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Tuesday, 14 October 2008
Page: 9094

Mr BURKE (Minister for Agriculture, Fisheries and Forestry) (7:02 PM) —in reply—I want to thank all honourable members who have participated in the debate on this bill. Some have spoken from the perspective of concern for producers and some have talked about their hope of seeing better prices out there for consumers. There has also been a general discussion on some of the issues relating to deregulation itself as well as some of the mental health challenges. Both the member for Forrest and the member for Kennedy in their contributions referred to the suicide rates and serious depression that still plagues large parts of rural Australia.

There were some specific issues raised by the shadow minister which I should respond to. He indicated his support for the legislation, for which I am grateful. He said that we needed to have a plan for water use. As the shadow minister knows full well, the Minister for Climate Change and Water has that plan. We have the water for our future program focusing on efficiency, planning and information; the water buybacks from willing sellers; the irrigation industry’s workshop program, which is providing further information for irrigators; and the irrigation management grants, implementing water management strategies for the Murray-Darling Basin irrigators. I am not providing any information there that the shadow minister does not know. I think his issue is quite simply that he would prefer the neglect that occurred under the previous government, and that is something that this government will not be a party to.

There have also been some curious comments for which I was not in the chamber, but I was able to listen to part of the contribution from the member for Gippsland. He called on the government to implement the promise of $3 million to support nutrient management in the Gippsland lakes. I am very glad that he is supporting us delivering on that election commitment. I would be astonished if the member for Gippsland were asking us to send out the money prior to contracts being formalised. That is something that, from time to time, the National Party have been reasonably relaxed about, but I am sure that they would appreciate that it is best to have the contracts in place before you pass the money over. It is interesting that the member for Gippsland was showing such support for that project on the same day that his colleagues in Senate estimates were being critical of the government wanting to provide that money.

I understand that the member for Gippsland also said—I did not hear this bit but I am advised that he said it—that the minister for agriculture should visit the Macalister Demonstration Farm. He is right—and I have. I am grateful for his advice that I go there, but I have gone there. Like him, I am very impressed by it. They have been able to do some extraordinary work on natural pasture on that demonstration farm, and I share his admiration for the facility. But I am curious about his demand that I need to visit there, given that I have visited, have been impressed and have made comments about that publicly.

The Dairy Adjustment Levy Termination Bill 2008 amends the Dairy Produce Act 1986 to close the $1.92 billion Dairy Industry Adjustment Program. Specifically, the bill before the House provides for the termination of the dairy adjustment levy, the wind-up of the Dairy Adjustment Authority and the closure of the Dairy Structural Adjustment Fund. The bill will provide for surplus levy funds to be returned to consolidated revenue, and it clarifies our understanding that costs of terminating the adjustment program can be considered costs of the program itself. Consequential amendments will remove references to the adjustment program in other acts and repeal acts that were originally there to establish the dairy adjustment levy.

Importantly, the bill makes arrangements to minimise collection of the consumer levy surplus to program needs. The Dairy Produce Act 1986 does have some shortcomings—none more serious than the projected $50 million in surplus dairy adjustment levy funds that will be collected unless the act is amended. The bill will allow the government to terminate the levy in a way that minimises levy collections above the needs of the program. This will be achieved in two ways: firstly, by cutting the levy termination notice period from 28 days down to seven and, secondly, by allowing the government to consider levies paid by consumers but not yet receipted into the Dairy Structural Adjustment Fund when declaring a levy termination date.

The government expects to remove the dairy adjustment levy in the first quarter of next year. The benefits of removing the consumer levy should be passed on to consumers. Any complaints or suggestions of anticompetitive conduct in relation to removal of the levy will be dealt with by the ACCC. Amendments will also allow the government to close the Dairy Structural Adjustment Fund, after which the adjustment program will also be considered closed.

Australia’s dairy industry has undergone a process of significant transformation in the last decade. In the late 1990s, Australia’s dairy industry was not confident that it could compete with its efficient New Zealand counterpart within the then regulated environment. Today, the industry is competitive and export oriented.

While this legislation brings to a close a program that supported dairy producers to make that transition, the government recognises that the industry still faces challenges. Strong global demand for dairy products has contributed to increased farm-gate prices. But water dependency and climate change represent particular challenges. The government will support the dairy industry to better prepare itself for these challenges. Dairy farmers, particularly in the Murray-Darling Basin, will also benefit from better information about climate and water availability, improved water trading arrangements being developed by the ACCC, and more appropriate allocation arrangements under water programs being administered by my colleague from the other place Minister Wong.

Of course, the government continues to provide income support, business advice and a range of other measures to all eligible farmers who are doing it tough because of drought. Assistance to farmers also includes exit assistance for eligible farmers who do not see a future for themselves in the sector. The Rudd government will do everything it can to ensure the Australian dairy industry makes its contribution to global food security in the face of a changing climate. This bill will allow the government to finalise the Dairy Industry Adjustment Program. It provides for good governance. It has been welcomed by Australian Dairy Farmers Ltd. And, when passed, it will deliver modest savings to consumers at the grocery checkout. I welcome the bipartisan support for the bill and I commend it to the House.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.