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AQIS costs to be cut by $20 million



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N E W S • F1 E L E A S E PIE93/16GR 3 February 1993

AQIS COSTS TO BE CUT BY $20 MILLION

The Minister for Resources, Alan Griffiths, today announced that the Australian Quarantine and Inspection Service (AQIS) is to, cut its operating costs by $20 million over the next three years.

AQIS's annual budget is currently around $188 million.

Mr Griffiths was speaking to a group of industry and community leaders at the National Agricultural and Resources Outlook Conference (NAROC) in. Canberra this morning.

"... The future of quarantine and inspection relies on industry accepting an increased level of responsibility for its operations in the areas of quality and integrity," he said.

"Such an approach offers the potential for dramatic and sustained cost reductions.

"To prove how serious the Government is on this point, AQIS will reduce permanently the total cost of operations by at least 10 per cent.

"The recent history of AQIS shows that costs can be substantially reduced. I have been of the view that further savings are possible. In response, AQIS has indicated to me that savings of $20 million can be achieved over the next three years."

The Minister went on to say that significant progress had already been made. He stressed however, that in achieving savings and efficiencies, the integrity of AQIS's quarantine and inspection services would in no way be compromised.

Along with the cost cuts, six other initiatives for AQIS 'were announced. They are

• improved communication between AQIS, consumer groups and industry • programs to assist new exporters • a commitment to a 'charter of service' • a strengthening of the skills and capacity of AQIS staff • the establishment of 'AQIS Training Services', and • the strengthening of quarantine preparedness.

"Over the next three years, the measures I have announced will result in an even more effective, more transparent, more accountable organisation," Mr Griffiths said.

Further information: Minister's Office: Kristen Barry, Ph: (06) 277 7480 AQIS: John Flannery, Ph: (06) 272 5234

Attached: Full text of Minister Griffiths' AQIS Statement

COMMONWEALTH

P.ARl1AMEN i ARY LIBRARY 1CAH

Parliament House Pfi5iie: ) 277 7480

Canberra ACT 2600 Fax: (06) 273 4154

G5

CHECK AGAINST DELIVERY EMBARGO 7.30 AM, 3 FEBRUARY 1993

MINISTERIAL STATEMENT BY

THE HON ALAN GRIFFITHS MP COMMONWEALTH MINISTER FOR RESOURCES AND MINISTER FOR TOURISM

Facing the Challenges of the 1990s: The task ahead for industry and AQIS

National Agricultural and Resource Outlook Conference 3 February 1993

Ladies and Gentlemen.

I intend to report to you this morning the detail of changes the Government has made to the operations of the Australian Quarantine and Inspection Service.

At the outset I want to make two important points.

First, AQIS's foremost priority is to maintain the integrity of Australia's food inspection regime so as to protect the consumers of both Australian and imported products, and through an effective quarantine service, protect the health

status of our animal and plant industries.

The efforts of the Government will continue to be based on the best technical advice to ensure that this foremost responsibility is met. In addition, resources and services will be maintained at levels to ensure the continued

effectiveness of quarantine and inspection programs.

As an associated issue, you are well aware of the recent case involving hamburger beef in the United States. This reminds us, again, of the necessity to retain the integrity of the inspection procedures of AQIS and a clean bill of

health for the Australian products.

At stake is around $3.3 billion in expo come from the sale of meat products.

You well understand that many areas of regional Australia are also dependent on the export meat industry, and that any threat to that industry is a threat to the livelihood of country communities.

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It is in this context that we must assess the proposals of the Opposition to cut AQIS programs by $39 million per year. Although superficially attractive, this particular proposal directly threatens the capacity of AQIS to

provide the inspection effort necessary to safeguard the reputation of Australian products in vital overseas markets.

As producers and exporters, you have a vested interest in the continued integrity of the meat inspection program. This particular proposal does not make export or commercial sense.

By way of contrast, the measures that I will announce today will enhance the capacity of AQIS to meet its fundamental obligations.

The second point which I wish to make is of equal importance: achieving the objectives of quarantine and inspection policy are not tasks AQIS alone can pursue.

It is my strong view that the role of AQIS cannot be based on the necessity to control industry. Industry must take responsibility for its products and share responsibility for their certification.

We can ignore the imperative for reform ' nd rely on traditional quarantine and inspection programs.

Alternatively, we can use our skills so as to make product quality and integrity our premier objectives.

The exclusive reliance on traditional methods is not appropriate for the 1990s.

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Rather, the future of quarantine and inspection relies on industry accepting an increased level of responsibility for its operations in the key areas of quality and integrity.

Such an approach offers the potential for dramatic and sustained cost reductions.

To prove how serious the Government is on this point, AQIS will reduce permanently the total cost of operations by at least 10 percent.

The recent history of AQIS shows that costs can be substantially reduced. I have been of the view that further savings are possible. In response, AQIS has indicated that savings of $20 million can be achieved over a period of

three years.

As the total recoverable costs of AQIS services fall, then so will costs to industry.

This measure, alone, represents a real saving of 24 percent on the cost of providing an equivalent set of quarantine and inspection services in, for example, 1989-90.

I referred earlier to the need for Government, AQIS, industry and unions to cooperate in the, development of an enhanced inspection and quarantine sew+. This cooperative approach demands stronger links between AQIS, industry and consumer groups.

In this, the revamped Quarantine and Inspection Advisory Council, the QIAC, will play a key role.

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Accordingly, I have requested the QIAC to review the means by which communication between industry, consumer groups and AQIS can be

enhanced.

We have different skills and a different perspective. believe that these can be complementary and can be combined to reinforce the ability of Australia to export and compete in tough world markets.

Importantly, I want industry to consider and communicate practical means by which it can organise itself to maximise the efficiency of inspection and quarantine services.

You well understand the difficulties associated with the penetration and development of new export markets. The Government is keen to remove impediments which would prevent Australian companies from exploiting the growth potential inherent in export markets.

I announce this morning that an additional task for the QIAC will be to examine the means by which AQIS can facilitate the shipment of test products. A sum of $250,000 has been set aside to develop

exports in key growth markets.

Of course, I recognise the potential- equ i ty. problems associated with this proposal. The QIAC has therefore been asked to examine, within six months, the most effective mechanism to deliver such concessions.

With the introduction of the full recovery of attributable costs, there exists the need for AQIS to define more clearly the guaranteed level of service which it can be relied upon to provide.

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In order to address this issue, I have instructed AQIS to develop what I call a "Charter of Service".

This will provide both the staff of AQIS and those who rely upon quarantine and inspection services - industry and consumers alike - with a clear statement addressing the degree, form and timeliness with which AQIS provides such services.

Such a statement can only be realised with the cooperation of a skilled, committed and trained staff. Indeed, the program which I have outlined demands the development of a new operational culture within the service.

Hence, the QIAC will further examine the means by which the training needs and career paths of AQIS staff can be best organised.

This will prepare AQIS staff for contemporary quarantine and inspection issues.

Industry, as well, needs to develop the skills and professionalism of staff in order to make its own transition.

AQIS will therefore develop a dedicated unit devoted to the provision of prfessional services to industry.

My objective in establishing "AQIS Training Services" is to establish an expert resource which can meet the training and technical requirements of industry, and facilitate the transition to QA systems.

The efficient delivery of services is a critical role for our quarantine and inspection organisation.

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You know however, that the maintenance of the integrity of Australia's quarantine regime is of fundamental importance. The Government will continue to maintain a quarantine policy based on the objective assessment of

quarantine risk. Our policy will continue to be consistent, and it will be based on the scientific and technical facts. The assessment of quarantine issues will continue to be open and transparent.

I believe however, that more can be done.

Hence I am announcing a number of initiatives which build on the progress made in quarantine policy over the past four years.

The more significant elements are:

• The development of an integrated risk evaluation and monitoring program covering the southern part of Australia. The successful Northern Australia Quarantine Strategy will be used as the basic model.

• The NAQS framework will be extended beyond Indonesia and Papua New Guinea to include South East Asia.

• AQIS is to re-examine Australia's` st, and Mouth Disease (FMD) strategy as a priority.

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Ladies and Gentlemen, these seven initiatives are the key to the successful operation of AQIS during the 1990s:

• Permanent cost savings in excess of $20 million per year.

• Improved communication between AQIS, consumers groups and industry.

• Assisting new exporters.

• A commitment by AQIS to a "charter of service".

• A strengthening of the skills and capacity of AQIS staff.

• The establishment of "AQIS Training Services".

• The strengthening of quarantine preparedness.

This is the task for AQIS, for unions and for industry in the years ahead.

The result will be an organisation equipped to fulfil its obligations to the nation, to its staff and to all of its clients. \\

Much already has been done in the past. It is appropriate then if I indicate the both the diversity and magnitude of the activities conducted by AQIS and the progress made to date in implementing the 1991 reform program.

During 1991-92, AQIS provided inspection and certification services for food valued at around $9.4 billion, including $8 billion of exports.

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By doing so, AQIS contributed to the retention of Australia's position as the third largest exporter of agricultural and processed food products.

Quarantine screening was provided for:

• bulk imports worth around $49 billion of imports;

• about 650,000 freight containers;

• 60 million tonnes of ballast water; and

• five million arriving air passengers and crew aboard almost 26 000 international flights.

No market closures or major food safety incidents were reported; no case of a quarantinable disease of humans was confirmed which could be attributed to a failure of AQIS systems.

Similarly, no case of exotic pest or disease outbreak of commercial significance to Australian industries, was reported which could be attributed to a breakdown in quarantine.

Over the past year, AQIS successful completed bilateral quarantine negotiations on conditions o ^ntry q 9 for:

• lemons to Japan;

• fresh citrus to the United States;

• fruit, vegetables, legumes, grains and oil seeds to Mauritius; and

• fresh fruit to Indonesia.

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In addition, AQIS is now negotiating a Memorandum of Understanding with Taiwanese officials, to ensure increased access to that significant new market. Negotiations with the Republic of Korea are also underway to establish quarantine conditions for trade.

Maintaining a credible and persistent voice in our overseas markets and in various multilateral or bilateral fora has been a major effort for the service during the past years.

But the efforts of AQIS overseas have been complemented by work at home.

Recoverable AQIS expenditure has been reduced by almost 12 percent in real terms since 1991-92.

In 1966 5 there were 2,070 AQIS meat inspectors, today there are 1391, a reduction of 33 percent.

AQIS has also worked hard to implement new programs and enhance the effectiveness of existing arrangements.

Attached to this statement are two documents.

The first is a report on progress of the AQIS reform package I announced in November 1991

The second is a report on quarantine policy, specifically the successful implementation of initiatives contained in the Government's 1988 quarantine policy statement -"Australian Quarantine - Looking to the Future ".

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Export Facilitation, Quality Assurance, A More Commercial Culture, Financial Management, Accountability, Consultation, Management and Industrial Relations, Food Safety, and Scientific Excellence - these were the nine

points at the heart of my 1991 statement.

Significant progress has already been made.

The AQIS Export Facilitation Unit, set up last year, has established a national network. The initiatives I have announced today will ensure that export facilitation will be at the forefront of AQIS's client co-operation program.

More than 1100 programs based on quality or certification assurance have been approved. QA programs cover meat, dairy, fish, and fruit and vegetable export establishments, and operate in the field of quarantine.

From 1 July this year, AQIS will operate under a Trust account making it more responsible for its own income and expenditure.

The other substantive issue flagged in the 1991 reforms that I wish to address is food safety. This is going to be a major area for effort by AQIS and by industry.

Consumers are more demanding of the which they

purchase and consume. We need to ensure that Australian - _ products satisfy the preferences of our customers.

The Government has mounted, through its "Clean-Green" strategy, a major effort with the food processing industry to maintain that essential quality edge. AQIS's programs will continue to provide an assurance that Australian

produce is world-class.

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An issue associated with food safety is the task of ensuring that imported food products satisfy the requirements of the Australian Food Standards Code. The Government has ensured that the imported product will

have to come up to scratch and will have to meet Australian standards - otherwise it will not come in.

Ladies and Gentlemen.

As a result of today's announcements, there will be a widespread change in the relationship between AQIS, the staff of AQIS and our clients.

This relationship must develop as a partnership.

It is important that the partnership meets statutory requir=ements and the requirements of food industry customers - most notably, food consumers in Australia and overseas.

Over the next three years, the measures I have announced:

• Permanent cost savings of $20 million per year.

• Improved communication between AQIS, consumers groups and industry.

• Assisting new exporters.

• A commitment by AQIS to a "charter of service".

• A strengthening of the skills of AQIS staff.

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• The establishment of "AQIS Training Services".

• The strengthening of quarantine preparedness.

will result in a more effective, more transparent, more accountable organisation.

There is considerable work still to be done - but the results will justify our efforts.

Thank you for your time this morning.