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Wednesday, 20 March 1985
Page: 598

Mr KERIN (Minister for Primary Industry)(4.05) —I move:

That the Bill be now read a second time.

The purpose of the Bill is to replace the Australian Meat Research Committee with an incorporated body called the Australian Meat and Live-stock Research and Development Corporation. The new Corporation will have the independence, flexibility and authority to improve the effectiveness and efficiency of meat and livestock research and development. The Bill is also designed to improve the means by which expenditure on research and development is accounted for by providing that those responsible for the spending decisions report to those providing the funds.

Concurrently with passage of the Bill the approval of Parliament is required for the Australian Meat and Live-stock Legislation (Consequential Amendments and Transitional Provisions) Bill 1985. Other Acts to be amended are the Live-stock Slaughter Levy Act 1964 and the Live-stock Export Charge Act 1977. For convenience the Bills will be debated together as cognate measures.

The Commonwealth assists rural research in two ways. The first way is directly through organisations such as the Commonwealth Scientific and Industrial Research Organisation and the Bureau of Agricultural Economics. The second way is as a provider of financial support through the rural industry research funds, which are known as RIRFs, and through various research grants, including the Commonwealth special research grant. The RIRFs are joint industry-Commonwealth schemes established within my portfolio to fund research for individual rural industries. Each scheme is co-ordinated by a research committee. The committees comprise representatives nominated by the relevant industry and interested research organisations and officers of my Department. Research sponsored by the RIRFs is funded by levies on the industry which are matched dollar for dollar with Commonwealth appropriations. In the case of the meat and livestock industry the Australian Meat Research Committee co-ordinates research funded through the meat research trust account.

A number of recent reports have questioned the organisation and funding of rural research schemes. These include reports by the Senate Standing Committee on National Resources on the Commonwealth's role in rural research and extension services which was published in November 1982, the Balderstone working group on agricultural policy which was published in September 1982 and an in-house joint management review of the administration of research schemes in the Primary Industry portfolio which was published in May 1983.

The accountability of some of the RIRFs to the industries they are designed to serve and the relevance of the research they fund to the technical, social, economic and welfare needs of those industries have also been called into question in recent times by primary industry leaders. The more important findings of these groups were:

Research committees were 'passive' in selecting projects;

'Value for money' considerations were not given sufficient weight in project selection;

The Department of Primary Industry should progressively divest itself of administrative involvement in the RIRFs;

More flexibility is needed in allocating funds to more diverse research activities and this could be achieved by widening the representation on research committees without necessarily increasing their size.

In the light of these reports the Government agreed that changes to the organisation and funding of rural research schemes generally were desirable. Action is in hand to rationalise the existing body of rural industry research legislation which has developed piecemeal over time.

In the case of meat research, the reports highlighted the administrative, legal and financial constraints under which the Australian Meat Research Committee is operating. For example, the Meat Research Committee is unable to enter contracts or manage its own funds. To initiate, or even slightly modify, one of its research projects requires specific ministerial authorisation. Incorporation is considered the most practical way of facilitating a more effective and efficient funding of meat research and development. It eliminates the need for outside intervention in the day to day administration of these activities and provides a more flexible and commercially appropriate organisational structure.

A separate corporation to manage the industry's research and development resources reinforces the key role which must be played by research and development if the meat and livestock industry is to respond flexibly and creatively to future opportunities. Research and development is so important that we must not allow it to be overly influenced by groups or institutions with particular functional responsibilities. The Australian Meat and Live-stock Research and Development Corporation will have the overall responsibility of making its own assessment of the industry environment and planning research and development accordingly. In developing an understanding of that environment it will need to understand and appreciate the objectives and aspirations of producers, processors, exporters and other institutions like the Australian Meat and Live-stock Corporation which serve the industry in other areas.

With this in mind, I expect the Research and Development Corporation to consult closely with other groups in the industry, especially the AMLC. There are provisions in the Bill which will encourage this process. I am sure there will be regular staff contact between the AMLC and the Research and Development Corporation and at a more formal level. The Meat and Live-stock Industry Policy Council will provide opportunities to ensure that the industry's total resources, including research and development, are being directed to well defined long term objectives.

In announcing the Government's proposed reforms to the meat and live-stock industry in November 1983 I foreshadowed the establishment of the Australian Meat and Live-stock Research and Development Corporation. Subsequently I set up a working committee to develop a blueprint for this body. The committee included representatives from the livestock industry, the meat processing industry, universities, CSIRO and State governments. The committee submitted its report in July 1984 and this has formed the basis of the Government's decision on setting up the Corporation. In passing, I would like to pay tribute to the members of the working committee for the excellent job which they did.

The functions and powers which the Government has agreed to for the Australian Meat and Live-stock Research and Development Corporation will put meat and livestock research and development on a fully commercial and innovative basis. It will ensure that the whole spectrum of economic, technical, organisational and welfare issues is examined and that priorities for research effort are serviced. There is specific mention of both research and development in the title of the proposed new Corporation. This is to make it clear that the functions of the Corporation extend beyond research to servicing the adoption of innovations applicable to the industry. It indicates that in its assessment of research projects, the Corporation is to have regard to their potential to improve the position of the meat and livestock industry.

Specifically, the Corporation will have the objective of maximising the return on its research and development funds to the meat and livestock industries; have its members selected on the basis of qualifications and experience in the same way as is done for the Australian Meat and Live-stock Corporation; have financial powers and responsibilities consistent with a commercial undertaking; actively seek out research and development projects; prepare a rolling five year research and development plan of proposed activities and an annual operational plan of individual research and development projects to be financed; approve expenditure on research and development projects across the spectrum from production to consumption; be able to enter joint ventures and exploit patents on research and development which it has funded; have commercial borrowing and investment powers; be allowed to appoint staff and set the terms and conditions of their employment, in consultation with the Public Service Board; report annually on its performance against its annual operational plan; and be accountable to an annual general meeting of registered members of the industry in the same way as is the Australian Meat and Live-stock Corporation.

I now turn to specific clauses and provisions in the Australian Meat and Live-stock Research and Development Corporation Bill 1985. In clause 4, meat and livestock research and development has been defined to allow the Research and Development Corporation to pursue promising research and development projects right through to their full commercial potential. Provision has been made to include other meat animals besides cattle, buffaloes, sheep, lambs and goats if the need arises. However, it is not intended to include pigs and poultry, as these animals are subject to separate research schemes.

Corporation members will be chosen on the basis of their professional qualifications and work experience. The corporation is to consist of 11 members, namely, a Chairperson, a Government member, the Executive Director of the Corporation and eight other members. The Executive Director is to be appointed by the Corporation and will become an ex-officio voting member of the Board. The eight other members will be selected on the basis of special professional skills and experience in the fields of meat and livestock production, meatworks operation, research and development, economics, finance and business management. They will be selected, for the Minister's appointment, by the Australian Meat and Live-stock Industry Selection Committee.

Recent changes in the meat and livestock legislation have been designed to secure the close involvement of industry in policy and planning aspects as, for instance, with the establishment of the Australian Meat and Live-stock Industry Policy Council. This Bill will further the involvement of industry. Under clause 22 the Corporation is required to convene an annual general meeting of industry members. Attendance at the meeting is open to those whose names appear on the registers of members maintained by the Australian Meat and Live-stock Corporation. Voting entitlements are the same as for the Australian Meat and Live-stock Corporation.

The Bill allows wide ranging powers for the AGM. The AGM can comment on or query any aspect of the Corporation's annual report or general activities. The AGM can vote on resolutions, with the Australian Meat and Live-stock Industry Policy Council to be notified of the outcome. Under the Bill the Corporation is required to put as a motion to the AGM any planned variation to levies or charges for research and development. Finally, the AGM, under clause 28, will have the power to cause the removal of the Chairperson of the Corporation or its members. A vote of no confidence in the Chairperson or membership of the Corporation would be carried only if 75 per cent of the votes of persons registered in each of the livestock producer and processor-exporter categories were cast at the AGM in support of the motion, either in person or by proxy.

To avoid duplication and save on expenses the Corporation will not maintain its own registers of members. It will use the registers maintained by the Australian Meat and Live-stock Corporation. As membership and voting rights for both bodies are identical, maintenance of a separate register would only serve to increase costs. The Corporation will reimburse the Australian Meat and Live-stock Corporation half the costs of maintaining its registers of members. For the convenience of those wishing to attend the AGM of the Australian Meat and Live-stock Corporation as well as that of the Research and Development Corporation the Bill has been drawn to provide that both meetings be held on the same day if it is practicable to do so.

Other arrangements to ensure the Corporation carries out its responsibilities in a business-like manner are included in Part V of this Bill which also provides the basis for its relationship with the Minister. Under Clause 30 the Corporation will be required to prepare a long term research and development plan. The first plan, which is to come into operation within 12 months of the establishment of the Corporation, will run to 30 June 1990. Thereafter each plan will be for a five-year period. The research and development plan will define the Corporation's principal objectives and outline the broad strategies it proposes to pursue in the achievement of its objectives.

Complementary to the five-year plan is the requirement under clause 35 for an annual operational plan to set down the particular projects that the Corporation proposes to fund, the type of projects it would be prepared to fund for the 12 months ahead and its estimated total budget. It will be noted that the Bill requires both the five-year research and development plan and the annual operational plan to be submitted to the Minister for Primary Industry for approval. These obligations provide an accountability arrangement which focuses the Minister's and Corporation's attention on the objectives, strategies and priorities of the Research and Development Corporation in relation to its total resources and allows the consistency of the annual operational plan to be compared with the Corporation's long term research and development strategy.

Approval of both the research and development plan and the annual operational plan will enable the Minister to exercise overall supervision of the Corporation's activity, without involving himself in unnecessary detail. It will avoid the constant reference to the Minister for approval of each separate research and development project or changes to projects, which is a feature of the present arrangements.

The Corporation will be subject to Division 2 of Part XI of the Audit Act 1901 and will thus be required to submit an annual report and financial statements to the Minister for Primary Industry. There is also a requirement that the Corporation include a copy of the annual report in its notice of meeting to members. The report will include a statement of objectives, particulars of activities funded and an assessment of its success in meeting its objectives. Thus the annual report will serve as a medium both for the Corporation to advise the industry about its activities and plans, and for the industry to make judgments about the effectiveness of the operations of the Corporation. It is a further measure in ensuring the accountability of the Corporation to both the industry and the Parliament.

With regard to the financial implications of this Bill and the three companion Bills, the principal cost to the Government and hence the general taxpayer comprises the amount of the Commonwealth's matching contribution. As I explained earlier, the Government has matched industry funds for rural research on a dollar for dollar basis. In 1985-86 this is estimated to be $5.3m. It can be expected to increase substantially in the next few years.

On 28 February I announced the Government's decision to increase the maximum level of its contributions for rural industry research. Our objective is to raise the government contributions to research under the Rural Industry Research Fund to 0.5 per cent of the annual gross value of production over the next five years. This, of course, is dependent on an equivalent contribution by rural industries. For the meat and livestock industry this initiative would provide an opportunity to embark on a much expanded research and development program. The Commonwealth contribution for meat research and development could increase by as much as $8m or $9m per annum to around $14m by 1989-90 on the basis of 1984-85 levels of gross value of production. I commend the Bill to honourable members.

Debate (on motion by Mr Hunt) adjourned.