Kirsten Livermore (Capricornia, Australian Labor Party, Shadow Parliamentary Secretary for Education) Share this | Hansard source

I welcome the opportunity to speak on the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No. 1) Bill 2007. Labor support this bill because Labor are fully supportive of extending the opportunities for research and development across our agricultural industries. We on this side of the House all know that research and development is so important. Labor understand and embrace innovation as a key driver of economic growth. Through creativity and knowledge and value-adding, we enhance our competitive advantage.

Labor strongly supports an effective, well-funded research and development program as it is vital to sustained productivity growth in our key export sectors. This applies to all regions, particularly to my electorate in Central Queensland, which is home to a very large proportion of the important meat industry in Australia. Nationally, the meat industry has a value of $15 billion a year and earns nearly $7 billion in export revenue. The beef industry is a large part of the economic activity in Central Queensland and contributes money and jobs to our towns and rural communities.

This bill will lead to the cessation of the current system, whereby the meat-processing sector funded its marketing and research commitments through a voluntary contribution system. Labor supports this bill, as the industry believes a collective funding arrangement for marketing, research and development is now necessary. Processors were given the opportunity to vote on this issue last year and the ballot returned a large majority in favour of the proposal to move from a voluntary levy to a statutory levy. Consequently, this bill will put in place a statutory levy to enable the sector to continue its whole-of-industry commitment to undertaking marketing and research and development programs. This will provide a basis for sustained productivity in the meat-processing sector.

The move to a statutory levy provides certainty to the Australian Meat Processor Corporation and allows it to undertake long-term initiatives for the benefit of the sector. All sections of the red meat industry have supported directing the funding to the existing services company—that is, the Australian Meat Processor Corporation Pty Ltd. The corporation already conducts marketing and R&D on behalf of the processing sector or it directs these funds, on behalf of the processing sector, to Meat and Livestock Australia, the industry research and development body, to carry out specific projects.

A quick look at the Australian Meat Processor Corporation’s website shows some of the important things that the corporation has been doing with the funds that it currently collects and will continue to collect from the processing sector. It lists things such as market access through supporting the MLA’s activities in the Middle East, Korea, Japan, China and other markets; new meat products, including new uses for waste products and value-adding current cuts; and domestic marketing supporting Australian red meat. The corporation also invests in R&D in processing technology, such as developing new stunning methods and commercialising safe bandsaw technologies. Another example is R&D in new technologies, particularly through the environmental biotechnology CRC, which is developing new and safer cleaning methods and new ways to deal with pipes clogging and manage nitrates in wash water. As someone who represents a city with two large meatworks within sight of the CBD, those sorts of initiatives are of course very important to me.

Another initiative which caught my eye was the meat safety R&D, including the Meat Industry Services Group, which provides technical advice and support in plant crisis situations as well as development of key tools and ongoing technical support and training through regular meat safety updates. Again, those initiatives are very important to not only the health of the industry but also the health of the people working in meat-processing plants and the health of those of us who live nearby. Labor understands that the amendments being debated today will not affect existing arrangements for Commonwealth matched funds because the research activities will continue to be directed to the MLA as the industry research and development body.

The Australian Meat Processor Corporation is a representative organisation representing all processors active in the red meat processing industry. Its aim is to protect, promote and further the rights and interests of its members, including promotion of free trade of members’ products and improvement in the quality of Australian meat, as we heard with some of those initiatives I read out. As someone who lives in and represents the beef capital of Australia, I know that we have one of the most vibrant meat industries in the world.

The future for Australian agricultural exports must lie in providing the highest quality products. That will be achieved by ensuring a trade and industry strategy is in place that enables our agricultural industries to find new markets but also gives industries more capacity to value-add to their products. We know that is the name of the game in a competitive global environment. It is about ensuring the best investment in research and development exists in our country. We know that we are good at R&D when it is properly supported.

We believe that this bill is a step in the right direction and it is a bill that will open up more opportunities in R&D in the meat-processing sector. But it also opens up a debate about the failure of the government when it comes to the nation’s R&D effort. Innovation is a key driver of the nation’s growth. By becoming clever, innovative and creative, we enhance our growth and opportunities. That applies to all Australian industries. Through innovation, we create more interesting job opportunities. This bill improves opportunities for R&D and we support it. Through creativity and knowledge and through value-adding we enhance our competitive advantage.

Labor has always understood the importance of encouraging R&D innovation at both the macro and micro levels. Labor’s investment in R&D and encouraging business investments through programs such as the CRCs have paid dividends to this country since their early implementation. In the 1980s and 1990s, Labor introduced the 150 per cent tax concession for R&D. It also introduced syndicated R&D for start-up companies. It increased investment in R&D, and we saw an increased expenditure by companies in R&D. There was also increased expenditure by the Labor government in R&D. But we know now that when this government came to office it cut, to the country’s detriment, the research and development tax concession from 150 per cent to 125 per cent. We have seen business investment in R&D grow at half the rate of the previous decade.

The government cut syndicated investment in R&D and they cut overall investment in R&D. Government investment as a proportion of GDP has fallen from approximately 0.24 per cent in 1995-96 to 0.18 per cent in 2004-05. The results of this on business investment in R&D are stark. We have seen the average annual growth rate of real business investment in R&D fall from 11.4 per cent in the period 1986-87 to 1995-96 to 5.1 per cent in the period 1995-96 to 2004-05. Throughout the 1980s to 1996 we saw steady growth in business investment in R&D both as a proportion of GDP and in terms of real dollars. But between 1996 and 2000 we saw negative growth in both business and government investments in R&D. This was a wasted opportunity. Years of underinvestment have hampered our industries’ capacity to innovate, to value-add to their products and to better compete in global markets.

The problem is that the government sees expenditure on R&D as a cost rather than as an investment. We know that it is the same in other areas that are so important to our productivity and future prosperity—areas like broadband, which I spoke about at length in the appropriations debate earlier today. We need to have that investment in national infrastructure and high-speed broadband internet so that we have the ability to compete effectively with countries overseas and create the kind of productivity growth that Australia needs to stay on top in a competitive global marketplace.

Broadband is an example of where the government has failed to make the investment that we need in this country to foster and promote innovation and productivity. We have seen that the cuts to investment in research and development have had a similar effect. We are seeing the effects of those in lower productivity. I think in the budget papers this year we see that we have now fallen to a projection of zero per cent growth in productivity in Australia and we just cannot afford a continuation of that. We have seen the government show that they are not prepared to invest in the future. We can only imagine the economic growth and job creation opportunities that we have missed and that would have been created if the trend of Labor government investment in R&D had continued.

Australia’s farm exports are facing increasing competition from developing countries, not only due to those countries’ low costs but also because they are now investing more in productivity-enhancing R&D. Sustained productivity growth in our key export sectors has underpinned Australia’s ability to compete and succeed in global markets. While we acknowledge the impact of drought on matched R&D funding in recent years, we cannot stand still. We cannot afford to waiver in our commitment to agricultural R&D.

I take this opportunity to remind the House that it was Labor, under the stewardship of the then Minister for Primary Industries and Energy, John Kerin, which, in the mid-1980s, saw the need for reform of rural R&D. It was the Hawke government’s John Kerin who recognised the need to improve the gap between research and product development and to improve our export performance and productivity by marrying the scientific research with the needs of industry to enable best practice and innovation in product development.

This was significant in greatly improving the competitiveness and profitability of Australia’s agricultural, fish and forestry industries and supporting sustainability of our natural resources base. It drew on the compulsory levies that industry had to pay. The government collected them for the purposes of R&D and/or marketing for their industries. It was all about growing those industries for the benefit of all of us. To expand Australia’s rural R&D efforts, government would match these levies for industry to continue the innovation effort. This is the same principle before us today. I have no doubt it will improve the R&D outcomes of the meat industry.

The act introduced under the Labor government thanks to John Kerin formed 14 rural research and development corporations. All of the corporations, except one focused on land and water, would receive levy funds from the industry which would be matched by the Commonwealth dollar for dollar up to a maximum of 0.5 per cent of the ex-farm-gate value of the industry concerned. The Hawke government recognised that there was a market failure in private sector research because many types of firms and individuals were unable to derive sufficient benefit to make their investment worthwhile. The priority was to get industry more involved in funding and directing research to establish an integrated approach. Researchers would have the incentive to find solutions to the problems identified by their industry.

The corporations were granted a degree of autonomy to borrow money and take out patents. They were also the sole recipients of industry levies for R&D, giving them authority and empowerment to develop their industries through research and innovation. The legislation put in place by the Labor government put important safeguards in place to ensure that, while the rural research and development corporations were autonomous and could meet their industry objectives through research, they were also accountable to industry and developed a strong relationship with the end users. Rather than having a one-size-fits-all approach, this enabled each RDC to develop its own structures and processes to best meet the needs of its industry.

The model which Labor developed and built is still in place today. It is a credible model which has worked. It is a model which has stood the test of time and survived numerous government reviews. There are not many policy initiatives which have lasted with such success despite some of the industries being substantially altered over that time. The cooperative research centres introduced by Labor in 1990 have also stood the test of time. The program linked researchers with industry to focus R&D efforts. Labor made the commitment in 1990 to establish 50 CRCs. Today there are 56 CRCs operating in six sectors and the nation has reaped the benefits.

There are two CRCs that have had a major impact on my electorate. One of them is the railway CRC based at Central Queensland University in Rockhampton. We also have a great deal to do with the beef CRC, not surprisingly. I am really pleased to say that the beef CRC was one of the 14 successful CRCs that were granted continuing funding under the 2004 funding round. I know that Dr Heather Burrow played a great role in achieving that success for the beef CRC. I know that in my electorate we are very pleased to have that connection to the CRC and to be able to use the innovations and research that come out of the work they do.

The beef CRC uses emerging gene discovery and gene expression technologies to focus on precision cattle breeding and management—something that is of vital importance to the beef cattle industry if it is going to maintain its competitive advantages. I also note that the beef CRC actually won the Cooperative Research Centre Association Excellence in Innovation Award last year. That was for the Beef Profit Partnerships program developed by the beef CRC. It is a groundbreaking new approach helping to boost on-farm productivity and profitability and involves beef producers, feedlotters and processors from across Australia. It has been recognised for its achievements in that research.

I note that one of the producers involved in the research effort, Phil Chalmers, anticipates that his involvement in a Beef Profit Partnership will boost his on-farm productivity by 20 per cent and double his farm income. So this sort of research is not just happening in test tubes in laboratories; it is having a direct effect on the productivity of our beef producers. Of course, those are the sorts of results we are seeing right across the board from CRCs.

Since the commencement of the CRC program, all parties have committed more than $1 billion in cash and in kind to CRCs. This includes more than $2.6 billion from the CRC program, $2.8 billion from universities, $2.1 billion from industry and more than $1.1 billion from the CSIRO. While we acknowledge the success of CRCs and congratulate industry and the researchers for what they have achieved, I might just point out that a report last year found that the CRC program has delivered an estimated $2.7 billion to the economy since it started in 1990. That is a pretty remarkable effort, and it shows why it is important for government to make the investment in research and development on behalf of our nation.

On the downside of that, I noticed a report in yesterday’s Fin Review that cast a cloud over the future of the CRC program. Twenty-two of the program’s 56 centres will be seeking the renewal of their seven-year government funding commitments next year, and there is concern within the sector that, unless the government increases its investment in the scheme, there will not be enough money to go around to keep those 22 existing programs continuing with their research into the future. Apparently the CRC Association has been told by the government to expect funding for next year’s round to be similar to the 2006 commitment of $310 million. But yesterday in the Fin Review the CEO of the CRC Association, Michael Hartmann, said:

That is going to have an effect on the number of CRCs that can be funded. Our estimation is that it could force more than 15 CRCs to close operations. It’s just such a competitive funding round.

When we see the outcomes that Australia is getting from the CRC program, I think the government needs to look very carefully at its commitment to CRCs and the funding that is required to keep some of these vital research centres continuing their good work into the future.

Both of the programs that I have talked about—the CRCs and the RDCs—are about creating better linkages between industry and the research effort. That also involves industry being prepared to support the research effort—and that is very important in having that link between industry in research. Labor recognise the importance of R&D in the agricultural sector, and we put rural research corporations in place 18 years ago. These corporations have provided a unique and successful partnership to meet the needs of our crucial agricultural industries, which represent 22 per cent of Australian exports in goods and services. By better connecting research and product development to improve export performance, these corporations have benefited not only these industries but also the nation. The research and development corporations have provided a unique and successful partnership between government and the industry. I understand that in 2004-05 the total spending by the Commonwealth and industry on RDCs was $511 million, and over $230 million of that came from industry. So it is a strong and effective partnership.

Labor has identified the need for better coordination of rural R&D. Labor took to the last election a strong platform for R&D for rural industries, which was endorsed by the National Farmers Federation. We propose to establish a rural research and development advisory council to ensure that our R&D effort is better coordinated. The council’s role would be to develop a national strategic investment plan, to assess the operational plans of individual research organisations against that plan and to advise government on the effectiveness of the overall rural research effort. The council would also work with the rural research sector to develop uniform methods for assessing the benefits derived from investment in research and for the development and reporting of those assessments. The council’s role would also include working to promote more effective and timely commercialisation of research outcomes. Labor will continue to look carefully at research and development issues for rural industries to enable the best outcomes for industry, the community and the economy.

I know that this bill is about investment in research and development in the meat processing industry, but I would like to take the opportunity to remind the meat processing sector that it is also important for them to invest in workforce training and skills development within the sector. In the recent past we have seen too much neglect of skills development and training by the meat processing sector. There are two major meatworks in Rockhampton. There is also a meatworks in Biloela and another in Bakers Creek. We are seeing an increased reliance on the use of 457 visas to fill positions at those meatworks at a time when there are people in Rockhampton and in communities in Central Queensland who are looking for work and could be trained for those positions so that we could have a local workforce learning skills in the meat sector and being employed in our local meatworks. The use of 457 visas is particularly prevalent at the Lakes Creek meatworks in Rockhampton and also at the other Teys Bros meatworks in Biloela. I note that, up until now, the AMH plant in Rockhampton has largely avoided the use of 457 visas. There are some workers from overseas there on those visas, but the AMH plant has a predominantly local workforce.

I note that there is the possibility of a change of hands, a change of ownership, with the AMH meatworks. If that happens, I would urge the new owners to continue the tradition that we have seen of AMH using local workers to fill their positions.

In the context of this bill, which is about investment in research and development in the meat processing sector, I would remind the meat processing sector, in particular those companies operating in that sector, that we expect genuine efforts to be made to train our own local workers before companies resort to the use of 457 visas to fill positions. It is not something that is supported within the communities of Central Queensland. I think companies, certainly those within my electorate, need to be more serious and genuine about employing and training local people for the positions in their meatworks.

Returning to the bill, Labor strongly supports an effective, well-funded research and development program as being vital to sustained productivity growth in our key export sectors. As the National Farmers Federation recently pointed out, Australian farmers are fortunate to have a world-class R&D framework through rural research and development corporations. Labor, in office, has been a driver of research and innovation through the establishment of programs for the RDCs, the CRCs and the R&D tax concession. While we welcome this bill to improve the R&D arrangements for the meat processing industry, we urge the government to consider the range of issues facing rural R&D so as to achieve the best outcomes for the sector and our ability to compete in global markets.

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