David Gillespie (Lyne, National Party) Share this | Hansard source

The Rural Research and Development Legislation Amendment Bill 2014 is a very important piece of legislation for a very important sector of our economy. The extent of research and the impact of the rural development corporations is profound. There are five statutory bodies run by the government and 10 industry led bodies, whether it be the Cotton Research and Development Corporation, the Grains Research and Development Corporation, the Fisheries Research and Development Corporation, the Rural Industries Research and Development Corporation, the Grape and Wine Authority or the industry-led bodies, such as Sugar Research, Forest and Wood Products Australia, Dairy Australia, Australian Wool Innovation, Meat and Livestock Australia and the Australian Egg Corporation. All of these bodies are doing an essential task for the good functioning and the growth and development of Australia's primary industries.

As the member for Riverina just alluded to, a lot of people focus on gross domestic product being centred around the metropolitan centres; but I remind this House that it is wealth creation that builds the capital that is then circulating in the GDP. A lot of our gross national product is all onshore. Some of the essentials of wealth creation are missed when you look at GDP figures. It is more of a reflection of turnover. An economy is great if you have got a bigger GDP. But somewhere along the line the nation has to produce wealth. It starts with our primary industries, whether it is agriculture in this instance or in the mining industry, where it starts with bit of dirt and mine it for a mineral. It is the same with agriculture. It is making wealth and support for the nation out of the land.

I have the utmost respect for people in the rural industries because basically we have the best and the most efficient farmers, graziers and croppers in the world. The amount of production that we put out this country is enough to feed 60 or 80 million people. That is way in excess of what we need in this country and it is in one of the harshest climates in the world. There have been two studies showing the benefit of investing in research and development in the rural space. The first one was in 2008 and the second one was in 2010. They confirmed that for every one dollar put into research, you get a five-year return of $2.36. The 10-year return is $5.56 for every one dollar you put in. For the 25-year return—depending on which study, although they were both very similar—one was $11 for every one dollar invested and the other came out as $10.52 for every dollar invested. It is a fairly robust analysis.

That is why there is such good value in us investing in research, particularly in this space where we have a competitive advantage over the rest the world. Doing the research and the development in the agricultural space will help us maintain that; because for every commodity in the world that we sell, there is someone elsewhere in the world trying to sell it. All our commodities are subject to world commodity prices so we if can be more efficient and get 10 per cent more protein out of an animal or get crop yields are 10 or 15 per cent, that is a bottom-line improvement for our farmers and graziers. It means the farm-gate price that they are likely to get is so much better if we have got good product.

This extensive network of rural research capacity was set up in 1989. They are funded by statutory levies, which are matched by Commonwealth funds up to a capped amount for appropriate research activities. The cap is based on the relevant industries' gross value of production. The Fisheries Research and Development Corporation receives contributions from the Northern Territory and the states. No doubt, you all appreciate that some of the fishing goes on within the states' sphere of influence, way out to our national fishing borders. This act will modify some of the workings of this complex set of research and development processes. It will affect the Primary Industries Research and Development Act, the Sugar Research and Development Services Act and Australian Grape and Wine Authority Act—just to name a few—so that the government which pays the fees for all the international bodies and similar peak bodies and advisory bodies around the world are paid for by the Commonwealth government. This legislation will allow the government to recoup those fees from the relevant development corporations.

That seems harsh, but all these changes in finances are predicated on us because we are committed to getting the budget back under control. We inherited such fiscal mess that we have had to make these hard decisions. The fees that are payable are considerable and every portfolio has to do its part. There are changes across all levels of government, whether it is social security, health or rural research and development. Some of these fees—in the Fisheries RDC, for instance—are almost a million dollars a year. Sugar research is $160,000; the Grape and Wine Authority is $110,000; the Grains RDC, $150,000; cotton, $95,000.

Because we are an island nation and our fisheries surround us, we have to keep track of what is going on with other fishery bodies—for information about fish stocks and so on. Most of the fish we catch migrate around the great oceans of the world. If our responsible authorities are not in tune with the Pacific Island nations and what they are doing with their fisheries—and with what is going on in the Indian Ocean and in the Great Southern Ocean—our fisheries will suffer. We have to be hooked into them. Whilst we are doing a good job of minimising our harvest rate so that we have sustainable fish stocks, if our neighbour nations and states do not apply similar restraint, our fisheries will eventually suffer. That is why it is so important that there are so many fisheries organisations.

Unfortunately, we in the government have to fund all this research and we have been put in the red by the previous government. That is why we are taking responsible, measured steps to help, at least with this portfolio, bring things back into the black. Not only are we funding these statutory bodies, as I have outlined, those amounts are matched dollar for dollar by the industries—or, rather, the government matches the money the industry bodies raise. All up, along with our research-for-profit initiative, which includes another hundred million dollars, there is $250 million a year being spent on rural research and development. Twelve days ago the minister announced the R&D-for-profit program, which is putting $100 million out there for all 15 of these research and development corporations. Whether they are industry owned and run or statutory organisations, they will be competing for these funds. It is a competitive process. The people with the best hypothesis or business case will be the beneficiaries of it. Again, all this research over time leads to better product and better returns for the growers and producers—and better take-home pay for the individual.

What we need is a secure, long-term funding set-up. This is a minor change, making the rural research and development organisations pay for their memberships in their associated international bodies. In addition, we are trying to reduce some of the cost burdens and the regulations that these organisations face. Regulations always have a financial impact, no matter what industry you are in. We have modified the requirements for these statutory bodies to table reports every year—saving them that cost. They still have to keep their papers in order, but there is a financial cost to preparing these reports. Some of them cost up to hundreds of thousands of dollars to produce, publish and table. In a way, we are saving them, on a recurrent basis, quite a lot of money—in a cumulative sense.

Another thing mandated by the existing legislation—which this legislation will amend—is the requirement for coordination meetings. What do we want? Do we want to have meetings for meetings' sake or do we want these R&D corporations to go out there and do research and development? I would much rather have the RDCs spending all their energies organising research and marketing for their industries than having endless meetings—coming here to Canberra and getting on the merry-go-round of meetings. I am sure there are better ways to coordinate research than to have yet another meeting in Canberra. These are well-staffed and well-credentialled bodies and I am sure they know how to coordinate their research.

My electorate produces up to a quarter of the state's milk. Whether you are a dairy farmer on the Comboyne Plateau, down in the Manning Valley or in the Lorne Valley, you would be reassured to know that Dairy Australia, in this instance, is doing research and developing marketing that will help you on your farm. A quarter of the state's milk from one reasonably small geographic area—that is incredibly productive. But it is incredibly productive because 10, 20 and 30 years ago there was extensive research that helped generate the productivity our farmers now demonstrate. There is a herd of 750 on one farm up on the Comboyne Plateau. That is a huge undertaking. There are 350 on another farm up there. There are similar herds down in the Manning Valley—all highly productive undertakings with cutting-edge technology.

If you were to walk onto one of those farms, it would be easy, with a superficial look, to say, 'That's easy—you just get them out there and milk them.' But vast amounts of research have gone into generating the productivity increases that have been achieved over the last two or three generations. There have been improvements in genetics, cross-breeding, fodder development, fertilisation regimes and irrigation—all of these together having an overall cumulative impact on productivity, whether in the abattoir at Wingham, the processing plant at Wauchope or on one of the many beef properties in my electorate. The research that has led to the genetic improvements has taken place over generations. It has been undertaken by the CSIRO, by Meat and Livestock Australia and by other bodies before them—decades of research into making our production of meat and livestock more efficient. In the Wingham area for instance, the abattoir is the single biggest employer. It is those efficiency improvements that give them good product to export to Korea, to Japan and to Hong Kong. That is why they are able to employ that many people. My colleague the member for Cowper relies on the same industry—he has a branch of that processing plant up in his electorate.

The ramifications of supporting R&D in the rural research space are extensive. It increases profitability, and not just for those businesses—Wauchope township relies on a lot of the small scale and larger scale producers coming into town and shopping at the co-op. There are several agricultural suppliers there. In the Manning, the biggest industry outside the health industry is the dairy industry. It is the shining light of productivity. They have had to be so efficient because they have had to deal with low commodity prices in the daily fresh milk market which, as we all know, has been subject to some very difficult trading conditions.

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