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Thursday, 16 August 2012
Page: 5530


Senator COLBECK (Tasmania) (12:10): I present the report of the Senate Select Committee on Australia's Food Processing Sector, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator COLBECK: I move:

That the Senate take note of the report.

Often these report presentations end with thanks but I think it is appropriate today that I commence my comments with thanks, because this has been quite a project over time, and the gestation of the report, and even the terms of reference, took some time. I start by thanking the secretariat; it is appropriate that there are some members of the secretariat in the advisors box this morning, because they have done a fantastic job on this inquiry for us. I specifically say thank you to all of the members of the secretariat. We have had a bit of a changeable time. We have had, I think, three secretaries over the time of the inquiry, but to pull together a substantial report like this one has taken a fair bit of work and I certainly appreciate the work that the secretariat has done in assisting the committee with this inquiry. I also thank the submitters and the witnesses who appeared before the inquiry over the last 12 months.

I have seen this as an important piece of work for some time, as I know other members of the committee have, and I hope that the work we have put out through the report bears justice to the industry—an industry that is very important to Australia.

I also thank my colleagues on the committee. Coalition members, crossbench members—Senator Xenophon, Senator Madigan and also members of the Labor Party who participated in the inquiry. Obviously there were a number of perspectives represented around the committee and that is manifested in a minority report from the opposition and a minority report from Senator Xenophon. I thank them for their input. This is an important issue. I particularly thank Senator Xenophon and former Senator Fielding for supporting the motion that put this inquiry into train. The government did not support this inquiry going ahead; nor did the Greens. but I appreciate the fact that Senator Xenophon and former Senator Fielding saw that this was an important issue for the Senate and I thank them for that. As I said, I note that the government did not want this inquiry to go ahead and voted against it, as did the Greens, who played absolutely no part in the entire inquiry, unfortunately, despite their discussions around this particular matter. As I said, a number of senators have been concerned about this for a considerable period.

The terms of reference took a bit of time to put together and they were deliberately broad. This report provided us with the opportunity to have a good look at the industry across a number of elements to consider where we might take it. There are 35 recommendations and they cover a fairly wide range of issues, but I hope that there is something in the recommendations for everyone, and I certainly hope that the report provides the opportunity to dispel a few urban myths that were presented to us as part of the overall inquiry process.

I am not going to be able to deal with all the recommendations in the 10 minutes I have, but I will deal with some of the key issues that were raised through the inquiry. The taxation regulatory environment was certainly an important part of the process that we discussed and the issue of carbon tax inevitably came into that discussion. Our recommendation is not so much critical of the carbon tax, although there was plenty of evidence to demonstrate the impacts of the carbon tax through the food processing supply chain. I know one company is spending $17 million to mitigate the impact of the carbon tax and, after they have done that, they will still have a $7 million a year bill. The impact that that will have down the supply chain is concerning to me. We have asked the government to look at how the big emitters pass the cost down the food supply chain, how the profitability of small businesses is impacted and how those businesses can work that through to recoup some of those costs that the government is imposing on them through the carbon tax.

Importantly, from my home state of Tasmania, which is significantly impacted by transport, we heard from a number of places about transport costs. I urge the government to continue to move quickly on the Deegan report, which talks about the fundamental efficiency and the cost-effectiveness of transport across Bass Strait. It is a significant factor for my home state of Tasmania and we urge the government to move on with that.

The issues of supermarkets, creeping acquisitions and the operation of the Competition and Consumer Act was inevitably an important part of the report and there were a number of opinions around the table. The significant recommendation arising, from an opposition perspective, was that there needs to be a comprehensive review—a root and branch review, if you like—of the Competition and Consumer Act. It has been a long time since there was one; the market continues to evolve and it is appropriate that we go through that process again. There were a number of issues that were continually raised with us about misuse of market power, creeping acquisitions, predatory pricing and unconscionable conduct. I know the ACCC is looking at these matters now and I look forward to its report when it comes out later in the year and the contribution that it makes to the overall debate.

The supermarkets send us glossy brochures referring to their performance and the way they look after their customers, which is vitally important as part of this overall discussion, but one thing they do not measure, and which I have not seen any measurement of, is their suppliers' satisfaction. They have asked me how they deal with that—we have had conversations about that in the past—and the perception that they are not looking after their suppliers. We are recommending that they establish, as part of their benchmarking and as part of their corporate reporting, a mechanism through their independent reporting process, which is already in place, to measure, benchmark and report on supplier satisfaction. It will help them deal with some of the perceptions that are out there in the market and, as well, will give the broader market a better idea of what is going on.

The cost of government to industry was a significant concern right through the inquiry. It did not matter whether it was export fees and charges, the carbon tax or regulation. I know the government has processes in place to deal with, say, transport across the country and providing national systems to reduce costs, but we need to continue to do as much as we possibly can to reduce the input cost of government to business. That has to be a fundamental role that government plays as part of the way it operates. So there are a number of recommendations that deal with that and which also to try to take some of the red tape and duplication of costs out of the supply chain. We recommend that the government get involved, and industry also, in the global food safety initiative so that some of the multiples of certification that are required for businesses can be condensed to remove the number of times that businesses are imposed upon for audits and things like that, and also to try to take some of the cost of doing business out of the system.

In respect of education, we are really concerned at the engagement of the agricultural and food processing sectors with the education system and Australians' more broad understanding of the food system. Where their food comes from and how it is generated is lacking. We recommend that the government work with industry—we know there is some work already occurring there—to try to draw those understandings together and to make sure it is properly funded—because it is funded in a very piecemeal way at the moment, causing divisions within the sector—to give Australians a better understanding of where all these things lie.

Inevitably, workplace relations comes as part of this. I know the government is not going to support our recommendations on that but it is a significant issue for industry and was expressed to us a number of times. One of the other things we hear a lot from government is that Australia will be the food bowl for Asia. I can tell you that at the moment there are some real inhibitors to being part of that market. The government has a significant role to play in making that easier. Our recommendation, that we embark on a 'brand Australia' type program to start promoting us into the Asian region, is a very, very positive one.