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Wednesday, 20 February 2019
Page: 14082


Mr FITZGIBBON (Hunter) (12:45): The opposition will be opposing the Future Drought Fund Bill 2018, and we will be doing so for a number of reasons. It is of course not because we don't want to help drought-affected farmers—just the opposite. It's not because we don't support the ideals outlined in the bill—we do. We oppose it because we believe there is a better path.

Before I go there, I want to make a few comments by way of background to the matters that we're dealing with today. Strong rural economies need a strong agriculture sector. Our food and fibre sectors are in desperate need of the capital required to drive scale and build the on-farm infrastructure needed to lift productivity and build resilience and diversity. There are, of course, only two real sources of investment for this project: domestic and foreign. On the latter, the current government could not have done more over the course of the last five years to discourage capital inflows—in particular, those coming from our north. A Labor government will not play to the crowd on foreign investment. It's far too important to be the subject of populist policies.

On the domestic investment front, people often and understandably lament the fact that our superannuation fund managers don't pay sufficient attention to opportunities in the agriculture sector. I always return to the very sobering words of super fund industry expert Garry Weaven, who told the ABC last year: 'The returns are quite low in relation to the risks and volatility of the investment.' His are words that every one of us in this place and everyone who has an interest in the agriculture sector should deeply reflect on and return to on a regular basis. We in this place, of course, think agriculture is special, and it is. It is the sector that feeds us, the sector that puts clothes on our back and the sector that makes a significant contribution to global food security. But in the eyes of investors there is nothing special about the agriculture sector. If they can see higher returns in another asset class, that's where their investment will go. Their fiduciary responsibility is to maximise the returns of those paying into their superannuation accounts. While they are obviously part of the equation, the success of the agriculture sector is not measured only by the volume of products produced, the prices secured or the numbers exported. No, the numbers that really matter to those fund managers are profit and return on investment over time. That is the bottom line for investors. Fogging up their reading glasses are two really key concerns: perception and risk. While there are exceptions to the rule, when farming is in our news stories, sadly, it's usually there for all the wrong reasons. Making it worse, too often politicians are too quick to run to the cameras to reinforce the negative message. I regret all of that. None of it encourages investment in the agriculture sector.

On the risk front, investors baulk at at least seven things: (1) the vagaries of the export markets and our heavy exposure to them; (2) growing global competition in our key export markets; (3) commodity price falls over time in real terms; (4) increasing foreign investment hurdles; (5) the constant presence of agripolitics and the ever-present fear of irrational government intervention; (6) the uncontrollable and unpredictable influence of weather events, climate change and the sector's dependence on natural rainfall; and (7) rising community concern about the treatment of animals and the health of Australia's natural environment. That's a lot of concern for us to collectively overcome if we are to meet our aspirations for the agriculture sector. We have a really big task ahead of us as we strive to capitalise on that rising global demand for the high-quality, clean, green and safe products that we produce as a country. I want to work with the sector to overcome those barriers to investment.

Government certainly has a key role to play in capitalising on those opportunities. No one farm, business or group of farm businesses can hope to secure access to export markets on fair terms. That's the work of government, and it will be a priority for a Labor government if elected. Farmers alone can't protect our products from pests and disease or guard our reputation and brand. That's primarily the role of government, as is ensuring our farmers have timely access to the chemicals and animal medicines they need and our customers trust.

We can't fulfil all of our aspirations if we don't have the world's best research. The need to aggregate investment and the challenges of spillover demand govern involvement and leadership from government. I am energised by the prospect of having the opportunity after the next election, if we are so fortunate, to ensure that our research dollars are spent in the most effective way and in a way that returns the best investment for levy payers and taxpayers alike. Dollars are too scarce in this area to waste one cent.

The majority of our farm entities are small and lack market power. Government has a key role to play in ensuring that they are not subject to market power abuse. Trade practices law has always been an area of interest to me, and I'll stand with our farmers to defend against the abuse of market power. Trade-exposed industries can only compete if governments keep costs down. Cost of energy is a key issue for agribusiness, and we will strive to put in place an energy policy that restores investment certainty and puts downward pressure on energy prices.

Government has a key role to play in the management, health and efficient allocation of our water and soil resources. This an area that has been largely vacated by the current government, although it has shown a key interest in the water. I note that the member for New England has joined us. When I say 'key interest', I say it for all the wrong reasons.

There's one further big task we need to tackle together. We've all become very familiar with the term 'disruption'. When we talk about disruption, more often than not we talk about technology and the way it's changed business and changed our lives. Most immediately, we think of Airbnb, Uber and social media and all the things that come with them. But in my view, the two other significant forms of disruption—particularly as they apply to the agriculture sector—are a changing climate and changing community attitudes. We should see the latter not just as a challenge—and it is a challenge—but as an opportunity. We need to harness changing community attitudes and food preferences to turn them to our advantage, and we can.

Let us be in no doubt: consumer preferences will continue to evolve. More and more, they will want our producers to respect the welfare of animals and they will want our product produced in a sustainable and ethical way. They are also growing more health conscious as each day goes by. They face a wave of advice on a daily basis about what they should and shouldn't be eating, and they're listening to that advice. They're listening here in Australia, and they're listening in our key export markets. In fact, in some of our key export markets, the change is more rapid than it is here. I have also noted the claim that Australia is the third fastest growing vegan market in the world, behind China and the United Arab Emirates. That is amazing. I think that would surprise most people.

But let me share two quick anecdotes. Three years ago, I released Labor's animal welfare plan during the 2016 election. It was, I would argue with great confidence, a sensible and measured document. The industry opposed it. But, following further controversy, it now supports it. Eight months ago, following a very bad incident in the live trade sector, I came to the conclusion that the live sheep export sector was unsustainable and posed a very real threat both to Australia's reputation in international markets and, indeed, to other markets, including the live cattle sector, because I feared it would infect that much larger sector. The live sheep sector initially argued that the Awassi Express incident was just an isolated incident—a one-off—that there was nothing really to be seen here and that everything was okay. Eight months on, the industry has voluntarily suspended the live sheep trade and is now embracing regulation imposed by the minister sitting opposite that is heavier than anyone could ever have expected—regulation they would never have countenanced before this series of incidents. In both cases, the sector opposed change, only to be forced to embrace change. But, in the meantime, in the interim, the sector did itself more reputational damage. This is pointless.

Attacking and demonising those who raise environmental or animal welfare concerns while defending the status quo, no matter what it looks like, has proved to be a failed strategy. We have to accept that the status quo does not always look good or meet consumer expectations and that, as a result, we risk losing the initiative. There is, I will argue, a better course, and politicians and industry leaders must work together to chart that better course. Together, we need to anticipate change and work with those in the sector who are not moving sufficiently quickly to accommodate growing opposition to outdated practices. We need to swim with the rising tide and surf the currents of activism to a more sustainably profitable place, just as the meat sector has done by pledging to be carbon neutral by 2030. They're on the front foot, anticipating the change and leading the way. They're not waiting for government to regulate them. They're not waiting for the tide to take them out. They are surfing the wave to something that is to their own advantage.

Putting the barricades up, screaming at the sometimes very legitimate concerns—and there'll always be those radicals on the far left who need to be dismissed—and getting into a shouting competition with the mainstream, which is a rising, growing, large stream, is a recipe for failure. We all need to be singing from the same hymn sheet. Governments will be more willing to invest in those who are falling behind and who need a partner if they know they can be confident that the policy approach enjoys public support. Of course, this approach will produce good outcomes for the broader economy because it will lift productivity and increase the value we secure for the allocation of our human capital and our financial and human resources. Yes, as I said, there will be those on the extreme left with multiple agendas, but if we, the sensibles in the middle, stand together we can deal with them. But to win outright and to maintain the trust of the growing majority who are listening to the debate on a daily basis we need runs on the board. We need to build political capital. We need to build the social licence. We need to demonstrate that we are moving. And we need to be able to point to the things industry has already achieved or is on track to achieve.

We don't talk about our environmental and animal welfare achievements regularly enough, loudly enough or convincingly enough. Our natural resource base is in decline; that is just a statement of fact. So too is the statement that our ecosystems are under enormous stress—enormous stress! Agricultural policy should begin and end with a focus on our natural environment, which is also—next to technology—the most likely place to secure productivity gains and to produce the best defence to drought.

That takes me to the bill before us. Drought and climate change will be the great challenges of our time. There will be those still who want to have an argument about what's causing it and whether it's only around for a short time or a long time. They'll argue that it's been happening forever. That's fine; they can argue that. But it's an incontestable fact that the climate is changing and it's changing considerably. The overwhelming majority of scientists are saying it will get worse and we need to act to retarget our contribution to the change.

Drought should no longer be considered an exceptional event. Drought is, when you think about it, a subjective term. How dry or hot does it have to be and for how long for a weather event to constitute a drought? The fact is, on one measure, we'll probably always be in drought. Someone will say, 'Oh, well, it's flooding in Queensland.' Yes, but I've heard of at least one landholder in north-west Queensland who has a large property that's in drought at one end and in flood at the other. Drought is not the only consequence of the way the climate is changing. The climate is changing in erratic ways.

The bill proposes to establish the Future Drought Fund. How does it do that? It's going to transfer $3.9 billion out of the Building Australia Fund into this new future fund for drought. That's our first concern about this bill. We believe if there is merit in investing heavily in building drought resilience—and we do think that—then it's worth funding. We do not believe that you should steal $3.9 billion out of another fund to make the investment. Regional Australia needs drought assistance, but it also needs critical infrastructure. It needs roads, in particular. Why the government would want to rob Peter to pay Paul, I don't know, but the opposition absolutely rejects the concept. If this bill is of merit, it should be funded on the budget.

Second, we are really concerned about what this fund looks like, or, indeed, what it doesn't look like. We don't know how this money is going to be spent. I think I know when it will be largely spent—during the next election campaign. Those listening who think that the government is going to go away and build some grand strategy for long-term drought resilience are, sadly, probably mistaken. You can bet London to a brick that, if this bill gets through this parliament, from day one of the election campaign, the $100 million proposed to be drawn down each year on this fund will be spent, and it'll be spent on projects that the government claims are important drought resilience projects. It's not hard to claim that. With most projects, whether it be on-farm infrastructure, roads or whatever it might be, you can claim that. And you can be just as certain it will be spent in National Party seats. This fund looks to me very much like yet another National Party slush fund.

Ms Henderson: That's very offensive.

Mr FITZGIBBON: The member for Corangamite finds that offensive. We are in a robust parliament here, as the Prime Minister shows us daily in question time when he seeks to politicise Queensland floods, for example, and the member for Corangamite finds it offensive that I would suggest that the National Party would have a slush fund! I think that, if she goes and does a bit of research, she might find my statement to be very true. I suspect she won't go and do the research, because I don't think she needs to. I think she knows this already. Exhibit A is sitting right over there: the member for New England. He never saw a bit of pork he didn't want to barrel. That's the member for New England. And, of course, he's the guy who showed no care for the agricultural sector by moving the Australian Pesticides and Veterinary Medicines Authority to Armidale, where he knew it couldn't work, but he didn't care. He didn't care. It got him through an election campaign. He was able to promise something. What are they doing now? They're employing people in Canberra against their own government policy order. The policy order says, 'You shall not have APVMA staff working within 150 kilometres'—I think it is—'of Canberra.' Well, now they are. There are 40 or 50 of them, as I understand it, because, as we predicted, they can't make it work. These are highly respected regulatory scientists and lawyers. They have families in Canberra and kids in school. They're not going, so now they're staying. We asked the CEO of the APVMA: 'How is this so? This is in breach of your own government policy order.' He said, 'I've got legal advice.' He's got legal advice that he can breach the terms of his government's own government policy order. But would he show us the legal advice? Nah.

We're to believe that, if this bill passes the parliament, the advice for how the money will be spent—I shouldn't say we are to believe; we believe it—will be done by the minister, with no parliamentary accountability and no transparency. By the way, these aren't my words; these are the words of the Senate Scrutiny of Bills Committee. And off the advice of who? The member for New England's Regional Investment Corporation and his hand-picked group. An organisation which has zero expertise in these matters—zero expertise!—is going to tell the government how to spend $100 million a year. This is bad public policy, and every member of this House should reject it.

There is a better way. Labor will oppose this bill, but we'll spend as much money and we'll fund it as it should be funded. We'll fund it on the budget. It won't be a pork-barrelling exercise. It won't be a slush fund. We'll establish a farm productivity and sustainability fund and we will have a panel of guardians appointed in the early days of our government, if elected. We'll have economists, environmentalists and agronomists. We'll have the Soil Advocate. We'll have a farm leadership group. We'll have a representative of the Rural Research and Development Corporations. We'll have the secretary of the COAG committee. And we'll have them, in the shortest possible time, recommend to the new government how this money can be spent in a way that maximises our main effort—that is, to better prepare farmers for drought, to get innovation out there and inside the farm gate and to develop sustainable profitability even in the most difficult of times. We will consider those recommendations and we'll start rolling that money out to farmers as quickly as possible. It will be a considered plan from the experts and the people at the coalface, the people who know what needs to be done. That's Labor's plan. It's a better plan. We will spend the money on the budget. We won't steal it from regional road projects, and we'll let the experts provide the guidance and tell us, as a government, where they believe that money can be best spent.

When asked whether they can have confidence in this fund being established by the government—a fund which has no detail—in 2013 something really historic occurred. Following an earlier agreement in about 2008 or 2009, the Commonwealth and all the states came together and agreed, supported by the National Farmers' Federation and other farm leadership groups, that we had to rethink drought policy. More than that—we needed to tear it up and start again. A number of principles were adopted, many of which go to the things I've been talking about, including resilience. It was the role of the Standing Council on Primary Industries to progress those principles over the next five years, to put the meat on the bone, to say how we make the principles become reality. Do you know what happened then, Mr Deputy Speaker Vasta? There was a federal election and the coalition secured the government benches. What happened next? The member for New England came along and abolished SCoPI. He abolished the COAG committee charged with progressing drought reform. In five years, we've had no progress whatsoever.

When the member for New England first abolished SCoPI, he said: 'It's all right; we'll just have a meeting from time to time, ad hoc. It'll be all right.' Over time, it became a bit more formal and this AGMIN meeting emerged. We seem to be creeping back to a more formal process where ministers have an agenda which is pursued on an ongoing basis. But it seems a little bit too late for that AGMIN group to do anything meaningful. Indeed, some questions were asked in Senate estimates about these issues. We got a little bit of an insight into how AGMIN works. The officials could not provide detailed information as to the role the Commonwealth government will play in progressing the many items listed in the latest AGMIN communique. AGMIN was held on 8 February 2019 and critical items appeared to be left to state governments to address. Indeed, we're told that it was the Victorian government that ensured that these important climate change related issues were on the agenda. That doesn't instil me with any confidence that this government still is taking the COAG process seriously. The states are the main managers of our land sector and we can't achieve what we want to achieve in drought resilience if we don't have them on board and working with us. Their participation will be absolutely critical to the success of any project going forward.

I appeal to those who will be voting on this bill to join with the opposition in embracing a far more sensible approach to addressing these serious drought issues. Our approach, of course, must fall into three categories. Farmers in drought need immediate assistance—cash. That's why we have a farm household allowance, another matter of bipartisanship. But since 2014 farmers have been unable to access farm household allowance, certainly not in a timely way. I see the member for New England smiling. It's still happening.

Mr Joyce: Because you're hopeless!

Mr FITZGIBBON: It's still happening. It's 2019 and they still can't access farm household allowance. They still can't access it. They can't get this right.

Second, we need to incentivise investment in on-farm structure. I'm going to acknowledge some of the good things the government has done on this front. For example, we're with you on accelerated depreciation. That's good. We need farmers investing in on-farm infrastructure. That's a good thing to do. That gets a tick. That's a good thing to do.

The big missing picture is the third tranche, and that's resilience building, better preparing for drought and maintaining profitability in drought. This is the area this government hasn't been prepared to talk about for the last five years or more. Now it wants us to believe that this is the response. We had a drought summit after probably five years, or close to it. The Prime Minister—the new Prime Minister at the time—decided we needed a drought summit, a talkfest. No-one was there that hasn't been in the conversation 100 times before. There were no scientists or economists or agronomists, as we would have on our panel; it was just all the usual people, who are well intentioned but who have a voice anyway, saying the same things we've all been saying for a long time. I do acknowledge those who bravely stood and talked about climate change and the need to act.

The great disappointment of the drought summit, other than the obvious, was that the Prime Minister's announcement on the drought fund came before the drought summit even kicked off—a slap in the face for everyone who was attending. They thought they were going there to make a contribution to the outcome, but the outcome was given before they walked in the door. That's an important point, because it highlights again what this fund is all about. Is it really all about finally embracing the need for a science based, strategic approach to long-term drought funding, or, really, is it about the next election campaign? Given the timing of this, it's pretty easy to come to the conclusion that this is not about helping our farmers. If they wanted to help our farmers, they wouldn't be robbing them of the investments that could be made out of the Building Australia Fund. After five years, this sudden rush to pretend they're doing something is not about our farmers, it's not about sustainable profitability and it's not about our natural environment. No, it's about the National Party, that mob that get four per cent of the primary vote nationally but get to run the government, or at least be a large part of the government. But people are tiring of it. They're waking up to them and they're coming after them, and this stunt, this slush fund they're trying to create to buy those votes back, will fail. People should oppose this bill.