Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

Saying the names of these bills is a mouthful, Deputy Speaker Scott, if you will excuse the pun. I believe this is my first opportunity at the dispatch box to congratulate you on your re-election as Deputy Speaker—well deserved, and we look forward to working with you. As I travel the world, like all members of this place I am asked specifically where I come from in Australia, and I very quickly and boastfully tell people I represent the world's finest wine region. Now, there will be some in this place that will challenge that proposition, no doubt—and justifiably so, because Australia is a great producer of wine. Indeed, it is the fourth largest wine-exporting country in the world. For a country our size, with rather limited land, water and people resources, that is a very, very significant achievement. So people will not be surprised to see me as the member for Hunter talking on the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013, but on this occasion I do so as the opposition spokesperson for agriculture and therefore the person responsible for speaking on these issues on behalf of the Labor Party. This bill was one introduced into the parliament by the former Labor government. I believe it passed the House of Representatives in the 43rd Parliament but did not fully run the gauntlet of the Senate, and it has now been introduced by the new Minister for Agriculture—and I again congratulate him on his appointment.

The Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill 2013 creates the Australian Grape and Wine Authority. The new authority will commence its operations on 1 July 2014. It will take the roles and functions of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation. The former Labor government agreed to merge the two wine statutory corporations following a proposal from the Winemakers' Federation of Australia and Wine Grape Growers Australia. The proposed merger, I am advised, is widely supported by the industry and has really been a long time in the making. A single wine industry statutory authority will support the industry by providing links between the investment initiatives and functions of the Grape and Wine Research and Development Corporation and the Wine Australia Corporation. The merger will provide further benefits by improving administrative efficiency and service delivery to the industry. The merger aligns with the then Australian government's 2012 Rural Research and Development Policy Statement. In particular, the statement noted that combining research and development and marketing functions in one organisation can lead to administrative savings as well as important synergies.

On 19 June 2013, the then government introduced the Rural Research and Development Legislation Amendment Bill 2013 to implement the policy statement. Once this bill has been considered by the parliament, the government will amend the Grape and Wine Legislation Amendment (Australian Grape and Wine Authority) Bill to ensure consistency between the two pieces of legislation. The merger of the two statutory authorities is also in accordance with a broader policy goal to reduce the number of government statutory corporations. This bill proposes amendments to the Wine Australia Corporation Act 1980 to establish the new authority and renames the act as the Australian Grape and Wine Authority Act 2013. The amendments to the Wine Australia Corporation Act are significant, but the merger is not a takeover of the Grape and Wine Research and Development Corporation by Wine Australia; this is a strategic merger of the two statutory corporations.

This bill is divided into two schedules. Schedule 1 amends the Wine Australia Corporation Act to create the authority itself. Schedule 2 covers matters arising from the transition from two statutory corporations to the authority. It covers matters such as the transfer of staff to the authority. Schedule 1 is divided into two parts. Part 1 of schedule 1 commences on the day after royal assent. This part amends the Wine Australia Corporation Act 1980 to establish a selection committee to select and nominate to the Minister for Agriculture possible members of the board of the authority. The bill gives the Minister for Agriculture an alternative option of appointing a board of the authority for a 12-month period without reference to the selection committee. Part 2 of schedule 1 commences on 1 July 2014. This part provides amendments to the Freedom of Information Act 1982 and the Wine Australia Corporation Act 1980. This part establishes the authority and provides the governance framework for its operation.

Schedule 1 also provides the research and development functions, including provisions for the Commonwealth to match research and development levy funding dollar for dollar. The authority will be required to spend research and development levy money and government matching funds on research and development activity. Industry has highlighted the importance of this issue for the new authority. It is also important to the government to ensure that Australian government money appropriated for research and development is used for this purpose. Importantly, the bill does not include any changes to the structure, to the amounts of the levies which currently fund both statutory corporations or to the existing regulatory, marketing and compliance roles of the Wine Australia Corporation.

The bill transfers definitions of research and development from the Primary Industries and Energy Research and Development Act 1981. It establishes an authority with a skills based board of five to seven directors, selected and nominated by a statutory selection committee and appointed by the minister. The board is led by a chair appointed by the minister following consultation with industry. The authority is required to prepare a five-year corporate plan to outline the authority's strategies, policies and priorities to achieve the objectives. The authority is also required to prepare an annual operation plan, but, unlike those of the two statutory corporations, this plan is not required to have ministerial approval.

Schedule 2 provides for the transition of the Grape and Wine Research and Development Corporation and Wine Australia to the authority, including operations, assets, liabilities and staffing conditions. Of particular note is that schedule 2 provides that the minister may engage consultants to assist with preparations for establishing the authority and for appointing the chief executive officer.

The bill allows the Minister for Agriculture to reappoint the first board after royal assent. The board will commence on 1 July 2014. Between the date of appointment and 1 July 2014, the minister can engage future board directors as consultants to prepare for the authority's commencement and to assist it in becoming fully operational on 1 July 2014. Before 1 July 2014 the future directors, in their roles as consultants, may not make decisions that would bind the authority into the future. However, it can be expected that any recommendations they make would be ratified by the board at its first meeting. The costs of the consultants will be met by the Commonwealth through the Department of Agriculture.

Once the authority commences, any and all Commonwealth funding provided for the purpose of engaging consultants will be refunded by the authority. As the consultants are the future board directors acting in the interests of the authority, it is reasonable for the authority to reimburse the Commonwealth for the costs of the consultants. The bill ensures that all employees of the Grape and Wine Research and Development Corporation and Wine Australia are transferred to the Australian Grape and Wine Authority, along with all employee entitlements.

The bill also provides for a number of amendments to be made to outdated sections of the Wine Australia Corporation Act 1980. It introduces modernised language to bring it up to date with current terms. The wine industry has a unique regulatory structure, with the Wine Australia Corporation enforcing the Label Integrity Program, licensing exporters and maintaining Australia's wine geographical indication system. These important roles are not affected by the merger.

The Australian Grape and Wine Authority will therefore have a strong focus on controlling exports and developing domestic and international markets for Australian grape products, along with investigating, coordinating and funding grape and wine research and development. The authority will be responsible for reporting these to the parliament or to the minister and to representative organisations. The government has introduced amendments to the Commonwealth Authorities and Companies Act 1997 and to the Financial Management and Accountability Act 1997.

The merger of the wine industry statutory corporations is being undertaken at the request of industry and continues to have the support of the industry. This reform will help the industry to function better. It will improve linkages between marketing and research and development and achieve these benefits at no additional cost to winemakers and grape growers. Two companion bills are being introduced alongside this bill, proposing minor amendments to various relevant other acts.

In boasting my representation of the Hunter wine region, can I say that this is a very small step in assisting a wine industry which is under significant challenge from a stubbornly high Australian dollar affecting our competitiveness, coming off the back of the global financial crisis—which had a chilling impact on consumption in some of our key export markets—further consolidation and growing market power in the retail sector, and drought, all combining to produce some very significant challenges for those operating in the wine market, be they growers, winemakers, exporters or distributors.

This industry also faces some wonderful opportunities. I am very fond of talking about the dining boom, which will lead to significant increases in consumption in South-East Asia and China as the middle class emerges along with a growing desire for quality wine. From the Hunter to Margaret River, from the Yarra to the Barossa, from the Tamar to the Clare Valley, winemakers and growers are combining to make the most of those very significant opportunities. They will need government help in a range of areas. Obviously in future we will need to increase our yields of wine production if we are to capitalise fully on the opportunities in Asia. Research and development will be critical to lifting our production output capacity in this country. This bill takes a small step in that area by making as efficient as possible what we are doing in research and development in particular.

One of the big challenges the wine industry face at the moment is what they see as a threat from coal seam gas, much of which is being extracted in the wine region I represent. I want to put on record what I have said many times before. We need coal seam gas in New South Wales. Our energy prices will climb very steeply if we do not find new sources of gas for our state, as we become more dependent on other states and as demand begins to outstrip supply. What I have also always said is that we cannot afford to have our sustainable industries threatened by industries which might be with us for only 10, 20 or even 100 years—I put coalmining in that category.

My view is that we need these gas resources, but I am concerned about the demonisation of the industry. I think each of these projects should be considered on its merits. Some projects will certainly be able to progress without any threat to water tables or, more generally, to the sustainability of local industries. But some may not. We should rely on the science and allow those that are safe to proceed to proceed, while making sure that there is no threat to the sustainability of viticulture or, more generally, to our agricultural sector.

This is just one of the many challenges the industry faces, some of which I have already mentioned—the Australian dollar, the wake of the global financial crisis and the consolidation of market power in the retailing sector. These are all combining to put enormous pressure on what is a very important industry for this country. As the local member for Hunter, no-one understands that better than I do. Three of our children have worked in the hospitality sector, which of course feeds off the wine sector. It is really the jewel in the crown for Hunter tourism. It is a very important industry, which enjoys my very strong support and the support of all members of this place. This bill is a very small first step in helping it along and I wish it the very best for the future.

Debate adjourned.