Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I move:

That the Trade Practices (Horticultural Code of Conduct) Regulations 2006, made under the Trade Practices Act 1974, as contained in Select Legislative Instrument 2006 No. 376, be disallowed.

In moving this motion, obviously we had a lot of conjecture as to whether we should move for disallowance. But the reason for moving for disallowance is that we will plead with the Minister for Agriculture, Fisheries and Forestry to consider alternatives. The alternatives are so comprehensive that it is hard for me to see how the regulations could be amended rather than having them replaced. We would emphasise that it is most certainly my position and the position of the seconder of this motion, the member for Calare, that if there is a choice between having this or not having this, Minister, then we would prefer to have it. We are only moving for disallowance on the basis that there is an alternative out there, which we will be moving for acceptance by the government. We will have to do that by way of legislation. We make the point very forcefully to the House that some advancement has been made here. We thank the minister for that but, compared with what was required and what was promised, it falls a million miles short.

Having said those things, what was agreed to was a mandatory code of conduct. But this is not a mandatory code of conduct; this is a mandatory contract—it is a contract. And a contract is enforceable by the parties to the contract, not by the government. So the government says, ‘You must have a contract.’ That is good, Minister; we thank you for that. But that leaves us facing off against Woolworths and Coles—not that they have to have the contract anyway! So we do not have a mandatory code; we have a contractual code—two entirely different things. ‘Mandatory’ means that the government tells you to do it. ‘Contractual’ means that the parties decide themselves what they are going to do.

It must be said that I think—and my information is such—that the minister has tried hard for us on this. The current minister is a million times better than his predecessor, and I know that he is a very worthy person. I remember the fate of John Kerin. But I would ask him to recall that John Kerin is remembered with affection because he said publicly what he would like to do. When the government disagreed with him, the reflection was upon the government. At least we knew that we had someone in there batting for us. So we would plead with the minister to take that position. From where I sit, the minister had the embarrassment—although I do not think it was embarrassment; I think he should be very proud of the fact—of having this taken off him for some period of time and Minister Macfarlane was in fact appointed as the spokesman. I think that was very much to the minister’s credit.

But I would ask the minister to think about John Kerin, and I would ask him to consider the famous words of JT Lang. JT said:

It was not important to me that I should sacrifice my political life, but it was vitally important to me that I sacrificed it in a worthy cause—

which, of course, he did, during the Great Depression. So, Minister, we are not asking you to sacrifice yourself, but there may come a time when that is required, because the situation with agriculture in Australia is very sad indeed.

Jeff Kennett is the head of the body that oversights action to try to prevent people committing suicide. On the front page of the Age he said that every four days a farmer in Australia commits suicide. The minister’s brother was one of the best exponents of the fact that if we deregulated the dairy industry it would be the greatest crash in Australian agricultural history. There is the handiwork of the people who involved themselves and dirtied themselves—and they will be answerable to their maker one day—and were a party to the deregulation of the dairy industry. That is their handiwork: every four days a farmer commits suicide. Every two months a sugar farmer commits suicide. When the wool industry was deregulated in western Queensland we had a suicide every two months.

The issue that we are trying to address here is only a very tiny part of the problem. It stems from the fact that the only country on earth with a massive oligopoly situation—such as we have with Woolworths and Coles—is Australia. Read the government report, the so-called Baird report, the fair market report, which indicates clearly that the two biggest food retailers in America, the United States, Germany, France or Japan—or any other country—do not come up to 20 per cent.

In Australia, the big two are Woolworths and Coles. I always like to back up what I say, and the grocery industry overview from Retail World magazine says that 76.7 per cent of the market was held by Woolworths and Coles in 2002. If you go back to 1991, you see that they only held 50.5 per cent of the market. So if ever there was a classic case of duopoly, you have it here. If you want a manifestation of it working, when they deregulated the sugar industry within Australia, the food retailers—principally Woolworths and Coles—took an extra $470 million a year from the Australian sugar producers for their own profits. When dairy was deregulated, we saw a 30 per cent reduction in the amount of money going to the dairy farmers and a 40 per cent increase in price to the consumers over the same five-year period. In the egg industry, the figures were about $400 million. So, in three items alone, there was an extra $2,000 million a year of profit principally divided up between two companies.

I am not attacking Woolworths and Coles. They are there to maximise profits. That is their legal duty, quite frankly. But it most certainly is the duty of the government to protect the consumers and to protect the producers with a free market system—and there sure ain’t any free market system when just two players have 82 per cent of the marketplace.

Our other problem, which I have mentioned on many occasions and which is set out in the latest OECD figures that I have to hand, is that there is a 49 per cent average subsidy tariff in all the other OECD countries and it is six per cent in Australia.

I specifically turn now to the code of conduct itself. I regret that the minister is not here. It is a very important matter, and a matter that he should have cognisance of. I must emphasise again that we asked for a mandatory code. We were promised a mandatory code within 100 days which would include the large supermarket chains. It is now over 700 days, and we have a code that does not include the large supermarket chains, a flagrant breach of promise. The government asked people to vote for them before the election on this basis, and I am sure that there are a number of people who did. They said, ‘Do this for us and we will do this for you.’

When they come out and tell the most flagrant mistruth on a matter of such great importance, is it any wonder that people hate politicians and single out their hatred and contempt for the government and, particularly, the party that was once the champion of rural interests? Here is a party that made this promise and is part of a government that is absolutely determined—

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

Where are they?

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Where is a single member of the government? There is nobody. I am sorry; one is there. Where are they? I would be hiding too. I would not like to have to come in here and show my face after I had made a cold-blooded promise before the election.

It was made in my electorate. It was made after a meeting in Mareeba. God bless the rural action mob up there and Scotty Dixon, Joe Moro and those people. God bless Noel Hall, who travelled all the way down to Townsville to see the Deputy Prime Minister. I will not say, ‘God bless all those people who went to the National Party rally in Innisfail to show their support for the National Party,’ but I will remind them about this when I see them in the street. And they will hang their heads like mongrel dogs, because that is truly what they are. You made a promise to these people, and you have treated the promise with absolute contempt.

Let me be very specific. There are a number of issues that need to be dealt with here. I constantly get complaints that people send product into the market and get a rejection slip. They send down perfect fruit—and I know a lot of these growers; they have an excellent reputation and they would not send down substandard fruit—and the market slips or there is a glut, and the retailers will just return it. There is a glut in the market and they cannot sell it, for whatever reason, and they will return it.

Let me give you one specific case. Do not quote me on the figures, but the figures will be relatively correct. A very big grower who grows lychees sent product down to Brisbane. The agent rang him up and said, ‘Mate, you’ve got $36,000 from that product you sent down to me,’ and the grower said, ‘Whoopee!’ He was getting $28 a box. That is a good price. He had made a lot of money. He was a very happy man. That was on a Thursday afternoon. On the following Tuesday, the agent rang him back and said, ‘Sorry mate, they have rejected all of that product.’ The farmer said: ‘They cannot reject it; it has been sold. It is a done deal; it is a gone transaction.’ The agent said, ‘They have returned it; it is sitting here in my market in front of me.’ The grower said, ‘They can’t do that,’ and the agent said, ‘They just have.’ He also said, ‘Of course, the market has slipped from $28 a box down to $12 a box, so they returned it all and then went and bought the same product for $12 a box.’ This bloke had lost a week of shelf life.

You need to involve people who are at the coalface. The code talks about a produce assessor a year later—this is a matter of days. You have only got days. Your shelf life, as often as not, is two weeks at the outside. You have a day of picking and packing, and then you have a day or two to get it to market and sell it. By then, often your shelf life is down to a fortnight. If it is returned, of course, your shelf life is gone. So that grower received something like $6,000, which hardly covered the cost of his boxes. This sort of case has happened again and again.

Let me say that the minister has included ‘in a contract’—but it is only a contract; it is not enforceable. We asked for a mandatory code. We asked for the government to pass laws so that if you act in this manner you act illegally. An agreement has to be enforced by us. How can a little grower—‘Joe average grower’ up in Mareeba—sue Woolworths and Coles? Of course he can’t take them on; and with an agreement that legal action is all you are left with. If these people act as agents, you have not even got the right to demand an agreement—if they are still agents.

At least I suppose the minister has put in the code that they have to have a contractual arrangement, and the contractual arrangement has to make them declare whether they are a merchant or an agent. So I think there has been movement forward in the code, and we thank the government for that very narrow little piece.

Having said that, there is nothing in the code that says he has to disclose who he has sold the product to. There is no way of ensuring that the same games that were being played before are not going to be played now. There is no onus upon anyone to disclose. The argument that there is no bill of sale was one of the things that we most needed—that there is no proof of sale—is the heart of the problem. It says here that you do not have to include who the product was sold to. You do not have to include that. If I am wrong, I would like the minister to put me right. I do not have a battery of lawyers to help me interpret the law. But, on my reading of the law here, I cannot find any clause that says that, in the bill of sale, you have got to put the name of the person it was sold to. That was the main thing that people like Scotty Dixon in Mareeba wanted. He was to some degree orchestrating the requests throughout Australia, and most certainly precipitated, along with Noel Hall, the agreement out of the then Deputy Prime Minister. They did it with all sincerity; they were not trying to set him up or anything. The main thing they wanted was that bill of sale. But the bill of sale does not include who you sold it to. It is not much use having a bill of sale that has not got the name of the person that you sold it to. If we are wrong, Minister, we would ask you to point it out to us. I cannot see how having recourse only through the common law leaves us in a much different position from where we are at present.

But I would like to talk specifically about some issues. I mentioned the horticulture produce assessors and the issue of mediation. A lot of this centres around rejection of product, and there are cases where products should be rejected—but not from normal, serious operating farmers in the marketplace. It would be very rare that they would send diseased product to market, because no-one would ever buy from them again. They just do not do that. They take all the actions that need to be taken to send down a good product to market, and that is why they are still in the industry. But the fact is that these diseases do not show up for a couple of weeks. You know yourself, Mr Deputy Speaker, that if you buy a mango or a banana, it might be two or three weeks before blemishes start to occur. It becomes a very grey area as to whether the product is diseased. You could argue that bacteria naturally occurs in the degeneration of any plant life.

The people who have done the work for me have said that the agreement must state ‘within two weeks’. If a person working on this knew anything about the industries he was dealing with, he would know that that is not going to be in the agreement. It says you have got to put that down in the agreement, but an agent is not going to put in there that he is going to be responsible for who he sells it to. That is not going to be in the agreement. It never has been before, and it never will be in the future.

With respect to the cost of bringing in the produce assessor, the mediator and all these things, I think that Mr Dixon makes a very good point. He says you are talking about growers who—in my case, anyway, in Far North Queensland—are 2,000 kilometres away from the marketplace. They need to get an aeroplane to take them from Cairns down to Brisbane—or, worse still, Melbourne and Sydney, where the vast bulk of their product will be sold. So if they want to go to any of these produce assessor mediations, they are up for a huge amount of money. This is just not practical. If the minister could appoint somebody, and he would be the arbiter and there would be a tribunal that could hear this, we would have something that we could use.

In conclusion, we would emphasise again that there has been some advance made. We appreciate the minister having made an effort for us, and we want that to go on the record. Having said that, to bring out this code and to have 90 per cent of the industry—that is, Woolworths and Coles—the processors, and the exporters left out of the code of conduct really makes a mockery of it. And it insults all of those people who believed in this code—as I did. At the time, I thanked the government, even though it was during an election campaign. I congratulated them and said, ‘We look forward very much to the introduction of the code.’ You can rest assured about what I will be saying this time around. So we want to say that, and we want to say that what we have not got is a mandatory code of conduct. What we have got is a contractual agreement, and that is all. (Time expired)

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion for disallowance seconded?

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

I am happy to second this motion of disallowance moved by the member for Kennedy. On 11 August 2005, the then new Minister for Agriculture, Fisheries and Forestry said in this place, in answer to a question from me about the mandatory code of conduct for the horticulture industry:

A mandatory code of conduct for the horticultural industry was an election commitment by the government which will be honoured in full.

This is the reason for this disallowance motion. A code may have been delivered, but it is not the code that growers believed was promised. This is not an election commitment honoured in full. It is a deceit.

The member for Kennedy was more gracious than I am about handing out bouquets for this half-code. He spoke about the shelf life. Well, the shelf life of the MPs representing fruit growers has been dramatically shortened, I would suggest, and their use-by date is almost up, especially with the added announcement in recent days of the decision to recommend the importation of New Zealand apples.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

And Filipino bananas.

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

And Filipino bananas. This government’s so-called mandatory horticulture code of conduct represents a broken promise. The former Deputy Prime Minister and Leader of The Nationals, John Anderson, made the promise on behalf of the soon to be re-elected coalition government on 1 October 2004 to impose a mandatory code of conduct on the industry to cover all stakeholders in the industry, from growers through to produce buyers who are, to quote the member for Gwydir, ‘in many instances large supermarket chains’. That press release states:

The code will give producers a fairer deal on their terms of trade and on resolving disputes with produce buyers, which are in many instances large supermarket chains. It demonstrates The Nationals’ commitment—as part of a re-elected Coalition Government—to providing a fair deal for primary producers and small businesses in regional Australia.

I well remember when that came out. It was during the 2004 campaign and I was in a shopping centre in Orange along with Peter Darley—an orchardist, and now the Chair of the Horticulture Committee of the Farmers Association—other growers, their wives and supporters handing out apples to people freely in that shopping centre as a mark of the importance of the industry to the Orange district and further afield. It goes right through to Bilpin and areas on the Blue Mountains, down into the Cowra district and beyond, to the area around the Southern Highlands and down into the southern parts of New South Wales. We are talking here not only about the apple industry but about all of the industry—fruit and horticulture in general. The government’s so-called ‘mandatory’ horticulture code of conduct represents a broken promise, and that has been told to me over and over again by Peter Darley and other growers who are tremendously disappointed at the outcome of what they believed was going to be a full delivery of that undertaking made during the 2004 campaign.

It is a twice-broken election promise. It was not delivered by legislation within 100 days, and the code we got at the end of last year does not include the large supermarket chains, whatever the voluntary or contractual arrangements might be. Without those supermarket chains, the code will do nothing to address the imbalance in the fresh fruit and vegetable marketplace. The mandatory code provided in these regulations will affect only the relationship between our growers and the wholesalers operating from this country’s central markets. The growers do not want a code without the supermarket chains, nor do the central market operators.

I have been having meetings with many people from both of these groups since last year, when it first became apparent the government was going to let the supermarkets off the hook. This is perhaps one of the most interesting developments in this whole issue. It was the relationship between these two parties that first motivated growers to call for a code of conduct. The government has only got it half right. The code currently provides definitions of wholesalers as either agents or merchants, which gives growers more certainty when it comes to the price they receive for their produce and how much it is sold for at the market. But defining buyers as agents or merchants helps growers track the price they get for their produce from the wholesalers at the central markets.

For many years the problem has been the lack of clarity as to whether the buyers or wholesalers are agents selling a grower’s fruit and vegetables on behalf of the grower for a commission or merchants buying it outright from the grower and selling it as their own property. The importance of this definition is in the information the growers get as to which retailer has purchased their fruit and vegetables and at what price. The proper definition ensures a document trail that allows tracking of prices paid and where the product ends up.

With no definition of how buyers and wholesalers were operating under the Trade Practices Act, they were immune from regulation determining their obligations to provide information to growers. This is very significant because of the fact that in trading fresh fruit or vegetables, the longer it takes to sell, the less fresh the produce is—as the member for Kennedy so graphically described—and thus the less valuable it is. There was nothing in law to compel the buyer or wholesaler to inform the growers when the cases of fruit or vegies were sold or the exact price they were sold for. Growers were being given an average price per case across the board rather than the prices of particular cases of their crop.

The inclusion of specific definitions of buyers as agents or merchants gives a new transparency to the process of taking produce to the fresh fruit market. But the gains of this aspect of the code have been severely undermined by the failure of the government to include retailers, most importantly the major supermarket chains, in its regulations. Indeed, it has brought the growers in central markets together against the mandatory horticulture code of conduct, or the half-mandatory horticulture code of conduct. The central market authority has described this current code as anti-competitive and discriminatory. The buying power of the big supermarkets is so huge—as, again, the member for Kennedy described—that they will have the power to basically set the prices they pay to the wholesalers. When there are only two major buyers—and because we are dealing with fresh produce—they have the power to dictate price. Further, as the retailers are not covered by the code, there is nothing to stop them conducting their business with growers or wholesalers who choose to operate outside the central market system, which then removes these transactions completely from the regulations of the code, leaving the growers back where they started.

The whole process of building the mandatory code has been fraught, and it has been obvious the government has aligned itself firmly with the supermarkets’ best interests. Again and again I receive complaints from growers that the consultative process to work out the form of the code was little more than a political exercise, with the vast majority of meetings being held in capital cities—with some in larger cities; I think Cairns was one—rather than in the growing regions.

Further, it soon became apparent that the government—The Nationals in particular—had no intention of honouring the full extent of the promised code. By July 2006, well after the 100-day deadline, the new Deputy Prime Minister and leader of The Nationals stated that the government was not about to regulate the retail sector with the mandatory code, and his agriculture minister weakly supported him by saying, ‘Retailers were never part of the election commitment which was written down.’

This is one of the weakest and most gutless excuses for a policy backflip I have heard in my time in this place. If the member for Gwydir’s press release does not count for a documented written election commitment then I do not know what does. The exemption of retailers, the major supermarket chains, food processors and exporters makes this code useless. Whether supermarkets have voluntary codes of conduct for themselves or terms of trade agreements with wholesalers, or growers for that matter, none of this is entrenched in law and, as such, can be completely ignored if the supermarket retailers deem it necessary. Market conditions will rule, and we will not see compliance with voluntary codes of conduct if it does not mean maximum profit returns to the shareholders. Rather than level the field for all players in the horticulture industry, this mandatory code of conduct entrenches the advantage of the major retail grocery chains as the biggest buyers in the marketplace, be that within the central wholesale market system or outside it.

As far as I am concerned, the six-year battle of my local Calare growers is not over. Until the horticulture mandatory code of conduct includes all players in the horticulture industry—growers, wholesalers, buyers and retailers of all sizes—my campaign for a fairer deal on behalf of our growers will continue, as will my and my growers’ criticism of the recommendation by Biosecurity Australia to allow the importation of apples from fire blight affected countries such as New Zealand and no doubt North America and other places. I support strongly this motion to disallow the Trade Practices (Horticulture Code of Conduct) Regulations 2006, and I ask whether those other coalition members from rural constituencies are defending these regulations.

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I cannot help asking the question, having listened to the contributions from the members for Kennedy and Calare: have they read the code?

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Yes!

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

If they have read the code, they have not understood it. The current refrain that this is not enforceable at law is a laughable notion. These are contracts that are mandatory. They are not voluntary; they are compulsory. Every wholesaler has to enter into a contract under the conditions of the code. If there is a dispute that arises then there is compulsory mediation. If the mediation fails then the Australian Competition and Consumer Commission enforce the contract against the code. There is no need to rush off to the magistrates court or the Federal Court, because it has the backing of the ACCC. So the charge made against us by both members repeatedly—that this is somehow a voluntary or non-compulsory, non-mandatory code—is an absurdity. Of course it has the force of law. That is why we have regulations in the parliament to amend the ACCC’s operations.

It is an absurdity, and I do not see how two members can take up the time of the parliament with such a falsehood. The basis of their understanding of this code is utterly flawed. It is enforceable under the law of the Australian Competition and Consumer Commission, and it is vitally important that the regulations for a mandatory code of conduct pass through the parliament quickly so as to provide a fair and efficient market for fresh fruit and vegetables. We want the code to start on 14 May. I agree: it has been too long in coming. But now it is here, it seems to be a tactic by the Independents to delay it further.

It created a great deal of division and difference of view within the supply chain in the fruit and vegetable industries. I tell you what: I had plenty of letters from small, medium and large growers opposed to a mandatory code of conduct. Of course we know the fresh markets conducted, and still are conducting, a vigorous and, at times, inaccurate, bordering on the dishonest, campaign against a mandatory code of conduct. So there is no uniformity of view on this. There might be a majority of growers in Mareeba who have a set code of conduct in mind, but across the nation there is a divergence of opinion. But I am confident there is a clear majority of growers who support the government’s mandatory code of conduct.

Now let us deal with the second falsehood being perpetrated by the Independents, which is that somehow this is a breach of an election commitment. Let me read, for the honourable members, the government’s election commitment that was contained in the agricultural policy titled ‘Investing in our farming future’, released on 23 September 2004:

… a re-elected Coalition Government, as a last resort, will put in place a new mandatory Code of Conduct specifically tailored for the grower/markets sector of the horticulture supply chain.

In every one of the press releases—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I claim to have been misrepresented.

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

Take it up at a later time.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

The member can intervene at some other stage to rectify that.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

We are leaving on the record something which is patently false.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member has other options.

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

My only charge against the member for Kennedy is that he has not read the code.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I have read the code!

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I am prepared to take his word for fact, across the chamber, that he has read it—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

It has footnotes all over it!

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

but I stick to my assertion that the member has not understood the code. Let us get back to the charge that somehow the government has broken an election commitment. It is in black and white in the agriculture policy of the 2004 election that it is limited to the wholesale market sector. In all of the press releases—and you can imagine I have gone through a lot of the documents by Warren Truss, the then minister for agriculture—it has been specifically limited to horticulture. I concede there is one press release, and one press release only, from the member for Gwydir, then Deputy Prime Minister, and one sentence, and one sentence only, that is ambiguous.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Your leader gave an undertaking!

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

Undoubtedly. But anybody looking at the election commitment, all statements leading up to that one ambiguous sentence in one press release and the several statements that immediately followed it which included the discussions and negotiations with the industry knew without a doubt that this was a mandatory code of conduct for the wholesale markets. The Independents are playing with one phrase in one press release to create political mischief. We made an election commitment and we have made several statements detailing the mandatory code of conduct for growers and wholesalers.

Why is the retail sector not included? This is something that the members have not thought through. It is because, again, they do not understand the mandatory code of conduct. The mandatory code of conduct is to provide transparent and clear terms of trade. When a grower sells to a retailer—especially to a supermarket they have a contract and they know what the terms of trade are. Somehow the member for Kennedy seems to think that the code of conduct will force a pricing return for growers. It will not. Supermarkets and processors provide clear price information, written quality specifications, written terms of trade and internal codes of conduct. That is consistent with what we are attempting to do with the mandatory code of conduct with the wholesale sector so the retailers—and I do not for a moment believe that they pay their growers enough—at least adhere to what we want to achieve in this code. The terms of trade, the terms of delivery and pricing are known up-front. You cannot pretend that the mandatory code of conduct is something that it is not. It is not a floor price; it will not guarantee a higher price. What it will guarantee is that your wholesaler has to act in your best interests in a defined role—agent or merchant—and provide all the terms of trade, terms of delivery and other information.

I believe that, if we impose this mandatory code of conduct totally unnecessarily on the supermarkets, retailers and food processors are going to pass the costs on. There will be a price to pay for them changing their contract systems, and they will definitely pass on to growers the added costs. That is not in the interests of growers. It is important to remember that all of these retailers are signatories to the voluntary code of conduct for the produce and grocery industry, and that voluntary code promotes good commercial relationships amongst trading parties.

My submission to the parliament is that there is a clear election commitment with regard to a mandatory code of conduct for growers and the wholesale sector. At the same time, it makes no sense to impose a mandatory code of conduct of this kind on the retail sector—or indeed on the supermarkets—because it would achieve nothing that is not already being achieved in the direct relationship between suppliers and retailers, and in all certainty would force up the cost to growers.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Why not mandate it then?

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

The member for Lyons interjects. It is difficult to deal with this issue when people do not understand the ABC of the mandatory code of conduct. The member for Lyons interjects, ‘Why don’t you make the code of conduct mandatory for the retail sector?’ It is because they have a contract. They know what they are supplying, what they are getting for it and where and how to do it.

The problems in the wholesale sector have remained largely unchanged despite the government putting in place in 2000 a voluntary produce and grocery industry code of conduct. Despite industry attempts to improve trading practices through their own codes of conduct, we have not seen a significant improvement. This code is going to improve the trading conditions in the horticultural industry; it will clarify the responsibilities of growers and wholesalers and increase the transparency of transactions.

The key requirements of the code are that wholesalers publish their preferred terms of trade, growers and wholesalers use written agreements, wholesalers are clearly identified as either agents or merchants, prices agreed in writing under merchant transactions be provided, wholesalers provide written transaction information to growers, independent assessments be available on transactions, and compulsory mediation will occur if disputes arise.

The contracts that are negotiated between suppliers and supermarkets are negotiated with full clarity and include all commercial aspects of the transactions. That does not happen necessarily in the wholesale sector. An unnecessary regulatory burden would impose additional costs on the industry if we were to proceed to a mandatory code of conduct in the retail sector without any measurable benefit with regard to increased clarity and transparency. I appreciate that retailers, processors and exporters are strongly opposed to being included in the code. If they are forced to adapt their trading systems and conduct compliance audits, it could significantly increase the overall compliance costs of the code and impose an unnecessary regulatory burden on businesses that already trade under transparent and clear contractual terms.

For the average grower, the mandatory code of conduct will mean the opportunity to achieve more certainty in their trading relationships with wholesalers, more confidence that business is being conducted in a fair and effective manner, clearer market signals and improved feedback on the quality of produce. The code will be enforced by the Australian Competition and Consumer Commission. At the same time, the government has appointed a horticulture mediation adviser who will help the industry resolve any trading disputes that arise.

The majority of growers and wholesalers support the code. It has not been developed in isolation in some bureaucratic ivory tower. All the way through we have consulted the National Farmers Federation, AUSVEG, Growcom and other organisations such as the Horticulture Australia Council. These organisations are representative of the industry, they have put a number of drafts to their members, and I believe they are worthy negotiators on behalf of the majority view of growers across Australia. There has been enormous and extensive consultation with industry stakeholders. An industry committee will be established to monitor the proposed code and advise the government on matters relating to its operation and performance.

With regard to compliance costs, the code requires terms of trade and the use of written agreements between growers and wholesalers. This is standard good business practice in most industries. There will be minimal additional costs for those growers and wholesalers already using good commercial practices. Clear terms of trade and written agreements will result in reduced disagreements and therefore reduced conflict resolution costs. The government is working with growers and wholesalers to produce contract templates which will further reduce the cost to both wholesalers and growers.

The government is funding the enforcement and administration costs of the code and will subsidise the costs of mediation. This will remove the need for expensive legal costs for growers and wholesalers, which the member for Kennedy seems determined to impose on them by pushing them into the court system. This is a speedier way. If a dispute arises we try to mediate. Failure to mediate then results in ACCC intervention. What could be more enforceable under the law than that? At the same time, everybody has to enter into a contract under the terms of the code. I am sorry, I listened carefully to the member for Kennedy. I would wish to be the hero that he wants me to be, but I am genuinely convinced that this is in the best interests of the industry.

I thought only an Independent could tell the story of John Kerin: that he would go out there and tell people his personal view, what he was going to do, so that people knew he was fighting on their behalf, even though he could not deliver on behalf of the government. That is an Independent’s mentality. That is just cheap populism by a member of a government who wants to walk both sides of the street. They want the personal glorification and the benefit that comes with being part of a government.

We have batted off the wholesaler organisations and the fresh food markets. We have answered their issues. We have argued the case with them, and it is very disappointing for me to come in here and find that the Independents are causing more trouble by potentially delaying the implementation of the code—although I have been reassured by the member for Kennedy that he will not vote against the code if the test should arise. It is a code that has been long in planning. It needs to be implemented. It will be successful.

Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The Labor Party finds itself in agreement with the sentiments and the motivation expressed by the honourable members for Kennedy and Calare. We do, however, have a different way of dealing with the problem. We agree that the absence of buyers’ agents in the code is not only a deficiency; it is a breach of faith. It is not a promise kept; it is a non-core code. It is a code—which the honourable members who have spoken before me have also indicated—the government was dragged kicking and screaming into implementing. It is a code that the government promised would be mandatory and then it tried to squib on it. The government tried to introduce a voluntary code and then it was forced, kicking and screaming, into bringing in the code that we have now.

The minister arrogantly says that anybody who disagrees with him either has not read the code or does not understand it. I know that the honourable member for Lyons and the members who have spoken before me have not only read it but also understand it. They understand the difficulty that it causes for their constituents.

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

It is non core.

Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

It is a non-core code. It is a promise which has been breached. The Horticulture Australia Council said that it was always the intent to include retailers and buyers’ agents in the code, but they mysteriously disappeared when the code came out just before Christmas last year.

The minister ignores the issues raised by the honourable members for Kennedy and Calare and by the opposition and says, ‘Well, you haven’t read it,’ or ‘You don’t understand it.’ What he does not acknowledge is that he himself tried to squib on the commitment. I would also like to pay tribute to the member for Corio, the former spokesman in this area, who came into this House and argued strongly for the mandatory code and who, together with the honourable members for Kennedy and Calare and the honourable member for Lyons, forced the government into this backdown.

We cannot support a motion to disallow this regulation. The honourable member for Kennedy referred to the code as ‘some advance’, and we agree with him that it is some advance. We know that, if this code were disallowed without a suitable replacement code, the government would throw the farmers to the wolves. The government would leave them hanging and say, ‘The parliament has disallowed the code; they obviously don’t want a code.’

We have a different approach. We will go to the next election with the same commitment that we had last time—a proper mandatory code; a code which protects farmers. No doubt, when in government, if we are honoured with that mandate, we would consult widely, including with the members for Kennedy, Calare and New England and with interested peak body groups. We will vote differently from the members who sit in the crossbenches today—not out of a different motivation, not out of a different sentiment, but out of a conclusion that scrapping this regulation will leave farmers exposed, because this government will leave them hanging. The government will not respond to the parliament and will not allow a better code to come into force. We agree that the code is flawed, but we agree that it is some advance and that it is better than nothing.

I am sure that, should the Labor Party be elected later in the year, we would have fruitful discussions with members on the crossbenches and we would consult with them closely. I know that the honourable member for Lyons will be pushing very strongly, should we be in government, for the code to be beefed up and protected, as would the honourable member for Franklin and other honourable members on this side. We acknowledge the motivations of the members who have spoken and we agree with the sentiment. We will be voting against the motion today but, should we be elected later in the year, we will be revisiting this issue.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

As a representative of the good state of Tasmania, as someone with a strong relationship with the state’s first-class horticultural industry and as a member of the Standing Committee on Agriculture, Fisheries and Forestry, I welcome the opportunity to speak on this motion moved by the member for Kennedy. My colleague the member for Prospect has indicated Labor’s support for this endeavour and why we cannot support the member for Kennedy’s disallowance motion. We do not believe that the mandatory horticulture code of conduct put in place by the government is adequate. It is plainly not and it fails to live up to what was promised by the coalition government in the 2004 election. But we believe the code is better than no code at all and gives some opportunities to those growers.

It should not be forgotten by Australia’s 20,000 fruit and vegetable growers that the Howard government had to be dragged kicking and screaming to honour that agreement to introduce a mandatory code for their industry. Labor committed to a mandatory code well before the 2004 election. We put it on the board, nailed it up there and said: ‘This is what we will go to an election with. This is our policy. Put it out there.’ The government followed suit and promised to introduce a mandatory code within 100 days of its return to office.

The then Deputy Prime Minister, the Leader of the National Party, made the promise on 1 October 2004. The Minister for Agriculture, Fisheries and Forestry has come into the House now and said that this was not really the promise. The press release says:

A re-elected Coalition Government will impose a mandatory Code of Conduct on the horticultural industry.

He cannot deny that. It is there in writing in a public document. To try to fudge that is quite dishonest on the part of the minister. At the end of that press release, he says:

… a re-elected Coalition Government will, within its first hundred days, propose legislation to give the Australian Competition and Consumer Commission the power to enforce a Horticultural Code of Conduct.

The government made the commitment, and they broke that promise to the 20,000 Australian farmers in that position. It was not a real promise. The first 100 days went by. We waited; we were ticking them off on the calendar after the election. We were crossing them off. A hundred days went by and nothing had happened. The government continued to twist and turn until they were forced to act under pressure from the industry and the Labor Party. Where are the National Party members of parliament tonight? They are not here. Where is the member for Braddon in Tasmania? He should be hanging from the rafters at the Yolla hall screaming. His area of Braddon grows vegetables and bulbs. He should be here putting pressure on his minister to do the right thing by the people he represents. The member for Braddon is lost when he should be in here arguing a point of view.

It was not until December 2006—26 months after the election—that regulations for a mandatory code were made. They do not commence until 14 May this year—more than two years and seven months after the National Party made their 100-day pledge. It is a broken promise and, when they get there, it is not the real McCoy. Nevertheless, we take the view that the code set to come into force in May is better than no code at all. There are some opportunities to prevent people being ripped off, as has been occurring in the past. A successful disallowance motion would not assist growers who have waited for more than two years for the Howard government to honour its 100-day election pledge.

Labor’s position today should not be construed as a big tick for the current code. It is not. We do not think it is adequate. We do not think it is up to it. I note the comments made in the debate by the member for Kennedy. Labor have been made directly aware of the growers’ concerns about the buyers’ agents—who represent retailers, including the two big supermarkets—being excluded from the code. The two big supermarkets in Australia have too much power when it comes to buying from little people, whether it is manufacturers, food processors or growers of fresh food. They have too much power and our agencies should have operated more to protect the small people of this country. The ACCC has failed to do that on several occasions. I also think it failed dismally when it let the retailing of petrol become locked into supermarkets as well. I understand that growers and their representatives were led to believe that transactions with those agents would fall into the scope of the code. They have been sorely disappointed again—another disappointment and another sell-out by this government.

Labor enjoys a good working relationship with the horticulture sector. I am the chair of the regional committee of the Labor Party, and my colleagues from Tasmania—Harry Quick, with the apple industry in the southern areas of Huon and the channel area, and Senator Kerry O’Brien—meet regularly with growers; we know their needs. I believe that we know their needs a lot better than those on the other side of this House.

We will continue to talk to them about the code. When we win the next election we will certainly be having major discussions with them about the code. We will continue to work with the industry to ensure that the code provides the intended fairness for this sector so that people can get a fair go, a fair opportunity. Disallowing the regulations will not represent a step forward for Australia’s fruit and vegetable growers, including the Tasmanian growers that I represent in this place. So I cannot support the member for Kennedy’s disallowance motion, but I do congratulate him for having it on the Notice Paper, because it has given us an opportunity to point out again that this government is really a fraud. It is committing fraud on many people in regional Australia. Disallowance would represent a step back, and we want to go forward. On that basis, I cannot lend my support to the motion.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

We’re only doing it on the basis of an alternative code being submitted.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I also say that the members of the horticultural industry in Tasmania are very concerned, Member for Kennedy, that this government has now passed regulations to allow New Zealand apples to come into Australia.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Fire-blighted apples!

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Fire-blighted apples. Fire blight will end up helping to destroy the Tasmanian apple and pear industry. There is no fire blight in Tasmania. We do not have fruit fly in Tasmania. We are an island of the big island. This island, Australia, has fewer diseases and bugs and things that cause us problems than many other parts of the world. We are lucky because we are an island continent. But then we have that little island that hangs off the bottom, an island on the periphery of the big island. We on that little island have even fewer diseases and pests for the horticulture industry and other agricultural industries to deal with than are prevalent in other parts of the world. So we can say we are lucky, but we have to be very vigilant if we are going to keep them out. To let New Zealand apples come in will be a major step backwards and will destroy our apple industry. The state minister in Tasmania has said that he will propose legislation that will prohibit those apples being sold in Tasmania. I understand that he is moving that way.

The family of the President of the Senate, Senator Calvert, have been farming apples in Tasmania for many generations. The government have failed the growers in Tasmania and in the rest of the country. They have failed people in Victoria and New South Wales. I do not think they grow many apples in Queensland. We have a good pear industry. The pear industry will be destroyed by fire blight. I think the New Zealand industry still grows apples, but their cost of production is something like 30 per cent more to deal with fire blight. It would impose an enormous extra cost on a small area of production like Tasmania to have that within our industry.

Unfortunately, we cannot support this motion. We have pointed out the reasons why. We think that there is an opportunity to step forward, not back, but that the regulation is not what was promised. We promise growers that, when we win government, a Labor government will introduce the mandatory code that was promised in 2004.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I rise to support the disallowance motion moved by the member for Kennedy and seconded by the member for Calare. I am delighted to see the Attorney-General in the House, because I think this is a very poor piece of law. No doubt he is here to listen to the arguments about this poorly structured regulation and the breach of a promise that was given in 2004 as an election commitment. The member for Lyons read out the first line of the former Deputy Prime Minister’s press release, where it quite categorically made a commitment to a mandatory code of conduct. That has not been delivered through these regulations. As I was saying, I am glad to see the Attorney-General is here to listen to this attempt to disallow a very poor regulation which is a breach of an electoral commitment made in 2004.

I support the member for Kennedy and the hard work that he has put into the struggle against the major supermarkets. I acknowledge the commitment that he has given to the smaller people in relation to their marketing power against the corporate giants. I am disappointed in the Labor Party’s view. If a commitment is given at election and the Labor Party disagree with that commitment—and if it is poor law and does not deliver to working families and small businesses the arrangements that were promised—I do not think that to line up beside that arrangement because it is supposedly somewhat of a movement forward is a good enough reason not to oppose this very poor regulation.

It does not surprise me that the National Party have backed away from an election commitment. It is becoming part of their representational processes. We have just been through the New South Wales election, for instance, where billions of dollars were promised. Knowing full well that they could not win the election, the National Party went on this massive spending spree. I think it was about five to one against the current Labor government. Billions of dollars were committed to try to buy seats. I think that people are becoming very much aware of the use of money and promises at election time—such as this one that a mandatory code would be put in place to give a fairer deal to horticulturalists and vegetable growers et cetera. Those sorts of commitments are not listened to anymore in the electorate.

There have been more recent examples of this sort of behaviour, this sort of flexible commitment, that the National Party have adopted. Last year in Victoria at a wheat rally the Deputy Prime Minister, Mark Vaile, gave a commitment to wheat growers at a place called Warracknabeal that he would poll all wheat growers if there were to be any substantive changes to the export marketing arrangement for Australia’s bulk wheat. He gave a commitment to those wheat growers, and I remember in this place I supported him because I thought: ‘That is a good stand to take, because you are actually going to confer with the industry before making a decision.’ Alas, once his Liberal masters informed him that that was not what this process was about, he reneged on it and instead put in place a consultative group to travel around Australia to determine the views of growers.

I went to those meetings and no votes were taken. Where there was an attempt to move a motion at the meeting, it was stomped on. Where people presented a point of view, they were interrogated about it. The committee chairman, John Ralph, on a number of occasions made the point that he was there to listen and take the message back to the government to engage in debate on. When people said, ‘We’d like to have some say in this and move a motion here today,’ he refused to listen to and take that message back. We had this consultative committee—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Shame! Shame—and sham as well as shame!

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

The member for Kennedy says ‘sham’, and in a sense it was. I think the members of that committee were quite legitimate in what they were trying to do, but the terms of reference did not enable them to convey the wishes of growers. And the Deputy Prime Minister had assured growers at that meeting in Victoria last year that he would poll them if there were any substantive changes in those marketing arrangements.

I have taken it upon myself to carry out a poll of wheat growers, and I will be releasing that information tomorrow. I am hopeful that the government will take it on board. If the consultative committee has essentially taken on board the views of the growers, there should be no significant difference in the recommendations. It will be very interesting to see what the recommendations by a government appointed group are and what the views of the growers are. The government and all the political players in here, including the National Party, have been consistently saying, ‘We want to do what the growers want’—as they were going to do with what these growers wanted. It is going to be very interesting. They said, ‘We will fix that. We will do what the growers want.’ They wanted a mandatory code of conduct. It has not been put in place. It will be interesting to see if there is a replay of a similar agenda in terms of the export wheat marketing arrangements. In the poll I conducted, there were something like 3,600 respondents. It was done by a legitimate body and will be released tomorrow. I will be handing it on to the Prime Minister, the minister responsible and anybody who wants to look at it. The release of the poll is going to be a fully open document.

Just recently again, we have seen a similar display of a commitment given by the National Party in my electorate during the state campaign. The leader of the National Party, Mark Vaile, opened their election campaign in Tamworth and promised something like a quarter of a billon dollars to the people of Tamworth on that day if they were elected. I am pleased to say they had a 10 per cent swing against them, so money does not buy confidence. These people have developed a form that they will say anything coming into an election period or to a crowd of people they want to impress. When they return to Canberra and the buttons are pushed, they renege on these things—and similarly in Sydney in terms of the state agenda.

Mark Vaile, the leader of the National Party, was at the opening. He made a speech and he spoke with the press. He had visited sometime before that, when the country music festival was on, and made certain commitments that the Commonwealth government would support the upgrade of a dam. I have raised that in question time in this place. In answer to a question in here Mr Vaile made the point that the upgrade of Chaffey Dam was not only an issue about urban water for the people of Tamworth; it was also an issue for irrigators in the Peel system. When he did that, given the Prime Minister’s 10-point plan and the agreement from the state Premier to hand over the responsibility for water, particularly irrigation water—there is some dispute about urban water—to the Commonwealth government, there was a certain obligation on behalf of the Commonwealth to look after the irrigators.

Mark Vaile, when in Tamworth, made a commitment that he would support, at a Commonwealth level, the upgrade of Chaffey Dam. On Monday morning, two days after the election result, he also reneged on that commitment. So there is real form on this. I think it is very disappointing on two levels—firstly, that we actually have to move a motion of disallowance to a regulation such as this, when the Deputy Prime Minister of the day gave a firm commitment. In our parliamentary system you cannot believe the Deputy Prime Minister of the day—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

And Leader of The Nationals.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

and, as the member for Kennedy said, Leader of The Nationals. I have articulated three instances, and there are many more, where these people cannot be believed. These are tests of their commitment to the people, and the commitment that they would look after these working people and small businesses in regional Australia was given prior to an election in a bid to win an election. They have been countermanded by the corporate giants in the retailing world. There is absolutely no doubt about that. Take the wheat example. Who pulled the strings to stop the growers having their say? I do not know the answer to that, but I think someone should find out what the answer to that question is. And who pulled the strings in terms of Chaffey Dam, a localised issue? Who is pulling these strings which make people make commitments when they want to win a vote and then, as soon as the election is over, remove themselves from the scenery and countermand their own decision? What that says is that they are breaching the trust of the Australian public and, in this particular case, there has been a massive breach of trust of the horticulturalists of our nation.

I support the member for Kennedy and the member for Calare. I would suggest to the Labor Party that, if they are serious about representing workers and small businesses, this is an opportunity to express that feeling. Do not hide behind a small step forward. This is very poor law, it is a poor regulation and it should be opposed.

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the member for Kennedy’s disallowance motion be agreed to.

A division having been called and the bells having been rung—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

As there are fewer than five members on the side for the ayes in this division, I declare the question negatived in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Andren, Mr Katter and Mr Windsor voting yes.