Stone, Dr Sharman, MP

Dr STONE (Murray) (12:12): I too rise to support the Export Charges (Imposition—General) Bill 2015. I come from an electorate, the electorate of Murray, which is a major exporter of prime food as well as fibre, so fair and reasonable charging for the inspection regimes which certify the cleanliness and quality of those exports is key to us growing our markets offshore and keeping those markets. I have to say that I am concerned about the price hikes in the past, particularly over the past five or 10 years, when it comes to paying for the tests, inspections, audits and certifications. Those price rises have been extraordinary. While this bill rightly sets out a new regime, and we need a new regime, we need to make sure that the biosecurity sector in the Department of Agriculture, which is making the full cost recovery charges, is mean and lean in terms of its efficiency so that the costs are not simply a bit of a go in order to support other activities within the department. They have to be very carefully watched, and I know the minister is dedicated to making sure that the department does not put unfair administrative overheads into that cost regime. This group of bills is designed to be a cost recovery mechanism to recover costs under both the Export Control Act and the Australian Meat and Live-stock Industry Act. These acts manage the exportation of certain goods, such as meat, seafood, dairy products, plant products and live animals, to ensure that we meet the requirements of the importing countries. As previous speakers have said, our clean, green global image is enviable. I have just come back from the Western Sahara, where I went to a number of sardine factories, and even in Morocco people were aware that Australia has an incredible reputation for not making shortcuts or mistakes with our biosecurity. We have very rarely seen diseases like rabies, foot-and-mouth or bluetongue that are endemic in our neighbourhood, because we are careful about our import regimes. In exporting our product, we offer high quality and good value for money. The costs that the government incurs from all types of export activity happen to be incurred through the Department of Agriculture. It is going to be recovered through these bills. I am sometimes bemused when we talk about full cost recovery from the beneficiaries as the principle behind these charges and who pays. The beneficiaries of course go well beyond the actual grower of the oranges, the beef or the grains. The beneficiaries of our exports are well beyond the primary producer: they extend also to the broader Australian society. Other countries, when they talk about cost recovery, do not simply pick the easiest target, which is the primary producer; they extend that concept to the taxpayer as a whole or the broader society. I would like us to think beyond the square in this, because too often we are burdening, in this case, our primary producers with cost recovery—so-called full cost recovery—which is not from the most efficient provider and which burdens producers to the extent where some just bow out of the industry altogether. We have to make sure that the officials within the Department of Agriculture, and Customs, are highly trained and that the fees charged are competitive. We should regularly compare those costs with our competitors, such as New Zealand, the US and UK. What are their fees and charges comparatively? If ours are way out of kilter, then why is this so? Why is it that we are overburdening our primary producers? Other countries, our competitors in particular, do not simply put the fees and charges collected back into general revenue; they actually make sure they go into research and development to improve the productivity of the sector. The fees, levies and charges paid end up increasing opportunity for even more exports, because funds are churned back into new ways to do a job—primary production in particular. I think we should look at that. We should say: 'Okay, we're generating hundreds of millions of dollars'—as it turns out in some cases—'with these fees and charges. Let's put them back into the industry.' If we are only going to charge the primary producers for this so-called full cost recovery, then let's make sure the industry sector benefits by redirecting those fees and charges into, for example, research and development or marketing that would support them in further export expansion. Murray electorate is today the food bowl of Australia. We are doing it tough at the moment, because we have come through 10 years of drought where half of our irrigation water was siphoned off to the Commonwealth Environmental Water Holder. That water continues to disappear to the Environmental Water Holder through on-farm water use efficiency grants and the so-called food bowl modernisation project, which has a billion dollars of federal funding. But the cost of that billion dollars is more water from irrigators going back into the Environmental Water Holder's bucket. My irrigators and my primary producers have some of the biggest and best herds of dairy cows in Australia, some of the best horse breeding—Murray standardbred horses, in particular, have their breeding material being exported for the racing industry globally—and large volumes of exported product from around Shepparton; Echuca; Nagambie, where Black Caviar was born; and Avenal. We have a huge horse genetics exporting sector. We export grains and of course our fruit exports are famous. We are getting back to exporting processed fruits as the dollar comes down and we deal better with the problems we have had with import dumping actions in the very immediate past. We have to watch that, while 55 per cent of all our primary production is exported—including 75 per cent of our fish products and 60 per cent of all our forest products—the costs of the export inspection regime are not a killer and do not in fact mean that the primary producer cannot spend on improving the genetics of their livestock or plant or that they cannot employ higher-paid labour, because they have thousands of dollars in bills to be paid for the inspection charges. I also have anecdotes, I am afraid, from my electorate where, if there has been a complaint about the productivity or experience or expertise of the inspector, then that inspector has actually sabotaged the product that they have been inspecting. I have brought this to the attention of the minister. This is not just unconscionable behaviour from a public servant but from anyone who is supposed to be supporting exporting from our country. This bill is not setting charges; it is providing a modern drafting framework for applying cost-recovery levies and charges. The next step that the minister will oversee is the charges to be made. I am very pleased the minister is going to consult on the cost recovery guidelines, but he will be somewhat exercised, I know, in trying to ensure that the costs that are levied against these primary producers are fair and reflecting the most efficient, professional and export workforce of inspectors that any country can produce. I am not convinced that is the case at the moment with a lot of the personnel who are out there doing the job on behalf of the nation. I heard the previous coalition speaker talk about a contestable situation where you can actually compete with others to do a very rigorous course to become a licensed, accredited inspector, auditor or tester of products in order to bring down the price that is currently required to be paid. It is a monopoly situation in our packing houses, abattoirs and piggeries across the country. Let's look at some contestability without compromising any of the expertise or the very high regard that our inspection services are held in overseas. We have got to do all that we can to reduce these charges. I also refer back to my earlier remarks about looking at who are the beneficiaries of these charges. We need to understand that it is not just the struggling abattoir or orange grower; there is a whole sector of beneficiaries in Australian society, including the consumer, who could be asked to pay. When overseas countries require certain standards or quality assurance in our nation—and let me also stress we have the highest standards globally anyway—we must make sure that the importer demanding those qualities pays for any extra costs. If there is an inspector from another country standing in a packing house in the Goulburn Valley, let us make sure that the fees and charges are fair and that the importing nation bears the cost. This legislation, as I said, depends for its effectiveness on the costs being reasonable. Every speaker, including the previous one, the member for Makin, has stressed this. It has been a shocking situation in which the massive, sudden price hikes cannot be justified. And I am pleased that this bill does look at that fairness and equity matter and talks about the averaging or amortising of costs across a whole sector, not just knocking out people who make a smaller contribution to export production because they carry such a heavy burden of fees and charges. I will also say that it was not the coalition who introduced the massive cuts to biosecurity services; that happened under the previous government. Those massive cuts not only have left us vulnerable to accusations of not doing enough by way of inspection—auditing and checking—but have meant that those who are left to do the task are often stressed; they do not have a good relationship with the primary producers themselves, which is key. Cooperation is everything. So we have to make sure, if we are going to cut staff further, that we have that contestable situation in which people can enter into the field of inspecting from the broader public, not just from the Public Service itself. I am very concerned that the No. 1 condition of Australia's exports—the clean, green image—be retained. We have an enviable record of virtually guaranteed quality. Unfortunately, with the loss of the Australian Wheat Board we have lost some of that capacity to guarantee the specification of the product we export. I am deeply concerned and saddened by that loss. But, despite that, we are one of the few countries that demand of our primary producers a paddock-to-plate continuous traceability of the product. Someone who produces a prime lamb in Shepparton is fully aware that when that prime lamb arrives as a live sheep export in a market in the Middle East they are still accountable if that animal experiences less than humane treatment. We are the only country in the world that demands that of our primary production system. It is an extraordinary thing that we do, that total traceability of our livestock. Some Middle East countries see that as contesting their sovereignty, that we are increasingly inspecting what they do with the animal once it arrives in their markets. But I am saying that Australian primary producers have been prepared to go along with that strategy. It is one of the most rigorous in the world. But they need a break. They do not need to be charged an arm and a leg for the inspection services that go along with that. They are already burdened with some of the highest prices for energy in the world and in my electorate some of the highest prices for water. They have some of the highest prices for refrigerant gases. The removal of the carbon tax has taken some of the heat out of their costs, but not enough to make a lot of them viable. Australian primary producers are extraordinary in surviving despite, for many of them, year after year of not making a profit. They have to produce in one of the most variable climates in the world. They have to produce in one of the world's highest-cost labour markets and one of the world's least flexible labour markets. I am in awe of the capacity and the performance of our primary producers. But let us make sure that these inspection charges—the framework that is to be ushered in with these bills—is not an excuse for even higher charges and levies to be made. Our primary producers do an extraordinary job in bringing wealth to our nation through their export earnings. It is therefore a benefit to all of the society, and I commend these bills to the House.