Gerard Rennick (Queensland, Liberal Party) Share this | Hansard source

The Protecting Australian Dairy Bill 2019 is a classic example of wedge politics in action. One Nation now wants bureaucrats to regulate the price of milk whilst, at the same time, it is calling for bureaucrats not to regulate water in the Murray-Darling Basin. If you don't like the way bureaucrats are regulating water, what makes you think they'll be any better at regulating milk? Talk about flip-flopping.

Like the Murray-Darling, our dairy industry is complex and varies significantly by state. Trying to determine a price for milk that will keep everyone happy is an impossible dream and only goes to show how out of touch One Nation are. So let me say this: a base milk price will not be effective, because of regional variations in dairy farming and the difference in domestic and export prices. If a base price is set by a state, the processors will just buy milk from the state with the lowest base price, thus sending dairy farmers in other states, like Queensland, broke.

Not once have I heard One Nation or Labor actually name their price. It's all very well saying you want a floor price. That's the easy part. But has anyone actually done a sensitivity analysis on the different impacts of different base prices? I doubt it. I haven't heard anyone talk about the detail here—that is, if you believe, like those opposite us, that bureaucrats should set prices.

Once upon a time, the government set a floor price for the wool industry. Do you know how that turned out? It destroyed the industry for the best part of a decade as a result of oversupply. Why? Because farmers were guaranteed a fixed price regardless of demand. They didn't have any incentive to rein in supply when demand was slowing. Ultimately, this led to a massive wool stockpile that crushed the wool price and the industry with it.

My childhood was spent in the sheep yards and shearing sheds mustering, yarding, pressing wool and working alongside my first great love—the Australian working dog. Not many of you may be familiar with what happened to the wool industry, but I am. I had to watch my parents struggle to make ends meet when the industry crashed, and they did. My parents, like so many others, don't bother complaining. They accept that the world isn't perfect, and they adapt to prevailing conditions. It's a pity, though, that the world didn't listen. My father hated the floor price. He hated governments regulating prices, period. He knew it was going to crash the industry, and he was proven right.

The devil is in the detail, so let's go there. I think you will soon agree that, like myself, Senator Hanson is sadly lacking any commercial acumen whatsoever—lots of rhetoric but no solutions. Are we talking about the narrow definition of milk or the wider definition? This matters because milk only constitutes 27 per cent of dairy products sold. The largest product sold is cheese, at 36 per cent, followed by milk, at 27 per cent, and butter, at 23 per cent, with yoghurt and ice cream making up the remaining balance. In Senator Hanson's proposed bill, she wants the ACCC to set a base price for milk. The main condition on this is that the ACCC, when settling on this price, must have regard to the cost of collecting, processing and selling dairy products, to the long-term food security of Australia and to the commercial viability of dairy farms and processors. That's about as clear as mud, isn't it. How many bureaucrats are we going to have to employ to work all this out? Sounds like a great waste of taxpayers' dollars to me.

Tell me: is this base price meant to be the same for each state, or is there going to be a different price for every state? This matters because the average expense of milk solids varies significantly, state by state. In Tasmania it's $4.36 per kilogram and in Queensland it's $6.63 per kilogram. In other words it's almost 50 per cent more expensive to produce milk in Queensland than in Tasmania. Processors already pay more for Queensland milk than they do for milk from other states. That's right: Queensland receives $7.84 per kilogram of milk, while Victoria only sees $5.87 per kilogram of milk solid. Effectively, by introducing a base price for milk, One Nation is going to throw Queensland dairy farmers under the bus, since they are already the highest-paid dairy farmers in Australia. And, if the price is set by state, how does the bill prevent processors from buying milk from the cheapest producing states?

I'll make a couple of other points before I conclude. The preamble to this bill says that dairy farmers have been leaving the industry since it was deregulated in 2000. This is not the full picture. As a matter of fact, more dairy farmers left the industry in the 20 years before deregulation than after it. It's also worth noting that farmers who left the industry after deregulation would more than likely have been part of a transition package funded by the consumer, who had to pay an 11c-per-litre levy for milk for eight years after deregulation, a deregulation that the dairy farmers asked for and that the state governments—not the federal government—agreed to. It should be remembered that much of the land in Queensland that was once dairy farms has now been subdivided into acreage. Many dairy farmers who got out of the industry did so by subdividing and taking profit from rezoning agricultural land into residential land.

What the coalition government is going to do is give our dairy farmers greater control over their destiny by bringing in a mandatory code of conduct that will ensure dairy farmers can fairly bargain with processors so they can receive a fair price for their milk and related products. We will continue to fight for lower water charges, Australian ownership of water, lower power prices, strong enforcement of anti-dumping laws and—most importantly of all—higher taxes on profits sent offshore by foreign owned companies, which most of the major processors are. That's something that I would be working on right now if it weren't for this desperate, attention-seeking stunt.

I will always be a fierce defender of our agricultural industry and way of life. But the best way to ensure we maintain our high standard of living and vibrant agricultural industry is to ensure that we continue to drive productivity. Our freedoms are the child of affluence. If we don't constantly improve our productivity, we will not continue to earn the profits that provide us with the freedoms we have today.