Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Hansard source

I begin by expressing how bewildered I am by this Rural Research and Development Legislation Amendment Bill 2014. I would never suggest that $7 million is not a lot of money—it certainly is. Anyone listening to this broadcast or watching from the galleries would agree that $7 million is quite a lot of money. In the context of a Commonwealth budget of around $400 billion, it is a modest amount of money but to the research and development corporations being adversely affected by this initiative it certainly is a lot of money.

Our agriculture sector operates in a very competitive environment, particularly those who are focused on export markets. Having said that, our agricultural community has remained strong because we have a number of competitive advantages. Amongst them of course is our geographical location. We are close to the very large and growing markets of Asia. The skills, knowledge and productivity of our farmers certainly contribute to our competitive advantage in our region. So too does our clean, green and safe image. This is potentially our greatest competitive advantage as the growing middle classes of Asia, who have had food scares, are looking for Australian food that is environmentally clean and safe for their consumption.

Another advantage is the strength of our research and development system, which is the envy of the rest of the world. The current model is another product of the Hawke government and one of the greatest legacies of the Hawke government's agriculture minister the Hon. John Kerin, who I am very proud to say is today the patron of Labor's all-important country caucus. The co-funding model for research and development that John Kerin put in place is, as I said, the envy of the rest of the world. Under the model, our research and development corporations receive government funds on a dollar-for-dollar basis up to a cap based on the value of the sector's output. It is a system which empowers the people who really matter and who understand their commodity sector best, and they are, of course, those who come from the land, more often than not, to represent the interests of those who put them there.

There are 15 research and development corporations, and these are made up of nine industry-owned companies that provide R&D services and marketing for the benefit of their industries, and six research and development corporations that provide leadership and investment. The industry-owned companies are: the Australian Egg Corporation Ltd, the Australian Livestock Export Corporation Ltd, the Australian Meat Processor Corporation Ltd, Australian Pork Ltd, Australian Wool Innovation Ltd, Dairy Australia Ltd, Forest and Wood Products Australia Ltd, Horticulture Australia Ltd and Meat and Livestock Australia Ltd. In addition to those there are other industry bodies, including: Cotton Research and Development Corporation, Fisheries Research and Development Corporation, Grains Research and Development Corporation, Grape and Wine Research and Development Corporation, Rural Industries Research and Development Corporation and the Sugar Research and Development Corporation. These organisations are critical to our ongoing success in agriculture and, of course, critical to our international competitiveness.

What this bill does is begin the process of chipping away at that model. Some might say, at $7 million over the forward estimates, it is in a modest way, but that is not the case for those who are trying to administer the funds and do good things in this sector. What this bill does is force those research and development corporations to pay their own subscriptions to a range of international commodity organisations and regional fisheries management corporations. These payments are currently allocated by the Department of Agriculture. To put that slightly more in layman's terms: some of our RDCs are members of international organisations with whom they work on research and development. Fisheries is an obvious example to those listening, because obviously fish stocks do not recognise international borders, and international work on some of these issues can be very important. We also do so not just to benefit ourselves but to benefit other nation-states, particularly developing nations, who obviously benefit from the work we do in partnership with them. It is a very obvious statement to say that the best thing we can do for developing nations which face very significant challenges that we do not need to deal with in this lucky country is to empower them economically, and working with them in these areas of research and development is of course very, very important.

The other reason I am bewildered by this bill that is before the House today is that it represents another clear breach of what was said pre the election by this government. Prior to the election, this government rightly talked about the importance of research and development, and that was a matter in which there was absolute bipartisan support. In this increasingly complex world, a world that is driven by technology and innovation, Australia will have to stay ahead of the game in the area of research, development, innovation and/or, importantly, extension, to make sure innovation gets down to the farm, where it has the effect.

Since the election, things have changed. I acknowledge that the government has fulfilled, in part at least, its commitment in the budget to allocate an additional $100 million over the forward estimates as an additional contribution to the R&D effort of our farm sector, not only farming in the agricultural sense but also in fisheries and forestry. There was a lot of speculation prior to the election about how that money would be spent. I think it suited the government, at the time, to suggest that, rather than be provided money on a dollar-for-dollar basis, research and development corporations could expect to maybe get $1.05 or $1.10 or $1.20 for each dollar they contribute. It seems that is not to be the case but rather the government will be putting that money out on a competitive tender basis, inviting RDCs to compete for those additional funds. That, of course, will mean that some RDCs will enjoy more funding as a result of the additional allocations and other RDCs will not.

There has also been a suggestion that the bids that are most likely to be successful are those which are cross-sectoral—in other words, those for research which benefits more than one commodity sector. To again simplify that for any listener: it might be research into grass, which is, of course, important as a feedstock across a range of commodities. I think that is a pretty good example. I do not necessarily have any difficulty with that. In pure public policy terms, that might be the best way to spend the money. We shall wait and see what the proposition is when it is put forward, but it certainly is not consistent with the impression that the government gave or provided to the various commodity sectors prior to the election. That is just a minor point compared to what is the main point in demonstrating that this is another addition to the pre-election promises. This is not so much about RDC funding. The government said it would enhance the research and development effort but of course, since the election, while it has included in the budget some $100 million in the forward estimates, on the other side of the ledger it has dramatically cut research and development funding in the agricultural sector. Some $80 million has come out of the cooperative research centres; some $146 million has been cut from the CSIRO's work—something that will also cost significant jobs in the area; and some $11 million has been reduced from the annual appropriation for the RIRDC. What the government is effectively doing is giving out money with one hand and taking it back with the other. That is a clear breach of its election promises and, indeed, it is not in the spirit of what they told the sector prior to the election.

I will go back to the idea, in this bill, of forcing the RDCs to pay their own subscriptions to international organisations. It is a bit worse than that because, given the way the government has constructed this bill, the RDCs do not have an option to opt out of the investment organisations; they cannot make the decision that spending money on local research and development is more important than their contribution to international organisations because the government is not allowing them to. What the government is doing is paying the international organisations without any reference to, or consultation with, the RDCs. It is taking the subscription amount out of the allocation it makes to the research and development corporations. If that is not a breach of a pre-election promise, I do not know what is. It could not be any clearer than that: paying the money directly and then taking the money out of the RDCs' annual funding allocation. In other words, they are leaving the RDCs with no choice but to remain part of the international organisations. That is the decision of government, really, and if it is the government's conclusion that it is appropriate for the RDCs to be forced to be part of these organisations, then the government should be paying. It is no more complex than that.

That is why I began my contribution by expressing bewilderment that this bill is coming before the House. It is coming before the House just so the government can do this—so the government can say there was $7 million over the forward estimates and force the RDCs to remain in these organisations, while at the same time forcing them to pay for the membership of the organisations.

This is going to have a very real effect on these RDCs. It comes on top of the government's decision to force them to do something else as well—not all of them, but some of them. The government's other great idea is to force these RDCs to move to rural and regional areas. That all sounds fine on the face of it. We all love the idea of decentralisation—the idea of pushing government departments out into the regions in order to create economic activity and jobs there. But we also need to ask ourselves how often that has been successful. We have all been speaking fondly of Gough Whitlam this week. He made a big push for decentralisation. But, reluctant as I am to say it, that met with limited success. It can be successful, and Gough had some successes; but it is more likely to be successful when it is accompanied by a well-thought-out strategic plan. We do not have any well-thought-out strategic plan with respect to the decentralisation of our research and development corporations; rather, we have a thought bubble. I put it to the House that Minister Joyce just woke up one morning and decided he was going to force these RDCs out to certain parts of the country—not just the RDCs, I should point out, but also the APVMA, an agency critical to chemical regulation in this country. Minister Joyce, of course, intends to move them to Armidale in the minister's electorate. That is very handy indeed. But there is no strategic plan, or support, or transition plan for these research and development corporations. To make it worse, the minister has issued a decree that they shall meet all the costs of these moves themselves from within their own budget. I ask other members of the House: does that sound like another breach of an election promise? That sounds very much to me like another breach of an election promise. That is taking money out of the hands of our research and development corporations. It is a very clear breach of a pre-election commitment.

But it gets worse. Knowing the limited success of these moves in the past, it is inevitable that these organisations will lose people—experienced people, good people and people with expertise; people who are critical to the success of these organisations. That is really serious. And it gets yet worse again, because when you lose people from the public service you also face redundancy payments. Redundancy payments can run into millions of dollars in aggregate. It is clear, as a result of the minister's edict, that cost will be borne by the research and development corporations—another clear breach of an election commitment. There is another question, too, around the $100 million allocated in the budget—which we might never see. The money allocated in the current fiscal year—that is, the first $40 million, maybe less—is unlikely to be spent in this fiscal year. We shall see. But, given the time it will take to put the final construct into place for the delivery of this $100 million—the time it will take to go through a competitive tender process, assess those applications and finally allocate those funds—I think is unlikely to occur before June 30 next year. I will be very happy to be proven wrong. We shall wait and see. But, as we all know in this place, money not spent in any financial year is not likely to be rolled over to the next financial year. It will not be $100 million anymore; it will be somewhat less.

When you net it all out—with what has been taken out of the RIDC, the CRCs and the CSIRO and the money it is going to cost the RDCs to decentralise, for want of a better word; I am reluctant to use that word in this case but I will go with it. Of course the money coming out of the RDCs as a result of this bill—$100 million is looking pretty poor. Some of the costs are unknown but it could be that the net result is one of deficit for our research and development corporations. We shall wait and see. But it certainly will not be the $100 million that they were promised prior to the election.

This brings back the old 'mean and tricky' phrase that we heard so much about some years ago. The research development corporations and all those who rely upon them will not be appreciating it today and in fact I know they are not appreciating today the fact that they have been tricked into believing they were going to do much better under this government.

This is not justabout the RDCs and their staff and those who might be affected by these changes. This is about the future of Australian agriculture—and what a future Australian agriculture has with those emerging middle classes of the Asian region and a significant increase across the globe generally with a population growing to some nine billion people.

But it is an opportunity that will not just come to us. To fully capitalise on this opportunity, we will have to go to it. We will have to be better, stronger and more innovative. We will have to work harder than ever before, if we are to fully capitalise on it. The opportunity is there, and the extent of our success will largely be driven by the private sector—its investment decisions, its decisions in innovation and its strategic planning. But there will be a very important role for government in branding and marketing; in policies which make the most of our limited natural resources; in policies to open market opportunities in those countries I have been talking about; and of course in research and development.

The countries that will do best are not just those with geographical advantages, and some of those other competitive advantages I have been talking about. Those who will do best are those who are serious about being ahead of the game in research and development. That is something I thought we all understood and agreed on in this place. But this bill and the decision to decentralise RDCs—and the decisions to cut funding from CSIRO, from our CRCs and from our rural industries RDC—show that the government is not serious about it. They were not telling the truth prior to the election and they have let the agriculture sector down. I appeal very genuinely rethink this one. They will get absolute bipartisan support. The savings involved in the budget are not worth the cost or the adverse impact this will have on our RDCs in the immediate future. It is certainly not worth the impact it will have further down the track for research, development and extension in this country.

See this speech in context