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Monday, 25 June 2001
Page: 24948

Senator WOODLEY (12:52 PM) —I want to agree with most of what the previous speaker has said. However, I want to begin the debate a little further back in time because the problems that the dairy industry is facing, and has faced, did not begin with this legislation. They began with the coalition and the Labor Party giving in to the commercial forces in Victoria which they said made deregulation inevitable. The Democrats have never accepted that deregulation was inevitable. We have said on many occasions that it was only inevitable because there was not the political will to ensure that those commercial forces could be resisted.

Let us be sure in describing those political forces, because very often generalisation is used rather than specifics when we refer to the dairy industry in Victoria as driving deregulation. In fact, a few large producers drove deregulation. Many producers were absolutely confused by the whole process and some producers were absolutely opposed, as were the Democrats, to deregulation. However, the main driving force for deregulation came not from farmers but from processors, particularly from Bonlac and Murray Goulburn. The Senate report in 1999 made it very clear that processors were driving deregulation and that those same processors, through deregulation, would destroy the very industry on which they depended. I want to begin the debate at that point to make sure that the chamber and anyone listening to this debate are quite clear that we are here not simply because the original legislation was flawed—and it was—but because we proceeded to deregulate an industry which did not need deregulation and which has suffered incredibly because deregulation went ahead.

When we debated the original legislation, I predicted that we would be back in the Senate within 12 months because the legislation was flawed. It was quite clear that it was not going to meet the needs of everybody and that a significant number of people would be disadvantaged rather than advantaged by the legislation. My prediction was slightly out. It is a little over 12 months since we debated the legislation on the last occasion, but it is near enough to 12 months. We have had to come back. The original legislation was flawed and it was rushed through, and we are now having to fix it up. When we debated the original legislation in committee, I said:

I just do not think it is good enough that, if we discover problems along the road, the government might look at this issue. I want some commitment from the government that there is a process that will enable that to happen.

I then went on to talk about the people who I was sure, at that point in time, would be disadvantaged. Unfortunately, the government did not put in place a process which was at all useful, and we have had to come back and amend the bill through the debate and the legislation before us today.

Even more importantly than that, the problem is not that we have had to move amendments but that we could have put in place a proper appeals mechanism. That would have enabled us to deal, outside this chamber and through the Dairy Adjustment Authority, with the problems that people encountered. However, the legislation, and later the guidelines in particular, were so restrictive that the anomalies which have been encountered could not be dealt with through the Dairy Adjustment Authority and we have had to bring back these amendments.

When we have further guidelines, which will be available to extend the legislation, I appeal to the government to ensure that those guidelines will not again be so restrictive that we will not be able to pick up the people who the government is saying it wants to help. It is very important that we do that. Again, when we last debated this legislation in committee, I said:

The second point is that, if we use the processes of appeal, tribunals or whatever to solve this problem, what we are really saying to these people is, `The only recourse you are going to have will be a long, expensive and legal one.' I do not think that is good enough. It has been shown very clearly—at least to the rural and regional affairs committee when it met—that there is a significant problem. I believe that we ought to be getting from the government a proper process for resolving that problem.

One of the problems, of course, was the situation of lessees and lessors. That has developed into a very vexed question. It was clear to the committee that it would be a problem, and yet the government did not put in place an appeals mechanism which would have allowed the Dairy Adjustment Authority to deal with that particular problem. So let us very clearly say that, having passed these amendments—as we will this week—let us not have again the situation where, because of restrictive appeals guidelines, we discover that we are still not able to assist those people for whom the anomalies have been thrown up, although there is no doubt that they have a just claim and a just cause, but, because of the restrictive guidelines, that cause cannot be finalised to their benefit.

Let me say in support of the government that the amendments certainly are needed and they will be beneficial. The outstanding question is whether they will be sufficiently flexible to achieve what the government says it wants to achieve. Several amendments will enable the government to achieve its objective, and I hope that the government will see the logic of those amendments and will support them. That will enable it to deliver what the rhetoric has said should be delivered.

Senator McGauran —Are you going to mention the state governments?

Senator WOODLEY —I certainly am—that comes very shortly, Senator McGauran. Thank you for reminding me of that.

Senator McGauran —I gave you the lead.

Senator WOODLEY —That is good. This amendment bill picks up a number of dairy farmers who were severely disadvantaged under the entitlements accessed by other dairy farmers through the original Dairy Structural Adjustment Program. Now I come to Senator McGauran's point: this includes those farmers in the quota states of Queensland, New South Wales and Western Australia who have not received any compensation for the loss of quotas, even though those quotas were real property that had been bought and sold prior to legislation. Certainly in Western Australia, and perhaps in other quota states, the sale of quotas attracted stamp duty. State governments actually recognised that they were real property, and that stamp duty was a gain for those state governments. But, apart from Western Australia, which has done something, other states, particularly New South Wales and Queensland, have refused to recognise their responsibility to compensate people whose real property was destroyed. Those states have received millions of dollars through the National Competition Council payments, and part of those payments was for dairy deregulation. There is a clear obligation on the states of Queensland and New South Wales, and a part obligation still on the state of Western Australia, to come good on those payments and to direct a portion of those payments to dairy farmers who have lost quota. I am very clear about that: this bill does not remove the obligation on those states to come up with compensation for those farmers.

Another problem is that some farmers who were lessors received very little under the DSAP payments while the lessees received the bulk of the entitlement. Many lessees walked off the farms, broke their contracts, and left the owners in great difficulty and unable to find new lessees for their properties. In evidence at the hearing on this legislation—it was subsequently supported by written documentation—we were told that that represents about 70 per cent of farmers who had contracts between lessor and lessee. Nobody really expected that lessees would break contracts to that extent, but it has happened. We could not say that the government should have expected that—I do not think that anyone expected it. We expected lessees to support the contracts by which they were obligated, but they did not. Lessors in Victoria, in particular, have found great difficulty in getting new lessees to take up leases on their properties. They have been disadvantaged to a significant degree, and this package must address their problem. I believe that the legislation is again too restrictive. I have an amendment that I hope will be accepted, as it will certainly make it easier for lessors to get some justice under the legislation.

Another group of farmers who were disadvantaged under the DSAP were Capel dairy farmers in Western Australia and farmers in the south-east of South Australia whose entitlements were unfairly reduced because of the way in which their entitlements were calculated under the DSAP. To put it in simple language and to short cut the rather complicated explanation, they were deemed to have produced a certain amount of market milk because of the payment of the DSM. Because of that, they were deemed to have produced a certain percentage of market milk, but in fact they produced a higher percentage than that which was deemed to them. We need to address their problems, too.

It was very difficult to come up with an amendment that would deal with their situation, because of the problem with the Constitution and the need to treat everybody equally. I am still puzzling about that, but I hope that the government, in their response, will indicate that the needs of those farmers will also be covered. It depends on the anomalous circumstances and how widely they are defined, and on the discretion that the minister and the Dairy Adjustment Authority will have. It depends also on whether that discretion will be flexible enough to take on board their situation, and it is important that we do that.

Those are some of the problems that still remain with this legislation. Let us give the government credit for attempting to bring in amendments that will be beneficial for a number of dairy farmers. The government certainly are trying, but they have not quite got there. I hope that they will be sensible enough to understand that they can get there if they accept the amendments to be moved by the opposition and the Democrats. If so, they will be able to deliver what the rhetoric says they want to deliver, but if they refuse to accept those amendments, or refuse to give us a commitment that they will deal with the problems in one way or another, they will not be able to deliver what the rhetoric says they want to deliver.

These are the issues that are to be dealt with under this legislation. I commend to the Senate the report of the Senate Rural and Regional Affairs and Transport Legislation Committee. I also commend the staff of the committee who responded to the one-day hearing that we had on the legislation and wrote a very good report in very quick time. I did not have a chance to say this when the report was presented: I want to put on the record the tremendous expertise that the staff of our committee bring and the very good work that they did on this occasion to produce the report on the provisions of this legislation. I commend to the Senate the legislation and also the amendments which will be moved in the committee stage. I trust that the government will see that these amendments are not meant to destroy the legislation but rather to enable the government to really deliver what the rhetoric of the press release and the minister's statement says they want to deliver.