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Monday, 10 September 1984
Page: 888

Mr CUNNINGHAM —Has the Minister for Primary Industry received the latest proposals by the Australian Dairy Industry Conference on marketing arrangements for the dairy industry? What is the present state of play with respect to the development of more up to date and realistic marketing arrangements? Is it possible to have any change to these arrangements in place by 1 November this year? Is the Government concerned about the possible breakdown of orderly marketing of milk throughout Australia which, if allowed to occur, could result in a loss of many factory jobs in rural Australia as well as the demise of many family farms?

Mr KERIN —I thank the honourable member for McMillan for his question on this matter. The Government and I are very much aware of the current problems in the dairy industry. I have been working very hard at developing a reasonable degree of consensus within the industry and between the States on new dairy marketing arrangements. Unfortunately, the Australian Agricultural Council at the recent meeting in Townsville was unable to reach overall agreement on future dairy marketing arrangements and the industry itself has been divided. As honourable members are aware, the basic problem with the milk industry throughout Australia is that some dairy farmers receive 11c or 12c a litre for their milk and others receive 33c a litre.

The regulation of the dairy industry is largely in the hands of the States. The international price situation, to which my colleague the Minister for Trade has just referred, applies, as well as to the wheat industry, in the dairy industry. The price of products on the international markets is now down to minimum prices under the General Agreement on Tariffs and Trade.

The only instrument available to the Commonwealth with respect to dairy product pricing is the domestic value for levy purposes and, despite the fact that that has not been increased since December 1982, production in Australia has now risen to something approaching six billion litres. If we are to solve some of the dairy industry's problems, we need a more national approach to try to spread some of the revenue in the industry throughout the industry.

I put to the Australian Dairy Industry Conference for consideration a proposal which incorporated key features of the industry's proposal itself and of the report of the Industries Assistance Commission. These included the establishment of a market milk committee and a levy on all milk to build export returns up to a level of 120 per cent of real export prices. I indicated to the ADIC that I would also take forward an entitlement scheme for consideration by the Government if a number of specific conditions were met; for example, broad industry support, full negotiability and simplicity.

I am informed by officials of my Department and from what I read in the rural newspapers that the industry has reached unanimous agreement. All the States have reached unanimous agreement about a levy and entitlement scheme. The officers of the ADIC have met the officers of my Department, and this week officers of my Department are visiting all the States to see the State Ministers for agriculture and the dairy industry authorities or dairy corporations in the States, because the proposal from the ADIC, which has now been unanimously agreed to, very much involves the States in its administration. I inform the honourable member that I hope to receive a formal submission from the ADIC soon; but, regardless of that fact, I am moving as quickly as I can.

Another part of the honourable gentleman's question referred to timing. That depends on how quickly we can get agreement with the States and with the industry on the full package of legislation. That would come into effect from 1 July 1985. There is a proposal before us, or a hope expressed by the industry, that a levy mechanism could be put in, without the full package of measures being in effect, from 1 November 1984. It would be pretty difficult, given the timetable of the parliamentary sittings, to get the legislation through this House and the Senate. But the industry certainly is very hopeful that a levy mechanism can be put in place. Even if a levy mechanism is put in place, that will not get away from the basic problem of international prices and production levels.

In respect of the last part of the honourable gentleman's question, the potential for revenue loss to the industry if there is a disastrous outbreak of interstate trade is something that the Government has under scrutiny. All I can say at this stage is that I trust that the people setting out to destabilise the dairy industry and to rip tens of millions of dollars out of the industry's revenue are aware of the existing legislation.