Thursday, 13 May 2010
Economics References Committee; Report
This report is one which has been produced cooperatively on a multipartisan basis—if I can put it that way. It was the subject of a reference that I moved and that was co-sponsored by Senators Milne and Colbeck. The inquiry was initiated by serious problems in the state of Tasmania in relation to negotiations between dairy farmers and milk processors but has proceeded way beyond the remit of that particular problem, although that problem has been given serious consideration in the report.
The report points out that the dairy industry was the subject of deregulation and that up until the year 2000 there was much regulation around the country in the dairy industry. At that time a process of deregulation took place and it was examined then by the Senate Rural and Regional Affairs and Transport References Committee, a committee of which I was a member at that time. The report of that committee is one in which I participated on a very active basis. This report refers to the circumstances that existed at that time and in the lead-up to that time and talks about one of the findings of that report. This report of the Senate Economics References committee says in paragraph 2.18:
In their findings however, they also noted that of serious concern was the suggestion that the controlled regulation provided would ‘shift to processors and large retailers who would then be able to dictate terms to the industry and marketplace.’
This report essentially has found that the Senate Rural and Regional Affairs and Transport References Committee’s finding at that time has proven to be correct and that power in the industry has indeed moved substantially into the hands of processors and large retailers. In relation to the balance of power between those entities, large retailers held by far the most power.
There are 15 recommendations made in this report. They refer to the state of trade practices law in this country and matters which pertain to the negotiation between dairy farmers and processors and other entities. They refer to the state of affairs which relates to the regulation of acquisitions and takeovers, particularly as they relate to the dairy industry. There are references in the report to members of this committee who are concerned with that issue as it pertains to other industries as well. In other words, the findings in this report are compounding the views of members of the committee in relation to other issues.
This report is one which has very broad support. It is, if I can perhaps put it this way, one which is made beyond politics and made on the evidence before it. It is one of the reports which typically used to come from the rural and regional affairs committee—but it has now come from this committee—where members of the committee make a finding based not on politics but purely on the evidence before them. We would encourage the government and the public to have regard for the report on that basis.
There is limited time today to present a full debate about this matter, and the government is very keen for other legislation before the chamber this morning to proceed. We hope that we have the cooperation of all parties in that regard. I want to thank the secretary, John Hawkins, and a member of the secretariat, Sandra Kennedy, for their very hard work in the production of this report and the work of the committee. It certainly has been greatly enhanced by the work and the drafting that they have done for us. I think many members of the committee would share the view that this report would not read as well and probably would not be as soundly presented without the assistance of members of the secretariat.
I thank members of this committee who have participated in this inquiry for their cooperation. We hope that this report illuminates the affairs in this industry and will have some impact on policy of any government in the future in this regard.