Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014, which restructures the maximum rate cap for dairy levies in this country. It is also an opportunity to speak about the importance of the dairy industry in Australia. I was lucky enough to spend a week working on a dairy property near Maryborough a number of years ago, and I must say it was probably the hardest week of work I have ever done. It is a tough business, dairy. It has been through significant ructions. It competes in tough international markets against competitors who often receive significant protection and support. With our small population, a significant amount of our dairy production is exported of course; and, thanks to the deregulation decisions that were made a number of years ago, I am proud that Australia is a very, very effective dairy producer and able to survive in the open export market.

Much of that is due to the tremendous work of our dairy farmers, who have increased their herd sizes and used a number of scientific techniques, including artificial insemination, to maximise the productivity of their herds—more about that later. It is great that the sector can work together to collect a levy that effectively ensures that Animal Health Australia is properly funded and is able to do its great work in protecting the livestock in the industry that underpins it. It is a $17-billion industry, and it is tremendous that this sort of levy that is collected through the industry is so broadly supported.

Dairy is potentially Australia's oldest industry. Dairy cows arrived on the First Fleet. I am not sure how long they lasted—how long until they wandered off, were lost overnight or were slaughtered in a famine—but dairy goes right back to the first days at Sydney Cove. There were significant advances possible, really, only in the 1880s as refrigeration improved, given the short shelf-life of dairy products. But it was obvious that Australia's natural endowments placed us in a position, particularly in the south-east of this great continent, to maximise the higher levels of rainfall around there and produce dairy products—the highest-quality dairy products in the world—not only for our own consumption but also for our near neighbours, the Pacific islands and Asia.

There is a cautionary note, though. New Zealand has made extremely insightful decisions and tough decisions early, and have really streaked ahead, I dare say, with their free trade agreement with China. Now New Zealand interests are purchasing significant parts of Australia's dairy industry. It is a massive part of their economy—50 per cent of the entire GDP of New Zealand comes from agricultural exports—and New Zealand's actions are a lesson to us across the Tasman that grasping the challenge in agriculture is vital and that informed debate about improving our agriculture, particularly our dairying, is really important. We never want to allow the fact that two-thirds of the members of this chamber live in urban Australia to abrogate our connection to the debate on agriculture. The debate must be informed, insightful and inclusive.

Most importantly of all, if there are tough decisions to be made, we have to look into the future. I regret that we have not always done so here in Australia. Too often we have been conservative in our decisions—too often we have not taken the tough decisions—and this fact has been to our disadvantage. A large number of dairy farmers have gone to the wall and left the industry. Even today there are $300 million worth of dairy properties for sale in this country which after 12 months have not yet been sold. The GFC, because of its impact on our international markets, was a massive blow to all of our agriculture—particularly in the states, such as Victoria, where dairy products are produced for export.

Of course, there is also an upside. For example, there is the recent free trade agreement with Korea, which is our 10th largest dairy partner. China is No.1—as you would expect—Japan is No. 2 and then there are Indonesia, Malaysia and countries as far afield as the Middle East. We are even sending significant amounts of cheese to Morocco. The great initial concern of farmers, once we had deregulated the industry and taken away the floor price, was somewhat eased when the international price started to rise. It was impressive that, five to 10 years after the removal of the floor price, international prices were equalling those which were being paid domestically—and artificially—just 10 years earlier.

I once worked in Dirranbandi, and, fortuitously for me, in my first couple of weeks out there, when I was looking for a home-cooked meal, a farming family invited me over for dinner. Invitations such as this were among the great highlights for an urban professional living in the bush. The conversation quickly turned to the wool floor price, and the head of the household turned to me and said, 'How would you feel about the government cutting your wage by two-thirds?' It was really hard at that time, as a barely decent doctor, to try to work out the implications of a floor price. To me it was completely intuitive that the free market reigned supreme. Still, I could not see how farmers could survive if they lost a floor price and ended up getting just a third of what they had been receiving in the previous year. But that is life in rural Australia; that is life as a small-business person. One moment you are poring over spreadsheets; the next day you are out thinking about the quality of your pasture and making decisions about fertiliser and—Australia's great scourge—wondering when the next rain will come. Rural people, these great Australians, live with such things every day of their lives. Everyone here enjoys the security of regular income, but we must never forget what a gamble it is to live and work on the land in Australia.

Uncertainty about water must be a pre-eminent concern in water-intensive industries such as dairying. But political challenges have overlaid this concern. The carbon tax, for example, continues to pose great challenges, and further levels of unnecessary regulation have combined with it to make life on the land really tough. On the upside, there has been a 30 per cent increase in China's demand for our dairy produce. I see the situation of the dairy industry as somewhat balanced, but never could it be said that it is not precarious.

The price of fertilisers, which make up about 10 per cent of dairy input costs, have increased significantly. The big cost in dairying, of course, is feeding your cattle. Ultimately, dairying is turning pasture into milk—it is as simple as that. The dairy industry is utterly reliant on high-quality pasture and the maximisation of the ability of herds to turn pasture into milk. An enormous amount of science underpins these things. We need to fund such science and make sure that we lead the world in it. We also need, as this bill points out, to support Animal Health Australia and to look at areas where there is underinvestment, risk and opportunities. In these areas there is a significant role for the research and development corporations of the dairy industry. Such corporations do great work in identifying how we can better produce milk and all the other dairy products—cheese and yoghurt and cream—for domestic consumption and the important role that whey proteins and casein now play in a range of food substitutes.

So dairy has that opportunity to maximise those fluctuations in price and demand. But, importantly, if we ever choose to not take a long-term view, if we ever chose to nobble our industry by not identifying the risks inherent in the fluctuations, then people can simply move to milk based substitutes. One of the great challenges is that, once consumers move to substitutes, it is a real challenge for the dairy sector to move people back on to fresh dairy.

We are now utterly reliant on international markets. As I said earlier, I think we have missed a number of opportunities that New Zealand managed to grab. Our herd sizes have increased from what I recall two decades ago—85 beasts—to now around 220 and heading increasingly toward herds of 1,000. The US has already moved significantly towards these large herds, and the same trend is evident in Australia, albeit slow; producing, I think, 1.6 million dairy cattle in the country. There are 6,500 dairy farms where there used to be 22,000 of them. That difference, that delta, tells a real story about absolutely dedicated, committed Australian families who have been moved off the land by the changes in the dairy industry. We should never forget that extraordinarily painful transition that has occurred over the last two decades.

So where are we? We have a thriving dairy sector; I think we can say that. We have a dairy sector that is prepared to voluntarily pay a levy on the milk protein and the fat content of their milk. Obviously, the rest of it is water—it is a little difficult to tax that, although I am sure a Labor government might find a way to do that. We have that money being invested sensibly and productively in protecting our herds, developing the best possible resilience for them. By genetically improving the herds we know we can get around 1,000 litres more milk per beast per year, and that is an impressive achievement. Obviously what they are looking for is structure and longevity in beasts and just genetic potential. If you cease doing that, and if you cease investing, then ultimately you will fall behind, with very few options.

So dairy farmers do struggle because it is a water-intensive industry. They really are reliant on those fluctuations. We are lucky enough to be producing dairy products all around the country. Though, as you move out of Victoria, increasingly it is for domestic consumption. We are very lucky in my part of the world to have great, world-standard dairy products available to us. In my mostly urban electorate, I confess, there are just one or two cows that I see when I drive around the city. I do not really know who owns them; I do not know if people eat them or milk them. It is unfortunate that I have not taken a greater interest in working out exactly what kind of cattle industry there is in my own electorate. If there is, I have to admit that it is terribly small, but I am glad that it still exists. In my electorate of Bowman those cattle remain, although there were many more in the past. They cohabit with our koala population.

At every level, while we may not produce any milk in our electorate—we barely grow grass in Bowman; we have a little bit of poultry—but we strongly support every member on this side of the chamber in supporting the great work of Australia's dairy industry.

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

The Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 is a response to a request from Australian Dairy Farmers Ltd the national representative body for the dairy industry. It is, therefore, something we strongly support. I believe it should have bipartisan support, but I do note there is a fairly silly amendment that has been put up as a distraction to the real focus and intent of this dairy produce bill, and of course the coalition will simply ignore that.

The levies are payable by the producer and collected by the Commonwealth for redistribution to Animal Health Australia, which will help to respond to animal health and welfare matters. As Australian Dairy Farmers Ltd is a party to the Emergency Animal Disease Response Agreement, it will also assist in a quick and nationally cost-sharing response to a sudden and serious outbreak of disease—for example, blue tongue or anthrax or, heaven forbid, some other problem that at the moment we have managed to avoid.

These amendments do not change the levy rates; rather they increase the cap on the rate of the animal health council levy which may be payable by the dairy producer. Before there is any change in the levy rates, there would need to be comprehensive industry consultation and a vote of levy payers, leading to forwarding a proposal to the government for action on those recommendations. These would have come out of consultation and a vote. So this is very much a bill which serves the needs of the dairy industry as it has requested.

Australia can be proud of its dairy industry, which has evolved to be one of the most efficient in the world as well as being one of the most sustainable and natural. In particular our industry has avoided adopting whole-scale factory style farming where thousands of animals are corralled in feed lots or shedded, which brings with it lots of additional disease burden.

The Murray electorate, located in northern Victoria, is the home of one of the biggest dairy production regions in Australia. The dairy farms are interspersed with a range of manufacturers, both Australian owned and multinational, including companies like Bega-Tatura Milk, which makes and exports infant formula as well as its famous cheeses; Murray Goulburn, which makes cheeses and powders; Fonterra, which produces cheese powders and ghee; and Nestle, which makes the world's best condensed milk at its Tongala plant. There is also a new $40-million UHT plant in Shepparton established by ACM and Pactum Australia with the aim of exporting product to Asian markets. The milk processing adds some $2 billion to the Victorian economy annually. Milk powders continue to be one of the biggest export commodities out of Geelong and that is including during the 10 years of drought.

The recent Korea-Australia Free Trade Agreement contained some good news but also some real disappointments for the Australian dairy industry. This FTA has once again shone a spotlight on the huge inequities that exist in international food trade, which is one of the most corrupted, subsidised and protected sectors of any trade in produce or services in the world. When the quotas, tariffs, duties and non-phytosanitary barriers are added to the high Australian dollar, it is no wonder that some of our exporters of food have seen their export market penetration disappear altogether in the last several years. Their years of investment, of new product development and of export market development have simply gone out the window through no fault of their own.

Australia exports $80 million worth of dairy product annually to Korea despite punitive tariff levels. Cheese is our major dairy export and has had to contend with a 36 per cent tariff. Cheeses will immediately enjoy a duty free quota of over 4,500 tonnes, which can grow at three per cent annum, and this tonnage represents some 80 per cent of our cheese exports to Korea in 2013. However, for the remaining 20 per cent of exported cheeses—many of them coming from my electorate of Murray—there will be a progressive elimination of the 36 per cent tariff. But it will take 13 years for our cheddar to become tariff free, 18 years for cream cheese to be duty free, and for all other cheeses it will be 20 years before they have duty free status. So if you are a cheese maker do not hold your breath unless you can squeeze into that first 80 per cent proportion that will be tariff free. For our butter and dairy spread manufacturers, the Korea-Australia FTA will have an immediate duty free quota of 113 tonnes growing at two per cent per annum, but the duties of up to 89 per cent will not be gone until the 15th year.

Infant formula receives similar treatment, with an immediate quota of 470 tonnes to be duty free and the rest of the duties to come off some 15 years later. This is despite the huge demand for Australia's safe and nutritious infant formulas. The contaminated formulas sold in China are still leaving hundreds of parents grieving for the death and disabling of their babies. Australia's strict hygiene protocols mean our dairy products are amongst the safest in the world; however, it will still be 15 years before we have a free flow of trade into Korea of our clean and safe infant formula powders. We will presumably continue to see tourists from Korea as well as from China and other Asian countries take home as many boxes of our canned infant formula as the weight restrictions allow them to haul onto planes. The duties on milk, cream, ice-cream, yoghurt and whey will be eliminated, but that will take up to 20 years.

It is a great frustration that our milk powders and our great Nestle Tatura condensed milk, the choice of quality confectioners and chefs the world over, because it is made from whole milk not reconstituted milk, have been excluded from the Korea-Australia Free Trade Agreement all together. This is a great disappointment, given Australia long ago opened its doors to importers with zero or near zero tariffs on a whole range of products, but we have struggled for decades to see our generosity reciprocated.

This Korea-Australia Free Trade Agreement is a move in the right direction for the Australian dairy exporter. We thank the coalition government for moving it along after the six years of inaction from Labor. But the length of time before all tariffs are removed on those products and the exclusion of some key dairy products are a handbrake on the development of the Australian dairy exports industry.

The Australian dairy industry, like all Australian agribusiness, is one of the least government subsidised primary production sectors in the world. Only three per cent of the income of Australian farmers can be attributed to government support. The announcement of drought support for some today—and I commend and applaud that announcement—is tiny in comparison to the government assistance offered to the rest of the developed world's farmers when faced with any natural disaster. One of the major components of government support in Australia is a dollar-for-dollar offer for agribusiness research—and these funds are raised through industry levies. Even dealing with animal health and welfare, as you can see from this bill, is largely to be in the hands of Australian primary producers themselves. Norwegian farmers enjoy government support that makes up some 60 per cent of their total farm income. The average government support for farmers across the OECD is 20 per cent—and is not likely to come down anytime soon. To drive these comparisons home, a USA farmer is paid US$30,170 per annum and an EU farmer about four times that amount in government support.

In most countries there is an appreciation of the importance of a nation's capacity to feed itself, to contribute to its own food security. There is also the contribution of agribusiness to environmental services production—keeping soils, waterways, biodiversity and air quality in a good state for the rest of the nation. Most nations also understand the high risks faced by any industry of national significance, such as farming, which depends on weather or seasonal conditions—the boom-and-bust cycles that we see in Australia in particular. So it will come as a surprise that the small town of Tatura, a town of only 4,500 people, hosts one of Australia's premier dairy events—an event which is, in fact, second only in international importance to an event in Chicago, as it recognises dairy excellence and good genetic development.

The International Dairy Week of Tatura was established in 1990. Despite droughts and floods, each year it has continued to offer its prestigious awards to the best of the over 1,000 first-class dairy cattle shown there. Over 100 dairy companies and businesses annually display the latest products and technologies in this tiny town. It is an extraordinary achievement for, as I say, a very small population. The whole of the community comes out and makes this event possible each year, including the service clubs like Rotary and Lions. The City of Greater Shepparton is of course also a major contributor to the success of this international dairy show.

A decade of drought in northern Victoria took a very heavy toll on dairy farms. They were forced to buy in fodder and to sell their water to the Commonwealth Environmental Water Holder, which cruelly held out the offer of $2,400 per megalitre without really explaining the fact that that water would disappear out of food production forever. This took water out of northern Victoria to the extent that we lost half our dairy farms. To survive, many dairy farmers not only sold their water but sold their heifers to China. Others were forced to put their whole herds through the abattoirs, reflecting the fact that their capacity to borrow had run out. Where have all the dairies gone?, a report published in July 2010 by the Victorian Department of Primary Industries and the Northern Victorian Irrigation Renewal Project, said:

In 2010 at the end of the drought, an inspection by the Victorian Dept of Primary Industries and others found that over 45% of the once rich dairying country, or nearly 800,000 hectares across the GMID, was idle rural land.

I want to report the very good news that only 3½ years later, since July 2010, we have fought back. Despite half of the water being taken to the Environmental Water Holder and the fact that that water now sits in our storages at such volumes that irrigators cannot have their remaining allocation put down the system for their farms. We have had a major renewal of the dairy industry in our part of the world. Despite the terrible impact of the drought on the dairy industry where the century-old irrigation system failed for the first time, we are seeing a significant rebuilding of the herds with herd size and production approaching pre-drought levels. While sales of live dairy cattle to China continue with some 55,000 pedigree animals exported by the end of June last year and 36,450 dairy cattle exported in the first eight months of 2010, the industry is continuing to add to its herd size.

We are also seeing new dairy manufacturers like the UHT plant in Shepparton being established. This is despite the escalation in costs if you are trying to dairy. Feed costs have significantly increased. Many still carry significant debt from the years of drought. And the carbon tax, which we cannot get rid of until Labor cooperates, has significantly added to the cost of the power used to run a dairy, and the refrigerant gas tax has pushed up the cost of the cooling milk vats to unsustainable levels.

On top of that, when Labor insisted on three hours of minimum pay for casual milkers in dairies which had been modernised to take less than two hours to complete the milking, we saw real inefficiencies in the cost of labour. Of course, the price of irrigation water has gone through the roof. Unfortunately, the irrigation system in Victoria is owned by the state government. There are no other state governments still in charge of irrigation systems. In Victoria, they employ over 800 people and the state system is hugely in debt. They are trying to get out of that debt and their own inefficiencies by upping the fees and charges to their irrigators. We are just teetering at the point where the cost of water is beyond the productive capacity of farmers to make ends meet.

Data from Dairy Australia's regional forecast of milk production outcomes paint an interesting picture of the intentions of the Murray Dairy regional producers. I have already described the difficulties they face with the irrigation water costs, the loss of half of their irrigation entitlement when they were forced through drought circumstances to sell that water to the Commonwealth for the environment, which still has not seen the benefit of that environmental water held.

The Murray Dairy region's figures show that herd sizes have grown from 253 on average in 2012 to 282 on average in 2013. More interestingly, 48 per cent of Murray Dairy farmers felt positive about the future, second highest only to Tasmania where 50 per cent had a positive outlook for the future of the national dairy industry. The worrying thing is that, for an industry that is as important as dairying, this data shows us that in areas like western Victoria only 19 per cent had a plan to invest next year and only 46 per cent had a positive view about the dairy industry into the future. Gippslanders had even lower expectations for a positive future. The dairy industry needs a great deal of understanding and support in Australia. It is not an industry that needs a handout but it does need real Australian support.

David Gillespie (Lyne, National 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, which has been brought forward at the request of Australian Dairy Farmers to make provision for future biosecurity capability. The electorate of Lyne on the mid-North Coast includes some of Australia's oldest and most naturally blessed dairying country. It is blessed with extensive alluvial plains running back into the hinterlands, in the Manning, Hastings and Macleay valleys, and the Gloucester Valley with its many rivers. Normally, it has reliable, moderate to high rainfall, but currently it has had to cope with below average rainfall and drought conditions, particularly in the south-west.

The historical context of dairying in the region is important. It started off with timber-getters arriving in the region in the 1800s and then in the 1900s they quickly recognised the natural attributes of soil fertility and a temperate climate, and the governments of the day supported their endeavours to get dairying running in the region. It was the highest returning enterprise of the time. Farming ventures sprang up along the rivers and the creek systems; communities grew on the back of it along with butter factories, which seemed to be on every river.

While it was hard, unending and most often low-paying work, the pay-off was that it was incredibly satisfying to have your own land and be able to raise a family on a farm, and pass it on to the next generation. This historical context is important, as I mentioned, because this is where the dairy industry's ongoing and acknowledged perseverance and resilience comes from—to keep getting the cows in twice daily for milking, day in, day out, all year, every year, and dealing with all the pressures such as mother nature, distorted markets, dubious marketing campaigns, land prices and government land-use policies, as well water policies, droughts and the vagaries of being a very poor applicant in price negotiations due to the power of the processing and retail end.

During the 1960s to the present, the situation is that a lot of farmers have left the industry because they have not been able to keep up as viable dairying units, despite trying as they did in the face of all those pressures. There has been a massive rationalisation of the industry, from the farm level to the dairy-processing level since those early days and that is well documented. Many properties in our region are still being turned over to lower-yielding beef production. The ones that are still operating have been able to do so through a combination of very good planning, very hard work, a lot of will and purpose, and a readiness to assess and invest in new techniques. They have also recognised the strategic importance of supporting the dairy industry because it is the source of essential food supply and a source of income for the regional population. Governments of all persuasions and jurisdictions over many, many years have allocated funds to research, development and extension.

The Australian dairy industry has always embraced new ways of doing things, be it with pastures, animal health and welfare, breeding and reproduction, nutrition, farm management, dairy factory operations or, most importantly, the area of biosecurity. The industry has been a world leader in adapting innovation and working collaboratively in all those areas for mutual benefit. It must continue to do so, and that is why the government is introducing this bill, the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014.

The purpose of the bill is to amend schedule 6 of the Primary Industries (Excise) Levies Act 1999 to increase the maximum rate of the Australian Animal Health Council levy on dairy products for vital biosecurity capacity. Animal Health Australia is a not-for-profit company that manages more than 50 national projects improving animal and associated human health, biosecurity, market access, livestock welfare, productivity, food safety and food quality. Animal Health Australia is a public company whose members include the Australian government and state and territory governments, the peak national councils of Australia's livestock industries and various key research, veterinary and educational organisations. Part of its mission is to 'build capacity to enhance emergency animal disease preparedness'. Funding of the AHA is provided from a number of sources including the Australian Animal Health Council levy. Dairy producers, amongst others, are required to pay the Australian Health Council levy.

In the explanatory memorandum, Australian dairy farmers are documented as having asked the government to legislate for an increase to the maximum rate of the levy. But the industry has a cost-sharing deed in place to assist with emergency animal disease responses. The deed facilitates rapid responses to and control and eradication of certain animal diseases by, amongst other things, defining funding responsibilities up to certain limits for each emergency animal disease. This cost-sharing deed provides that where an emergency animal disease response plan is implemented, each party must initially meet its costs in accord with agreed principles. However, where the industry is not able to do so, the Commonwealth will initially meet those obligations. In that case, the amount paid by the Commonwealth must be repaid within a reasonable time—generally expected to be no longer than 10 years. Repayment may be made through industry statutory levy arrangements. Animal Health Australia is also a signatory to the cost-sharing deed and is entitled to recover those of its costs which are additional to its ordinary operating costs.

Relevant to this bill, schedule 6 of the act provides for the imposition of the Australian Animal Health Council levy on relevant dairy produce and provides that the levy is paid by the producer of the relevant dairy produce. It sets the maximum milk-fat rate for the purposes of the levy. Item 2 of the bill sets the maximum protein rate for the purposes of the Australian Animal Health Council levy, so that the potential rate, should there be a need for it to be increased, can rise from 13c per kilogram to 35c per kilogram. However, the proposed amendments do not change the levy rates. Instead the bill increases the cap on the rate of the Australian Animal Health Council levy which may be payable in the future.

Before this can occur, industry consultation will be required, including the requirement for a vote of levy-payers to be conducted and the preparation of a proposal to the government containing a recommendation on the preferred levy rate. It is important to recognise that this bill is not raising the levy, but putting in a framework for the Australian Animal Health Council levies to be raised to assist with emergency animal disease responses, should the need arise. This will make it much easier for industry and government to get to work straight away and respond to any biosecurity issue that may arise in the future. There needs to be eternal vigilance against the ever-present threat of exotic pests and diseases.

There are many diseases in the world from which Australia, through both good fortune and good management, has been able to safeguard its producers and consumers. Some of these have been mentioned and they include foot and mouth disease, rinderpest, swine fever, screw-worm fly, scrapie, anthrax—and the list goes on. There are literally hundreds of pests and diseases in the world that we do not have—and we do not want. Animal Health Australia has played a pivotal role in ensuring our livestock industries have world-class plans in place to prevent these diseases from entering our country, and ensuring our industries have plans and funding mechanisms in place in case they do enter the country, and control or eradication programs are required for the greater good.

It is pertinent to make some observations on the current state of the dairy industry to see that it is not an inappropriate time to be introducing this bill. International market fundamentals were weighted towards higher commodity prices for most of 2013. Our producers have had to cope with the vagaries of the environment. We have just gone through an extended very dry period during which feed and fodder had to be purchased. A lot of these costs cannot be factored in, even for future purchasing agreements. Milk supply from most producers is yet to fully recover from the setbacks of the low milk prices and higher debt loadings of last year, but demand continues to expand.

With high international commodity prices now being hopefully reflected in farm-gate returns, 2014 will see global milk production grow. I hope that will translate into higher milk production volumes in the electorate of Lyne. The recently signed free-trade agreement with the Republic of Korea will also offer Australian exporters a more competitive position in the growing dairy market, but it will take time for this to have its full effect. It will not happen as quickly as some would like, but there will be an improvement.

Ongoing dairy demand is now translating to improved returns to farmers, with farm-gate prices overseas up to 25 per cent higher in the EU, the USA and for some Australian contractors, and over 40 per cent in export-focused New Zealand. Producers in our electorate have traditionally focused more on the domestic fresh milk market and we have not seen the same jump in milk price as that experienced by dairy producers in export-focused regions, but they are still facing similar cost pressures as a result of unfavourable weather and tight regional feed supplies. The most important thing that the dairy industry in my electorate needs is increasing farm-gate prices, which will boost confidence and provide further latitude to capture profitable production opportunities as the season progresses.

Significant change has occurred as a result of supermarket transitions to more direct relationships with farmers, such as Coles's decision to enter into a long-term contractual arrangement with Norco and others for the supply of fresh milk. In the Manning Valley Woolworths has increased its direct supply arrangement with farmers to supply Farmers' Own milk brand and recent increases into that retail outlet have been announced. I fully support that.

The dairy industry will continue to evolve in accord with market and policy changes, but one thing is sure: a good, workable biosecurity framework is essential now and into the future. This bill enables that and I commend it to the House.

Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

I rise to speak in relation to the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014, but with the brief indulgence of the House I would also like to take the opportunity to update members on the fire situation in Gippsland. I recognise that you, Deputy Speaker Mitchell, as the member for McEwen, are very familiar with the impact of fires in your own community and I wish you well in your endeavours to support your community.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Thank you.

Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

On Tuesday I spoke about the four major outbreaks across Gippsland and reflected on the concern within the Morwell community more generally relating to the mine fire which is a short distance from the Hazelwood power station. I can report that overnight crews contained some grass fires between the Hazelwood mine and the Hazelwood power station and those fires are no longer threatening infrastructure in that immediate vicinity. The main focus of the firefighters now is preventing the spread of the fire into the coal batters and continuing to monitor all the critical infrastructure which is in place. We have firefighters using vehicles with compressed-air foam systems to help suppress the fire. This foam contains less water than other foams and is used to smother the fire and reduce the smoke and hopefully reduce the impact on the surrounding residents. The firefighters have been doing a terrific job in very difficult conditions. The amount of smoke, ash and carbon monoxide in the Latrobe Valley varies significantly on a day-to-day basis depending on the weather conditions. But every effort is being made to ensure the firefighters remain safe as they combat this outbreak and also that the nearby residents remain safe.

When there are light south-westerly winds or no winds, that is when the township of Morwell experiences the worst conditions. It has been extraordinarily difficult for residents in the Morwell community to deal with the smoke and the ash which is impacting on their town. The air quality is being monitored by the EPA, and emergency services and HAZMAT technicians are in the region. Both fine particles and carbon monoxide are being measured as indicators of the impacts of smoke on local air quality. The emergency services and the EPA will continue to monitor over the coming weeks to minimise any risk to communities or the firefighters, but we can expect to have continued smoke haze for some time in the valley as our firefighters deal with this outbreak. Of course, firefighter safety is absolutely critical in this effort. Some firefighters are required to wear breathing apparatus and carbon monoxide levels are regularly checked as they undertake their work.

More broadly, in terms of the local community, the air quality in the Latrobe Valley is being affected by the smoke and ash from the burning of the brown coal. I urge people to stay aware of the changing conditions via the EPA website—their 1,300 numbers are available and there is a lot of support on the ground. I encourage people, if they have any existing respiratory concerns—the elderly, pregnant women or children are likely to be more sensitive to the effects of the fine particles in the smoke—to seek medical attention if required. We are reassured by health authorities that it is not expected that exposure as a result of this fire will have long-term health effects on the community.

Can I simply acknowledge the concerns in my community that not enough has been done to assist them in this extremely difficult situation. I can understand why residents have been angry and disappointed that they have had to battle this prolonged fire and the conditions which have deteriorated in their community over the past two weeks. I would like to reassure local residents that, along with relevant agencies and my state colleague Russell Northe and my federal neighbour and friend Russell Broadbent, we are making every effort to ensure the community—indeed, the nation—is aware of the fire situation they are facing. I have personally advised the Prime Minister about the challenges we are facing in the Latrobe Valley and I know that Russell Northe has been in regular contact with the Premier and the Deputy Premier's offices in regard to the fire itself and also in regard to the conditions the residents are enduring. A great deal has been done but I accept that we can always do more. We can always respond more quickly to concerns or ensure that information is provided in a more timely manner. I believe that is happening now better than perhaps it was happening a week ago.

May I stress that help is available throughout the Morwell district and the community is not being ignored. May I thank the volunteers and the professional staff for their efforts during this emergency situation. On those thankyous, can I also thank the local media for their efforts, in particular, with the emergency broadcasts on local radio and reports on TV and in the newspapers. I would also encourage the metropolitan media, which has discovered Morwell in the last few days. To the metropolitan media which has discovered Morwell: they are welcome in the Latrobe Valley, but I would just ask them to be sensitive to local community, which is feeling somewhat bruised and battered at this time.

Can I acknowledge also that there is anger in our community that this fire appears to have been deliberately lit and there is disgust within our community about that. You can only urge people who have any information to contact local police if they have seen any suspicious activity. To think that this fire was deliberately lit in such appalling conditions on 9 February is something that any right-thinking Australian would be absolutely appalled about. There was no regard whatsoever for life or the property of people in our community in lighting these fires. I would encourage anyone who does have any information to make sure that they report that information to the local police and I wish the police well in their investigations. I thank the House for that indulgence and I will turn my attention to the bill itself.

The bill provides for the collection of levies that are used to fund initiatives that will increase productivity and sustainability of the dairy industry. The dairy industry is obviously a major contributor to the economy of Gippsland. The families in that industry are major contributors to the social wellbeing of my community and to the advanced land-management practices which are important to the environmental health of the Gippsland Lakes. I make that point because sometimes the agricultural sector is unfairly vilified for the impact that it has on the environment. I make that point because in Gippsland the landholders, the custodians of the land, understand they need to look after the environment if they are going to remain productive into the future. They are working very closely with the relevant environmental authorities to reduce the amount of nutrients from their properties, to maximise the value from the water that they have available to them and to ensure that their farms remain productive. I have been very impressed over the past five or six years as the member for Gippsland how engaged the landholders throughout the Gippsland region are on environmental issues—whether it be the practical application of projects through Landcare or through involvement in various studies and strategies to help develop new systems to maximise the productivity of their land without having an undue impact on the environment.

The dairy industry in Gippsland is centred around the highly productive Macalister Irrigation District, and its future development is critical to the future prosperity of the Gippsland region. The MID is one of the most productive agricultural areas in the nation, but it is reasonable to say that the irrigation system is in desperate need of upgrade—it is ageing and there is a real demand for further investment in the system. To that end, there has been some positive news in recent times and I do commend the efforts of Southern Rural Water and the Victorian coalition government, which last year announced its support for the first stage of what we call the MID 2030 plan.

Under the plan there is $16 million going from the coalition government and $16 million from the industry as a co-contribution, which will be recovered from the irrigators themselves, to support the first stage of the modernisation plan. It will help increase the amount of food that the region can produce; and it will certainly boost the local and state economy with the initial phase of the project expected to return more than 12,000 megalitres of water a year for productive use. The works, which will take in the order of three years, will involve some channel automation projects, some additional work on the Southern-Cowwarr Balancing Storage area, further outlet rationalisation and modernisation, and design of a future pipeline for the Southern Tinamba supply zone.

The Victorian agriculture minister, at the time, remarked that now the first phase of the project has been secured he would negotiate with the Commonwealth to help build the Southern Tinamba pipeline. I know Peter Walsh, the agriculture minister, well; I know that he is passionate about the future of the MID in Gippsland, and it is a passion I share with him. I think there is a role for the federal government to work in partnership with the Victorian government and the dairy industry to secure future growth opportunities through the modernisation and expansion of the Macalister Irrigation District. It is an issue I have been working on for many years now. I had the former parliamentary secretary, the former member for Braddon Sid Sidebottom, in my electorate and showed him around the MID; and there is no question he was impressed by it and was keen to pursue it during his time as the parliamentary secretary. I have also had the current agriculture minister in Gippsland to give him the opportunity of getting a better appreciation of exactly what is available to the nation out of investment in the dairy industry in the Gippsland region.

With access to secure water, almost anything is possible in the agricultural sector in Gippsland. As the government is in the process of developing its agricultural white paper, there are forward-thinking producers in my electorate who are looking at opportunities for future growth by meeting the demand for products in Asia. We hear a lot about the growth in demand in Asia, particularly for dairy products, as the Asian middle class expands and develops a taste for the products that can be produced here in Australia. Our reputation as a supplier of clean and green agricultural goods will be critical to future growth in our regional communities. I note the member for Forrest, another keen regional member, is in the chamber and will speak to the impact on and the opportunities for the dairy industry in her own electorate. I have heard other speakers who represent dairying communities across the nation speak today. There are huge opportunities for our dairy industry in this nation, but there is definitely a role for government in helping our dairy farmers achieve those opportunities.

I believe the government has a role to help reduce the cost structure, particularly by removing some burdensome red and green tape from the shoulders of our farmers. There are opportunities for the government to remove discriminatory taxes, like the carbon tax. I ask the opposition: how could you possibly justify imposing a tax in the order $5,000 plus per dairy shed every year under the carbon tax? It is not just the big industries that pay for the carbon tax implemented by the previous Labor government; it is also a direct cost on our dairying industry. I urge those opposite: if you are serious about supporting agriculture in this nation and serious about supporting our dairy farmers, then support the abolition of the carbon tax and release them from that burden. There are also opportunities for the federal government, in particular, to help secure new markets for our dairy industry and in that regard I congratulate the new trade minister for his success in securing deals which, I acknowledge, were negotiated in part by the previous government and progressed over many years. But I do congratulate the current trade minister for bringing those trade deals to fruition. We need to open up new markets to allow our dairy farmers, in particular, to compete with growers overseas. It is a tough and competitive industry and they need everything going their way if they are going to compete and access these new markets into the future.

We are fortunate in this country to have world-class farmers. We have highly productive farmers on quality land who are doing an extraordinary job every day of the week not only to feed our nation but also to feed the world. We should never underestimate the contribution that our farming sector makes to the greater good when we talk about global issues. Two-thirds of Australian agricultural products—food and fibre products—are exported. We are helping people emerge from poverty; we are helping people in other nations emerge from food crises. I congratulate our farming community for the work they do in that regard. We have highly productive farmers who are keen to secure their own farming futures and also the farming futures of their families. I would encourage the government and I would encourage the current agricultural minister to keep working with the agricultural sector in Gippsland and I am looking forward to working with him, as my community continues to try to achieve that goal.

The dairy industry is big business in Gippsland and throughout Victoria. I understand that the dairy industry is the largest export product out of the Port of Melbourne, and a lot of that product comes from the Gippsland region. The Wellington Shire itself has more than 400 dairy farms and the majority of them, as I said, are located in the Macalister Irrigation District. The region has its own major collection and processing facility at Maffra, which, with the Murray-Goulburn Coop, produces a range of products destined for export markets. Much of the water debate in the past decade has been on the Murray-Darling Basin, but I see opportunities for future investment in new infrastructure in Gippsland through the MID 2030 plan. We need to invest in the efficiency of the existing systems in Gippsland but also to explore new opportunities to increase productive capacity of good farmland. I encourage the current agricultural minister and I encourage the government through the trade minister delta and others to continue to explore new opportunities to expand our agriculture sector and I look forward to working with both those ministers on securing better outcomes for farmers in Gippsland.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

As we have just heard, Australia has a well-earned international reputation for producing clean and green food. This is our competitive advantage and one we need to protect and guard. It is a competitive advantage that should never be taken for granted just as our biosecurity should never be taken for granted. The measures contained in this Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 will assist the industry to maintain that advantage, and the bill itself is supported by industry.

Like the previous speaker, the member for Gippsland, I have repeatedly said that in my opinion many Australians take our locally grown amazing quality food for granted. Western Australia's dairy industry is a prime example of this. It is an efficient producer of high-quality milk sold to both the local and South-East Asian markets. The dairy industry is very important industry in Western Australia particularly in the south-west of my state and in my electorate. Farmers in my part of the world milk all year round, every day of the year. We have internationally competitive production costs. Western Australian processors—our manufacturers—are at the leading edge of technology in the transport of our fresh and extended shelf-life milk products. We see this in the activities of Harvey Fresh and Brownes, for example, Harvey Cheese and Bannister Downs Dairy, just to name a few. They are modern processing facilities owned by local and international companies. The state's fast and efficient transport links are really a key. It is an advantage we have in delivering high-quality fresh products in the shortest amount of time to both our domestic and international customers. I see this as a real advantage in Asia particularly.

Western Australian milk has been identified as some of the cleanest and highest quality in Australasia. How many people out there know that? Well, I am telling them that it is and it is produced by farmers every day. The quality attributes include low bacterial counts and good flavour and colour, things that are very important in the market, and there are several farms producing milks with specific added health benefits. WA has a very high herd health status, free of any disease like foot and mouth or bovine spongiform encephalopathy. WA has good access to markets in Asia and in the Middle East, which are large and rapidly growing consumers of dairy products. This is our opportunity. WA's dairy industry is relatively small in size but it is highly reputed for its innovation and high-quality products.

I am a dairy farmer so you could say that I have got a vested interest in the debate. My son and my husband right now, as I speak, are working on the farm. I have a history here, Mr Deputy Speaker Vasta, and I hope you will indulge me. My father was the very first milk carter for Brownes' factory in Brunswick Junction in 1942. The factory has grown and developed over the years, changing ownership several times, but it is still processing locally produced milk. So many communities in the south-west have historic links to the dairy industry, and what is also often underestimated and undervalued is the fact that dairy industries in so many communities right around Australia actually underpinned local economies and local communities.

The other thing that is important is that these are the people who go along and support the communities. They are the volunteers. They are the people whose tractors, whose machinery, whose labour and whose knowledge actually get things done in communities. They are doers, not talkers, and that is so important in regional communities.

The family of one of my neighbours, Graeme Manning—and I am talking about history here—was the second dairy farmer in Western Australia. The Mannings milked their cows around the edge of Mounts Bay Road—Kings Park is above that—just a few cows, and they used to supply milk on a yoke to the households in St Georges Terrace at the time. When Kings Park became a reserve, they left South Perth in 1895 and moved to Myalup close to where we are and then some of their descendants moved into the area where I live now and where they farm. John Daniel Manning was that first farmer in 1852. Then we had Ernest John and Ernest David and now we have Graeme Manning, and you look at how they have evolved as a family and as a dairy business, going from just a back-out dairy to a walkthrough dairy to a swing-over dairy and now a double-up dairy. This is a typical example of an industry that has evolved and been on the front foot.

Graeme Manning is now the fifth generation of Mannings to actually dairyfarm in Western Australia—and it his birthday today, and I think that is a great thing! He has a sixth-generation Manning family member working with him. I said to him, 'You have experience and knowledge in the industry. Yours is a very well-respected family. What are the issues that you see as the critical issues for the dairy industry in Western Australia?' Of course he said the current price of milk, the cost of production and keeping young farmers in the industry, the farmers of the future. That is a real concern. Across all sectors there are young farmers who are going to be the farmers of the future—and what is their access to finance? They have great potential, an enormous amount—five generations of farming knowledge sit behind Graeme Manning. It is really difficult. My own son carries a couple of generations of knowledge nurtured on the farm, the knowledge of how to farm your particular area. This is something that is very difficult to teach. Graeme also said that farm debt levels are also an issue.

These are matters for the industry ongoing, and they are also matters for us. In Western Australia it is an industry that has had huge challenges and it still faces significant challenges. We have seen hundreds of farmers exit the industry, and in my view that is a massive loss. One of the greatest losses is the intellectual property that went, perhaps, not only with the senior farmer but the young farmer who has had to go on to do other things. We have lost the experience and the investment and, often, that critical next generation to learn and hone their craft—because it is a craft—as part of a family business.

There are approximately 160 or so dairy farmers producing this highest-quality milk in Australia, mostly in my electorate. As you can tell, Mr Deputy Speaker, I have enormous respect for my fellow dairy farmers. Yes they farm by choice, but they take great pride in what they do in the full knowledge that it is one of the toughest forms of farming. When I used to promote dairy products at the royal show and I had a sign that said, 'G'day, I'm a WA dairy farmer,' I cannot tell you the number of people who said, 'No, you're not.' The answer is, 'Yes, I am.' But how many simply could not take on the job? They are not prepared for the intense nature of the industry, or the investment required or they simply do not have the diversity of skills.

A dairy farmer has to be a jack-of-all-trades. To manage the dairy herd alone, you need skills in feeding and nutrition, herd management and reproduction, genetics and livestock health and diseases. Wrapped up in this is needing to calve cows at any hour of the day or night and dealing with all forms of herd health. You have to have the skills to manage your pasture to produce fat and protein in milk—that is what you are paid on. You need to know the correct fertiliser regime for your particular property, the necessary cattle management skills, and how to manage irrigation systems. There is the machinery; you have to understand your machinery and to have an ear for when you are working the gear too hard. You have to be able to build your own equipment; you have to cut your costs, so you need to be able to weld. As well you need to have really good mechanical skills, staff management, business management and be across finance and taxation issues—all of the same things that affect small business.

That is not all; that is just some of what you need. There are the early mornings, the working in all weather and the routine of having to milk the cows twice a day every single day of the year. There are the challenges of management, and this is something that is forgotten in the whole dairy debate. We have to manage one of the most perishable products in any form, and that also exposes us in the market. Of course, having a perishable product also exposes us to the constant vagaries of challenging and changing weather, water shortages, dry winters and an increasing cost base. As I said, we have had the challenges of the two major supermarkets. In Western Australia what that has done to the industry is that the majority of milk is sold on the domestic market.

We have heard about the carbon tax price and we have talked about costs of production being an issue. Let me tell you that the carbon tax had a significant impact on the dairy industry, and this is where the members opposite actually need to get on board and reduce costs so that farmers like Graeme Manning and like those in the industry right around Australia can get on and do what they want to do, and do best, which is to produce this fantastic quality product that so many take for granted.

There is the tax on refrigerants. I tell you, I was absolutely appalled at the proposal to put a seven-cents-a-litre additional tax on transport fuel. Every single thing that is delivered, pretty well, that we use on our farm, and on most farms around Australia, comes on the back of a truck. And there was going to be a seven cents increase on transporting milk, refrigerants—you name it. This tax has to go. We actually have to reduce the red and green tape burden as well.

As if this were not enough, our competitors in the market did not have this tax. But, hey, we did. This comes on the back of tough years in the WA dairy industry. We have had dry winters, we have had increased feed costs and rising costs of production that included the carbon tax and red and green tape. So really, what all small businesses want is what the dairy industry and the dairy farmers want: they want government to get out of the way. They are there to do a job and they do it very, very well, but they do not need additional cost and they do not need additional red tape burdens.

We should be in the business here, in this place, of assisting business to do their business and to do it well. That way the whole country benefits. One of the things that has concerned me very much in Western Australia is actually the fall in milk supply. This is another reason for us to get rid of the carbon tax—the cost, okay? That is impacting on farmers. We have seen another decrease in milk production volumes this year; we are down 6.1 million litres on last year so far and down 18.7 million litres compared with the last half of 2010.

Why does that concern me? Because I think the next six months will be very interesting. If this trend continues, the annual WA milk supply could be quite low—perhaps in figures that we have not seen since the 1990s. This is another good reason to lower the cost of production so that farmers can produce milk efficiently and effectively, as they have. That is why getting rid of the carbon tax is so important.

This industry is one that constantly works on improvement. You have heard a simple one, the Manning's story. There are many others in my part of the world and around Australia. The issue of biosecurity is critical not just to the dairy industry but to all primary producers. The focus on biosecurity by the previous government was not what it should be, and I have spoken previously on that issue. Of course, we do need to continue to foster good industry and efficient producers like my dairy farmers and to continue, as a government, to offer them increased access to markets. That is where government can help and that is where government should help.

As we have heard previously, it is a very tough and competitive industry. This is not an industry for the fainthearted; even with your investment—when you put your hand up and actually invest—it is a significant investment and it is one where your cost of production is the issue for you and your business. Like all small business, you look at your costs and the things that you can control. But you cannot control it when the government comes and whacks a carbon tax on you and then says, 'On top of that we are going to add another seven cents for transport to this industry and right across Australia!'

If the previous Labor government were still here, then come about June or July the industry would have been looking down the barrel of an increase in the carbon tax on transport. Just for dairy farmers it is a huge issue; for all of regional Australia it is a huge issue that was underestimated by those opposite.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

It is an honour to follow the member for Forrest from Western Australia, who we heard is possibly the only dairy farmer in the parliament. She brings to this place enormous insight into the industry. I have had the privilege of going to Western Australia and visiting the member's office. Not only is she an asset to this place but, because of the advocacy she does in the industry, she is well respected by her peers.

I rise to speak on the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. In summary it is a request by the industry to take the cap off a levy to increase it. I will speak on that later at length. I believe the bill as it sits in the House at the moment has support from both sides of the House. Before I go on to speak at length about the bill and the intricacies of it it would be remiss of me not to highlight the plight of Queensland dairy farmers, particularly in the south-east corner.

My electorate of Wright takes in just on 8,000 square kilometres. We have seen our fair share of dairy farmers exit the industry over the last couple of years. It is a travesty. Are they leaving the industry because of market conditions or are they leaving it through natural attrition? The latest numbers highlight that Queensland used to have in excess of 2,500 dairy farms and today we have fewer than 500. The dominance of the retail market is having a negative effect on our producers. Since the introduction of $1 a litre milk we have seen an additional 100 dairy farmers exit the industry and the largest producer in our area and in Queensland seeking expressions of interest to buy his farm because he is no longer viable.

I commend the work of the Queensland Dairyfarmers' Organisation and in particular its President, Brian Tessmann, for the terrier-like approach he has taken in taking the charge up to the retailers for the way they are bastardising this sector. I also acknowledge the outstanding work done by his Vice-President, Ross McInnes. Ross is probably a third generation farmer in my electorate and a true gentleman. He gives his time more than freely to help fight for the cause and to give me the tools to go into battle for their sector. Adrian Peake, the Executive Officer of the Queensland Dairyfarmers' Organisation, has also been a wealth of knowledge.

To give you an idea of the stress that these guys are under I will quote from a media release and some recent surveys that the Queensland Dairyfarmers' Organisation did under the auspices of the gentlemen I have just alluded to. Recently the Queensland Dairyfarmers' Organisation conducted a survey of the extent of the Queensland crisis. They sent the survey to no fewer than 496 dairy farmers and they received a response rate of 46 per cent. The data that came out of that was shocking and chilling. Almost nine out of every 10 Queensland dairy farmers lack confidence in the future of their industry. If that lack of confidence to continue to make long-term investments were translated to any other industry, it would make front-page headlines.

The majority have a negative cash flow. It is estimated by the QDO that the farm gate milk price will need to rise by no less than 12c per litre before confidence can be renewed and fresh milk supplies restored for the Queensland consumer. That was one of the key findings of that survey. QDO President, Brian Tessmann, said that the survey was confirmation of the ongoing impacts and confidence crisis hitting Queensland's industry, which has been rocked in recent years by floods, cyclones, the milk price war and now severe drought. Of those surveyed, an alarming 87 per cent said that they were uncertain or not confident in the future of the northern industry and 79 per cent were either uncertain or not confident in their own dairying business.

When you go beyond that survey to try to understand why these guys are not confident about the future, you need not look any further than their cost of production and what they get paid. The Queensland government's Queensland Dairy Accounting Scheme report for the 2012-13 financial year reports that the cash cost of production in our area is 55.2c per litre, compared with the farm milk gate price of 51.3c a litre, leaving dairy farmers in the red. It is implausible that we would have an industry whose weekly milk cheque is unable to meet their weekly operations. When the money comes in there is not enough to pay the outgoings on a weekly basis, so farmers are drawing down on the equity of the assets on their property to maintain viability.

There is desperation among dairy farmers. I will use the example of some excellent dairy farmers in my electorate: Alan and Dolores Stock from the Lockyer Valley. It is painful to witness the uncertainty on these people's faces when they ask you, 'As a government, what can you do to help us?'

They do not ask or advocate for a handout; that is not what they ask. They just ask why it is that they cannot go ahead when they see world prices for milk exports at record highs. Why is it that we see processor bidding wars into the tens of millions of dollars—hundreds of millions of dollars—to buy profitable processing plants, and are these profits of retailers and processors coming at the expense of our farm gate?

The economic purists will say that it is rationalisation of the market. I challenge that theory with the fact that it is not a free market. The principles of demand and supply would mean that, with less supply, there would be more demand and so the price would go up. That process is capped because of the $1 a litre milk. It becomes a regulated market as such, a regulated market where the true effects of demand and supply are unable to roll out in their entirety. So it is of great concern for the likes of Alan and Dolores Stock, and I do not know if they are prepared to go on, with the pain they are feeling—unless, as a government and as a parliament, we can bring some pressure to bear to change their confidence levels or, at a minimum, help them with the result that their milk cheque is going to be greater than their outgoings. Their outgoings have virtually doubled over the past couple of years as a result of the drought, cyclones and other weather effects.

If I had a magic wand, I would order 100 millimetres of rain for every dairy farmer, for every primary producer, on the days that they wanted it. If I had a magic wand, I would do that. If I had a magic wand, I would influence downward pressure on their input costs—electricity costs, protein costs, transport costs. If I had a magic wand, I would do that, but I do not. I have limited tools available to me in this place to influence change, and what the industry says would make an enormous difference is a mandatory code of conduct for the retailers to adhere to, for there to be an independent adjudicator. It is unfathomable that, as a society, we are prepared to sit and watch this industry falter—particularly in Queensland where operational costs, I grant, are higher than the state averages. Milk is such a staple: milk is a food; milk is a protein source. We pay more for bottled water than we do for milk; we pay more for Coca-Cola than we do for bottled milk. And yet when you have a look at the health benefits of milk, it is not a product that we can allow to exit our shop aisles.

I have grave concerns that the square metreage of aisles with UHT milk is becoming greater and greater. I do not know if it is an underlying motivation of the retailers to actually exit the fresh milk sector because of the operational cost to keep it there—the freezer cost. The retailers had the carbon tax increase the cost of their refrigerant gas, so their operational costs for milk are so much higher. The labour cost on fresh milk is so much higher because of the rotational cost. But once they put a carton of UHT milk up on the shelf, it can sit there for a number of weeks without the cost of refrigeration—

Mr Nikolic interjecting—

or for months, yes—or stock rotation. The retailers know quite well the value of milk. They know the value of milk because they strategically place it at the back of their shops so that you have to walk past their other product lines to pick up your staples—your milk and your bread—before you turn back through the shop. They refer to it as using it as a basket filler.

Before my time expires, I also want to bring to the attention of the processors that they have a responsibility. There are many profitable parts of their businesses: in yoghurts, in cheeses, in the by-products that are built from cream. We also use as a staple healthy products that are profitable. The message I send to the processors is this: do not think that the weakest link in this value chain can continue to be the dairy farmer. I call on the premium groups that negotiate with the processors to understand the value of the product. If a processor does not have milk for one week, can you imagine what the retailers' business model would look like? If people are going to shops to buy milk and bread and retailers do not have milk—well, I do not know, but there is a value component in your negotiations.

Do not continue, dairy farmers of Queensland, to accept prices on behalf of farmers that are less than the price of the cost of production. You must rally. I will do everything in my power, through this place with my colleagues and with this House, to bring about the changes that you need legislatively to compete on an equal playing field. I give you that commitment; I will continue to fight. I had discussions yesterday with our small business minister, of which I will report back to QDO this afternoon. But there is not one silver bullet that is going to fix this industry. It is a battle that has to be fought on many fronts. The retailers must allow a fair price for a great product in their outlets. Our processors must become far more reasonable in the way that they negotiate with our dairy farmers.

In Queensland, we have a situation where the number of dairy farmers that have exited our market means we can no longer produce the volumes required for domestic consumption. We are importing milk from New South Wales. It is at a higher rate than the farm gate by the time you put the transport costs on it and it begs the question: how this is sustainable?

My dairy farmers are at a point of desperation, the industry is at a point of desperation; they no longer want lengthy Senate inquiries. They no longer want submissions to be—

Cathy McGowan (Indi, Independent) Share this | Link to this | Hansard source

They want action!

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

They want action, and they want it so that they can continue to survive. At the moment, their enterprise—their world—is frightfully bleak, unless we in this place stand and rally. It is an industry that employs more than 43,000 people in this nation. It is not an industry that we can afford to see disappear overnight. I give them my word: I will continue to fight for their cause.

Cathy McGowan (Indi, Independent) Share this | Link to this | Hansard source

I rise to speak on the Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014. My speech is in three parts: I would like to introduce my interest in the dairy industry; I would like to talk about a case study from Indi; and I would like to make a call to action to our colleagues on the other side of the House.

The dairy industry is an essential part of both the economy and the culture of my electorate. A prosperous and vibrant agriculture and food sector, encompassing production, processing, distribution and consumption, is essential to the future of Indi and of Australia. Agriculture and food production is central to the past, the present and the future of Indi, and dairy is an essential part of our food-manufacturing future. My region of Victoria is one of Australia's most productive dairy regions. Farms are smaller, but they carry more cows and produce more milk than the national average. The high level of productivity is due to our wonderful climate, our reliable water, and our proximity to fodder- and grain-growing regions—plus the enterprise of our farming communities. During the election campaign, I committed to the following: I would lobby for new investment in the innovative food and agriculture sector in Indi, including in the dairy industry; I would fight to increase funding for research and development; and I would support local organisations that help deliver sustainable and adaptive agricultural businesses. I will work with industry to improve the industry and agriculture and food sectors, and I will lobby for ongoing skill development and training for agriculture. I will work specifically with the dairy industry to identify and remove restrictions on their businesses—and it is on this topic that I address my comments today.

The aim of this amendment is very specific. It is to increase the maximum level of the Australian Animal Health Council levy on dairy produce from 0.058 to 0.145 cents per kilogram of milk fat, and from 0.13850 to 0.34625 cents per kilogram of protein. These levies are collected by the Commonwealth for payment to Animal Health Australia. As the minister said in his second reading speech, while this is a significant increase in the cap, it is a non-controversial decision and it is being done at the request of the peak representative body, Australian Dairy Farmers Limited. This levy will enable the dairy industry to achieve in all the areas I believe are essential for the ongoing growth and success of the dairy industry in my electorate. The dairy produce levy enables the dairy industries to strengthen the industry and to respond quickly to issues around animal health.

As many members of parliament—and those that have spoken on this bill—know, Australia exports 50 per cent of its dairy produce overseas to a variety of markets, including those that are emerging and those that are attempting to grow their dairy industries. This levy will strengthen the industry to make it more competitive in this highly competitive overseas market. The export potential in our region is incredible, with Asia's demand for dairy products increasing. This amendment will enable the dairy industry to supply sufficient product to meet this demand. With this brief background, I would like to talk about a case study and an example of a dairy success story in my electorate.

I will begin with the Mitta Valley and the community-based project Our Valley, Our Future. I will talk then to the industry development arm, the Alpine Valleys Dairy Pathways Project. The Mitta Valley is located in Towong Shire and includes the beautiful towns of Mitta Mitta, Eskdale and Dartmouth, and the Tallandoon community. The significant rural land which surrounds these townships and the unique balance of farming land, natural assets and wonderful community are strong parts of the Mitta Valley identity. As the name suggests, the area is based around the Mitta Mitta river, which makes its journey from the Dartmouth Dam through the valley to the Murray River. The valley is also close to Albury-Wodonga and to the large township of Tallangatta. While many people travel into the larger centres, we are fortunate that a variety of businesses and services operate locally, including primary schools in Mitta Mitta and Eskdale, hotels, general stores, churches, post offices and a small supermarket. It is a thriving community. While the population has been growing smaller—in 2009 there were 591 people living in the valley; in 2011 this had decreased to 568—there is an enormous strength of vitality. Agriculture, forestry, and fishery are the largest industries and employ something like 34 per cent of the workforce. Most of the farms within the Mitta Valley are dairy farms, although beef farming is still a significant contributor. The latest figures show that milk production in the valley is recovering strongly post-drought, but that it has not yet recovered to the record levels of 2001 and 2002. Over the last 10 years, the number of dairy farms has actually reduced by 35 per cent, but the production by suppliers has increased significantly. Annual average milk production per dairy farmer in the valley is now upwards of 1.3 million litres per year.

The valley has been working hard to strengthen its community and its key industries. The Our Valley, Our Future: Mitta Valley Community Strengthening Project is a collaboration between the Gardiner Dairy Foundation, Towong Shire Council, the Mitta Valley Advancement Forum and the Alpine Valleys Dairy Pathways Project. It is a community-driven project that will have significant positive impacts on the future growth and wellbeing of the Mitta Valley communities. The project commenced in July 2012 and will end in December 2015. Its objectives are many, but perhaps some of the most important, from my perspective, are: to achieve a shared vision of the Mitta Valley as a prosperous and vibrant community; to empower and equip community members to execute current and future strategic plans that build upon our natural assets and economic potential; to identify and provide the means for the community to achieve economic sustainability and future growth; and, to enhance the collective strength and experience of community members, to build greater teamwork and to promote cross-functional relationships that will increase capacity for long-term sustainability. This project has led by a steering committee made up of representatives from key stakeholders, and it is doing very good work.

The initial community consultation process led to the development of the Our Valley, Our Future plan, which was launched in November 2013. The plan identifies the community's future aspirations and vision, identifies specific issues that are inhibiting growth and identifies potential solutions to achieve future economic growth and strong social cohesion. I offer my warm congratulations to the full team on a great job: well done.

The Alpine Valleys Dairy Pathways project is a sister to this community based project. I regard it as the production arm. Its aim is to both increase the number of dairy farmers and double milk production in the next 10 to 15 years. The aim of the Alpine Valleys Dairy Pathways project is to make a significant contribution to local jobs and wealth creation in the Alpine Valleys. It is working with farmers and communities in the valleys to create a future for dairy that young people and their families will want to be part of.

It has specific aims. It aims to increase economic value for Alpine Valleys by growing milk production. It aims to move away from farm based farming. It aims—and my colleagues from the government side might be interested in this comment—to move away from family based farming to a new model that can be the showcase for a sustainable dairy industry in Australia. It aims to lift average farm performance to the level of the current top 25 per cent of performers—to move performance from the average to the top. It aims to improve pathways in and out of the industry for famers and the next generation. It aims to implement a workforce strategy to ensure the industry attracts and retains the people it needs. And it intends to develop a strong culture in the Alpine Valleys that really values and supports the dairy industry.

Why is this so important to me? If you will indulge me, Mr Deputy Speaker, I will give a few key reasons. At a personal level, I am the daughter of dairy farmers. I grew up in the valleys of north-east Victoria, and in the 1950s all of my community and my friends were in dairy farming. I have fond memories of working with my dad in the dairy, getting the generator going, moving the dairy cans so that the factory truck could pick them up—all before refrigeration—and, along with our neighbours, ensuring that our cream went on the railway line to Wangaratta.

One of the wonderful aspects of growing up in a diary community in the 1950s was the introduction to the concept of a farmers cooperative. I am very proud to still be associated with the thriving cooperative movement in north-east Victoria, one of the stars being the Murray Goulburn Co-operative. Growing up I had a great interest in women in agriculture. I was part of the initial Women in Dairy Project. At this stage, I would like to acknowledge the contribution of my colleague in this House Nola Merino as a leader in this area. The MILC group in Western Australia led Australia in bringing women together to take a leadership role. She was a key leader then, and what a leader she has been in this place. Thank you, Nola, for the wonderful contribution you have made to us.

At the end of the 1990s in Australia, we experienced an upheaval in the dairy industry with the impact of deregulation, in particular on the states of Western Australia, Queensland, New South Wales and South Australia. I worked with families and communities to bring together women and communities to manage this transition. I am very proud to say that I still keep in touch with most of those dairy industry women and their families and with those organisations. The Women in Dairy Project, which we established, was instrumental in helping families make the transition between a regulated and a deregulated industry. It has led the way in Australia for many other women in agriculture groups: women in horticulture, women in sugar, Women in Wool and Partners in Grains. All, with the support of Australian Women in Agriculture, continue to make a big impact on Australian agricultural communities.

In summary, I am pleased to support this amendment but, like many of my colleagues in this place, particularly on the government side, I also put on the record a strong call for action. As a government, we have an obligation to set in place a policy operating environment that supports, enables and encourages the future of agricultural production and food manufacturing in Australia. As a government, as a parliament and as representatives of our people, we need to support, encourage and grow agricultural research, development and extension in Australia.

RD&E is vitally important for our future. I say to my colleagues—to those opposite in particular—that it is not enough to complain, to blame and to describe the problem. It is time to use the combined knowledge, skills, experience and commitment that we have heard demonstrated over the last two days in talking about this bill. My call to the government benches is: put your words into practice. We need a strategic approach. We need clear budgets and time lines. We need a vision for the future of agricultural production, agricultural manufacturing and agricultural communities in Australia, and I look forward to working with you to implement that.

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

I rise to move an amendment to the second reading amendment. My amendment will be seconded by a representative from Tasmania—arguably the biggest dairying state in Australia, outside of Victoria. The area that I represent is the biggest dairying area in Queensland. I move:

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

"notes that the deregulation of the dairy industry in the mid-2000's had catastrophic economic and social impacts on Australian dairy farmers; in 2000, there was 1,545 dairy farms in Queensland and in 2013 there was 500 and that the Government should establish a national single desk to set a minimum price to dairy farmers for milk."

Australia wide, there were 12,896; there are now only 6,398 dairy farmers.

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

Is the amendment to the amendment seconded?

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

I second the amendment to the amendment and reserve my right to speak.

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

I sat here and enjoyed my $200,000 per year after they took all the rifles and firearms off the people that I represent, as well as off all the people of Australia. I stayed loyal. I sat in this place and took my $200,000 when my own party, the Liberal National Party in Queensland, completely destroyed the fishing industry of North Queensland. Two thousand jobs vanished in North Queensland. I sat in this place and was loyal. The ALP wiped out the timber industry, but I was not in the ALP, so I could savagely and fearlessly attack them. I did not savagely and fiercely attack the LNP, as I should have. I sat in this place when some 2,000 jobs vanished in the tobacco industry—and I think that affected the electorate of the member who spoke prior to me in this place, the member for Indi. That was after deregulation of the tobacco industry—nothing to do with people not smoking. I stayed loyal. They deregulated the sugar industry and we lost 1,500 jobs. Two of the six—arguably seven—sugar mills in Kennedy closed. I still stayed loyal. But, when it came to the dairy industry, that was the bridge too far.

Everyone knew what would happen to the dairymen if they were deregulated. The LNP government in this place and the ALP government of Queensland signed an agreement to deregulate the dairy industry, so they deregulated it. I would estimate that we lost about 1,500 jobs on the Atherton Tableland. We had about 240 dairymen. Last time I looked, I think 42 were all that we had left. One of our little towns up there had the highest suicide rate in Australia. Within three years of dairy deregulation—and I hate using this statistic because it seems to me that I am lessening the impact every time I say it—we had a farmer committing suicide every four days in Australia. The people in this place knew that, because they knew the suicide figures after the deregulation of the wool industry and the deregulation of the sugar industry. It was one suicide every two months in the wool industry, which is a much smaller industry than the sugar industry. It was one suicide every two weeks in the sugar industry. But, after the collapse of the dairy industry, we had one suicide every four days—not dairy farmers but one farmer every four days.

Has this resulted in a single change of attitude? Is there a single scintilla of change in attitude or policy? No. Has there been any change in the agricultural outlook? I loved the previous speaker and her optimism. The simple facts of the matter are that the dairy herd is down 31 per cent. Are the prices so attractive that people are going to go back into it? I will give you the prices. Under a regulated system, with a fairness tribunal, the price for fresh milk was 59c a litre in Queensland. That was the figure for my area, but I think it is a fair figure for Queensland. In New South Wales, I would say 58c was the price. Victoria had rolling deregulation, so it is very hard to pick an exact time at which you could say the prices changed, but their figures would have been worse than ours. We went from 59c down to 42c overnight. The day before regulation, we were on 59c. The day after regulation, we went to 42c.

So much for your free market. There cannot, by definition, be a free market when you move from a regulated market to a deregulated market and the price drops 20c, or 30 per cent, in one day. The figure in June 2000, as I said, was 59c a litre for fresh milk. The current price offered for fresh milk on the Atherton Tableland is 48½c, and we are getting a pretty good deal. I suspect our deal is probably better than anyone else's in the rest of Australia, so I am not complaining about the deal we are getting. But a government fairness tribunal decided that a fair price in June 2000 was 59c, and now the market has decided that a fair price in the year of our Lord 2014 is 48c. How can anyone possibly survive in this industry?

These are lovely people, dairymen. They are not people that would understand how much money is coming in here and how much money is going out there, although some of them do. I have the great honour of having probably one of the biggest dairymen in Queensland—with about 850 head—Ray Graham, in my electorate, and Ray can tell you specifically the cost of every single cost input in his operations. But most of them are not able to do that. They just know that the banks start ringing them up and saying: 'Look, we're not happy with the way your account's going. Can you come in and see us?' And from then on it gets grimmer and grimmer and grimmer.

They are trying to get by now on 48c a litre, whereas in June 2000 they were on 59c a litre. If you CPI that 59c then they should be on 84c. So a fairness tribunal today would decide that 84c a litre was a fair call. They are being paid 48c, not 84c. Maybe they got the numbers mixed up and put the wrong number in the front—I do not know. I do know and that is not true.

Was this good for Australia? Did the consumer get a cheaper price for milk? No. Within two years, the price for milk went up 25 per cent and stayed up for the next 11 years. Now Coles have pulled a bit of a stunt, with a margin on their competitor, Woolworths, so the price has gone down for the farmer. I do not know that Coles suffered any losses but farmers most certainly did—their price went down. But for 11 years the price was up 25 per cent. So here are our free marketeers who come in here and tell us that, if we move to a free market, this is going to benefit Australia. Well, your export market is down 30 per cent I think—it is around that sort of figure. Exports are down, production is down 31 per cent and a number of farmers are gone, never to come back if they have any brains.

So where was it good? Was it good for the consumers? No. They paid an average price increase of 20 per cent. They did not get any benefit from the price going down 30 per cent to the farmer, no benefit at all. It is an insult to the intelligence of every person in this country for us to come in here and talk about a free market when nearly 90 per cent of the food market in Australia is held by two companies, and that is not my call. I will give you the actual figures. When the AC Nielsen series was discontinued in 2002, they had 76.7 per cent of the market. The Australian Bureau of Statistics official government figures use a different basket and they had them at 68 per cent. Whether you want to say they are on 68 per cent or on 76.7 per cent, that is up to you, but this parliament sat here and watched them grow from 50.5 per cent in 1999 up to the 70 per cent range when we had the big inquiry on Woolworths and Coles—Fair market or market failure? So everyone knew that they were moving up towards 90 per cent over the next 10 years and nobody did anything.

The people who were on that committee will go down in history condemned by every single thinking Australian. The decision taken by that committee is already in the history books. All you people who served in this parliament should know and understand that there will be a history book written and your names will go down in it. That is the reason I resigned from the party. The history books will say that when they did this to the people I represent, I went out and sacrificed. At that stage, no independent member had ever been re-elected to this parliament. So for me, I was cold-bloodedly walking to my own open grave.

I do not come in here to gloat myself up because I started this speech by saying that I stood and watched the sugar industry and the fishing industry hacked to pieces by my party, the tobacco industry hacked to pieces by my party, and I did nothing. I continued on here enjoying my $200,000 a year salary package and jeez it was good. I got up and thundered about how terrible things were for the people in the bush and how wrong the decision was, but I still sat here and took my $200,000.

The dairy industry was just a bridge too far away for me. It was far preferable for me to walk into my open grave than it was to continue to sit in this place and betray the people I represent. I supported a party that was a free-market party and is a free-market party today. A free market means that you remove all constraints, any involvement by the public, any interference in the relationship between buyer and seller. So you can see a situation where there are two buyers in the market and 13,000 sellers and you are going to tell me that we will have a free market!

Unlike most people in this House, I did an economics course at the university. I did not complete the final year but I have done a course in economics. When I went to university, I was told that when there are two buyers and 13,000 sellers that is called an oligopoly and the price will not be determined by the market place; it will be determined by those two people. I conclude on the words of Henry Bournes Higgins, that very great Australian and founder of the Arbitration Commission: 'a contract made by one person is by definition not a contract'. I venture to suggest to this parliament that a contract made by two people is not a contract.

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 moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The honourable member for Kennedy has now moved as an amendment to that amendment that all words after 'House' be omitted with a view to substituting other words. The question now is that the amendment moved by the member for Kennedy to the amendment moved by the member for Hunter be agreed to.

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

In summing up, I will deal with the two amendments to the bill and some of the issues raised by the member for Kennedy. The Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 amends the Primary Industries Excise (Levies) Act 1999 to facilitate the dairy industry's continued commitment to maintaining the health of the Australian dairy herd. Australian Dairy Farmers Ltd, the industry's national representative body, has requested the preparation and introduction of this bill and, as such, it should not be seen as the government proposing these changes but something being driven by industry. The responsible industry is keen to ensure that they can maintain the Australian Animal Health Council and maintain the animal health and welfare issues of the dairy herd.

This bill will also allow the dairy industry to meet the requirements of being a signatory to the Emergency Animal Disease Response Plan. The bill amends the act by increasing the maximum permitted rate the Australian Animal Health Council levies on dairy produce. The maximum rate will increase from 0.058c to 0.145c per kilogram of milk fat and 0.1385c to 0.34625c per kilogram of milk protein. There is no financial impact on the dairy producer. This bill does not increase the actual levy paid by the dairy levy payers. The current operative rates were set in 1999 and are at the maximum levels allowable under the act. This merely gives them the right, if they so wish in the future, after discussions and a proper vote by the industry, to raise the levy if they choose. The increase will enable the industry to apply for future increases to the operative rates provided under the regulation if required. This bill is important to the industry and it is important that the parliament supports the industry in its endeavour to maintain the health of the herd.

I will now discuss the two amendments. The first amendment has been moved by the shadow minister for agriculture, the Hon. Joel Fitzgibbon. It is hardly even tangential to the bill; it is completely unrelated. But on the part that the government is not acting on drought, I might remind the House that one of my first actions as the Minister for Agriculture was to get a bill through to deal with drought, which involves the reallocation of tens of millions of dollars to drought affected areas and to find $10 million for water infrastructure. Today, the Prime Minister and I have announced the second iteration to deal with the effects of the drought which will provide access to a further $280 million at four per cent and bring forward the farm household allowance. People on farms will have access to a different assessment criteria, so they can maintain the dignity of their house by getting access to the social security net that should be available to any person in this nation. The assessment criteria for their on-farm net assets will increase from $1.5 million to $2.55 million, and will allow exclusion of the primary domicile, which was not in the first iteration. It will also allow them around $270,000 of off-farm assets. This shows an absolute commitment to dealing with the issues of the drought. Therefore, we will not be supporting the amendment moved by the Hon. Joel Fitzgibbon.

On the amendment moved by the Hon. Bob Katter, he did mention something that is correct, that the states deregulated not the federal government. This is once more an issue about regulation which, if properly processed, would be taken up by every state. Therefore, the government will not be supporting the amendment. To some of the other issues raised by the member for Kennedy. I believe that the dairy industry has a great future and that has been no better expressed in recent times than by the heated approach to the purchase of Warrnambool Cheese and Butter by Saputo from Murray Goulburn. They see a great future in dairying and we have seen an increase in our exports, predominantly into Asia, which in 2012-13 were worth $2.76 billion. The dairy industry does have a great future and, as Asia develops its middle-class exports of dairy products, will continue to grow.

I take some exception to the statements by the member for Kennedy regarding the approach to politics—that apparently the only way you can have an effect is to remove yourself from a political party and stand as an Independent. If he was collecting a salary before, he is still collecting it. He is collecting the same salary. I remind you that sometimes the hottest battles you can have are in the room with the people who actually make the decisions. In fact, that is the only way you can make a difference.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

You've crossed the floor a few times.

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

I certainly have, but I have never resigned from my party. You have never crossed the floor. You are not allowed to. In the Labor Party you are not allowed to cross the floor. They take away the right to do that. They do not believe in your freedom to actually express your views. They always believe they are the agent provocateurs, the rebels, but you always have to do exactly what you are told.

We continue to fight on behalf of the issues of people in regional areas and people in the agricultural sector. I choose to do it from where the battle can be won or lost, which is in the room with the people who actually make the decisions. I do not think it is an act of bravery to remove yourself from the field of engagement and stand on the sidelines as an Independent.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that the bill be now read a second time, to which the member for Hunter moved an amendment that all words after 'That' be omitted with a view to substituting other words. The member for Kennedy has moved an amendment to that amendment that all words after 'House' be omitted with a view to substituting other words. The immediate question is that the amendment moved by the member for Kennedy be agreed to.

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

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

Question negatived, Mr Katter, Mr Palmer and Mr Wilkie voting yes.

The question now is that the amendment moved by the member for Hunter be agreed to.

Question negatived.

The question now is that the bill be read a second time.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.