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

I rise to speak on the Rural Research and Development Legislation Amendment Bill 2013 and cognate bills. The bills will implement a number of changes to the research and development corporations which will, hopefully, facilitate small but positive improvements to these organisations to continue the proactive evolution of research and development for agriculture and agribusiness.

The amending legislation allows statutory RDCs to undertake marketing activities where the relevant industry requests this and agrees to raise a marketing levy. Currently, nine of the 15 RDCs are industry owned and can undertake marketing activities. The amending legislation will allow the remaining RDCs to also undertake marketing activities. This does not impact on government matching funds, which can only be applied and used for research and development activity. However, industry owned RDCs have demonstrated that benefits can result from combining these roles.These bills make arrangements for providing government matching funding for voluntary contributions made by industry to an RDC. Again, a number of RDCs already do this and the arrangement will be extended to all RDCs.

Industry clearly recognises that research and development investment returns far outweigh the costs. These changes are intended to encourage voluntary private sector investment in rural R&D and to ensure equal treatment of RDCs by government. The bills will provide maximum levy and charge rates for each specific commodity, to reduce the cost and delay associated with primary industry electing to increase their investment in R&D and/or marketing.

The requirement for the minister to consult with and take account of the views of levy payers when setting operative rates will be strengthened. The minister will be prevented, as he should, from setting a levy or charge rate above that recommended by industry. For statutory RDCs, board selection processes will be streamlined to reduce the time and cost of vacancies.This includes cutting the size of selection committees and creating a reserve list of suitable candidates to allow for the unforeseen circumstance where the preferred board member pulls out or serves a very short tenure. Amendments also provide that funding agreements between statutory RDCs and government will be required from July 2014.

Over the last decade, funding agreements between the government and industry owned RDCs have been used to manage governance and clarify partner arrangements. This bill extends funding agreements to the government relationship with statutory RDCs. Funding agreements create a flexible mechanism, which can be further modified to reflect the changing needs of the parties. Funding agreements will be used to promote transparency and accountability, and these agreements will be tabled in the parliament.

Another change will see statutory RDCs no longer having to submit their annual operating plans to the minister for approval. The minister will still get the operating plans but industry will not be required to wait for his approval every year, as governance issues will already have been managed through funding agreements.

The Primary Industries and Energy and Research and Development Act 1989 will be amended to clarify funding arrangements for fisheries sectors which have a statutory levy in place that is specific to that sector. The amendment will allow the future establishment of levies for individual fisheries sectors, where requested by that industry. The amending legislation also incorporates a widely supported 1995 ministerial direction requiring the fisheries RDC to spend industry funds raised from a particular fishery, industry sector or jurisdiction on R&D projects relevant to the source funds.

The government conspired with the Productivity Commission to cut R&D funding, but I am very happy to say that industry and the coalition shamed them out of it. In an effort to regain credibility on R&D, the minister put out a research and development policy statement in June. These changes to legislation are an effort to show that Labor are now doing something in this area and are trying to get the public to overlook six years of neglect, along with policies from the government that have caused immense problems for industry and destroyed the confidence of this sector.

One thing that the Productivity Commission report showed was that the Australian taxpayer gets good value out of R&D—to some extent, this bill deals with that issue—and also that we can get a better result out of research and development by the various RDCs and the various industries working together better, and I think that is needed.

The biggest issue with this legislation is the haste with which Labor is pushing everything through in the last week before we rise. Industry has had little time to review the changes, given the legislation has only been available for industry for a little over a week. Consultation has been far less than that required for good process. We will allow the bill to pass through this House, but we do reserve the right for the Senate to perhaps demand an inquiry to allow the coalition to get the assurance that industry supports this legislation. We are happy with the bill as read in this House.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I too wish to speak on the Primary Industries (Customs) Charges Amendment Bill 2013, the Primary Industries (Excise) Levies Amendment Bill 2013 and the Rural Research and Development Legislation Amendment Bill 2013, which are being considered here. Obviously, these bills are of critical importance to my part of the world, where our economy is underpinned by agricultural production. That production, in turn, depends on innovation, well-funded research and industry development. We have gone through a very bad period when our different state and federal governments have pulled back from what were sometimes 80- or 90-year-old research stations. We have seen a lot of the CSIRO effort in rural and regional research no longer funded.

I am concerned, too, about things like plant breeding, which may take literally 20 or 30 years to undertake if, for example, you are looking for a new wheat variety that is particularly suited to our climatic conditions—perhaps in Western Australia. The seed-breeding program that used to be in place in Western Australia brought forward for Australia a whole new focus on quality and higher yields. For example, the noodle wheats in Western Australia, wheats like Eromanga, were evolved as a consequence of the state-supported seed-breeding program. Much of that is now lost and the business of breeding new varieties is too often in the hands of research organisations commercial and not based in Australia, and so they have other conditions attached to the buying of those varieties. It is no longer always the case that farmers can use their own seed for replanting, for example. Too often there are highly restricted conditions around the seeds—patenting or licensing. This business of research and development—including the levies raised, matched by government funding in this case—is a most important matter for the future sustainability, evolution and additional productivity in Australia's agriculture.

What do these bills do? They allow statutory RDCs to undertake marketing at the request of the industry in addition to their more traditional activities. I have a little issue with this. When an RDC does something like promote the eating of fresh fruit or a dairy product, or maybe Australian meats, this tends to increase the shopper uptake of that product. The shopper goes home perhaps with more cans in their trolley or more fruit in their diet. This is a good thing but, of course, imports also benefit from that marketing effort. If the general response to that food category is stimulated by marketing dollars, I have a view that the importing country should also contribute to that marketing effort, particularly in the case of New Zealand, where we have a great deal of two-way flow in food. We have, as we know, under the CER, or Closer Economic Relations, a longstanding arrangement whereby there are no barriers or inhibitions between the two countries in terms of tariffs, duties or quotas. Only phytosanitary considerations are in place. Yet, if RDCs are to raise levies for marketing within Australia to promote, for example, the eating of apples, I think the New Zealand Apple and Pear Marketing Board, the equivalent body, should make a contribution.

The bill will also make sure that the government's matching funding extends to voluntary contributions made by the industry. This change is intended to encourage voluntary private sector investment, and we need to see that across Australia. The bill also removes product specific maximum levy and charge rates to reduce the cost and delay associated with primary industries electing to increase investment in R&D and-or marketing. The minister will be prevented from setting the levy or charge rate above that recommended by industry, and that is a good thing, but all of this is about reducing red tape and putting more control back in the hands of the industry itself. These are important developments, I believe.

The board selection processes are to be altered and, hopefully, improved. There is also going to be a reserve list created for suitable candidates. A selection committee will create this reserve list. It will cut the size of selection committees, reduce expense and delay in filling board vacancies but, importantly, also look at the diversity and gender balance of various boards. It is too often the case that all we see on these RDCs are men and yet, in agriculture in particular—take dairying—you see men and women participating equally in the business of running their farms or, indeed, participating at a high level in industry policy development.

Funding agreements between statutory RDCs and the government will be required from July 2014. These will provide a more flexible mechanism for agreeing governance and performance issues. This will allow timely modification of these arrangements when needed without having to come back for legislative change. It will improve consistency in the government's relationship with RDCs—that is the aim—a bit like local EBAs. I think it can only be good where, if the industry is in agreement and the government is in agreement, you do not have to come back and queue to see legislative change put in the pipeline.

So these measures look at cutting red tape; they allow marketing to also be an activity of the RDCs although not to have, we understand, government funds put into the marketing arena—just into the R&D activities. That is appropriate and understandable. But we are concerned about the consultation time frame. The industry has had no time to review the legislation and we, the coalition, have hardly had any time at all to look at the issues. There are a large number of stakeholders from very diverse industry sectors who really should have been consulted. There should have been extensive feedback in relation to these changes.

Perhaps we can still have some feedback. We do need more flexibility and less red tape in this area. We need to increase the funds available for R&D in Australian agribusiness in particular. We have had a real problem of productivity not growing in Australian agribusiness sectors for quite a while. Of course we have had floods, droughts and pestilence—that is for sure—but it is interesting to see the productivity advances being made by our neighbours like New Zealand, but also in Asia. Those productivity increases in the agribusiness sector have been quite astonishing, while in Australia we have been standing still.

I was particularly concerned when our crisis—our tragedy—struck in the Goulburn and Murray valleys, where virtually overnight the canning fruit industry found no market for their produce. We needed to consider quickly what alternative varieties to plant which might have greater market value, or indeed whether there were vegetables or some nut varieties to make best use of the soil types, the climate and the human capital in my part of the world. So we looked around for research and development capacity at the state level, at the federal level and in the private sector, but we found there is in Australia a real dearth of expertise and funded support for research and development in horticulture. We used to have the work of the Tatura Research Institute, which did such amazing things as developing the Tatura trellis system. This revolutionised the way fresh apples and pears were grown. It is a system that has been emulated throughout the world. But that particular place, the Tatura Research Institute, now has virtually no research scientists still employed. Unfortunately their places have been backfilled with public servants who are employed by the Goulburn-Murray Water authority and who unfortunately are highly inefficient and a burden not a help or an assistance in keeping our agribusiness in place given the unconscionable fees and charges that they are now imposing.

We do need to look very hard at research and development activity in Australia. The statutory RDCs are a critical part of that. I also hope that, if we stimulate our statutory RDCs to be more flexible and to also have a marketing focus, they will address or somehow stimulate a younger generation—the next generation of people working in primary industries. We have so much distress and concern in horticulture. Our dairy industry are hardly making any return above their costs of production. We have a serious problem in many parts of our country with the costs of doing business. Whether it is energy charges, veterinary supplies, farm chemicals of any description or fertiliser, the costs confronting our primary industry sector are making us less competitive, and that is without even starting to discuss the labour costs in Australia compared with our competitors.

So research and development is critical. We once led the world in innovation in our seed-breeding and in our livestock genetic development. We supplied the world with the most superior genetics in our wool-producing sheep varieties. We developed cattle species that are able to survive in tropical Australia and can resist ticks. These cattle have a virtually disease-free status compared with other varieties of cattle who have traditionally been bred in other parts of the tropical Southern Hemisphere. We have done an amazing job in the past but we are now slipping with our research and development effort. That is reflected in our virtual flatlining of productivity growth over the last 10 or so years. It is also reflected in the lack of decent returns for people working in primary industries. It is reflected in the fact that we have a crisis in the next generation's reluctance to take up agribusiness. We have very low levels of investment in food manufacturing or indeed even back on farm.

Perhaps the saddest reflection of all is on the state of our agribusiness or our agricultural science training in universities. Unfortunately, universities now have a funding model which depends on how many students they can seat in their hallowed halls, how many of those students are overseas full fee payers and how many refereed journal articles or pieces of research can be published. Unfortunately, the agricultural science courses do not tick any of those boxes. They are not popular with overseas full-fee-paying students. They are very expensive to run. They do not necessarily lead to additional publishing in refereed journals. These facts are reflected in the collapse in numbers in agricultural science teaching across all of our universities and the near disappearance of institutions like Dookie Agricultural College and other great Victorian institutions—agricultural colleges that, I would argue, trained some of the best agribusiness specialists in the world. Certainly they were in demand as such.

I am concerned about the rush and the lack of consultation in relation to these matters of significance to agribusiness and the future of agriculture in this country. The industry has not had sufficient time to review the legislation, nor has the coalition. However, having said that, I need to say the changes do appear to be positive and I am anxious to see that more work is done in the closing days of this parliament in relation to these issues.

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

It is always a pleasure to follow the member for Murray, who like me represents an agricultural region vast in the variety of produce it produces not only to feed our nation but to feed other nations as well. I know how desperately worried the member for Murray is about a future for farming. These bills are to do with agriculture, and agriculture is under great pressure at the moment through a combination of factors, not least of which is the high Australian dollar. Fortunately, that high Australian dollar is weakening—fortunately, that is, for the farming sector, who rely on overseas importers in order to export their produce at a price that is reasonable and good for them so that they get the maximum price at farm gate. With a high Australian dollar there is a disinclination for those overseas countries to continue to trade with many of our fine farmers.

Australia does have the world's best farmers—there is absolutely no question about that. I know the Parliamentary Secretary for Agriculture, Forestry and Fisheries at the table would concur with me on the fact that Australian farmers are the very best in the world. They are using world's best practice. They are using less water to grow more. Yesterday I commended the member for Braddon, who is the Parliamentary Secretary for Agriculture, Fisheries and Forestry, on the wine-marketing export arrangements—the new statutory body which is being formed. But, unlike with that particular piece of legislation, I do not think that there has been due diligence or sufficient consultation with respect to this bill. It bothers me that in the last few days of this parliament we are seeing this rushed through without the coalition being properly consulted, and moreover without industry bodies and key stakeholders being consulted. They are the ones who are going to wear the effects of any changes and they need to have the comfort and security to know that the government of the day is doing the right thing by them. But I am not certain that they have those assurances.

We have seen agriculture under enormous pressure, and not helped at all times by this government. There has not been the focus on regional Australia that there should have been in this parliament. I hope that in the next parliament, whichever party has the Treasury benches—

Government Members:

Government members interjecting—

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

You do not come from regional Australia and so, quite frankly, would not know. There needs to be a greater emphasis on regional Australia, and I know that the members opposite would agree with me there, whichever party is on the Treasury benches. Regional Australia grows the food to feed this nation and others. Regional Australia is the backbone of this country—it always has been and may it long continue to be. But it is not being shown the respect that it should have been shown.

These bills will implement the changes to the rural research and development corporations, or RDCs, as the statutory RDCs will be permitted to undertake marketing activities where the relevant industry requests this and agrees to raise a marketing levy. Government matching funds may only be used for research and development activities, but industry owned RDCs have demonstrated that benefits can result from combining these roles. These bills make arrangements for providing government matching funding for voluntary contributions made by industry to an RDC. This change is intended to encourage voluntary private sector investment in rural R&D to ensure equal treatment of RDCs by the government of the day.

I heard Warren Truss, the Nationals leader, saying in answer to a question about foreign investment that one of the reasons why there is so much interest by overseas countries in Australian agriculture is that it is the very best, but more than that there is not the same inclination by Australian companies—and, indeed, superannuation funds and others—to invest in Australian agriculture. That is a pity, because there is a bright future for Australian agriculture. There is a bright future for regional Australia, and it is a shame that more Australian investors do not acknowledge that fact. At the moment we see Archer Daniels Midland, an American company, attempting to take over GrainCorp. There needs to be more investment by governments and certainly by the private sector in Australian agriculture. I heard the member for Murray talking about the R&D factor. Research and development in genetic foods and better farming methods and practices is so very critical. I know the great work that Charles Sturt University, in Wagga Wagga and other regional campuses, is doing in that space.

These bills will remove product-specific maximum levy and charge rates to reduce the costs and delay associated with primary industries electing to increase their investment in research and development and/or marketing. The requirement for the Minister for Agriculture, Fisheries and Forestry to consult with and take note of the opinions of levy payers when setting operative rates will be maximised, bolstered and strengthened. The minister will be prevented from setting a levy or a charge rate over that recommended by industry. That is not such a bad thing—in fact, it is a necessary thing.

For statutory RDCs, board selection processes will be changed to reduce the size of selection committees and lower expense and delay in filling board vacancies. That is a good move, too. Selection committees will create a reserve list of appropriate candidates and more emphasis will be put on diversity and gender balance.

Funding agreements between statutory RDCs and government will be required from July next year. Funding agreements will provide a more flexible mechanism for agreeing governance and performance issues, something that I am sure industry will concur with. This will allow timely modification of these arrangements where and when needed without requiring legislative change. It will improve consistency in the government's relationship with RDCs—there is certainly no argument there. To try to match the coalition commitment to cut red tape and moreover green tape and to try to add some substance to Labor's hollow promises to reduce regulation—because we have seen more and more red tape and green tape in this 43rd Parliament—statutory RDCs will no longer have to submit their annual operating plans to the minister for approval.

The bills make several small and minor arrangements to improve consistency in governance between RDCs. They will clarify the role of RDCs and they will simplify the arrangements of governance. The Primary Industries and Energy Research and Development Act 1989 will be changed to clarify funding arrangements for the fishery sectors, which have a statutory levy in place which is specific to that particular sector. This amendment will allow the future establishment of levies for individual fishery sectors where requested by industry. Certainly, the fishing industry has not been at all assisted by this government—locking up marine reserves, the case with the supertrawler which was banned from Australian waters. There are so many factors and so many ways in which this government has disadvantaged the fishing industry, so anything in this will be looked forward to.

The amendments will also incorporate a widely supported 1995 ministerial direction requiring the Fisheries RDC to spend industry funds raised from a particular fishery industry sector or jurisdiction on research and development projects relevant to the source of funds. That is a good thing. The government committed in the commitment to regional Australia—and it is a shame that the government has not followed through on some of the other commitments to regional Australia—to reviewing the RDC model. Passage of these bills will implement changes arising from that very review.

The government conspired with the Productivity Commission to cut R&D funding, and shame on it for that, but industry and the coalition shamed them out of it. That was necessary. In an effort to regain credibility on R&D—and nothing is more important than R&D, particularly in the farming sector—the minister put out a policy statement in relation to research and development, and now these changes to legislation are an effort to show that Labor is coming to the party in this particular area. We could say, 'Too little, too late,' but we have two days of parliament to go. Finally, even though it has rushed it through and even though there has not been consultation, the government is doing it.

Given the short time frame, the lack of consultation is a major issue. It is a significant issue. Industry has had no time to review legislation. A lot of the legislation that industry is often tackling here is complicated and complex, and industry needs to talk to its grassroots stakeholders to see how it will affect them. Often, the devil is in the detail; it is something that is forgotten on that side of the parliament. We heard the Senate bells going crazy last night and again today as upper house members scurried about trying to get through the dozens upon dozens of bits of legislation that this government is rushing through at—symbolically—five minutes to midnight in these last few days of parliament. It is not good enough. The public deserves better. Industry has had no time to review the legislation and, like the coalition, it has not seen it before its introduction last week. That is simply not good enough.

However, we have spoken to a large number of stakeholders. As you would expect from the coalition, we consult with people. We care about people and we care about those affected. Their feedback—and you might be surprised to know this—has been relatively positive, with no substantive concerns raised. The changes appear positive, as they allow RDCs to undertake marketing at the request of industry, and that was an industry request. It enables the government of the day, by providing matching funding for voluntary contributions to all RDCs, to encourage the private sector to invest in rural R&D. It removes the requirement for statutory RDCs to submit their annual operating plans to the minister of the day for his or her sign-off. It makes statutory RDC board selection processes more streamlined, and that is a good thing. It introduces funding arrangements for statutory RDCs to drive performance improvements, something we might see on the other side eventually. Performance improvements—that would be good. It increases transparency in the delivery of R&D services and allows individual fisheries industry levies to be collected and matched, subject to a cap based on the gross value of production of that industry. It removes product-specific charge and levy rates.

The coalition has consulted with a number of stakeholders, including the National Farmers' Federation, that important, august body. I had the Chief Executive Officer of the NFF, Matt Linnegar, in my office yesterday and he is hopeful for better things to come. He is hopeful for an improved relationship between the government of the day and the primary industry sector because he obviously knows—and coming from the Riverina he would well know—the benefit of good consultation between government and the agricultural sector. Having worked at Murrumbidgee Irrigation he has seen how the water rights debate did not go as well as it ought.

There are many farmers in my area who are hoping to see better legislation. They are looking very much forward to buyback being capped at 1,500 gigalitres so that farmers can get on with the job they have been doing in the Riverina for 100 years; that is, growing the food to feed our nation. I know that water is important for South Australia, even in regional areas such as Kapunda, in the member for Wakefield's electorate. I know that water is important for South Australia, but it is also important to be able to utilise that water as it flows down the Murray-Darling and Murrumbidgee systems to enable the farmers to get on with the job that they have been doing and that they were asked to do by government 100 years ago.

They are getting on with the job. SunRice is certainly getting on with the job, having reopened its mills at Deniliquin and Coleambally, and with all the rain we have had in recent weeks we are very much looking forward to a great grain harvest. We certainly hope that the profits of that grain harvest will stay right here in Australia and that they will not be going overseas to be decided by a boardroom in Illinois. I ask that the Treasurer reject the ADM takeover of GrainCorp out of hand because it is un-Australian, it is not necessary and we need to keep the future of Australia's grain harvests in Australian hands. That is so very important.

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

It gives me great pleasure to sum up the debate on the Rural Research and Development Legislation Amendment Bill 2013, a bill which is very significant for the primary industry sector of our economy. I would like to thank the members for Calare, Murray and Lyons, in particular, for their comments. Also, I cannot let my friend from the Riverina leave the chamber without making a few remarks on the comments that he made.

First and foremost, contrary to the templated sheet that was handed out to those opposite, consultation on not only these amendments but also the intent and most of the content of the bill was carried out over a three-year period and very much formed the content of the 2012 research and development policy statement of this government. I hope the member for Riverina—who is, I must say, a very diligent member—has read that policy statement, because he, like me, in terms of primary industries and rural and regional development, believes that good ideas should be shared and, if they are very good, they should be followed. Prior to the exposure draft going out it was offered to some 72 relevant stakeholders, and only seven of them replied and even the majority of those were highly positive. The member for Riverina—who I know gets around his constituency and his agencies—was able to report a positive response to these amendments, and do you know why? It is because they have been part of the consultation process since cocky was an egg. So, frankly, I think that was a bit of a red herring.

I would leave you with one thought before we go on to the amendments themselves. This government created a ministry for Regional Development Australia and has done more for regional and rural Australia in the last three years in particular in terms of infrastructure and recognition than the other side did over decades. I think the Nationals member representing the Riverina is a little bit envious of what we have been able to do in that time, and I think it is only fair to due give recognition to that.

Anyway, let us move on to the amendments. The Rural Research and Development Legislation Amendment Bill 2013 updates and refines the Australian Research and Development Corporation, or RDC, model in line with policy commitments made by the government in the Rural Research and Development Policy Statement some years ago. In preparing the policy statement the government met and consulted with stakeholders around Australia and took into account many submissions. Extensive consultation continued in the process leading to these legislative amendments before us.

The bill will allow statutory RDCs to carry out marketing activities on behalf of their industries if a marketing levy is in place. RDCs undertaking marketing will be able to use their industry expertise to provide cost-effective, targeted marketing activities in accordance with industry needs and priorities. I would like to note that no changes to levy rates or new levies are part of these amendments. The amendments will encourage private sector investment in rural R&D by extending to all RDCs the arrangements for government matching funding to voluntary contributions for eligible research and development.

Statutory funding agreements for statutory RDCs are proposed to drive performance improvements and increase transparency in the delivery of R&D services. Funding agreements have been a flexible mechanism for providing government guidance and oversight to industry owned RDCs, and these amendments will extend that mechanism to statutory RDCs. Amendments in the bill change the process for selection of statutory RDC board directors to improve transparency and efficiency. The amendments promote due consideration of diversity in the selection process. These amendments aim to ensure high-quality boards for RDCs and reduce the time and delay associated with securing them.

The bill proposes to allow the collection and matching of individual fishery industry levies, subject to a cap based on the gross value of production of that individual fishery. This will allow specific fisheries to propose levies to invest in R&D for their industry and to undertake marketing in a similar way to other rural commodities. The burdensome requirement for ministerial approval of statutory RDCs' annual operating plans will be removed and other minor technical matters will be addressed.

The Primary Industries (Excise) Levies Amendment Bill 2013 removes the maximum levy rates for research and development and marketing levies on primary industry products. Similarly, the Primary Industries (Customs) Charges Amendment Bill removes the maximum charge rates for R&D and marketing changes that are duties of Customs. The numerical maximum levy and charge rates will be removed, and the rates will be limited to no more than the level recommended by an industry body following consultation with the levy and charge payers. The amendments will not change any levy or charge rates that are in operation at the moment, but they will streamline the process for changing rates in the future. Levies and charges may be increased following a request by industry, but will not be allowed to be set above the rate recommended by industry. This will allow industries to manage their collective investment in research and marketing whilst also providing a safeguard for levy payers against an arbitrary increase to rates.

Finally, I would like to thank the ministerial staff, the DAFF departmental officers and the drafters of the bill for their work and I also want to thank all those who contributed to the consultation process. I recommend this legislation to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.