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Tuesday, 25 February 2014
Page: 841

Dr HENDY (Eden-Monaro) (19:38): I rise in support of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. I have an interest in the dairy industry not simply because of the importance of the industry to my electorate but because there have been dairy farmers in my ancestry. My mother's family, the Hardy family, were the first of my ancestors to come to Australia, in the 1850s. They came to try their luck on the Victorian goldfields; unfortunately they did not find any gold. They ended up moving to coastal New South Wales and some of them became dairy farmers in the Manly area of Sydney. The second unfortunate thing in my family is that they did not retain their properties. It would have been very nice to own a few acres today in Manly.

As the minister said in his second reading speech, the bill will amend the Primary Industries (Excise) Levies Act 1999 to enable the dairy industry to continue to meet its obligations in relation to its Animal Health Australia annual membership, and other animal health and welfare initiatives. The bill is important to ensure that Australian dairy farmers are able to be partners in the biosecurity system and maintain the health of Australia's dairy herd.

The amendments primarily increase the maximum rates or caps of the Australian Animal Health Council levies on dairy produce from 0.058 to 0.145 of a cent per kilogram of milk fat and from 0.13850 to 0.34625 of a cent per kilogram of protein. I note that the current operative levies are equivalent to the current cap rates. As the minister noted, the levy system enables industries to remain highly competitive in world markets. The Australian Animal Health Council levy on dairy produce under the act was introduced to provide funding for animal health programs carried out by Animal Health Australia. The funding also provides for the dairy industry's annual membership rates to Animal Health Australia. For the dairy industry, the levy is payable by producers who deliver or supply dairy produce for the manufacturing of dairy produce, such as whole milk or whole milk products. The amount paid by producers is based on the milk fat and protein content.

Australian Dairy Farmers Ltd, the national representative body for the dairy industry, has requested the amendments. The levies are payable by the producer of the relevant dairy products and are collected by the Commonwealth for disbursement to Animal Health Australia, for research and development. While the proposed maximum rate increase is significant, the bill will not increase the actual levy paid by industry members. It should be noted that any increase to the operative rate requires a case to be put by the industry to government, demonstrating widespread industry consultation and strong support as set out in the Australian government's levy principles and guidelines.

Stepping back to look at the wider scene, I note that in the 2012-13 financial year the Australian dairy industry produced 9.2 billion litres of milk for domestic use. The dairy industry overall represents a $13 billion farm, manufacturing and export industry, with export earnings in 2012-13 of $2.76 billion. The recent bid by the Canadian company Saputo to purchase Warrnambool Cheese and Butter shows the confidence foreigners have in the Australian dairy industry.

Eden-Monaro has a long history of dairy farming. The member for Braddon and other members have made big claims about their dairy industries. However, my electorate is no slouch when it comes to dairy products. In particular, the areas of Bega, Bodalla, Moruya and Narooma have survived and flourished on the back of dairy farming. Dairy farming in the Bega Valley dates back to the mid-19th century, around 1840, and it became the region's dominant industry during the 1860s, overtaking cattle farming. Today, 12.9 per cent of those employed in Bega work in dairy product manufacturing, primarily the famous Bega Cheese Factory. This is up from 9.5 per cent in 2006 and is by far the largest sector of employment in Bega. In terms of the Bega Valley as a whole, dairy manufacturing has the second highest level of employment, second only to education.

Dairy farmers are attracted to the Bega Valley due to the quality of the grass and the consistency of the rainfall. Today there are many dairy farms in Eden-Monaro which produce quality butter, cheese, yoghurt and milk products. Bega Cheese is perhaps the best-known dairy production company in Eden-Monaro. In fact it may also be the most famous company to have its roots and main operations in Eden-Monaro. The origins of Bega Cheese can be traced back to the 1890s when the Bega Co-operative Creamery Company began producing butter. Bega Cheese's products are stocked in most supermarkets around Australia. These products see Bega Cheese occupy 16.9 per cent of the market share for cheese in Australia. The company continues to be profitable, expecting an after-tax profit of $44 million, according to its full-year accounts. On announcing this, the company said, 'Bega Cheese has a very strong balance sheet and is well positioned to participate in the ongoing opportunities in the Australian dairy industry.' Currently, Bega Cheese employs around 700 people in the Bega Valley and is the largest employer in Bega. It produces over 50,000 tonnes of cheese every year and is exported to over 50 countries. The size of Bega Cheese allowed it to be listed as a publicly traded stock on the ASX in August 2011. In October 2013 it was named New South Wales regional exporter of the year.

However, it is not just Bega Cheese which produces high-quality dairy products. Bodalla Dairy is another great establishment in Eden-Monaro. Bodalla Dairy's roots go back to the 1860s when Thomas Sutcliffe Mort brought dairy cows to Bodalla. The company today makes boutique cheeses, which can be purchased online; cheese accompaniments; a variety of yoghurts; and supplies milk to the local community. All the milk comes from two herds of Friesian cows and one herd of Jersey cows that graze nearby. The company also runs cheese-making courses, which make a perfect weekend getaway. The company is expanding and last year it began to stock its milk in IGA stores throughout the Eurobodalla shire.

The Bodalla Dairy Shed is important for tourism in the region, with tourists coming to sample the fine cheeses and milkshakes. Last year, the Bodalla Dairy Shed was a finalist in the 2013 South Coast Regional Tourism Awards for tourism excellence in two categories: tourist attractions and tourist cafes.

Located at Central Tilba, the ABC Cheese Factory is another milk producer on the New South Wales South Coast, founded only a couple of years ago by Erica and Nic Dibden, a married couple who have been dairy farmers for over 15 years. The couple used to supply high volumes of quality milk to the Bega Cheese Factory for use in their produce. The company ethos is to heighten awareness of the hard work that dairy farmers do and to educate the community of the benefits of good-quality produce which comes straight from the source.

The company is now best known for producing Tilba Real Milk, which is a popular milk of the New South Wales South Coast, in particular Pambula and Merimbula. Erica and Nic took a huge risk in starting up a milk production company but have been extremely successful. Through hard work and dedication, they have established a successful business which now has a strong and loyal following. Beginning in April 2012, the company was selling 1,000 litres of milk a week by December 2012 and is now selling a massive 25,000 litres a week. Such is the growth of the company that the Tilba Real market now retails in Canberra and is a very popular product at the Canberra Farmers Market. The company now employs around 15 people. Altogether, that is a great record in Eden-Monaro.

I want to note that the government is very serious about strengthening Australia's agriculture. We have a large repair job to do after the last government's massive hit on the agriculture sector. I can start with the live cattle export to Indonesia fiasco. It severely hurt the beef industry as well as being a serious blow to our international relations with Indonesia. In addition, members will know that a large part of the agricultural sector is small businesses. In my electorate of Eden-Monaro, small businesses are the lifeblood of rural communities. Across the nation, some 21,000 additional regulations were created over the last six years, stagnating small business employment levels, resulting in 3,000 fewer small businesses which employ people. The overall result for small business has been staggering. Under Labor, 412,000 jobs were lost in small business. In fact, the small business share of the private sector workforce went from 53 per cent to 43 per cent.

As the member for Braddon recently told the House in a speech, the carbon tax on average has hit dairy farms to the tune of $20,000 each. For the sake of the dairy industry, the carbon tax must go.

Only the coalition has a plan to create jobs, by getting the budget in order, taxes down, regulation down and productivity up. Recently we released the Agricultural competitiveness issues paper. It is part of a process that will lead to the production of a white paper setting out policy reform in agriculture by the end of the year. It will examine issues around food security and the means of improving market returns at the farm gate, including through better drought management. Of course, we have seen drought conditions in the northern regions of our state of New South Wales and in Queensland, and it has been very dry across Eden-Monaro. At least we have been getting some welcome rains in Eden-Monaro over the last two weeks.

The white paper terms of reference also include the government's commitment to review whether the current guidelines relating to drought are adequate. But, of course, the government is also fast-tracking consideration of drought issues and it is my understanding that the Minister for Agriculture will be taking some recommendations to cabinet in the near future. The white paper will also look at access to finance, farm debt levels and debt sustainability. It will look at the agricultural value chain and recommend changes to skills training, R&D and critical infrastructure.

The white paper will be developed in three phases: first, an issues paper that has already been released; second, a green paper to be released in the first half of 2014 or mid-2014; third, a white paper to be released towards the end of 2014. Stakeholders and the broader community will have opportunities to contribute to the development of the white paper, including through formal submissions in response to the issues paper and the green paper.

We are keen to get information from both industry leaders and at the grassroots level. A task force has been established in the Department of the Prime Minister and Cabinet to develop the white paper. The task force will meet with stakeholders during the white paper development process to ensure that a broad range of views are considered. Meetings will take place in regional areas as well as in capital cities. I have asked the Minister for Agriculture to consider holding one of the formal forums in Eden Monaro. Failing getting that forum, I nonetheless have secured an agreement from the minister to visit the electorate at the end of March to talk to relevant stakeholders, with concentration on a roundtable that includes all the local shire mayors. Submissions received on the issues paper will be used to develop the green paper and, subsequently, the white paper. Submissions received on the green paper will be used to develop the white paper. That is the bigger picture. Dairy will be a focus of the review as one of our significant agricultural commodities.

In conclusion, I am happy to support the bill and believe, as I said earlier, that it helps maintain the health of Australia's dairy herd.