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Thursday, 29 March 2001
Page: 23288


Senator HEFFERNAN (Parliamentary Secretary to Cabinet) (9:39 AM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

PRIMARY INDUSTRIES AND ENERGY RESEARCH AND DEVELOPMENT AMENDMENT BILL 2001

The Primary Industries and Energy Research and Development Amendment Bill 2001 places the Forest and Wood Products R&D Corporation on a much more secure footing to provide a strong and national focus to forest R&D, by increasing the Commonwealth contribution to the Corporation from July 2001.

The Primary Industries and Energy R&D Act 1989 inaugurated a major delivery system for rural research and development, through a series of R&D Corporations financed by industry levies and matching Government contributions.

Many primary industry producers lack the size to individually undertake R&D activities necessary for the long-term development of their industries. Governments have recognised this situation and developed, with industry, a mechanism whereby levies and charges are imposed and administered by the Commonwealth at the request, and on behalf, of industry organisations. The Primary Industries and Energy R&D Act established, and now governs the operation of, this R&D delivery mechanism.

When the Forest and Wood Products Research and Development Corporation was established in 1994, the Primary Industries and Energy R&D Act was amended to provide a specific funding arrangement for the forest sector of $1 from the Commonwealth for every $2 from industry. This was half the rate for all other R&D Corporations to which a levy is attached under the Act.

This policy was based on the belief that dollar for dollar funding should be confined to the rural and primary production part of the industry. It was suggested that the Commonwealth should not match R&D expenditure in the processing and manufacturing part of the forest and wood products industry.

There is, however, no significant difference in industry structure between forests and any other food crop or fibre industry covered under the Primary Industries and Energy R&D Act arrangements:

The Forest and Wood Products R&D Corporation, like all other R&D Corporations, funds research into production, processing and marketing links in the chain.

In common with other primary industries, timber processors and wood product manufacturers often tend to be small, competing enterprises that are difficult to organise and who find it difficult to fund and capture the benefits of R&D.

The arbitrary separation of the forest and wood products sector into rural/primary production and manufacturing components is inconsistent with modern approaches to resource industries. This Government is actively encouraging rural industries to move towards a 'whole-of-chain' approach to industry planning and development. Whole-of-chain planning encompasses sustainable resource use, production, processing, storage, transport, marketing and usage, plus promoting the linkages in the chain.

In the forest and wood product sector, I am working with industry on an Action Agenda to engender a more innovative and outward looking industry on a “whole of chain” basis. Artificial divides between primary production and manufacturing components of the sector are inconsistent with the Action Agenda.

In 1999-2000, Australia imported $3.8m (mainly paper and high value products) and exported $1.6m of forest and wood products (mainly woodchips and roundwood). Yet with our extensive forest resources, Australia should be in a position of exporting a wider range of high value products to redress this imbalance.

R&D on forest and wood products are vital if Australia is to reverse the current trade imbalance in trade in these products. Forest R&D have the potential to create sustainable long-term competitive advantage for the industry, particularly for higher value products. This Bill is therefore a vital component of the Forest and Wood Products Action Agenda.

Since 1997, the Commonwealth has supplemented the funding arrangement under the Act to bring Commonwealth contributions to 49 per cent of the Forest and Wood Products R&D Corporation revenue. The main source of these additional funds, the Wood and Paper Industries Strategy (WAPIS) operated from 1996 to June 2000.

The conclusion of WAPIS coincides with a number of other developments that could jeopardise continuing investment in forest R&D. Following the conclusion of Regional Forest Agreements, there has been a significant reduction in the State forest commercial estate. At the same time, there are an increasing number of small private growers establishing plantations and managing commercial stands of native forest.

A strong Forest and Wood Products R&D Corporation is required to prevent greater fragmentation in the forest and wood products industry and consequently reduced R&D investment particularly for broader national, strategic and public good research.

The Primary Industries and Energy R&D Amendment Bill 2001 is a timely demonstration of Commonwealth support for strategic, innovative and high quality R&D in the forest and wood products sector. It closely follows the Innovation Action Plan launched recently by the Prime Minister. And it demonstrates strong Government support for the Forest and Wood Products R&D Corporation. This support is likely, in turn, to ensure continuing industry support.

The increased funding will underpin a range of commercially viable projects to create greater value for our native timber resources, while developing new opportunities for our expanding plantation base. The Bill will ensure continuing investment in forest R&D, particularly for whole-of-chain, national and strategic research.

The Bill simply but effectively removes an anomaly that has existed in R&D funding under the Primary Industries and Energy R&D Act 1989 since 1994. It does not affect the arrangements for all the other R&D Corporations under the Primary Industries and Energy R&D Act.

—————

SYDNEY AIRPORT DEMAND MANAGEMENT AMENDMENT BILL 2001

I am pleased to introduce the Sydney Airport Demand Management Amendment Bill.

The Bill will make a minor change to the Sydney Airport Demand Management Act 1997, which will underpin the amendments to the Slot Management Scheme that the Government announced on 13 December 2000. The Scheme is a disallowable instrument made under section 40 of the Act. The Bill will ensure that the amended Scheme is not subject to Part IIIA of the Trade Practices Act 1974.

The Government has concluded that Sydney Airport will be able to handle the air travel demand over the next ten years. The advantages of operating to the airport are so great that the airlines will adopt aggressive commercial strategies to maximise their use of the airport.

The Government has reaffirmed its commitment to the existing operating arrangements at Sydney Airport. We will not alter the curfew, the 80 movements per hour cap, or the guaranteed slots for regional airlines. We will, however, make four changes to the Slot Management Scheme, which will:

· cap the number of regional slots allocated in peak periods at its current level;

· encourage airlines progressively to introduce larger aircraft;

· establish a minimum aircraft seat limit for allocating new slots, to be determined in consultation with industry; and

· remove any risk that the major airlines could avoid the regional guarantee by migrating the regional slots held by their affiliates into non-peak periods.

The Department of Transport and Regional Services is drafting a discussion paper on these changes, which will be released later this month.

I want to stress that the Sydney Airport Demand Management Amendment Bill does not pre-empt our consultations on the details of the amendments to the Scheme. It simply ensures that the amendments - whatever their final details - will be valid. The Bill has to be introduced into Parliament now to ensure that the Scheme can be amended before the airline timetables for the Northern Winter 2001 scheduling season need to be settled.

I turn now to the main provision of the Bill.

Schedule 1 of the Bill will enable the Slot Management Scheme to differentiate between specified categories of aircraft movements, despite Part IIIA of the Trade Practices Act.

The Government's policy on Sydney's future airport needs will enable Sydney and Australia to benefit from the growth of air travel, while still protecting local residents and regional New South Wales.

The Bill will underpin the Government's policy.

Ordered that further consideration of these bills be adjourned to the first day of the 2001 Budget sittings, in accordance with standing order 111.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.