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Monday, 2 March 2015
Page: 1777

Mr CRAIG KELLY (Hughes) (13:18): I am pleased to speak on the motion moved by the member for Fremantle. I am sure the member for Fremantle is embarrassed to have to bring this on after six long, and somewhat hard, years of the previous Labor government. We know what they did in this area: a duck egg. I am very pleased that the Minister for Agriculture has taken this on and that we are going to have something actually done on the inadequacies of our food labelling after six years of inaction.

In the time available I would like to make what I would say is the free market case to do something on labelling. We know that we often talk about free markets, and it is not that we have absolutely zero government regulations. For the free market to work efficiently, we have prohibitions on coercion, on misuse of market power and on misleading or deceptive conduct. The simple reason that we do so is that, in any market, the more informed a buyer and seller are, the more efficiently a market works. The primary object of our labelling laws should be to ensure that there is nothing misleading about the labelling.

Let us look at some of the labelling that we allow at the moment. I purchased a packet of frozen raspberries from one of the supermarkets recently. I looked on the side of the packet and it said 'Packed in Australia from imported ingredients'. That is very nice—but imported from where? That is the question. Firstly, as a consumer, you have the right to know where ingredients are imported from. Secondly, as a food producer—and I speak to someone who has worked for 20 years in designing, producing and marketing consumer products—or as someone doing anything with food, you simply do not want to have the words 'Produce of China', 'Grown in China' or 'Made in China' on your product, and the reason is that we know that Chinese standards for growing food are less than adequate.

I have travelled extensively throughout China. I am happy to buy my footwear, my clothing and my electronics from China; but, when it comes to produce that is grown in China, having been to China many times, I will simply pass. If we enable a manufacturer not to disclose the fact that the produce they have in their packets is made in China then the market is simply not working to it most efficient level. There is no pressure on producers in China to improve their standards. If we have efficient and effective labelling which gives the consumer the knowledge that that product is from China, the consumer will only buy that product if there is a substantial discount. So, if there is a substantial discount on their products, companies in China will want to close that gap. There will be market pressure on them to clean up their act. There will be market pressure on them to ensure that they do not use practices such as using raw human sewage as a cheap fertiliser. There will be market pressure on them to extinguish such practices. We have seen this occur with many other consumer products with the label 'Made in China' that were simply seen as being an inferior brand or of inferior quality. The companies have worked to lift their standards with these products. Nowadays, when we see 'Made in China' on most electronic consumer products, it is not seen as a symbol of poor quality—but it is still seen that way in health. The Chinese have no incentive to fix their practices unless there is market pressure, and that means full disclosure.

The other issue with product labelling is home brand products. We have perhaps one of the most concentrated grocery retail markets anywhere in the world, and this enables the large retailers to have their own home brands. This is an asset transfer from small- and medium-sized businesses to those large retailers. The good will associated with the brand that is on the shelf has been taken away and is now owned by the large retailer. If I am having a home brand product, I want to be able to go from manufacturer to manufacturer to basically use as much market pressure as I can to screw that manufacturer down in price, and so the person who is producing the goods has no good will. If I am able to have a product that looks like it is made in Australia by dressing it up with an Australian company, whether it be Woolworths or Coles, with the label 'Produced in Australia' and if I am able to sneak offshore and source that product from overseas, for instance, from China, without making a full declaration to the consumer then that is misleading and deceptive conduct, and it takes away the good will from Australian manufacturers. This is why the coalition is proudly acting on this issue. (Time expired)