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Wednesday, 21 September 1983
Page: 1094

Mr KERIN (Minister for Primary Industry)(4.27) —I move:

That the Bill be now read a second time.

The purpose of this Bill is to increase the limits imposed by the Dairying Industry Research and Promotion Levy Act 1972 on the amount of levy which may be imposed on the production and sale of whole milk and butter fat, for the purpose of promoting the sale of dairy products in Australia. The actual amount of levy imposed is set by regulation and is known as the operative rate. The proceeds of the levy are paid into the Dairy Produce Sales Promotion Fund from which the Australian Dairy Corporation draws funds for its domestic promotion activities.

At present the Act provides that the operative rates of levy for promotion purposes may not exceed 12c per 100 litres of whole milk and $3 per 100 kilograms of butterfat. The operative rates are currently at those levels. Earlier this year the Australian Dairy Corporation and the Australian Dairy Farmers' Federation recommended that the maximum limits be increased to 24c per 100 litres of whole milk produced and $6 per 100 kilograms of butter fat produced. In doing so the Corporation and the Federation argued that with significant falls in returns on the export market and with every prospect of those returns continuing to fall, there should be much more active promotion of Australian dairy produce on the domestic market. The Corporation mentioned cheese as being a particularly suitable candidate for increased domestic sales if it were more extensively promoted.

I accepted the recommendations and on 17 June 1983 was pleased to announce the Government's decision to present legislation to increase the maximum rates at the earliest opportunity. The result is this Bill. Honourable members may be interested to know that, since then, the Australian Dairy Corporation has, in accordance with sub-sections 13 (3) and (4) of the Act, recommended to me, after consultation with the Australian Dairy Farmers' Federation, that the operative rates of levy for promotion purposes in respect of whole milk and butter fat be increased to 19c per 100 litres produced and $4.75 per 100 kilograms produced respectively.

On the assumption that the recommended operative rates apply on and from 1 November 1983, and based on present projected production figures for 1983-84, total income from the levy for 1983-84 would be in the order of $9.2m. By comparison, last year's income was $6.5m. The industry's view, as I understand it, is that the revenue from increased domestic sales resulting from greater promotion of dairy products will more than offset the cost of the levy to farmers.

I stress that the industry itself has requested the increases in the maximum and operative levy rates. I also note that there are no Commonwealth contributions in respect of the levy for domestic promotional purposes and no financial implications in the Bill for the Commonwealth. As for the remaining clause of the Bill, the opportunity is being taken to correct an anomaly in the Act. Paragraph 9 (1) (a) of the Act refers to gallons while the remainder of the Act is in terms of litres. The Bill will correct this minor inconsistency. I commend the Bill to honourable members.

Debate (on motion by Mr McVeigh) adjourned.