Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

The Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 will amend the Primary Industries (Excise) Levies Act 1999 to enable the dairy industry to continue to meet its obligations in relation to animal health and welfare and its membership of Animal Health Australia. The amendments increase the maximum rate—that is, the caps—of the Australian Animal Health Council levies on dairy produce from 0.058 to 0.145 of a cent per kilogram of milk fat and from 0.13850 to 0.34625 of a cent per kilogram of protein. The current operative levies are equivalent to the current caps.

The bill will not increase the operative rate paid by industry members and does not impose a financial burden on dairy farmers. Any increase to the operative rate requires a case to be put forward by industry, a case which would demonstrate widespread industry consultation and strong industry support. This bill will allow the dairy industry, led by Australian Dairy Farmers Ltd, to meet its requirements as a signatory to the Emergency Animal Disease Response Agreement and to meet its obligations in any event of an emergency response, including any expenses that may be incurred in dealing with those events.

The opposition very strongly support this bill. It has been requested by the industry and will give the industry far more flexibility if the need arises and a case can be made for an increase in the levy in the future. A second reading amendment has been circulated in my name. I move:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading the House notes the:

(1) failure of the Government to act urgently in response to the effect of the drought on the dairy and other agricultural sectors; and

(2) omission of 'resource sustainability' in the terms of reference for the Government's agriculture white paper."

I believe the member for Perth will be seconding my amendment.

I have moved this second reading amendment not in any way to politicise what is an important bill and a bill with bipartisan support but because I think it is timely to have a discussion about a number of issues that affect agriculture. There are many reasons that cause me to do so, but a few stand out. The first is the ongoing challenge of climate change and drought. Another is the current focus on the increasing demand for food globally, particularly the increasing demand for food in Asia and what that might mean for Australia in terms of opportunities to take up a slice of that increasing demand in the future. Third is the government's decision to produce an agricultural white paper, hopefully, in the not too distant future. That is going to create a vacuum in the public policy space for at least 12 months.

I will start with drought and climate change. Australian farmers are currently facing a very severe drought. It is time the government responded to that drought. The opposition have been extending bipartisan support on this matter for well more than a month now. We have indicated we will extend any cooperation required to pass any legislation required. We have indicated that we acknowledge that money needs to be spent and we will, therefore, support any appropriate measures. There are some caveats on these things, but I said 'any appropriate measures'.

I have put forward three things the government could do almost immediately. Firstly, it could do something with the farm household support payment. It is currently a transitional payment, but it is going to be an allowance after 1 July this year. I note that the Prime Minister announced two days before the Griffith by-election that he was going to do something on that. He said he would bring it forward, but bringing it forward is more difficult than it sounds. It requires legislation; it would require an additional commitment to further relax the means testing of that payment. Unfortunately, the Prime Minister missed the opportunity to do that when the House last sat. The Senate is not sitting this week, and the opportunity has now passed to get that legislation through this place effectively any earlier than 1 July. That should have been done, and it should have been done with some urgency.

Secondly, I have invited the Prime Minister to do something with Labor's Farm Finance package. This is the $420 million package that extends debt relief to farmers facing difficulty with their debts, whether it be caused by drought or market conditions or whatever it might be. Obviously, that program is very heavily in demand given the severity of the drought. It would appear to me that a very sensible and quick way would be to further enhance that package. Curiously, on being elected, Minister Joyce changed that package by denying money to some of the states with smaller populations—South Australia, Tasmania, Northern Territory and Western Australia—and only distributing part of the money he took from those states to the larger states of New South Wales and Queensland. In doing so, he effectively withheld $40 million of the Farm Finance package—a package that I note is now fully taken up by those on the land in New South Wales. So, why the minister continues to hold back that $40 million is a mystery to me. At the same time, I am calling upon him to put more money in. He is holding money out of that package, effectively reducing it from a $420 million package to a $380 million package.

Thirdly, it is past time that the government further progressed the drought reform process. This is a reform process which was begun by the former Labor government, and which enjoyed bipartisan support in this place and the support of the states. It removed all of the old EC programs, which a whole range of expert bodies, including the Productivity Commission, declared not to be good public policy—the retention of a welfare payment, if you like, for those who need it. The next step was to progress something to replace the old EC arrangements, something which is more in keeping with good public policy—probably and possibly, for example, a payment that acknowledges drought situations that are the equivalent of natural disasters. Sadly, not only has the government not progressed that reform in its first six months in office, it has also abolished the very COAG vehicle responsible for progressing that further, and I refer there to the Standing Council on Primary Industry.

There is speculation that tomorrow, if my intelligence serves me well, the government might finally announce a drought package. I see some members on the government benches smiling, which indicates to me that my intelligence is correct. That would be very welcome. It is a number of weeks too late, in my view, and certainly in the view of the National Farmers Federation and other leading farm organisations; it is certainly a few weeks late in the eyes of those who are suffering so badly on land and have been doing so not for weeks now, but a number of months.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Years.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

I hear the interjection 'years'. That is, in effect, true, but the severity of the drought has grown worse week on week in recent months, and it is past time the government acted.

This brings me back to climate change. There is still a lot of debate around this country about climate change and appropriate government responses to it. I recall very vividly being out with Bruce Tyrrell in his vineyard, in June last year, I think. Bruce Tyrrell pointed me in the direction of his vines and he said to me, 'You see those leaves on those vines?' I said that I did. He said: 'They shouldn't be there. They shouldn't be there at this time of the year. That's climate change.' He was quick—I am sure he would not mind me sharing this story—to make the point that he did not necessarily believe that climate change was the result of human activity, but he was very certain in his view that the climate is changing in Australia. The climate is changing in Australia. We can have our arguments about what is causing it—whether it is cyclical or whether it has been going on for hundreds of years—but whatever the case might be, the climate is changing. Droughts are becoming more regular and more severe, and that trend, unfortunately, is likely to continue. It is time we all acknowledged that collectively. We can still have our debates about what to do about it, but one thing is certain: we will not fulfil our ambitions in our quest to take our share of that massive growth and demand in food in the coming decades that I spoke about earlier if we do not more efficiently manage our natural resources, the resources that allow us to produce food in such a plentiful way in this country. As a parliament, we need to recognise that and get more serious about that.

And that takes me to the third point I made—that is, the failure of the government in this coming white paper to include in the terms of reference resource sustainability. I would have thought that resource sustainability would be right at the top of that white paper and its ambitions, because we cannot produce a lot more food in this country with the same or depleting land, water and even human resources in many senses—workforce issues are a huge challenge for agriculture in Australia. It is very disappointing that regional sustainability is not in the terms of reference, and I suspect, sadly, it is because we have not gone that step further and collectively announced that we all believe the climate is changing and that this is posing a big challenge for those on the land, because that might be an admission that the current government is wrong to be taking such a 19th-century approach to the issue of climate change.

It is a shame, because they have consistently said—and in doing so in a sense recognised the size of the challenge—that they have committed themselves to the same greenhouse gas emissions targets as has the now opposition. What remains unclear to us is how they expect and hope to meet those targets. We hear a lot about Direct Action but at the same time we hear a lot about what might be the future of the renewable energy target, and, of course, we have not seen any detail of where the money is going to be coming from or where it is going to be spent. Is it going to be a big tax on all of us and distributed to rent seekers? We do not know. After six months in the life of this government, we simply do not know what Direct Action is really going to look like.

We support this bill, but we would like to see more debate in this place about these massive challenges facing not only those on the land in rural and regional Australia but those who work on the land and those who work in small businesses and other pursuits who rely so heavily on the health of our agricultural sector. We cannot allow a policy vacuum to exist for another 12 months while Minister Joyce develops his white paper—or, should I say, while the Department of the Prime Minister and Cabinet develops the white paper, which is my understanding of the process. Why the white paper is being written by PM&C, I do not know. I do not know that it is something which would give a lot of encouragement to those in this place who hold hopes of a positive white paper, a white paper that is active and useful and that really does something for those who work on the land. They may prove me wrong, but again it is a great shame that they have been given inadequate terms of reference from which to work.

So the derivative is important but so too are all these issues. I made a point about the white paper in a recent article I wrote for the Farm Institute. I listed a number of research papers that have been done on agriculture in recent times. This is just some of them: Greener Pastures, Farming Smarter Not Harder, the NFF Blueprint, Feeding the Future, Infrastructure and Australia’s Food Industry, the National Food Plan, the Rural Research and Development Statement, and many Farm Institute papers, to name a few. I put it to the House that there is a wealth of information and research out there. I think we know what the questions are. I think a range of reports, including those I have mentioned, have answered the questions. I believe we know what needs to be done in agriculture to make it more productive, more profitable and—I underline—more sustainable.

I do not know whether we can afford to wait another year for the white paper to determine what those responses should be. I suppose we have to, because that is the government's intention. The opposition will do its best to participate in that white paper process in any way it can and in a positive way, but I think it is a great shame that the government has decided to put everything on ice and create such a policy vacuum and so much inertia in agriculture policy while we are waiting for that white paper process to be completed. I believe the member for Perth will second my second reading amendment.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I second the amendment.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Hunter has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. If it suits the House, I will state the question in the form 'that the amendment be agreed to': the question now is that the amendment be agreed to.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I rise to speak on this important motion. As I do, I would like to answer some of the claims put forward by the member for Hunter, the shadow agriculture minister, who is a good man; I know he has good intent. When he took over the difficult role of agriculture minister, from Senator Ludwig, he did his best to correspond with me as the member for Riverina. The member for Hunter would know what an important food bowl the Riverina is. In fact it is one of Australia's one of the most important food bowls in Australia—if not the most important food bowl in Australia. I do acknowledge that I am biased in saying that.

I invited the member for Hunter to come to the Riverina. I know in good faith he would have come, but then we went into caretaker mode and we had an election and the government changed, thankfully. I say 'thankfully' because when the manmade drought that the previous government, under Labor, enforced upon Australia—and certainly upon the Riverina irrigators—was put forward, it certainly left my people in a very difficult situation. And it certainly was not any fault of the member for Hunter because he did not have the agriculture portfolio back then.

He talked about droughts. I know that the Prime Minister and the Minister for Agriculture made a very important tour of the electorates of Farrer and Parkes in New South Wales, and Maranoa in Queensland, which have been very badly affected by drought going on 18 months now. In fact, in one part of Parkes—the member there, Mark Coulton, told me—the last time it rained, it came down in an absolute deluge overnight, inches upon inches of rain, but they have not seen any since. It is a dust bowl. Or it was, until the Prime Minister arrived. But that is not to say that the drought is over, not by a long stretch. Just because it rains for a day or a week—even if it drizzled on and off for a month—it does not mean the drought is over. These people are hurting, as the member for Hunter quite rightly pointed out. I welcomed the latest farm finance package when it was announced last year, but it did not go far enough and it was very difficult to access for those farmers who were doing it so tough.

The member for Hunter talked about dairy farmers. I would like to quote from a dairy farmer in my electorate. Neil Jolliffe and his wife Simone have a farm at Euberta. It is a generational dairy farm in the Riverina electorate near Wagga Wagga. Back in July 2012, when the price of milk came down to 40c a litre—that is the price that the farmers get at the farm gate—the Jolliffes were very shocked. Simone said:

“A drop doesn’t come as a surprise - we would have been happy with a stable milk price or even a 5 per cent drop—

which she described as:

… more understandable …

She went on:

“Morale is low and from the people who were asking questions and commenting—

at the meeting they attended—

you could hear the emotion in their voices.

“There’s not enough for the older guys to keep going.”

Neil is by no means an older farmer. He is in fact younger than me. But he is a good farmer. He wants to get on with the job, and he wants to get on with the job—not with a handout but with a hand up.

He and so many other farmers in this country, whether they are dairy, wheat, rice or whatever else—and they grow everything in the Riverina, bar, maybe, mangos, pineapples and bananas—need a hand up and good government policy. They are getting it from this side. The new agriculture minister is putting a white paper out and calling for submissions, and I know that there is going to be a forum at Griffith, in the heart of the Murrumbidgee Irrigation Area. I welcome people making submissions to that meeting so that their feelings can be known on this important subject.

Australia has one of the most productive and sustainable dairy industries in the world. The amendments in this bill—that is, the original amendments—are aimed at supporting the industry's ongoing productivity. Dairying is a vital industry to many regional communities and to the nation as a whole. Australia's dairy industry is worth $13 billion a year in production, manufacturing and exports, with a farm gate value of $4 billion annually. We exported $2.27 billion worth of dairy products in 2012-13. Dairy is our third largest agricultural commodity behind beef and wheat. I am proud to say that the Riverina produces all three. Australian dairy exports account for 10 per cent of the world's entire dairy trade. That is a lot—10 per cent.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

It is a lot.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

The member for Cowper fully understands how important it is. Our 6,700 dairy farmers produce 9½ billion litres of milk every year. The industry employs over 43,000 people directly and a further 100,000 indirectly in associated services. That is from Dairy Australia's website under 'Dairy at a Glance' 2012-13. It is critical that Australia's dairy industry remains at the forefront of technology and innovation through investment in appropriate research and development. R&D is something that our government, this side of the House, really recognises, particularly in the agricultural space. It is something that was certainly ignored by Senator Ludwig and others in the previous government. R&D funding will ensure that our dairy industry remains profitable, competitive and sustainable over the longer term.

We heard the member for Hunter talk about climate change, and he quoted Chris Tyrrell. We appreciate that there are difficulties with unseasonable weather. We also appreciate the fact that Chris Tyrrell, a fifth generation winemaker, would receive so much benefit if Labor just got on board with us and repealed the carbon tax. I am sure that Mr Tyrrell and other winemakers would appreciate the boost.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

Money in their pocket.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

And the money in their pocket. The boost to what are in many cases electricity driven industries would really help them.

In my own electorate, Riverina Fresh manufactures roughly 22 billion litres worth of fresh and processed dairy products, including milk, yoghurt, cream cheese, thickened cream and other boutique products. We actually had them at a parliamentary secretary's breakfast this morning. My colleagues were very appreciative and commented on the wonderful products out of the Riverina, particularly the milk. The company sources milk from 21 local dairy farmers.

This bill amends the Primary Industries (Excise) Levies Act 1999 so that Australia's world-class dairy industry can continue to fulfil its obligations in relation to animal health and welfare through membership of Animal Health Australia as well as via other initiatives. It is important to really stress that they are world-class because I think sometimes we forget. Farmers have been maligned. They were certainly maligned during the six years of Labor. But they are the best people in their industry, in their roles, working the land. I say that as the proud son of generations—I do not know how many generations—of farmers in Australia and elsewhere. Our farmers are the very best in the world.

Levies such as those made possible by these amendments enable industry bodies to pool their resources in a more effective way to provide a range of essential services on behalf of dairy producers, manufacturers and exporters. This amendment increases the maximum rate of the Australian Animal Health Council levy payable by dairy producers from 0.058 to 0.145 of a cent per kilogram of milk fat and from 0.13850 to 0.34625 of a cent per kilogram of protein. Those might not sound like big numbers, but they certainly mean a lot to the industry.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

It all adds up.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

It all adds up. The Australian Animal Health Council levy is currently set at the maximum rate. The rate cap increase has been requested by Australian Dairy Farmers Ltd as the current maximum rate has been in place for the past 15 years. As outlined by the agriculture minister in his second reading speech, the increase in the cap is significant, but it is important to note that this bill does not increase the actual rates currently paid by industry. The process for determining actual levy rates has not changed. It remains incumbent on the relevant industry body—in this case, Australian Dairy Farmers Ltd—to consult with members and seek their support via ballot before putting the case to government for a rate increase. This process is consistent with our commitment to competent and consultative government—'consultative' being a word we did not hear in the last six years. That word is really important.

Levies raised for the Australian Animal Health Council remain by far the smallest of the four different levies provided for under the act, even after taking into account the proposed increase in the maximum levy rate. The services funded by this levy are recognised as being essential to the very survival of the dairy industry. If we do not have a healthy dairy herd, then we will not have a dairy industry in this country. It is as simple as that, and I know the member for Fraser would agree with me on that point. Australian dairy cows operate in quite different conditions to their American and Canadian sisters, often walking longer distances and experiencing greater variability in weather conditions.

Member levies fund Australian Dairy Farmers Ltd and Animal Health Australia. Through levies and direct government funding, these two bodies promote and support the industry through myriad ways along the entire production value chain, which makes dairy farming and manufacturing in Australia as profitable and sustainable as possible. We have to make sure that it is sustainable. We have to make sure that it is there for the future. A particular focus of their work is on animal health and welfare, on disease monitoring and prevention, and, importantly, on emergency disease management. Some of the work funded by this levy includes: coordination of the National Animal Health Laboratory Network, Australian biosecurity planning and implementation, and emergency animal disease preparedness. It is critical that Australia continues to pursue the quality and excellence which our industry is renowned for and which is one of our natural strengths.

Opportunities presented in the recently agreed Korea-Australia Free Trade Agreement mean Australian farmers will have improved access to a major foreign market. Under this agreement, tariffs of 36 per cent on cheese and 89 per cent on butter will be eliminated over the next 13 to 20 years. I commend the Minister for Trade and Investment, Andrew Robb, for his work in this regard. Duty-free quotas on cheese, butter and infant formula will also be expanded, conferring further benefits for our exporters. They are Australian farmers, world's best-practice farmers, being benefited by the good work of Mr Robb. I again commend the trade minister for his hard work and his ongoing diligence in pursuing this historic agreement that will deliver so much for our local industry over the years to come.

Looking beyond Korea, Australia has even more opportunities presented by growing demand from China, India and other growing Asian economies for high-quality dairy products from, I say it again, Australia's world's best-practice farmers. Australia is well positioned to meet this growing demand. I well recall the former Prime Minister Julia Gillard talking about how we needed to feed the burgeoning population in the Asian century, and she was right. I agreed with her on every point. She made that wonderful landmark Melbourne speech where she talked up Australia as a food bowl. Unfortunately, we did not see the policies flowing on from that. Enabling our industry to maintain and protect the health of our herd ensures that Australian dairy farming will continue to be around for a long, long time, which will ultimately deliver benefits for everybody. We need it to continue into the future.

May I also take this opportunity to thank our dairy farmers, not only in my own electorate of Riverina but right across the country. They do a remarkable job producing some of the best, if not the best, dairy in the world, and they do it with little government assistance. Each of them has in their own way contributed to the development of one of the most enviable dairy industries in the world.

I commend the bill to the House. I further add that Australian farmers are not as heavily subsidised as their international competitors. They are at the moment being slugged with a carbon tax, unlike many of their international competitors. The member for Hunter in his speech talked about some of the practices of the coalition being back in the 19th century and called on us to get into the 21st century. I just wish some of the previous Labor government's practices had been in the 19th century when it came to irrigation thinking. I refer to one of the great pioneers of the Riverina—in fact, one of the great pioneers of Australian farming—Sir Samuel McCaughey, of whom there is a wonderful bronze statue now situated in a special park in a town called Yanco in my electorate, which is very much the heartland of the Riverina. It is halfway between Mt Kosciuszko and Hillston, which is about the breadth of my electorate. Sir Samuel pioneered those irrigation channels which gave life to what was described by the early explorers as an arid wasteland. He brought a veritable garden of Eden through his waterways, his channels and his vision for the Riverina. He brought hope, he brought life, he brought economies—

Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Hope, reward and opportunity!

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Hope, reward and opportunity—certainly, because it was not there before. It was just an arid wasteland. But you can drive through Griffith, Leeton, Narrandera, Hillston and all those wonderful areas in the Murrumbidgee Irrigation Area or the Coleambally Irrigation Area and, whilst they were not helped by Labor, they certainly will be helped by us. We have stepped into that space by capping water buyback. The Minister for Agriculture, Barnaby Joyce, is putting forward a white paper. Whereas under the previous government there was a man-made drought, we are getting on with the job of helping farmers, world's best-practice farmers; we are getting on with the job of helping agriculture; and we are getting on with helping those communities which rely so heavily on the agriculture industry. We all like to eat, and we need to do our very best to help regional Australia in this regard.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in favour of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. While the amendments in this bill may appear to some to be minor, they will have an important impact on the industry, and I support them.

Farm animal health is important to the productivity and sustainability of the Australian dairy industry, and in the Bendigo electorate we still have a stake in the dairy industry. This bill will allow for levy cap rates to be adjusted to enable the dairy industry to meet its obligations in relation to its Animal Health Australia annual membership and other animal health and welfare initiatives.

Australia's reputation for clean, green safe products is its greatest competitive advantage. This reputation is maintained by the work undertaken by Animal Health Australia. This work will ensure that the dairy sector is able to capitalise on the world's demand for safe milk products, particularly in Asia.

This bill is important to my electorate. Agriculture and the food and beverage manufacturing sector are important and employ thousands of people in the Bendigo electorate, making them major employers. There are roughly 2,000 people employed in agriculture and an additional 4,000 people working in food manufacturing, so securing the supply chain is important, and this proposal goes to the heart of that. For example, food and beverage manufacturing contributes an estimated annual output of roughly $550 million to the local economy and employs just over 1,200 people. That is just within the City of Greater Bendigo, not to mention the rest of the region. That is why it is important to ensure Australia's reputation for clean and green safe products, which is its greatest competitive advantage overseas. This will help ensure that people within my electorate continue to be employed.

I want to talk about the levies in this bill and the way in which this bill has been structured. It is important to the dairy producers that the levies be collected by the Commonwealth for disbursement to Animal Health Australia. This will ensure that there is accountability and efficiency within the system.

The levy system will enable industries to maintain competitive advantage not just in world markets but in our own. As I have mentioned already, Bendigo, in central Victoria, has a stake in the dairy industry. I wish to highlight Parmalat Australia, who has taken ownership of the oldest dairy farm in Bendigo. The Symons Dairy is an independent franchised distributor for Parmalat Australia Ltd. It is Bendigo's oldest locally owned dairy and has been servicing the area since 1919. Symons Dairy has been owned by three generations. Today it produces various products which all of us enjoy, whether it be here in parliament, in our restaurants or in our kitchens. The site employs 150 local people, demonstrating why a strong dairy manufacturing sector is important.

Bendigo's becoming home to more dairy and food beverage manufacturers is a key priority for our region. In a recent meeting with the Bendigo Manufacturing Group we talked about establishing an alliance of our food manufacturers. We see the opportunity in this industry. The levy will also support other small and emerging industries which may benefit from cooperation and resource sharing. Bendigo and northern Victoria are home to some fantastic local producers which, with the right industry support, could become stronger not just in our region but in Australia.

An example are Jonesy's Dairy Fresh. Their farm, just north-west of Bendigo, has a significant number of suppliers of their product in the electorate. Jonesy's Dairy Fresh want to make sure that farmers get a fair price for their milk and that consumers get a great product. They enshrine the 'Buy local, produce local' motto. Jonesy's milk does not contain permeate. Whilst the debate on permeate has not yet been resolved, there is a market for milk that does not contain permeate. Jonesy's have stepped in to make sure they have a product consumers want.

Another example are Holy Goat Cheese, which you may know of if you attend regular farmers markets. The farm is 30 minutes south of Bendigo towards Castlemaine. Their goats have free range access to a wide variety of native grasses, herbs and shrubbery. Their cheese is a hit. It is sold out at every local market and in Melbourne and Sydney delicatessens and it is used in restaurants. There is not one piece of cheese that they produce which is not sold—again, another outstanding local producer doing well in our region. Their philosophy is simple:

Our farm is small, producing high quality and desirable cheeses. We don't get side tracked by others agendas. The heart of a business started years ago. We are ethical, idealistic and can stay in business.

That is a wonderful motto from a diary producer in our region. Both producers are part of the growing farmers market and foodie scene in central Victoria—another opportunity for industry development. We often hear of the dining boom in Australia and the overseas growth that will come with it. We need to extend that dining boom to talk about the entire supply chain, from the paddock to the plate. In Bendigo and central Victoria, we are embracing this philosophy with gusto, quickly becoming a foodie destination as well as a producer of products to be sent overseas. With continued support from farm to plate this industry will continue to grow.

I also understand the importance of supporting Animal Health Australia and the proposals this bill puts forward to ensure that this not-for-profit public company can react if there is a disease outbreak. Its role is to facilitate improvements in Australia's animal health policy and practice in partnership with the livestock industries, governments and other stakeholders.

Another Bendigo manufacture active in this space is MSD Animal Health. MSD is a global, research-driven company that develops, manufactures and markets a broad range of veterinary medicines and services. Their modern production plant in Bendigo, Victoria, produces high-quality vaccines for most of Australia's domestic and farm animals and gives employment to over 100 people, including 40 scientists. I was very pleased to be at the site a few months ago when they officially celebrated and launched their solar energy. They were able to install a number of solar panels through the former Labor government's clean technology grant program. They are now the largest producer of solar energy in the Bendigo electorate. This is another way in which governments can partner successfully with industry, whether it be through levies to support the development of the industry, as we see in this bill, or through clean technology grants. MSD research, develop and market vaccines not just for our local market but also for overseas markets. This fantastic local manufacturer demonstrates our region's potential. Whether it be producing food or vaccines, there is an opportunity here not just in the Bendigo electorate but for Australia.

While I support the bill, we need to start addressing what we are doing in relation to drought. It is disappointing that the government has failed to act urgently in response to the effects of drought not necessarily in my electorate but in electorates further north. As I have mentioned, jobs will be put at risk. In my own electorate, if drought were to hit, there would be concern. As I have mentioned, there are 2,000-plus people employed in agriculture and 4,000-plus people employed in food manufacturing. Those supply chains are linked back to the farms. This sector is a big employer even within my own electorate.

Food and beverages manufacturing was the largest manufacturing sector in Australia in 2012-13. It will continue to grow and innovate, but we have to get the support right at the farm gate. At the moment, this sector employs 1.7 million people in Australia, including many in my electorate. Over time, demand for high-quality produce should see employment in the sector increase. But jobs in this area of manufacturing will only increase if we continue to have a strong and healthy agricultural sector. That is why the government needs to act urgently in response to the drought effect in the agricultural sector in Queensland and New South Wales. The agricultural sector comprises a large share of our export revenues. So, economically, this sector matters. These industries must be supported to adapt to climate change, so that they are ready and able to react to the droughts that are increasing in our time in history.

It is disappointing that the government's failure to react quickly could see a slowdown in production not just in what we see driven out of the farm gate but also in the manufacturing sector. It is disappointing because there was a plan in place. In government, Labor delivered Australia's first ever National Food Plan, a blueprint that aimed to increase Australia's food production by 45 per cent by 2025. Those opposite fail to appreciate that Labor is in the business of securing and creating jobs, and that means working within this sector. Food and beverage production is such an opportunity for us and we need to make sure we are assisting the first step of the supply chain: our farmers. Work is needed to be done by government and industry across the supply chain, from the paddock to the plate, to use the science and the research to put farming and food production at the cutting edge of industry worldwide. We know we have the expertise in the science area. We continue to put funding in that area and it is the right thing to do, but it is all for nothing if we do not act quickly to support our farmers, particularly those in drought affected areas.

Australia needs to seize the trade opportunities, especially those offered by the Asian dining boom. Australia's farmers are great innovators and that is why we need to partner with them to ensure that more of the food we grow ends up on the consumer plate. The Labor Party in government had a plan and that plan aimed to tackle the droughts in New South Wales. It is an easy one for the government today to pick up on. The government could immediately assist drought affected farming families by restoring the $40 million that the minister withheld from the farm finance low-interest scheme. The minister could continue to publicly call on the cabinet and his colleagues to act. But this one simple decision could see an additional $40 million being made available now. Further, a quick and effective response to the growing drought emergency would be to enhance farm finance by further lowering the interest rates to 4.5 per cent and adjusting the guidelines to improve access for drought affected farmers. Given that the farm finance scheme is already in operation, the additional money could flow quickly, thus getting to the farmers now. Every day counts. It is not just about farmers and their families; it is also about the supply chain and jobs, from the paddock to the plate. We need to act quickly to ensure that we continue to have a viable agricultural sector because so many other sectors can be built on it and we can secure those jobs.

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014, the aim of which is to future-proof Australia's dairy industry. The bill is about building financial capacity to prepare for and manage emergency disease outbreaks. Watered down, it is about dairy farmers taking greater responsibility for their future prosperity, something which the farmers in my electorate of Hume know is critical to their future. We need to support this legislation, but first we need to look at it in the broader context of Australian agriculture and the dairy industry. As I have said before in this chamber, there is an extraordinary opportunity for Australian agriculture as we see rapid growth in markets to our north, both in terms of volume and in terms of value. This applies particularly to our dairy industry and it applies to the agriculture sectors right across my electorate of Hume.

The shift in economic growth from the developed world to the developing world is driving an enormous opportunity for agriculture. To put this in perspective, in the five years to 2010 the developing world accounted for almost three-quarters of global growth and most of that growth happened in Asia. We all know that the result has been a surge in demand for the basic materials necessary to support industrialisation and urbanisation. Much less well understood is the fact that the new-found wealth and incomes of the developing world are leading to increased calorie consumption and higher protein diets, both of which demand greater agricultural production, particularly dairy production. This combined with population growth should see world agriculture demand double by 2050. And it will not be due to a five-year plan like Labor's Food Plan.

Little or no new land and water is coming into production and some is being withdrawn, with supply unbalanced across the world. The relative scarcity of agricultural land and water, particularly in Asia, given the size of the population and the demand growth, is central to our opportunity. Demand for many agricultural products has already begun to outstrip supply, resulting in periods of high global food prices in recent years, particularly once we account for our inflated currency.

As incomes go up, so does consumption of dairy products. Last year Chinese imports of dairy products grew by about 300,000 tonnes, a little less than the entire volume of Australia's dairy exports. In the face of these shifts some are predicting that Australia could become a food bowl for a fast-developing Asia and that our dairy industry could be central to this. After all, commodity based economies are logical sources of food and fibre for increasingly affluent markets in our region. However, it is clear that we are not seeing these opportunities translate into higher farm-gate prices, growth or investment.

Success depends on addressing the key issues that are hindering our performance and have hindered our performance for a number of years. Moreover, the race to make this opportunity a reality is a global one and the competition is intense. We have to remember that international competitiveness in agriculture is about more than just having access to good land and rainfall; it is about getting access to large and fast-growing markets and having extremely efficient supply chains to get product to the markets. We need world-class research and development capability, innovative financing including, as our amendment sets out, future-proofing against disease We need productive farms with the necessary scale, organisation, funding and skills. These are the platforms that have seen Brazil sweep aside global competition to capture the market for soybeans, Malaysia and Indonesia dominate the production and marketing of palm oil and New Zealand lead the global dairy industry. Australia is doing well but we have not been at the forefront.

The example set by New Zealand is illustrative of what the Australian dairy industry could achieve. I was privileged to be part of the extraordinary reforms the New Zealand dairy industry pursued in the 1990s and early 2000s. I will quote from a paper, which the member for Hunter so kindly referred to and I co-authored in late 2012 called Greener Pastures: The Global Soft Commodity Opportunity for Australia and New Zealand. In this paper I spell out that New Zealand dairy farmers took their destiny into their own hands. I would like to summarise how they did that. Their industry has been completely transformed, with milk production more than doubling in the past two decades. They have created Fonterra, the greatest export focused dairy company owned by farmers in the world. Central to the reform is a farmer driven deregulation agenda—farmers taking their destiny into their own hands—with a strong focus on Asian markets, particularly China.

Above all else, the Kiwis were willing to adapt. In the mid-1980s, the New Zealand government removed agricultural subsidies as part of its response to systemic economic problems. This gave impetus to the diversification of products and markets in the dairy industry. In the decades since deregulation, there has been a wave of conversions of land use, as beef and sheep farmers have moved over to dairy and other higher value products. Significant investment in irrigation infrastructure allowed dairy production to extend to the South Island, which now accounts for about a third of New Zealand dairy cattle. New Zealand was among the main proponents of the Uruguay Round of the General Agreement on Tariffs and Trade in the mid-1990s. In recent years New Zealand established a very close trading relationship with China, much closer than Australia has managed to achieve. Significant industry consolidation at the farm and processor levels also enabled efficiencies of scale to be realised.

Meanwhile, the industry established an extraordinarily sophisticated benchmarking and incentive system for manufacturing and logistics. In the year 2000, in response to changing world markets, farmers asked the government to remove the single-desk marketer, the New Zealand Dairy Board. This resulted in the formation of the vertically integrated farmer-owned cooperative called Fonterra. While Fonterra remains the dominant player in the industry, thoughtful competition measures included in the act fostered the emergence of a competitive fringe of processors and marketers. In 2011 Fonterra not only accounted for more than 90 per cent of the New Zealand dairy market but was the largest processor of raw milk in the world. It currently has around 11,000 farm shareholders and an impressive global supply chain. Today, New Zealand dairy accounts for more than a third of all global dairy exports, while we sit on about 10 per cent. In 2011 New Zealand dairy produced about 50 per cent of the country's gross value of agricultural production.

Australia can learn a lot from the New Zealand example. We need to realise, however, that our starting point is different. We have a different market structure and a stronger domestic focus, but the kind of success seen in the New Zealand dairy industry has not emerged in Australian agriculture in recent years or in our dairy industry in any substantial way, despite the fact we have some of the best farmers and best agricultural land in the world. Agriculture in Australia has been understandably preoccupied with surviving recent drought. However, with a new government sympathetic to agriculture there is an urgent need for Australian farmers and agriculture to overcome a series of growth-limiting hurdles.

Most importantly, we need to open up new markets, just as we have in the recently negotiated free trade agreement with Korea We need to extend that to other countries like India, China and Japan. We need to better protect access to land and water, as we have recognised in our approach to the Murray-Darling Basin Plan. We need to help our farmers to be more competitive with lower energy costs, less red tape and a lower currency, aided by governments living within their means. All these things are a focus of this government. We need to help farmers to rebuild their balance sheets as farm debt levels are already too high and are stretched by succession problems and farm consolidation as many farmers age. Widespread skill shortages need to be addressed by boosting the image of agriculture, attracting new workers and enhancing education services. We need a stronger focus on research and development, which we recognised in our election commitments.

It is a sizeable list and one which is critical to my electorate of Hume. I have no doubt that our agricultural white paper will add to the list, but the key to the success of New Zealand's dairy industry is its recognition that it needed to define its own future. With this bill before the House, the Australian dairy industry can take a small step down the same path in taking control of its own destiny. This legislation to increase the cap on levies for milk products and to future-proof the sector against potential major revenue loss is a keen example of the forward thinking Australian dairy needs. If passed, it does not mean farmers will be paying a higher levy to the Australian Animal Health Council; it simply increases the cap on the rate of the levy which may be charged. This is simple, safe economics. While the broader issues for the industry are challenging, the sector has overcome significant obstacles in the past.

Australian dairy needs to grab, quite literally, the bull by the horns. It needs to stand up, shape its own destiny and be ready with appropriate funding in the event of unforeseen circumstances. This is the kind of amendment bill which will build confidence within the sector and encourage badly needed investment and growth. I wholeheartedly support the bill.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I wish to support the bill that is before us and the second reading amendment that has been proposed by the opposition's shadow minister. I think it is very heartening that we have seen here at least some recognition by the government that not all regulation is bad. I am very pleased to see that the proposal to abolish the Australian Animal Health Council levy is not on the basis that it constitutes red tape. The presentations by the minister, by the parliamentary secretary and by others who have spoken here are recognising that this is actually a very effective and important piece of legislation that allows the dairy industry to act collectively, to come together and to ensure that there are funds provided for these important tasks of biosecurity and research and also to ensure that we have suitable animal welfare practices in place. I would urge the minister in future, as he is ranting and raving about the abolition of red tape and that regulation is all bad, to consider the very positive role that is played by this legislation.

I want to make a few comments on the West Australian dairy industry. We do not have the biggest dairy industry but we do have a very strong and very innovative industry, albeit with some problems. We produce about four per cent of the national milk supply but we consume about 11.5 per cent of the nation's milk dairy products. Certainly our industry has a couple of challenges. One is associated with soil fertility and acidification of land. Under the federal government's Landcare policies there has been considerable investment over the last few years in trying to deal with those issues. Another challenge which has not been mentioned yet—which I am surprised about given people are talking about the dairy industry—is the problem with prices and the use of a very market dominant position that we have seen in the first instance by Coles and then in response by Woolworths, who said they had to go there because Coles were going there. Certainly the dairy farmers in WA point to the fact that, whilst their production is increasing, their farm gate prices have been decreasing.

I really admire the dairy industry in Western Australia and its very active marketing techniques. Harvey Fresh have been very innovative in the range of products that they are putting on the market and the way that they sell their products and encourage people to purchase them. We have seen not just dairy farmers but the processing industry in WA create an incredibly interesting array of treats that greet us at our supermarkets and produce stores. We are seeing fantastic innovation. Indeed, there is product differentiation that we are seeing happening just with milk as drinkable milk, if that is the term to use, and the ways in which individual companies have been trying to rise to the challenge presented by the Coles-Woolworths milk wars. There are signs, obviously, that we can bring that market back to the differentiated product and ensure that our dairy farmers get a decent price at the farm gate. This is another area where we have to look at regulation. I know that in other debates members of the National Party have raised their concerns about the power of this duopoly. It is not something that we can go on ignoring forever. As I said, it has had a very critical impact on dairy farming Western Australia.

That having been said, I quite rejoiced a couple of months ago when I was down in Busselton and met a couple in their 30s who were dairy farmers. They were having a weekend off, saying how much they enjoyed their life as dairy farmers and how they were making a good return and they deserved their fabulous weekend at Bunker Bay. So while it is certainly not all doom and gloom, I think that of all farming tasks this is one of the hardest, with its requirement to be there day and night, to ensure that you have always got someone on the property, that you are there with that very labour-intensive process of bringing in the cows and ensuring they are milked each day. It does really mark this out as a very hard task.

I like to think that I have some other personal basis for being interested in the dairy industry. Some of my ancestors were very much involved in opening up Gippsland as a farming area. One strand of my family, the Bolands, came over to Gippsland from Ireland in the 1860s and proceeded between them to open up four or five dairy farms. I note that the names of the towns or townlands they were from in Tipperary are still marked in some of the names of those properties in Killeen and Nenagh, around the Tinamba-Maffra area, and that my great-great-grandmother, a dairy pioneer, is buried in the Maffra Cemetery. I would like to just make that little reference. Certainly we knew the stories of how hard the dairy farming life was and of my father's refusal to be part of it because it was, indeed, too hard. Some of us actually regretted him taking that attitude when he was young and losing that contact with that area.

Perhaps I can use that as a small segue into commenting on something that the minister said during his speech which I found truly extraordinary. The minister was commenting that his family had also come from Ireland and he spoke, quite rightly, of the famine in Ireland and how shocking it was and that there were millions of people—I am not sure he actually said millions, but there were in fact millions of people—who either starved or died of petulance, I am sorry, pestilence.

Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Your side's known for its petulance!

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

The pestilence, as they used to call it then, which was a form of plague. The minister was quite right and he went on to acknowledge that at the same time there was in fact a surfeit of food being produced in Ireland—of course, also totally correct. But what I found really extraordinary was the conclusion that he drew from this. The conclusion was that this is the deadly hand of bureaucracy, as defined by politics beyond your domestic control, and the reality of where power truly lies when it comes to food. The bureaucracy? It was, somehow or other, a group of public servants or bureaucrats that decided that this food was not going to be consumed in Ireland and it was going to be shipped off overseas. That is totally wrong—and this is an important thing that we need to recognise. This is a Tea Party mantra, that we are constantly surrounded with this evil bureaucracy that is doing in our country. It has got nothing to do with bureaucracy. This was a deliberate policy at the time of the British government and the British landed gentry, who believed that Ireland was overpopulated and that the best thing that could happen for Ireland, and particularly for their interests in Ireland, was for there to be a significant reduction in their population. And, indeed, there was a genocide that occurred at that time, with probably not 400,000 but closer to a million people starving to death and another two million or so people being forced overseas—although I am one of those people who say I am glad my ancestors had the get up and go to get up and go, because I think we have a great land of opportunity here in Australia.

Coming back to my first comment, we have a strange conundrum with the minister. On the one hand, notwithstanding all his ranting and raving against 'regulation' and 'red tape' and 'just get out of the way', a la the Tea Party, he is very sensibly supporting an amendment through this piece of legislation to ensure that the Australian Animal Health Council can provide a proper emergency response when there is a requirement to do so. Then contrast that with the completely ill-informed idea that the Irish famine and the fact that so many people died was somehow or other the fault of a bureaucracy, rather than a conscious and deliberate policy on the part of people who had a lot of vested interests. Thank you, Mr Deputy Speaker, and I commend the bill to the House.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Perth for the tour around Ireland and Maffra and I call the honourable member for Calare.

John Cobb (Calare, National Party) Share this | Link to this | Hansard source

Thank you, honourable Deputy Speaker. I am speaking on the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. As far as the amendments in this legislation go, like most of my colleagues I have always taken the view that if the bulk of the industry agree with these things then it is not our job to stand in their way. In this case it is somewhat forced on them by the actions of all governments back in the late 1990s, when they brought the act into being when state and federal governments stopped funding for the sorts of pestilences that might be visited on the various industries. So they really do not have a lot of choice and we are not going to stand in their way on this.

The dairy industry in general has had some tough times. Drought, whether it is down in Victoria or in Queensland or wherever it may be, has played the most recent part in all that, not to mention the high dollar and most certainly the high cost of production. Then we have a few man-made problems as well, and I am sure I am not the first one to mention the carbon tax. I do not have a lot of dairy in my electorate—we are more into high-level dryland farming of one type or another, although I do have dairies—but I have been to an awful lot of dairies in my time, whether it be down in Gippsland and south-eastern Victoria, or the Murray, Tasmania, Western Australia or whoever it might be. But, in all that, the biggest single whack that the dairy industry has copped, in my experience, was a totally deliberate one by an Australian government. It was called a carbon tax. I will never forget hearing the previous Prime Minister of Australia, Julia Gillard, saying that that agriculture will just pass these things on, like everyone else.

It is quite incredible, because agriculture are price-takers; they were very seldom price-setters. The only time agriculture is a price-setter is, for example, when there is a cyclone in Northern Queensland and there are no bananas except for the few that survive. Then the boys have their day and they deserve it!

However, let us just talk about the effect, the very serious effect, that the carbon tax has had on the dairy industry. We did the figures and we found it is somewhere over $7,000 a farm. It cost Murray-Goulburn, for example, one of the big ones, a great deal. They figured well on that list that came out this month on what people had to pay by way of the carbon tax. We worked out the cost of processing is about $7,000 for every one of the dairy farms that supply them. On top of that, of course, it is somewhere between $3,000 or $5,000 or more at least. It can be a lot more for a big farm like Lexington Farm in Western Sydney where the carbon tax is costing in the order of $80,000 a year—though that is not a small farm. So we are talking around $10,000 a farm.

I actually did the figures on a 200-cow herd once. It was about a week's production that they are doing for the government of the day now—though it was the Labor government that then existed. It was costing the farm a week's work for nothing and they still had the cost of that production for that week. It is a huge issue. There are a lot of things that agriculture needs, and dairy is not very different from the rest. I have mentioned the carbon tax. The government can help dairy in the same way they can help most of agriculture. Agriculture makes no money out of a press conference. What they will make money out of is us saving them money.

What we need to do is not to take the bureaucrats' word when they say, 'We cannot help you with chemicals. There are certain laws and it is also bigger and more involved and you have just got to wear whatever the APVMA comes up with.' That is rubbish. If we do our work and individually deal with every chemical that comes through, when one is banned simply because that seems to be the thing to do at the time, we should sit down and work out whether it is really necessary. Do not listen to the bureaucrats saying, 'There is a procedure whereby this all happens and we cannot do anything about it.' That is rubbish. It is gutless and we are not doing our job.

Let me tell you that the dairy industry in particular has been built by the supermarkets and by Wesfarmers in particular. Coles have no board. They are owned lock, stock and barrel by Wesfarmers, who do have a board. Wesfarmers is a company that started off as an agricultural supply company. That is what they were. Wesfarmers employed people and told them to just increase their market share and it did not matter how they did it.

I do agree with those who say that the dollar for milk thing—and all the other supermarkets obviously followed suit—has been a disaster for those who actually produce milk. The supermarkets have brought this review of the Trade Practices Act on themselves. They may not break the law, but they employ very, very good barristers to tell them how close they can go to the Trade Practices Act and not break it. So probably they have not broken it—and maybe they have not—but, by heavens, they go close.

The best way to handle them is for us to make sure the bureaucracy in trade and the bureaucracy in agriculture do every damn thing they can to help producers get markets. Do bilateral trade deals and do them well. The best way to make the supermarkets pay for milk or any other agricultural product—be it horticulture or whatever—is simply not to have to supply them. The greatest thing that agriculture in Australia can have is a viable export market for everything we produce. Make the supermarkets No. 2, not the best or the first place to sell your product. We have to do our job to absolutely ensure that every possible thing that can be done will be done. The red tape and the procedures are mind-boggling for a small producer. A small horticulturalist, or a niche market area that wants to sell their product overseas, needs every bit of help that we can give them. It is hard work. It is not stuff to do on TV. It is minute and piece by piece, but it needs to be done. That is the best way for Australian agriculture to free itself of the shackles of the duopoly—and it is soon going to be a 'fouropoply' or whatever you call it! But let me tell you, competition outside Australia is the greatest thing that can happen to all Australian agriculture, and dairy is no different.

I am happy to say that dairy has had a lift in recent times. Rain will help that a lot, and certainly the world price of milk products has gone up. Queensland, more than any other state, is totally dependent upon the domestic market and does need somebody to put a processing plant up there. If they did, I believe they would get a very high proportion of the milk in that state.

Tasmania and Victoria, which are centres for milk processing and the milk product market, have certainly in recent times been in a much better state than the other states. New South Wales has some processing but is still mainly locked into the domestic milk market. I was over in WA not long after Wesfarmers pulled their dollar-a-throw: we will sell you water which is much more expensive than milk you want to buy it individually. The previous speaker mentioned Harvey Fresh. I remember going there. At that time they were not sourcing either of the supermarkets and I asked why not. 'We are not going to cripple ourselves by tendering for that. In fact we are looking at expanding various products into Asia,' was their answer. I said, 'How good is this? The more you do that and the more others do that, finally, when they run short'—and they will run short of fresh milk in WA—'they will have to pay more to the locals to get them expanding their industry instead of contracting it.' I had barely got back to eastern Australia when I heard that Harvey Fresh had just taken a contract with one of the two duopolies, which was a pity because it really took away the power of not having to supply them. That is why exports have to be what our future is.

Food security in Australia, be it dairy or any other industry, is not about having enough to eat. This is not Somalia; it probably is there and in Ethiopia from time to time, but it is not about food security in Australia. It is about having the best product in the world for our own consumers. But we actually set a standard around the world for what agricultural products should be. Our greatest marketing tool in the world is our clean, excellent image of product. It is the greatest marketing thing we have. People will pay more because of it.

It is no accident that the Chinese people with money would rather buy ours than their own. That is because they know ours is pretty much guaranteed and theirs—well, you know, make your own mind up about that. But be in these markets, whether you are a middling-sized company or a small one. I have spoken to horticulturalists, for example, and niche dairy producers around Mildura and the Sunraysia, and they are nearly driven berserk by having to meet all these different criteria because we do not always have a straight-out situation determined with China, India and other countries. So, it is a big job we have to do to get those little trade things sorted out.

We need to remember that the bureaucracy will not change anything that it does not have to, whether it is about chemicals, AQIS or whatever it is. Has it ever crossed government's mind to make AQIS inspections contestable and local? Having someone trained locally who can charge a local fee instead of having someone come from Melbourne or Brisbane would reduce the cost of exports one heck of a lot.

There is a lot we can do. It is hard work; it is not all stuff to get you in front of TV cameras. It does not make you a hero but, by God, it relieves the pressure and the cost of doing business for the first industry that ever existed in Australia and one that is thought well of around the world. Thank you.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I rise to speak in support of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 and the amendment to this legislation moved by the member for Hunter. This bill will amend the Primary Industries (Excise) Levies Act 1999 to enable an increase in the maximum rates of the Australian Animal Health Council levies on dairy produce from 0.058 cents to 0.145 cents per kilogram of milk fat and from 0.1385 to 0.34625 cents per kilogram of protein. I have to say that I pity the people who have to work out the real dollar figures relating to those figures!

The bill will not increase the operative rate paid by industry members and does not impose a financial burden on the dairy farmers at this point in time. That is a matter for the industry itself, and it will be a matter that they will have to put to their members if they want to increase the actual levy being paid. But what it does do is to lift the cap which, in turn, enables the industry to lift the levy if it so desires. In doing so, that will enable Australian dairy farmers to meet their requirements as a signatory through the dairy industries to the Emergency Animal Disease Response Agreement and also to meet any obligations in the event of an emergency response, including costs that may be incurred as a result of that emergency response.

As other speakers have pointed out, dairy is an important industry to this country. It generates around $13 million a year in farming, manufacturing and exports. I understand that it is the third-largest rural industry in the country. I also understand that about 40 per cent of Australian milk is exported, and that in turn generates something in the order of just under $3 billion per annum. It represents about seven per cent of the world dairy trade; it is not insignificant. By any measure it is indeed an important industry sector for Australia because of its economic value and, just as importantly, because milk is an essential food commodity. I cannot imagine life in any country without milk and dairy products. It is in our national interest, therefore, to ensure that our dairy industry remains viable and continues to grow.

Central to that viability is the industry's ability to maintain its disease-free, safe and healthy product standard. Quite properly, other speakers have talked about the clean, green image of the dairy industry in Australia. It is an image, I must say, that applies to most of the food that is produced in this country. I agree with the member for Calare that it would have to be one of the biggest selling points of Australian produced food to the rest of the world. I am sure it is.

The Australian Animal Health Council levies are used to allow the dairy industry to meet its requirements as a signatory to the Emergency Animal Disease Response Agreement and to be able to respond to that in the event of an emergency. I made that point in my opening remarks. That is an important element of ensuring that we maintain and retain that clean, green image that we have spoken about.

Of course, it is also in the national interest from the point of view of health to ensure that Australian dairy products remain both nutritious and disease free. Australian dairy farmers are the backbone of the Australian dairy industry, and I make the point that most of the dairy industry in this country is the collective work of individual dairy farmers. Only a small amount of dairy farming is carried out by corporations in this country or by share farmers. Most of the farming is done by owners of those farms—in many cases second, third and fourth generation farmers.

We have seen in the last three decades a real decline in the number of dairy farmers in this country. The numbers have fallen from around 22,000 in 1980 to just over 6,000 today. In my home state of South Australia, where dairying was once a fairly important industry, we had something like 1,700-plus dairy farmers and are now down to about 268 dairy farmers. I know the local dairy farmers there have for some time been struggling to make ends meet. We saw at the turn of the century—I think in July 2000—the introduction of the dairy industry adjustment levy as a way of rationalising the industry. Along with that we saw the exodus of many dairy farmers from the industry. The adjustment levy ended in February 2009 because it had served its useful purpose. We did see a huge transition and adjustment throughout the industry.

We also saw dairy farmers being hit by falling milk prices, milk price wars, droughts, a deregulated Australian market and free trade agreements—all of which added additional pressures to our dairy farmers. Added to that was the high Australian dollar. A high Australian dollar never helps our exports. Around 40 per cent of our dairy products are exported so, undoubtedly, the high Australian dollar has had an effect on exports and in turn on the income of the farmers who rely on those exports.

Yet despite all of that the Australian dairy industry does have a strong future and the international players know it, as evidenced by the recent fight over Warrnambool Cheese & Butter that included Saputo, the Canadian company that ultimately took a controlling interest in Warrnambool Cheese & Butter. We saw how hard that was fought between Saputo and other industry players. We saw today reports in the media that Chinese entities, some of which are owned by the Chinese government, want to invest in plants in Australia to manufacture milk powder to be shipped directly to China. I understand those discussions are taking place now. That interest is real. They want to invest in several plants around the country. Furthermore, we see companies like Fonterra, Kirin and Lactalis showing no signs whatsoever of exiting Australia. That tells me that the people who best understand the industry see a future in the Australian dairy industry and are optimistic about that future.

We should, nevertheless, be prepared to respond to any emerging risks and threats. In particular I want to talk about the risks associated with climate change and changing weather patterns. I notice that the member for Hunter also referred to those risks. Changing weather patterns present two critical risks. The first is to the production of food and water that is required by the cows. According to some figures, it is estimated that you need up to about 1,000 litres of water to produce one litre of milk and that each cow requires around 1.6 tonnes of feed per year. If those figures are correct—and I assume that they are, or are at least somewhere near the mark—then clearly if the climate changes, as it has done in recent times, it will impact on our ability to provide water for the cows and water to produce the feed that is required by the cattle. It is a real risk that we need to address. We have already seen many parts of Australia in drought and right now we are seeing drought affecting dairy farmers in New South Wales. It is a matter that we simply cannot continue to ignore. By doing so, we are turning our back on the dairy farmers.

The second risk with climate change is associated with diseases because, as the climate changes, our ability to manage different, new and emerging diseases also has to change. We have to be ready for those kinds of changes because climatic changes do more than just affect rainfall patterns. Yet many government members in this place continue to deny the reality of climate change and in turn the threats that those changes pose to Australia's dairy industry. In doing so, members opposite are doing the dairy farmers, who happen to be mainly their constituents, no favours whatsoever.

Even if members opposite do not accept that the climate is changing, the drought that New South Wales farmers are experiencing right now is real, their struggles are real, the effects on their health are real and their pleas for government assistance are real. Yet what we have seen over recent weeks from the Abbott government, from the Prime Minister and from the Minister for Agriculture is procrastination. I heard the member for Hunter saying earlier that he has picked up that there might be an announcement tomorrow with respect to drought assistance for those farmers. I hope he is right because, quite frankly, every day assistance is delayed I am sure adds to their stress and to their woes.

One thing the government could do is reinstate the $40 million that has been withheld from the farm finance low interest loan scheme and lower the interest rate associated with that scheme. As I said, farmers need that assistance now, not when it is too late. What they do not need is talk and platitudes; what they need is real assistance.

The animal health and welfare body is a not-for-profit public company established by the federal and state governments with membership from a cross-section of livestock industry bodies. Dairy Australia is one of the five associate members of animal health and welfare. It has a stake in the operations of that organisation. The organisation plays a critical role in ensuring that we as a nation are always one step ahead of the risks and threats to that particular industry, and I believe it plays a critical role in that regard. Of course, it needs to be properly funded if it is going to do its work and do it properly. This bill enables the industry to raise its contribution to the work of animal health and welfare and, in turn, do the work that is necessary and in the interests of the dairy industry of Australia. I therefore support the broad principle of this bill, albeit I support the amendment moved by the shadow minister for agriculture.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

I am so pleased to rise this evening to speak on the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. It will amend the primary industries levies act to increase the maximum rates of the Australian animal health council levies on dairy produce. It will amend the Primary Industries (Excise) Levies Act 1999 to enable the dairy industry to continue to meet its obligations in relation to its Animal Health Australia annual membership and other animal health and welfare initiatives. The levies are payable by the producer of the relevant dairy produce and are collected by the Commonwealth for disbursement to Animal Health Australia. Australian Dairy Farmers Ltd, as the national representative body for the dairy industry, has requested the amendments. Australian Dairy Farmers Ltd is also party to the emergency animal disease response agreement, so this bill will allow the dairy industry to meet requirements of being a signatory to that agreement, including the ability to meet its obligations in the event of an emergency response and where a nationally costed share response has been agreed.

This bill gives me the opportunity to highlight the importance of the dairy industry in Tasmania, and more particularly Braddon. I enjoyed the contributions of both the member for Hume and the member for Calare, and I look forward to the contribution shortly of my colleague from Lyons, whose also shares a passion for the dairy industry in Tasmania. It not only gives me the opportunity to get excited about future prospects for the industry, but to also warn of the challenges that are being faced. The dairy industry is the largest agricultural sector in Tasmania: 1,500 people are employed on farms and over 3,000 are employed in the industry; 160,385 cows—I am not sure when that count took place, but maybe this afternoon—on 437 farms produce around 770 million litres of milk. Dairying accounts for about 38 per cent of all agricultural gross products, second only to the salmon sector. But when downstream products including confectionery are included, the dairy industry is in fact the largest agriculture sector—valued at more than $1 billion. My electorate in north-west Tasmania and King Island is the largest dairying region in Tasmania, with more than 54 per cent of the total number of farms and about 58 per cent of the cows. My region employs about 800 people in the industry; 145 farms and 67,523 cows are to be found in one particular region—that is, the Circular Head region. As we say in my electorate, it is the land of milk and honey.

It is an honour to be able to stand here today and declare to all members present, and to those hopefully listening, that your electorates, wherever they are across this great nation, do not do cheese or butter as well as my electorate in Braddon.

The DEPUTY SPEAKER interjecting—

You may cough as you wish, Mr Deputy Speaker Broadbent, but the proof is in the pudding—or should I say that in this case the proof is in the multiple gold and silver medals awarded to north-west Tasmanian producers at the most recent Royal Sydney Cheese and Dairy Produce Show. So I am not making this up!

Honourable members interjecting—

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I would remind honourable members that the member for Braddon does not need encouragement.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

That is true! Over 800 cheeses and butters were submitted for judging recently, but only a few were worthy of being named winners or awarded gold and silver medals. There just is not enough time to list all the winners here, but special mention must go to Fonterra, and to Lion-owned King Island Dairy and Heidi Farm—both their cheese makers won cheese categories and managed to take home more than a dozen gold and silver medals.

For the benefit of members, and particularly you, Mr Deputy Speaker, it was never a fair contest. I mean how could the mainland ever compete with the cleanest air in the world, the healthiest and happiest dairy cows in the country, the greenest and most nutritious grass, and some of the most skilful cheese makers in the world? In the case of King Island Dairy, farm manager Mr Scott Clark—a good friend of mine, in fact—takes great pride in his work. He manages to get the highest quality milk from his cows, which is then handed over to master cheese maker Ueli Berger. Mr Berger is one of Australia's leading cheese makers, with awards from a host of international and local shows, including the New York Fancy Food Show and the World Championship Cheese Contest in Wisconsin. Congratulations to Ueli; he has done it yet again.

If there are members of parliament yet to taste the world's best cheeses from the electorate of Braddon, I suggest you get down to your local supermarket and pick up one of the many Tasmanian cheeses there. Or, even better, book yourself a ticket to the north-west coast and King Island! I will be happy to take anyone from either side of the House on a tour—except for the minister at the table, the member for Paterson. Mr Baldwin has been before, and I cannot keep the food up to him. Maybe I could put on a few platters one evening and invite you all to my parliamentary office—or maybe not!

As I said in my first speech, I have a vision for a better Braddon that can build on its Tasmanian brand by increasing dairy production by the targeted 40 per cent over the next five years. Reaching this target will require tens of thousands more cows, more sustainable farms and new farms. Most importantly—particularly given the results of the Brotherhood of St Lawrence research results yesterday showing my electorate, unfortunately, disappointingly, sadly, at the top of the pile when it comes to youth unemployment—this target, if it is to be reached, will provide hundreds and hundreds of new jobs in the industry.

To reach this target we need innovative dairy farmers, and my electorate, Mr Deputy Speaker Broadbent, you will not be surprised to learn, has many. Fifth and sixth generation farmers Norm, Lesley and Rob Frampton were named the 2013 Australian Dairy Farmers of the Year. In the Tasmanian Dairy Business of the Year Award in March 2013, the Framptons achieved a return on investment of 12.9 per cent through a focus on low-cost productivity, including labour, fertiliser and weed control, and through attention, importantly, to animal health. So not only do we produce the best cheese and butter and win those awards at the royal show, we also knock over the best in the country when it comes to the dairy farmer of the year awards.

There are exciting opportunities for us in dairy farming, not only in Tasmania but certainly in my electorate. The $66 million upgrade to the Cadbury factory in Hobart, to which the government contributed $16 million to reopen the world-famous Cadbury chocolate tours, will create the biggest difficulty facing the industry, believe it or not. The dairy industry will need, on this initiative alone, to increase its herd by 6,000 cows and produce an additional 80 million litres of fresh milk in order to accommodate the Cadbury upgrade alone. No wonder this is such an important investment, and most of this increase will need to come from my electorate in north-west Tasmania.

In addition to Cadbury, Lion Dairy and Drinks has just completed a $140 million upgrade to its Burnie facility, which will lift cheese production of 11,000 tonnes to 18,000 tonnes by 2016. Tasmanian Dairy Products invested $80 million in a processing plant in Smithton, which opened in March 2013. It processes raw milk from Tasmanian farmers into a range of dried dairy products for export to overseas markets. The Van Diemen's Land or VDL Company proposes to develop 11 new dairy farms on its Woolnorth property in Circular Head, which will create 58 immediate, direct, ongoing roles, and add 14,000 milking cows to its herd and an additional $100 million to the local economy in north-west Tasmania. In September last year, Tasmanian Dairy Products started operation of a powdered-milk processing facility at Smithton. The project will employ another 50 people and process up to 480,000 litres of milk each day.

The export opportunities for dairy related products are opening up before our very eyes. The Asian market in particular, as alluded to by the member for Hume, wants our stuff. I cannot put it any more bluntly than that: they want our stuff. Those in the growing middle class of Asia are seeking quality products, especially for their children. They want the best for their children.

Markets will continue to open up as a result of the very good work being done by Minister Andrew Robb in the area of trade, with exciting developments on free trade agreements with Korea and the work being done with Japan. Those two markets alone will open up many opportunities for us.

As I try to wrap up in time, I will say that there are some challenges facing the dairy industry. Like every farming region, Tasmanian dairy farmers face a host of difficulties: red tape, regulation, the questionable market practices of large supermarkets, fluctuating milk prices and poor weather. But perhaps the biggest issue facing dairy farmers in Tasmania is demand—meeting the demand, not the lack of it.

Let us talk about the carbon tax. Analysis undertaken—and I will not take exception to the member for Calare, but I am not sure that he had the most recent data as he alluded to this topic—would indicate to me that the impact of the carbon tax on the average dairy farm is approaching approximately $20,000 per average farm. That is right: $20,000.

The carbon tax leaves its toxic footprint everywhere. It finds its way into the cost of transport and the cost of energy and water. It finds its way into the cost of machinery and asset repairs, and even finds its way into the cost of fertiliser. A 2011 ABARES report of research into the impact of the carbon tax on agriculture highlights that:

… dairy farms are expected to be more affected by the carbon price than any other sector considered.

Unlike most businesses, dairy farmers cannot simply pass on the carbon tax impost. As you would all be aware, they are price takers and are mostly at the mercy of multinationals. Farmers generally work their butts off. They toil in inclement weather, they wake every morning to uncertain economic factors and the price of the dollar, and they risk much year on year.

As this industry grows, there is a need for more flexible working arrangements on dairy farms, and in agriculture in general, given the vagaries of the agriculture sector. It is imperative that we all understand the cost implications of labour. Workforce shortages are very much real, and—unbelievably, given the data released yesterday, as I said, about youth unemployment—dairy farms are still struggling to attract and keep workers. Unbelievable!

At this point I need to put paid to the idea that the basic skills of literacy and numeracy do not matter in a job on a dairy farm, because they do matter. We have a great deal of work still to do on this front—making sure that our young people in particular are job ready. So it was pleasing to have the Assistant Minister for Education, Sussan Ley, with me in my electorate last Friday discussing this very challenge.

There are good jobs to be had and working on a dairy farm is more than placing cups on cows and sloshing around, dare I say it, in cow shit. It is also about animal husbandry and developing a business. Farming is not just farming—it is in most cases a small business and far too often this fact is forgotten by too many. In Braddon most dairy farms are multimillion-dollar revenue businesses.

I do not want to give the impression that increased dairy production is the economic panacea for the electorate of Braddon—it is not. But it does represent one significant piece of the 'repair jigsaw' and the benefits to jobs, growth, farm sustainability and profitability, state GDP and flow-on dollars to small businesses in my regional communities who desperately need it should not for one minute be underestimated. I thank the House.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Member for Braddon, just for clarification, did I hear you say cow manure before?

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

I think that is correct.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Braddon for his erudite explanation. I call the honourable member for Blair.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. You can be assured that I will not be numbering the cows in the electorate of Blair! I do speak in support of the amendment to the legislation and I speak in support of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. I thank the member for Hunter, the shadow minister, for his amendment, which I think is important in terms of the failure of the government to act in the sector, particularly with the effects of the drought on the dairy and other agricultural sectors in the farming industry. I also support his reference to the omission of resource sustainability in the government's agricultural white paper.

Briefly, the legislation is supported by the industry. It enables the dairy industry to continue to fulfil its obligations, as many people have talked about, in terms of animal health and in relation to its membership of Animal Health Australia. There are increases to the maximum rates, known as the caps, of the Australian Animal Health Council levies on dairy produce in relation to milk and protein. I will not go through the details. It will not increase the operative rate paid by industry members and does not significantly add to any financial burdens on dairy farmers. The industry and its peak bodies support it. I do note with some irony that it is an area of regulation that those opposite support, having heard many speeches from them in relation to regulation over the years. We agree with them in relation to this form of regulation. It does allow the industry and Australian Dairy Farmers Ltd to meet requirements in relation to being a signatory to the Emergency Animal Disease Response Agreement to meet its obligations in the event of an emergency in the sector. So I speak in support of the bill.

Travelling through Asia on numerous occasions, I have been in grocery stores, supermarkets and delicatessens and places like that in parts of Asia only to think that I was in Woolworths in the Brassall shopping centre directly opposite my electorate office, with so much yoghurt, so much cheese and butter as well as milk being on display, recognising brands that are produced here in Australia. Obviously it is an industry that adds considerably to our national wealth. ABARES have in fact underestimated the benefit in terms of export. They thought $2.5 billion this year but it is about $2.7 billion. So the dairy industry is tremendously important in terms of export. Some people say it is a two-speed or two-tier industry. States like Queensland and New South Wales have more domestic focus; other states have more of an export focus as well. This is an important industry and our projections into Asia are particularly important as the middle class continues to grow. Milk products which are safe are really crucial for the health of this country and many country towns are most dependent on the dairy industry.

In my electorate of Blair country towns like Esk and Toogoolawah, Lowood, Minden, even rural Ipswich, and country towns like Rosewood and Walloon are very much dependent historically on the dairy industry and farming. As I say, the levies are payable by the producer of the relevant dairy produce and collected by the Commonwealth for disbursement to Animal Health Australia.

This is an important industry for my home state of Queensland. I read recently that the Queensland Dairyfarmers' Organisation, on about 24 February, talked about a survey they conducted in relation to the industry, saying that almost nine in every 10 Queensland dairy farms lacked confidence in the future. Most of those have negative cash flow situations. They are concerned about farm gate milk prices, which will need to rise by about 12c before confidence can be renewed in the sector and fresh milk restored for Queensland consumers. That was a key finding. The survey was conducted around January. We have about 500 dairy farmers in Queensland. There was a time when that would have been a small part of the total even in my electorate of Blair.

I note the comments made by the Queensland Dairyfarmers' Organisation president, Brian Tessmann, who said that the survey confirmed the ongoing impacts of the confidence crisis hitting Queensland dairy farmers, who have been rocked by floods, cyclones, the milk price war and now severe drought. Those dairy farms in my electorate have very much been impacted by floods, as has the whole farming sector. I have in my electorate the Wivenhoe Dam and the Somerset Dam, the Brisbane River and the Bremer River, Lockyer Creek and other areas that are notorious in terms of flooding. So the farming industry has been particularly hard hit. Indeed, the Somerset region was even worse hit in the 2013 flood, which did not impact as adversely on Ipswich as the 2011 flood that really devastated Ipswich and Brisbane.

Eighty-seven per cent of those surveyed, according to the QDO, said they were uncertain about or not confident in the future, and 79 per cent were either uncertain about or not confident in their own dairying business. I have spoken to many dairy farmers over the years, and they have always said that this is an industry that they were born into. They work hard. Often their children perform a great deal of work before school and after school. Many of them would love to hand on their farms to their progeny, but in fact the truth is that many of them are concerned about their future.

I saw that firsthand during the 2013 federal election campaign when I attended, in my electorate, the forum that was held in Esk at the Somerset Civic Centre on 25 August 2013. The then Minister for Agriculture, Fisheries and Forestry, the member for Hunter, was not able to be there, nor was the parliamentary secretary, but, as the local federal member and a parliamentary secretary in the former federal Labor government, I was asked to be there. I was pleased to be there to hear what dairy farmers had to say. There were a number of candidates. There was someone from the Greens and someone from Katter's Australian Party, and the now member for New England, now the Minister for Agriculture in the Abbott government, was there to speak. He and I were, of course, the people who spoke the most on that particular day.

I spoke to important farmers in the region as well as other locals. I caught up with John Cochrane, who is a Gympie rural industry figure and a very well-known figure in Queensland. He really impressed upon me the plight of the dairy farming industry as I sat down and ate with him and talked to him about what was happening. He has been in the industry for such a long time and has been involved in the representative bodies, and he has a really good knowledge of the industry.

After hearing about the plight of the farmers, I am pleased that progress has been made on the voluntary code. Many in the industry want a mandatory code, but in fact this government had the same policy that Labor had with respect to a voluntary code, and I am glad that there has been progress in that area.

When we were in government, we made a big impact to try and assist farmers in this area. We know that there is competition in the domestic retail sector. We know that there have been low farm gate milk prices. There has been a fluctuating Australian dollar. There have been variable climate conditions, and we know also that climate change has an impact on this industry. In Queensland there has been work done by the National Farmers' Federation. In fact, they got me to launch a report, when the Lockyer Valley was in my electorate, in relation to climate change and the impact in Queensland. So we made a big impact to assist people in this sector.

We developed the Farm Finance package—short-term assistance in the form of concessional loans for productivity enhancement projects or debt reconstruction. We funded 17 additional full-time counsellors with the Rural Financial Counselling Service. We increased the non-primary-production income threshold for farm management deposits from $65,000 to $100,000 and allowed consolidation of existing FMDs. We established a national, consistent approach to farm debt mediation.

We also assisted the farming sector by pushing hard in relation to the voluntary code I referred to before. We assisted with initiatives such as 'Tactics for Tight Times'—workshops to help farmers to better understand their business position and cash flow options and to develop management plans to reduce operating costs and improve their incomes. That gave them the opportunity of one-on-one sessions to discuss those issues. There was also the Carbon Farming Initiative and other energy efficiency grants which we provided, such as $1 million to Dairy Australia to undertake farm energy assessments for a number of dairy farmers nationally.

There was lots to be done, but there is still more to be done. I noticed recently the comments that have been made by the National Farmers' Federation. The President of the National Farmers' Federation, Brent Finlay, said that basically the procrastination of the Abbott government across this space meant that there was some increased anxiety from farmers who were hoping for some support and help from the government.

We have been critical of the failure of the Abbott government in terms of their progress on drought policy in the six months they have been in office, and I think that is justified. Also, I cannot believe they scrapped the Standing Council on Primary Industries. I think that was a very bad mistake. We know that the money that was provided in debt relief and other assistance to New South Wales has all been taken up. We saw the New South Wales regional assistance authority receive 138 applications, administering $30 million in debt relief for eligible farmers.

I think this government should really restore the $40 million it withheld from the farm finance low-interest loans scheme. I think that was a very bad move by this government upon coming to office. It sent a very bad signal to the industry as well. I think the government should restore that. There should be a quick response to the growing drought emergency. So far we have seen photo opportunities. It has been across the national media, but not enough is being done. The government could take steps by further lowering the 4.5 per cent interest rate and adjusting the guidelines to improve access for those farmers as well.

As I said, I think this government should never have abolished the COAG Standing Council on Primary Industries, which dealt with drought reform, because that was the place where you went to the table with people from all of the sector. It meant that people in New South Wales and Queensland and federally could get together and talk about the issues at a peak level and response could take place. It meant that people had to be engaged and thinking about what needed to be done.

So there are things that the government could do. It is time to end the photo opportunities opposite. It is time to take steps to provide the help that this sector needs.

In closing, I just want to mention a couple of things pertinent to my electorate. I think it is really sad that National Foods closed the butter factory which had been operational in my electorate since 18 May 1901. They closed it about three years ago. My father worked in the butter factory there. It was at Booval, in Jacaranda Street. Jacaranda iced coffee was pretty legendary, to be honest with you. In 1962 the factory produced 9.5 million pounds of butter and three million gallons of milk and provided 10,000 bottles of milk to 82 schools in and around Ipswich. It was an important part of Ipswich. Actually, Jacaranda iced coffee had a cult following on Facebook and even has its own Facebook page.

I also want to mention what we have done in terms of regional development in Australia. We put in half a million dollars to resuscitate the old condensery which Nestle used to have and which employed a couple of hundred people. They closed that factory in 1929 and many families left the district. At its height, Toogoolawah had about 3,000 people up in the top part of the Somerset region. That half a million dollars is being leveraged with $1 million from the Somerset Regional Council to create the new Toogoolawah Cultural Precinct, and around 47 people will use that cultural precinct every day. I have spoken with people from the McConnel family, who were the first owners of the milk factory, and I have also spoken to the council and many people in that region. They are looking forward to the project being completed later this year. It goes to show that it is a Labor government that invests in regional Australia. It has always been a Labor government which has been a friend to the farmers, and it has always been a National Party government in Queensland that has let down the farmers.

Peter Hendy (Eden-Monaro, Liberal Party) Share this | Link to this | Hansard source

I rise in support of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. I have an interest in the dairy industry not simply because of the importance of the industry to my electorate but because there have been dairy farmers in my ancestry. My mother's family, the Hardy family, were the first of my ancestors to come to Australia, in the 1850s. They came to try their luck on the Victorian goldfields; unfortunately they did not find any gold. They ended up moving to coastal New South Wales and some of them became dairy farmers in the Manly area of Sydney. The second unfortunate thing in my family is that they did not retain their properties. It would have been very nice to own a few acres today in Manly.

As the minister said in his second reading speech, the bill will amend the Primary Industries (Excise) Levies Act 1999 to enable the dairy industry to continue to meet its obligations in relation to its Animal Health Australia annual membership, and other animal health and welfare initiatives. The bill is important to ensure that Australian dairy farmers are able to be partners in the biosecurity system and maintain the health of Australia's dairy herd.

The amendments primarily increase the maximum rates or caps of the Australian Animal Health Council levies on dairy produce from 0.058 to 0.145 of a cent per kilogram of milk fat and from 0.13850 to 0.34625 of a cent per kilogram of protein. I note that the current operative levies are equivalent to the current cap rates. As the minister noted, the levy system enables industries to remain highly competitive in world markets. The Australian Animal Health Council levy on dairy produce under the act was introduced to provide funding for animal health programs carried out by Animal Health Australia. The funding also provides for the dairy industry's annual membership rates to Animal Health Australia. For the dairy industry, the levy is payable by producers who deliver or supply dairy produce for the manufacturing of dairy produce, such as whole milk or whole milk products. The amount paid by producers is based on the milk fat and protein content.

Australian Dairy Farmers Ltd, the national representative body for the dairy industry, has requested the amendments. The levies are payable by the producer of the relevant dairy products and are collected by the Commonwealth for disbursement to Animal Health Australia, for research and development. While the proposed maximum rate increase is significant, the bill will not increase the actual levy paid by industry members. It should be noted that any increase to the operative rate requires a case to be put by the industry to government, demonstrating widespread industry consultation and strong support as set out in the Australian government's levy principles and guidelines.

Stepping back to look at the wider scene, I note that in the 2012-13 financial year the Australian dairy industry produced 9.2 billion litres of milk for domestic use. The dairy industry overall represents a $13 billion farm, manufacturing and export industry, with export earnings in 2012-13 of $2.76 billion. The recent bid by the Canadian company Saputo to purchase Warrnambool Cheese and Butter shows the confidence foreigners have in the Australian dairy industry.

Eden-Monaro has a long history of dairy farming. The member for Braddon and other members have made big claims about their dairy industries. However, my electorate is no slouch when it comes to dairy products. In particular, the areas of Bega, Bodalla, Moruya and Narooma have survived and flourished on the back of dairy farming. Dairy farming in the Bega Valley dates back to the mid-19th century, around 1840, and it became the region's dominant industry during the 1860s, overtaking cattle farming. Today, 12.9 per cent of those employed in Bega work in dairy product manufacturing, primarily the famous Bega Cheese Factory. This is up from 9.5 per cent in 2006 and is by far the largest sector of employment in Bega. In terms of the Bega Valley as a whole, dairy manufacturing has the second highest level of employment, second only to education.

Dairy farmers are attracted to the Bega Valley due to the quality of the grass and the consistency of the rainfall. Today there are many dairy farms in Eden-Monaro which produce quality butter, cheese, yoghurt and milk products. Bega Cheese is perhaps the best-known dairy production company in Eden-Monaro. In fact it may also be the most famous company to have its roots and main operations in Eden-Monaro. The origins of Bega Cheese can be traced back to the 1890s when the Bega Co-operative Creamery Company began producing butter. Bega Cheese's products are stocked in most supermarkets around Australia. These products see Bega Cheese occupy 16.9 per cent of the market share for cheese in Australia. The company continues to be profitable, expecting an after-tax profit of $44 million, according to its full-year accounts. On announcing this, the company said, 'Bega Cheese has a very strong balance sheet and is well positioned to participate in the ongoing opportunities in the Australian dairy industry.' Currently, Bega Cheese employs around 700 people in the Bega Valley and is the largest employer in Bega. It produces over 50,000 tonnes of cheese every year and is exported to over 50 countries. The size of Bega Cheese allowed it to be listed as a publicly traded stock on the ASX in August 2011. In October 2013 it was named New South Wales regional exporter of the year.

However, it is not just Bega Cheese which produces high-quality dairy products. Bodalla Dairy is another great establishment in Eden-Monaro. Bodalla Dairy's roots go back to the 1860s when Thomas Sutcliffe Mort brought dairy cows to Bodalla. The company today makes boutique cheeses, which can be purchased online; cheese accompaniments; a variety of yoghurts; and supplies milk to the local community. All the milk comes from two herds of Friesian cows and one herd of Jersey cows that graze nearby. The company also runs cheese-making courses, which make a perfect weekend getaway. The company is expanding and last year it began to stock its milk in IGA stores throughout the Eurobodalla shire.

The Bodalla Dairy Shed is important for tourism in the region, with tourists coming to sample the fine cheeses and milkshakes. Last year, the Bodalla Dairy Shed was a finalist in the 2013 South Coast Regional Tourism Awards for tourism excellence in two categories: tourist attractions and tourist cafes.

Located at Central Tilba, the ABC Cheese Factory is another milk producer on the New South Wales South Coast, founded only a couple of years ago by Erica and Nic Dibden, a married couple who have been dairy farmers for over 15 years. The couple used to supply high volumes of quality milk to the Bega Cheese Factory for use in their produce. The company ethos is to heighten awareness of the hard work that dairy farmers do and to educate the community of the benefits of good-quality produce which comes straight from the source.

The company is now best known for producing Tilba Real Milk, which is a popular milk of the New South Wales South Coast, in particular Pambula and Merimbula. Erica and Nic took a huge risk in starting up a milk production company but have been extremely successful. Through hard work and dedication, they have established a successful business which now has a strong and loyal following. Beginning in April 2012, the company was selling 1,000 litres of milk a week by December 2012 and is now selling a massive 25,000 litres a week. Such is the growth of the company that the Tilba Real market now retails in Canberra and is a very popular product at the Canberra Farmers Market. The company now employs around 15 people. Altogether, that is a great record in Eden-Monaro.

I want to note that the government is very serious about strengthening Australia's agriculture. We have a large repair job to do after the last government's massive hit on the agriculture sector. I can start with the live cattle export to Indonesia fiasco. It severely hurt the beef industry as well as being a serious blow to our international relations with Indonesia. In addition, members will know that a large part of the agricultural sector is small businesses. In my electorate of Eden-Monaro, small businesses are the lifeblood of rural communities. Across the nation, some 21,000 additional regulations were created over the last six years, stagnating small business employment levels, resulting in 3,000 fewer small businesses which employ people. The overall result for small business has been staggering. Under Labor, 412,000 jobs were lost in small business. In fact, the small business share of the private sector workforce went from 53 per cent to 43 per cent.

As the member for Braddon recently told the House in a speech, the carbon tax on average has hit dairy farms to the tune of $20,000 each. For the sake of the dairy industry, the carbon tax must go.

Only the coalition has a plan to create jobs, by getting the budget in order, taxes down, regulation down and productivity up. Recently we released the Agricultural competitiveness issues paper. It is part of a process that will lead to the production of a white paper setting out policy reform in agriculture by the end of the year. It will examine issues around food security and the means of improving market returns at the farm gate, including through better drought management. Of course, we have seen drought conditions in the northern regions of our state of New South Wales and in Queensland, and it has been very dry across Eden-Monaro. At least we have been getting some welcome rains in Eden-Monaro over the last two weeks.

The white paper terms of reference also include the government's commitment to review whether the current guidelines relating to drought are adequate. But, of course, the government is also fast-tracking consideration of drought issues and it is my understanding that the Minister for Agriculture will be taking some recommendations to cabinet in the near future. The white paper will also look at access to finance, farm debt levels and debt sustainability. It will look at the agricultural value chain and recommend changes to skills training, R&D and critical infrastructure.

The white paper will be developed in three phases: first, an issues paper that has already been released; second, a green paper to be released in the first half of 2014 or mid-2014; third, a white paper to be released towards the end of 2014. Stakeholders and the broader community will have opportunities to contribute to the development of the white paper, including through formal submissions in response to the issues paper and the green paper.

We are keen to get information from both industry leaders and at the grassroots level. A task force has been established in the Department of the Prime Minister and Cabinet to develop the white paper. The task force will meet with stakeholders during the white paper development process to ensure that a broad range of views are considered. Meetings will take place in regional areas as well as in capital cities. I have asked the Minister for Agriculture to consider holding one of the formal forums in Eden Monaro. Failing getting that forum, I nonetheless have secured an agreement from the minister to visit the electorate at the end of March to talk to relevant stakeholders, with concentration on a roundtable that includes all the local shire mayors. Submissions received on the issues paper will be used to develop the green paper and, subsequently, the white paper. Submissions received on the green paper will be used to develop the white paper. That is the bigger picture. Dairy will be a focus of the review as one of our significant agricultural commodities.

In conclusion, I am happy to support the bill and believe, as I said earlier, that it helps maintain the health of Australia's dairy herd.

Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

I rise to speak in favour of both the amendment and the bill, the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. I also rise to say thank you to the dairy farmers of Western Australia, the farmers in Hervey, the Margaret River, Denmark and Northcliffe through the south-west of Western Australia—farmers who work hard in difficult circumstances both on the land and in the marketplace. In many cases, these are families who for generations have worked for a living in a tough and difficult environment.

The dairy farming industry in Western Australia is relatively small. We produce less than four per cent of the national dairy product of our country—less than 340 million litres per year. We are a small producer and a relatively small market. According to Dairy Australia, Western Australia, with its nearly 340 million litres of milk in 2012-13, is not simply the smallest state producer but also a state where production has been declining over the last decade—from around 400 million litres a decade ago to nearly 340 million litres in the last financial year.

Western Australia has no real infrastructure for the large-scale export of powders to Asia and its primary product is drinking milk for our domestic market. About 20 per cent of Western Australia's milk is exported. We have a number of large producers within our small dairy economy. Harvey Fresh is the biggest dairy exporter in Western Australia, with about 20 to 30 per cent of its 120 million litres shipped to Asia via the port of Fremantle. A large proportion of Harvey's milk supplies under its private label contract gets sold through Coles and then again through Woolworths.

We are a small dairy producer. But, having said that, the dairy industry is an important part of the agricultural sector in Western Australia. That is why this bill is important. The Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 will amend the Primary Industries (Excise) Levies Act 1999 to enable the dairy industry to continue to meet its obligations in relation to animal health and welfare and its membership of Animal Health Australia. The amendments increase the maximum rates—that is, the caps—of the Australian Animal Health Council levies on dairy products from 0.058 to 0.145 of a cent per kilogram of milk fat and from 0.1385 to 0.34625 of a cent per kilogram of protein. The current operative levies are equivalent to the current cap rates.

The bill will not increase the operative rate paid by industry members—and this is important. It does not impose a financial burden on dairy farmers—and that is important. Any increase to the operative rate requires a case to be put forward by industry, demonstrating widespread industry consultation and strong industry support. The bill will allow Australian Dairy Farmers Limited to meet its requirements as a signatory to the Emergency Animal Disease Response Agreement and meet any obligations in the event of an emergency response, including any costs that it may incur.

The farming sector of Western Australia is an important part of our economy. The past year has been a good year in general for broadacre cropping in Western Australia. We see a crop this year that will top 14 million tonnes—close to a record—and we will see, once again, the wheat bins of Western Australia producing the bulk of our export wheat crop. That is what we do in Western Australia: we export. We help drive the wealth of our nation through exports, not just of minerals—which everyone hears about—but, importantly, also through exports of our primary products.

I would like to note the visit to Western Australia just two weeks ago by shadow minister Joel Fitzgibbon. The shadow minister met with farming industry representatives and sought to inform himself, as the shadow minister, of the shape that our industry is in. When he had finished that visit he concluded that, in general, our broadacre cropping sets, as we know, some of the world's highest standards for dry country farming. The visit also allowed the shadow minister to see the terrific work done by CBH and our export oriented farming infrastructure and families.

It allowed him to reaffirm Labor's commitment to Western Australia farmers and allowed him to reaffirm Labor's commitment to farming activities. This is important for my electorate. Although my electorate does not produce any dairying herds or any milk, we do a lot of live animal exports. We do a lot of cattle exports but, in particular, out of my electorate, we do a lot of live sheep exports. That is important for the rural economy of Western Australia and important for jobs in my electorate. I hope that in coming months we will see a further live animal export market open—hopefully, in Iran. I know a lot of work has been done by the Western Australia Farmers Federation.

A government member: Hear, hear!

I hear the member opposite cheering in favour of the proposition of opening that market in Iran. It is important. It is one that successive governments have worked hard to achieve. It is one that is good for best practices in live animal exports and, importantly, it is a market that will add even more vigour to the Western Australian farming sector and animal production in Western Australia.

The history of grain growing in Western Australia is quite extraordinary. In many ways, the settlement pattern of Western Australia followed the attempts to open Western Australia up to farming. From the days in the 1840s of farmers literally dying in famine through to a state that now hosts Australia's export grain crop has been a tough journey. It is a journey that has been led by science and innovation. It is a journey that defines the very settlement pattern and the nature of Western Australia. Let me explain the science. Western Australian soils are ancient and dry and, as a consequence, they are also weak soils. So it really was not until science identified the lack of trace elements, and then discovered that could be rectified by a relatively simple application of trace elements, that we were able, in the early part of the last century, to begin opening the grain belt of Western Australia.

My family on my wife's side settled at Doodlakine in the 1930s and opened a small farm, which still operates. And, as my father-in-law, former senator Peter Walsh, is fond of saying, the grain belt in Western Australia is so reliable that only in one year since 1934 have they not covered the costs of their crop. That is not to say the work is easy; it is not; it is tough. But the application of the internal combustion engine, which grew at almost the same time as the growth in the Western Australian grain belt, allowed heavy mechanisation, heavy capital application to a science based agricultural initiative that produced great wealth from the broadacre cropping in Western Australia.

Following those initiatives, we had a terrific piece of innovative work done by an academic from the University of Western Australia, the member for Perth's father-in-law, Henry Schapper. The work that Henry did on farm management, the work that Mr Schapper did in driving good business practices on farms, allowed the development of a farming culture in Western Australia which became, and still is, in many ways the envy of our nation.

At the same time that it grew terrific wheat crops, our wheat belt also made a fantastic contribution to the politics of our nation, not only producing the outstanding work of John Hyde—one of the more remarkable free market economists to enter this parliament—but also Peter Walsh and, in later years, Brendan Grylls, whose association with the farming industries out of Merredin. Also, I should say, that the current Finance Minister, Mathias Cormann, also hails from the great and productive Western Australian wheat belt—or rather his wife does.

Dairy farmers, wheat farmers, pig farmers—farmers of Western Australia—work hard to produce a livelihood for themselves and to produce a bounty from the land which sees us develop sustainable industries that nurture one of our great natural strengths.

We know in this place that Australia's farmers follow world's best practice. We know that in some areas where dairy is much stronger than in Western Australia—in Tasmania for instance—not only does dairy itself drive its own businesses but the ancillary businesses, through other food production, are big employers and substantial wealth generators.

The dairy industry will be greatly pleased with the passage of this bill. The dairy industry will be greatly pleased with the attention they have received from this parliament. And the dairy industry around our nation will be made better for the thoughtful contribution that our parliament has made by supporting this bill.

I began by saying that I thank the dairy farmers of Western Australia for the work that they do. In fact, I thank all farmers. The life of a farmer is not an easy one. Every single one of my family members are farmers, principally broadacre croppers in the wheat belt of Western Australia. It is a life that they enjoy and it is a life that has provided their families with a great sense of purpose. It provides my family with a great sense of being Western Australian and a great sense of connection to the soil, to the dirt and to the great agricultural provinces of Western Australia.

It was with great enjoyment on the weekend just passed that my wife and I spent both Saturday and Sunday in the grape growing districts in the southern part of Western Australia near Northcliffe and Pemberton, where my son, in pursuit of his next scouting badge, had to complete an agricultural task. He did that by measuring the sugar levels in the current wine crop of my sister and brother-in-law. He proudly pronounced that the sugar levels in this year's crop were exactly what is required. So the harvest of that grape crop will occur on Tuesday night.

The farming sector of Western Australia has so many skills, so much to give and so much that it does give, to our nation and to our state. To simply say 'thank you' seems wholly inadequate. We are indebted to it for the life, the definition; and the great wealth it brings to our state is simply an understatement.

As I close I say again to every single farmer in Western Australia: thank you for what you do. Thank you for doing it every hour of every day of every week of the year. I wish all the farmers of Western Australia all the best for the coming season.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Could I associate myself with those concluding remarks from the member for Brand. I also commend the member for Eden-Monaro for his speech, which was a bit of a tour de force of the dairy industries in his electorate which I found most interesting.

We have before us today a bill and I am glad to see that the bill is supported by both sides. Unfortunately, we have an amendment to the motion for the second reading, which has been moved by the shadow minister for agriculture. I will come to that, because I do not think this bill needs cheap political point scoring associated with it. It is a serious bill and a bill which both sides know is noncontroversial.

This is a very good opportunity for people to come into this chamber and talk about the importance of agriculture to their community and how it provides much-needed employment, not only for people in regional and rural Australia but also for people in urban Australia. The member for Brand gave us a very good speech on where Western Australia fits in that regard. We have already heard from one of the members from New South Wales. My good friend from Tasmania will follow me, and I am sure he will give us a very good speech on the wonderful dairy industry in that wonderful state. Remember that, when the GFC hit, for instance, the sector which kept us out of recession was the agriculture sector, and the sector which still provides this country with much-needed export dollars is the agricultural sector. It is good that we can come in here and point this out and, on both sides of the chamber, use this opportunity to talk about agriculture.

What is the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 about? I will go over the context of the bill. The bill increases the maximum permitted rates of the Australian Animal Health Council levies on dairy produce from 0.058 to 0.145 of a cent per kilogram of milk fat and from 0.13850 to 0.34625 of a cent per kilogram of milk protein. Australian dairy farmers required the increases in the maximum rates in the Primary Industries (Excise) Levies Act to enable it to continue, for the next decade, to meet its obligations, as a partner with government and other livestock industries, under the Emergency Animal Disease Response Agreement. It is very important to note that the bill will not increase the actual levy payable by industry members and will not impose a financial burden on dairy farmers. I think everyone in this place welcomes that.

The Australian dairy industry is vital for the nation. The dairy industry of south-west Victoria is vital for my electorate of Wannon. It is the largest dairy producing area in the country. As a result, we also have dairy processers in my seat. We have Fonterra and Murray Goulburn. We have Warrnambool Cheese & Butter, which, as we all know, has recently been taken over by Canadian company Saputo. Lion also has processing interests in my electorate. The industry provides much-needed jobs and much-needed incomes. It also supports dairy farmers in my electorate. Dairy farmers work hard, provide local employment and contribute to the community in a significant way. They not only help our local community and help jobs locally but they also provide much-needed export income.

The dairy industry in my electorate this time last year was in a great deal of pain. We had had, in what is usually a reliable rainfall area, one of the driest nine months that we had ever seen. Prices were low, the cost of fodder and grain to feed the dairy herds was high, cash reserves were run down and debts on farm began to increase. Fortunately, the best thing that could happen to farmers, in particular dairy farmers, happened in my region towards the middle and end of last year—we got substantial rainfall. In some cases, farmers were able to cut hay, silage and more silage. They put that away, which means that they have it there in reserve. For those uninitiated to dairying, grass is the best thing that you can provide a dairy cow to make sure you get very good milk, and Australia produces the best milk.

Not only did we get good rainfall, which led to good grass growth, meaning that farmers could restock their fodder, but we also saw, through the battle for Warrnambool Cheese & Butter, people begin to understand the importance of this sector and what it can provide to this nation. An overseas company, Saputo, and two local companies, Bega and Murray Goulburn, bid for Warrnambool Cheese & Butter, and the share price more than doubled. It gave great confidence to the industry to know that people saw it as worthwhile and valuable. In the end of that process, Saputo won. There are a couple of lessons that we need to learn arising from that process, but Saputo won in the end because it was able to convince the shareholders and the board of Warrnambool Cheese & Butter that it was the best option.

Murray Goulburn were also very keen to purchase the asset but they had to go through the Australian Competition Tribunal to be able to put a wholehearted bid on the table. Unfortunately, that process can take some time. Something that we need to relook at as part of our review of competition policy is whether we can speed up the process that occurs when something is taken to the Australian Competition Tribunal. I will say, though, that the rules and regulations, the hoops that all companies would need to go through as part of the battle for Warrnambool Cheese & Butter, were quite clear from the outset, when the process started.

It was very pleasing to welcome the Deputy Prime Minister down to my electorate of Wannon last Friday to speak at the Sungold Field Days, the largest dairy field days in this nation. Sungold is one of the products which is produced by Warrnambool Cheese & Butter. The Deputy Prime Minister gave a very insightful speech about where he saw the future of agriculture and the Australian dairy industry over the next few years. One of the more interesting things that he said was about our need as a nation to understand the importance of our agricultural assets and to encourage Australian investors—whether they be superannuants, whether they be private investors—to realise how important our agricultural assets are to us and the potential returns they can give us over the years to come. I would like to place on the record my thanks to the Deputy Prime Minister for coming down and speaking at the luncheon of that important field day.

I would like to turn now to the pious amendment put forward by those opposite. It reads:

"whilst not declining to give the bill a second reading the House notes the:

(1) failure of the Government to act urgently in response to the effect of the drought on the dairy and other agricultural sectors; and

(2) omission of ‘resource sustainability’ in the terms of reference for the Government’s agriculture white paper."

I will just address drought for a minute. The government was left with a non-existent drought policy by those opposite, so we have had to systematically, methodically and carefully put together a package, and that is what we have done. That is under active consideration as we speak, and I am sure that we will hear in the very near future about what the government is going to do in this area. But for those opposite to engage in cheap political pointscoring on this matter is contemptible. They left us with no money, so we have had to do the best we can to come up with a policy. I have full confidence, following the Prime Minister's tour of drought affected areas, that that is exactly what the government is going to do.

It is also remiss of those opposite to talk about terms of reference being left out of the agriculture white paper. The agriculture white paper process—and the member for Eden-Monaro set it out in detail—is once again going to be a very systematic, very considered approach to what we need to guarantee the future of this great industry for our nation. It is going to focus on the key area—because without this nothing else follows—and that is: how do we ensure that the sector remains profitable? If you cannot have the profitability, you can forget about the sustainability and all the other issues which flow on from that. Profitability is what we need to drive into the sector.

If those opposite are serious about making this white paper process a proper one, the first thing they can do is take away the most serious burden on the industry at the moment, and that is the carbon tax. They should go and talk to Murray Goulburn about the carbon tax bill that they have to pay. They should go and talk to individual dairy farmers, who are currently going to have to pay $7,000 to $10,000—or $15,000 when they are big operations—per annum for the carbon tax. That is before we see the impact on fuel added come 1 July. So rather than putting forward this pious amendment, why don't the opposition look at the imposts on the sector at the moment? There is one impost which they could fix immediately by getting rid of the carbon tax. Do not come in with these cheap political pointscoring exercises. Do your research, do your homework and look at what is in the long-term interests of the sector. If you do that, you will start to realise that we must fix regulation, we must fix the taxation system—in particular, the carbon taxation system—and we must ensure that there is that much-needed flexibility in the workplace. A sector like the dairy industry needs that, because obviously during milking times—mornings and afternoons—there is a greater need for labour than there is in the rest of the day.

I commend this bill to the House and I welcome the fact that both sides are in favour of the substance of the bill.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

Coming from a regional electorate like Page where we have a strong dairy industry, it concerns me when I hear the two words 'levy' and 'increase'. However, the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 is not about raising the industry levy our dairy farmers' pay. In fact, it will not necessarily cost the farmers or the industry one cent. This is about establishing a free insurance policy that will give our farmers the flexibility they need to quickly respond to a health crisis in their industry. This bill leaves it up to the farmers to vote to increase the levy to a new maximum rate in the event of a disease outbreak. Australian Dairy Farmers Limited asked for this piece of legislation to increase the maximum cap. This will allow it to continue to meet its obligations to Animal Health Australia and to other animal health and welfare initiatives.

The Australian Animal Health Council, which was set up in 1996, manages more than 50 national collaborative projects that improve animal and associated human health, biosecurity, market access, livestock welfare, productivity and food safety and quality. Part of the Animal Health Council's mission is to 'build capacity to enhance emergency animal disease preparedness'. The bill increases the maximum permitted rates the Australian Animal Health Council can levy on dairy produce from 0.058 cents per kilogram of milk fat to 0.145 cents, and for protein milk from 0.138 cents to 0.346 cents. What it does not do is increase the actual levy payable by industry members or impose a financial burden on our dairy farmers. This is because any actual increase to the levy must first be put forward by the dairy industry, demonstrating widespread consultation and support, in accordance with the Australian government's Levy Principles and Guidelines.

We know from bitter experience that, if we are slow off the mark following a health outbreak, there can be serious consequences. We need look no further than the outbreak of mad cow disease in the UK and closer to home to the equine flu. These diseases caused serious financial and personal hardship for individual farmers and breeders, for the industry as a whole and for the national economy, which our then Treasurer Peter Costello noted.

Global competition in the dairy industry is intense. This bill removes a roadblock to allow farmers to respond effectively to an outbreak so they can protect the industry and its domestic and global market share. We all know that large parts of northern New South Wales and Queensland are in drought and this government, to its credit, is now working on an assistance package. The Minister for Agriculture, Barnaby Joyce, and the Prime Minister, Mr Abbott, visited the drought affected areas a week or so ago to look at the type of assistance needed to support these industries. I want to put this in context: this should not necessarily be looked upon as an industry handout. If we were to look at the industry handouts that happen across the world in agriculture, we would see that Australia is at the bottom of the chart. Australian government assistance to farmers is barely measurable on a chart, whereas many other countries give very heavy support to their farmers. This will be assistance in the sense that it is a one-off because of the weather experienced recently.

The drought did not start yesterday or last week. It has already affected milk production, with output falling last year. We cannot make it rain but we can provide the right economic and regulatory conditions for the industry to adapt and prosper. That is what we are doing by introducing the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014, by announcing 19 March as the government's first repeal day to scrap thousands of suffocating pieces of regulations and by negotiating free trade agreements such as the one with South Korea. Many dairy farmers and many people in my electorate have told me that they felt the previous government's answer to anything was to provide more regulation and more rules. We know that that does not help any person trying to produce wealth or jobs in this country.

This bill should be seen as part of a package that provides the framework for the dairy industry. It will help farmers to withstand domestic shocks, like the outbreak of disease, and to protect and grow their industry's profitability and market share so it can continue to employ tens of thousands of workers in regional Australia.

Over the last few years, overseas investors have shown intense interest in many of Australia's dairy companies. While this has caused some consternation, it reflects a global recognition of the importance of Australian dairy and agriculture in meeting the dietary needs of a rapidly growing world population and, in particular, Australia's role in becoming the food bowl of a burgeoning Asia. We all know that, in Australia's infancy, our nation was said to ride on the sheep's back. Now, in what many are calling the Asian century, it is Australia's food industry that will increasingly feed the world.

After negotiating the free trade agreement with Korea, which the dairy industry hailed as 'a step forward' and 'providing a range of new opportunities', I cannot think of many things worse than farmers signing contracts with Australia's 10th largest dairy market only to find they cannot deliver due to the slow response to an outbreak. If we are to make the most of this Asian century, we must make sure that any disruption to the supply chain caused by a disease outbreak is minimised as much as possible.

The dairy industry is critically important to my community. Norco, our dairy co-operative, was founded in June 1895. Last year it purchased 152 million litres of milk from its 159 members, an increase of 3.3 million litres from the previous year. It directly employs 413 locals. I might say that they make, in my humble opinion, Australia's best ice-cream, in which I regularly indulge. Norco had a tough 12 months last financial year as it held up the farm-gate price for its members and restructured its business for the future. Conditions for the local dairy industry are starting to look a bit rosier, with indications the farm-gate price is rising and Norco signing a number of significant deals made possible by the restructure. One is to supply milk to Coles supermarkets private label in South-East Queensland, another is to produce that supermarket's branded ice-cream, which I happily report to parliament scooped 12 silver medals in this year's Sydney Royal Cheese and Dairy Produce Show.

A government member: They scooped it.

They did scoop it. Norco is also now exporting ice-cream to Japan. Norco is currently looking with our help to export fresh milk into China and the last time I spoke to them, they had had two attempts. They are trying to sort out some initial problems, but this is potentially an exciting prospect for them. In the company's annual report, Norco's chairman Greg McNamara said that it was also looking for other export opportunities as:

The heightened international interest in food produced in Australia from Australian sourced ingredients should provide Norco with opportunities to enter into new business partnerships which are designed to enhance our export opportunities.

Of course, we know that Australia has a great, clean image in this field, as it has in many others.

Mr McNamara is talking about Australia's competitive advantage. Business studies 101 states that in a globalised world, countries and businesses will reap the rewards if they exploit their competitive advantage, and it is our role as the government to ensure this industry can do just that. We have a part to play in ensuring the industry can maintain an uninterrupted supply of quality milk and other value added produce like ice-cream, butter and yoghurt.

Norco, I am happy to report, takes quality assurance very seriously. It places a high priority on assurance programs and certifications within each of its three processing facilities. This bill will allow Norco to quickly join the rest of the industry in responding to an outbreak so it can maintain its quality domestic and export dairy produce without having to wait for the government to legislate for a levy rise to pay for the emergency response.

Nationally, dairying continues to be an important rural industry. It is Australia's third largest rural industry and a major regional employer not only on farms but also through processing, manufacturing and distribution of a range of high-quality products. I have some quick facts to put it in perspective. The Australian dairy industry is forecasting the production of about nine billion litres of milk this financial year. There are 6,770 dairy farms located across Australia. About 1.6 million dairy cows produce all of Australia's milk. About 50,000 people are directly employed on dairy farms and in manufacturing plants. In the six months to last December, the industry earned about $1.4 billion in exports. As we know, exports increase the real wealth into our country not only from the people it employs and the taxes they pay but also from real export dollars. Owner-operated farms dominate the Australian dairy industry.

In the International Year of Family Farming, it is refreshing to remember share farming was employed on 18 per cent of farms in 2012-13, while corporate farming made up just three per cent of the total. Although the bulk of milk production occurs in the south-east corner of the country, it really is a national industry with all states having their own dairy industries that supply fresh drinking milk to our regional communities and cities. The industry adds value to the processing of milk through the production of fresh lines such as yogurt, custard, ice-cream, butter, cream and a wide variety of cheese types. Longer shelf-life products such as bulk and specialised milk powders are also produced in high volumes.

This bill will protect this industry not through tariffs or subsidies, or by slugging farmers with higher costs and more regulatory burdens, but by allowing it to be nimble and flexible, and enabling it to respond to a potential emergency health situation in a more timely way than it currently can. I commend this bill to the House.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

I rise also to speak on the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. The dairy industry is a very important industry not only in my electorate but also in the state of Tasmania. I note the contributions by the previous speakers. Like the member for Wannon, I also associate myself with the comments made more generally by the member for Brand about the importance of farmers. They were most appropriate. I note also the comments by the member for Page about the total Australian dairy production. Based on the figures he provided, it suggests that dairy production in Tasmanian is something akin to 10 per cent of the total national production. Given that Tasmania's land mass only makes up two per cent of the nation's total, it emphasises the importance of the industry to the state of Tasmania. It may also be relevant to know that about 12 per cent of the nation's rain falls on that two per cent. That is probably the link to the production of milk in our state.

In my largely rural electorate of Lyons, in Tasmania, nothing is more important than protecting our domestic livestock from the threats posed by exotic diseases. In fact, as an island continent Australia has a natural competitive advantage in regard to biosecurity. The island status of Tasmania also gives us a distinct advantage in many respects as far as biosecurity is concerned, though I acknowledge there are some disadvantages having a piece of water between us and Victoria. Anything that this government can do to help keep our state disease free will certainly be supported wholeheartedly by me.

This amendment bill seeks a redistribution effectively of the funds from the existing levy on dairy farmers so that the Australian Animal Health Council can secure a small increase in the existing levy. I note that it is supported by Australian Dairy Farmers, which recommended and asked for this increase to be introduced. The Australian Animal Health Council is a not-for-profit public company managing more than 50 national projects that improve animal and associated human health, biosecurity—the focus of this bill—market access, livestock welfare, productivity, food safety and food quality. The Australian government is a shareholder in the Australian Animal Health Council. This amendment bill does not increase the overall levies on dairy farmers, but it will enable the country's peak dairy industry body to lift the cap on rates with the existing levy money going into animal health.

In respect of biosecurity, Tasmanian farmers are already on the front foot. A new livestock biosecurity office has just been appointed to work out of the Tasmanian Farmers & Graziers Association office in Launceston to better educate farmers about the threat posed by exotic diseases. Jess Coad was appointed with the help of existing dairy levy funds to help farmers become proactive in responding to the possibilities of diseases like foot-and-mouth and mad cow disease and their effects on all livestock industries. I note also the work done by the state department in the past few years in trials and responses to deal with such outbreaks were they to happen. The Tasmanian Farmers & Graziers Association CEO, Jan Davis, is a firm believer in prevention rather than cure and she supports this amendment bill, as it allows more money to go into biosecurity education. Those involved in this fast-growing Tasmanian industry agree with Jan Davis.

We need to be careful not to generalise about the state of the dairy industry in this country. I note comments by the member for Calare in respect of competition and the challenges faced by many farmers, particularly fresh milk suppliers. I note also examples given by the member for Hume in relation to an example of an industry at its height, as is the case in New Zealand. The New Zealand industry is a shining light in dairy production, but the Tasmanian dairy industry is performing well. In fact, return on capital and return on capital including capital depreciation in Tasmania are much higher than the national averages. Importantly, the cost of production in Tasmania was recently measured at about three cents per litre below the national average. This is largely due to innovation in investment made by farmers and downstream processors in Tasmania. Also, Tasmania has a natural competitive advantage in producing high-quality, high-protein feed owing to its high rainfall.

We are also experiencing an expansion of irrigation, most recently on the north-west coast in the Dial Blythe scheme in the electorate of my colleague the member for Braddon. In this electorate there was also a welcome development on the historic Woolnorth property, which will increase Tasmanian dairy production with an additional 14,000 cows. This is part of what is required to fill the stainless steel equipment that already exists in Tasmania. Tasmania faces the challenge of filling stainless steel equipment already invested in by local and international investors and we need approximately 70,000 dairy cows to fill that existing capacity—what a wonderful problem to have. This year's Tasmanian Dairy Conference in Burnie will be held on 26 March. Convenors are aware of the need for vigilance in the industry regarding biosecurity and the prevention of exotic diseases. Biosecurity is one of the nine topics up for discussion.

I note also the tragic figures announced this week for youth unemployment. Tasmania is at the bottom of the pile on youth unemployment: one in five Tasmanians aged between 15 and 24 is unemployed. It is a crisis of confidence as a result of 14 years of Labor-Greens state governments, and the next election, on 15 March, cannot come soon enough. The south-east corner of my electorate has the fourth worst figure in Australia, which to me is unacceptable. The dairy industry offers one of the very few opportunities for employment now and in the future to young people with a range of skills.

There are very few industries or sectors in our country in which a young person can start as a labourer and within 10 years have an asset backing of more than $1 million. There are many examples of this on the north-west coast in the form of share-farming. It is a fantastic opportunity and I encourage young people, even those from non-agricultural backgrounds, to look at the opportunities within the dairy sector in Tasmania. This sector offers an opportunity to build a career in a range of different areas. The industry is the backbone of local communities. It is nothing for a dairy farmer to spend more than $1 million annually with suppliers in the local community, be they electricians or rural merchandise suppliers.

The key point that I would like to make about dairy is one that is true of the challenges that face agriculture in our country and more broadly. I digress, but I came out of the wool industry, having bought and sold wool and exported wool out of Australia for many years. Wool is an industry that has virtually no local processing capacity left in this country. But in the case of dairy, we do, and we are seeing investment in this country in an industry in which we have a natural competitive advantage.

All of Tasmania's milk is value added, with the small exception of local fresh milk production. There are cheese factories at Burnie—my colleague the member for Braddon went through a number of acknowledgements of awards that that particular business has received, and I will touch on that a little bit further; there is the Tasmanian Dairy Products milk powder factory at Smithton, which is producing dairy milk powder that is being exported all around the world, particularly focusing on the opportunities that are opening up in Asia, not least of all China; there is yoghurt production in Launceston; and there is chocolate production in Hobart.

I would also like to particularly mention two perhaps smaller but more diverse businesses that are within my electorate. One is the Pyengana Dairy Company. Just for the member for Braddon's reference, it has recently won not only the 2014 but also the 2013 Australian Grand Dairy Champion Award for cheddar cheese. The other is the Ashgrove family business located on the Bass Highway between Deloraine and Devonport. It is an example of an award-winning business that has diversified its traditional milk production business into one based around tourism and is now employing 80 people within the local area. It is a fantastic success story. The knock-on benefits of value adding, such as in the businesses I have described, are significant.

The Tasmanian dairy industry is small in so many respects. The mere 445 dairy farmers last year at farm gate accounted for 40 per cent of the total value of agriculture in my state. People like Grant Archer and people like Grant Rogers, albeit a New Zealander. We are working hard to make him an Australian, although he tells me he will never support the Wallabies! There is Paul Bennett, who comes from the Ashgrove business I mentioned before. These people are doing wonderful things to encourage the expansion of the dairy industry in our state that is needed to fill the processing capacity that exists already within the state.

The Tasmanian dairy industry's mission is to focus on the long term. That will be by maintaining a low on-farm cost of production. This is the natural competitive advantage that we have in Tasmania because of our rainfall, because of the investment that we are making in irrigation and also because of the climate that we have that can produce high-quality ryegrasses. The long term will be secured by the business management improvements that are being undertaken in maintaining and also developing strong supply chain relationships with those businesses that are investing in that part of the industry in Tasmania. It will also be secured by supporting efficient, innovative and responsive processing capacity. Having the processing capacity locally is such an important reason why the dairy industry in Tasmania is successful at the moment.

Confidence in such an important thing in so many industries. Get rid of the carbon tax and you will see this sector in my state expand even further. I commend the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 because it will improve the health and wellbeing of the Tasmanian dairy herds and biosecurity within my state and also provide confidence within the dairy industry, which is so important to the state of Tasmania.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

I would like to speak in support of the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. Firstly, I would like to acknowledge the good work done by Australian Dairy Farmers Limited, the national representative body for the dairy industry. This bill proposes amendments to the act to increase the maximum rate of the Australian Animal Health Council levy on milk fat and milk protein. These amendments are clearly necessary for the industry to meet its obligations in relation to the important animal health and welfare initiatives that have to be agreed to for the Emergency Animal Disease Response Agreement, the EADRA. Importantly, this bill will not increase the actual levy payable by the industry and its members. It does not impose a financial burden on dairy farmers. Furthermore, it will have no financial impact on the Commonwealth. Any increase to the levy rate will require a case to be put forward by the dairy industry. The case must demonstrate widespread consultation and support in accordance with the Australian government's Levy Principles and Guidelines.

The levy has not been increased since 1999 and ADF have indicated that they have no current plans to increase it. However, the proposed increase in the levy cap will give the industry the flexibility it needs to invest in preparedness for foot-and-mouth disease and emergency disease response capability and surveillance. For the dairy industry this is a particular priority. FMD, foot-and-mouth disease, has been described as the single greatest threat of any disease to Australian livestock. A large outbreak of FMD has the potential to reduce Australia's gross domestic product by $10.3 billion to $16.7 billion, which would have a very significant effect on our economy.

We, the coalition government, are proud of the industry and have confidence in its future. We want to help the dairy industry, along with the agricultural sector generally, to grow and prosper and achieve our goal of helping Australia become a world leader in sustainable food production. Our focus is on securing market access, cutting red tape and ensuring that farmers can continue to get a fair price. The government is active in encouraging the development of productive farming systems and world-standard resource management practices.

In my electorate of Flynn and, indeed, in Queensland, the dairy industry is somewhat different from what our good members from Tasmania have been telling us about the industry there. While the demand in Queensland for milk products is increasing by seven per cent a year, our dairy farmer business is declining. The Port Curtis Co-operative Dairy Association is a co-op that I have lived with ever since I was born—my family had a dairy farm where I grew up. Unfortunately, in Queensland we have become price takers and we cannot justify the low price of around 55 cents a litre for milk. Some of my farmers three or four years ago were getting 60 cents a litre and we have found that the drop to 55c was unjustifiable.

The three main players in our industry in Queensland are the dairy farmers themselves, who have little or no say in their industry; the processors, who are generally overseas owned; and, of course, the big Coles and Woolworths stores, who sell the bulk of milk. I do believe that the future is in the overseas markets and that for Queensland, as a growing state, the ability to give fresh milk to the population is a must. The industry itself is sometimes struggling. I have 29 farmers in my electorate who supply milk to Rockhampton PCD. The big danger is that if too many more dairy farmers drop out of business then we are afraid that the Rockhampton branch could close. If that happened it would be a tragedy, so we have to encourage our farmers to hang in. I think the future is in Korea and the other Asian markets, and I have to thank Andrew Robb for the good work he has done on tariffs and the free trade agreement with Korea. That can only help the farmers' cause and it means so much.

In terms of the eastern states, including Tasmania, Queensland still plays a part but it is the minor player and I think our farmers are the worst off. I was at a meeting with the dairy farm group where they were talking about a world price. I said I had not heard of a world price. They said it is about 40 cents or 45 cents a litre. I think Victorian farmers are on something like that. I asked what the price was for Queensland milk. They said, 'You can easily work that out—it is world price plus freight from Victoria to Queensland.' That is the way they will work it out. So I went around and I asked a few dairy farmers how much the price of freight was from Victoria to Queensland, because that is what they are thinking in the long term if things get worse in Queensland, and I was told it was 18c. That would put milk in Queensland at about 58 cents a litre.

If we were able to get our dairy farmers up from 55c to 65c, that would ensure the viability of the dairy farms in my electorate. I hope that can be achieved one day. I do not think 10 cents a litre to our dairy farmers would hurt the consumer. Surely if we can work around our processors, Woolworths and Coles et cetera, I think that is very achievable. At the present rate of 55 cents a litre, it is not on.

To give you some facts and figures on Queensland, we produce about 500 million litres of high-quality fresh milk a year. The industry generates $240 million worth of milk products. It adds $2 billion to the Queensland economy. The dairy industry in Queensland is quite a large employer, with around 3,000 people having jobs in the dairy industry. Of course, the industry throughout Queensland, not just in Flynn, still faces massive challenges. The ongoing supermarket price war has forced the processors and the farmers into an unprofitable situation—I refer you back to the 55 cents a litre. The farmers have to put up with drought and increasing costs, and the wretched carbon tax is not helping their cause one little bit. Where you have dairy farms you have irrigation, crops of lucerne to grow and cattle to feed on a 24-hour basis, and when you start pumping water from one place to another it is very costly, with electricity bills going through the roof.

However, the coalition government is working in partnership with the industry to ensure a balance of market power for the dairy farmers in Queensland and throughout Australia. We are trying to cut red tape. We are trying to get rid of the excise fuel levy that is going to come in on 1 July. If we do not get rid of the 6½c diesel impost from the carbon tax then our dairy farmers, especially the 29 farmers I talked about in my electorate, will have their business go down the gurgler. They cannot pay that extra fuel price when they are already producing at below cost. It is a dire situation.

To get back to the measures in this bill, the dairy industry is the third largest rural industry in our economy, coming in just behind beef and wheat, so it is important to Australia. We have 6,770 farms with, on average, 240 cows per farm. Each cow produces about 5,926 litres a year or 16 litres a day. That is much bigger than it was before.

Debate interrupted.