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Wednesday, 15 March 2000
Page: 12867

Senator CRANE (4:38 PM) —I too rise to speak on the Dairy Industry Adjustment Bill 2000 and related bills. I want to say at the very start I do not believe there was anybody on the committee who, if they had had another choice, would have ended up with a situation where the dairy industry was being deregulated. But we, as policy makers, also have to face reality. There is little point in talking about `we are doing this' or `that is happening' or something else because at the end of the day for their own commercial reasons the Victorians decided they were going to deregulate. That is a simple fact. Mr Kennett announced it some time ago. Mr Bracks when he became Premier fiddled around at the edges of it and had a referendum on the issue, knowing full well that the Victorian dairy farmers would vote for the package and vote for deregulation. That is the reality that we have to face.

This parliament, this government, or any party had no say whatsoever in terms of that. Our position, our role, as a government was to look at the issue and determine how we could assist in what was being foisted on the industry because of the action at that time by the Victorians. I do not blame the Victorians for that because, obviously, there is a commercial benefit to them in it. They do produce two-thirds of the total milk produced in Australia, and they were in a totally different situation to the rest of Australia. Once that decision was made by the Victorians it was inevitable, as Senator Woodley has mentioned, that the dairy industry in Australia would be deregulated in a price sense.

Every other state could have remained regulated if they had so chosen and ran an authority in their own state, but the fact is that as milk moved across the border and around Australia the price would be set by that Victorian milk. While the domestic market price, as I believe it probably always will do, remains above export prices—of course the first and only most attractive market, starting with New South Wales, is Sydney, then probably South Australia or Queensland and then, last of all, Western Australia—the milk would come in. So there is no doubt that we were facing a situation whereby the dairy industry was going to be deregulated regardless of what the other states did, regardless of what the Commonwealth government did.

So we, as a government, really had just one choice. We could decide to stay back, stay away from it, do nothing and wait for the outcome, or we could develop—as was done mainly with Mr Pat Rowley on behalf of the industry—a package to assist the transition from an industry that had been regulated by the states for many years to a situation where the industry was going to be deregulated right across Australia. I think when people debate this they need to recognise that simple fact. If you cannot recognise that, then the comments made in terms of the changes in the Australian dairy industry get totally distorted. And I think that is one of the sad things about politics, because everybody has to put their particular angle to suit their political situation at that time, and I am quite certain if we were actually having this discussion over a beer in one of the bars downtown everybody would agree with what I have just said. I just wish in terms of bringing this debate to the fore that people would recognise this. And I will repeat it: once Victoria made the decision to deregulate, the whole country was going to be deregulated, and the date just happens to be 1 July.

The Commonwealth has responded to requests from the industry with a $1.8 billion package. It is unprecedented in Australian history. We heard mentioned earlier on—I think it was from Senator Forshaw—that it was a tax under the guise of a levy. I think that is what he said, to be quite correct. The dairy industry is quite familiar with levies. It has had them for a whole range of schemes over the years. Of course, under the new circumstances I believe this will be the last levy in this form applied nationally, right across Australia. As has already been said, it is an 11c levy for eight years.

But can I also say that while there are going to be some huge difficulties for a whole range of people in terms of this, I believe that the dairy industry in Australia—and I particularly refer to my state—has a very sound long-term future. I believe the dairy farmers in Australia are so efficient and so good at what they do that they will adjust to the requirements. They will become much more dependent over the years on the development of the export market. They will become much more like our grains industry, our beef industry, our wool industry, and they will bring a lot of wealth to this country. This package is designed to help them get to that situation, to help them get through the tough times.

Not everybody is going to survive. We know that. It is impossible to expect everybody to survive. But let me just say it is my understanding that the Victorian industry was on the edge of major reform and the necessity to expand in terms of the ratio between exports and what is consumed domestically. If we look at the Victorian situation, 93 per cent of that milk—the 66 per cent of the total Australian production that they produce—was export milk anyhow. It was made into product to go overseas. Only seven per cent was consumed locally. That figure may not be precisely right, but it is right fair square in the ballpark. Obviously they made some flavoured milks and other product that did go into some of the other states. But it is my strong belief that over time we will see a very healthy and strong dairy industry.

Let me say that, going back to the Kerin plan, the aim of that plan was to prepare the Australian industry for the fact that they had to focus more on the export market and the growth of that export market if they were going to expand and continue to grow, and of course that is what happened. Had there not been an Asian crisis, as there was, and the breakdown of many of those economies where our industry had focused their efforts in exporting, the situation today would not be quite as difficult as it is. But I think we can see many of the countries in Asia coming out of some of their particular problems, improving their economies and starting to grow again. Of note is that about a month ago, or maybe three weeks ago, I happened to read in a press statement from one of these companies—I think it was in Victoria, but that does not matter—that it had signed a $6 million milk powder agreement for additional exports to Japan. That is the way of the future, and I think we need to recognise that.

Senator Woodley said many things and we could go over and over them again, but I particularly wish to go over some of the report recommendations—which Senator Woodley mentioned very briefly—from the committee that he chaired. The fact that we had that inquiry at that particular time certainly made my job as chair of the legislation committee and the jobs of the members of that committee, who are substantially the same people as were on Senator Woodley's committee, much easier because a lot of the groundwork had been done. Recommendation 1 stated that:

The Deputy Prime Minister and Minister for Transport and Regional Services and the Federal Minister for Agriculture, Fisheries and Forestry call, as a matter of urgency, a meeting of state Agriculture and Regional Development Ministers to determine a framework, and a timeframe, for the co-ordinated deregulation of the Dairy Industry.

Our minister—and I particularly refer to Minister Truss—responded to that recommendation very positively, but it took until 23 December for all the agricultural ministers to agree to attend that meeting. It is well and truly publicly known that there were other attempts, going back to Minister Vaile, to convene a meeting of state ministers. Some chose not to cooperate—not to come—and I have dealt with that issue before, so I will not repeat it. Recommendation 2 stated:

That should administrative arrangements not be in place in time to make the first payments by 1 July 2000, that appropriate compensatory arrangements are factored into the payment schedules, in order that dairy farmers do not suffer any more financial hardship than is presently envisaged.

I thank the people in this debate—from the Labor Party and the Democrats—for the fact that we are getting on to this legislation today in a very short time in terms of delivering the legislation report so that these arrangements do happen and the first payments are ready to go on 1 July. The first payments, as I understand it, will start on 28 September. Recommendation 3 stated:

That the states of Queensland, New South Wales and Western Australia consider the issue of quota entitlements and any form of compensation that may be appropriate for the resumption of quota entitlement, including the possibility of using NCP payments as compensation.

What has happened there? One state has responded: my state, Western Australia. At this point in time an additional $37 million has been put on the table—$27 million of that will be direct from government resources and the other $10 million, which is held in the statutory authority, the Dairy Industry Authority, has been delivered. No other state, including Victoria, New South Wales, Queensland and South Australia—I might as well name the lot—has responded at all to add to what the Commonwealth has done. I say to the people involved in this, concerning the pressures they could have applied as federal members to their state governments, that they have let their dairy farmers down. That disappoints me enormously. But we, in Western Australia, engaged with our Premier and the Minister for Agriculture, Monty House—as did, obviously, the dairy industry—and I think we have produced quite a remarkable result in terms of our state responding to the particular situation there.

On recommendation 4, which Senator Woodley mentioned, concerning the regional adjustment packages, once again the Commonwealth has responded to that. While I note what Senator Woodley said about the agriculture minister for Queensland—and I certainly recognise his efforts—there were a lot of other people who were also in negotiation with the government from our side of the parliament. I do not know what the other side did or what the Democrats did, but certainly our people, who represent dairy farmers, put in a lot of effort in terms of our party room, our minister and the Prime Minister to make sure that, having recognised there were going to be some difficulties as far as regional adjustment was concerned, we got a package up that will be administered through the program that Mr Reith is responsible for. That needs noting.

Recommendation 5 refers to the Australian Competition and Consumer Commission. While the government has not responded exactly to that recommendation, in this bill we have put in place a mechanism whereby there will be funding to the ACCC to monitor retail prices. Once again, the government has responded to that particular resolution, although not in the precise manner as set out in that recommendation. Recommendation 6 is outside the particular legislation before us, so I will not deal with it at this particular time.

In winding-up my comments, because I know I have other colleagues who wish to speak on this particular legislation, I want to reiterate some of the comments that I made at the beginning—that is, that while I recognise that things will be difficult and I would have preferred not to have had a situation of deregulation, that was not the reality of life. We, as a government, have responded in a way that reflects the reality of life, and that is one of the things that you have to take on in being the elected government of the country. Other people can take a different attitude or a different position, but in our particular case we did not have that choice.

I would also like to raise a couple of other points about lessors and lessees. We were notified at a very late stage of our deliberations that there might be some problems with their particular situation. I have certainly taken note of that and I have listened. I am not sure how the government could have responded differently from the way it has done, but I am quite certain that if anomalies and problems come up in terms of that and if there is unfairness—I am not sure that there is but, equally, I cannot say that I am certain that there is not—we will find a way to deal with it.

In dealing with that particular aspect, I want to make the point here right now that, in terms of lessors and lessees and the exit package, both parties will be eligible for the full $45,000 in terms that they choose if they both choose to exit. If only one chooses to exit, then one will get the $45,000 and the other will continue in the industry or do something else with his money.

Senator O'Brien —Subject to the means test.

Senator CRANE —Yes, we know that. It is all consistent with other relief measures. It has to be. I did not think it was necessary to re-emphasise that particular point because I know the people involved in this chamber and the people listening to this particular debate are aware of that. With the time we have left, the detail of many things that we would like to do cannot be done today. Having said all of that, I am certainly very appreciative of my minister for agreeing almost totally with the recommendations that we put forward as a references committee in a unanimous report. It is not a committee that the government has the majority on, but it nonetheless looked at the issue very carefully. I wish to reiterate what I said earlier: despite the difficulties that will be faced initially by the dairy industry, I think if I were still going to be here in 10 years time—and I will not be—I could make a speech or my successor could make a speech about the success of the dairy industry and how it has become a giant in terms of export capacity in this country.