John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

I do rise to speak on the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013, the Primary Industries (Customs) Charges Amendment (Australian Grape and Wine Authority) Bill 2013 and the Primary Industries (Excise) Levies Amendment (Australian Grape and Wine Authority) Bill 2013. These three bills amend the Wine Australia Corporation Act 1980, the Wine Australia Act, the Primary Industries (Customs) Charges Act 1999 and the Primary Industries (Excise) Levies Act 1997 to implement the merger of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation to create a new wine statutory authority, the Australian Grape and Wine Authority.

The authority will commence on 1 July 2014. It will undertake the functions of the Grape and Wine Research and Development Corporation and Wine Australia without a change in the structure or the amounts of the levies that currently fund both authorities. The assets, staff and functions of GWRDC and Wine Australia will transfer to the authority.

The wine industry is a fantastic example of a progressive Australian agricultural industry. It has progressive farmers, sophisticated wine manufacturers and innovative exporters. The wine industry, like most industries, has had its issues with periods of drought, low prices, restructuring and consolidation, and has had problems with high input costs like the carbon tax, overregulation and a high Australian dollar. But the future is bright. I believe that after years of what could be called 'overproduction', it is consolidating and I do believe that the future really is bright. The industry is proactive and has shown a great ability to change with the times and tackle issues head on.

This legislation is a natural progression by the industry in continuing reform to meet future challenges. The GWRDC was established in 1991 under the Primary Industries and Energy Research and Development Act 1981. The PIERD Act plans and invests in research, development and extension programs and facilitates the dissemination, adoption and commercialisation of the results throughout the industry.

Wine Australia was established in 1981 originally as the Australian Wine and Brandy Corporation under its own legislation as a statutory marketing corporation. In August 2012 the Winemakers Federation of Australia and Wine Grape Growers Australia lodged a formal submission requesting that the government agree to merge GWRDC and Wine Australia. WFA and WGGA are the peak wine industry bodies for winemaking and grape growing respectively, and obviously quite a few are in both camps. WFA and WGGA proposed creating a single new authority to undertake the existing functions of the current authorities without a change in the structure or amount of levies that fund each authority. WFA and WGGA proposed that a merged authority would enable important links between the investment initiatives and functions of the GWRDC and Wine Australia to be realised under a unified whole-of-industry strategy. WFA and WGGA argued that the major benefits would allow the industry to better align its strategy, give better service delivery, provide a single pathway for industry in communicating with the statutory authorities, and provide for administrative efficiencies. In 2012, both bodies undertook a consultative process that included providing information on the merger to levy payers and a series of public meetings. They received letters of support from the state and territory regional associations and major wine companies representing the majority of the industry.

The GWRDC and Wine Australia are both corporations established under the Commonwealth Authorities and Companies Act 1997. The authority will continue to operate under the CAC Act. The amendments to the Primary Industries (Customs) Charges Act 1999 and the Primary Industries (Excise) Levies Act 1999 ensure the new amendments operate as intended in respect of the imposition and collection of the levies.

The main bill, which creates the authority, is divided into two schedules. Schedule 1 amends the Wine Australia Corporation Act to create the authority. Schedule 2 covers matters arising from the transition to the authority such as the transfer of assets and liabilities from the GWRDC and Wine Australia to the authority and will commence on 1 July 2014.

The changes in the Primary Industries (Customs) Charges Amendment (Australian Grape and Wine Authority) Bill 2013 are straightforward. This amendment bill replaces references to the Wine Australia Corporation with references to the authority. The change will allow for levies collected to be paid to the authority. The bill also repeals clauses that provided for Wine Australia, following an annual general meeting, to make recommendations to the minister about the levy rate.

The Primary Industries (Excise) Levies Amendment (Australian Grape and Wine Authority) Bill 2013 makes amendments to the Primary Industries (Customs) Charges Act 1999. These amendments involve replacing references to the Wine Australia Corporation with references to the authority. The change will allow for levies collected to be paid to the authority as previously. The bill also repeals clauses that provided for Wine Australia, following an annual general meeting, to make recommendations to the minister about the levy rate.

The main issue is again the short time frame to check the mechanics of these bill, to check that they do what they say they do and to conduct consultation to properly gauge industry support. However, in the main these bills are straightforward and industry does clearly support the amalgamation. Any concerns are with the mechanics of the amalgamation, such as the make-up of the board, and not with the amalgamation itself. So on balance the coalition has decided to support industry by supporting this bill.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Of course, I have a strong interest in the wine industry. It is a vital employer in many of the regions that overlap my electorate, particularly the Barossa Valley and the Clare Valley. It also spills over into manufacturing in the bottom part of my electorate: there is a labelling plant in Elizabeth and a bottling plant just outside Gawler, between Roseworthy and Freeling. So it is a big employer in my area. It is a big exporter and it is a vital part of the state economy. South Australia in particular has a lot of skin in the game when it comes to the wine industry. This is very important legislation for the wine industry. Only on the weekend, I was at Seppeltsfield with Nicole Hodgson, the tourism manager there, and the Minister Assisting for Tourism, Don Farrell, talking about some tourism grants that will transform Seppeltsfield Winery—a very famous winery in South Australia and a great place to visit. If the Deputy Speaker ever wishes to come to South Australia, I am sure we will put on a good show for him. There are, of course, many other good wineries around the place. I have, on occasion, gone and talked to Mitchell Taylor of Taylors Wines; my friend, Simon Pringle of Mitchell Wines; and Peter Barry of Jim Barry Wines about the wine industry. They have all been voices in my ears about this very important industry.

This legislative package contains three bills that provide the mechanism to implement the merger of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation to create a new statutory authority, the Australian Grape and Wine Authority. Those three bills are the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013, the Primary Industries (Customs) Charges Amendment (Australian Grape and Wine Authority) Bill 2013 and the Primary Industries (Excise) Levies Amendment (Australian Grape and Wine Authority) Bill 2013. These bills as a package wind up the GWRDC and Wine Australia, and transfer their assets, staff and functions to the authority. The authority will commence on 1 July 2014 and will undertake the functions of the two aforementioned bodies without a change in structure to the amounts of the levies that currently fund both bodies.

This whole process was set off in August 2012 when the Winemakers' Federation of Australia and Wine Grape Growers Australia lodged a formal submission requesting the government agree to merge the GWRDC and Wine Australia. They are the peak bodies for the industry, in winemaking and grape growing respectively. They are important bodies. They are bodies that are listened to by government and they are representative of industry and, certainly, of the regions I represent. So, obviously, the government took their wishes to heart. Their proposal to create a single new authority to undertake the existing functions of the current authorities without a change to the structure of levies is an important one. The industry argued that a merged authority would enable important links between investment initiatives and enable the functions of those two bodies to be better realised under a whole-of-industry strategy.

Those major benefits, principally, are the alignment of strategy, better service delivery and administrative efficiency gains. They are important things for any industry. It is not a secret that the wine industry is confronting the same struggles that the manufacturing industry across Australia is struggling with—that is, the very high cost of the Australian dollar, which is a penalty for exporters; and the emergence of our currency as something of a safeguard currency in the current world economic situation, with some 19 central banks now holding our currency. That has made the dollar persistently high, despite commodity prices coming off, and that is a very serious issue. Obviously, the only way to combat that is through high-skill, high-value exports. That is the only way you can deal with a sticky dollar, a high dollar. This single, new authority will help the industry to combat those sorts of challenges, and it is reflects the realisation that the interests of grape growers and winemakers are inextricably linked.

Both industry associations undertook a consultation process, provided information on the merger to levy payers, had a series of public meetings and got letters of support from the state and territory regional associations and the major wine companies who are representing this industry. The government has noted in its Rural Research and Development Policy Statement that combining the R&D and marketing functions in one organisation can lead to some synergies, helping research programs and the like.

This is a good bill. It does what it sets out to do: it helps the wine industry, it creates some synergies and efficiencies and a better alignment of strategy for the industry and it creates a recognition that we are all in this struggle against the high dollar together. There is a mission to, if you like, reinvent the wine industry as a higher value industry than it has been. It is still a high exporter, and I am always encouraged when I talk to people like Peter Barry up at Clare. He is a winemaker who saw this coming a long time ago, changed his strategy and is now providing jobs and export income for his company but also for this nation. I know that the minister for education, Peter Garrett, is a big fan of Jim Barry Wines. A great friendship has been spurned between the minister for education and Peter Barry, and that is no bad thing.

Mr Husic interjecting—

Created, I should say, not spurned. That is right. Thank you to the member for Chifley for helping me! It is a real friendship. This is a good bill and I commend it to the House.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

I rise to support the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013, the Primary Industries (Customs) Charges Amendment (Australian Grape and Wine Authority) Bill 2013 and the Primary Industries (Excise) Levies Amendment (Australian Grape and Wine Authority) Bill 2013. These bills will give effect to the merger of the Grape and Wine Research and Development Corporation, the GWRDC, and Wine Australia. This legislation will create a new wine statutory authority, the Australian Grape and Wine Authority. The authority will commence on 1 July 2014 and will undertake the functions of the GWRDC and Wine Australia without a change in the structure or amounts of levies that currently fund both authorities. The assets, staff and functions of the GWRDC and Wine Australia will transfer into the authority.

I will address a range of issues pertinent to these bills that I have been closely following as a member representing an electorate in the Hunter Valley region, which, without doubt, is the premium wine-producing area in Australia, and as the shadow minister for regional development and the shadow minister for tourism, because wine is critically important to both those portfolio areas.

The merger of these two existing statutory bodies would see the following benefits: an ability to identify and deliver aligned industry strategic imperatives and RD&E goals; management efficiency of program delivery and associated cost savings to government and the industry; streamlined functional relationships between industry and government; genuine accountability to industry at the same time as meeting the government's requirements; and improved communication and strategic alignment between the national associations and the merged entity.

Australia is consistently ranked as one of the world's top 10 wine producers, and the finest Australian wines are amongst the best in the world. Australia is the No. 4 wine-exporting country in the world and the No. 16 wine-drinking country in the world. For Chinese tourists, Australia is the world's No. 2 food and wine tourism destination after France. The United Kingdom imports more wine from Australia than it does from France, and that is thanks, in no small part, to Robert Oatley AM, whose 1980 gold medal in London for his Rosemount Chardonnay really started the UK's obsession with our wines. Australian wines have won medals at almost every major international wine competition and have set records for prices for a single bottle. Around 78 per cent of wineries have cellar doors—no surprise in that. Twenty-nine per cent of those cellar doors have on-site dining, 11 per cent have accommodation and some offer adventure further afield into opera, theatre, musical events and festivals. Without doubt, the wine industry is a critical part of our national tourism fabric.

Recently, when I was in Tasmania, I accompanied the candidate for Bass, Mr Andrew Nikolic AM, who took me to meet another lion of the Australian wine industry, Josef Chromy AM, in Relbia, Tasmania. Joe Chromy Vineyard hosts concerts, runs an excellent restaurant and is even progressing plans to part fund a resumption of the Relbia Wine Train—helping a range of other tourist attractions in the region. Joe Chromy also showed me a mechanical invention of his own design: an improved grape-crushing machine in operation at his winery.

The inventiveness and can-do business thinking of our winegrowers is underpinned by the GWRDC, which has established a plan to invest in research, development and extension programs. It facilitates the dissemination, adoption and commercialisation of the results throughout the industry. This is similar to ABARES, who produced an excellent report in 2010 on Agri-tourism, two years before the UN World Tourism Organisation published their major report on culinary tourism. I received these through the Regional Australia Institute.

Our future wine production and wine tourism success depends on high-quality primary and secondary scientific, economic and consumer preference research. This will be centrally reliant on: the new Australian Grape and Wine Authority, created by this bill; the Commonwealth Scientific and Industrial Research Organisation, CSIRO; Australian Bureau of Agricultural and Resource Economics and Sciences, ABARES; Australian Trade Commission Service, Austrade; Regional Australia Institute; and Tourism Research Australia.

A coalition government, if elected, will also rely on industry groups like Restaurant Catering Australia. Their research into food and wine tourism supported their recommendations to the NSW Visitor Economy Taskforce last year. Tourism Australia also commission useful, actionable research to inform their marketing activities, such as the GFK Blue Moon Development Plan research; and the Euromonitor food and wine tourism research, which is currently underway.

Last year's UNWTO report on culinary tourism stressed the importance of cooperation:

It is necessary for the actors operating in the destination (producers, farmers, ranchers, fishermen, chefs, restaurateurs, public administration, hoteliers etc) to be involved in the definition and management of food tourism offerings …

Last week the coalition outlined our vision to develop Northern Australia, which will do much to reinvigorate debate, interest and research into agriculture nationwide. As my colleague the shadow minister for innovation and science noted on in her 5 September media release, a World Economic Forum global competitiveness report has revealed that Australia is continuing to fall further behind its global competitors in innovation. Since the last global competitiveness report was released one year earlier, Australia has declined further in a number of key indicators, in particular capacity for innovation, where we have dropped from 27th to 32nd globally; and company spending on research and development, where we have dropped from 27th to 30th.

The report cited restrictive labour regulations and inefficient government bureaucracy amongst the most problematic factors for doing business in Australia. It also highlighted very significant concerns over tax regulations and policy instability. The model used by the World Economic Forum was the basis for Regional Australia Institute's [In]Sight modelling, which was publicly released this morning. Australia's wine regions have been done a great service by Regional Australia Institute, and I would like to thank Su McCluskey, Jack Archer and the other staff at RAI for the work that they have done.

[In]Sight is the nation's first online index and interactive map tracking the competitiveness of Australia's 560 local government areas and 55 Regional Development Australia (RDA) regions. [In]Sight spans 10 themes and 59 indicators specifically tailored to reflect the fundamentals of sustainable growth in Australia, capturing the competitiveness of LGAs and RDAs according to current economic performance and drivers of future success. While investment in research, development and extension programs, and the promotion, adoption and commercialisation of the results amongst Australian businesses is vital to secure and retain an edge, this is especially so in agriculture.

I was pleased to attend the Winemakers Federation reception here in Parliament House last week, and spoke with the outgoing CEO of Wine Australia, Mr Andrew Cheesman. I would like to echo the remarks of Wine Australia's chairman who paid tribute to Mr Cheesman's record of service to the industry. The memorandum of understanding signed in January this year between Wine Australia and Tourism Australia on co-location of their offices was a great outcome.

According to the one-time adviser to the Hon. Robert Hill and current CEO of the Winemakers' Federation of Australia:

(1) A confluence of international and domestic financial and market impacts has severely impacted Australian producers …

  …   …   …

(2) Like most primary and value-added industries, the effect of a high dollar, increasingly fierce global competition and high costs compared with other new world producers have created serious challenges for the wine sector.

(3) Domestic demand was flat, meaning most producers had to grow their sales overseas …

  …   …   …

(4) Vineyard profitability continues to be a major concern, with Wine Grape Growers Australia figures showing average vineyard operators have not met the cost of production for the past three years.

(5) "The costs of production are not being met by the prices paid by wine producers who also are under extreme pressure," …

Against this backdrop, the main concern raised in the consultation was ensuring that levy funds collected for research and development would only be spent for research and development by a new authority. This government has a habit of spending other people's money for its own political purposes.

This is a good venture by the government to bring about greater efficiency, but what is critical is that we act in the interests of the wine industry and do what we can through the various agencies available to the industry to build our export markets. We have a glut of grapes in Australia at the moment, and we need to build on those markets. One of the key issues raised in one of the weekend newspapers was that our glut of wine being sent overseas was not at the premium end of the market, and this has affected those areas whose production is solely or primarily at the premium end of the market. Of course, that is the Hunter Valley, which, as I said right at the beginning, without doubt produces the best wines in Australia. It is a source of argument from those less informed—from the Barossa Valley, Tasmania or down in the Riverina. There can only be one premium area and of course, parochially, that is the Hunter Valley. It is recognised that young Neil McGuigan is the international best winemaker in a semillon grape.

We encourage this. We always want to work to grow the industry. It is a good, high-value industry. It suffers from weather. A single session of out-of-character rain can destroy some grapes yet improve other grapes. So all we can do is support them. We wish this organisation well and we encourage further dialogue with the industry to make sure the whole of the industry goes forward.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013, the Primary Industries (Customs) Charges Amendment (Australian Grape and Wine Authority) Bill 2013 and the Primary Industries (Excise) Levies Amendment (Australian Grape and Wine Authority) Bill 2013. These three bills amend the Wine Australia Corporation Act 1980 and also the Primary Industries (Customs) Charges Act 1999 and the Primary Industries (Excise) Levies Act 1999 to implement the merger of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation to create a new statutory authority, to be called the Australian Grape and Wine Authority. This authority will direct research and development in the industry and it will have a combined budget of close to $35 million, which will come jointly from levies upon growers and from a matching contribution from the taxpayer.

This is an important move. It is supported by the industry and is also supported by the coalition. The wine industry is perhaps one of our most important agricultural industries. Here are some of the numbers from 2011. In Australia our consumption of wine was 455 million litres, which works out to something like 20 litres per person. I am sure there are some that drink quite a lot more than that. Our exports in this industry are even more impressive. Something like 66 per cent, or two-thirds, of our production of wine in Australia is exported. In the last calendar year we exported over 700 million litres of wine.

It is very important that this industry remains diverse, has many players and continues to experiment—to develop new ideas and new methods of marketing—and to look for new export markets. It is also important that we have an environment that encourages investment and risk-taking amongst the entrepreneurs in the industry. However, there are threats to this industry. There is the threat of the carbon tax. A typical winery, producing 50,000 tonnes, will see its electricity bills increase close to $500,000. If the current government is re-elected, we will have the carbon tax extended to transport costs, and that would also have a substantial effect on the wine industry. Every grape has to be moved around the country. Movements from country areas to city ports will increase the tax.

Perhaps one of the main threats to the industry is the increasing market concentration in our retail sector. In that sector, under the current legislative settings of the Trade Practices Act, today we have two players, our supermarket duopoly, controlling something in the vicinity of 60 to 70 per cent of the wine sales of our nation. That has come about simply because of the legislative settings of our Trade Practices Act, which is based on the delusion that small business in the industry cannot be efficient. It has evolved so that we now see a policy that encourages not survival of the fittest, which is what we want, but survival of the biggest.

These problems with market concentration affect the wine industry in a few ways. Firstly, there are mergers. We have seen many mergers in the industry. A lot of those mergers and consolidations have been through bullying. A paper written by Professor Evan Jones details a few of the difficulties. It cites how in 1995 in Adelaide a small market trader of organic products applied for a liquor licence to sell organic wines. Coles fought the application in the Licensing Court of South Australia and appealed an adverse judgement in the Supreme Court, all with highly paid counsel. Although Coles lost the battle, the fact that they were prepared to expend substantial resources on harassment of a minnow is indicative of a strategy of market dominance.

The other issue that we see in our wine-retailing sector is the issue of price discrimination. Certainly if someone is buying a smaller quantity of wine they would expect to pay a higher price. Likewise, if someone is buying a larger quantity, they would expect to receive a discount. But, when retailers in the liquor industry can go to their larger competitors and buy wine at a retail level at a lower price than they can get it from a wholesaler, something is significantly wrong with the workings of the market. That is simply because of price discrimination, which we are seeing rampant in the liquor and wine retail industry.

Then there is the issue of predatory pricing. For many years, we had no effective law to combat predatory pricing. However, that was remedied in 2007 when the former Treasurer Peter Costello brought in what was known as the Birdsville amendment, legislation written and drafted by Professor Zumbo. But, in the last six years of this government, the ACCC has not brought one case under that legislation. There have also been examples of geographic price discrimination damaging independent retailers.

This is very important for our farmers and our wine producers. We need legislation not only to protect the consumer but also to make sure that our wine producers have several players to sell to. If they are forced into a market where two players control 60 to 70 per cent of the market, that damages the supply chain. That becomes a discouragement to investment. It simply becomes more difficult for a wine producer who is experimenting with a new label to get that label onto the nation's supermarket shelves and get it before consumers.

The other issue that affects our wine producers is our law on retail price maintenance. This law is a hangover from bygone years, taken from American antitrust legislation, when it was the producers who actually had the market power. Today we are seeing the inverse. The American courts have in many cases overridden that law against retail price maintenance and it is no longer anticompetitive and against the law of America. Again, that affects premium wine producers who would like to market their products at the premium end and to maintain a price.

Another law that leads to market concentration is our current licensing regime. Under that regime, anyone who wants to enter the market to sell wine on a retail basis has such regulatory barriers that the result is that only the largest players in the market have the resources to wade through all the legislation, regulation and red tape and be able to compete in the market. These are the risks to our wine producers from market concentration. We do not want to see a situation where our wine producers are the same as our dairy farmers, where they are being screwed down to the last penny, there is a lack of investment in the industry, they are getting low prices and they are basically being held hostage. This is the problem we face.

We must also look at the risks to the consumer from such market concentration in our retail wine sales. Despite the theory telling us that market concentration would lead to lower prices, what we have seen in our supermarket sector is that market concentration for food and groceries has led to the Australian consumer having to suffer some of the highest rates of food inflation in the developed world. If we do apples-for-apples comparisons of items on our grocery shelves and those in any other country, we find Australian consumers are paying some of the highest prices. For consumers who enjoy wine—and, as I said, the average is 20 litres per person; for every man, woman and child in the country—that is a risk they face from the increase in market concentration. So the idea that it will benefit consumers is wrong. There is pressure coming from this unnecessary market concentration, both for the consumer and for the supply chain.

The coalition welcomes this legislation. We hope it will lead to some benefits and we wish the wine industry well. We hope that their marketing and research will lead to innovation and to some new export markets that Australian wine producers can sell to. But we must have a look at our competition laws to ensure we do not get greater concentration, because that is not in the best interests of this important industry.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

At the outset I commend the member for Braddon, who I know is the Parliamentary Secretary for Agriculture, Forestry and Fisheries, because he has consulted industry on this legislation and I commend him for that. All too often in this place we have seen bills rushed through on which there has not been proper consultation with industry. In this case I know the member for Braddon has been dutiful in his portfolio area by actually consulting with industry, which is commendable. He represents a regional area in north-west Tasmania and, as far as regions go, he gets it. There are all too few people in this parliament who 'get' regional Australia, which is a unique place. There are so many people who live on the eastern fringe of Australia, overrepresented in terms of population and, dare I suggest, in the number of parliamentarians too.

Those of us who live beyond the sandstone curtain understand regional Australia and also understand the complexities, the unique challenges and the risks going forward. One of the risks is to our agricultural sector, so I am pleased that the parliamentary secretary has seen fit to consult industry. I served with him on the Regional Australia Committee, headed by the member for New England, and the member for Braddon was the deputy chair of our inquiry into the Murray-Darling Basin and the challenges facing that vital part of regional Australia—that food bowl of not only our nation but other nations too. Thanks to a bipartisan approach, the committee did some good work. The wine industry made a very good submission to the inquiry and, had all the committee's recommendations been adopted, I think we would have had a better outcome as far as the water rights debate was concerned.

As far as this particular legislation is concerned, the three bills which we are debating as cognates amend the Wine Australia Corporation Act 1980, the Primary Industries (Customs) Charges Act of 1997 and the Primary Industries (Excise) Levies 1997 to formulate the merger of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation to establish a new wine statutory body, the Australian Grape and Wine Authority. Like the parliamentary secretary and like the member for Calare—who is the shadow agriculture minister and, more importantly, the food security shadow minister—I too have done my due diligence and consulted with various industry groups and individuals within my electorate.

My electorate has a huge stake in the future of the wine industry. Members of the Riverina Winemakers Association include five of Australia's 16 largest wine exporters—namely Casella Wines, De Bortoli, McWilliam's, Nugan Estate and Warburn Estate. The Riverina wineries produce around a quarter of Australia's wine and the region grows around 20 per cent of the nation's grapes. The Riverina wine industry is worth around $1 billion and is a huge export earner. In fact the Yellowtail, which is produced by Casella Wines Pty Ltd and based at Yenda, in 2003 was the No. 1 imported wine to the United States of America. That is a tremendous achievement by a once-small and humble winery at Yenda in the Riverina. The winery has a capacity of about 300 million litres a year at its Yenda site. The Yellowtail label—with that very familiar yellow-footed rock wallaby—is synonymous with so many good dinner parties, certainly in the United States. John Casella, the proprietor of that wonderful company, is grateful that the Australian dollar is softening—today it is 92.52 cents—and also commends this legislation. He has been watching it carefully, but he is not opposed to it, because he sees the merit in it. The Winemakers Association is similarly supportive. I spoke to the Riverina Grape Marketing Board's industry development officer, Kristy Bartrop, just a few moments ago. She said that it will be a good thing when the money that is going to be spent on promotion and tourism and on research and development is fused together—so long as the R&D side is not diluted by the promotional side. We know that in all aspects of agriculture—indeed, in all aspects of business—that R&D is vitally important. We can never underestimate the value of R&D to ensure that industry not only survives but also prospers. Speaking of surviving and prospering into the future, I would like to take a moment—with the indulgence of the member for Braddon, who has heard this before—to mention the Riverina Winemakers Association submission to the Murray-Darling Basin. Water is crucial for the Riverina, and the new statutory board will also understand just how important water is as a component in the future of the wine industry in the Riverina. I have told the House before just how big that market is, not only to the Riverina's overall exports, but also to Australia's.

In its submission to the Murray-Darling Basin Authority on 17 December 2010, the Riverina Winemakers Association said in relation to water:

There are a number of long term risks in taking a quick fix route:

I talked before about John Cobb, the member for Calare, and his role in food security. Certainly, food security is very much on the coalition's radar. The Riverina Winemakers further points were:

So the Riverina Winemakers Association highlighted the need to ensure that ecotourism, marketing and tourism do not completely wash over the R&D component research funding necessity. The Winemakers Association also told the Murray-Darling Basin Authority:

I might add that the demand for the wine will continue to grow as well. The submission went on with these points:

The association finished its submission by saying:

The problem is that the environmental genie is out of the bottle. Now that the Plan has determined the range of environmental water needs, unless there are modifications to the Water Act that will allow a more balanced plan, there will be constant agitation for further reviews and harsher implementation of SDLs—

sustainable diversion limits—

until the maximum needs of the environment are achieved.

Certainly I have no argument with the Winemakers Association there and I thank the member for Braddon for allowing me to put that on the record. He has heard it before because, as I say, he was on the Regional Australia Committee which spent time in Griffith and the Riverina and heard from those people who do such a wonderful job not just on behalf of the locals but on behalf of the nation and our exports.

The merger of the two existing wine statutory bodies would see the following benefits: it would create an ability to identify and deliver aligned industries strategic imperatives and R&D goals, management efficiency of program delivery and associated cost savings to government and the industry. That is important because the industry, like all agricultural industries and all regional industries, is hurting at the moment. The high Australian dollar and a crisis in confidence in regional Australia brought about by any number of factors are really having an effect on the psyche of people in regional Australia and certainly on business confidence. When those business confidence parameters are down, people are not willing to invest and they are not willing to spend. There is, hopefully, an opportunity into the future that things will improve. The softening Australian dollar is one thing that will go a long way to ensuring that confidence in regional Australia, which relies so much on exports, particularly in agriculture, will improve.

Another benefit of merging these two statutory bodies will be a streamlined functional relationship between industry and government. That is important. I said at the outset of this speech that government has not consulted with industry enough on so many levels and so many aspects of legislation. I thank the member for Braddon for consulting with industry, because it is important. Industry need to feel not only that they are participants in the parliament but also that what they do is actually worth something. How they go about achieving and generating income and, indeed, taxes for us as a government and as a Commonwealth to spend is really important, and they need to know that their worth to the nation is valued.

Another benefit will be genuine accountability to industry at the same time as meeting government requirements. That, too, is very important. Another benefit is improved communication and strategic alignment between the national associations and the new merged entity. That, too, is absolutely critical, because the wine industry does play an important part. As I said, it has been under a lot of pressure lately, not helped by the high Australian dollar, the global downturn or poor public policy, including on water. Water, as we all know, is critical to the Riverina and to all winemaking areas. Getting those parameters right is going to be critical for the future success of the winemaking industry. It is certainly a valuable industry to the Riverina.

Whilst I highlighted the Riverina side of things, as far as the Riverina Winemakers Association goes, there are also a number of boutique wineries in the cold climate of the Riverina electorate, which I serve. I am talking about those at Tumbarumba and other parts of the Snowy Mountains, because the Riverina electorate stretches from Mount Kosciuszko right out to the fringe of the outback beyond Hillston. The former regional Australia minister, the member for Hotham, once described it as the high point of the Australian parliament because Mount Kosciuszko is in the actual electorate. I rather thought he meant it was because of its value to regional Australia. I am certain that he is a friend of regional Australia, and certainly of the Riverina, because he visited there on a number of occasions during the time he held that portfolio. He was certainly very interested in the fortunes of the Riverina, because he recognised the value of the region to our nation's exports.

I finalise on a rather sombre note: today I telephoned Brian Simpson, who is the Chief Executive Officer of the Riverina Wine Grape Marketing Board, in relation to this matter and, very sadly, in the last hour, his wife Liza had passed away after a very courageous fight against cancer. I wish to pass on my condolences to Brian and his family at this very sad point in time.

Sid Sidebottom (Braddon, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Thank you very much for the contributions from the members for Calare, Paterson, Hughes, Wakefield—and particularly from my colleague and friend the member for Riverina. Thanks for your commitment and that of others in this chamber to regional Australia and for your support for this legislation. I assure the member for Riverina that there will be no dilution of R&D at the hands of or to the exclusion of marketing. That is not the intention here—in fact, it is the very opposite. Please be assured of that.

I will just give it some context. We are dealing with what appears on the surface to be a dry piece of legislation but which is absolutely crucial to the industry. I have actually got a specialist wine-growing area in my electorate of Braddon. I want to mention one particular white wine specialty vineyard, Ghost Rock at Port Sorell, and also the vineyards in the Lower Barrington. We are developing a really good reputation for these lovely, cool-climate wines.

Also, listening to the members opposite, and the member for Wakefield on our side, I think is really important—because it gives this legislation a very local, down-to-earth overview of how research and development and extension, and also marketing, in this important industry, is important to local economies. It is also, of course, most importantly, a significant contributor to the national economy. So it is good to give it some localised context.

In December 2012 Senator the Hon. Joe Ludwig, the Minister for Agriculture, Fisheries and Forestry, announced a merger of the two statutory wine corporations—namely, the Grape and Wine Research and Development Corporation and the Wine Australia Corporation. The merger of the two corporations will create a single, whole-of-industry statutory authority: the Australian Grape and Wine Authority. The new authority will offer strategic benefits to the industry—as highlighted by all those who have spoken in support of this legislation—such as improved leadership, service delivery and administrative efficiency. It will also enable a single board to make strategic links between research and development, investment initiatives and marketing. The merger creates a new authority that will inherit the functions of the two corporations.

The merger aligns with the Australian government's 2012 research and development policy statement, which noted that combining research and development, and marketing functions, in one organisation can lead to synergies such as being able to factor customer requirements into research programs, as highlighted by previous speakers.

The merger also fits with the broader government policy agenda of reducing the number of statutory bodies. There will not be any change to the structure or amount of industry levies. The legislation before us provides that all levies collected for a particular purpose, such as research and development—as I mentioned earlier to the member for Riverina, with respect to his concerns—will only be used for that purpose by the new authority. There will also be no change to the existing regulatory, marketing and compliance roles of the Wine Australia Corporation under the new authority.

The government's announcement of the merger followed an industry proposal, submitted in August 2012, by the two industry peak bodies: Winegrape Growers Australia and the Winemakers Federation of Australia. The merger has widespread industry support and addresses discussions that have been raised over the last 20 years—not recently alone, but over 20 years.

Three bills are being presented for introduction that provide the mechanism to create the Australian Grape and Wine Authority and implement the key elements of the reform. The bills are the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013, the Primary Industries (Customs) Charges Amendment (Australian Grape and Wine Authority) Bill 2013 and the Primary Industries (Excise) Levies Amendment (Australian Grape and Wine Authority) Bill 2013. I thank all those who have taken part in the consultation process, and I thank the department for the excellent work that they went about, along with the minister's office, in the consultation that took place and in the presentation of this important legislation. I commend the legislation to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.