House debates

Thursday, 14 May 2020


Dairy Industry

9:48 am

Photo of Bob KatterBob Katter (Kennedy, Katter's Australian Party) Share this | | Hansard source

I move:

That so much of the standing orders be suspended as would prevent the Member for Kennedy from moving the following motion forthwith:

That the House:

(1) notes that:

(a) on 6 May 2020 the Minister for Agriculture put out a media release titled "Time to stop milking dairy, fair go for farmers";

(b) nearly 500 dairy farmers have left the industry in the past year;

(c) the ACCC in 2018 identified that there is a market imbalance between processors and farmers;

(d) in the state of Queensland alone the number of dairy farmers has dropped from 1,305 in 2000-2001 to 356 in 2019;

(e) Australia had 12,896 dairy farms in the year 2000;

(f) in 2018 there were just 5,699 dairy farms, a reduction of 57 per cent which is likely to have increased in the last 12 months;

(g) in the North Queensland dairy area before deregulation farmers got 60.4 cents per litre, but after deregulation they got 41.1 cents;

(h) Dairy Australia's Situation and Outlook March 2020 report says dairy farmers have been impacted by the summer bushfires adding additional price pressures to their operations, including in:

(i) NSW, 32 dairy farms on the south coast and far south coast and eight on the mid coast;

(ii) North East Victoria, 35 dairy farms directly affected and 11 more operations significantly impacted;

(iii) East Gippsland in Victoria, approximately 30 dairy farms affected in the direct fire zone with varying degrees of impact, including two known to have lost major assets; and

(iv) South Australia, 12 dairy farms affected by fires prior to Christmas;

(i) Dairy Australia has also stated a range of factors weighed on economic growth last year, including geopolitical tensions, trade policy uncertainty, social unrest and stressed emerging markets and overall, growth in global output fell 0.7 per cent to 2.9 per cent, the lowest level since the 2008-09 financial crisis;

(j) the Australian Dairy Situation Analysis dated May 2019 states that Australian dairy farmers operate in a deregulated and open market, leaving them quite exposed to the product price adjustments induced by global market shocks and associated flow on impact to farm gate milk prices, which, coupled with increased volatility in the availability and pricing of key production inputs such as water and feed has undermined local farmer confidence in the long term dairy market outlook and the scope to extract reliable returns from their milk to build a longer term future; and

(2) calls on the Government to:

(a) give more support to Australia's dairy farmers;

(b) instruct the ACCC to develop a minimum farmgate milk price;

(c) enforce the minimum farmgate milk price through the Dairy Code of Conduct; and

(d) as an interim measure, provide a mechanism for mandating the voluntary milk levy until the minimum farmgate price is established or create an offence to purchase fresh milk below the minimum price to farmers that will be set by an arbitration authority designated by the ACCC.

I represent one of the three areas designated in Australia as being the biggest and most at risk. Bega was another area that was designated as one of the biggest and most at risk. On the day before dairy deregulation, we were getting 60c a litre for fresh milk. The day after we were getting 41.1c a litre. Thirty per cent of our income was taken off us overnight. Every person in this room, imagine if you got a telephone call and were told that 30 per cent of your income was to be taken away tomorrow. That's what happened to these poor farmers.

For those that advocate for free markets, I strongly advise that they sue the universities they went to for not telling them that free markets do not include a situation where two retailers have 80 per cent of the marketplace. That is called an oligopoly, and proof positive is the fact that within one day the price had gone from 60c down to 40c. That's not a free market. That clearly is an oligopolistic pricing mechanism, where two, three or four people control the price. If further proof were needed, as Fred Cudor pointed out to me, if Coles and Woolworths could decide arbitrarily that they could put 20c a litre on milk to help drought affected dairy farmers then clearly they're controlling the marketplace. Just two people in the marketplace could unilaterally decide to kick the milk prices up 20c, further proof that it is not the market setting the price but the two giant supermarket chains.

I'm not attacking them. They have a responsibility to their shareholders to maximise profits. The honourable opposition member who will be seconding this motion, Mr Joel Fitzgibbon, has pointed out on numerous occasions that they have a responsibility to maximise profits to their shareholders. They're going to play by the rules, but we set the rules. The rules are based upon a free market when there is no free market, clearly. If overnight you can chop the price down 30c and then you can put it up 20c literally in one day, there is no free market. You're just deciding whatever price you want to put on it and that's the price it will be. That is the necessity for minimum pricing. Quite frankly, intelligent people—and there are a lot of unintelligent people out there—know that the government members are getting constant publicity because they are saying: 'Oh, this is dreadful. Oh, we must have a code of conduct. We've got to put a code of conduct in.' Well, they got the code of conduct in and we got 3c out of it. Consumers are paying 20c.

I can't speak for every farmer in Australia, but there are only two factories left in Queensland. One is in Brisbane and one is in North Queensland. There are a million people in North Queensland, so it's a very sizeable factory. For that area with a million people, I can say very definitely that we got 3.1c. So the consumer's paid 20c and the farmer got 3.1c—and it was to help the farmers! I don't know what farmers got helped, unless you consider 3c a help.

An arbitration commission—it was a fair claims commission, if you like—set the price for milk to the farmer at 60c a litre. If you extrapolate that price to prices currently, 20 years later, then you come up with a figure of 94c a litre. That's what they should be getting, and they're getting 60c a litre. I don't want to get tangled up with figures, but you don't have to be told that every dairy farmer in this country is going down. Some of the big boys think that, by getting bigger, they are going to be all right. I had discussions many years ago now with Tony Perich, the second biggest milk producer in Australia. He is in Penrith, outside of Sydney, and he's milking over 2,000 milkers. That's fantastic. I don't think anyone in Queensland is doing 700, and he was doing over 2,200 at the time. He said: 'We're losing money. If you think you're going to get bigger and that will somehow solve the problem, it won't, because I'm as big as there is and I'm still going broke.' For those stupids who think they can stay where they are, they will be gone because of their stupidity. You can take your free market and every intelligent person who believes in free markets—

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

Member for Kennedy, could you pause for a second. You have moved that standing orders be suspended, so at some point you really need to be saying why standing orders ought to be suspended.

Photo of Bob KatterBob Katter (Kennedy, Katter's Australian Party) Share this | | Hansard source

I take your point, Mr Speaker. We have lost 500 dairy farmers in the last year. If I had to put a figure on it, I would say we're losing 30 a week. So do we stand here and do nothing—because this House maybe won't sit for another month or two; I don't know—and watch another 100 or 200 farmers hit the wall or move into a situation from which they can never recover? That is the urgency of this motion.

Quite frankly, I think there are probably some people over here who are not game to open their mouths but are praying that we get this through because, eventually, their farmers going to wake up. Eventually their farmers are going to wake up and say, 'We've been voting for the country party, but we don't think this mob are the country party anymore.' Sixty per cent of New South Wales has made that decision. With the land mass in New South Wales, they have left. All of North Queensland, virtually, has left. The people are not dumb and eventually they will wake up and realise that the party that was formed to deliver a statutory market, a minimum price, is now the party— (Time expired)

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

Is the motion seconded?

9:59 am

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture and Resources) Share this | | Hansard source

I second the motion and reassure the House that this matter is urgent, because not a day goes by when we don't lose another dairy farming family from the land. I remind members that this is an essential consumer good for Australians everywhere. The member for Kennedy has moved this as an urgent matter because he cares deeply about not just those dairy farming families but all those along the value chain and, of course, all those Australian consumers who don't want to find themselves in a situation where they're importing their drinking milk in powder form. Now, some people would say that is overreach. It is not. It is not overreach if we continue to lose our dairy farmers at the rate we have been losing them now for a number of years. So this is an urgent matter. It's a matter that can't be put off any longer.

I've been in the agriculture portfolio for, I think, almost seven years. My first meeting with Australian Dairy Farmers was a request—a plea, really—to put pressure on the government to put in place a mandatory code of conduct, urgently. That was nearly seven years ago. This is why this matter is urgent today. We finally had put in place a code of conduct late last year, but, as the member for Kennedy has pointed out, a code of conduct is not a sufficient mechanism to deal with the structural issues in the dairy sector and the power imbalance issues in the dairy industry. If you've got a structural problem, you need to address it with policy that addresses those structural problems and you need to do it very urgently, which is why the member for Kennedy has moved his motion today and it's why I am very happy to second it in this place.

Now, we are open to other ideas. I hope the member for Kennedy doesn't mind me saying that. If the government doesn't want to embrace the policy exactly as the member for Kennedy has put it, that's fine, but let us at least have an urgent conversation today about what the government might propose, because the only thing the government is proposing now, in addition to the mandatory code of conduct, which took six years to put in place, is to put pressure on the retailers to voluntarily keep a levy on milk to return to our dairy farmers. Well, voluntary isn't good enough. It's not sustainable. It's not going to address the structural issues in the industry.

The Labor Party proposed a very simple thing: refer to the ACCC to test the merits of a minimum farm gate price in every region—because every dairy region is different—so farmers couldn't be paid below their cost of production, which is regularly done to them on a regular basis now. But this government, for some bizarre reason which I cannot get my head around, is not even prepared to ask the ACCC to make that inquiry to test the merits and the efficacy of a minimum farm gate milk price. Do we not care about our dairy farmers and our dairy farming families sufficiently just to let the ACCC test that proposition? This is why this debate is urgent today: the clock is ticking. We are creeping further and further towards total import dependency for our fresh drinking milk—our drinking milk; it won't be fresh—and our other dairy products.

I've spent weekends on a dairy farm on a regular basis for the last couple of years. I've seen firsthand the impact of the drought and the price squeeze that our farmers have been in for such a long time now—in fact, arguably since deregulation in the early 2000s. It's urgent. The government needs to respond to this motion today, not ignore it as it usually does. To National Party MPs today: there's nothing politically in this motion. It doesn't criticise the government, so we're not inviting Nationals MPs to be critical of their own government. We're just asking them to vote with us today to send a clear signal to their own government that it's past time we did something for our dairy farming communities. (Time expired)

10:04 am

Photo of Alan TudgeAlan Tudge (Aston, Liberal Party, Minister for Population, Cities and Urban Infrastructure) Share this | | Hansard source

I'll respond very briefly on behalf of the government that we won't be supporting the suspension of standing orders motion moved by the member for Kennedy. We appreciate his passion for this particular area and we appreciate the seriousness of the topic which he is raising, but the question for this parliament right now is that standing orders should be suspended to prioritise this above all other matters. That's actually the issue at hand here that we would be voting on, and we will not be supporting that, because there are other mechanisms to raise these issues should the member want to raise those issues and should, indeed, the Labor Party want to raise these issues.

Today the daily program does include very important matters. The very next bill that was about to be introduced concerns the National Skills Commissioner, which is going to be a very important piece of architecture to support the reskilling of Australia, which is going to be so needed following the coronavirus crisis to enable us to get through the recovery. There is also going to be an important report coming up in relation to the National Redress Scheme, and there will be a report which the member for Newcastle will be speaking to in the not-too-distant future as well. There are also other important tax measures as well as legislation in relation to defence, health insurance et cetera. That program is outlined.

That's why we won't be supporting this motion. There is a full program to get through today. There are other mechanisms to raise these important issues, and I encourage the member for Kennedy to do so.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The question is that the motion to suspend standing orders moved by the member for Kennedy be disagreed to.

10:15 am

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

Just while I have members here, and the member for Kennedy for here, I'm going to address the length of the motion. Some motions have become inordinately long, and this is against the practice of the House. The motion moved by the member for Kennedy obviously places the Speaker in a difficult position, because you're not sure when it's going to end—it was very, very long indeed. In fact, it went for nearly three minutes. Now, previous Speakers have warned of this practice. It's outlined clearly on page 297 of Practice where Speaker Snedden said that if the motions continued to be of that length, he would take action. He didn't need to and I don't want to, but members need to know that the motion needs to be a concise point that the House can make a decision on, and motions shouldn't narrate a long argument or debate the matter. I've been very practical with that in accepting there always is an element of that, but if that becomes the dominating feature then I want to be predictable, so I'm letting members know: if it gets to that point, if there was a repeat of what just occurred, I would simply withdraw the call, ask the member to go and amend their motion and give them the call at a later date.

10:17 am

Photo of Bob KatterBob Katter (Kennedy, Katter's Australian Party) Share this | | Hansard source

I understand what you're saying and I am chastened by my behaviour.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

That's good! So I'll take that as you voluntarily not wishing the call for the rest of the week, or the rest of the day. That's no problem at all!