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Tuesday, 24 September 2002
Page: 4757

Senator COLBECK (5:19 PM) —I must say at the outset that the difficulty of moving from what essentially has been a completely deregulated industry to one that is regulated is demonstrated in both the evidence and the deliberations of the Rural and Regional Affairs and Transport Legislation Committee in its inquiry and report on US beef quota allocation. Remember, the main reason we are essentially considering this situation is the downturn in the Japanese market over the last 12 months and the desire of those servicing that market to move into the US market.

With respect to a quote that Senator O'Brien has just referred to from one of the witnesses, the Australian Lot Feeders Association noted that the current system took away the ability of a lot of those who were having great problems in servicing the Asian markets to move into the US market and was historically different from what was the case. Essentially, we had in this circumstance a large group of industry players who were looking to move from a market that had collapsed and to take a slice of a market that was being serviced by other industry players. I would have to say that throughout this entire process I have been extremely disappointed in the industry itself. It appears that it has been largely driven by self-interest rather than by industry interest. The difficulty of the RMAC group in coming up with a proposal in the initial circumstance clearly demonstrates that.

The thing that this report brings with it, though, is that it largely has the support of the majority of the industry, and more particularly those who are not focused on the US market. Importantly, the changes made to what started as the AMH model—which I think was largely grasped at by industry players in an effort to get a global model— cater to those who have historically, since 1994, built markets specifically into the US. A key issue for members of the committee was to ensure that those who had, through essentially a free market, made a choice to work in the US market did not have their businesses jeopardised by any changes to this system, and that was one of the imperatives put forward by Minister Truss in his initial proposal.

A concern that remains with some members of the committee is that the model in the report will result in significant handouts of rental from the US market being diverted to those who have not traditionally worked in that market and will potentially develop a paper trade in quota. There are some in the industry who believe that is a good thing. I am not of that view, but the committee also has recommendations in place to restrict this, for which I am very grateful. I will be very interested to see the impact of this system in 18 months time, once it has bedded down and we review it a little further.

The AMH model in its raw state left out several sectors of the industry such as the branded beef specialists and, again, I mention the transitional arrangements put in place for the US specialists. There is also the modification to the allocation of tranches to flatten out the seasonal variations that would have existed under the original AMH model that was proposed to be put together on a quarterly allocation basis.

As I said at the outset, this would have to be one of the most difficult industries I have been involved with. It is a significant industry for Australia, as Senator O'Brien said. I just hope that we are not back here in a short period of time, having to reconsider this particular issue in the event that what we are proposing does not work.

Question agreed to.