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Monday, 24 May 1965

Senator ANDERSON (New South Wales) (Minister for Customs and Excise) . - I move -

That the Bill be now read a second time.

In 1962 Parliament passed the Processed Milk Products Bounty Act providing for payment of a bounty on exports in 1962- 63 of milk products not eligible for assistance under the Dairying Industry Act 1962, which provides for the payment of bounty on the production of butter, cheese and related butter fat products. The bounty was made available in 1962 in order to help the Australian processors to compete with subsidised exports of processed milk products from other countries and, in addition, to divert butter fat away from the manufacture of butter which was experiencing a serious surplus position at that time. The legislation was amended in 1963 and again in 1964 to enable the bounty to be continued in each case for a period of 12 months. In the three years in which the assistance has been available, the bounty has been provided at maximum levels of £350,000 in 1962-63, £500,000 in 1963-64 and £400,000 in the current year 1964-65.

The purpose of this Bill is to extend the bounty for a further two years and to provide a maximum amount of £400,000 for this purpose for each of the years 1965-66 and 1966-67. The principal Act provides that the final rate of bounty is to be no greater than the final rate of bounty payable on butter under the Dairying Industry Act 1962, the actual rate being dependent on the amount of bounty available and the quantity of butter fat contained in the products exported in any year. In 1.963-64 when an amount of £500,000 was available, a bounty rate of 7.96d. per lb. butter fat was paid for processed milk products. This equalled the final rate for butter and approximately £60,000 of the total bounty available for milk products was unexpended. In 1962-63 and 1964-65 however, the bounty rate on processed milk products will amount to about 80 per cent, of that received by the butter producers and all of the total amounts allocated will, of course, have been expended. The benefits derived from the bounty assistance on exports of processed milk products since its inception in 1962 have been well in excess of expectation. For example, exports of butter fat in the milk products in 1962-63 amounted to 5,566 tons compared with 3,850 tons in 1961-62. the year before the bounty was introduced.

In 1963-64 exports rose to 6,465 tons of butter fat - a gain of nearly 68 per cent, since 1961-62 - and figures in the current year indicate that the trend in exports is still rising. Tn the first six months of the year exports were already over 500 tons of butter fat above those of the same period of the previous year. Export income from processed milk products increased by 38 per cent, between 1961-62 and 1963-64 when it amounted to nearly £10 million. It is expected to be in excess of this figure in the current year.

There are eighteen Australian manufacturers, half of whom are co-operative companies, now sharing the bounty. The larger manufacturers are, of course, receiving the greater share, but on the other hand it must be remembered that they are the major contributors to the success of the scheme because of their more extensive overseas market outlets.

The extension of the bounty is strongly supported by the Australian Dairy Industry Council, which represents the Australian Dairy Farmers' Federation, the Commonwealth Dairy Produce Equalisation Committee Limited, and the Australian Dairy Produce Board, and also by the Processed Milk Manufacturers' Association of Australia Limited. I commend the Bill to honorable senators.

Bill (on motion by Senator Kennelly) adjourned.

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