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

The dairy industry has asked the government to remove the statutory requirement to hold a levy related poll of producers each five years. The Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 gives the sector what it has asked for, and the opposition supports the bill. The purpose of the poll is to secure the views of levy payers in the industry about the adequacy of the levy from time to time. The new arrangement will require a poll only when the industry is proposing a levy increase. There is a safeguard: if 15 per cent of producers get together, they can request a poll in the event that they disagree with the decision not to conduct one.

The key objective is obvious: polls are very cumbersome and quite expensive. The dairy sector estimates that every five years the poll costs them around $750,000. That is $750,000 that could be going back to research and development rather than on the conduct of a poll which has no real purpose in the event that the industry is not looking for a variation in the levy.

The key players in this equation are the industry representative body, Australian Dairy Farmers, and the industry research and development corporation, known as Dairy Australia. Industry R&D and marketing are the reasons levy moneys are raised in the case of industry owned corporations. R&D plays an important role in enhancing the productivity and competitiveness of Australia's agriculture, fisheries and forestry sectors. It can provide various other benefits, including better and lower priced food for consumers and improved environmental and animal welfare outcomes.

Australia's spend on agricultural R&D is around $1.5 billion annually. Three-quarters of that money comes from Australian Commonwealth and state governments. The public funding is delivered through an array of general and sector-specific programs, with the research in turn conducted by a mix of government and private research providers. A sizeable part of the Australian government's R&D efforts is provided to the rural research and development corporations—the so-called RDCs—and they have been the subject of some public debate in recent months. These corporations commission rural research on behalf of primary producers, some processors and the government. Producers typically contribute to the cost of this research primarily through statutory and voluntary levies, with most of the government's contribution provided on a matching dollar-for-dollar basis up to a value of industry input.

This is a bill which is very important to the dairy sector. I am advised that the dairy sector has consulted very broadly with levy payers, and levy payers are comfortable with this new arrangement. On that basis, the opposition also is comfortable with the arrangement. We want to ensure that the sector is able to work as efficiently and as profitably as possible. Research is a very important component of that, particularly on the productivity front, and we are happy to do what we can from opposition to allow them to do so.

Levies are never without controversy. Levy payers—producers, growers and farmers generally—are often key to ensuring that their levy money is well spent. They do not always believe that it is, but in my almost three years in this portfolio I have been able to come to the conclusion that, while things are not always perfect, our RDCs do a good job of making sure that the money is well targeted, spent efficiently and leads primarily to enhanced productivity in the sector.

There is no shortage of literature making the direct link between investment in research and development and, indeed, extension and productivity in the agriculture sector. That is why it is important that we continue not only to invest heavily and wisely but also to invest as efficiently as possible.

The industry broadly was very pleased that prior to the election the then opposition and now Turnbull government promised to spend an additional $100 million in R&D over a four-year period. But the industry was then disappointed when after the election they cut at least $100 million and probably more than that from agriculture research and development in other areas. I include in that cuts to CSIRO and cuts particularly in forestry, but there were cuts across the board in agriculture. There were cuts to cooperative research centres and, very sadly, a significant cut to the Rural Industries Research and Development Corporation.

On the other side of the ledger, in terms of the additional $100 million promised, the government almost at the end of its term, if we believe election speculation, has spent some $26 million. So more than $100 million has been taken out of R&D in the range of areas that I have noted and some $26 million of the $100 million in additional funding promised has gone back into research and development corporations. I note that we had one round of the government's new R&D scheme which was supposed to be funded by the $100 million. This is where the $26 million comes in. But the second round closed on 1 December 2015, and here we are almost in March 2016 and no information at all has been provided as to where the second round of funding will be spent, who might be successful and therefore what agricultural R&D pursuits might benefit from the money under round 2.

By any measure, this government's pre-election promise on research and development funding has been broken. By any measure, that promise has been broken at a time when productivity in the agriculture sector in Australia has, at best, plateaued and probably is falling. This is at a time when we are facing enormous structural issues, including the ageing of our workforce. This is at a time when a variable climate is putting new and additional pressure on our natural resource base—water and soils, in particular. This is at a time when there are a number of issues facing the industry. The ageing of the workforce is an example. We should be investing more money in research and development, not less money.

There are a couple of other things floating around this issue that are of great concern to the opposition. First of all is Minister Joyce's bullying of research and development corporations. He is bullying them into moving from Canberra to locations they do not want to be in. One of the key ingredients in a successful research and development corporation is quality staff. At the moment the staff of the Grains RDC, the Fisheries RDC and the others that Deputy Prime Minister Joyce is forcing to move are based in Canberra. My prediction is that the overall majority of them will continue to stay and live in Canberra as their home and to send their children to Canberra schools.

This is a big mistake. I remind the House that research and development corporations, despite their names, do not do research. Research and development corporations collect research moneys through the levies we are talking about this morning and they then contract out the research to various organisations—and they might be universities, they might be governments and they might be CRCs or whatever. But they do not do research themselves. So for Minister Joyce to say that it is important that we put these RDCs close to the growers or producers because that is who they need to talk to is just rubbish. It is just rubbish!

But there is another very important point: it is important, if we are going to spend R&D money most efficiently and effectively, to have competitive tension in the market. So when an RDC takes levy-payers' money and farms it out—excuse the pun—to a researcher of some sort it is basically putting something out to tender. The RDC is basically putting something out to tender. Various universities might be interested in doing the research required, and so might a private sector organisation, a government instrumentality or body—a department, even—be interested in doing the research. This competitive tension amongst researchers gives the RDC the opportunity to secure the best deal on behalf of the levy payer.

Now, Minister Joyce says, for example, 'No—the RDCs should be up next to UNE,' in his electorate. 'They do great work in agriculture,' he says—and they do. UNE does do extensive work in agriculture, and good work in agriculture. But cosying the RDC up to one particular university—

Ms King interjecting—

Yes—lots of universities. The member for Ballarat has just noted that her local university does good work too. But cosying the RDCs up to one university does not create the competitive tension we require for this project. The member for Ballarat's university might be interested in doing the same research work that Minister Joyce now wants to give exclusively to a university in Wagga, for example, or, indeed, the university at Ballarat. This is not the way to conduct public policy. This is Minister Joyce, again, always putting his own political ambition ahead of good public policy. This decentralisation program, as he sells it, is about him and the National Party, not about good R&D for agriculture. It is going to dismantle these RDCs. These RDCs do not want to move.

It is interesting: there are two categories of research and development corporations—some are statutory bodies, over which the minister has substantial control, and some are industry-owned bodies, over which he does not have such control. Minister Joyce is forcing the statutory RDCs out of Canberra for no good public policy purpose. But I find it interesting: he has not had any consultation with the industry-owned corporations. He does not have the same power to force the industry-owned corporations out of the capital cities, but if he were so intent on this public policy prescription and if he were so sure that pushing RDCs out of our capital cities was going to provide a better outcome for the agriculture sector, why has he not been talking to the industry-owned corporations? This is an inconsistency. It makes no sense—there is no rationale here. If he is so sure that this is a good idea, why is he only using his extensive powers to bully the statutory corporations out of Canberra? It makes no sense.

Still on these issues: the government also promised that it would provide $13.8 million to somehow encourage and help farmers, producers and growers to form cooperatives. Minister Joyce, at a time when CBH—the most notable operative in this country—is talking about demutualising and forming itself into a corporate entity, is spending $13.8 million of taxpayer's money to tell farmers what sort of corporate structure they should have. If that is good public policy then I have been in the wrong place for 20 years. Farmers, growers and producers—and it has been nice to be with Mr Billson all that time!—will make their own astute decisions about their structure: sole trader, partnership, company or cooperative, or whatever they like. They will look at the various tax advantages, possibly—what suits them best. They do not need Minister Joyce to provide $13 million of taxpayers' money to help them work that out in this 21st century, surely?

But it gets worse than that, because Minister Joyce took $200,000 of that $13.8 million and he gave it to the Rural Industries RDC and said: 'Give us the scoping work. Tell us how we might spend that $13.8 million.' I have no problem with that, because I have no idea how he is going to spend $13.8 million instructing or teaching farmers how to become cooperatives, so I at least welcome the fact that he decided to spend $200,000 of it asking RIRDC to tell him how he might spend it. So RIRDC did the work. They did their scoping study. They delivered that to the minister.

But the minister was not satisfied with that. He decided he would appoint a task force. He would ask the member for Page to go out and find out how he might spend $13.8 million. The member for Page went out and consulted with the sectors, allegedly—probably most of the consultation took place in Page, which of course is a razor-edge marginal seat for the government. What we want to know now is what Mr Hogan, the member for Page, learned and what he delivered as a result of his consultation.

So we asked this question in estimates. We asked the secretary of the department, 'Can we have Mr Hogan's work, because this $13.8 million is sitting there and we want to know how it's going to be spent.' The department secretary, with greatest respect, said: 'Well, we couldn't release that, because we'd have to ask Mr Hogan. You know, it's his work. It might be considered a private document.' So we let that matter pass and moved on to the next subject. Five hours at least later, we were advised by the officials that they had been unable to find Mr Hogan in this building. For five hours or more, they could not find the member for Page in this 21st century, with all of our technology, in this closed building. So we are still trying to find out—

An honourable member: Couldn't they just ring him?

Well, I thought they could have just called him. So it is suggested that, if I just called the member for Page, he would have handed it over to me. I think the point has been missed. The government did not want to hand over Mr Hogan's report, and I suspect the reason the government do not want to hand over Mr Hogan's report is that it is now the government's intention to spend the $13 million in the electorate of Page. That is my advice: it is the government's intention to use the $13-plus million they allocated to tell farmers what corporate structure they should embrace in the electorate of the leader of the task force, Mr Hogan, the member for Page. No wonder they could not find Mr Hogan in the building on estimates night.

Mr Pitt interjecting—

The member for Hinkler is yapping at the table, rejecting this proposition, expressing mirth at the idea that they could not find Mr Hogan in the building. Well, I am expressing mirth too. I cannot believe they could not find Mr Hogan in the building. But this can be easily fixed now. The minister or the member for Hinkler, his assistant minister, can close this debate by tabling Mr Hogan's report. The assistant minister is nodding, so I am assuming that is an affirmative. The assistant minister will table Mr Hogan's task force report when he closes on this debate, and we look forward to reading it. We look forward to finding out where the $13 million is going to be spent and whether or not it is consistent with the recommendations of the Rural Industries RDC.

Mr Quinlivan, the departmental secretary, or one of his officials—I will qualify that; it may have been one of his officials—conceded in Senate estimates that there had been a departure from the white paper program. 'Departure' might not have been the word, but it was something very similar. So there was a concession in Senate estimates that the $13.8 million as set out in the white paper is not going to be spent for the purposes expressed in the white paper. So I invite the assistant minister, in addition to tabling the member for Page's report, to tell us what that means. If that $13.8 million is not going to be spent as set out in the white paper, how will it be spent? That is a very important question.

On the issue of levies and how they are spent, I made the point that there is a difference between statutory research and development corporations and industry owned corporations. The difference, in addition to the minister's capacity to direct and appoint the chair and all of that, is that statutory RDCs spend money on R&D only, but industry owned corporations have the brief to also spend money, if they like, on marketing. We have seen some of those big campaigns—on beef, for example.

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