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Monday, 8 October 1984
Page: 1835

Mr McARTHUR(8.38) —I rise to speak on the Meat Export Charge Bill and to support the honourable member for Darling Downs (Mr McVeigh) in his forthright comments on the Bill and our stand in the coalition. The export inspection services and the meat inspection services generally were originally brought forward to protect from disease people who consume meat. However, the inspection services have become a bureaucracy and are controlling the industry. This situation has arisen particularly in the meat industry. The background in the meat industry is that we have 100,000 people employed, 30,000 of whom are employed in the export works. The meat industry produces $2,300m worth of export income and 50 to 60 per cent of our meat is exported.

Over the past five years 40 works have closed and cattle numbers have declined from a peak of 33 million in 1976-77 to the low figure of 22 million in 1983-84. The Industries Assistance Commission report in 1983 indicated that the meat industry was seriously depressed and likely to remain so for some time. During this time of change in the industry the numbers of meat inspectors employed by the meat inspection service make an interesting comparison. In the peak years of 1976-77, 1,616 meat inspectors were employed. In the peak years of 1978-79 there were 1,794 meat inspectors. Although cattle numbers had declined in 1982-83 we still had 1,632 meat inspectors employed.

The problems of the meat industry are varied and well known to the members of this House. Producers encounter problems in selling on the overseas market and processors have problems with the availability of livestock. In addition, there has been the impact of the 1967-68 drought and the more recent drought in 1982- 83. The problems of processors in making their plants efficient and in achieving a constant throughput occur each year. Not only does the meat industry face these difficulties, but it has problems with regulations for export, regulations for the home market, and the inspection services the costs of which we are discussing tonight. This is a very labour intensive industry and it is prone to industrial disputes. The year 1980 was a peak year for industrial disputes and the meat industry was significantly disturbed.

Turning to the Budget Papers and the figures we are now discussing, it is interesting to observe that the expenditure set out for export meat inspection services is $77.7m and the estimated revenue will be $61.7m. I wonder whether the Minister can assure the House that the $21m included in the revenue figure will be recouped from last year's unpaid charges. I hope that the Minister will give an assurance that that money will be forthcoming. We now see that the net cost to government will be about $37.7m.

There is doubt about the efficiency of the Commonwealth meat inspection service as it now operates. I wish to quote from the Woodward report of the Royal Commission into the Australian Meat Industry. The report states:

. . . I believe administrative arrangements and procedures for supervision of the handling of meat for export have been far from adequate to ensure that such meat has met the requirements prescribed by law.

The important sentence stated:

I believe that they are now adequate, but could be made more cost-effective and more certain.

Mr Hawker —Those are key words.

Mr McARTHUR —As the honourable member for Wannon says, that is a key point. There is a comparison between the inspection services at a Federal level and those offered at a State level in Victoria. Industry sources estimate that the cost of the service in Victoria runs at $8.4m. The service inspects something like 85 to 90 per cent of the meat processed in that State. Industry sources estimate that it costs about $13m to render the same Federal inspection service which covers about 10 to 15 per cent of the remaining export products. The Country Abbatoirs and Wholesalers Association of Victoria reports that because of this cost differential the State meat inspectors could inspect and brand the present export kill in the Victorian export works for a cost of $4m. So one can see that on a contractual basis the Victorian inspectors could save the producers and processors $9m. Those are the figures and the observations which are made on the industry.

The Australian Meat Exporters Federal Council has drawn up a table which I believe demonstrates the problem in broad terms. Let us look at the cost of inspection charges for the number of animals processed. In 1979-80, 8.8 million cattle and 30.5 million sheep and lambs were slaughtered. The inspection charge in that year was $31m. In 1983-84 7 million cattle were slaughtered. This was a reduction of 20 per cent. The figure for sheep and lambs went down to 24 million representing a reduction of 21 per cent. However, the interesting point is that inspection charges rose to $79m, an increase of 150 per cent.

Mr Hawker —They went up.

Mr McARTHUR —The charges went up. Yet the number being inspected was less. Regarding the charges which are before the House, the Minister has put forward a suggestion that there has been a reduction from $5.40 to $4.35, a reduction of 20 per cent. I draw the attention of the House to the true position. In September 1983 a charge of $1.80 applied. In October 1983 the charge was increased to $5.40.

Mr McVeigh —A 300 per cent increase.

Mr McARTHUR —There was a hike of 200 per cent in charges on that occasion. We now propose a charge of $4.35 which represents a 142 per cent increase on the September 1983 figure. The situation in Queensland is that the proposed export fee of 2.4c a kilogram will add a cost of about $8 to $10 per head. This export levy will be very important in Queensland because that is from where most of the cattle are exported and that is where the increase in charges will be most painful. The increase in Queensland and throughout Australia will be $1.80, up to $10, representing an increase of 500 per cent.

Mr Hawker —How much?

Mr McARTHUR —Five hundred per cent. The Meat Exporters Federal Council estimates that the increased inspection fees will add $30m to industry costs in a full financial year. The interesting comparison to be drawn is that meat inspection in America, New Zealand and Canada is publicly funded which means that our competitors on the international market will not have to bear this quite excessive charge. It means that they will be able to export their meat into world markets competitively and at much better prices than we can in Australia.

Mr McVeigh —So the Government pays for the total cost over that.

Mr McARTHUR —That is correct. That is our policy and that is the way we would do it in government. We would give our primary producers a chance to compete on the export market. It is interesting that just this very day the inspectors in Victoria have gone on strike. They could be worried about their jobs. The important thing in Victoria is that although there is a strike the domestic consumers have been able to receive their meat because the Victorian inspectors have continued to work on.

Mr Andrew —You mean only the Federal inspectors are on strike?

Mr McARTHUR —Only the Federal inspectors in Victoria have gone on strike. I gather there will be further strikes around the nation in the next few days. Can the Minister assure the Australian meat producers, the taxpayers and the processors whether any inspectors are working at processing plants which are no longer operative or inspectors who are surplus to requirements? Hopefully the Minister can assure the House that there are no inspectors who are surplus to requirements and are not working in plants that are not in operation. It is a sad situation for the meat industry that, in a 6-week period from 9 August, five works have closed throughout Australia. Five thousand workers have been put off. Industry people suggest that the increase in inspection charges has been a contributing factor in the closure of these works. The interim Inspection Policy Council, which was appointed by the Government to look into these matters, has made two strong recommendations to the Government. Apparently the Government has seen fit to not take up these recommendations. The Council, in its report in April 1984 recommended:

. . . in the short term there is a compelling case for assistance to be given to the industry through a reduction in the export inspection charge.

In fact, the Government has increased the charge to the industry. The Council recommended further, in line with the difficulties the industry is facing and the closure of abbatoirs, that:

. . . a moratorium be declared on the export component for 2 years because of the State of the industry, the need for trade incentives and the fact that efficiency measures and charges must be phased in.

I conclude by asking: Are we propping up yesterday's men in yesterday's practices or are we putting in place the most cost effective meat inspection service for both domestic and export consumption that will take us into tomorrow 's world?