Libby Coker (Corangamite, Australian Labor Party) Share this | Hansard source

Clearly, our dairy industry is in crisis. What a tragedy for a sector that has directly employed 42,000 people and which is worth about $730 million a year in exports. And yet this industry is now under further threat, with production volumes declining markedly by more than 10 per cent in a year in states like Queensland and WA and by around four per cent in Victoria, which produces over 60 per cent of all milk volumes. At a time when dairy should be growing, Dairy Australia anticipates a further drop in milk supply from nine billion litres to around 8.3 billion litres. For too long our dairy farmers have been caught in a cost price squeeze, and their plight has now been compounded by the shocking drought in some areas of the country.

Those on the other side would try and hide their inaction by blaming the drought—although I note that the government recently tried to give drought relief funding to a south-west region of Victoria that wasn't even in drought. It is clear that there has been a failure of leadership for the last six years, especially since the dramatic events of 2016, when the then Prime Minister Malcolm Turnbull and the member for New England turned their backs on our dairy farmers when Murray Goulburn cut farmgate milk prices and backdated the clawback to July 2015. A week later, Fonterra did the same thing. It was estimated that these clawbacks created average debts of $120,000 for each dairy farmer. Giving farm families access to the farm household allowance and concessional loans is simply a bandaid and not a cure.

I remember having meetings with farmers and their families down near Lavers Hill during the 2016 election. Family members were in tears at the way they had been treated. In May 2016, my colleague the member for Hunter wrote to the then minister asking him to put pressure on Murray Goulburn in a bipartisan manner to deviate from its profit-sharing mechanisms. The processors could have directed funds back to higher milk prices for farmers to provide a significant cash flow boost. They didn't. The member for New England ignored the request and essentially ignored our dairy farmers.

Three years on, the consequences are there for all to see. Nationals senator Susan McDonald admitted on Radio National recently that she finally gets it that our dairy farmers are in crisis and, in her own words, this is 'complete market failure'. When asked about the causes of Queensland losing 311 dairy farmers, she admitted it is more systemic than just the drought. Senator McDonald was nothing but honest when she said that, without the removal of the exclusive contracts clause, they can't expand their production. It is so important that we get dairy farmers not just surviving but receiving a premium.

The government's inadequate answer to this crisis appears to be twofold. Firstly, they propose to have a mandatory code of conduct; the nine key points of the code of merit, especially in prohibiting exclusive price arrangements; and retrospective and prospective price step-downs. There will apparently be capacity for the ACCC to investigate breaches of the code and issue penalties. Is this the best the government can come up with? How effective do we believe it will be? After all, the banking industry has codes of conduct and we've had a whole royal commission into banking and financial institutions, much of it focused on the failings of the regulators to do anything but advise and mentor. Yet, in recent days, we've had Westpac allegedly involved in further countless breaches of the law and another financial institution still allegedly charging dead people for finance. At a certain point, you actually have to do more than codes of conduct; you have to have a plan for the industry and you have to regulate to protect the little people.

This crisis has been too long in the making. A Senate report into the industry in 2017 noted:

Australian milk production since deregulation over 15 years has decreased from approximately 11 billion litres per year to 9 billion litres per year—a 20 per cent decrease, while New Zealand milk production has almost doubled.

According to Senator McDonald, the second solution is for consumers to demand that supermarkets pay a premium to farmers. It is more a statement of hope; it certainly isn't a plan. This government trades on hope. It trades on letting the market rip. It despises rational industry plans and stable pricing mechanisms. It goaded the car industry into departing our shores. It has let the financial sector do as it pleases— (Time expired)

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