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Wednesday, 5 October 1983
Page: 1344

Mr LLOYD(12.17-I will disappoint the previous speaker, the honourable member for McMillan (Mr Cunningham) , by basically restricting my remarks to the Dairying Industry Research and Promotion Levy Amendment Bill and in particular by restricting my remarks to cheese. This Government accepted the recommendation of the Australian Dairy Farmers Federation to increase the maximum levy per 100 litres of milk or $3 per 100 kilograms of butter fat to 24 cents per 100 litres or $5 per 100 kilograms of butter fat. The dairy industry has recommended that the operative rate be 19 cents which will increase revenue from the levy available to the industry to $9.2m this year from $6.5m last year. In other words, it is a very substantial increase. It is also for the dairy farmers of this country a substantially increased burden to bear. I refer in particular to dairy farmers in my electorate. With due deference to dairy farming representatives from Gippsland, McMillan, Dawson and Darling Downs, the electorate of Murray has the largest number of dairy farmers in Australia and it is the major dairy farming electorate in this country. It also produces the best quality dairy products.

After that advertisement I will get back to the point I was making; that is, that the dairy farmers-I am just using those in my electorate as an example-will suffer a drop in their incomes of about 20 per cent in real terms this year. That is a dramatic reduction in dairy farmers' income this year. I determined this figure of about 20 per cent after consultation with local dairy industry leaders. This figure is based on two points: Firstly, there will be a reduction in the final return to dairy farmers on a kilogram butter fat basis for manufacturing milk of between 30 cents and 40 cents per kilogram. Secondly, there will be an inflation rate for farm input costs for dairy farmers of about 10 per cent. So we have those two amounts of 10 per cent coming together. If we look at the increased Victorian Government charges which will particularly affect dairy farmers, such as electricity cost increases, irrigation water, rail freight and increased Federal and State government levies for petrol and diesel, we see that the 10 per cent calculation of increased costs for farm inputs will be conservative. I believe that it is correct for the Government to accept the recommendations of the appropriate dairy industry body to increase the maximum levy rate and the operative levy rate. But as the dairy industry has recommended these significant increases at a time when the industry is facing a substantial reduction in real returns, and as the Government has accepted that industry's recommendations, it is important for both the industry and the Government to ensure that the promotion that will follow from this increased levy money will maximise the return to the dairy farmers.

The Minister for Primary Industry (Mr Kerin) in his second reading speech indicated that the industry hoped that the greater promotion of dairy products on the domestic market would offset the greater levy costs. We certainly all hope that it will do so. The Minister also stated that cheese is a particularly suitable candidate for increased domestic sales if it is more extensively promoted. So cheese is the central feature of this promotion and levy Bill. It is the central point of responsibility for both the dairy industry and governments to ensure that this promotion campaign for increased domestic sales of cheese is successful. Increased sales of cheese on the Australian domestic market may follow but it does not automatically follow that those increased sales will be from Australian cheese. That is the important point that has to be made. For the additional levy money to be worthwhile any increased sales of cheese on the Australian market have to be basically due to, or brought about by , increased sales of Australian cheese.

The central problem for increased sales of Australian cheese on the domestic market has been the rapidly increasing percentage of imported cheese coming into this country.

Mr Cunningham —I mentioned something about that.

Mr LLOYD —The honourable member should just wait a minute. I will give him all the information and also a few extra facts which he may want to forget if he keeps interjecting. The major factor concerning the percentage of imported cheese hinges on two points: Unfair competition-meaning dumping-and food standards. For the information of the honourable member for McMillan I note that the Government has taken some action. I congratulated the Government-as I do now -for accepting the fact that dumping was taking place-in other words, unfair trading-and for taking action in that regard. The Government acted just as the previous Government acted earlier on this question of dumping and on possible disease dangers as a result of certain types of cheese being imported.

I am pleased that the Labor Government has acted more responsibly than the previous Labor Government when former Senator Murphy dropped anti-dumping duties against imported cheese in the early 1970s without any reference to the then Tariff Board to which he should have referred. If the honourable member for McMillan keeps trying to interject he will get that sort of stuff thrown back at him. The point I want to make is that the Government has acted on one of the points of unfair competition-that is, dumping. As the degree of subsidy on much, if not most, of the imported cheese coming into this country is as high as 100 per cent I believe that this is a completely unfair situation to be faced by any industry in this country.

The next point concerns the standard of the cheese imported into this country. This is a major issue in my electorate at present because my electorate happens to be the major cheese producing and exporting electorate in Australia. At present cheese is being imported and openly sold in Australia when it is known that the cheese contains additives which are prohibited for use in Australia. In other words, people who are buying imported cheese in many cases are buying cheese which is considered by the health standards people and the various State governments to be substandard food that should not be sold in this country. No Australian cheese manufacturer is allowed to add these preservatives and additives to Australian cheese. This is a general problem with imported food. Other examples occur with imported sausages-I refer to the preservatives and the percentage of fat-with wine, with added sugar and with brandy. Problems also occur in determining whether brandy is actually made from grapes rather than potatoes or some cheaper substitute.

The logical and efficient way in which to police food standards so that any food sold in this country is of a uniform standard and imported food is allowed to be sold only at a standard equal to the domestically produced product is for the Commonwealth to take control and to amend the customs prohibited imports legislation. To be fair to the Commonwealth-this is no criticism whatsoever of this Government-food standards are constitutionally a State government responsibility. I am advised that the National Health and Medical Research Council-that is, the federalist body which attempts to have uniform standards for such matters in Australia-has been trying for 40 years to establish uniform food regulations in Australia. In 1980, it provided some model legislation for the States to enact. So far, Queensland is the only State which has enacted this model food legislation. Once the States enact this uniform legislation and bring in uniform regulations, then I believe the Commonwealth should be called upon to act to police, at the point of entry into Australia, the uniform regulations for those standards. However, I concede and make the point that it is impossible for the Commonwealth to do anything at this stage when, from State to State, differing regulations and standards for different foods apply.

As I said earlier, this is a major issue in my electorate in northern Victoria. It was raised initially in Echuca. Pressure was applied to the Victorian Government and to the Victorian Minister of Health who has the responsibility of policing food standards in Victoria. It was said that the Victorian Government was not carrying out its responsibilities and ensuring that the imported cheese sold in Victoria met with the food standards of its legislation and with the food standards required for any cheese produced in Victoria. Initially, Mr Roper attempted to blame the Commonwealth. It was pointed out to him that, after all, Victoria had not even bothered to pass the model food legislation which had been sitting there for about three years and, further, the question was posed: How could the Commonwealth do anything when the State was not even carrying out its responsibilities? He later accepted this responsibility and cheese containing one of those preservatives, natamycin, was temporarily banned or restricted. However, quite contrary to his earlier point that there must be uniform arrangements for the policing of food standards, he has now yielded to pressure. It would be interesting to know who provided that pressure. Perhaps it was some of the cheese importers who had stocks of this cheese on their shelves and on the wharves. Completely unilaterally, Victoria will allow one of these prohibited additives to continue to be used in Victoria and will allow that cheese to continue to be sold.

The main point I make is that the Australian dairy industry is efficient by world standards. After the New Zealand industry, it is the most efficient dairy industry in the world. It is an industry which can and does export commercially. One can look at some of the other industries in Australia which this Government, at the Federal and State levels, has been very anxious to protect, such as the highly inefficient automobile industry, the steel industry and the textile industry. The Government has been providing additional protection to preserve employment in this country. But, at the same time, one of the most efficient industries in this country-the dairy industry, which is an efficient industry by world standards-is not even being assisted. Legislation exists to ensure that the dairy industry in Australia has the chance to compete fairly with these sub- standard imports. What hypocrisy and what double standards when the Government is doing nothing to protect employment by the major agricultural employer in Victoria against unfair competition. The Government is increasing this fence of protection for far less efficient industries in other sectors of our economy.

I agree that in the future the Commonwealth must police the standards for the importation of all food coming into this country. But, according to what I have been advised, I do not believe that it is the Commonwealth's role to do anything at this stage until the States pass what legislation they should pass and come to the Commonwealth saying: 'We have uniform legislation but it is far more sensible for it to be policed at the point of entry rather than by health inspectors at each of the local government areas in Australia'. According to the advice given to me, only at that time when the States come to the Commonwealth will it be appropriate for the Commonwealth to act. Certainly I believe it is a responsibility that the Commonwealth, after that action by the States, must accept.

The other point I wish to make relates still to this matter of promoting cheese . If we promote cheese in Australia to a greater degree than we have in the past , will Australian cheese be sold? This raises not just the question of whether, therefore, it is right and proper that any cheese imported into Australia is imported in a commercial way and to a standard acceptable to Australia. This also raises the matter of New Zealand cheese. New Zealand has a fixed percentage of the Australian domestic market. Therefore, if there is successful promotion of cheese in Australia the New Zealand dairy farmers will benefit from that expenditure incurred by Australian dairy farmers. A number of dairy farmers in my electorate, who are not particularly happy with the Australian Dairy Farmers Federation recommendation for increasing the levy, have put it to me that, if it is right and proper for Australian dairy farmers to increase their expenditure on promotion at a time of 20 per cent reduction in their income, it is right and proper for the New Zealand dairy industry to share the burden of what it knows is a captive market for a certain tonnage of New Zealand cheese. I hope that the Australian industry, in carrying through its responsibility to its members to maximise the return from that increased levy, will discuss with the New Zealand industry what is a fair share of that promotion money.

The last point I wish to make is that the honourable member for McMillan was very vocal about what he considered to be the lack of consultation by the previous Government-that is the present Opposition parties-with regard to the dairy industry organisations and dairy industry matters generally. If he really believes that consultation is of the highest priority and is really sincere about this I think he should be starting to lecture his Government a little about this. I certainly believe consultation is a high priority. I believe the party to which I belong has always been most meticulous in its discussions, arrangements and agreements with the industry organisations because, after all, their representatives are the people elected or appointed to represent that industry. For example, one can look at the Victorian Government and the actions that Government has taken with regard to the Victorian Dairy Industry Authority without any consultation with the dairy industry in Victoria.

I am also disappointed with the Minister. It is obvious that when this legislation was being prepared he did not consult more with the industry. If he had, the Minister would not have felt it necessary to introduce this last minute amendment after being prompted by the honourable member for Darling Downs (Mr McVeigh). This amendment is being introduced at the last moment so that the refund of the levy that is charged for milk used in the Ovaltine which is exported by a Tasmanian company will be returned to the people to whom it should be returned-the Tasmanian dairy farmers. I hope that those Tasmanian dairy farmers and the Tasmanian dairy industry generally are made very well aware of the positive action taken by the honourable member for Darling Downs on behalf of the Opposition which will mean that they will gain some justice in this matter.

I support the legislation in terms of the points made and the amendment foreshadowed by the honourable member for Darling Downs. I reiterate my major concern that at a time of decreasing real income for the dairy farmers of this country-I represent the most efficient dairy sector of Australia, which is, even in my view, the second most efficient dairy industry in the world-there is a great responsibility for both the industry and the Government to ensure that that money is not spent in vain.