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Wednesday, 31 August 1994
Page: 638

Senator BELL (11.08 a.m.) —The matters under discussion—the Primary Industries Levies and Charges Collection Amendment Bill, the Horticultural Export Charge Amendment Bill and the Horticultural Levy Amendment Bill—received some attention yesterday. In continuation of that debate, the Democrats' point of view needs to be expressed clearly. There is some degree of frustration, which I detected yesterday in Senator Tambling's speech, that there were recommendations from the government's citrus working group of the horticultural task force, both chaired by Senator Sherry, which we see no evidence of being addressed and followed through in this set of legislation, when it is appropriate that those recommendations could have and should have been followed through.

  The only thing that surprised me about Senator Tambling's contribution yesterday was that after being critical in that regard—and I agree with his criticism—he supported the bills. Perhaps a warning is being issued. If that is the case, then I would like to underline that warning and suggest that there are measures which this government can follow and recommendations before the government on which action needs to be taken in this area of horticultural levies and the whole business of sales tax and the arrangements that this country is entering into with regard to the results of the December 1993 Uruguay Round of GATT.

  I am glad to see that Senator Boswell has joined us, because of his particular interest in this. Also in question time yesterday I was reminded of his interest when he asked a very pertinent question about levels of heavy metal contamination in certain imported products, namely, peanuts and the international arrangements which would affect Australia in that regard.

  It is very important to pay attention to what happens in Australia when overseas treaties and agreements are entered into. On the one hand, we see a great flurry of concern from some coalition members about overseas treaties and agreements and yet, on the other hand, we see quite a ready acceptance of the ramifications of GATT which, if anything, is a huge overseas treaty or agreement. It is the general agreement on tariffs and trade and it is very international. I would like to see a little more consideration given to our acceptance of that and its ramifications in Australia.

  In this area we heard mention yesterday, and again through Senator Tambling's speech, of the effects that would be felt in the citrus fresh fruit juice area. The fact is that, until now under the local content arrangements for all fruit juice drinks, if the drink contains 25 per cent or more local juice, either freshly squeezed or from local concentrate, then sales tax is levied at a rate of 11 per cent. If there is less than 25 per cent local juice, then sales tax is payable at 21 per cent—and `local' is defined as Australia, New Zealand or Papua New Guinea. But as a result of the December 1993 Uruguay Round of GATT, the local content arrangements will be abolished from 1 January 1995.

  One of the questions that should be considered carefully is the degree of compliance with the 1993 Uruguay Round of GATT by other countries and whether Australia is again leading with its chin internationally, and I am sure Senator Sherry knows exactly what I mean. Is it proper; is it in Australia's best interests to lead the charge against our own local producers, against the interests of Australian domestic trade before determining whether our other competitors in that area will comply with the letter of the agreement?

  I am not suggesting in any way that Australia should welsh on its international agreements. But I am suggesting that a degree of circumspection be applied to the decisions we make in this area and that we check out the moves of our competitors before we rush headlong into what we believe is necessary for compliance. I might make it a little clearer by saying that the recommendations of the citrus working group of the horticulture task force do express some caution and suggest that the government take compensatory action before applying compliance with GATT. That compensatory action of exemption of fresh orange juice from sales tax et cetera is available to the government and should be followed through before we comply with the other constraints upon our domestic trade.

  The other actions that the government can take dealing with the definition of fresh orange juice or fresh citrus juice, can be taken without contriving to avoid the GATT agreement but to the advantage of our own producers. I share Senator Tambling's concern that those steps are yet to be taken and could and should be taken as early as possible.

  One other matter I would like to raise that I noticed was an important part of Senator Tambling's contribution—and while this was an aside, it was a very important aside and should be picked up—is the interpretation given by the Australian Taxation Office of a new tree planting. The Industry Commission report into this area asked the Taxation Office to change the way that new tree plantings are treated as capital expenditure by the Taxation Office, and to recognise that new tree plantings are maintenance of the productive capacity of an agricultural pursuit which in many ways form a parallel to the plantings, prunings and horticultural pursuits in other areas and should not be a penalty for those wishing to enter the industry and add to Australia's productive capacity.

  That Industry Commission report has not been acted upon, and Senator Tambling sought to stir things up a little by suggesting that that would be a step the government could take. In fact, over two years ago I wrote to all of the representative bodies of the Australian horticultural industry that were concerned with fruit trees and their plantings and suggested that very matter. I give notice to the coalition that the Democrats would welcome and support any such move to include Senator Tambling's suggestion in an amendment to whichever bill we can amend to clear up this matter. As a result of my writing to those representative bodies, we received considerable support for this move. Although I would not claim responsibility for provoking the Industry Commission to consider it, we welcomed that consideration and support the commission's recommendation. In case anybody thinks the Democrats have gone completely over the top by supporting an Industry Commission report, on its merits it is a good recommendation and it seems logical to us. So they are the areas of concern to us arising from this particular bill.

  The central thrust of the bill, which I have not yet addressed at all, allows an increase in the levy, is worthwhile in itself and receives our full support; but I took the opportunity to raise those associated matters. I remind the Senate that, essentially, we are warning that GATT has implications that have not been properly addressed or considered; but they can be resolved much more favourably to support our domestic citrus industry. The government should be moving on that much more quickly than it is and we support the coalition's concerns there. We also support the coalition on the treatment of new tree plantings. So we find ourselves in a situation of supporting the bill but wanting to find a vehicle to express concerns. I have done that and I hope the minister takes the concerns into consideration.