Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Hansard source

I rise to make a contribution for the opposition on the Dairy Adjustment Levy Termination Bill 2008 and note that the opposition will be supporting the legislation. This is a bill which indicates a real milestone in the life of the dairy industry and the structural adjustment program. When the industry came forward to the government in the late nineties to provide a road map for how it saw the industry moving forward, given the real need and the push for the industry itself to deregulate, the industry brought a program to the government which the government subsequently supported, and the Dairy Structural Adjustment Program was announced in September 1999. It has in fact transformed the industry. In the early seventies, when my parents moved to a dairy farm in the foothills of Cradle Mountain, in Tasmania, the herds were averaging about 70 cows, and now we see herds in the hundreds. It really has made a significant change to the industry. I note the very mature way that the industry now looks to plan for its future. The plans of the industry, particularly in my home state of Tasmania, are very mature. It has a very sound process for taking the industry forward, and I am sure that that is a result of the process of the adjustment that occurred from 2000.

The intention of the bill is to terminate both the Dairy Adjustment Authority and the dairy adjustment levy and to wind up the structural adjustment fund. It is interesting to note that through a levy of 11c per litre of milk the government has met the responsible and fiscal goal set to fully recoup the cost of an estimated $1.74 billion in adjustment funds to the industry.

Today, the gross value of our industry is about $3.2 billion, $2.4 billion of that in exports. About 50 per cent of our milk production goes overseas in the form of cheese, butter and milk powders. We are the third largest exporter in the world after the EU and New Zealand. While the industry continues to face the pressures of Australia’s primary producers at present—the credit crunch we hear so much of, the depreciation of the dollar and higher fuel and feed costs—there is no doubt that deregulation has had a significant impact on the industry. With the passing of the bill, the dairy adjustment levy will cease. I share the expectation of my colleagues and the industry that the government will ensure that we see a reduction in the price of milk of 11c per litre. Again, in the current circumstances, I think that is an important thing. I reiterate the coalition’s support for the bill.