Senate debates

Thursday, 5 December 2019

Ministerial Statements

Dairy Industry

3:33 pm

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party, Minister for Agriculture) Share this | | Hansard source

It's my absolute pleasure to come into the chamber to talk about the plan the Liberal-National government have to support Australian dairy farmers. I'm an optimist when it comes to agriculture in this country and this is how I see the dairy industry. It is an industry that is glass half full. Yes, the industry is facing some challenges at the moment. Drought and high input costs of water, fodder and electricity are having a real effect on our dairy farmers. Despite historically high farmgate prices at the moment, farmers are not seeing that turn into profit, partly because of the cost of production. The warm and dry winter has played havoc on milk production across Australia, especially in the northern regions. Milk production on farms across Queensland and New South Wales has been contracting due to prolonged drought conditions, and the failure of some grain crops in these areas is temporarily decreasing fodder availability, with forecasts showing the feed supply will remain tight.

Tasmania and southern Victoria bucked the trend, though in Victoria on-farm costs grew by 20 per cent last financial year as a result of higher priced irrigation and feed. Things have been tough, particularly in northern Victoria and southern New South Wales, with limited water availability and high input costs. For example, the median price for temporary water in northern Victoria has been well in excess of that required to turn a profit as a dairy farmer. In South Australia, crop yield expectations have been downgraded due to frost this year, and the cost of feed is persistently high. Right now milk production in Western Australia is ramping up after a late start to the season, but, whilst the cost of stock feed wheat has reduced by 23 per cent, the price of hay has substantially increased over the last year.

Dairy production is expected to fall by a further three to five per cent over this financial year, as the ongoing challenges of drought and high input costs mean that farmers are making tough decisions to sell or cull their stock. The dairy-milking herd has reduced as farmers proactively manage the risk of poor animal welfare outcomes in drought. Farmers are also managing the risk of heat stress in their herds, which further lowers milk production in the drought. This season's farmgate milk price will provide many farmers with the chance to make up some ground financially. However, high costs of feed and water—not to mention the ongoing drought—will continue to hold back profitability. Whilst these challenges persist, milk production is likely to remain subdued.

Our government knows it is tough. We recognised our dairy farmers were doing it tough prior to the last election. We've not come to this issue yesterday, like others, who may claim to be fighting for the dairy industry. That is why our government has a real plan to support dairy farmers across Australia and to address both price and input costs. I and all those on the government benches want to see a vibrant, sustainable and prosperous Australian dairy industry that continues to produce safe, nutritious dairy products not only for Australians but also for the world.

To address the effects that input costs are having on the industry, our government has taken the following actions. For those experiencing drought conditions, we've announced over $8 billion in drought measures and improvements to the farm household allowance, to ensure that many eligible farmers, including dairy farmers, are able to receive assistance. That includes $98 million to make up to 100 gigalitres of water available to produce fodder, silage and pasture, which is due for open application this month. This will directly assist dairy farmers in the southern basin but will benefit all as more fodder becomes available on the market. Our government is providing $3.3 billion of funding through the National Water Infrastructure Development Fund, and our government has established a $100 million National Water Grid Authority to bring together the world's best science to identify opportunities and plan the next generation of water infrastructure.

Electricity prices—particularly for those dairy farmers in Queensland, where the operation is state owned—are wreaking havoc on profitability. We have a plan that includes $10 million to assist dairy farmers to upgrade or invest in energy-efficient equipment to reduce their energy costs. That's something that those particularly in North Queensland are telling us that they want to see. Our government has also put in place a price safety net, capping standing-offer prices. We've introduced a reference price when it comes to electricity, requiring advertisers to make offers more transparent, and we've progressed the big stick legislation to ensure that electricity retailers pass on those reductions.

We've improved the productivity of our dairy farmers, including a modernisation plan through the research and development corporations. And that's not all. We're progressing the review of the EPBC Act, and this is in addition to the Craik reforms. We've had $3 million of grants to support farmer groups to set up farm cooperatives and other collective business models so that they can address some of the structural issues within the dairy industry to gain more market power against the processors and the retailers.

To help farmers get the best price for their milk, our government has taken the following actions. At the election we announced a suite of measures: $8.1 million in additional funding to the ACCC's agriculture unit and a dairy specialist. That is already proving returns, as the ACCC result for Norco against Coles has seen today. The Nationals were key in delivering the effects test to limit the use of market power by big business and strengthen protections against anticompetitive behaviour. We've backed the development of cooperatives and mutuals. We're creating more opportunities to sell dairy products at premium prices by actively supporting our dairy farmers to get the most of our free trade agreements, by working to reduce or remove barriers to trade to establish new technical market access. This is in addition to fighting for Australian dairy through the negotiations of the geographical indicators that are part of the EU free trade agreement negotiations. The gains from trade are clear. Under the TPP-11, cheese tariffs with Japan, covering almost $100 million of trade, will be eliminated. That is great news for Australian dairy farmers. Under the FTA with China, tariffs on all dairy products will be abolished by 2026. Our government also recognises the increasing significance of non-tariff measures for Australian agricultural industries, including dairy, and the impact that they have on restricting market opportunities, imposing unreasonable additional costs on export.

But, most importantly, our government is working to deliver the mandatory dairy code of conduct for industry, due to be in operation by 1 January 2020, to help protect farmers against egregious conduct from processors, to improve transparency in the industry and to set enforceable minimum standards of conduct for business practices between farmers and processors. Today I am pleased to announce to the chamber that we have received broad support from industry right across the country, across all states—Queensland, Western Australia, South Australia, Tasmania, Victoria and New South Wales. The dairy industry is supporting our efforts to deliver a mandatory code. The code will cover seven of the eight recommendations made by the ACCC in its 2018 dairy inquiry. Recommendation 6 is covered by our election commitment of half a million dollars to Dairy Australia to provide financial and legal advice to farmers so that they can properly consider the implications of their contracts with processors. This means that by 1 January 2020 all of the ACCC recommendations will have been delivered—just over six months since being returned to government.

Finally, I want to make this point in relation to alternative proposals that are being suggested in this chamber, notably the push for a floor price. Those proposing floor prices don't support the government pursuing free trade agreements with new markets. They don't support dairy exports that help the industry to grow. We support and we've demonstrated that we want Australian dairy farmers to get paid a fair farmgate price, but we do not support a floor price. In the last 10 years there have been 10 reviews into the dairy industry. These reviews examined the key issues around pricing, cost, performance, contracts and supply chain, but not one of those 10 reviews in a decade of examination supported the introduction of a floor price. Any floor price ignores the basic principles of economics, supply and demand; and does nothing to fix the underlying issues, like the high input costs for fodder, water and electricity; and the difficulty farmers have in negotiating a fair price for the milk that they produce with the processors. A floor price would create damaging distortions across the dairy regions; incentivise the purchase of milk from southern states, where production costs are historically lower; significantly impact other states, like Queensland, New South Wales and WA; and mean that imported dairy products, such as cheese and milk powder, would become cheaper in comparison.

Raising the price of milk paid to dairy farmers would reduce our competitiveness as an exporter, and the floor price is also likely to reduce the profitability of dairy farmers by increasing competition for inputs such as feed and water. Importantly, history shows that price regulation doesn't work. If you want a great example, look at the wool industry when it comes to floor prices. I'm pleased that, in combination with my colleagues, we're taking up the fight for Australian dairy farmers to the supermarkets. I'm proud of our work as a government. We're going to deliver our ongoing plan to support our dairy farmers. I believe, my team believes and our government believes that the dairy farmers in this country have a very bright future, and we are doing everything we can to support that end.

3:43 pm

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | | Hansard source

It's the last sitting day of the year, and here we are again debating the failure—

Photo of Sue LinesSue Lines (WA, Deputy-President) Share this | | Hansard source

Senator Watt, are you taking note?

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | | Hansard source

I move:

That the Senate take note of the minister's statement.

It's the last sitting day of the year, and here we are again debating the failure of this third-term government to provide support to Australia's dairy industry. The Minister for Agriculture continues to feign support for the industry, attempting to claim that this government has actually done anything meaningful to save Australia's dairy industry. This is the minister who is bypassed by her own backbench when it comes to acting to supporting Australia's dairy industry, to the point we're starting to talk about the 'Bridget bypass'. This is the minister who voted against ensuring our dairy farmers receive a fair price for their milk.

Photo of Sarah HendersonSarah Henderson (Victoria, Liberal Party) Share this | | Hansard source

Madam Deputy President, a point of order: could I ask Senator Watt to refer to the minister by her correct title.

Photo of Sue LinesSue Lines (WA, Deputy-President) Share this | | Hansard source

Thank you, Senator Henderson. I remind Senator Watt to please refer to people in this chamber by their correct title.

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | | Hansard source

Thank you, Madam Deputy President, for your guidance. This is the minister who shows no contrition for failing to quickly respond to this dairy crisis. This is the minister who is part of the government that, back in 2016, ignored the plight of our dairy farmers when Murray Goulburn clawed back the milk price. This is the minister who stood with her colleagues and voted against the dairy code of conduct. In fact, my father was a dairy farmer so I know a little bit about this topic, if not the Victorian dairy market.

National Party senators who claim they support our dairy farmers had yet another opportunity to show real support for Australian dairy farmers and to send their coalition partners a message they cannot take their support for granted. Instead, they voted against Senator Hanson's bill. Yet Senator Susan McDonald last week told Radio National: 'We're losing a dairy farmer a week from the industry Queensland. We're down to 311 and it has to stop today.' She also said this is a complete market failure. She said: 'I have long talked about the complete imbalance of power between Coles and Woolworths, and, you know, to an extent, Aldi. They hold so much market share. I think there are more steps to be taken to address supermarket power.' Isn't it funny—you'd almost think the government wasn't in power, that they hadn't been here for six years and actually could have done something about this. There's irony in a new senator who has just arrived here, after six years of this government, having to point out the failures of her very own government. At any point over the last six years National Party members could have stepped up and supported our dairy farmers, but they chose not to.

Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | | Hansard source

We did!

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party, Minister for Agriculture) Share this | | Hansard source

We have!

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | | Hansard source

I take the interjection from the two senators. They claim that they did. Well, you have to ask them why their own senator, in an interview with Radio National, is pointing out the crisis in the dairy industry.

Instead of National Party members stepping up and supporting the industry, what we see is a minister who has completely lost control of the portfolio, Nationals backbenchers writing policy and still no action from this government. The minister promised One Nation that she would implement a dairy code of conduct by the end of the year, yet here we are on the final day of the parliament for the year and still no code of conduct. It's completely missing. No matter how far we look for it, it's not here. But this comes as no surprise. The minister and the government have promised a lot of things to our farmers that they have not delivered. The only way the Liberal Party will start to take the plight of Australian dairy farmers seriously is if Senator McKenzie and her National Party colleagues in the Senate are prepared to take a stand to ensure that dairy farmers are receiving a fair farmgate price.

Liberal and National senators will say that, in response to the Murray Goulburn debacle, dairy farmers were given access to the farm household allowance and concessional loans. But they're missing the point. It never should have come to that. The reckless actions and the failed capital raising structure by Murray Goulburn fell disproportionately upon dairy farming families, and it was not fair. Murray Goulburn could have suspended the direct link between milk prices and the money it pays to investors. They could have directed funds back to higher milk prices for farmers to provide a significant cash flow boost to farmers. But there was no pressure from the then agriculture minister on Murray Goulburn to do the right thing.

Dairy farmers need a fair farmgate price, transparent contracting and effective dispute resolute mechanisms. All senators in this place already know this, and there have been a number of inquiries supporting the fact that the dairy industry is facing a number of challenges and a crisis situation. There have been a number of interjections with all sorts of suggestions about what could be done. I ask any of those senators: why don't you actually just do it? You know you're in government. You're in government. You can actually do things. I know it involves having bit of a plan and deciding you want to get something done rather than just getting in the COMCARs, rolling in, sitting there for a few hours and then rolling out home. You've actually got the power. The reason we wanted to win the election was so that we could actually do things. You opposite just wanted to win the election so you can sit on that side of the chamber and nod along. If you've got so many good ideas, why don't you do it? You're in government. That's what government does—get things done. You don't just sit there and roll along and see the supermarket monopoly roll over the top of farmers. Get your act together and get something done.

There have been plenty of warnings about the need for action. In 2017, the Senate Economics References Committee presented its report, Australia's dairy industry: rebuilding trust and a fair market for farmers. The reference for the inquiry was made on 14 September 2016, and it investigated how to establish a fair, long-term solution to Australia's dairy crisis. That's nearly four years ago when this all kicked off and we still haven't seen any action. The inquiry made particular reference to fresh milk security, the legality of retrospective elements of milk contracts, the behaviour of Murray-Goulburn and other related matters. This is not a new thing; this has been going on for years.

The Senate also noted back in 2016 that the Australian dairy industry was facing an unprecedented crisis, with the retail cost per litre of bottled milk often less than the retail cost of bottled water. In 2011, eight years ago, a report of the Senate Economics References Committee recommended that producers' contracts with dairy farmers should offer a clear and consistent formula for milk pricing, with unambiguous conditions. Five years later, the livelihoods of up to 40 per cent of Australian dairy farmers are under threat because of imposed retrospective debt helped by unclear and inconsistent milk-pricing contracts with ambiguous conditions, and Australian rural and regional communities face losing millions of dollars and thousands of jobs if a fair, long-term solution to Australia's dairy crisis is not found.

The committee further noted:

Despite being Australia's third largest agricultural industry, the dairy industry faces a number of significant challenges which, if left unaddressed, have the potential to threaten the long term viability of dairy production.

These are not new matters. These have been known for years, while this government has been in office—turning a blind eye and saying it was all too hard. Sadly, the issues facing the dairy industry have been left unaddressed, and that is most likely why government members voted against another inquiry into the dairy industry by the Senate during the previous sittings on 17 October 2019.

Fortunately, the motion was successful—even without government senators. Senator Duniam was given the job of trying to explain why the government would not even support a Senate inquiry into the dairy industry, claiming:

The government does not support reregulation via an ACCC investigation, as reregulation is not supported by the industry. As recommended by the ACCC, we're implementing a mandatory code of conduct to increase fairness and transparency between dairy farmers and processors. The code has been developed in consultation with industry and will help to address the imbalance in bargaining power between farmers and processors. Progress has been made to expedite the code. An exposure draft will be released shortly for industry feedback, and it's expected to be in place by 1 January 2020.

The problem for the government is that this rhetoric just doesn't stack up. A Senate inquiry doesn't have the power to reregulate the dairy industry, and the code of conduct can only do so much, if, indeed, it ever gets implemented. Essentially, Senator Duniam was being loose with the truth. But, most likely, he was just given the statement to read out by the agriculture minister, Senator McKenzie.

The Senate inquiry is seeking to ask and answer questions about the performance of Australia's dairy industry and the profitability of Australian dairy farmers since deregulation in 2000. Therefore, the question has to be asked: what are government members and senators are scared of? Angry farmers is the obvious answer. This week, the fact that farmers took the time to protest outside Parliament House should cause the government to reflect upon its failings. While it's nice to see members of the National Party finally stepping in to support our dairy industry, simply sitting on their hands and hoping that consumers go into their supermarkets and ask to pay more for their milk is a fantasy proposal and begs the questions: who is responsible for this government's agriculture policy? Is it Senator McKenzie? Is it Senator McDonald? Is it Minister Littleproud? Is it Woolworths? Is it Coles?

The government accepted the ACCC's recommendation for a code of conduct 19 months ago. Farmers are still waiting and government MPs and senators are still fighting over what it should look like. This government has had ample opportunity over the last six years to do one thing, to lift one finger, to assist our dairy industry. There has been Senate inquiry after Senate inquiry after Senate inquiry, and other inquiries, which have made recommendations to this government to take action to support our dairy industry. But every single time the government has found a reason why it's too hard or just not in its interest to make progress.

As with so many other issues, how many years of this government—how many terms of this government—will it take before this government actually gets around to helping out the people who it says it stands for? This government says that it stands for farmers, but every time it's asked to help it says it's all too hard. It's about time this government started doing some work. (Time expired)

3:54 pm

Photo of Perin DaveyPerin Davey (NSW, National Party) Share this | | Hansard source

I rise to take note of the Minister for Agriculture's response outlining what the government is doing for the dairy industry. I commend the minister because this government is taking action to support the dairy industry. We are also bringing the industry with us on the journey. We are consulting on the mandatory code of conduct; we have consulted all year. We've been talking to the industry since the ACCC made the recommendation, which we are going to deliver on by January in line with what we have said we would do.

Let's not beat around the bush here. The reason we have to have such an initiative is that, in 2011, our consumers in this nation were told that milk was worth less than bottled water. It was not consumers asking for discounted milk prices. It was some marketing guru's bright idea to bring prices 'down, down' and tell consumers that agricultural products are not worth the cost of production. Let's—

Senator Patrick interjecting

I'll take the interjection. I am more than happy, Senator Patrick, to work with you—and with my colleague Senator McDonald, who is all over this issue—to have a thorough review and work out how we can address the divesture laws. But let's get back to those supermarkets. Today we see in The Sydney Morning Herald that the ACCC is fining Coles $5.25 million because yet again their marketing does not match their promises. They promised to pass on 10c a litre to farmers in drought, and they reneged on that deal: 'Oops, we had an agreement already to increase our milk prices paid to farmers, so in reality we'll give them the 10c until our predetermined increase goes through and then we'll cut back our 10c contribution by the equivalent.' That is not fair because the Australian consumers, who have not whinged at all about paying that extra 10c a litre and who actually feel that it is the right thing to do to pay for their milk and for the cost of production, expected Coles to pass on that full 10c a litre. I commend the ACCC for investigating that issue, hammering it home and fining Coles the appropriate amount, which will go straight to the farmers.

The relationship, though, between processors and farmers is the crux of it, and this is what the mandatory code is all about. In the past, the processors actually signed those supply agreements with the supermarkets. So when the Australian public rightly stood shoulder to shoulder with farmers after the Murray Goulburn debacle and said, 'We will not pay a dollar-a-litre milk; we are going to go and buy branded products,' unfortunately all that did at the time was reward Murray Goulburn because it was Murray Goulburn who had signed a supply agreement with Coles and with Woolworths to supply branded and unbranded milk. So Coles and Woolworths enter an agreement with the processors, the processors then turn around and have an agreement with the farmers, and it's the farmers who get hung, drawn and quartered. They cop it. We need those processors to act with integrity. We need those processors to pay the farmers the cost of production. Then, if Coles and Woolies are trying to stand over them, we need our processors to stand up and say, 'This is not on.' Call it out. Call it out publicly or call it out behind closed doors—I don't care—but let's get our farmers a fair price because that is what I'm told our farmers want.

Our farmers are battling high input costs—record input costs. The price of feed and fodder for their cows is through the roof. If they are an irrigation dairy farmer, their temporary water prices are through the roof, nearly at record prices. They're not quite paying what they paid during the millennium drought, but it's very close. Electricity prices are through the roof to the point where dairy farmers are actively looking at mechanisms and ways they can disconnect from the grid and become self-sustainable, and I commend them for that; I think that is great. They're putting in solar panels. They're looking at turning methane into power. That is great. But, while they're struggling with these high input costs, we've got to make sure that they get the fair price they want. A floor price is not necessarily going to deliver that. And a floor price will make the processors just as lazy as they've been in the past, because a floor price will effectively become a ceiling price. There will be no impetus for our processors to pay the extra for better quality milk—for milk with higher protein content. There will be no requirement to do that because they can say: 'Well, that's the floor price set by the ACCC. We're just going to accept that and that's a standard price across the region.'

We've listened to industry. The other thing we're doing is, because Senator Hanson set up the Senate inquiry, respecting that process. We are using that process to hear from the range of stakeholders involved, including the supermarkets, I'm led to believe, and we're going to see what that report recommends. But Senator Hanson, who insisted on that inquiry, is not even respecting the process that she initiated. She is going ahead of the pack, before the report comes in, before the recommendations are made, before all the submissions have been sifted through and collated, and that is not fair on the people who are participating in that inquiry in good faith, including the New South Wales Farmers Federation Dairy Committee, including Australian Dairy Farmers, including Queensland Dairyfarmers' Organisation. We need to respect that process and let those people have their say. I honestly believe that the outcome of that inquiry will be a fair price with concerns about the impact of a floor price.

4:02 pm

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

I take note of the explanation by the Minister for Agriculture. It's very interesting the responses here about being a regulated dairy industry that is nowhere else in the world. Well, I'm sorry, but we are the only country in the world that is unregulated in the dairy industry. Even New Zealand has a regulated dairy industry and produces about 22 billion litres of milk a year. America is regulated. Europe is regulated. We are the only country that isn't, yet in Australia the number of registered Australian dairy farms has fallen from 5,699 in July 2018 to 5,200 in the present day. Milk production has fallen from 12 billion litres in 2000 to eight billion litres in 2019.

I also want to talk about the processors. Dairy foods play an important part in Australia's food security and human health. None of the recommendations contained in the final report of the Australian Competition and Consumer Commission dairy inquiry dated April 2018 have been implemented. Australia is forecast to import more dairy products than it exports by 2023. Four foreign owned milk processors control an increasing proportion of milk production in Australia, setting the price at the farm gate during the period of 2013 to 2017. These processors have revenues in Australia of over $160 billion but pay less than $160 million in income tax, or a rate of less than one per cent. The main dairy export countries, including New Zealand, which is the largest dairy exporter in the world, have a regulated farmgate milk price. Regulation of farmgate milk prices is correlated with growth in milk production and increasing exports, whereas Australia's export of dairy products has been in decline.

The minister says we have a high farmgate price at the moment. Well, I have dairy farmers in the Scenic Rim ringing me up and saying, 'I'm being forced to sign a contract with a processor, and for the next five years I'm only going to get 50c a litre for my milk.' Yes, the costs are going up at the moment because of the drought. Electricity prices have gone up; water has gone up in price. Why? Why are we facing high electricity prices? It's government policies and legislation that have put us in this predicament at the moment, so it's because of government policies that we're paying high water prices.

I visited a dairy farm down on the border of New South Wales and Victoria. They're paying $1 million a year for fodder and water just to keep production going. They can't keep going the way they are at the moment. There's a dairy farmer outside Toowoomba who had 1,100 cattle; he's now down to 600 cattle, and he looks like he could be losing his property because he can't get a fair price. He said: 'I'm getting 57c a litre for my milk, with a 5c loyalty on top of it, so 61c a litre. In Victoria, if they get the milk exported up from Victoria to Queensland, the processor pays Victorian milk producers an immediate 87c a litre for the milk.' Why can't they pay that directly to the farmer?

You talk about a farmgate price. This is what the minister hasn't explained: what damage is it going to do to the dairy farming industry in Australia if we give them a fair farmgate price that is viable, that will cover their costs. This can be regulated; it can be set by the ACCC. That is what has happened in other countries around the world. Senator McDonald has made comments saying: 'Well, look; we should get Coles and Woolies to actually set the price. They can pay the processor, and the processor can then pay the farmer.' What other industry do we have where the retailer sends the moneys back? What a great idea! Then the headlines came out today about Coles having to pay $5.25 million because they allegedly did not pass on 10c milk price hikes to the farmers. That idea works really well, doesn't it? As if they are going to pass it on! As if they want the book work! And where's the money going? That's not going to work at all.

Here's another thing. Senator Patrick voted against this. He said: 'I got a phone call from my South Australian dairy industry and they told me this is not going to work. I can't vote for this.' 'Do you understand it?' 'No, I really don't understand it, but that's what they told me. It's not going to suit South Australia.' Well South Australia's not doing too badly. I don't think they get their farmers to fully supply all of their milk, so they have to import from Victoria. But they're more interested in the export market, and they thought, 'This might destroy our export market.' It's got nothing do to with the export market whatsoever. Anyway, my staffer rang them up and spoke to a Nick Brokenshire, who was the vice-president. His response was, 'Just do what the Nationals tell you.' That was the response. So here you have it. Is it political? It's all political. That's what it's all about. It's very political.

The government says, 'But we're putting this $10 million in to assist in electricity prices, and we're doing all this to help.' The farmers out there just want a fair price for their milk. You admitted that people pay more for water on the shelf. They're quite prepared to pay for the water. And then you say, 'Oh, well, we are addressing the mandatory code of conduct.' I'm sorry, Minister; One Nation had to force your hand because you weren't going to bring it in until July next year. You admitted you had targeted July next year to bring in the dairy code of conduct. You had one already. You had the ACCC's sitting on the table, but you changed it completely. You changed it completely. You changed it from the original one, which was under consultation. It is a document that favours the processors. So if the processors actually have lost—

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party, Minister for Agriculture) Share this | | Hansard source

Point of order: in response to a request from Senator Hanson last week, I tabled documents—

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | | Hansard source

No, Senator McKenzie, if you do not have a point of order—

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party, Minister for Agriculture) Share this | | Hansard source

in this place that show what she is saying in this contribution—

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | | Hansard source

Senator McKenzie, resume your seat. Senator Hanson.

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

Thank you very much. The truth hurts. And the facts are that it's all leaning towards the processors because the legislation has changed. If that causes them to lose profits, they can then change the price. So my bill was about giving a fair farmgate price to the farmers that was to be determined by the ACCC investigation. It was also to make sure that the processors had to divest if they had too much control of the market in their area. The other thing was the mandatory code of conduct. The minister said no-one asked for this, not one person asked for a fair farmgate price.

Senator McKenzie interjecting

Well, isn't it funny, I actually had representatives from the Queensland and New South Wales dairy industries come into my office. I've got a letter that states 'we want a farmgate price for milk'. That's what they're asking for. The say they want a price for milk. The Queensland Dairyfarmers actually represent 78 per cent of the dairy farmers in Queensland. The number of dairy farmers in Queensland has dropped from 1,500 down to just over 300. At the moment, we're losing a dairy farmer a week. This has not just happened since the drought; this is prior to it. As I said, we had milk production at 12 billion litres a year in 2000 down to eight billion litres a year now. If Australians think this will get better, it won't.

Under this government, run by the Nationals, Senator McKenzie as the agriculture minister is running the dairy industry into the ground. I just think that the government responses to this are pathetic. They're only doing this because of pressure from One Nation, no other reason. That is why the ACCC has followed up Coles. There has been a lot of public support for me to push this. The Australian people do want to support the dairy industry. Australian people want to drink Australian milk, not have the Chinese buying up our dairy farms here and exporting the milk overseas. They are getting from $9 a litre up to $15 a litre for our milk. We will see ourselves importing milk from New Zealand if we are not careful or we will be drinking long-life milk. There's no reason.

When Senator McKenzie talks about wool prices and the problems there, that is a totally different issue. This has nothing to do with wool prices. That's the government's only excuse for it—a pathetic one. We need to support the dairy farmers. I wish they would really understand. I want to know: what's the real reason for this? They're backing the big multinationals; they are backing the big processors. All the processors are actually foreign owned and don't pay taxes here in this country. So support our dairy farmers. If not, get out of the way and let someone who will.

4:12 pm

Photo of Janet RiceJanet Rice (Victoria, Australian Greens) Share this | | Hansard source

The issues facing the dairy industry in Australia are complex, multifaceted and are not going to be solved by knee-jerk single responses. There are many issues manifesting at the moment. The Greens are concerned that dairy farmers get a fair price for their milk. The question is: how do we ensure that occurs? We have supported the bills Senator Hanson has brought into this place for a floor price. That is one measure but, in fact, it is not the best measure. The Australian Greens still think the amendments that we moved to Senator Hanson's bill are the best way forward that we can see at the moment. Rather than going for a full floor price, which has got the problem of having the same floor price in Queensland as in Victoria, go for an ACCC price notification scheme, where you could have prices being paid and then, if the price that the processors are proposing to pay to the dairy farmers are lowered, then the ACCC have got to sign off on that.

This sort of price notification scheme works for other industries. It works for Australia Post, it works for Airservices Australia and it works for Sydney airport. The Greens believe it's a middle road, having some level of regulation that clearly is needed. Clearly the system that we've got at the moment is not working. When you hear the stories about farmers not even being paid the cost of production by the processors, clearly this is not sustainable for them and it leads to overexploitation of the land as well. It's not something that we can continue with.

We think that further consideration of a price notification scheme by the ACCC is a very sensible middle way forward—certainly in the inquiry which we're about to go into the first hearing for in about 45 minutes time. I was very pleased to hear the minister give a commitment that the code of conduct—the long, long awaited code of conduct that really has taken far too long to be brought into being—will come into place on 1 May. As I said, that's been a very long wait and it's not before time. I think having that mandatory code of conduct in place, which has been a big push by many people, will be a significant step forward.

The third area that we really need to come to terms with is that a lot of the problems the dairy industry is facing are because of our changing climate. It is harder to have a productive dairy industry in areas where the temperatures are rising and where drought is occurring because of the climate crisis. The huge decrease in rainfall, the massive dryness and the extreme heat are reflective of the climate crisis. Two years ago, in 2017, we had 40 dairy cows die in the Shoalhaven area due to heat stress, because of the extreme weather conditions that occurred then. This is going to continue to occur across the country.

The basic reason that it costs more to produce milk in Queensland is, frankly, because it's hotter there and dairy cows don't like hot weather. So as the weather gets hotter, it's more difficult for the dairy industry to be profitable. We're looking down the barrel of increasing heat, increasing drought and increasing extreme temperatures, so it's inevitable that the dairy industry is going to continue with the struggles only getting worse.

If we are concerned about having a viable, profitable and sustainable future for our dairy industry in Australia we have to tackle our climate crisis. While we continue to say that it's absolutely fine to keep on mining, burning and exporting coal, gas and oil, and to have increasing carbon pollution, we are selling our dairy farmers out—just like we are selling out the rest of the Australian community and the rest of the world. I will know that this government and this parliament are serious about making sure that we have a sustainable dairy industry when they are serious about acting on our climate crisis. And that means we need to quit coal, we need to quit oil and we need to quit gas. We need to replace these with renewable energy sources. That's what's going to be good for the dairy industry. That's what's going to be good for the dairy industry in Queensland and that's what's going to be good for all of Australia and, in fact, all of the world.

This is the existential threat that is currently being faced, and until we come to terms with that threat we're just playing games. We know that there is not going to be a long-term sustainable future for so many of our industries unless we tackle our climate crisis.

4:18 pm

Photo of Susan McDonaldSusan McDonald (Queensland, National Party) Share this | | Hansard source

I rise to take note of Senator McKenzie's statement. It saddens me, it shocks me and it dismays me to see people in this chamber rising to speak on something that they know nothing about. We do not have enough voices of farmers in this parliament, and today I'm standing to talk to you about the challenges that we have. I'm standing to talk to you about farmers right across this state, right across this country—who wept to me after the floods in North Queensland, after the droughts in the rest of the state and after the droughts in the rest of the country—and say, 'We don't believe you care anymore. You sit in Canberra, you talk about climate crisis, you talk about floods and you talk about bushfires, and you have no idea.'

I want to tell you their stories; I won't have time tonight. But these people, these men and women—these generations of great land managers, of great genetic herd-builders and of great pastoralists—have had enough of the posturing, the poor responses and the misinformation that was promoted tonight from the Greens, from Labor and from One Nation.

What those parties are telling you is just not true. The dairy industry in Australia, and particularly in Queensland, is in crisis, but it is a complex industry. Queensland in particular has challenges that the rest of the country does not have. We primarily promote and provide to the fresh milk industry, to the drinking milk that we all enjoy. It is that milk that is valued most cheaply. We don't have the higher levels of fat and protein that are generated in the southern states. The dairy industry in Australia has been and still is being pillaged and bullied into effectively running their businesses at a loss by processors like Lactalis, which even today is bullying its suppliers into an unfair contract that is not right. This is not about price; this is about our values. This is about what Australians want and believe in. We want and we believe in our dairy farmers. Not only does this greedy and destructive practice of processors like Lactalis and Lion and businesses like Coles, Woolworths and Aldi constantly cripple these hardworking, taxpaying, good Australians to the point of going bust, it will damage this nation's dairy industry to the point that Australia will literally run out of Australian produced dairy. My disappointment is immeasurable when it comes to supermarkets being so obtuse when it comes to the salvation of these farmers. It is unacceptable and intolerable that there should be such a lack of ethical behaviour amongst our supermarkets. It was only today that an ACCC report showed that Coles misled Australians when it said it was paying the full 10c drought levy to farmers. That has resulted in $5.25 million being distributed to Norco's farmers right now.

Dairy is a massive part of life in Australia, and this could not only damage our GDP but cripple forever the future of dairy in Australia. Dairy production accounts for roughly 42½ thousand jobs in rural and regional Australia. However, businesses such as Coles, Aldi, Woolworths, Lactalis and Lion are driving a stake through the heart of each and every single one of these farmers. The introduction of dollar-a-litre milk led to a collapse in fresh milk supply prices from Queensland's dairy farmers. I spoke to Peter Garrett in Scenic Rim, who said, 'I knew it would be a tough six months.' He never ever dreamt it would be eight years later. Since then, our farmers have been living impossibly difficult lives, having to sell parcels of land and their herd and use their superannuation trying to stay afloat, but these farmers can stay afloat for only so long. I have travelled this state. I wish other senators would spend as much time as I have getting out on farms, standing with farmers, talking with them about their businesses, about their herd, about their pasture, about their prices, about their relationships and about the way they're being bullied by their processors. Liam Thiess is a fifth-generation dairy farmer. I said to him, 'What do you want?' He said: 'I just want to run these cows. They're like my family. They have names.' He enjoys the process of being a farmer. It is a calling to him.

We have introduced a dairy code of conduct which is going to provide some rules of engagement, some fair negotiation for these farmers and these relationships, but I do say to the supermarkets: it is time that they grew a moral backbone. It is time that they lived up to the standards that they put up on their website, which apparently are good enough for the rest of the country but not for our farmers. If farmers are not even breaking even, surely there is a breach of an ethical policy. And the answer is: yes. It's in the salaries of the deep-pocketed CEOs at Coles, Woolworths and Aldi, who are in breach of their own ethical policies. The Coles Group Ethical Sourcing Policy, at 8.1 under section 8: 'Wages and Benefits', explicitly says:

In any event, wages should always be enough to meet basic needs and to provide some discretionary income.

Coles has misled consumers and damaged the dairy industry to the point where it will take decades to recover from this mistreatment, because farmers are only earning this income as they sell small parcels of land, piece by piece, to stay in the dairy industry.

As for Woolworths, the Woolworths Limited Ethical Sourcing Policy is similar to the Coles Ethical Sourcing Policy. Section 6: 'Living Wages' literally says:

In any event wages should always be enough to meet basic needs and to provide some discretionary income for workers and their families.

It may sound familiar, as it is almost exactly the same as Coles' policy, because both ethical policies were derived from the International Labour Organization. And unsurprisingly, Woolworths has also breached this code, like Coles and like Aldi.

It is extraordinary to me that the Labor Party can sit across there and criticise the coalition for having done nothing, when they have been asleep at the wheel, promoting labour standards for workers, yet leaving farmers out in the cold. So I want to acknowledge the advice—and the support that I want to send out to Brad Teese, Peter Jarvis, Liam Teese, James Geraghty and Colin Daley up on the tablelands. The dairy code will provide them with some protection, but we know that it is the introduction of better prices from Coles, Woolworths and Aldi that has the power to solve the dairy farmers' problems today—not in two years time, when some mythical floor price might be introduced. The ACCC is very clear that it would take years to introduce a regionally based floor price, but what is worse is it has the real potential to wipe out dairying in Queensland because the costs of production in Queensland are so much higher than they are in the rest of the country.

It is also untrue that New Zealand, the US and Canada are regulated by a floor price. They have their own systems of managing prices. In New Zealand it is managed by a really big co-op. In the US, it's managed using a margin scheme. In Canada, it's managed using a combination of pasture and other inputs. So this is not about prices. This is about our values: our values as Australians and our values for dairy farmers.

4:28 pm

Photo of Rex PatrickRex Patrick (SA, Centre Alliance) Share this | | Hansard source

I rise to take note of the minister's answer as well, and I just want to put on the record that Centre Alliance supports dairy farmers. We do not support a floor price, and we don't support a floor price because we listen to our constituents, and the South Australian Dairyfarmers Association basically says it's not something that is wanted. But I'm not going to give the government a free kick here. There are things that you are doing wrong. You've got an F in relation to the Murray-Darling. I understand the input costs of feedstock are high. The government has done nothing about energy prices, and that has to be sorted out. And of course there is the rising cost of living. I will acknowledge the work in terms of market imbalance that Senator McKenzie had in relation to co-ops. She did some fantastic work in that area. But the code of conduct has been late coming—way too late.

In relation to the market imbalance divestiture laws, we moved some a couple of weeks ago in this place and were not supported by the government, and we need to look at that again. And the market perception of a dollar milk—since 2011 we've understood that that is just hugely problematic. That's Coles and Woolies, but there could've been earlier action in relation to that. As was mentioned by Senator Watt, we have had a number of inquiries into this, both back in 2011, in relation to $1 milk, and indeed in 2017, in relation to Murray Goulburn. The government has let people down because they haven't acted on recommendations that were before them.

Photo of Scott RyanScott Ryan (President) Share this | | Hansard source

Order, Senator Patrick. It being 4.30 pm, in accordance with the motion agreed to this afternoon I will now put the questions required to conclude consideration of the bills listed in that motion. I will deal first with the Australian Crime Commission Amendment (Special Operations and Special Investigations) Bill 2019 and the amendment moved by Centre Alliance. The question is that amendment (1) on sheet 8863, moved by Centre Alliance, be agreed to.

The question now is that amendment (2) on sheet 8863, moved by Centre Alliance, be agreed to.

4:42 pm

Photo of Scott RyanScott Ryan (President) Share this | | Hansard source

The question is that subitem (2) of item 53 and items 54 to 56 of schedule 1 stand as printed.

Centre Alliance opposed schedule 1 in the following terms—

(3) Schedule 1, item 53, page 11 (lines 12 to 19), subitem (2) to be opposed.

(4) Schedule 1, items 54 to 56, page 11 (line 20) to page 13 (line 33), to be opposed.

4:45 pm

Photo of Scott RyanScott Ryan (President) Share this | | Hansard source

The question is that the remaining stages of the bill be agreed to and the bill be now passed.