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Thursday, 14 November 2002
Page: 6425


Senator O'BRIEN (5:18 PM) —I can say that I am extremely pleased to speak on the Egg Industry Service Provision Bill 2002 and the Egg Industry Service Provision (Transitional and Consequential Provisions) Bill 2002 because these bills provide for a new egg industry structure, including the declaration of a new industry services body. The industry services body will provide promotion and research and development and other services to the egg industry. The Egg Industry Service Provision Bill provides for the Minister for Agriculture, Fisheries and Forestry to declare a new industry services body and then enter into a funding agreement with that body for the receipt of levies collected by the Commonwealth for the industry's promotion and research and development and the Commonwealth's matching funding for research and development expenditure.

The second bill, the Egg Industry Service Provision (Transitional and Consequential Provisions) Bill, provides for the transfer of assets from the existing egg subprogram of the Rural Industry Research and Development Corporation to the new body. In relation to the current industry structure, egg industry services are currently provided by the Australian Egg Industry Association, the industry peak body, and the egg subprogram of the Rural Industry Research and Development Corporation. A levy of 7.87c per laying chicken is currently imposed under the Primary Industries Excise Levy Act 1999. The levy funds are largely devoted to research and development through the Rural Industry Research and Development Corporation egg subprogram, with some funds directed to residues and animal health matters.

In 2001 the Australian Egg Industry Association presented a proposal to the Commonwealth seeking a new industry structure, including a corporations enacted company, to undertake egg promotion, research and development, and to provide other industry services. Under the proposal the existing Rural Industry Research and Development Corporation egg subprogram would transfer to the new company. The Australian Egg Industry Association has also sought a new statutory promotional levy at 32.5c on each laying chick purchased from a hatchery. The proposed levy would be imposed on egg producers but collected by the hatcheries. All egg producers who pay the statutory promotional levy will be eligible to become members of the new industry body. The Australian Egg Industry Association engaged in extensive consultation on the industry reform, including the new levy, between April and September last year. The results of an industry ballot suggest significant support for the Australian Egg Industry Association's proposal from both producers and hatchery operators.

The bill provides for the new industry structure sought by the Egg Industry Association, and the new regulations will implement the proposed levy regime. The existing levy for research and development residues testing and animal health will remain in place. With regard to the industry and the need for these reforms, the Australian egg industry has suffered from declining fortunes over the past decade. In the period 1989 to 1999, Australia's annual egg consumption declined by six per cent, from 146 to 137 eggs per person. Per capita, egg consumption is much higher in comparable countries. In New Zealand, for example, the average annual consumption is 208 eggs per person. The industry attributes the difficulties to outbreaks of Newcastle disease, enforced changes to hen caging and an inability to engage in generic marketing or to fully benefit from industry research and development. Previous attempts by the industry to introduce and manage voluntary promotional levies have failed. The industry believes a new industry services body will have the capacity to engage in effective generic marketing to boost egg consumption and to better capitalise on the links between product promotion and research and development.

The Egg Industry Service Provision Bill 2002 will provide authority to the Minister for Agriculture, Fisheries and Forestry to declare a company limited by guarantee as the industry services body. Before the declaration is made, the minister will be required to enter into a funding contract with the company. The contract between the Commonwealth and the company will establish obligations in respect of the use of levies and matching research and development funding and the company's accountability to its members and the Commonwealth. Further accountability measures will be contained in the company's constitution. Once the declaration is made, the Commonwealth can make payments to the company. Agri-political activities will continue to be undertaken by the Australian Egg Industry Association as the peak industry body.

With regard to the levies, the effective use of statutory levies can assist producers to pool resources and work collectively on research and development, promotion and other priority industry tasks. Most traditional industry sectors have a levy system and a number of key primary industries have recently amalgamated their research and development and marketing functions. For example, Australian Pork Ltd and Horticulture Australia have been created as a result of change in research and development and marketing arrangements in the pork and horticultural industries.

The opposition has recently received representations from some members of this industry opposed to the imposition of the levy as proposed. I have received a copy of a petition signed by 76 industry members that specifically addresses opposition to the levy. I know other senators have received letters and telephone calls urging opposition to the new industry arrangements. The imposition of industry levies is, of course, often a difficult matter. It should be noted, however, that these bills do not impose the proposed levy; rather, they provide for a new Australian egg industry structure, including the declaration of a new industry services body. The matter of the proposed levy will be the subject of a yet to be introduced regulation.

During the examination of this legislation by the Senate Rural and Regional Affairs and Transport Committee into the provisions of the bill, a number of concerns were raised in respect of animal welfare and the accountability of the new industry body. The committee, while noting these concerns, recognised the following: the legislation is not actually concerned with specific animal welfare issues, as you would have gleaned from my earlier comments, and the new company will provide generic promotion and research and development functions for the whole industry. Additionally, issues relating to animal welfare are more appropriately covered through other activities and through state legislative arrangements. With respect to the accountability of the new company, the committee formed the view that the provisions are adequate and similar to those for other companies operating under Corporations Law. I might say that the opposition concurs with the conclusions of the committee in respect of these matters.

In conclusion, the opposition supports the implementation of this new egg industry structure, as requested by the industry and developed by the industry itself. The coming months will be crucial for the future prosperity of the Australian egg industry, and of course one of the main challenges is the crippling consequences of the current drought. Egg producers, like pork, chicken and beef feedlot growers, are currently facing uncertain feed supplies and escalating prices. The opposition has called for a national grain audit to address concerns about grain hoarding, uncertain supplies and skyrocketing feed prices. Thus far, the government has ignored the opposition's demands. For the sake of Australia's intensive industries, including our egg producers, I renew the call for a national grain audit today. The opposition agrees to the passage of these bills and trusts that the new industry structure will assist the industry to build a more secure future for its members.