be a further extension.

  I could go on and on about what could happen. The ad valorem system is used in most cases that I know of. There are rates and taxes—local government rates and state land tax—and none of them are on presumed yield or presumed income from housing or presumed income from office space that is let. Of course, if there were a system relating to presumed income from office space that is let I think the Labor Party would do pretty well with Centenary House. We will not get into that debate at this stage, but I am giving examples of what might happen.

  In conclusion, the coalition has decided in its wisdom to support the legislation. I certainly do support it because every industry should have a levy that goes towards research and development. I believe every industry should carry its part of the load. The government is carrying its part by putting in a matching fund of 0.5 per cent towards research, but I believe that this method of collection should not spread.

  Debate (on motion by Senator Crowley) adjourned.