Kirsten Livermore (Capricornia, Australian Labor Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No. 1) Bill 2007. Labor support this bill because Labor are fully supportive of extending the opportunities for research and development across our agricultural industries. We on this side of the House all know that research and development is so important. Labor understand and embrace innovation as a key driver of economic growth. Through creativity and knowledge and value-adding, we enhance our competitive advantage.

Labor strongly supports an effective, well-funded research and development program as it is vital to sustained productivity growth in our key export sectors. This applies to all regions, particularly to my electorate in Central Queensland, which is home to a very large proportion of the important meat industry in Australia. Nationally, the meat industry has a value of $15 billion a year and earns nearly $7 billion in export revenue. The beef industry is a large part of the economic activity in Central Queensland and contributes money and jobs to our towns and rural communities.

This bill will lead to the cessation of the current system, whereby the meat-processing sector funded its marketing and research commitments through a voluntary contribution system. Labor supports this bill, as the industry believes a collective funding arrangement for marketing, research and development is now necessary. Processors were given the opportunity to vote on this issue last year and the ballot returned a large majority in favour of the proposal to move from a voluntary levy to a statutory levy. Consequently, this bill will put in place a statutory levy to enable the sector to continue its whole-of-industry commitment to undertaking marketing and research and development programs. This will provide a basis for sustained productivity in the meat-processing sector.

The move to a statutory levy provides certainty to the Australian Meat Processor Corporation and allows it to undertake long-term initiatives for the benefit of the sector. All sections of the red meat industry have supported directing the funding to the existing services company—that is, the Australian Meat Processor Corporation Pty Ltd. The corporation already conducts marketing and R&D on behalf of the processing sector or it directs these funds, on behalf of the processing sector, to Meat and Livestock Australia, the industry research and development body, to carry out specific projects.

A quick look at the Australian Meat Processor Corporation’s website shows some of the important things that the corporation has been doing with the funds that it currently collects and will continue to collect from the processing sector. It lists things such as market access through supporting the MLA’s activities in the Middle East, Korea, Japan, China and other markets; new meat products, including new uses for waste products and value-adding current cuts; and domestic marketing supporting Australian red meat. The corporation also invests in R&D in processing technology, such as developing new stunning methods and commercialising safe bandsaw technologies. Another example is R&D in new technologies, particularly through the environmental biotechnology CRC, which is developing new and safer cleaning methods and new ways to deal with pipes clogging and manage nitrates in wash water. As someone who represents a city with two large meatworks within sight of the CBD, those sorts of initiatives are of course very important to me.

Another initiative which caught my eye was the meat safety R&D, including the Meat Industry Services Group, which provides technical advice and support in plant crisis situations as well as development of key tools and ongoing technical support and training through regular meat safety updates. Again, those initiatives are very important to not only the health of the industry but also the health of the people working in meat-processing plants and the health of those of us who live nearby. Labor understands that the amendments being debated today will not affect existing arrangements for Commonwealth matched funds because the research activities will continue to be directed to the MLA as the industry research and development body.

The Australian Meat Processor Corporation is a representative organisation representing all processors active in the red meat processing industry. Its aim is to protect, promote and further the rights and interests of its members, including promotion of free trade of members’ products and improvement in the quality of Australian meat, as we heard with some of those initiatives I read out. As someone who lives in and represents the beef capital of Australia, I know that we have one of the most vibrant meat industries in the world.

The future for Australian agricultural exports must lie in providing the highest quality products. That will be achieved by ensuring a trade and industry strategy is in place that enables our agricultural industries to find new markets but also gives industries more capacity to value-add to their products. We know that is the name of the game in a competitive global environment. It is about ensuring the best investment in research and development exists in our country. We know that we are good at R&D when it is properly supported.

We believe that this bill is a step in the right direction and it is a bill that will open up more opportunities in R&D in the meat-processing sector. But it also opens up a debate about the failure of the government when it comes to the nation’s R&D effort. Innovation is a key driver of the nation’s growth. By becoming clever, innovative and creative, we enhance our growth and opportunities. That applies to all Australian industries. Through innovation, we create more interesting job opportunities. This bill improves opportunities for R&D and we support it. Through creativity and knowledge and through value-adding we enhance our competitive advantage.

Labor has always understood the importance of encouraging R&D innovation at both the macro and micro levels. Labor’s investment in R&D and encouraging business investments through programs such as the CRCs have paid dividends to this country since their early implementation. In the 1980s and 1990s, Labor introduced the 150 per cent tax concession for R&D. It also introduced syndicated R&D for start-up companies. It increased investment in R&D, and we saw an increased expenditure by companies in R&D. There was also increased expenditure by the Labor government in R&D. But we know now that when this government came to office it cut, to the country’s detriment, the research and development tax concession from 150 per cent to 125 per cent. We have seen business investment in R&D grow at half the rate of the previous decade.

The government cut syndicated investment in R&D and they cut overall investment in R&D. Government investment as a proportion of GDP has fallen from approximately 0.24 per cent in 1995-96 to 0.18 per cent in 2004-05. The results of this on business investment in R&D are stark. We have seen the average annual growth rate of real business investment in R&D fall from 11.4 per cent in the period 1986-87 to 1995-96 to 5.1 per cent in the period 1995-96 to 2004-05. Throughout the 1980s to 1996 we saw steady growth in business investment in R&D both as a proportion of GDP and in terms of real dollars. But between 1996 and 2000 we saw negative growth in both business and government investments in R&D. This was a wasted opportunity. Years of underinvestment have hampered our industries’ capacity to innovate, to value-add to their products and to better compete in global markets.

The problem is that the government sees expenditure on R&D as a cost rather than as an investment. We know that it is the same in other areas that are so important to our productivity and future prosperity—areas like broadband, which I spoke about at length in the appropriations debate earlier today. We need to have that investment in national infrastructure and high-speed broadband internet so that we have the ability to compete effectively with countries overseas and create the kind of productivity growth that Australia needs to stay on top in a competitive global marketplace.

Broadband is an example of where the government has failed to make the investment that we need in this country to foster and promote innovation and productivity. We have seen that the cuts to investment in research and development have had a similar effect. We are seeing the effects of those in lower productivity. I think in the budget papers this year we see that we have now fallen to a projection of zero per cent growth in productivity in Australia and we just cannot afford a continuation of that. We have seen the government show that they are not prepared to invest in the future. We can only imagine the economic growth and job creation opportunities that we have missed and that would have been created if the trend of Labor government investment in R&D had continued.

Australia’s farm exports are facing increasing competition from developing countries, not only due to those countries’ low costs but also because they are now investing more in productivity-enhancing R&D. Sustained productivity growth in our key export sectors has underpinned Australia’s ability to compete and succeed in global markets. While we acknowledge the impact of drought on matched R&D funding in recent years, we cannot stand still. We cannot afford to waiver in our commitment to agricultural R&D.

I take this opportunity to remind the House that it was Labor, under the stewardship of the then Minister for Primary Industries and Energy, John Kerin, which, in the mid-1980s, saw the need for reform of rural R&D. It was the Hawke government’s John Kerin who recognised the need to improve the gap between research and product development and to improve our export performance and productivity by marrying the scientific research with the needs of industry to enable best practice and innovation in product development.

This was significant in greatly improving the competitiveness and profitability of Australia’s agricultural, fish and forestry industries and supporting sustainability of our natural resources base. It drew on the compulsory levies that industry had to pay. The government collected them for the purposes of R&D and/or marketing for their industries. It was all about growing those industries for the benefit of all of us. To expand Australia’s rural R&D efforts, government would match these levies for industry to continue the innovation effort. This is the same principle before us today. I have no doubt it will improve the R&D outcomes of the meat industry.

The act introduced under the Labor government thanks to John Kerin formed 14 rural research and development corporations. All of the corporations, except one focused on land and water, would receive levy funds from the industry which would be matched by the Commonwealth dollar for dollar up to a maximum of 0.5 per cent of the ex-farm-gate value of the industry concerned. The Hawke government recognised that there was a market failure in private sector research because many types of firms and individuals were unable to derive sufficient benefit to make their investment worthwhile. The priority was to get industry more involved in funding and directing research to establish an integrated approach. Researchers would have the incentive to find solutions to the problems identified by their industry.

The corporations were granted a degree of autonomy to borrow money and take out patents. They were also the sole recipients of industry levies for R&D, giving them authority and empowerment to develop their industries through research and innovation. The legislation put in place by the Labor government put important safeguards in place to ensure that, while the rural research and development corporations were autonomous and could meet their industry objectives through research, they were also accountable to industry and developed a strong relationship with the end users. Rather than having a one-size-fits-all approach, this enabled each RDC to develop its own structures and processes to best meet the needs of its industry.

The model which Labor developed and built is still in place today. It is a credible model which has worked. It is a model which has stood the test of time and survived numerous government reviews. There are not many policy initiatives which have lasted with such success despite some of the industries being substantially altered over that time. The cooperative research centres introduced by Labor in 1990 have also stood the test of time. The program linked researchers with industry to focus R&D efforts. Labor made the commitment in 1990 to establish 50 CRCs. Today there are 56 CRCs operating in six sectors and the nation has reaped the benefits.

There are two CRCs that have had a major impact on my electorate. One of them is the railway CRC based at Central Queensland University in Rockhampton. We also have a great deal to do with the beef CRC, not surprisingly. I am really pleased to say that the beef CRC was one of the 14 successful CRCs that were granted continuing funding under the 2004 funding round. I know that Dr Heather Burrow played a great role in achieving that success for the beef CRC. I know that in my electorate we are very pleased to have that connection to the CRC and to be able to use the innovations and research that come out of the work they do.

The beef CRC uses emerging gene discovery and gene expression technologies to focus on precision cattle breeding and management—something that is of vital importance to the beef cattle industry if it is going to maintain its competitive advantages. I also note that the beef CRC actually won the Cooperative Research Centre Association Excellence in Innovation Award last year. That was for the Beef Profit Partnerships program developed by the beef CRC. It is a groundbreaking new approach helping to boost on-farm productivity and profitability and involves beef producers, feedlotters and processors from across Australia. It has been recognised for its achievements in that research.

I note that one of the producers involved in the research effort, Phil Chalmers, anticipates that his involvement in a Beef Profit Partnership will boost his on-farm productivity by 20 per cent and double his farm income. So this sort of research is not just happening in test tubes in laboratories; it is having a direct effect on the productivity of our beef producers. Of course, those are the sorts of results we are seeing right across the board from CRCs.

Since the commencement of the CRC program, all parties have committed more than $1 billion in cash and in kind to CRCs. This includes more than $2.6 billion from the CRC program, $2.8 billion from universities, $2.1 billion from industry and more than $1.1 billion from the CSIRO. While we acknowledge the success of CRCs and congratulate industry and the researchers for what they have achieved, I might just point out that a report last year found that the CRC program has delivered an estimated $2.7 billion to the economy since it started in 1990. That is a pretty remarkable effort, and it shows why it is important for government to make the investment in research and development on behalf of our nation.

On the downside of that, I noticed a report in yesterday’s Fin Review that cast a cloud over the future of the CRC program. Twenty-two of the program’s 56 centres will be seeking the renewal of their seven-year government funding commitments next year, and there is concern within the sector that, unless the government increases its investment in the scheme, there will not be enough money to go around to keep those 22 existing programs continuing with their research into the future. Apparently the CRC Association has been told by the government to expect funding for next year’s round to be similar to the 2006 commitment of $310 million. But yesterday in the Fin Review the CEO of the CRC Association, Michael Hartmann, said:

That is going to have an effect on the number of CRCs that can be funded. Our estimation is that it could force more than 15 CRCs to close operations. It’s just such a competitive funding round.

When we see the outcomes that Australia is getting from the CRC program, I think the government needs to look very carefully at its commitment to CRCs and the funding that is required to keep some of these vital research centres continuing their good work into the future.

Both of the programs that I have talked about—the CRCs and the RDCs—are about creating better linkages between industry and the research effort. That also involves industry being prepared to support the research effort—and that is very important in having that link between industry in research. Labor recognise the importance of R&D in the agricultural sector, and we put rural research corporations in place 18 years ago. These corporations have provided a unique and successful partnership to meet the needs of our crucial agricultural industries, which represent 22 per cent of Australian exports in goods and services. By better connecting research and product development to improve export performance, these corporations have benefited not only these industries but also the nation. The research and development corporations have provided a unique and successful partnership between government and the industry. I understand that in 2004-05 the total spending by the Commonwealth and industry on RDCs was $511 million, and over $230 million of that came from industry. So it is a strong and effective partnership.

Labor has identified the need for better coordination of rural R&D. Labor took to the last election a strong platform for R&D for rural industries, which was endorsed by the National Farmers Federation. We propose to establish a rural research and development advisory council to ensure that our R&D effort is better coordinated. The council’s role would be to develop a national strategic investment plan, to assess the operational plans of individual research organisations against that plan and to advise government on the effectiveness of the overall rural research effort. The council would also work with the rural research sector to develop uniform methods for assessing the benefits derived from investment in research and for the development and reporting of those assessments. The council’s role would also include working to promote more effective and timely commercialisation of research outcomes. Labor will continue to look carefully at research and development issues for rural industries to enable the best outcomes for industry, the community and the economy.

I know that this bill is about investment in research and development in the meat processing industry, but I would like to take the opportunity to remind the meat processing sector that it is also important for them to invest in workforce training and skills development within the sector. In the recent past we have seen too much neglect of skills development and training by the meat processing sector. There are two major meatworks in Rockhampton. There is also a meatworks in Biloela and another in Bakers Creek. We are seeing an increased reliance on the use of 457 visas to fill positions at those meatworks at a time when there are people in Rockhampton and in communities in Central Queensland who are looking for work and could be trained for those positions so that we could have a local workforce learning skills in the meat sector and being employed in our local meatworks. The use of 457 visas is particularly prevalent at the Lakes Creek meatworks in Rockhampton and also at the other Teys Bros meatworks in Biloela. I note that, up until now, the AMH plant in Rockhampton has largely avoided the use of 457 visas. There are some workers from overseas there on those visas, but the AMH plant has a predominantly local workforce.

I note that there is the possibility of a change of hands, a change of ownership, with the AMH meatworks. If that happens, I would urge the new owners to continue the tradition that we have seen of AMH using local workers to fill their positions.

In the context of this bill, which is about investment in research and development in the meat processing sector, I would remind the meat processing sector, in particular those companies operating in that sector, that we expect genuine efforts to be made to train our own local workers before companies resort to the use of 457 visas to fill positions. It is not something that is supported within the communities of Central Queensland. I think companies, certainly those within my electorate, need to be more serious and genuine about employing and training local people for the positions in their meatworks.

Returning to the bill, Labor strongly supports an effective, well-funded research and development program as being vital to sustained productivity growth in our key export sectors. As the National Farmers Federation recently pointed out, Australian farmers are fortunate to have a world-class R&D framework through rural research and development corporations. Labor, in office, has been a driver of research and innovation through the establishment of programs for the RDCs, the CRCs and the R&D tax concession. While we welcome this bill to improve the R&D arrangements for the meat processing industry, we urge the government to consider the range of issues facing rural R&D so as to achieve the best outcomes for the sector and our ability to compete in global markets.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

I have to say that I found the last speech quite fascinating. The honourable member for Capricornia might claim to represent the cattle country of Australia, and that might very well be so, but her speech reminded me a lot of the analogy of those big longhorn bulls that you see in those Western Texan movies: there was a point here and a point there and a lot of bull in between. I will come to those matters as I go through my speech. The honourable member for Capricornia referred to 457 visas. I think there is a very serious issue as to how the Labor Party is treating that subject.

I rise in the House today to speak on the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No. 1) Bill 2007. This bill is important not only to me but also to the constituents of my electorate of Barker as it is home to four quite substantial abattoirs. Two of these abattoirs uphold the coveted A-plus category of accreditation that only one other holds in South Australia. These two abattoirs, T&R Pastoral, located in Murray Bridge, and Teys Bros, in Naracoorte, are both export abattoirs. Tatiara Meat, who are located in Bordertown and form part of Tatiara Lamb, are Australia’s largest lamb exporters. Of course, we have in Murray Bridge Big River Pork, which I believe has the largest pork processing factory in Australia.

Abattoirs are not only an important part of the export industry; they also provide local jobs for the constituents of Barker. For example, Teys Bros in Naracoorte alone employs 300 people and is a viable and secure operation. It employs these 300 people at above-award rates. In fact, its employees  receive hundreds of dollars per week extra—and guess what? They are on AWAs. This is a very good example of how AWAs work in this industry for the benefit of the constituents of my electorate. T&R Pastoral employs, quite successfully, over a thousand employees in Murray Bridge. I can remember eight years ago when the abattoir company was going through the hoops, was cutting staff members and was certainly not prospering. But the T&R Pastoral company have come in and really grown the business. One of the problems they have actually found is that they cannot find enough locals to work there. They have gone from a workforce of about 400 to one of well over a thousand. It is no wonder that, after advertising for staff—and being prepared to upskill people and train new people—for that abattoir without the results, they had to resort to 457 visas. It would have been a lot cheaper and a lot easier for them to have used local people if they could have got them.

It was the Labor Party who used these two abattoirs: they disgracefully attacked these two abattoirs over their use of 457 visas to fill a labour shortage. With a wink, wink and a nudge, nudge, they referred to these Chinese 457 visa holders with a disgraceful racist undertone.

It was actually the Labor state government that identified the shortage. It was the Labor state government that supported the use of 457 visas. It was the Labor state government that signed off—they have to sign off these—the 457 visas. So the member for Capricornia either does not understand the issues facing the meat industry in getting employees or is playing pure cheap politics on this matter.

I very well remember the Mudginberri abattoir issue in the Northern Territory whereby the union movement and the Hawke Labor government tried to stop its employees earning 2½ times what the award rate was. The abattoir used to be on a tally system, the union system which was not efficient and did not provide productivity. While the Labor Party is very good at talking about productivity and the fact that we have got to increase it, which I agree with, they do not take the actual measures to increase productivity. Back then they were quite prepared to stick with the old tally system so that when employees got their numbers up by one o’clock in the afternoon they could knock off and go home. As a result, we had a very inefficient meat industry in Australia.

The abattoir systems all around Australia were going broke. It was not until we took away that antiquated system, that union system, that Labor system, that we actually got productivity back. That is a perfect example of how the government’s measures work. AWAs work very effectively in the meat industry. Employees are paid much more than the award rate. Why wouldn’t we be happy with that? But the Labor Party want to take away AWAs. They want to rip them up, they want to ruin the beef industry, the sheep industry and the pork industry, along with the manufacturing industry for those three meat industries and go back to the old way. Here is a perfect example of the folly of the Labor Party idea to rip up AWAs.

The meat processing industry is a valuable part of Australia’s beef, sheepmeat and goat meat trade. Of the four abattoirs in my electorate, two of them slaughter all three species of cattle, sheep and goats. Australia wide, the industry employs approximately 25,000 people. It has an annual turnover of around $15 billion and earns $7 billion in exports. Within my electorate the two A-plus accredited abattoirs process 1,200 cattle and 8,000 sheep and lambs per day. The meat processing industry has the capacity to add value to Australia’s economy. This amendment bill will ensure that a legislative framework is in place to allow it to change its structural and funding arrangements for delivering marketing and research and development services. Australia’s economy can be further strengthened by the collective funding of meat processor marketing and R&D services.

The Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No. 1) Bill 2007 was put in place to amend the Australian Meat and Live-stock Industry Act 1997. The amendment bill was introduced to create greater flexibility for the disbursement of funds which are derived from the collection of compulsory levies and charges on the slaughter of cattle, sheep and goats.

In 1997-98 the red meat industry restructure enabled the meat processor industry to fund its marketing and R&D services through a voluntary contributions system. The system, however, made way for free riders, who refused to contribute. So the industry made it clear that, after 30 June 2007, members would no longer participate in the voluntary system. These free riders were able to reap the benefits of collectively funded R&D, whilst operating with a commercial advantage. Until recently, these free riders represented only a small percentage but a significant part of the industry.

During industry discussions regarding the voluntary contributions system—a three-year agreement—a number of large processors indicated that their ongoing support was conditional on the free riders commencing to pay their share of the contributions. If the larger meat processors decided to opt out of the system, the funding would not be sufficient to meet the sector’s whole-of-industry commitments under the red meat industry memorandum of understanding.

In December 2006 a ballot was conducted by the Australian Electoral Commission on the future of funding arrangements. It resulted in 73 per cent in favour of moving to a statutory levy system. The vote was also in favour of the funding being directed to the industry’s existing service provider, Australian Meat Processor Corporation. The new levy rate would be recommended by the industry’s peak body, the Australian Meat Industry Council. The government agreed on making the funding changes through an amending bill. The government believes that collectively funded marketing and R&D programs are the key to continued industry growth and productivity. Consequently, the government supports the move to a statutory levy and has no objection to AMPC receiving and administering the funds.

The government’s agreed amendments would allow the Minister for Agriculture, Fisheries and Forestry to determine a meat processor industry to receive revenue obtained by the Commonwealth from compulsory levies. These levies would be imposed on the red meat industry by the Primary Industries (Excise) Levies Act 1999. The amendments also include the capacity for the minister to declare that a body be recognised as the meat processor marketing body and/or the meat processor research body. Controls over who receives disaggregated levy payer information held by the Department of Agriculture, Fisheries and Forestry are also in the government’s amendments. Existing legislation does not allow for such information to be passed to the red meat industry. These new conditions are based on those which exist for the dairy industry and have been quite successful.

Key existing elements of the bill include the current arrangements that were established under the 1997-98 restructure to accommodate the red meat industry’s desire to be viewed as one industry. However, provisions were made to accommodate other sectors within the industry to have some self-determination. This arrangement will allow for some sectors to choose to be funded through the voluntary contributions system; otherwise, levies would apply under a statutory scheme and would have their operating rates set at zero and no revenue would be collected against those levies. The proposed arrangement supports the meat processor sector’s collective marketing and R&D activities to now be funded by compulsory levies. This would result in the funds raised by the compulsory levies being channelled into the existing services body, the Australian Meat Processor Corporation Ltd. The existing legislative arrangements see the funds channelled into Meat & Livestock Australia, which then carry out agreed marketing and R&D projects as required under the red meat industry’s memorandum of understanding. The current arrangements provide for the minister to activate the statutory levy provision in the event of a sector failing to meet their whole-of-industry obligations from voluntary contributions. So either way they are covered.

Under the proposed arrangements, the statutory based levies and charges would be paid into the consolidated revenue fund and then approved for payment to a declared marketing body and declared research body. Current arrangements only allow the minister to declare one industry marketing body and one industry research body, which is Meat & Livestock Australia, and one livestock export marketing body and one livestock export industry body, which is the Australian Livestock Export Corporation Ltd.

Activation of these proposed compulsory levies provisions on the slaughter of cattle, sheep and goats without amendment to the existing bill would result in all funds being directed to Meat and Livestock Australia rather than the Australian Meat Processor Corporation, which is contrary to industry preference. That is the reason why these changes are being made.

In conclusion, this amendment bill provides better arrangements for an industry that is part of most Australians’ daily lifestyle. I am lucky enough to have abattoirs in my electorate that are amongst the country’s largest and best. I appreciate firsthand this incredible industry. I commend this amendment bill that seeks to protect the meat processor industry’s funding arrangements for marketing, research and development services.

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

I rise to speak on the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No. 1) Bill 2007. I want to point out to the honourable member for Barker, a chap whom I work with on committees and a decent sort of man, a few things about the meat industry. The tally system came from the chain system. The chain system is one of those systems that is used to get workers to work harder and faster. It goes back to Henry Ford and Taylorism. It is a system to get people to work in a continuous process. It is pretty tough stuff. If you want a history of labour and an understanding of work, you should research it. The tally system grew out of that. It grew out of piecework—that is, you get paid for what you do; if you do not do it, you do not get paid. That is the reality. The tally system may have had its day, do not worry about that, but that is up to negotiations between people in the workplace. When you have hide pullers and others then of course things change and they need to be dealt with.

On the issue of over-award payments under common-law agreements operating in your electorate, Labor has no problem with those. If people want to pay over the award and have common-law agreements, there is no problem with that under Labor policy. The unfairness of AWAs is what the Labor Party is totally opposed to. Your government yesterday introduced a bill into this parliament because it admits they are unfair. They admit that their Work Choices legislation, which has been taking peoples’ penalty rates and overtime off them without compensation, is unfair. I just point out to you that you need to get these things in perspective and you need to have an understanding of them, don’t you minister.

Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Link to this | Hansard source

You’re a dinosaur, Dick.

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

There is nothing dinosaur like about me, mate; I just understand where the labour movement has come from. You have to understand that there is a bit of history behind labour in this country, and in the world. If you do not understand that, you suffer. Just like your government is suffering now and will continue to suffer. You must make things fair.

Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Link to this | Hansard source

You’re an old union hack.

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

And you are a nasty little man. You have a reputation for being so. I am sad about that, because you will not get anywhere by being like that.

Kim Wilkie (Swan, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Lyons will refer to honourable members by their seat or title.

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

This bill relates to the restructuring of the red meat industry, during which the meat processing sector has funded its marketing and research commitments through a voluntary contributions scheme. This will now cease to operate on 1 July 2007. The government are now proposing to support the meat industry’s view that collective funding for marketing, research and development is necessary for the sustained productivity of the meat processing sector, and therefore they are putting into place a statutory levy to enable the sector to continue its whole-of-industry commitment to undertake marketing, research and development programs. While the support for marketing, research and development in this industry is very important—and although I do not in principle disagree with the bill—I am concerned that there is nothing mentioned about keeping the focus of the research on the support of the workers in the industry in Australia. That has been mentioned on my side of the House.

There are many issues confronting the meat industry today, and one of them of course is the effect of drought, which has reduced the amount of stock becoming available. Add to this the focus the industry has in some areas on live export and there is beginning to be a lessor amount of meat processed in this country. Research is important to actually come up with alternatives, whether it be in processing, worker skills or markets. It seems that much of the industry is more intent on de-skilling than reskilling. That may reflect the federal government’s lack of incentives and courses for young people to learn about this industry and the many-faceted skills required. We must ensure that those skills are still being taught, because although we are moving to multiskilled workplaces in many instances the basics are still needed to become an employee in the big works.

I know from my own experience in Longford that the meatworks has been a pivotal point for many young people leaving school and getting work. Many go in unskilled, get injured and cannot continue. Because of the way that employment is set up these days, mostly on a casual basis, these workers do not get rehabilitated and are often put out on the scrap heap and lost to the industry. We must teach the skills they need. People need to learn to work safely so that they are not lost to the meat industry. Potential workers are being put off. We need those workers to be available in country areas where this work needs to be done. We need those core work skills to be taught at TAFE and through VET programs to allow workers to learn the skills to be able to work anywhere in the works—from the slaughter floor through to the boning rooms and the packing, chilling and freezing processes. We must enable the young ones to get experience in supervisory roles so that they can drive the changes rather than allow them to happen without them, putting them out of work.

Drought too has taxed the ability of farmers to have their best stock going to market and it is driving down the quality of our product that is processed here. Some of it is now being directed to overseas live markets where, although the price received does not differ much, the jobs are being exported. For example, 17 abattoirs have closed in Western Australia in the last 20 years and it must be put down to the fact that thousands of head are being exported live. There are no abattoirs north of Carnarvon now, yet there is still a lot of stock coming from that area.

This marketing levy could concentrate on finding out why the Middle East prefers our meat on the hoof, so to speak, rather than it being neatly packaged and sorted ready to go straight into the kitchen. It is not just to do with religion, as in the past we have undertaken halal kills for local consumption here and overseas. Why can we not put together an impartial trade mission with a representative from farmers and representatives of government and others in the meat-processing industry to go the Middle East and see for themselves the markets that exist and what would be required to keep the jobs in Australia. They may even discover new markets for our products, which have to be among some of the best in the world, despite the drought situation which has influenced the way some stock is being marketed.

It is not good enough to have our animals go offshore to somewhat dubious yards and kept in less than ideal conditions in the Middle East. They can still reject them, like the many troubles that we have had in the past where stock was left to roam the high seas looking for a buyer because of local politics in their original destination. I am sure the Minister for Trade remembers those difficult situations.

When talking about marketing, I think we should do more with new products. I still believe that Asia is much underdone with Australian meat products. We need to come up with products the market wants. Somebody once told me that Asian people did not like Australian lamb, that they felt it was too strong and they did not much go for it. With new ways of cooking with herbs and spices and with the right techniques in today’s world we could produce many products that that market would entertain. I am sure that a lot of people in the House have travelled into Asian and would have seen lamb being consumed there. They may not eat a leg of lamb like a roast in Australia, but there are many other ways of dealing with a product. We could do a lot better in Asia and we need to lift our game and maybe this bill could help us.

I remember some years ago I was in Jordan in the Middle East, and the member for Mallee was with me, and I can remember their meat industry saying—I would not say bragging—to get meat on the shelf there it had to come from kill within 72 hours and this prohibited imports coming from outside in a chilled form. There is no reason why you would not try to change that, and it is probably an issue with the WTO situation anyway. I can remember a case with Korea which was won by Australia and improved our opportunities there.

We should be looking to knock over some of these agreements and get meat and meat products into those broader markets. Agents and shippers make a lot of money from having animals sail around the world and, with modern thinking in this country and abroad, it will be hard to maintain live sheep and livestock exports to the degree that this country has. People think very differently and there will be a lot of pressure coming down the pipe over the next 10 years in that regard. I do not think it is a greatly sustainable industry, and we should be doing a lot more to get meat into those markets and allow us to improve what we sell there. Our traditional markets of Japan, America and Europe and of course Korea are highly paying markets and our processors and exporters like to maintain their positions in those markets.

While dealing with this bill I thought back to the person that started the levy system and set up the corporations structures for agriculture, John Kerin, the agriculture minister in the Hawke Labor government, who did such a good job in seeing the need for a structure that was driven by the market and also improved the processes on the farms to improve productivity and get the right products. I give this government credit that it saw that it was a good process and has maintained it in policy terms and probably improved it in some areas as well. I understand that people overseas also look at our system with some glee.

We know that the drought has already caused stand-downs in some of our major plants, and we foresee that this will continue next year until we can sort out new ways of raising stock and keeping them through dry times. There need to be new ideas, new structures and new ways of marketing, so that we can cater for the growers’ needs as well as the needs of those processing the meat, so all can make a good living out of our cattle and sheep industries.

Tasmania could have had another 580 people working in the industry if we had been able to keep the 75,000 cattle and the 280,000 sheep that were shipped out of the state live last year, not so much to overseas as to mainland markets. If the farmers are to be levied, they would really be better served to try and find answers for some of those marketing problems and to investigate ways of improving existing plants and ways of work that would benefit the farmers, the processors and the workers of this great industry.

Life has never been easy on the farm, and that really has not changed—there are still long hours of work, and the heartbreak of drought, stock losses and disease—but there are ways in which people are doing things differently, and now is as good a time as any to start looking at making sure our young people want to go back onto the farm and into the processors. Give them the skills to do more and better while still allowing them a good life. We all seek that. So when these sorts of bills come through the House, while I support the research and the marketing I do hope that those in charge of choosing what is to be done are people of vision and integrity, who want to see the betterment of the whole sector and not just one part of it. I thank the House and have much pleasure in supporting the bill.

John Forrest (Mallee, National Party) Share this | Link to this | Hansard source

The member for Lyons challenges me to respond. My recollection of abattoirs in the Middle East is that I simply remember all the flies! But I am grateful that in Australia this is a great industry; it certainly is in my own electorate. That is why I am delighted to have an opportunity to speak in support of this legislation, the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No. 1) Bill 2007.

The purpose of the bill is to amend the Australian Meat and Live-stock Industry Act 1997 to introduce greater flexibility for the disbursement of funds derived from the collection of compulsory levies and charges on the slaughter of cattle, sheep and goats. While the debate this evening has been a fairly wide-ranging one about a whole host of associated matters, my intention is not to be diverted by those but to speak to the features of the bill.

The amendments in the bill will ensure that the legislative framework is in place to allow the meat processing industry to change its structural and funding arrangements for delivering marketing and research and development services. The meat processing industry is a valuable part of Australia’s beef, sheepmeat and goat meat trade. As the member for Barker has said, it is a significant regional employer of about 25,000 people, mostly located in regional Australia. It has an annual turnover of $15 billion and earns $7 billion a year in exports.

Indeed, my part of the world is engaged in some very large investment, and I speak very proudly of the honour of representing the Woodward family at Swan Hill—a small-medium enterprise, a family-owned operation, whose investments are creating employment capacity for Swan Hill. It is actually the last remaining significant abattoir in the whole of my electorate now. It is not quite the size of the abattoirs boasted of by the member for Barker, but it is one of which I am immensely proud anyway.

The capacity of this whole industry to add value to Australia’s economy is strengthened through the collective funding of its marketing and R&D programs. The 1997-98 red meat industry restructure allowed the meat processor industry to fund its marketing and R&D programs through a voluntary contributions system. A strong friendship with the Menegazzo family has made me acutely aware of the complaints of a voluntary contribution system, which I will refer to shortly.

However, the industry made it clear that, after 30 June 2007, members would no longer participate in the voluntary system because of entities which persistently refused to contribute. These so-called ‘free riders’, as they were referred to, reap the benefits of a collectively-funded R&D without cost and therefore operate with an unfair commercial advantage. Up until recently, these free riders had represented only a small percentage of the industry. However, during industry discussions on renewing the voluntary contribution system’s three-year agreement cycle, a number of the large processors indicated—and this was very much the case for the Menegazzo family—that although they were keen to keep this system, their ongoing support was conditional on the free riders beginning to pay their share of the contributions.

By mid-2006, industry negotiations had not been able to encourage the free riders to join the voluntary system in a voluntary way. If the larger processors opted out of the voluntary system, it would have meant funding would not have been sufficient to meet the sector’s whole-of-industry commitments under the red meat industry memorandum of understanding. So a ballot was conducted by the Australian Electoral Commission in December 2006 on the future of the funding arrangements. The outcome of the ballot saw an amazing 73 percent in favour of the move to a statutory levy system and for the funding to be directed to the industry’s existing service provider, Australian Meat Processor Corporation. The ballot also supported a new levy rate as recommended by the industry’s peak body, the Australian Meat Industry Council.

The government agreed to bring about the funding changes through an amending bill, resulting in this legislation before the House tonight. The bill will: (a) allow the minister to determine a meat processor industry body, to receive revenue obtained by the Commonwealth from compulsory levies imposed on the red meat industry under another piece of legislation, the Primary Industries (Excise) Levies Act 1999; (b) include the capacity for the minister to declare that a body be recognised as the meat processor marketing body and/or the meat processor research body—two activities badly needed: fundamental research and important marketing activity; and (c) allow for controls over who receives disaggregated levy payer information held by the Department of Agriculture, Fisheries and Forestry and also for what purposes the information can be provided.

In highlighting the key elements of this bill, it is important to highlight the existing arrangements, which will be superseded once the measures in this bill come into effect. The current arrangements established under the 1997-98 restructure accommodated the red meat industry’s wish to be viewed as one industry. However, provision was also made for sectors within the industry to have some autonomy and self-determination—either growing cattle or processing them, or whatever. This meant that some sectors could choose to be funded through voluntary contributions from its members. Levies that would otherwise apply under a statutory scheme would have their operating rates set at zero and no revenue would be collected against these levies.

In the case of the meat-processing sector, voluntary contributions fund its service company to conduct marketing and R&D on the industry’s behalf. The service company can also direct these funds to Meat and Livestock Australia Ltd to carry out agreed marketing and R&D projects as required under the red meat industry’s memorandum of understanding. The funds provided to Meat and Livestock Australia Ltd for research are included in Meat and Livestock Australia Ltd’s R&D total, and eligible activities attract a matching contribution from the Australian government—about which other members have waxed lyrical and claimed credit for. That is okay. It is a good model, and it is right that the rest of the world follows our orderly levy system, which covers a whole range of commodities.

The maximum level of matching funds committed by the Commonwealth is set at 0.5 per cent of the annual gross value of production for the red meat industry—which led to some management problems, if you like. The current arrangements provided for the minister to activate the statutory levy provisions in the event of a sector failing to meet its whole-of-industry obligations from the voluntary contributions. Commonwealth matching funds for research and development are provided to the industry research body, as envisaged by the government and the industry in the 1997-98 restructure agreement. The voluntary arrangements also enabled the service company to access payer disaggregated financial information. Existing legislation does not allow for such information to be passed to the red meat industry. In the industry’s interests, this is important information. It is disaggregated and de-identified but is important information for both sectors to have.

The proposed arrangements were set up to address these issues. The ballot conducted by the Australian Electoral Commission resulted in a clear majority support for the meat-processing sector’s collective marketing and R&D activities to now be funded by compulsory levies. Together with the other sectors of the red meat industry, it was also agreed that the funds raised by the compulsory levies should be channelled directly to the existing services body, the Australian Meat Processor Corporation Ltd, rather than to Meat and Livestock Australia, as provided for under existing legislative arrangements and the industry memorandum of understanding.

Statutory based levies and charges are generally paid to the consolidated revenue fund and appropriated for payment to a declared marketing body and a declared research body. The current provisions of the Australian Meat and Live-stock Industry Act allow only one industry marketing body and one industry research body—which the member for Barker has also explained. These separate entities will be declared by the minister. Activation of the compulsory levy provisions on the slaughter of cattle, sheep and goats without amendment to the Australian Meat and Live-stock Industry Act would result in all funds being directed only to Meat and Livestock Australia rather than to the Australian Meat Processor Corporation, which would have been contrary to the preferences clearly indicated by the industry.

This is an example of the government responding positively to an industry that is growing and one of which we are immensely proud. It is also providing important rural employment and investment in an important part of Australia.

The maximum level of matching by Commonwealth funds for eligible research expenditure will remain unchanged at 0.5 per cent of the annual gross value of production for the red meat industry, but it will be much easier to manage because the voluntary levy uncertainty will be removed. Access to disaggregated levy payer information is being processed separately through amendments to the Primary Industries Levies and Charges Collection Act 1991 which will come before the House shortly. However, these separate amendments will not provide for control over who can access the information and what it can be used for.

The bill provides for the minister to determine a body to be meat processor marketing or meat processor research body. However, reflecting an agreed industry position, the bill requires the payment of matching Commonwealth contributions for R&D expenditure to continue to be paid to Meat and Livestock Australia. It also provides for the control of who receives levy payer information and what it can be used for. These conditions are based on an existing model in the dairy industry—also an important commodity to my constituency of Mallee. We can rely on the provisions there to be protected. The bill will also repeal some provisions of the previous act for technical reasons. Provision to permit the raising of the necessary levies payable to the meat-processing marketing body and the meat processor research body will be undertaken by amendments to subordinate legislation.

I will conclude my remarks, so we might actually wrap up this bill this evening. Continued investment in research and development and innovation is vital for ongoing growth and improvement in the profitability and sustainability of Australia’s agriculture, fisheries, forestry and food industries. The importance of investing in R&D has been recognised through the government’s research and development priorities—policies of which I am immensely proud. The rural sector needs to be well positioned to respond to and manage change in order to maintain and improve its long-term profitability, competitiveness and sustainability. Climate variability, climate change and all the challenges associated with water have been included in these priorities for the first time, reflecting this government’s emphasis on assisting our industries to adjust to significant risk.

I am delighted to support this bill. Unlike the comments made tonight have suggested, it is an industry that acts in its own interest. The reliance on section 457 visas is an unfortunate advent. Around Swan Hill, the Woodward abattoir has to rely on it because the employment level at Swan Hill is at a historically low point. I think it is unfair to criticise the industry for not addressing training. The reality is that the people to do these tasks are not there. I will be looking forward to the growth of this industry so important to my electorate of Mallee. I welcome this bill and commend it to the House.

Sussan Ley (Farrer, Liberal Party, Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I thank my colleagues the member for Mallee and the member for Barker for their contributions. In the electorate of Farrer, both are my neighbours geographically. As always, I am amazed by their knowledge and understanding of the red meat industry. I also thank the member for Capricornia and the member for Lyons for their contributions. I welcome their support for the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No. 1) Bill 2007, but I would like to make just a couple of comments about their remarks. Both claimed there is insufficient focus on support for Australian workers by the red meat industry, and that is simply incorrect. AMPC is a major funder of MINTRAC, the industry training and development body. There is a very strong focus on occupational health and safety research and development.

AMPC funds the Australian Q Fever Register and Q fever research. Q fever is an occupational illness for people involved in the livestock industry and it can be very debilitating. I actually have firsthand experience of it from my time working in the shearing sheds of western Queensland. The government recently invested $9 million, announced in November 2006, to build a new Q fever vaccine manufacturing facility. Organisations such as AMPC, MLA, the Cattle Council and the Sheepmeat Council were united in support for this investment in the world’s only production facility for the Q fever vaccine. The meat industry, through AMPC, is also investing in practical initiatives such as safer bandsaw technology, new and safer cleaning methods et cetera. I just wanted to make that point.

As we know, the red meat industry is a significant contributor to the wellbeing of Australia’s economy, with an annual turnover of around $15 billion a year. It earns nearly $7 billion a year in exports. Marketing and research and development, which are collectively funded by industry members, contribute to industry profitability and competitiveness on global markets. It also underpins the high standing the industry enjoys among our trading partners. The meat processor industry understands the importance of collective funding and since 1998 has supported its funding needs through voluntary contributions. For many years the voluntary contribution system was well supported by the majority of the industry. However, by its nature, a voluntary system allows benefits of collective marketing and research and development to accrue to industry members who did not contribute financially.

The amendments proposed in the bill will ensure the meat processor industry continues to have the capacity to meet the requirements of both domestic and international markets. It will also enable the industry services body to continue to meet joint program obligations and whole-of-industry commitments, as envisaged under the red meat industry memorandum of understanding. The new structural arrangements presented in the bill are the result of nearly three years of discussion between meat processors and consultation with the government.

The provisions are straightforward and follow the precedent set by the restructure of the livestock export industry. Under these new arrangements there will be accountability to the levy payers as members of the company and there will be accountability to the government through the funding contract. The bill also makes provision for the Commonwealth to control who can receive the levy payer information and for what purposes that information can be used. The level of control is similar to that already in place for the dairy industry. It is intended to provide assurance to industry members that the information will be used appropriately.

This bill will continue to give the meat processor industry ownership and control over its marketing and research and development programs. The bill will continue to provide the industry with the capacity to respond effectively and efficiently to current and emerging challenges and to ultimately remain viable and profitable. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.