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Thursday, 9 May 1985
Page: 1996

Mr KERIN (Minister for Primary Industry)(5.48) —I move:

That the Bill be now read a second time.

This Bill amends the Dairy Industry Stabilization Levy Act 1977 and is an integral element in the overall package of marketing arrangements. The Bill imposes a levy on certain dairy products produced at a factory, with butter, butteroil and cheddar cheeses likely to be the only products, in practice, to attract a significant levy. The rate of the levy will be determined by regulation in the first year and for subsequent years by a formula which is detailed in the legislation. Funds from the levy will be used to provide further support for domestic prices of dairy products in addition to that funded by the levy on all milk under the Dairy Produce Market Support Levy Bill 1985.

Levies imposed under this Bill form part of a transitional arrangement designed to ease the movement over time to a lower level of support for domestic prices of dairy products. The levies will be phased out under the formula, with the timing of the phase-out being determined by the extent to which production and/or market milk prices fall. The aim of the formula is to abate the rate of decline in levies and hence support for domestic prices if milk production or market milk prices fall rapidly. A rise in either market milk prices or production would, incidentally, under the formula have the same effect as no change in these factors. This is necessary to ensure that support for domestic prices of manufactured dairy products is not adversely affected by the actions of one or more State governments in increasing market milk prices.

Honourable members will be aware that the regulation of the market milk sector of the industry has been and remains the responsibility of State governments. However, the Government, in the Dairy Produce Market Support Bill 1985, provides for the repeal, given that, of the Dairy Industry Assistance Act 1977 and the Dairy Industry Assistance Levy Act 1977. These Acts, which were passed in 1977 but never proclaimed, have been seen by the dairy industry as inhibiting interstate trade in market milk. In the view of the Government, it is inappropriate for the Commonwealth to impose artificial impediments to rational sourcing of milk, whether it be market milk or manufacturing milk.

The only direct financial implication for the Commonwealth is the cost associated with collection of the dairy products levy, which will be in the vicinity of $120,000 per annum. Given that the Commonwealth in the past has met the cost of levies imposed under the Dairy Industry Stabilization Levy Act 1977 and the imposition of the levy under this Bill is for a limited time period, it was not considered appropriate for collection charges to be met from levy receipts. I commend the Bill to honourable members.

Debate (on motion by Mr N. A. Brown) adjourned.