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Tuesday, 27 March 2001
Page: 25708

Mr HORNE (2:55 PM) —My question without notice is to the Minister for Agriculture, Fisheries and Forestry. Minister, isn't it true that not one federal government cent has gone into your dairy industry adjustment package? Isn't it also true that, of the nearly $1.8 billion raised by—

Mr SPEAKER —The member for Paterson will commence his question again and will be heard in silence.

Mr HORNE —Thank you, Mr Speaker. Minister, isn't it true that not one federal government cent has gone into your dairy industry adjustment package? Isn't it also true that, of the nearly $1.8 billion raised by your milk levy, up to $500 million goes to the federal Treasury as a result of farmers paying tax on their grants? Minister, doesn't this mean that while consumers pay a tax on milk and farmers pay tax on their grants, your government reaps a profit of nearly $500 million?

Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) —The interesting thing about the industry adjustment scheme provided by this government for dairy farmers in Australia is that it took the federal government to provide adjustment assistance because the states that deregulated the industry did nothing. They provided not a cent by way of compensation for quotas as requested by the industry. The states stood idly by after deregulating the industry, and were prepared to provide no assistance whatsoever to support dairy farmers. That is one of the real tragedies of the way in which Labor responds to the concerns of farmers right around Australia. This government responded fully to the industry's request that we facilitate a $1.78 billion restructuring package funded by a levy of 11c a litre on milk.

The honourable member suggests that somehow or other the money that has been raised by this Commonwealth levy on milk is not government money, or that it is not government tax. That is a bit like saying that income tax is not government money, either. In a sense that is true: governments have no money of their own—they get it all from the taxpayers. In this particular case, the taxpayers are the consumers of milk and that is government money in the same way as all other taxes received from taxpayers are government money. This government has in fact acted and responded to the industry's request.

The other quite erroneous comment that the honourable member has made is that he has parroted the New South Wales Labor agriculture minister with this quite extraordinary claim that the government has somehow or other got a huge tax windfall as a result of this arrangement. Let me first point out that, when the package was originally designed by the industry and the industry approached the government, they asked for a $1.2 billion package, but they wanted it tax free. There is no precedent for these sorts of adjustment packages to be tax free, and so the industry agreed that the scheme should be taxable but it was boosted by a further $500 million to ensure that no farmer would be worse off as a result of these arrangements. However, that does not mean that the federal government has collected $500 million worth of tax. In fact, Mr Amery, Mr Palaszczuk and the Labor ministers who like to peddle this line to cover up for the fact that they have done absolutely nothing themselves, know full well that an independent authority was commissioned to do a study on the taxation impact of this particular levy, and the conclusion of that study was that the revenue implications for the government were neutral. Mr Amery and Mr Palaszczuk know and they can tell the honourable member for Paterson, if he will listen, that the taxation implications of this for the government are neutral. There is no $500 million windfall, but there is $1.78 million worth of benefits for the Australian farmer—benefits that would never have been provided by Labor state governments, who ignored the dairy farmers of Australia even though they acted to deregulate the industry.