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

The dairy industry has asked the government to remove the statutory requirement to hold a levy related poll of producers each five years. The Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 gives the sector what it has asked for, and the opposition supports the bill. The purpose of the poll is to secure the views of levy payers in the industry about the adequacy of the levy from time to time. The new arrangement will require a poll only when the industry is proposing a levy increase. There is a safeguard: if 15 per cent of producers get together, they can request a poll in the event that they disagree with the decision not to conduct one.

The key objective is obvious: polls are very cumbersome and quite expensive. The dairy sector estimates that every five years the poll costs them around $750,000. That is $750,000 that could be going back to research and development rather than on the conduct of a poll which has no real purpose in the event that the industry is not looking for a variation in the levy.

The key players in this equation are the industry representative body, Australian Dairy Farmers, and the industry research and development corporation, known as Dairy Australia. Industry R&D and marketing are the reasons levy moneys are raised in the case of industry owned corporations. R&D plays an important role in enhancing the productivity and competitiveness of Australia's agriculture, fisheries and forestry sectors. It can provide various other benefits, including better and lower priced food for consumers and improved environmental and animal welfare outcomes.

Australia's spend on agricultural R&D is around $1.5 billion annually. Three-quarters of that money comes from Australian Commonwealth and state governments. The public funding is delivered through an array of general and sector-specific programs, with the research in turn conducted by a mix of government and private research providers. A sizeable part of the Australian government's R&D efforts is provided to the rural research and development corporations—the so-called RDCs—and they have been the subject of some public debate in recent months. These corporations commission rural research on behalf of primary producers, some processors and the government. Producers typically contribute to the cost of this research primarily through statutory and voluntary levies, with most of the government's contribution provided on a matching dollar-for-dollar basis up to a value of industry input.

This is a bill which is very important to the dairy sector. I am advised that the dairy sector has consulted very broadly with levy payers, and levy payers are comfortable with this new arrangement. On that basis, the opposition also is comfortable with the arrangement. We want to ensure that the sector is able to work as efficiently and as profitably as possible. Research is a very important component of that, particularly on the productivity front, and we are happy to do what we can from opposition to allow them to do so.

Levies are never without controversy. Levy payers—producers, growers and farmers generally—are often key to ensuring that their levy money is well spent. They do not always believe that it is, but in my almost three years in this portfolio I have been able to come to the conclusion that, while things are not always perfect, our RDCs do a good job of making sure that the money is well targeted, spent efficiently and leads primarily to enhanced productivity in the sector.

There is no shortage of literature making the direct link between investment in research and development and, indeed, extension and productivity in the agriculture sector. That is why it is important that we continue not only to invest heavily and wisely but also to invest as efficiently as possible.

The industry broadly was very pleased that prior to the election the then opposition and now Turnbull government promised to spend an additional $100 million in R&D over a four-year period. But the industry was then disappointed when after the election they cut at least $100 million and probably more than that from agriculture research and development in other areas. I include in that cuts to CSIRO and cuts particularly in forestry, but there were cuts across the board in agriculture. There were cuts to cooperative research centres and, very sadly, a significant cut to the Rural Industries Research and Development Corporation.

On the other side of the ledger, in terms of the additional $100 million promised, the government almost at the end of its term, if we believe election speculation, has spent some $26 million. So more than $100 million has been taken out of R&D in the range of areas that I have noted and some $26 million of the $100 million in additional funding promised has gone back into research and development corporations. I note that we had one round of the government's new R&D scheme which was supposed to be funded by the $100 million. This is where the $26 million comes in. But the second round closed on 1 December 2015, and here we are almost in March 2016 and no information at all has been provided as to where the second round of funding will be spent, who might be successful and therefore what agricultural R&D pursuits might benefit from the money under round 2.

By any measure, this government's pre-election promise on research and development funding has been broken. By any measure, that promise has been broken at a time when productivity in the agriculture sector in Australia has, at best, plateaued and probably is falling. This is at a time when we are facing enormous structural issues, including the ageing of our workforce. This is at a time when a variable climate is putting new and additional pressure on our natural resource base—water and soils, in particular. This is at a time when there are a number of issues facing the industry. The ageing of the workforce is an example. We should be investing more money in research and development, not less money.

There are a couple of other things floating around this issue that are of great concern to the opposition. First of all is Minister Joyce's bullying of research and development corporations. He is bullying them into moving from Canberra to locations they do not want to be in. One of the key ingredients in a successful research and development corporation is quality staff. At the moment the staff of the Grains RDC, the Fisheries RDC and the others that Deputy Prime Minister Joyce is forcing to move are based in Canberra. My prediction is that the overall majority of them will continue to stay and live in Canberra as their home and to send their children to Canberra schools.

This is a big mistake. I remind the House that research and development corporations, despite their names, do not do research. Research and development corporations collect research moneys through the levies we are talking about this morning and they then contract out the research to various organisations—and they might be universities, they might be governments and they might be CRCs or whatever. But they do not do research themselves. So for Minister Joyce to say that it is important that we put these RDCs close to the growers or producers because that is who they need to talk to is just rubbish. It is just rubbish!

But there is another very important point: it is important, if we are going to spend R&D money most efficiently and effectively, to have competitive tension in the market. So when an RDC takes levy-payers' money and farms it out—excuse the pun—to a researcher of some sort it is basically putting something out to tender. The RDC is basically putting something out to tender. Various universities might be interested in doing the research required, and so might a private sector organisation, a government instrumentality or body—a department, even—be interested in doing the research. This competitive tension amongst researchers gives the RDC the opportunity to secure the best deal on behalf of the levy payer.

Now, Minister Joyce says, for example, 'No—the RDCs should be up next to UNE,' in his electorate. 'They do great work in agriculture,' he says—and they do. UNE does do extensive work in agriculture, and good work in agriculture. But cosying the RDC up to one particular university—

Ms King interjecting—

Yes—lots of universities. The member for Ballarat has just noted that her local university does good work too. But cosying the RDCs up to one university does not create the competitive tension we require for this project. The member for Ballarat's university might be interested in doing the same research work that Minister Joyce now wants to give exclusively to a university in Wagga, for example, or, indeed, the university at Ballarat. This is not the way to conduct public policy. This is Minister Joyce, again, always putting his own political ambition ahead of good public policy. This decentralisation program, as he sells it, is about him and the National Party, not about good R&D for agriculture. It is going to dismantle these RDCs. These RDCs do not want to move.

It is interesting: there are two categories of research and development corporations—some are statutory bodies, over which the minister has substantial control, and some are industry-owned bodies, over which he does not have such control. Minister Joyce is forcing the statutory RDCs out of Canberra for no good public policy purpose. But I find it interesting: he has not had any consultation with the industry-owned corporations. He does not have the same power to force the industry-owned corporations out of the capital cities, but if he were so intent on this public policy prescription and if he were so sure that pushing RDCs out of our capital cities was going to provide a better outcome for the agriculture sector, why has he not been talking to the industry-owned corporations? This is an inconsistency. It makes no sense—there is no rationale here. If he is so sure that this is a good idea, why is he only using his extensive powers to bully the statutory corporations out of Canberra? It makes no sense.

Still on these issues: the government also promised that it would provide $13.8 million to somehow encourage and help farmers, producers and growers to form cooperatives. Minister Joyce, at a time when CBH—the most notable operative in this country—is talking about demutualising and forming itself into a corporate entity, is spending $13.8 million of taxpayer's money to tell farmers what sort of corporate structure they should have. If that is good public policy then I have been in the wrong place for 20 years. Farmers, growers and producers—and it has been nice to be with Mr Billson all that time!—will make their own astute decisions about their structure: sole trader, partnership, company or cooperative, or whatever they like. They will look at the various tax advantages, possibly—what suits them best. They do not need Minister Joyce to provide $13 million of taxpayers' money to help them work that out in this 21st century, surely?

But it gets worse than that, because Minister Joyce took $200,000 of that $13.8 million and he gave it to the Rural Industries RDC and said: 'Give us the scoping work. Tell us how we might spend that $13.8 million.' I have no problem with that, because I have no idea how he is going to spend $13.8 million instructing or teaching farmers how to become cooperatives, so I at least welcome the fact that he decided to spend $200,000 of it asking RIRDC to tell him how he might spend it. So RIRDC did the work. They did their scoping study. They delivered that to the minister.

But the minister was not satisfied with that. He decided he would appoint a task force. He would ask the member for Page to go out and find out how he might spend $13.8 million. The member for Page went out and consulted with the sectors, allegedly—probably most of the consultation took place in Page, which of course is a razor-edge marginal seat for the government. What we want to know now is what Mr Hogan, the member for Page, learned and what he delivered as a result of his consultation.

So we asked this question in estimates. We asked the secretary of the department, 'Can we have Mr Hogan's work, because this $13.8 million is sitting there and we want to know how it's going to be spent.' The department secretary, with greatest respect, said: 'Well, we couldn't release that, because we'd have to ask Mr Hogan. You know, it's his work. It might be considered a private document.' So we let that matter pass and moved on to the next subject. Five hours at least later, we were advised by the officials that they had been unable to find Mr Hogan in this building. For five hours or more, they could not find the member for Page in this 21st century, with all of our technology, in this closed building. So we are still trying to find out—

An honourable member: Couldn't they just ring him?

Well, I thought they could have just called him. So it is suggested that, if I just called the member for Page, he would have handed it over to me. I think the point has been missed. The government did not want to hand over Mr Hogan's report, and I suspect the reason the government do not want to hand over Mr Hogan's report is that it is now the government's intention to spend the $13 million in the electorate of Page. That is my advice: it is the government's intention to use the $13-plus million they allocated to tell farmers what corporate structure they should embrace in the electorate of the leader of the task force, Mr Hogan, the member for Page. No wonder they could not find Mr Hogan in the building on estimates night.

Mr Pitt interjecting—

The member for Hinkler is yapping at the table, rejecting this proposition, expressing mirth at the idea that they could not find Mr Hogan in the building. Well, I am expressing mirth too. I cannot believe they could not find Mr Hogan in the building. But this can be easily fixed now. The minister or the member for Hinkler, his assistant minister, can close this debate by tabling Mr Hogan's report. The assistant minister is nodding, so I am assuming that is an affirmative. The assistant minister will table Mr Hogan's task force report when he closes on this debate, and we look forward to reading it. We look forward to finding out where the $13 million is going to be spent and whether or not it is consistent with the recommendations of the Rural Industries RDC.

Mr Quinlivan, the departmental secretary, or one of his officials—I will qualify that; it may have been one of his officials—conceded in Senate estimates that there had been a departure from the white paper program. 'Departure' might not have been the word, but it was something very similar. So there was a concession in Senate estimates that the $13.8 million as set out in the white paper is not going to be spent for the purposes expressed in the white paper. So I invite the assistant minister, in addition to tabling the member for Page's report, to tell us what that means. If that $13.8 million is not going to be spent as set out in the white paper, how will it be spent? That is a very important question.

On the issue of levies and how they are spent, I made the point that there is a difference between statutory research and development corporations and industry owned corporations. The difference, in addition to the minister's capacity to direct and appoint the chair and all of that, is that statutory RDCs spend money on R&D only, but industry owned corporations have the brief to also spend money, if they like, on marketing. We have seen some of those big campaigns—on beef, for example.

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

Lamb.

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

Yes, that is another example. Anyone else?

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

Eggs.

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

Pork.

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

I stand with the grain growers who have expressed concern about the current activities of the Grains Research Development Corporation. I have the highest regard for their chair. In fact I appointed Richard Clark as chair of the Grains RDC, so he enjoys my confidence, as does the team there. It is of course one of the RDCs being bullied out of Canberra, which will cost them a lot of money and, in my view, severely undermine their effectiveness.

The Grains RDC is spending a lot of money on marketing. They are sponsoring the Global Food Forum; they are running, as a complement to that, ads in The Australian; and they are doing a roadshow, which is headed by Alan Jones. I have heard the ads on 2GB: 'Come to the roadshow—Alan Jones—fantastic. Come along and hear about the bright future of the grains industry.' I trust and hope that the grains industry does have a bright future. I just do not know whom they are telling. I have had a look at some of the panellists. They are great people—big players in the sector. But I do not know how levy payers are benefiting from these Alan Jones led roadshows.

These are serious questions for this parliament and for levy payers, but Minister Joyce will not ask the question. I have asked him to ask the question. I have publicly required him to ask the Grains RDC, a statutory body, why they are spending this money on Alan Jones and this roadshow—when they do not have a marketing remit from either this parliament or this government. I invite the assistant minister to address that issue as well. Surely he has been briefed? Surely he has been briefed about one of our statutory RDCs spending a lot of levy payer money on newspaper ads, sponsorships and Alan Jones led roadshows?

I have not been invited to the roadshow, by the way. That is not the reason I am offended by it of course, but you would have thought that, if the government were interested in working on a bipartisan basis, I might have been invited—I suspect Barnaby Joyce may have been. Surely these roadshows are not going to include Minister Joyce preaching the gospel of the National Party alongside Alan Jones? I wonder what the assistant minister thinks about that prospect? Maybe he has been invited to speak at some of the roadshows too. It is a pretty clever way to produce some cheap campaigning—have the GRDC hold a roadshow with Alan and just turn up! It will be interesting to see whether Minister Joyce does turn up. I might have just put the kibosh on it—that is the risk in making this contribution. It might have been better to just let it go and then see what happened. But surely the assistant minister will have something to say about that when he closes this debate? It is a great shame the Deputy Prime Minister is not closing the debate, by the way, but I will be very welcoming of the assistant minister's contribution.

Still on levies: recently the minister announced that he would be supporting an industry request to place levies on chestnuts and sweet potatoes. That is a good thing. What is happening there of course is that the growers and the producers themselves are saying, 'We would like the opportunity to have a government matched levy. We will use that for R&D and possibly marketing purposes.' That is a good thing and we support that. The interesting thing is that at the same time the minister was considering levies for chestnuts and sweet potatoes he was considering a levy for thoroughbred breeders. I proudly represent the horse capital of the nation, part of which, by the way, is going into Minister Joyce's electorate as a result of the redistribution in New South Wales. Sadly, Minister Joyce declined the request of the thoroughbred breeders to strike a levy, notwithstanding the fact that—as you would expect—the thoroughbred breeders produced a very sound plan for how they would spend that levy on genetics, workplace safety, horse safety et cetera. It was a very good plan.

Why chestnuts and sweet potatoes but not thoroughbreds? I do not know. Minister Joyce has made no attempt to explain. Maybe the assistant minister, when he closes, can enlighten us on this too. Unfortunately, when some people think of thoroughbreds they think of racing—of course they would, because the two are incontrovertibly linked. They are one and the same in many senses. But thoroughbred breeders are as much primary producers as are grains producers, beef producers, lamb producers et cetera. They are primary producers. I suspect they are being discriminated against because they are part of the racing industry and that this minister fears that maybe someone will resent the government funding what is seen as a wealthy elite part of our society. Let us push the importance of the racing industry aside for a moment, although it is a very important economic contributor to this country—many in this place like a punt, no doubt. But putting that aside, the thoroughbred breeding sector should not be penalised because of where their end product plays a role. They are primary producers like all the others. Minister Joyce wants to discriminate and give the levy to two commodities in addition to all of those who already have a levy—and there are many of them; name pretty much any commodity and there is a levy attached—but not to the thoroughbred breeders.

To make it worse, the equine industry is potentially facing a crisis. It is facing a crisis, sadly, because of a thing called equine herpes—I think that is the technical term. There is no vaccine in this country at the moment for this terrible herpes, and it poses a very significant risk to the sector.

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

From promiscuous horses!

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

I am going to let that interjection go through to the keeper.

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

I am glad you will!

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

But I thank the member for her contribution. There is no vaccine, and it is no-one's fault that there is no vaccine. What happened is Zoetis, the manufacturer and producer of the vaccine, changed the location of their manufacturing plant in the US, and somehow the transition caused the new vaccine to fall outside of the approvals of the APVMA. It is no fault of theirs; it just happened. It is a very technical science and approvals are very complex. But there is a way of fixing this. Zoetis make another product that is used in New Zealand and in other countries as we speak. What Zoetis need to do is apply for an emergency temporary permit so that the additional vaccine can come out quickly. Zoetis are somewhat reluctant because it is a very expensive process, the market here is relatively small and they do not necessarily see the return on their investment. It is an arduous, complex and expensive process.

The government has a role here. Minister Joyce is very happy to get involved in all sorts of issues in the agriculture sector when he wants to—and I have given some examples here today—but in the three months since I raised this issue with him last year, has he picked up the phone to Zoetis?

Had he expressed any concern about this terrible tragedy which could fall upon the equine industry? No. Finally, when we had some breeders in this place a fortnight ago, he decided to see them and he made some promise about talking to Zoetis. I trust he has, I hope he has and he may have, and I welcome that. How hard has he tried? What public comment has he made? What assistance is he offering Zoetis in an attempt to induce them to quickly pursue that emergency vaccine permit? I have seen nothing. I have seen nothing from the minister, who is most likely to intervene in this place when he sees political opportunity. For some reason, whether it be the levy or the vaccine, he sees no political opportunity in the equine industry, in the thoroughbred breeding industry in particular, so he has done nothing. He says nothing and will do nothing and it is a disgrace.

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

Unlike the previous speaker, I am actually going to talk about the dairy industry. I support the Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 that is before the House today. Let me say at the outset, I am a dairy farmer and definitely have a vested interest in this bill. Equally, I want to say hello to every dairy farmer in Australia, who was probably up before dawn this morning milking cows. Local farmers all around Australia, I just want to say hello to them too. They do an enormous job and they are part of that Australia's well earned international reputation for producing clean and green food. It is our competitive advantage and one we need to protect.

I have repeatedly said that in my opinion many Australians take our locally grown food and amazing quality food for granted. The Western Australian dairy industry is a prime example of this. Western Australian milk has been identified as some of the highest quality in Australia. Western Australia is an efficient producer of high-quality milk sold to both South-East Asian and domestic markets. It is a very important industry in Western Australia, particularly in the south-west of my state and in my electorate. WA has a very high herd health status, free of any disease like foot and mouth or bovine spongiform encephalopathy.

Farmers in my part of the world milk all year round, twice a day every day of the year. WA's dairy industry may be relatively small in size but it is highly reputed for its innovation and high-quality products—that goes back to the farmers, it goes back to research and it also goes back to organisations like Western Dairy. The local farmers keep a very close eye on the research and the strategic work of Western Dairy. They do some great work in the implementation of dairy research and extension back to farms. Their Greener Pastures and feed based integration projects are both examples of what Western Dairy does. Rumen8, a software app to help manage dairy cow diets, is also a useful tool for local farmers. We have internationally competitive production costs in Western Australia. Our processors have modern processing facilities owned by local and international companies. The state's fast and efficient transport links are also vital in delivering high-quality fresh products in the shortest amount of time to both our domestic and international customers. I look forward to the freight out of the Busselton airport being a part of that process.

The Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 will amend the Dairy Produce Act 1986 to remove the requirement for the dairy industry to hold a dairy levy poll every five years. There are around 6,000 dairy farmers who pay this levy, with around 160 in Western Australia. Under the Dairy Industry Services Reform Act 2003, Dairy Australia Limited is the declared industry services body for the Australian dairy industry. Dairy Australia has two categories of membership. Group A members are dairy farmers, who pay the dairy levy. Membership is voluntary and entitles members to vote at Dairy Australia Limited annual general meetings. Group B membership covers the peak dairy organisations. Australian Dairy Farmers and the Australian Dairy Products Federation are Group B members.

In accordance with the Primary Industries (Excise) Levies Act 1999 and the Primary Industries (Customs) Charges Act 1999, dairy farmers pay a dairy service levy to Dairy Australia based on the fat and protein content of their milk. Section 9 of the Dairy Produce Act 1986 requires Dairy Australia to make recommendations to the minister in relation to the amount of the dairy service levy. Before making each recommendation, Dairy Australia must conduct a poll in accordance with the regulations and the recommendation must accord with the results of the poll. The regulations stipulate a dairy levy poll must be held, currently every five years.

The dairy industry was concerned about the regulatory and financial burden associated with a poll every five years and where that funding could be better spent in research, regardless of whether a change in levy rate is to be sought. So if there is no change, the poll is still required. ADF and Dairy Australia commissioned an independent review and it recommended simplifying the levy poll process. In November 2015 the dairy levy payers, the dairy farmers, supported simplifying the dairy levy process including removing the requirement to hold a dairy levy poll every five years. The poll process costs up to $1 million every five years. Imagine the additional research and development activities that this could fund. There is a range of subordinate legislation in the instrument to require the industry services body to do a poll on the levy rate every five years and require a poll if a variation to the rate is recommended to the advisory committee—an advisory committee will be a part of this. It also includes a mechanism for Group A members to request a poll if they disagree with the advisory committee's decision not to convene a levy poll. It must be supported by 15 per cent at least of those in Group A so there are checks and balances.

When we look at the dairy industry, we know that our dairy farmers need incredible skills in feeding and nutrition, herd management and reproduction, genetics and livestock health and diseases. Wrapped up in this is needing to calve cows at any hour of the day or night and dealing with all forms of herd health. You need the skills to be able to manage your pasture to produce that fat and protein that pays the levy. That is what you are paid on as well. You need to know the correct fertiliser regime for your particular property, the necessary cattle management skills and how to manage irrigation systems.

There is the machinery—you have to know your machinery. You really need a very good ear if you are operating machinery. You need to know if you are working it too hard in the particular gear you are in. You have to be able to build your own equipment if you are a dairy farmer. You have to know how to cut your costs, and you really need to be able to weld. If you cannot weld you are in all sorts of strife. You need good mechanical skills, staff management skills and business management skills, and you need to be across finance and taxation issues—all the same things that affect small businesses. Of course, you need to be at the cutting edge of technology, which the industry is very good at.

Dairy farmers manage one of the most perishable products in any form. That also exposes us as dairy farmers to the market. Having a perishable product exposes us to the constant vagaries of challenging and changing weather, water shortages, dry winters, an increasing cost base and the challenges of having just two major supermarkets with their control in the marketplace and the use of milk as a loss leader in that grocery marketplace.

The dairy industry, through Dairy Australia Limited, is ready to co-invest in the continuing future of this very important industry. We need to ensure, however, that this investment represents value for money and provides tangible benefits for dairy farmers. Dairy farmers want to see on their properties and in their herds that the research done by Western Dairy and others is actually making a difference and adding to what they do and their businesses. This is and must be the prime focus of the minister, the government and the industry.

In the few minutes that are left me in this debate I want to mention another contribution that dairy farmers have recently made in my electorate. Everybody knows that we have had very serious bushfires in Waroona, Yarloop and in the Uduc area of Harvey, perhaps one paddock away from our own property. In each of those fires and in other fires our local farmers—and particularly, in these two fires, the dairy farmers who were affected—were front and centre in that fire effort. Pretty well most of them have fire units that they put on the backs of their utes. When they see a neighbour in strife, as we did at Uduc only two weeks ago, the first people on the ground were the farmers themselves, first seeing that there was a problem and where it was, and then not only contacting our local fire brigades and emergency services but then getting out there with their own equipment to help.

There were about 13 or 14 individual farmers' units running on the face of that fire recently around the Uduc area and in the paddock of our neighbour, Graham Manning. They were doing an extraordinary job on this fire. Added to that, we had farmers, including my own son, who had their tractors out discing all around our neighbours' houses. There were several instances where a combination of the farmers working with the discs on the tractors and the local fire brigades were able to save people's homes. This is something that often we do not necessarily see. We have wonderful fire and emergency services—DPaW and DFES in WA and our volunteers—and we also have this particular interface, which is our local farmers.

These same dairy farmers have lost a significant amount of fencing. Hundreds of kilometres of fencing have gone as part of this. People who milk cows know that you have to be able to keep them in a paddock to be able to feed them, keep control of them and milk them. These were some of the things that they could not do, which caused huge pressure and stress. I have seen it in some of my own farmers. When I was out on the ground in those early days they were covered in ash and dust, and I could see the whites of their eyes. One, it was shock; two, it was stress; and three, they were working their hearts out to try to save not only their cattle but also their homes, their dairies, their communities and their neighbours. They did a huge job. This was replicated over and over.

I also want to acknowledge the two farmers, one of whom was a dairy farmer, who, after the Uduc fires, got that group of people together, those fantastic dairy farmers who had helped to control the fires on their property and stop even more loss and stop the fire running into Harvey. They got those guys together, took them down to a local hotel and bought them a few drinks and a meal as a way of saying thank you for the work they had done.

This is replicated right across Australia, I would say, but in my part of the world in the south-west it has been a huge effort. There were other farmers, not just dairy farmers. There were beef farmers and those who grow fruit and vegetables as well, on the ground with their fire units helping their fellow farmers.

We have some great young people in the gallery today, and I would say to you that when you are out and see your farmers and the work they do on the land with their animals and their produce, they are producing fabulous food and fibre for you, for Australians and for other people around the world. Sometimes when you see them working you do not even consider what it is that they do. They have a multifaceted job and they are very, very skilled people. In my view they are often are underestimated for their intelligence and their manual capacity. Most farmers I know, particularly my dairy farmer friends and colleagues of all these years, can fix anything, anywhere, any time. They can make it work and they will never, ever go short of a feed. They are often people who are not only dairy farmers but grow their own fruit and vegetables as well and are almost self-sustaining. They are very focused on environmental management. That is one of the key focuses as well of Western Dairy and the research. So I commend this bill and the work of the dairy farmers of this nation to this House.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I thank the Chief Government Whip and I take the opportunity to acknowledge the support that you and your husband, Charlie, gave the farming community during the Yarloop fires. It was a magnificent effort. Thank you.

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

I would also like to congratulate and acknowledge that lovely speech by the member for Forrest—well said!

In speaking to this Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 I would like to take the opportunity to talk about the great success that is the dairy industry in my electorate of north-east Victoria, and I would also like to take the opportunity to report on some of the actions that I have been able to do in the 2½ years I have been the member for Indi.

There has never been a better time to live in north-east Victoria and to be involved in agriculture. Our future is bright, with new trade opportunities, excellent water and rain supply readily available, access to skills and training through La Trobe and CSU universities, excellent TAFE services and great high schools in Tallangatta, Rutherglen, FCJ College in Benalla and Mansfield, all offering wonderful courses to young people. Agriculture in Indi is ready for the next really big transition. Our farmers and businesses are already leading the way.

In my electorate of Indi, ag is worth over $600 million per year. It is the fifth-largest employer, with over 5,000 businesses across eight local government areas, and food based manufacturing that value-adds to our produce employs over 2,200 people.

I have been very proud to represent the diversity of the agricultural businesses in my electorate for the last 2½ years. In this time I have been an active member of the agricultural standing committee. We have undertaken and are still doing an inquiry into what we need to do in the future to make agriculture more innovative and to help us keep that cutting edge. I had great pleasure in taking the committee to Wodonga in north-east Victoria earlier this month and also on tours up to the dairy industry in the Kiewa and Mitta valleys.

I have had the privilege of representing the chestnut industry in its efforts to get a levy for the industry and to work with Horticulture Innovation Australia. I am really pleased at the success there. And there are other, smaller industries that I have been able to work with as Horticulture Innovation Australia does its organisational transfer work.

I have been absolutely delighted to represent many constituents, particularly those concerned about animal welfare issues—from animal welfare, to live exports to halal—to take their issues to Canberra and to be a strong voice for them. I have been a participant in, and have encouraged many of my communities to be involved in, the Senate inquiries that have taken place. And I was very pleased to be part of the process of making sure that the voices of Indi came right to Canberra. I have arranged deputations for farmers and farming businesses to come to Canberra, to meet the relevant departmental staff and ministers.

I have supported legislation in this House right across the spectrum, but I have been particularly pleased to support the private member's legislation calling for the legalisation of industrial hemp for human consumption. This legislation is still on the table. It is a really important issue and I hope that it gets addressed before we go to the election.

I have lobbied fiercely for regional provision of higher education, particularly for agriculture, and to make sure that we have centres of excellence in the country—not just the big eight in the city. I have supported continual funding for CSIRO's research—particularly for one of my all-time favourites, which is the dung beetle project. Across summer, as we were having our barbecues, many of us noticed that there have been no flies this season. One of the reasons for why there have been no flies and that we have been able to eat outside is because of the fantastic work of the dung beetle. Sadly, that research has been curtailed, but it is one of those really important issues where the community comes to their local member and they can then bring it to Canberra.

I have been really pleased to make representations to and get support from the Minister for Health for continued funding for the National Centre for Farmer Health. I am delighted that centre is now up and running again. I have been a great supporter of the Murrindindi Shire, and was delighted that they were able to get funding to revamp the Yea Saleyards. I have represented farmer concerns, particularly concerning the constraints management strategy—part of the Murray-Darling Basin Plan—and the impact this is going to have on farmers in the upper Goulburn. I have brought farmers to Canberra, getting their voices heard, and lobbied the government. I think we have done some really good work on that one.

I have been able to support local food manufacturers, particularly in their lobbying around cross-border issues related to training. I have met with many delegations and have been happy to bring them to Canberra. One of the ones that I have been most proud to support was by hosting a deputation of members of Australian Women in Agriculture as they came on their regular lobbying trip to Canberra. It has been great to see them here. That process has been going on now for well on 15 or closer to 20 years. Women from Australian Women in Agriculture come from right across Australia with their issues, and they bring the voice of agriculture—particularly women's voices—to this parliament.

In the electorate it has also been a very busy time. We have established a water advisory group; we have had forums on food manufacturing; we have supported agricultural education, particularly encouraging young people to go to university or to TAFE to get the skills they need; and we have hosted the Australian Farming Forum at Wodonga, together with TAFE and major industries—a terrific turn out. I was delighted to welcome my parliamentary colleagues, Bob Katter and Senator John Madigan to that event. And we have had CSIRO come to talk to local farmers about their research and opportunities for much closer collaboration between those on the ground and CSIRO.

But perhaps the biggest achievement of my time in this parliament has been getting the 40 NBN wireless towers and the 30 mobile phone towers, because all of us know that if we do not have really good, strong, effective, reliable and affordable communication the business of agriculture just cannot proceed. So I am really pleased that we are actually now at the cutting edge of where we need to be for the future of my area.

In that case, I would now particularly like to address my remarks to the importance of the dairy industry. It has played a major role and is doing some absolutely fundamental work to take all of agriculture to the next century, particularly in the Kiewa and Mitta valleys. In this House at other times I have spoken about the Alpine Valleys Dairy Pathways Project, but today I would particularly like to talk about the work they are doing on succession planning and acknowledge the work of Patten Bridge and the pathways team in this regard.

In 2011, ABS census data showed that over 60 per cent of dairy farmers, owners and managers were aged over 50 years, making it the oldest farming cohort in Australia. So we have families who have been in the community for a long time, getting older and thinking, 'What am I going to do with my dairy farm?' As part of this Alpine Valleys Dairy Pathways Project, the community undertook a study to see what was actually happening and what we needed to do to unlock the barriers that farmers were facing, because as farming families got older they would move out of dairying—perhaps they would move into beef—and the amount of milk coming out of our valleys was decreasing. This has an impact on our production facilities—particularly at Tangambalanga—and, eventually, if we do not have the milk coming then we do not have the industry.

So this research project was really important. It looked at farm succession planning, what was currently happening, what the barriers were and what we needed to do. Clearly, it is a very complex process of passing the farm from one generation to another to bring new, young players into the industry.

One of the issues that the survey shows is that it is a really hard topic to get people to talk about. It is emotional, it involves money, it involves land, it involves relationships and it involves intergenerational communication, so it is really hard to get the topic even talked about as well as being a hard topic to address. They found that there was not much documentation. Some of the farming businesses had in their head the plans for what they were intending to do but did not necessarily put it on paper, talk to their accountant, talk to the farm adviser or, really importantly, talk to their children. They found that, while professional help is available—we have good lawyers, solicitors, accountants and mediators—it is often not used. There is a huge opportunity to introduce these professional accountants to the farming community and explain how the process works.

And of course timing is critical. If you leave your farm succession planning too late, it just might be too late. Do it while you are well, healthy and have a next generation interested and able to do it. It takes time. You cannot just do it overnight. Often it takes years to get all your ducks lined up so you can do what you need to do.

The Alpine Valleys Dairy Pathways Project set about talking to people and working out what was currently happening. They designed and trialled a practical intervention and they now have plans to engage professionals. The conclusions they reached were that we really need to understand much better the impact that failing to do succession planning is having on agriculture—not only on the dairy industry but all of agriculture—with the blockage it is causing in our ability to move on and absolutely be more innovative.

We need to improve the agricultural education system and particularly interaction with new technology: using our mobile phones and our internet to bring that enormous capacity to our farms so that we can really get the cost savings and the benefit we can through that new technology. But we need the education to do it. We need direct intervention with farming families and teams of people to go work with families and help them through this process. The study showed that fewer than 25 per cent of farming businesses had a clear direction for the future but over 73 per cent were really interested.

I am committed to continuing to work with the dairy industry and the other agriculturals in Indi to bring about the potential we have got for major increases in productivity, production and, importantly, profitability. To the beef, the prime lambs, the wool, the horticulture, the wheat and grains, the oilseed, the nurseries, the flower farmers, the fishing, the turf, the wine growers, the honey, the hops, the grass seeds, the berries, the mustards, the alpacas, the horse breeders and all the other agriculture industries in Indi: know that you have got a champion with me. I know the industries, I know the circumstances and I know what we need to do to absolutely make Indi one of the most productive, profitable and wonderful places to do agriculture in the whole of Australia.

I will make a couple of comments about the legislation before the House. This proposed bill is a really interesting one for me because in my prior life I was actively involved in the dairy industry and this whole conversation about levies and how they work. I have a little note of warning to my colleagues in the dairy industry: be careful what you wish for. The proposal to remove the requirement to have a dairy poll, which is what this legislation does, will actually take away the requirement. In its place, rather than having to do it every five years—and let me say wool does it every year, so five years is not a big ask—the industry has suggested that we set up a consultative committee. I have not got the details of how that consultative committee is going to be set up but I do hope it has good gender balance as well as age balance on it. This advisory committee is actually going to provide advice on the levy. So let's just check how that is set up and how you get elected to that—or do you get nominated?

Then there is a fallback position where, if 15 per cent of the group-A levy payers decide they do not like it, they can actually call on a levy poll. The major advantage—and I think we have to be really careful with this—we see is that we are going to reduce red tape and make it easier and quicker, but the whole reason for having this poll every five years was to have a direct connection between the people who pay the levy and the people who spend our money. This legislation is removing that direct connection. We are putting a third party in place. If I know anything about agriculture, I know that, when you have got a direct connection and the people who spend my money have to tell me how they are spending it, they have to come to my community, they have to justify it, they have to have the meeting and they have to argue the case, then they are much more considerate about how they spend my hard earned dollars.

I say to the dairy industry: in getting rid of the levy or changing the arrangements, pay particular attention. We in the wool industry, the beef industry, horticulture and the other industries that pay prize our ability to have regular polls and to set how much our levy would be.

In closing, I am going to support the legislation because it has come from the industry and I am a great believer in representing the industry and doing what it needs to do, but I say to my constituents: keep an eye on it. If you think the industry is not doing what it needs to do, I am very happy to pay some attention to it.

I say to my dairy industry colleagues and to my friends in the agriculture industries: I remain committed to working for you. I am absolutely dedicated to being the voice of agriculture, agribusiness and manufacturing in north-east Victoria. To the families, to the businesses, to the students, to the educators, to the service industries, to the stock and station agents, to the truckers, to the saleyard attendants: it has indeed been an absolute privilege to be your representative in parliament, and I look forward to seeking your support at the coming election.

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

I look forward to participating in the debate regarding the Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 and associate myself with the comments particularly of the member for Forrest, who is an outstanding advocate for the dairy industry. I also welcome the comments from the member for Indi, my neighbour. There is only a mountain range between us. I congratulate the member for Indi on her advocacy on behalf of agricultural industries. I also note while I have the opportunity that she has a very strong candidate running against her from the National Party at the next election: a fellow by the name of Marty Corboy, who is an equally strong advocate for regional Australia and agricultural sectors. I assume it is going to be a strong and fair fight and I am confident the best man or woman will win when the time comes.

I associate myself with the comments of my colleagues who have spoken so strongly on behalf of the dairy industry, because the dairy industry is such a vital industry to Australia. It is important to reflect on the number of dairy farms in Australia—there are more than 6,000 dairy farms—and, as the member for Forrest, correctly remarked in her contribution: getting up every day, early, milking cows twice a day, providing food for not only Australians but also throughout the world makes the national dairy herd of 1.7 million cows an incredibly important asset to the Australian agriculture sector.

In Gippsland alone, the agricultural total product in terms of dairy product from the farming sector, manufacturing and export industries is in the order of $3 billion per year. There are about 6½ thousand people directly or indirectly engaged in farming and processing in Gippsland associated with the dairy industry; and over 1400 dairy farms across the broader Gippsland region, which includes the electorate of Gippsland but also the electorate of Macmillan so strongly supported by my colleague, the member for McMillan, Russell Broadbent.

It is a very important industry for the future of Gippsland, and there are huge opportunities for the future, which I will reflect on in a moment's time. In particular, the opportunity for us in the dairy industry in the Gippsland electorate relates to the Macalister Irrigation District, which is the heart of dairying in my electorate. It is a powerhouse for the dairy sector not just in Gippsland but also for Australia. The Macalister Irrigation District also has a significant vegetable production industry, creating more than $500 million for the Victorian economy each year and underpinning the growth and security of Gippsland's rural communities.

What I am working on at the moment, as the member for Gippsland, is the effort by the community, Southern Rural Water, the dairy industry and the horticultural industry to further modernise the Macalister Irrigation District—a project which will deliver benefits in the order of $45 million to $50 million per year, and cost in the order of $60 million to modernise. The food related activities depend on the Macalister Irrigation District are calling Australian governments at both state and federal level to modernise and carry out the next stage of the irrigation infrastructure upgrade.

I have been very fortunate in my time as the member for Gippsland to have had visits from Labor members of parliament who were interested in the agriculture sector and the former Labor parl sec Sid Sidebottom but also, in more recent times, the former Deputy Prime Minister, my great friend the member for Wide Bay, Warren Truss; and the current Deputy Prime Minister and minister for agriculture, Barnaby Joyce. They visited Gippsland, because they appreciate the value of the agriculture sector to our community but, in more recent times, it is about giving them the opportunity to see what we could do with a little more government investment.

We are working as a community to secure funding for the major upgrades of the Southern-Tinamba project and the irrigation infrastructure supply system, which will help us meet future growth in global dairy demand. It will help us create a healthier environment for the Gippsland Lakes, which I am particularly passionate about. It will promote high-value land use and increased farm productivity.

On the issue of the Gippsland Lakes, it is worth noting in today's debate that our farmers have been very active in reducing the amount of nutrients that flow into the creeks and rivers which feed the Gippsland Lakes system. This helps reduce the likelihood of algal blooms, which have been so devastating in the past for the tourism industry. It has worked, because governments have been prepared to provide some seed funding for the farmers to do whole-of-management plans and nutrient reduction work. The farmers, having secured that seed funding, have then capitalised and put their own money into reducing the amount of nutrients leaving their farms. They are not only benefiting from increased productivity on their own farms but also the environment clearly benefits with the reduction in nutrients going into the Gippsland Lakes system.

What we are keen to see in Gippsland and the Macalister Irrigation District is the investment between state government, federal government and the farmers themselves in a joint effort to improve the supply system. It will provide in the order of 9,700 megalitres in savings from the current system. These water savings can obviously be used to further support growth and expansion in the dairy and horticultural sector in Gippsland.

We have had some level of interest from the state government, which has been good to see. Unfortunately, the state government has tied its funding commitment to the Port of Melbourne sale process, so it remains to be seen whether that goes ahead. However, I still think the Victorian agriculture minister and water resources minister should be making the commitment untied to any asset sales just on the basis of the economic value it will provide to the Victorian and Gippsland economy.

As I mentioned, I have had the Deputy Prime Minister and agriculture minister, Barnaby Joyce, visit the region. He appreciates the importance of this project, and it has been recognised as one of those projects that may be available to seek funding under the government's water infrastructure plans—and more detail will be forthcoming in the weeks and months ahead.

Regarding the bill specifically, it is important to note that the dairy industry supports the legislation that the government is bringing to the House. It has the support of dairy farmers across New South Wales, Victoria, Queensland, Western Australia and Tasmania, and United Dairyfarmers Victoria are on board. So it is important that the industry is supportive of the measures being put to the House today.

The bill implements a request from the Australian dairy industry to introduce some flexibility into the dairy levy process. The dairy levy raises in the order of $34½ million, and the Commonwealth funds to support Dairy Australia for R&D are in the order of $22 million. So it is a significant sum of money we are talking about.

The dairy industry has expressed concern about the regulatory and financial burden associated with holding a dairy levy poll every five years as required under the Dairy Produce Act. This bill will remove that requirement, so it is a measure that reduces red tape. It reduces a cost that has been imposed on the dairy industry. It is in the order of a million dollars to hold that levy poll every five years, and the industry is keen to have that flexibility in the arrangements into the future. So the money that is being used to run an election as such will then be available for the R&D work and other activities that are associated with the use of the farmers' dairy levy.

The dairy farmers—and I take the point raised by the member for Indi—do not lose their democratic right by any stretch. In circumstances where the majority of dairy farmers support the current rate of levy and where there is no widespread demand for a change to the levy, it makes sense to allow the dairy industry to avoid holding a poll, enabling those funds to be put to productive use. So this bill will require there to be a dairy levy poll only when a change in the rate of the dairy levy is proposed, and this will provide the industry with the flexibility around the timing of levy polls. So the bill entrenches the democratic power of dairy farmers themselves to control and determine any changes in the rate of the dairy service levy.

I note the concerns raised by the member for Indi but can offer her reassurance that the democratic power of dairy farmers across Australia has not been eroded in any way, shape or form under the bill put before the House. They still retain control in the way that the dairy service levy is utilised and, in the case of it going to be increased, if they want to have a vote on it, they certainly may, as the time comes.

In closing, I wish to acknowledge the important work being carried out by the Minister for Agriculture in support of the dairy industry in Gippsland. I will continue to lobby him, as you would expect, to secure funding for the Macalister Irrigation District upgrades. He would expect me to do that at every opportunity.

Since I have taken over the role of Minister for Infrastructure and Transport, I have found I have a lot more friends in this place that I realised. I have many friends from both sides of this House who have taken the time to have a chat with me about their own infrastructure projects in their electorates, as you would expect they would. I certainly will be amenable and open to those discussions, just as I will, as the member for Gippsland, continue to extol the virtues of the Macalister Irrigation District to the Minister for Agriculture and encourage him to come good with some funding at the appropriate time. That is what we do as members of the House of Representatives. We come here to argue our case as fiercely and parochially as we can to try to ensure that our communities receive a fair share of government funding whenever it is available to us.

I congratulate those opposite for supporting the changes as proposed by the Minister for Agriculture and I commend the dairy industry for the work it is doing in supporting jobs growth and prosperity, not just in Gippsland but throughout Australia. I commend the bill to the House

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I thank the minister for his contribution and note that I have been his friend for some time.

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

Mr Deputy Speaker, I may not have been a friend of the minister for as long as you have been, given we have not known each other that long, but I am pleased to hear that the new Minister for Infrastructure and Transport is keen to talk about infrastructure projects.

Ensuring we have good regional roads and rail networks is one of the many issues that are raised with me by farmers, whether they are retired farmers or current farmers. This is not just in my electorate, but also throughout regional Victoria. Whether it be my listening post at Strath Village or catching up with Greg Toll or any of the other farmers who have established themselves in Bendigo post being on the land or looking to retire to Bendigo, what they raise with me is what is still going on in their farming communities, communities that they are very proud of. They raise with me the issue of roads and how critical it is that we see investment go into roads. They raise with me the cost of transport and freight and how they want to see a revival of funding for our rail system, to give farmers and producers that option.

They raise with me the crisis of water, the importance of water and how critical it is that we have a mature, constructive debate on water. They raise with me the issues around energy costs; despite this government's great fanfare about abolishing the carbon tax, they are seeing their gas bills and electricity bills skyrocket. They are issues for a lot of our farmers. We have some farmers who have disconnected themselves from the grid if they can. It is a lot harder for dairy farmers to do that because when they need energy it is before dawn; it is before the sun is actually up. So it is harder for the dairy farmers to look at that as an option.

They raise with me the need to keep young people in their community; how critical the NBN is to modern farming; how they desperately want the ability to connect and how this government has, quite frankly, dropped the ball when it comes to the rollout—the delay of two years in actually getting on with a decent NBN plan. The problems with the NBN satellite program that has been oversubscribed—towns like Queenstown in Tasmania have been offered satellite even though they are a community of 3,000. That could be part of the problem about the clogging up of the network. These are the issues that farmers raise with me when they want to talk about what is going on on the land.

Not one of them has raised the issue of levies. They just expect governments to do it. They welcome what we have done here. They welcome what is being put forward. The industries are vocal about it and Labor has, through consultation, agreed with the government to these amendments. But I have to say I have spoken on quite a number of levy amendment bills that have come before this House. It appears to be all this government is doing in this space. It is bill after bill on levies. Quite frankly, there is so much more going on than just levies. It needs to be more than just levies.

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

What about the free trade agreements?

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

We talk about the free trade agreements. What I am hearing from people on the farms about the free trade agreements is that they actually need water. They need water to be able to grow the produce. They need water. They need decent water policies to ensure they have a product to sell. They need decent infrastructure policies to ensure that they can get their product to port to be able to sell it. When it comes to the free trade agreements, they need a government that is going to focus on the secondary trade barriers, on what is going on in the countries of transit. I have had a number of heartbreaking conversations with producers who have said, 'My product is stuck on a port in China and I am not getting the support I need to get it released.' Where is the government's focus on that?

What we did have come through my part of the world and through regional Victoria was a great roadshow telling them what is great about the free trade agreements. But there was no practical support on how to develop those industries so that they can actually get into those markets and no practical support about what to do when it goes wrong. That is the disappointing thing about this government: we stand up time and time again to talk about levies and to talk about amending levies when that should just be part of the function of government: listening to the industry, addressing the levy issue. But what we do not see is a really concrete plan, a reform and a mature discussion that can actually help build a strong, sustainable agricultural community going forward.

I mentioned the water issue and just a couple of the experiences that I had just in relation to the dairy industry. I can tell you what these dairy farmers will say to me when I go back and say, 'Great news, we have done the amendments around that dairy levy.' They will roll their eyes and say, 'That's great, Lisa, but what about water? I'm still having to pay a ridiculous rate on the temporary water market.'

And how bad is the water issue when it comes to Victoria? I am not the only MP who has been vocal about this; I acknowledge that there are other regional MPs who are vocal about this issue. In our south-west the dairy farmers are saying that there is a water issue, that there are not a lot of good bores out there, that the water is too deep and we just cannot get it. They are saying that we just have not had the rain that we have needed to help our dairy farmers. In warm weather, lactating cows require 150 litres of water per day, and it is literally not there. The farmers are working with the local council, but they are saying that it is getting very tough.

In northern Victoria changes to water policy in the past decade have led to a massive reduction in the available water for irrigation. This has dramatically changed dairy farming in the Murray region. It is the reality. I am not for a moment standing here advocating for a change to environmental water. I believe that is a misdirection about what is happening in the conversation about the Murray-Darling Basin Plan and water. One farmer who I know has made some comments on Facebook that really sum up the crisis and the challenge for some of our dairy farmers:

… due to an unsustainable temp water prices Kyle and I made the extremely tough decision to sell our farm … to our neighbour, this was a very sad day for me as I thought—

this—

… would have been my forever home but sadly not owning any permanent water meant we were at the mercy of the temp water market and we could not make any money buying water at $300 a meg. We are selling the farmer in the north and moving to where it rains in the South West.

This is the real experience of a dairy farmer. They are not talking about levies. They are talking about water.

As I said, I am not for one moment speaking against environmental water. What I am talking about is the lack of a mature conversation about the temporary water market and how it is impacting water prices around the Murray area. I am not trying to argue that all the water woes being experienced by our dairy farmers and other farmers are because of environmental water allocations. They are not.

Earlier this year the new Murray-Darling Basin Authority boss said that recovery of water for the environment is 'the largest single structural adjustment an industry has had to go through'. They are working closely with industry. He also said that it appears the Basin Plan is delivering improvements for native fish, birds and vegetation throughout the Murray-Darling, according to a new report they have just released. This is good news, because it is about getting the balance right between the environment and irrigation water.

But what we have not seen and what this government is only flirting around the edges of is a genuine discussion about temporary water. We need to start asking questions. Is it appropriate to have speculators in the water market? Is it fair and right to have a water market that is structured to maximise the profits of investors before the agricultural and environmental interests of the Murray-Darling Basin Plan? We need to talk about whether it is a free and fair market that we have established in water.

Think about the structures of market based economies. If you are an investor, it is a great deal. You can play the numbers. You know exactly how much the government must allocate in terms of environmental water. You know that figure. You know exactly how much water some industries will need—for almonds or any of those other crops—so you are able to run the numbers and work out what price point you can push farmers to. That is the problem I see that we have with the water market. Yet, rather than having a bold discussion about this issue, the government instead is flirting around the edges of the issue.

Yesterday the federal government released further details of its plan to introduce a national register of foreign ownership of water entitlements. We are not seeing any bold, mature discussion about water. We are seeing the government release a consultation paper on a proposal to introduce a national register of foreign ownership of water entitlements. You could not get further from action. That is saying, 'All we're going to do is talk to you about setting up a register of who owns water.' That is not good enough. That is not bold enough. This is a government that claims to be the voice for the bush, and all it can do in this critical space, when it wants to see us grow our ag industries, to build on the free trade agreements, is to talk about setting up a national register of foreign ownership of water.

A bolder move of the government would be to ask for feedback on whether it is right that we have foreign ownership of our water entitlements. That would have been a bolder move by this government—to go to the question of whether it is right to have foreign ownership of our water and our water entitlements. These are the issues that this government is not willing to tackle head-on and have a mature conversation about. Probably it is because of the split within their own ranks between the city based Liberal MPs and the country based MPs. But your rhetoric will bring you undone. If you are serious about maximising profits in the bush, if you are serious about building the ag industry, if you are serious about ag being the new black and the growth industry that will bring us forward into the next age, where we are going to have a boom, then you need to get serious about the critical infrastructure that will help not just our dairy farmers but our other farmers.

We need to start a mature conversation around water infrastructure. We need to start a mature conversation about energy costs and production costs. This government instead has just dropped the ball. It has stopped talking about energy costs, because they have skyrocketed. It is not serious about an NBN plan, which is another thing that our dairy farmers are crying out for. Only last year in this place, when I was talking to some dairy farmers at a couple of functions that we had up here, one of them said to me: 'Lisa, what I need is the NBN. What I need is to be able to do my farming business, to run my farm and connect to the NBN.' That is not what this government is prioritising.

What this government also needs to prioritise is coming up with a genuine plan on how they can help our dairy farmers develop their markets overseas. Standing up and rattling off the price of milk and farm-gate prices is, quite frankly, not enough. Our farmers and farming communities do want to hear from their government. They do want to make sure that when it comes to building the ag industry, and about staying on the farm, that this government is going to get serious. Legislation after legislation that focuses on levies is lazy ag policy. It needs to happen but it is not the genuine reform that will give legs to the white papers that have been released over and over again.

Whilst Labor supports this bill and congratulates the work that the dairy farmers have done—in the broad consultation that they have done—we advocate that the levy dollars be spent as effectively as possible. We would like to see, and want to see, this funding go into research. We know that a number of our dairy farmers are active in this space because they do want to be the best producers that they can be. It is great to see that partnership going on between industry and our industry research. This levy will help. Let us get serious about infrastructure that will really help our dairy farmers.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

For those out there listening, the Labor Party support this bill. You would not think it after hearing that from the member for Bendigo. I do not know what it is I have done in a previous life, but it seems I am so often in the chamber listening to the member for Bendigo as I am about to speak. That might be because she is the go to person for agriculture on that side of the chamber—she is, pretty well, the only person on that side. Very few members from rural, regional or remote Australia find themselves ensconced in the federal parliamentary Labor Party. That might have something to do with the recent decision on live exports and their decision to ban that trade when they were in government. A harm, thankfully, we have undone and that you know so well, Mr Deputy Speaker Scott.

I was not going to address her contribution but I have to. It seems to be that the thrust of it was that farmers do not mind levies and that the coalition has no concrete plan for stronger sustainable rural communities. There was the inevitable attack from the member for Bendigo on foreign investment and, then, there was a throwaway line about NBN. I will go to these issues.

I live in a farming family and I have never met a farmer who likes a levy. They tolerate them. I must say, they are not cheering for them. They have not sent me to Canberra to say, 'Tony, the first thing you do is talk to your colleagues about higher levies because that is something we want.' Maybe I need to spend some time in the member for Bendigo's electorate—they might be a different cohort of farmers, but I do not expect that they are.

In terms of a concrete plan for a strong and sustainable rural community, one of the best things this government has done is acknowledge the need to expand markets, globally, and we have done a lot of good work—thanks to the now former Minister for Trade and Investment—in establishing free trade agreements and I will talk to those. There was the inevitable attack on foreign investment. Whilst it is an issue that needs to be debated, in detail, and is a topic for conversation in my electorate, as in hers, I make the point that very many of our processes that underpin the price of commodities in rural Australia are, indeed, products of foreign investment. I would hate to see fewer buyers on the rails because we took a deleterious position with respect to foreign investment.

With respect to the NBN, I am pretty well prepared to back the fact that there are more NBN connections in the member for Bendigo's electorate today than there were in early September 2013. There certainly are in my electorate. Sky Muster will be in the sky, soon to be operative, and there will be fixed wireless towers and other opportunities.

The most deplorable suggestion we heard from the member for Bendigo was, effectively, an attack on the Murray-Darling Basin Plan. She was very careful in couching her submission, but I think she needs to quickly go and speak to the leader of opposition business, who was the chief architect of the plan. I want to say to those people listening to this contribution in Barker that this side of the House is committed to ensuring the plan is delivered in full and on time and that no amount of windbagging from the member for Bendigo will change that attitude. I have taken far too long. It is a serious issue and the people of my electorate understand the need for water security.

I support this bill. I welcome any change that supports the dairy producers in my electorate. It will ease the regulatory burden placed on the industry through cutting costly and unnecessary bureaucratic processes. According to information compiled by the Australian Dairy Farmers association, in the last financial year the Australian dairy industry farm-gate value totalled $4.7 billion. In anyone's language that is a whopping sum. That national milk production increased 3.8 per cent. That is 360 million litres to a total of 9.7 billion litres. I think that is more milk than you can fly a rocket over. In any event, the dairy industry continues to be one of Australia's major rural industries. Based on a farm-gate value of production of some $4.7 billion, it ranks third behind beef and wheat.

Reports suggest that over 40,000 people are directly employed in the sector. Related transport distribution activities, and research and development projects, represent further employment associated with the industry.

Dairy is also one of Australia's leading rural industries, in terms of adding value through downstream processing. In my home state of South Australia there were some 252 producers last year who produced some 516 million litres. Many of these world-class farming enterprises in my electorate of Barker are located in the south-east where I also find my home. Barker is particularly important to South Australia's milk production as a significant proportion of the milk produced is exported abroad.

There have in recent times been some significant announcements regarding investment into dairy producers in my electorate. In December last year, Beston Global Food Company announced the reopening of two milk processing factories at Murray Bridge and Jervois, with some 100 associated jobs. Building on this investment in the dairy industry of Barker, Beston announced that it has formed a joint venture with Hong Kong's Sunwah Group to distribute its food into Hong Kong, Macau and southern China. This will serve to increase the demand for Australia's world-class milk from the dairy cows who graze throughout Barker. The coalition government is providing unprecedented opportunity for our agricultural sector through the free trade agreements we have recently signed, along with the Trans-Pacific Partnership. The TPP will provide significant new access for dairy into all 10 of the TPP countries, some of which are the most heavily protected markets in the world. Alongside greater access to Korea, Japan and China, the TPP will foster growth in our dairy exports across our region as the emerging Asian middle class turn to Australia for quality dairy produce.

I welcome this opportunity for producers in my electorate and I know it will have a transformative effect on the industry as it drives a new era of jobs and growth across the Australian dairy industry. Yet it is not enough that we simply open opportunities for our producers; we must also respond to their concerns and remove unnecessary regulation that impedes their growth. Measures in this bill will free up capital in our dairy industry to be used in research and development, which will enable those in the industry to leverage their existing reputation for quality and to grow their businesses. This bill implements a request from the Australian dairy industry to introduce flexibility into the dairy levy poll process. The dairy industry has expressed concern about the regulatory and financial burden associated with holding a dairy levy poll every five years, as required under the Dairy Produce Act 1986. This bill responds to that concern by removing that requirement. The dairy industry estimates that the cost associated with holding a dairy levy poll every five years is up to $1 million—money that would be much better spent either in the hands of hardworking dairy men and women of Australia or in research and development.

The government has absolute confidence that the dairy producers of Australia have the capacity to make the most of the opportunities this government has delivered through the free trade agreements that I have mentioned. The money that is currently wasted in running the dairy levy poll process would be better spent investing in the industry.

Through industry led innovation and development, Australian producers have an unprecedented opportunity to increase productivity, drive new growth and create new jobs. This bill will ensure that a responsible and reasonable approach is taken to the dairy levy. In circumstances where the majority of dairy farmers support the current rate of levy, and where there is no widespread demand for a change in the levy, it makes no sense at all that the dairy industry should be forced to undertake a poll. This bill will require that a dairy levy poll be held only when a change in the rate of the dairy levy is proposed. This will provide the industry with flexibility around the timing of levy polls. The bill will require that Dairy Australia periodically establish an independent poll advisory committee to review the levy rate. The committee will recommend whether there should be a change to the levy or not. The industry have proposed that the poll advisory committee be independently chaired and include representatives of Dairy Australia, dairy farmers as nominated by Australian Dairy Farmers, and a representative of the Australian Dairy Products Federation. If no change to the levy is proposed, there would simply be no poll. If a change to the levy is proposed, a poll of all dairy farmers will be called. If dairy farmers representing 15 per cent of levy payers disagree with the recommendations of the poll advisory committee and request a poll, then a process will be put in place to enable a poll to take place.

This bill delivers a more democratic result to our dairy industry and delivers to them better autonomy. The bill introduces enabling clauses. The detail of the procedures for conducting the poll and forming the poll advisory committee will be in legislative instruments once the bill is passed. There has been extensive industry consultation in the lead-up to the preparation of this bill. In 2014 and 2015, Australian Dairy Farmers, as the peak national dairy farmer representative organisation, and Dairy Australia, the industry services body, undertook an independent review of the dairy levy poll process following the 2012 dairy levy poll. This review recommended the reforms proposed in this bill.

This bill is consistent with the coalition's commitment to cut red tape and unnecessary regulation. Today the coalition is delivering to the Australian dairy industry the autonomy that it has requested and that it needs to remain globally competitive. There are many challenges that face our dairy producers both in my electorate and across the nation. This reform will not solve all of those challenges but it is a step in the right direction to deliver a freer, less restricted industry.

I thank the dairy industry and their peak bodies for their honest and open consultations in this matter. I take this opportunity to thank the dairy men and women in my electorate who get up at the crack of dawn and do very difficult, very hard work—in many parts of my electorate it is very cold work—to supply this globally recognised product to the world. An indulgence: my very first job in life was to work on a dairy farm at Tarpeena. My parents sent me there in my scholastic holidays to work with good family friends of ours. In subsequent discussions with my parents, my father told me he was keen to ensure that I toughened up a little bit. I must say, those early mornings and long days—aside from shedding 15 kilograms one particular summer—taught me something about life, and that is: there is no reward without effort and we must all work hard to achieve our goals. I thank the chamber for that indulgence. This bill ensures that we as legislators are making the right decisions in responding to industry and working for a better agricultural Australia.

I came to this place committed to lower taxes and greater opportunities for constituents throughout Barker. I am glad to say that today I can stand here happy that this bill takes a very small step in that direction. It is a message that I hope my electorate hears loud and clear. I commend this bill to the House.

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

It never ceases to amaze me how people who speak in this House speak without any reflection, intelligence or thoughtfulness whatsoever, and the last speaker was a good example of that. He lauded the TPP. He lauded free trade and thanked the government for its help in free trade. Mr Deputy Speaker, I will tell you what—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Order! I remind the member for Kennedy that to reflect on another member in this chamber is unparliamentary and I warn him that if goes down this path, he will—

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

I take the warning.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

No, you will not reflect on another member in this chamber. Your comments in your opening words bordered on a reflection on all members of this chamber. The member for Kennedy has the call.

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

I am counting how much time you have taken off me, Deputy Speaker. If I could disagree with what you have just said. This is a parliament for debate between those people and those people and these people and that person and that person, and I disagree with what he was saying then I am entitled to say that. If that is a reflection upon him, that is your interpretation. If you are saying to me that I am not allowed to say something which reflects upon him then I would disagree with you strongly. If my remarks are pejorative or personal then I withdraw those remarks and I accept what you are saying. But if you are saying to me that this is not a place for debate between one person and another then I disagree with you very, very strongly indeed.

To back up what I just said about the previous speaker, he said that he thanked the government for the free trade regime which they have introduced. Well, we are talking about the dairy industry. We will have a look at what free trade has done for the dairy industry. Don't these people do any homework at all? Before this wonderful free trade regime of his was introduced, we have 2.2 million dairy cows in Australia—2.2 million milkers in Australia. We now have 1.7 million milkers. That is the loss of three-quarters of a million dairy cows. Free trade has helped us!

Acting Deputy Speaker Broadbent, surely he knows that we were on around 59c a litre for fresh milk before deregulation and after deregulation we were on 42c. Thirty per cent of our income was taken off us, and he talks about these hardworking people. Well, hardworking they are and you took 30 per cent of their gross income off them. These poor people do not understand a lot of these things that are happening to them. All they know is the banks are ringing them up. Well, there were 13,000 of them before this wonderful free trade regime was imposed upon them. There were 13,000 of them; now there are 6,000 of them. This has been good for them, has it, the loss of 30 per cent of their income, which basically went to Woolworths and Coles! This has been good for them!

What is wrong with the parliament of Australia? What is wrong with the government of Australia? What is wrong with democracy in this country that a person who may be a good member of parliament can get up and put out a statement that is so colossally out of keeping with reality? Does he know nothing about his own electorate?

I had to watch the horror in my own electorate, and I did not watch it as a National Party member because that was the final straw for me. The LNP wrecked the sugar industry, wrecked the maize industry, wrecked and completely closed down the tobacco industry of Australia and wrecked the fishing industry. The ALP completely shut down the timber industry of North Queensland. You wrecked all these industries and the final straw for me was the dairy industry. There were 15 members in the party room that day. I know should not say what was said in the party room, but this is flattery for them, I suppose. Every single one of them got up and said that this will be worse disaster in Australian history. Julian McGauran said that it will be the worst train smash in agriculture in the nation's history if the deregulation goes ahead. He said that in the public arena. He also said that in the party room and everyone said, 'Here, here, we agree' and they all got up and spoke and said that it will be the greatest disaster. What did they do? They straightaway went ahead with it. What is the point of being in a party room that is a joke? We unanimously say, 'We're going to go this way' and then unanimously go the other way—then you join reality land in here.

The result in the area I represent is that we had about 240 farmers and the last time I looked we have 38 farmers. That is all that is left. That is arguably the worst area in Australia for an outbreak of a certain disease—the s-word I do not want to use anymore in this place or elsewhere. Heartbreak and misery were imposed. People keep talking about farmers. For every dairy farmer there were nine other people who worked in the industry as contractors, suppliers of feed, haulers who carted the milk in and out, workers—not that there are a lot of employees in the dairy industry—and the factory workers from the very big factory in the Kennedy electorate behind Cairns. That carnage was reflected all over Australia. There were 13,000 dairy farmers; now there are 6,000.

We stand here today to talk about some little irrelevancy in the greater scheme of things. But there is one party in this country that are the true standard-bearers with pride from the old pre-war Labor Party and the standard-bearers with pride from the Country Party. We have already had the sugar industry reregulated in Queensland. For the first time in 29 years, the farmers have been able to get a fair go. They have a monopoly situation in the situation, exactly the same as in the dairy industry. If my farmers cannot sell to the local factory, they have to put the milk in a milk wagon and take it all the way down to south Queensland—nearly 3,000 kilometres.

Similarly, in South-East Queensland now—unless they go across the border in New South Wales to Norco and carry it many hundreds of kilometres—the local dairy factory has a monopoly, because of the destruction of the dairy industry by the people in this parliament. It was a magnificent and viable industry. Atherton was the only branch of the three major banks that had no farmers in trouble, until this parliament destroyed their livelihoods—and then we probably had more farmers in trouble than anywhere else in Australia. We had 240 farmers and now we have 38 farmers. That is happening right across the board in rural Australia.

When farmers go broke they have to sell their shares in the local factory. So now the factory is owned by a corporation that can pay them whatever they feel like paying them. If that is not bad enough, the ultimate buyer of the fresh milk is Woolworths and Coles. One of the worst countries on earth for concentration of market power is the United States, and Costco and Walmart have 23.1 per cent of the market, the last time I looked. Woolworths and Coles have around 90 per cent of the market in Australia.

If you doubt me, go and have an argument with ACNielsen, who did the series, or go and have an argument with the Australian Bureau of Statistics, who did the series. In 2002 one series said that Woolworths and Coles had 72 per cent and the other series said the two had 68 per cent. There was another big player in the field at that point in time who is not there now—it was not Davids; it was another very big player—and most of that is now owned by Woolworths and Coles. In any event, they had two per cent market growth each year. So, from 2002, at two per cent market growth, that is another 20 per cent of the market—and they had 70 per cent then. Both series said 70 per cent and both series said two per cent. The net result of this is that Coles make a big hero of themselves selling milk at $1, but they are selling it, quite literally, over the dead bodies of the farmers. They are making big heroes of themselves with the public at the cost of the farmer—the greatest cost that anyone could suffer.

The Australian economy has lost some half a million dairy herd. That is $1,000 million a year. The Australian economy has lost $1,000 million a year. And the cost and the heartbreak of 6,000 farmers and some 60,000 workers losing their jobs, well, you can figure that our for yourself. If you lose your job, pretty typically you lose your car and you lose your home. In about 40 per cent of cases, you lose your family as well due to the heartbreak, tension and trauma that set in, and in about two per cent of cases you lose your life. Those are the ugly statistics that are out there.

There is no-one to blame for the situation in the dairy industry, except the people in this place. The previous speaker lauded the TPP agreement and the free trade with China agreement—as I am quite certain every other speaker in this place will do. It was so good that the government had to put advertisements on three and four times a night on every television channel telling us how wonderful it is. Those advertisements went down so well that the polls for the Prime Minister fell to such a degree that the Liberals threw him out—and their polls are plummeting once again. Well, that is what happens if you get up in this place and laud a decision to deregulate this industry—a decision which destroyed the industry. If you are so stupid as to laud those sorts of policies, you will get thrown out. The other mob over here, who are no better, were almost totally to blame for what happened due to the deregulation of the sugar industry. Members in here get up and preach free trade. Where is the free trade when you have got two people in this country to sell food to? Where is the free trade within Australia, when you have two people to buy food from and two people to sell food to? It is worse still in the sugar and dairy industries because we can only sell to the local factory and sugar to the local sugar mill. So they have a monopoly.

So it has been left to the KAP, our tiny little party and, I have to say, the LNP under the leadership of Lawrence Springborg in Queensland. We thank them very much for their support in this area. We have a bit of joy there at the moment on some of these issues with Mr Springborg in there. So it has been left up to a tiny-weeny, miniscule little party like the KAP. What are the government doing at the present moment? They are spending all their time trying to eliminate the tiny, miniscule parties—and the people will have no voice at all, because the only voice in this place that opposed the deregulation of the dairy industry was the voice of the party that I represent, the KAP. That was the only voice we had in this place. And the forces on that side of the chamber and those on the other side want to extinguish that voice, so that they can free trade everything.

Let's have a look at where we are going. By far and away, the biggest cattle-owning company and the biggest landowner in Australia is Macquarie Bank, under Terra Firma, which was Great Southern—which they purchased. I need confirmation of this, because I am only going on media reports that say that they own 320,000 head of cattle. That would be a significant proportion of the land surface of Australia. When the last survey was done 11 per cent of Australia was owned by foreign corporations. That does not sound too bad but, when you take out 52 per cent of desert and 20 per cent which is supposedly owned by the first Australians—but they own a glorified national park—and then you have the national park with another seven per cent, with 11 per cent they owned more than 50 per cent of the available land back in 2006. Uruguay, the biggest wool producer outside of Australia, is one of the 20 poorest countries on earth. Why? Because 72 per cent of Uruguay was owned by the United States. They got no benefit for their great product, their wool. It was in its heyday then and was a bigger export in Australia than coal. That is where Australia is going. (Time expired)

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

I am just catching my breath after that contribution from the member for Kennedy. I am not sure whether anyone in the chamber understands where the honourable member, who just resumed his seat, actually sits with his intention on how he might vote on this bill. I am surprised that he went for a full 15 minutes and, yet, I have no idea whether the honourable member will be supporting the Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016, because he chose to take his time to address a whole range of other issues. I may come to some of those if time permits, but I will get to the substance of the bill first so that I do not fall for that same trap.

As we say over and over again in this House, this government is absolutely committed to supporting small business and farmers, and reducing red tape. We have listened to industry and to the people who are impacted by the legislation we create. As a result, this bill will introduce flexibility into the dairy levy poll process following a request to do so from the Australian dairy industry. The dairy industry has shown some concern regarding the regulations that mandated a dairy levy poll be held every five years, as required by the Dairy Produce Act 1986. There is a regulatory and financial burden associated with this poll being held every five years. The dairy industry estimates that the cost of holding this poll at the current frequency of every five years is up to a potential cost of $1 million. This $1 million burden comes out of a fund that is paid into by farmers in the form of a compulsory levy. Where farmers are obliged to pay this compulsory levy, it is important, I believe, to ensure that farmers have the ability to make sure that the money is being spent in a way that benefits them the most and to ensure that every single dollar gains the most benefit.

Without the need to hold a levy poll every five years, this is going to be an extra $1 million that can be spent on vital research and development or other investment directly for the farmers' benefit in the dairy industry. Whilst research and development often sounds like an intangible good, the benefit of research and development in the dairy industry is something that can assist the farmers in my electorate and all over Australia enormously. With research and development in dairy production, I think there is much more potential for innovation to improve efficiency and the production of milk or to create new management strategies or technologies to deal with drought.

As many farmers around Australia will know, as will the members of this parliament who represent rural and regional Australia, as I do, the lack of rain has been seriously affecting farmers in the dairy industry. In my home state of Tasmania, milk production will be down by approximately 2.5 per cent by the end of the year. This, of course, has obvious flow-on effects impacting the financial situation of farmers in Tasmania and in my electorate of Braddon. With the money saved by not being obliged to conduct levy polls, these kinds of issues could be addressed—something of benefit to farmers in the present and in future years.

As with all changes to regulations, there are the obvious questions of whether it will expose farmers to added risk or unfair changes that diminish their say in the matters of their industry. In situations where the majority of dairy farmers support the current rate of the levy, and where there is no widespread demand for change in the levy, it just does not make sense to spend so much money on a poll of farmers when it is completely unnecessary to do so. This is the obvious rationale behind this legislation. It is only when there is a change in the dairy levy proposed that a poll is required. This gives the industry the flexibility and autonomy to hold polls only when needed, rather than on the obvious five-year rotational basis, as is currently mandated by legislation.

Whether there should be a change to the levy or not will be determined by an independent poll advisory committee, which will be established periodically by Dairy Australia, as required by this bill. If no changes to the levy are proposed, then no poll will be held, generating significant savings to be used to benefit the dairy industry. There are safeguards in this bill to protect farmers. The poll advisory committee cannot become a tyrannical overhead recommending against polls to stymie the voice of farmers. If dairy farmers, who collectively represent 15 per cent of levies paid, disagree with the poll advisory committee in its recommendations, then a process is able to be put in place to enable a levy poll to be held.

This legislation is not the dairy industry or the government telling farmers what is good for them in some paternalistic way. This legislation has come about as a request from the industry to improve the way that those farmers' levy funds are used. In 2014 and 2015, Australian Dairy Farmers and Dairy Australia, as the primary national dairy farmer representative organisation and the industry services body, undertook a review of the dairy levy poll process. This review process took place following the 2012 dairy levy poll. The reform proposed in this bill comes from recommendations by that review.

This legislation has also been consultative. Six thousand two hundred and eighty eight Australian dairy levy payers received an information pack, 1,221 dairy farmers attended 30 separate presentations and 785 telephone conversations were had with dairy levy payers. In addition to this, a vote on the proposed changes was held, with almost 90 per cent of voters in favour of these changes. Every single dairy levy payer has been contacted in some way, in relation to this change, and was given the opportunity to provide feedback during a wide and extensive consultation process.

In talking about the legislation that will impact the dairy industry, it gives me a good opportunity to paint a picture of the dairy industry in Tasmania for members of this House. There are approximately 150,000 dairy cows in Tasmania spread across about 500 dairies. These cows produce hundreds of millions of litres of milk per year. In 2010, Tasmania produced 7.5 per cent of the Australian milk production total. The dairy industry in Tasmania is a very significant part of the Australian agricultural sector. For a state that accounts for just over two per cent of our population nationally, I think it is fair to say that, once again, in yet another industry, the great state of Tasmania is punching well above its weight in the dairy production sector.

As such, this legislation will be of enormous significance to Tasmania. I am sure it will be welcomed by the dairy farmers in my electorate of Braddon and across the state. This legislation will remove some of the red tape and give dairy farmers the ability to collectively determine when they need levy polls and how often those polls should be. This government is continuing to be committed to small government and is giving those in industry the power to determine their own destiny without unnecessary regulatory burdens. It is on that basis that I have no hesitation this morning in supporting this bill that is before the House.

I would like to use some of the time remaining to talk a little bit more about the dairy industry in Tasmania and take a few moments to pay public tribute to the contribution that all farmers make. On this occasion, given we are focused on the dairy industry, I want to publicly thank the dairy farmers of my electorate for the way in which they are going about their business, for the way in which they are growing in their belief in their industry, for the way in which they are growing in confidence about the future of their industry and for the way in which they have unilaterally embraced the exciting potential that will be coming from the free trade agreements that have been signed and that will more than likely be signed.

I found the contribution from the member for Kennedy a few moments ago quite extraordinary. He talked about a previous speaker lacking reality. I thought that was quite ironic. I encourage those people who listen on a regular basis to the member for Kennedy to put that in some context about who in this House may hold a firm grasp on reality. He talked about the fact that we killed off the dairy industry—collectively the Labor Party, the Liberal Party and anyone else in this House except the honourable member himself. He talked about the number of farms being down from 13,000 to 6,000 but he made no reference at all to the way in which the industry has shifted significantly over the last decade or two. Obviously the smaller farms have come under enormous pressure—that goes without saying—but it has given them an opportunity to sell their properties, to sell their businesses. We now have more productive farms, more efficient farms, more economies of sale within those farms. It was an inevitable outcome that I think everybody in the dairy industry knew was coming and probably in their heart of hearts knew had to come. The traditional model of small farming was coming under enormous pressure with the growing influence of the dairy sector.

I think it is fascinating to understand a little bit about where the whole dairy industry has gone. I mentioned in my maiden speech a quote from Dr John Tanner, who was talking about the timber industry in fact when he said that wood fibre is the new milk solids. What he was really saying was there is still a lot to be discovered about the by-product of wood fibre if you look at the way in which the dairy industry of the last few decades, maybe 30 years in fact, has just grown so much by producing alternative products and consumer desired products out of milk. It was not that long ago that milk was just milk, a white liquid in a bottle. We got a bit of it at school. There were a few different flavours if you were lucky back in my day but really milk was milk and there was not a lot of excitement to it. But look at it now. It forms the basis of a whole range of saleable and exportable products. I think this is at the essence of the dairy industry—how it has rebirthed itself over the last 20 or 30 years. It has taken a natural product produced by tremendous producers across the country and has seen its way into a whole new future. Just the Asian markets alone, never mind anywhere else, want so much of our product. They want our cheese, they want our yoghurt, they want these products that their children can take to school in their lunch breaks and the list just goes on. What an exciting future that we have.

There is technology now in the whole dairy sector. I get the opportunity regularly to visit dairy farms, to walk out and about and to go into the new milking sheds of the 21st century. Gone are the old days. Dairy cows now are producing so much more per cow per year. It is an incredible story. It is really hard to believe that we can get so much more milk out of an animal than what we did 10 or 20 years ago. The husbandry and the care and the condition of these animals is exceptional. I dip my lid to those dairy farmers in my electorate and across the country for the way in which they are embracing the huge potential of the industry.

I want to spend the last two minutes on a very contemporary issue when it comes to dairy farms—that is, the approval yesterday by the Treasurer in accepting the recommendations of the Foreign Investment Review Board to allow the sale of the VDL company in Woolnorth in my electorate. It is the biggest dairy farm in the southern hemisphere. There has been a lot of chatter about it. I was quite disgusted really with the interview transcript I read from last night—I did not hear it live. Ben Fordham interviewed the Treasurer. I thought it was very rude interview and showed a complete lack of understanding of the industry or, in fact, the feelings of those who live in my electorate where obviously this sale has taken place. The reality is this property has been on the sale list for a number of years. It has never been owned by an Australian company. It is currently owned by a council in New Zealand. No-one wanted this farm. No-one wanted to buy it and then at the last minute we had two bidders come into play. One was TasFoods, which Jan Cameron has some involvement in, and also another investment company called Moon Lake Investments, which is the successful bidder.

Can I just say, for everybody listening, particularly in Sydney and Melbourne, stay out of the interests of the people in my electorate. Get on about your own business. Stop using us as some social experiment because we do not need your opinion. The people of Tasmania, the people of Braddon quite accept that foreign investment is a part of our life. The original offer was well below the final offer. Not only that but the final offer had attached to it tens of millions of dollars of further infrastructure development. Then when a Chinese company identified as pretty well an unconditional buyer, Jan Cameron and some of her ilk like Andrew Wilkie and these sorts of people came in to make heroes of themselves when a contract was already in place, cashed-up, ready to go, subject only to approval. We do not want Jan Cameron or her like trying to lock up Tasmania as they have done in the past. We are quite happy. It would obviously have been better if somebody had bought it with Australian content. We understand that. (Time expired)

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

I remind the member that he must address other members of this chamber by their correct titles.

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

Like who?

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

The member for Denison. You can shake your head, but those are the rules.

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

I apologise.

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

I rise to speak on the Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016. The current legislation requires the dairy industry to have a poll held every five years to obtain feedback from the relevant dairy farmers who pay that levy about whether changes should be made to the rate of the services levy. This levy funds the activities of Dairy Australia to undertake research and development to support dairy farmers' sustainability, including systems to improve farm management practices and dairy industry forecasts.

The bill amends the Dairy Produce Act 1986, removing the need to conduct a dairy levy poll every five years. It is a simple act then, in a sense, but it is a sensible move. This piece of legislation has been developed in very close consultation with dairy farmers throughout the country. Dairy farmers had expressed concerns about the money spent on conducting a levy poll every five years. They estimated that to be up to $1 million. Dairy Australia, therefore, commissioned its own independent review of the levy poll process last year. This review, carried out in conjunction with state dairy farmer organisations, came back after extensive consultation with an overwhelming interest in the content of the legislation we have before us today. The result of the discussions will be that dairy farmers will have a simpler process and additional legislation will be enacted to remove the requirement to have a five-yearly dairy levy poll.

As well, there will be a dairy advisory committee set up to review the levy every five years. There will also be a mechanism by which dairy farmers can request a poll if they disagree with a decision of the advisory committee. That seems to me to be very fair and reasonable, and I know my dairy farmers support it.

What are we talking about when we refer to the Australian dairy industry? I think it is important to put its size and value into perspective. The national dairy herd is now at 1.74 million cows. While the average herd size is 284 cows, there are many much larger herds, many herds of 400, 500 or 600. We have milk production at nearly 10 million litres. We have some very high figures for average annual milk production per cow, compared with international figures.

Dairy is Australia's third-largest rural industry. It is a $13 billion farm manufacturing and export industry. It generates a huge volume of well-paid and varied employment: approximately 39,000 people are in the dairy industry workforce, but there are multipliers there which make that employment even greater, including into metropolitan areas.

A big proportion of our milk is manufactured, and that is where a lot of the industry employment is generated. Drinking milk is only about a quarter of the production; the rest goes to cheese, milk powders, butter, whole milk powders and another nine per cent of other varied outcomes. The major export industry that dairy represents is six per cent of world dairy trade. Australia represents six per cent of world dairy trade. I wish that were more. When I was writing my thesis on the Australian dairy industry and its export history and potential, we were a bigger proportion of the world dairy trade, neck and neck with New Zealand. Now New Zealand has substantially overtaken us. But our major export industry value is some $2.88 billion in the last financial year, which is not at all inconsequential. The percentage of our milk exported was 34 per cent in 2014-2015. As Deputy Speaker Mitchell himself, a member from Victoria, would know, one of the biggest exports out of the port of Geelong is Victorian dairy milk powders. We are proud of that.

Our major markets for Australian dairy products are, of course, Australia, which is our biggest market. That includes our drinking milk. Then it is China, Japan, Singapore, Indonesia and Malaysia. You will see that in that list of where our dairy products go to we include China and Japan, and we are very pleased to say the newly signed free trade agreements are going to facilitate even greater exports and greater value exports to China and Japan, but also to South Korea, in the coming years.

As a nation, our per capita consumption of drinking milk is 105 litres and of cheese is 13.6 kilograms. That is way above the consumption of our near neighbours in the Indo-Asia-Pacific, where we are very aware that there is a growing interest in the consumption of dairy products. Indeed, it is often said in export circles that Australia is sitting in the right place at the right time to substantially influence the consumption of dairy products in India and in the Indo-Asia-Pacific region. We can seriously grow not only the consumption of whole milks, infant formulas and cheeses, but also other products like the yoghurts and ice-creams and even pharmaceuticals which are derived from dairy products.

We have an enormous future and great potential in the dairy industry in Australia. One of our major advantages is the fact that we do not depend on what some will refer to more commonly as industrial farming for our dairy production. Many of our cattle are free range. They graze in the great outdoors on pastures. So, for example, the golden colour of our dairy products is often remarked upon. That is a natural consequence of betacarotene, of cows being able to live outdoors in moderate climates and eat green pastures. The goodness of that grazing system is translated into the value and nutritional status of the milks. Other countries have tried to simply dye their cheddars and cheeses a golden colour to mimic what our dairy cows do naturally.

I have to say, though, that not all is well in the dairy industry of Australia. We have a huge issue with being able to attract and keep sufficient labour or workforce, from both those who milk the cows—the most basic labour needed for milk production—through to highly skilled workers in herd management and farm management, through to our manufacturing sector.

I am pleased to say that we have recently introduced a special visa to facilitate dairy farm workers coming to Australia. They must have at least several years of relevant dairying experience or a relevant qualification in on-farm dairy management. I was very interested recently to meet in Saudi Arabia a lot of Filipino dairy workers in one of the biggest dairies in the world, doing their two years of dairy experience in that country in order to qualify to come to Australia to work in our dairies at, of course, much more reasonable wages. And I have already met some of those Filipino workers doing a great job in our dairy industry in northern Victoria.

While the labour supply is a challenge, so also the margins for our dairy producers are not always adequate. We are always under pressure in our domestic market, given the duopoly of Coles and Woolworths owning some 80 per cent of the retail grocery sector. Clearly, they are then in the position to exert major power on their suppliers, in this case the dairy producers and manufacturers. They have their generic, or 'home', brands produced by the same manufacturers, often at a substantially lower price. It is then put onto the supermarket shelves in direct competition with their own branded product.

Coles and Woolworths do not play fair. Of course, we have had the dollar-a-litre milk enticement—a loss-leader-pricing strategy. In effect, a lot of people said 'No, no—this is just Coles and Woolworths taking a small hit to entice people in to buy a litre of milk at $1.' Let me assure you—it was the dairy industry itself which took the hits in having thinner margins on their dairy farms when milk was offered at a dollar for a litre.

We have also had other experience with the supermarkets. When a big dairy manufacturer refused to have generic product come out of its factory system with a much lower price, in direct competition with its own branded product that it had invested a lot of money into researching and developing to be a premium brand, they were removed from the supermarket shelves. That was a very salutary lesson for that particular great Australian dairy company. I hope that the recent strengthening of the spine of the ACCC will continue and that there will be more action taken to curb the unconscionable behaviour and abuse of market power that has been observed for so long with Coles and Woolworths in particular.

We also have in Australia a lot of competition from imported dairy product. Now, there is nothing wrong with competition: long live competition! But when that dairy product is produced with subsidies in Europe, that is not fair. It is certainly also a very good thing to observe that we have now had a recent strengthening of the national interest and the spine of our Australian Anti-Dumping Authority. In the recent decision about imported canned tomatoes from Italy, we have finally—after what had to be an appeal against the first decision—seen all of the product from Italy on our supermarket shelves with an anti-dumping set of duties placed on it to overcome what was, of course, long-term cheating. In the case of Australian-grown tomatoes, they are, of course, not produced by slave labour—refugee forced labour—as we have found is now the case too often in Italy. Even though we have in Australia our own home-grown magnificent tomatoes, we still have Coles and Woolworths with a huge price differential. That suggests that they have their stores filled to the ceiling with imported, cheap and sometimes slave-labour-picked product. I urge Coles and Woolworths to be fair about this and also to look on their supermarket shelves at imported dairy product, and ask themselves, 'Has this product been produced without subsidies and in a humane environment, in terms of animal welfare?'

Dairy farmers in my area are particularly stressed now, given that they were once water safe and water secure—being located in the biggest irrigation system in Australia, the great Goulburn Murray Irrigation District. Unfortunately, that irrigation system failed for the first time in its 100-year history during the Millennium drought. That would not be a long-term problem if, during that long-term drought, some half of my irrigated dairy farms were forced to sell all or most of their water to the Commonwealth Environmental Water Holder, via a tender—an untargeted, uncapped tender—which was offered by the then minister, Penny Wong. At the end of the day there was up to $2,400 per megalitre paid for permanent sale of high-security water to the Commonwealth Environmental Water Holder.

Tragically, those farmers had no option. They owed double and triple their normal debt to their lenders. The banks said to them, 'You sell down your debt by selling your water or we will sell you out.' At the time, temporary water was only $30 to $40 a megalitre. Today the 50 per cent of dairy farmers in my area who have been trying to continue to farm, relying on that temporary water market, are faced with $300-plus per megalitre prices. That is beyond the capacity of the most efficient dairy farm to pay. So, weekly, I see magnificent dairy enterprises evaluating the costs now of Goulburn Murray Water's delivery of irrigation to them. The fees and charges are extraordinary. After all, they have some 800 permanent Victorian public servants working in that system—a hugely overmanaged and inefficient system.

My dairy farmers need their irrigators' water market to be evaluated and reviewed. They need it to become transparent, regulated and fair, with transmission losses calculated in the sales. And they also need the carry-over entitlements of the Commonwealth Environmental Water Holder and other non-primary-producing players in the market, like the state governments of Victoria and South Australia, evaluated so that our dairy farmers, amongst other food producers, can continue to prosper and to thrive.

There is an enormous future for dairy in Australia. We are one of the world's best, cleanest and most nutritious producers of dairy product, but a lot of that is now in jeopardy in northern Victoria—not because of drought but because of failed state and federal government policy and ineffective management of the system. I commend this bill to the House.

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

The Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 amends the Dairy Produce Act 1986 to remove the legislative requirement for a dairy levy poll to be conducted every five years. This bill is consistent with the Australian government's commitment to creating a stronger business environment for the agricultural sector by reducing regulatory burden.

After extensive consultation with industry, Australian Dairy Farmers and Dairy Australia Ltd have requested the preparation and introduction of this bill into parliament on behalf of dairy farmers. The introduction of this bill will not have a negative impact on the dairy levy. Dairy levy payers demonstrated support for these changes by voting in favour of simplifying the levy process. If the bill is passed, it is expected the saving to industry would be up to $1 million every five years, when a poll is not required to be held. These funds could be redirected towards further investment in marketing or research and development activities.

On the subject of research and development, this coalition government is investing strongly into agricultural R&D. I note the government and industry invest around $550 million annually through the rural R&D corporations. New government initiatives will increase this investment and provide better targeted results. The government's $1.1 billion National Innovation and Science Agenda was launched on 7 December 2015. The agenda is aimed at supporting innovation and entrepreneurs in businesses across the economy, beginning in the 2016-17 financial year. More than $260 million has been allocated this year in Commonwealth matching funds for rural R&D corporations. This represents a $30 million increase on matching funds provided in 2012-13 by the former government.

Total rural R&D payments, including RIRDC, are budgeted at almost $269 million. This is up from $241.5 million in 2012-13. The government has invested $200 million over eight years for the Rural Research and Development for Profit program. The government has more than delivered on its election commitments in this regard. The first round of $26.7 million in R&D grants was announced in May 2015. These grants will be matched by more than $32 million in cash and in-kind contributions by the successful applicants. Further announcement on the second round of R&D-for-profit grants will be made in due course.

Recent GRDC activities have been raised in debate. The type of events referred to by the member for Hunter are not marketing as defined under GRDC's enabling legislation. The GRDC has an obligation to engage with its levy payers and to disseminate the findings of its research and development. Ultimately, the GRDC needs to answer to its levy payers for its expenditure in how it goes about communicating with those levy payers.

The bill is deregulatory in line with the government's policy of reducing red tape and lifting the regulatory burden on industry and will provide for a flexible, streamlined levy poll process consistent with the other agricultural sectors.

Question agreed to.

Bill read a second time.