Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Australia's dairy farmers lead the world in producing efficient, sustainable, and quality produce to meet domestic and international demand. In the 2012-13 financial year, the Australian dairy industry produced 9.2 billion litres of milk for domestic use. The dairy industry overall represents a $13 billion farm, manufacturing and export industry, with export earnings in 2012-13 of $2.76 billion. Maintaining the health of Australia's dairy herd is vital to the industry and the nation.

The Primary Industries (Excise) Levies Act 1999 provides for the collection of levies that are used to fund initiatives that will increase productivity and sustainability of industry. Primary industries levies enable relevant industries to pool effort and resources to effectively manage priority issues. I think it is very important at this juncture that people clearly understand the difference between research and development, which levies are part of, and what would otherwise be known as subsidies. We have seen some reports in the paper that have confused the two issues. It is extremely important that, if Australia is to grow what is a vital pillar of its economy, we be at the forefront of the technology and the academic effort to make sure that our produce leads the world in not only volume but also quality. These initiatives include research and development, marketing and promotion and plant and animal health programs.

The levy system enables industries to remain highly competitive in world markets. The Australian Animal Health Council levy on dairy produce under the act was introduced to provide funding for animal health programs carried out by Animal Health Australia. The funding also provides for the dairy industry's annual membership rates to Animal Health Australia. For the dairy industry, the levy is payable by producers who deliver or supply dairy produce for the manufacturing of dairy produce, such as whole milk or whole milk products.

The amount paid by producers is based on the milk fat and protein content.

Australian Dairy Farmers Limited, the industry's national representative body, has requested the preparation and introduction of this bill into parliament. The Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 will enable the dairy industry to continue to meet its obligations in relation to its Animal Health Australia annual membership and other animal health and welfare initiatives. Australian Dairy Farmers Limited is also party to the Emergency Animal Disease Response Agreement. This bill will allow the dairy industry to meet its obligations as a signatory to this agreement.

The Bill amends the Primary Industries (Excise) Levies Act 1999by increasing the maximum rate of the Australian Animal Health Council levies on dairy produce. The maximum rates will increase from 0.058 to 0.145 of a cent per kilogram of milk fat and from 0.13850 to 0.34625 of a cent per kilogram of milk protein. The increases to the milk fat and protein levy maximum rates will enable application for future increases to the operative levies provided for under the Primary Industries (Excise) Levies Regulations 1999, if required. The current operative rates, which were set in 1999, are at the maximum level allowable under the act.

While the proposed maximum rate increase is significant, the bill will not increase the actual levy paid by industry members. It should be noted that any increase to the operative rate requires a case to be put by industry to government, demonstrating widespread industry consultation and strong support as set out in the Australian government's levy principles and guidelines.

The Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 is important to ensure Australian dairy farmers are able to be partners in the biosecurity system and maintain the health of Australia's dairy herd.

We have seen a large increase in interest in dairy production throughout the world. We only have to look across the Tasman to see how successful our good neighbours in New Zealand have been in the dairy industry. We know that there is a massive capacity for an increase in demand by our South-East Asian neighbours and Australia has to be ready to provide for that.

In the September quarter, New Zealand's GDP increased by 1.4 per cent, and this was predominantly driven by their agricultural output, which is driven and underwritten by dairy produce. We have a great capacity to do it and we have seen in the recent intense interest, especially by Canadian interests such as Saputo into Warrnambool Cheese and Butter, that the world is looking at Australia to see how it can increase its dairying capacity, because it sees a vital market for this. I think this is extremely encouraging for the dairy industry in Australia and extremely encouraging for primary production in Australia.

I commend the bill to the House.

Debate adjourned.