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Rural and Regional Affairs and Transport References Committee
04/07/2013
Review of the citrus industry in Australia

WALKER, Mr Peter, Private capacity

CHAIR: Welcome. Would you like to make an opening statement?

Mr Walker : Good morning and thank you for the opportunity to talk to the inquiry. First of all, I am a citrus grower in Waikerie. I have about 50 hectares. I have been a grower for about 40 years. During my time as a grower, I have represented a lot of bodies. I was the chair of the Citrus Board of South Australia for six years, as well as being a director prior to that. I was also a deputy chair of HRDC, the body that was the R&D corporation prior to merging with AHC—the Australian Horticultural Corporation—to make Horticulture Australia. I was a director on that board for seven years and was a pivotal part of the R&D model we have now.

Today I will not deal with areas that have already been covered per se; I would like to deal with the dubious and poor governance of Horticulture Australia, the IAC under it that reports to the board, and the poor and dubious governance of Citrus Australia. I would also like to talk about the minimal accountability, the non-transparency and the non-contestability of the project funding, which is many, many millions of dollars of growers' funds and the public purse. That should obviously be of interest to senators in relation to wasting money and using funds wisely.

Senator RUSTON: Thank you very much, Mr Walker, and thank you for your submission. I want take to you to the submission by Citrus Australia. A Deloitte report was included in that submission. My understanding is the Deloitte report was written as the substantiation or a precursor to the change of the industry structure.

Mr Walker : That is correct.

Senator RUSTON: In that report it was predicated that at that time there were 1,811 growers identified by the various state organisations that made up the citrus industry. I imagine those 1,811 people had been captured by the various state bodies, and so we knew not only how many there were but also who they were. Is that correct?

Mr Walker : Each state had its own database so that would be an accurate number.

Senator RUSTON: In that submission, it is stated that about $2½ million was collected by the industry organisations in the states by virtue of either voluntary or mandatory levies.

Mr Walker : Yes.

Senator RUSTON: It then proceeded to go on to say that that $2½ million would translate into the proposed structure or the preferred model that came out of Deloittes—that is, the $2½ million would immediately translate into $2½ million of voluntary membership to Citrus Australia. Is that your understanding?

Mr Walker : That is the way I understood the report as well.

Senator RUSTON: You were around in that time. At that time was the industry led to believe that the financials of the new organisation would be as the financials were stated in that Deloitte report? So did the industry actually believe that everything that that they were currently getting, they would get from Citrus Australia without the need for them to pay their voluntary or statutory levies to their industry bodies?

Mr Walker : The single structure model in the Deloittes report of 2015—that was its projections—mentioned the fact that they would earn those sorts of numbers in grower contributions in membership. If you refer back to the annual report of Citrus Australia in any of the subsequent years of 2009, 2010, 2011 and 2012, most of the times Citrus Australia only earns in grower levies or grower contributions of members of about $140,000 to 170,000. Now that is that millions and millions dollars short of the projections of the Deloitte report. I think that is the crux of your question, isn't it?

Senator RUSTON: Yes.

Mr Walker : The single structure model has not worked. And that model is what the then Citrus Australia board took to the members, saying 'We will have all the growers join; it will be utopia and we will have this amount of funds to do agripolitical work on your behalf'. That has not eventuated in any way, shape or form. I could go on to how they have funded the organisation, but I am sure you will ask me—maybe.

Senator RUSTON: Back to the collection of the names of the people who paid the levies that existed under the previous structure, what was the problem with—we now know from evidence and submissions that we have received from other people that the industry, not even Horticulture Australia, seems to know who the levy payers are who pay the citrus R&D levy. What happened between us being able to identify those people and not being able to identify them now?

Mr Walker : Are you talking about identifying growers now?

Senator RUSTON: I am assuming the 1,811 people who were identified by the Deloitte report are the levy payers and that the levy payers, by virtue of how they operated, were members of these various organisations around the states. I am assuming we still have 1,811 levy payers, or thereabouts, who are paying their levy through the revenue levy service in Canberra—

Mr Walker : Yes, that is correct.

Senator RUSTON: but we do not know who they are any more, do we?

Mr Walker : No, because most of the statutory boards, under their state acts, had the ability to collect that data on production, crop harvesting and obviously who was in the industry. So, for instance, in South Australia we knew there were 450 growers, we knew what yield, we knew what the planting database was, we had full nine yards in relation to information, and that would have gone into that Deloitte report. Subsequent to the demise of that board, that information is now not—no-one has the ability to collect that information, and they will not get that information under the Privacy Act anyway. Effectively, unless you have some sort of statutory power to do that, you will not get it.

Senator RUSTON: So in your opinion, how valuable was that information to industry in terms of its decision-making?

Mr Walker : Knowledge and data are king; that is the standard around the world. You need to have that knowledge to be able to—and this Deloittes report was always about communicating capacity and capability. They may have got the communication right; they do not have the capacity and they definitely do not have the capability.

Senator RUSTON: You have mentioned the lack of transparency between the IAC and Citrus Australia. We heard from a previous witnesses that it was a bit like being the umpire and the players. Do you have any specific issues you would like to put on record in terms of where you see that conflict lying?

Mr Walker : Perhaps I could first take five minutes to talk about the structure of Horticulture Australia. When an industry hit a certain size levy income, we had the ability to then ask for an industry advisory committee. The board had linkage to the industry or the commodity group to make sure that the R&D monies being collected and spent on behalf of industry were sound, that it had an annual investment plan, an operational plan and a strategic plan. All those things were in place and that was working very well. In about 2007 some of the industry bodies, the commodity groups, started—

Senator COLBECK: When did you get the IAC?

Mr Walker : Most of the big industries—apples—

Senator COLBECK: When did citrus get to the stage where it had an IAC?

Mr Walker : They would have had an IAC from day one, at the formation of Horticulture Australia. If you look at the deed of agreement between DAFF and Horticulture Australia, that IAC was supposed to be a skills based IAC—in other words, it had science capacity, research, marketing and the whole bit, in relation to its formation. During that period in the mid-2000s, a lot of the industries were very lean in relation to grower contributions to run their agri-political side and funds to keep the doors open. One of them hit on the idea that they could become service providers on behalf of industry and use the R&D funds and clip the ticket on the way through, which would pay for rent and all those on-costs in relation to projects. So we started to see a monster being developed. In the last years when I was on the board, this was becoming very apparent that this model of commodity groups becoming service providers was out of control, and I think it has gone out of control even further.

In 2008 we had the formation of Citrus Australia and obviously the growers did not embrace it. Most voluntary memberships do not get embraced initially. They were obviously told, 'Get some runs on the board or no-one will join you.' The only way they were going to get runs on the board was to start doing projects, so they went into that model. If you look at the financials of Citrus Australia, 97 per cent of its income in the 2009-2010 period and 93 per cent in 2011 was solely R&D grant money. This is just immoral and improper. When you actually look at the IAC, the IAC at that period was the seven directors of Citrus Australia. So we have a 'fox in the hen house' effect: 'We need money. How do we keep the doors open? We'll do projects.'

Maybe Citrus Australia can defend that they were looking after the interests. I rang Citrus Australia and said, 'Why haven't you got an R&D plan?' If you have got an R&D plan you must be able to account for those funds. That is the transparency side of it: there is no transparency on who decides what projects should be done. They may be good projects, but I am talking about governance here—and poor governance. The rest of the IAC was two independent people. One was the previous ACG in the federation model; they gave him the gig as the chair of the IAC. I am not saying he had a conflict of interest. The other one was a gentleman from APAL, who, as I mentioned earlier, was the architect of how to develop service provision. So here we have the whole nine yards of people saying, 'How do we get taxpayers' funds and growers' funds for the wealth and benefit of Citrus Australia?'

If you look at the financials, you will see that they are very, very poor. If any recommendation can come from this committee it should be that the financials be split. They should be accountable. They are terrible. You cannot drill down and find anything out. Also, Horticulture Australia is not covered under a freedom of information act, so you cannot drill down and find out what they are doing in relation to minutes of IOCs and all those sorts of things that you need to develop in relation to making people accountable. Do you want me to keep on going?

Senator RUSTON: No. I think we have the idea. I have one last question. When you were with Horticulture Australia, what were the criteria for determining whether a particular organisation—whether it be ACG, Citrus Australia or whoever—was the peak industry body? Was there a set of criteria that they had to meet to be eligible for that?

Mr Walker : I have actually tabled two papers in relation to my concerns with the deed of agreement between Horticulture Australia and the government. It is lightweight in schedule 4 in relation to how you determine a peak body. You will see my notes on that schedule.

CHAIR: Do you mind if we table the documents you have given to the secretariat?

Mr Walker : I would love you to.

Senator RUSTON: To your understanding, what are the criteria to establish an organisation as a peak industry body?

Mr Walker : It is a very loose arrangement. If you look at schedule 4, it just needs to be recognised as a peak body. We actually started recognising a peak body on membership, which could well be the way it is determined. You have the Murray Valley marketing board here with 400 growers on their database as members. Then you have Citrus Australia around the corner with 13 per cent of the 2,000 growers on their books as members. You effectively can say that the Murray Valley marketing board is the peak board in Australia if membership is the criteria.

Senator MADIGAN: So what you are telling us is that the Murray Valley board is more truly representative of growers than Citrus Australia?

Mr Walker : I was being flippant.

Senator MADIGAN: But in sheer numbers, they have a far greater—

Mr Walker : Yes. The answer is that, yes, they have a greater number of growers, but it is captured under a statutory act that gets those growers. They may not want to be; I do not know the answer to that either. The acts in the other states have been disbanded because of growers' unwillingness to be a part of them. That is the way it is. People move on.

Senator MADIGAN: When Citrus Australia was formed, people in the industry were under the impression that it was going to be a more responsive and more representative body and that they would get better bang for their buck in research, lobbying et cetera for the industry.

Mr Walker : I think you have put a couple of extra words in there that I do not agree with. When you form an agripolitical body like Citrus Australia its job is agripolitical. Some people seem to have this mistaken belief about the R&D funds that are collected by Horticulture Australia. They are industry funds. They are not Citrus Australia's funds. This has been muddied so often that everybody just seems to think that these funds are automatically Citrus Australia's to do with what they wish. That is just nonsense.

Senator COLBECK: Who thinks that?

Mr Walker : Citrus Australia obviously think that because they have disbanded the skills based board. They have put themselves in as directors. I want to go into another reference group off there and I have written to Minister Ludwig. He has responded. I have also tabled that response to you, ladies and gentlemen. Which one am I answering? Sorry.

Senator MADIGAN: Who is everyone?

Mr Walker : I do not know who everyone is. I apologise. I believe people think, especially in the Citrus Australia ranks, that those funds are their funds to do with as they wish.

Senator STERLE: And you think that is the belief of most of the growers here in Australia.

Mr Walker : I think most of the growers do not understand the process.

Senator MADIGAN: So, of the levies that are paid by growers, do most growers believe that those funds are to improve their industry for R&D and to, say, lobby for the growers' concerns—would that be a fair comment?

Mr Walker : They are compulsory levies.

Senator MADIGAN: Having listened to Griffith yesterday and what is coming through today is that the growers are getting more and more bureaucracy that does not really represent their wishes—another way of putting it would be: jobs for the boys and snouts in the trough.

Mr Walker : If there had been a genuine attempt by Citrus Australia to have open contestability of all the projects they have won, I would perhaps say I disagree with you. But if it is just taking millions of dollars of grower and taxpayers' funds and without that contestability on the open market, one would suggest it is snouts in the trough.

Senator MADIGAN: So a nice building, more jobs, more cars.

Mr Walker : I am more worried about the process.

Senator MADIGAN: But if the grower pays a statutory levy, they expect some bang for their buck to improve their industry to get better R&D, a better score on the board for the industry. But, from what we are hearing over the past two days, industry is contracting, there is more stuff coming in from overseas and they feel like they are not being represented.

Mr Walker : That is correct. The issue with R&D—I am trying to stay at that level, not juice and all that type of thing. I am focusing on the governance of spending money to enhance the industry: the D side of it: Citrus Australia could be applauded to say, 'We've moved R for a while and we are going to do the D.' But I just maintain: who makes that decision? Because it is not Citrus Australia; it is supposed to be the IAC but, in my reading of all the notes, the IAC are one and the same. I am trying to suggest to the senators here that we need to have a separation, review the deed of agreement with Horticulture Australia, have a separation between industry and the peak body. Let them get on with the agripolitical arguing with the government et cetera, but the genuine R&D should be done by an IAC, which is obviously accountable to the HAL Board. If Citrus Australia wish to do projects in relation to the D side of it, developing market access or whatever, it should be contesting that, because who tells me they are the best people to do the job. I have no idea. It is just a closed book. They are clipping the ticket all the way through. I cannot get funds out of it, because it is a closed shop. It is just immoral and improper.

Senator COLBECK: So how many research projects have you done in the past?

Mr Walker : Personally? I am a grower; I do not do research.

Senator COLBECK: Have you applied for any research?

Mr Walker : We have applied for projects on the statutory board I was a chairman of and they were knocked out because Horticulture Australia, rightly, have said, 'For those projects that you are putting up under a voluntary contribution type arrangement to get government funds, you will need to get endorsement from the peak body.' That is probably a fair comment in relation to making sure it fits the strategic plan of the industry, but the industry strategic plan and the IAC are one and the same, so if you are not in that inner circle you are disenfranchised.

CHAIR: What do you want to study?

Senator COLBECK: So your issue is governance—

Mr Walker : Absolutely.

Senator COLBECK: and, if at the end of the day, Citrus Australia still ends up doing 80 per cent of the R&D but there is a decent governance process in place, you do not care.

Mr Walker : Correct. But Minister Ludwig wrote to us—it is on the web, so it is public—and he recognised the fact that there was a misuse of R&D funds in relation to the projects and the amount of money that was going into one body. He recognised there was no contestability, and so has effectively tried to change the process. But, if you want to deal with the current process—not 09, 10 and 11—it is still flawed.

CHAIR: But when was that letter from ex-Minister Ludwig?

Senator COLBECK: Last year some time, I think it was, wasn't it?

Mr Walker : It is dated 4 January 2012. He put the acid on DAFF and the acid was put on Horticulture Australia to change the make-up of these IACs. We are not just talking about citrus here, senators; we are talking about the rorts of avocados—it goes all the way through horticulture. There needs to be a good broom through Horticulture Australia under the deed.

Senator COLBECK: From recollection, that was part of the request—that there be a change to statutory deed between DAFF and HAL.

Mr Walker : That is right.

Senator COLBECK: You talked about the IAC making the decisions. Isn't it the HAL board that would make decisions on the recommendation of the IAC? Isn't that the way the structure should work?

Mr Walker : The HAL board, when I was on it, had a sign-off to a certain level—like $100,000. We would not see that. I reviewed thousands and thousands of projects as a director, at a certain level and in a certain field. I would do nuts, fruit and other things—in other words, each of the directors had segments of areas where they had expertise.

CHAIR: Senator Xenophon, are you still out there? I am just checking.

Senator XENOPHON: I am still out here and listening. Mr Walker, to try to summarise what you have been saying: you are basically that undertakings were given by both the department and Citrus Australia as to what was going to be done, but those undertakings have not been fulfilled?

Mr Walker : The undertaking to change the IACs was to change the percentage of commodity-group directors on the IOC. They have changed that to, I think, only four now. It cannot be more than 50 per cent of the IOC. But when you actually start to look at the make-up of the IAC—it is supposed to be skills based—it is generally all CA members. And if CA only has 13 per cent of 2,000 members, 87 per cent of those growers who are not members of Citrus Australia have no representation on the IAC and will be battling to get back on it.

I have been a director on many boards. I have been a grower for 40-plus years. I have chaired Riverstone Export, which is sending fruit, as an export company, to the USA. And I applied to be on the IAC and I didn't even get on the short-list!

Senator XENOPHON: Do you think the process was fair? Do you think the IAC is representative of the industry and representative of the talent available for the work it has to do?

Mr Walker : The IAC model is the right model to review projects on behalf of the five-year R&D plan for industries. The HAL board cannot physically review everything, or get into the kitchen too far with commodity groups. The issue is that that model should work, and it should work well, but the problem is that it has been muddied by the peak bodies getting into the kitchen and taking all the funds. So, effectively, there needs to be a genuine separation. So the model works, as long as you have good science and research capability there—like Pat Barkley, who can decipher crap projects over good projects.

Senator XENOPHON: And are you saying that is not being done now?

Mr Walker : The current model has a reference group, I believe, which is made up of three or four gentlemen. I think one of them is a Citrus Australia employee under a project—I would have to check that.

Senator XENOPHON: So are you saying that that raises, in your mind, a potential conflict of interest?

Mr Walker : There is a total conflict of interest through this whole process, Senator. I rang the chair of the IAC and said, 'Please tell me how you deal with conflict of interest'. He said: 'There are seven directors on there from Citrus Australia. We take a vote. Obviously they declare a conflict'—if they do, which I do not think they do, because I cannot get hold of the minutes under freedom of information. They tell me that effectively it goes forward with a two-seven vote as a majority, because the other seven abstain. It goes to Horticulture Australia. The industry program manager for citrus says, 'Well, this is what they've sent up to me; it must be right, because it's come forward and it fits the plan.' I test that, because I do not think there is a plan that it can be tested against.

Senator XENOPHON: Finally, Chair, through you, whilst Mr Walker has had difficult getting copies of those minutes, I foreshadow that I would like to move that the committee, when Citrus Australia comes to give evidence, formally request all those minutes and those documents in relation to this whole process.

CHAIR: Okay.

Mr Walker : Senator, you are also confused, because those are industry funds and those IACs are part of Horticulture Australia. We should not even be using Citrus Australia in the same sentence.

Senator XENOPHON: I understand that, but you have asked for the process involved with the IACs. You cannot get hold of the minutes. Are you talking about minutes from Citrus Australia or from Horticulture Australia?

Mr Walker : I am asking for the minutes of the IAC meetings of Horticulture Australia. Under its limited constitution, it does not have to deliver them, because it is an industry-owned organisation, so it can say, 'Take a hike.'

Senator XENOPHON: Chair, I foreshadow that I will seek those minutes from Horticulture Australia in relation to the IAC meetings. I do not know if you can hear me, Chair.

CHAIR: Say that again.

Senator XENOPHON: Given Mr Walker's evidence, I am requesting that the committee consider whether it ought to obtain—whether in confidence or otherwise—the minutes that Mr Walker has not been able to obtain to date about this whole process with the IAC of Horticulture Australia.

CHAIR: Thanks very much for that. We will give it due consideration, and I have made a note of it.

Senator XENOPHON: Thank you, Chair.

CHAIR: Senator Ruston, do you have a follow-up direct question?

Senator RUSTON: Yes. You made the comment that Horticulture Australia is an industry-owned organisation, so that means it is owned by the industry. HAL is a wholly owned industry organisation, so that means that the PIBs that make up the industry own HAL. HAL then has—

Mr Walker : They are the members.

Senator RUSTON: Yes, they are the members. There is a board of HAL, which I assume is elected by the members of the PIBs.

Mr Walker : Correct.

Senator RUSTON: Then they have the IAC, which is chosen by Horticulture Australia, which is actually owned by the industries, who are the PIBs, which is where we are now talking about the conflict.

Mr Walker : Yes. The original concept of the IACs was as a committee of the HAL board. It was just a way of having linkage to the industry—not the peak body but the industry. I have to try and keep that separation.

Senator RUSTON: So that is where it has broken down.

Mr Walker : That is where it has broken down. So the industry would elect half the guys in the room here or whatever, and they would say: 'Go out. HAL will do the work. Here are all the needs under your five-year plan. This is what we need you to do. Go out to tender it, and you review it, and we'll manage the money flow.'

Senator RUSTON: I get it. Thank you.

CHAIR: I think it would help anyone that is listening to this if the acronyms were replaced every now and then.

Mr Walker : A peak industry body is PIB.

CHAIR: Every now and then it would help suck that in.

Senator STERLE: We had APAL earlier on. I picked that one up—pears and—

CHAIR: But for people that do not understand the industry.

Senator GALLACHER: The evidence we have heard over the last 1½ days has been almost 100 per cent critical of Citrus Australia. I read in one of the submissions that there might have been a greater level of support in Queensland for Citrus Australia's activities, but who are they pleasing? Have they done anything right?

Mr Walker : I think the problem with Citrus Australia is that they have been trying to kick goals. They have come from a start gun when the industry was in crisis with the high dollar. We are an export-focused industry. We have to export. We grow far too much for the domestic market. They are at a crossroads in trying to figure out what to do. They obviously need those R&D funds to run their organisation and deliver goals. The biggest problem is that they have done it poorly and probably improperly. That is something that can be cleaned up by good governance. But the biggest problem with Citrus Australia is that, and I joined and unjoined because, I do not trust them anymore. They just do not have grower trust.

Senator GALLACHER: Who does trust them?

Mr Walker : The Queenslanders do, obviously. And that is another country, so what the heck?

Senator STERLE: Yes: 'We're not out there, so ha ha ha.' Mr Walker, the terms of reference are pretty wide, and what we have heard from just about every grower in front of us is that they want to bag the living daylights out of Citrus Australia. In terms of the challenges of the high Aussie dollar, water, fruit fly and whatnot, are you suggesting that if Citrus Australia were spending the R&D money the way it was supposed to be spent then it would solve the ills of the problem and this would not be a crappy industry anymore?

Mr Walker : You fall into that same trap again. If Citrus Australia won those projects legitimately, if a peer group had reviewed those projects that they are running with millions of dollars of growers' taxpayers' funds, that is effectively the model that everybody should be saying they support. But no-one knows, because there has been no plan up to 2012. They have been doing this on the whim of their own decisions. They say, 'I've talked to a grower down the road and he wants to have market access into China, so let's do it.' That is being flippant, but if you had a five-year plan—and the five-year plan previously had not been reviewed because we had gone through drought and a high dollar, and the annual investment plan had not reflected any change in it.

To me, they were running on empire building—I should not have said that, because that is probably not true. They are trying to do the best thing with the resources they have, but they have no members, they have no money, and the only way is to clip the ticket on the way through. If you start looking at the financials, and you probably will, you will see that this is why growers are not trusting them; they are clipping them for $2½ million or $3 million every year, and having $170,000 income. They will not even pay the CEO.

Senator GALLACHER: On that problem, why is the outcome of that expenditure at $2½ million? What comes out the other end and helps the industry?

Mr Walker : I will table these; this is the accountability. We get these documents at the end of every year. These are what we spend our money on.

Senator STERLE: Even though you are not members?

Mr Walker : You have to, because you pay levies. We are going back into that. This is industry money, not CA money.

Senator COLBECK: Someone must know who the levy-payers are.

Mr Walker : We pay a levy at first point of sale. The packing sheds send the money off to levies collection, and under the privacy act you would be battling—you guys could. That is the balance sheet—that is pretty good, isn't it?—and that is the projects. It is pretty lame.

Senator COLBECK: So you do not get any other information on any of the projects?

Mr Walker : This is history/

Senator COLBECK: No, you do not get any other information on any of the projects other than—

Mr Walker : That is the weak transparency I talked about.

Senator COLBECK: Do you get any reports on the projects?

Mr Walker : You can go on the HAL website, and if you are good enough you can migrate your way through that. The issue I have is that—

Senator COLBECK: Do CA not put them on their website?

Mr Walker : I am unsure. I cannot answer that. You will have to ask them.

CHAIR: There is a shaking head behind you.

Senator COLBECK: So CA do not put the reports from their projects online?

Mr Walker : They should, because that is where—

Senator COLBECK: That is why I asked the question. I am still working out—

Mr Walker : They are the peak body. They should say, 'This is why it is being invested in your industry.'

Senator STERLE: They have 13 per cent of the growers as members—

Mr Walker : Yes.

Senator STERLE: That was said somewhere. We understand that there are small family businesses and we understand and know that there are huge businesses. To the best of your knowledge, do you think that 13 per cent still represents a sizeable amount of the fruit growing? Is that the way you would put it?

Mr Walker : Because it is a membership-based organisation I do not know who the 13 per cent are, and because it is 13 per cent of mixed farms and large farms—I know the largest farm in Australia is a member—one would suspect that they have quite significant land membership against individual membership.

Senator STERLE: Yes, that is what came out yesterday.

Mr Walker : The size of farms is variable. In South Australia last year the average holding was about 11 hectares, which is not big.

Senator STERLE: I will wrap up, Chair. I was of the view that every industry had its state based forums or organisations who reported and worked as one with the federal representative body, except in the case of the—before the chair goes crook at me—National Farmers Federation, which the chair tells me all the time could not be any less representative of the industry than anyone else. That is not the case with the state based citrus organisations?

Mr Walker : The model I was trying to relay to Citrus Australia and the state statutory boards was that they had the ability under their state acts to get significant contributions—

Senator STERLE: In membership?

Mr Walker : And money. We are captured under an act. You had to fill in the data. You had to pay. You can request it back, but you had to send the data in at least. Effectively, my model to Citrus Australia was to have regional representation, because every state has different needs, wants and wishes. Queensland is tropical, we have a Mediterranean climate, and there are all the things in between. When we are talking to the governments of the day, they only want to speak to one person, and I accept that, and Citrus Australia should have the No. 1 alpha dog status for that. When they want to talk about biosecurity, market access—all the key hit points that you guys want to talk to us about—I offered that every state does its own biosecurity plan, its own market access plan and all the relevant documents and feeds them into Citrus Australia. They develop a one-stop shop document and then, when there is an issue on biosecurity or whatever: bang, there it is—it is in South Australia; that is their issue; deal with it. To me, that would have been a simpler way of doing it, but there was the plan that we were going to get $3 million in membership, all was going to be utopia, and let's get on with it, but in the meantime we had drought, the high dollar, Labor governments—

Senator STERLE: Hang on: before you go there, you have two Labor members on the committee who have gone out of their way to come and listen to you—

CHAIR: Do not take—

Senator STERLE: And let me make it very clear to you, Mr Walker and everyone listening: this committee does not play the bullshit politic game. We came here because we want to hear from the growers.

Mr Walker : Okay, I apologise.

CHAIR: All right. Order! Control yourself, Senator Sterle.

Mr Walker : In defence of that comment, Sir, we have had a state Labor government that has hardly focused on rural sectors and it did not talk to the growers very well. It supported our fruit fly issue very well—I will give them that—through Primary Industries, but, if you look at South Australia, the erosion of the contribution to primary industry is abysmal in relation to what it returns to the state coffers.

Senator STERLE: I come from a mining state and I agree with you. You have governments that cannot get past the bulldust spread out by the mining industry, and if it was not for the mining industry we would all—

CHAIR: All right. You need fewer apparatchiks and a few cockies. The last question goes to Senator Colbeck.

Senator COLBECK: Why did all this happen?

Mr Walker : I think the Horticulture Australia board lost its way in relation to—

Senator COLBECK: Yes, but why did Citrus Australia become the body? Surely someone must have decided this would happen.

Mr Walker : It was a federation. It was like a—

Senator COLBECK: So the industry decided to do it, it has lost control of it and now it is not happy?

Mr Walker : The original ACG was also fund strapped. They felt that under this report they were going to have growers beating a path to their door. I think it was a flawed model. It never looked like it was going to get traction. I did argue against it and I am on record as saying I argued against it. Anyway, the issue is that we have what we have now and now we have problems.

CHAIR: Finally, when we signed the free trade agreement with the Yanks, we were at 67c. We got rid of the tariffs and now we have a currency tariff, as it were, and we have a regime over there where they have billions of dollars of farm subsidies. Does that annoy you?

Mr Walker : We export a lot of fruit to the United States. When it was in the 60s it was a good earner for the growers. The free trade agreement helped minimise cost at the USA end. Our inspection charges and all the things that we did not have to deliver on saved hundreds of thousands of dollars. I think in our company alone that free trade agreement saved $500,000. I have not yet found anyone to say that we need to put something back instead.

CHAIR: Thank you very much for your evidence today.