Nick Xenophon (SA, Independent) Share this | Hansard source

I just reflect on Senator Back's very powerful contribution. We cannot ignore what Senator Back has outlined. They are very real concerns in terms of Australia's slipping productivity and competitiveness. These are real issues that we must address, otherwise we will lose significant export markets. We will not be able to compete on the world stage. We will not be able to compete in global markets. The consequences of that for our agricultural sector will be disastrous. It will have a cataclysmic effect on our agricultural sector and, indeed, our economy unless we address these issues. Senator Back's contribution makes specific reference to some of the extraordinary charges. We know that Senator Back is a former vet—once a vet always a vet. Fees of $625 an hour being charged is extraordinary. Fees have been ramped up without, apparently, any level of transparency, accountability, rhyme nor reason. It must be addressed by this place; it must be addressed by the department. I would urge the minister, the Honourable Barnaby Joyce, to read every word of what Senator Back has said in terms of our lack of competitiveness and our slipping productivity.

In relation to this bill, I have real concerns about cost recovery when it comes to export markets. I acknowledge that the Department of Agriculture is operating on less than half the budget it had only seven years ago, which is a ludicrous position. Agriculture, food production and exports are vital to the Australian economy. The department should have enough funding to provide support to the industry. It should not have to bill the very people it is supposed to be backing, because the enormous economic benefits of having a strong export market for what is our ultimate sustainable, renewable resource—agricultural products—is something that we must be able to support rather than put roadblocks in the way. Exports and agricultural exports in particular provide a net benefit to the Australian economy. These activities should be supported by the government as a whole rather than penalised by extra fees. That is what my real concern is about.

There appears to be no bipartisan consensus with respect to these fees over the years. I think we have gone in the wrong direction. We should be acknowledging that, if you build export markets, it means that those businesses will be more profitable and they will be paying more tax, and they will be employing more people, who in turn will be paying tax. That is the approach we need to have philosophically. To make matters worse, the application of cost recovery has been, I believe, a disaster—although, to be fair, I believe that Minister Joyce and the current government understand some of these issues and seem to be willing to address them. Cost recovery is spread unevenly and I think that it needs to be dealt with.

I will be supporting this bill but I do have serious and significant reservations about the whole concept of cost recovery. I note that Minister Joyce and his office have been very supportive in addressing particular concerns I have had about matters relating to this bill. In particular, I have had representations from Ross Hampton, the CEO of the Australian Forest Products Association, and from Gavin Matthew, the manager of processing, and there have been some useful and fruitful discussions with the department and with the minister's office in respect of those representations. The minister and the department have now agreed to hold off on applying tonnage charges to the forestry industry until a review of the proposed fee application has been completed. I would like to take this opportunity to table a letter from the minister outlining this agreement. It was a letter received from the minister this morning. It is undated but it is a letter that was prepared this morning. I seek leave of the Senate to table that letter.

Leave granted.

I will just read into the Hansard the letter from the minister, the Hon. Barnaby Joyce, MP. In this letter, which is addressed to me, the minister states:

I am writing with regard to the planned fee review for plant export industries.

The fee review will commence in July 2014 and will include consideration of the equitable distribution of a quantity (tonnage) charge for timber products.

In determining appropriate fees and charges the Department of Agriculture will develop a draft Cost Recovery Impact Statement (CRIS) after consultation with industry. This will be facilitated primarily through the Grain and Plant Products Export Industry Consultative Committee and the Horticulture Export Industry Consultative Committee. The draft CRIS will be released for public comment and further feedback will be sought prior to its finalisation and, if required, eventual submission to the Minister for Finance for approval. Ultimately I will consider a legislative package that will be subject to usual parliamentary consideration.

I am advised the process outlined above will take an estimated 9 to 12 months with implementation of the new fee regimes to commence after that process has been completed.

Thank you for your willingness to engage with me on this important issue.

Yours sincerely

Barnaby Joyce MP

I think that gives a degree of comfort and support to the industry to give them time to adjust to a tonnage charge. The process means that, in effect, there will not be a tonnage charge in place until at least 1 April next year, given that the process will take nine to 12 months. I am very grateful to the minister's office and to the department's advisers who put up with me last week in a number of meetings that we had in respect of that issue, but I think it was a good and fair result.

My concern about recovery fees is maintained. My concern is that cost recovery is spread unevenly across the sector. A proportion of experts are currently carrying the burden for everyone, which is patently unfair. I note the department is planning to review the ways fees are charged, and I hope they will be more considerate and flexible when it comes to applying these charges, and also to take heed of the issues raised by Senator Back in terms of what appear to be less than transparent charges that have been in place for a number of years.

It is also not fair for small exporters to pay the same as large exports, or for forestry products to be charged per tonne in the same way grain is, when these products have very different tonnage values. I have spoken in this place before about Mick and Tanya Punteriero, who are niche lime growers in the Riverland—people from your neck of woods, Madam Acting Deputy President Ruston, in the wonderful Riverland of South Australia. I know that you have done a lot of work with them to assist them. Mick and Tanya export a small number of pallets of their limes to New Zealand each year. The application of cost recovery, however, meant that they were charged the same amount as a large packing house exporting thousands of tonnes. It was a fixed charge that was unreasonable—around $8½ thousand.

I understand that a number of matters have flowed on from that through your work as well, Madam Acting Deputy President, which has been of some assistance to growers such as the Ponterieros. But, while there are some rebates for smaller producers, there was no guarantee how long these would last. A fee structure that does not recognise the size of a business or what they are exporting is not just unfair but also a disincentive to export. If you want to encourage those small exporters to become medium to big exporters in the future, encourage them now; do not hit them with punitive fees that are simply too uneconomic for them to be involved in the export market. It means that smaller shipments like those into new or niche markets just are not available and, without innovation, our industries will stall.

I will be supporting this legislation with some reluctance and, while I acknowledge the work of the minister and the department in addressing some of these issues, I am still philosophically and practically opposed to the way cost recovery is applied at the moment. I hope that when the budget issues have been addressed the government will reconsider the use of cost recovery in the agricultural sector to the extent it is now being used and also to kick-start incentives for the small exporters which will become the big exporters and the bigger employers in the future.

In the meantime, I hope the fee reviews will be thorough and will take into account concerns raised by the industry and the concerns raised very ably by Senator Back. If cost recovery is going to exist, it should at least be equitable and fairly applied. I believe these measures agreed to by the minister will go some way towards achieving this and for the forestry products industry I believe that the undertakings, the letter from Minister Joyce today, will give them some comfort and ability to plan for their sector.