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Thursday, 28 March 1985
Page: 1132

Mr WRIGHT(9.12) —I have listened intently to the contributions made by the honourable member for Wannon (Mr Hawker) and also by the honourable member for Moncrieff (Mrs Sullivan). I noticed that they took time to support the amendment that has been moved to the motion for the second reading by the Deputy Leader of the National Party of Australia, the honourable member for Gwydir (Mr Hunt) which is really a motion of criticism and concern about the export inspection levy. As one speaks with representatives of the meat industry and with graziers generally, one finds a very great concern in the industry as to the effect of that levy. I think it needs to be said, however, that that levy was part of the Opposition's policy when in government.

Members of the Opposition seem to have very short memories. They come into the chamber now and express this concern. They talk about how it will affect the competitiveness of the industry. But I can find nothing on the record which shows that members of the National Party, in particular, opposed the Fraser approach of establishing a concept of getting 50 per cent recovery of these charges from the industry. In fact, Mr Fraser and his Government, through the infamous razor gang, not only introduced the principle of the recovery of 50 per cent of the costs, but also applied that principle to the dairying and grain industries. So it is rather hypocritical for honourable members opposite to come forward now and talk about how bad this Labor Government is. No industry wants additional costs. I concur with those in the grazing industry who are unhappy with this, especially since the charges were increased. I reiterate that the principle of 50 per cent recovery was introduced by the Fraser Government. When the Hawke Labor Government took over, the whole thing was in train.

I welcome the initiative that has been taken by the Hawke Labor Government and, in particular, by the Minister for Primary Industry (Mr Kerin), in replacing and remodelling the Australian Meat Research Committee into a more independent, more flexible, more efficient and more incorporated body for meat and livestock research and development. The previous Liberal-National Party Government fiddled around. It talked with the industry about the idea, but it did nothing.

The four Bills before the House are further proof of this present Government's willingness and preparedness to act on issues that are important to the rural sector. Members will be aware that a number of recent reports have questioned the organisation and funding of rural research schemes. As the Minister explained in his second reading speech, the accountability of some of the rural industry research funds to the industries they have been designed to serve has been called into serious question, as has the relevance of some of the research they fund to the technical, social economic and welfare needs of those industries. Recent studies have found the need for more flexibility in allocating funds to more diverse research activities. They have also found the need for greater consideration or weight to be given to value for money when selecting research projects. Moreover, in the specific area of meat research reports have highlighted unnecessary and unwarranted constraints on the Australian Meat Research Committee in the administrative, legal and financial spheres.

The proposed Australian Meat and Livestock Research and Development Corporation should be applauded by Opposition members who are truly interested in the future of the Australian meat and livestock industry, for it will certainly put meat and livestock research and development on a fully commercial and, more importantly, innovative basis. There is a need to maximise the return on research and development funds to the meat and livestock industries. The new Corporation has the potential to do just that, given the stated terms of reference, but there must be proper and adequate consultation with producers to ensure that research considerations can be applied practically.

Drawn to my notice recently was an instance where research funds were given to develop a waterproof raincoat for sheep. I do not have the in-depth knowledge necessary to make proper comment on that, but maybe it is of value. However, it has been questioned by others within the meat industry. In the past 80 to 90 per cent of research funds have been directed at production and the emphasis today should centre on marketing research. In the past the emphasis has been on improving production, and then for the industry and marketing forces to try to sell that additional production. I suggest that in most instances the industry is well able to keep abreast or even ahead of productive and production changes and improvements. What industry needs to know is what to market and how to market.

There have been major changes in consumer attitudes in recent years. It may well be said that the day of the roast beef dinner is fast disappearing. We have upon us the era of the fast food products and the microwave oven. There is a need for the meat industry to rethink its consumer marketing strategy. I strongly urge that the new Corporation research and develop fast food meat products. I urge that it research and develop new packaging and presentation techniques to tap the changing consumer and retailer demands. There is a need for ongoing market-place studies aimed at the consumer and his or her changing lifestyles. There is a need for research aimed also at reducing domestic and export marketing costs in the marketing chain. It is important that the cost-price squeeze confronting the beef producer in particular is appreciated and also addressed.

In the first four years of this decade prices paid by cattlemen have risen by 33 per cent, but cattle prices have increased by only 14 per cent. Cattlemen across the length and breadth of Australia have appreciated and experienced a negative return on invested capital. That excludes capital appreciation. They have experienced that negative return on invested capital in every one of the last eight years, except in 1978-79. In 1982-83 there was a decrease of 2.4 per cent; in 1983-84, almost the same with 2.3 per cent; and in 1984-85, 0.1 per cent. This has resulted in limited increases in herd numbers. This must be a matter of concern to all those who are interested in the industry. In 1976 Australia had 33.4 million cattle; in 1985 this had dropped to 22.5 million, a drop of 33 per cent. Although there is a slight expectation of an increase in 1986, it will only go to around 23.2 million. The objective has to be to improve the return to cattle producers. This will be achieved by increased sales in the domestic and export markets and by reducing and containing costs.

The processing costs need to be thoroughly investigated. There are constant claims of inefficiency in the processing industry, not because of labour costs, although this is often the butt of criticism from National Party members, but mainly because of out of date technology. The question is constantly asked: 'Why is it that in Australia the cost of processing is four times that in the United States of America?'. There is a need for these matters to be investigated thoroughly. I ask that the new Corporation investigate this aspect. Likewise, there needs to be a thorough investigation into carton trading in lieu of carcass trading.

There is a need for a common description system for the export and domestic markets. I well appreciate the work that is being done and has been done by the working party of the Australian Agricultural Council and by the Australian Meat and Livestock Industry Policy Council to establish a national trading language for red meat. This common description is necessary if the industry is to maintain quality consistency on the domestic market. When retailers buy in export cartons to make up those shortages of cuts of rump or T-bone or whatever they need to be able to be sure that the quality is there. Because of lack of this consistency and the lack of common description there is no guarantee. There is no existing system of relating the description used in the export market to the Australian domestic market. This results in uncertainty about quality and, therefore, can affect consumer sales.

Honourable members will be aware of the latest trend of sale by description using computer technology. The technique eliminates the cost of double handling from property to sale yards, and from the sale yards to the meat works. There are other advantages. It reduces bruising of cattle and the need to hold cattle for two or three days during sale yard selling processes. We need to promote the direct sales concept, the concept of producer to processor, to give a better return to the cattle producers. I am confident that the new Corporation can deal with the matters I have raised, especially if it maintains the desirable and necessary contact with producers.

I note what the honourable member for Wannon (Mr Hawker) says. There has been some concern as to the involvement or participation of the producer in the new Corporation. There has been some criticism as to the lack of producer representation that may be finally on the Corporation. I acknowledge that the new Corporation's make-up will be on the basis of qualifications and experience, as is the case with the Australian Meat and Livestock Corporation. I have not heard the same sort of criticism about the AMLC, but I take on board what is being said. There is a need to meet with producers, although I am sure that the Minister for Primary Industry, because of his special interest and commitment to the rural sector of this nation, will ensure that the producers have their say. Let us ensure that it is more than just a say by representation. There is a need for this new Corporation to meet with producers through the Cattle Council of Australia at least twice a year. This would guarantee a producer input in the selection of research projects. That is a very important role. It would ensure that the practicality characteristic of such projects is constantly up front in the minds of researchers. Finally, it will allay the fears that the Corporation will not be industry-producer minded.

I now turn to problems in the export area that should be addressed by the meat and livestock industries through their corporations. The Australian cattle industry is under threat in the international beef arena. That threat has come from the European Economic Community's farm subsidies approach and from Brazil's drive to generate foreign exchange which has increased its share of the world beef market from 10 per cent to 28 per cent in the last five years. That must be of major concern to beef producers and those in the industry. The Korean market is closed to protect domestic producers. Australia's share of the Japanese market falls in favour of the United States and as the United States applies pressure to reduce its trade deficit with Japan, again there is a growing and real concern for the industry.

Coupled with this there are international problems. There has been a fall in domestic consumption in Australia as well as across the world. In Australia we see a fall in domestic consumption from 57 kilograms per head in 1979 to an estimate of only 39 kilograms per head in 1984. From the marketing aspect, the industry is open to some self-criticism. Australian exporters have undercut each other to secure orders. Promotion in the past has been inadequate. I note that the beef industry spends only $5m a year on promotion, yet the wool industry spends about $80m a year. The product has also been inaccurately described, so its consistency has varied.

There is no need to canvass again the image problems associated with the beef substitution scandal. Additionally, exporters have also concentrated on high volume markets and have been reluctant to develop smaller, specialised markets. These are the negatives, but I also acknowledge that there have been pluses in the restructuring of the Australian Meat and Livestock Corporation and the formation of the Cattle Council of Australia, and a very important and significant change in allowing the AMLC to trade in its own right. If the private exporters are not prepared to develop the smaller, specialised markets, such as the hotel trade in the South East Asian area, the AMLC should use its new powers to establish these markets. I have spoken to some experts in the beef industry and they have estimated that this could mean additional sales of tens if not hundreds of tonnes of high quality meat. It also means the breaking of new ground in Asia, especially in China, which is establishing hotels and tourist centres to attract foreign exchange. The AMLC could encourage exporters to service and tap these markets, as the Corporation has control over export licences. I say again that if the private exporter is not prepared to do it, the AMLC ought to.

On a broader basis, there is a need to adopt a strategy to counter the threat of the EEC to Australia's traditional markets. Australia should give the lead in developing what I call a counter trade bloc to the EEC. I see a need to set up a Pacific basin trading bloc, which would or could incorporate Canada, the United States of America, New Zealand, Australia and countries on the South American continent.

The issue is not just a matter of finding new markets, because in present statistical terms the Australian beef industry will have great difficulty in filling the quota access in relation to the United States of America, Canada, Japan and Korea. It is not just an issue of finding new markets; it is an issue of protecting and shoring up the markets Australia already has. I contend that the concept of a Pacific basin trading bloc, or a Pacific economic community, needs further consultation, deliberation and consideration. It may be the only effective way outside solid, long term reciprocal trading arrangements of maintaining viable export markets for Australia's rural industries.

The Prime Minister (Mr Hawke) and the Minister for Primary Industry should be applauded for tackling the EEC during the recent beef threat. But I am reminded, as no doubt all honourable members are, that the guarantee given by the EEC stands 'under foreseeable circumstances'. I do not believe that the EEC can be trusted. I have heard the EEC described as a rogue trader internationally. The ability for it to subsidise its exports and to load its subsidy costs on to the domestic market and the domestic consumer must be of major concern to everybody in Australia. We have to tackle the problem of the EEC. It shall be done, no doubt, by dialogue, by the talks our Minister and our Prime Minister have already had. I believe that it is a matter of strength against strength and the only way the EEC will listen is if we in Australia, in co-operation with other countries in the Pacific, are able to come up with a PEC or a Pacific basin trading bloc. This must be a matter of special consideration by this Government and the rural industry bodies.

I am so pleased with the approach this Government is taking to rural industry. As a previous State member of parliament, I went through the calamity of 1974 and 1975 when, as a Labor person, wherever one went one was lampooned, attacked and criticised for the Labor Party's supposed attitude to the man on the land. I say to the House that the change is here and it has been wrought by the Minister for Primary Industry and the present Labor Government. We have seen it in so many areas. I believe that the four Bills before the House tonight are further proof not only of the Government's willingness to address the problems but also of its commitment to those rural industries to protect and ensure that they go on in the interests of the Australian economy.