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

The Export Control Act 1982 provides the basis for ensuring exports meet the requirements of the importing country. Labor welcomes this bill, the Export Legislation Amendment Bill 2014, which will provide a fairer and more consistent approach to cost recovery for services provided by the Department of Agriculture to exporters. The bill seeks to remedy technical defects and inconsistencies, which will in turn allow the Department of Agriculture to recover an estimated $1.9 million each year for the provision of export services for commodities which are currently excluded from cost-recovery mechanisms. It does so in part by tidying up and standardising the definition of 'prescribed goods' across, I think, seven statutes.

These changes are important because Australia exports around 65 per cent of our farm products, 75 per cent of our fish products and some 60 per cent of our forest products. So, obviously, our international markets are absolutely critical to the health, wellbeing and profitability of our agriculture sector. As we strive to fully capitalise on the Asia-led dining boom, a full and efficient cost recovery of export services will be of increasing importance, given how important our brand image is in those international markets.

Changes to the export legislation will ensure that Australia's exports meet importing-country standards and that our reputation for clean, safe, green food is maintained in those markets. However, changes will be required to Australia's biosecurity legislation more generally for the above points to be achieved and maintained. At this point, I will move the second reading amendment which has been distributed in my name. I move:

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

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

(1)   the importance of updating legislative requirements that impact on Australia’s biosecurity;

(2)   that the Quarantine Act 1908 is over a century old and new legislation is needed to support safe and seamless transition of goods and services across Australia’s borders; and

(3)   the Beale review recommended that Australia update its biosecurity legislation to ensure Australia’s biosecurity systems remain world-class.”

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

Is the amendment seconded?

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

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

This legislation is important. The former Labor government, in response to the Beale review, had a larger reform and modernisation program for our biosecurity system. Raising farm gate profits in a sustainable way should be—and I am sure it is—a common goal for all of us in this place, particularly those of us who have an intense interest in agriculture. To achieve this we must ensure that pest and disease threats are minimised and well managed, and a modern, robust biosecurity act will be a powerful step forward in this process.

On 28 November 2012 the former Labor government introduced the Biosecurity Bill 2012, which established the office of Inspector-General for Biosecurity. That bill was introduced in the Senate by the former Minister for Agriculture, Senator Joe Ludwig. Until that legislation was passed, we appointed on an interim basis an Inspector-General for Biosecurity. This was a first step in our modernisation plan—a step taken after the Beale review, which was one of many reviews, including the Nairn report, into our biosecurity system. That legislation was referred to the Senator Rural and Regional Affairs and Transport Legislation Committee for further consideration, but subsequently lapsed as a result of the proroguing of the 43rd Parliament.

So here we are nine months into this new government and we still have not seen the return of those bills. Interestingly, we asked in Senate estimates this morning about the status of those bills and when the parliament might see them again. Unfortunately, we were not able to get an answer. As the Beale review reminds us, Australia's privileged pest and disease status confers significantly economic, environmental and community benefit for this country. And there is some urgency to get this modernisation program completed, and I urge the minister to, at the very least, inform the House when he sums up on this bill where that reform program is and, indeed, whether we can expect to see it return, if not in the same shape and form as that produced by the former Labor government, in some form in the government's own name.

I said that our clean, green, safe image gives us a competitive advantage around the world—and it certainly does. That is why I have expressed concern about the suggestion that the government is considering merging our biosecurity services into the new border force—which, of course, has responsibility for both immigration and customs. Labor is always happy to talk about reforms and potential efficiencies, but imagine a government entity which is responsible for immigration, customs and biosecurity control. I suggest that, in the absence of significant safeguard mechanisms, in that equation biosecurity runs the risk of being the third poor cousin with less money, less resources and less love and attention.

Further, biosecurity is a highly complex area and requires a high degree of expertise and experience. The department has thousands of officers working in this area—not just sitting behind desks in Canberra but also sitting and working in our seaports, in our airports and in our quarantine stations right around the nation. We cannot accept any diminution of our biosecurity protections. As we look to the Asia-led dining boom, our clean, green, safe image, as I said, will be of critical importance. The Australian brand will be of critical importance as we compete with other nations for the growing food demand around the globe and in Asia. This really should be front and centre of the minds of every government.

In the short period I was agriculture minister, I often thought that the title of the ministry—and I still think it—would be better described, if biosecurity were part of that title, for example, as the 'Minister for Agriculture and Biosecurity.' I think, apart from those in this place who have been the minister, the shadow minister or had an intense interest in this area, including my good friend the member for Parkes—I know it is not Parkes—Calare; they keep changing the names, including the member for Calare—they appreciate that biosecurity is a very large part of the work of the agriculture minister in this place; and rightly so, given the complexities and the importance of biosecurity in keeping pests and disease out of this country. Imagine, if in this country, we had the sort of outbreaks we have seen in the UK and in Europe more broadly with foot-and-mouth and other diseases like BSE, and the outbreaks of BSE in northern America. These are critical matters for Australia' agriculture and therefore the Australian economy.

I had a meeting just before I came done to make this contribution with the Invasive Species Council. I make no judgement at this stage on the merits of the case they put to me but they made some very, very important points which I am going to have a closer look at. They are calling for a Senate committee inquiry into Australia's state of preparedness for new environmental invaders. Their concern is not predominantly for agriculture but for the natural environment. Of course, as the member for Calare would know, it is difficult to differentiate between the two, because the future of our agriculture sector is very much tied to the future of our natural environment. That is why in this place I have often expressed dismay at the government's decision to exclude natural resource sustainability from its agricultural white paper.

I do not know how you properly prepare for the opportunities the Asian dining boom presents to us while not also asking how we are going to produce more food with the same level of land, water and people resources or, in some cases, depleting resources—and I am referring there to land resources and water resources, which are a real issue for this country. I do not know how you plan for agriculture without dealing with the state of those natural resources, including the impact of climate change.

The Invasive Species Council alerted me to the fact—and I was not so much aware of this when I was agriculture minister because they are probably more an issue for the environment minister—that since 2000 there have been multiple failures of environmental biosecurity, resulting in new extremely serious threats to biodiversity and putting increasing pressures on environmental and biosecurity budgets. They give a whole list of those from red imported fire ant, yellow crazy ant right down to myrtle rust.

They say there has been no parliamentary oversight of environmental biosecurity, no investigation of the factors that have led to repeat failures and no evidence of changes made to improve biosecurity processes. They also go on to say that, since 2000, there have been at least 18 Senate inquiries into specific biosecurity failures or perceived inadequacies, all initiated for industry reasons; just one had relevance to the natural environment. If those figures are correct, I think they make an important point about whether we are properly focusing on all of the issues that present risk for our natural environment and therefore the agriculture sector.

Again, I make no judgement about the issues they have put forward but I will certainly, having just come out of the meeting, have a look at what they have had to say and determine whether there is sufficient merit in their proposition to warrant a Senate or some other form of inquiry into the issues they raise.

As the Beale review points out, we can never hope to have a zero risk in our biosecurity system. It is impossible for an island country like Australia living in this part of the world, but we must strive to have the very best biosecurity system in the world, one that protects the clean, green, safe image I was talking about.

The idea of consolidating biosecurity into the Border Force is not one that was recommended by Beale—and I did not recheck the Nairn review but I am sure it was not recommended back when Professor Nairn did his review. I make the point that even the Prime Minister's own Commission of Audit showed reluctance in making such a recommendation. It made reference to it but it certainly did not make a recommendation that that course of action be pursued.

I make an appeal to the minister, the Prime Minister and the Treasurer not to rush forward with this idea of folding biosecurity into the Border Force. I think that is a discussion that should happen over a long period of time and I can foreshadow that this side of the House would take some convincing that the same level of resourcing, funding, attention, priority and the same retention of sufficient expertise, including our scientists, that we expect would maintain the level of biosecurity in this country.

I also make a last-ditch appeal to the minister to say something about the border biosecurity reforms when he sums up in this debate. With your indulgence, Mr Deputy Speaker Vasta—and it is particularly relevant, given you are currently occupying the chair—I take this opportunity ahead of tonight's game to say: Go the Blues.

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

The shadow minister correctly mentioned the importance of biosecurity. The Export Legislation Amendment Bill 2014 and cognate bills are about the affordability of biosecurity. He mentioned that we are a large island. I am not sure whether we are on the smallest continent or the biggest island in the world, one of the other, but we have the luck of being surrounded by water and Tasmania takes even more advantage of that than the rest of the country, but that is another issue. This bill is about the biosecurity needs of our customers and about the needs of Australia. Biosecurity is a two-way trade. We need to be very careful about how things come to our country and about our reputation as goods go out. A as the member for Hunter correctly said , without a doubt the greatest selling point or marketing tool for the two-thirds of our production which leaves our shores is our clean, green image and our reputation for having equal to the best if not the best agricultural commodities in the world, whatever they may be.

I stress that this is also about the practicalities of trade. Australia is a trading nation and a resource-rich nation. Coal and iron ore can be stockpiled forever but perishable agricultural products in particular cannot be stockpiled. So you have to have your boxes lined up. It is no secret that I am a big believer that a lot of our future lies in our near neighbours. There are probably 400 million people in the three biggest countries closest to us—Indonesia, the Philippines and Malaysia. There is pretty much nothing we produce that they cannot use. I believe in the future they should play a very much bigger role in trade than they do currently. It seems to me incredible that we do more trade with New Zealand, a country 4½ million people, then we do with almost a quarter of a billion people in Indonesia. That is something we have to redress. I see Indonesia as being a very big part of our future, not to mention the other countries. Wherever it goes, this is very much about us protecting our trade position and about protecting us from the things that come into Australia.

We must never lose sight of the fact that the bulk of our broadacre commodities—wheat, beef or wool and in the case of wool almost 100 per cent—are exported. For wool and grain, AQIS is not such a huge cost. For meat and niche market horticulture, and for new players in trade, the cost of paying for AQIS is a very serious issue. For those wanting to become established, it is a very serious issue. In striving for cost recovery, we should never for one second forget or assume that AQIS is always on top of its game, that it is always as efficient and least cost to industry as it can be because certainly it is not.

Personally, I believe the only way we will get to that peak efficiency is through contestable issues. As an example, in an inland town like Mildura in the Sunraysia I have met and spoken with a lot of people who, if they are not able to now, want to get through what is a complicated issue. We must make it contestable to act on behalf of the Commonwealth in biosecurity issues and train people to become experts to do inspections. It could be somebody who has another business or is educated in these things. It would be much cheaper for somebody who lives in the region to do an on-site inspection for all that is required by the country we are exporting to.

I am not convinced that we are totally on top of the game with the way AQIS works. AQIS is an essential body. The shadow minister was spot on when he said how important biosecurity is to us. We can be more efficient and less cost onerous particularly to new and small exporters for whom it can be a serious issue. In the past, we have committed to looking at the Commonwealth's responsibilities in some of these situations. In a sense, AQIS in some ways acts on behalf of the taxpayer, not just on behalf of the exporter.

I have always believed that we never get the best out of all of these things until we make them contestable. At the moment we are trying to create a level playing field, so I guess we are doing the right thing. In the future, we will have to look beyond what we are doing now to make it more efficient and faster. We have to make sure AQIS responds very quickly. There is not always a lot of warning when people are able to stitch up a deal, especially with China. China is a moving feast. We do not as yet have that trade deal, so we do not have specific lines of process and things can happen very quickly. The more we can speed things up and get involved with our near neighbours in providing what they want the better. We have to learn what they want and they have to learn what we have got. But never forget that the customer is always right.

I do agree with the shadow minister that biosecurity is a big thing for us. May AQIS never be moved out of the Department of Agriculture. AQIS's place is in the Department of Agriculture, in a very specific and a very important way. I take my hat off to those small exporters, particularly in horticulture and the smaller ones outside broadacre industries, who work their guts out. Agriculture can be a disastrous game in the broad sense, but even in the specific sense in horticulture things can happen overnight and they can get wiped out. They have to have the right crop at the right time, and they have to be able to act quickly. That is another reason that those doing the inspections have to be able to respond quickly when they are called upon and another reason that it should be local people who are trained to do this and not necessarily government employees. That could be a very good thing.

There is another reason that this is all so important for speed and every other thing. Agriculture in Australia is the oldest profession in this country since European settlement—and I presume our original inhabitants were agriculturalists in one way; they certainly harvested the country. I am totally convinced that unless every commodity has an export opportunity, they are never going to realise or be free of the yoke which is being felt more so in recent years, given that the domination of the two big supermarkets is up to 70 per cent or 80 per cent, whereas 25 or 30 years ago it was only around 40 per cent. The only way producers can be free of the yoke of the supermarkets is if they do not need them and they have an export option. I think that is incredibly important and it is why it is so important that we are able to respond quickly to the needs of exporters, large or small, broadacre or intensive. In that way, it will be easier to find markets where they can regularly supply some of the best products in the world, wherever it may be around the world, particularly to near neighbours. Our exporters and those who work with them and for them are the actual commercial heroes of our country. They need our protection.

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to be able to support the Export Legislation Amendment Bill 2014 and the related legislative package that implements a number of changes to our export legislation. For those watching at home, for the kids up in the gallery and those who are with us today, the legislation before the House is particularly concerned with how we regulate the exports of food in Australia. As you can imagine, the export of food is a rather complex business. We export to lots of different countries and they all have different standards and conditions that we need to comply with. This is particularly in the context of meat exports. The Department of Agriculture plays an incredibly important role in helping our exporters take their produce out to the world. One of the ways it does this is providing certification that the food that is exported from Australia meets certain conditions.

The amendments before the House today have the role of clearing up some technical defects in the way that the exports legislation is drafted—some things around differing definitions from one piece of legislation to another. Another very important impact is facilitating cost recovery. That means the costs associated with exporting which the department bears at the moment will actually now be borne by the exporter. For some, this may sound a little technical and dry, but these are actually very important parts of the broader framework for food exports and for biosecurity protections, which Australia provides and which are so important to the industry.

It is an important part of Australia's economic future. These are not things that just affect us today. Despite the fact that a lot of Australians perceive agriculture to be a declining sector, food exports and agriculture are among the most important parts of our economy today and something that we project will grow significantly into the future. Somewhere over the next 30 years, global demand for food is going to double and a lot of that growth is coming from right within our region. So we will see significant increases in populations around Asia but also changing tastes, which, excitingly for Australia, are leading consumers to value even more products that we grow in our great country.

One of the great things about agriculture for Australia is that it is an area where we have a real competitive advantage. Of course, we have a rich and proud tradition of agriculture, but we also have some logistical comparative advantages in that we are close to areas of significant population growth. We do not want to exaggerate that, but we are close to those Asian countries where food demand is growing so much. A Deloitte report was published in March called Positioning for prosperity? that goes into some of these issues. That report estimates that over the next 20 years Australia is poised to reap significant benefits from growing our food exports and processing industries. Deloitte's estimate that this could add $250 billion to our economy over the next two decades. This is really important stuff. Deloitte's went on to talk about how Australia could become the delicatessen of Asia, offering high-value, high-margin products. So it is an exciting future that we have to look forward to and it is a very important one.

I raise this because the legislative framework that sits around the amendments that we are discussing today are very important to this future for food exports. One of the significant selling points about food exports from Australia is the perception that food grown here is safe food and good for the people to whom we export. The Deloitte report actually said that food safety standards are one of the most important elements that are valued about food exports to Asia. Thinking specifically about incidents that we have seen with baby food, which is one example that is often put forward, nothing really could be more important than the security we place around the food system here in Australia and the food system that protects our exports.

Labor has a pretty good story to tell here. It is one that we are very proud of, one that the second reading amendment speaks to, and one that our shadow minister, the member for Hunter, talked about earlier this morning. While Labor was in government $1.6 billion was invested to try to minimise threats to our primary production sectors. These are sectors that, as you can understand, really underpin our reputation as a reliable exporter of high-quality food around the world.

The most recent review to our biosecurity measures has been the Beale review, that Labor commissioned. The member for Watson was the minister at the time. We really wanted to make sure that Australia was in the best position to take advantage of the significant growth in demand for food, which I have talked about. It was a very wide-ranging assessment and made some very important findings. I will go through some of the highlights. One of the important things about the Beale review regarded the threshold question about the standard of our biosecurity and quarantining regulations in Australia. They are working. They are working well but there are things we need to do to improve them. One of them was about efficiency. I have heard other members talk through that today. This is about targeting resources where we are going to have the greatest return for our primary producers. Another chestnut is encouraging greater cooperation between the Commonwealth, states and territories. That is something that affects all areas of legislation but specifically this area of exports. Another was around improving the transparency and processes in relation to biosecurity operations.

The legislation that is before us today actually does go right into the Beale review and the things that came out of that important review. I want to use this opportunity to urge the coalition, who are now governing this area, to continue the important work that is yet to be done on implementing the remaining recommendations of the Beale review. We introduced the Biosecurity Bill 2012 in November 2012 and the Inspector-General of Biosecurity Bill 2012 in the Senate. These were the first steps to the development of a really comprehensive modernisation of Australia's biosecurity regulatory framework. I note in the second reading amendment the number for Hunter has put forward that he mentions the Quarantine Act 1908 is over a century old. We all know that things have changed profoundly in that time. We really urge the coalition to continue that important work that Labor began in modernising the framework that protects our food exports in Australia.

I make those points simply to make it clear that this legislation is part of a broader framework of protection that is so important to our farmers and farming communities. It is a protection framework that will see Australia continue to be well served, but we do want the reforms to be pushed and for continued pressure to make sure that Australia maintains its reputation as a land of really clean and secure food sources. The more we protect our reputation, the better for our exporters and the better for those communities that depend so much on agriculture. I commend the legislation to the House.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak to the Export Legislation Amendment Bill 2014 and the associated bills. This bill is pretty straightforward. It will address an anomaly which sees export inspection and registration processes taking place across a wide range of goods. But it is part of a user-pays system. Only some of the users are paying for the service at the moment. There are 676 establishments who are registered exporters of grains, fruit and vegetables. However, there are 269 who have not, until now at least, paid these fees. They are exporting things like cut flowers, dried fruit, fodder, nursery stock, nuts, seeds, timber products and tissue culture. They are not paying now, as I said. Undoubtedly they will not love the fact that they will have the opportunity to pay in the near future. But it is a bit like the budget. There are things that you know are right, and sometimes we have to do what is right. So I am sure those businesses that are currently exporting without paying these fees will cope.

Much is said about the exponential growth in demand for food worldwide and what Australia's place might be in that. Much is said about the people in the quickly expanding middle classes of the nations to our north who will undoubtedly, unfortunately, probably like Australians, learn to eat more. But importantly, as far as Australia sits, they will have a vastly changed diet. They will be looking for higher protein diets, a higher basis of manufactured good, and very clean, green products, because they are a very discerning population.

Australia has a great opportunity in this area. I gave a speech to this chamber last night that touched on some of those opportunities. One is our proximity to the markets. If we cannot get our food fresh, safely and economically into Asia then you have to ask yourself who can. There is also this great opportunity for Australian producers to actually change the make-up of the products that we try and sell into Asian markets. That might mean through the manufacturing process, but it also might mean through value-adding some of the products that we grow here already. Australia have a very large and efficient grain industry, and we export most of that grain as a bulk dry commodity, with very little value-add as it leaves the shores. I perceive a great opportunity for Australia in livestock, in the provision of meat protein into Asia. I think as their diets change and people have more income they will be looking for a heavier input of protein, much as Western nations have done.

This is a great opportunity for Australia because we can produce livestock here that will have the clean, green image and that will be taken quickly from the abattoirs into the markets, quite possibly as fresh product as well as frozen. Of course, there is also the opportunity for live export. This potential expansion will be a very big value-add for Australia. But we cannot underestimate how sensitive these Asian markets are, particularly the high-price markets, to being clean, green and having a reliable product.

In 2012, I was fortunate enough to be part of a bilateral parliamentary delegation to China. We visited Beijing; Kunming in the Yunnan province, in the fast-growing south-west of China; and also Shenzhen, in the Guangdong Province. It was an enlightening trip, especially to the south where we visited a number of Australian businesses with a significant and expanding foothold in China, businesses such as ANZ Bank's China's back office and an export cut-flower industry being facilitated by Australia's largest fresh cut flower wholesalers, the Lynch Group.

It was in Kunming that we met a young woman, who, with her mother owned three department stores. She was very keen on being able to get Australian products into her shop. I do not think we in Australia understand the shock in China of the 2008 melamine milk scandal. This is now etched deep in Chinese minds and those people who can afford it are looking for a safe product. This woman said to me, 'I eat Australian food; I provide Australian food for my family whenever I can, at every opportunity.'

At this stage I would like to congratulate the Minister for Trade and Investment, Andrew Robb. He has had fantastic success in forging bilateral trade agreements with Korea and Japan just this year. We are very hopeful—and he is very hopeful—that a deal is getting very close with China. There are some people in the Australian public who are distrustful of trade deals; they should not be. Every opportunity opens up more opportunities for Australian businesses. It must be remembered that Australia has very few trade barriers. We have quarantine laws, but they are driven by science, not by trade issues, as it should be. We have very few trade barriers, so we have very little to lose in forging these bilateral trade agreements. Most of these nations already have good access to our markets. What the bilateral trade agreements are about is getting better access to their markets. Of course, in some cases, it is not 100 per cent open. It is not a completely free trade deal. But any deal that improves the baseline situation we are in today is better than where we were yesterday.

I think it is interesting when we talk about free trade deals to reflect on the New Zealand experience. New Zealand has a free trade deal with China. It has led to a booming economy and a huge expansion in profits, particularly in the dairy industry. New Zealand has heavily promoted itself as a producer of clean, green, quality products and, in many cases, it has had the jump on Australia.

However, last year there was the first speed hump, the botulism scare with New Zealand milk. China immediately banned New Zealand milk powders. The businesses are now operating again, but there are still huge ramifications for what is seen as that failure by New Zealand. In fact, French food giant Danone is suing Fonterra for NZ$492 million. The brand and reputational damages that have been done in China are still not fully known, but there is no doubt that brand New Zealand has been damaged with this incident. It just shows how easy it is, with one incident, to lose that hard-won market respect.

We cannot underestimate that sensitivity. The melamine milk scandal in China I spoke about earlier has fuelled the skyrocketing demand for safe food. We understand that, while we suffer quite a large tariff disadvantage compared to New Zealand, I understand that Australian milk sales to China have lifted since the advent of the New Zealand problem. But expanded sales could not be expected if we were to have a quality problem.

I am Chair on the House of Representatives Standing Committee on Agriculture and Industry. Currently, we are conducting an inquiry on country of origin food labelling. I was looking through some of the testimonies from our witnesses, including a recent one from AUSBUY, in Sydney. I have written to them and asked for further information. They said they had evidence that Australian business had been approached by Chinese interests to bring Chinese produce into Australia, to transform it in some way so it met our labelling standard of 'Made in Australia' and 'Made from local and imported produce'—not with the aim of putting it back on Australian shelves but with the aim of putting it back into China where they could trade on the good name that Australia has. I have asked them to provide further evidence of this. It needs to be more than hearsay. So I am looking forward to how they might come back and provide that evidence. But let me say: if this was happening, this would be one of the greatest threats to Australia's clean, green image overseas than one could possibly imagine—for example, if a product that was substandard or even, in some cases, contaminated and was marketed on Australian shelves, that would be very bad. But if it is marketed in a very sensitive market, such as China or Japan, under a label that says 'Australian made,' which would signify it was of a certain quality and it turned out not to be, the damage that could be done to our export markets in the future would be enormous. As I say, I do not have any better evidence than that at this stage, but I will certainly be following it with great interest.

I want a light touch on regulations. However, we must be able to guarantee Australia's quality and reliable and properly funded services with our inspection and registration schemes. Our very future depends on having an agency which can properly fulfil the functions that are set for it and that is what this legislation seeks to do. It seeks to equitably spread the load across the industry so that we have a well-funded agency. I would like to add my support to the comments of the member for Calare and I think the member for Hunter, who spoke against any suggestion that biosecurity should leave the Department of Agriculture and become part of a new border force, if you like. I would strongly resist it. I think this would be a bad move. The agency that looks after the reputation of Australia, our future biosecurity, must be stand-alone and fully focused on the issue at hand. We cannot run the risk of biosecurity becoming a second, third or fourth priority; it must remain a very high priority. In the end, some of the effects that I have spoken about today actually have great potential to damage Australia's future.

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

I support the amendments to this legislation moved by the member for Hunter earlier. We live in a globalised economy where business ventures and trade flow freely across from one nation to another. Indeed, business looks for growth opportunities across the entire world. Governments promote trade to boost national economies and to ensure there is a balance of trade between their country and others. We are also seeing it through a rush to sign free trade agreements with individual countries, which the member for Grey referred to in his remarks only a few moments ago. Speaking about free trade agreements, I would have thought that it is far better to do things in a uniform way throughout the world rather than having individual free trade agreements between individual countries as we have had for several years now. As we have seen, every time there is a free trade agreement signed between two countries it disadvantages other countries, as Australia was disadvantaged prior to signing the free trade agreements with Korea and Japan. I would have thought that if we can work through the World Trade Organisation and have some uniform standards across the world it would indeed make a level playing field for all countries, including Australia, on issues of trade.

Trade is important to Australia and very important with respect to our farm products. I am referring to meats, grains, wool, cotton, fruit, vegetables, sugar and so on. Fast transport in recent years has opened up new markets for Australian produce. The ability to get that produce to overseas markets within hours enables you to sell produce that would not normally last very long in terms of its shelf life into markets we were unable to access when we were relying on slow shipping transport methods. As other speakers have quite rightly said, much of the value attached to Australian farm produce is to do with the quality of Australian produce and the confidence of overseas buyers in the way that those products have been produced. They also, understandably, want to know that there are minimal, if any, health risks associated with the products that they import from Australia, just as we want to know what risks are associated with products that we import from other countries.

The fact is that Australia does maintain high standards by comparison with other countries, particularly when it comes to food and farm production. If we are to maintain those standards we have to manage the risks, and that is effectively what this legislation is all about. It is in Australia's interest to manage those risks, firstly because Australia's clean, green image adds value to our products. There is substantial evidence out there that overseas markets are prepared to pay more for the Australian product because they feel confident in it. Secondly, there may be health risks associated with the products that are either exiting or coming into Australia. We saw that in recent years with respect to the threat of bird flu and the costs that our economy sustained as a result of that risk and our efforts to try and manage that risk. It ran into the hundreds of millions of dollars.

Thirdly, if those risks are identified then trade can be shut down. We saw that only recently with respect to beef that was exported to the USSR, some 24,000 tonnes of chilled beef that went there in 2013 worth about $170 million. The trade was shut down because of claims that the product had hormones in it that should not be in there. And when I refer to the export of beef, it was interesting that that happened under the watch of the Abbott government. A trade worth $170 million, 24,000 tonnes per annum of beef, and yet hardly a word said about the shutdown of that market from members opposite. It is very interesting indeed when you compare their reaction to when the trade was shut with Indonesia. There was also a case that went on for nearly 3½ years with respect to kangaroo meat to the USSR also having been banned, again for similar reasons. I can recall a processor of kangaroo meat coming to see me at the time to see if I could speak with our trade minister and reopen the doors for the export of that product, because his future and his business depended entirely on it. With that went the jobs of the people that he employed. I understand that as a result of that risk 11 out of the 14 processing plants of kangaroo meat indeed closed. Those are the kinds of risks that are attached to products being affected in one way or another through disease or similar.

Fourthly, if a disease or pest does enter Australia, not only do the products lose value but there is an enormous cost in managing the disease or pest thereafter. Again I refer to the equine influenza outbreak in this country in 2007, where the costs of trying to manage the outbreak ran into tens of millions of dollars. Perhaps the most important concern is that once diseases or pests enter Australia quite often you can never eradicate them. That has been the case with so many of the diseases and pests that have come into this country. When that happens there is an ongoing cost to our farm producers in trying to manage the disease, and it means the use of more chemicals. Chemicals cost money and their use has associated health risks. So it becomes a major problem.

Managing our biosecurity risks does come at a cost. The inspection services provided by AQIS and others have to be paid for by someone. This legislation is about trying to recover those costs from the producers of the products. The services apply to inspections of both outgoing and incoming food and farm products. I would personally be very keen to know what proportion of the fees charged and generated by AQIS come from exports as opposed to imports. It seems to me that exporters may be paying a disproportionate level of those fees, possibly more than importers are paying.

My understanding is that exporters have all of their products inspected and certified for export, whilst imported products are subjected to random testing only. I stand to be corrected on that, but that is my understanding. Those costs are indeed high. I spoke in this place only weeks ago about how those costs have risen in recent years from several hundred dollars a week to several thousand dollars a week, from a small amount per day to something like $1,000 a day for export businesses, particularly those in the fruit and vegetable industries. I have spoken to some of those exporters personally and they have confirmed with me that those costs are real and that those costs are impacting on their viability and on their competitiveness with other nations. Other countries around the world can be competing with you for export markets, and I do not know whether those other countries impose the same level of costs on their growers and suppliers. If they do not, that clearly puts Australian growers at a disadvantage. Again, the advantage they have is that people have some confidence in the Australian product and hopefully might still choose the Australian product, even though it comes at a higher cost. That is a matter that we need to think carefully about, particularly as we try to enter into new markets as a result of the free trade agreements that we keep pushing forward.

I want to talk about another matter with respect to cost recovery, because cost-recovery should be exactly that—cost-recovery, not making a profit out of the service and charging excessive or unnecessary fees. Not long ago I visited the facilities of a food producer in Adelaide who makes food for both the Australian market and the export market. The food produced for the Australian market and the food produced for the export market is all produced on the same premises, using the same equipment, by the same workers. The only difference is that the export product is packaged for export.

The food producer is subjected to state health department inspections in order to ensure that the production complies with state health regulations. It would seem to me that if the food complies with all of the Australian state health department regulations and is fit for consumption in Australia then it should be fit for consumption elsewhere. Yet, because the food is going to be exported, this manufacturer has to then get a second clearance for the food from AQIS. So effectively the inspection service carried out by the state department is duplicated by the federal department in order for the producer to get an export certificate to export the food. It would seem to me that that is unnecessary and that there ought to be a level of cooperation between federal and state departments that are essentially providing the same service. If there were, it would mean that this producer could produce and market his products at a lower price or, alternatively, might be able to make more profit, and that in turn would allow him to grow his business and employ more people.

It is these kinds of issues that we should bear in mind with this legislation. Whilst I accept that the inspection services need to be paid for and that they do come at a cost, the government departments and the ministers responsible should also be mindful that the fees do impose additional costs to the manufacturer of products or to the growers of farm produce—costs not only in terms of what they are billed for but also in terms of being time-consuming processes for the producers. Quite often the paperwork associated with exported food and the processes that producers have to go through are time-consuming to the point where it adds to the cost of the production.

With those concerns, I come back to the original point of this legislation, and that is to recover the costs associated with inspection services. I think that is fair and reasonable, but I would certainly hope that the minister would take on board the concerns I have raised and the concerns the shadow minister has raised with respect to the matters outlined in the amendment.

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

I too rise to participate in this debate on a most important matter, especially if you represent regional Australia and in an electorate dependent on exports. Across Australia, we export about 55 per cent of all of our farm production. That includes 75 per cent of our fish products, 60 per cent of our forest products, most of our cereals and a significant proportion of our dairy powders, cheeses and drinking milks. In fact, it has long been known that the biggest export out of Geelong port is dairy milk powders.

We have new exports emerging which are going to be increasingly valuable, especially if we get the quarantine services and marketing right. They are the standardbred horses and breeding materials that are now being exported as part of the racing industry, with bright new prospects in the rapidly evolving Chinese market. I am particularly interested in the exporting of horses and their breeding material for the racing industry because much of that industry is based in my electorate—at Echuca, Avenel, Shepparton and Nagambie—and it is brilliant country for raising some of the fastest horses, we argue, in the world.

All of these exports are dependent on Australia retaining its reputation for exporting products and services which meet importer standards and, we would argue, go beyond the minimum importer standards. We know that our country-of-origin labelling—'made in Australia', 'produced in Australia', 'grown in Australia'—carries with it at the moment, in the mind of the consumer and in the mind of importers in other countries, values which include fresh, chemical free, uncontaminated and true to specification, and we can sometimes charge a premium for our foods with those particular characteristics.

We know of the terrible concern in China when they discovered that their imported infant formula and some of their domestically manufactured infant formula was poisoning and killing their babies. There are food scares regularly reported globally, whether it is the horsemeat contamination of beef throughout Europe or the most recent one, today, where pig DNA has been found in chocolates in Malaysia, where the chocolates were claimed to be halal. There is an extraordinary range of food contamination that goes on globally, whether it is because of poor hygiene or it is the unintended consequence of countries' inspection services not being adequate or there is not a culture of clean, green food production like we have and nurture in Australia.

Long ago, the principle of full cost recovery for our export inspections was debated and agreed to. There are some who still argue—and I am sometimes with those people—that, like some of our key competitors who also charge for export inspection services, those fees should find their way back into the industries in research and development and other supports. But we are not debating the issue of full cost recovery today; we are looking at the current legislation governing the charging of export inspection services. The legislation has for some time included technical defects and they have not always been equitable in the way that the fees have been allocated across exporting industries or sectors. Some producers have not been required to pay establishment registration charges for plant products like cut flowers, dried fruits, nursery stock, nuts, seeds, timber products and some tissue cultures.

The Export Legislation Amendment Bill 2014 and the cluster of related bills are not supposed to impose any extra charges at all but rather to bring everyone into the same net of paying for export inspection services or registrations. In particular, smaller exporters will now also be required to meet some of the full cost recovery. There are 676 establishments with export fruits, grains and vegetables now paying registration fees, but there are another 269 exporters who have not been charged those fees. The current registration costs in horticulture vary from $2,844 or so to over $8,500. So, as you can see, these are not insubstantial registration costs, but some have been applied to some businesses and not to others. Clearly, that is inequitable.

Currently, the Department of Agriculture cannot charge for the quota certificates an exporter must obtain to take their product into some markets which have strictly enforced quotas. This will be corrected through the amendments contained in these bills. I do not think many people would argue with establishing equity across export services. But what we do have to watch is that, in arguing for and imposing full cost recovery, we do that in a way that we all agree is appropriate and that is not in any way inflated to cover other costs for the department. We have a set of principles that were agreed as appropriate for applying full cost recovery, including key principle 3:

Any charges should reflect the costs of providing the product or service and should generally be imposed on a fee-for-service basis or, where efficient, as a levy.

Key principle 6 states:

Where possible, cost recovery should be undertaken on an activity (or activity group) basis rather than across the agency as a whole. Cost recovery targets on an agency-wide basis are to be discontinued.

Key principle 10 states:

Agencies with significant cost recovery arrangements should ensure that they undertake appropriate stakeholder consultation, including with relevant departments.

That is to ground-proof their estimations. Key principle 12 states:

Agencies are to review all significant cost recovery arrangements periodically, but no less frequently than every five years.

These principles are in the Australian government cost recovery guidelines of July 2005. So we have the guidelines and we have the principles, but there is a lot of argument about how much is being attributed to a full cost recovery charge, and I think that is a debate that we need to look at very carefully, because it is all about competition.

We know that it costs substantially less in New Zealand for these fees and services. Recently I have had my attention drawn particularly to the concerns of Harness Racing Australia. Obviously New Zealand is our close competitor in terms of providing standardbreds and breeding material into the international market. Harness Racing Australia is the peak national body for the sport and business of harness racing across Australia. It represents more than 48,400 individuals involved in the process of producing and preparing standard-breds for racing in Australia and they directly spend more than $511 million annually, 64 per cent in regional Australia. As I mentioned before, there are some superb establishments in the Echuca, Shepparton and Avenel areas, as well as in Cowra, Bathurst and Wagga Wagga in New South Wales. We are very jealous of our reputation of producing superb standardbreds for racing in Australia and, increasingly, in international venues.

In their submission to the department on the Live Animal Export Draft Cost Recovery Impact Statement, the HRA has made some very compelling points. They pointed out that the impact of the proposed and unexpected export fee increases was enough to cause reconsideration of many industry breeding practices, in particular moving some operations offshore to New Zealand, where the cost of doing the same business is less, therefore making them much more competitive. That has impacts on employment and direct spending by Australians on this industry locally.

There are concerns about the lack of transparency, reasonable time lines and the flawed consultation and representation of the equine sector in developing the draft cost recovery impact statement. In fact they drew my attention to the principles that have been developed for full cost recovery. A long-term review is proposed for 2014-15 to look at these principles and consider the cost-based fees and charging mechanisms for each of the industry sectors. They are concerned that the introduction of the new fees is very precipitous and they will not have time to adjust.

They are particularly concerned about the quantum of the fee increases proposed on 1 July this year for both live horses and the undefined amount for reproductive horse materials, particularly as it threatens our international competitiveness with our near neighbour just as we see new trade opportunities with China developing in the horseracing industry. They argue that horse exports, particularly live horse exports, are different from sheep and cattle, because there may be multiple exit and entry situations. Fees are imposed each time and each way so there are both import and export fees when you send your horse out to race and you bring that horse back to retrain, ideally to race again. So we need to take into account the special circumstances of some parts of our live animal export industry.

We also have to make sure that our other export industries are not hit with such high additional costs or new fees that would make it more difficult for a new entrant to establish in the export market. I draw attention to one of my local abattoirs, Ryans at Nathalia. They are a tier 1 processor and they can export to 25 countries without export inspection. They operate on Australian standards and they process about 300,000 lambs a year. If they went to tier 2, they would have to pay around $200,000 per annum. They are a very small abattoir, one that just survived when totally inundated by the floods in 2012. They have only just recovered, so you can understand that they are very concerned. They would like to go to tier 2 as an exporter but the cost of $200,000 per annum in those new export inspection charges makes them think twice about being able to expand. That is a real concern.

There is also the piggery industry. I have some of the biggest piggeries in Australia in my electorate and I am regularly in contact with them, of course. They talk about how there does not always seem to be a sense of national interest with the inspection services provided. They talk about the gouging of carcasses when samples are taken for inspection where a small incision or slice would do without seriously devaluing the carcass as a chunk is removed as the carcass speeds by on the assembly line. They wonder why there is not more care taken to protect the value of the carcass and, indeed, the value of the export, when a little more care, attention and empathy for the viability of the industry is so needed. We have to make sure that the people who are doing these inspection services do have the national interest at heart. They are paid by the hour so it is not a case of having to rush to do the job. The abattoir would prefer that a better job be done. I have been told that you can have a loss of up to $40 per carcass due to the injudicious use of a sampling knife. I want to stress the importance of employing the right people to do these inspection jobs, not somebody who could not care at all or who sees the producer as 'the enemy'.

We also have another industry in my part of the world—the fruit growing industry—and I have some key domestic suppliers. Over 90 per cent of the kiwifruit grown in Australia is from the Goulburn Valley. The vast majority of pears are grown in the Goulburn Valley. One of my big exporters talks about the cost of their having to get their product out of the country. They say that unless they have 20 containers being exported at a time it really does not cover their costs for the inspection fees and services. Now 20 containers at some times of the year is not possible or a sustainable number of containers to be sent out of the country.

We have got to make sure that we continue to do a stunning job in our quarantine inspection services, or our customs inspection services. While we have had some hiccups referred to by the previous speaker with kangaroo meat substitutions—and I am sometimes quite sure, false allegations of growth hormones or other substances being found in product—mostly we have an enviable reputation in terms of our true-to-specification products being sold overseas. This is borne out by the numbers of investors from Singapore, China and Malaysia now trying to buy properties in Australia to take advantage of our superb production systems and inspection services.

But we have got to make sure that the full cost recovery system does not become injudiciously calculated; that we have a very efficient and effective, well-trained and empathetic inspection service; and that our exporters are supported in what they do by our government agencies—and that they are not seen as the enemy. Therefore I commend this bill to the House in its original form. I believe that our exports in the food sector in particular are going to be the replacement for the mining boom in the future, but only if we get it all right and that includes having appropriate inspection services at the border.

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

I rise to sum up on the Export Legislation Amendment Bill 2014, the Export Inspection (Quantity Charge) Amendment Bill 2014, the Export Inspection (Service Charge) Amendment Bill 2014 and the Export Inspection (Establishment Registration Charges) Amendment Bill 2014.

Australian farmers are world leaders in producing efficient, sustainable and high-quality produce to meet demand both here and abroad. Australia exports around 65 per cent of its farm products, 75 per cent of its fish products and 60 per cent of its forest products, worth more than $41 billion in 2012-13.

I might take a moment to speak on the shadow agricultural minister's amendment. The government is eager to ensure that Australia has the most rigorous and robust biosecurity system possible. The coalition has noted the previous government's attempts to introduce the biosecurity bill and its subsequent referral to the Senate inquiry for scrutiny. Many submissions were made to that inquiry, which highlighted certain deficiencies in the legislation that the government believes need to be addressed before reintroduction. The government is certainly continuing the development of the biosecurity bill with a view to reintroducing it once the concerns held by relevant stakeholders and industry have been addressed.

Agricultural exports are the lifeblood of my Riverina electorate. There is not much we do not grow in the Riverina, from wheat and apples to wine and alpacas, and just about everything in between. The area around Griffith in my electorate in the Western Riverina grows three-quarters of the wine grapes grown in New South Wales, which generates around $800 million each year in wine exports.

I know that the member for Murray, the member for Grey and the member for Calare feel similarly strongly about the importance of agriculture in their electorates, and I thank them for their contributions in this debate. It is always a pleasure to hear those opposite take an interest in Australian agriculture, and I acknowledge the contribution to the debate made by the member for Hunter, who is, of course, the shadow minister for agriculture. I thank as well the members for Hotham and Makin.

The legislation which underpins Australian agricultural exports is being amended to place it on a more sustainable footing. The bill package amends the Export Inspection and Meat Charges Collection Act 1985, the Export Inspection (Quantity Charge) Act 1985, the Export Inspection (Service Charge) Act 1985 and the Export Inspection (Establishment Registration Charges) Act 1985 to remedy technical defects in these acts and to allow more consistent and equitable cost-recovery for services provided to exporters by the department.

Inconsistent definitions in these acts have meant that the department has been unable to recover establishment registration and quantity charges for exporting certain products. If you receive a service, you should pay for it. Allowing some exporters a free ride is inequitable and not in the long-term interests of the agriculture sector as a whole. These amendments will address the inconsistencies identified and enable the department to recover around $1.9 million per annum in a manner which is equitable and consistent across the whole of the primary production export system.

The bill package also amends the Australian Meat and Live-stock Industry Act 1997 to enable the department to recover costs relating to services, such as issuing quota certificates for quotas that are administered by other countries. These amendments are largely supported by industry, who believe that costs for export services carried out by the department be appropriately and consistently recovered. Cost-recovery also plays a role in keeping government agencies accountable for their performance. If you pay for a service, you generally care more about the service that you are getting.

The bill package also corrects errors in the Export Control Act 1982 and the Imported Food Control Act 1992. The bills are an important piece of legislation which not only provide a fairer and more consistent approach to cost-recovery for services provided to exporters but will also provide departmental officers greater access to important documents and information in a timely manner, making it easier for them to perform the important role of protecting Australia's biosecurity—and we know how important that is. Maintaining a strong and reputable biosecurity system is vitally important if we are to protect Australia's unique animal and plant health status, as we have just heard from the member for Murray.

Australia is free from many of the pests and diseases found in other parts of the world, and this is a significant and selling point for our produce in overseas markets. That is why we are going ahead with the construction of a new post-entry quarantine facility at Mickleham in Melbourne. This new, modern facility will enhance our capacity to manage the risks posed by ever-increasing amounts of new plant and animal material coming into Australia. It will replace a range of outdated facilities that are no longer fit for purpose. I was very pleased to join the Minister for Agriculture, Barnaby Joyce, at the sod turning at that post-entry quarantine facility in Victoria recently.

Last night the House passed legislation to remove red tape around the use of agvet chemicals, which will implement an important election commitment to remove the reapproval and re-registration scheme introduced by Labor. The government is cutting red tape to the agricultural sector and investing in the biosecurity infrastructure, and with these amendments we are ensuring the future integrity and sustainability of the biosecurity system which helps keep Australian food, fibre and meat production safe and clean.

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

The question is that the amendment be agreed to.

Question negatived.

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

Bill read a second time.