Paul Neville (Hinkler, National Party) Share this | Hansard source

I rise today to speak on the Sugar Research and Development Services Bill and cognate bills. The electorate of Hinkler encompasses the Bundaberg and Isis cane-growing districts so I speak on these three bills with much interest and with much focus on the industry. As has already been mentioned, the Australian sugar industry comprises more than 4,000 sugar farmers across Queensland and northern New South Wales. Until recently there were also some in Western Australia, and I understand that there is a possibility that there might be again.

Sugar is an important contributor to regional economies in these areas. In fact, I think the sugar towns of northern New South Wales and the Queensland coast are model communities on which other industries like the mining industry have now been based. Why? Because there was a great engineering and scientific base for engineering firms to rise up in those areas.

At each crushing season in Queensland, around 1,200 mechanical cane harvesters cut approximately 33 million tonnes of cane. They cut that off 440,000 hectares. Cane is delivered either by cane railway—that is the two-foot gauge rail—or by road, to 23 sugar mills. In my electorate, sugar is crushed at three mills—Milliquin, Bingera and Isis Central Mill. Bundaberg Sugar, which controls Milliquin and Bingera, is a grower, miller, refiner and marketer of sugar and related products in Australia—for example, molasses is sold to the cattle industry. It also runs the Bundaberg foundry, which plays a very important part in the sugar industry, not only in Australia but internationally. Bundaberg Walkers Engineering manufactures the crushing rollers that are used in many parts of the world, especially in Asia. Bundaberg Sugar is the largest canegrower in Australia, and owns more than 11,000 hectares of cane, which produces half a million tonnes of cane every year. Isis Central Mill crushes cane from Childers and Gin Gin and parts of the Wallaville district, and also from the fringes of the Bundaberg region.

The Australian sugar industry produces, on average, between 33 million tonnes and 38 million tonnes of cane per season, which equates to between 4½ million and 5½ million tonnes of raw sugar, with a gross value of production of between $1.5 million and $2.5 million. More than 80 per cent of this sugar is exported, making Australia the third largest raw sugar supplier in the world.

Over the years, the sugar industry has undergone many transformations and advancements. Research and development is integral to the sugar industry, and the bills before the House today concentrate on that very point. These bills will provide the mechanism for implementing key elements of reforms to sugar research and development arrangements. The process of reform began when the Australian sugar industry engaged in an informal review and reform of sugar research, development and extension over a period of 2½ years. They dedicated time, effort, money and energy to get to the point where they had fully surveyed what was at stake from the past and what might go on into the future. An initial review was conducted by Port Jackson Partners and then Frontiers Insight. They consulted broadly with industry stakeholders before developing and implementing a plan for reform. More than 100 written submissions were received for the initial report and more than 200 meetings across industry were conducted from August 2010, including a public roadshow early in 2012 which saw over 1,000 growers attend meetings to come to the final proposal.

In September last year, the industry submitted a proposal to the Australian government asking it to restructure research and development arrangements. The proposal involved moving from three separate industry backed research bodies to a single company, combining the assets and activities of the Sugar Research and Development Corporation, of BSES and aspects of Sugar Research Limited. The government drafted legislation and regulations necessary to recognise the new industry owned company. It will be known as Sugar Research Australia Limited. It will be funded by a statutory levy of 70c per tonne of sugar cane, paid equally by the growers and the millers. In the case of Bundaberg Sugar, they will be paying both because they are both plantation owners and millers. The levy will replace the existing SRDC levy of 14c a tonne, the BSES services fee of 55c a tonne and research elements of SLR's activities, estimated to be around 5c a tonne.

The sugar industry showed strong support for these reforms. In August, Sugar Poll 2012 was conducted. The Australian Sugar Industry Alliance was the peak industry organisation involved in the poll, with cane growers representing over 80 per cent of growers and ASMC representing 98 per cent of milling capacity. The poll was conducted by the Australian Electoral Commission on behalf of the alliance, with papers sent to 4,441 eligible cane growers and 3,373 thousand valid votes cast. Eighty-four per cent of these votes supported the proposal. That represented 64 per cent of all cane growers. Seven of the eight milling companies also supported the proposal.

With that sort of support for the formation of the new body, Sugar Research Australia, it is now imperative that these bills be passed to enable the proposal to commence on 1 July and to get SRA up and running. As the shadow minister said, we cannot drag our feet any longer. The SRA board of directors has already been appointed and includes Mr Paul Wright as chair, with six directors. One of these directors is Mr Mike Gilmour, who is also an independent director of the Isis Central Sugar Mill. Congratulations go to Mike. It is pleasing to know that there will be a good spread of directors on this new board.

I must mention that, despite the majority of support for the new body, there were some similar concerns raised by a number of smaller organisations regarding the consultation process not seeking their views; the fact that the levy collector and researcher are contained in the one body and that that might create a conflict of interest; ongoing obligations for millers to contribute, as they have only committed for five years; and the concern that sugar research will be too focused on sugar production and not enough funds will be committed to diversification and the co-benefits of cropping arrangements. The amalgamation of sugar research bodies is supported but the loss of regional research stations like Bundaberg is not.

This is a matter of some concern to the people in my area. Bundaberg BSES is a very fine piece of infrastructure and it is a great disappointment to know that that one will be dropped out of the new body. I have been in contact with Dr Mike Cox and some of his staff and it is obvious that there is a great sense of depression that all those talented people are in a state of flux. So I urge the government to get this thing decided quickly and I urge the new board to move quickly so that we retain this talent. Sugar talent is rare talent. We are a leader in the world. We were the leaders in mechanical cane harvesting. I actually knew Harold and Colin Toft, from North Queensland, who were among the first inventors of mechanical harvesters, as well as the Massey Ferguson and the Don Mitzis.

Those people put the Australian sugar industry in a very enviable position. They have also been at the forefront of other experiments in running new forms of trickle irrigation and in trying to get six and seven returns out of sugar cane—doing all sorts of important things that consolidate the industry and give it an edge over the sugar cane industry around the world. A lot of sugar cane is grown in countries with low labour costs, so what we do in Australia has to be done very well. Like the car industry in Melbourne, we have seen the shock of losing our cane-harvesting enterprise from Bundaberg to South America. Not that there was anything much we could do about that, because only nine per cent of mechanical harvesting was occurring in this part of the world, compared to between 60 and 70 per cent in Latin America. Nevertheless, I know what the people of Geelong and Melbourne and such places are going through at present. Having been through that with mechanical cane harvesting, we do not want to lose the scientific edge that we have with sugar cane. As I said, the Bundaberg BSES is in my electorate and I find it regrettable that that particular one is closing.

Many staff will be retained because there is a farm owned by Bundaberg Sugar which is being used for plant research. But I do make the plea that we keep the talent that is available in Bundaberg for the wider industry. It is paramount to the future of the industry. The need for continuing advancement in the development and release of new cane varieties will ensure that competitiveness of the industry remains. It drives productivity improvements and ensures the economic viability of the industry.

After speaking with the Bundaberg and Childers canegrowers' offices, it is obvious that they support the new reforms and the formation of the SRA, albeit with some sadness at the loss of the BSES facility in Bundaberg. As Wayne Stanley, from Isis canegrowers, said:

Sugar Research Australia will provide a much more efficient body to which every stakeholder will contribute. It will provide an ongoing strong program, dedicated to ensure that all facets of research and development in the sugar industry are met.

One of the core activities of the new body will be plant breeding. This is continuing in Bundaberg as part of the Southern Plant Breeding program and, as I said before, on a property owned by Bundaberg Sugar. Plant breeding provides the sugar industry with a guaranteed program that continues to provide farmers with new and improved varieties and, most importantly, those that are resistant to disease.

I grew up in Bundaberg and remember the times, two decades ago, when we had the Fiji disease, which was a wasting disease of sugar that dried out the cane stalks. In more recent times, in June 2006 we found a fungal disease called smut—a fitting name for such a disease. From June to November, it moved from Childers, south of Bundaberg, to Mackay. It was a dreadful scourge on the industry. This goes to highlight the importance of having good research. So I appeal to the government and to the new board of this organisation to be very focused on this changeover on 1 July to make sure that the new body gets off to a flying start and consolidates an industry which has been uniquely of Queensland and northern New South Wales.

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