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Wednesday, 30 November 1983
Page: 3094

Mr KERIN (Minister for Primary Industry)(6.19) —I close the debate which has been very wide-ranging.

Opposition members-Oh!

Mr KERIN —An arrangement has been arrived at. This again shown how much hypocrisy and irresponsibility there is in this Opposition. The final point that the Leader of the National Party of Australia (Mr Anthony) just made is that we should delay the Live-stock Slaughter (Export Inspection Charge) Validation Bill for another two months. Of course what he does not realise is that since 21 November the charge has been validated by regulation.

Mr McVeigh —Twenty-first November.

Mr KERIN —As I said, the twenty-first. The charge has been validated by regulation and it is being paid except by those people who have chosen not to pay it. However, let me get back to the main part of the debate and to a matter which was raised by the honourable member for Darling Downs (Mr McVeigh). He and other speakers on the other side said the only reason that this Bill was being brought forward was that a High Court of Australia challenge is under way. They must have seen the High Court challenge and they must know what the grounds are to make this accusation. We have not seen the High Court challenge, we have only heard about it. We do not know what is in it. This is just a simple, straightforward measure to fix up a technicality. There has been a very general debate on all aspects of the meat industry. Much of the debate duplicated the debate that took place when Opposition members opposed the changes verbally, but of course they did nothing about it in the Senate. They have said that this Bill is a Budget Bill, but they could have gone along with the Australian Democrats because it was simply a measure to hold the charge at $5.40.

I would just like to go into the background of this matter so at least the record will show what this Bill is all about. It is about the validation of an Act due to the negligence of the previous Government. Let us go right into it. It is necessary really to go back many years to the passage of the Export Control Act in June 1982. Before the Department of Primary Industry's export inspection and related control activities, these inspections were carried under four Acts, none of which was administered solely by the Minister for Primary Industry. These were the Customs Act 1901, the Commerce (Trade Descriptions) Act 1905, the Quarantine Act 1908, and the Navigation Act 1912.

The major export inspection powers were drawn from the Customs Act. Advice received over the years was to the effect that the Department had limited powers to operate under this Act. Because of this restriction a number of administrative requirements had been introduced over the years, with doubtful legal backing. The Attorney-General's Department suggested that the use of orders made by the Minister be considered to give effect to detailed requirements. Substantial legislative amendments were necessary to overcome the difficulties which had arisen over the years. The most logical course to follow was the establishment of new and specific legislation administered by the Minister for Primary Industry. In chronological order, in September 1981 the Royal Commission into the Australian Meat Industry was initiated. In March 1982 the new export inspection service came into being. The Export Control Act came into effect in January 1983. At that time the Export Control (Miscellaneous Amendments) Act 1982 and the Export Control (General) Regulations became effective.

It is rather invidious that this debate should boil down to sides blaming one another. Surely any rational observer of this debate would realise that a process had been long underway, initiated by the previous Government, to give legislative clarity to the export inspection powers. The former Government was proceeding down that path, and this Government has proceeded down the same path in implementing legislation. A lot of play has been made of the fact that I said I could not win on the question of going to 54 per cent of export inspection charges. I make no apology for that; I have said it before. I could not win because it was the policy of the previous Government. It had been its policy since 1979. In particular it had been its policy since March 1981. The former Minister for Primary Industry was on the Review of Commonwealth Functions committee, the so-called razor gang. That committee reaffirmed that clear policy . The basic legislation we are talking about today went back to 1 January this year when the 50 per cent policy commenced to be implemented, and further legislation was to be implemented on 1 July. When I took over the Department of Primary Industry all the legislation was there.

Let us get back to this exact package of legislation. As a total package the objective was to introduce new legislation administered by the Minister for Primary Industry, together with associated regulations and a system of orders made under the regulations governing day to day technical and administrative matters. The development of this proposal was accelerated by the meat substitution scandal in late 1981. The House will recall a number of legislative amendments which had to be in place as of January 1983 as a result of the changes last year. The Export Control (Miscellaneous Amendments) Act amended 19 Acts consequential upon the Export Control Act. A number of those Act contained a provision which governed the effects of those Acts on the Customs Act, the Commerce (Trade Descriptions) Act and regulations made under them. The Act also provided for appropriate amendments to other legislation, including legislation relating to the recovery of costs associated with the provision of export inspection services.

Of particular interest is the definition of abattoir in the Live-stock Slaughter (Export Inspection Charge) Act 1979. Previously it meant premises that are registered under the Export (Meat) Regulations as an export establishment for the carrying on of operations in connection with the slaughtering and dressing of animals from which meat intended for export is obtained. As a result of the repeal of the Export (Meat) Regulations by the Export Control (General) Regulations it was necessary to incorporate a new definition of abattoir. It was defined as meaning prescribed premises used for the carrying on of operations in connection with the slaughtering and dressing of animals from which meat intended for export is obtained.

By an oversight no premises were prescribed under the Live-stock Slaughter ( Export Inspection) Charge Act, as required by the new definition. Very recent advice from the Attorney-General's Department was that the original regulations made under the Act needed to be amended to prescribe the premises. As a result, collection of the export inspection charge has not been properly authorised from 1 January 1983 until 20 November 1983. On 21 November 1983 regulations came into effect which defined an abattoir as premises registered under the Export Control Act. The Live-stock Slaughter (Export Inspection Charge) Validation Bill which is now before the Parliament is intended to correct this technical oversight by the previous Government. The Parliament failed to sight it when it went through this House in about September 1982. Because of the failure to take legislative action there is provision in the Bill now before us to exempt from the validation penalties for late payment imposed in the period from 1 January 1983 to 20 November 1983. However, fees paid or payable are proposed to be retained as this was the clear purpose of the amendment of the Live-stock Slaughter ( Export Inspection Charge) Act made by the Export Control (Miscellaneous Amendments) Act.

I have gone through those matters in great detail because I wanted to put before the House what this Bill was all about. We have had a very lengthy debate on all aspects of the meat industry. We have talked about Egyptian tenders, halal slaughter, foreign affairs, and even pigs. Let us now go in to the hypocrisy and irresponsibility of the Opposition. The charges went through the Senate. The intent of Parliament has been clear ever since 1979. The previous Government's policy was 50 per cent cost recovery. If the previous Government had not been so administratively incompetent on 1 July 1983 all products would have had to be subject to 50 per cent cost recovery. This had been the former Government's policy since 1979 and was reaffirmed by the razor gang. The need for the validation Bill is a further indication of the previous Government's administrative incompetence. When it amended the Live-stock Slaughter (Export Inspection Charge) Act 1979 last year it omitted to ensure that the legislation was watertight. It failed to put in the definition of premises. These great administrators opposite failed to ensure that the premises were duly described. It is all right for the honourable member for Darling Downs to stand up in the House now and say that he would not have enforced the policy of 50 per cent cost recovery because the industry could not stand it at this time. If the policy had not been enforced, as far as the legislation goes, as far as the intent of the Government goes, and as far as all the administrative material I can see goes, it would have been by default and not by design.

The previous Government's incompetence has hounded the meat industry. Meat inspection is inherently expensive because of the need to set up the export inspection service as the previous Government tried to do meat inspection on the cheap. It set up the export inspection service. It set in process the procedures that are going on. This Government has tried to do something about the costs. We have set up an Inspection Policy Council. We have reported to that Council today on the new systems of charging in an effort to try to do something about the cost of charging, giving industry an exposure to costs and the reasons for them. The previous Government's incompetence has hounded the meat industry. The present state of the industry reflects the neglect of the Liberal-National Party Government over more than seven years. The meat substitution scandal rocked the industry to its foundations. The result is the need for the EIS. If Australia is to maintain its access to valuable export markets this Government is determined to make the EIS as lean and efficient a service as possible and it considers that it is appropriate that the industry should carry some of the cost of the service.

I should now like to turn to the matter of over-capacity. I ask honourable members to look at what the previous Government did to the meat industry. When I was in Opposition meat industry representatives came to me saying: 'The Government is rejecting us time after time. We want a better spread of the charges on the abattoirs. We want the Government to do something about reconstructing the industry'. After two years the government of the day referred the matter to the Industries Assistance Commission. The Opposition is now bleating. It never said a word when meatworks closed. It suddenly thinks that this Government is responsible for the problems that have occurred over the last six or seven months. Opposition members are conspiring with the meat processors to defer this legislation because they think they will go to the High Court of Australia.

I do not know whether the Opposition realises what will happen if it blocks this legislation. There are 92 licensed export abattoirs. If they want to reclaim the money that the previous Government took from them from 1 January to 5 March or that this Government has taken by way of recoupment, there will be a need for 92 court cases for them to take the Government to court to reclaim that money. If this Government wishes to get the fees due between 1 October and 20 November, I guess there will again be the initiation of court cases. The Opposition is leading us down a rather dangerous and irresponsible path.

Let us look at the inspection charges and the recoupment involved. The Leader of the National Party of Australia (Mr Anthony) said that this legislation is retrospective. There is no retrospectivity. We are simply validating something that was done. He said there has been no consultation. I would hazard that there has been more consultation with the beef industry by this Government than any other government. When decisions are taken in the Budget context one cannot very well go to an industry and say: 'Look, a decision has been taken in the Budget deliberations. May we consult you on that?' That is not the way Budgets are framed. The 50 per cent means that the taxpayers pay 50 per cent. This year only 39 per cent will be collected. The problem, of course, was that over the years, with the service becoming inherently more expensive, the amount of recoupment was reduced to 19 per cent.

The other point the Opposition fails to realise is that the fee increase of $3. 60 took place only last Monday; that is, two days ago. Suddenly all those abattoir closures have taken place because of the imposition of fees that were collected last Monday. The honourable member for Darling Downs told me that the abattoirs are not paying. I suppose he phoned them and found out how many are not paying. But I should not have thought that after two days, abattoirs would collapse because of an increase in fees. They were not to be collected until 28 November.

Mr McVeigh —Yes, but they were due on 1 October. The fees started on 1 October.

Mr KERIN —No, they were not. They are due on 28 November. The problem is a lot deeper than saying that an increase in recoupment costs of $3.60 has caused all the abattoirs to shut, when abattoirs have been shutting over the last two or three years. The basic problem is that we had 180 million sheep in 1970; we now have about 134 million sheep. We had about 33.4 million cattle in 1976; we now have about 22.8 million cattle. There was massive over-capacity in the abattoir industry. There have been efficiency gains. This year 61 per cent of the recoupment will be paid by the taxpayers on a 1983-84 basis. The industry is inherently expensive.

Another confusion in the minds of members of the Opposition concerns who is to pay. The Bureau of Agricultural Economics has done studies that show that between 70 and 80 per cent of fees charged by meatworks is passed back to the producers in the saleyard price. Honourable members opposite cannot have it both ways. They cannot say that it is a cost to the abattoir and to the producers at the same time. Eventually it becomes a cost on the consumers, particularly with respect to domestic consumption. Export costs are a little more confused and are more difficult to work out, but there is a pass-back mechanism. There is diversion taking place from mixed domestic-export abattoirs to purely domestic abattoirs.

There is a problem with respect to charging, particularly when we do not have a national meat inspection service. Members of the National Party would be well advised to put some pressure on their colleagues in Queensland, who are basically in the business of putting stamps on meat, to take the money. The States claim up to 95 per cent of the cost of meat inspection. Again what the Opposition fails to realise is that the reason that export inspection is more expensive is that veterinary surgeons are involved and we have to meet the requirements of overseas markets, and in particular the requirements of the United States Department of Agriculture. Let us return to the IAC report. The honourable member for Darling Downs would be interested to realise that when I met abattoir owners in his electorate they were very much of the view that the Government should go along with the IAC's recommendations and not impose a levy that would disadvantage the small abattoirs and advantage the larger abattoirs.

The matters that have been raised today reflect a problem for the beef industry . The Government accepts that. This cost is to be paid by the taxpayers. This was the policy of the previous Government. The Bill that we were discussing today until the debate broadened refers purely and simply to validation due to the negligence of the previous Government. The Government rejects the motion for deferment.