Thursday, 11 February 2016
Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016; Second Reading
That this bill be now read a second time.
As requested by the Australian dairy industry, this bill amends the Dairy Produce Act 1986 to remove the requirement to conduct a dairy levy poll every five years.
In 2015, Australian Dairy Farmers, the industry representative body, and Dairy Australia, the industry research and development corporation, conducted an independent review of the dairy levy poll process. This review followed concerns raised by dairy levy payers about the cost of conducting a levy poll every five years, which is estimated to be up to $1 million.
Under the current legislation, the dairy industry must hold a poll every five years to seek the views of levy payers on whether changes should be made to the rate of the dairy services levy. This levy is used to fund the activities of Dairy Australia.
Dairy Australia's role is to help farmers adapt to a changing operating environment and strive for a profitable and sustainable dairy industry. This is achieved through investment in research, development and extension activities, and provision of services such as farm-accounting systems, dairy industry forecasts and information on farm management practices.
The recommendations of the review supported a flexible, streamlined poll process where a dairy levy poll would only be held if a change in levy rate is being considered. The amendments in the bill will provide industry with more flexibility around the levy poll.
In September 2015, Australian Dairy Farmers, with the support of Dairy Australia and the state dairy farming organisations, embarked on a program of national consultation with dairy levy payers regarding the proposed changes to the dairy levy poll process.
Every Australian dairy levy payer was contacted at least once through the consultation period and provided with opportunities to provide feedback on the proposed changes, including by formal vote.
Consultation with dairy levy payers has demonstrated support to simplify the levy process.
The bill complements the government's commitment to creating a stronger business environment for the agricultural sector by reducing unnecessary regulatory costs imposed on individuals, businesses and community organisations.
Subordinate legislation will be developed which: removes the five-year timing of the dairy levy poll; establishes an advisory committee to consider the dairy levy rate every five years; and includes a mechanism for Group A members of Dairy Australia to request a poll if they disagree with the levy poll advisory committee's decision not to convene a levy poll. This proposal must be supported by at least 15 per cent of levies paid by Group A members.
Dairy Australia has two categories of membership. Group A members are dairy farmers who pay the dairy levy. Membership is voluntary and entitles members to vote at Dairy Australia annual general meetings. Group B membership covers the peak dairy organisations. Australian Dairy Farmers and the Australian Dairy Products Federation are Group B members of Dairy Australia.
This approach is deregulatory, reduces red tape and focuses levy funds on growing an even more productive and profitable dairy industry.
The issue of levy payer polls has also been investigated by the Senate Rural and Regional Affairs and Transport References Committee in the report of its inquiry into agricultural levies. The government will provide a response to the committee's report in due course.
The dairy industry has been in a structural transition since deregulation in 2000. The number of farms has more than halved from 12,896 in 1999-2000 to around 6,100 in 2014-2015 and volatility in the international market and a weaker Australian dollar have challenged the industry.
Despite these challenges, the dairy industry has improved productivity and has demonstrated a willingness to embrace new technologies and implement new farming practices.
The bill will enable the dairy industry to redirect investment into research and development priorities to allow the industry to progress its goals of profitability, productivity and sustainability. The dairy industry is affected by an appreciating dollar as well.
I would also like to note someone—and he is with us here at the moment—who came from the dairy industry, whose family were in the dairy industry—that is, the trade minister, Andrew Robb. I am absolutely certain that the minister in his time has maintained an incredible interest in and been a great benefactor of the dairy industry. On behalf of the dairy industry, I would like to thank Minister Robb for the work that he has done. Minister Robb is certainly a person who has been lauded far and wide in all circles and at every country barbecue. All the best and God bless, mate.