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Monday, 26 March 2001
Page: 22909

Senator FORSHAW (12:31 PM) —I rise to speak on the Pig Industry Bill 2000. This important piece of legislation continues a trend, in respect of a range of rural industries, of privatisation of statutory corporations, particularly research and development corporations. The Senate will recall that over the last couple of years we have dealt with legislation in the wheat industry, in the wool industry, in the red meat industry and, more recently, in the horticulture industry. This legislation is in a similar vein.

I mention those earlier bills because later on the opposition will be moving amendments that we believe will strengthen this legislation, particularly in the area of accountability and parliamentary scrutiny. Those are not new issues. The opposition have raised them on each and every occasion when similar legislation on other agricultural industries has come before the parliament. The opposition had hoped that, by now, the government—in particular, the Minister for Agriculture, Fisheries and Forestry—would have got the message and would not be relying on us to continually improve the legislation with respect to accountability and parliamentary scrutiny. Once again we will be doing that, and I look forward to the situation after November this year when we will be able to get things right from the outset.

The Pig Industry Bill 2000 provides for the establishment of a new industry owned company to replace the Australian Pork Corporation and the Pig Research and Development Corporation. This new company will be responsible for the activities of marketing, promotion, research and development. Up until now, those functions have been carried out by the Australian Pork Corporation and the Pig Research and Development Corporation. The new company will also have responsibility for strategic planning and policy development. Until now, those activities have been carried out by the Pork Council of Australia, which is the industry body that represents growers in the pork industry.

This new company will be a not-for-profit corporation established under the appropriate Corporations Law. Accordingly, it will take over all of the assets and the liabilities of the Australian Pork Corporation and the Pig Research and Development Corporation. The staff of those corporations will be transferred to the new company. All their entitlements will be fully protected and will transfer with them. That is a matter that we are particularly concerned about and is one that we have raised in earlier debates on other legislation. The new company will be established as a corporation. Accordingly, all of the statutory levy payers in the industry will be eligible to register as members and will be afforded full voting rights in the new company.

The new arrangements that will be established by virtue of this legislation are the result of lengthy negotiations and consultations with the industry. The opposition have been briefed on an ongoing basis by the industry and very recently by the government on the outcomes of those negotiations and consultations. We are aware that there is strong industry support for the new arrangements that will be established by virtue of this legislation and for the new company that will be formed. Indeed, I understand that the new company, known as Australian Pork Ltd, has already been established. It is intended by virtue of this legislation that it will be appointed as the industry services body.

The main thrust of the Pig Industry Bill 2000 is to bring those new arrangements into place and to provide a mechanism whereby the Minister for Agriculture, Fisheries and Forestry can declare the new company—that is, Australian Pork Ltd—as the industry services body. That terminology is important. It is the term that is used within the legislation whereby the minister declares a particular company—in this case APL—to carry out all of those administrative functions and other functions such as promotion, marketing and research and development that were previously carried out by the statutory corporations.

Under the legislation the government will continue to collect levies, as it has done over many years. In turn, they will be expended by the new company for the purposes intended. The arrangements—as I think all honourable senators are aware—are that industry members, the growers, pay certain levies, the government acts as the collection body for those levies and passes them on to the company to be expended for the purposes outlined. Similarly, the additional contribution by way of matching contributions up to a defined figure will continue to be provided by government. That has been the case under previous arrangements and under the current arrangements, and that will continue into the future. I am advised that the amount of public funds that are contributed as matching contributions are of the order $3.6 million per year. It is not an insignificant amount.

Therefore, it is crucial that any new company declared to be the industry services body with that responsibility of properly managing these funds, be accountable both to the levy payers in the industry and, also, to the parliament. Under the current arrangements—that is, under the operations of the Australian Pork Corporation and the Pig Research and Development Corporation—because those bodies are statutory corporations, there is a transparent process whereby parliament is able to peruse the operations of the corporations. The details of the expenditure of those corporations are set out in the portfolio budget statements each year and in the annual reports and, accordingly, the Senate has been able to scrutinise the expenditure of funds and the operations of those corporations through the estimates process.

That process will no longer be available to the parliament once a new private company comes into operation. Australian Pork Ltd will be a private company. However, it will be expending government contributions. It will be, therefore, expending and be accountable for public moneys. We have raised this issue on previous occasions and we do so again. There is a clear requirement for accountability to the parliament as well as to the industry for these new arrangements. Our concerns have been raised before in respect of legislation in other rural industries and they have also been raised by the Senate Standing Committee for the Scrutiny of Bills. I refer to Alert Digest No. 18 of 2000, which had this to say:

Subclause 9(1) of this bill—

that is the Pig Industry Bill 2000—

authorises the Minister (on behalf of the Commonwealth) to enter into a contract with an eligible body (or with an eligible body and other persons) that provides for the Commonwealth to make marketing, R&D and matching payments to that body. An eligible body is defined simply as a `body that is registered under the Corporations Law as the company limited by guarantee'. `Other persons' is not defined, and the bill does not specify any qualifications or attributes which those persons should or should not possess.

Once a funding contract with a body is entered into, the Minister may then declare that body to be the pig industry services body.

The bill makes no provision for Parliamentary scrutiny of these Ministerial decisions. In its Seventeenth Report of 2000 the Committee drew attention to a similar Ministerial discretion to enter into a deed of agreement with, and to determine, an industry services body for the horticulture industry. Notably, the Horticulture Marketing and Research and Development Services Bill 2000 also authorised the Minister to declare that a body should cease to be the relevant industry services body—something apparently not contemplated by this bill.

The Committee, therefore, seeks the Minister's advice as to why the exercise of the discretion to contract with, and declare, an eligible body should not be subject to Parliamentary scrutiny or some form of review. The Committee also seeks the Minister's advice as to the persons contemplated by the term `other persons' and whether these persons should be limited in some way by reference to appropriate qualifications or attributes.

Finally, the Committee notes that Horticulture Marketing and Research and Development Services Bill 2000 was subsequently amended in the Senate to take account of issues raised by the Committee. The Committee seeks the Minister's advice as to whether this Bill might be amended in similar terms.

The minister did reply to the committee on that issue and on other issues that they raised. We in the opposition are of the view that, just as a course was taken in respect of the horticulture bill, this bill should also be amended to ensure that there is proper parliamentary scrutiny of the operations of the company and the expenditure particularly of public moneys. Accordingly, we will be moving amendments to give effect to such a requirement. I understand those amendments have been made available to the government and to other parties, and we anxiously await an indication from the government particularly as to whether or not they will agree to our amendments.

We will also be moving similar amendments which relate to the issue of the minister giving directions. Our amendments in that regard will pick up the same types of concerns that were raised by the Scrutiny of Bills Committee and previously raised by the opposition—that is, that such directions, if they are given by the minister, should be ones which, in turn, are required to be reported to the parliament and consequently tested within the parliament.

There is a range of other issues which we intend to take up in the committee stage of the bill. These issues are ones which we have just recently drawn to the attention of the government, once we had an opportunity late last week to see the final drafts of the constitution and of the contract that is proposed to be entered into between the government and the company. Some of those issues, for instance, go to the definitions contained in the contract. One particular issue relates to a definition in the contract of `agripolitical activity'—that is found in clause 5.3. The contract provides for a prohibition on the company spending funds on agripolitical activity. However, I also note in clause 5.4 that, where an issue arises at the board level of the company as to whether some proposed expenditure is or is not agripolitical activity, there is a requirement for that issue to be referred to the minister. Certainly, it appears that the minister can have a major say in determining what might or might not fit within the definition of `agripolitical activity'. We can all think of potential problems that might arise in that area. It is something that we wish to pursue and to get some clarification on from the government in the committee stage.

I also note that, in their report, the Senate Scrutiny of Bills Committee—and I do not have time to read the specific references—sought clarification from the minister on the definitions and scope of the terms `national interest' and `exceptional and urgent circumstances' used in clause 12. Clause 12 of the bill provides that the minister can issue directions, and I refer particularly to clause 12(3):

The Minister must cause a copy of a direction to be laid before each House of the Parliament within 15 sitting days of that House after the direction is given, unless the Minister makes a written determination that doing so would be likely to prejudice:

(a) the national interest of Australia;

We will be seeking some clarification from the government, as the Scrutiny of Bills Committee did, as to just what might come within the definition of `national interest' and also on the use of `exceptional and urgent circumstances', with respect to clause 12 of the bill.

In summary, there are, firstly, some amendments that we intend to move which will strengthen the legislation by providing for the appropriate parliamentary scrutiny and accountability that we have argued in the past should be provided for in the establishment of these private companies to replace the statutory corporations in these agricultural industries. Secondly, there are some issues that we wish to have clarified during the committee stage debate. With those remarks, I indicate that the opposition supports the legislation and hopes—we look forward to it—that the government and other senators will support our amendments, which will significantly improve the legislation.