Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to 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.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

The Dairy Adjustment Levy Termination Bill 2008 amends the Dairy Produce Act 1986 to close the $1.92 billion dairy industry adjustment program. Specifically, the Dairy Adjustment Levy Termination Bill 2008 provides for the termination of the dairy adjustment levy, the wind-up of the Dairy Adjustment Authority, closure of the Dairy Structural Adjustment Fund, surplus levy funds to be returned to the Consolidated Revenue Fund and costs of terminating the adjustment program to be paid for by the levy. The bill also provides for consequential amendments to remove references to the adjustment program in other acts and repeal of the acts that established the dairy adjustment levy.

The Dairy Produce Act 1986 has some major shortcomings, none larger than the $50 million in surplus dairy adjustment levy funds that will be collected under the act unless it is amended. Asking Australian families, as consumers of milk, to pay significant levies over and above the needs of the adjustment program is something that this government will not do. The government has proposed amendments to the act that will terminate the levy in a way that minimises levy collection surplus to the needs of the adjustment program. This will be achieved by cutting the levy termination notice period by 28 to seven days and by allowing the government to consider levies paid by consumers but not yet receipted into the Dairy Structural Adjustment Fund when declaring a levy termination date.

The government expects to remove the dairy adjustment levy in the first quarter of 2009. Any surplus funds will be credited to the Commonwealth. The government expects the removal of the levy to be passed on to consumers. Any complaints or suggestions of anticompetitive conduct in relation to the removal of the levy will be dealt with by the ACCC. The government has also proposed to wind up the Dairy Adjustment Authority by declaration, and this is expected to happen in December 2008 or January 2009. Amendments will also allow the government to close the Dairy Structural Adjustment Fund, after which the adjustment program will be taken to be closed. I commend the bill to the chamber.

Question agreed to.

Bill read a second time.