Senator O'BRIEN (3:54 PM) —I want to address my remarks on the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 to clauses 44 to 48, which have been the subject of a reference to the Rural and Regional Affairs and Transport Legislation Committee for a report to the Senate. It is interesting to note that the effect of those clauses was to reduce the moneys appropriated to the Fisheries Research and Development Corporation by $3,612,000 for the year 1997-1998. I make the point that we are now in the financial year 1998-99 dealing with this piece of legislation. Obviously, it was not a priority to deal with this matter within the financial year in which the moneys were supposed to be reduced.

As I understand it, those moneys have in fact been paid to the Fisheries Research and Development Corporation on the understanding that, if this bill passes, those moneys will be paid back to the government. So the moneys are in the hands of the Fisheries Research and Development Corporation at the moment. As I understand the evidence of the Fisheries Research and Development Corporation to the committee, as a result of this bill and expecting that the government will get the $3.6 million back, they have scaled back the expenditure proposals for the future and spread that cost over the next four years.

It was suggested early in the process that the Fisheries Research and Development Corporation had substantial reserves and that they could simply pay this money to the government—they had all these projects committed along the way, therefore, they must have had reserves. It was suggested at one stage, I think by the minister, that they had reserves of $33 million. Of course, the Fisheries Research and Development Corporation do not have `reserves' as such. They have pro jects to which they have made commitments and they have moneys in hand to meet those commitments. So the effect of the reduction is not to take moneys from reserves. Quite properly, the Fisheries Research and Development Corporation will have to meet their contracts in relation to research and development projects funded, but the cut in funding will reduce the size and/or the number of research and development projects in the fishing industry funded in the future, particularly in the next four years.

I want to deal with that aspect because the fishing industry is a particularly important industry for the state of Tasmania, the state which I represent in the Senate. Fishing and aquaculture are important contributors to the Tasmanian economy. They are also contributors to the social wellbeing of many of its towns and cities. Some of the regions, particularly in the Huon area south of Hobart, are heavily reliant upon the employment generated in the fishing industry and the aquaculture industry.

It has been suggested that the number of people employed in the fishing and aquaculture industries in that region now outstrips the number of people employed in forestry. I think that is a development which is important, given the difficulties that that region experiences in terms of high unemployment and a lack of available jobs. The creation of and the building of these industries has been critical for the survival of communities in that region, and many other regions in Tasmania rely on this industry.

The industry, of course, relies on growth as well as the maintenance of existing opportunities. Research and development is a basic building block for future growth, especially in the important value adding components of the industry, as well as for sustainable fishing practices into the future.

In Tasmania there are well over 1,000 commercial fishermen, there are 65 seafood processors and there are over 95 marine farmers who operate over 150 marine farm leases in Tasmania. The Tasmanian Fishing Industry Federation is the peak body that represents these groups locally and through the Australian Seafood Industry Council nationally. The total value of the industry is around $200 million annually for Tasmania.

Sea fisheries and aquaculture provide employment for around 7,000 Tasmanians in the catching and post-catch sectors. Approximately 60 per cent is exported. The remainder helps provide the basis of a thriving tourism and hospitality industry. In Tasmania, the main products are Atlantic salmon—an industry which generates $65 million in income—abalone, rock lobsters, oysters, mussels and general scale fish.

I must say the Tasmanian economy and seafood industries have received a good deal of attention—and deservedly so—in their relationship with the FRDC. It has to be said that, for every dollar invested in cash with the FRDC, Tasmania receives $15 in research and development investment which is of benefit to the state. The FRDC will invest almost $2.5 million in research and development funds provided to Tasmanian research and development providers in this current financial year. This is on the assumption that there are no further cuts imposed on the organisation. In fact, for the Tasmanian economy overall, the total figure is $3.3 million. The difference between this figure and the one I mentioned earlier is that this includes research and development undertaken in Tasmania but of benefit to other fisheries, for example, Commonwealth fisheries, mainly through funds going to the CSIRO fisheries research centre located in Tasmania.

What sorts of projects are being funded? One of the major projects to be conducted by Tasmanian based researchers will examine harvest strategies, performance indicators and monitoring strategies for the South-East Fishery. There has been a lot said about the South-East Fishery and the adjustment program in that area. The South-East Fishery is one of Australia's principal fisheries with an annual commercial catch of more than 24,000 tonnes, which is worth more than $55 million. It harvests a range of species from just north of Sydney, south to Cape Jervis in South Australia, and out to the 200-mile limit of the Australian exclusive economic zone.

Scientists in this program will develop performance indicators and harvest strategies for the South-East Fishery to help achieve the appropriate balance between the objectives of long-term resource sustainability and maximisation of economic gains for the nation. The overall objective remains ecologically sustainable development. The project is to be conducted by the CSIRO Division of Marine Research. It will receive $99,000 from the FRDC in this financial year and up to $208,000 over the three-year life of the project.

Another project to be conducted by the CSIRO is the analysis of the early life history of southern Australian fish species to assist in the management of fisheries resources. One objective of the project will be to produce an atlas for southern fish species covering information such as timing and location of spawning, larval distribution and larval growth and dispersal patterns. The project is to receive $118,000 from the FRDC in 1998 and up to $371,000 over three years.

Another project to be conducted in this area by the Tasmanian Parks and Wildlife Service aims to reduce the accidental hooking of albatross on long-lines set for tuna. Apparently, albatross dive to take tuna baits off long-lines as they are being set from commercial fishing vessels and some have become accidentally hooked. Fishing related mortality has been implicated in a fall in the numbers of the six species of albatross. The Parks and Wildlife Service project involves designing and testing an underwater line setting device to keep baits and hooks out of the reach of albatross. The results will be compared with other equipment and bait setting techniques currently in use. This project is to receive $68,000 in 1998-99 and up to a total of $91,600 over two years.

In addition, the University of Tasmania is to be funded to conduct research on aquaculture feed for Atlantic salmon. The Australian salmon aquaculture industry is world class but to maintain this position commercial feed development needs to continue to advance. There are great trade pressures on this industry as well as pressures which emerge from time to time in relation to quarantine matters. But in this particular project, the objective is to formulate feeds for testing in commercial type conditions and to transfer the results to ingredient producers, feed manufacturers, salmon and trout farmers and the scientific community. That project is to receive $66,000 in 1998-99, and up to a total of $205,000 over three years.

That is the sort of project that the FRDC has funded. As I outlined earlier, we are talking about an industry which is of great importance to the state of Tasmania. What consequences would there be for my state if these funding cut proposals were put into effect? Mr Dundas-Smith, who is the Executive Director of the FRDC, in his evidence to the committee asked himself a rhetorical question and then answered it. He said:

Will the $3.6 million impact on future R&D? Absolutely, and I want to pick up on that one.

Apart from the downstream effects on industry, there is another aspect to this. This document says that the FRDC should take control and coordinate all the fisheries and marine research. The only way you can do that is to invest jointly in projects. So any lessening of our ability to fund projects means lessening of our ability to ensure there is no duplication, to ensure that research is properly directed in Australia.

It could be argued—and I have heard it here today—that the government has actually invested more money in fisheries and marine. If that is referring to money that is going into the Australian Institute of Marine Science and CSIRO, for example, that money is used to partner projects that we fund.

That is, the FRDC fund.

Very rarely will CSIRO and AIMS go out and spend research money on projects that we do not plan, fund and manage. As this document has recognised, we set the priorities through a very elaborate structure nationwide called fisheries research advisory bodies in every state. In some states they are appointed by state ministers to determine the priorities.

Subsequent to his giving evidence, the department and the minister sought to attack some of the statements made by Mr Dundas-Smith in correspondence to the chair of the committee dated 15 June. Frankly, having read that correspondence, it seems to me that the government did not lay a glove on the evidence of Mr Dundas-Smith in terms of the significance of this body, the importance of its research, the fact that this organisation did not have reserves and it was not necessary for the government to make these cuts to fund, for example, the South-East Fishery adjustment project, even though it had taken $1.5 million from the allocation to be made to the FRDC to go to that project.

Clearly, if you look at the budgetary position today—we are talking now in the 1998-99 financial year—this cut of $3.6 million is insignificant in that the government says it is moving to a surplus. But $3.6 million in research money will be significant for this industry, it will be significant for the fishing industry in Tasmania, it will be significant if it causes a cut in research, for example, in the aquaculture industry.

The salmon industry in Tasmania has grown and has become a world-class industry. According to industry figures, that industry needs to continue to grow to survive. If it does not grow, its economy of scale will mean that it cannot compete with other producers around the world. It is good to have clean, disease-free status. But, ultimately, if it cannot compete on price and quality and if, because of lack of funds for research and development, it falls back in that regard, then the industry is in danger and, therefore, hundreds and thousands of jobs in Tasmania will be in danger.

So what are we talking about? We are talking about a $3.6 million funding cut for the FRDC for one year. According to the information that I have been given, every dollar cut in Tasmania sees an effective cut of $15 in the research effort in Tasmania. That is the advice I have received from the Australian Seafood Industry Council. There is no information that I have seen that contradicts that information. So we are talking about a cut of $3.6 million for last financial year, money that the FRDC now has but money it will be asked to pay back to the government if this bill is passed.

The impact on the government's budget position will be minimal. The government is saying it is going into a budget surplus. What is the importance of this $3.6 million? We are talking about a very small amount of money in terms of overall Commonwealth expenditure. Isn't it more important that the research effort of the fishing industry continue be cause, after all, isn't the fishing industry one of the industries that maintain the regional coastal economies around Australia, not just Tasmania, and isn't the fishery industry critical to the survival of towns in Tasmania, Western Australia, Queensland and the Northern Territory?

Isn't it possible, as is proposed in the opposition's amendment, to leave this $3.6 million with the FRDC by deleting the provisions of the bill which would take that money away from them, allow them to continue their good work, allow the science of the fishing industry to continue to grow, and allow the industry and the environment outcomes in this Year of the Ocean to develop and prosper? This parliament would take a very positive step if it endorsed the opposition's amendments and rejected the government's proposal to withdraw this money from the FRDC.