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Wednesday, 27 June 2001
Page: 28778

Mr O'CONNOR (9:57 AM) —The Passenger Movement Charge Amendment Bill 2001 that we are debating here today provides for an increase in the passenger movement charge from $30 to $38, with effect from 1 July 2001. This particular increase in the passenger movement charge is being used by the government to fund a $600 million addition to Australia's quarantine and border patrol measures. This extra funding will be shared between the Australian Quarantine and Inspection Service, the Australian Customs Service and Australia Post. This new spending will raise in the order of $70 million a year and it will fund a series of new quarantine initiatives that the Minister for Justice and Customs recently announced.

The shadow minister for small business and tourism, Mr Fitzgibbon, will be following me in this debate and, in the course of the time allocated to him, he will be moving a second reading amendment related to areas of his portfolio responsibility. I mention that because he is in another place at the moment unveiling a plaque to the recently deceased Greg Wilton. We all know that the shadow minister was a good friend of Greg's, and Mr Fitzgibbon would have led this debate in this chamber had he been able to be here at this time.

I mentioned the range of initiatives that this measure will finance in the quarantine area, and they are measures that we on this side of the House do support. We are fortunate here in Australia that we are free from many of the exotic pests and diseases that have devastated agriculture in other parts of the world. Of course, any funding that can be allocated to the quarantine task to strengthen arrangements to protect Australian agriculture from the ravages of exotic pests and diseases is welcome.

I will make some comments later on the manner in which the government has chosen to fund this particular initiative and why it has chosen this route, but if we go over the particular expenditures that are being undertaken over a period of some four to five years—this extra $600 million—$5.7 million is being provided for AQIS until 30 June 2001 to fund extra measures introduced in February due to the UK and European outbreaks of foot-and-mouth disease. I am quoting here from the minister's press release:

$281 million from 2001-02 to 2004-05 to AQIS border operations;

$238.8 million from 2001-02 to 2004-05 to ACS to support AQIS quarantine services;

$68.8 million for new infrastructure at international airports and international mail centres, and ongoing costs for Australia Post, to allow greater scrutiny of incoming mail, passengers and goods;

$1.2 million over four years to strengthen risk management and preparedness arrangements for FMD and Bovine Spongiform Encephalopathy (BSE), being coordinated by a high-level industry and government management group; and

$0.5 million for the purchase of reagents to allow the rapid testing of suspected FMD cases as part of Australia's surveillance program.

That is a very comprehensive response by the government, and it is one that we wholeheartedly support. It is timely, because we have recently received an audit report—and I will refer to that report a little later—that really rang the bell on the gaps in our quarantine preparedness, our border control measures and other measures that we take to insulate ourselves against foot-and-mouth and other exotic pests and diseases. There are some fairly significant gaps in that and it has taken the foot-and-mouth outbreak to bring to our attention the necessity to strengthen the nation's defences in this regard.

I suspect that these measures that the government brought down were not only in response to the foot-and-mouth outbreak in the United Kingdom and the spread of that disease through Europe, but partly as a response to the rather adverse Audit Office report that showed some very significant gaps in our preparedness to meet the ravages of this and other diseases.

Foot-and-mouth is a disease which has inflicted enormous costs on British agriculture and the British economy and other economies throughout Europe. It has had an absolutely devastating impact on the beef industry in the United Kingdom. There have been varying estimates of the cost of this particular outbreak, but in May of this year, the President of the UK National Farmers' Union, Mr Ben Gill, gave all farm leaders an update on the devastating foot-and-mouth disease outbreak, in a release that was issued by the NFF. He said the disease could cost the UK as much as $A25 billion. Recent estimates are as high as $A30 billion. That is nearly equivalent to the amount that this government has shrunk the surplus, in a very short period of time. That gives you an idea of the dimensions of this.

Mr Baird —Not as much as we have shrunk the deficit.

Mr O'CONNOR —It is about as much in current dollars as the deficit that the Prime Minister left Labor back in 1983. That will give you an idea of the extent of the economic impact of this disease. He said it could cost the UK as much as $A25 billion, and was far from being under control. In May 2001 he indicated that there have been 1,593 cases confirmed, and an average of six new cases are still being confirmed each day, compared to 43 a day in March. More than 2.65 million animals have been slaughtered and a further 75,000 head of stock are tagged to be killed. This is the devastating impact of this disease on the UK beef industry.

It is not the only cost, though, that will have to be borne by the British public because of this outbreak. There are ancillary costs associated with the impact on the national export performance of the British economy. There have been devastating impacts on local communities and massive social dislocation. And there have been huge impacts on the tourism industry, which is also very important to the British economy. In addition you have the significant environmental costs that are associated with the clean-up.

If we did suffer a similar outbreak in Australia our livestock industries would face similar devastation. Dr John Weaver, a prominent South Australian, said in an ABC News Online bulletin on Tuesday, 5 June that an outbreak in this country would take some six to 12 months to control. In his view, with agriculture accounting for a much greater proportion of Australia's GDP—20 per cent—the impact here could be much more dramatic. He had this to say:

I think the problem comes if the disease gets into a big sheep market and gets dispersed throughout the country, it's the nightmare scenario ...

It is really a nightmare scenario, one which any minister for agriculture anywhere has to contemplate. From my conversations with former Labor ministers for agriculture Kerin, Crean and Collins—very prominent members of the Labor Party—I recall that one of their great fears was of being in the driver's seat during one of these exotic disease outbreaks.

With the best intentions we do attempt to insulate ourselves from these sorts of incidents, but we live in a world where increased trade is taking place. We now have an export based economy, not only in manufactured and processed goods but also in livestock and certain raw materials or commodities from the agricultural sector. We import many foodstuffs, and with the movement of passengers to and from Australia there is great danger that exotic diseases may be brought unintentionally into this country. The nightmare for those agriculture ministers was—and, I guess, is now for the Minister for Agriculture, Fisheries and Forestry—that one of these exotic disease outbreaks might occur on the minister's watch. I have never been one to play heavy politics over this issue. Despite the best intentions of any minister and despite whatever enormous resources the government might put into this task, there is always the possibility, the danger—the reality—of an outbreak that could have a devastating impact. Australia's livestock industries are very sensitive on this matter, as they should be.

We on this side certainly support the measures that the government has put in place. They are sensible and timely, although some could say that they are long overdue and prompted not only by the particular outbreak but also by some aspects of an audit report that pointed to significant gaps in our preparedness. I will quote from page 16 of that report, Managing for quarantine effectiveness, in which the Australian National Audit Office rang the bell on the fact that this situation had been allowed to drift. The report had this to say:

The value of current border effectiveness measures is limited as they do not address the likelihood of seizable material approaching and breaching the border, or the potential consequence(s) of such an event. The ANAO has undertaken estimates of the former, using available AFFA data. Estimates of the latter, that is how `risky' the material escaping detection is, could not be made because of the absence of relevant AFFA data. The ANAO estimates indicate that almost 90 per cent of seizable material arriving by mail, and more than half arriving carried by international airline passengers, enters Australia undetected. These rates, and differences in the rates between entry routes within these two programs, suggest aspects of border operations warrant priority management review and action, including assessing the consequences of barrier breaches, and appropriate cost-benefit options for dealing with them.

That report was undertaken long before the government announced these particular measures. I would imagine that the minister and the government had wind of the report. Some of the measures that have been announced by the minister are specifically designed to overcome some of the problems that have been identified in this report. So the minister's response is timely—firstly, given the outbreak that has occurred and the dangers to Australia as a result of that and, secondly, in light of this Audit Office report.

Although we have strengthened the frontline—what we would call the first tier—of defence against this particular disease and others, I think it is very important to give some consideration to what the industry terms the second-tier defences. A letter was sent to me by a young student in a veterinary course in a New South Wales university recently. Unfortunately, I left it in my electorate office when I came here. I would have liked to have quoted from that letter in my speech. I am referring to the issue that was raised by that student, although I do not have his name with me at present. The student was bemoaning the fact that it was increasingly difficult to attract students into veterinary courses and that our universities were contracting resources to students in this area. This student recognised a very important gap that we are facing in what we call the second-tier defence. It relates to our preparedness to cope with a major exotic disease incursion once that outbreak has occurred. We have that frontline defence, but a second-line defence is required if an outbreak should occur in Australia, with effective infrastructure in place to contain that outbreak and to limit its damage.

Over the last decade we have seen a declining number of what we would call `large animal' vets. These people are very important to Australia's livestock industries. We have also seen generally a declining number of vets in rural and regional Australia. We have also seen state government veterinary and livestock offices in Australia's rural regions being run down. There has been a consequent decline in our ability to manage a large-scale exotic disease outbreak. These are very important issues that will need to be addressed by any future government, because it is not just the frontline defence that is important; the second-line defence is also very important.

In conclusion, I want to refer to the funding issue, because we ought to note in this debate that the government is using a passenger movement charge to fund these expenditures. They are, if you like, new taxes. No matter what way you dress them up, they are new taxes. It is a bit like the milk tax which raised about $1.9 billion for a restructure package for the dairy industry. It is a favourite technique used by the Howard government to raise money in the face of the fact that it has blown the surplus.

I think we need to address the issue of funding of these sorts of expenditures head on. The Prime Minister said that he would never, ever introduce a GST. After spectacularly breaking that promise came his promise not to introduce any new taxes and not to increase existing taxes. The Clerk of the Senate prepared a document recently that indicated that 113 new taxes or tax increases had been instituted by this government. The increase in the passenger movement charge that we are debating here today increases that figure to 114—114 broken promises on the taxation front.

That is a spectacular backdown on the government's position that the Prime Minister put to the Australian people—that he would not introduce any new taxes or increase existing ones. These expenditures would have been, I would imagine, financed out of the budget surplus which was trumpeted by the Treasurer in the 1998-99 budget, when he said that that surplus would amount to $14.56 billion in 2001-02. Well, honey, he shrunk the surplus; it is now down to $1.5 billion, and heading south.

Mr Lloyd —Compare it to your surplus.

Mr O'CONNOR —I mention this because you portray yourselves as great fiscal managers; really, you could not run a country dance. Here it is: in 1998-99, $14.5 billion. `Honey, I shrunk the surplus; it is down to $1.5 billion.' You come into this House and introduce a new tax, a new passenger movement charge. (Time expired)