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Monday, 31 October 2011
Page: 12224

Mr TEHAN (Wannon) (19:21): It is with great joy that I rise this evening to support this motion moved by the member for McMillan. I must thank the member for McMillan because when he said he was going to move this motion he asked me whether I would be prepared to second it. It was with great delight that I said I would, and I congratulate him for moving this motion. There are 1,500 dairy farms in western Victoria. They currently produce around 2.1 billion litres of milk. That is nearly a quarter of Australia's milk production. The processing sector processes that milk into cheese, ice cream, drinking milk, milk powder et cetera for the domestic and international markets. In total, the farm and processing output plus the service provider industry value that hangs off it provide about 6,000 jobs and $4 billion to the economy of western Victoria. That is about one third of the region's economic activity.

I stand here tonight to say that the dairy industry is crucial, it is vital and it is terribly important to the economy of western Victoria. It has been interesting to note what the member for Corangamite has said because, sadly, one of the greatest threats to the industry is the level playing field. But it does not come from trade barriers. It comes from the carbon tax because, if you look at the way dairy has been treated in other countries' ETSs compared to how it is being treated here in Australia under the carbon tax, it is going to suffer and suffer significantly. Under the European ETS, all the major dairy manufacturers are exempt from paying the ETS because it is a trade exposed, emissions intensive industry. The reason given is that the Europeans are worried that jobs and industries will move offshore.

I appeal to the government, and it is not too late, to think seriously about the impact that the carbon tax will have on the dairy industry in Australia. You can still make amendments. As a matter of fact, I understand that in March there will be amendments made to the legislation. Think long and hard about the impact that it will have on the dairy industry. There are jobs at risk. Employment could be affected by your carbon tax. All you need to do is say, 'Okay, yes, dairy is trade exposed; yes, it is emissions intensive; yes, in the European Union it was looked after.' If we are to be fair dinkum and if we are to have the so-called level playing field, how dairy was treated in the European Union is how it should be treated here and our processors should be exempt.

I appeal to the government, once again—and I have done this on numerous occasions—to think long and hard about what impact the carbon tax will have on our dairy industry. It is all well and good to come in here and talk about the importance of the sector but we have to remember that it is a trade-exposed sector, and therefore any extra cost you put on it means that it is harder for them to be able to sell those commodities overseas. Ultimately, our dairy processors within Australia have to pass those costs back to the dairy farmer. They cannot increase their prices on the international market, they have to pass it back to the farmers.

The research shows that the carbon tax will cost dairy farmers—this is research which the government has seen—between $5,000 to $7,000 per farm. That is a hit which they cannot take at this stage and, as it has been pointed out to me, that is at a minimum. Larger dairy farmers will have larger costs than that $5,000 to $7,000. So I take this opportunity to applaud the 1,500 dairy farmers in western Victoria for the contribution they make to the local economy, to jobs and to providing ancillary jobs. But I also use this opportunity to say to those members opposite to think about the harm their carbon tax is going to do to this sector. It is not too late: act on dairy farmers' behalf and change your legislation.