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

I begin by expressing how bewildered I am by this Rural Research and Development Legislation Amendment Bill 2014. I would never suggest that $7 million is not a lot of money—it certainly is. Anyone listening to this broadcast or watching from the galleries would agree that $7 million is quite a lot of money. In the context of a Commonwealth budget of around $400 billion, it is a modest amount of money but to the research and development corporations being adversely affected by this initiative it certainly is a lot of money.

Our agriculture sector operates in a very competitive environment, particularly those who are focused on export markets. Having said that, our agricultural community has remained strong because we have a number of competitive advantages. Amongst them of course is our geographical location. We are close to the very large and growing markets of Asia. The skills, knowledge and productivity of our farmers certainly contribute to our competitive advantage in our region. So too does our clean, green and safe image. This is potentially our greatest competitive advantage as the growing middle classes of Asia, who have had food scares, are looking for Australian food that is environmentally clean and safe for their consumption.

Another advantage is the strength of our research and development system, which is the envy of the rest of the world. The current model is another product of the Hawke government and one of the greatest legacies of the Hawke government's agriculture minister the Hon. John Kerin, who I am very proud to say is today the patron of Labor's all-important country caucus. The co-funding model for research and development that John Kerin put in place is, as I said, the envy of the rest of the world. Under the model, our research and development corporations receive government funds on a dollar-for-dollar basis up to a cap based on the value of the sector's output. It is a system which empowers the people who really matter and who understand their commodity sector best, and they are, of course, those who come from the land, more often than not, to represent the interests of those who put them there.

There are 15 research and development corporations, and these are made up of nine industry-owned companies that provide R&D services and marketing for the benefit of their industries, and six research and development corporations that provide leadership and investment. The industry-owned companies are: the Australian Egg Corporation Ltd, the Australian Livestock Export Corporation Ltd, the Australian Meat Processor Corporation Ltd, Australian Pork Ltd, Australian Wool Innovation Ltd, Dairy Australia Ltd, Forest and Wood Products Australia Ltd, Horticulture Australia Ltd and Meat and Livestock Australia Ltd. In addition to those there are other industry bodies, including: Cotton Research and Development Corporation, Fisheries Research and Development Corporation, Grains Research and Development Corporation, Grape and Wine Research and Development Corporation, Rural Industries Research and Development Corporation and the Sugar Research and Development Corporation. These organisations are critical to our ongoing success in agriculture and, of course, critical to our international competitiveness.

What this bill does is begin the process of chipping away at that model. Some might say, at $7 million over the forward estimates, it is in a modest way, but that is not the case for those who are trying to administer the funds and do good things in this sector. What this bill does is force those research and development corporations to pay their own subscriptions to a range of international commodity organisations and regional fisheries management corporations. These payments are currently allocated by the Department of Agriculture. To put that slightly more in layman's terms: some of our RDCs are members of international organisations with whom they work on research and development. Fisheries is an obvious example to those listening, because obviously fish stocks do not recognise international borders, and international work on some of these issues can be very important. We also do so not just to benefit ourselves but to benefit other nation-states, particularly developing nations, who obviously benefit from the work we do in partnership with them. It is a very obvious statement to say that the best thing we can do for developing nations which face very significant challenges that we do not need to deal with in this lucky country is to empower them economically, and working with them in these areas of research and development is of course very, very important.

The other reason I am bewildered by this bill that is before the House today is that it represents another clear breach of what was said pre the election by this government. Prior to the election, this government rightly talked about the importance of research and development, and that was a matter in which there was absolute bipartisan support. In this increasingly complex world, a world that is driven by technology and innovation, Australia will have to stay ahead of the game in the area of research, development, innovation and/or, importantly, extension, to make sure innovation gets down to the farm, where it has the effect.

Since the election, things have changed. I acknowledge that the government has fulfilled, in part at least, its commitment in the budget to allocate an additional $100 million over the forward estimates as an additional contribution to the R&D effort of our farm sector, not only farming in the agricultural sense but also in fisheries and forestry. There was a lot of speculation prior to the election about how that money would be spent. I think it suited the government, at the time, to suggest that, rather than be provided money on a dollar-for-dollar basis, research and development corporations could expect to maybe get $1.05 or $1.10 or $1.20 for each dollar they contribute. It seems that is not to be the case but rather the government will be putting that money out on a competitive tender basis, inviting RDCs to compete for those additional funds. That, of course, will mean that some RDCs will enjoy more funding as a result of the additional allocations and other RDCs will not.

There has also been a suggestion that the bids that are most likely to be successful are those which are cross-sectoral—in other words, those for research which benefits more than one commodity sector. To again simplify that for any listener: it might be research into grass, which is, of course, important as a feedstock across a range of commodities. I think that is a pretty good example. I do not necessarily have any difficulty with that. In pure public policy terms, that might be the best way to spend the money. We shall wait and see what the proposition is when it is put forward, but it certainly is not consistent with the impression that the government gave or provided to the various commodity sectors prior to the election. That is just a minor point compared to what is the main point in demonstrating that this is another addition to the pre-election promises. This is not so much about RDC funding. The government said it would enhance the research and development effort but of course, since the election, while it has included in the budget some $100 million in the forward estimates, on the other side of the ledger it has dramatically cut research and development funding in the agricultural sector. Some $80 million has come out of the cooperative research centres; some $146 million has been cut from the CSIRO's work—something that will also cost significant jobs in the area; and some $11 million has been reduced from the annual appropriation for the RIRDC. What the government is effectively doing is giving out money with one hand and taking it back with the other. That is a clear breach of its election promises and, indeed, it is not in the spirit of what they told the sector prior to the election.

I will go back to the idea, in this bill, of forcing the RDCs to pay their own subscriptions to international organisations. It is a bit worse than that because, given the way the government has constructed this bill, the RDCs do not have an option to opt out of the investment organisations; they cannot make the decision that spending money on local research and development is more important than their contribution to international organisations because the government is not allowing them to. What the government is doing is paying the international organisations without any reference to, or consultation with, the RDCs. It is taking the subscription amount out of the allocation it makes to the research and development corporations. If that is not a breach of a pre-election promise, I do not know what is. It could not be any clearer than that: paying the money directly and then taking the money out of the RDCs' annual funding allocation. In other words, they are leaving the RDCs with no choice but to remain part of the international organisations. That is the decision of government, really, and if it is the government's conclusion that it is appropriate for the RDCs to be forced to be part of these organisations, then the government should be paying. It is no more complex than that.

That is why I began my contribution by expressing bewilderment that this bill is coming before the House. It is coming before the House just so the government can do this—so the government can say there was $7 million over the forward estimates and force the RDCs to remain in these organisations, while at the same time forcing them to pay for the membership of the organisations.

This is going to have a very real effect on these RDCs. It comes on top of the government's decision to force them to do something else as well—not all of them, but some of them. The government's other great idea is to force these RDCs to move to rural and regional areas. That all sounds fine on the face of it. We all love the idea of decentralisation—the idea of pushing government departments out into the regions in order to create economic activity and jobs there. But we also need to ask ourselves how often that has been successful. We have all been speaking fondly of Gough Whitlam this week. He made a big push for decentralisation. But, reluctant as I am to say it, that met with limited success. It can be successful, and Gough had some successes; but it is more likely to be successful when it is accompanied by a well-thought-out strategic plan. We do not have any well-thought-out strategic plan with respect to the decentralisation of our research and development corporations; rather, we have a thought bubble. I put it to the House that Minister Joyce just woke up one morning and decided he was going to force these RDCs out to certain parts of the country—not just the RDCs, I should point out, but also the APVMA, an agency critical to chemical regulation in this country. Minister Joyce, of course, intends to move them to Armidale in the minister's electorate. That is very handy indeed. But there is no strategic plan, or support, or transition plan for these research and development corporations. To make it worse, the minister has issued a decree that they shall meet all the costs of these moves themselves from within their own budget. I ask other members of the House: does that sound like another breach of an election promise? That sounds very much to me like another breach of an election promise. That is taking money out of the hands of our research and development corporations. It is a very clear breach of a pre-election commitment.

But it gets worse. Knowing the limited success of these moves in the past, it is inevitable that these organisations will lose people—experienced people, good people and people with expertise; people who are critical to the success of these organisations. That is really serious. And it gets yet worse again, because when you lose people from the public service you also face redundancy payments. Redundancy payments can run into millions of dollars in aggregate. It is clear, as a result of the minister's edict, that cost will be borne by the research and development corporations—another clear breach of an election commitment. There is another question, too, around the $100 million allocated in the budget—which we might never see. The money allocated in the current fiscal year—that is, the first $40 million, maybe less—is unlikely to be spent in this fiscal year. We shall see. But, given the time it will take to put the final construct into place for the delivery of this $100 million—the time it will take to go through a competitive tender process, assess those applications and finally allocate those funds—I think is unlikely to occur before June 30 next year. I will be very happy to be proven wrong. We shall wait and see. But, as we all know in this place, money not spent in any financial year is not likely to be rolled over to the next financial year. It will not be $100 million anymore; it will be somewhat less.

When you net it all out—with what has been taken out of the RIDC, the CRCs and the CSIRO and the money it is going to cost the RDCs to decentralise, for want of a better word; I am reluctant to use that word in this case but I will go with it. Of course the money coming out of the RDCs as a result of this bill—$100 million is looking pretty poor. Some of the costs are unknown but it could be that the net result is one of deficit for our research and development corporations. We shall wait and see. But it certainly will not be the $100 million that they were promised prior to the election.

This brings back the old 'mean and tricky' phrase that we heard so much about some years ago. The research development corporations and all those who rely upon them will not be appreciating it today and in fact I know they are not appreciating today the fact that they have been tricked into believing they were going to do much better under this government.

This is not justabout the RDCs and their staff and those who might be affected by these changes. This is about the future of Australian agriculture—and what a future Australian agriculture has with those emerging middle classes of the Asian region and a significant increase across the globe generally with a population growing to some nine billion people.

But it is an opportunity that will not just come to us. To fully capitalise on this opportunity, we will have to go to it. We will have to be better, stronger and more innovative. We will have to work harder than ever before, if we are to fully capitalise on it. The opportunity is there, and the extent of our success will largely be driven by the private sector—its investment decisions, its decisions in innovation and its strategic planning. But there will be a very important role for government in branding and marketing; in policies which make the most of our limited natural resources; in policies to open market opportunities in those countries I have been talking about; and of course in research and development.

The countries that will do best are not just those with geographical advantages, and some of those other competitive advantages I have been talking about. Those who will do best are those who are serious about being ahead of the game in research and development. That is something I thought we all understood and agreed on in this place. But this bill and the decision to decentralise RDCs—and the decisions to cut funding from CSIRO, from our CRCs and from our rural industries RDC—show that the government is not serious about it. They were not telling the truth prior to the election and they have let the agriculture sector down. I appeal very genuinely rethink this one. They will get absolute bipartisan support. The savings involved in the budget are not worth the cost or the adverse impact this will have on our RDCs in the immediate future. It is certainly not worth the impact it will have further down the track for research, development and extension in this country.

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

I thank the House for the opportunity to speak on this bill and support its second reading. This bill implements decisions taken in the budget that confront the realities of the budget task facing the Australian nation. It represents some hard decisions that have had to be taken.

So, while remaining utterly committed to research and development in the rural sector, we recognise that all sectors of the economy have to share in the budget repair task. In my view as an economist, the No. 1 priority for the Australian economy is to get the budget into a sustainable surplus over the medium to long run. Australia cannot go on borrowing $1 billion every single month just to pay the interest on the previous government's borrowings. This is wasted money that could otherwise be spent building roads, schools and hospitals; funding additional research and development; or paying for tax cuts for long-suffering taxpayers.

Australia has just run six straight years of record budget deficits. A further $123 billion in projected deficits and gross debt forecast to hit $667 billion was left for the new government to manage. This year's budget papers show that, even with the government's efforts to repair the budget, there will be four more deficits over the period 2014-15 to 2017-18. That would make 10 deficits in a row and would be unprecedented in our post-war history.

Over the whole 45 years of budget data published in budget paper No. 1, going back to 1970-71, the longest the budget has previously stayed in deficit is seven years in a row, through the extremely severe early-1990s recession. Extraordinarily, the last six budgets saw a faster increase in net debt than during that episode, both in dollar terms and as a percentage of GDP. This debt disaster problem occurred despite the benefit of a once-in-a-century mining boom and commodity prices that reached record high levels.

As the minister stated in his second reading speech:

Australia's rural industries are among the most innovative and productive in the world.

He noted:

The Australian government supports rural industries in a variety of ways.

For example:

To help primary producers increase their output and improve their profit margins, we support rural research and development. Much of this support is channeled through the 15 rural research and development corporations.

Part of the government's role is to be:

… a member of international commodity organisations and regional fisheries management organisations.

The minister further noted:

This bill implements a 2014 budget measure to change the way that the government pays for its membership to these organisations. The bill also reduces the red-tape burden currently imposed on some of the rural research and development corporations.

As the minister noted in his speech:

Australian research and development operates within a global system and must take into account international issues. The change to the legislation reflects this and also acknowledges that the ultimate beneficiaries of the activities of these international organisations are farmers, fishing industries and rural communities.

The bill amends three acts to allow the government to recover the cost of the memberships from the Commonwealth funding provided to relevant rural research and development corporations.

The government is of the view that:

This will provide a funding mechanism for memberships to these organisations that is sustainable in a time of increasing budget pressures.

The amendments will result in a saving to government of about $7 million over the next four years. This saving will be redirected by the government to help repair the budget.

And, as noted previously:

The bill also reduces red tape for some of the research and development corporations.

So, what do these RDCs do? As the Department of Agriculture's website states:

The RDCs invest in R&D and innovation to improve the productivity and delivery of high quality products in order to underpin the competitiveness and profitability of Australia's agricultural, fish and forestry industries.

…   …   …

The government-industry partnership model that supports the RDCs has been operating successfully for over 20 years and now provides more than $470 million in annual R&D expenditure, including around $247 million from industry and $218 million from government in matching contributions …

Based on legislated or industry funding agreements, the Australian Government agrees to collect industry levies for the purpose of R&D and/or marketing.

It then matches expenditure on R&D generally. The website continues:

The RDCs are a mix of statutory bodies and industry-owned companies (IOCs) … All undertake R&D activities and the IOCs also undertake marketing activities.

Currently, there are six statutory RDCs. They are in the areas of cotton, grains, fisheries, rural industries more generally, sugar and grape and wine research. Then the industry owned companies are the Australian Egg Corporation Limited, the Australian Livestock Export Corporation Limited, the Australian Meat Processor Corporation, Australian Pork Limited, Australian Wool Innovation Limited, Dairy Australia Limited, Forest and Wood Products Australia Limited, Horticulture Australia Limited and Meat and Livestock Australia.

It is worth mentioning that in 2011 the Productivity Commission did a review of rural R&D. It made a number of recommendations, particularly on future funding arrangements, many of which the then government rejected. However, I do want to note that the commission made an overall finding that:

It further stated:

This recommendation was not accepted, but the findings of the PC do give some analytical backing to the government's decision here to make the changes in the current bill.

The Department of Agriculture currently pays fees for Australian government membership to international commodity organisations and regional fisheries management organisations. These organisations work to improve the trading environment for agricultural products by funding and coordinating R&D, providing information and statistics, setting international standards and ensuring ongoing access to fisheries. As the bill's explanatory memorandum notes:

Australia's membership of these organisations benefits the industries concerned. The international commodity organisations deliver industry good-outcomes, such as trading standards, research on global issues, and market statistics. The regional fisheries management organisations facilitate the management of migratory stock and high seas stocks that are fished by various nations. They inform international fisheries management and stock assessments.

So, we are rationalising this area of spending. But let us not lose sight of the bigger picture on research and development. I am here referring to the significant microeconomic reform in the form of higher education reform contained in the May budget.

I believe that it is both necessary and vital for the Australian economy. As I have said before, we all know that a first-class higher education system is a necessary condition to maintain a first-world economy. It is the difference between having a wealthy and an also-ran country. Australia is a first-rank economy and one of the most developed in the world. That is not a matter of luck. Many countries have abundant natural resources but have poor and weak economies because they do not possess the intellectual firepower to utilise those natural blessings. As John Howard often said, 'Economic reform is like participating in a running race with an ever-receding finish line.'

The reform task can never end if Australia is to stay in the front rank of nations. Specifically in terms of R&D, the higher education reforms include much to be proud of. We will secure Australia's place at the forefront of research, with $150 million in 2015-16 for the National Collaborative Research Infrastructure Strategy. This will ensure that we secure the benefits of the $2.5 billion investment in the state-of-the-art research infrastructure since the strategy was created by the Howard government in 2004. There will also be $139.5 million to deliver 100 new four-year research positions per year under the Future Fellowships scheme. This will be delivered through the Australian Research Council.

A few weeks ago, the Minister for Education announced 150 fellowships awarded to outstanding researchers. As he noted, these researchers are working on a broad range of research that will deliver benefits to our nation and our region. This includes improving Australian agriculture and food security and preventing future water scarcity. In addition, there is $26 million to accelerate research in dementia, $42 million to support new research in tropical disease and $24 million to support the Antarctic Gateway Partnership. This is a fantastic boost to research and will complement the $20 billion Medical Research Future Fund that the government is also setting up. Further, the Prime Minister recently launched the Industry Innovation and Competitiveness Agenda. It included $188.5 million to fund industry growth centres in five key sectors, one of which is food and agribusiness. This adds to the current $9.2 billion annual Commonwealth investment in research.

Finally, may I conclude my speech by acknowledging the recent win by a New South Wales grazier, Pip Job, of the 2014 Rural Industries Research and Development Corporation Rural Women's Award. I also congratulate runner-up, Jackie Jarvis, of Western Australia. The RIRDC Rural Women's Award is a leading awards program that recognises women in rural communities. As the Minister for Agriculture's media release informs us:

Ms Job has instigated significant changes to Landcare policy and recognises the impact rural life can have on farming families. This has resulted in the 'Women in the Landscape' program which is being rolled out nationally.

So congratulations to this year's winner, Pip. I wish her and her colleagues all the best in their future endeavours. In conclusion, I note that the government remains strongly committed to rural research and development. I commend the bill to the House.

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

I join the previous speaker in congratulating the women who won the rural leadership awards just last month—in particular, Jackie Jarvis, from Western Australia, who was runner-up to a very worthy winner in Pip Job. Jackie's work centred around building good jobs and good support structures for refugees, bringing people into our regional and rural communities to work, to have good lives and to enjoy the great environment and the strong communities of regional and provincial Australia, in this case rural and provincial Western Australia. Jackie's efforts were acknowledged by her peers and acknowledged by RIRDC through that wonderful evening.

My sister-in-law, Shelley Birch, who farms at Karoo in the northern wheat belt in Western Australia, was a past Western Australian winner from the early 2000s, demonstrating the importance of a vibrant rural sector, a broad understanding of what research actually means and an engaging culture of those things that we can do to lift the productivity of our rural sector in a meaningful and measurable way. The Rural Industries Research and Development Corporation is a great organisation, and it is a great evening that we all have here once a year to acknowledge the women from our regional, farming and primary industries communities for their simply outstanding effort.

The Rural Research and Development Legislation Amendment Bill 2014 is not an outstanding effort. This bill is a sneaky attempt to make a saving where no saving should exist. It is an attempt to take, as a saving, the fees paid by RDCs to international organisations as part of their international affiliations. I mentioned my family connections to the Western Australian grain belt. The Western Australian grain belt is an economic pillar not only of Western Australia but also of our nation. We produce, in Western Australia, our nation's export grain crop. That export grain crop frequently runs in the order of 12 million to 18 million tonnes or maybe even more per year. It earns us export income and generates good jobs. The Western Australian grain crop is mostly exported through the Kwinana terminal in my electorate, through CBH. But, importantly, our export grain crop is generated through, largely, family businesses run through the grain belt of Western Australia.

The Western Australian grain belt is a unique proposition. One hundred and twenty years ago, farmers attempting to grow crops in the grain belt of Western Australia found themselves unable to produce sustainable crops in the weak and ancient soils of Western Australia. They found themselves north of Geraldton, at Champion Bay, producing crops that were so weak and so feeble that communities faced malnutrition and starvation. The fix for the Western Australian grain belt was the discovery of the reason for the feeble soil, which was a lack of trace elements. That was done through science and the application of good research to understand the reasons why our soils of Western Australia were not capable of producing bountiful crops. It seemed, from the weather pattern and from the nature of the vegetation, that the grain belt of Western Australia should have been productive land. But the reality for our farmers trying to open up the hinterland around Geraldton was that it was simply impossible to grow a sustainable crop.

The science that understood the role that copper and other trace elements play in renovating those large tracts of land in Western Australia was simply second to none. The work that was done to apply superphosphate to the weak soils of Western Australia was simply second none. And, of course, the ability to apply those trace elements and the ability to apply superphosphate occurred in Western Australia at almost the same time as the application of the internal combustion engine to provide motor force and tractor capacity in Western Australia to allow the development not just of a science based grain belt but also a capital based grain belt. It was investment in substantial tractor capacity motor force that allowed the grain belt to be opened in Western Australia from the 1920s.

My wife's family moved to Doodlakine in the 1930s to open land in those circumstances. As my father-in-law, former Senator Peter Walsh, is fond of saying, the land which they opened at Doodlakine in the 1920s and 1930s has always been productive and returned the cost of that crop. Therein you have the great synergy between science, research and a productive rural sector.

As we speak here today, in the grain belt of Western Australia from Esperance through to Geraldton, crops are being taken off. My family at Coorow began the harvesting process three weeks ago, and the harvest is going pretty well. It is not going so well at Esperance where very bad weather conditions struck a number of property owners just north of Esperance, and the season does not look as if it is going to be good for them. All we can do from this place is offer our best wishes and acknowledge the importance of our rural industries and communities not just to Western Australia but to the nation.

That brings me to the importance of RDCs. RDCs are about establishing communities of knowledge in some areas where international funding is paid to international sister organisations. It is also about good science and being practically capable of implementing measures that we want to have in place, for instance, in managing a fishery. Fish tend not to respect national borders. Fish tend to swim wherever they choose and so therefore having RDCs which link with international organisations tends to be good public policy but also good policy in fisheries management. Good policy in fisheries management is about sustainability: it is very much about productivity and it is absolutely about ensuring a sustainable future.

When we look at the decision of the government to save a paltry $7 million, we would have to conclude that this is not simply unnecessary policy, it is not properly balanced policy. We are still in search of the new $100 million that the government said it would invest in RDCs. We are still in search of what that means, because we are confronted by the surprise that all we have to debate and consider here today are the cuts to RDCs—cuts to those very organisations that work in a collaborative and cooperative way with our regional communities; our scientists who help manage good public policy in agriculture industries; families; people like Pip and Jackie Jarvis—people whose family concern and interest in developing their good businesses and their strong regional communities had always until now been partnered with a deeply bipartisan approach to RDCs.

RDCs have always been a realistic and valuable part of our public policy infrastructure in primary industries for over a quarter of a century. They have grown in their influence from being specifically sectoral to on many occasions international, and are accountable to their membership organisations, transparent to government, supported by communities and celebrated by this parliament.

When we saw a $7 million saving over four years, many of us thought: 'I can't believe that that can be true. I cant' believe that you would attempt to extract a saving from such lean organisations'—organisations that are not simply run on the smell of an oily rag but on the rumour of the smell of on oily rag. The families and the communities that support our RDCs are genuinely frugal. They do not sign up to international organisations to have fun; they do it in the name of good research, good partnership, good science and good outcomes. Because good science is about regional solutions, and that is never more obvious than in the context of fisheries research and management.

We found ourselves genuinely struggling to understand: why this saving? We find ourselves incapable of understanding why—when RDCs bring together industry and researchers to establish research and development strategic directions and fund projects that provide industry with innovation and productivity tools—you would want to wind that back, especially in global marketplaces; especially when the farming family to which I belong is in competition every day of every week with potential grain suppliers out of the old Soviet Union, North America and South America. They need to be kept up to the game in whichever way they possibly can. They need not just the dollar support they receive from the Australian federal government but the emotional support.

I find it distasteful, unfortunate and unnecessary that, in the weeks following that terrific event in Parliament House where we acknowledged the winners of our RDC programs and I was simply overjoyed to see how well Jackie Jarvis had done—and the great project that Pip had brought and which was the national winner—we would not acknowledge that we see an efficient spend of public money in these organisations. We see an effective spend of public money. We see networks that support Australian farming families. We see international networks that support the productivity agenda that is critically important to key primary industries, in particular fisheries and fisheries management. We also find ourselves stepping back inside Australia and not embracing the world in which our agricultural and horticultural projects and produce need to compete. That is important, because the future of farming is the future of our regional communities. In Western Australia, Merredin, Geraldton, Mukinbudin, Esperance and Albany are all communities that live and go from strength to strength on the strength of our agricultural opportunities and fortunes. They need to know that governments will stand by them.

Not one of the people who I have spoken to about this bill was aware that the government had cuts in mind. Not one of them had in mind that the cuts would be to such an infinitesimal area of the operations of RDCs; yet it is such a very important area of the operation of RDCs. I find myself in opposition to this bill not simply because it makes no sense but also because I find myself surprisingly emotionally in opposition to this bill. That is because I know the great value that comes to our farming and our agricultural communities from good dollars that are spent effectively in the interests of our farming and regional communities. That is something that is so important and had never been questioned before through successive budgets in 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1997 and 1998—all the way through to today. We had never seen this sort of initiative from a federal government. I ask members of the government to please reassess why you are doing it and change your views. (Time expired)

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

I rise to speak on the Research and Development Legislation Amendment Bill 2014. I cannot commence without commenting on the previous speaker and, indeed, the speech before from the shadow minister. While I found the first part of member for Brand's speech quite interesting, as I always do, it did really run off the reservation in the last few minutes. For the first six years that I had this place in parliament, as a member of a rural seat, I was knocking on the door of successive ministers for agriculture in the Labor government. The frustration that I felt from the disengagement of the previous Labor government of the agriculture sector was palatable.

I saw the frustration of my constituents who are involved in agriculture as they watched the previous government disband drought policy and destroy the live cattle trade. They saw that the only way of obtaining funds from the federal Labor government was if it was something through their ideology. That is, if it was anything to do with climate change. That might have got a look in from the Minister for Agriculture. But other than that, they were not interested. Indeed, we speak about the last government possibly being the worst government in Australia's history. Certainly, the last couple of agricultural ministers have been very, very ordinary and invisible in many cases. While the shadow minister now is making a valiant effort to make a lot of noise about agriculture, I fear that he is making up for six years of lost ground and really would not have any support within his party.

Australian farmers are amongst the most competitive and innovative in the world. The competitiveness is drawn from a number of factors, but a key contributor to this competitiveness is the annual continual innovation in the sector brought by research and development. Research and development is important, as it allows primary producers to produce more with less to improve the operational efficiency. This contributes to greater profits and a better return for farm-gate producers. As I stand here today, in the northern part of New South Wales and in the electorate of Parkes, farmers harvesting crops on one of the lowest rainfall years on record. They are growing crops that their fathers or grandfathers would not have been able to grow; that is because of innovation in research and because of the advent of zero till, spraying crop weeds out, conserving moisture, innovation in machinery with disc planters and the like has meant that farmers are harvesting viable crops, whereas in previous years they would not have.

Agricultural research and development has always provided to dividends for Australian farmers in the broader economy. One only has to look back on examples such as William Farrer's rust-proof wheat, which allowed the development and expansion of the Australian wheat industry, or the continual development of quality merino wool, which has allowed for the development of a high-quality, high-premium industry. It has been developments such as these that have put Australian agriculture in such a competitive place. Continual investment is needed in order to remain in this place.

Investment in agricultural research and development is also important due to its value for money. On average, farmers generate a $12 return for every dollar invested over a 10 year period. This means that for any money that is spent on research and development the government and public is guaranteed a return on this investment almost immediately. It is for this reason that the government investment provides resources for this critical sector. The Australian government invests extensively in research and development. This financial year alone, $700 million will be spent on this sector.

There has been a lot of talk today about the $7 million of cuts that have had to be made. Keep that in context. There is $700 million that will be spent in this sector. The reason that those cuts have had to be made is because they have had to be made across the board in every sector. Certainly, no minister wants to have to find savings in their portfolio, but the Minister for Agriculture has done his duty—as have other ministers—to make these savings while having the most minimal effect as possible. I have got to say, the farming sector over the last six or seven years has watched billions of dollars squandered down at their local schools for classrooms or halls that were not needed and has watched pink batts put in houses in an inefficient manner. One of the great frustrations for the people in my electorate has been watching the Labor Party squander taxpayers' funds. The Australian people know that without a balanced budget it is not possible to continue to provide the necessary support to industry.

The rural research and development corporations provide mechanisms for farmers and fishers to invest collectively in services that will contribute positively back to their industry and their operations. Through the collection of statutory levies, which are matched in funding by the federal government, primary producers are encouraged to invest in their own industry. This industry self-investment shows the positive culture of innovation in Australian farming. It is this culture that has contributed to Australian agriculture's international success and it is through continuing government investment in this sector that this culture can be maintained and expanded.

The government has also committed an extra $100 million in funding, starting next year, for these rural research and development corporations. This is delivering on the coalition's 2013 election commitment to improve the level of funding for this important sector. This funding boost will be directed by the rural research and development corporations towards projects that increase the profitability and productivity of primary industries, increase the value of primary products, strengthen the ability of primary producers to adapt to opportunities and threats, strengthen on-farm adoption and improve information flows. These projects are needed to further contribute to farm productivity and profitability. This funding could be used to address, for example, wild animal control or better mechanisms to control wild blackberries and other pests. Such projects are crucial in an increasingly competitive export environment where innovation is needed to diversify Australian agricultural products from those of their foreign competitors. It is through innovation that markets are created, it is through innovation that profits are created and it is through innovation that returns at the farm gate are increased.

This bill also reduces the level of red tape imposed on the research and development sector. It standardises the reporting requirements for the research and development corporations. For instance, the Australian Meat and Live-stock Industry Act is amended to remove the tabling requirement for the funding agreement, and variations to the funding agreement, between the Commonwealth and the Australian Livestock Export Corporation, as well as for the annual report and the compliance report of the Australian Livestock Export Corporation. This reduces the costs associated with compliance. The affected research and development corporations will be able to invest these savings back into research. It will allow the affected rural research and development corporations to shift their organisational focus away from overbearing government compliance and back towards research. In order to meet the future needs and wants of Australian agricultural markets, the time of these research organisations must be efficiently and effectively focused on research. This can be done while preserving the quality of oversight and the accountability of the research and development sector to primary producers and to the public in general.

This bill eliminates the requirement for the rural research and development corporations to hold an annual meeting. There are already a number of other channels through which coordination can be and is performed, so an annual meeting is not needed. The meeting only involves five of the 15 rural research and development corporations and its removal will not affect coordination outcomes. This change will also reduce the organisational time directed towards the meeting, allowing research organisations to refocus their energy on research. It is important to the future effectiveness of these organisations and the future competitiveness of Australian agriculture that as much organisational energy as possible is focused on research and innovation.

There has been a lot of negativity from the opposition about the cuts in the bill. But we now have a government that is focused on agriculture. We now have a government that recognises agriculture as one of the pillars of our economy. The Minister for Agriculture is developing a white paper which will give us, for the first time in years, a clear direction for Australian agriculture. Over 700 people have contributed to the process so far, and that consultation is ongoing. We now have a government that understands that the future of this country, in the long term, is reliant on the viability of the agriculture sector. It will not do our agriculture sector or any other sector any good if we ignore our financial responsibilities—our responsibility, as a government, to get the budget back in order.

The great frustration, not only with the debate on this bill but with many debates in this place over the last 12 months, is the great disconnect on that side of the House. They do not seem to believe there is any need to show any financial responsibility. There seems to be no understanding—I suppose it comes from their lack of experience in the real world of business—that things have to be paid for. This bill goes a small way towards addressing that problem and I support it. Research is vitally important.

I will just touch on the fact that the shadow minister had a go at the government about decentralisation, saying what a bad thing it was to remove public servants from the cities and put them in regional areas. The shadow minister lives at Maitland. That is the outer Barcoo as far as the Labor Party is concerned. The idea that anything of any significance could go on outside the capital cities is foreign to the Labor Party. Decentralisation is a very valid idea and the minister is certainly on the right track. I am horrified at the hypocrisy of the Labor Party trying to rewrite the last six years of Labor mismanagement. This bill has my full support.

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

I acknowledge my colleagues who have already spoken in this debate and I give them my total support for decentralisation. I look forward to policies that support Albury-Wodonga in particular. It gives me great pleasure to speak to the Rural Research and Development Legislation Amendment Bill. I would like to cover off three points. The first is the recommendations made by the National Farmers Federation, the second is the importance of consultation, and the third is my congratulations to the Minister for Agriculture on his green paper. I will discuss some of the topics he has raised in that, in particular the importance of education. In summary, the principal of government setting a major precedent of change for the RDC model without consulting with industry is very concerning, particularly given that the RDC model rests on cooperation and partnership with industry. Why change a major system like this that has operated so well for so long just for $7 million, and why provoke the wrath of an industry by not consulting properly? I hope that when we move through to discussion and debate about the white paper we can take seriously the comments that industry has made.

The National Farmers Federation made a number of recommendations in their submission to the inquiry by the Senate Standing Committee on Regional and Rural Affairs and Transport. They made two recommendations on the bill that I would like to bring to the attention of the House. One was about the pain of international subscriptions on behalf of some of the RDCs. The NFF recommends that the committee consider whether the funding of membership to international intergovernment commodity organisations requires legislative change. It is their belief that it does not. The NFF also recommends that the committee consider whether the government is making long-term structural changes to the RDC model without adequate consideration of the consequences or adequate industry consultation. They are two very valid points that I hope the government representative on the front bench, the member for Gippsland, will answer when he replies to the debate.

The second recommendation that the NFF makes—I think it has an enormous amount of value—is that even if we agree with these changes and we put them in place, they do not have to be there forever. The NFF recommends that the bill be amended with a sunset clause of five years, when the obligation of funding of international intergovernment commodity organisations shifts back to the Australian government. Again I think there is a lot of merit in that and I ask the parliamentary secretary to comment on it. They are two things that the NFF are saying need to be done and I will be keen to hear support from my colleagues opposite on that.

The next issue I would like to address is consultation with industry, and how important it is to me, as a member representing a rural electorate, that the government have deep and extensive consultation with industry—and not only consults but also takes on board what industry has to say. I congratulate the minister for the agricultural competitiveness green paper and the opportunity to consult with industry over the next couple of months on some of the major themes in the paper. The minister has done a fantastic job—giving it time, giving it resources and putting in place skilled public servants who can pull such a really good paper together. That is exactly the way we should be consulting with industry. It builds trust but, much more importantly, it gets us really good results in the long-term.

There are a couple of topics in this paper that I bring to the attention of the House. One is education and training. We have heard right across the country that we can do all we like at one level with R&D, but if we do not have a solid base of education and training the whole system will shift in ways that we do not want to see. Education and training is fundamentally important to the long-term sustainability of a rural research and development cooperation program. University education is particularly important. As members of this House know, the Minister for Education has plans to change the way education is funded in Australia. While that might work for our city cousins, I have great doubts that it is going to work for our agricultural sector.

Jim Pratley, from Charles Sturt University, has done studies which show that we already have market failure in rural and regional Australia, particularly in regard to training agricultural economists and all the specialist people that we need with a university education. In 2012, he indicated there was a need for 4,000 professionally qualified agricultural research people in Australia, and we were able to produce only 800. So, we absolutely need to change the situation. But we need to change it so we can meet the real need in rural and regional Australia for qualified scientists and other research people, and we have to hold them in rural and regional Australia so they can contribute to the whole process of building a competitive agricultural sector. We need those qualified, skilled, tertiary educated people to do the work that has to be done. I am a great supporter of what I read in this paper about building pathways between schools, TAFEs and universities so that we have a system in which people can move up to do their PhDs and then hopefully live and work in rural Australia when they have finished their PhD. I bring to the attention of the House how important that consultation is and I emphasise the words that our community have been saying and urge that we hold onto these thoughts at the next stage of this paper when it becomes a white paper—we need to put funds, personnel and resources into particularly tertiary education, particularly in rural and regional Australia, and particularly into agriculture. It is probably the most important thing we can do.

Another part of this paper that has great merit concerns the need to establish a new body, or task existing research bodies, to coordinate cross-sector research. One of the important things that need to happen in rural and regional Australia is that we need to talk to each other across RDCs. A worrying part of this legislation before the House is that the RDCs do not have to report to parliament and they do not have to meet on an annual basis.

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

Order! It being 1.30 pm the debate is interrupted in accordance with standing order 43.