John Cobb (Calare, National Party, Shadow Minister for Agriculture, Fisheries and Forestry) Share this | Hansard source

The object of the Dairy Adjustment Levy Termination Bill 2008 revolves around two main issues. The first one is the cessation of the Dairy Adjustment Authority. The second one is the cessation of the 11c levy which consumers pay on milk products unless the products are refined or processed to the point where they have a higher than 12 per cent butterfat content. We do not oppose this bill. We are in agreement with it. The industry always knew that the levy and the authority had a sunset clause. It was not as a result of anything that the federal government of the day did. It was as a result of the deregulation of the dairy industry—a decision within the dairy industry itself and a decision by the state governments involved to accede to that.

However, the money set aside to help the industry adjust was a loan from the Commonwealth, in effect. It has mostly been paid back. There was some $200 million still owing as of July this year. Based on the average rate of collection from consumers, by some time around February 2009 that should have been paid back to the Commonwealth. I think that, as of April of this year, payments to the industry were finalised. As I said, there was still $200 million owing to the Commonwealth as of July.

I think that, obviously, that 11c should not be collected past the time when the Commonwealth is no longer owed money. I think it is incumbent upon the minister and the department to see to that. I expect that they will do their level best to ensure that money is not collected past the date when it is no longer necessary to do so. There is no need for consumers to pay money which, as this bill stipulates, will only go back to the Commonwealth. I think that, given the industry’s position, they would be upset as well if money did continue to be collected past that time. This bill exists in spite of the fact that there always was a sunset clause on the original bill put through in 2000 by our previous government. Despite that, this bill is necessary to ensure that there is no time lag or as little lag as possible between money not being owed to the Commonwealth and the collection of that money.

But the big issue here—and I think it is an issue for all parties in the industry and especially the government of the day—is to watch and make sure that those people who process or, more particularly, retail milk, be it the big supermarkets or anybody else, bring the price of milk down by the 11c that is involved in the collection at the moment. The parliament—whichever side, be it the government or the opposition—and certainly the industry have a vested interest in this and we owe it to the consumers of Australia to ensure that 11c does come off the retail price of milk.

While we are talking about the dairy industry, let me say that deregulation was a tumultuous issue for the industry in the various states. The industry has adjusted far better than anyone might have imagined at the time. There were very disparate views amongst the various states. The main players were Victoria, Tasmania, New South Wales and Queensland, and of course there is dairy in other states. The export market opening up to the extent it did certainly has made the dairy industry very competitive around Australia.

Dairy is an industry, particularly in New South Wales, that has always produced on a level basis. That is, to a large extent, because it is an irrigation industry. Years ago, when I was president of the New South Wales Farmers Association, I went down the Murray in times of previous water shortages and I was somewhat surprised to learn that the people in those days who paid the most for temporary water were dairy farmers. That is possibly not true today but it certainly was eight or 10 years ago. Dairy farmers would outbid the rice growers, the horticulturists and others for temporary water because they had to have continuity of production.

Given what I have just explained, the irrigation industry is important—whether it be bore irrigation, river irrigation or whatever it might be—because it is an intensive industry in agricultural terms. It is also important that we look at the National Plan for Water Security instituted by our government previously. The only plan the current government seems to have to deal with water security is to buy water—and that, once normal seasons come back, is going to hurt all our industries and our towns to an enormous extent. I believe it is incumbent upon the current government to look more at a plan for the way they deal with the irrigators, be they dairy farmers or anyone else, because that continuity of supply is so important. It is important not just to our dairy farmers and our irrigators but also to the communities that live along the rivers, particularly the Murray, and in Tasmania and other places.

For those who depend upon river irrigation we need to have a plan and we need to have structural adjustment, which has been wiped out—as the last lot of Senate estimates revealed—by the current government in the current National Plan for Water Security. That is the plan that is being put forward or dealt with by the government. It only involves buying water. It is not a plan which looks at the needs of the industry and the needs of rural communities in the Murray-Darling basin.

The history of dairy farming in Australia is a long one. When we lost our close ties to the UK, when the UK joined with other European countries in the economic union, it had a profound effect on Australia—far more than on New Zealand or anywhere else—but the dairy industry has modernised over the years. It is a tough industry. It has done a fantastic job of dealing with the modern strictures of production. Dispite the ruptures that existed in 1999 and 2000 when the dairy industry deregulated, it has come to terms with that deregulation and it is one of the bright spots in Australian agriculture, in terms of trade.

I think the industry needs to have a minister and a government that are well aware how important it is to everybody—not just those within the Murray-Darling basin but in Tasmania, Queensland—

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