House debates

Wednesday, 19 June 2013


Sugar Research and Development Services (Consequential Amendments and Transitional Provisions) Bill 2013, Sugar Research and Development Services (Consequential Amendments — Excise) Bill 2013; Second Reading

4:21 pm

Photo of John CobbJohn Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | | Hansard source

I speak on the Sugar Research and Development Services Bill 2013, the Sugar Research and Development Services (Consequential Amendments and Transitional Provisions) Bill 2013 and the Sugar Research and Development Services (Consequential Amendments—Excise) Bill 2013.

The sugar industry is a great example of an agricultural industry on which our country was built. Australia's sugarcane is grown in high rainfall and irrigated districts along coastal plains and river valleys on well over 2,000 kilometres of Australia's eastern coastline between Mossman in Far North Queensland and Grafton in New South Wales. Queensland accounts for about 95 per cent of Australia's raw sugar production and New South Wales for about five per cent—although the new development in the Ord is expected to bring WA into the equation.

Information from canegrowers is that there are approximately 4,400 sugar growing farms operating along Australia's eastern seaboard. While the average size of a cane farm is 100 hectares, some are in excess of 1,000. While there are still a number of smaller farms, like most farming enterprises in Australia, the average farm size is increasing each year as the number of growers contracts and the areas farmed by their grain farming businesses expand.

The Australian cane industry produces 30 million to 35 million tonnes of cane each year which, when processed, equates to around four to 4½ million tonnes of sugar. The Australian sugarcane industry is recognised worldwide for its cutting-edge technology and sustainable cane growing.

The Australian sugar industry is not just one of the world's most efficient and innovative producers and exporters of sugar; it is also the leader in the adoption of sustainable farming practices. In continuing the industry's fine tradition of progressive research and development, the industry has been very proactive and engaged in a formal review and reform of sugar research, development and extension for some 2½ years, dedicating significant industry time, money and energy.

The industry commissioned Port Jackson Partners to conduct an initial review and then appointed Frontiers Insight to consult broadly and develop an implementation plan for reform. More than 100 written submissions were received for the initial report and more than 200 meetings across industry have been conducted since August 2010, including a public roadshow in early 2012 that saw more than 1,000 growers come to an agreement for a proposal. The proposal involved moving from three separate industry-backed research bodies to a single company, combining assets and activities of the Sugar Research and Development Corporation, BSES and Aspects of Sugar Research Ltd. The government drafted legislation and regulations necessary to recognise the new industry-owned company, Sugar Research Australia, as the industry services body funded by a statutory levy of 70c per tonne of sugar cane, paid equally by growers and by the mills. The levy will replace the existing SRDC levy of 14c per tonne, BSES service fee of 55c per tonne and research elements of SRL activity estimated at 5c per tonne.

All levy-paying businesses have the opportunity to vote on the new arrangements, including on the increase in the levy. In August 2012 the Australian Electoral Commission, on behalf of the Australian Sugar Industry Alliance, polled all 4,441 eligible sugar cane growers, with 3,373 valid votes cast. It was as near to three quarters, or 75 per cent, as you are likely to get. Eighty-four-point-three per cent of these votes supported the proposal. This represents 64 per cent of all cane growers, whether they voted or not. Seven million of eight million companies representing 99 per cent of cane processed in 2011 also supported the proposal, including the Australian-owned mills.

I will read a short quote from a letter from the CEO of the Australian-owned Mackay Sugar: 'You are well aware of the significant efforts of the Australian sugar industry to reform our research sector over the past three years. I am also aware you have been sent information detailing the comprehensive consultation communication and democratic efforts the industry has undertaken to get to this unprecedented level of industry support and commitment. As one of three remaining Australian-owned and predominantly grower-controlled sugar mills in Australia, Mackay Sugar sees this reform as absolutely essential, particularly in light of changing mill ownership and structures.'

The legislation was then introduced, and included the Sugar Research and Development Services Bill 2013, the Sugar Research and Development Services (Consequential Amendments and Transitional Provisions) Bill 2013, and the Sugar Research and Development Services (Consequential Amendments—Excise) Bill 2013. It provided the mechanism to implement key elements of reforms to sugar research and development—in other words, R&D—arrangements. Under the reforms the Sugar Research and Development Corporation and BSES Ltd will be wound up and their assets and R&D functions, along with the research coordination activities of SRL, transferred to the industry-owned company, Sugar Research Australia Ltd.

SRA is a company limited by a guarantee operating under the Corporations Act 2001. Operating one industry research body should deliver increased R&D efficiencies. The new company should, therefore, have the capacity to better integrate and avoid duplication of R&D activities across the sugar industry supply chain, leading to a wider range of research opportunities and increased industry and public good benefits. The industry-owned company will be funded by a statutory levy of 70c per tonne of sugar cane, processed or sold for processing, to be paid 35c per tonne each by growing into new businesses. The new levy will replace the existing sugar R&D statutory levy of 14c per tonne and incorporating existing voluntary contributions that fund the industry-owned BSES Ltd. All persons who pay the statutory levy will be eligible to register for membership and then be eligible for voting rights in the company.

The legislation is not without controversy and highlights the fact that Labor left this too late to deliver on the most basic reforms sought by industry and supported by a majority vote. The government introduced two bills on 5 June and, due to its habit of leaving things to the last minute, it has had to introduce another bill on 18 June to fix up problems with one of the original bills. The last bill was required to separate the taxation and non-taxation elements of the original consequential amendments bill as required by the Constitution. It is not the nature of the mistake that is the issue, although it does seem to be significant. It is a patch-up job, and the expectation is that everything else will just blindly fall into line without trying to evaluate the amendment arrangements in the hope that there will be no more problems to come.

There is a minor point also that again highlights the lack of attention to detail: the definition of a season in the Sugar Research and Development Services (Consequential Amendments—Excise) Bill 2013 is 'from 1 March to 28 February the following year'. I have never claimed to be Einstein but it is obvious even to me that every four years there will be a day that is not covered by the definition of a season—29 February each leap year. So if a cane processing establishment wanted to use some creative accounting, it may be able to avoid paying the levy. This may be unlikely but the point is: why leave a gap in the definition of a season and invite trouble?

There is a very short time frame for the legislation to take effect—1 July 2013, which is just 12 days from now—which is far from ideal and highlights a lack of basic government process. The Gillard government is caught up in bickering and infighting instead of running the country. However, amendments include changes to the Primary Industries (Excise) Levies Act 1999, the Primary Industries Levies and Charges Collection Act 1991, the Primary Industries (Excise) Levies Regulations 1999, the Sugar Research and Development Corporation Regulations 1990 and the Primary Industries Levies And Charges Collection Regulations 1991. The amendments made by the companion bills will start taking effect from 1 July 2013 so that industry will be provided with certainty about the imposition of the levy and when the increase to the levy rate will come into effect.

The R&D activities of the SRDC and 75 per cent of its assets will be transferred to the industry services body on the date it is declared as such. The remaining assets will be held by the SRDC to cover wind-up costs until it is abolished on 30 September 2013, and any remaining SRDC assets and liabilities will be transferred to the industry services body on 1 October 2013. While most of the industry supports this, those who oppose it are strongly opposed to it. The fairest thing would have been to allow time for a Senate inquiry to examine the individual concerns. I do not believe it would have changed where we are at, but I do believe they should have had the opportunity to do that.

In the interests of certainty and in recognition of the long process it has taken to get to where we are today, we have taken the responsible position of supporting this bill. I have spoken with all the MPs and senators with interests in sugar growing areas and, while there were some concerns from their constituents, most were very supportive of the reforms. The Australian sugar industry alliance, the ASA, representing 80 per cent of growers and 99 per cent of rural sugar milling production, has led the reform and obviously supports it. Canegrowers represent around 80 per cent of the canegrowers in New South Wales and Queensland, with 19 offices, and they strongly support these reforms.

Given the short time frame, we then tested how the peak body view was represented regionally by speaking with Rocky Point Canegrowers, Mackay Canegrowers and Childers Canegrowers, who confirmed their support for the peak body's position. A number of small organisations such as Pioneer Canegrowers Organisation, which represents 100 larger growers, and Kalagro Canegrowers Organisation, which represents approximately 180 sugar cane growers within the Burdekin region, were also contacted. They confirmed that they support the reforms but have some concerns. They are concerned that the consultation process and the new organisation will not seek views from smaller organisations. They are concerned that having the levy collector and researcher contained in the one body will be a conflict of interest. They are concerned that foreign ownership of the mills and influence on the organisation and marketing may not be in growers' interests. They are concerned about the ongoing obligation for millers to contribute, as they have only committed to five years. There is concern that sugar research will be too focused on sugar production and will not commit enough funds to diversification and the co-benefits of cropping arrangements, and because of this it does nothing to address the long-term viability of farmers and only addresses the short- to mid-term perceptions of millers. Amalgamation of research bodies is supported but the loss of regional research stations such as Bundaberg raises concerns.

Australian Cane Farmers Association, which I understand represents about five per cent of the industry, have similar concerns as the above groups, but their level of concern is greater, and they do not support the reform model. They support the retention of the BSES and SRDC. While their concerns are legitimate ones it appears that many of their concerns can be dealt with in the funding agreement and with appropriate consultation. So it is important that these groups are appropriately represented in the consultation plan, as it is appropriate for all industry-levy payers to be consulted on the operation of the company and to contribute to its priority-setting process. The growers did reiterate to me that they were concerned about the priority-setting process.

We will be monitoring this process closely to ensure that it reflects the views of the whole industry. We take the process of government very seriously. This is a sensible reform, supported by the majority of industry. There does seem to be legitimate concerns, and a good government would have given us time to properly address them. But we have to make the best of it. In the far-less-than-perfect time frame we have had, we have taken a very close look at this bill and, on balance, have decided that it is definitely in the best interests of the sugar industry, and the coalition will support it.

4:36 pm

Photo of Paul NevillePaul 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.

4:51 pm

Photo of George ChristensenGeorge Christensen (Dawson, National Party) Share this | | Hansard source

I rise to speak on the Sugar Research and Development Services Bill 2013, the Sugar Research and Development Services (Consequential Amendments and Transitional Provisions) Bill 2013 and the Sugar Research and Development Services (Consequential Amendments—Excise) Bill 2013. These bills seek to consolidate the research and development processes of the Australian sugar industry. These bills wind up the Sugar Research and Development Corporation and also BSES Ltd. The assets of both those organisations and their research and development functions will be transferred to the industry owned Sugar Research Australia. That is a single research and development body that will deliver greater efficiencies and better outcomes for the sugar industry, both growers and millers.

As it stands in the sugar industry today, we have a number of smaller organisations conducting research for the sugar industry. That means there is a lot of duplication in those processes. The duplication of administration alone is a vast waste of resources. By the time these smaller organisations have been set up and are fully operational, much of their funding is exhausted. This single R&D body, an industry owned research and development company, will be funded by a statutory levy of 70c per tonne of sugarcane processed or sold for processing. The levy will be paid equally by the grower and the miller. Under current arrangements, R&D bodies are funded through a statutory levy of 14c per tonne and a number of voluntary contributions, including 55c per tonne for the BSES and an estimated 5c per tonne for the research elements of Sugar Research Ltd activities. I note, though, that, as with all voluntary payments, some of those voluntary contributions do not happen. Obviously, it throws those organisations and the good work they do into jeopardy when they are unsure about the financial investment they are likely to get.

These bills put into action a proposal contained in a report conducted by the Australian sugar industry. For more than two years, more than 100 written submissions were gathered and more than 200 meetings were held right across the industry, including a public roadshow early last year that saw 1,000 growers turn up to offer their views. The resulting proposal aims to modernise the industry with a strong organisation, Sugar Research Australia, which will be able to attract and retain the best researchers and staff while also raising investment in cane farming. This single research organisation will bring together the activities of the three current sugar industry organisations—that is, the BSES, the government industry entity called the Sugar Research and Development Corporation, and aspects of the sugar-milling research agency, Sugar Research Ltd. The single entity, Sugar Research Australia, can balance the need for a secure funding base and the need for a reasonable and affordable levy to be imposed on the industry. As a result, more money will be available for research—and that is the key thing here. There will be more money available for research, more money available for different varieties and more money available for biosecurity because overheads will be reduced. Industry stakeholders, who will be the owners of Sugar Research Australia, will see their funds further leveraged with the Australian government actually matching funding for R&D every year at 0.5 per cent of the gross value of production. That is a very welcome initiative from the government.

This proposal and these bills come before us after this extensive consultation with the industry, and, as a result, the bills have extensive industry support. I am aware, though, that there are some concerns about the legislation from some sectors of the industry, notably the Australian Cane Farmers Association. And while I think there is generally a high level of support throughout my electorate, there are some organisations with concerns. They are not concerned enough to say that they do not want this to go ahead, but just some concerns about how Sugar Research Australia will operate. One of those concerns is that one-on-one extension will be abandoned, though the reality is that the extension process, which allows that one-on-one service to individual cane growers in North Queensland, is actually occurring outside of the current R&D framework, as it will carry on outside the new R&D framework.

Growers have got together and established their own networks of extension services such as those in the Mackay area—the Mackay Area Productivity Service. There are various extension providers that are mainly organic. The organic network of these extension services has popped up to fill the gap that the BSES was once involved in and has gradually pulled away from as their resources have dwindled. There is nothing in this legislation that will prevent that organic grower-controlled and local extension network from continuing on.

The proposal to move towards a single body acknowledges the need to maintain and even enhance, I suppose, that extension network. I am sure there will be linkages between Sugar Research Australia and these local extension offices. I have received a letter from the Australian Sugar Industry Alliance which outlines their view on the benefits of the move towards a single R&D body for the industry. The Sugar Industry Alliance outlined four main elements to the reforms, including a transition program to strengthen the skill set of the network of local sugar extension providers to provide one-on-one advice to cane producers. So I am reasonably certain that the issue of extension is sorted out and will be sorted out by Sugar Research Australia and there will not be a problem in the industry with that.

The other concern that I thought was of note, and it was certainly raised by the Australian Cane Farmers Association, is that there are a range of different grower organisations that fall outside the umbrella of Canegrowers, the peak body, or the Australian Sugar Alliance. That does not just apply to the Australian Cane Farmers Association. As I said, there are smaller independent organisations within my own electorate—Pioneer Cane Growers, Kalamia Cane Growers and, recently, Invicta Cane Growers. So there are a number of different organisations that feel they could be left out of discussions and consultation with the new body. I do share that concern, but I see from the legislation, particularly from the proposed constitution of Sugar Research Australia, that that body will be compelled to consult with all stakeholders, not just the Australian Sugar Alliance, although that will be one of the main consultative bodies they approach.

As the representative for Australia's largest sugar growing region, if I am here after 14 September, I will be ensuring through the different functions I have—I am a member of the House Standing Committee on Agriculture—that Sugar Research Australia actually does consult with all groups, especially those smaller groups, including the Australian Cane Farmers Association. I note the shadow agriculture minister has said that he also sees that as a legitimate concern, but he believes that it can dealt with in the funding arrangements between the Commonwealth and Sugar Research Australia. I impress that upon the parliament secretary, who is present, to ensure that that consultation is right across the industry when they are doing the funding arrangements with Sugar Research Australia.

The Liberal-National coalition has conducted extensive consultation with industry to establish a firm position on this proposal. That is because we act in the best interests of the industry, the individuals in the industry and all of the stakeholders. That high level of consultation will continue. Through that extensive consultation with us it has become quite evident that these bills have widespread support within the industry. Canegrowers CEO Steve Greenwood, in supporting the move to a single R&D body, said this: 'Growers in the industry have had their say and it's clear that there is very strong support for the proposed new body, Sugar Research Australia. A robust, stable and well-funded research and development system is essential to the Australian sugar industry's competitiveness on the global stage.'

Likewise, BSES supported the move, with a reassurance that the best outcome for the industry and for the BSES would be the migration to a single body. Their chairman, Paul Wright, said in July last year:

All BSES directors support these important changes and want to see the Sugar Poll vote succeed. The Industry is working together to establish Sugar Research Australia, backed by a stable statutory levy at reasonable levels for growers and millers in order to sustain vital research. This is the best direction for the industry, and for transition of BSES the company, its research activities and its 145 staff and associated casual workforce.

There was a sugar poll, which Mr Wright made a comment on in the above quote. It was an industry-wide poll. It was administered by the Australian Electoral Commission in August last year. Of the 76 per cent of the industry that voted in that poll, 84 per cent voted in favour of creating Sugar Research Australia, the model as proposed by the Australian Sugar Industry Alliance. Prior to the start of voting in the sugar poll, a collection of industry leaders submitted messages of support for the yes case. I note that Mackay grower and then local Canegrowers chairman and the vice chairman of the Canegrowers organisation, Paul Schembri, who most recently was elected the new chairman of Queensland Canegrowers, said that we must take this opportunity for change. That is how growers are seeing it.

Mackay grower and the new Mackay Canegrowers chairman Lawrence Bugeja: 'One new industry company with a compulsory levy will be efficient. You won't be subsidising non-payers.' That is an important point. Actually, I have that wrong: Lawrence Bugeja is the vice-chairman of Mackay Canegrowers; Kevin Borg is the chairman. He is a Plane Creek grower in your electorate, Madam Deputy Speaker. He said, 'I'm voting yes to form Sugar Research Australia as a high performance, energised and industry owned company with secure funding.'

Mr Borg, in his new role as the Mackay Canegrowers chairman, wrote to me outlining the support that Canegrowers had for these bills and also a preferred timetable for the bills to be passed. In his letter, Mr Borg said 'Industry has prepared all the ground for start-up and a new board of directors to be in a position to commence the vital work once the legislation has been passed through both houses of parliament.' He went on to say, 'We're hopeful that the legislation can be introduced to and passed in the House by 6 June. We are hopeful that the legislation can be introduced to and passed in the Senate in the period from 17 June to 27 June.' Mr Borg and others in the industry have voiced their concerns about the urgency of the legislation. They have wanted the bill to come before this place for a long time.

Knowing that the government will soon go into caretaker mode and parliament will cease within a week, the industry has become anxious about the bills' speedy passage through the parliament. It is vitally important that these bills are voted upon and go through the Senate before its rising. It is a bit of a shame that the bills have been only been brought before the House at the last minute. Given that there is support for them from both sides of the chamber, this is something that should have been done a while ago. If it is not done by the end of this parliamentary sitting, there are going to be sugar research and development staff left in limbo. I know that there are people in the Mackay BSES who are desperately worried because the BSES is dying financially. It simply does not have enough funding to keep going. Talented staff with experience and expertise and much to offer the industry feel that there is no future for them or for staff of other smaller organisations. Some of the best and the brightest minds that we have within the sugar industry are right now weighing up options because they do not have certainty. We in this place must act now in the interests of the sugar industry. I believe that the bills have broad support in this place and I urge the government to grant swift passage of this legislation to give those best and brightest research minds the certainty that they need.

Since I am the last speaker on this—other than the parliamentary secretary's summing up—I would suggest it might be a good time for the parliamentary secretary to put to the Manager of Government Business that we get this voted on this week, and I hope that can happen within the remaining sitting period.

Without the certainty or prospect of a stable funding foundation for the industry collected under one roof, you will find that many of those are indeed people who will vote with their feet if this is left until after the election. They will move overseas. They will take up research jobs with our competitor countries, and that will be a serious blow for the industry. If this is not passed—and passed expediently—the sugar industry will lose those key people overseas, which will place Australian exporters at a disadvantage and will create an advantage for our competitors. So I do urge the parliamentary secretary to impress upon his government colleagues to get this voted on as soon as possible in this place.

5:05 pm

Photo of Sid SidebottomSid Sidebottom (Braddon, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | | Hansard source

I do thank the members for Calare, Hinkler and Dawson for their support of the local and national sugar industry. I certainly take on board the viewpoints that they have represented so very well, particularly by the member for Dawson. I note that the member for Calare, an opposition spokesperson for agriculture, noted the comment from the Mackay sugar-mill owner who said it is absolutely essential that we pass the legislation. The member for Dawson reinforced that. The government is certainly reinforcing that. We do take on board the comments made by the members for Calare and Dawson about the need for genuine consultation, particularly taking into account priorities in the funding agreement and the priority-setting processes. We take that on board and certainly hope the new authority takes it on board as well. Thank you for your contribution and positive response to this.

In summing up, I would reinforce the fact that research and development play a critical role in ensuring our agricultural food and fibre industries are able to achieve productivity gains and be competitive, particularly in the international market. That is absolutely essential for sugar, which is very much a heavily export-oriented industry. On 22 September last year the Australian Sugar Industry Alliance came to the Australian government, after extensive consultation with the industry, asking it to restructure research and redevelopment arrangements for the sugar industry. Under the reforms, the Sugar Research and Development Corporation and BSES Limited will be wound up and their assets and R&D functions, along with the research coordination activities of Sugar Research Limited, transferred to the industry-owned company Sugar Research Australia Limited.

The proposal demonstrated strong support from industry through a poll of all levy-paying businesses and that has been absolutely reinforced by those members opposite who have spoken. The government assessed the proposal in detail and worked closely with the industry to ensure the Board of Sugar Research Australia Limited can operate independently and that the rights of levy-paying members are indeed protected. On balance, the government considers that this proposal represents the best mechanism for long-term delivery of research and development to the sugar industry.

The bills before you today, the Sugar Research and Development Services Bill 2013, the Sugar Research and Development Services (Consequential Amendments Excise) Bill 2013 and the Sugar Research and Development Services (Consequential Amendments and Transitional Provisions) Bill 2013, provide the mechanism to implement key elements of these reforms. Operating one industry research body, as members opposite have clearly supported, should deliver increased efficiencies. The new company should have the capacity to better integrate and avoid duplication of research and development activities across the sugar industry's supply chain, leading to a wider range of research opportunities and increased industry and public-good benefits.

Incorporating the existing sugar statutory levy and voluntary contributions under a new statutory levy will eliminate what we call free-rider problems, as all industry members that benefit from research and development services provided by Sugar Research Australia Limited will now contribute the same amount to their operations through the new statutory levy. The change should therefore create a stronger national research and development capability and provide certainty to growers and millers about their liabilities and the amount of funding that will be available for research and development to the industry.

Passage of these bills will implement arrangements that will underpin a strong and efficient research and development program that will help drive productivity and profitability in the Australian sugar industry and help to ensure its continued success. It will also generate significant flow-on effects to the broader community and to the economy in terms of regional development, exports and, most importantly, employment opportunities. I commend the bills to the House.

Question agreed to.

Bill read a second time.

Message from the Administrator recommending appropriation announced.