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Monday, 26 March 2001
Page: 22915

Senator O'BRIEN (1:10 PM) —The Pig Industry Bill 2000 is designed to allow for the creation of a pig industry services body, Australian Pork Ltd, to oversee the strategic policy development of this important rural industry. It will also be responsible for marketing and research and development services currently provided by the Australian Pork Corporation and the Pig Research and Development Corporation. The bill will repeal the enabling legislation for both these bodies and also provide for the transfer of assets, liabilities and staff to the new body. This new not-for-profit body will be limited by guarantee and will operate under the Corporations Law, and all industry levy payers will be eligible to register for membership and have full voting rights. This restructure follows a similar process which was established by other sectors, such as the red meat sector, the wool sector and more recently the horticulture sector.

The restructure of the administration of this important industry has been on the agenda for some time. At the Pork Council of Australia's general meeting held on 12 and 13 May 1999, delegates resolved that a joint industry-government working party be established to develop options for the establishment of a single industry body. This resolution led to the preparation and distribution of an options paper in October 1999. That paper offered three models for amalgamating the three organisations into one body. As this industry has done on all important issues, a very exhaustive consultative process was undertaken with members. This involved direct mail, fax stream broadcasts, media exposure of the options, and direct meetings with producers. I understand that there were meetings in no less than 14 regional centres and also that there was overwhelming support for the option recommended by the working group.

Pork producers faced a very difficult market conditions situation through the second half of the 1990s with very low prices, rising input costs caused by drought and the hoarding of grain, a stable domestic market for pig meat and an increasingly open Australian economy. But, despite the obvious and increasing hardships facing many producers, requests for help from Canberra were met with little or no interest. The so-called farmers' representatives in the Howard government, the National Party members and senators, proved to be no representatives at all to this industry. In response to requests for action to protect them from a flood of imported products through the application of WTO legal action, Mr Anderson and Mr Fischer told producers to forget it. The National Party leadership said that growers should put the national interest ahead of the interests of their families and their farms.

The approach of the government to any issue in recent weeks provides an interesting contrast. The national interest is now well and truly off the agenda and has been replaced by raging political self-interest and nothing more. This is a very good time to ask a government for help, when it is in its terminal political decline, as is this government: you are sure to get a positive response. But clearly that is no way to run a country—and I am sure the voters of Australia will agree.

Since the early 1990s this industry has also experienced profound structural change. It has largely made the transition from a fragmented and domestically focused industry to a cohesive, internationally focused industry. It is now increasingly an export industry with a solid domestic base. But it has been a difficult road to that reform. As I said, its task has been made almost impossible by this government. Rather than work through a comprehensive strategy to help this industry, the government responded—and, I might say, with some considerable reluctance—in a disjointed and ad hoc manner.

In November 1997 the then minister announced assistance worth $10 million. He said it was designed to boost the competitiveness of the industry. But clearly that response from the government was inadequate. Then on 10 June 1998 Mr Anderson and Mr Fischer had a second attempt, announcing what was described as an `enhanced' assistance package for the pork industry. This package was also designed to enhance the competitiveness of the industry. It was more a response to the difficult political situation than to the needs of the industry—and that not only is my view but also was the view of the then Deputy Prime Minister, Mr Fischer. On the ABC's PM program on 10 June 1998 Mr Fischer was asked whether or not the second government pig meat assistance package was an electioneering handout. He said:

Well, I think it is more to do, to be blunt and honest, with the fact that people are voting next Saturday in one State of the island and, soon enough across the whole of the land, and there is a sense of urgency attached to this industry.

I do not think I need to say any more on that point. This second package provided an additional $9 million to go with the already committed $10 million. But the package was still clearly inadequate and in January 1999 we saw yet another package announced. This one was worth $6 million and was designed to assist people to exit the industry—not a coordinated strategy to address all the key issues facing the industry and delivered in a timely manner, but a disjointed approach driven by political pressure.

Much of that political pressure emanated from this chamber. On 7 April 1998, the Senate supported a motion calling on the then Minister for Primary Industries and Energy, Mr Anderson, to take immediate action to assist the Australian pork industry. Specifically, the Senate called on the Howard government to launch an immediate inquiry to determine whether the level of imported pig meat was the primary cause of the industry's current difficulties. If that proved to be the case, then the Senate called on the government to look to the `emergency protection of an industry' provisions of the World Trade Organisation rules to limit the volume of imports. The motion also called on the government to review the current level of financial assistance available to the industry, and to put in place proper labelling arrangements.

Following the Senate's resolution, two things happened: prices deteriorated further, and imports surged. The front page of the May issue of the Pig Producer said it all: `Farmers shoot pigs—they can't sell them'. Rather than deal properly with what was clearly a crisis, the then minister, Mr Anderson, decided to play politics. In an interview on the ABC Country Hour, he claimed that there had not been a rise in imports. He said:

My honest assessment of that is that at the moment it is likely to be found that there's been no particular rise in what is coming in.

He continued:

In fact, what's coming in now is what was allowed in under the 1992 protocol set up by Labor.

I thought at the time that the minister was surprisingly out of touch with the circumstances of this important industry. But, having observed Mr Anderson since that time, particularly as the minister responsible for aviation, I should not have been in the least bit surprised.

The reason I raised this matter in the first place was that it was obvious to me—and apparently to everyone else except Mr Anderson—that the pork industry was in trouble and needed help from the government. That is what governments are elected to do, and that is the reason we have a minister for primary industries. I did not say that it was the minister's fault, because import protocols for imported pig meat were varied in November 1997. I said that there had been a surge in imports and a collapse in the domestic price and that the government needed to look at that as a matter of urgency. I said that, if imports were the major problem, there were things that the government could do to assist the industry. I called on the government to look at what action could be taken within the terms of our GATT arrangements. That was the view of 75 other senators in this place. The motion was supported by National Party senators, Liberal Party senators, my colleagues, the Democrats, the Greens and the Independents—but not by Mr Anderson and not by Mr Fisher.

The Senate, it seems, saw it as an apolitical issue, but the minister was not of the same view. He did not say, `Yes, there is a problem and, yes, we will do what we can.' He said, `There has not been an increase in imports and, anyway, it is all Labor's fault.' There were, in fact, record imports in 1997. Over 11,000 tonnes were imported, resulting in a fall in pig prices in the lead-up to Christmas of that year for the first time in history. The prices being received by growers reached their lowest level for 30 years. The records show historically that the pork industry supports trade that is fair and free, but the industry is quite rightly opposed to competition from countries that subsidise and protect their own industries. At that time, with this government saying to pork producers, `We must support free trade,' Denmark granted unimpeded access for Australian pork but only as long as local producers—that is, Australian producers—paid a tariff of $3,145 a tonne, and Canada was providing its domestic industry with production subsidies of around 16 per cent—a figure disputed at that time by the Canadian High Commission, which claimed the subsidy was only 11 per cent.

As a result of the failure of the Howard government to help this industry in its hour of need, pork producers were forced to resort to direct political action. Again, rather than address the legitimate needs of pork producers, the government chose to issue a few political threats of its own. During the 1998 election campaign, the then Deputy Prime Minister, Mr Fischer, wrote to Mr Mazzanti, a member of the South Queensland Pork Action Group. Mr Fischer was responding to a letter, dated 10 September, from Mr Mazzanti to Senator Brownhill. Mr Mazzanti raised a number of concerns about how the Howard government policies were adversely affecting rural and regional Australia. Mr Fischer said that he was responding to the letter to Senator Brownhill because he `has asked me to respond on his behalf'. It is highly unusual for the Deputy Prime Minister to reply to a letter on behalf of a parliamentary secretary, but we did have a highly unusual Deputy Prime Minister and so nothing should come as a surprise.

The letter ran through the usual lines about getting macro-economic settings right, how important a free trade regime is to the overall wellbeing of the rural community, and how there are now effective antidumping and safeguard procedures to deal with instances where Australian producers for the domestic market are being injured by unfair competition from imports. He claimed, quite inaccurately, that the opposition's call for action to protect the interests of the pork industry by limiting imports was in contravention of the World Trade Organisation rules. He referred to the alleged transport cost savings to rural and regional Australia in the Howard tax plan—which I might say has turned out to be little more than a sick joke. At the bottom of the letter the Deputy Prime Minister added a postscript. It said:

The pork industry's continuing advertising campaign is very carefully noted, including those elements of the industry pushing it.

Despite a denial from his office on the matter, that postscript was nothing less than a threat. The government did not properly consider the difficult circumstances the industry faced. It did not look at all the possible policy remedies. It ignored the fact that there had been a massive surge in imports. It ignored the fact that the importers had targeted the peak season for the product on the domestic market. It ignored the fact that the importers had focused on the premium cuts of the product. It ignored the fact that there had been a collapse in the price received by Australian producers—a price well below the cost of production. It dismissed any short-term assistance through the provision of exceptional circumstances programs. It also chose to ignore possible trade remedies, such as legal remedies through the World Trade Organisation—measures that a number of our trading partners regularly use, including against Australia.

The crisis that confronted Australian pork producers and the complete failure of the government to respond to that crisis in a constructive, comprehensive, timely and sympathetic manner is one of the sorry tales of public administration under Mr Anderson and Mr John Howard. This government well and truly dudded the Australian pork industry. This industry was not seeking a One Nation style `blanket ban on imports' response from the government. It was looking for a comprehensive and legal response to the personal and financial crisis confronting many producers. But it did not get it. The industry quite reasonably took its case to the public during the federal campaign, as it was entitled to do. The way in which the government dealt with this matter gave the industry no option but to take the action that it did.

There are very few sectors in the rural economy that have experienced such significant change. The pork industry in 2001 now produces more meat of a better quality and at a lower production cost than ever before. Such a radical change has not been without its difficulties, but this sector accepted that it had no choice. This change has been underpinned by considerable producer investment in research and development and marketing programs. This change has come about without the support of the price stabilisation schemes, floor prices, single desk arrangements, or import tariffs and quotas enjoyed by sectors such as the wool sector, the wheat sector, the sugar sector and dairy producers. Australian pork producers are committed to the development of a sustainable, export orientated and jobs generating industry. Unlike the government generally and the Deputy Prime Minister in particular, we on this side of the chamber are committed to working constructively with them to achieve that goal. The passing of this bill, and the reforms that will flow from it, is an important step in that process. But there is absolutely no basis on which this government can claim any credit for these reforms. They have been achieved by the pork producers in spite of the government.