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Wednesday, 15 March 2000
Page: 12881


Senator O'BRIEN (5:58 PM) —The committee was directed to clause 13 of the bill, particularly clause 13(5), in relation to the provisions of the bill which form the basis for ministerial orders made to give effect to the government's policy for the assistance adjustment package.

The problem some members of the committee faced is that we took evidence from lessors of dairy properties who were affected by the proposed measures and who, for example, found themselves in a situation where, even though the lessee in possession of the property at the end of September in 1999 would be entitled to a substantial part of the adjustment package, even before the package came into effect those lessors would have left the industry and indeed in some cases had already determined that they would leave the industry prior to 28 September 1999. Given the provisions in the bill and given what the committee was advised in relation to the drafting instructions for the ministerial orders, how does the government say that situation is equitable and appropriate

Excluding the market milk premium but looking at the other aspect of the package, according to the example on page 4 of the drafting instructions the committee was given there might be, say, $100,000 in an adjustment package for the non-market premium part of the package, and the lessor would receive $20,000 and the lessee $80,000. On the basis that the history of milk production has led to the view that a property would produce five times as much in milk as was the lease payment, this arrangement would provide what some might argue would be a windfall benefit to what might in some cases be a lessee who had no intention of remaining in the industry. On the other hand, it would deny the lessor, who may well have intended to return to the industry before 1 July this year, a fair share of that part of the adjustment payment.