QUESTIONS WITHOUT NOTICE
Thursday, 7 May 1992 ASSEMBLY 1311
Thursday, 7 May 1992 Mr Kennett interjected.
Ms KIRNER - I actually manage to listen occaSionally in the House, which is more than the Leader of the Opposition does because he does not The SPEAKER (Hon. Ken Coghill) took the chair at agree with the shadow Treasurer on most things. 10.34 a.m. and read the prayer. The Leader of the Opposition is smiling, but it is interesting that when this House debates things like the Auditor-General's report, the opposition QUESTIONS WITHOUT NOTICE spokesman is missing from the House. Where is he now? I cannot see him! Perhaps he has gone to do another radio program to abuse people! Where is STATE ELECTION he? Here he is! Isn't that nice!
Mr KENNEIT (Leader of the Opposition) - I Honourable members interjecting. refer the Premier to her often repeated claim of being a community-based politician and I ask: at The SPEAKER - Order! I warn the Leader of the what stage will she put the community's interests OppOSition. He is well aware of the provisions of ahead of her and the government's selfishness, Standing Orders. I expect him to observe the same sorts of standards in this House that he requires in incompetence and dishonesty in managing the meetings that he chairs. affairs of the community she claims to represent by immediately calling an election? Ms KIRNER - No doubt the shadow Treasurer Ms KIRNER (Premier) - I thank the Leader of was out practising his calculated abuse of individuals on the telephone. You would think the Opposition for his question and invite him to he wouldn't you? He lost the work with me to ensure that the policies and would learn, really, confidence of the business community of Victoria programs that are being developed to assist the when he attacked a reputable banker in this House people of Victoria move forward. We can build on the current economic indicators, which show that and in tenns -- there is some progress in the economy. Later today I Mr Kennett interjected. shall release the beginning of what will be a major youth policy statement for, I believe, the whole nation. That will build a real community concern Ms KIRNER - No, it is not a personal attack - into a real community answer. you ought to recognise them! In tenns of the issue of political morality, honourable members should look at the behaviour of the shadow Treasurer on the In fact, we are doing exactly the same thing with issue that has been addressed over the past 24 hours child-care, housing, police and emergency services and Priority Victoria, which the opposition is about in the media -- to pass after all its criticism. When the community makes its judgment at the election I will be pleased Mr E. R. Smith interjected. to be judged by the real community. The SPEAKER - Order! The honourable Mr McNAMARA (Leader of the National member for Glen Waverley is well aware of the Party) - I refer the Premier to the fraudulent provisions of Standing Orders. I ask him to respect the House. misrepresentation of the State's accounts and ask: how much longer will this government continue to Ms KIRNER - On the issue that has been corrupt the values, standards and requirements of addressed by the Leader of the National Party, it is its own affairs tha tit legisla tes for and expects and demands of the community? quite clear that the difference between the $1.2 billion deficit as shown in the Niemeyer statement and the Consolidated Fund and the $2 billion Ms KIRNER (Premier) -If there were any referred to in the Auditor-General's report is misuse of political morality, as has been suggested explained by the Leader of the National Party, I would have to by the inclusion in the Niemeyer statement of borrowings as receipts and the say it was perpetrated by the shadow Treasurer on repayment of borrowings as expenditure. Not only radio this morning. I listened to him this morning, as is that consistent with the Public Account Act, it is I have listened to him over the past few weeks -- QUESTIONS WITHOUT NOTICE
1312 ASSEMBLY Thursday, 7 May 1992 also consistent with the way the reporting has been national agenda, as I intend to do at the Premiers done by previous governments, and indeed by Conference on Monday. governments across Australia that use proper accounting methods, including the Commonwealth The issue of teenagers' futures, not simply teenage and New South Wales governments. employment, should be occupying the minds of honourable members on both sides of the House. Honourable members interjecting. The paper I will put to the special Premiers Conference contains a number of key The SPEAKER - Order! I ask the Deputy Leader recommendations to tackle the issue. The first way of the Opposition to remain silent. I remind the to tackle the issue is to face up to the Leader of the National Party that he has asked his recommendations in the Cannichael report. Unless question and should allow the Premier to reply we face up to the issue of training wages, which the without interruption. report raises, and unless we can get both industry and unions to back the recommendations, there will Ms KIRNER - The opposition has engaged in an be no real prospect of change. orgy of abuse that reflects on the integrity of the public servants who are responsible for preparing The second issue we have to face up to is TAFE the reports, as well as on members of this House. funding. The Commonwealth has put an offer on the Mr Stockdale claimed on television last -- table to take over the major portion of the funding of colleges of TAFE. My government believes that is The SPEAKER - Order! The Premier should the right direction to take, and we are prepared to refer to the honourable member in the proper cooperate with the Commonwealth on that issue. manner. Priority Victoria shows that the government is prepared to play its role - from 1 July we will Ms KIRNER - The honourable member for create an additional 1000 TAFE places because the Brighton, the shadow Treasurer, claimed on TAFE sector is an essential part of the resolution, but television last night that the government has by itself that is not enough. On Monday, when falsified financial statements made to Parliament Victoria, the Premiers of the other States and, I hope, and to the public. There has been no such the Prime Minister put the issue of youth on the falsification. national agenda the next step in addressing the issue of youth employment and training will have been YOUTH UNEMPLOYMENT addressed.
Mr SEITZ (Keilor) - In light of the special It is interesting to contrast the work we have done Premiers Conference that is scheduled to take place and the determination we have shown on the issue next Monday, will the Premier advise the House with the attitude of the opposition. We have not what action the government is taking to address the heard the Leader of the Opposition say anything important issue of youth unemployment and to about youth since 1977 when, in a previous role, he improve opportunities for young people in Victoria? said that 75 per cent of the people then on the dole chose to be unemployed - and his solution to the Ms KIRNER (Premier) - The honourable problem was national service! member raises what is probably the most important question facing Australia; a matter that is often Honourable members interjecting. raised by honourable members on both sides of the House and one that must be addressed. Ms KIRNER - I do not know whether he still believes that because he does not have a current One has only to look across the Pacific Ocean at policy on youth issues. We do not know what his what happened in Los Angeles to realise what might policy is! I thought -- happen if Australia finishes up with an underclass of children in terms of their education and Mr Kennett interjected. employment. That was pointed out clearly by Geoff Barker in the Age on Tuesday, and I share that Ms KIRNER - You say you haven't changed! To concern. This morning I discussed that concern with everything you say you add that you haven't the American Secretary of Education. It is important changed. Let's hear your youth policy! that we in Australia put the issue of youth on the QUESTIONS WITHOUT NOTICE
Thursday, 7 May 1992 ASSEMBLY 1313
The previous Leader of the Opposition, the member for Glen Waverley. I have already honourable member for Gippsland West, offered a cautioned him and if he is unable to accept the law ray of hope -- and order that applies in this place I will act against him. The SPEAKER - Order! There is far too much audible conversation. Honourable members interjecting.
Ms KIRNER - When the previous Leader of the Ms KIRNER - Thank you, Mr Speaker, for your Opposition set up his youth task force in 1989 he participation in question time; that is better than said that the task force would make the most most of us today. I think I detected just a slight energetic efforts ever made by the Uberal Party to difference in the views of honourable members involve elected representatives in giving Australia's opposite. Perhaps we should test it and find out. I young people a vision for the future. I do not know think I heard the Leader of the OppOSition say to me, who the members of the task force were and I do not "Call an election now". know what recommendations they made, but they certainly did not deliver any jobs or offer any view Honourable Members - Hear, hear! of the future for young people. Ms KIRNER - I am sure the shadow Minister It may be possible that the Leader of the Opposition for Finance, the honourable member for Polwarth, found the report of the task force - and if so, I actually suggested to me that he would like me to would be keen to see it. It may be possible that he wait until the government has received the said, because he does not like task forces - that is Auditor-General's report for the full financial year. what he usually says - that the opposition would develop policies of its own. But nothing like that has Mr Kennan - He wanted an assurance. happened. As a result the opposition has not expressed a single view about youth issues. Mr Kennett interjected.
By contrast, the government has a clear policy. We Ms KIRNER - Now, when things go slightly will deliver it, we will put it on the national agenda, wrong, the Leader of the Opposition resorts to his and Victoria will benefit from it! usual level of personal abuse. It is an interesting sidelight on what goes on within the Uberal Party. AUDITOR-GENERAL'S REPORT Mr Baker interjected. Mr I. W. SMITH (Polwarth) - I refer to the Premier's threat to extend her Parliamentary term Ms KIRNER - That's right. beyond October and to hold an election late in the year, and I ask whether she will guarantee that the Mr I. W. SMITH (Polwarth) - On a point of Auditor-General will be able to report to Parliament order, Mr Speaker, the Premier is making a brave on the full financial year's results prior to her calling attempt to obfuscate and skid her way around the the election. question, which clearly referred to her threat to extend Parliament beyond October. My question Ms KIRNER (Premier) - I think there is some was whether she would guarantee that the disparity of views among members of the opposition Auditor-General will report to Parliament before she this morning. I think I heard the Leader of the calls an election. Opposi tion ask me to go to an election now; I think I heard that. The SPEAKER - Order! There is no point of order. Honourable members interjecting. Ms KIRNER (Premier) - I used to set year 12 Mr Kennan - What do you think, Alan, a show exam papers on English. I think I heard again that of hands? the shadow Minister for Finance wants to ensure that the Auditor-General's report on the full Mr E. R. Smith interjected. financial year is available before an election is held.
The SPEAKER - Order! I ask the Deputy Honourable members interjecting. Premier to remain silent. I warn the honourable QUESTIONS WITHOUT NOTICE
1314 ASSEMBLY Thursday, 7 May 1992
The SPEAKER - Order! The Deputy Leader of that Victoria is the strike capital of Australia. The the Opposition is making it difficult for honourable facts are exactly opposite. We have had four times members to hear the Premier's reply. 1 ask the fewer industrial days lost in disputations over the Leader of the National Party to remain silent. past decade than the decade before. That is because the government has worked in cooperation with and Ms KIRNER - The honourable member for communicated with all parties involved in industrial Polwarth knows full well that the government does relations rather than adopting the confrontationist not control the reporting of the Auditor-General. He style that has been adopted by New Zealand, New determines when he will table his reports in South Wales and the previous liberal government in Parliament. He determines the appropriate date of this State. The figures bear that out. his reporting, but 1 shall determine the date of an election. The New Zealand system has been discredited by many, but most recently by the new Premier of INDUSTRIAL RELATIONS Tasmania, Ray Groom, who rejected the New Zealand confrontationist style and rejected the Mr MICALLEF (Springvale) -I ask the Minister Hewson-Howard pOSition on industrial relations. He for Labour -- said on ABC radio:
Mr Kennett interjected. Many employees on the shop floor would feel quite ill equipped to negotiate arrangements with employers. Mr MICALLEF - Have a look at who they're So it is only a matter of fairness and justice that they laughing at. have someone to represent them.
Honourable members interjecting. Hewson and Howard want to destroy the union movement and Federal awards, they want to adopt The SPEAKER - Order! I ask the honourable the New Zealand situation where individual member to come to his question. contracts are made up and employees are given $6 an hour, which is supposed to include sick leave, Mr MICALLEF - Will the Minister for Labour holiday pay and so on. That is not a system we will infonn the House of the most recent advice he has adopt. It is not a system we will operate under. received on the industrial relations figures for Cooperation and communication are essential. We Victoria? will not use the confrontationist style that is adopted by Hewson, Howard and their various cohorts Mr POPE (Minister for Labour) -I thank the around Australia. honourable member for Springvale for his question and his assistance with industrial relations in this TREASURY CORPORATION OF State. As has been said by me on previous occasions VICTORIA in this House, the industrial relations figures for Victoria have been exceedingly good for the past 10 Mr STOCKDALE (Brighton) - 1 ask the years. Treasurer whether it is a fact that the proposed --
The latest Australian Bureau of Statistics (ABS) Mr Micallef - No! figures show that for the month of January Victoria had the lowest industrial disputation figure Mr STOCKDALE - You wouldn't know, recorded since 1964, with only 600 days being lost. anyway! In the same period New South Wales lost some 3000 days. Over the 10 years of this government Victoria The SPEAKER - Order! 1 ask honourable averaged around 200 days lost per 1000 workers. In members on my right to remain silent so that the the 10 years prior to our coming to government the honourable member for Brighton can exercise his figure was 785 per 1000 workers, some four times right to ask a question. more. Mr STOCK DALE - Is it a fact that the proposed In the 12 months to January this year 125 days per Treasury Corporation of Victoria is already 1000 employees were lost compared to the national operating unlawfully and in contempt of Parliament average of 263 and the New South Wales figure of because its enabling legislation has not been debated 527. That puts the lie to the claim by many people QUESTIONS WITHOUT NOTICE
Thursday, 7 May 1992 ASSEMBLY 1315 or passed, and has it been involved in the so-called question about our privatisation position that has debt equity swap? been answered that we strongly oppose the privatisation - that is, the selling off to the private Or Napthine interjected. sector - of the core assets of this State. I will repeat it for him: that involves Melbourne Water, the Gas The SPEAKER - Order! I ask the honourable and Fuel Corporation and the SECV. member for Portland to withdraw unreservedly. Mr McNamara - What about the rest? Or NAPTHINE (Portland) - I withdraw. Ms KIRNER - That is a very good -- Mr A. J. SHEEHAN (Treasurer) - With respect to that interjection, it is important in the reporting Honourable members interjecting. from Parliament of the discussion of important issues that participants in the debate use language The SPEAKER - Order! I warn the Leader of the that is accurate and moderate so that those who National Party. He asked his question and the report discussions and important decisions can do Premier has a right to provide the answer, which so accurately and free of the vindictiveness and should be heard by all honourable members. I will nastiness that is fundamental to much of the current not warn the honourable member again. discussion. Ms KIRNER - The reason he constantly asks the Honourable members interjecting. question and then makes a lot of noise while the answer is being given is that he wants only to get the The SPEAKER - Order! Will the Treasurer question on the record. He does not want to hear the pause until the House comes to order? answer because it entails not only a statement of our pOSition but also a comparison with theirs. Mr A. J. SHEEHAN - Unless the participants in the debate have some integrity, the debate has no It is perfectly clear that this is going to be a major integrity. issue of debate in the next six months, and the debate will clearly illustrate that one of the key With regard to Treasury Corporation of Victoria, the differences between the government and the legislation has been introduced into this House and opposition is that they would flog off the core assets will proceed with the support of all parties. In the of this State to the private sector. That is in one of the meantime it is clear that we have amalgamated very few policy briefs they have issued. We know VicFin with the Victorian Development Fund, and how brief their policies are, but that is one of the few they are operating under the VicFin Act. policy briefs we have heard.
PRIVATISATION OF GOVERNMENT Mr DELZOPPO (Narracan) - On a point of UTILITIES order, Mr Speaker, it is obvious that the Premier is breaching Standing Order No. 127. She is debating Mr McNAMARA (Leader of the National the question, and I ask you to bring her back to Party) - I refer the Premier to her claimed order. abandonment yesterday of support for privatisation. Does this mean that the government's planned The SPEAKER - Order! At this stage I do not privatisation of the State Insurance Office, the 40 per uphold the point of order. I ask the Premier to relate cent of Loy Yang B, the Melbourne Water's her remarks to government administration and to tunnelling company, the pine plantations, the nine the question asked. city buildings, the Portland smelter interest, the Melbourne Water's catering operations, the Ms KIRNER (Premier) - My government Melbourne Water's legal service, the Latrobe Valley administration will not be selling off those core vehicle fleet and the government car fleet will not assets. now occur, or does the Premier intend to continue to privatise community assets? SPORTING INITIATIVES
Ms KIRNER (Premier) - The Leader of the Mr JOLLY (Doveton) - In view of the National Party is one of the more amazing people in outstanding success of the World Cup cricket final this place, one must say. It is very clear from every staged in Melbourne, will the Minister for Sport and ECONOMIC AND BUDGET REVIEW COMMITIEE
1316 ASSEMBLY Thursday, 7 May 1992
Recreation inform the House of the major sporting Bringing the championship to Melbourne and the initiatives being developed by the Department of Southern Hemisphere in 1994 again proves what a Sport and Recreation? great sporting city this is in the world sphere and that international sporting events are a major Mr TREZISE (Minister for Sport and industry. Recreation) - There is no doubt that the World Cup cricket series was a great success for Australia, for ECONOMIC AND BUDGET REVIEW our sporting lovers and for the overall Australian COMMITIEE community. The many overseas visitors who attended the series injected about $75 million into Parliamentary accountability and debt the Australian economy and the major State share management would have been taken by Victoria because the wonderful Melbourne Cricket Ground was chosen, Mr COLE (Melbourne) presented report of rightly, as the venue for the final between England Economic and Budget Review Committee on and Pakistan. Parliamentary accountability and debt management, together with appendix. Like all international sporting series, it shows how vital the sporting industry is, which is often not Laid on table. appreciated by the community. The sporting industry relates to many other facets of industry, Ordered to be printed. such as manufacturing, employment, transport and tourism. For example, the Ford Australian Open at CONSOLIDATED FUND DEFICIT the National Tennis Centre in January each year is often criticised by the opposition but it brings into Mr STOCKDALE (Brighton) - I wish to move the State thousands of interstate and overseas the adjournment of the House for the purpose of tourists who inject approximately $54 million for discussing a definite matter of urgent public each tournament. importance - namely, the Treasurer's reporting of the Consolidated Fund deficit and the requirement The attraction of the Tabaret for international and for the Treasurer to issue a corrected March interstate visitors is also growing. About 20 000 Niemeyer statement on the basis of the people a week are queuing to pl~y the machines, Auditor-General's report that was tabled yesterday which is a great boost to Victoria. On average more and for the Niemeyer statements for April and May than $800 000 is put through the machines each day. and the year's final accounts to report the Last Friday week $1.1 million was put through the Consolidated Fund deficit correctly and honestly. 270 machines in one day. A share of that was spent by interstate and international visitors. Required number of members rose indicating approval of motion being put. One could go on forever about the attractions of international events in Melbourne. It was with Mr STOCK DALE (Brighton) - I move: delight that last week I heard the news that another major international sporting event is to be held in That the House do now adjourn. Melbourne in 1994 at the Exhibition Buildings. We will be hosting the world veterans' table tennis Yesterday'S Auditor-General's report reveals a championships - I may be a participant - which is further major financial scandal in Victoria. The a major international event attracting more than financial scandal is compounded by the fact that its 2000 overseas competitors, who will be accompanied basis involves a deliberate attempt by the by friends and relations. We expect about 5000 government to confuse an instrument of public international visitors in 1994. It is a feather in the cap accountability that has subsisted throughout of Melbourne and Australia. Like the Olympic Australia for almost 60 years. It is also compounded Games, which have been held only once in the by the fact that over the past 24 hours the Southern Hemisphere in 100 years, this international government, and in particular the Treasurer and the table tennis championship will be the first to be held Premier, have sought to confuse the issue. They have south of the equator. Apart from 1990, when it was misused information in the Auditor-General's report held in Baltimore in the United States of America and have attempted to avoid accountability by and this year when it is being held in Ireland, it has confusing the presentation of Niemeyer data on the always been held in European cities. CONSOLIDATED FUND DEFICIT
Thursday, 7 May 1992 ASSEMBLY 1317 basis of the Consolidated Fund format on the one modified and presented exclusively on the basis of hand and a national accounts fonnat on the other. what the government called a national accounting format. The Victorian government made certain The government has attacked the opposition and the modifications to the national accounting format media for correctly reporting what is in the which is used in publications of the Australian Auditor-General's report. The Treasurer, in Bureau of Statistics (ABS) and which provides particular, has misled the public and distorted the accountability across Federal, State and Territory Auditor-General's report in relation to footnoted governments. material. The government introduced a new system of Mr A. J. Sheehan interjected. Niemeyer statements that reported exclUSively on a national accounts basis. Following criticism by the Mr STOCKDALE - Mr Speaker, the Treasurer opposition and a Parliamentary committee, the just called me a liar. I take exception to that and ask government introduced a further change. It returned that it be withdrawn. to include reporting on the traditional basis of the Niemeyer statements but it introduced two separate The SPEAKER - Order! I ask the Treasurer to parts of the Niemeyer statement. withdraw the unparliamentary expression he used. The fact that the government introduced two parts Mr A. J. SHEEHAN (Treasurer) - I withdraw. of the Niemeyer statement is critical and central to the present controversy. One might ask why that Mc STOCKDALE (Brighton) - Thank you, was done. We have a system that is followed in the MrSpeaker. Commonwealth and the other States. As I said, it has subsisted for a long time and is well understood by Or Wells interjected. those who follow and comment upon State finances in Victoria and elsewhere and it provides a fonn of The SPEAKER - Order! I ask the honourable reporting that imposes accountability on the member who used an unparliamentary term to government. The government changed to a fonnat identify himself and withdraw. of reporting that I suggest is understood by very few people. It is extremely complex; it is not comparable Or WELLS (Dromana) - I withdraw. with material issued from other States; and, indeed-- Mr STOCKDALE (Brighton) - For almost 60 years Victoria and other States have provided Mr Roper interjected. monthly statements of transactions in consolidated funds. Those statements are an important Mc STOCKDALE - It is not comparable with accountability mechanism. They were introduced the format used in other States! into Australia after the great depression following a visit by Professor Otto Niemeyec, and they therefore Mc Roper interjected. bear his name. Their purpose has been to provide monthly accounting on a timely basis so that Mr STOCK DALE - There is more than one Parliament and the community can assess the other State! perfonnance of the executive government against its own Budget. It is an important accountability Mr Roper interjected. mechanism and is the only comprehensive basis upon which Parliament and the people of Victoria Mr STOCKDALE - It is not comparable with have the opportunity of assessing the perfonnance the reports from other States. The Minister for of the government against its own Budget targets Employment, Post-Secondary Education and during any Budget year. Training, the real Treasurer, has just conceded that fact. It may be that there is a movement in other Some time ago the current Victorian government States to adopt the format, but it is not the case that sought to weaken the accountability mechanism. these reports are comparable with those of other The government moved from a system of reporting States, and the Minister for Employment, that had subsisted for almost 60 years to a new Post-Secondary Education and Training is in fact system. It introduced a modification to the conceding that. Niemeyer system. Initially the Niemeyer report was CONSOLlDA TED FUND DEFICIT
1318 ASSEMBLY Thursday. 7 May 1992
The reality, however, is that this was all designed to the national accounts fonnat data, and I will return obfuscate financial reporting, divert attention away to that later because over the past 24 hours the from the traditional reports, and enable the Treasurer has blatantly misused that footnote in government to make its own adjustment to the pu~lic comment. national accounts format. The critical thing is that the comparison that has to Critical to the present debate is the fact that the be made is between the Consolidated Fund fonnat Niemeyer statement each month now includes two data in the Niemeyer statement and the separate forms of accounting: in one case, reporting Auditor-General's report on the deficit of the the equivalent of a deficit in general terms, net Consolidated Fund on the same basis as at 31 March financial transactions; but in relation to the fonnat 1992, as reported in the table at page 410 of his that closely reflects the traditional Niemeyer report. statement, the Consolidated Fund format, reporting - as it has always reported - the To illustrate the fact that there are differentials Consolidated Fund deficit. between the government's treatment of the data and the Auditor-General's treatment of it, I seek leave to The distinction between those two forms of incorporate in Hansard a table headed "Consolidated reporting is critical. It is critical also to acknowledge Fund Deficit". The table has been cleared as suitable that the Auditor-General's report released yesterday for incorporation in Hansard; Mr Speaker, I under the authority of the Auditor-General reports understand you have a copy of it. only in relation to data in the Consolidated Fund fonnat. It is true that there is a footnote in relation to Leave granted; table as follows:
CONSOLIDATED FUND DEFICIT
March 1991 March 1992 $M $M
Auditor General (a) 1760 2038 Treasurer (b) 1068.8 1269.7 Discrepancy 691.2 768.3
Sources (a) Auditor-General: Report on Ministerial Portfolios, April 92, p. 410 (b) Treasurer: Monthly Budget Statement - Transactions of the Consolidated Fund, March 1991 and March 1992.
Mr STOCK DALE - The table reports the same concept reported upon in those figures. In both cases concept. All the figures deal with the Consolidated the Auditor-General and the Treasurer report the Fund deficit on the Consolidated Fund format at Consolidated Fund deficit for March 1991 and 1992. March 1992 as shown in the second part of the That is the critical point. The figures are based on the Niemeyer statement and as shown in the table at same set of accounts and the same dates. page 410 of the Auditor-General's report. In his report tabled yesterday the Auditor-General Some confusion has arisen following the Treasurer's concluded that the Consolidated Fund deficit at obfuscation of the comparison between 1992 and March 1992 was $2038 million. In the Niemeyer 1991. This morning the Treasurer called me shifty. statement released on 24 April 1992 the Treasurer One need only listen to his remarks on radio this reported the deficit on the same basis and on the morning and look at the Uberal Party's television same accounts as $1269.7 million. There is a advertisements to draw a conclusion about which discrepancy of $768.3 million between the two party aptly fits that description. figures.
The table makes a comparison between the It was suggested this morning that the position was Auditor-General's figures and the Treasurer's different last year and that the differential was much figures. There can be no disagreement about the lower. We examined the Niemeyer statement CONSOLIDATED FUND DEFICIT
Thursday, 7 May 1992 ASSEMBLY 1319
published in 1991 and the Auditor-General's reports. comprehensively reported that the deficit is fwlded The Treasurer reported the Consolidated Fund from borrowings. deficit for March 1991 as $1068.8 million and the Auditor-General's figures published yesterday on The Treasurer admits that he left out temporary exactly the same accounts gave the figure as borrowings, and what is the justification? The only $1760 million. There is a discrepancy of justification is that it will work out all right at the $691.2 million. It is clear that the discrepancy last end of the year. It might work out all right, but year is similar to the discrepancy this year. equally it might not. Those figures could be less than the temporary borrowings figures at the end of the The Treasurer's explanation of the discrepancy is year. They could be the same, but equally they could that it is an accounting difference. That is absolutely be more because the government uses those trite. Clearly it is an accounting difference. We do accounts as balancing items, and in reality they have not deny that it is an accounting difference. The been in credit at the end of some years, representing issue is not whether there is an accounting a deposit in the accounts, and in other years they difference, but who is telling the truth. Both figures have been in deficit, representing a drawdown on cannot be correct, because they both refer to the those accounts. They should be recognised as same set of accounts on the same date. In round borrOWings, and the Auditor-General is clearly right. terms there is a $770 million difference. The second major area of obfuscation is that the The Treasurer's explanation that it is an accounting Treasurer argues that it all has to do with a different difference is certainly true, but to try to obfuscate the basis of accounting. He says it is a matter of the position the government ignores and does not report government using Niemeyer and the as borrowings the temporary borroWings it uses for Auditor-General using the Consolidated Fund. The cash balances. The Treasurer argues that the Premier repeated the same argument in the House government excludes the figures because at the end this morning, saying the opposition and the of the year they tend to be wiped out. He claims the government were using Niemeyer data and the amounts will be repaid and the figures will all come Auditor-General was not. out square. If those matters are ignored in March, by implication they will be ignored in every other As I have already outlined to the House, that is month. That is not the issue. The issue is not simply not true. The Niemeyer statement does not whether the figures reported in the June accounts consist solely of data presented on a national are accurate. accounts format. Also, now that the government has been forced to recant, it includes data presented on a Last year the Auditor-General disagreed with the Consolidated Fund basis, and the proper government's June figures. He said the deficit was comparison is not with the national accounts format $2 billion, as did the Parliamentary estimates data but the Consolidated Fund data. subcommittee. We know that at the end of the year there will be a discrepancy as well. What is critical is I shall read the note attached to the whether the March figures accurately report the Auditor-General's report under the table showing deficit. the Consolidated Fund position as at 31 March 1992:
The Treasurer, and by repeating the argument in the The difference between the Consolidated Fund deficit House the Premier, are pleading guilty to the charge and total Budget sector financing transactions, that they omitted borrOWings from the accounts. determined on a national accounting format, of There is no disagreement. It came from the mouth of $1737 million, as disclosed in the March 1992 Niemeyer the Premier in the House this morning and from the statement, arises due to differences in the classification Treasurer's mouth came yesterday'S version before of transactions between the two formats and the he cooked up another story overnight. Yesterday'S inclusion of Budget sector statutory authority version was, 'We don't report temporary transactions in the national accounting format. borrowings in the March statement". That is a confession that the government has left out some That note is accurate and reasonable but it has borrowings. The Auditor-General reported nothing whatever to do with the explanation of the yesterday that he is documenting the government's difference between the Consolida ted Fund report in borrowings and he expressly concluded that the the Niemeyer statement and the Consolidated Fund Consolidated Fund deficit is fwlded from report in the Auditor-General's figures. The note borrowings. The Auditor-General has accurately and deals with a separate issue altogether, and in two CONSOLIDATED FUND DEFICIT
1320 ASSEMBLY Thursday, 7 May 1992 separate places it clearly draws a distinction Auditor-General "has never had to criticise the between a deficit reported on a Consolidated Fund government"; that his reports have been "slender basis and one reported as a national accounting little volumes with only a couple of pages of format Budget sector financing transactions item. conunendation of the government's performance"!
It is not to do with the discrepancy between the This is a figment of the Treasurer's imagination! reported Consolidated Fund deficit as shown by the There are almost 500 pages listing the government's Treasurer as $1270 million and the Auditor-General financial mismanagement and inaccurate reporting. as $2038 million, and the Treasurer knows that. The government has survived on deceiving the However, notwithstanding that fact, in conunents Victorian people about its financial mismanagement made in the past 24 hours he has sought to suggest and the consequences. The government has stooped that that note explains the difference between his to no end of financial chicanery to cover up the claim of a Consolidated Fund deficit of $1270 million consequences of its actions. There have been and the Auditor-General's deficit figure of repeated instances of the Treasurer and his $2038 million. The Treasurer made that claim this predecessors being found out only by the diligence morning on radio while I was listening to him, as of the opposition and the diligence and courage of were most honourable members. The Treasurer is the Auditor-General. misusing the figures. What he is saying is inconsistent with the figures and words used by the In return the Auditor-General has been attacked and Auditor-General in his report, and it flies in the face maligned. A concerted campaign has been mounted of the inclusion of the table in that report. by the government to undermine his standing and independence. We have stooges on the government If the Auditor-General had not intended to report on benches-- a comparative basis, why is the table included at all? If he was dealing with a comparison of the Mr A. J. SHEEHAN (Treasurer) - On a point of Niemeyer statement based on the national order, Mr Speaker, the shadow Treasurer has accounting format and the Consolidated Fund alluded to attacks on the Auditor-General. There deficit, why is there no table reconciling those two were no such attacks. I find those remarks offensive concepts? That can easily be done. Indeed, we have and request that they be withdrawn. done it, but the Auditor-General does not attempt it because it is not what he is talking about. He is Mr Richardson - Twit! talking about the fact that as at March 1992 the government is under-reporting and excluding The SPEAKER - Order! I ask the honourable $768 million of temporary borrowings from its own member for Forest Hill to withdraw. Consolidated Fund accounts in the Niemeyer statement. Mr RICHARDSON (Forest Hill) - I withdraw the word "twit". Let us consider the question of who is to be believed. There is a clear, direct conflict between the end The SPEAKER - Order! It does not appear to the product of the Auditor-General and that of the Chair that Standing Order No. 108 applies in the Treasurer. There is no difference in terminology, manner suggested by the Treasurer. Accordingly I concept, measure or time; the difference is in the end do not uphold the point of order. product, the reported deficit figure. The Auditor-General correctly includes temporary Mr STOCKDALE (Brighton) - The government borrowings and the Treasurer agrees that he has engaged in a campaign of concerted attacks to excludes temporary borrowings. Which is an undermine the standing and independence of the accurate accounting of the deficit, and who is to be office of the Auditor-General. Both the former believed? Premier and the former Treasurer have made repeated attacks on the Auditor-General in the Every Victorian knows what a long history the Parliament and in public. Backbench members of the Treasurer and the government have in the accuracy government have delivered speeches attacking the of their reporting of their own mismanagement! We Auditor-General. The government has a long history know how full and frank the government was with of showing undue sensitivity to the diligent, forceful the Victorian people in 1988 in reporting the and competent Auditor-General who is in office now financial disasters that were about to befall the State! and his predecessors who have served the We know that over the past six or seven years the conununity very well. CONSOLIDATED FUND DEFICIT
Thursday, 7 May 1992 ASSEMBLY 1321
The government has brought the State to its knees to bringing in the next Budget with a deficit of through financial mismanagement on a scale $836.6 million. There is no hope in Hades that the nobody could have imagined possible. The State's government can produce an honest Budget that credit rating has been downgraded twice, and it has shows a deficit of $836.6 million, and the been placed on a negative credit watch at present. government knows it. That is why these fraudulent Confidence in Victoria has been destroyed; the building blocks are put in place; why there is a economic recession is overlaid with a crisis of lack of consistent understating of the deficit; why we have confidence that has driven this State deeper into the to depend on the Auditor-General to disclose the mire of recession and unemployment than the rest of true position of the State's deficit. Australia. We have a government which is beset by financial scandal at every turn and which is What is the Significance of the report? This report is preparing to go to another election on the basis of a the last Auditor-General's report we, the people and deception, and laying the groundwork for a false the Parliament, will get before the next election. The report to the people in the next Budget. government is preparing to not have the Auditor-General's report on the full year's Why would the Auditor-General do anything transactions released before the election. That is why dishonest? Why would he exaggerate the position or the opposition this morning asked for an use a false basis of accounting or include borrowings undertaking. Did the Parliament get one? No, that should not be included? He has no axe to grind; because the Premier proposes to make sure the he has nothing to hide. He does not have to be Auditor-General does not get another chance to tell accountable at the ballot-box for the government's the truth about what is going on with this record. He does not have to produce a deficit figure government. in next year's Budget. He is an honest and independent statutory authority. He is responsible On page 21 of the report tabled yesterday there are to the Parliament, not to the government. figures going back to 1982. The Auditor-General produced the annual deficit figures and, again, they The Auditor-General has served the people of show that the government has consistently Victoria honestly and competently. In the face of misreported the State's deficit. The point is not that attempts to denigrate him and his predecessors they on a national accounting format the deficit is $1737 have shown great courage in the interests of the million after just nine months of the year, the people of Victoria. This discredited government has government having forecast a deficit of less than been caught out not only in showing financial $1500 million on that basis. What counts and what incompetence but also in perpetrating enormous the Treasurer has to explain is why, as at March, he cover-ups. It has lived on cover-ups. It sits on the is not reporting that there are temporary borrowings government benches today because of a series of in the government's deficit. cover-ups perpetrated in 1988. This thoroughly discredited and dishonest government has not met The Auditor-General has defined the deficit as being the minimum standards of integrity that the people financed by borrowings. The basis on which the have a right to expect in a democracy. In the final deficit has always been reported is that it represents analysis, democracy depends on the integrity of the the extent to which the government has to draw on executive government. borrowings to fund its Budget. The Niemeyer statement does not accurately report the State's I must say it is disconcerting that there has been no deficit, and the Treasurer knows it. He sought to rebellion in the bureaucracy, that there are no obfuscate and shift the blame, and implicitly honest, capable and professional public servants attacked the Auditor-General, while at the same saying to the government, "Enough! We will no time denying that that was what he was doing. longer be party to these deceptions". These people have a duty to the community to unmask the truth The reality is that the government is preparing to go of what is going on. to an election based on hiding from the people the true facts about Victoria's finances. The government On the one hand we have an independent statutory does not want the people to know that, nine months authority with nothing to gain, and on the other into the financial year, the real deficit is $2 billion. hand we have a dishonest, disreputable government The figures show that, contrary to the Treasurer's about to face an election and preparing a fraud. The claim, the discrepancy is of the same order as it was reason for the figures is clear: unWisely, in last year's in last year's Budget at the same stage. In March economic statement the Premier committed herself CONSOLIDATED FUND DEFICIT
1322 ASSEMBLY Thursday, 7 May 1992
1991 the government was also hiding $700 million of Some months ago I tabled a letter of support from temporary borrowings. the Auditor-General for my actions as Minister for Finance. That support is reiterated in the foreword At the end of that year we know that, on the to the Auditor-General's Report on Ministerial Treasurer's chosen fonnat, the deficit ended up Portfolios May 1992, which states in part: being nearly double what the government had forecast. This year, even if the government does not I advised the Minister for Finance that "The processes produce a deficit double what is forecast, it is you have put in place not only ensure that my conceded by the Treasurer and the Premier that a comments and recommendations are fully evaluated blow-out of at least $130 million is already in but, in my opinion, will enhance confidence in public prospect. sector administration and improve the financial management of the State". This debate is about the minimum standards of integrity that the people of Victoria are entitled to For the second time the Auditor-General went out of expect from executive government. The his way to publish his expression of support for me. Auditor-General has found the government and the Those are not the sorts of remarks that would be Treasurer guilty of understating the deficit by nearly made about a person who had launched an attack $770 million. No amount of obfuscation, running against him, as has been suggested by the shadow together of different concepts or publishing new Treasurer. material on new bases that have never been used previously can hide the fact that, yet again, an There is absolutely no suggestion in the honest and capable Auditor-General has unmasked Auditor-General's report of fraud or anything like and exposed a deceitful government that cannot be it - the opposition has used those words, not the trusted by the people of Victoria. Auditor-General.
The people of Victoria will reject the government not Firstly, the government's presentation of the only for its incompetence but also for its destruction position of the Consolidated Fund is consistent with of public integrity and the corruption of political the provisions of the Public Account Act. Contrary values that it represents. to what is claimed by the opposition, the government's actions are completely consistent with Mr A. J. SHEEHAN (Treasurer) - I welcome this that Act. Sections 4 and 5 of the Public Account Act opportunity of replying to the campaign of concern the Consolidated Fund. Section 4(2)(d)(ii) misrepresentation and personal vilification that has refers to all moneys received by the Treasurer: been launched by the opposition, a campaign of fear based on a continued and deliberate from the sale of property purchased or produced or for misrepresentation of the facts. The campaign is work paid for out of the Works and Services Account based on the opposition's fear that it will be proved or out of moneys made available before the to lack credibility on its range of predictions on the commencement of this Act out of the Loan Fund or 1991-92 Budget and that the Budget for 1992-93 will under the authority of any Loan Application Act. be consistent with the planning parameters spelt out in the June economic statement. Mr STOCKDALE (Brighton) - On a point of order, Mr Speaker, the Treasurer has referred to a The opposition understands clearly that if the letter from the Auditor-General as being a letter government delivers on those objectives the addressed to him as the Minister for Finance dealing opposition's campaign of destabilisation and with issues in response to the Auditor-General's attempts to weaken community faith in the public report and not with the reporting of the deficit. I ask institutions of the State will have failed. the Treasurer whether he will formally make a copy of the letter available to the House so that it is clear I am far from being critical of the Auditor-General to the House what the letter deals with and in what I have worked closely with him. For the second time capacity it was addressed to him. in recent months the Auditor-General has publicly and explicitly commented upon our close and The SPEAKER - Order! There is no point of effective working relationship. I believe it is order. However, if the Treasurer wishes to take up unprecedented for an Auditor-General of any State the matter he may do so in his contribution. to support the activities of a Minister in such a public way. CONSOLIDATED FUND DEFICIT
Thursday, 7 May 1992 ASSEMBLY 1323
Mr A. J. SHEEHAN (Treasurer) - I have already now complaining that the government is trying to done so - some four months ago! In short, the misrepresent the facts. government's presentation of the Consolidated Fund is consistent with the Public Account Act. Secondly, Mr Stockdale - You are misrepresenting them. it is also consistent with the conventions of the national accounting classifications as set out by the The SPEAKER - Order! The honourable Australian Bureau of Statistics. All States have member for Brighton has had his opportunity. I ask agreed to adopt the national accounting format. him to remain silent.
The Auditor-General makes it clear that it is he who, Mr A. J. SHEEHAN - The difference in the for his own reasons, has chosen a different method figures arises from the exclusion from the of calculation. The Auditor-General's reasons for his Auditor-General's calculation of figures which are approach create no inconsistency with the included in the government's calculation. The government's figures. The Auditor-General draws government includes those figures in a way which is on the government's figures and makes it clear in consistent with the presentation used by the Federal table 3.24A at page 410 of his report that he has government and which is increasingly being used by chosen a different calculation. Paragraph 3.24.10 of other States. the report states: The figures which are not included and which make Table 3.24A details the position of the Consolidated up the total that the opposition is talking about are Fund at 31 March 1992, as determined by audit, after moneys from the capital works authority, moneys eliminating borrowings. from the State Development Fund and moneys from what are known as section 21 advances. The In other words, the difference results from the government has conformed to all the provisions of Auditor-General's presentation. The government's the Act, which is what the opposition does not presentation is consistent with the Public Account understand. Act and with the standards for national accounting classifications as set out by the Australian Bureau of Mr I. W. Smith interjected. Statistics. Mr A. J. SHEEHAN - The Auditor-General is Further, the Auditor-General goes on to say that the happy with our presentation of the figures and has difference -- made it clear to my office today that he fully supports the Treasury's presentation of the Mr Stockdale interjected. figures - and that is fair comment
The SPEAKER - Order! The honourable Honourable members interjecting. member for Brighton was allowed to make his contribution to the debate without interruption. I Mr A. J. SHEEHAN - In the letter he has written suggest he extend the same courtesy to the Treasurer. to me today the Auditor-General says:
Mr A. J. SHEEHAN - Footnote (c) to table 3.24A In my report on Ministerial portfolios, tabled in states: Parliament yesterday, I referred to the overall deficit of the Consolidated Fund as at 31 March 1992. As the The difference between the Consolidated Fund deficit comments on the deficit have already been the subject and the total Budget sector financing transactions of considerable public debate, both informed and determined on the national accounting format, of uninformed, I feel it would be timely to set out my $1737 million, as disclosed in the March 1992 Niemeyer rationale for highlighting the Consolidated Fund deficit. statement, arises due to differences in the classification of transactions ... He spells that out in the letter, which I will make available. I emphasise that the Auditor-General says that the difference arises as a result of differences in the Mr Stockdale interjected. classification of transactions. In October 1991 the New South Wales government changed to the Mr A. J. SHEEHAN - The Auditor-General national accounting format that the Federal explicitly cites the paragraphs I have referred to - government has used for 20 years. The opposition is CONSOLIDATED FUND DEFICIT
1324 ASSEMBLY Thursday, 7 May 1992 paragraphs 3.24.3 and 3.24.4. He makes it clear that Leave granted; letter as follows: we are not in disagreement. Furthermore, he says: The Hon. T. Sheehan, MP Treasurer of Victoria There is a philosophical difference of opinion between 1 Treasury Place myself and your officers as to what should be the MELBOURNE Vic 3002 predominant reporting format. Whilst I see the information provided to Parliament in a national Dear Mr Sheehan, accounting format as a useful economic reporting Report on Ministerial Portfolios -May 1992 medium in that it allows comparisons with other administrations, the supplementary information in the In my report on Ministerial portfolios, tabled in Consolidated Fund format included in the monthly Parliament yesterday, I referred to the overall Niemeyer statement should, in my opinion, be the deficit of the Consolidated Fund as at 31 March predominant accountability medium ... 1992. As the comments on the deficit have already been the subject of considerable public debate, Mr Slockdale interjected. both informed and uninformed, I feel it would be timely to set out my rationale for highlighting the Mr A. J. SHEEHAN - But I am entitled to have a Consolidated Fund deficit. philosophical difference of opinion with the The rationale is sununarised in my comments in Auditor-General. paragraphs 3.24.3 and 3.24.4 of my report - Mr Stockdale interjected. "3.24.3 The Niemeyer statements for the months of July 1991 to November 1991 were presented in Mr A. J. SHEEHAN - Correct. I am not, and he the national accounting format. This format is makes that clear. used for the presentation of financial information in various government Budget Mr STOCKDALE (Brighton) - On a point of Papers and extends the reporting of financial order, Mr Speaker -- transactions beyond those of the Consolidated Fund to also encompass transactions of Honourable members interjecting. Budget sector organisations, e.g. the Public Transport Corporation, Roads Corporation The SPEAKER - Order! Honourable members and public hospitals. While monthly on my right are interfering with the entitlement of statements prepared under the revised format members to use the time available to them. provided additional information, they did not separately disclose transactions specifically Mr STOCKDALE - The Treasurer is referring to relating to the Consolidated Fund, or the a letter which has not been made available, so I ask interim financial position of the fund." him to make it available to the House. "3.24.4 The estimates committee, a subcommittee of the Parliamentary Economic and Budget The SPEAKER - Order! The Treasurer has Review Committee, in its November 1991 already said that he will make it available to the report, commented on the revised content and House. There is no point of order. format of the monthly Niemeyer statements. The committee considered that the benefits Mr Mac1ellan (To Mr Stockdale) - Would you arising from the new format introduced in like it incorporated in Hansard? Why don't you ask? July 1991 were outweighed by a number of accountability disadvantages which impeded Mr A. J. SHEEHAN (Treasurer) - I will table the monitoring throughout the year. These document - and more than that I shall have it disadvantages included the inability to incorporated in Hansard, at the suggestion of the monitor the Consolidated Fund recurrent honourable member for Berwick. deficit and the appropriation performance of individual Ministries." The SPEAKER - Order! This places the Chair in a difficult situation, because the Chair has not had There is a philosophical difference of opinion between an opportunity to examine the document. However myself and your officers as to what should be the it is fair to assume that it is in a form suitable for predominant reporting format. Whilst I see the incorporation. Is leave granted? information provided to Parliament in a national accounting fonnat as a useful economic reporting CONSOLIDATED FUND DEFICIT
Thursday, 7 May 1992 ASSEMBLY 1325
medium in that it allows comparisons with other Furthermore, this morning the Auditor-General administrations, the supplementary information in contacted the director-general of the Treasury to the Consolidated Fund format included in the make it clear that the presentation by Treasury of the monthly Niemeyer statement should, in my Consolidated Fund is acceptable to him. He has also opinion, be the predominant accountability said, and this is confirmed in his letter, that he is medium as it relates directly to the Appropriation willing to have the matter taken to the Economic Acts passed by the Victorian Parliament and is a and Budget Review Committee so that he can make summation of the operations of the Consolidated clear his point of view about this apparent conflict. Fund from which appropriations are drawn. In other words, the Auditor-General has volunteered .. ... to have the matter put before the Economic and Table 3.24A mcluded. m my report detailed the pOSition Bu d ge t ReVlew . C ornnu'tt ee. Tha t Wl'11'1 nal once and of the Consolidated Fund at 31 March 1992, as E 11 th ·ti' . f determined by audit after eliminating borrowings. or a e OppOSl on s campaIgn 0 I should stress that the Consolidated Fund deficit misrepresentation and its attempts to undermine public confidence in the institutions of this State. of $2038 million disclosed in the table is a snapshot in time and is no more than indicative of what the I make it clear, as is confirmed by the final Consolidated Fund outcome may be for the Auditor-General in his letter and in the foreword to year ended 30 June 1992. The final result may be his report, that I stand as one with the favourably impacted upon by any current Auditor-General. I accept and acknowledge his government initiatives or increases in net revenue reports. Our presentation of the data is consistent flows. with the Public Account Act, from which I have As I stated in paragraphs 3.24.11 and 3.24.12 of my quoted, with the method of presentation used by the report, additional information on anticipated cash Commonwealth for 20 years and with the method of flows would enable a more comprehensive presentation the New South Wales government has analysis of the status of the Consolidated Fund and adopted since October 1982, as well as the would considerably enhance the usefulness of presentation methods adopted by every other State information provided to the Parliament. You may in Australia. also care to give consideration to providing to the Parliament a reconciliation between the results Mr I. W. SMITH (Polwarth) - I support the disclosed in the national accounting format with motion moved by the honourable member for the information provided on the Consolidated Brighton. I am grateful that the Treasurer has Fund operations. attempted to explain the situation. It is enlightening to discover that he accepts what the Auditor-General In view of the comments made by the Economic and says and that the way he has presented the figures is Budget Review Committee on the importance, acceptable to the Auditor-General. But what the from a Parliamentary viewpoint, of Consolidated Auditor-General does not accept is the final figure, Fund operations, I would suggest that it may be because it is wrong. The final figure presented by the appropriate for this whole issue to be re-examined government is out by more than $700 million! by the Parliament. Yours sincerely Mr Dollis interjected.
C. A. BARAGW ANA TH The SPEAKER - Order! I ask the honourable Auditor-General member for Richmond to remain silent. 7.5.1992 Mr I. W. SMITH - The whole point of the An honourable member interjected. Auditor-General's report is to make it clear to Parliament that the figures provided by the Mr A. J. SHEEHAN - I shall talk about that Treasurer are simply wrong. The method by which because the Auditor-General says: the Treasury presents its accounts is understood and appreciated by the Auditor-General, but the I should stress that the Consolidated Fund deficit of government's figure is wrong. $2038 million disclosed in the table is a snapshot in time and is no more than indicative of what the final Everyone in the outside world knows in their heart Consolidated Fund outcome may be for the year ended of hearts that there is something off-track in the 30 June 1992. The final result may be favourably financial administration of this government -and impacted upon by any current government initiatives that feeling has strengthened over the past 10 years. or increases in net revenue flows. CONSOLIDATED FUND DEFICIT
1326 ASSEMBLY Thursday, 7 May 1992
Some began to doubt the Labor Party's honesty modem money management method of making that when the then Leader of the Opposition, the debt and liability disappear. The debt has to be Honourable Frank Wilkes, talked about all the repaid through taxes and charges that will be money in statutory authorities that would become inflicted on everyone. It is one of the major reasons available to a Labor government. why the government panicked earlier this year. All the government's Budget projections about the When the Labor Party came to office it spoke a great revenue and the expenditure have been wrong. deal about the deficit left to it by the previous Liberal government, but nothing could have been The government predicted an upturn in the further from the truth. The figures quoted by the economy. Why did it do that? There were no reasons Labor Party did not refer to the deficit but to the for it. Clearly there will not be an upturn in wish lists handed to the then Treasurer at the economic activity unless money flows in from beginning of each series of Budget discussions. The off-shore in the form of either borrowings or figures quoted were the costs of programs people investments. Clearly the economy will not improve wanted included in the Budget, not the actual unless more wealth is generated. Where are the extra Budget figures. The previous Liberal government bales of wool and the higher prices for that wool? left the incoming Labor government with a surplus Where will the extra money come from for the sale of $5 million or $6 million, not the wish-list figure of grain or the export of our minerals and raw that Labor Ministers quoted. materials?
From its earliest days the Labor government set out The government did not have the capacity to judge to deceive the Parliament and the people of Victoria. whether the economy would substantially recover Its deception has had a multiplier effect, as a result within the current Budget period. Surprise, surprise! of which the chickens have finally come home to The Auditor-General has now shown that there has roost. Because the Auditor-General reports openly, not been a recovery in the government's revenue honestly and in detail to Parliament we can see the stream. magnitude and consequences of the government's deceitfulness. As I said, the government panicked earlier this year. It threw up its hands and asked, 'What will we do to A former Treasurer, the honourable member for try to meet our promise of bringing the Budget in on Doveton, constantly harangued the House about the line?" Instead of attempting to sell the 2200 wonders of modem money management. Figures properties already identified as ready for sale - can be used to paint different pictures, but in the many of them were identified as surplus in final analysis everyone knows that you cannot spend 1986-87 - the government adopted another course. money if you do not earn it. The government's failure to understand that simple truth has led to its The former Prince Henry's Hospital building was undoing. That is where the government has come valued at $56 million. It is still unused, lying unstuck. It has embarked on a program of dormant, but it has been substantially devalued as a obfuscation of its public administration, supported result of the mistiming and ineptitude of the by a range of confusing financial statements that the government. That is just one example of an asset that media and Parliament have found difficult to was identified as surplus almost seven years ago. comprehend simply because no-one else would Nothing was done about selling that asset or many adopt the accounting principles the government has other such assets when the property market was adopted over the past 10 years! No-one would have buoyant, but now the government is attempting to appointed the persons the government has sell assets that have a value of $355 million - some appointed to run the State's financial institutions of them large buildings - in a depressed property and then allowed them to operate at arm's length. market! That is the reason for the debts and the disasters that have befallen the State. The government wants to sell nine major buildings that are not surplus to requirements - buildings the Slowly and surely the public has come to government is being forced to rent at ridiculous, understand that the government's so-called modem above-market rates because it has to generate a money management system has gone wrong. It has surplus so that it can bring its shonky Budget in on gone so wrong that now every citizen of the State - line. That is what the government is about. every man, woman and child - has a debt and a liability of approximately $14 000. There is no magic, CONSOLIDATED FUND DEFICIT
Thursday, 7 May 1992 ASSEMBLY 1327
The public, through its taxes, will be paying flog off buildings which are not surplus to its needs approximately $14 million a year more in rental for and which will have to be leased back at an at least 10 years. estimated cost of $14 million a year!
Mr Harrowfield - What about the Rialto? The government will not get the money it claims it will obtain for these properties. It will receive only Mr I. W. SMITH - I can discuss the Rialto $90 million or $100 million. The market will not building at any time. The government has stuffed it accept the vague conditions imposed by the full of no-hopers. government. Many city properties are being let rent-free for two or three years, including fit-outs. Mr Harrowfield interjected. The government is offering to lease properties it has for sale at rentals higher than market rates so as to Mr I. W. SMITH - The former Liberal attract higher capital prices for the buildings. The administration did not sell the Rialto building government would not receive much for the because it was required. It is now being used by this buildings if they were sold on the market without government; it is stuffed full of education lO-year rental agreements that set rents at administrators of dubious value - an issue that will above-market rates. The government will not get be examined by the next Liberal government. I am $150 million for the buildings it proposes to sell. amazed that the Minister for Finance is complaining about the lease for the Rialto when the building is Until today the Premier has been misleading the fully utilised. The Minister for Employment, House about the government's privatisation Post-Secondary Education and Training wanted a objectives. No government in the history of Victoria new toilet in his Ministerial suite; he is pleased to has so rapaciously gone down the privatisation path, have his office in the Rialto building. not because it wants to engender competition within public utilities or offer lower costs for services that The government is trying to flog off for an estimated the community enjoys but simply because it is $150 million buildings that will not have asbestos bankrupt. certificates and will have vague requirements about maintenance and refurbishment contracts - which State Bank Victoria was sold to balance the books, probably means that the successful tenderers will and the nine buildings that the government is now not conform with the provisions of the Sale of Land proposing to sell will be sold to balance the books - Act so the tenders will have to be readvertised. to cook the books. It is important that Parliament insist on having sufficient sitting time, despite the I note that the government is proposing Premier having told us that an election will not be amendments to the Sale of Land Act, so it is held in the next month. I am sure she will not have probably trying to cover its tracks. You will an election during the winter recess. Before we go to probably not even get the money from the sale of an election it is important that the Auditor-General those nine buildings you are trying to flog in this reinforce in his full report for the financial year the financial year - that is how inept you are! comments he made in the interim report.
The SPEAKER - Order! I do not think the I bet the Premier is not game to allow that to occur! I honourable member for Polwarth is intending to challenge her to allow the Auditor-General to report refer to the Chair in that way. He should refer to the to Parliament at the beginning of the spring Chair in the appropriate fashion. sessional period prior to her calling an election. If she does not do so we will know full well that the Mr I. W. SMITH - Mc Speaker, I am not in any books for this financial year have been cooked along way implying that you are inept. I am making a the lines that the figures reported by the global comment on the government's administration Auditor-General suggest. It is important that the of the State and its incompetence. community has the expectation --
I have cited examples of where the government has The SPEAKER - Order! The honourable had opportunities to sell property worth member's time has expired. $350 million during the past seven years - 2200 properties have been identified as surplus to Mr HARROWFIELD (Minister for Finance) - I government needs - but has not done so because of welcome the opportunity of joining the debate its own incompetence. The government is trying to today. It is important that a debate of this kind CONSOLIDATED FUND DEFICIT
1328 ASSEMBLY Thursday, 7 May 1992 allows the issues in the Auditor-General's report to The government will continue to make progress be placed in their proper context. It always intrigues reports on the implementation of the me to see the reaction of opposition members to recommendations of the Auditor-General in his reports of this kind. When the availability of the regular Ministerial portfolio reports. Again the report is announced they rush off to the Papers intention of the government - and certainly my Office and, like naughty schoolboys, go down intention as Minister for Finance - is to present to behind the shelter sheds to try to find the dirty bits. Parliament later this year a further report based on They concentrate on the bits and pieces of the report the issues raised in the Auditor-General's report that that enable controversy or contention to be was tabled in Parliament yesterday, to ensure a developed. proper following through of those issues.
It is important to regard this and the It is also important to make the point - and it is Auditor-General's other reports as an important part certainly made by the Auditor-General in his of the dialogue between government, Parliament report - that the government has taken seriously its and the Auditor-General. responsibility to look at and pursue the issues raised in the Auditor-General's report. I again quote from Mr Mac1ellan - And the people. the foreword to the Auditor-General's report:
Mr HARROWFIELD - And the people, of It is pleasing to note that of the 2SO issues covered by course. It is nothing unusual for auditors' reports, the 1991 Finance Ministry report, 236 (94 per cent) were whether they be in the private or public sector, to regarded as being issues of legitimate concern focus on issues that may be contentious. That is the warranting remedial action by government nature of audit reports. Of course that has departments and agencies. traditionally occurred with audit reports presented to this Parliament. So the government has followed through and taken seriously the points raised in the audit reports as a The government has established additional useful management tool to make sure that processes of dialogue between Parliament, the departments and agencies perfonn better. government and the Auditor-General on the issues raised in these types of reports. Last year my As I said before, by their nature audit reports focus predecessor initiated the process of systematically on a range of issues, but it is not terribly common for coordinating responses from government audit reports to highlight positive aspects of departments and agencies to the range of issues performance. raised by the Auditor-General in his Ministerial portfolio reports. That has been widely acclaimed Mr Bildstien - Not in the past 10 years! and acknowledged as a Significant refonn in the way Parliament and the government deal with the audit Mr HARROWFIELD - Not under any process. government or in any company; that is not the nature of the audit process. The process is to Reference to that refonn was made by the highlight points of difference, to suggest Auditor-General in the foreword to his report. He improvements and to identify problem areas or outlined the initiative and reiterated his support for potential problem areas. it. I refer honourable members to his comment in the foreword: Mr Elder interjected.
At the time, I advised the Minister for Finance that The SPEAKER - Order! The honourable "The processes you have put in place not only ensure member for Ballarat North is out of his place and out that my comments and recommendations are fully of order. evaluated but, in my opinion, will enhance confidence in public sector administration and improve the Mr HARROWFIELD - The purpose is also to financial management of the State". make criticisms. That is not unusual; it is the role of an auditor in the private sector and it is the role of That is a strong and real endorsement by the the Auditor-General in the public sector, so it is not Auditor-General of the processes of additional surprising that these issues should surface. dialogue that were established between Parliament, the government and the Auditor-General. CONSOLIDA TED FUND DEFICIT
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The government regards the Auditor-General's government and various Ministers of all sorts of bad report as an agenda for dealing wi th these matters. motives in the issues that have been highlighted. We take that agenda seriously and we look at the points of difference and the suggestions made by the It is important to remind the House of the comment Auditor-General for improved performance. We made to the Treasurer by the Auditor-General in the accept the praise, congratulations and letter tabled in the House today: commendations that he offers - and there are plenty of them in this report, but that is never There is a philosophical difference of opinion between mentioned by the opposition. We also take seriously myself and your officers - the identification of problem issues and we work with the Auditor-General -- referring to officers of the Treasury -
Mr Elder interjected. as to what should be the predominant reporting format.
The SPEAKER - Order! I will deal with the There is nothing evil or sinister about that. That sort honourable member for Ballarat North if he is of discussion rages every day in the accounting unable to accept the normal discipline of the House. profession. They talk about accounting definitions and about the most appropriate reporting process. Mr HARROWFIELD - The honourable member for Ballarat North would do better to get on with his Whilst I see the information provided to Parliament in long-awaited youth task force report, which he has a national accounting format as a useful economic never produced, instead of prattling on in the House. reporting medium in that it allows comparisons with other administrations, the supplementary information The report also provides an agenda for dealing with in the Consolidated Fund format included in the the criticisms the Auditor-General makes. As he monthly Niemeyer statement should, in my opinion, be said, again in the foreword to his report, issues were the predominant accountability medium as it relates classified by the Ministry as: directly to the Appropriation Acts passed by the Victorian Parliament and is a summation of the judgmental disputes involving "a matter of operations of the Consolidated Fund from which government policy or where a difference in opinion on appropriations are drawn. accounting treatment exists between the Auditor-General's office and the portfolio". That is the opinion of the Auditor-General. He is correct when he says there is more than one point of It is not unusual to have such points of debate and view about these matters. His point of view is disagreement. An Auditor-General's report provides completely legitimate. There is a philosophical an agenda for debating presentational differences. difference of opinion. His comments in the foreword put into context the debate about the issues contained in the report. Mr Stockdale interjected. Issues are raised in relation to each portfolio and the criticisms will be followed through by the Mr HARROWFIELD - You have had your turn, government. We have a systematic and excellent just listen! You may learn something! process for doing that. Mr Stockdale interjected. However, the Auditor-General chooses to raise other issues from time to time, as is his perfect right and The SPEAKER - Order! The honourable responsibility, where there is genuine disagreement member for Brighton has had his opportunity. He about matters that are not black and white. I refer to had the protection of the Chair and he was heard by presentational issues, definitional issues and the House, which gave him every opportunity to put accounting policies. There are genuine grounds for his case. I ask him to extend the same courtesy to having debates of that kind. other honourable members who may wish to contribute to the debate. It is important for Parliament to have this type of debate but it is unfortunate that when there is more Mr HARROWFIELD - The Auditor-General has than one point of view on an issue the debate can chosen to take the point of view preferred by him; suddenly degenerate into the personal abuse we that is his perfect and legitimate right. The national heard from opposition members who accused the accounting format is the more appropriate, and that CONSOLIDATED FUND DEFICIT
1330 ASSEMBLY Thursday, 7 May 1992 is not only the government's position but also the Mr Bildstien - We have waited 15 minutes and position Federal governments have taken for 20 that is the best you can contribute. years.They decided it is a more appropriate way of presenting Budget sector reports. It is more Mr HARROWFIELD - We are prepared to encompassing and embracing of what the debate the issues, as is the Auditor-General. community regards as a Budget sector report. However, all we have from the opposition is a mealy-mouthed, nit-picking attitude to them. It is also true that Premiers conferences and loan council meetings have endorsed the use by Mr W. D. McGrath interjected. government of the national accounting format. Nothing evil or sinister is intended. It simply means Mr HARROWFIELD - That is not what he said. there is more than one point of view about the most He said there are philosophical differences of appropriate way of presenting financial and opinion. He does not say the government is wrong accounting information. Anyone vaguely involved because it takes a different point of view. The loan with accounting issues knows about debates that council and Premiers conferences have taken a rage every day within the public and private sector different view. It simply means there are different accounting professions. points of view. Neither the honourable member nor the opposition parties may be able to handle that There is nothing sinister about the way the issues are view, but the people who understand the issues presented. However, the opposition jumps up and welcome the fact that there is a sensible debate. We down with glee about table 3.24A at page 410 of the will enter into debate not in a mealy-mouthed Auditor-General's report. The opposition seizes response-- upon the information that suits it, but that is an injustice to the Auditor-General. The SPEAKER - Order! The Minister's time has expired. The Auditor-General, by way of footnote, acknowledges the points of dispute and Mr W. D. McGRATH (Lowan) - The only disagreement about definitions in his presentation. conclusion to be drawn from the Minister's Footnotes (b) and (c) to that table highlight the comments centres on his reference to this being a different assumptions made and definitions applied. silly motion, yet if one looks at every metropolitan That does not mean that he is wrong and we are newspaper and listens to the reports on today's right, or that we are wrong and he is right. It simply radio-- means there are differences of opinion about the most appropriate method of presenting such Mr Harrowfield - The Herald-Sun - is that your infonnation. Bible? It is a disgrace!
The motion seeks to take out of context the nature of Mr W. D. McGRA TH - And the Age. the Auditor-General's report. It does not acknowledge the work the government has done on Honourable members interjecting. developing the audit process and on setting up an additional process of reporting on the findings of the The SPEAKER - Order! The Minister for Auditor-General's report. It deliberately confuses the Finance has had the protection of the Chair and the fact that there is a legitimate difference of opinion, Deputy Leader of the National Party will have the and that there are legitimate grounds for same protection. I ask the honourable member for disagreement about how one best presents financial Dandenong and the Minister for Finance to remain and accounting material. silent.
Debate is not helped when the House has a silly Mr W. D. McGRATH - The shadow Treasurer motion of this type before it; the opposition has has shown a responsible attitude in moving this attempted to place issues into simple black and "silly" motion, as the Minister has called it. The white categories. intention is to place on the public record the concern of the opposition about where the State stands now Mr Bildstien - "Silly motion" - is that the best in relation to financial transactions. you can come up with? In his contribution the Treasurer said that Victoria Mr HARROWFIELD - It is your silly motion. was being lumbered with a campaign of fear where CONSOLIDA TED FUND DEFICIT
Thursday. 7 May 1992 ASSEMBLY 1331 there should be no fear - but try to tell the government contfuues spending. One must ask how unemployed out there that they should have no fear! will it be paid for. The government doesn't have a At present 11.6 per cent of Victoria's population is clue. I could not run my farm under that sort of unemployed. Try to tell them there is no fear out regime. there! Mr Pescott - Uving off Bankcard! By way of response to the motion the Treasurer and the Minister for Finance told the House the Mr W. D. McGRA TH - Exactly. The motion opposition is establishing a campaign of fear by highlights the degree of concern felt by the people of moving a "silly" motion. What sort of response is Victoria. that? What sort of legitimate and responsible approach is that to this very sound motion? At page 11 the executive summary of the Auditor-General's report on health states: Because of their contributions no credibility can be afforded to either Minister. I hope someone from the WorkCare levies in State psychiatric hospitals increased other side will be able to contribute, when given the by 345 per cent over the past five years due to the high opportunity - and now the former Treasurer, the incidence of workplace injuries. As a result, these honourable member for Doveton, enters the House. hospitals are among the worst performing industries in Perhaps he will be able to give some credence to the terms of WorkCare claims in Victoria. government's response! Three officers who were deemed fit to return to work Mr Jolly - I have been here all the time. by the State Superannuation Board as far back as 1985 have still not been re-engaged by the department. Mr W. D. McGRA TH - How can you term this motion "silly" when every man, woman and child in Statistics relating to the number of in-patients treated Victoria carries the responsibility for $14 000 of debt by public hospitals are not prepared on a consistent created by this irresponsible State government? Is basis and therefore are not a reliable measure of this, then, a silly motion? hospital performance.
Perhaps I can put my concern into simplistic terms. Under the heading of '1abour", the report states: If I were to operate my farm using the modem financial management techniques the government At December 1991, there was a backlog of over 6SO used to run this State, by now I would have sold not WorkCare fraud allegations, which could take up to 18 only the back paddock but quite a few other months to resolve. paddocks. That is what has happened with the government. All Victoria's assets are being Although the Accident Compensation Commission's reduced, not for debt retirement but for current investigation branch has estimated that if 6 vacant expenditure purposes. investigators' positions were filled it could achieve savings of around $16 million, the positions have That is why the alarm bells are ringing and we are remained vacant for at least eight months. witnessing the sensational headlines on the front pages of the Age and Herald-Sun. Those newspapers The Auditor-General is identifying the irresponsible are expressing commwlity alarm about the financial financial management practices within the yarious problems of the State. government departments. It claims that it has the responsibility of implementing government policy The Auditor-General's report shows that there is a on financial management, but it fails year after year. deficit of $2 billion in the Consolidated Fund, which is some $768 million higher than the figure stated by It is irresponsible of the Treasurer and the Minister the government. The projected Budget deficit for for Finance to say that the motion is a silly one and 1991-92 is $1.5 billion. There has been a huge that there is a fear campaign. The government increase in the amount of money owed by the State. should be giving the commwlity an idea of how it We are all suffering from this irresponsible financial will provide light at the end of the tunnel. When one management because the government has allowed looks down that tunnel one sees only darkness. The its departments to become politicised. It has government will be decimated at the next election provided jobs for the boys who do not know about and government members will have to look for jobs. proper financial management practices. The CONSOLIDA TED FUND DEFICIT
1332 ASSEMBLY Thursday. 7 May 1992
I doubt whether anybody in the workplace will statement and has absolutely nothing to do with employ them. what is happening in Los Angeles. I ask you to bring the honourable member back to the motion, Mr MICALLEF (Springvale) - On a point of otherwise he will continue debating anything he order, Mr Acting Speaker, the honourable member is likes and his speech will be totally irrelevant to the talking about the Auditor-General's report and not debate. the motion. We are not debating the Auditor-General's report, we are debating the Mr DOLLIS (Richmond) - On the point of order, motion. Mr Acting Speaker, if the honourable member had been listening, he would have recognised that I was The ACI1NG SPEAKER (Mr Evans) - Order! I directing the attention of the House to the reason do not uphold the point or order. why the motion has come before Parliament, why the government is attempting to introduce new Mr W. D. McGRATH (Lowan) - I was economic policies and, ultimately, why the responding to comments made by the Treasurer and Auditor-General in his report is praising the the Minister for Finance. There is no choice but to government's attempts to govern the State on behalf condemn the government for its financial of and for the people. mismanagement of the State when one reads the Auditor-General's report and the motion. That is Honourable members interjecting. highlighted by the huge deficit in the Budget and the ongoing loans and liabilities that are mounting year The ACflNG SPEAKER - Order! The after year. When elected to govern the coalition will honourable member for Richmond is perfectly have to come to terms with the debt that has been entitled to put his view on the point of order before imposed on the people of Victoria. It will be an it is ruled upon. I ask honourable members on my enormous task for the coalition to put in place good left to give him that opportunity. policies and at the same time come to terms with that debt. Mr DOLLIS - If the honourable member for Bulleen had listened to the contributions of the Mr DOLLIS (Richmond) - Today we have shadow Minister for Finance, the honourable witnessed one of the most pathetic attempts ever by member for Polwarth and the Deputy Leader of the an opposition to try to divert debate from the real National Party, he would have recognised that they issues. were given considerable latitude to touch on a number of issues to make their arguments relevant For the first time Victorians are beginning to see the to the debate. I am attempting to bring home to difference between this government and the Parliament the irrelevance of the motion. opposition, which is making an attempt to be elected without specific policies. Mr GUDE (Hawthorn) -On the point of order, Mr Acting Speaker, I direct the attention of the The government is not prepared to sacrifice the House to the motion moved by the shadow Victorian community on the high altar of economic Treasurer. In doing so I remind the House that rationalism. If the opposition has any doubts about adjournment motions, by their nature, must be the difference between us and them, it should look specific. at the specific figures from two developed countries, the United States of America and the United Mr Perrin - And urgent! Kingdom. Each of those countries over the past 10 years created two different communities living in Mr GUDE - They have to be urgent and relevant one society. They have divided their communities to a matter that can be considered at the first into two sections: those who are able to afford First opportunity . World standards and those who are slowly sinking below Third World standards. If the opposition still Mr Hamilton - Like quoting matters reported in has doubts, I refer it to the recent incidents in the Herald-Sun! Los Angeles. The American community is torn -- Mr GUDE - The motion states: Mr PERRIN (Bulleen) - On a point of order, Mr Acting Speaker, the adjournment motion refers The Treasurer's reporting of the Consolidated Fund to the Auditor-General's report on the Treasurer's deficit and the requirement that the Treasurer issue a CONSOLIDATED FUND DEFICIT
Thursday, 7 May 1992 ASSEMBLY 1333
corrected March Niemeyer statement on the basis of Mr Bildstien - Mr Acting Speaker, the yesterday's Auditor-General's report and that honourable member for Richmond advised the Niemeyer statements for April and May and the year's House that he wants this matter to be debated with final accounts report the Consolidated Fund deficit some vigour. That being so, I direct your attention to correctly and honestly. the state of the House so that his colleagues can be present to hear his contribution. Although I confess that I have not read every word of the Niemeyer statements or of the Quorum formed. Auditor-General's report tabled in the House yesterday, I doubt whether the honourable member Mr DOLLIS - If the House is still not convinced for Richmond can direct my attention to any by the opposition's disruptive attempts to raise reference in them to the British or American points of order and the pathetic action of the economies or to incidents in Los Angeles. I suggest honourable member for Mildura in calling for a the opposite is the case. The motion specifically quorum, I point out that the shadow Treasurer, who deals with what is happening in Victoria and the moved the motion, is not in the Chamber to listen to way in which the government has misreported the the debate. During the past 10 minutes I have facts to the people. The motion has no relevance to spoken for only 3 minutes and the remaining time riots in Los Angeles. has been taken up with members of the opposition raising points of order because they do not want to The ACI1NG SPEAKER - Order! I ask the hear the truth. If the people of Victoria give the honourable member for Hawthorn to come quickly opposition its chance, the community will be taken to the point of order and not take up the time of the to the sacrificial altar of economic vandalism. honourable member for Richmond. Although it is the opposition's motion, the House Mr GUDE - Mr Acting Speaker, I ask you to can observe how many members of the shadow bring the honourable member back to the motion. frontbench are present to support it. The opposition has attempted to disrupt the proceedings of The ACfING SPEAKER - Order! I have Parliament simply because the arguments it raised listened carefully to the contribution of the in support of its motion were adequately answered honourable member for Richmond and believe he by the Treasurer. He was specific in rejecting this was endeavouring to provide a broader view of the pa thetic motion. issue, which is broad in itself. In my view he was reaching the point of relating his comments directly The people of Victoria recognise that debate to the motion. Although there is no point of order, I between now and the next election will be based on hope the honourable member will relate his remarks differences between the parties that are now directly to the motion. becoming more obvious. The opposition wants to privatise every essential service in the State. The Mr DOLLIS (Richmond) - I was on my feet for opposition will not only demolish more jobs in only a short time before members opposite raised government instrumentalities and retard economic points of order in an attempt to waste time because growth in Victoria but in the current economic the debate is beginning to hurt them. The motion is a climate also destroy the Victorian economy once and pathetic attempt by the shadow Treasurer to attack for all. the government. In reply the Treasurer of Victoria put the facts on the table. Again he proved that the Do members of the opposition come to this House opposition is incapable of bringing a specific motion and propose a debate on specific opposition before the House and arguing in support of it with policies? What do members of the opposition do to facts, vigour and conviction. present themselves as a relevant alternative government for the people of Victoria? What do they If honourable members opposite had bothered to do to give themselves an opportunity of saying, in listen to the Treasurer yesterday or today they effect, ''These are the policies that will enable us to would have recognised that he welcomed the take this State forward"? What do they do? They use Auditor-General's comments on his and on other the Auditor-General's report, which they cannot Ministerial portfolios in the report to Parliament. criticise, to show that in the past few years the The Auditor-General said -- government has attempted to correct just about every little item that the Auditor-General has directed to the attention of the relevant Ministers. CONSOLIDATED FUND DEFICIT
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It might be of interest to honourable members I invite honourable members to consider the real opposite to know that, for example, of the 23 situation. The reality is that, if we go to the heart and Treasury issues raised in previous reports of the soul of the matter, the Auditor-General says that the Auditor-General, 18 - that is, 78 per cent - have . government has understated the deficit as at the end been resolved; 3, or 13 per cent, are in the process of of March by $768 million. being resolved; and only 2 remain to be resolved. These are the sorts of facts that the useless and Honourable members interjecting. pathetic group on the back bench opposite does not want to hear. These are the facts they do not present Mr MACLELLAN - The Auditor-General has to Parliament. said that the statement of the deficit as at the end of March was understated by the government by If anyone needs proof of the irrelevance of the $768 million; that the figure was not what the opposition, he or she need only examine its record: Treasurer said it was, but that it was in fact $2000 the opposition took up 6 and a half to 7 minutes of million as at the end of March. mytime-- Eventually Victorians will see the outcome for Mr Perton interjected. June - that is, when the new government reveals the true figures, because they will not be released by The ACTING SPEAKER - Order! The this government. The current situation really gets honourable member for Doncaster! down to the issue of who one believes.
Mr DOLLIS - Members of the opposition took Mr F. P. Sheehan interjected. up 6 and a half to 7 minutes of the time available to me in this debate simply because they are not Mr MACLELLAN - The honourable member for capable of understanding and do not seek to support Ballarat South is apparently willing to trust his their shadow Treasurer's motion. socialist left Treasurer and his statement. The opposition parties are prepared to trust the Honourable members interjecting. Auditor-General's figures, as are members of the public. Mr DOLLIS - They are not able to argue convincingly for the motion; they will not be able to All the talk about the other issues in the convince the people of Victoria. They want only to Auditor-General's report and about the fact that the obstruct, delay and play tricks with mirrors in the Auditor-General has written a letter today does not hope that the current state of the economy will go to the heart of the matter. I bet the enable them to be elected at the next election. Auditor-General did write a letter to the Treasurer today! No wonder he wanted to read it into the The ACTING SPEAKER - Order! The record today! He needs it because the press, the honourable member's time has expired. other media and the community in general, as well as the opposition parties, have the Auditor-General's Mr MACLELLAN (Berwick) - In supporting the report and have discovered that the government has motion moved by the honourable member for not been telling the truth about the accumulated Brighton, I commend him for the way that he deficit. Now the Auditor-General is giving his directed the motion to the attention of the House version of the deficit and the Treasurer describes the and for the way he supported it this morning by difference between them as an ideological difference. using rational and reasoned argument. Indeed, the Auditor-General uses exactly that word. Unfortunately, it met with an attempt from members on the government side to divert the attention of Mr Dollis - Philosophical! Parliament from the detail of the motion to other issues. The honourable member for Richmond Mr MACLELLAN - All right, I do not doubt wanted to talk about race riots in Los Angeles; the there is a philosophical difference between our Treasurer wanted to talk about misrepresentation socialist left Treasurer and the Auditor-General. I and personal vilification. Heaven knows why he should be horrified if there were not; I am relying on wanted to do that, given the recent remarks of the there being a difference between them because I am honourable member for Richmond, who seemed to relying on the Auditor-General telling the truth, and indulge in nothing else during his contribution! I must say that I do not place such reliance on our Treasurer. ADJOURNMENT
Thursday. 7 May 1992 ASSEMBLY 1335
I think our Treasurer would tell us anything if it believe the honourable member for Berwick was would give the government another week in referring to the Treasurer. power - anything is good enough if it leads to the government surviving another 24 hours. During that Mr MACLELLAN - I withdraw any imputations time it can make another payment to a departing in respect of the Treasurer, and I make it clear that I public servant who was once a mate of the am making no imputations on the Treasurer when I government. That time would provide another say that the government issues shifty figures that opportunity to spend more money on some new cannot be trusted. The Auditor-General has made program or some old program that might enhance that quite clear, and we accept the Auditor-General's the electoral prospects of a dying government. figures, not the shifty figures issued by the government. It is a dying government and its members have no more than 25 weeks to go. The one issue before the Members of the opposition parties are not prepared State is really which of the next 25 Saturdays the to take the word of government members because Premier will choose for the election. That is really we know we cannot trust their word. We could not what the government members have to live with. trust it on State Bank Victoria; we could not trust it They have a maximum of 25 Saturdays to go. on Tricontinental Corporation Ltd; we could not trust it on the Pyramid Building Society; we could An election is cOming, defeat is coming and the truth not trust it on the Victorian Economic Development is catching up with the government. The truth has Corporation, and we cannot trust it on anything else. already caught up with it in a number of ways. The Auditor-General's report is one of the ways that the Members of the government have perhaps truth catches up with governments that do not tell 25 Saturdays to go before public opinion catches up the truth. with them. They do not like it and they are wriggling, trying to justify their actions and get out I should not be so concerned if the Treasurer had of the situation they have put themselves in. The said, ''The Auditor-General says the deficit is truth of the matter is that when the figures for $2000 million but our argument is, on other grounds, 30 June are cooked up - and they will be cooked that the deficit should not be that figure because ... ," up without any regard for the truth - to produce and had then given the reasons. Why did he not do the result that the Premier and the Treasurer want, that and trust the public to make the judgment as to they will not be of any more use as advice to the whether the Treasurer is better at determining the public than the figures presented by Mr Bond or figures than the Auditor-General? Why not present MrSkase. the figures in parallel so that the people can judge? That is exactly what the Auditor-General has The ACflNG SPEAKER - Order! The time presented in his report. appointed under Sessional Orders for Government Business to take precedence has now arrived. The The argument has been conducted for some time. It chair will be resumed at 2 p.m. has been conducted in the hearings before the Economic and Budget Review Committee as well as Debate interrupted. in reports of the Auditor-General. I have no hesitation in saying that the opposition parties trust Sitting suspended 1 p.m. until 2.2 p.m. the Auditor-General's judgment in this matter; we do not trust shifty -- ADJOURNMENT
The ACflNG SPEAKER - Order! The Mr ROPER (Minister for Employment, honourable member should refer to the Treasurer by Post-Secondary Education and Training) - I move: his proper title. That the House, at its rising, adjourn until Tuesday, Mr MACLELLAN - I am delighted to withdraw 19 May. if you, Mr Acting Speaker, think what I said was an imputation on the Treasurer. I withdraw. Motion agreed to.
The ACflNG SPEAKER - Order! Bearing in mind a controversy that arose earlier in the day, I DAIRY INDUSTRY BILL
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DAIRY INDUSTRY BILL Mr W. D. McGRATH - I do not support the recommendations of the Industry Commission that Second reading the industry should be placed in a free market situation. The question that needs to be addressed Debate resumed from 19 March; motion of relates to underwriting. The Minister for Primary Mr BAKER (Minister for Food and Agriculture). Industries and Energy is not prepared to underwrite the industry. I favour a degree of underwriting for Mr W. D. McGRATH (Lowan) - Today we are the dairy industry, as was done for the wheat dealing with a rewritten Dairy Industry Bill industry. It gave the right signals to the various providing for market milk in the State of Victoria. It industries. is a big industry in Victoria, as it provides much of the input into the overall economy of the State. Mr Baker - Market distortions! There is an overlapping between the State and Federal governments on dairy legislation. Mr W. D. McGRATH - They are not necessarily market distortions. It is a matter of giving the right A review was conducted by the Industry signals and an example of that is what happened in Commission into the national milk industry and in Western Australia when its Premier underwrote last some ways this legislation supports what I believe year's wheat harvest by $150 a tonne. The will happen Federally. The Federal Minister for beneficiary was the wheat industry because the Primary Industries and Energy, Simon Crean, has government gave signals of confidence to wheat now reached consensus with the industry at a growers. Federal level to ensure that milk levies and other necessary components provide the dairy industry I believe I am right in saying that the Federal with a degree of security. government has underwritten the wheat industry only once during the past seven years. That is a This week the Minister for Food and Agriculture reasonable record. when answering a dorothy dix question made reference to the necessity of the Bill being passed to Mr Baker - Why do you need it? ensure the passage of the Federal legislation. I cannot understand why it is necessary to pass this Mr W. D. McGRATH - It will signal confidence. legislation, which deals entirely with market milk, to It will signal that there is government support for ensure the passage of the Federal legis la tion, which and appreciation of what the industry is all about. deals primarily with the manufacturing side of the dairy industry. Perhaps in his response the Minister Today we are dealing with legislation on market will take the time to answer tha t question. milk. Victoria is the largest milk producing State in the Commonwealth. In 1990-91 total Victorian milk Mr Baker interjected. production was 3908 million litres. This week I was speaking to Terry O'Callaghan and he advised me Mr W. D. McGRATH - It could. I find it hard to that Victoria is producing some 62 per cent of the rationalise the two. I note that the Minister played a national milk production and that for the first time role in ensuring that the legislation was put in place in 20 years milk production in this State exceeded at the Federal level. I should like to place on record, 4 billion litres. as the Minister did during question time, that I also wrote to the Minister for Primary Industries and In 1991 the 446 million litres of market milk in Energy suggesting the recommend a tions of the Victoria was produced by some 956 000 cows and Industry Commission should not be co-opted. I also 8648 dairy farmers. In 1990-91 the return to the wrote to the Australian Dairy Industry Corporation farmer for farmgate milk was 38.4 cents a litre, and advising it -- for manufactured milk it was 21.1 cents a litre. It is imperative that we put in place a legislative Mr Baker interjected. framework to ensure that that standard for market milk - that is, milk consumed by the public - is Mr W. D. McGRATH - I also wrote to the maintained. Minister. Market milk, also known as white milk, is marketed Mr Baker - That was a big help! as flavoured milk, ultra heat treated milk and in various other forms and takes up slightly more than DAIRY INDUSTRY BILL
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11 per cent of the State's overall milk production. followed by the Western District and then the Market milk is very important, and I am pleased Goulburn Valley. They are the principal milk that under the Bill the demand for that resource will producing districts of this State. be shared equally among all dairy farmers around the State. I place on record my appreciation for people who have spoken to the coalition committee on this It would be easy for us to move in and say we will subject. Recommendations have been received from deregulate the industry so that milk processors the United Dairyfarmers of Victoria and, of course, would be able to source their milk from wherever from John Watson and Terry O'Callaghan, the two they wanted to. That would be a big advantage to driving forces behind the dairy industry in Victoria. dairy farmers within close range of the market milk Both of those gentlemen are very good advocates for processors, but some distortions would occur in the their industry. marketplace. Therefore, I am pleased that the government has adopted the recommendations of The committee received representations from the most sectors of the industry for the equalisation of processors that turn the milk produced by dairy the sourcing of market milk and for the returns for farmers into the various forms of milk that go out to market milk to be spread across the whole of the the consumers, from the distributors who take it dairy industry. It is a positive move. from the processors and deliver it to supermarkets, delicatessens and milk bars throughout the After examining some statistics produced by the community, from the retailers, who are important to Australian Bureau of Statistics I have some concerns the overall industry, and from the Victorian Dairy about liquid milk. In 1989-90, 343 tonnes of liquid Industry Authority. milk was imported from New Zealand into Australia. In the following year, 1990-91, that figure Much of the Bill relates to the role and function of had increased to 867 tonnes. We need to be alert to the Victorian Dairy Industry AuthOrity (VDIA) and ensure that the consumers of our nation drink local its membership. I wish to consider how the Bill will Australian products rather than those from New provide the legislative framework for the industry in Zealand. the foreseeable future. There are always anomalies in new legislation so undoubtedly there will be It is often said that New Zealand has the most amendments to this Bill. efficient dairy industry in the world, but the Victorian dairy industry is very close to it and has Initially the authority had a membership of 10 and been aided by the restructuring that has taken place, its members came from all sectors of the industry; it particularly over the past 10 years. During that time was not grower-dominated. I notice that the Bill the number of dairy farms has been reduced by reduces the number to eight. The National Party about 1000 every year and restructuring has does not oppose that. The Minister has the right to occurred in all stages of milk production. nominate the chairperson and a representative of the government; the other six members must be Dairy farms are basically divided into three separate appointed on the recommendation of the selection groups around the State - the Western District committee. dairy farms, the Gippsland dairy farms and those in the Goulburn Valley and Murray region. Those three I agree with the composition of the selection areas are very much the key milk producing districts committee. It will consist of three people appointed in this State. by the Minister each of whom must be nominees of the United Dairyfarmers of Victoria, the Milk A breakdown of where the various dairy farms are Processors Association Victoria and the Victorian situated in this State is very interesting. In the Dairy Products Association respectively. These Barwon region there are approximately 105 000 nominees may be representatives from other sectors dairy cattle; the Western District has 307 000 cattle; of the industry. the Central Highlands region has 8000 milking cattle; the Loddon Campaspe region has 104 000 I agree that two members of the authority should cattle; the Goulburn region has 305 000 head of have expertise in milk production. I notice that one milking cattle; the Ovens and Murray has 55 000; member must have some expertise in industrial East Gippsland has 70 000 head of cattle; and relations, and that is a new requirement. There is a Gippsland has 367 000 head of cattle. One can see large work force in the milk industry so it may be that Gippsland has the highest number of cattle better for somebody with expertise in industrial DAIRY INDUSTRY BILL l338 ASSEMBLY Thursday, 7 May 1992 relations to be on the inside rather than the outside. More than 1000 people are directly employed within The National Party is prepared to accept that, but I the industry, which comprises 12 processing factories stress that this person must be someone whose around the State. industrial relations philosophy is reasonable. I do not want to see a mad, left-wing radical coming in Total invesbnent in their industry is estimated by the with what is claimed to be expertise in industrial Milk Processors Association (MAPV) at about relations. I accept that there are responsible people $150 million. in the trade union movement and so long as the person has a degree of understanding of the The association goes on to say that it wants industry and is prepared to adapt his considerations Parliament to address the unprofitable nature of to the role, I believe that person could add milk processing and asks for a review of the VDIA something of value to the authority. and its role in contributing to that position.
The other three members of the authority must have As I said earlier, the pricing methodology that has expertise of a kind, other than milk production and been used for a few years needs to be questioned industrial relations, which is to be determined by the closely to find out whether the margins allowed in Minister. If the selection committee is good enough today's costs of production, processing and to nominate those three members there should be no distribution are realistic. Although Significant rises need for the Minister to determine the kind of have occurred in other areas of the cost of living, expertise that is necessary for the nominations. We margins on milk and returns to milk producers seem will ask the Minister to delete that paragraph of the distorted to the advantage of consumers. clause. The submission from the Milk Producers The authority will be a key player in what happens Association Victoria states that anger about to the milk industry in Victoria over the next few inadequate margins reached a head following the years. There has been some criticism of the VDIA in determination by the VDIA that took effect in relation to the promotion and marketing of milk, November 1990. There was a further adjustment on which is sometimes justified. The intended increase 1 May. The milk producers talk about a 4 cents a litre in the amount of liquid milk getting to consumers increase in the retail price of milk, out of which has not been achieved; if anything, that amount has producers receive only 0.43 cents, a rise of declined a little. Compared with beverages such as approximately 4.6 per cent. The submission further Coca Cola or mineral water, milk is good value for states: money; it is very cheap indeed. Milk prices have been kept down for the benefit of consumers, and Following discussions with the MPA V the VOlA there should be a greater recognition of the cost of commissioned Price Waterhouse to review processing production at the farmgate and the distribution of and distributor margins. milk, including the transportation of milk from the processor to the various outlets that sell it. A report was distributed within the processing industry in the first week of March and the final report It is easy to say that the margins are adequate. That was issued later that month. may be so for some of the larger supermarkets that order bulk consignments of milk, but if you have a The Price Waterhouse report confirms the views of the milk bar from which you sell small quantities of MPAV that the authority's own pricing structure has milk you want a reasonable return for your efforts. been the fundamental cause of a major contraction and downturn in our industry. The report points out that We are concerned about the processing side of the the authority's methodology for assessing industry industry. The coalition's agricultural committee costs and determining margins acts as an incentive to received a substantial submission from the Milk squeeze out the small to mid-size processors in favour Processors Association on the key matters it wants of larger processors. Parliament to consider. The submission states: This contraction can be expected to continue unless The milk processing sector is one of Victoria's major urgent remedial action is taken. industry. It processes and packages some 10 million litres of milk per week into a range of products for The VOlA considers the report by Price Waterhouse Victorian, interstate and overseas markets. offers ample evidence of the alarming decline in DAIRY INDUSTRY BILL
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profitability within the processing industry in Victoria A review of the price of milk to country processors at over the past 10 years. the time of the withdrawal of remote area distribution support will be undertaken to recognise different costs In relation to return on investment the document in the transportation of bulk milk to processing plants. states: That is, there may be different (lower) prices for milk for different country processors which would increase The Price Waterhouse document points to the complete their competitive advantage in country areas. inadequacy of current returns in achieving a fair return on investment for investors. According to Price Supply of Victorian milk to all areas is the priority of Waterhouse, the return to the four major processors the VOlA but alternative sources of supply are comprising the survey for the first half of the 1990-91 available. These will ensure Victorian processors financial year was $483 000. These four process the maintain competitive pricing. The threat of UHf milk bulk of packaged milk in Victoria. In annualised terms supply will also place pressure on daily pasteurised this means a return on investment of some $966 000 or pricing. less than 1 per cent on the combined assets of the processing industry in this State, estimated by the The VDIA paper then refers to alternative sources of association at $150 million. milk for the Mildura district and East Gippsland. Milk is currently provided to the Mildura area by The Bill will eliminate the maximum retail price. Sandhurst Dairies at Bendigo. The authority That action signals an opportunity for processing to suggests Shepparton, Horsham, Berri-Renmark and recommence in East Gippsland and in the Mildura Finley as alternative sources. As those places appear district. to be similar distances from Mildura as is Bendigo, freight costs should be comparable. Mr Bildstien - I will talk about that. The opposition proposes an amendment to the Mr W. D. McGRATH - I am glad to hear the provision in the Bill that allows a review of pricing honourable member for Mildura say that he will be to be undertaken in 23 months to determine whether speaking along those lines in his contribution to the milk prices in Mildura and East Gippsland are out of debate. This is an important question when one kilter with those in the rest of the State. considers the large volume of milk produced in Gippsland. Bulk milk from Gippsland is trucked to Associated Dairies Ltd currently supplies the Rowville, processed and sent by rail back to East majority of milk in East Gippsland. The VDIA says Gippsland at no insignificant cost. That must be a factors that will help keep prices in line with those in green light to someone to examine the the rest of the State are: the existence of Bowen, a re-establishment in East Gippsland of milk small-scale processor at Lakes Entrance; competition processing to provide a regional opportunity for a between the Pura and Associated Dairies Ltd; the secondary industry to develop. possible reopening of the Maffra dairy; and supply from Bega. I hope a processing operation does Knowing that something like $1 million is provided reopen in the Gippsland area. each year in transport subsidies to maintain a close relationship between the minimum and maximum The Victorian Dairy Industry Authority briefing retail prices of milk - at present the difference is paper also states: approximately 4 cents a litre - I was concerned that the Bill may result in a Significant increase in the Local community businessmen, farmers or other price differential and I put my concerns to the VDIA. individuals may seize the opportunity to start a small The authority responded to my concern and its to medium processing operation such as the briefing paper states: proprietors of cheese operations like Jindi, Blue Cheese. Small to medium processing operations are generally Excess production capacity in the processing sector of the most profitable; larger operations tend to grow past the dairy industry provides intense competition for optimum size. additional litres. At present, remote area distribution support is paid on approximately 11 million litres in During the Committee stage the opposition will the north-north west of the State and 8.5 million litres move an amendment to clause 64, which stipulates in the east. that the Minister must ensure that a review of all pricing arrangements is conducted at the end of 12 months after the commencement of the provision. DAIRY INDUSTRY BILL
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The Bill may have been carelessly drafted because The VOlA should continue to be responsible for the clause gives one the impression of such a review ongoing generic promotion and continue to be having to be undertaken of all sectors of the liquid custodian of the industry brands ... milk industry. I am sure that is not the intention of the clause. The amendment will ensure that any That is, brands such as Big M, PhYSiCAL and Rev. review applies only to the operations of the processing sector. The UDV does not support the inclusion of a sunset clause in the legislation to terminate the marketing role The coalition will also move an amendment to delete of the VOlA as the government of the day is able to clause 64(2), which empowers the Minister to set up review legislation at any time and also the government a review panel. Settling the membership of the has a review process of SMAs through the PBRe. review panel at this stage would be premature. In 12 months the Minister of the day should be free to The inclusion of a sunset clause to terminate the select the most competent people he can find to marketing role of the VOlA will lead to inefficiencies carry out the review. It would be not only through marketing staff expertise diminishing and unnecessary but restrictive to nominate the members product distribution diminishing as the sunset date is of the review panel at this time. approached.
Other dairy industry groups have written to the The UDV has agreed with the milk processors and the coalition about the Dairy Industry Bill. I have VOlA that a separate company be set up by the VOlA already paid tribute to the work done by John for generic and industry brand promotion to be Watson and Terry O'Callaghan. The President of the managed by the industry along the following principles: United Dairyfarmers of Victoria sent a submission to the industry retains ownership of the existing the coalition parties on 3 April 1992. Firstly, the industry brands to be held in custody by the VOlA; submission addresses the proposed role of the Prices Commissioner: exclusive rights to the industry brands will be assigned to an independent company; There is no requirement for the Prices Commissioner to the independent company will report to an be given reference in the Act as the Fuel Prices independent board with industry representation; Regulation Act 1981 covers the terms of reference for and the Prices Commissioner. shareholding of the independent company to be Processors and distributors believe the Prices determined. Commissioner should play no role in setting prices At one stage the government hoped to make of liquid milk products. If the Victorian Dairy millions of dollars from the planned sale of the Industry Authority is doing its job properly it will industry brands it believed it owned. It was told by represent the various sectors of the industry and the processors that rather than their being forced to make the right decisions. If the members of the spend millions of dollars to buy existing industry authority do not do their jobs, the Minister should brands, they would develop their own. Once again dismiss them and appoint the right people. The the government was brought back to the real world! VOlA will soon know whether liquid milk products As the government has found out on more than one are being underpriced or overpriced. If they are occasion, the sale of assets is neither as easy nor as overpriced, consumption will decline and many straightforward as it thinks. producers, processors and distributors of liquid milk products will go out of business. The VOlA must The coalition agrees with the United Dairyfarmers of adopt the correct methodology in determining liquid Victoria, the Victorian Dairy Industry Authority and milk prices. If the methodology is right there will be the milk processors that a marketing company no need for the Prices Commissioner to be involved should be set up to promote existing brands in the in any way in the setting of prices for liquid milk - hope of increasing the consumption of liquid milk a point made clearly by the UDV. products. The establislunent of such a marketing company would require the deletion of the sunset Turning his attention to what he sees should be the provision. During the Committee stage the coalition marketing objectives of the VOlA, the President of will ask the Minister to delete the provision from the the UDV says: Bill. DAIRY INDUSTRY BILL
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In its submission the UDV asks the coalition to (6) The authority must make price determinations in consider increasing from 2 to 4 the number of accordance with the endorsed guidelines. members of the authority who must have expertise in milk production. The production side of the dairy (7) If endorsed guidelines are not available in time for industry is only one component; one must also the first price determinations under this Act, the first consider the distribution and retailing components. price determinations may be prepared in accordance The coalition will propose an amendment to clause with the guidelines prepared under the Dairy Industry 10 so that the selection committee can nominate Act 1984. three members. In other words, the UDV wants a review of the The UDV requested a change in the membership of methodology of the pricing and to have the the selection committee. It wants four persons to be opportunity of making a contribution to any review appointed to that committee, two of whom it wants that may take place. to nominate. The coalition has considered that proposal but believes the current composition of the The UDV refers to the procedures for price selection committee is balanced. It does not propose determination and the reduced role of the Prices an amendment at this stage. Commissioner. It is essential that we get the proposed legislation right so that dairy farmers can The UDV was also concerned about the funds improve their returns. Unless dairy farmers obtain entrusted by the Victorian Dairy Industry AuthOrity reasonable returns for their products the quality and to an authorised agent. It has proposed an quantity of dairy produce will decline. amendment to clause 49(3) so that it would read: It is imperative that dairy farmers have every Any funds entrusted by the authority to the authorised opportunity of obtaining a reasonable profit for their agent for payment to dairy farmers for milk accepted produce. by the authority must be secured by the authority. Mr Baker - That is why the Bill is here. The UDV believes the security of farmer payments passed to a dairy factory by the VDIA should be Mr W. D. McGRATH - I hope the Minister for protected by the VDIA's taking out insurance for Food and Agriculture is correct. default - funded by having a margin on the wholesale price - not at a cost to the dairy factory A news sheet was given to me by Terry O'Callaghan that would ultimately be passed on to the farmer. this week. I shall quote a passage contained in it relating to Kraft Foods Ltd: I have already referred to the methodology for the pricing of milk and I shall place on the record the Kraft Foods has announced the Port Melbourne UDV's views on this issue. The UDV's submission research and development facility is to be the major suggests that clause 60 should be amended to read centre to serve the Asia Pacific region. $6.1 million will as follows: be spent on upgrading the R and D facilities to employ 100 food scientists and engineers to undertake product, (1) TIle authority must prepare guidelines on pricing packaging and process development research. The R principles and methodology to be used for the and D upgrade follows the recent announcements of purposes of this Act. investment projects exceeding $100 million at Strathmerton in Victoria, Sutton Town in South (2) The authority must ensure that the dairy industry is Australia and Port Melbourne. consulted during the preparation of guidelines. I am heartened that a major multinational company (3) The authority must refer the guidelines to the such as Kraft Foods is investing in research and Minister for endorsement. development so that food scientists and technicians can ensure that the quality of dairy produce in (4) The Minister may endorse the guidelines or request Victoria and Australia is of the highest standard. the authority to reconsider the guidelines. The newsletter also refers to the cheese tariff quota: (5) The authority must ensure that a copy of guidelines endorsed by the Minister is available for inspection at The current cheese tariff quota will be retained during any office of the authority during normal office hours. the current Gatt multilateral trade negotiations. The DAIRY INDUSTRY BILL
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cheese tariff quota was put in place as a result of while in Western Australia it is expected to have negotiations between the EC and Federal government increased by over 20 per cent, reflecting the high following a successful anti-dumping action. A tariff of proportion of income generated from other farm $96 a tOIUle (2 per cent) in imports is applicable up to activities, in particular, beef sales. 11 500 tOIUles. Imports above this quota will attract a tariff of $2100 a tOIUle. New Zealand imports are Because Victoria is the leading dairy production exempt from tariffs. State, it must be supported at government level through legislation to ensure dairy farmers have ApprOximately 11 000 tonnes of cheese is coming every opportunity of securing the best possible into Australia from overseas. I do not understand market share. why that is occurring. Australia has the best agricultural products in the world, but it is The purpose of the Bill is to reconstitute the importing cheeses from Europe! Victorian Dairy Industry AuthOrity and to regulate the dairy industry. It will serve as a useful I was in England during the Chernobyl disaster in mechanism to assist the dairy industry over the next the ther:t Union of Soviet Socialist Republics (USSR). few years. The challenge for the dairy industry I was interested to read that officials from the USSR and I am focus sing on the farm sector of the dairy had come to the United Kingdom to purchase 40 000 industry - is to come up with a blueprint for the Friesian cows to supplement their country's milk next three to five years that will ensure as many supply because of the radioactive fall-out that had farmers as possible stay on their farms. occurred within a large radius of Chernobyl, yet Australia still takes the risk of importing large Fewer than 9000 dairy farmers operate in Victoria amounts of dairy produce that is then sold in our and I hope in three to five years that figure has not supermarkets. I question the mentality of consumers declined further. I guess some will leave the who buy such produce. industry, but if it is strong and viable the industry will attract new people and Victoria will retain its The value of cheese and dairy products coming into strong position as a producer of high quality dairy this country in 1991 was apprOximately $80 million. products in the national perspective. One wonders why that is so when our dairy industry has the ability to be self-sufficient. I shall touch briefly on the distribution of market milk. I had some concern when the Victorian Dairy Another interesting point is made in the Farm Industry Association issued a distribution licence to suroeys report 1991. An article by Stephen Strachan a supermarket at Wycheproof when the local from the Meat and Dairy Economics Section headed distributor was already doing a reasonable job. I "Dairy industry" states: understand there was some conflict of personalities involved. However, we need to ensure that Continued high butterfat output in the face of falling distributors are given support. With their ability to world demand saw world dairy stocks rise in 1990-91. buy in bulk it is easy for supermarkets to dominate As a result, prices have dropped significantly, both the market. overseas and in Australia. The average Australian manufacturing milk price fell to 21.3 cents a litre in Mr Jim McEntee of Traralgon supports that 1990-91 from 25.8 cents a litre in 1989-90. This fall in contention in an article in the Latrobe Valley Express price is the principal reason for the 14 per cent decline of 23 April. He has also spoken to the local member, to $3S 900 in average farm cash operating surplus for the Honourable Peter Hall from the other place, as Australian dairy farmers in 1990-91. This fall follows an well as outlining his concerns in a letter to me. 8 per cent decline in average farm cash operating Speaking on behalf of his fellow distributors, surplus for 1989-90. Mr McEntee was reported as having said:
The largest decline occurred in Victoria, Australia's If the milk industry is deregulated, the people in the largest milk producing State, with an estimated 24 per country areas, which are currently subsidised, could be cent fall in farm cash operating surplus. With almost 90 paying up to 10 cents a litre more than in Melbourne. per cent of Victoria's milk production used in manufacturing, the greatest impact of a fall in I do not quite agree with that, but a fair and manufacturing milk prices was felt by Victorian reasonable increase in the price of milk for producers. Farm cash operating surplus is estimated to everybody in this State is warranted. The article have increased slightly in Queensland and Tasmania continues: DAIRY INDUSTRY BILL
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Following partial deregulation, the farmer remained on honourable members opposite will benefit but it will a fixed price, but the processor, distributor and retailer be interesting to see how many speak on this most bought milk on a minimum/maximum price basis, important Bill. which in most cases was a 4 cent variation. Anyone who has had anything to do with the dairy Mr McEntee said the industry continued to operate, industry will acknowledge that it is complicated by despite part deregulation, with the introduction of a the various pricing mechanisms and structures levy on the cost structure of milk to the processor called involved. Few honourable members, other than price equalisation: those directly associated with the industry, would have the faintest idea how it operates. ''That price equalisation (0.11 cents per litre) was to subsidise the freight on milk to remote areas all over Various organisations play important roles in the Victoria," he explained. industry, including the United Dairyfarmers of Victoria (UDV), which was mentioned by the ''But with the minimum/maximum price, the Deputy Leader of the National Party. The UDV is a supermarkets were able to negotiate with the branch of the Victorian Farmers Federation and processors, strike a deal and buy and sell milk at a represents dairy farmers. Two prominent gentlemen better price than the smaller shops could. Because the who play significant roles in the UDV are Mr Terry processor sold to the distributor at the maximum price, O'Callaghan and Mr John Watson. Like the Deputy they wouldn't discount it to the minimum, so the Leader of the National Party, I have a high regard distributors had to sell to the smaller shops at the for the ability, skill and the way in which both maximum price." gentlemen conduct themselves.
It is fair and reasonable for Mr McEntee to make On behalf of the Liberal Party I also take this those comments on behalf of his sector of the opportunity to thank the Minister and those who industry. Distributors around Victoria provide a have provided information for the coalition valuable link in the overall liquid milk industry. committee.
The Bill will go to the Committee stage later this The Victorian Dairy Industry Authority is the session and I shall suggest to the Minister that he managerial and marketing agency for the dairy put forward a number of amendments to cover the industry, and has played a significant role since points I have raised. If not, I will move the 1977. The Australian Dairy Industry Corporation amendments on behalf of the coalition and hope the represents the Australian industry. The Deputy Minister will accept them. Leader of the National Party referred to the fact that the Federal Minister for Primary Industries and This is an important Bill and I hope it will create Energy, Mr Crean, will not continue with the opportunities for all sectors of the liquid milk underwriting although the basics of the Kerin plan industry - the farmers, processors, distributors and will continue. retailers - as well as providing a good quality product to the consumers of this State. It has often been said in this place - and it is as true today as in the past - that the dairy industry is the I have said on numerous occasions that Victorian greatest decentralised industry in Victoria. It milk is underpriced,! am sure consumers would say employs about 50 000 people and for every dairy milk is a better product than a bottle of Coke or farm, about four jobs are created down the track in mineral water, the prices of which are significantly the manufacturing and processing sectors, and in higher than milk. I hope we can rectify that situation other downstream industries. in future years. The dairy industry is vital for many Victorian towns. Mr AUSTIN (Ripon) - The Bill amends the It is of paramount importance for the survival of Dairy Industry Act, the Borrowing and Investment such towns, for the well-being of residents and for Powers Act, the Food Act and the Stock Diseases the future of the children of dairy farmers. If the Act. It is some time since the House has heard a dairy industry did not exist today imagine the debate on the dairy industry. It provides an economies of towns like Camperdown, Colac and opportunity for honourable members to air their Warrnambool, or the irrigation areas in north and views and to learn a little about what makes this north-eastern Victoria, or the very important very important industry tick. Obviously not many Gippsland area. DAIRY INDUSTRY BILL
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Many people think deregulation is a wonderful countries. Our price is similar to that of New thing. If honourable members in this place were Zealand. In the United States of America it is half as asked to vote one way or another, many would vote much again; in France it is twice our farmgate price; in favour of deregulation of the dairy industry in Japan it is more than that; and in Switzerland it is but only because they do not understand the a lot more. Victoria produces a clean, efficient and consequent ramifications. cheap product and it is all grown from grass. Fresh milk is supplied on a daily basis. The Deputy Leader of the National Party said that the Canberra-based Industries Commission is Victorian farmers are extremely efficient by world always making recommendations that lean towards standards; they produce 60 per cent of Australia's industry deregulation. Recently the commission milk at 60 per cent of the cost of other mainland advocated the removal of State government controls States and the northern hemisphere. Victoria, over the pricing and supply of market milk. On the Tasmania and New Zealand produce 3 per cent of face of it that recommendation sounds reasonable the world's milk at 60 per cent of the cost of the rest and would probably receive the support of many of the world. Those figures speak volumes for the people who do not fully understand what would efficiency of the Victorian dairy industry. then happen. The European Community (EC) has a 50 per cent Many would support that move in the belief that share of the international market and produces 50 cheaper milk will be available for consumers. But per cent of the world's milk product. EC milk that is far from the truth. As was said earlier, that products are heavily subsidised for EC members and may occur in the short term but we must remember are frequently dumped on various markets in large that a litre of milk is cheaper than a litre of bottled quantities. water. Other honourable members feel strongly about such a comparison and some will inform Those who believe Victoria should lead the way in Parliament of the various comparative prices of milk deregulation and that we should have a level and other products. playing field should think again. They do not understand the extent of the dumping and The real effect of the complete deregulation of the subsidised product in other parts of the world, dairy industry would be the abandonment of many particularly the EC. We should not try to set the thousands of dairy fanns as we know them today. example and lead the way when no other dairy Without a dual pricing system we would not be able producing country in the world is deregulated. to produce the manufactured product, nor would today's 8648 Victorian dairy farmers be able to If we wish to keep our dairy industry in this country continue to farm. The other side effects would be as we know it today, as we wish to keep our wheat extreme. and other industries, we should ensure that we know what we are doing. I sometimes wonder Perhaps the Minister will later tell the House about whether those in decision-making positions know the importance of the $700 million received from the the issues before they make decisions or policies. export of the manufactured product. No-one can tell us much about the value of that figure to Australia It is interesting to look at the number of dairy because the emphasis appears to be on the fact that farmers in Victoria over the past 40 years. There we produce milk that is used in products, the prices were 50 000 in 1951; 28 000 in 1956; 15000 in 1976; of which are virtually below the cost of production. and today there are 8648 dairy farmers. There is always much discussion about oversupply. But some importance must be attached to the The number of cows has increased slightly and the $700 million received from the export of annual production of milk over that period has manufactured product. increased from 2000 million litres to 4000 million litres. The Deputy Leader of the National Party Not long ago Victoria had about 35 000 dairy infonns me that the United Dairyfarmers of Victoria farmers; many were small operators and had other has said that the largest annual volume of milk enterprises on their land. Today the average number produced in this State was in excess of 4000 million of cows milked per farm totals more than 100, and litres - that is, 4 billion litres. dairy farmers are highly efficient. Proof of that efficiency can be seen when one makes comparisons The cross that the Victorian dairy farmer has to bear between Victoria and other major producing relates to the amount of product that goes into the DAIRY INDUSTRY BILL
Thursday. 7 May 1992 ASSEMBLY 1345 liquid or market milk area. About 12 to 13 per cent Agriculture, the Chairperson of the Victorian Dairy of all the milk produced is consumed in that more Industry AuthOrity and a representative from dairy lucrative market. About 87 per cent goes into the industry employees. manufacturing sector, some for domestic use and some for overseas export. The situation is reversed The opposition has great respect for the Prices in the rest of Australia. A dairy farmer on the New Commissioner but is a little nervous about his South Wales side of the River Murray is $20 000 a approach to setting prices. When the Prices year better off compared with a dairy farmer on the Commissioner set the price for eggs the factors he Victorian side. took into consideration and the way he considered the matter ignored some of the important It can be said that the production of milk is a simple ingredients that he should have considered. The process. All one needs is a paddock with grass, a Prices Commissioner assessed the production costs cow and perhaps a bull. The cow is milked by a few in the egg industry by picking out several of the children of the family and the milk finishes up in the most efficient farmers. I suggest that that is not the dairy tanker. That process takes a great deal of time. most appropriate or fair way to come up with a But it is the processors and retailers who are most reasonable price for a given product. The opposition affected by the Bill. There are some 13 processors - is not suggesting that farmers should not attempt to the Deputy Leader of the National Party says there be as efficient as they can, but there are several are 12, but I will not argue with him - 200 reasons why some farmers are more efficient than distributors and about 2000 retailers. others. The cost of production varies significantly.
I turn to the pricing mechanism for standard white In coming to a decision it would be more milk. The farmgate price of milk at present is 39.97 appropriate to take a cross-section of farms. The size cents a litre. Cartage to the factory gate is 3.54 cents of farms and variations in rainfall are important. a litre which means that the price paid to the One must consider irrigation versus dry land factories by the Victorian Dairy Industry Association farming, soil types, economies of scale and a number (VDIA) is 43.51 cents a litre. The VDIA bulk of factors that significantly influence the cost of transport cost is 2.35 cents a litre and administration production on a farm. Many factors are outside the and marketing cost is 2.33 cents a litre. The price control of farmers. paid to the VDIA by the processors is 48.19 cents a litre. The processor margin is 21.5 cents a litre. The The Deputy Leader of the National Party advised price paid to the processor by the semi-wholesaler is the House that some amendments may be moved 69.69 cents a litre. The semi-wholesaler margin is during the Committee stage. He indicated that the 13.31 cents a litre. The total price paid to the opposition will examine the operation of the review semi-wholesaler by the retailer is 83 cents. The every six months by the VDIA of milk price retailer margin is 10 cents a litre. The minimum de terminations. price paid to retailers by consumers is 93 cents a litre. That is the minimum price consumers must The Bill will abolish the remaining distribution pay for a litre of milk in the supermarkets or the zones. Zoning has always been a sore point in the corner stores. dairy industry. It appears that a lot of the sting has gone out of the argument and I hope the problem The maximum processor's margin is 22.07 cents; the has almost disappeared. From 1 January 1994 the semi-wholesaler's margin is 13.74 cents; and the marketing functions of the VDIA will be transferred retailer's margin - instead of the 10 cents minimum to the private sector. Again that issue will be margin I quoted earlier - is 13 cents. The maximum discussed further during the Committee stage. price paid by the consumer to the retailer is 97 cents a litre and the minimum price is 93 cents. The Bill One of the possible side effects that has already been will remove all maximum price controls from the referred to in the debate is the problem that can processor through to the retailer. It will abolish the arise -and probably will arise, particularly in the minimum retail price on flavoured milk, including early stages of the implementation of the Bill - for UHT flavoured milk. people who live in remote areas of the State. The problem is not so much that they live in a remote The Bill will establish a review panel to monitor the area of the State; it is really a matter of how far away new pricing arrangements. The panel will be chaired an area or town is from the nearest milk processor. by the Prices Commissioner, Allan Fels, and will For instance, towns like Orbost and Wycheproof, comprise the Director-General of Food and which have been mentioned in the debate on the DAIRY INDUSTRY BILL
1346 ASSEMBLY Thursday, 7 May 1992 proposed legislation, are not only fairly remote but and all of them appointed having regard to the also a considerable distance from the nearest objects, functions and powers of the authority. processor. The Dairy Industry Bill envisages a board comprised One can understand the concern of people who live of eight members. One will be the chairman, another in, say, Orbost and who can look over a fence and will be a government representative, and the other see some cows grazing there; they know the cows six members will be appointed by the Minister for are milked a few hundred yards from their own Food and Agriculture. Of those 6, 2 will have back door, yet they find that the milk has to be sent expertise in milk production - in other words, they long distances to be processed before it can be will be processors/ farmers; 1 will have expertise in brought back for sale. People in such situations are industrial relations; and the other 3 will have seriously disadvantaged. expertise of a kind determined by the Minister.
I suppose the same could be said of any product for The opposition will not argue about the proposed which distribution involves a substantial transport change in the composition of the board of the VOlA. component. In the case of milk, the distance is The board should work, as its composition is fairly significant partly because there has been a form of representative. equalisation system in place before, and people suddenly find that over a short period they are Mr Baker - As long as they don't fight! paying considerably more for milk. Mr AUSTIN - Yes. The industry selection The matter will have to be addressed after committee will be comprised of one person from the honourable members have had the opportunity of United Dairyfarmers of Victoria, one person from observing developments over the next few months the Milk Processors Association of Victoria and one and giving consideration to alternatives that arise. person from the Victorian Dairy Products Distribution may be taken up in a competitive Association. They will be appointed by the Minister marketplace and it is hoped the result will be that for Food and Agriculture. Mildura and similar places will not be too savagely affected. This important piece of legislation deals with an important industry. Uke all primary industries it is Mr Bildstien - Hear, hear! currently going through difficult times. As legislators we must ensure that we do things that are Mr AUSTIN - No doubt the honourable in the best interests of the industry and in doing so member for Mildura will have something to say we must not forget the consumers. about the issue between now and the time the football match at the Melbourne Cricket Ground Strong evidence has emerged from the debate about (MCG) starts later today! the price of milk, which has always been reasonable. When you compare the price of milk with the Mr Bildstien - He will! consumer price index (CPI) you find that milk has a low curve and the CPI has a high curve. I do not Mr AUSTIN - Currently the board of the hear housewives complain about the price of milk Victorian Diary Industry Authority is comprised of after their weekly shopping. If the legislation makes 10 members, as provided for by the Dairy Industry the processing and distribution of the industry more Act 1984. Three members are persons representing effident that will be a step in the right direction. dairy farmers; 1 represents people who conduct any business engaged in the manufacture or processing The Deputy Leader of the National Party of any dairy produce; 1 represents people who foreshadowed that he will be moving amendments, conduct a business engaged in the manufacture or and if they are taken into consideration we will not transport of dairy produce; 1 represents people who oppose the Bill. are distributors of market milk; 1 is a representative of people who are members of trade unions Mr KILGOUR (Shepparton) - I rise with consisting of persons employed in the dairy pleasure to debate the Dairy Industry Bill, which has industry; and 3 are people appointed by the Minister important ramifications for the future of the dairy for Food and Agriculture who are experienced and industry. I have spent 18 years in the dairy industry qualified in marketing, with one qualified in finance, involved with the marketing and sale of milk products. I represented an innovative company, DAIRY INDUSTRY BILL
Thursday, 7 May 1992 ASSEMBLY 1347
Ducats Food Products. That company, which is Victoria because the VDIA has the authority to located in Shepparton, marketed flavoured milk source the milk that is required, and we must long before Big M was introduced. Because of its protect that right. success in marketing flavoured milk in Shepparton, where 18 ()()() litres was flavoured, One of the fW1ctions of the authority is to determine which is a large proportion of that market compared prices, and it has been carrying out this role for with the 1 per cent of milk that is flavoured in many years. The authority has the mechanism and Melbourne, the former milk board came to Ducats to know-how to know what it costs for milk to be investigate, and Big M was born. produced. It must also oversee the supply and payment of farmers. It is important that the farmers I was involved in the milk industry long before Big are paid on a regular basis to ensure that they M came on the scene. It was one of the greatest continue producing that product, as they do so triumphs of the milk industry and it was one of the efficiently in Victoria. greatest marketing coups in beverages. Why is the legislation needed? When we asked the department It is also up to the authority to promote why the Bill was being introduced the reply was, consumption, as is stated in the Bill, so that milk is "To deregulate the industry". We are ready for some marketed in such a way that people will continue to deregulation of the industry. consume it at the same level as they have consumed it in the past. Indeed we must endeavour to increase However after studying deregulation of the dairy that consumption. The Bill also states that the industry in the United States of America I warn the authority must consult with the industry, and there industry that it should not deregulate too quickly has been a lack of consultation in the industry for because of the pitfalls that may be encoW1tered. We many years. need to be sure that we do not fall into the same traps. The gentleman that I worked for, Mr Ray Ducat from Ducats Food Products in Shepparton, is one of My experience studying the milk marketing the great authorities on milk. His father and industry in the UrJted States was interesting. I was grandfather commenced the business in Shepparton told by the people there that if they had our system in 1917, and the Ducats are now in their 75th year in in the United States they would be able to make a the industry. Mr Ducat was on a milk marketing dollar out of milk. A dairyman from Indiana said, advisory committee set up by the VDIA, and the ''Don, if we had your system I could make a dollar; committee did not meet for two years, which shows if I took my company to Australia we could make a that the VDIA was going along its merry way dollar". America has a totally deregulated industry, without consulting with the industry as to how the and we must not fall into that same trap. Victoria marketing of milk should proceed in Victoria. I urge needs a body to ensure that milk is sourced, the Minister to ensure that the VDIA consults with processed and delivered in an orderly manner. the industry.
Mr Heffernan - And controlled! The VDlA should not be seen as a separate entity from the milk industry; It should work hand in hand Mr KILGOUR - Indeed, controlled, because we with the various aspects of it. Board members of the must protect the quality of this important product. association play an important role and will continue One needs to have been involved in the milk do so into the future. industry to W1derstand that it is a unique product. No other product has to be sourced and delivered as Two aspects of the Bill have vital importance to the quickly as milk. In fact, the Victorian Dairy Industry future of the dairy industry. Let us talk about the Authority (VDIA) plays an important role in make-up of the VDIA. I believe it is important that ensuring that we receive the amoW1t of milk members of the VDIA have a good W1derstanding of necessary for the Victorian market, and that the milk sector. I fOW1d it frustrating to be part of an monitoring role does not exist in America. industry that did not have proper representation on the board. In fact, the gentleman who was supposed I well remember speaking to a man from Gary, to represent our sector - the market milk sector - Indiana, when we were both attending a Chicago had no knowledge of it because he represented a dairy industry seminar. On that particular day his milk factory that did not process market milk. He major problem was that he was 80 000 gallons short came to Ducat's for advice on the market milk for the day's milk supply. That does not happen in industry a number of times. DAIRY INDUSTRY BILL
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I commend the Minister for ensuring that all sectors succumbed and people have had to sell out. Dairies of the industry will be represented on the VDIA. we have known for many years - Gilmore's, Unless we have true representation from the farm McKay's in Coburg and Parton's in Caul field - and the processing and distribution sectors, I believe have all disappeared. That is very sad. We no longer there will be disharmony between the authority and have competition in the processing sector. the industry. We do not want to see that because it is not good for the industry. There are two giant processors in Melbourne. The Gippsland processor has moved to the New South I am pleased that the three major sectors will be Wales border so now there is the ridiculous situation represented on the selection committee to nominate of milk being carted from East Gippsland to the three members of the authority, the United Rowville, packaged at Rowville, and carted all the Dairyfarmers of Victoria (UDV) being one. They are way back to Gippsland instead of it being processed the people who actually produce the milk, who in Gippsland. If I had some money and knew a know the true costs of the farm, who know what it is factory in Bairnsdale was empty because someone like to get up at 4.00 every morning, seven days a could not make a go of processing vegetables, I week, to milk 150 or 200 cows and go back into the would look to opening a milk processing plant there, dairy at 4.00 every afternoon to milk the cows again, sourcing milk from Gippsland. I would then be able and who know the cost of purchasing extra property. to send that milk to the Latrobe Valley at a competitive price because I would not have to cart The UDV is headed by fine people such as John milk between Rowville and Gippsland. Watson and Terry O'Callaghan who have the responsibility of leading the industry into the next Industry representation on the Victorian Dairy century. They have had a lot of input in the industry Industry AuthOrity board will ensure that there is an and have spoken with the coalition's agriculture understanding of the need to ensure that each sector committee to put their views about how the industry of the industry invests the money that is needed to should work in the future. make milk readily available in all parts of Victoria.
It is good to see that the Victorian Dairy Products The Bill also requires the VDIA to prepare five-year Association will be represented on the panel that operational plans. Anyone going into business needs will elect the three people to the authority because it a plan. The Bill provides that the views of the dairy will ensure that the VDIA is truly represented. The industry must be taken into account in the Victorian Dairy Products Association sees formulation of those plans. That has not occurred in representation from the milk factories as playing an the past and I implore the Minister to ensure that the important role in collecting the milk from farms, views of the industry are sought. taking it to the factories and making sure it gets to the processor so it can be put into cartons or bottles. I remember attending a meeting of the VDIA at I commend the Minister for ensuring that those three which the former general manager of the authority sectors of the industry will play an important role in told distributors and processors that the VDIA was the authority to ensure that things that have the heart of the dairy industry. A gentleman from happened in the past do not happen again and that the processing industry in Melbourne responded each sector receives the remuneration it should that it was a pity that the heart did not know where receive. the arteries led. That was a typical example of the problems in the industry caused by a VDIA that did Milk is far too cheap in Victoria; it goes onto the not consult with the industry when it was planning table for less than it does in other States. Because the and considering future marketing objectives. VDIA has tried to ensure that the cost of milk to the consumer is kept as cheap as possible, the industry The Minister has been under pressure to ensure that has been squeezed over the years and dairy farmers the Bill does not contain a provision for maintaining are receiving less than they should receive from the minimum prices. I commend the Minister for industry. ensuring, for the present, the continuation of minimum prices. If minimum prices were reduced The milk processing industry has been squeezed out. before agreement was reached between distributors When I joined the industry there were 24 processors; and processors the milk distribution industry would now there are 12. Why? The sector that should have be devastated. The removal of the maximum price been given the opportunity to make enough money will cause problems in the dairying areas of Victoria from milk has not been allowed to do so. It has because the VDIA has advised that once the Bill DAIRY INDUSTRY BILL
Thursday, 7 May 1992 ASSEMBLY 1349
becomes law the authority will remove assistance minimum price is removed and supermarkets are currently provided to companies like Sandhurst allowed to squeeze local milk distributors out of Dairies Ltd and Associated Dairies Ltd for the rural markets. cartage of milk to Mildura and East Gippsland. The review of liquid milk products in 12 months will In the near future the honourable member for give the industry the opportunity to reach an Mildura will have to pay up to 10 cents a litre more agreement guaranteeing the continued operations of for milk in Mildura because the only way processors milk distributors in rural areas. The decision by the will be able to recover their cartage costs after the Victorian Dairy Industry Authority to award a milk removal of the cartage assistance will be to increase distributors licence to a Wycheproof supermarket the retail price. In the end the consumer will pay. has caused a great deal of heartache throughout the local milk distribution area. Under the current In areas that are a long way from milk processing system all supermarkets have applied for plants the retail price of milk will increase greatly. distributors licences - and there is little that the That is bad for consumers in far-flung areas of VDIA can do about it. Unless an industry agreement Victoria. If the minimum price is removed, can be reached the removal of the minimum price supermarkets will squeeze milk distributors out of will have serious ramifications for local distributors. the market - as the Minister well knows. On a The supermarkets are waiting for the chance to put recent visit to the United States of America I saw the screws on the milk distribution sector. That will first-hand the extent to which that can happen. I result in the demise of milk distributors throughout visited one of the Bestever dairies in Anderson, the State - unless we do something about it. Indiana. While watching truckloads of milk being shipped out to a supermarket chain, I said to the I see no reason why the Prices Commissioner should president of the company, Mr Lowell Hardacre, '1 be involved in the setting of liquid milk prices. As wish we could move milk like that in Victoria". But constituted by the Minister the VDlA already has the he told me that he was losing money on every ability to set prices of liquid milk products. The truckload that left the dairy. He said that in order to Prices Commissioner is interested only in ensuring continue supplying the chain of supermarkets he that milk is priced as low as possible. He is not had to supply loss leaders four times a year - and concerned whether distributors or processors are in those circumstances the rest of the year's profits squeezed out of business. If this situation is allowed go out the window. to continue all processing will be done by one large company. What will happen to the industry if that If the minimum price is removed what will happen occurs? to milk distributors in places like Kyabram? If the milk processors deal directly with the supermarkets, A review of the industry must be held within 12 the local distributor will be forced out of business months to ensure that orderly marketing continues because he will not be able to meet the supermarket and that appropriate agreements exist between the price and will be unable to supply the corner stores processors and the distributors. with fresh milk. They will have only UHT milk to sell. Only those distributors who deal with I know that the price of milk will increase in country supermarket chains will be able to stay in business; areas. Recently I went to my corner store to purchase distributors in country towns will not be able to 2 litres of milk and they cost me $1.85. Two bottles of compete. coca cola cost $2.05.
In those circumstances who will supply milk to The community does not appreciate how much it towns such as Dookie, which is 18 miles from costs the dairy farmer, the processor and the Shepparton? Who will sell the milk to distributor to put milk in the supermarket, but when Manangatang? Unless local distributors can keep the the price of milk increases there is a hue and cry, supermarket business small towns will miss out on ''Milk has gone up again!" What happens when the fresh milk supplies. People like the Deputy Leader price of coca cola increases? Nobody worries about of the National Party will not be able to buy fresh it. People go to their local supermarket and gladly milk at his corner store when he comes home to pay the extra 10 cents or 15 cents extra for a bottle of Minyip or Horsham after a heavy day in Parliament. coca cola. Why is the community so concerned when He will have only UHT milk to pour on his the price of milk increases? It should be more cornflakes every morning! I feel sorry for country concerned about keeping the dairy industry afloat so people because that is what will happen if the that money can be spent in country towns. The soft WATER (ELECTIONS) BILL
1350 ASSEMBLY Thursday, 7 May 1992 drink and aerated water industry is a rip-off; the opportunity of selling this magnificent product until comrmmity is being ripped off. 9 or 10 p.m.
The dairy industry knows exactly how much the People should be able to purchase fresh milk cost of each sector of the industry contributes to the delivered daily by a distributor in the city or in end price of milk, which is very reasonable. Victoria country towns so that the milk industry continues to has the lowest price of milk of any State in Australia thrive in the future for the benefit of the people of because the dairy industry in this State is so efficient, Victoria. as it should be. But why does the community accept a higher price for soft drinks than it does for milk, Debate adjourned on motion of Mr BILDSTIEN especially when it costs far less to produce a bottle of (Mildura). soft drink? Debate adjourned until later this day. It is time that dairy farmers, processors and distributors received a fair price for what they WATER (ELECTIONS) BILL contribute to the industry because they work extremely hard and invest so much of their Message from Council relating to amendments hard-eamed capital to ensure the industry remains considered. viable. Council's amendments: The United Dairyfarmers of Victoria is concerned 1. Clause 5, page 3, lines 4 to 6, omit paragraphs (m) and that dairy factories are not burdened with the extra (n). cost of providing security for the money they hold on behalf of dairy farmers. Factories receive money 2. Clause 5, page 3, line 7, omit "(0)" and insert "(m)". from the Victorian Dairy Industry Authority (VOlA) 3. Clause 5, page 3, line 11, omit "(p)" and insert "(n)". on the 15th day of the month and that money is paid out immediately. Dairy factories are only 4. Clause 5, page 3, line 14, omit "(q)" and insert "(0)". intermediaries that pass on the money to farmers. Mr CRABB (Minister for Water Resources) - I The VOIA should be responsible for ensuring the move: security of the money that is forwarded to dairy farmers. That amendment No. 1 be disagreed with but the following amendment be made in the Bill: The Bill proposes that the marketing functions of the VOIA be separated and that the selection committee Clause 5, page 3, after line 24, insert - comprise representatives nominated by the UDV, "() Regulations made under sub-section 7 must the Milk Processors Association of Victoria Inc. and not provide for election by the the Victorian Dairy Products Association. I look quota-preferential or any other method of forward to the implementation of this composition proportional representation.". of the committee. The government's treatment of the Council's The committee should truly represent industry amendments is the result of advice received from the interests and have the concerns of dairy farmers and Deputy Chief Parliamentary Counsel on the effect of the industry at heart. It will assist in improving the amendments made in another place to the Bill and marketing structure of the VOIA so that it is able to from discussions held between the government and face the problems that will occur in the next century opposition. and assist in increasing the consumption of milk. The intention is to reinstate provisiOns enabling Whatever happens in the Bill we must ensure that Governor in Council to make a regulation to cover, every Victorian has the opportunity of buying this firstly, the counting of votes and, secondly, the magic product at his or her local corner store or method of determining the result of an election held supermarket. It must be available as a fresh product by a water authority. in the corner stores so that people can buy it long after supermarkets have closed. Supermarkets do The Deputy Chief Parliamentary Counsel has not care about people after midday or 1 p.m. on advised that, if the Assembly amendment is not Saturday, so corner stores should have the made, a court would read significance into the omission of those paragraphs and, given the nature POLICE (INDUSTRIAL FUNCTIONS) BILL
Thursday, 7 May 1992 ASSEMBLY 1351 of the regulations, it is desirable to mention Motion agreed to. expressly those matters in the regulation-making power. Both the government and the opposition Ordered to be returned to Council with message endorse the views of the Deputy Chief intimating decision of House. Parliamentary Counsel on that point. POLICE (INDUSTRIAL FUNCTIONS) The second aspect of the motion deals with an BILL amendment relating to the power to make a regulation on proportional representation. The effect Message from Council relating to amendments of the motion is to agree with the Legislative considered. Council's intention to delete those provisions from the Bill. Council's amendments: 1. Clause 1, page 2, lines 1 to 5, omit paragraphs (d) I should say that we are doing so only in the and (e). interests of expediting the passage of the Bill. It is the government's wish that water authorities be 2. Clause 20, omit this clause. given as much autonomy and flexibility as possible 3. Clause 21, omit this clause. so that they can adopt other methods for counting votes at elections. The effect of the amendment will 4. Clause 22, omit this clause. be to limit choices that may be made by authorities. 5. Clause 24, omit this clause. The government would have preferred to accede to the wish of the Victoria Authorities Association of 6. Clause 25, omit this clause. Victoria which states: 7. Clause 26, lines 6 to 14, omit sub-clause (1).
The association is finnly of the opinion that authorities 8. Clause 26, line 15, omit "(2)". should be able to adopt the proportional representation 9. Clause 26, lines 18 to 22, omit sub-clause (3). system of voting if they choose to do so. 10. Clause 27, omit this clause. I am not aware of any water authorities that would 11. Clause 28, omit this clause. be about to leap into proportional representation, so perhaps that argument is academic. Mr POPE (Minister for Labour) - I move:
However, from discussions held with the opposition That the amendments be agreed to. it is clear that the Bill will not proceed in another place other than by the government's accepting the Mr GUDE (Hawthorn) - Is the Minister amendment. prepared to explain to the House what --
Mr COLEMAN (Syndal) - This situation arises Mr Pope - They are your amendments. from actions taken in this House and in the other place that had the effect of denying the opportunity Mr GUDE - They are ours? for water authorities to conduct elections and to have counts occur. Mr Pope - They are --
Discussions have occurred since the Bill passed The SPEAKER - Order! The Deputy Leader of through this place which have lead to the solution the Opposition has the floor. now proposed by the Minister. It has the support of the opposition and, accordingly, I support his Mr GUDE - I understand there is now some motion. urgency, but I seek clarification. If it is, as the Minister said in his interjection, the case that the Motion agreed to. amendments were made by the opposition in the other place, we are happy to agree to the motion. Mr CRABB (Minister for Water Resources) - I move: Mr POPE (Minister for Labour) - The amendments were moved by the coalition in the That amendments Nos 2 to 4 be disagreed with. Legislative Council. They removed all provisions apart from the provision relating to the police, and LAND (CROWN GRANTS AND RESERVES) BILL
1352 ASSEMBLY Thursday, 7 May 1992 such provisions will now come under the To overcome the doubts raised by the Supreme jurisdiction of the Industrial Relations Commission Court judgment, the Bill makes amendments to (IRC) of Victoria. That matter has been discussed section 8 of the Crown Land (Reserves) Act 1978 and and negotiated with all the parties, including the inserts a new section in the Land Act 1958. opposition, the Police Association and the Police Force. Section 8 of the Crown Land (Reserves) Act 1978 is amended to provide that Crown land that is All other matters relating to the Industrial Relations permanently or temporarily reserved cannot be sold, Act were removed in the amendments of the Council leased or licensed unless an Act or law is passed that and, as such, we now have an agreement by all makes specific reference to the revocation of the parties, including the political parties, that the police reservation in respect of the particular reserved land will come under the jurisdiction of the Victorian IRe. or refers to Crown land or reserved land tha t includes the particular land or refers generally to Motion agreed to. Crown land or reserved land.
LAND (CROWN GRANTS AND A new section is inserted in the Land Act 1958 to RESERVES) BILL provide that any condition of a Crown grant which allows the alienation of land, if authorised by some Second reading act or law, cannot be construed to allow for the alienation, and hence sale, of the land unless the Act Mr HARROWFIELD (Minister for Finance) - I or law that authorises the alienation of land makes move: specific reference to the land or refers to Crown land or reserved land that includes the particular land or That this Bill be now read a second time. refers generally to Crown land or reserved land.
The purpose of this Bill is to clarify the The Bill provides for commencement on 9 April circumstances in which reserved Crown land or 1992. This was the day after the Supreme Court reserved land over which a Crown grant has been decision created the doubt about the protection of issued, can be sold, leased or licensed. permanently reserved land that is the subject of a Crown grant. This is required to ensure that the This issue has recently been thrown into doubt by a Crown's interest in such land is protected from the judgment in the Supreme Court in relation to an area time when any doubt about the protection of of land at Barkly Avenue and Burnley Street, reserved land became apparent. Richmond, permanently reserved for abattoirs and general municipal purposes. A Crown grant of this The Bill will ensure that on behalf of the people of land was issued to the City of Richmond. The grant Victoria the government maintains an interest in contains conditions that restrict the use of land to the reserved Crown land regardless of whether it is the purposes of the reservation and prohibit the sale of subject of a Crown grant. the land unless authorised by a law enacted after the date of the grant. This Bill also reinforces the long-accepted principle that any decisions to revoke any permanently The substance of the Supreme Court decision is that reserved Crown land and to sell such land properly the general power in section 236 of the Local rest with this Parliament, not with those entrusted Government Act 1958, which enables a municipal with a grant of land for a particular purpose. council to sell land, constitutes a law made after the grant was issued, and that this provides sufficient I commend the Bill to the House. authority for a municipal council to sell land that is the subject of a Crown grant, even though it is Debate adjourned on motion of pennanently reserved. Mr HONEYWOOD (Warrandyte).
The provisions in section 8 of the Crown Land Debate adjourned until Thursday, 21 May. (Reserves) Act 1978 have always been regarded as preventing the sale, leasing and licensing of reserved land unless there is an act or law that allows the same by specifically identifying the land or class of land that may be sold, leased or licensed. NATIONAL PARKS (WILDERNESS) BILL
Thursday, 7 May 1992 ASSEMBLY 1353
NATIONAL PARKS (WILDERNESS) agencies should undertake comprehensive reviews, BILL such as those undertaken by the Land Conservation Council of Victoria, of public land to determine all Second reading areas of wilderness quality, and that protection should be afforded these areas under State and Territory Mr HARROWFIELD (Minister for Finance) - I legislation. move: After considering the LCC recommendations, the That this Bill be now read a second time. government has accepted the vast majority of them. However, as is any government's right, it has made The Bill amends the National Parks Act 1975 to: some small variations. establish a system of wilderness parks and wilderness zones in Victoria, including the creation WILDERNESS PARKS AND WILDERNESS ZONES of a new wilderness park and amendments to the two existing wilderness parks; extend two existing The wilderness parks and wilderness zones national parks; make specific provision for the proposed in the Bill reflect the diversity of Victoria's protection of remote and natural areas within natural areas: the semi-arid dunefields of the Mallee, existing national parks; and make several other the escarpments and ranges of the Alps, the forests amendments. and gorges of East Gippsland, and the coast. In total, the existing and proposed wilderness parks and Consequential amendments are also made to other wilderness zones cover less than 4 per cent of the Acts. State. Some 65 per cent of this area is located in the virtually Wltracked dWlefields of the Mallee. About The Bill is based on the government's clear policy 90 per cent of the area covered by the existing and commitments to preserve the State's remaining areas proposed wilderness parks and wilderness zones of high wilderness quality and to identify and already lies within existing national and wilderness protect wilderness areas. That policy acknowledges parks. Overall, the impact of those proposed that areas with high wilderness value need to be wilderness parks and zones on existing uses is specifically recognised, protected and appropriately minimal. managed to ensure that their wilderness quality is not diminished over time. The dramatic changes that The wilderness zones will be Significant features of have occurred to Victoria's natural landscape in only some of the State's great national parks: ISO years or so reinforce the need to take specific Murray-Sunset, Wyperfeld, Alpine, Snowy River, action to protect remaining areas of high wilderness Coopracambra, Croajingolong and Wilson's quality to ensure that they are still Significant Promontory. Because of the size of the parks system, features of the State in ISO years. there is ample scope for a great variety of recreational opportunities within that system. Those The government has taken several key steps towards opportunities will be maintained and encouraged. implementing its policy. In 1988 the government The wilderness zones will add to the diversity of requested the Land Conservation COWlcil (LCC) to recreational settings available for visitors to the carry out a special investigation into wilderness. In parks as well as protect areas that are in an 1989 the government introduced into Parliament the essentially Wldisturbed condition. They will ensure most comprehensive wilderness management that this and future generations will continue to be provisions of any legislation in Australia. The Bill able to Wldertake wilderness-style recreation in builds on those actions to establish a comprehensive wilderness settings. This is and will continue to be a system of wilderness parks and wilderness zones. great feature of the parks system and is an asset no longer available in many countries in the world. Victoria's actions on wilderness protection are reinforced by the views of the Resource Assessment The Bill is important for wilderness protection in a Commission, which recently noted in its forest and national as well as a Victorian context. The Big timber inquiry final report that: Desert Wilderness Park and the wilderness zones in the Mallee include the largest areas of high With increased pressures on all land tenures for many wilderness quality in south-eastern mainland different uses, areas of wilderness quality will become Australia. In the alps and East Gippsland, several increasingly rare and of increasing value. The inquiry areas complement the protection being given to considers that the appropriate State and Territory NATIONAL PARKS (WILDERNESS) BILL
1354 ASSEMBLY Thursday, 7 May 1992 wilderness values in parks and reserves across the The 20 wilderness zones to be established within border in New South Wales. national parks, along with the three wilderness parks (Big Desert, Avon and Wabba), will be The protection given to some of Australia's most managed according to the wilderness provisions of important mountain wilderness areas on both sides the National Parks (Amendment) Act passed by of the State border in the alps will enhance the Parliament in 1989 and the amendments made by Memorandum of Understanding in Relation to the the Bill. Cooperative Management of the Australian Alps National Parks signed by Ministers from Victoria, New South These amendments provide for specific uses in Wales, the Australian Capital Territory and the particular wilderness zones, including three Commonwealth. essential navigation lights in two wilderness zones, deer hunting by stalking in three wilderness zones, The Bill creates the Wabba Wilderness Park in and the continuation of grazing in several north-eastern Victoria and extends the existing Big wilderness zones in the Alpine National Park until Desert Wilderness Park. It also excises a small area various dates, none of which is earlier than the end from the existing Avon Wilderness Park, in line with of the term of the licence. the Land Conservation Council recommendation to provide for vehicle-based camp sites on the Avon The National Parks Act is amended also to state that River. The Bill establishes 20 wilderness zones operations under any permit, lease or authority within the national park system, including additions under the Petroleum Act 1958 must not be carried made by the Bill. out in a wilderness park or wilderness zone. The Petroleum Act is consequentially amended. As well as the areas recommended by the LCC, the government has decided to designate two additional REMOTE AND NATURAL AREAS wilderness zones in the Mallee: Chinaman Flat within an expanded Wyperfeld National Park, and The Land Conservation Council recommended that Mount Cowra within the existing Murray-Sunset remote and natural attributes in certain areas should National Park. The LCC recognised the essentially be protected. To assist in the long-term protection of undisturbed character of both those areas. these values, the Bill introduces appropriate management provisions and establishes a new The government has also accepted the LCC schedule of remote and natural areas. recommendation that, should timber harvesting not proceed in the upper Wongungarra River, the The schedule includes the 20 areas recommended by Wongungarra area should also be deSignated a the LCC that are located in national parks. It is wilderness area. That part of the Wongungarra area important to stress that these areas are not not already included in the Alpine National Park wilderness zones, and existing permitted will be added to the park. In all three cases, the activities - such as four-wheel driving, horse boundaries have been drawn so as to minimise riding, and grazing - will not be excluded. possible land use conflicts. In relation to the Wongungarra wilderness zone, which contains The government is including an additional area in about two years potential supply of timber for a this category, in the Alpine National Park adjacent to local sawmill, the government is satisfied that the Cobberas wilderness zone. The remote and commitments to the timber industry can be met natural values of the Suggan Buggan area are highly from the East Kiewa area and from the possible valued by many park visitors, including horse earlier harvesting of regrowth. The decision to riders, four-wheel drivers and bushwalkers, and protect the Wongungarra area as a wilderness zone deserve to be spa.;fically recognised and protected. will have no impact on jobs in the timber industry. Existing permitted uses will not be excluded.
It is important to stress that the addition of three CONCLUSION wilderness zones is not a major departure from the LCC's recommendations. In all three cases, the LCC With the passage of the Bill, Victoria will be the first acknowledged their wilderness value. The State in Australia to have addressed in a systematic government's view is that the particular areas are manner the pressing issue of wilderness protection, worthy of protection as wilderness. and to have established a comprehensive, Statewide system of wilderness parks and wilderness zones. In doing so, Parliament will be making an historic WATER (RURAL WATER CORPORATION) BILL
Thursday, 7 May 1992 ASSEMBLY 1355 statement about the value that this community apiarists, branches of the Victorian Fanners places on protecting some significant parts of the Federation and all groups that will be affected. State in an essentially undisturbed condition. They will require time not only to read and digest Last century, the American philosopher Thoreau the legislation but also to respond with their written wrote that "in wildness is the preservation of the and verbal comments to me as the local member. world". The Bill, with the support of Parliament, will Then peak organisations will need to be consulted make a significant contribution to ensuring that and the matter will require discussion in the wildness is preserved in this State. confines of the party room.
I commend the Bill to the House. I do not see any need for the Bill to be rushed through at the tail end of this sessional period. If the Debate adjourned on motion of opposition requires additional time and the Bill Mr HONEYWOOD (Warrandyte). needs to be held over until the next sessional period that should be the case. For the Minister to try to Mr HARROWFIELD (Minister for Finance) - I push through a Bill as important as this during the move: dying days of the sessional period is totally unacceptable. We want a clear understanding from That the debate be adjourned for two weeks. the Minister that if two weeks are insufficient and we require more time we will get more time. Mr HONEYWOOD (Warrandyte) - On the question of time, on any criterion this is a major Motion agreed to and debate adjourned until piece of legislation. It will involve representations Thursday, 21 May. from conservation groups, four-wheel drive groups and other interested groups such as deer hunters. WATER (RURAL WATER The opposition is concerned about the time frame CORPORATION) BILL and it wants some flexibility on the matter of time for debate on the Bill. Second reading
Mr HARROWFIELD (Minister for Finance) (By Mr CRABB (Minister for Water Resources) - I leave) - The matters in the Bill have been the subject move: of extensive and wide-ranging consultation through the Land Conservation Council process. However, I That this Bill be now read a second time. hear the points made by the opposition, and if additional time is required we will certainly be The Bill implements an earlier commitment made by prepared to consider it. the government to undertake a major shake-up of Victoria's rural water services, and follows the Mr BILDSTIEN (Mildura) - I support the receipt of recommendations of an independent comments made by the honourable member for review chaired by Mr Stuart McDonald, Warrandyte. Although I hear what the Minister has Chairperson of the Rural Finance Corporation and a said about the consultation process that has already fonner Federal President of the National Party. taken place, we have heard that from Ministers before in this place. It has been my experience, and The changes involve the replacement of the Rural that of other members on this side of the House, that Water Commission of Victoria by a new corporation the first many interest groups know about to be known as the Rural Water Corporation. The legislation of this kind, which affects them, is when new corporation will consist of: a small corporate they get copies of the Bill from their local opposition centre with a board of directors; five regional members of Parliament. management boards also having a board of directors to manage the rural water services now delivered by Mr Cooper - Hear, hear! the Rural Water Commission; and service companies providing technical, management and other services Mr BILDSTIEN - The legislation affects large to the corporation, the regional management boards sections of my electorate and I want to ensure that and to the water sector on a commercial, adequate time is available to provide copies of the fee-for-service basis. Bill and the Minister's second-reading speech to local municipalities, four-wheel drive clubs, WATER (RURAL WATER CORPORATION) BILL
1356 ASSEMBLY Thursday, 7 May 1992
The new corporation will have improved customer Public consultation was carried out in two rounds. service as its primary focus, and its creation is The first was conducted in July and August 1991 and consistent with the government's vision for the brought the McDonald steering committee into water industry. The changes do not affect the contact with more than 1000 water users, staff and functions of any other water authority, river other interested people at more than 100 public management board or Melbourne Water. meetings. Some 175 written submissions were also received. The Bill also makes some small but important changes to the Water Act to require some water As a result of the first round of consultations, a authorities to pay for their bulk water supplies for series of options was developed and published in the first time and, secondly, to streamline the late October 1991 as an options paper. The options process for registering agreements under paper was discussed in a second round of community salinity and drainage schemes. consultations undertaken in November 1991, involving seven public meetings and eight regional THE McOONALD REVIEW workshops. The workshops were attended by representatives of the Victorian Farmers Federation In April 1991 the Premier announced that a review (VFF), the United Dairyfarmers of Victoria, the of the Rural Water Commission's future Australian Dried Fruits Association, regional management arrangements would be undertaken. advisory committees of the commission, commission The announcement followed widespread concern staff, municipal councils, water boards and river expressed by the Victorian Farmers Federation and management boards. A total of 65 written other irrigator groups into the efficiency and submissions were also received. effectiveness of a range of rural water services during the current recession in rural industries. The In January 1992, the McDonald steering committee review was managed by a steering committee submitted its final report to me. Some 3000 copies of chaired by Mr Stuart McDonald comprising: the committee's report were distributed to Mr Peter Bertolus of the Trades Hall Council; commission staff, irrigator bodies, the VFF and all Mr Don McGauchie of the Victorian Farmers members of this Parliament. Federation; Mr Don Swan, Chief Executive Officer, Smorgan ARC; and Mr David Dole, Director, I would like to place on record the government's Operations, Rural Water Commission. appreciation of the work done by all these people in attending meetings, workshops or writing In summary, the terms of reference of the McDonald submissions. Their involvement and commitment steering committee were to: has assisted the steering committee in developing sound options for government to consider. 1. Develop a range of management options to improve the effectiveness and efficiency of The government and the rural water industry owes a rural water systems both at local and regional great deal to Stuart McDonald in particular for levels; and leading the review and developing such a broad 2. Assess the feasibility of the options developed consensus on the major changes now being above and to recommend a preferred option. implemented. I put on record the government's appreciation of the FINDINGS OF THE McOONALD STEERING work of all members of the steering committee, as it COMMITTEE REPORT has provided the government with a blueprint to ensure the long-term financial viability of rural The McDonald review found that the Rural Water water services, improved services and more effective Commission is an effective and reliable supplier of local decision making. water to rural Victoria. However, the committee also found that in 1990-91 the commission had a shortfall The McDonald review undertook a comprehensive of $45 million and that consequently customers are examination of the commission's structure, not meeting the full cost of services provided and operations and procedures, requiring an extensive the water supply system is running down. public consultation program covering commission staff, customers, representative bodies and interest The McDonald review suggested that the only groups, government deparbnents and regional realistic options to be considered in the pursuit of water authorities. commercial viability are: cost savings through WATER (RURAL WATER CORPORATION) BILL
Thursday, 7 May 1992 ASSEMBLY 1357 organisational and work place restructuring; real management, management of the environment and revenue increases for new and existing consumers of law. rural water services; and continued government subsidy of rural water services until the turn of the Clause 12 of the new schedule states that the role of century. the board of the corporation is to:
The review also made a number of (a) decide the strategies and policies to be followed by recommendations to ensure that rural water service the corporation; and providers are more directly accountable to their customers. (b) ensure that the corporation performs its functions and exercises its powers in a proper, efficient and The question of the Rural Water Commission's economical manner and in a manner consistent with existing debt, which was raised in the review, will be sound commercial practice. addressed as part of the 1992-93 Budget deliberations and the formulation of the The board of the new corporation will be required to corporation's overall performance contract. develop a rolling, three-year business plan for the corporation and its regional management boards, The Bill is consistent with the recommendations of and determine funding and financial arrangements the McDonald review and the steering committee's for functions performed by the regional recommendation that the changes be implemented management boards. as quickly as practicable. If fact, in adopting the findings of the review, the government has decided The corporation will also coordinate the to accelerate their implementation by at least 12 construction, operation and maintenance of water months. I will now turn to the main features of the systems managed by the regional management new corporation and its regional management boards, and establish the framework for human boards. resources and industrial relations policies for the corporation. CREA nON OF THE NEW RURAL WATER CORPORA nON The corporation will also play an important role in assisting the Department of Water Resources in Clause 4 of the Bill inserts a new Schedule 3 to the implementing the new bulk entitlement system Water Act to provide for the creation of a new created under the Water Act. authority to be known as the Rural Water Corporation, and the abolition of the Rural Water REGIONAL MANAGEMENT BOARDS Commission. The McDonald committee recommended that the The corporation will comprise a board of operational powers and functions of the corporation management of up to seven directors. Up to six be devolved to six reconfigured regions each with its directors will be appointed by the Minister on the own board of management. My decision on the basis of their skills, expertise and experience of creation of the new Coliban Region Water Authority matters relevant to the functions of the corporation. means that the new corporation will have only five The managing director is to be appointed by the regional management boards. Those boards will board of management itself. manage and operate both the district-based and other non-district or Statewide functions of the An important key to the success of the new Rural corporation. Water Corporation will be the appointment of the board of directors. The new board will have a high A regional management board managing an level of commercial and professional competence irrigation district of the corporation, such as the and provide the necessary long-term and strategic Goulburn-Murray Irrigation District, will have the outlook required to meet the corporation's needs. following functions delegated to it: the provision, management and operation of systems for the Directors will not represent regional or sectional supply of water for irrigation and the drainage and interests. The Bill specifies that the qualifications of protection of those irrigated lands; the identification directors may include the business of the and planning of irrigator and community needs in corporation, public finance or economics, relation to irrigation, drainage and salinity engineering, business management, water resource mitigation; the development and implementation of WATER (RURAL WATER CORPORATION) BILL
1358 ASSEMBLY Thursday, 7 May 1992 programs for improved irrigation, drainage and prices to be charged for services; standards of salinity mitigation practice; and the investigation maintenance for infrastructure; organisational and research of any matter related to its delegated structures; human resources practices; and industrial functions. relations practices.
A regional management board managing any water The regional management board will negotiate with district of the corporation, such as the the corporation on the funding and financial Wimmera-Mallee system, will have the following arrangements for water services in the regions. functions delegated to it: the provision, management operation and protection of water supply systems, Finally, the regional management board will including the collection, storage, treatment, transfer establish the terms of appointment for, appoint, and distribution of water; the identification and review the performance of and, if necessary, dismiss planning of user and community needs relating to the regional general manager. water supply; the development and implementation of programs for the conservation and efficient use of All those and any other delega ted powers and water; and the investigation, promotion and conduct functions will be performed in accordance with any of research into any matter related to its delegated conditions or limitations placed on the regional functions. management board by the corporation via the business plan, performance contract or instrument of Regional management boards will also have delegation. delegated functions of the corporation outside constituted districts to carry out the Statewide I make it clear that the regional management boards functions of water supply, drainage, salinity are accountable to the corporation for the efficient mitigation, waterway management, flood mitigation and effective delivery of their delegated functions or flood protection, and act as delegates of the and for their overall performance. Each regional Minister in the administration of surface water and management board will be obliged to prepare an ground water licences and related functions. annual performance contract and business plan and may set tariffs only within an agreed business plan The Bill provides that each regional management approved by the corporation. Together they will board shall consist of up to eight directors - a form the framework within which the board will chairperson; a deputy chairperson; the regional operate and on which its performance will be general manager; and not more than five other judged. The corporation may require the regional directors. management board to vary a business plan if required. All directors of the regional management board except the regional general manager are to be In line with the recommendations of the McDonald appointed by the Minister. Again the Minister will review, it is anticipated that the corporation's be required to appoint directors on the basis of their regional management boards will become skills and expertise in a similar way to the board of financially independent and fully accountable to the the corporation. The regional general manager will needs of rural water users, particularly irrigators. be appointed by the directors of the regional management board. More of the planning, coordination and priority-setting activities associated with the The regional management boards will also be given delivery of rural water services will devolve from all the necessary powers, authorities and discretions the centre to the regions. The timing and sequence of of the corporation to ensure that the systems under that devolution of power cannot be accurately their control are properly managed. Included among predicted and will depend upon factors such as those delegated powers will be the power to fix financial viability and the willingness and capacity tariffs and other charges for irrigation water of locally managed boards to take up increased supplied and other services provided. responsibilities.
Within agreed business plans and performance TRANSFER OF EMPLOYEES contracts, the regional management boards will have the delegated powers to prepare or determine: All officers and employees of the commission will financial and operational plans; operating and not be employed under the Public Service Act after capital budgets; levels of service to be provided; this Bill comes into effect. Reforms to workplace WATER (RURAL WATER CORPORATION) BILL
Thursday, 7 May 1992 ASSEMBLY 1359
practice and culture were seen as a major plank in also assist in enhancing the revenue stream of the the overall drive to improve the productivity and new regional management boards, thereby ensuring efficiency of the new corporation by the McDonald that they are viable and financially independent. report. REGISTRATION OF ACCESS AGREEMENTS AND Clause 20 of the Bill makes clear that the terms and COMMUNITY DRAINAGE AGREEMENTS conditions of employment of people transferred must not be less favourable than those applying to A small number of technical amendments to the them immediately before transfer to the new Water Act have been made to simplify the process of corporation. In addition, any officer transferred will the registration of the agreements between also have a right to return to the Victorian Public neighbouring landholders concerning access for Service as provided already in the Water Act. water supply, salinity and drainage purposes. These amendments will mean that for the registration to be FIRST MILDURA IRRIGATION TRUST AND valid the registration of any agreement made under OTHER WATER AlITHORITIES NOT AFFECTED a community drainage scheme or any other access agreement is made not to the duplicate property The creation of the Rural Water Corporation and the title - held by an owner or mortgagor - but only to five regional management boards does not affect the the original title held by the Titles Office for the functions and responsibilities of the First Mildura registration to be valid. Irrigation Trust or any other Victorian water or river management authority, including Melbourne Water. JURISDICTION OF THE SUPREME COURT
BULK WATER CHARGES Cia use 9 of the Bill alters or varies section 85 of the Constitution Act 1975 to the extent necessary to The McDonald report identifies 33 urban authorities prevent the bringing before the Supreme Court of a which extract water from waterways secured and proceeding to impose on the corporation or any regulated by works and storages managed by the director or officer of the corporation or any director Rural Water Commission but which do not of a regional management board certain liabilities contribute to the costs of operating such works and under sections 90 and 166 of the Water Act. Such a storages. Those water authorities are not paying provision is needed to ensure that the existing their fair share towards the cost of operating the statutory protection afforded to the Rural Water storages. The amendment avoids a situation that Commission and its members and officers is could occur when the next major drought strikes - continued for the corporation and its directors and a "money-paying" irrigator could be restricted in the officers. In so doing, this clause means that the amount of water used while the nearby town corporation and its directors and officers and any continues to pump its water for nothing. Everybody director of a regional management board are given should pay their fair share of the costs. the same statutory protection in exerCising powers and functions under the Water Act that is afforded Earlier in 1990-91 as part of the State Budget, the to all other authorities and their members and government decided that certain fees should be officers. In short, clause 9 preserves the status quo. imposed. The Rural Water Commission attempted to implement the charges but was not able to do so CONCLUDING COMMENTS as a legal opinion suggested that such a fee may be invalid. In order that all the authorities are required The past decade has seen major changes to Victoria's to pay for water they receive, it is appropriate that a water industry. Entering the 1980s, management number of technical but important amendments are was highly fragmented - there were almost 500 made to the Water Act. bodies, ranging from billion-dollar enterprises to small, non-viable authorities best suited to the Any revenue from the imposition of such fees will horse-and-buggy days. There was little go to the new regional management boards and not accountability, poor use of financial resources, and a to the Consolidated Fund. This will be consistent wide variation in the standard of service. with revenue received from all other sources by other authorities. This measure will result in all The government has achieved much in the past water users in areas such as northern Victoria being decade in water management: a more cohesive and treated equitably and will ensure that revenue from less fragmented industry; better accountability; and this initiative remains in the region collected. It will continued progress towards improved water ADJOURNMENT
1360 ASSEMBLY Thursday, 7 May 1992 quality. Yet much needs to be done. Ultimately, the Productive Culture Australia State needs authorities that are commercially viable, adopt catchment management principles, deliver Mr PERTON (Doncaster) - I ask the Minister for good services, and are fully accountable to their Tourism to direct to the attention of the Minister for communities and this Parliament. Consumer Affairs in the other place an instance of possible election pork-barrelling by the Labor Today the focus for attention is the Rural Water government and the allocation of taxpayers' funds to Commission. The Bill will provide it with a mates of the Labor Party. commercial orientation and, most importantly, provide its customers with more efficient service in Yesterday I received documents under the Freedom future. of Information Act that show that the government has engaged the consultants Productive Culture I commend the Bill to the House. Australia to prepare a strategy "to investigate the feasibility of a particular strategy to fast track the Debate adjourned on motion of Mr COLEMAN developments of ethnic chambers of commerce to (Syndal). enhance government service delivery to ethnic communities" at a cost of $24 905. Strangely enough Mr CRABB (Minister for Water Resources) - I I have been denied access to the final report move: prepared by the consultants.
That the debate be adjourned until Thursday, 21 May. The tender documents reveal that the purpose of the tender is the implementation of the government Mr COLEMAN (Syndal) - On the question of strategy as set out in the Victoria Big Opportunities for time, Mr Speaker, the Bill is a complicated measure Small Business booklet of October 1987. In referring that has been introduced as a result of the significant to ethnic affairs, the booklet states at page 31: work done by the chairman of the steering committee, Stuart McDonald. Because it is likely that The SBOC has therefore expanded its programs for only two sitting weeks remain there may not be ethnic small business operators in order to improve enough time for the Bill to be passed by Parliament their access to the mainstream government programs. before the end of the sessional period. The corporation has recently released a range of material printed in several languages and, together Given the breadth of the matters in the Bill and the with the Department of Labour, is investigating the strength of feeling expressed in various sections of training needs of ethnic entrepreneurs. the community about its implications, I ask the Minister to give an undertaking that if required In May 1991 the then Treasurer, now the Minister for additional time will be made available for Education, Post-Secondary Education and Training, consultation. revealed that although two officers were employed in ethnic small business programs and the Mr CRABB (Minister for Water Resources) (By consultants, Productive Culture Australia, had leave) - The government has every intention of already received $14 600 for implementing the having the Bill passed by Parliament this session. I programs, there were: no records detailing the shall be more than happy to provide the opposition names of ethnic people who received assistance; no with whatever assistance it needs by way of means to identify the economic advantage to ethnic briefings and consultations as required during the communities from the program; and no firms that intervening fortnight. had received grants of assistance since 1988.
Motion agreed to and debate adjourned until It is appalling that for five years the government has Thursday, 21 May. done nothing for ethnic entrepreneurs and business people. The government, in its death throes, is ADJOURNMENT attempting to do two things: firstly, it is engaging a firm of Labor mates for $25 000 when they have Mr ROPER (Minister for Employment, already received $14 600 - rorting the system - to Post-Secondary Education and Training) - I move: prepare a strategy for fast tracking the development of the program. Why does the community need to That the House do now adjourn. fast track this program in May 1992? There is only one reason - an election is coming. ADJOURNMENT
Thursday, 7 May 1992 ASSEMBLY 1361
Ethnic chambers of commerce are already operating living in country areas. People living in the successfully because they were started by business metropoli tan area can use the public transport people for business people and without the system around Melbourne at any time, whereas the interference of government. Who will receive the people in country Victoria who need to use V/Line grants for the new ethnic chambers of commerce? to move from country areas to Melbourne and back The only conclusion one can draw from the timing again are restricted to specific days of the week and of the grants is that it is yet another corrupt misuse specific trains and often discounts are not available of taxpayers' money. It is an allocation of funds to to them. Labor Party mates to help the government further the Australian Labor Party's election strategy. Not Additionally, in other areas an extended range of only that, it is a blatant pork-barrelling exercise discounts is available through private enterprise for because it improperly promises funding allocations metropolitan Melbourne that is not available in the to ethnic communities associated with this corrupt country. I know it is up to private enterprise to government to further its election strategy. provide those discounts but when an organisation has branches throughout Victoria it should provide Ethnic communities know the Liberal Party is a the same discounts to country people purchasing better choice for business. The Australian Labor articles as city people receive. Party can promise only a continuation of the shambles, lies and deceit of the past 10 years. The government has advertised the availability of a Seniors Card to all people living in Victoria. The I call upon the Minister to table the final report and government should make that card available to all the plans of his department and to make a promise people in the State and any difference in the to this place and the Legislative Council that the availability of assistance being provided should be grants and the program, which has delivered investigated and brought into line. nothing to ethnic communities in the past, will not be used for blatant engineering of misuse of I ask the Minister for Employment, Post-Secondary taxpayers' funds or for misleading ethnic Education and Training, who is at the table, to take communities, as the Labor Party has tried to do time up this issue with the Premier so that people in and again in both Federal and State election country areas can receive the full benefits provided campaigns. by the Seniors Card.
Seniors Card Pecuniary interests of councillor
Mc JASPER (Murray Valley) - In the absence of Mr THOMSON (Pascoe Vale) - I ask the the Premier, I direct the attention of the Minister for Minister for Employment, Post-Secondary Education Employment, Post-Secondary Education and and Training, who is at the table, to direct to the Training to the operation of the Seniors Card. attention of the Minister for Ethnic, Municipal and Honourable members are aware that a practice has Community Affairs, section 77 of the Local developed within Victoria and in other States of Government Act, which refers to councillors and providing assistance to people over 60 years of age. members of council committees not being allowed to make improper use of any information acquired as a The Seniors Card is designed to provide special councillor to directly or indirectly gain a pecuniary assistance to people over the age of 60 years, but advantage. assistance is automatically given to people who are recipients of social security pensions. However, I I ask the Minister to investigate whether that section have received extensive representations from people of the Act has been breached by Cr Peter Hadley as in my electorate who have applied for the Seniors part of a corrupt conspiracy by Coburg independent Card and who are concerned with the lack of councillors which resulted in $10 000 of Coburg assistance provided for people living in country ratepayers' money being paid to one of their own - Victoria. I understand it is a developing system, but Cr Peter Hadley. The money was paid to him to the services that are available to people over 60 settle a private debt which was owed to him by a years of age in metropolitan Melbourne should also former council employee, Bill Barratt. be available to country people. The Minister should understand that, in the first For instance, in the public transport system there is a place, Mc Barratt was not entitled to this money limitation on the availability of assistance for people from council and his claim for overtime was bogus. ADJOURNMENT
1362 ASSEMBLY Thursday, 7 May 1992
Secondly, Cr Hadley made improper use of his blatant pay-out by the council to one of its mates. position as a councillor to get ahead of the long The matter requires urgent investigation by the queue of Mr Barratt's creditors and get his hands on Minister. the money first. Prosecution of Mr McArdle As evidence that Mr Barratt was not eligible for this overtime I quote from the report of the Chief Mr E. R. SMITH (Glen Waverley) - My concern Executive Officer of 1 July 1991: is addressed to the Attorney-General and relates to the McArdle matter. During the recent grievance It is important for councillors to be fully aware that no debate in this place the Attorney-General spoke overtime was ever authorised or approved, as required about allegations against McArdle not being by the relevant award; moreover, no claims for sustained mainly because the Attorney-General overtime were made in accordance with the normal himself has prevented evidence from being heard on practice of submitting time sheets, setting out the actual the charges against McArdle. He instructed his hours worked within the appropriate pay period. prosecutor to offer no evidence against McArdle in the County Court trial. Evidence in a Federal Court hearing on this matter appeared to have been prepared all at the one time What a wonderful way to suppress evidence - a and after the event. Many of the times allegedly kangaroo court, a Star Chamber behind closed worked were when Mr Barratt was on either sick doors! This is the normal approach of the leave or annual leave. The chief executive officer Attorney-General, who, in his bullying way -- (CEO) further states in his memorandum: The SPEAKER - Order! The honourable No satisfactory explanation was given at the hearing as member's comments appear to be clearly in breach to how Mr Barratt could both work and be sick, at the of Standing Order No. 108, but in addition, I direct same time. his attention to the general provision applying to the debate on the motion for the adjournment of the Many officers of the council work substantial unpaid sitting, that is, that the matter should be of recent hours and if Mr Barratt's claim for unauthorised and occurrence. unrecorded overtime is accepted, then the way is open for claims to be made by any officer who works more I know from previous addresses to the Chair by the than the required 35 hours per week. honourable member that the general issue he seeks to raise is a longstanding one. I advise the The CEO also states that the council: honourable member that he should conduct himself in accordance with the Standing Orders and that he ... must not overlook the value of the rent-free cottage should raise only urgent matters of recent plus the fact that Mr Barratt owes council a substantial occurrence. sum of money representing unpaid rent from 1977. Mr E. R. SMITH - On the same matter, Notwithstanding all those facts, the chairman's Mr Speaker, further evidence is soon to be brought. committee of councillors Willoughby, Rawson, The matter is certainly urgent and, so far as the Cooper and Hadley recommended payment of victim is concerned, when this matter returns to the $13 000 to Mr Barratt; on 7 September Cr Geraldine public arena he will certainly regard it as current. Rawson - more recently known as the Phil Cleary baiter after polling a mere 450 votes in the Wills There was ample evidence against McArdle in 1976 Federal by-election - and Cr Lang moved that the and, as I have said, more evidence will be led. The money should be paid. Most of that money was in prosecuting counsel, Mr Morrish, based his reason fact not paid to Mr Barratt, because two gamishees for not leading evidence on what he termed an authorised by the Registrar of the Magistrates Court ''hypothesis consistent with innocence", which, in totalling $10 071 were served on the council by a turn, he based on the proposition that McArdle was judgment creditor, namely, Cr Peter Hadley. entitled to do the acts complained of because a former partner of his firm instructed him to do so. That appears to constitute a breach of section 77 and This argument is similar to that used in the even section 79 of the Local Government Act. It is holocaust trials; apparently one did as one was told one of the most disgraceful episodes I have because that was the order. experienced during my public life; there has been a ADJOURNMENT
Thursday, 7 May 1992 ASSEMBLY 1363
The case against McArdle was fully documented. It Turana Youth Training Centre is not a matter of circumstantial evidence lending itself to am Azaria Chamberlain-type defence. The Mrs RA Y (Box Hill) - I direct the attention of the real issue' of fraud has been hidden because of Minister for Community Services to the escape of discussiom about apologies and retractions made by four youths from the Turana Youth Training Centre, the ABC. He is actually speaking about apologies the high-security facility for juvenile offenders that and comments he made in at least two instances. took place on Tuesday afternoon.
In the thirrd instance he refers to a statement, not an Turana is important to the juvenile justice system in apology or retraction, contained in a confidential the State. In the course of its inquiry into mental settlememt of an action between McArdle and the disturbance and community safety, the Social ABC. It was simply a denial by the ABC that it was Development Committee received detailed evidence accusing McArdle. on the role the facility plays in the supervision and rehabilitation of young offenders who, as well as This matt-er is very serious. It is obvious the criminal records, have multiple problems that they Attorney-General thinks it is serious because he frequently exhibit and other conduct disorders such spoke about it recently during a grievance debate. as drug abuse that in many cases are related to early The Atton1ey-General further attempted to discredit childhood deprivation. the evidence by Cunningly referring to findings by judges that there is not "a tittle of evidence". It must I make this point so that it is understood that this be clearly understood that that does not relate to the group of young people in custodial care have very evidence of fraud, but to the evidence of a special needs for preventive and rehabilitative conspiracy to pervert the course of justice in the intervention. The staff of that facility have a non-prosecution of Mr McArdle. Such an allegation particular and urgent responsibility in regard to the has never been made; certainly not by me. Mention prevention of later trouble both to young lives and has been made of the fact that the Director of Public to community safety. There is no doubt that if the Prosecutions and certain others were in it together. community can at this stage intervene positively in Perhaps the people involved in it should have the lives of those young people it can prevent those denied it at the time; they should have acted upon it. young people graduating into adult criminal circles, thus saving both risk and expense. Another matter of incredible performance was the fact that the person offering the evidence to the DPP Yesterday the Minister indicated that she was taking ilt the time, Mr Flanagan, who prefaced his advice action to contain the situation. We understand that with the comment that he had an association with the supervision role at that facility is being Mr McArdle's firm, went on to give as a reason for undertaken by volunteers. In the light of the not prosecuting the outrageous proposition that a conflicting reports in the newspapers, I request some jury would be more likely to believe the account of clarification from the Minister of the number of Mr McArdle than that of Mr Legge because escapees, the level of supervision and the progress in Mr McArdle is a solicitor and Mr Legge is merely a settling disputes, as well as some general publican. reassurance to the Victorian community that the situation is contained. What is very interesting in this case is the fact that on the two occasions when the evidence has been Speed cameras aired, namely at the committal proceedings before a magistrate and before the grand jury, the result was Mr DICKINSON (South Barwon) - I raise for that Mr McArdle was sent for trial. At the committal, the attention of the Minister for Police and Mr McArdle was represented by two Queen's Emergency Services the issue of speed cameras, Counsel who failed to prevent him being committed which raise $4 million a month in revenue for the for trial. government. I refer the Minister to the November 1991 report of the Social Development The SPEAKER - Order! The honourable Committee's inquiry into speed limits in Victoria member's time has expired. and to his lengthy reply of 14 Apri11992 to my question on notice on the subject. There seem to be discrepancies and confusion about evidence given to the committee on the number of people incorrectly fined through the use of speed cameras. ADJOURNMENT
1364 ASSEMBLY Thursday. 7 May 1992
The committee was told that a 100 per cent quality 22 624. The 22 624 frames rejected in Apri11991 control program was in place. In evidence to the represent 44.5 per cent of the 50 834 photographs, inquiry on 4 April last year, Assistant Commissioner not 22 per cent as the report indicated the TCO (Traffic), Mc Frank Green is recorded as having said figures showed. in evidence: The committee appears to have been misled about There have been four hiccups in the system where the use of video image detection. The Minister infringement notices have been issued inappropriately should give a full and adequate explanation to the and that has caused me problems. House, especially as Mc Green told the committee that the system required that the photographs Recently the Minister provided me with numerous developed from the films be examined manually. statistics from the Traffic Camera Office (TCO). At Only last month, the Minister indicated that the least 874 people have had speed camera fines imagining system had been rejected because it was cancelled after they were able to prove that their cars not able to operate at a high enough standard. were not in the speed camera photographs or that the wrong vehicles had been booked. Those are just It is important that we should not have errors in the the errors the TCO is aware of after people have operation of speed cameras so that people are not viewed the photographs of the alleged offences and unjustly and wrongly issued with infringement realised that they had not been in the area where the notices. Parliament deserves a full explanation from offences were alleged to have occurred. the Minister as to why there is such a variance between the statistics he has provided in his answer The figures provided to me indicate that the and those contained in the Social Development following number of infringement notices had been Committee's report cancelled after the TCO received pleas from people able to prove their vehicles had been wrongly Director of Public Prosecutions booked prior to Mc Green giving evidence to the inquiry: November 1990, 5; December 1990, 12; Mrs HIRSH (Wantirna) - I raise for the attention January 1991,10; February 1991, 11; and March 1991, of the Attorney-General a series of appalling and 11. cowardly attacks on the Director of Public Prosecutions (DPP) made yesterday in this House by The Minister further advised me that prior to the honourable member for Glen Waverley during November 1990 manual police records were the Appropriation debate. maintained but had not been collated due to the significant additional workload. I express concern Of course, honourable members are protected by because it relates to the accuracy of figures relating Parliamentary privilege when they speak in the to the rejection rate of speed camera frames. House, but the misuse of that Parliamentary privilege by the honourable member for Glen Last year's Auditor-General's report on Ministerial Waverley is disgraceful-- portfolios found that between December 1989 and January 1991, 53 per cent of speed camera frames The SPEAKER - Order! I advise the honourable were rejected due to various technical and legal member that she should not reflect on the conduct of difficulties associated with the setting up of cameras, another member of the House. reading of photographs and interfacing with the motor vehicle registration database. I am extremely Mrs HIRSH - I am concerned about claims concerned that the report of the inquiry into speed made by the honourable member for Glen Waverley limits in Victoria stated that TCO figures had shown that the Director of Public Prosecutions (DPP) the rejection rate had been reduced from 53 per cent, misled Parliament. I am also concerned about the as reported in the Auditor-General's 1991 report, to honourable member's accusations about the legal 22 per cent in April 1991, following improvements in incompetence of the DPP. I am gravely concerned - operations. and I ask the Attorney-General to give consideration to this matter -about the honourable member's Figures provided to me show that the rejection rate calls for an investigation into the conduct of the DPP. in April last year was 44.5 per cent; the total number of speed camera frames of vehicles exceeding the As I said, I am deeply concerned about the matter speed thieshold in April 1991 was 50 834; and the and I ask the Attorney-General to give his attention total number of frames rejected in that month was to the problem that I have outlined. ADJOURNMENT
Thursday, 7 May 1992 ASSEMBLY 1365
Moe railway station All I can say is that the arrangements for the Premier's opening of the railway station at Moe are a Mr DELZOPPO (Narracan) - In the absence of disaster! the Premier, I ask the Attorney-General, who is at the table, to take note of this matter. On 13 May next Responses the Premier will visit the Latrobe Valley. She will spend half an hour at Moe, where she will officially Mr KENNAN (Attorney-General) - The open the railway station. I regard it a matter of honourable member for Glen Waverley -- extreme discourtesy that the Premier did not have the good manners to invite local members of Mr Leigh interjected. Parliament to that function. Whenever Ministers of the Crown have visited the electorate I have always Mr KENNAN - He wants me to return his shirt shown them every courtesy and treated them as I to him at the end of the day! He was worried about would treat members of my own party. Nobody the blood, but I think he should be more worried would have any cause to complain about the way I about the sweat and the tears! behaved on those occasions. I consider it a gross insult that the Premier has not invited me to that The honourable member for Glen Waverley has, in opening, especially as I have been working for some his usual obsessive manner, again raised the Legge six or seven years to have the railway station and McArdle matter. Mr Speaker, even after you upgraded. inquired as to whether he was raising an urgent matter, once again he failed to shed any further light The Moe City Council feels aggrieved by the on it. Premier's timetable for the opening of the railway station. I read into the account a letter sent by the Obviously the honourable member for Glen Moe council to the Premier: Waverley is stung by the fact that the Australian Broadcasting Corporation has made a withdrawal Dear Premier on three occasions now; he has not represented fairly, properly or accurately in any sense the abject The council, at its meeting last night, was informed that apologies made by the ABC. The ABC was, of you will only be spending half an hour in Moe on course, trapped into all this by the fact that it had the Wednesday, 13 May next, to officially open the railway gross misfortune to have the honourable member station and will not have time available for discussions appear on the 7.30 Report, during which he made with council representatives. some allegations.
The council was extremely disappointed that its As a result the ABC has been caught up in litigation original written request to you dated 20 December, to for a number of years. Finally it gave up and totally discuss a number of issues including the future of the retracted the allegations. Unless taxpayers want to city, has been ignored. have a special levy for a defamation fund for the ABC so that the honourable member for Glen I have already advised your secretary, Ms Addison, m Waverley can spout forth defamatory comments, I writing that a meeting with the Minister for local do not believe the ABC will do that again. If it does I government is not appropriate for the type of issues do not believe the taxpayers will be thrilled. The that council wishes to discuss and as were set out in its ABC's apologies and re tractions relating to invitation to visit our city of 20 December last. Mr McArdle were complete.
I think the most potent section of the letter is the last It is Significant that tOnight we have heard a paragraph: repetition from the honourable member for Glen Waverley. During the adjournment debate yesterday I ad\'ise you that council resolved last night that it not the honourable member for Glen Waverley referred be represented in any official capacity at the opening of to the Director of Public Prosecutions (DPP). It is a the new Moe railway station next week. The council pity, as with his remarks about Mr McArdle, that he feels very strongly on this issue and continues to is not prepared to repeat them outside the House. request a meeting with you to discuss the future of the He will have difficulty finding media organisations city. that will report his comments because they do not want to be trapped like the unfortunate ABC and have to apologise and withdraw the defamatory ADJOURNMENT
1366 ASSEMBLY Thursday, 7 May 1992 comments, which could not in any way be justified. of Public Prosecutions or the practice of previous He suggested some sort of failure of performance on DPPs on whether a particular matter should be the part of the DPP. referred by the chief commissioner to the DPP. That is to say, it is apparent and has always been The honourable member also went on to say that apparent that it is a matter for the discretion of the there should be some sort of investigation. He spoke chief commissioner of the day as to whether he seeks about the matter "screaming out" for investigation. the advice of the DPP on any matter. He suggested by way of screaming out or innuendo that the Chief Commissioner of Police sought the Nothing has been said by the DPP or the chief DPP's advice and the honourable member for Glen commissioner that would contradict that fact. The Waverley related that matter to evidence given in a suggestion that the DPP has in any sense misled defamation case for which $160 000 was awarded to Parliament or behaved in anything other than a the Chief Commissioner of Police. proper manner is absolutely wrong, and on this matter, as in the McArdle case, it is time the Liberal The chief commissioner is an outstanding and Party took its destiny into its own hands and dealt honourable man, as are the DPP and judges of this with the honourable member for Glen Waverley. State, yet the legal system is constantly being sledged by what one might describe as the de facto It is time he went outside Parliament and apologised shadow Attorney-General, the honourable member for this constant sledging. It is not a healthy thing for for Glen Waverley. That is well recognised around the independent administration of justice in this the traps. State -whether it be our excellent chief commissioner, our excellent DPP or our many The legal community knows that the Liberal Party excellent judges and magistrates - to be open to policy on the judiciary, the legal system and law constant sledging from a major political party, in this reform is effectively driven by the honourable case led in the sledging campaign by the honourable member for Glen Waverley. There are lawyers and member for Glen Waverley. others in the Liberal Party interested in the law, but they seem to be overshadowed when publiC It reflects badly on the other members of the comments are made about the legal system, the opposition parties, and the honourable member for police and law reform by the honourable member Glen Waverley should once again do the decent for Glen Waverley. thing and go outside this place and apolOgise.
There can be no doubt he is the front-runner when Mrs SETCHES (Minister for Community the Liberal Party consults with the community. Services) - I thank the honourable member for Box Often the shadow Attorney-General is accompanied Hill for raising a matter of concern to a number of by the honourable member for Glen Waverley, people - the continued industrial action at the which creates a good impression! Turana Youth Training Centre in Parkville. The issue has taken a number of turns today, and at the very Mr Roper - It makes the honourable member for base of it the State Public Services Federation Kew look good! Victoria (SPSFV) appears to be using Turana as a vehicle for causing havoc and disruption to services Mr KENNAN - All those visits do for the within Community Services Victoria. It invoked honourable member for Kew and the rest of her section 26, which relates to the cessation of work party is make the honourable member for Glen provisions, of the Occupational Health and Safety Waverley seem to be the real front-runner. Act to declare the work site unsafe.
It is so much rubbish to suggest that the DPP has The attraction to the SPSFV of using those provisions effectively misled the House! There seems to be appears to be that it can persuade its members that it some suggestion that there is an obligation to seek is possible to stay off work for extended periods and advice in particular cases. That is not the case. The continue to be paid. That is just not the case. The police are independent but they can seek the advice situation as at 10 o'clock on Tuesday night was that of the DPP if they wish to do so, and the DPP can the SPSFV wrongly advised its members to go on give advice if he wishes to do so. In a case where the strike. police seek advice on a particular prosecution, it is a matter for them. It is quite wrong to say that there A work site inspection was carried out as provided was anything in the report or practice of the Director for under the Act, and the inspector from the ADJOURNMENT
Thursday, 7 May 1992 ASSEMBLY 1367
Occupational Health and Safety Commission and it seems that, along with the television cameras declared that the workplace did not constitute an being there to watch the trainees going over the immediate hazard to staff and therefore told the wall, as was the case on Tuesday, a number of things SPSFV members that there were no grounds for do not add up to the usual industrial dispute. invoking section 26 of the Act. As I said, that occurred at about 10 p.m. last Tuesday. The SPSFV I make it clear that I will not allow the Occupational refused to accept that decision and is continuing to Health and Safety Act, which has been fought for advise staff that they are entitled to stay out on full and defended by the government and which is well pay. understood by the union movement and employers, to be used in this way. There is not an occupational Several hours after the end of the stop-work meeting health and safety issue at Turana. on Tuesday four trainees escaped from Poplar House maximum security section, but I was able to The officers are on strike and they will be dealt with advise the House last night that one had given under the provisions of the Act relating to people himself up in Geelong. Another turned up at Turana believed to be on strike. There will be no pay for this morning at 9 o'clock saying he was also ready to people who are on strike. They must understand come back. That means two have given themselves that there is no time for this nonsense of creating up and two are still out there, and the police are issues for the media to be involved in. They should looking for them. get to the negotiating table and get back to work. Their duty of care is to look after the 20 or so people It appears the SPSFV is publicly stating through the who are left in Turana and who are being cared for media - and of course this has caused anxiety for by volunteers. many people out there -that the centre is out of control and about to erupt and other words to that Mr ROPER (Minister for Employment, effect. I am advised that, contrary to that position, Post-Secondary Education and Training) - The things are proceeding at Turana in an orderly honourable member for Narracan raised the matter manner under the care of volunteers, most of whom of the Premier's visit to Moe to open the station. I have some sort of training in child-care and are well should have thought he was pleased that funds had qualified to be caring and watching over those been committed to provide the station. I will draw people. the honourable member's comments to the attention of the Premier. However, at this stage it is wise to examine some of the things which have occurred because they will The honourable member for South Barwon raised an show quite clearly that the SPSFV has some ulterior issue for the Minister for Police and Emergency motives. Services and I shall draw that to his attention. The honourable member for Murray Valley raised an This morning the media went on a tour of Turana issue concerning the Seniors Card and I will ask that that lasted quite a while. They had a good look the matter be dealt with. through and saw that things were quiet, that volunteers were in place and that the young people The honourable member for Doncaster raised the were calmly going about their business. At the end matter of assistance to ethnic businesses and of the tour the SPSFV arrived on the scene and asked suggested that there should not be a program of the media to come to a showing of weapons at such assistance. I am sure the ethnic communities SPSFV headquarters at 3 p.m. today. The media duly will be interested in the honourable member's went along and were shown a variety of weapons comments. that they were told had been confiscated from Turana. Mr PertoD - You are misleading the House!
I have made preliminary inquiries about this and I Mr ROPER - I am sure the Minister for shall go into that in a moment. During the showing Consumer Affairs will ensure that ethnic of weapons allegedly taken from Turana over recent communities will have every opportunity to days, the media was advised via a telephone call understand that the honourable member for that a riot was going on at Turana. The media left Doncaster does not want that type of assistance SPSFV headquarters and went to Turana, only to provided. find that everything was calm, as it had been earlier in the day. There have been two bomb threats today, ADJOURNMENT
1368 ASSEMBLY Thursday. 7 May 1992
The honourable member for Pascoe Vale raised a Motion agreed to. matter of payments by the City of Coburg and suggested that a person had received a payment and House adjourned 5.45 p.m. until Tuesday, 19 May. that the payment had effectively gone straight into the pockets of a councillor. That is a serious matter and I will ask the Minister responsible for local government matters to conduct a full and proper inquiry into that because allegations like that would concern any person, but particularly people living in Coburg. DISTINGUISHED VISITORS
Tuesday, 19 May 1992 ASSEMBLY 1369
Tuesday, 19 May 1992 that he seems to have forgotten to notice that statement.
It is perfectly clear that not only the Chairman of the Gas and Fuel Corporation but also the heads of the The SPEAKER (Hon. Ken Coghill) took the chair at other agencies, the opposition and the people of 2.5 p.m. and read the prayer. Victoria will have the opportunity of being part of the negotiations on the debt~quity swap. DISTINGUISHED VISITORS I have noticed an increased frenzy on the opposition The SPEAKER - Order! On behalf of benches over this matter; I suspect because honourable members it gives me great pleasure to opposition members know that the proposal is part welcome to the Public Gallery a number of guests. of a major opportunity for public sector reform. Cr Sean McManus is the Mayor of Sligo in Ireland. Opposition members know that the principles that Cr McManus is accompanied by his wife, Ann, and the government will introduce into this House in Mr Declan Foley, Secretary of the W.B. Yeats Society this sessional period will be enabling legislation for of Victoria. Cr McManus is the guest of the the reform of government trading enterprises. honourable member for Bentleigh. Opposition members also know that they will have to face up to those principles, which will include the I also welcome Cr Adrian Mannix, Mayor of the ownership by the public of the assets that the Rural City of Bellarine, who is accompanied by opposition wants to sell. Mr Ian Cooper, Chief Administrative Officer of the Rural City of Bellarine. Cr Mannix is the guest of the As well as that the opposition is aware that it will honourable member for Bellarine. have the opportunity in the forthcoming Budget of doing what it did in this Budget: to determine the I also welcome Mr Bill Brent, Consul of the United amount of the dividend, with the government, that States of America in Melbourne, who is here as my the authorities will pay. It is another example of the guest. selective art of the Leader of the Opposition, who has been running a wonderful story over the past few weeks on the need for further borrowings by QUESTIONS WITHOUT NOTICE Melbourne Water. It is perfectly clear from the statement made by DEBT-EQUITY SWAP Mr Lloyd of Melbourne Water that the dividend was set in the last Budget, and indeed available to the opposition, so how can it suddenly be a surprise to Mr KENNETf (Leader of the Opposi tion) - I the Leader of the Opposition? refer to the public comments of Mr Fitzmaurice, Chairman of the Gas and Fuel Corporation of Regarding the issue of the debt~quity swap, the Victoria, to the effect that the government's public opposition will have the same opportunity to vote authority reform and debt~quity swap is the on the principles of that swap in the September death·rattle of a dying government aiming to sessional period of Parliament and to pass the bandaid its debt problems, and I ask whether the Budget, which will reflect the view of the various Premier will now drop the debt~quity swap, which authorities, as well as the opportunity to have full is clearly designed to sabotage the State's finances. access to the financial arrangements of the debt~quity proposal, as will the public. Ms KIRNER (premier) - The Chairman of the Gas and Fuel Corporation has made it clear that he Mr McNAMARA (Leader of the National looks forward to the negotiations on the debt-equity Party) - I refer the Premier to the comments of the swap. I must say that that -- chief executive of the State Electricity Commission of Victoria, Mr Bates, to the effect that the commission Mr Kennett - Where did he say that? will reject the debt~quity swap unless the government includes industrial workplace reforms Ms KIRNER - The Leader of the Opposition in the public authority reforms and I ask her to interjected, ''Where did he say that?" Mr Fitzmaurice inform the House of the key industrial reforms that said that in a statement yesterday. Such is the Leader of the Opposition's selective reading of documents QUESTIONS WITHOUT NOTICE
1370 ASSEMBLY Tuesday, 19 May 1992 the government will include in the public authority Honourable members interjecting. reform package. The SPEAKER - Order! I ask the Minister for Ms KIRNER (Premier) - TItis is another Police and Emergency Services and the Leader of the illustration of the clear difference between the National Party to remain silent so that the Leader of government and the opposition. The government's the House can be heard. position on workplace reforms is the same as those of other progressive countries in the Western World; Mr ROPER - That program has allowed the SEC it is based on cooperation. What a difference to significantly improve its recent performance. That between the government's view and that of the will continue into the future. It is quite proper for Deputy Leader of the Liberal Party which is based, the Premier to place what is currently occurring in not on cooperation but on division! The honourable workplace reform in that context. member for Hawthorn recently tried to inflame the industrial dispute in Tasmania by asking Associated The SPEAKER -Order! At the stage at which Pulp and Paper Mills Ltd (APPM) to move to the Leader of the National Party raised his point of Victoria. He said, ''You won't get any opposition order, the Premier had been replying for only about from our Victorian government". His position is 2 minutes. When she was interrupted I understood even worse than the position taken by the her to be prOViding information on the process being Tasmanian government! followed in workplace reform, which seems to the Chair to be entirely in line with the question that Let us be clear about the reforms that have taken was asked. There is no point of order. place so far within the State Electricity Commission of Victoria. They have allowed the commission to Ms KIRNER (Premier) - Workplace reforms that keep increases in the price of electricity below the have actually been put in place so far, have been consumer price index. It is important to both the supported by the opposition from comments made industrial approach and competitiveness. by them in their visits to the Latrobe Valley. They say they will do more of them, therefore they Mr Stockdale interjected. obviously know what workplace reforms have taken place so far. The reforms will be built on during the Ms KIRNER - The honourable member for process of further government trading enterprise Brighton has a very interesting recipe for workplace (GTE) reform. reform: sack the workers! The honourable member for Brighton knows that with the reduction of One essential part of GTE reform will be business employees at the SEC-- plans. If the honourable member knows anything about public sector reform he will know that one Mr McNAMARA (Leader of the National does not tell those, whatever the corporate body is, Party) -On a point of order, Mr Speaker, what the workplace reforms are; they come to you concerning relevance, you have allowed the Premier withan-- to waffle for several minutes in response to my question, which was quite specific. I asked what are An honourable member interjected. the key workplace reforms about which Mr Bates is so concerned if the government goes down the track Ms KIRNER - That is the essential issue; they of a debt-equity swap. So far the Premier has not come to you with a business plan and that business been specific on any issue, and I ask you to bring her plan is within the framework, for example, of the back to the question and request her to advise the cost of electricity and the price that is charged to the House precisely on the key workplace reforms that consumer. are so desperately needed to ensure efficiencies in the public sector. You know and we know that part of the reform is a business plan that will deliver workplace reforms Mr ROPER (Minister for Employment, and will include an extension of the workplace Post-Secondary Education and Training) - On the reforms that are already being dealt with in the point of order, Mr Speaker, the Leader of the Latrobe Valley and which will be the basis for future National Party asked for details of workplace change. reforms and the Premier is demonstrating that there has been a continuous, ongoing program. QUESTIONS WITHOUT NOTICE
Tuesday, 19 May 1992 ASSEMBLY 1371
TEXTILE, CLOTHING AND The SPEAKER -Order! There is far too much FOOTWEAR INDUSTRY interjection. I ask the honourable member for Brighton to control himself; he has been unusually Mr LEIGHTON (Preston) - Will the Premier noisy this afternoon. advise the House of the most recent government initiatives in Victoria's textile, clothing and footwear Ms KIRNER - There is real value to be added to industries to stabilise employment and to provide a the clothing industry, and in that particular example basis for the long-term development of those it was when he moved out! I am more concerned industries? about the Leader of the Opposition lately, because he has said, '1t is all too late. Even if we retain the Ms KIRNER (Premier) - Yesterday the Minister remaining quotas no-one will invest because of the for Employment, Post-Secondary Education and continuing changes in government policy". Ask the Training released an employment update on the workers at Diana Ferrari Pty Ltd or the workers at textile, clothing and footwear industry and the Jane Debster and you will find that they want the automotive industry in Victoria. government and the Leader of the Opposition to back the industry. From that report it was perfectly clear that the situation in the automotive industry could be turned The other day I wondered a little when I read in the around because of the framework of industrial Warrnambool Standard that the Leader of the policy, but in the textile, clothing and footwear Opposition had actually invited me to take a (TCF) industry that is not possible. We have already bipartisan approach to this problem. I thought, '1 lost 7000 direct jobs in 1990-91 and are likely to lose can't remember that letter". But it is no wonder I further jobs in both Victoria and across Australia if cannot remember the letter because I never received there is not a clear development of an industry it. I do not know whether it was sent! sector policy for this area. The letter I received was a copy of a fax addressed Of particular interest is that there are many firms "My Dear Prime Minister" - not usually the way he like the one I visited this morning, Diana Ferrari Pty refers to Paul Keating! He said, "My Dear Prime Ltd, a shoe company, that are investing, Minister" and actually said that he would like the restructuring and taking the opporhmity of quotas to be stopped -- developing. It is absolutely essential that we as a government, the manufacturers as an industry, and Mr Kennett - What date? the unions work together to develop a secure future for the industry. In factories like Diana Ferrari they Ms KIRNER -8 November 1991. What has he are saying, 'This is the sort of industry we want and said since? The letter was directed to the this is how we will go about getting it". Honourable Bob Hawke, and nothing after that to the Honourable Paul Keating or indeed to the That is why the government has set up the textile, Honourable John Hewson, whom he knows is on clothing and footwear industry task force. And it is about destroying the industry entirely. why we will be going, together with the Premier of South Australia, to see the Prime Minister to get a I thought, "Okay, it seems a good idea that we might better policy framework and to get specific have a bipartisan approach". I wrote back to the improvements for the industry. Leader of the Opposition and --
The Leader of the Opposition has made a few An honourable member interjected. comments on the TCF, but he never backs up the industry with action; he is not prepared to stand up. Ms KIRNER - No! I said, "Dear Mr Kennett". He is saying that the best example of his support for On 6 December 1991 I said, "Dear Mr Kennett, the knitwear industry is that he was asked by his would you please join with me in bipartisan support co-employers to move out of the industry so they for this program" - but not a word was received in could get on with the job. That is not quite what I response. would regard as value-adding! Mr Sandon -No response? Honourable members interjecting. Ms KIRNER - Not a word. I do not know what he said to the honourable members for Ballarat QUESTIONS WITHOUT NOTICE
1372 ASSEMBLY Tuesday, 19 May 1992
South, Warmambool and Bendigo East, but there Mr A. J. SHEEHAN (Treasurer) - As is well was no bipartisan support. He now says that he is known in this place, the government has embarked sorry. It is not enough to be sorry about that on a substantial program of public authority reform. industry, it is a matter of getting off our tails, having That reform is based on two notions: firstly, to policy and fighting for the industry because the only ensure the operating and financial efficiency of thing happening with the Leader of the Opposition government trading enterprises into the 1990s so in Canberra and the Leader of the Opposition here is that they will be able to provide low-priced power that they are doing a job on the textile, clothing and input to domestic and industrial consumers during footwear industry, not fighting for jobs. that period --
SALE OF PUBLIC BUILDINGS Honourable members interjecting.
Mr I. W. SMITH (Polwarth) - Given that the The SPEAKER - Order! I had hoped by this tenders for the sale of nine public buildings closed stage that the honourable member for Malvern last Friday, will the Premier today make available in would have learnt the conduct expected of him in the Parliamentary Library the Valuer-General's this Chamber. I warn him. I will not warn him again. valuation for each of those buildings? Mr A. J. SHEEHAN - Secondly, to provide a Ms KIRNER (Premier) - As I understand the proper rate of return to the Victorian people from position, the details of the negotiations are still going those authorities. The program is based on the on and it is not appropriate at this time to answer fundamental notion of retaining the authorities in that question. full public ownership and control. It is interesting to note the comments made by the people involved. Mr STOCKDALE (Brighton) - On a point of There has been a high degree of understanding of order and on the question of relevance, the Premier and support for the program. There is certainly an does not seem to have heard the question. The increased attractiveness in Victoria as an investment honourable member for Polwarth asked the Premier opportunity for international institutions. Finally, to make the Valuer-General's valuations available, the notion of debt-equity swaps is well known and not the details of the negotiations. well understood internationally.
The SPEAKER - Order! There is no point of Mr Perton - Particularly in South America! order. The SPEAKER - Order! I warn the honourable Honourable members interjecting. member for Doncaster. I have asked him to remain silent and he continues to interject. I will not warn The SPEAKER - Order! I have ruled on the him again. point of order. Has the Premier completed her reply? Mr A. J. SHEEHAN - With regard to the Ms KIRNER (Premier) - I did not hear you debt-equity swap, it is part of a package of reform through the noise, Mr Speaker. On the matter raised aimed at improving the authorities' balance sheets. by the honourable member for Polwarth, clearly That is a fundamental and driving force of the negotiations are still going on. I would need to take reform, which is aimed at improving the authorities' advice from the people who are negotiating with the balance sheets. It is true that it is an instrument that Minister as to whether that is appropriate and is widely used corporately. It has been used whether it would interfere with the negotiations. I frequently by governments in Victoria and am perfectly happy to ask that question and I will Australia. For example, the Telecom-AOTC package provide that advice to the honourable member for was substantially a debt-equity swap. In New South Polwarth. Wales the grain elevators board moved to corporatisation involving a debt-equity swap and PUBLIC AUTHORITY REFORM the SEC proposed a substantial debt-equity swap in a recommendation to a Parliamentary inquiry in Mr BA TCHELOR (Thomastown) - Will the Victoria. Treasurer advise the House of the international market response to the government's proposed In this Parliament we have twice approved public authority reform program? debt-equity swaps with the support of the opposition, which they no doubt have forgotten. In QUESTIONS WITHOUT NOTICE
Tuesday, 19 May 1992 ASSEMBLY 1373
1985 the Rural Water Commission was involved in a DESTRUCTION OF DEPARTMENTAL substantial debt-equity swap. The Victorian Arts DOCUMENTS Centre also involved a substantial debt-equity swap. On 1 March 1988 the honourable member for Mr STOCKDALE (Brighton) - I am reluctant to Brighton stood in this place and publicly supported intervene in the conduct of Comedy Week, but I a debt-equity swap. It is an instrument that is well wish to address a question to the Premier. I refer the understood and frequently used in corporate and Premier to the current shredding of documents by government sectors throughout Australia. her department, the Department of Treasury and the Department of Manufacturing and Industry I reject out of hand any notion that a debt-equity Development and ask: what documents are being swap is a mechanism for deferring interest destroyed, on whose instructions are they being payments. lbat is a complete furphy run by the destroyed and is the Premier aware that under opposition. The swap will provide for the authorities section 19 of the Public Records Act such destruction to be placed on a sound financial footing. of public records is a criminal offence?
It was interesting but a little saddening to read some Ms KIRNER (Premier) - I cannot answer for of the comments about Third World schemes that other departments, but in my department a number recently appeared in newspapers. I took the trouble of copies of documents are made. For example, I of contacting the supposed source of a particular have with me a copy of a document the Leader of article and I put to him that perhaps he had been the Opposition sent to me. It is the letter he sent to misquoted or misrepresented. I shall quote a letter I Mr Hawke on the textile, clothing and footwear received from John Hall, the Executive Director of industry. The letter is probably the only opposition the powerful Australian Merchant Bankers policy document on the industry! The copy I have Associa tion: will be taken to my department and I imagine tha tit will be shredded. The original is still on the file so, if Dear Mr Sheehan, it were of any use, which it is not, I could get the original if I needed it. Having read a copy of the article titled "Sheehan's Third World Vic Plan" in yesterday'S Sunday There are many copies of many documents; there are Herald-Sun, I feel the need to provide you with fuller copies of newspaper cuttings and copies of many details on the comments I had made to the journalist to papers. However, it is interesting to note the whom I spoke on Friday. difference between the previous government and this government. The previous government, some 10 I stated that debt-for-equity swaps were a years ago, had no proper records of Cabinet well-established mechanism for organisations (public meetings, let alone of any other kind of business of or private) to restructure their debt repayment government; no proper process for Cabinet; no obligations whereby lenders exchanged their right to proper records of Cabinet meetings. The difference interest payments for dividends. is that we do, and we keep them on record.
I indicated that most States in Australia were troubled PURCHASE OF PAINTING by financial problems and I proffered the view that governments should not be denied access to the range Mr McNAMARA (Leader of the National of financial transactions which are available to private Party) - I refer the Premier to the often-repeated enterprises. public statements about the need to privatise and corporatise public assets and to achieve greater There was no reference in the journalist's questions or efficiency and ask, given the sale by the government in my answers to your recent visit to New York or any of many of the community's assets to raise cash, Victorian government authority, as implied by the how does she justify spending $8000 on a painting article. hanging in her office, when an appropriate painting could have been borrowed from the National I trust that this background helps clarify the context of Gallery of Victoria at no cost to the public, or is my remarks and my intention, which was to offer the this-- view that debt-for-equity swaps are legitimate and effective financial transactions which have been widely Honourable members interjecting. used by both private and public sector organisations. QUESTIONS WITHOUT NOTICE
1374 ASSEMBLY Tuesday, 19 May 1992
The SPEAKER - Order! I ask the honourable sector interest in investing in the new museum at member for Mildura to assist his own side of the Southbank? House by remaining silent. Mr KENNAN (Minister for Major Projects) - As Mr McNAMARA - I ask the Premier whether the House will be aware, along with other this is just another example of her double standards. governments we have been seeking to attract greater levels of private sector investment in projects that The SPEAKER -Order! The latter part of the might hitherto have been carried out by the public question is out of order. sector. In contradistinction to the Leader of the OppOSition, what we are doing is seeking to work Ms KIRNER (Premier) - The question obviously with the private sector, not trying to intimidate its reveals the absolute commitment of the opposition members and frighten them away. to the real issues of the day. A range of those projects are on the books, including Mr Elder - Is this the apology to Trish Jones? the rapid transit link, for which there are more than 20 bidders, some of which are major Australian The SPEAKER - Order! The honourable companies and some of which are overseas member for BaHarat North! companies; and the casino, for which there are also more than 20 bids. We will shortly be calling for Ms KIRNER - There are many issues that face expressions of interest in the major road proposals, the Victorian people, the biggest one, of course, including the Western bypass and the tunnel under being employment. the Domain. In rela tion to these projects and the museum, we are seeking to work with a lot of the Honourable members interjecting. major construction companies, if not indeed covering the field of major construction companies The SPEAKER - Order! The Premier, without and financial interests. assistance from either side of the House. We are not about going out threatening them, but no Ms KIRNER - Within that is the issue of the doubt after the comments of the Leader of the manufacturing industry. Tomorrow we will be OppOSition a question that must be asked is: are releasing, in cooperation with the very business these the sorts of people he thinks are getting into people whom the Leader of the Opposition has seen bed with the govenunent because they express fit to criticise, a statement on a framework for interest in the museum at Southbank, for instance? manufacturing industry in Victoria. We have already made clear statements about our Honourable members interjecting. commitment to the textile, clothing and footwear (TCF) industry; we have already made clear Mr KENNAN - You can go out and start statements about our commitment to aerospace naming names if you want to, but let me see if these industries. What we are actually talking about are are the ones the Leader of the Opposition wants to the real issues of the day. So far as we are concerned, go out and intimidate. Six organisations have they are the issues I have outlined. submitted tenders for the museum. The first is Fletcher Jennings. Is it to be said that it has got into However, on the matter of the painting by a leading bed with this government because it has expressed Aboriginal artist, it seemed to me appropriate that in interest in building this major public project? Is the corridor outside my office, through which Multiplex Constructions to be placed on some everyone walks who comes on a deputation or to a McCarthy black list? Will Baulderstone Hornibrook major meeting with my government - particularly (Vie.) Pty Ltd be blacklisted if the Leader of the people from other countries - that we actually have OppOSition is to be Premier of this State? Will it be a representative example of Aboriginal art owned by blacklisted and not welcome to do business in this the public. I make no apology for it. State because it has expressed interest in building or partly building this major museum? Are the MUSEUM AT SOUTHBANK Westpac Bank, ANZ Capel Court and Babcock and Brown Pty Ltd to be blacklisted, too? This is making Or V AUGHAN (Clayton) - Will the Minister for Joe McCarthy seem understated. Major Projects inform the House of any private QUESTIONS WITHOUT NOTICE
Tuesday, 19 May 1992 ASSEMBLY 1375
These firms are expected to fonn three consortiurns INTEGRATION OF STUDENTS WITH that will bid for the project and, in contradistinction DISABILITIES to the opposition, we are delighted with the level of private sector interest. We welcome the interest of Mrs RAY (Box Hill) - In light of the conference these major firms. It is not our business to politicise on the integration of students with disabilities being this issue but rather to generate interest in the public held at the Phillip Institute of Technology, will the sector and to support private sector investment Minister for School Education advise of his w1der our public infrastructure guidelines. involvement in that conference and of relevant initiatives being undertaken by the Department of The House will be aware that piling work is well School Education with regard to the integration of W1der way on the site. Some 100 piles a week will be children with disabilities? put in place for a 12-week period and construction work will follow that. Mr POPE (Minister for School Education) - I shall be involved, and I think the Premier will also, The House will also be aware that we have in that conference, which is to take place on 6 and 7 purchased the Tea House at the site to allow staff to July this year. The conference is being sponsored by move and be consolidated next to the new museum. the departments of health and commtmity services The government has been successful in attracting and the Philip Institute, and its focus will be on private sector investment in public sector integration with a national perspective. As I have infrastructure. What has been worrying the business said before in this House, we are very proud of our commtmity in Victoria in the past few days is how it record with respect to integration of students with will be categorised by the Leader of the Opposition. disabilities in this State. Will it find itself sledged on 3LO or elsewhere in the coming months because it tried to do business for It commenced in 1984 with the integration report and on behalf of this State in the public interest? handed to the then Minister for Education, the Honourable Robert Fordham. The position at that The Leader of the Opposition should make a formal time was that there was a small amount of funding, public withdrawai, because he has put W1certainty less than $3 million or $4 million in the financial year and fear in the minds of the private sector by reason 1984-85. This year $44.2 million is being spent on the of his comments. It is the reverse of all the rhetoric integration of students with disabilities in this State. about encouraging confidence that we have heard A t the same time the special school area has also from him off and on for a long time. He does not been receiving increases in funding - from $40 want to encourage confidence, he wants to destroy million to more than $90 million this year, taking it. He does not want to work with the private sector, into account various on-costs. he wants to threaten it, just as he threatened politicians about superannuation and just as he In the time we have been operating integration refused to pass the Constitution (Independence of programs in schools in Victoria the number of Judges and Public Officers) Bill. He is not interested disabled students being catered for has grown to in the public interest, he is interested only in going 5000. One of the problems we have with integration out and threatening people he does not like. is its great success. Its success has brought about a greater demand from parents with children who GEM PIER, WILLIAMSTOWN have disabilities. All members of this House are well aware of that demand, which we have to try to meet Dr NAPTHINE (Portland) - I refer the Premier by supplying resources. to reconstruction works currently in progress at Gem Pier in Williamstown, and I ask on what basis We have dramatically increased the funding to more and on whose authority this project is being funded, than $44 million and it is obvious that more given that the project was not included in either the resources are constantly going to be needed in this Port of Melbourne AuthOrity budget for 1991-92 or area to ensure its continued success. One of the the State Budget for 1991-92. criticisms made of the integration program was raised with me when I appeared before the Ms KIRNER (Premier) -It is on the authority of Estimates Subcommittee of the Economic and the Minister for Manufacturing and Industry Budget Review Committee a couple of months Development. ago - the issue of non-categorisation. Categorisation of students with disabilities is extremely difficult. For instance, Stephen Hawking QUESTIONS WITHOUT NOTICE
1376 ASSEMBLY Tuesday, 19 May 1992 was born without the ability to speak and has very a former Minister for Planning and Environment, the little use of any parts of his body. Professor Honourable Tom Roper, of $4.2 million to the Hawking holds the Lucasian Chair of Mathematics Melbourne City Council as a result of his christmas at Cambridge University and is one of the world's tree planting decision involving land at the corner of pre-eminent theoretical physicists. One would Uttle Collins and Swanston streets. I ask the wonder about actually putting resources into Minister whether it is a fact that the Melbourne City teaching a person suffering that degree of disability. Council has been forced to wait until next financial That is the issue that is raised day in and day out year for the $4.2 million payment because the with the integration program in Victoria. government is broke and is therefore still placing this liability with the ratepayers? I am not saying that there are many Professor Hawkings in the system in Victoria now, but there Mr A. J. SHEEHAN (Treasurer) - I will provide could well be, and we can hold our heads high by the Deputy Leader of the National Party with details ensuring that every child suffering disabilities has later in the day. the option of a proper education throughout the school system in Victoria. NEW POLICE STATIONS
GEM PIER, WILLIAMSTOWN Mr McDONALD (Whittlesea) - Will the Minister for Police and Emergency Services inform Dr NAPTHINE (Portland) - I refer the Premier the House of progress in the construction of 21 new to her direction to the Port of Melbourne Authority police stations under the Victorian accelerated (PMA) that, contrary to its own policy, the PMA infrastructure program? should build a replacement for Gem Pier in Williamstown to be paid for by a one-off future Mr SANDON (Minister for Police and grant of $1.422 million from the State government. Is Emergency Services) - I thank the honourable it not a fact that it was the Premier who instructed member very much for his question and for his that this pier be built and was it not the Premier who interest in providing modem police stations in his instructed the PMA that that instruction remain community. In February this year the government confidential because the undertaking was given at a announced that it would be building 21 new 24-hour time when funding cuts were being applied to a police stations throughout Victoria. That agreement range of services for families and young people in was made with the Fletcher Jennings group and the Williamstown? National Bank, two very reputable firms in this State, which, unforttmately, have been blacklisted Ms KIRNER (Premier) - The discussion that and have been said by the Leader of the Opposition was had with the Williamstown council and the to be engaging in immoral or amoral activities. Williamstown group that supported the reconstruction of Gem Pier was held with the The fact is that both these firms have worked very Minister for Manufacturing and Industry closely with the government to provide what is Development, who is also the Minister responsible desperately needed in this State, modem police for Ports, and me, and the decision was made by the stations. Not only are we providing the right Minister for Manufacturing and Industry infrastructure for the Victoria Police but we are also Development. ensuring through this $200 million-plus project that we will be able to provide more than 5200 jobs. Honourable members interjecting. What we have is very reputable firms in this State Ms KIRNER - I would be perfectly happy to who are prepared to work in partnership with the provide the honourable member with the government, but we also have the Leader of the information that he requires, and I am sure the Opposition doing everything he can to undermine people of Williamstown will be very interested to and sabotage this program. Twice this year we have know that the opposition opposes that had the shadow spokesperson on Treasury matters, reconstruction. in February and May, saying that he would look for any way that he could to get out of it. The opposition CHRISTMAS TREE PLANTING is placing at risk the safety and security of all Victorians because these police stations will ensure Mr W. D. McGRATH (Lowan) - I refer to the that we provide a modem Police Force that is Treasurer the Treasury payment liability incurred by BUSINESS OF THE HOUSE
Tuesday, 19 May 1992 ASSEMBLY 1377 effective and efficient through the 24-hour services it BUSINESS OF THE HOUSE provides. Mr STEGGALL (Swan Hill) - On a point of It is interesting that the backbench members of the order, Mr Speaker, I ask whether the Minister for opposition do not share the views expressed by their Community Services intends to make a statement Leader on this issue. Some three weeks ago we had today in relation to the children who were taken the honourable member for Murray Valley from their parents last week. indicating his thirst for a new police station. In fact, he cracked a bottle of champagne to celebrate. He The SPEAKER - Order! There is no point of was very thirsty for a new police station. order.
The honourable member for Frankston South is also DISTINGUISHED VISITORS very keen to get a new police station/ court complex in Frankston. The honourable member for Ivanhoe is The SPEAKER - Order! On behalf of very supportive of our program. We have had honourable members I welcome to Victoria His Liberal candidates in the Belgrave area express their Excellency the Japanese Ambassador, who is strong support for such projects. accompanied by the Consul-General of Japan, both of whom are in the Public Gallery. Last week we had the Leader of the National Party saying that the Mordialloc police station - in my Honourable Members - Hear, hear. own area - should be built. I had already aIUlounced it two weeks before, so that is an PETITIONS indication of how up-ta-date the Leader of the National Party is. Clearly, there are double The Clerk - I have received the following standards within the coalition. We have one side petitions for presentation to Parliament: saying that they want new police stations and we have the shadow Treasurer saying that he would do Melton Youth Linkage anything to stop them, he would do anything to undermine them, and we have the Leader of the To the Honourable the Speaker and members of the Opposition saying that he will do everything he can Legislative Assembly in Parliament assembled: to break these so-called "immoral contracts". The humble petition of the undersigned citizens of We are dealing with some of the best and most Victoria respectfully asks: reputable firms in Victoria and in partnership with them we are providing an appropriate arrangement That your petitioners, we the undersigned, wish to to ensure that we enhance the public safety and support your application for ongoing funding for security of the State. I cannot think of anything Melton Youth Linkage in order to maintain your better than ensuring that we modernise the Victoria current level of youth health crisis and resource service Police. Many of these buildings have been left alone within Melton and surrounding areas. for more than 100 years. In the past 10 years we have replaced one in four buildings - that is, one in four And your petitioners, as in duty bound, will ever pray. is new or refurbished - and we will continue to provide the Victoria Police with the buildings it so By Mr Cunningham (1952 signatures> rightly deserves. Sydenham railway station It is outrageous and an absolute slur on Fletcher Jennings and on the National Australia Bank for the To the Honourable the Speaker and members of the Leader of the Opposition to say that he will do Legislative Assembly in Parliament assembled: everything to undermine this program. He will not undermine the Victoria Police and will not be able to The humble petition of the undersigned citizens of the undermine these important buildings. We will State of Victoria respectfully asks: continue to provide the Victoria Police with the resources it so richly deserves. That the government retain the existing railway station at Sydenham. AUDITOR-GENERAL'S REPORT
1378 ASSEMBLY Tuesday. 19 May 1992
That the existing station be upgraded to provide more COUNTY COURT JUDGES cover to protect passengers from inclement weather. The SPEAKER presented, by command of His That improved toilet facilities be installed as soon as Excellency the Governor, report of County Court possible. judges for 1990-91.
The residents do not object to new railway stations Laid on table. being built along Sydenham-Sunbury line, but oppose relocation of existing station because: SUPREME COURT JUDGES Hardship caused to existing families to access new The SPEAKER presented, by command of His railway station. Excellency the Governor, report of Supreme Court Sydenham community built around railway judges for 1990. station, which promised future transport access. Laid on table. Lack of consultation by authorities to discuss issues with local community. PAPERS And your petitioners, as in duty bound, will ever pray. Laid on table by Clerk: By Mr Cunningham (118 signatures) Parliamentary Committees Act 1968 - Response by the Roundabout - Coolart and Momington Minister for Transport with respect to the Tyabb roads recommendations made by the Social Development Committee's Report into Speed Limits in Victoria To the Honourable the Speaker and members of the Legislative Assembly in Parliament assembled: Planning and Environment Act 1987 -Notices of approval of amendments to the following Planning The humble petition of Georgia Newton sheweth: Schemes: Bungaree Planning Scheme - No. LlO We wish to petition that a roundabout be installed at the crossroads of Coolart Road and Morrungton-Tyabb Buninyong Planning Scheme - No. L39 Road, Tyabb. Camberwell Planning Scheme - No. Ll1 And your petitioners, as in duty bound, will ever pray. Dandenong Planning Scheme - Nos Ll3, Ll4 Essendon Planning Scheme - No. L21 Part 1 By Mr Cooper (1896 signatures) Keilor Planning Scheme - No. L46 Laid on table. Knox Planning Scheme - No. L38 AUDITOR-GENERAL'S REPORT Moorabbin Planning Scheme - No. L5 Integrated education for children with Newham and Woodend Planning Scheme - No. disabilities U4 Prahran Planning Scheme - No. L25 The SPEAKER presented special report No. 17 of Shepparton (Shire) Planning Scheme - No. L38 Auditor-General on integrated education for children with disabilities. Swan Hill Planning Scheme - No. L8 Swan Hill (Shire) Planning Scheme - No. L8 Laid on table. Upper Yarra Planning Scheme - No. Ll Part 1 Ordered to be printed. Westemport Region Planning Scheme - No. RIO Statutory Rules under the following Acts: Animal Preparations Act 1987 - SR No. 65 Dairy Industry Act 1984 - SR No. 66 APPROPRIA TION MESSAGES
Tuesday, 19 May 1992 ASSEMBLY 1379
Drugs, Poisons and Controlled Substances Act Financial Institutions (Victoria) Bill 1981 -SR No. 62 Land (Crown Grants and Reserves) Bill Health Services Act 1988 - SR No. 63
Medical Practitioners Act 1970 -SR No. 64 Melbourne Market and Park Lands Bill Public Service Act 1974 - Public Service Royal Melbourne Hospital Determinations Nos 11, 12 and 14 (Redevelopment) Bill Seeds Act 1982 -SR No. 67 Royal Melbourne Institute of Sentencing Act 1991 - SR No. 53 Technology Bill Stock (Artificial Breeding) Act 1962 -SR No. 69 Superannuation (Occupational Stock Diseases Act 1968 -SR No. 68 Superannuation Standards) Bill Vegetation and Vine Diseases Act 1958 -SR No. 70 Swinburne University of Technology Bill Water Act 1989 - SR No. 61 Water (Rural Water Corporation) Bill Swan Hill Pioneer Settlement Authority - Report for the year 1990-91 INTELLECfUALLY DISABLED PERSONS' SERVICES (TRUST MONEY) Tallangatta Hospital- Report for the year 1990-91 BILL
...... Second reading
Proclamations fixing operative dates in respect of Mrs SETCHES (Minister for Community the following Acts pursuant to Order of the House Services) - I move: dated 25 October 1988: That this Bill be now read a second time. Building Co-operative Housing and Friendly Societies (Amendment) Act 1990 -Sections 20, 21 and 22; 5 May The purpose of this Bill is to revise the provisions in 1992 (Gazette No. S13, 5 May, 1992) the Intellectually Disabled Persons Services Act 1986 on trust accoWlts. As honourable members of this Building Societies (Prudential Standards) 1990- House are aware, the government is committed to Sections 1, 3 (other than paragraphs (a) and (h», 4, 5, conducting thorough investigations to Wlcover 13,14, IS, 16(1) (other than paragraphs (b», 16(2), 16(3), abuse and malpractice within institutions. The Bill is 19(1) (other than paragraph (b), (c) and (f», 19 (2) and one of the results of those investigations. 19(3); 5 May 1992 (Gazette No. S13, 5 May, 1992) In September 1990 an inquiry was commenced in Friendly Societies (Reserve Board) Act 1991 - Sections relation to the Pleasant Creek Training Centre. 5,9 (other than paragraphs (b), (d) and (k», 10 (other Community Services Victoria subsequently formed than paragraphs (a), (b), (c), (d), (e), (g), (h), (i), G) and an Institutional Investigation Task Force to conduct (k», 11,13 and 14; 5 May 1992 (Gazette No. S13, 5 May, inquires into other centres, to gather information for 1992). diSciplinary proceedings, and to Wlcover evidence in relation to criminal activities which is then referred Health Registration Acts (Amendment) Act 1991 - to police. Sections 13, 20, 27 and 32; 1 July 1992, Section 16; 1 October 1992, Sections 5, 8, 34, 40 and 43; 1 January Investigations are currently being conducted at the 1993 (Gazette No. G17, 6 May, 1992) Caloola Training Centre at SWlbury and at the Janefield and Kew centres. The Auditor-General has APPROPRIATION MESSAGES commended the department for the actions it has taken to Wlcover the misuse of trust accoWlts. Messages read recommending appropriations for: Health Department Victoria also appointed a board Accident Compensation (Further of investigation last year to examine activities at the Amendment) Bill Aradale Training Centre, which was then a joint INTELLECTUALLY DISABLED PERSONS' SERVICES (TRUST MONEY) BILL
1380 ASSEMBLY Tuesday, 19 May 1992 facility for both intellectually disabled and mentally While the department has been operating the trust ill persons. That investigation found that there were accounts for residential institutions and residential breaches of the trust account provisions in both the programs, particular persons have not been Mental Health Act and the Intellectually Disabled appointed as senior officers. Persons Services Act. The current requirements in the Act also create a The investigations by Community Services Victoria number of difficulties. For example, in large have disclosed a number of disturbing activities institutions it is not practicable for one senior officer regarding the use of trust accounts. For example, it to manage all trust accounts, deposit and withdraw appears that some funds from residents' trust all funds, and consult with each resident. There is no accounts have not been appropriately accounted for power under the Act for the senior officer to and have been misused, and bank accounts have delegate his or her responsibilities. In addition, the been opened on behalf of residents contrary to the requirements in the Act mean that one person is provisions of the Intellectually Disabled Persons responsible for all of the trust fund management Services Act. functions within an institution. This is undesirable.
In order to ensure that the department's systems, The amendments in the Bill will rectify these practices and procedures are of the highest standard, problems by providing that the director-general of in July of last year the department established a the department will be responsible for managing project team to review all aspects of the one residents' trust fund. The fund will consist of a management of trust funds of intellectually disabled number of accounts, including a trust account for clients. As a result of this review work began in each resident who resides in a residential institution November of last year on the development of a new or a residential program. All of the responsibili ty computerised trust fund management system and regarding investments will rest ultimately with the the specification of procedures and organisational director-general. arrangements which will be progressively implemented from July this year. The Bill will allow the director-general to delega te his or her functions to the appropriate officer or The Bill will make the amendments to the Act that employee within the department. For example, are necessary to enable the new system to come into investment decisions will be made by senior staff in operation. The proposed changes can be broken up consultation with a major bank which has been into five main areas. contracted as funds manager. The withdrawal of funds and consultation with eligible persons will be 1. MANAGEMENT OF INDIVIDUAL CLIENT delegated to separate staff within each institution TRUST FUNDS IN INSTITUTIONS AND and region. The separation of powers within the RESIDENTIAL PROCRAMS OPERATED BY department's structure will provide a number of COMMUNITY SERVICES VICTORIA checks and balances to ensure that the funds are properly administered. The computer system used Two types of residential care are provided by the by the department will enable scrutiny of department for eligible persons under the Act. transactions by regional and central management. Residential programs are residential services provided by the department in a non-institutional 2. MANAGEMENT OF FUNDS IN form. The Act currently requires a senior officer of a NON-GOVERNMENT REGISTERED residential program to maintain a trust account for RESIDENTIAL SERVICES each resident. The senior officer is authorised to withdraw money from a resident's account to ''Registered residential services" are residential purchase goods and services for the benefit of that services provided to intellectually disabled persons person after consulting with that person. who are eligible to receive such services provided by municipalities or non-government organisations. Similar prOvisions apply in relation to residential The Act currently requires individual trust accounts institutions operated by the department, except that to be maintained for each resident of a registered the senior officer for each institution must operate residential service. one residents' trust accoWlt for that institution. The Act currently provides that a financial management The Bill provides the non-government organisations system is to be maintained which separately records that fW1 these services with the ability to elect to use transactions on each resident's account. the residents' trust fund and associated INTELLECTUALLY DISABLED PERSONS' SERVICES (TRUST MONEY) BILL
Tuesday. 19 May 1992 ASSEMBLY 1381 computer-based accounting systems. Those It is proposed to rectify this situation by creating a organisations with scarce resources and little new residents' amenities fund for each institution. expertise in the areas of trust fund management will Each fund will be comprised of an annual levy be able to operate individual trust accounts within payable by all residents of that institution and any the fund. donations received. The levy for each institution will be detennined by the Minister after considering the This proposal will give non-government views of a standing committee of residents, relatives organisations the option of using a more and staff at each institution. It is anticipated that the sophisticated trust management system. However, levies are initially likely to be of the order of $2 or $3 to ensure that the non-government sector retains its per week. This is a substantial reduction for many independence the use of the residents' trust fund is clients and is an equitable charge. All income not mandatory. If a non-government organisation derived from the residents' trust fund will be wishes to manage its own trust accounts it may distributed to accounts within that fund and will not continue to do so. To ensure that appropriate be used for amenities. standards are maintained in these cases the department will discuss trust accounting methods 4. EXPENDITURE OF FUNDS FROM RESIDENTS' with the non-government organisations as part of AMENITIES FUNDS the service agreement process. The Bill will ensure that current good practice will be maintained and The current provisions of the Act provide that the improved among the non-government sector. senior officer of each residential institution may withdraw money from the residents' amenities 3. RESIDENTS' AMENITIES FUND accounts. To improve the quality and accountability of such decisions the Bill provides tha t this The Act currently provides that a residents' responsibility will lie with the director-general or his amenities account must be established for each or her delegate. The director-general must also residential institution. Such accounts have been in prepare and have regard to an annual plan for the operation under the Act since November 1987. The expenditure of money from these funds. pu.rpose of these accounts is to provide goods, Consultation with a standing committee comprised services and other amenities for the general use of of residents, relatives and staff of each institution is residents in each institution. The amenities provided to continue, except that the committee is now to be with funds from these accounts are additional to the consulted when the annual plan is prepared. standard proviSion of board, lodging and 24-hour support staffing provided by the institutions. 5. DISBURSEMENT OF AMENmES FUNDS WHEN INSTITUTIONS CLOSE At the start of the 1991-1992 financial year approximately $2.5 million was held in the The Act is silent on the disbursement of money in residents' amenities accounts for all of the residents' amenities accounts when institutions institutions. These accounts consist of donations and close. The Act also does not make any provision for an annually detennined percentage of interest the disposal of goods purchased from residents' earned on each resident's trust account. This amenities accounts when institutions close. This is of annually detennined figure is usually 25 per cent. particular concern as both St Gabriel's and the Brierly Hospital have ceased to operate as This is an inequitable process as the amount that residential institutions under the Act and as the each resident contributes depends upon the amount closure of Caloola is rapidly approaching. held on trust for him or her by the department. Many of the most affluent clients - for example, The Bill provides for distributions to occur in those who are beneficiaries of their parents' relation to institutions that have closed before these estates - have all or most of their funds managed amendments come into operation. As the residents' outside the department. Such residents may not amenities accounts have been funded from a contribute the same amount to amenities as do those proportion of interest earned on residents' trust whose funds are all held in trust accounts under this accounts it is appropriate that the proceeds from the Act. As the funds from the amenities accounts are residents' amenities accounts and from the sale of used for goods and services for all residents in an goods purchased through those accounts are institution, such a procedure is clearly unfair. returned to residents. BANKING (PREMIUM ACCOUNTS) BILL
1382 ASSEMBLY Tuesday, 19 May 1992
The Bill also provides for a distribution of funds in a participate will ensure that accounting procedures residents' amenities fund to residents to occur when and systems are also of the highest possible standard. an institution closes in the future. The department's work to develop enhanced Compliance with the current requirements in the Act systems and procedures has been supported by the regarding the allocation of a proportion of interest to Auditor-General, the Public Advocate, the individual trust accounts with the remainder to be Guardianship and Administration Board, the Public deposited in the residents' amenities accounts has Trustee and the Victorian Residential Association for proved to be administratively difficult. Interest the Intellectually Disabled. The new system accrued during the 1990-1991 financial year has not represents a substantial upgrade of current yet been distributed. procedures and will help to enhance the security of trust funds of intellectually disabled residents. The The closure of St Gabriel's and Brierly and the Bill is an integral part of this new system. pending closure of Caloola as residential institutions for the intellectually disabled have also left the I commend the Bill to the House. department uncertain as to how to allocate interest that has accrued in the residents' trust accounts for Debate adjourned on motion of Mr JOHN those institutions. It was not considered to be (Bendigo East). appropriate to allocate the surplus interest into residents' amenities accounts when residents of Debate adjourned until 2 June. institutions that had or would close would not receive any benefit through the use of amenities. The BANKING (PREMIUM ACCOUNTS) Bill provides that the distribution of interest will still BILL take place under the current provisions of the Act. However, the Bill remedies the problems alluded to Second reading by ensuring that where an institution has closed the residents will be reimbursed through the Mr ROPER (Minister for Gaming) - I move: distribution of the amenities funds. That this Bill be now read a second time. CONCLUSION This Bill provides for amendments to the Lotteries The Bill also includes a number of consequential and Gaming and Betting Act 1966 to enable banks to transitional amendments to change over to the new operate schemes for paying cash prizes in respect of trust fund procedures. For the first time the Bill also designated accounts. Similar schemes operate in the inserts provisions dealing with matters such as the United Kingdom - called premium bonds - and closure of accounts when a resident leaves an also in New Zealand. institution or a service. The Bill repeals all of the current provisions on trust accounts, that is sections The principal features of the scheme are: a 45 to SO, and reinserts new sections. This is a more participating bank will be licensed by the Minister; satisfactory way of amending the Act than the the scheme will operate on designated aCcoW1ts; a alternative of making a large number of deletions deposit of $100 will entitle the account holder to one and insertions to specific sections. chance in the monthly draw - multiples of $100 will therefore give multiple chances; the deSignated In 1987 the department took an important step by accounts will not attract interest, rather, the interest appointing a major bank as fund manager of from all accounts will be paid into a pool from resident trust funds under the Act. That which prizes will be paid each month; the return to arrangement has proved to be very successful in government will be 25 per cent of prize pools in the ensuring that the rate of return on the investments of first three years and thereafter 30 per cent of pools; residents is maximised, and in guaranteeing that and there will be government supervision of draws daily cash requirements are met. That arrangement and checking of equipment. will continue into the future. The introduction of a new Residents Trust Fund for all residential The scheme was first proposed to the government institutions and programs provided by the by the ANZ Bank and it was developed through department and for residential services provided by discussions both here and interstate. The scheme is those non-government agencies that also wish to likely to be introduced elsewhere in Australia, with New South Wales showing particular interest, and LOY Y ANG B BILL
Tuesday, 19 May 1992 ASSEMBLY 1383 our proposals will serve as a model for the rest of continued reductions in the real price of electricity to the country. The ANZ is to be commended for its all Victorian customers, and also increase the initiative in putting forward the scheme. competitive position of the SECV in the national power grid. This will strengthen Victoria's potential The scheme will be available to all banks within the to export electricity to other States on a competitive meaning of the Commonwealth Banking Act. 1his and cost-effective basis. means that other financial institutions, such as building societies, will not be able to participate This transaction represents a significant opportunity without further Parliamentary sanction. for private sector involvement in Victorian infrastructure projects and the electricity industry. It It is anticipated that the scheme will have a is one of the biggest public sector transactions ever significant effect on savings, to the benefit of contemplated in Australia. It will be the first time depositors and of the commwtity generally. The that part of a major State power station will be research of the ANZ Bank indicates that 65 per cent part-owned and managed by a private investor. of funds in the special accounts will be diverted from conswnption and that depositors will maintain The introduction of competition into the Victorian balances of $1000 on average. power generation industry, particularly the introduction of principal wtion coverage, will result Finally, the Commonwealth has recently legislated in improved plant performance and industrial to make prizes in the scheme subject to income tax. relations in the power generation industry in It is not considered that this will set a precedent for Victoria. taxation of earnings from gambling. The rationale of the Federal amendments is that interest would be A direct result of the proposed 40 per cent sale will payable on deposits if it were not for the scheme. be a substantial decrease in the debt of the SEC V and significant improvement in SECV profit. I commend the Bill to the House. The Bill contains various provisions which facilitate Debate adjourned on motion of Mr STOCK DALE the operation of the power station under the new (Brighton). ownership arrangements. Some are relatively minor but nevertheless vital changes to certain laws of the Debate adjourned until Tuesday, 2 June. State.
LOY YANG B BILL The Bill authorises the Minister for Manufacturing and Industry Development to enter into on behalf of Second reading the State a contract with the new owners of the power station, under which the State will undertake Mr A. J. sHEEHAN (Treasurer) - I move: to do and provide certain things and the owners will likewise be required to meet certain obligations. The That this Bill be now read a second time. agreement is provided in a schedule to the Bill. Discussions are continuing with Mission on aspects The object of the Bill is to facilitate the partial sale of of the agreement. the Loy Yang B power station, currently under construction by the State Electricity Commission The Bill seeks to provide a mechanism whereby (SECV) near Traralgon. State laws that are inconsistent with the intended outcomes under this Act or the State agreement are SECV has been authorised by the government to sell to be construed as if they were modified so as to to private sector investors a 40 per cent stake in the give effect to the agreement. power station. A further stake of 11 per cent is to be sold to a company affiliated with the Victorian The Bill seeks to confirm that the SECV has the government but independent of SECV control. power to complete the transaction that is contemplated and do all the things that the SECV Under the terms of the proposed sale, a world-class will or might need to do when the station is operator will operate Loy Yang B in competition operating under new ownership. with SECV-owned power stations. When completed, the jointly owned Loy Yang B power station The Bill seeks to achieve a number of other operating under new management will help ensure miscellaneous changes designed to enhance the LOY Y ANG B BILL
1384 ASSEMBLY Tuesday, 19 May 1992 operation of the project, including: confirmation of with one of the largest and most complex the process followed by SECV to establish an privatisation deals in Victoria's history. The appropriate title for the power station site; negotiations have been going on for more than 12 establishment of certain easements; closure of months and originally involved eight participants, defunct roads in the Loy Yang project area, which came down to two participants and finally particularly in the coalmine area; prevention of one. The matter involves very complex legal, mineral exploration in the project area so that the financial and technical details and deals with power station operations are not disrupted; a flexible constitutional issues. approach to achieve compliance with relevant building control standards; extension of the term of It is unacceptable for the opposition to be expected the necessary water licence in accord with the life of to be able reasonably to debate the Bill in the time the station; avoidance of an anomaly which involves proposed by the Minister. The Bill encompasses nine the continued payment of the energy consumption agreements with currently unnamed participants. levy on gas consumed by SECV; the capacity for The opposition would like the opportunity to gain VicFin or its successor to fund the from the government advice as to who the government-related participants if needed; the participants are and a chance to discuss the Bill with granting of power to the Treasurer to provide the participants. support for SECV in the event that SECV is unable to meet its obligations under the project; clarification The Bill names a number of municipalities as being that the Loy Yang project is not in contravention of involved and time would be necessary to deal wi th the Commonwealth Trade Practices Act; and their interests. Because of the vast contractual detail, exemption from the provisions of inconsistent Acts which, if seen on a table, would be roughly 18 inches or subordinate instruments and from the provisions high, and to which the government has said the of the Freedom of Information Act. opposition will have access, it is absolutely ridiculous that the opposition is being asked to The Bill seeks to establish that the Loy Yang B site is debate the Bill on behalf of the people of Victoria not subject to local government rates or charges. when such a short time is available for consideration However, it is intended that the new owners will of the proposed legislation. make payments in lieu of rates. Furthermore, these should be paid not solely to the shire in which the The government has had plenty of time to bring this station is located but also to other affected legislation in and has chosen to do it at this late hour municipalities. The beneficiaries are defined in the in the session, which is a measure of the Bill as the shires of Traralgon and Morwell and the government's utter incompetence. To expect the City of Traralgon. opposition to look at the details, which have cost the other participants more than $15 million and the Negotiations will be required on the total amounts State Electricity Commission of Victoria to be paid and the distribution among the three approximately $20 million, in these few days is councils. The government will encourage the without precedent in the history of this Parliament. councils to take the opportunity to come to a This sort of legislation, because of the complexity mutually acceptable agreement. However, if such and size of the matters involved, would normally agreement is not reached within a reasonable time, come into the House with debate being adjourned the Governor in Council will decide the matters in for at least two months to allow the opposition to question, upon advice from the Office of Local consider it carefully. Government and the Victoria Grants Commission. The very least I ask of the Treasurer is that he allow I commend the Bill to the House. the Bill to lie over during the Parliamentary recess to allow the opposition time to fully and properly carry Debate adjourned on motion of Mr PLOWMAN out its responsibilities on behalf of the people of (Evelyn). Victoria by examining the deal and returning to this place after a reasonable time to give reasoned Mr A. J. SHEEHAN (Treasurer) - I move: responses to it.
That the debate be adjourned until Thursday, 28 May. The few days allowed is totally unacceptable and the opposition seeks from the Treasurer a Mr PLOWMAN (Evelyn) - On the question of reconsideration of the proposed adjournment period time, this legislation, introduced today, is dealing LOY Y ANG B BILL
Tuesday, 19 May 1992 ASSEMBLY 1385
in light of the momentous task the government now consulted to achieve an outcome which is not just places before it. right - and that is very important - but which in this context both the government and the opposition Mr W. D. McGRATH (Lowan) - Also on the can attach some pride to. question of time, Mr Speaker, the National Party totally supports the comments of the honourable The impact of the Bill on the State and on future member for Evelyn.The Bill is significant not only generations will be considerable. One must bear in for the present but also for the future of Victoria. mind the parlous state of Victoria's finances at present. We are being asked to pass a Bill introduced It is one of the most crucial Bills to have entered this in the dying moments of the government with the place. Discussions on the Bill have taken place for Treasurer knowing full well that he is running up some time and now, in the last few weeks of the against the gag effectively introduced by the other autumn sessional period, the Minister asks us to go place. The Bill is being introduced far too late. out into the community to consult community groups and come forward in just nine days with a The adjournment proposed by the government is an reasoned political direction on the Bill. That is totally insult to honourable members and to people who inconsiderate of the government. had wished to be clients or customers of this State. The preferred tenderer has been involved in intricate Bills of far less importance lie in wait on the Notice negotiations and has had discussions with both the Paper day after day, week after week. I cite the government and the opposition over a long period. Companion Animals Bill, which has been on the The opposition has pointed out to that tenderer the Notice Paper for some time. That is as it should be so importance of the legislation, in case the government that public consultation can take place. was not aware of it.
The honourable member for Evelyn is asking for a If the legislation is introduced too late there will be similar period of consultation so that reasonable and great difficulty. Worse than that, the opposition has sensible decisions can be made without the spent considerable time and effort in doing opposition being forced into making hasty decisions whatever has been necessary to deal with the issue which might be regretted and which could be to the and is now asking for commonsense, but the detriment of Victorians. Treasurer has moved that the debate should be adjourned for two weeks - nine days in effect! With only nine days in which to have consultations, a considered decision cannot be arrived at. It is The government's action is totally unreasonable and totally irresponsible of the Minister. As the unconscionable and does no credit to it or to the honourable member for Evelyn interjects, it is a Minister. $3 billion deal, yet we are asked to consider it in just nine days. That is certainly not on. Mr DELZOPPO (Narracan) - Many people who work at Loy Yang reside in the Narracan electorate. I Mr GUDE (Hawthorn) - Further on the question would like an opportunity of ensuring that workers of time, Mr Speaker, as has been stated by the two in my electorate who are employed at Loy Yang previous speakers this is one of the most important have their rights and employment opportunities and significant Bills to have been brought before fully protected when this Bill is passed. Parliament for many years. As one who has been associated in a relatively minor way in trying to In his second-reading speech the Minister also work through some of the material made available mentioned that the Bill affects the Shire of Traralgon at this stage, I have a genuine understanding of the and the City of Morwell. Parts of those complexities and extensive nature of the proposal. municipalities are also in my electorate and I wish to circulate the Bill and obtain the views of those The Minister knew full well that difficulties would municipalities so that I can represent their views in arise if the legislation were introduced at the end of debate on the Bill. the sessional period. We are now contemplating the stitching up of a $3 billion deal without full access to I urge the Treasurer to note the requests of the all the material necessary. We will not have the time honourable member for Evelyn and other necessary to consider that material, to gain the honourable members on this side of the House and necessary advice and to consult with the broad allow further time before the Bill is debated. range of community members needed to be DAIRY INDUSTRY BILL
1386 ASSEMBLY Tuesday, 19 May 1992
Mr A. J. SHEEHAN (Treasurer) (By leave) - I Lea,Mr Tanner,Mr acknowledge that the Bill involves a number of Leigh, Mr Wade, Mrs complex issues involving a large amount of detail Lieberman, Mr Weideman, Mr and large amounts of money. McGrath, Mr J.F. Wells, Or McGrath, Mr W.O. However, the government has made its own advice available to the opposition for quite some time and the opposition has been well resourced in that Motion agreed to and debate adjourned until regard. Thursday, 28 May.
The government is proposing that the Bill be DAIRY INDUSTRY BILL debated in 9 or 10 days time. The opposition has had many months to prepare and there has been Second reading considerable public debate. Debate resumed from 7 May; motion of House divided on motion: Mr BAKER (Minister for Food and Agriculture).
Ayes, 45 Mr BILDSTIEN (Mildura) - The Dairy Industry Andrianopoulos, Mr McDonald, Mr Bill will repeal the Dairy Industry Act and amend Baker, Mr Mathews, Mr the Borrowing and Investment Powers Act, the Food Barker, Mrs (Teller) Micallef, Mr Act and the Stock Diseases Act. The major change in Batchelor, Mr Norris, Mr the Bill is the immediate abolition of all maximum Cain, Mr Pope, Mr price controls at wholesale, semi-wholesale and Cole, Mr (Teller) Ray, Mrs retail levels. The Victorian Dairy Industry Authority Crabb, Mr Roper, Mr (VDIA) will continue to be responsible for market Cunningham, Mr Rowe,Mr milk price de terminations, for pricing Oollis, Mr Sandon, Mr determina tions to the processor and for Emst, Mr Seitz, Mr post-processor minimum pricing with Prices Fordham, Mr Sercombe, Mr Commissioner approval. The Bill also includes a Garbutt, Mrs Setches, Mrs sunset provision for the abolition of the marketing Gavin, Mr Sheehan, Mr A.J. role of the VDIA on 1 January 1994. It provides for Hamilton,Mr Sheehan, Mr F.P. the reconstitution of the authority board, and will Harrowfield, Mr Shell, Mr improve quality assurance procedures and HiII,Mrs Simmonds, Mr administration. Hirsh, Mrs Spyker, Mr Jolly,Mr Thomson, Mr During the deliberations on the legislation, the Kennan, Mr Trezise, Mr coalition agricultural committee consulted Kennedy, Mr Vaughan,Dr extensively with a number of organisations, Kimer,Ms Walsh, Mr including the Victorian Milk Distributors Leighton, Mr Wilson, Mrs Association, the United Dairyfarmers of Victoria McCutcheon, Mr (UDV), the Milk Processors Association of Victoria, Noes, 37 the Victorian Dairy Industry Authority and the Austin, Mr McNamara, Mr Australian Dairy Products Federation. Bildstien, Mr Maclellan, Mr Brown, Mr Maughan,Mr The SPEAKER - Order! There is far too much Clark, Mr Napthine, Or audible conversation. I ask honourable members to Coleman,Mr Perrin, Mr lower their voices. Cooper, Mr Perton, Mr (Teller) Oelzoppo, Mr Pescott, Mr Mr BILDSTIEN - Prior to the adjournment of Oickinson, Mr Plowman,Mr debate the honourable members for Lowan and Gude, Mr Reynolds, Mr Ripon clearly put the position of the Liberal and Honeywood, Mr Richardson, Mr National parties on the Bill. At the outset we were Jasper, Mr Smith, Mr E.R. totally behind the retention of farm-gate pricing and John, Mr Smith, Mr I.W. the need for equitable treatment of dairy farmers Kennett, Mr Steggall, Mr and consideration of their costs and margins in the Kilgour, Mr (Teller) Stockdale, Mr pricing of market milk. We are also concerned about DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1387
the role of the Prices Commissioner in reviewing It is worth noting that in Victoria there are some prices. I shall return to that in a moment. 8400 dairy farmers, that is, about 300 or 400 fewer than there were 12 months ago. The Minister for We support the industry agreement, reached after a Food and Agriculture cannot expect dairy farmers to review, to establish its own marketing company run believe that the office of the Prices Commissioner by a board of management including UDV, will work in their best interests. They believe the processor and VDIA representatives. I emphasise Prices Commissioner will work for consumers, that the point made recently by the shadow Minister for is, not for fair prices for dairy farmers; he will be agriculture that the primary objective of any new seeking to promote lower prices for consumers. I marketing company should be to boost the market understand that Professor Fels has already been and maximise sales of milk to arrest the recent reported as saying he believes the dairy industry is decline in sales of flavoured milk in Victoria. He "too fat" and the price of its product has to be went on to say, and I echo his comments, that it is lowered for consumers. I find that reported not enough to produce new brands that cannibalise statement hard to accept when the evidence is that the existing market but rather a matter of being Australian consumers already enjoy the lowest innovative and targeting a different segment of the priced dairy products in the world. Indeed, the market milk product range. Victorian dairy farmer produces the lowest cost milk in the world; and the market milk price in Victoria is As I said, the coalition is concerned about the the lowest price in Australia. involvement of the Prices Commissioner as proposed by the Dairy Industry Bill. The matter was Over the past 38 years, milk prices have increased summed up succinctly in the submission put to the only 5.2 times. It is interesting to compare that figure coalition agriculture committee by the United with price increases in other consumable items. Dairyfarmers of Victoria, in the following terms: During that time span, the price of bread has increased 14 times; cigarette prices have gone up Whilst the Prices Commissioner can advise the VOlA 11.3 times; beer has increased in price 8 times; petrol on the guidelines for pricing pril1ciples and has increased 11 times; postage stamps have methodology, the UDV is not in favour of the Prices increased 14.5 times; and tram fares have gone up 39 Commissioner being required to approve or times. disapprove of the pricing principles and methodology nor the six-monthly price determinations by the Someone in our research department who is a bit of authority. a whiz with figures has worked out that in 1971 an average wage earner had to work 5.5 minutes to The position of Prices Commissioner was established to purchase a litre of milk, compared with 3.7 minutes provide the government with advice on prices in the in 1991. interest of the consumer, and the commissioner should not have the power to intervene in the price setting Victorian dairy farmers produce some 61 per cent of process. The role of the Prices Commissioner should be Australia's total milk production. Over the past 20 restricted to an advisory role to the VOlA and to the years milk production per farm has increased in the government. order of 185 per cent. The Victorian dairy industry has a record of being the State's largest decentralised Further in the submission, the UDV states: industry. Dairy products account for some 40 per cent of the State's processed food exports, and those There is no requirement for the Prices Commissioner to export earnings bring in around $700 million a year. be involved in the price setting procedure other than So the 8400 dairyfarmers I referred to earlier, advising the VOlA and the government under the employing some 30 000 people State-wide, powers currently granted to the Prices Commissioner. contribute $700 million a year to Victoria's export income. The UDV is not in favour of the Prices Commissioner approving or disapproving the VOlA price The average dairy farmer in this State produces determinations in preference to the government about 400 000 litres of milk per year. Of that, 45 000 making an independent assessment. litres, or between 11 and 12 per cent, is sold through the Victorian Dairy Industry Association as market The amendments that have been foreshadowed by milk at a higher price than is paid to the dairy the shadow Minister reflect the support of the farmer for manufactured milk. The previous two coalition for that UDV submission. speakers have explained that at the moment the DAIRY INDUSTRY BILL
1388 ASSEMBLY Tuesday, 19 May 1992 price of market milk is fixed at around 40 cents per 10000 retail outlets. As I said also, the number of litre, which is about 20 cents a litre higher than the dairy fanners in Victoria has declined in the past 12 price of manufacturing milk. The result in dollar months or so by 300 or 400. Many of them are terms of 11 or 12 per cent of a dairy fanner's justifiably worried about the future of small towns production being provided as market milk is around and their local economies, in particular the impact $9000 or $10 000, that is, the fanner gets that much that that reduction in numbers is having on more for selling the milk at market milk prices. If employment. one considers the total returns and the two prices are blended, dairy farmers more accurately receive a I shall speak broadly about the dairy industry, but it price of 23 cents a litre for their product. is incumbent upon me as the member for Mildura to refer firstly to the specific impact that the proposed It is interesting to note that the retail price of a bottle legislation might have on my electorate. of milk is about two-thirds of the price one might pay for bottled water. By any stretch of the The Minister for Food and Agriculture would know imagination milk and dairy products are cheap. that the Victorian Dairy Industry Authority has been subsidising processors and distributors to the tune As I said, in Australia dairy farmers receive about 20 of approximately $1 million a year towards the cost cents a litre for manufacturing milk. That price must of distributing milk to remote areas of the State. be contrasted with 90 cents a litre in Japan and, I Sandhurst Dairies Ltd, which is based at Bendigo think, a price that is about 70 per cent higher in the and supplies milk to Ouyen, Mildura, Robinvale and United States of America than it is in Australia. Manangatang has been receiving a remote area rebate of approximately $130 000 a year from the It is worth noting also that every government in the VDIA. The VDIA has said that with the impending world intervenes in the pricing structure for milk removal of the maximum milk price it will no longer produced on dairy farms. I said earlier that this State be able to justify the remote area allowance. produces 61 per cent of Australia's milk. It is produced at a cost that is about 30 per cent lower My interpretation of section 57 of the Bill is that the than the cost of production in other mainland States. authority may still be able to subsidise the cost of transporting milk to remote areas, but if it chooses It is interesting to note the price increases in the not to do so it would be reasonable to expect the dairy industry over the past two or three decades. In distributors of milk to isolated areas to increase the the past 35 years manufacturing milk returns have price to cover their costs. I have raised this matter increased by some 38 per cent; market milk by 570 with the general manager of the VDIA, Mr Douglas per cent; the consumer price index by 850 per cent; Weir, who recognises the problem and has offered and average weekly earnings by 1700 per cent. me the following comments:
Earlier I referred to the need to arrest the decline in Excess production capacity in the processing sector of sales of flavoured milk. Nobody could argue that the dairy industry provides intense competition for any other Statewide flavoured milk has had additional litres. At present, remote area distribution anything like the success enjoyed over the past support is paid on approximately 11 million litres in decade or so by Victoria's Big M. I am sure north- western Victoria. A review of the price of milk to honourable members will recall the fanfare with country processors at the time of withdrawal of remote which the product was introduced. There were area distribution support will be undertaken to scantily clad girls in bikinis - the Big M girls, I recognise different costs in the transportation of bulk think they were called - and the sales of Big M milk to processing plants. That is, there may be calendars, when they were released, went through different (lower) prices for milk for COWltry processors the roof. which would increase their competitive edge in country areas. Supply of Victorian milk to all areas is the The product has been very popular, and it still is. priority of the VDIA, but alternative sources of supply The processor tells us that it outsells other flavoured are available. Alternative sources for Mildura could be milks by seven to one. The UDV and the VDIA are Shepparton, Horsham, Berei, Renmark or Finley. Local proud of the record of Big M sales and want to see community businessmen, farmers or other individuals its strength in the marketplace maintained. may seize the opportunity to start a small to medium processing operation. As I said, Victoria has 8400 dairy fanners. There are also 13 processors, 200 distributors and well over DAIRY INDUSTRY BILL
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I floated that idea locally and I do not think it is Mr BAKER (Minister for Food and likely. Agriculture) - On a point of order, Mr Speaker, I take offence at the reference to a 4O-meeting, ID-day Competition between freight operators in general will trip across four regions being described as a junket. I ensure competitive pressure on distributors transport ask the honourable member to withdraw. rates. Optimum delivery quantities may be used. Milk has a ten day useful life which may contribute to The SPEAKER - Order! The Minister has asked efficient distribution patterns. for the comment to be withdrawn. Will the honourable member for Mildura withdraw? Mr Weir concluded his letter to me by saying: Mr BILDSTIEN (Mildura) - Mr Speaker, with If current suppliers increase retail prices to Mildura, respect, the trip that was undertaken by the competition from other suppliers should prevent a Minister-- price blow-out. The SPEAKER - Order! Will the honourable I certainly hope that that will be the case because member indicate to the Chair whether he is willing Sandhurst Dairies has told me that the round trip to to withdraw? Ouyen, Mildura, Robinvale and Manangatang, which it does six days a week, is approximately 800 Mr BILDSTIEN - I have publicly described -- kilometres, which costs $400. The truck on each trip carries 19 550 litres of milk. The dairy is concerned The SPEAKER - Order! Will the honourable that it will have to increase the price of milk in member indicate to the Chair -- Mildura if the $35 000 a month it receives in rebates from the VOlA is removed. It has been suggested Mr BILDSTIEN - I have some difficulty doing that that price could easily need to be increased by that because I have publicly described the Minister's some 5 cents a litre. overseas mission as a junket in the past. To withdraw would be to contradict my earlier I direct the Minister's attention to the likely impact remarks. With respect to the Chair, and most of this proposed legislation on the north-western reluctantly, I withdraw. part of the State. Similar circumstances exist in East Gippsland. It is important that we keep a close and The SPEAKER - Order! The honourable watchful eye on prices. I said earlier that I wanted to member may proceed. talk in more general terms about the need for positive policies from the government relating to Mr BILDSTIEN - The Minister would be aware agriculture in general and the dairy industry in that in Victoria wholesale prices for butter and particular. cheese are about half those in Europe and North America and that Victorian dairy producers are paid For too long under this Minister and his less than half what other farmers receive in the predecessors the government's policies have been Northern Hemisphere. The Victorian dairy industry barren of any initiative in agriculture. No foresight has been exemplary in its ability to change for the rural sector is being enunciated by the structurally not only at the farm-gate level but government. In contrast, let me say that the coalition throughout the processing chain. There remains the has a vision and believes this State can become the need to develop a blueprint for the dairy industry premier agribusiness dairy food industry in for the 19905 and beyond. What needs to be put in Australia, one that is recognised by all our place is a competitive strategy for the future. international trading partners. We all know that European agribusiness companies are keen to secure To take advantage of the expanding world future sources of clean and quality-assured food population and the demand for food, that strategy products that they can import. Victoria is very well has to be based on the expanding Asian markets. I placed. On a world scale Victoria is second only to do not know whether the Minister will agree, but the New Zealand in its low costs from the pasture to the alternative for Victoria would be a potential manufacturing plant. takeover by foreign companies, with their buying up the industry and controlling the marketing of our The Minister has recently been on a junket to Asia products. In the 40 meetings that the Minister for and he would be aware that the wholesale -- Food and Agriculture says he had in Asia, I trust that he learned - if he did not know already - that DAIRY INDUSTRY BILL
1390 ASSEMBLY Tuesday, 19 May 1992 technology is now the major detenninant of patterns Mc BILDSTIEN - I will not be deterred! There is in world trade and investment. It is not land, no doubt that the dairy industry in Victoria must resources, capital or labour - it is technology. develop increasing integration with east-Asian economies as part of a wider international It is essential that the dairy industry adopt the latest realisation. We must understand that these food processing technology to enable it to survive favourable trends are the key to improved economically and to protect Victoria's future as an international competitiveness, as is the structured internationally competitive exporter of value-added removal of our barriers in the longer term. dairy products. The possibility of dairy cooperatives receiving increased research dollars for product This must be coupled with the need to identify development for both domestic and international import costs as a total percentage of the cost of markets will need to be explored in the future. This production for farmers and processors. I am talking means that when we have resolved our short-term about labour, transport, waterfront and shipping market support problems, dairy farmers will have to costs and all the regulatory costs that face the realise that the future survival of that cooperative industry. Only when governments are prepared to structure will require increased investment in tackle those issues and ensure that reforms are put product and brand development. The current in place will we be able to develop maximum strategy and goals of the Dairy Research competitiveness. Development Corporation are commendable when taken into account with the local initiatives of dairy It is no good for this government and the Keating farmers. Market initiatives and brand development government in Canberra to argue that we can march will be necessary for export development and price straight into Asia without first undertaking reform premiums to be maximised, especially with the in the areas I have mentioned. We must have an increasing recognition that Asia provides significant efficient industry structure post-farm gate; then we growth opportunities for the future. can ensure that we target a specific market with the right produce at a competitive cost. The proposal At present about 80 per cent of our exports are bulk being suggested by the honourable member for commodities - commonly called generic Lowan on behalf of the coalition is to build a products - and about 20 per cent represent the community of interest in the dairy industry to brand and specialised products. It must be examine potential improvements in labour markets recognised that Australia is still an unknown and in transport and shipping costs, the impact of quantity in the vital and high growth Asian markets. industrial and environmental regulations and the Image development will be as critical a factor as need for investment incentives, productivity efficiency, reliability and price if we are to gain a development, promotion and marketing strategies, toehold in the market for processed foods, which in and skills training. a decade's time will dwarf the total value of all exports from Australia. Until such time as the government is prepared to address these issues the industry will never have the Unless we can get that recognition and get our opportunity to compete on export markets in a way products on the supermarket shelves of Asia we can that will make it world competitive, nor will it be forget about the whole thing. The major brand able to create and develop niche markets, names and the expertise are firmly in the hands of particularly in Asia. the international corporations. Our best option will be to sell Australia as a producer of excellence in I conclude by saying that I trust the Minister will agriculture as the basis of our brand development take on board the comments I make, specifically and to focus on wholesome, clean agricultural food those relating to the likely impact of the cost of milk as the best in the world. to consumers in remote areas of Victoria, notably East Gippsland and Mildura where the loss of the The development of niche markets in Asia will remote area rebate could lead to a price increase in enable cooperatives to expand in alternative markets the order of 4 or 5 cents a litre. The price needs to be to the subsidised products of northern hemisphere constantly reviewed, and I trust the Minister will countries. give that undertaking.
Mr Baker - This is a shocker! Mc J. F. McGRATH (Warrnambool) - The electorate I represent and the area from which I come would be recognised as one of the principal DAIRY INDUSTRY BILL
Tuesday. 19 May 1992 ASSEMBLY 1391 producers of milk in Victoria. I have a practical milk and may have a detrimental effect on the background in dairy fanning. I was raised on a dairy industry. But the removal of the maximum price farm. I doubt that many members in this House may have the opposite effect: by allowing market would have had the experience of actually milking forces to come into play the price of milk may rise. A cows - not that I enjoyed it! However, it does give rise in price could be justified, especially when one one an appreciation of other tasks in life because the compares the cost of a litre of milk with the cost of a life of a dairy farmer can best be described as litre of soft drink and the nutritional values of both. demanding. While many other types of agricultural production allow the farmer some freedom and time The Bill will open up the industry to the influence of for relaxation, dairy fanning does not. Apart from market forces, which until recently the industry has the lean period when one turns the cows out before been somewhat reluctant to accept. Dairy farmers they come back into the calving season, one milks and others have been afraid that any removal of the cows twice a day, seven days a week. controls may have a detrimental effect on the industry. Nevertheless I have been heartened by the Because our farm was reasonably small and my responses of those involved in the industry to whom father supplemented the income by building dairies I have spoken, particularly dairy farmers. Their and doing other jobs for other landholders in the involvement gives them a better understanding of area, obviously somebody else had to do the the broad range of issues that must be considered milking. I did the milking in the morning before I when one talks about the marketing of milk. went to school, and when I came home in the evening I did the milking again. I look back on it as People within the industry have shown their being part of my training. support for the removal of the maximum price which, I do not mind saying, I was concerned about. Mr Sercombe - Why didn't you stay there? Although I am still concerned about the effects of the removal on a number of regions, in general dairy Mr J. F. McGRATH - The honourable member farmers and others believe this step should be taken. on the back bench might wish I had stayed there, but I knew some political vandals were on the horizon, The Minister's second-reading speech states that one and that is why I am here! The task of milking gave of the main purposes of the Bill is to reconstitute the me a basic understanding of the dairy fanning Victorian Dairy Industry AuthOrity. Honourable comnllmity. When I compare the processes on our members will be aware that in 1977 the VDIA was farm then, which was relatively small and not as established under the Dairy Industry Act. From time technologically up-to-date as some of the farms were to time I have been critical of the authority. An even then, with the advanced dairy industry of organisation that is funded by the dairy industry today then I can see enormous changes in the dairy should always act in the industry's best interests and industry. Given that we are seeing such changes it is should reflect industry views. vital to the overall economy of Victoria, particularly the economies of south-west Victoria, that we For that reason I am concerned about the way it is continue to review the legislative direction of the proposed to reconstitute the VDIA board. I am not industry. for 1 minute suggesting that the board should comprise only producers and processors; but such I suppose the principal function of the Bill is the one people should be given a say in the sorts of expertise that deals with the pricing of milk. The they believe should be represented on the board. In second-reading speech states that the Bill will: other words, the VDIA should be operated by the industry for the industry. If such an approach were refonn the market milk system, especially through a taken, a reconstituted board would enjoy more reduction in price controls at wholesale and retail levels. credibility and its decisions would receive proper recognition. The Bill also deals with the reconstitution of the Victorian Dairy Industry Authority, which is the I am concerned about the proposed role of the Office body charged with the responsibility on behalf of of the Prices Commissioner. I believe the Prices the State of price setting, marketing and a range of Commissioner has been nothing more nor less than other matters within the industry. a proponent of cheaper goods for the masses. I say that deliberately, because although the I am concerned that the removal of the maximum commissioner has successfully intervened in many prices will lower the prices of wholesale and retail areas I believe his effectiveness can best be judged DAIRY INDUSTRY BILL
1392 ASSEMBLY Tuesday, 19 May 1992 by his inactivity in the matter of controlling petrol dairy farmers have been used to the State's best pricing. advantage. The industry could be used as a role model for the restructuring of many other industries By ensuring that the prices of many goods and because it is highly competitive, productive and services are reviewed, his intervention has been of efficient. benefit to consumers living in the metropolitan area. But the Prices Commissioner has failed dismally to Forty-one years ago there were approximately control petrol prices, particularly in rural Victoria. 50 000 dairy farms in Victoria; five years later the Country people are paying exorbitant prices for number of dairy farms had crashed - I suppose I petrol and liquefied petroleum gas when compared can use that word - to 28 000. Today Victoria has with the prices paid for those products by people approximately 8900 dairy farms. Whatever the living in the city. Although members of the coalition determining factor for the decline in the number of have raised the matter with the Prices Commissioner dairy farms, a rationalisation of the industry has by telephone and in correspondence, he has failed to occurred. grasp the nettle. I shall show how the rationalisation of the industry The only likely effect of the Prices Commissioner's has affected the State and my electorate of review of milk prices is to drive the price of milk Warrnambool and explain why I believe the down, which seems to go against what the Minister proposed legislation is vital, not just to my dairy for Food and Agriculture claims is the thrust of the farming constituents but to the urban dwellers who Bill-to reform the market milk system, especially benefit from the economic multiplier effect of the through a reduction in price controls at the dairy industry and the impact that has on the wholesale and retail levels, and in that sense to open economy. up the industry to market forces. If that aim is to be achieved the Prices Commissioner should have no Since 1988 dairy farmers have improved their role to play in reviewing milk price determinations. productivity by 5 per cent each year. That sort of productivity increase cannot be found in any Because, as I said, I have become cynical about the industry throughout the State or the nation. It has performance of the Office of the Prices occurred without government funding, incentives or Commissioner I believe it would be appropriate to urging, and has come about because the industry propose an amendment in the Committee stage to has recognised the need to improve its overall delete from the Bill any reference to the Prices operation, particularly the quantity and quality of Commissioner. That is particularly important if we the products it produces. are to realise one of the main purposes of the Bill, which is to remove the maximum prices of Sometimes when farmers endeavour to maximise wholesale and retail milk and to allow market forces the output from the land on which they are farming to come into play. or the number of animals they are farming they may lose sight of quality, but the quality assurance within The reconstituted Victorian Dairy Industry the dairy industry should be a model for other Authority will commence operations on 1 January industries. People involved in the meat industry 1994. The opposition will ensure that the readily speak about the quality assurance and the appropriate people are appointed or proposed for quality product of the dairy industry. election to the VDIA board. Some 50 000 people are employed in the dairy industry, which is a Although there has been a significant reduction in Significant part of the State economy. It should never the number of dairy farms the increase in the retail be forgotten that the industry is a Significant price of dairy products since 1988 is only 70 per cent employer. Sometimes people see farms as of the increase in the consumer price index. So fragmented units, thereby failing to appreciate the although dairy farmers have maintained a 5 per cent fact that each farm is an integral part of a national productivity improvement on a per annum basis and State network. since 1988 the increases in the costs of their products have been less than the increase in the consumer It is estimated that the operations of each dairy farm price index. Members of Parliament should take result in the creation of four jobs. The value of the account of that because it is Significant. dairy industry to the State can be seen in its high levels of productivity and efficiency. I do not believe The dairy industry's gross value of dairy production the demonstrated expertise and experience of our is approximately $1025 million, a Significant DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1393 amount. Victoria produces 61 per cent of all milk the European and Canadian markets, whose produced throughout Australia and provides products are heavily subsidised, is the market that approximately 90 per cent of the milk used in should receive the closest examination. products developed for the export market. That is a credit to the State's dairy industry. Western Victoria is one of three recognised large dairying regions. It plays a prominent role, in This has occurred at a time when the environment company with the Goulbum Valley and Central has been unfriendly. Production costs have escalated Gippsland, in producing milk in Victoria. beyond the level of increases in the consumer price index. For instance, power supplied by the State Or Roy Powell from the University of New England, Electricity Commission, fuel and other costs that New South Wales, has conducted a study into the bear significantly on the cost of production have dairy industry in Victoria and Tasmania. Some of increased significantly, yet dairy fanners have the results are quite enlightening. He speaks about showed the way by continually improving their the impact the industry could have on an area: productivity. Together the three Victorian regions generated $2826 If the major issues that affect manufacturers, million in output - producers and the value-added sector, such as the milk industry -labour costs, labour market reform that is, the three areas I have referred to - and waterfront refonn -were addressed the international competitiveness of the dairy industry while local households benefited from the addition of would be enhanced considerably. The dairy industry $906 million of income - competes on the magical level playing field that supposedly exists throughout the world at a decided with about 30 000 jobs being created. disadvantage. It is high time that legislators looked at the role they should play at both the Federal and Obviously the industry is Significant. In State levels in relation to those production costs. south-western Victoria, Warrnambool and surrounding towns rely heavily on the dairy Obviously current waterfront practices do not assist industry, particularly on its efficiency and continued Australia's international competitiveness. In fact, viability. they obstruct producers and the dairy industry in their efforts to be internationally competitive. Residents in that area have watched the progress of this legislation with some interest. And they The honourable member for Mildura referred to the certainly have been most interested in the report of Minister for Food and Agriculture's recent trip to the Industry Commission and the subsequent Asia. Australia should increase its exports to the response of the Federal government, because of the Asian region, but it must ensure it understands the possible consequent impact on the dairy industry. market and provides the dairy products that the Extensive submissions were made to the Industry region wants. Obviously their needs are different Commission by residents of south-western Victoria from the needs of the Australia, New Zealand or who have been concerned about the impact of European communities. Unfortunately, Australia indiscriminate or poorly researched moves that may has largely ignored the Asian market for too long. hasten the deregulation process. To his great credit, Mr Tim Fischer, the Leader of the Federal National Party, has been a proponent of Everyone must be aware that many issues should be increasing agricultural exports to Asia and he has considered in dealing with the industry'S visited the Asian region regularly for some years. competitiveness. We must be conscious of the 5 per cent per annum productivity gains made by the I encourage the Minister for Food and Agriculture to dairy industry and the fact that other issues have not further explore the export potential for agricultural been tackled by the State or Federal governments. products, particularly products from the dairy Federal and State governments of all political industry. persuasions have a responsibility to provide an environment in which industries can prosper and The proposed legislation is said to be in the best grow and best serve the economies of the States. But interests of the dairy industry, but I have no doubt that has not happened. that the industry must find new markets and the Asian market, which is closer to our country than DAIRY INDUSTRY BILL
1394 ASSEMBLY Tuesday, 19 May 1992
The government must be serious about starting to For two years prior to my entering this place I was deregulate the labour market and doing something Secretary of the VDIA. I have also been a member of about improving Victoria's deplorable record of the Public Bodies Review Committee (PBRC), which industrial activity on the waterfront. If it is serious had referred to it a report on the VDIA. I am , about ensuring the viability of agriculture, therefore, in a position to make some useful particularly the dairy industry, such issues as comments. waterfront reform must be addressed. The Bill goes only a short way towards picking up This Bill has the support of the dairy industry, some of the recommendations of the PBRe. The especially the movers and shakers, if you like, within report of the committee was presented to Parliament the industry. However, they would like more action in August 1989, yet only now is this slow-moving to be taken. This is an appropriate occasion to call on government starting to act on some of its the Minister to do all he can to bring about the recommendations. structural change necessary at a level higher than that concerned with the pricing and structuring of The dairy industry is important to Victoria. It is the industry boards, particularly the replacement of the State's largest rural industry. Any damage to the Victorian Dairy Industry Authority. He must tackle industry would be a major disaster for Victoria's the issues weighing heavily on the dairy and economy. We must encourage a more efficient associated industries - namely, as I have already industry and we must ensure that Parliament enacts emphasised, the problems involving waterfront legislation that will work properly. There is no labour and reform. doubt that the PBRC was of the opinion that the VDIA was not working satisfactorily, and the Those responsibilities rest primarily with the Federal changes in the Bill are a direct result of that government but there is no doubt that the State committee's report. governments have a role to play and a responsibility to be involved in any deregulation. The dairy The first important factor is that the number of industry - from the dairy farmer to the participants in the industry is contracting. The manufacturer - must be commended because it has degree of contraction is illustrated by statistics been able to find that 5 per cent per annum increase, included in the August 1989 PBRC report, at table but the government must be condemned because the 4.2. The number of dairy farmers fell from 12674 in industry has been forced to operate at a 1977-78 to 8687 in 1991. Those statistics are included disadvantage. The costs of production have in the VDIA annual report. Although the number of continued to escalate but the government has failed dairy farms decreased, milk production increased as to act on the necessary reforms. dairy farms became more efficient. In 1977-78 there were 285 delivery dairies in Victoria but in 1991 Now that the government has squeezed as much there were only 209. That is another clear indication milk from the cow as possible it must get on with that the number of participants in the industry is implementing macro-economic reforms and creating contracting. an environment that is more friendly to the Victorian dairy industry so that it can continue to be the The third area to which I shall refer is the number of significant industry it has always been for this State. milk processors. In 1977-78 there were 30 milk processors and in 1991 there were only 20. The Mr PERRIN (Bulleen) - The Bill is a step ownership of milk processing operations has forward in making the dairy industry more relevant become more concentrated - there are only to today's age. The Bill aims immediately to abolish 20 throughout the State - and without any shadow maximum price controls at the wholesale, of doubt the two largest processors dominate the semi-wholesale and retail levels and to make the industry. The other 18 processors are small in Victorian Dairy Industry Authority (VDIA) comparison to those two large Melbourne responsible for the determination of market milk companies. The Public Bodies Review Committee prices. It also contains a sunset provision covering found a concentration of ownership and control in the abolition of the marketing role of the VDIA, to the dairy industry. commence from 1 January 1994. It will reconstitute the VDIA board and improve quality assurance In 1977-78 there were 64 milk carriers in Victoria but procedures and administration. by 1991 there were 52. The number of participants in that area is also falling. However, as a counter to that, the number of registered milk shops increased DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1395 from 6958 in 1977-78 to 8113 in 1987-88. It is House. Having worked for the VDIA and having important to note that the numbers of dairy farmers, been a member of the PBRC, it is my strong view milk processors, deliveries and vendors have fallen, that the past highly-regulated and controlled system but the number of retailers has increased. worked against the dairy industry.
The key to the report of the PBRC is the fact that per There has been a long trend of gradual deregulation capita milk consumption is decreasing, in other of the Victorian dairy industry, and one example words, people are drinking less milk than they did that immediately comes to mind is that of milk in the past. I shall quote the figures because I want contracts. Over a 10-year period the Victorian Dairy them on the record. In 1978-79 the per capita Industry AuthOrity had to buy out milk contracts to consumption of milk in Victoria was 112 litres ensure that farmers with contracts were per person. In 1991 that figure had decreased to compensated. A pool system was then set up. 101 litres per person. Deregulation of the industry is occurring at a more rapid pace than it has in the past. Ownership has become more concentrated and the number of retailers in the dairy industry have I make this critical point: it is clear that more increased and dairy farmers are becoming more competition is needed in the dairy industry. The efficient. However, less milk is being consumed. statistics I quoted show a reduction in competition That is an indication that the previous system has in various sectors of the industry. Competition is the not worked, and the Public Bodies Review only way prices will be kept down, and I shall give Committee decided that that was the case. It an example. When petrol retailers compete for recommended that the dairy industry be business with other retailers in their areas the price deregulated to some extent. of petrol decreases. That situation should apply in the dairy industry. A totally regulated and I am concerned about the decrease in competition in controlled system is not required; competition is the dairy industry. The number of milk processors needed. A small town in a remote part of Victoria has dropped from 32 to 20 and 2 major processors should have access to more than one milk supplier. dominate. The Public Bodies Review Committee When competition exists supply is assured and received evidence of vertical integration and prices to the consumer are kept down. common ownership of factories. That point led to the commi ttee recommending changes to the Act. Because the dairy industry is almost totally regulated, what is known as the shield of the Crown The committee found that the objectives of the has operated - that is, the Crown has given . Victorian Dairy Industry Authority are almost indemnity against other legislation. Parliament has unattainable, but the Bill still includes as an objective regulated the dairy industry and trade practices of the authority the marketing of dairy products legislation, which is to ensure the existence of including cheese, cream and yogurt. It is clearly not competition, has never been applied. That legislative a role of the authority to market those products. Its exemption is the reason why problems have predominant concern should be market milk, which occurred in supplying milk to some outlying areas. is the white milk sold in cartons and bottles. The objectives of the authority set by Parliament are It is only when there is competition that one cm be clearly not being achieved. assured the consumer will be protected. Trade practices legislation does not apply to the dairy The PBRC also found that a number of rogue milk industry because it is regulated by an Act of this processors were not following the spirit of the Parliament. The clear indication is that at times legislation and were not declaring accurate retums Parliament has not moved quickly enough to ensure to the authority. One processor that comes to mind the consumer is protected, whereas the industry is is Midland Milk Pty Ltd. At some stage that protected by some of the means I have recently company had to make a large payment to the mentioned. authority to make up for past inaccurate returns. One of the other areas about which the Public Bodies Regulation has not worked, and that is the crux of Review Committee received much information was the report of the committee. It is a pity the the concern, especially in the dairy industry, about government has not picked up more of the the failure of the Victorian Dairy Industry Authority committee's recommendations given the statistics to consult the industry. At public hearings all sectors and trends I have directed to the attention of the of the industry - processors, retailers and dairy DAIRY INDUSTRY BILL
1396 ASSEMBLY Tuesday, 19 May 1992 farmers - said that at times the VDIA had been product, they market a particular brand of petrol. dictatorial and had imposed upon them something The same thing applies to lemonade, orange juice, which they did not want. lhat lack of consultation beer or even cigarettes, which are all marketed led to many of the submissions made to the Public Wlder particular brands. The Bill will allow milk Bodies Review Committee. processors to develop and market their own brands, and I strongly support that. Milk processors are The VDIA has authority over all market milk - that capable of branding and selling their products better is, the normal milk product available for human than does the VDIA. consumption. Market milk comprises 12 per cent of the milk that is produced in Victoria. It is a small but The Public Bodies Review Committee was told that significant proportion of the milk produced. There is milk processors wanted to sell their own milk a premium for market milk and I consider it only brands. The committee looked at the operating right that market milk does attract a premium expenses of the VDIA and fOWld that in 1977-78 the because we must ensure that consumers receive a VDIA received $1.4 million for market promotion. premium product. By 1987-88 that had risen to $4.7 million, a massive increase in the money available to it at a time when A succession of Industry Commission reports over the per capita consumption of milk was declining. In the years have attacked that premium and other words, it was spending more marketing questioned why the consumer is paying for a dollars to sell less product. premium product. The Victorian consumer gets a good deal. Victorians pay a low price for milk That was a major worry to me when I was a member because it is one of the cheapest producing States. of the Public Bodies Review Committee and it is Tasmania can produce milk cheaper than Victoria something which must be addressed. The whole but it has a small competitive problem in that it is focus of marketing must be changed. Consumers, costly to get its milk across Bass Strait. New Zealand especially women, want more low-fat products that is also an efficient producer but finds it hard to are better suited to their lifestyle, and that is what compete in Australia for the same reason. Because we should be promoting. Victoria is on the mainland and can produce milk cheaply it has the potential to acquire a large share We must also consider the branding of products. For of the Australian market. example, two products in the low-fat range were looked at by the committee. Both PhysiCal and Rev Victoria is experiencing a decline in consumption of were marketed in aggreSSive campaigns some years milk with only 101 litres per head of population ago. Advertisements on television showed PhysiCal being consumed. There are a number of reasons for attacking Rev as an inferior product. The that, the main one being the lifestyle of people today. counter-marketing approach showed Rev attacking People are moving away from fats in their diet, and PhysiCal. lhat was predatory marketing and did not milk has a high butterfat level. The response of the promote the qualities of the product. industry has been excellent and many products on the supennarket shelf are low in fat and cater for the In other States of Australia, especially South needs of consumers. Many companies are producing Australia, advertisements appear for competing low-fat milk with some additional additives to make brands of flavoured milk. Victoria should be sure their product!: are attractive to consumers. expanding its market for flavoured milk. Apart from Notwithstanding that, the consumption of milk in Ducats Food Products, as mentioned by the this State is declining and that puts into question the honourable member for Shepparton, Big M has no marketing of milk and the operation of the VDIA. competition in Victoria. People either drink Big M or they do not drink any type of milk. In fact if people The Bill provides that from 1 July 1994 marketing do not like Big M they probably drink another will no longer be a function of the VDIA. That product such as orange juice, and that reduces the provision was a recommendation of the Public dairy industry's market share. I believe we need Bodies Review Committee and I support it. The competing brands in all segments of the market, be clearest indication I have had from milk producers is they white milk, low-fat milk or flavoured milk. We that they want to move into the branding of milk need them all and we need them to compete with products. The VDIA has been trying to market a each other on an equal footing; the milk processors generic product. To my mind nobody has should be part of that operation. successfully done that. For example, petrol companies do not market petrol as a generic DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1397
I now turn to the pricing of milk. The Bill will phase One can go through the range of 375 millilitre, 300 out maximum milk prices, which I support. I do not millili tre and 140 millilitre cartons. For the 140 believe maximum prices work. I believe competition millilitre size the maximum price is supposedly 28 keeps down the prices down of every product one cents, but the real maximum is 30 cents. That applies can think of, so I believe it will keep milk prices to all the milk price determinations of the VDlA. The down. minimum prices are an absolute joke because unless there is a 5 cent differential they do not apply. I support the Deputy Leader of the National Party and the amendments that I know he will propose in The VDlA, in its advertisements, says: the Committee stage of the Bill, which reflect the fact that the opposition believes the Prices Commissioner The gazetted price for milk must be charged but when has no role to play in the dairy industry. The neither the purchaser nor the retailer have one or two opposition believes the Prices Commissioner has cent coins, rounding of the total purchase must follow had a detrimental effect on the industry and it will the Federal Treasurer's guidelines, that is, round to the move amendments to ensure that the Prices nearest five cent interval. Commissioner does not have a role in setting prices in Victoria. Retailers are saying that, because it is a gazetted price, they cannot go under the minimum, they have I wish to talk about minimum prices. It is good to to go up to the nearest 5 cents. see the Minister for Food and Agriculture coming back into the Chamber because I think he should I conclude by saying that I sat at the board table of listen to what I am about to say. Minimum retail the VDlA on a number of occasions. I point out to prices are an absolute joke. They are a joke because the government the need for a quality board because the Federal government - in my view, stupidly - the people on that board can make a big difference phased out 1 and 2 cent coins. It would have been all to the dairy industry. That was one of the criticisms right if it had just phased out the coins and did not we heard constantly in submissions to the Public mint any more, but what the Federal govemment Bodies Review Committee. did was to take the 1 and 2 cent coins out of circulation. That has meant that in Victoria a person The Bill reduces the number of people on the board walking into a milk bar to purchase 1 litre of milk or from 10 to 8. If the number is to go down to 8, the a milk product is charged a minimum price that is members have to be pure quality. I put that to the rounded up to the nearest 5 cents, all because we Minister very carefully, as one who has sat at the have milk price regulation. board table of the VDlA on a number of occasions and watched the board's operations. The milk prices that we have at the moment are an absolute joke. I will supply a couple of examples and With deregulation the dairy industry has a great relate them particularly to pensioners, because this future. I am absolutely aghast at the fact that we situation has been brought to my attention by a have not marketed Victoria's milk interstate and that pensioner who has complained to me that when she we are not exporting as much dairy produce as we goes to her milk bar to buy a small carton of milk - should be. This State has the potential to have the she does not drink much milk, she just wants a bit most efficient dairy industry in Australia. Victoria for her tea - as there are no 1 and 2 cent coins, the can produce very clean food, yet we are not making minimum price of milk actually goes up, not down. the most of our markets. We are precluded from According to the latest VDlA price list, as of 1 May getting into interstate markets when we should be this year, the minimum price for a 500 millilitre making sure that we open up those markets to the gable-top carton of milk is 58 cents, but the real cheaper, good quality Victorian milk that is effect, because there are no 1 and 2 cent COll15, is that available. Not only should we be getting into a 500 millilitre carton of milk costs 60 cents, not 58 interstate markets, we should be getting into export cents. markets.
It is a joke to say that the minimum price of a 500 With this Bill and some further changes that need to millilitre carton of white milk is 58 cents, because if a be made in the future, those marketing pensioner walks in the door no retailer has 1 or 2 opportunities will open up to Victoria and we will cent coins so the pensioner is charged 60 cents. The have a situation where -- minimum price is not 58 cents, it is actually 60 cents. DAIRY INDUSTRY BILL
1398 ASSEMBLY Tuesday, 19 May 1992
The SPEAKER - Order! The honourable He studied three major dairying areas in Victoria's member's time has expired. north, east and south-west. The purpose of the study was to identify and estimate the economic Mr JASPER (Murray Valley) - I rise to join the importance of the dairy industry to those regions. In debate on the Dairy Industry Bill. I have listened both direct and flow-on effects the three regions with a great deal of interest to the contributions together generated $2826 million in output, while made by a number of honourable members, local households benefited by the addition of $906 particularly to the detail provided at the outset by million of income and 29184 jobs in 1989-90. He the honourable member for Bulleen and the facts goes on to say that for every 100 jobs in the dairy and figures he supplied in relation to the importance industry, an additional 110 jobs are created in of the dairy industry to Victoria. associated regional activities.
There is no doubt that the dairy industry is one of Those figures add to many of the figures that have the great industries in Victoria. It is this State's been prOVided in the debate, and they highlight the fourth largest industry and is a major employer in importance of the dairy industry. It really is a perfect country Victoria. It is interesting to have a look at example of value adding. At present there is a lot of some of the facts and figures in relation to the dairy talk by the government about value adding, which industry, and we should remind ourselves of the suggests that we should closely examine industries importance of the industry and the significant part that can provide value adding in a particular played by primary producers working within it. product.
A large number of primary producers in my The documentation from which I quoted a few electorate of Murray Valley, particularly in the moments ago highlights the importance of value western end in the irrigated areas of Cobram and adding. For every dollar produced by a dairy farmer Numurkah, operate in the dairy industry. an extra $2.66 is produced in flow-on activities to the activities undertaken by the dairy farmer. I refer to some comments and information provided in a publication entitled Dairying Regional Australia The production in Victoria of 4 billion litres of milk at Work. The publication highlights the important every year indicates the importance of the industry. contribution made by the dairy industry to the State Dairy farmers work hard for their returns. It is a of Victoria. Various charts in the document show 7-day week job and when one examines the return how the dairy farmer's dollar creates wealth. It per hour to the farmer one realises that it is not high. shows that with a return of $1, the flow-on activities Such returns would not be accepted by most people generated by a dairy farmer are worth $1.19 and in the workplace. However, dairy farmers enjoy dairy processing is worth another 72 cents. The their work and we need to ensure a maximum flow-on activities from that are worth an additional return to them. 75 cents, giving a total for every $1 produced from the dairy farm of $3.66. When one compares the price of milk with other products one highlights the fact that milk is cheap. To put that into the words of this document, for For example, a 375 millilitre can of soft drink costs every $1 of dairy farm output, goods and services $1.10 in round figures yet a litre of milk costs 97 valued at an additional $2.66 are created in the cents, give or take a few cents. Therefore, one can region as a result of dairy processing and associated obtain three times the quantity of milk for a lesser activities. That highlights the importance of the price, which demonstrates the contribution being dairy industry and its flow-on effects for country made by dairy farmers and their resulting returns Victoria. compared with the returns to the manufacturers of other products. The man who undertook this study, Dr Roy Powell, is a senior lecturer in the Department of Agriculture, In 1981 there were 28 milk processors. The number Economics and Business Management at the has progreSSively reduced to 12, and there are now University of New England in New South Wales. Dr really only four major milk processors. However, Powell says that his study found that dairying there is potential for further development within the accounts for about 20 per cent of employment, 10 industry and we need to examine the area closely. per cent of output and 25 per cent of income in a number of important rural dairying regions. The dairy industry is particularly important in the electorate of Murray Valley, which has a huge DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1399 number of dairy farmers, particularly on its western an efficient manufacturer and exporter of cheese end. It also has two major dairy factories - the Kraft products throughout the Asia Pacific region. factory at Strathmerton and the Murray-Goulburn factory at Cobram. It represents a significant capital outlay for Krait in a major country area at a time when rural Australia is My colleague, the honourable member for Rodney, feeling the worst effects of economic recession. As such reminds me that Strathmerton was once in the it will create a positive stimulus to the area and create electorate of Murray Valley. A redistribution significant fiow-on benefits. I welcome the induded it in the electorate of Rodney, but that was announcement from Krait, with the development only on a temporary basis. A more recent expected to be completed by 1996. redistribution brought Strathmerton back into the electorate of Murray Valley, as part of the Shire of Kraft Foods Ltd has been operating in Australia for Numurkah, where it rightfully belongs. more than 65 years. It is a major manufacturer of cheese and grocery products for Australian and I stress the importance of the dairy industry and export markets. associated factories in the area. Kraft Foods Ltd at Strathmerton is undertaking a huge expansion. In an The other major dairy factory within the electorate announcement on 1 November 1991 the managing of Murray Valley is the Murray-Goulbum factory at director at the time indicated that Kraft would spend Cobram. It is now a huge operation and currently $76 million on redevelopment. employs about 360 people. It is also undertaking an expansion of its facilities at an estimated cost of Currently the factory employs 140 people and the $6 million. 'That factory produces a large range of expanded construction will result in an additional cheeses and other dairy products that are distributed 320 jobs in the Shire of Numurkah. Certainly, that throughout Victoria and Australia and on overseas will be a tremendous fillip to the area. markets.
Many advantages result from Kraft developing the There are concerns about the operation of the dairy factory in country Victoria. It is relocating much of industry and the Victorian Dairy Industry Authority the cheese production currently undertaken at Port as to how the most efficient distribution of the Melbourne and leaving the other products to be product can be achieved to ensure the highest return produced at Port Melbourne. However $25 million to dairy fanners. I am concerned about various will also be spent on the Port Melbourne factory aspects of the Bill. We should be attempting to where products other than cheese will be produced. achieve the highest return possible for dairy farmers, who work hardest in the industry by producing milk. The products produced at Strathmerton are the Coon and Philadelphia brand cheeses, but the An examination of information on the pricing redevelopment will mean that the full range of structure in the industry as at March 1992 shows processed cheeses will be produced there. that the farm gate price per litre was 39.97 cents, cartage to the factory and the factory margin was The manager of the Strathmerton factory said 3.54 cents, VOlA bulk transport cost was 2.35 cents, recently that the advantage will be not only having and the cost of administration of the VOlA was 2.33 the factory close to the milk supply but also having a cents, making a total of 48.19 cents. The stable work force. It is certainly great news for recommended price to retailers is between a decentralisation and shows confidence in the dairy minimum of 93 cents and a maximum of 97 cents. industry. The Bill proposes to remove the maximum retail Kraft Foods Ltd is undertaking redevelopment in price and ensure only that there be an established country areas dose to the milk supply and is return to the dairy farmer. I am concerned that the producing in an orderly and efficient manner proposed changes and the removal of the VOlA bulk through its country factory. Announcing the transport subsidy could lead to increased charges for Strathmerton expansion the managing director of milk for country people. Currently milk produced in the company, Mr Tom Park said: Gippsland is transported to Rowville for processing and back to Gippsland for distribution. People This investment is consistent with our commitment to consuming milk in country Victoria will have to pay Australian manufacturing and the dairy industry in a higher price for the distribution of milk. this country. It will continue to improve our position as DAIRY INDUSTRY BILL
1400 ASSEMBLY Tuesday, 19 May 1992
Currently a subsidy is provided and there is a The report points out that the sorts of methodology uniform maximum price for milk. Under this Bill the used to assess industry costs and determine margins minimum price will be retained but it is possible act as an incentive to squeeze out small or mid-sized that people in country Victoria will pay more for producers in favour of larger processors. If the VDIA milk. This is a matter of justice and of doing what is is not efficient possible changes should be examined right. so that it can operate efficiently in the marketing of milk to achieve greater consumption and reverse the Electricity is supplied to people across Victoria at a trend towards a reduction in the consumption of uniform price. That system was introduced by a milk. Country Party government to ensure that country people would not pay higher prices than There are dangers in overregulation of the industry. metropolitan people for electricity. In examining I am concerned about the actions taken by the VDIA possible efficiencies the State Electricity Commission and about some of the recommendations that have of Victoria (SEC) has said that in distributing been included in the Bill we are debating. The electricity to some areas, such as north-eastern opposition will be proposing major amendments to Victoria, it incurs a loss of over $1 million a year. In the Bill to take account of the important issues raised future governments will say that where a loss is by the Minister for Food and Agriculture in incurred country users should pay higher prices for introducing the Bill and of the recommendations of electricity. That is unacceptable. I would not like to the coalition's agriculture committee, which have see a situation where there were variations in the been accepted by the coalition. prices of electricity provided to people in country Victoria. As a result of discussions between the opposition's spokesperson on agriculture and the Minister it The public transport system in metropolitan should be possible to come up with a Bill that will Melbourne is subsidised by approximately 50 per benefit all people in the industry. I think the Minister cent. There is one standard for metropolitan would be the first to admit that we are seeking to Melbourne, where a loss is accepted and a subSidy is maximise returns to all people involved, particularly provided, yet the government is not prepared to to those who work the hardest at the accept that situation in country Victoria. commencement of the milk production process, the dairy farmers. There is a definite possibility that people in country Victoria will pay higher prices for milk if this Bill is The industry needs to be examined as a whole to passed. That seems a ridiculous situation. If there is achieve the best marketing possible for the products to be some sort of control, uniformity should be in Australia and overseas. Much work needs to be maintained. Perhaps we should remove controls done in that regard. completely. If that were done the people who work hardest to produce the product - the dairy Although I have expressed concern at the removal of farmers - may receive higher returns. the maximum price and the problems that may cause for country people I see the dilemma in trying Those are the sorts of concerns that the opposition, to achieve a balance between achieving a maximum and particularly the National Party, have about this price for the product, providing a maximum return Bill. Dairy farmers work long hours every day of the to the primary producer and others operating in the week and do not get a return per hour equal to industry - cartage operators and processors - and others in the community, yet this Bill opens up the providing a product to consumers of the highest possibility that country people, often in the same standard. communities as the dairy farmers, will have to pay higher prices for dairy products. I am concerned that the changes could result in higher prices for the goods being produced in the Consideration needs to be given to reports on the area. The shadow Minister has already spoken about dairy industry prepared by the Public Bodies the abolition of the Victorian Dairy Industry Review Committee and by the milk processing Authority's marketing activities. Appropriate industry. A report prepared for the industry by Price arrangements should be made with the opposition Waterhouse confirms the views of the Milk and the government about appropriate legislation Producers Association Victoria (MP A V) that the that will be of benefit to everybody in the dairy VDIA's structure has been the fundamental cause of industry. It is important to country Victoria and to a major contraction and downturn in the industry. my electorate. Primary producers should be able to DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1401 achieve a higher return and to maximise those and, as the Minister has rightly been saying in his returns through production and distribution to those trips around Victoria, the value adding for our operating within the industry. It is one of the most agricultural industries is critical to the economy of efficient and value-adding industries in Victoria. the State, and the dairying industry has been leading the way for many years with factories that are of Mr MAUGHAN (Rodney) - The Dairy Industry world standard. Bill sets the composition of the Victorian Dairy Industry Board and regulates the dairy industry. I The Victorian industry employs about 30 000 people, have some concern about that. There should be a of which about 8500 are dairy farmers. It is an minimum of regulation in all primary industries; important industry in my electorate. Without they should be allowed to get on with the job. I am boasting, there are more cows, more farmers and pleased that the Bill goes towards abolishing a more dairy factories in my electorate than any other maximum retail price for milk. Who is better placed electorate in Victoria and, I would suggest, in than the dairy fanners and the processors to decide Australia. About 12 per cent of dairy farmers and 12 what price the market can reasonably bear? I am per cent of Victorian dairy cattle are in my concerned about proposals on the maximum retail electorate. The Rodney electorate has the Murray price. The dairy industry is important not only to Goulbum plant at Rochester, the Bonlac plant at my electorate but also nationally. Stanhope, and the Nestles plant at Tongala which recently has annoW1ced a $12 million expansion. The The value of production at the farm gate is Kraft plant at Strathmerton is about to spend $1.7 billion which, with value adding, is $4.5 billion $74 million in updating its plant. There is also a at the retail level. The industry exports about Kraft plant at Leitchville. The Plumrose plant at $700 million-worth of product annually and Echuca is involved in the manufacture of dairy provides employment for 100 000 people nationally. products. The dairying industry is the major Victoria is by far the largest producer of dairy employer in my electorate, in the production of milk, products and exports about 90 per cent. Victoria in the factories, in transporting either milk or dairy produces 3900 million litres of milk a year, 61 per products and in the various component sectors cent of Australia's production. The cost of milk related to the dairying industry. It is critical to the produced in Victoria is less than half the cost of milk prosperity of the electorate. produced in most other parts of the world. I have another interest. I am one of the few By any standard the Australian dairy industry, in honourable members who for many years earned a particular the Victorian industry, is competitive on living from a dairy farm. The honourable member the world scale. Because of the corruption of the for East Gippsland is another former dairy farmer. I world market, the Australian dairying industry is know something about the dairying industry unable to capitalise on the efficiency of not only because I have been there, done that and earned a production but also processing by maximiSing living from it. I have also been involved in the returns to dairy farmers. It should be stated again manufacturing side, because for a number of years I and again that Victorian dairy farmers can hold their was a director of the Murray Goulbum cooperative own anywhere in the world. company. I take pride in having been a director of that company during its vigorous expansion - it Agricultural industries, and the dairying industry in Originated in Cobram and was largely centred in the particular, have recorded productivity increases that Goulbum Valley - into Gippsland and the Western are at least double the rest of the community. The District. It is now a large company on the Australian dairying industry has recorded productivity dairy scene. increases of 5 per cent a year for the past 10 years. The agricultural industries generally, as the Minister It is critical to the dairying industry of Australia that pointed out in his review of agricultural research, amalgamations should go even further. I would be have increased productivity by 2.8 per cent a year pleased if there were an amalgamation between for not only 5 or 10 years but for 20 years compared large dairy cooperatives such as Murray Goulbum with a productivity gain of 1.1 per cent by the rest of Cooperative Ltd and Bonlac Foods Ltd so that the community. Australia can compete with large dairy processors from the rest of the world, such as Nestle and Kraft The dairying industry is Victoria's largest Foods Ltd, which have plants in various places in decentralised industry. Dairy products accoW1t for the world. Companies such as Murray Goulbum 40 per cent of Victoria's processed food products and Bonlac are big by Australian standards but they DAIRY INDUSTRY BILL
1402 ASSEMBLY Tuesday, 19 May 1992 are not large when compared with international in other States and other parts of the world. Big M dairy companies. I hope during the next five years helped maintain the per capita consumption because there will be amalgamations of dairy cooperatives in of its excellent promotional efforts. The fact that it Victoria and throughout Australia. I understand that did not increase the per capita consumption does not the legislation providing for cooperatives contains mean the program failed. On the contrary I argue an impediment to amalgamations. I hope such an that it was an effective program because it impediment can be removed soon so that dairy maintained the per capita consumption rate cooperatives can amalgamate and exert their compared with other per capita consumption rates strength on the world market. around the world.
Statistics for the Shire of Deakin in my electorate of Mr Baker interjected. Rodney indicate that it has more cows and more dairy farms than any other municipality. Those Mr MAUGHAN -It did stop a declining figures show the strength of the dairy industry in market. The market has changed. Yoghurt now my electorate. occupies more of the market than many fat-based products. We are selling larger quantities of yoghurt Another matter that concerns me is that in spite of than butter. There has been a change in the market the efficiency of Australian dairy farmers by world from fat-based products to value-added dairy standards, they are not able to capitalise on their products. I take great pride in the fact that a factory efficiencies and it is difficult for dairy farmers and in my home town of Echuca, Plumrose Pty Ltd, has the community to understand why people who are contributed to that market by producing a productive and efficient by world standards have a high-quality yoghurt that has captured declining standard of living. People are angry and approximately 40 per cent of the market. It has hurt; they are at the end of their tethers. Whole added to the volume of dairy products that is sold. It families are working incredibly hard; they are is what the consumer wants. This change has efficient and yet their incomes continue to fall. In occurred during the past 10 or 20 years. The dairy 1990-91 their incomes fell even further by 14 per industry is examining what the consumer wants and cent. That decrease followed an 8 per cent fall in the producing that product rather than producing milk previous year, to earn them a net income of and turning it into cheese, butter or casein and then approximately $8000. The average farm income a trying to sell them on the world market. year was estimated at $11 600 in 1990-91, which is an appalling return for people who have worked As I mentioned earlier, it is a tragedy that we are incredibly hard throughout the year with little time competing against highly subsidised products from off. They have invested a great deal of capital but get other parts of the world. I refer specifically to only a small return on capital invested because they products from the European Community which are finish up with a net income of $11 600, which is less highly subsidised and against which it is difficult to than unemployment benefits. They work for seven compete. I look forward to the day when the General days a week, 365 days a year and every member of Agreement on Tariffs and Trade negotiations reduce the family works for $11600. We must come to grips some of those subsidies so that we can compete and with this problem. maximise the productive capacity we have in the dairy industry in this State. The dairy industry should be commended for its efforts to improve not only its productivity but also I turn now to a theme that has been raised on a its marketing efforts. I refer particularly to the number of occasions about micro-economic reform. introduction a number of years ago of Big M. The Some of the impediments to the dairy industry's dairy industry took a quantum leap in terms of competing on the world market are things we can maintaining its share of the liquid milk market. deal with in this State. I refer to waterfront reform, Big M was an excellent initiative. Other products greater efficiency in the transport industry, a more have also helped to increase the market share. efficient industrial relations policy and overtime rates. All those things are impediments to the dairy Mr Baker interjected. industry's competing on a world scale. They are matters that both the State and Federal governments Mr MAUGHAN -It did not increase the market, can and must deal with. I look forward to the day as the Minister has correctly pointed out, but when action is taken to reduce the costs so that we without the Big M initiative the per capita can be more competitive on the world market. consumption of milk would have declined as it did DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1403
The port of Melbourne is only about 30 per cent as Mr MAUGHAN - Perhaps we should. I would efficient as the ports of competitors in other parts of be happy to have it for petrol and remove it for milk. the world. It is not as efficient as ports in New Zealand. The transport industry is suffering from The proposed legislation will at least maintain the high fuel costs and the railway system is causing farm-gate price for milk, based on the cost of unnecessary costs to the dairy industry. I am also production. That important principle must be concerned about dumping of imported products. retained as farmers should be assured of being paid This is a Commonwealth issue, but I believe we at least the cost of production. As I said, farmers need to take decisive action on dumped imports at a should be able to set their own prices but a national level. I have no problem with products that minimum requirement is that they are paid the cost come from New Zealand on a fair basis. We have to of production, as determined by a proper survey of deal with them and we are coping with them, but it that cost. is difficult to cope with products that are dumped on our market. The Dairy Industry Bill is an important piece of proposed legislation for the industry and wide Truth in labelling applies to the dairy industry as it consultation has been Wldertaken on it. The does to many other industries. Producers are not opposition's view on the Bill is supported by the able to capitalise on the value of their product to the majority of dairy farmers and by the United retail industry in this country because consumers are Dairyfarmers of Victoria, including its branches in being duped into believing that products are my electorate. I have much pleasure in supporting Australian produced. The labelling laws allow the opposition's stance on the proposed legislation. I people to merely package material in this country believe it will be for the benefit of the dairy industry and label it as produce of Australia. and will help to make it better and stronger.
A number of principles are involved in the Dairy Mr LIEBERMAN (Benambra) - The Dairy Industry Bill, which deals essentially with the Industry Bill effects a partial deregulation and composition of the board of the Victorian Dairy reorganisation of Victoria's dairy industry. I support Industry Authority. While many people argue that the comments made on 7 May by the coalition marketing boards such as the VDIA should be shadow Minister, the honourable member for producer dominated - in this case, farmer Lowan, on the general thrust of the proposed dominated - I do not agree. However, I maintain legislation and his statement that some amendments that the people involved in the dairy industry, that are required to be made to the Bill. is, the farmers, the processors and the distributors, should choose the best people to run the industry. Honourable members must realise that the dairy Those representatives should be selected on the industry in Victoria has always been one of the most basis of their expertise in a range of areas. I reiterate important industries in this State. It is a major that although I do not agree that the VDIA board decentralised industry. It continues to contribute should be farmer dominated, I argue strongly for the substantially to the prosperity of the State. principle that those who comprise the industry, that Particularly in times of recession and currently with is, the farmers, the distributors, and the processors, the major decline in Victoria's manufacturing should select who will control the industry. industry, it is important to give every possible support to the continued growth and development The role of the Prices Commissioner is another of the dairy industry in this State. important principle. The industry should set maximum prices; they should not be set by the All honourable members who have studied the Prices Commissioner. No such role exists dynamics of the Victorian dairy industry realise that appropriately in the dairy industry as its members not only can it produce and deliver dairy products can regulate their own prices. I ask: if prices in the efficiently throughout the whole of the State and, dairy industry are to be set by the Prices indeed, many parts of the rest of Australia, but also Commissioner, why does a similar principle not it can and does provide exports of its products. I apply in other industries, for example, the fuel believe strongly that with continued support and industry? Why do we not have a limit on the price of development, with new technology and under good petrol? leadership, the Victorian dairy industry can capture new markets for Australia. Mr Baker interjected. DAIRY INDUSTRY BILL
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Both State and Federal governments have an people in the dairy industry and manufacturing important role to play in the support and industry generally, that the debate about the development of the dairy industry. The enormous removal of tariffs has not been properly understood foreign debt can be tackled in part and prosperity by many people. The debate would be improved if it can be restored in the general economy if could be structured properly. Firstly, consideration governments play their role correctly. must be given to the weapons that can be used legitimately by countries that seek to ensure that Recognition must be given to the unique character of unfair competition is eliminated. The most unfair the dairy industry. It is not localised in one part of competition to any nation, particularly to one like the State. It performs a number of different Australia, comes in the form of products from fwlctions. Fresh products must be provided on a overseas being dumped. The result in Australia has daily basis and distribution must be undertaken been that farmers, other producers and efficiently, while ensuring that the product is of manufacturers have lost their markets. good quality. The government must do what it can to ensure that the industry maintains its market The current dumping laws in Australia come under share and, hopefully, increases it. the jurisdiction of the Commonwealth, but the States have a vital interest in how they are structured and At the same time, the industry must provide work - or in this case how they are not working. efficient and reliable delivery of the product to help There is clear evidence that the present dumping manufacturers justify their investment in plant and laws and procedures are inefficient, cumbersome, to enable them to produce value-added products costly and take too long to work. The Prime and go out and win a market share in Australia and Minister, Mc Keating, should urgently adopt the overseas. proposals put forward by the Federal Leader of the Opposition, Dc Hewson, to change the dumping A problem that must be addressed urgently is the laws in Australia. unfairness of some competition from overseas products. All honourable members are aware of the This can be done through legislation with the importance of a satisfactory outcome of GAIT support of all parties in the Federal Parliament. The negotiations and of the problems inflicted on effect of Dc Hewson's proposals, as I understand Australian farmers because of the unfair attitude of them, are firstly, that they will substantially reduce members of the European Community. In an from a present average of in excess of 200 days to attempt to protect European products, inefficiencies less than 100 days the time that it takes to have a are subsidised. decision on dumping made. Those of us who have been involved in business and investment Mr Baker - Market distortions! understand that removing 100 days of uncertainty out of 200 days would help everybody in making Mr LIEBERMAN -As the Minister for Food and investment decisions and dealing with the problem. Agriculture interjects correctly, market distortions are maintained. Honourable members owe a duty to The second and most important aspect of Dc Victoria's dairy farmers who are at the beginning of Hewson's proposals is that they seek to reverse the the process and at the end of the process, so far as onus, to turn it around. At the moment the burden of negotiations are concerned. Honourable members proof rests mainly on the organisation or must ensure that the legislation is right and provides individuals, the manufacturing industry, or the an appropriate environment to enable Victoria's producers in Australia, to prove that the product dairy farmers to continue to maintain their share and coming onto the market in Australia is not being so provide manufacturers with the same brought in in the normal terms of trade but is being opportunities. dumped, that it is against the provisions of the General Agreement on Tariffs and Trade (GAIT) The question is: how do we do that? As I said, and other arrangements that supposedly exist in the problems exist in other nations looking after their world. Cynically, we know they are being own and providing unfair assistance, with many manipulated anyway. instances of inefficiencies and market distortions being the result. One of the positive things that can The proposal which I am advancing and which I be done in Australia is to undertake an urgent would like to see Mc Keating adopt is that the review of the dumping laws with a view to person who imports the product that is alleged to be improving them. I am convinced, having spoken to the subject of a dumping process be put on notice to DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1405 provide evidence that it is not and that in the interim Toby's Company Pty Ltd and in the pet food area there is the ability - not necessarily arbitrarily Uncle Ben's. Uncle Toby's from Wahgunyah, which imposed, but it can be imposed on application by is in north-eastern Victoria, is winning markets in the Australian interest - to seek an interim Asia on value-added food, is doing extremely well. injunction preventing the continued marketing of The dairy industry with its cheese exports and the the product at the alleged dumped price. The like has for many years been value adding, selling provisions could be flexible to allow the marketing overseas and doing extremely well. There is a lot we to continue, but at a price equal to that of products can learn from the dairy industry - how we can available in Australia from Australian restructure industry in Victoria and Australia by manufacturers, so the provisions would not cause giving it the right policies. hardship to someone who has imported in the interim period. This Bill provides the framework for some of that process of improving the way the industry can That process would immediately change the whole organise itself. I am pleased and welcome the partial dynamics of marketing in Australia. If introduced it deregulation of the industry under this measure. I would give an enormous boost to Australia and am reassured by people I respect a lot, such as John would help people in the dairy and other industries. Watson, Terry O'Callaghan of United Dairyfarmers Above all, it would help persuade people who doubt of Victoria (UDV) and Brian Ford, who very ably the wisdom of Australia's taking tough decisions represents the UDV in my local area and comes and eventually removing the tariffs that prop up down every week for meetings and gives up his inefficient working practices and the like; and in time to provide expertise to people, who think the many cases it would remove the objections raised by proposed legislation is right. The honourable people against the removal of tariffs. They would member for Lowan will move amendments that will immediately see that there is a way of ensuring that improve the Bill, and I hope the government will products coming in and competing against accept them. Australian products are being sold at prices that fairly represent the cost of production and delivery When I was first elected to Parliament in 1976 the to Australian markets from overseas. Victorian dairy industry was divided. I remember attending a meeting with the then Minister of We all know that there may still be a difference Agriculture, Mr Ian Smith, at which virtually three between the cost of the product delivered into different organisations represented the producers. Australia and the cost of our product here. There are We nearly had to meet in different rooms because some products we cannot compete against because they would not sit in the same room with each other. of the differences in costs in other countries. Because It is fantastic that the differences of the past have the dairy industry in Australia and Victoria in been put aside and the different sectors have been particular is a leader in providing good quality able to unite. For some years now the UDV has been value-added products efficiently, regularly and a united voice representing the producers, taking up reliably, it could take on the world and win new their interests and arguments when necessary and markets. being effective negotiators with the governments of the day and various authorities. However, it cannot do it while problems exist that deter manufacturers investing in Australia, and It has been a fascinating experience for me to see the deter farmers from going ahead and expanding their evolution of the producers in the dairy industry into herd and applying new technology because of the the organisation that it is today. Obviously people fear of having products dumped on their doorstep such as Brian Ford and John Watson have made that could wipe them out overnight. That is the major contributions in this area. I look forward to dilemma. We need to increase confidence so that working with them. I am a little worried about the people can reinvest, and put in new capital as Kraft ultimate outcome of the Commonwealth's policies Foods Ltd is doing in Victoria. It is good to see a for the dairy industry. I understand the Industry company like Kraft showing its confidence, it is a Commission's report is still the subject of good boost for everyone. examination and consideration by the powers that be. That is why it is important that the Mr Maughan - And Nestle. Commonwealth and the States urgently iron out the differences they might have and ensure that all of Mr LIEBERMAN - Yes, Nestle. It is a good the policy decisions relating to the dairy industry as company. There are other companies like Uncle far as the government's role is concerned at a DAIRY INDUSTRY BILL
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Commonwealth and State level are resolved without Wales. I believe the case was the North Eastern further delay. Dairy Company and Haberfields.
I should like to see all the processes completed so the Mr Baker - Don't do it again! industry can get on with the job. It cannot do that if there is uncertainty about what the Commonwealth Mr LIEBERMAN - We don't have to. It is my government will do. We know what the Victorian view that as a result of the litigation - I was acting government is doing - the Minister has introduced for some of the producers - it is clear that nobody the legislation, and for the most part I support should doubt Victoria's right to sell its milk products it -but the research I have done suggests that in another State. Some delicacy is involved here but outstanding decisions of major implication have yet the important thing is that as a result of that case to be made by the Commonwealth government. I many years ago the States have been able to come to ask that we all use our good offices with the more sensible arrangements in the sharing of Commonwealth government to hurry it along. markets.
As most of us will be involved in the review of the In the Albury-Wodonga area the marketing of milk Commonwealth and the States - inevitably with takes place across the border and there is sharing, increasing frequency over the next few years - we although it is structured. Frankly, I look forward to must look at the dairy industry as a good case study the day - I know the Minister will not want to of how successful Commonwealth-State relations acknowledge this as something he supports directly, and arrangements can enhance the process of but I think that in his heart he might support it - marketing, creating jobs and investment. To those when Victoria can supply -- people who argue for the abolition of the States, the total removal of the States from these sorts of Mr Baker - The whole of the eastern seaboard! enterprises and investments and the creation of a simple central government, I say that there is room Mr LIEBERMAN - Indeed! Actually I was going for them to review their attitude and support the to go further and say the rest of Australia. That is continuation of the strong cooperative system of the probably being selfish. There is no doubt that the Commonwealth and the States working together. efficiency and skill of Victorian producers is such that we can reliably deliver good quality milk every One way of doing that is to examine the process that day, seven days a week, in Sydney, Brisbane, is going on now. We are involved in helping Canberra and other cities and major areas without industry do its own thing by passing legislation that any hassle, and at a lower price than those of will complement the decisions made by the producers in other States. That challenge is very Commonwealth, so there is no need for a central exciting, particularly when we consider the future government to take over and replace the States in role of Victoria in Australia's economic activity, the these sorts of areas. That is not to say there is not a changes in manufacturing and the emphasis on need in other areas for the Commonwealth and the value-added products. I see many of the jobs that States to rationalise and work out who does what. have been lost as being replaced by the expansion The care of the elderly is a classic example of how and development of Victoria's dairy industry. I too many governments can hold up the believe it will be one of the winners for Victoria, and decision-making process, cost too much money and one of the ways in which we may provide jobs for stop the flow of funds to the people most in need. people who do not have them now. This legislation is important for that reason; therefore, I wish it a I digress, but this is not a bad way of reminding the speedy passage. House that there are different Commonwealth-State issues, some of which need more urgent attention Sitting suspended 6.24 p.m. until 8.3 p.m. than others. Mr EV ANS (Gippsland East) - At the outset I The importance of having the right to market in advise the House that I am a practising dairy farmer, other areas of Australia also interests me. I thought I working on the farm on which I was born and grew would mention that some years ago, before I entered up. At an early age I learnt to milk cows by hand, Parliament, I had the privilege of being one of the and I helped with the milking before and after legal people indirectly involved in the first legal school. All in all I have spent my life working in the challenge to establish that under section 92 Victoria industry. could legally market its milk products in New South DAIRY INDUSTRY BILL
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In my younger days the farm was a maize growing The second issue was to do with milk contracts. operation and we ran a small herd of between 20 Honourable members should be aware that the and 2S cows as a sideline. In 1948 the farm was establishment of the milk board resulted from the converted to irrigation, and since that time we have need for more stringent quality controls at a time been entirely engaged in dairy fanning. Naturally when milk was produced and transported in milk enough in my younger days I took an active interest cans, which were often left to stand by the sides of in the activities of the industry, becoming secretary roads in the hot sun. of the local branch of the then Victorian Oairyfarmers Association. In the mid-l95Os I was Many years ago customers bought their milk in billy elected to the central council of the association as a cans from distributors who carted milk in representative of my district council, which covered containers. The milk board was established to East Gippsland. In short, I have had a long control milk-borne diseases such as tuberculosis association with the politics of the industry. in those days Victoria was not blessed with tuberculosis-free herds - and typhoid fever. My experience enables me to put alternative views to those the House has heard during the debate. I Over the past 30 years quality controls have have always been concerned about the complex improved and screening procedures have changed a nature of the organisations that represent the great deal, and as a result the quality of the milk various sectors of the industry as well as the sold to consumers is far higher. Virtually all dairy complicated nature of funding and pricing herds are free of tuberculosis, and bovine diseases arrangements. that can be contracted by humans are pretty much under control. For many years the industry waited with bated breath before each Commonwealth Budget was In recent times the Victorian Dairy Industry brought down to discover whether the subSidy then Authority has been less concerned with quality paid would continue into the next financial year. control and more concerned with pricing The subsidy had a substantial effect on the arrangements. I have referred to the two issues L~a t I profitability of farming operations; and the reasons pressed in my days in the Victorian Dairyfarmers for its introduction have been misunderstood by the Association - the need for organisational unity and general community for many years. That the contract system, which was very much in vogue misunderstanding is at the heart of the myth that when my family moved into the dairy industry in has floated around for generations, which is that 1948. After a few years we were able to secure a agriculture is subsidised by the people who live in contract to supply milk to the metropolitan area. My the city. property had a contract to supply 10 gallons or 22 litres of milk a day. For the privilege of supplying During the second world war the governments of that amount of milk we had to milk 365 days of the Australia and Great Britain and her allies entered year; an onerous chore. into various trading arrangements. To avoid the price of butter going through the roof the However, it was evident during the winter months Commonwealth government agreed to pay the when the butterfat content in the milk was highest production costs of dairy farmers. Over the years and therefore was of most value that the Victorian consumers became accustomed to cheap butter; and Milk Board, as it was then known, took 2, 3 or 5 the subsidy was given to dairy farmers to meet the times the amount of the milk contract, yet allegedly costs of production, as the government had contracts were allocated to provide for the daily guaranteed. It should not be forgotten that during requirements of metropolitan Melbourne. Obviously those years the Commonwealth government made some dairy farms were falling down on the job: the more in profits from the international trade in dairy farms on the outskirts of metropolitan Melbourne products than it paid out in subsidies. had large contracts and spent a considerable amount of their income buying in feed for their cattle. The In my years as a member of the executive of the dairy farmers who received small allocations faced a Victorian Dairyfarmers Association I strenuously conundrum: when the price of milk was established pushed two issues, the first was the bringing the high-cost farms received high returns for their together of the two dairy farming organisations. I milk. That is why the return for a contract of 10 fought for the amalgamation of the VDA and the gallons of milk was quite high. The argument was then Australian Primary Producers Union, which put that farms that were not fulfilling their contracts ultimately became the National Farmers Federation. during the winter months were in breach of their DAIRY INDUSTRY BILL
1408 ASSEMBLY Tuesday, 19 May 1992 contract.The provisions in the proposed legislation Mr Micallef interjected. are heading in the same direction: the production of milk will be concentrated among the few large Mr EV ANS - The honourable member for feedlot dairy farms that have a high cost structure Springvale, by interjection, refers to contradictions, and the low-cost production farms in good dairy but I shall direct attention to a few contradictions in country will be put out of business. areas in which he claims he is an expert. Honourable members will recall that the then Premier, the I argued for many years within the various honourable member for Bundoora, referred the milk organisations to which I belonged that these dispute to Mr Justice Robinson for arbitration. At the anomalies should be corrected. The honourable time I felt it would be interesting to see how an member for Polwarth, who was the Minister of arbitration commissioner could apply the principles Agriculture in a previous Liberal administration did of the arbitration system to the dairy industry. The two valuable things for the farming community and dairy industry argued for income enhancement dairy farms in particular: he ensured that the two because dairy farmers were labouring under the farming organisations that were at loggerheads difficulty that in establishing the price of milk the resolved their differences and he did away with the Victorian Dairy Industry Authority had had to milk contract system. The end result was that the arrive at an implied figure for the value of the high-cost production farms situated close to farmers' labour. The authority established the price metropolitan Melbourne were put out of business. of milk by sending to farmers circulars that That is one of the reasons why the price of milk in contained the inputs for the production of milk, but Victoria is among the cheapest priced milk in the did not include a salary for the farmers, their wives world. or their children. In deciding the figure for those inputs it was decided that the farmer should be I do not agree with the honourable member for allowed the magnificent amount of $24 000 for his Bulleen, who said that the reason why the price of labour. The justification for that salary was that it milk is so low is because dairy farmers are so was the equivalent salary for a farm technician. So a efficient. If dairy farmers were not extremely person who undertook a farm apprenticeship course efficient they would go out of business. I also take and became a farm technician, employed by a dairy issue with the argument that other products such as farmer, would receive a salary of $24 000 a year. cigarettes and beer enjoy high rates of consumption That salary was justified on the cynical argument because they are successfully promoted. One of the that because dairy farmers opposed the award they reasons why milk is not promoted to the extent it would be satisfied with receiving that allowance. should be is because the dairy industry does not The farmers' wives and their children were granted have enough money to promote it. the same award as applied to a casual worker, a person coming off the street and doing a day's work. The proposed legislation will entrench the evils of It was a disgusting attitude. the price- fixing system, which was one of the main reasons why dairy farmers reacted as they did in In an effort to obtain a more realistic figure for their 1982-83. Dairy farmers receive little return for the input the dairy farmers asked Mr Justice Robinson to tremendous amount of work, effort and capital consider income enhancement. They also asked for involved. I have always held the view that if farmers consideration of the rate of return on capital in this State and throughout the nation ever receive a invested. In his judgment Mr Justice Robinson states: fair return for their products it will be because they are able to stop the supply of food coming to Any increase in market milk prices invariably benefits metropolitan Melbourne. That is the only way they most the farmers who need it least. will receive justice. The sad fact is that dairy farmers are probably the last people in the world who would I shall read that again so the House can absorb it: adopt such a tactic. Any increase in market milk prices invariably benefits In 1983 some dairy farmers tried to do just that and most the farmers who need it least. the then Premier, the honourable member for Bundoora, introduced the Essential Services Bill, That comment was made by Mr Justice Robinson, which was an outrageous thing to do in the who represented a body that has consistently given circumstances, because dairy farmers made it clear percentage increases to wage earners. Invariably they would supply essential supplies in the such increases benefit those on the highest wages. metropolitan area. The Industrial Relations Commission usually relates DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1409 increases to the consumer price index, leading to community will not receive the assured supplies of increases for everyone - a method that has led to a milk that it deserves. disastrous situation in Australia at present. What is intended by this Bill? What is the Mr Justice Robinson further states: government afraid of? In presenting this legislation the Minister said that the purpose is to reconstitute If enhancement of income were a legitimate ground for the VDIA and to regulate the dairy industry. I raising prices the benefits of such action should be cannot agree that they are the true purposes. They restricted. to those farmers properly categorised as may be the means to an end; and the Minister "needy". should come clean and tell us what that end is. Why is there a need to reconstitute the VDIA and why What an unusual precedent for wage fixing in should we regulate the dairy industry? He should Victoria! I defy anyone to come up with a parallel tell the House about the need, as the government illustration of such principles having been applied to perceives it. wages and remunerations. The judgment continues: Does he think the price of milk will go through the Although it is claimed that consumers will readily roof? Does he think that dairy farmers might be paid accept a substantial increase in retail milk prices the too much? What is his reason? I believe the object of response relied on is unstructured and actual the legislation should be to ensure that all Victorians experience is likely to be much more volatile than have access to a supply of high quality milk at a predictions suggest. More importantly, no study has reasonable price. The aim of the legislation should been made on the effect of an increase of the size not be to regulate dairy farmers and the Victorian claimed and in particular the impact on low income dairy industry but to facilitate the operation of the families and single income families with young industry, and to ensure that it remains broadly children. based, which is important because of the geographical and climatic conditions in Victoria. As a dairy farmer, the last people I would deny such an increase to would be low-income farmers with Mr Baker - It is to save the Kerin plan, don't you children. Is the industry to which I have devoted so understand that? many years of my life supposed to work on the lowest affordable figures? Victorians are presently Mr EV ANS - Here we are, coming up with this experiencing many agonising moments, particularly codswallop again! The Minister tried to tell us two through the government's approach to the or three weeks ago that the Bill was necessary to corporatisation of instrumentalities such as the State save the Kerin plan, but that plan, or its successive Electricity Commission. In the case of public bodies legislation, is in place and the industry has a the government has suggested that the community guarantee until the year 2000. service obligations should be paid for by the government. Mr Baker interjected.
However, it does not suggest that, because the SEC The SPEAKER - Order! The Minister will have can supply electric power to Alcoa of Australia Ltd his opportunity at the close of t.l)e debate. at a cut rate, everyone should receive electricity at a lower rate. Yet, that is the exact parallel of what the Mr EV ANS - The Minister should talk to his government is now suggesting about the price of colleague the Federal Minister for Primary milk. Industries and Energy, Simon Crean, who will tell him that the Commonwealth has put in place until The government says that, if a farmer can produce the year 2000 a plan for the dairy industry. The only milk for an export market that is at rock bottom thing lacking at this stage so far as the industry is because of subsidisation in Europe and America, concemed-- milk should be sold to everyone at that price. That is virtually what the Industries Commission and this Mr Baker - So long as you pass this. government have said. The government says, 'We should cut all tariffs and protection and make Mr EV ANS - There is no such condition. everyone operate at dump prices of commodities in the world market". If it goes down that path the Mr Baker - Yes there is. dairy industry will be destroyed; certainly the DAIRY INDUSTRY BILL
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Mr EVANS - In that case I suggest the Minister I often ask people how much extra money the is using blackmail. Such a condition is not in the average consumer would pay for the milk he legislation. The Minister is trying to blackmail consumes during 12 months if the price were to be Victorians and dairy farmers into passing legislation increased by 1 cent per litre. Very few know that that may be against their best interests. they would pay only a lousy $1.02 a year, but that extra cent a litre would mean an additional $2000 a In the process of the passage of the Bill the upper year for every dairy farmer. limit on the price of milk will be removed. That may sound good and seems to imply that milk prices can That equation should be examined by the House find their proper level. With your permission, because unless the dairy industry is paid a Mr Speaker, I seek leave to incorporate in Hansard a reasonable return for its product and value in dollar graph showing the quantity of various beverages terms, milk will cease to be the cheapest beverage. that can be purchased for $1. Milk is cheaper than even spring water. It is absolutely outrageous for the government to claim Leave granted; graph as follows: that dairy farmers are being paid too much.
HOW MUCH $1.00 WILL BUY" As at 15 May, 1992. 1.3 Ulres Beverage. 1.2 11 Milk 11 Coke IIl9monade 11 Bomed water 11 Orqa JuIce 11 Toma1O juice 11 Big M 11 Beer
Mr EVANS - The Minister asked me about the I would like to refer to other aspects of Mr Justice source of this document. It is my information from Robinson's report, but obviously I will not have figures obtained by my secretary at a Baimsdale enough time to go through them. Mr Justice supermarket on 15 May. The graph includes Robinson rejected the arguments put forward beverages like milk, Coca-Cola, lemonade, orange regarding the prices of milk in various capital cities. juice, Big M, bottled water and beer. The cheapest Apart from Adelaide, milk in all other capital cities beverage is milk - it is even cheaper than bottled costs more than it does in Melbourne. The lid placed water! on the price of milk in Victoria is one reason why the price in other States has been kept down. The Bill introduces an extraordinary price-setting mechanism apparently to keep down the price of It is interesting to note that Mr Justice Robinson milk but in that process the low price to the dairy rejected the use of comparisons. He said he was farmer is also maintained. convinced by the evidence put before him that Victoria could produce milk at a low cost and, DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1411 therefore, Victorians should be able to buy milk at a average size of a herd. The industry has come a long cheaper price than people in other States. How does way, and the Bill is another step in its development. that fit in with the principle of comparative wage justice that two people doing the same job should The legislation moves towards a more deregulated receive the same wage? environment although it maintains the important farm gate price for milk, a price which has been The greatest irony of them all is that the Australian argued for by United Dairyfarmers of Victoria. I Industrial Relations Commission has recently been firmly believe that milk in Victoria is too cheap. In using that argument. Members of the commission fact, it is extraordinarily cheap for the value of the are crying because they do not receive wages product. A litre of milk costs only two-thirds the equivalent to those of Federal Court judges. Recently price of bottled water. That is extraordinary. The one commissioner from the Industrial Relations price of milk could increase by 100 per cent and Commission said that if a Federal Court judge were Victorians would still be able to buy it cheaply. The getting $75 000 a year he would be happy with industry should be working towards that sort of $75000 a year. That very principle was rejected by price increase. Mr Justice Robinson during his deliberations on the milk dispute in 1985. Producers do not get adequate returns for their input. The current price of milk in Victoria is The legislation will entrench the outmoded and 98 cents a litre. That is the price for market milk, unfair system of price fixing for the farming which is the white milk sold in cartons and bottles. community. Nothing in the Bill will do away with Of the total milk production in Victoria, the so-called that absurd system. market milk segment makes up only 11 per cent. That is the high-value part of total production. Or NAPTHINE (Portland) - The Bill rewrites the legislation affecting the Victorian dairy industry. Of the 98 cents paid for a litre of milk, 40.59 cents is Therefore, it is important to use this opportunity to paid to producers, 13.35 cents is paid to retailers, examine the present and future prospects of the 13.85 cents is paid to distributors, 21.79 cents is paid industry. I place on record my thanks to the to processors, 2.84 cents is paid to the Victorian Department of Food and Agriculture, the United Dairy Industry Authority and 5.94 cents is spent on Dairyfarmers of Victoria and representatives of cartage and handling. Less than half the price paid distributors and processors who have provided for a litre of milk goes to the people who produce it. significant information to me and my colleagues. Producers get only 40.59 cents a litre, but that is for I particularly note the efforts of Spencer Field, who the highly priced market milk. The majority of milk has done a wonderful job over a number of years. produced on farms in Victoria goes to the He has a background in the pig industry, and there manufacturing milk sector. Although the price for is a link between the dairy and pig industries. As the that milk varies, it is currently approximately honourable member for Gippsland East said, years 21 cents a litre. ago more people milking fewer cows were involved in the dairy industry. Often only the cream was sold It is important to recognise that farmers do not and the skim milk was used in the pig industry. The receive huge amounts for the milk they produce. As dairy industry has certainly come a long way since the honourable member for Gippsland East said, then. under the old contract system, the market milk segment was dominated by a few people who Although I did not grow up like the honourable benefited by supplying all that milk. They made a member for Gippsland East learning to milk cows by lot of money while other farmers produced solely hand, I certainly grew up on a farm that ran 30 to for the manufacturing milk sector and had to 40 dairy cows. We had machines at that time, but we operate their farms on the smell of an oily rag. The separated the milk and sold the cream. I am a little change that provided a more equitable distribution younger than the honourable member for Gippsland of the valuable market milk sector was welcomed East, and obviously I do not possess his vast throughout the industry in Victoria, and the Bill experience and personal knowledge of the industry. continues that change. However, I recognise that the basis of the industry throughout Victoria was many small farmers with It is dear that although the market milk sector will herds of 20 to 50 cows. In past years a farm that ran continue to play an important and high value part in 100 cows was extremely large, but that is now the our dairy industry, because of the slow growth in DAIRY INDUSTRY BILL
1412 ASSEMBLY Tuesday, 19 May 1992 the Australian population there will not be a huge relatively easy to make - and many have trouble increase in the market for milk. All the promotion in with burnt saucepans! Readily prepared desserts the world will not significantly increase the usage of such as custards and cream caramels are becoming milk by the consumer. Although we can argue that popular as convenience foods and the market is flavoured milk is part of the beverage market and delivering what people want. therefore competes with Coca-Cola and fruit juices - and we can perhaps boost our share of that The dairy industry must look not just to Victoria and market - white milk consumed by children and Australia but also to new market opportunities in used in tea and coffee comprises the major part of Korea, Japan, Singapore, Hong Kong and the Middle the product but the chance for Significant expansion East and build on them. At the same time, we must of that volume of the market does not exist. not ignore our traditional markets, especially in Although it will be a steady increase as the Europe and North America, where we have a population increases, it will not provide high growth significant advantage in marketing agricultural in that market area. products, especially dairy products, because of our reputation throughout the world as a producer of However, the dairy industry should not be clean, pollution-free and radiation-free food. Those disillusioned by that. It should look at the new symbols are important because Europe still has the market opportunities being provided by the increase hangover of Chernobyl and has concerns about the in the amount of cheese produced in Victoria and wholesomeness of its food. Consumers want access the types of cheese produced. When I was growing to clean, wholesome foods and Australia has the up there was only Kraft cheddar and that was called reputation of being able to deliver them. Australia is cheese. If one did not like Kraft cheddar, that was it. seen as a land of sunshine and clean agricultural Our more multicultural society has led to broader industry and we must market along those lines. The tastes and we have seen a Significant growth in the dairy industry should take advantage of new market market for cheese in Australia and in the export opportunities based on our clean food image. market, and we have not only export opportunities but also import replacement opportunities. Dairying is a major industry in Victoria. Of some 15 000 dairy farmers in Australia, 8500 are in We still import 11 000 tonnes of cheese a year, much Victoria. Victoria produces 61 per cent of Australia's of that from Europe. It has been argued that one of milk and 80 per cent of Australia's manufactured the reasons we import a lot of cheese, such as the milk products. It is an efficient industry and it is French and Danish cheeses, is because we cannot important to recognise the Significant advances it make that quality cheese in Australia. That situation has made in efficiency of productivity over recent is changing rapidly. Some of the best cheeses in the years. world are now made in Australia and are being made not only by larger companies but also by For instance, in the past 10 years the number of dairy smaller, boutique style cheese manufacturers. The farms has been reduced by 30 per cent and the Timboon cheeses in western Victoria are famous and number of dairy cows has been reduced by 13 per Gippsland is famous for the Gippsland Blue cheese, cent but production is up by 33 per cent. That has which has been marketed extremely well. been achieved only by huge improvements in effidency on the farm. Victoria now has more milk The honourable member for Rodney mentioned per cow, more cows per hectare and more cows per opportunities in areas of consumption such as farmer. It is estimated that productivity in Victoria yoghurt and the use of manufactured milk in other has been increasing by 5 per cent a year over the foodstuffs such as ice-creams, custards and desserts. past 10 years. That is an extraordinary record He said we must recognise what the market is telling compared with other agricultural and us and meet its needs. Often people tell us they want manufacturing industries. convenience-type foods and plenty of opportunities exist in the dairy industry to deliver those Victoria is the home of the great dairy industry in convenience foods. Australia. It produces $4 billion for our gross domestic product each year. It provides $700 million A Significant innovation in recent times has been of exports, the majority of which comes from custard in a 1-litre pour pack. Many people Victoria. Indeed the dairy industry provides 40 per understand that the busy housewife of today - and cent of Victoria's processed food exports. Victoria is indeed the house husband of today - has difficulty the home of the major manufacturers, Kraft Foods finding the time to make custard even though it is Ltd, Bonlac Foods Ltd and Nestle Australia Ltd, and DAIRY INDUSTRY BILL
Tuesday. 19 May 1992 ASSEMBLY 1413 it has the potential to build on that industry in the milk, are among the most efficient in the world and future. it is disappointing that they receive such poor returns for their expertise, management skills and At meetings in Shepparton recently dairy industry investment in the industry.That is especially the case representatives identified their increasing market when one considers how cheaply conswners can opportunities throughout the world. However, they purchase milk in supermarkets and milk bars. said that to take advantage of those market Conswners should be prepared to pay more for the opportunities they must adopt world best practices milk they conswne. in their manufacturing plants and need to be world competitive in their pricing. They highlighted issues A few components of the Bill need particular of concern to them in trying to meet that world attention, and I shall devote a few minutes to them. competition. Off the tops of their heads they The Bill moves towards greater freedom in the mentioned WorkCare, work practices, transport marketplace, and there is some argument as to costs and payroll tax as being real problems facing whether the Bill should have gone further. The Bill is their industry in trying to become world a small step, and I am sure that the industry will be competitive. Those issues were highlighted as the subject of further legislation in the next few years. needing to be directed to the Minister's attention. Honourable members interjecting. Manufacturers were concerned about the lack of research by the Department of Food and Agriculture Or NAPTHINE - In response to the interjection in the dairy industry They were concerned that the of the Minister -- department was relying on Victoria's dairy farmers continuing to be efficient producers of dairy The DEPUTY SPEAKER (Mr Norris) - Order! products and to provide input to factories at the The Minister's interjections was disorderly. right price so that those products could be put on world markets at the right price. They were Or NAPTHINE - It was disorderly, but the concerned that the level of productivity set by dairy Minister cannot help himself; he is a disorderly sort farmers over the past 10 years would be eroded and of fellow. In response to the Minister's disorderly that they would become stagnant because of the lack interjection, I suggest that there could be further of research and scientific input by the Department of deregulation of the industry but part of that depends Food and Agriculture into dairy production and on the government of the day being prepared to management. Dairy industry representatives said it tackle some of the other issues I have raised was clearly the responsibility of the government to involving the costs involved in this industry for provide resources for the Department of Food and manufacturers through work practices, payroll tax Agriculture to carry out proper research and and WorkCare. Those matters must be addressed. extension programs for the dairy industry. If we are going to free up the marketplace, it cannot Another matter of concern in the dairy industry is be in a one-sided manner; we must look at all sides the relatively poor returns received by dairy of the process. Clause 9, which is a fundamental part farmers, who are the basis of the industry. of the Bill, refers to the structure of the Victorian Information I have received suggests that in 1990-91 Dairy Industry Authority. The clause provides that the net cash surplus to Victorian dairy farmers was the authority will consist of 8 members instead of only $8200 per farmer. That is appalling, especially the current 10. I am concerned about the clause when honourable members have heard that milk is because the Minister's involvement in the process is such a cheap product for conswners in Victoria. heavy-handed and overdone. The Minister has Victoria's dairy farmers are efficient, yet one must about three bites at the cherry. question why they cannot earn a decent living from their farms. That is a real concern to Victoria and Mr McNamara - Mr Deputy Speaker, I direct Australia that must be addressed. your attention to the state of the House.
The dairy industry in my electorate is centred Quorum formed. around Heywood, Casterton and Yambuc. It is largely a grass-fed industry without irrigation and it Or NAPTHINE - I was referring to clause 9 of supplies the critical winter milk market sector. Those the Bill in which the Minister's heavy-handedness is farmers who produce milk during the winter season, too evident. Clause 9(2) empowers the Minister to which is the most difficult time in which to produce appoint the chairperson and the government DAIRY INDUSTRY BILL
1414 ASSEMBLY Tuesday, 19 May 1992 representative of the authority. Clause 4 empowers clause for them. There is no way the codes of the Minister to determine what expertise the other practice come under the scrutiny of Parliament. three members must have, and the Minister also appoints the deputy chairperson. Clause 9(3) I am extremely disturbed by the way the Bill provides that the other six members of the authority confirms this new concept of codes of practice. It is a must be recommended by the selection committee, regulation-type code of practice rather than a but clause 10 provides for the Minister to appoint traditional guideline-type code of practice. The the selection committee. The Minister virtually hand Minister should seriously think about clause 39 picks the authority. while the Bill is between here and another place.
Clause 9(4)(c) provides that: Clauses 60 to 64 concern prices for market milk, and my concern is the involvement of the Prices 3 members must have expertise of a kind (other than in Commissioner. The Deputy Leader of the National milk production and industrial relations) detennined Party has already said that the coalition opposes the by the Minister. involvement of the Prices Commissioner, and that view is supported by the United Dairyfarmers of That is going over the top. It should be left up to the Victoria in a letter to him dated 3 April 1992, which selection committee to determine what expertise is states: needed. In particular, expertise in marketing, manufacturing and financial management is Whilst the Prices Commissioner can advise the VOlA important in the Victorian Dairy Industry Authority. on the guidelines for pricing principles and methodology, the UDV is not in favour of the Prices The Minister should not second-guess the selection Commissioner being required to approve or committee he appointed in the first place. disapprove of the pricing principles and methodology nor the six monthly price de terminations by the Honourable members interjecting. authority.
Or NAPTHINE - It is a pity that the honourable Similarly the Milk Processors Association of Victoria member for Morwell is sitting at the table and does not want the Prices Commissioner involved. It interjecting when the United Dairyfarmers of says he should be involved in an advisory capacity Victoria conference was held today in the City of only, and the opposition will be moving in that Morwell. That member will not even stand up and direction. make a contribution on the Bill. Why does he not tell us what he thinks about the Bill instead of I also note that the Bill includes sheep and goats for interrupting with inane interjections? He should be the first time, and while these are newly emerging putting forward his views on the dairy industry. industries, there is a need to control hygiene within After the next election I am sure that the them. newly-elected member for Morwell will have a more positive contribution to make on the dairy industry. The opposition will be moving a number of amendments to improve the Bill, and I certainly Clause 39 refers to codes of practice and lists 22 suggest that the Minister takes them on board ma tters covered by those codes. I am concerned tha t because they have the support of the industry. As I the codes of practice are really de facto regulations. said previously, with the opposition's amendments The tradition in agricultural legislation is that codes the Bill forms a reasonable basis on which the of practice act as guidelines; they are not de facto industry can operate for the next few years. regulations. However, clause 39 makes it clear that However, I predict that further changes to the the codes of practice cover a wide range of matters, industry and its regulations will be required. including regulating layout, finish and maintenance, design materials and construction of dairy premises. Mr WALLACE (Gippsland South) - I comment on the Bill as someone who has been involved in the If one examines all the key words such as dairying industry most of my life. Even before going "requiring", "regulating" and "prohibiting", one to school my job was to get the cows in. On many a realises that they are all covered by the codes of cold frosty morning I had to go down the paddock practice and, indeed, if the codes of practice are not and bring the cows in. Often I found warm spots complied with people can be prosecuted. Therefore, where cows had been lying and took the liberty of they are regulations, but there is no disallowance warming myself on those spots before bringing in DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1415 the cows. So I have had a fair bit of experience with on seasonal conditions. I have spoken in this place the dairying industry over the years. on many occasions about the Nambrok-Denison and Macallister irrigation areas, and in my speech on the My father became involved in the dairying industry Budget debate I spoke about the Thomson River after returning from the first world war. He moved dam which supplies the Macallister and to a property at Kilmany just after the war and, as a Nambrok-Denison irrigation areas. matter of interest, he was one of the first dairy farmers in that district to install milking machines. Many factors must be taken into account in arriving at milk prices. That is one of the things I spoke about I clearly remember him saying that he installed the earlier when I said that milk is cheaper than water. milking machines about a week before the Sale The fann-gate price per litre of milk is 39.97 cents. agricultural show. Of course, everybody goes off to Added to that is cartage and receiving and the the show and has a good day and does quite a bit of factories' margin of 3.54 cents. That automatically talking with other farmers about various things, and takes the price the factories pay to the Victorian he realised that he could do just that and then return Dairy Industry AuthOrity up to 43.51 cents. Added home and milk the cows in about a quarter of the to that are the VDIA bulk transport costs of 2.35 time he took previously. Ironically, however, he cents and the VDIA administration, marketing and came home to discover that the machines were not associated costs of 2.33 cents, taking the price paid to working and he had to milk the cows by hand! the VDIA by the processors to 48.19 cents.
The dairying industry has certainly led this State in In relation to the maximum price, the processors' many areas. At present Victoria produces margin is 22.07 cents, which takes the price paid to approximately 3900 million litres of milk per annum. the processor by the semi-wholesaler to 70.26 cents. That is 16 per cent of Australian production, so Slowly but surely the process is building and the Victoria clearly leads the way in the dairying cost is building. The semi-wholesalers' margin of industry. 13.74 cents takes the price to 84 cents. The retailers' margin of 13 cents is added, which takes the price to Earlier the honourable member for Gippsland East 97 cents, the maximum price. produced a graph proving that milk is cheaper to produce than water. It is crazy that dairy farms If one goes to the shop to buy a litre of milk one pays produce milk at such low prices and that water $1 because the Federal government decided to do running off the roof of, say, this building, and away with 1 cent and 2 cent coins. All of a sudden, requiring fairly Simple distilling and processing, through no fault of the dairy industry or anybody costs more than the production of milk from an else, but as the result of a government decision, the animal. Milk has to be taken from the cow, put into price of milk has risen by 2 cents, out of which vats, taken to dairies and processed and distributed; nobody gets a cut. That is crazy. yet it is still cheaper to produce than water. I shall be interested to hear what the Minister for Victoria produces milk seasonally on a grass system. Food and Agriculture will say in his response. The Only 3 per cent of the world's milk is produced Minister has introduced a Bill that has virtually seasonally, and Victoria produces one-third of that rewritten the dairy industry legislation. The milk. opposition will move amendments to the Bill. No doubt the Minister will argue those points as the The dairy industry is one of the largest decentralised debate goes on and make his side of the argument industries in Victoria. Even the Premier has spoken clear. I think he will find the opposition will wish to about Melbourne spreading out no further than at argue about a number of matters. present, yet here we have an industry that really is decentralised. If farmers wish to obtain better prices and stay on their farms they must improve in a number of areas. The dairying industry employs 30 000 people. Of From time to time the farming community has made that number, 8500 are dairy farmers who work long improvements and has increased production. I have hours. Their families contribute greatly to the whole a son in the dairy industry who is finding it farm operation. extremely difficult because his equity in the farm is low. When he first entered the industry it was a Dairy products account for 40 per cent of Victoria's viable proposition but over the past two years he has processed food exports. The industry relies heavily suffered an approximate 33 per cent cut in income. I DAIRY INDUSTRY BILL
1416 ASSEMBLY Tuesday, 19 May 1992 suppose anyone would find it difficult to take a 33 As has been spelt out clearly by many people, we do per cent cut in salary or income. not want the Prices Commissioner to be involved. This is the first time that legislation in this area has Young farmers are our future and the development spoken about sheep and goats. I know the sheep of the State and the nation will rely on young people industry has been through some problems. After who are prepared to have a go. We must support leaving the dairy industry some 20 years ago I those people. They must also help themselves and became involved in the sheep industry. I never look to further improving production and cutting thought about milking sheep. I do not know costs. whether it would be a viable proposition. I wonder how effective and efficient it is to produce milk in Earlier I spoke of my father, who was involved in that way and whether it is used only to make cheese. dairying for many years and realised that it was important to continue making improvements. He I am concerned about a number of clauses in the Bill had the first milking machines, which allowed him and will listen with great interest to the Minister's to milk more cows. In those days if you milked 60 response. A number of matters will be debated in cows you had an extremely viable operation. My the Committee stage of the Bill. father was not satisfied and had to get even more out of his cows. He went into an irrigation scheme Mr I. W. SMITH (Polwarth) - The Dairy on his own, taking water from a river, and increased Industry Bill is an important final link in the chain of his production. Today's farmers must also continue destruction that the Labor government has wrought to improve their rates of production. on what was the State's best decentralised industry. I shall explain that in more detail as I proceed. I This morning when I visited the conference of the represent an electorate in which dairying is a United Dairyfarmers of Victoria (UDV) it was prominent industry and has been for a long period. obvious to me that the hundreds of people in The towns throughout my electorate are dependent attendance were interested in the process of upon the prosperity and stability of the dairy improvement. The conference was an opportunity industry. for them to learn from others. That is an important function of that organisation. It was clear today that One of the complications caused by the way this those people supported many of the provisions in industry has evolved has been caused by the very the Bill, but were also concerned about others. The nature of milk - it is difficult to store for any length honourable member for Lowan will introduce of time. In this State where seasonal and soil amendments to ensure that improvements in conditions lend themselves to the formation and production take place in the dairy industry. growth of an industry like the dairy industry, we have seen historically a considerable amount of I am concerned about the proposed membership of control and regulation imposed by the various levels the Victorian Dairy Industry AuthOrity as provided of government to ensure that the quality and in the Bill. Clause 9 provides that the authority shall quantity of milk available to the population is consist of eight members. The chairman is to be available 365 days of the year. appointed by the Minister and the other members are to be appointed by the Minister on the In the transition from hand milking to recommendation of a selection committee. The mechanisation, from horse and cart delivery of selection committee must recommend two members cream cans to large tankers coming to farms, there who have expertise in milk production - I hope the has been great change in the system of regulation. Minister will explain what "expertise in milk One of the impediments to change prior to the 1970s, production" means; one member with expertise in when I was fortunate enough to be Minister of industrial relations - I presume that means a Agriculture, was that the dairy industry was divided person from the trade union movement but I ask the on most issues. I am thankful that the honourable Minister to explain what that means; and three member for Gippsland East recognised and paid members with expertise of a kind determined by the tribute to some relatively small initiatives I took Minister. I should like to know what the Minister is during that time to not only weld the farmers' talking about there. It is important that the Minister organisations together in a unified, stronger and explains on record exactly what he is talking about. more purposeful organisation but also to lead the Adjustments must be made to the appointment industry through a change to the regulatory process. structure that would make them more dynamic and more competitive and thus more enduring. DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1417
There were many other initiatives, but since the About 50 per cent of the staff remained and the change of govenunent in 1982 it has been paranoid VDIA with less than half the staff of the old Milk about unfettered deregulation of the industry, on the Board proceeded upon a campaign that put real one hand, and intervention by the Prices dollars at all levels into the dairy industry and not at Commissioner on the other, leading to a better deal the expense of the consumer. By all measures, the for the consumer. Ten years later it has been proved authority, its products and marketing programs that its rapadous desire for lower prices to the were a widely recognised success. consumer has not been achieved - but the returns to the dairy farmers have. The steps the govenunent That came to an abrupt halt through the unfortunate has taken to deregulate the distribution and and sickening intervention by the govenunent and processing of milk and the stupid and dramatic particularly by the former Premier, the honourable changes to the Victorian Dairy Industry Authority member for Bundoora, when Des Cooper was stood have not produced the benefits at either end of the down without any beg-your-pardons, where there productive chain. Neither the consumer nor the was an underhanded campaign launched by the producer has benefited. govenunent to justify its decision and to suggest that in some way Des Cooper, Brian Purtell and Brian We had the Sickening scenario of the former Buxton had done something mischievous or wrong Premier, the honourable member for Bundoora, within the authority. personally intervening in what was and should have been a relatively independent statutory authority set The inquiry was set up by the govenunent to justify up under an Act of Parliament but at arms' length the govenunent's position. It took six months to from the Parliament to run along commercial lines. investigate the matter and it cost the people Those who were placed in the responsible pOSition, involved a great deal for the legal representation to particularly Des Cooper, the Chairman of the VDlA, defend themselves. The inquiry not only exonerated achieved at all levels of the industry the most those people - it was a govenunent inquiry, a remarkable improvements to their returns, not at the witch-hunt to justify the sacking of the gentlemen expense of the consumer but because of an intense from the VDIA - but also praised the way those marketing campaign based around additional people managed the authority. products that were principally pure liquid milk and then either coloured or flavoured or, alternatively, It is disgusting to record that there was not only no fat increased or fat reduced. apology from the govenunent but also no recompense for those three people whose careers So successful was his time at the VDlA that his were destroyed by that govenunent because they services as a lecturer were sought by most dairying were opposed to its ideology. countries around the world for very good reason; that the State of Victoria during the late 1970s after The structure of the dairy industry was shaken by the establishment of the authority was the only place unfettered intervention in the interstate milk market. in the world where the per capita consumption of The situation was made worse because a relative of milk was rising. There was not only milk with an the former Premier, the honourable member for extra fat content - the Heart Foundation might Bundoora, was the reason that that situation with argue that it would do damage to people's the interstate milk trade came about. It is a pity that health - but also there was fat-reduced and fat-free the majority of the community does not understand milk that was of benefit to and without any what occurred during the early days of the Labor deleterious effects on the health of particular people. administration. On the one hand, this situation showed the capacity of the govenunent to make That stands to the credit of Des Cooper, Brian wrong decisions and, on the other hand, it showed Purtell, Brian Buxton and those who headed the the govenunent's ability to mount publicity Victorian Dairy Industry Authority. Not only that, campaigns to denigrate and destroy people's the authority, which was constructed to some extent careers. However when the government was proved out of the old Milk Board by the govenunent in the wrong it did nothing about it. Those actions will 1970s, was taken out of the Public Service arena and stand forever as a condemnation of the Labor Party all those who were working with the old Milk Board and those in the Labor govenunent during those were given the opportunity of either being early years. All that has passed before us proves the employed by the new VDIA outside the Public continuing and increasing ineptitude of the Service Act or of returning to the seeuri ty and administra tion. comfort of the Public Service. DAIRY INDUSTRY BILL
1418 ASSEMBLY Tuesday, 19 May 1992
Moving the VDlA to the Public Service cannot be processor of milk and will have built up goodwill as justified. It is not the taxpayer who funds the VDlA a result of the regulation. He may have borrowed but the industry. I challenge the government to take against the holding in order to improve his capacity a plebiscite amongst any section of the dairy or marketing ability and when regulations are industry to find out whether it wishes to have the changed or varied it may mean those already in that VDIA operate within the ambit of the Public Service market will not receive a benefit from the Board. It will find there is no support for that deregulation. U compensation is not paid to those proposition. Indeed, when the former Victorian who hold the goodwill and equity the playing field Public Service Association challenged me over the will not be level. New participants in the industry, proposal to move the staff of the fonner milk board with the minimum capital necessary and without to the VDlA and to remove it from the realm of the paying a cent for goodwill, will be competing Public Service Board, I said to them, ''Look, if the against others who have been in the industry for VPSA can sell this proposition to the people who only a limited period, but who have paid dearly for pay for it, that is the various sections of the dairying the regulative security and goodwill given to that industry, then I will sit down and talk again. Maybe industry or to that person. The principle is enshrined we can do something about it". Naturally the and endorsed by the government in the taxi industry association declined that offer because it knew full or hotel industry. U you want to buy a taxi licence well that it had absolutely no right to have public for the central business district of Melbourne you servants in a commercial operation paid by the must pay $120 000 for the piece of paper that gives industry. That is part of the reason why the industry you the regulative right to operate a taxi within that in this State has not gone ahead as it should. The area. If you want to buy a hotel, you have to authority became stultified because of those purchase a licence, which is a cost - for a piece of dismissals and because the VDIA staff have come paper - over and above the actual cost of bricks and under the Public Service Board administration. mortar - that is, the real estate cost of buying the hotel. The government has a paranoia for deregulating the industry in an unplanned and unconsidered way So it was in the dairy industry: if a dairy farmer that has not abated. The Bill puts the final nail in the owned a milk contract, it was something paid for by coffin of the growth of the liquid milk market in this and large because the contracts were generations State. Action by the government during the past 10 old. Similarly, if one had transport, processing, years has put the industry in a recessive mode. The distribution or retail capacity, all those systems of per capita component has decreased and it is still production and distribution throughout the decreasing. Who is paying? The consumer is not community had a considerable goodwill value receiving a benefit. The number of farms has been attached to them. reduced and farmers and the whole structure of the industry have been affected because of a lame duck In the deregulated market introduced by this administration set up by a government that has a government in the name of benefiting the consumer, paranOia to deregulate the industry. I have no the people who had high value in their goodwill objection to deregulation. In fact, I have been were absolutely decimated. It is not surprising, involved in many of the major steps of deregulation therefore, that the competition the government in the industry, but it must be understood that the expected to occur within the chain of production and agricultural industry cannot be switched on and off distribution in the dairy industry has not because the lead time is enormous in the eventuated. The deregulation has had such establishment of a farm, particularly a dairy farm, diabolical financial effects on those involved in the which is based on animal reproduction. It must, of collection, processing, distribution and marketing in necessity, be a long-term project. the industry that consumers are no better off. Had the government had the good sense to realise that in The government has strutted its way through deregulating the industry it needed to maintain a various exercises relating to the dairy industry level playing field, the retention of the people, the during the past 10 years. It has caused instability ingenuity, the productive capacity for a more stable and has undermined the traditional structures, but it and better organised and eventually more has put nothing in its place. A fundamental principle competitive collection, processing and distribution of regulation is that people who hold a particular network in this State would have been assured. segment of the market have invariably paid a high price for that segment. For example, a processor may The government stands condemned for the fact that have been allocated a zone where he is the sole per capita milk sales have dropped, that returns to DAIRY INDUSTRY BILL
Tuesday. 19 May 1992 ASSEMBLY 1419 the dairy farmer have therefore dropped, and that personalities who could achieve such a result. It put simultaneously returns to all other areas of fire in the belly of the dairy farmer and additional collection, processing and distribution in the dairy dollars in his pockets. It represented an increasing industry have dropped. Worst of all, the actual real proportion of milk production. While a premium cost of milk is no lower now than it was at any time was charged for liquid milk and paid to the dairy during the 1970s! No net gain has been achieved by farmer, in return the consumer had a guarantee, the experiment of the government. through the VOlA, of fresh milk of the highest quality in the world provided on 365 days of the Conversely, as a result of the government's action, year, come whatever the seasonal conditions were. all sections of the dairy industry have suffered a The system stood to the great credit of the previous substantial depletion. The Dairy Industry Bill is a government and the industry working in camouflage for the failure I have just described. It is cooperation. a pretence that things will improve. They will not. Numerous amendments will be moved in this Nothing in the actions of this government or the House - no doubt they will ultimately be imposed VOlA since has stood to the credit of the on the government in another place - that will government or the administration of the VOlA. The improve the Bill. However, no hope exists of Minister is out of touch, remote from the real needs achieving substantial reductions in the cost of milk of members of the rural community, particularly to the consumer or any increase in the variety of the those in the dairy industry. The Minister thinks that choice available to the consumer of dairy products by causing a diversion within the dairy industry, by or any additional returns to the distributors, producing this piece of proposed legislation, he is processors and collectors of milk. Worse than that, actually going to put more dollars into some no additional returns will flow to the farming people's pockets and save the consumer some community. money. The Bill will do neither. The Dairy Industry Bill is designed by a Minister whose time is up and The Dairy Industry Bill will not put another dollar whose capacity to do anything constructive for into anyone's pocket except those employed under agriculture is not in evidence. the resulting Act. The Bill perpetuates the sin of the earlier administration of this government that In his defence, the Minister will tell honourable brought the Victorian Dairy Industry Association members about his wonderful trip through back under the Public Service Act. The level of south-east Asia where he sold $1 billion worth of commercial responses that any industry must have product. When he makes his response, I invite him in this day and age cannot be sustained with the to tell honourable members precisely how many necessary overlay of the Public Service Act. contracts have been written as a result of his effort and how many dollars are actually flowing to the The Public Service Act, designed along the State of Victoria. All he has done is feed the publicity traditional principles of the Westminster system, is machine and produce a Bill that will raise not designed for commercial responses. It is an Act expectations that will not be met. designed to ensure accountability of the administration to the people, that is, to Parliament The opposition does not oppose all of the Bill but and to taxpayers. A commercial organisation cannot certainly some amendments will be made to it. The prosper with the stultification of the Public Service Bill is a short-sighted patch-up job that will convince Act hanging over it. nobody of this government's sincerity, nor will it increase anybody's capacity to make additional Finally, honourable members will be aware of the money or provide the consumer with any cheaper or well-known enthusiasm of the Minister for Food and better product from the dairy industry. Agriculture for the Bill. However, his capacity to get out and about on the farms and talk to people at the Mr COLEMAN (Syndal) - I should like to pick grass roots level of a farming community is not up from where the honourable member for Polwarth well-known. Had he taken his office seriously and left off - that is, what the benefits are for the moved among the people at the grass roots level of consumer in this Bill? When one looks at the the dairy industry, he would have been told on provisions in it one wonders where the benefits can every occasion of the depleting fortunes of the liqUid flow. The fact is that what we have in front of us is milk industry. During the 1970s the liquid milk more regulation, not less. This Bill attempts to put industry had the hope of increasing, and had the yet another fence around the dairy industry that it necessary structure to increase, with the DAIRY INDUSTRY BILL
1420 ASSEMBLY Tuesday, 19 May 1992 must climb over in trying to compete in the wider production so far as dairies are concerned and used market. for some other agricultural use.
I should like to draw the attention of the House to Producers are leaving the industry. That transition the clause that deals with the code of practice. The has occurred in the two well-endowed parts of the code of practice has no less than 23 sections and is State -south of the Divide and the Western designed to make this industry more effective, but District - and in central and eastern Gippsland and by its very institution it makes it more difficult for the irrigation districts of the Goulburn-Murray the industry to operate. It is operating in a market Irrigation District (GMID). Herd sizes have grown that has a lot of pressure on it. and production per cow has increased. That is a change the Bill does not recognise. We have to understand this industry is in a very advanced stage of transition. If you go back 30 years What this measure attempts to do - as I said earlier, and consider the industry as it then was, virtually all it is encapsulated in the code of practice that makes over the well-endowed rainfall areas of eastern up clause 39 of the Bill - is to try to regulate that Australia, and follow its progress, you see the transition. It is occurring and we need to recognise considerable contraction that has occurred over that it. The fact is that today Victoria is the premier State. period to the point where Victoria is the premier Other States, because of climatic conditions or dairy State. Through that process the industry has changed marketing arrangements, have divested expanded in the hands of fewer people and has cost themselves of dairy production. Because of that the lives of a number of people. In that process it has transition Victoria is supplying a greater percentage improved its output. of the liquid milk market along the eastern seaboard. It is supplying a greater percentage of the processed Today the production per cow is still rising, and milk market, and it has a bright future if we can look those who are in the industry are trying to increase it after it. further. It seems to have the best of competitive elements available to it - it is heavily competitive Does this Bill do that? I do not believe that the and uses the best of technology. Participants believe content of it actually means those people in the that if you want to be part of it, you have to have a industry will get the best benefit out of the proposed go. But this Bill takes a step backwards and erects legislation. The restructuring of the industry needs more fences that people have to climb over. to be in the hands of those who understand it. The marketeers have done a good job in penetrating new That is not a good message to be sending to young markets. As the industry is contracted back into people in the industry who are trying to advance. Victoria the penetration will continue. They have invested their capital in the industry and are trying to make their way through the process Other States have high-cost milk production cycles outlined in the Bill. An impediment is being put in based on contracts involving the purchase of feed their way. In certain areas of Victoria the industry is produced off-farm for the production of milk contracting. It is most noticeable in the irrigation on-farm. Because of the climatic conditions in the areas, where a consolidation of grazing areas is southern part of Victoria and the irrigation district occurring, particularly around developing that makes up the GMID, Victoria has a grass-based populations in the rural centres. Traditional areas of industry, therefore it is able to compete with other dairy production have been absorbed by increased States. Being a grass-based industry it is a question urbanisation. of scope rather than the industry itself being confined to small areas. It does mean that we need to As the honourable member for Polwarth pointed consider what scope is available to the industry in out, milk was produced under contract in Victoria. substantial areas on the eastern side of Melbourne. When that contract system broke down essentially We have built, particularly in the GMID, a situation all of the milk production in the eastern side of where we have reasonably small holdings. There Melbourne shifted to other parts of the State. That will continue to be a consolidation of those areas. It same land today is not available for dairy is useful to say that so far as the Water Act and the prodUction, it is either used for urban communities trading of water rights are concerned, the or is being subdivided into smaller portions for consolidation of areas will continue as farms that other activities. In the main it has been taken out of prove not to be viable are able to sell their water rights. DAIRY INDUSTRY BILL
Tuesday. 19 May 1992 ASSEMBLY 1421
Mr Bildstien - We've lost 300! Mr Baker interjected.
Mr COLEMAN - That is an interesting Mr COLEMAN - There seems to be a difference interjection; we have lost 300 dairy farms. Overall of opinion as to whether Victoria produces 61 or production has been maintained and a consolidation 62 per cent of Australia's milk. That is a considerable has been occurring, and as a result you start to get percentage of the market. the economies of scale that are part of a major manufacturing process. As this occurs there will be If any honourable member thinks this Bill is about an ability, through a larger cash flow, for new deregulation or making things easier, I draw technology to be introduced. attention to part 8 which deals with enforcement and legal proceedings. These provisions start at I am often reminded of the former honourable clause 65 and go through to clause 84, so there are member for Benalla, Tom Trewin, who related to about 20 clauses in addition to the code of practice this House in a much earlier debate the story of the which is outlined in the Bill covering these issues. If early days of the regulation of the egg industry. any honourable member thinks the Bill is about Children had to go along the tops of haystacks to lifting the burden of legislation and regulation off collect the eggs; nobody knew how old the eggs the industry I suggest that he or she go through the were or whether they were fertile or infertile. The 20 clauses that cover the additional costs and eggs were put on a train and they hit the Melbourne impacts on the industry, because, at the end of that, market at whatever the price was at the time. the only conclusion that can be drawn is that the government is not letting the industry grow on its The dairy industry has a similar history. We have own. seen the introduction of health regulations to ensure the quality of milk, and the introduction of These 20 clauses deal with the records of authorised refrigeration and the pick-up service which have officers, the general powers of authorised officers, ensured that the product reaches the market in an the actions of authorised officers, the destruction of attractive state. We have seen product dairy produce -- diversification such as flavoured milk and UHf milk, which have broadened the scope of milk Mc Evans - How do you keep a vat full of milk production. One hopes that this diversification will and keep milking your cows? continue as a result of this legislation. Mc COLEMAN - All I can say is that if you miss This legislation will start to build fences around the one milking you might get by but if you miss two industry again. Parliament recognises the changes you are in trouble. It would not be the first time that that have occurred and which will ensure that the the government has forced milk to be tipped out. various sectors of the industry are protected. The honourable member for Polwarth pointed out However, I should have thought that this legislation that this government created a dairy blockade and is not the way to go in this day and age. At the very forced milk to be tipped out once before. Given the least, the authority that will be created by the wrong set of circumstances, there is no doubt that it legislation should represent the industry. Clearly will force milk to be tipped out again. that is not the case. The legislation does not really state the process of determining who those members This Bill will do nothing to help the people in the should be, but there should be a recognition of the industry. They expect Parliament to look after their people who understand the industry and are able to interests and produce legislation which will enhance contribute to its welfare. their ability to make a living. The Bill will make things more difficult. There is no indication in the One hopes the Minister will provide assurances as to Bill that the best people might win or that if they what recognition will be given of the people who make some savings they might be able to retain have had stewardship of the industry and who have them. All we will have is a structure that determines seen through the changes to the industry that ensure the inputs and outputs and the success of the that Victoria is still the premier milk-producing enterprise. In today's broader context that is not State. One hopes that the contributions of these what we should be aiming for. people will be recognised in the composition of the board. The irrigation industry is a major contributor to the dairy industry; one can argue that the dairy industry Mr Bildstien interjected. is dependent on the water industry. The fact is that DAIRY INDUSTRY BILL
1422 ASSEMBLY Tuesday, 19 May 1992 we are about to corporatise the Rural Water Nevertheless Eastern European and Scandinavian Commission, and this process will put in the hands countries will also be targeting the markets Australia of irrigators the conduct of their own industry. They is targeting, which will put the industry under can make savings through the regional management increased pressure. I hope the Minister's trip will be boards and the savings will flow through to those of benefit to the dairy industry. I hope he recognises regions. the need to dismantle the inefficient structures that inhibit the industry's penetration of Eastern This legislation for the dairy industry states that if European and Asian markets so that we can not only you make the savings somebody else will take them maintain but increase the incomes of Victorian and off you. That is a critical part of the way in which the Australian milk producers. Bill has been handled. The issue is critical to the industry because the number of people maintaining The costs of inputs must be controlled. This production is decreasing and they will require a government is able to control some of them, the larger scope to maintain total production and most obvious being the cost of water. I believe the market penetration. proposed changes to the operations of the Rural Water Commission will result in lower water costs. As has been pointed out, 61 or 62 per cent of As I said, this government cannot control all input production is based in Victoria. If we are to maintain costs - for example, the cost of fuel, which is one of that we, as a community, have to say that the the highest input costs, is a Commonwealth industry is worth saving. It is one of the benchmark government responsibility. industries of the State. The Minister has been overseas at the taxpayers' expense and he says he Honourable members on both sides of the House has come back with $1 billion worth of orders. We must ensure that any legislation passed by must be able to say that Victoria has penetrated Parliament acts to reduce input costs; but so far as I some part of the Asian market with its dairy can see the Bill will not achieve that result. The products, so we need to have dearly laid out for us Dairy Industry Bill will ensure that those in the where the Bill will leave us following the industry who act as intermediaries between negotiations the Minister has had with Japan. Korea producers and consumers will be protected. and Japan are taking some milk so a $700 million export market is available to us. Honourable members will recall that in recent years many of the barriers that prevented the cartage and The bottom line is jobs on farms, jobs in the processing industries from being competitive have manufacturing sector and jobs in the export sector. If been dismantled, one of the results of which has the Bill is to be successful the Minister must be able been a reduction in the number of people employed to say that, at the end of the day, the government in those industries. Nevertheless both are still will be able to deliver the specific benefits he functioning efficiently. promised to the people of Victoria. It is imperative that the costs government imposes If there is to be an accounting of the overseas trip on industry are removed. I recently had the and the largesse -- opportunity to discuss exports and the export sector with John Corboy of SPC Ltd. He said that while his Mr Baker - Under budget! company can export the products it produces it cannot export the costs it has inherited from the Mr COLEMAN - I can only assume that if that government, something the Minister should is so the Minister must have had a very large budget, contemplate. Mr Corboy referred to the added-on because he is not known as being backward when it costs of WorkCare, the 17.5 per cent holiday loading comes to a shout! and superannuation, all of which prevent us from successfully competing with the rest of the world. Although we may worry about the $70 000 it cost to send the Minister overseas, the more important issue Mr Baker - And payroll tax, which was is the $700 million export order. I hope the market introduced by conservative governments? penetration the industry enjoys on the Continent can be extended to Asian markets. If the industry is Mr COLEMAN - And which will be removed efficient - which one hopes the Bill will by one, too, under the Fightback package. How's foster - that market penetration should be not only that? The dairy industry has two major components, maintained but improved. the domestic market and the export market. The DAIRY INDUSTRY BILL
Tuesday. 19 May 1992 ASSEMBLY 1423 export potential of the industry is critical to the Bill is significant because it concerns one of the most rebuilding of the State, which is bereft of important industries in Victoria. opportunities for growth as a result of the failures of the Labor government. Despite the government's It may come as a surprise to some that the worst efforts the dairy industry has survived. honourable member for Forest Hill, who has not a single dairy farm in his electorate, should participate If the Victorian economy is to be rebuilt such in a debate such as this. But I inform the House that I industries must be given opportunities to grow. We certainly know more about milking cows than the must take into account not only measures such as honourable member for Sunshine! the Dairy Industry Bill, which in my opinion will simply re-erect the fences, but also those aspects of Mr Baker - You want to be careful. government that prevent industries such as the dairy industry from successfully competing in Mr RICHARDSON - As a lad from Kerang I bet export markets. I have milked more cows than the Minister has. I know all about the tail on the nail and the effect on I hope an auditing of the Minister's trip will show the face when the tail becomes dislodged from the what it cost, what he said he would get and what he nail - and I know which cows are likely to do it! actually got. I am sure the Minister will end up hanging his head in shame when he realises that he The Bill seeks to reconstitute the Victorian Dairy did not achieve what he set out to achieve. Industry Authority and to regulate the dairy industry. To achieve those ends it will re-enact with Mr Baker interjected. amendments and repeal the Dairy Industry Act and amend the Borrowing and Investment Powers Act, Mr COLEMAN - The Minister says, "Rubbish". the Food Act and the Stock Diseases Act.
Mr Baker interjected. The Bill will lead to the immediate abolition of all maximum price controls at the wholesale, Mr COLEMAN - Will we see what happens at semi-wholesale and retail levels. The Victorian Dairy the end of the month? Will that be linked to the Industry Authority will continue to be responsible Premier's first-of-the-month statement? We can for determining the price of market milk, the price to expect an end-of-the-month statement by the the processor and the minimum pricing policy. The Minister for Food and Agriculture on the auditing of Bill provides for the abolition of the marketing role his trip, which will be closely followed by the of the Victorian Dairy Industry AuthOrity by 1994. It Premier's promised statement. We have much to will reconstitute the board of that authority, improve look forward to! its quality assurance function and administration.
The Dairy Industry Bill will make it more difficult The opposition parties have examined the Bill with for one of our most successful industries to compete great care, thoroughness and due diligence. They on export markets. have consulted widely and among the organisations that have been consulted are the Victorian Milk Mr Baker interjected. Distributors Association, the United Dairyfarmers of Victoria (UDV), the Milk Processors Association Mr COLEMAN - The Bill will erect more Victoria Inc., the Victorian Dairy Industry AuthOrity barriers to competition and will force those involved and the Australian Dairy Products Federation. The in the industry to meet yet more requirements - not opposition has talked to people who are directly those set by the export market but those set within concerned, those whose livelihood is dependent the market by the government. For those and other upon the production of dairy products, the reasons, the Bill will not achieve its aims. manufacturing of further products from that raw material, the marketing of products that flow from Mr RICHARDSON (Forest Hill) - The Dairy the dairy industry base and, finally, those engaged Industry Bill -- in retailing the products.
Mr Baker interjected. The opposition's consultation has been wide and it needed to be because the dairy industry is one of the Mr RICHARDSON - Did I hear a reference to fundamental industries in the State. Thousands of old pot-boilers from old pot belly over there? The families depend upon the success of the industry. DAIRY INDUSTRY BILL
1424 ASSEMBLY Tuesday, 19 May 1992
I speak with some authority in that I come from a The problem is that despite all this technology and rich heritage of the dairy industry. All of my the vast invesbnent put into the dairy industry dairy predecessors have been involved in dairying. As a farmers are falling steadily behind the line because boy I grew up in the dairying industry located of the impositions of government, and the policies of around Kerang where my great-grandfather was an foreign competitors. The difficulty is that although original settler in the Macoma district just outside the dairying industry is efficient and effective and Kerang. With great pride I inform the House that my the most productive industry in Australia it does not family still owns that original selection that was reward those who are part of the industry in the way owned by my great-grandfather. One of my cousins it should. still runs that farm, not a second cousin by marriage but a genuine cousin whose name is Richardson, but I know that a number of honourable members have to my knowledge he has never been called Richo. spoken of the financial difficulties being encountered by dairy farmers within their An honourable member interjected. electorates. Indeed, we all know of family tragedies that have occurred as those farmers with various Mr RICHARDSON - Indeed, he does have a financial pressures confronting them, together wi th reference, the 300 cows he milks on that property. It a lack of return for the products they produce so is a very effective and efficient dairy farming effectively and efficiently, have an income that is operation. It is this effectiveness and effiCiency of the declining all the time. Victorian dairying industry that is crucial to the success of the industry. Many speakers before me One hears daily of stories from various rural areas have referred to the efficiency and effectiveness of about families who have farmed their land our dairying industry and there is no doubt that the successfully for many years but are now finding tha t Victorian dairying industry is the most efficient in the family farm can no longer be sustained and that Australia, perhaps the world. I can only draw upon the business that has supported generations of a my own experience in these matters and turn to the family is unable to survive. Proud families that have farm to which I referred a moment ago, which my been self-sufficient and self-reliant for generations cousin operates. The farm has been extended in the find themselves unable to continue. more than 100 years since my forebears assumed the property, and it now exhibits modem technology I know of a couple of cases in the district from which and superior farming practices. My cousin has two I came and where I spent my childhood that have silos and the cows move from the holding paddock involved tragic suicides, particularly by heads of to the milking shed, which is mechanised with a families, because people have been to cope with rotary dairy where the floor moves around. That what they perceived to be the shame of failure and technology enables two men to milk approximately the pOSSibility of losing the farms they had inherited 300 cows twice a day. from their fathers, their fathers having inherited them from their grandfathers, and their grandfathers The way milking is done now is a far cry from the from their great-grandfathers. days when I milked without pay many years ago as a boy. The honourable member for East Gippsland That is the difficulty facing the dairy industry today, would recall the days when he was a boy or even a and it cannot be overcome by a government that is young man milking cows in a far less mechanised city-based and cares not one jot for what goes on way than occurs today. I recall the excruciating beyond the end of the tram tracks. That is what this moments when one would sit on the stool that one government is really on about. There has been not always carried to the bail to put the cups on to the one significant statement, initiative or policy from cow. The technique was to put one's head against this socialist, city-based government referring the flank of the cow to put the cups on the teats of realistically to the needs of country Victorians. the willing cow. The problem always was that the cow would, at that point, decide to shift her ground The government does not even relate to the towns. and I have vivid recollections of being spreadeagled Were it concerned about urban matters, one would against the other side of the bail as the cow's bulk think it would relate itself to the towns because the moved against me. Those of us who have milked Labor Party usually receives a reasonable vote in cows know just what advances have been made in country towns. It even gets a reasonable vote in the efficiency and technology that now applies in the Kerang, which is difficult for me to understand, dairy industry. knowing the people of Kerang. DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1425
Mr Evans - I don't think it will any more. Milk production per farm has increased by 185 per cent during the past 20 years as a result of the types Mr RICHARDSON - I pick up the observation of technological developments I described earlier from my learned friend. Those days are over when I referred to that very efficient dairy farm because the party has neglected country towns like conducted by my cousin. It is that efficiency and the Kerang, which depends on the dairy industry improvement in technology that has allowed our surrounding it. dairy industry to progress at the rate it has and to be able to sustain itself not only within Australia but The government has neglected not only the rural also in competition with other countries, particularly producer but also the small businessmen and the the European Community, which provides most civil servants who live in those country towns. tmfair competition in that it subsidises inefficient Everyone understands that the government will production and undercuts our product in world ignore the farmers, but if it were fair dinkurn about markets. being interested in urban matters one would expect it to take an interest in country towns where its In spite of all the obstacles placed in its way by the members could get a vote. European Community, the Victorian dairy industry is still able to compete throughout the world. Yet, Will the Bill do anything to change things for those difficulties that must be overcome continue to exist who live in rural Victoria; for those who work on the in Victoria. During the past 35 years the farms and live in the country towns; for those who manufactured milk return has increased by 380 per depend on the success of the farming community for cent and the return for market milk has increased by their own success? It is important to realise that 570 per cent. Our cost of living has increased by 850 there is a symbiotic relationship and that the country per cent and average weekly earnings, by 1700 per towns caIUlot survive without the success of the cent. In 1990-91 the Victorian dairy farm net cash rural regions surrounding them. Farmers must be surplus was only $8200. That figure is beneath the able to succeed so that the country towns can also poverty line - you get more than that if you are on succeed. Together they prosper. the dole!
A country town caIUlot survive without the success Does this Bill address that problem? of the rural producers surrounding it because they provide the income to meet the services provided in Honourable Members - No! the country town. If one of the two fundamental elements collapses, in turn the whole symbiotic Mr RICHARDSON - Does the Bill solve that relationship collapses. dilemma?
Let us examine the status of the Victorian dairy Honourable Members - No! industry. Victoria produces 3900 millilitres of milk per aIUlurn -- The ACTING SPEAKER (Mr F. P. Sheehan) - Order! The honourable member, without assistance Honourable members interjecting. from his colleagues.
Mr RICHARDSON - I shall pause a moment Mr RICHARDSON - I am grateful for it. and obtain advice. The ACTING SPEAKER - Order! The Mr Roper - I hope Hansard records that. honourable member's musings are interesting but I ask him to keep to the Bill. Mr RICHARD SON - That figure is 62 per cent of Australia's production. Victoria produces its milk Mr RICHARDSON - I am offended. I was on a seasonally based grass system - only 3 per relating my remarks directly to the Bill. Indeed, cent of the world's milk is produced seasonally. when my colleagues became emotional, I was asking Victoria produces one-third of all milk so produced direct rhetorical questions relating precisely to the in the world. Importantly, Victorian milk is Bill. I was asking: does this Bill solve the problem? produced at less than half the cost of most of the The answer is no, it does not. Does this Bill mean milk produced anywhere in the world. farmers who may have gone broke will not go broke? The answer is no, it does not. Does this Bill provide any sort of guarantee that Victoria's efficient DAIRY INDUSTRY BILL
1426 ASSEMBLY Tuesday, 19 May 1992 dairy farmers will be able to look forward to a The opposition agrees with some matters in the Bill. period of prosperity? The answer is no, it does not. However, it has flaws. The coalition does not believe the legislation will solve all the problems of the Honourable members should look to the importance dairy industry and it is not convinced that the of the dairy industry as part of the overall pattern of government has the necessary vision and foresight Victorian industry. The dairy industry is Victoria's to correct the situation. The record shows that the largest decentralised industry and it provides raw government has no interest whatsoever in country material for a number of production destinations. Victoria and it has no interest in the difficulties Part of the raw material goes in the form of market presently facing the dairy farmers of Victoria. milk to processing plants which pasteurise and then distribute the milk to households across Victoria. During the Committee stage the coalition will put forward some amendments to the Bill. If the Another portion of the market milk goes through Minister is serious in his protestations about various processing phases which can add flavouring assisting the dairy industry, if he has the interests of to the milk, reduce the fat content or in some cases rural Victoria at heart, and if he believes in and increase the fat content. All honourable members relates to Victorian farmers, he will take kindly to will be aware of a product that adds an additional the proposals that will be presented by my dollop of cream to milk! There are various end colleague, the Deputy Leader of the National Party. products in the market milk production stream and If the Minister does not take heed of those then there is non-market milk, which goes to the amendments, the Bill may not have a speedy manufacturing process. A variety of products passage and may hit the rocks in the other place. emerge from the manufacturing process including casein and other milk products used as part of Mr BAKER (Minister for Food and ongoing processing in Australian industries. Agriculture) - I thank honourable members for their contributions to the debate; they were wide The dairy industry is fundamental to the success of and varied on a scale that defies description. The Victoria; it employs thousands of people as both only common denominator appeared to be the fact employees and entrepreneurs. Every farmer is a that the Bill offered the opportunity for anyone who small business man and every farmer is basic to the could claim to have even the most limited success of the State's economy. The question is experience in milking a cow to get up and make that whether the Bill will preserve the dairy industry in a declaration. I shall not bore the House with my way that will enable it to continue to be viable. Will excursions to an uncle's soldier settlement farm. the Bill preserve the industry in a way that will enable it to grow and to strengthen Victoria's ailing Mr Richardson - Tell us anyway. economy? Mr BAKER - His name was Iver Amherst As a general statement, the opposition sees some McCarlie and he was known as Uncle Sonny. He merit in the Bill. However, we do not live in a used to come in at quarter to five in the morning perfect world. with a bucket of cold water to make sure you got up to do your duty by the few jerseys he had! Mr Simmonds interjected. I was surprised that no member of the coalition Mr RICHARDSON - I note the regret of the referred even in passing to the Industry Commission honourable member for Reservoir that we do not report and the threat it posed to the dairy industry. live in a perfect world. He will no doubt be They did not make any scant or passing reference to distraught to learn that the Bill does not solve all the the decision of Federal Cabinet recently announced problems of the dairy industry. I look to the by the Federal Minister for Primary Industries and honourable member to assist with his vote, when the Energy, Mr Crean, in which he put away the moment comes, to adjust the legislation presently Industry Commission's draconian propositions for under consideration so improvements will be made. the industry. As honourable members well know, Some improvements can be made, and when those the dairy industry has hailed that decision and well propositions are put forward I shall look to the understands the role this Bill played in beating off honourable member for Reservoir for support just as the flat-earth economic druids from the Industry he has looked to me for support from time to time. Commission in a way that they have not been beaten off before. DAIRY INDUSTRY BILL
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It is a matter of some honour -- However, the Minister should engage in a little lateral thinking rather than vertical thinking about Honourable members interjecting. this Bill instead of just picking up the trends that have been in place for years. As we are rewriting the Mr BAKER - The President of the Australian Bill it is pertinent that we should examine whether Dairy Industry Conference, Mr Pat Rowley, rang me we really need it in the first place. If we do need it, to thank me for the role I had played in this and we should consider the propositions we are aiming modesty forbids me from mentioning how many to achieve. We should be seeking to achieve what I others. However, this is a matter of honour and the propose in this amendment, but a number of other industry has an understanding with the Federal amendments will need to follow to change the Bill government that this Bill in major part must proceed around and achieve that objective. if the Kerin plan is to be saved. To give all Victorians an assured supply of milk at a Finally, there are propositions that will allow the reasonable price would mean that all Victorians industry in time and at a measured pace to move would get milk at the same price but the Bill does into branding and more sophisticated marketing and not provide for that. The provisions in the Bill will, presentation along the lines that some of the drier in effect, say to my neighbours, the people down the members of the Liberal Party said we should go. For road, my daughter and grandchildren who live in all those reasons I commend the Bill to the House. the town, that they will have to pay more for their milk than those who live in Melbourne. I do not see Motion agreed to. why my son and his family should work their insides out to enable milk to be sold at a cheaper Read second time. price to people living in Melbourne than to their own brothers and sisters in the neighbouring town. Committed. That is not fair and I do not think this Chamber Committee would support that proposition. I am absolutely disgusted that the party to which I belong will not Clause 1 fight for that principle. If ever there was a principle tha t the rural members of this Chamber should be Mr EV ANS (Gippsland East) - I move: standing up for it is that the children and babies in the country can get a drink of milk at the same price 1. Clause 1, lines 5 to 7, omit paragraph (a) and (b) and as everybody else. If they cannot get that basic insert - necessity, what the hell are we doing here? "ensure that all Victorians can obtain a reliable supply of high quality milk at a reasonable Mrs Hirsh interjected. price.". Mr EV ANS - The honourable member for Early in its term the Labor government introduced a Wantirna can screech about her care for the number of different procedures for the setting out of disadvantaged, the women, children and babies, but legislation. One of the things it did was to introduce she will vote to make milk dearer for babies in the the setting out of the purpose of a Bill in clause I, country than for babies in the city. She should be and that had a few merits because it set the scene for ashamed of herself for supporting such a what later clauses were aiming to do. In the process proposition. It shows how hollow and narrow is her it gave the opportunity for a fair range of debate on outlook. She is not concerned about the poor people clause 1. or the disadvantaged, her only concern is whether she gets a vote or two. If people are poor and It seems to me that the purpose as set out in the Bill disadvantaged and do not live in her electorate, she is really describing the means to an end rather than could not care a continental what happens to them! the end and I suggest the House should amend the purposes of the Bill to state what the end result of If babies in the country cannot get their bottle of the Bill is meant to be. If a Bill is designed to ensure milk at the same price as babies in the city, there is that all Victorians receive an assured supply of high something sick about this place and I suggest to the quality milk at a reasonable price that is an Minister that as we are close to the end of this admirable purpose and I would be somewhat at a sessional period he should report progress and sit loss to understand if the Minister did not agree with down and talk to people who have a real knowledge tha t proposition. DAIRY INDUSTRY BILL
1428 ASSEMBLY Tuesday, 19 May 1992 and a real concern for all the people engaged in the Amendment agreed to; amended clause agreed to. industry and who want to see everybody in the State treated fairly. Clause 3
We should go through the amendments carefully Mr W. D. McGRATH (Lowan) - I move: and come up with good legislation. If the Chamber 2. Clause 3, line 6, omit "65" and insert "64". does not accept the amendment I have moved, it will be abandoning the people who live in the country. It As we go through the Bill it will become clear that is high time the people in rural Victoria started to this is a technical amendment. If the Minister accepts look elsewhere when they cast their vote at the next the further amendments that are to be moved the election. numbering of clauses will be affected. It is purely a technicality that is necessary if the Minister accepts Amendment negatived; clause agreed to. further amendments as they are moved by the coalition. Progress reported. Mr EV ANS (Gippsland East) - I wanted to make The SPEAKER - Order! The time appointed a better offer on this deal, to omit //65// and insert under Sessional Orders for me to interrupt the "62", because there are a couple of clauses I would business of the House has now arrived. like to see deleted from the legislation. Whether this amendment is agreed to or otherwise, I still have the Sitting continued on motion of Mr BAKER opportunity to express my opinions about the later (Minister for Food and Agriculture). clauses and I will not be forgOing my right to do that at that stage if the amendment is not carried. Committee However, I am quite happy that the proposition be tested by the amendment being moved by the Resumed from earlier this day. Deputy Leader of the National Party, and we will see where it goes from there. Clause 2 Mr BAKER (Minister for Food and Mr W. D. McGRATH (Lowan) - I move: Agriculture) - The government opposes the amendment. 1. Clause 2, line 9, omit "or days". This is a standard amendment the opposition parties Mr BILDSTIEN (Mildura) - On behalf of the have been moving to clauses of this kind because the Liberal Party and in support of the Deputy Leader of government has been selectively proclaiming the National Party I ask that the Minister reconsider legislation that has been passed by Parliament by his attitude to the amendment. The Deputy Leader exercising the commencement provisions. The clause of the National Party has explained that further provides that the Act comes into operation on a day amendments are to be moved by the coalition and or days to be proclaimed. The words "or days" allow that what has been proposed is a technical for the selective proclamation that I spoke about. mechanism that relates to the forthcoming amendments. It is an important procedure that I am The coalition believes this is total industry sure the Minister should reflect on further. legislation. There is no reason for it to be proclaimed in stages or selectively; it affects the dairy industry Given that the Committee debate will proceed for in its entirety. I ask the Minister to accept the some time, into the wee hours of the morning by the amendment so that it is clear to Parliament and the looks of it, and that the Bill has to be considered in industry that when the Bill has completed its another place, we ask the Minister to review the passage through both Houses it will be proclaimed statement he has just made and accept the totally on the one day, thereby showing the industry amendment moved by the shadow Minister. and those who have an interest in the Bill that there will be no interference by the Governor in Council. I Dr NAPTHINE (Portland) - I rise to support my hope the Minister will accept the amendment. colleagues, the honourable members for Lowan and Mildura. Proposed amendment No. 10 standing in Mr BAKER (Minister for Food and the name of the honourable member for Lowan, the Agriculture) - The government accepts the Deputy Leader of the National Party, seeks to omit amendment. clause 62. Therefore, subsequent clauses will have to DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1429 be renumbered. Clause 65 will become clause 64. It convoluted mechanism for setting milk prices when is important to look at clause 62 in that context it has such a small effect on the cost of living and on because the provisions are inextricably linked. If the lives of people generally. If we were talking clause 62 is omitted, a renumbering must occur. about petrol, for example, I would say this very complex system of price justification would be Clause 62, which was alluded to in the needed. However, we do not worry about petrol and second-reading debate, deals with the role of the I suggest that the price of petrol impacts far greater Prices Commissioner in the fixing of prices. It is clear on the standard of living of people in this State than from the second-reading debate that the role of the the price of milk. Prices Commissioner is not accepted by any part of the industry: it is not accepted by the dairy farmers, Therefore, why is this arrangement necessary for the processors, the retailers, the manufacturers or milk? I suggest that its only justification is to keep a anybody involved in the industry. They all say that lot of highly paid consultants and accountants in the Prices Commissioner should have an advisory jobs. It is taking money out of the pockets of dairy role only and should not be involved in the final farmers, and the way it is going the cost of this determina tion of prices. ridiculous price fixing system will take milk out of the mouths of babies in country Victoria. If that is the situation, clause 62 should be removed. The Minister should accept that sound advice from I should like to see the clause removed, but I will the industry - that the Prices Commissioner's role deal with it in proper detail when we get to it. In the should not be as outlined in clause 62; he should meantime, the Minister does not really know yet have only an advisory role. whether he will agree to the clause being defeated. It is not a question of whether he agrees with it; I dare The industry is telling the Minister that this must say at this stage he may well feel that the clause happen. If the Minister accepts that advice from the should remain. However, after hearing more industry, which he should, even if he will not listen detailed debate, perhaps he will change his mind. to the coalition, clause 62 must be withdrawn. That will entail a renumbering of the subsequent clauses, I do not want to prolong the Committee stage, but if which means the Minister should accept amendment the Minister does not accept the amendment I will No. 2 moved by the Deputy Leader of the National be forced to introduce my amendment, which I am Party. entitled to do, and we can have the argument all over again. I say that so that the Minister is quite clear about exactly why the amendment has been moved at this Mr W. D. McGRATH (Lowan) - It is necessary stage. I think the Minister would understand that to take the advice of Parliamentary COWlSel on these clause 2 will disappear from the Bill, whether it be matters. Amendment No. 2 of the honourable here or in another place. He may as well accept member for Gippsland East, which omits clause 65 reality. He should listen to what the industry is and inserts clause 62, is almost identical to my telling him and, rather than dragging the Committee amendment No. 2, which inserts clause 64. stage on into the early hours of tomorrow morning, accept the amendment, which has been moved in Later amendments propose removing clauses 60 and good faith and with the support of the industry. The 62 from the Bill. They all relate to the role of the Minister should stand up and accept the amendment Prices Commissioner. Therefore, Mr Chairman, we now so that we will not need to debate it any further. are proposing, in essence, to omit all references to the Prices Commissioner. I ask whether it is Mr EVANS (Gippsland East) - The situation appropriate at this stage for me to develop the directs attention to what I consider to be a argument relating to my amendment No. 3, which shortcoming in the procedures of the Committee. I proposes to omit all words and expressions on page can understand the difficulty the Minister faces 5, lines 16 to 18. It relates to the Prices Commissioner because he has not yet heard the argument on why appointed under section 3(1) of the Fuel Prices several clauses ought to be deleted, but it would Regulation Act 1981. Mr Chairman, are you happy hardly be appropriate to deal with them in detail at for me to do that? this stage. The CHAIRMAN - Order! It is appropriate for I should like to see clause 60 removed from the Bill the honourable member to do so. because it is crazy to have such a complex and DAIRY INDUSTRY BILL
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Mr W. D. McGRATH - I shall develop my bigger commitment to the industry than the farming argument along those lines. The honourable member community and the factory milk processors, and for Portland outlined that the industry is very much their views are spelt out clearly and strongly. in favour of the removal of the role of the Prices Commissioner. It has been a thorn in the side of the The membership, roles and functions of the industry. Milk prices are a fair and reasonable authority are clearly spelt out in the Bill. The reflection of the costs incurred by the various Minister wants to revamp the Victorian Dairy components of the industry, regardless of whether it Industry AuthOrity by reducing its membership is the farming community, the processors, the from 10 to 8. Clause 9 states that the authority is to distributors or the retailers. consist of eight members and that the Minister may appoint one member who is to be the chairperson It has been brought to our attention that the Prices and one member who is to be a government Commissioner seems to come down heavily on the representative. Clause 9(3) states that the Minister side of the consumer when asked to determine must appoint the other six members on the market or liquid milk prices in the public arena. I recommendation of the selection committee. If the will quote what the UDV says in its submission on Minister claims that the people he will appoint to the the Bill: Victorian Dairy Industry Authority will have his full confidence, why does he see the need for a role for Delete the reference and definition of "Prices the Prices Commissioner? Commissioner" in clause 3 (Definitions). The Prices Commissioner is not needed to determine There is no requirement for the Prices Commissioner to the price of milk. That is one of the roles of the be given reference in the Act as the Fuel Prices VOIA, which comprises various industry groups. If Regulation Act 1981 covers the terms of reference for the authority is unable to set appropriate prices for the Prices Commissioner. both producers and consumers and does not accurately reflect the interests of the industry, the That spells out clearly that the UDV does not favour Minister has the right to sack its members - and the role of the Prices Commissioner in the setting of that is the way he should go! The Minister is wrong the retail price of milk. The submission forwarded to to involve the Office of the Prices Commissioner in the Minister by the Milk Processors Association of the determination of milk prices. Victoria (MP A V) states: Mr BILDSTIEN (Mildura) - I support the The future role of the Prices Commissioner as proposed comments made by the Deputy Leader of the in the draft is of great concern. If adopted it would give National Party. The coalition has consulted widely the Prices Commissioner total control of milk pricing on the issue of the role of the Office of the Prices which, we believe, would have a regressive effect on Commissioner. As has been clearly stated, two key the market milk industry at all levels. players in the industry, the Milk Processors Association of Victoria and the United Dairyfarmers Presumably the VOlA would continue in the role of of Victoria are at one in their belief that the Prices conducting price reviews and preparing price Commissioner should not be involved in determinations at intervals of six months and the detennining milk prices. MP AV contend that the Prices Commissioner should only intervene in an advisory capacity. The UDV, which represents some 8500 dairy farmers throughout the State, is in no doubt that the Prices It finishes by stating that: Commissioner should not be involved. In its submission to the coalition it states: The MP A V believes that other sectors would support this view and we therefore seek your further Whilst the Prices Commissioner can advise the VDIA consideration of this proposal. on the guidelines for pricing principles and methodology, the UDV is not in favour of the Prices The situation is clearly spelt out by two of the main Commissioner being required to approve or industry bodies - the UDV and the Milk Processors disapprove of the pricing principles and methodology Association of Victoria. If the Minister for Food and nor the six-monthly price determinations by the Agriculture is to support the industry for which he is authority. responsible he has to listen to input from two of the Significant players in it. No other segment has a DAIRY INDUSTRY BILL
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The position of Prices Commissioner was established to As I said during the second-reading debate, in 1971 provide the government with advice on prices in the the average wage earner had to work 5.5 minutes to interest of the consumer, and the commissioner should purchase a litre of milk, whereas some whiz-kid has not have the power to intervene in the price setting calculated that in 1991 the price of a litre of milk can process. The role of the Prices Commissioner should be be earned by the average wage earner in only 3.7 restricted to an advisory role to the VDIA and to the minutes. Victorian consumers are able to buy milk government. and other dairy products at more than reasonable prices because our dairy products are produced by There is no requirement for the Prices Commissioner to very efficient and competitive dairy farmers. be involved in the price setting procedure other than advising the VDIA and the government under the Returns to dairy farmers must not be eroded. While powers currently granted to the Prices Commissioner. speaking during the second-reading debate one of my colleagues alluded to the fact that the average The UDV is not in favour of the Prices Commissioner return to dairy farmers is $8200, which, as the approving or disapproving the VDIA price honourable member for Gippsland East said, is determinations in preference to the government barely as much as a person on unemployment making an independent assessment. benefits would receive.
In its submission the Milk Processors Association of The Prices Commissioner has done little to protect Victoria states: the interests of Victorian dairy farmers. It is for that reason that the coalition will press the point by The proposed role of the Prices Commissioner has been asking the Minister to reconsider his stance and discussed with the United Dairyfarmers of Victoria accept the amendment proposed on behalf of the (UDV), and both organisations agree that the Prices coalition by the Deputy Leader of the National Party. Commissioner should intervene in pricing matters in an advisory capacity only. Mr MAUGHAN (Rodney) - I support the comments made by the Deputy Leader of the We understand that this view will be presented to the National Party and the honourable member for coalition agricultural committee - Mildura about the need to remove the Prices Commissioner from the Bill. As the honourable which it was - member for Gippsland East pointed out, milk is cheap when compared with the prices of Coca-Cola, in a submission being prepared by the UDV. The lemonade, bottled water, orange juice, tomato juice MPA V will support the UDV stance on this issue. and beer. One dollar will buy a little over a litre of milk but will buy only 0.3 of a litre of beer and 0.9 of In his detenninations the Prices Commissioner a litre of Coca-Cola. always comes down on the side of consumers. Uttle if any consideration is given to ensuring fair and The Prices Commissioner should have no role to equitable returns to Victorian dairy farmers. In fact, I play in setting the prices of dairy products. As the believe the commissioner is on record as saying that Deputy Leader of the National Party said, that view there is too much fat in the dairy industry and that is strongly supported by both the United the prices of dairy products should be reduced. Dairyfarmers of Victoria and the Milk Processors Association of Victoria. In an even later letter than Australian dairy products are among the cheapest in that quoted by the Deputy Leader of the National the world. The price of Victorian market milk is the Party, the MPAV reiterates that the proposed role of cheapest in Australia at 39.97 cents a litre. Across the the Prices Commissioner has been discussed with border in New South Wales the price is 42 cents, and the United Oairyfarmers of Victoria and that both in Queensland it is 48 cents. The retail price of a litre organisations agree that the commissioner should of milk has recently increased by a cent or two to 94 intervene in price matters only in an adviSOry cents a litre, which compares more than favourably capacity. with prices interstate. Over the past few decades the price of milk has increased only five or six times. In its submission, one of the major manufacturers of That can be compared with the prices for bread, milk products in Victoria, Bonlac Foods Ltd, which cigarettes, beer and petrol, which have increased has a large manufacturing plant in my electorate, dozens of times. states: DAIRY INDUSTRY BILL
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Since the Prices Commissioner is involved by way of Commissioner. If the arguments that the industry is consultation under clause 60 we argue against the need efficient and will have a restructured board that the to refer price determinations to the Prices Minister says will be important for the future of the Commissioner under clause 62. Alternatively the dairy industry and which will reflect the needs of consultation process should be removed from clause 60. the industry are correct one would expect those people to be able to appropriately settle milk prices. The dairy industry in general and processing organisations such as the UDV and the Milk I reiterate what I said this afternoon in the Processors Association of Victoria in particular are second-reading debate: the Prices Commissioner has unanimous in their belief that the Prices failed in the difficult task of dealing with the petrol Commissioner should have no role to play in industry. My confidence, and I am that of my detennining milk prices. I join with the Deputy colleagues in country Victoria, not only in the Leader of the National Party and the honourable position but in this particular commissioner has member for Mildura in imploring the Minister to disappeared because of his failure to deal with that reconsider the matter and agree to the omission of very important issue. clause 62. Prices of petrol and gas in country Victoria are Mr J. F. McGRATH (Warrnambool) - It is significantly higher than they are in Melbourne. I difficult to understand why the Minister is adopting have made representations time and again to the such a hard and belligerent line on this issue when it Prices Commissioner in relation to issues that affect must be patently clear to him that there is very little not only the people who drive motor cars in country support for the retention in the Bill of references to Victoria but also primary producers and the Prices Commissioner. It has been made clear by manufacturers in the value-added field who are the Deputy Leader of the National Party and other affected by the inflated prices of petrol and gas. The speakers that United Dairyfarmers of Victoria (UDV) cost multiplier goes on uncontrolled because the and the milk producers and manufacturers do not Prices Commissioner has failed to respond to the see a role for the Prices Commissioner. needs of the whole of Victoria.
I adopt the argument of the Deputy Leader of the I have no confidence in the commissioner and I am National Party that given that the Bill deals with sure my colleagues have no confidence in him. We pricing and the restructure of the Victorian Dairy believe there is only one appropriate step to get rid Industry Association one would imagine the VOlA of him, and that is for the Minister to accept the view will be given powers and provided with expertise of the industry and of the people of Victoria that the that reflects the industry to enable it to make Prices Commissioner should be removed. Tonight is decisions in relation to pricing. One would have the acid test for the Minister for Food and thought the Minister would not have needed to add Agriculture: he will show whether he is in control of anything more to the pricing mechanism. this Bill and his department and acting in the interests of the industry and the overwhelming The milk industry in Victoria is a model that could majority of Victorians by accepting the amendment. be applied to many other industries throughout the Alternatively, he can sit tight, he can sit on his hands nation - it has demonstrated an ability to manage and have the amendment thrust down his throat in itself efficiently. With a 5 per cent a year another place, as ungraciously as that may be done. productivity gain the industry should be able to continue to efficiently produce milk, and one would There is an opportunity in the next few moments for therefore imagine that a restructured VOIA-like the Minister to reconsider his position in relation to authority would have no difficulty ensuring that the Prices Commissioner. The Minister must there was appropriate pricing for milk throughout understand from his consultations with people in his Victoria and that Victorians could continue to enjoy department and in the industry, whether it be dairy a cheap, high-quality product. farmers, processors or manufacturers, that Victoria has an extraordinarily efficient dairy industry. Those The Minister agreed with us today when we spoke people are able from practical experience to say about the great strides made over the decades in what they think is best for their industry. They are relation to quality assurance in the dairy industry, so saying clearly that they do not want the Prices it is difficult to understand where he is coming from Commissioner to be involved. in failing to accept that there is little or no support for the retention of reference to the Prices DAIRY INDUSTRY BILL
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It is extraordinary that the Minister, who claims to the industry. One must ask why it is necessary to be able to consult and mix with all of these people, have the Prices Commissioner when so much effort has failed to get the message on this issue. It is not has been involved in the selection of representatives an issue that is balanced or that might be won or for membership of the board of the Victorian Dairy lost - the community has said resoundingly that it Industry AuthOrity. The members of the authority does not want the Prices Commissioner! I fail to will ensure that each sector of the dairy industry is understand why the Minister is not prepared or able properly recompensed for their work. If the Prices to take the initiative as the Minister responsible for Commissioner is concerned only with putting milk looking after the industry and ensuring that it on the table more processors will be forced to leave continues to survive in the efficient manner to which the industry. we have become accustomed. I said during my second-reading speech that it is The Minister is the person who, when he took his difficult to maintain competition within the industry Ministerial oath, was challenged and charged with when so many processors have left it. It is important the responsibility of looking after agricultural to ensure that the processors and distributors stay in industries in Victoria, a fundamental part of which is the industry, and the only way that can be done is to the dairy industry. Tonight the Minister has not only properly recompense them for their work. an opportunity but also a responsibility to honour his Ministerial oath to look after the industry The Committee must ensure that the VDIA components or commodity groups that are in his recognises the work of each sector of the industry charge. Before the debate is finished I hope the and ensures that they are adequately recompensed. Minister will acknowledge that there are some The restructured authority will have representatives things in the Bill that industry representatives are from each sector of the industry, including two with unable to accept. expertise in milk production, to represent farming interests. Those two members should understand A number of organisations have said that the Prices the amount of work done by dairy fanners: the Commissioner is unacceptable to them. I call on the number of hours they work, the costs involved and Minister for Food and Agriculture to show the pressures they are under. They should ensure leadership and to demonstrate that he is a Minister that fanners receive real value from a litre of milk. who is in charge of the legislation and not a Minister who is driven by the caucus or Cabinet. I will be The member of the authority with expertise in interested to see in the next few minutes whether the industrial relations will ensure that the workers are Minister is, in fact, in charge of his portfolio or paid an appropriate wage for so efficiently whether he will wimp out and oppose the producing their products in Victoria. The authority amendment. will also comprise three members with expertise as detennined by the Minister, so they too will have an The Minister should acknowledge the request from input into the cost of milk production. the industry. If he is not prepared to do that all the talk about consultation, moving around rural The selection committee will comprise Victoria, mixing with fanners and manufacturers representatives from the United Dairyfanners of and trips to Asia are a front for empty rhetoric. Victoria, the Milk Processors Association of Victoria Unless the Minister is prepared to grasp the nettle all and the Victorian Dairy Products Association, so it is his talk is hollow. to be hoped that those people will ensure that all sectors of the industry are properly recompensed. The Committee will soon see whether the Minister is a man of straw or whether he has the courage of his I ask the Minister to reconsider the government's convictions and stands up for the industry. The opposition to the amendment and ensure that the Minister should accept the amendment rather than board of the VDIA properly represents the industry. risk being seen as a wimp. It is not necessary for the Prices Commissioner to be the chairperson of the review panel. The coalition Mr KILGOUR (Shepparton) - I have pleasure in has canvassed all sectors of the industry and has supporting the amendment that will ensure that the received advice, particularly from the United Prices Commissioner does not become involved in Dairyfanners of Victoria, that there is no necessity the pricing of milk. I have been involved in the milk for the Prices Commissioner to be included on the industry for 18 years and I am concerned at the review panel. effect the provision could have on various sectors of DAIRY INDUSTRY BILL
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The CHAIRMAN - Order! The question is that Gude,Mr Richardson, Mr the expression proposed to be omitted stand part of Hayward,Mr Smith, Mr E. R. the Bill. Heffeman, Mr Smith, Mr I. W. Honeywood, Mr (Teller) Steggall, Mr Mr EV ANS (Gippsland East) - Mr Chairman, I Jasper, Mr Stockdale, Mr ask for clarification. If the motion is carried will I be John, Mr Tanner,Mr prevented from moving a further amendment to Kennett,Mr Wade,Mrs delete subsequent clauses? Kilgour,Mr Wallace,Mr Lea,Mr Weideman, Mr The CHAIRMAN - Order! It will allow the Lieberman, Mr Wells, Or honourable member to move those amendments. McGrath, Mr ]. F.
Or NAPTHINE (portland) - Mr Chairman, is the Amendment negatived. Committee now voting on amendment No. 2? Sitting suspended 11.56 p.m. until 12.32 a.m. The CHAIRMAN - Order! The question is that the expression proposed to be omitted stand part of Mr W. O. McGRATH (Lowan) - I move: the Bill. Those supporting the amendment should 3. Clause 3, page 5, lines 16 to 18, omit all words and vote no. expressions on these lines. Committee divided on omission (Members in The Committee has canvassed this amendment in favour vote No): detail. It relates to the Prices Commissioner who is appointed under section 3(1) of the Fuel Prices Ayes, 44 Regulation Act 1981. It may be unnecessary to argue Andrianopoulos, Mr McCutcheon, Mr the point again but the opposition intends to call for Baker, Mr McDonald, Mr a division on this amendment if the Minister will not Barker, Mrs Mathews,Mr accept it. It is important that any reference to the Batchelor, Mr Micallef, Mr Prices Commissioner be deleted from the Bill. Cain,Mr Pope,Mr Cole,Mr Ray, Mrs If the Minister for Food and Agriculture is to be a Crabb,Mr Roper, Mr leader within his government in the areas of his Cunningham, Mr (Teller) Rowe,Mr responsibility, he cannot allow other Ministers who OolliS,Mr Sandon,Mr may be looking to protect their sectional interests, Emst,Mr Seitz, Mr such as the Minister for Consumer Affairs and Fordham, Mr Sercombe, Mr others, to hold sway over his legislative jurisdiction. Garbutt, Mrs Setches, Mrs He must represent his industries. The Minister must Gavin,Mr Sheehan, Mr A. J. prove tonight that he is on the side of his responsible Hamilton, Mr Sheehan, Mr F. P. Ministers. Unless he is prepared to accept the Harrowfield, Mr Shell, Mr amendment he will be seen to be not supporting the Hill,Mrs Simmonds, Mr industry. I cannot spell it out any clearer than that. Hirsh,Mrs Spyker,Mr ]olly,Mr Thomson,Mr The role of the Prices Commissioner has not proven Kennan, Mr Trezise,Mr to be advantageous to any sectors of the milk Kennedy, Mr Vaughan,Or industry, whether it be processors, distributors or Kimer,Ms Walsh,Mr retailers. The various margins are detailed in the Leighton, Mr (Teller) Wilson,Mrs minimum and maximum pricing information for Noes, 39 liquid milk. If the Minister is to represent his Austin, Mr McGrath, Mr W. O. constituency and his industries he must accept this Bildstien, Mr McNamara, Mr amendment and not, as the honourable member for Brown,Mr Madellan, Mr Warrnambool said, ask the opposition to bludgeon Clark, Mr (Teller) Maughan,Mr this legislation in the other House by moving Coleman,Mr Napthine, Or amendments. Cooper,Mr Perrin, Mr Delzoppo, Mr Perton,Mr If the Minister is not prepared to accept the Elder, Mr Pescott, Mr amendment, for goodness sake why does he not give Evans,Mr Reynolds, Mr us a reason? He should accept the amendment and DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1435 delete the reference to the Prices Commissioner. The the Prices Commissioner appointed under section 3(1) United Dairyfarmers of Victoria, producers and of the Fuel Prices Regulation Act ... other players in the industry will be receptive to such a move. If there was ever an illustration of the utter futility of a position in any legislation it is the Prices Mr BILDSTIEN (Mildura) - Earlier the Commissioner appointed under that Act. In country Committee comprehensively covered the reason Victoria it is not uncommon for fuel prices to be 10, why the coalition parties are proceeding with this 12 or 15 cents a litre higher than in Melbourne. The amendment. The two key players - the United Prices Commissioner has steadfastly refused to Dairyfarmers of Victoria and the Milk Processors intervene in that matter. It is a disgrace for a person Association Victoria - have said it is totally in such a position to fail to do his duty. I do not inappropriate for the Prices Commissioner to be know whether it is his fault or whether he is involved in this legislation. prevented from doing so by the government. It is a disgrace and it is sufficient justification for omitting I do not wish to prolong the debate by again these words and expressions from the clause. covering that ground. However, I echo what the honourable member for Lowan has said. The The Committee should also be aware that the chief Minister should stand up and say why he insists that research officer of the Public Bodies Review the Prices Commissioner has a role in the legislation. Committee during the inquiry into the VDIA took He is the Minister for Food and Agriculture and he up a position in the Office of Prices towards the end was previously the Minister for Agriculture and of the inquiry. Throughout the inquiry his attitude Rural Affairs. One wonders who is the driving force towards the dairy industry was contemptuous. He behind this proposal. It has been intimated by the laughed at any suggestion that the propositions honourable member for Lowan that perhaps the being discussed were unfair or would disadvantage Minister for Consumer Affairs in the other place has the dairy industry and rural people. He led a great insisted around the Cabinet table that the Prices many members of that committee by the nose. They Commissioner be involved. blindly accepted what he had to say although we did manage to water down some of his If the Minister for Food and Agricul ture has been recommendations. He did not want a premium paid rolled at the Cabinet table, where is the voice of on market milk. He wanted the price to be the same country Victoria? It is a sad and sorry day if the as that received for milk on the export market. That Minister is not prepared to stand up for the industry was his philosophy. that he tells us he believes in and supports with such a paSSion. It took a lot of browbeating to get him to change his attitude. I have not heard what has happened to him On a number of occasions I have accompanied the since and I am not particularly interested, but to the Minister on visits to parts of rural Victoria and he best of my knowledge he is working in the Office of has spoken to the farming sector with some Prices. If he is going to have a say in the price of sincerity. Now he has an opportunity to back up his milk, may God help the dairy industry and the words with actions by showing the dairy industry people of this State because there will be nobody left that he is supportive of its objective of obtaining fair in the industry. and reasonable returns and that he will not be bulldozed by Ministers interested only in the Mr KENNEIT (Leader of the Opposition) - I consumer. have not entered the debate until now because my colleagues have done exceptionally well. However I We will not back down from our resolve that the am amazed that the Minister is not prepared to amendment should be accepted. If the government accept the amendment because the Minister has is not prepared to accept it, we will divide and if argued about industry -not only the dairy industry necessary, we will pursue it in another place. but other parts of the agricultural industry efficiencies that give back to' the industry greater Mr EV ANS (Gippsland East) - I was hoping the control of its lifestyle, price setting, decisions about Minister would have indicated that he was prepared marketing and so on. to agree to the amendment. It is the height of irony that the Prices Commissioner as defined in the It is extraordinary that the Minister has taken this legislation means: view, given the fact that prices for the $1 billion of exports to Japan will not be set artificially by DAIRY INDUSTRY BILL
1436 ASSEMBLY Tuesday, 19 May 1992 someone outside the industry. There are many who low, they will sell greater volumes. That is surely the argue about whether prices should be set at all. If responsibility of those involved in milk production. prices are set the people intimately involved in the industry should set them rather than those outside I am interested to hear whether the Minister is the industry such as the Prices Commissioner. When prepared to support the amendment. It was not one considers the emphasis placed by the Minister moved in order to score points. It coincides with on guidelines and price control, one must ask both parties' philosophical approach. whether he is acting on behalf of the industry, or on behalf of outside interests. It is not necessarily a matter of the government trying to make the industry more effective and more The dairy industry in this State is one of our most efficient so that it gets new markets. The industry efficient agricultural producers. Over the past 10 or cannot succeed if we continue to add new levels of 15 years we have developed some fine products. I go bureaucracy that determine pricing. It will slow the back to Des Cooper who would have been one of the process down and it will bring in people who have best and most innovative marketing men. He no training or experience. The amendment should be developed new products; milk was able to compete supported by the government, and if it is not I against some of the best beverages in this State. seriously question the Minister's and the Other products have been developed since then such government's commitment to recognising the food as long-life milk. The industry is highly efficient, but industry as one of the growth areas not only for the the Minister is introdUCing a new ingredient into the next decade but for the next 50 years, 100 years and pricing of this competitively priced product. We all beyond. aspire at some stage, because of the quality and the competitiveness of our product, to sell more of our We have constantly argued that we must use the market milk in other parts of Australia. We do not next eight or nine years not only to come out of the have any real control over that because of the recession, but also to develop an industry that will current restrictions. The one area in Victoria that has provide growth and employment. The Minister and potential is the sale of fresh milk to other markets in the government have followed our lead and have Australia. accepted that the food industry will provide the greatest opportunity for Victoria. I urge that it does This Minister is not the Minister for agriculture, he is not shackle the industry by further regulations and the Minister for Food and Agriculture. He has taken levels of bureaucracy. on board a commitment the coalition parties made six months ago when we identified the food The Minister should give the dairy industry the industry as the biggest industry for growth, opportunity of putting into practice what he has said employment and value-added production in this about the food industry generally. He should country in the years to come. The Minister agrees recognise that the inclusion of price fixing by the with that in principle. I read in a newspaper today Prices Commissioner is against the spirit of that the Minister was advocating that Victorians everything he has been talking about over the past should drink more Victorian wine. I agree with him. four or five months. I am sure he does recognise that We produce the finest wines in the world. I cannot privately, but he is probably bound by his colleagues understand why anyone would drink anything else. and therefore cannot do so publicly in this place.
An honourable member interjected. Certainly the setting of prices by the Prices Commissioner goes against everything the Mr KENNElT - The only place I have met the opposition believes in and against the interests of the Minister is at the Imperial Hotel when we have been industry. The government should have the decency discussing matters of high policy. The Minister to recognise that the provision will limit the professes a real commitment to agriculture and to potential for growth of the dairy industry. opening up markets for food. If that is the case why is he introducing another line of bureaucracy into While it might be easy for the government to include the production and marketing of milk? We should the provision tonight, the result at some time in the leave it to those who produce the milk to take the future will be that the opportunity for the dairy responsibility for setting their own prices. If they industry to develop further will be restricted. make a mistake and set the price too high, the market will bring it down; and if the price is set too Or NAPTHINE (Portland) - Again I should have thought the Minister for Food and Agriculture DAIRY INDUSTRY BILL
Tuesday. 19 May 1992 ASSEMBLY 1437 would have taken the opportunity of standing up has been expressed in the authority and in the and indicating acceptance of what is a logical Minister who appoints the authority. The Minister position. Again it has been put to him that the dairy should stand up and indicate that he accepts the industry is urging that the Prices Commissioner not logic and commonsense of the argument put and be involved in detennining prices. Honourable withdraw the provision relating to the role of the members have quoted from the position put by the Prices Commissioner. The only reason he will not do United Dairyfarmers of Victoria and others; I shall that is that he is bound by Cabinet, that is, by other not reiterate what has been said. Clearly the members of his party. Perhaps it is the Minister for industry does not want the Prices Commissioner Consumer Affairs - the Minister for corporatisation involved in detennining prices. - who along with other members of the left have nobbled the Minister. He is obviously constrained. It It is clear also - this is a new point and I hope the is unusual for the Minister not to take part in a Minister will take it up - that it is an insult to have debate. I call on him to indicate why the Prices the Prices Commissioner involved in detennining Commissioner should be involved in determining prices in the dairy industry. The insult is to the prices, given the logic and commonsense of the Minister and to the authority he will appoint. Clause argument put forward tonight on why the role is 6 provides that: superfluous and will be counterproductive.
The functions of the Authority are to - Mr EVANS (Gippsland East) - Every now and again I sit and listen in utter astonishment to (a) subject to this Act, determine prices for the sale of speeches made by the Leader of the Opposition market milk. because he comes out with an extraordinary insight Tha t is the first and primary function of the into the real issues at stake. What the Leader of the authority. If one looks at clause 9, one finds that the Opposition has said supports 100 per cent the authority to be established will consist of eight amendments I have put before the Committee. members, every one of whom will be appointed, Those amendments are aimed at handing over the either directly or indirectly, by the Minister. setting of prices for milk entirely to a producer Therefore, the Minister will appoint the members of controlled authority. That should be done without the authority and their primary function will be to any of the consultants reports that honourable detennine prices. The Minister's involvement of the members will have seen, that is, the KPMG Peat Prices Commissioner in the determination of prices Marwick Chartered Accountants reports and others, is a vote of no confidence both in himself and his and the Robinson arbitrations. appointees to the authority. The dairy farmer controlled authority should set its I ask honourable members to consider what hope prices on the basis of what is a real thing in the there is of having the authority do the right thing by market place. So much competition exists in the the industry if its members are automatically beverage market that there is no hope of the price of shackled and are given a vote of no confidence by milk going through the roof. Every dairy farmer the very Minister who appoints them. How can they knows that if the price goes up too far the do the right thing if the Prices Commissioner is consumption of whole milk goes down and he will looking over their shoulders and vetting every be the sufferer. decision they make? It is a disgrace! There is no need for all the rubbish that is being A real opportwlity exists to appoint the right and spoken about the setting of prices. I have put proper people as members of the Victorian Dairy safeguards in the amendments that I propose: the Industry Authority. They should be able to get on dairy farmer organisation should detennine the and do the job, but they cannot do so if they are price of milk, subject only to disallowance by either shackled. As the honourable member for Gippsland House of Parliament. Who could argue that there is East has pointed out, the Prices Commissioner has anything undemocratic about or wrong with that been appointed under the Fuel Prices Regulation proposition? If the government of the day considers Act. That Act has been a failure. The dairy industry that the price set is tmrealistic or unfair, or has does not want the Prices Commissioner involved in anything at all wrong with it, it can move a motion detennining its prices. in this House that it be disallowed, because the government of the day always controls this House. I As I said, if the Prices Commissioner is appointed in ask honourable members to consider what is fairer a second-guessing capacity, a vote of no confidence than that. DAIRY INDUSTRY BILL
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By the same token, the body that is established has prices has been inserted in the Bill. As the to be able to control the prices through the system. honourable member for Portland has pointed out, The milk industry is important and honourable clause 6 relates to the function of the authority, members must ensure it is not subject to short-term which is primarily to set the price of milk. The variations, caused by somebody trying to get in to implication is that the Minister is appointing people make a short-term profit. Controls must be put in to the authority who cannot actually do the job. place to ensure continuity so that dairy farmers can Clause 6 states: continue the job of supplying milk. The Leader of the Opposition is completely in support of the point (1) The functions of the Authority are to - I have been trying to get through to the House and (a) subject to this Act, determine prices for the sale of to the Committee. market milk. I suggest the Minister for Food and Agriculture Clearly the Minister for Consumer Affairs must have would be well advised to report progress so that we bought into this. He must have said that the left can sit down in an attempt to agree on something by wing will push this through and insert into this Bill which we achieve the objective we all want, that is, a the power for the Prices Commissioner to set the good quality cheap milk supply for all Victorians. price for milk. He does not want it left to the eight good and true people the Minister has selected. The Mr COLEMAN (Syndal) - One would have Minister has been overridden in the way in thought that the Minister for Food and Agriculture which-- might have taken the opportunity provided to him and given the Committee some guidance as to Mr Evans - No, under the Act he can have his whether he accepts the proposition put. Clause 1 say. states quite clearly that the purpose of the Bill is to: Mr COLEMAN - No, I think it has been taken ... reconstitute the Victorian Dairy Industry Authority. away from him because if he cannot win it in promulgating legislation he cannot win it in the If the Minister is convinced and comes to this operation of the legislation, and he has certainly lost House-- in the promulgation of the legislation. He has abrogated the role of the authority. The Minister for Mr Steggall - With a lot of support! Consumer Affairs has actually walked away with this argument and said that the Cabinet will have a Mr COLEMAN - The Minister has two left wing say in the price of milk. members here trying to support him. That is generally the way. The Bill is now about how good this Minister is and whether he has the capacity to support the industry Mr Lieberman - Plus the honourable member and accept the amendment. The crunch is whether for Swan Hill, who is sitting beside him! the Minister has the capacity to stand up to his Cabinet colleagues or whether he will fail and take Mr COLEMAN - Yes, and from this side, he is the tag that goes with it. Does the Minister want to on his left! be tagged?
Suffice to say that the Dairy Industry Bill seeks to Mr Bildstien interjected. reconstitute the Victorian Dairy Industry Authority. The reluctance of the Minister to speak on the Mr COLEMAN - Does he want to be tagged, or amendment moved by the Deputy Leader of the dagged, as has been suggested? National Party, the honourable member for Lowan, is an acknowledgment of who runs the show. I am The ACflNG CHAIRMAN (Mr Delzoppo) - convinced that the amendment is what the Minister Order! I believe the honourable member's comment wanted because it is in accord with what is is bordering on being unparliamentary. contained in clause 1 which describes the purpose of the Bill. Mr COLEMAN - I understand how sensitive you are, Mr Acting Chairman. As you come from a Because the Minister for Consumer Affairs has rural electorate, you would know what the left-wing leanings and obviously supports the Prices terminology means. Commissioner, this pragmatic approach to setting DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1439
The argument about where the Minister stands on asked for an assurance that debate on the Bill be this issue has been clearly put by several members completed. As the honourable member for Lowan tonight. Does he rely on the authority he appoints or has said, we are prepared to sit here until 3, 4 or 5 does he rely on Professor Fels, who is the a.m. if necessary to finish the debate and to ensure handmaiden of the Minister for Consumer Affairs? the Bill goes to another place so that it can proceed vVill he put the responsibility of price setting in the through Parliament this session. hands of the authority or in the hands of the Minister for Consumer Affairs? If the Minister does You, Mr Acting Chainnan, should be under no not accept the amendment he will be sending to the misgivings about the position of the coalition on this dairy industry the message that he cannot win and Bill. We are ready to debate it and it will be on the he will never win. He will always have someone Minister's head if it is delayed in this Chamber. standing over him saying that the dairy industry will have the price set for it. Mr W. D. McGRATH (Lowan) - On the point of order, Mr Acting Chairman, the comments made by Mr Baker - We will lose the Kerin plan. the Minister across the table were to me as the shadow Minister for Food and Agriculture. He Mr COLEMAN - We will lose the Kerin plan? suggested that if the Bill is not passed tonight there Anybody with an understanding of the issue -- will be some ramifications for the Kerin plan in the Federal Parliament. I place on record that I want the Honourable members interjecting. Bill to go through, but I also want to debate the rights and wrongs of the Bill. If that takes until 5 Mr EV ANS (Gippsland East) - On a point of a.m., so be it. I and my colleagues are prepared to sit order, Mr Acting Chairman, I understand the here until 5 a.m. if necessary to get the Bill through. Minister has issued threats across the table. He has threatened that if the opposition votes against this The ACTING CHAIRMAN - Order! On the Bill certain action will be taken in the point of order, the Chair does not believe there is a Commonwealth Parliament. This is a matter of point of order. However, if the honourable member grave concern. Vve are entitled to vote on this Bill as for Gippsland East believes he has been under we see fit and I ask you to give consideration to duress or has been threatened, he should make a whether the Minister has breached Parliamentary complaint to the Speaker. There is no point of order. privilege in making a threat across the table. Mr COLEMAN (Syndal) - That little interlude Mr BILDSTIEN (Mildura) - On the point of clearly laid out for us an intimidating approach to order, Mr Acting Chainnan, it must be said in this issue. The opposition is arguing for an industry support of the honourable member for that has control of its own destiny, not an industry Gippsland East that inherent in the comments made that is beholden to the Prices Commissioner. by the Minister for Food and Agriculture was a threat to gag this debate in a short time. My What the honourable member for Gippsland East interpretation was that the Minister intended to said is pertinent to this issue. Inherent in this is our cease debate in about 15 minutes because apparently capacity to export products. The Prices members of the Cabinet are dissatisfied with the Commissioner has had control of one very essential progress of this Bill through Parliament. If debate on element in the productive cycle in the dairy the Bill is not concluded the Minister is claiming that industry, that is fuel pricing. Nobody in the dairy he will not bring it back. If he does not bring it back industry could be confident that the Prices it will be because he has been shown to be an Commissioner Victoria has at the moment, Professor incompetent Minister who has lost control of this Fels, will bring them a rational price under which Bill, as he has with the Companion Animals Bill they can at the present time productively lead which has been languishing on the Notice Paper Australia out of economic malaise. Nobody can say since it first went into the Committee stage. tha t in the hands of the Prices Commissioner the industry will be protected. That is a critical issue. The ACTING CHAIRMAN - Order! On the point of order. What the opposition's amendment would lead to would be the Prices Commissioner being taken out Mr BILDSTIEN - The point is we are being of this measure altogether. That would mean the intimidated by the Minister threatening to remove price would be set by the industry. Is there anything the Bill from debate. Frankly, the Minister should be wrong with that? Companies such as Coca Cola DAIRY INDUSTRY BILL
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Bottlers and Cadbury Schweppes Pty Ltd are not Your silence tOnight is allowing his influence -- confined by the Prices Commissioner, only this beverage would be controlled by the Prices Mr Micallef - It's not on the course! Commissioner. They are essentially the elements that the opposition wants to pursue in this matter. It Mr KENNETf - It is on the course because -- wants to delete reference to the Prices Commissioner from the proposed legislation and at least let the Mr ROPER (Minister for Employment, industry have control of its own destiny. Post-Secondary Education and Training) - On a point of order, this is a very limited amendment that Mr KENNETf (Leader of the Opposition) - It we are debating and one that relates to the previous has been mentioned before, but I am absolutely amendment that was determined by division. amazed that the Minister for Food and Agriculture Although the Leader of the OppOSition was not here has not had the courtesy to respond. We have a for the debate on that previous amendment, if he major, fundamental economic ingredient in this Bill had been here he would have heard a quite distinct and the Minister has not even had the courtesy to view put by the government in relation to this respond to what have been very civil comments and matter. contributions from this side of the House strongly arguing to allow the industry to have control over its He is not dealing with the particular clause. He is own fortunes and its own pricing. making some general comments that would be more appropriate for the second-reading stage, not for the If the Minister will not respond, and if he is not Committee stage on this amendment. going to take this amendment on board, there is no question that he is running away from his Mr KENNETf (Leader of the Opposition) - On responsibilities as Minister for Food and Agriculture the point of order, I am speaking specifically to this in this State. I see the honourable member for particular clause, and an amendment the opposition Morwell Sitting in the House. He has a lot of dairy has introduced that seeks the removal of the Prices farmers in his electorate and he knows that what I Commissioner from overriding the industry. It is and other members on this side of the House have you who have not been here. It is the Minister for been talking about is accurate. The Minister at the Food and Agriculture who has not been here. table is yet again deserting the dairy industry. Agriculture in this State is a no-interest area for this Mr Roper interjected. government. The ACIlNG CHAIRMAN - Order! The Minister was appointed to a very important Interjections across the table are grossly disorderly. portfolio. Agriculture will again be the major The Leader of the Opposition on the point of order. economic ingredient that will lift this State out of the mire, yet the Minister refuses to speak on behalf of Mr KENNETI - It is the Leader of the House the industry and is going to allow the industry to be who has not been here. We are debating a third dictated to by an independent person outside of the amendment moved by this side of the House to industry. Mr Acting Chairman, I do not know why remove the Prices Commissioner. It has not been this Minister who is always very ready to make a voted on. I raised this issue and the Leader of the contribution, either by interjection from his usual House has taken objection to it because I cannot seat, or comments to the media, remains silent think of any other reason why the Minister for Food tonight. One can only draw the conclusion from it and Agriculture has not defended the industry that that he is genuinely disinterested in rural Victoria he speaks so forcefully about most of the time. It is and as always a Labor government stops at the tram one of two reasons: either the reason I mentioned lines. That is what your silence is saying tonight, previously, that the Minister has deserted rural Minister. As far as the rural communities are Victoria, in this case the dairy industry; or he has concerned a Labor government stops at the end of done a deal to secure the vote. the tram lines. There is another reason, or a combination of both. I just wonder in looking at the The ACIlNG CHAIRMAN - Order! On the machinations of what the likely result of the next point of order. election will be whether the Minister has struck a deal with the Minister for Consumer Affairs in Mr KENNETI - I am speaking directly to the another place and is buying a vote. motion because the opposition cannot understand why the Minister is silent. I am trying to draw the DAIRY INDUSTRY BILL
Tuesday, 19 May 1992 ASSEMBLY 1441 conclusion from his silence that he has deserted the I can only assume, given all the machinations going agricultural industry, in this case the dairy industry. on in the Labor Party at the moment as they approach the next election, that it has more to do The ACfING CHAIRMAN - Order! I will give with what happens after the election. a ruling on the point of order. I believe that the Leader of the Opposition is debating the amendment Mr MICALLEF (Springvale) - On a point of which is deleting the words concerning the Prices order, Mr Acting Chainnan, the clause is a very Commissioner. He is in order and there is no point narrow clause and has nothing to do with of order. machinations in the Labor Party. I ask you to rule accordingly on the narrowness of the clause and Mr KENNElT - I am now trying to ascertain, as bring the honourable member back to debate on this I said at the beginning of my remarks, why the question. Minister has not firstly had the courtesy to respond to all the contributions. Because he will not respond The ACTING CHAIRMAN - Order! On the I am drawing a conclusion. It is one of only two point of order, the Leader of the Opposition is things: either he has deserted rural Victoria, the debating an amendment before the Chair that deals dairy industry; or he has done a deal with the with whether the Prices Commissioner should have Minister for Consumer Affairs in another place, effect in the Bill or not. The Leader of the Opposition Mr Theophanous. That deal can only be that after can advance any theories he may wish and may the election the Minister for Food and Agriculture is speculate as to the reasons why or why not the going to get the vote of the Minister for Consumer government insists that the Prices Commissioner Affairs in terms of occupying my chair on this side remain in the Bill. Therefore, I have already ruled of the House. that the Minister has a right at the end of the debate to put his point of view. Mr Baker - Rubbish! Mr MICALLEF - On a further point of order, Mr KENNETI -If the Minister says that is Mr Acting Chairman, do I Wlderstand that you are rubbish ---' setting a new precedent for these types of debates?
Mr BAKER (Minister for Food and The ACTING CHAIRMAN - Order! There is no Agriculture) -On a point of order, I find that sort point of order. of personal reference irrelevant and personally offensive and I ask you, Mr Acting Chairman, to Mr KENNElT (Leader of the Opposition) - It is direct the Leader of the Opposition to withdraw. a reflection --
The ACfING CHAIRMAN - Order! I will rule Mr MICALLEF (Springvale) - It is not! On a on the point of order. The Leader of the OppOSition further point of order -- made a passing reference. If the Minister wishes to refute what the Leader of the OppOSition is saying I The CHAIRMAN - Order! The honourable shall give him the call as soon as the Leader of the member for Springvale will resume his seat. If it Opposition has resumed his seat. were not so late at night I would take on the honourable member for Springvale. I fOWld his Mr KENNElT (Leader of the Opposition) - The reflections on the Chair to be disorderly, but I will opposition will welcome the Minister's contribution, ignore them tonight. There is no point of order. because it is what it has been after. He cannot blame us if we try to draw conclusions as to why he has not Mr MICALLEF - I ask for a withdrawal of that spoken on this important clause. Is it because his reflection. hands are tied, and if so, why? Is it a vote? Is it all about the machinations of the Labor Party after the Mr Kennett - What reflection? election, or because the Minister has deserted the rural industry? In real terms I do not think he has Mr MICALLEF (to Mr Kennett) - You said I deserted the agricultural industry because I have a reflected against the Chair! feeling that deep down, like myself, he realises this is one of the growth industries. There is something a The CHAIRMAN - Order! There is no point of lot more deep-seated that is driving this Minister to order. silence. PORT OF MELBOURNE AUTHORITY (AMENDMENT) BILL
1442 ASSEMBLY Tuesday, 19May 1992
Mr KENNE1T (Leader of the Opposition) - Harrowfield, Mr Shell, Mr Unfortunately it is difficult for the opposition to HiII,Mrs Simmonds, Mr draw a conclusion if the Minister does not contribute Hirsh,Mrs Spyker, Mr to the debate. If the government is going to sit mute, Jolly, Mr Thomson,Mr it should not blame the opposition for trying to Kennan, Mr Trezise, Mr understand why it is mute. I suggest that there are Kennedy, Mc Vaughan, Dr two reasons, but I think the main one is the Kimer, Ms Walsh,Mr machinations of the Australian Labor Party as it Leighton, Mr Wilson, Mrs tears itself apart day by day, night by night, led by Noes, 38 people like the honourable member for Springvale. Bildstien, Mr McGrath, Mr W. D. Brown, Mc McNamara, Mr Mr MICALLEF (Springvale) - On a point of C1ark. Mr MacIellan, Mr order, Mr Chairman, I fail to see what the Co\eman,Mr Maughan,Mc machinations of the Labor Party have to do with this Cooper,Mr Napthine, Or clause! Delzoppo, Mr Perrin, Mr Elder, Mr Perton, Mr (Teller) Mr Kennett - There are machinations in the Evans, Mc Pescott, Mr Labor Party! Gude,Mr Reynolds, Mr Hayward, Mr Richardson, Mr Mr MICALLEF - I fail to see what this has to do Heffeman, Mr Smith, Mr E. R. with the clause in question. I ask you, Mr Chairman, Honeywood, Mr Smith, Mr I. W. to rule accordingly and bring the Leader of the Jasper, Mr Steggall, Mr Opposition back to the clause. John, Mr Stockdale, Mr Kennett,Mr Tanner, Mr The CHAIRMAN - Order! The honourable Kilgour, Mr (Teller) Wade,Mrs member well knows that during the cut and thrust Lea, Mr Wallace, Mr of debate, so long as the speaker stays within the Lieberman, Mr Weideman, Mr subject matter before the Chair he is in order. There McGrath, Mr J. F. Wells, Dr is no point of order. Motion agreed to; progress reported. Mr KENNE1T (Leader of the Opposition) - I shall conclude my remarks to save the honourable PORT OF MELBOURNE AUTHORITY member for Springvale from getting more excited. (AMENDMENT) BILL
Mr ROPER (Minister for Employment, Introduction and first reading. Post-Secondary Education and Training) - I move: Received from Council. That progress be reported. Read first time on motion of Mr A. J. SHEEHAN House divided on Mr Roper's motion: (Treasurer).
Ayes, 44 JURIES (AMENDMENT) BILL Andrianopoulos, Mr McCutcheon, Mr Baker, Mr McDonald, Mr Introduction and first reading. Barker,Mrs Mathews,Mr Batchelor, Mr (Teller) Micallef,Mr Received from Council. Cain,Mr Pope,Mr Cole,Mr Ray,Mrs Read first time on motion of Mr KENNAN Crabb, Mr Roper,Mr (Attorney-General). Cunningham, Mr Rowe,Mr Dollis,Mr Sandon,Mr CRIMES (CULPABLE DRIVING) BILL Emst,Mr Seitz, Mr Fordham,Mc Sercombe, Mc (Teller) Introduction and first reading. Garbutt, Mrs Setches, Mrs Gavin,Mr Sheehan, Mr A. ]. Received from Council. Hamilton,Mr Sheehan, Mc F. P. FIRE AND EMERGENCY SERVICES (MISCELLANEOUS AMENDMENTS) BILL
Tuesday, 19 May 1992 ASSEMBLY 1443
Read first time on motion of Mr KENNAN Chamber is not in Committee. There is a question (Attorney-General). before the Chair. Secondly, I ask the Leader of the Opposition to address his remarks directly to the FIRE AND EMERGENCY SERVICES Chair. (MISCELLANEOUS AMENDMENTS) BILL Mr KENNElT - Sorry, Mr Speaker. I ask the government to adjourn the Bill so that the Leader of Returned from Council with message relating to the House can have discussions, as is normal, with amendments. the Leaders of the other parties. If the Minister does not want to do so, that is fine, but we will make no Ordered to be considered next day. further contribution to the debate until we have considered the matter because it introduces a whole COLLINGWOOD LAND (VICTORIA new element into the debate. PARK) BILL Mr Kennan - What element? Order of the Day read for resumption of debate. Mr KENNEIT - It is all right for the Deputy The SPEAKER - Order! I have examined this Premier to interject, but if ever a man has served Bill and am of the opinion that it is a private Bill. Parliament with a piece of legislation that is totally mixed up, it is this man. It is difficult enough to Mr ROPER (Minister for Employment, come to a decision about supporting your stand and Post-Secondary Education and Training) - By that of the honourable member for Richmond - leave, I move: who obviously wants the Bill - at any stage let alone at this time of the day. That this Bill be dealt with as a public Bill and that fees be dispensed with. The opposition rejects this late notification that the Bill be treated as a public Bill. If the Minister wishes Mr KENNElT (Leader of the Opposition) _. This to proceed by jackbooting the Bill through without is the first time the opposition has been made aware proper discussion with the Leaders of the two of the change. parties, so be it.
Mr Roper interjected. Mr EV ANS (Gippsland East) - I question the wisdom of treating the Bill as a public Bill. The Mr KENNElT - We were not told that the Bill Standing Orders on private Bills require the House was to be made a public Bill. It is clearly a private to appoint a committee to examine all the Bill, as was understood by opposition members circumstances of such Bills. The committee discovers when they received it. You are now suggesting that the beneficiaries of such Bills and establishes a scale it should become a public Bill. of fees.
There is no doubt that the government is totally Bearing in mind the intense controversy messing up its legislative program. The government surrounding the Bill, I suggest that such a course of is telling the House at 1.35 a.m. that what is clearly a action may well be desirable. It may well result in private Bill will become a public Bill. the contending parties realising they have to get together and come up with a mutually acceptable At some stage you people will have to get your solution rather than trying to hammer out a solution house in order. It is not good enough for the that may be unfair to one or other of the parties to government to bring about this change tOnight. I ask the dispute. the government to report progress on the Bill so tha t consultation can take place between the government Motion agreed to. and the Leaders of the other two parties. If you refuse to do that, there will be no comment on the Second reading Bill in this debate and we will discuss it in the other place. 'This decision by you at this stage -- Motion of Mr KENNAN (Attorney-General) (last debated 16 April) agreed to. The SPEAKER - Order! Firstly, I should clarify that this is not a matter of reporting progress. The Read second time. ADJOURNMENT
1444 ASSEMBLY Tuesday, 19 May 1992
Passed remaining stages. between Dandenong and Cranboume until 1995 at the earliest. ADJOURNMENT Mr Bastin's credibility depends upon his supposed Mr ROPER (Minister for Employment, close association with the Minister for Transport. I Post-Secondary Education and Training) - I move: ask the Minister to say whether Mr Bastin is telling the people of Cranboume the truth, when all the !bat the House do now adjourn. available evidence shows that the endorsed Labor candidate has set out to dupe and mislead them on Public transport in Cranboume the important matter of badly needed light rail services. Mr COOPER (Momington) - The matter I direct to the attention of the Minister for Transport relates Mr Bastin is aware that the state of public transport to a letter that appeared in the Cranbourne Sun on 27 in the new Cranboume electorate is a matter of September last year from a Mr Ray Bastin, who grave concern, which is why he has made such describes himself as the endorsed Australian Labor statements. Because all the available evidence Party candidate for Cranboume. suggests that Mr Bastin has set out to mislead and misinform, the Minister is obliged to clarify the In the letter Mr Bastin mentions transport issues in situation so that the people of Cranboume, the Cranboume area and says there is a need for a Langwarrin, Hampton Park and Botany Park are light diesel rail service to Cranboume. He says: told the truth about any proposals for light rail services in their areas. This service is planned for 1993 but that is too late. We need the shuttle service now ... we can get the service The people of the electorate of Cranboume want an we need for the light diesel shuttle. It costs less than unequivocal statement from the Minister for electrification and can be applied to the Cranbourne Transport and not the misleading information put line immediately. out by the endorsed Labor Party candidate for Cranboume, Mr Bastin. Mr Bastin's letter continues: Energy supplies to isolated areas As the Australian Labor Party candidate I have taken the fight right to the transport Minister's door ... Mr EV ANS (Gippsland East) - Some months ago I directed to the attention of the Minister If you are interested in gaining a better service, put pen representing the Minister for Manufacturing and to paper and send your ideas and suggestions to me. I Industry Development in the other place the plight will personally present them to the Minister and of a lady who applied for assistance under a demand action. government scheme to supply solar power to people living in isolated areas. She lives in an extremely Mr Bastin has made it clear to the people of isolated part of my electorate on a 12-acre freehold Cranboume that if he receives their support he will title surrounded by a national park. ensure the immediate introduction of a light rail service from Dandenong to Cranboume. All of the Last week I received a reply from the Minister for statements made on the issue, including those made Manufacturing and Industry Development, who by the honourable member for Coburg, who is the advised me that because the area in which the lady chairman of the Labor party's transport caucus lives is supplied by electricity from New South committee, are based on the fact that Sprinter light Wales he had asked the New South Wales electricity rail services will not come into operation until April authority whether it would contribute to the cost of 1993 at the earliest. providing solar energy to her establishment. Not surpriSingly, because the lady lives in Victoria the The information on the subject published by the NSW authority said no. government does not list Cranboume among the first 10 areas to receive light rail services. I Seeing that the scheme was set up to assist people understand, because of the need for track and living in areas to which electricity from the State signalling works, that there is no chance of a Sprinter grid could not be supplied economically, I find it light rail service being put into operation on the line inappropriate that New South Wales and Victoria should be arguing about which State should be ADJOURNMENT
Tuesday. 19 May 1992 ASSEMBLY 1445 responsible for giving her the assistance she has underlines the incredible dangers inherent in this applied for. sort of immoral practice.
I agree with the point of view put by the New South Mr Cooper interjected. Wales authorities that as the lady lives in Victoria her case is the responsibility of the Victorian Mr NORRIS - I suppose my position on alcohol authorities. I ask the Minister to have another look at generally may be contrary to the positions of some the matter to see what can be done to help the lady members of the opposition. I am not, never have in question. been and never will be a prohibitionist - history has proved that prohibition does not work! I believe Alcohol consumption there should be strict conditions concerning enticements to consume unlimited quantities of Mr NORRIS (Dandenong) - I raise a matter for alcohol, particularly when they are directed towards the attention of the Minister for Consumer Affairs in young people. another place and request that the Minister for Employment, Post-Secondary Education and Alcohol is the cause of the vast majority of social Training, who is at the table, direct it to his attention. tragedies that we see in the community. I challenge It is a coincidence that my remarks relate to a former members on the opposition side of the House to Collingwood footballer and that the Collingwood speak to young people in their electorates; they will Land (Victoria Park) Bill has just passed through the find that alcohol abuse is at the core of many of the House. problems we are facing today - high crime levels, vandalism and other anti-social behaviour. My remarks relate to the tragic death of Darren Millane and particularly to the comments made by Mr Bartholomew, the fonner senior psychologist at Mr Hallenstein, the coroner, in summing up his Pentridge Prison, reported that 78 per cent of the finding following his inquiry into the incident. I inmates he spoke to in one of his famous surveys draw the attention of the House to the coroner's were affected by alcohol when they committed their remarks and recommendation that the practice by crimes. It is right that there should be a lot of night clubs of issuing free drink cards be scrutinised attention given to the horrific and terrifying problem and reviewed. It appears that when Mr Millane of hard drugs, but the basic core of our drug entered the Tunnel nightclub on the night of his problems is alcohol abuse. tragic death he was issued with a card to the value of 10 free drinks. I ask the Minister to seriously consider the remarks made by Mr Hallenstein and to investigate the This matter has concerned me for some time. I activities of many discos, clubs and pubs in making realise that clubs, pubs and discos are under available free alcohol. When he entered the night enonnous pressure to compete and that they attract club Mr Millane was given a ticket entitling him to customers by offering all sorts of gimmicks, 10 free drinks. That was a recipe for tragedy and including free drinks. At some places anything you resulted in Mr Millane's death. can drink between, say, the hours of 9 and 10 p.m. is free. I consider that sort of inducement to be highly I hope the Minister for Consumer Affairs will take immoral, particularly when one bears in mind that the coroner's remarks to heart and implement the greatest drug menace facing the younger proposed legislation. generation of this country is alcohol abuse. Turana Youth Training Centre A report issued a few days ago stated that alcohol consumption in Victoria has declined. That decline Mr JOHN (Bendigo East) - I raise for the has resulted in fierce competition between outlets attention of the Minister for Community Services the for drinkers. Sadly, there has been an increase in dispute at the Turana Youth Training Centre. I am alcohol consumption among members of the disappointed that the Minister is not present in the younger generation. The gimmick of issuing free House because the issue is of vital importance to the drinks or making offers of all you can drink between State. Honourable members will be aware that some certain hours does not appeal to more mature weeks ago officers stopped work at that centre and drinkers but to young people who are highly some trainees, who had been given detention influenced by the atmosphere in these sentences for anned robbery, high speed car chases, establishments. I think the Darren Millane incident car theft and burglary, walked out. Indeed, one ADJOURNMENT
1446 ASSEMBLY Tuesday, 19May 1992 trainee who absconded from the centre was on a the Minister in charge of the State Place Names murder charge, but thankfully he has been returned Committee, the correct spelling of Latrobe Valley. to the centre. The issue has caused some angst and irritation in the Latrobe Valley for some years. The only people who The Turana Youth Training Centre is a major centre spell the name correctly are the people who live in and houses young offenders who have committed the valley and Hansard reporters. The Melbourne serious crimes. The Minister says that the staff are on media often use two words ''La Trobe" when strike. The union says the industrial action is about referring to one of the most important regions in occupational health and safety. The present position Victoria. is that 36 trainees have been allowed to go on leave, whatever that means, and some have had their Recently I wrote to the editors of the major sentences curtailed and been sent home, and the Melbourne newspapers about the incorrect spelling institution is holding only 26 trainees. Security of Latrobe when referring to the Latrobe Valley. The guards have been employed to assist the volunteers editor of the Age contacted me and said that he had to man the centre and they are being paid $25 an checked the matter with the Place Names Committee hour. The ratio of volunteers to security guards is 5 and found that it always uses La Trobe rather than to 1. Latrobe which is used by people who have a knowledge and understanding of the importance of It is reprehensible that the Minister has been so slow the area. to intervene or seek discussions with those involved. It is clear that she does not have control of I investigated the matter and went to the Australian Community Services Victoria. I submit that the Encyclopaedia which is published by Australian present circumstances pose a security and a safety Geographic Pty Ltd for the Australian Geographic risk, not just for the trainees, the volunteers and the Society. The latest edition in the Parliamentary security guards but also for members of the public. Library was published in 1988. It refers to Charles Joseph La Trobe who was Lieutenant-Govemor of Last week the chief executive officer, Mc Paul Carter, Victoria and whose name was important in the who was acting in a volunteer capacity, was naming of a number of places throughout Victoria. assaulted with an iron bar and had his ribs broken. Other volunteers have been assaulted at the centre. I In the same book, however, reference is made to the am informed that last Friday young students at the Latrobe River, which was named after Charles Phillip Institute were asked to man the centre as Joseph La Trobe. It also explains that although there volunteers over the weekend! is much confusion about the spelling Latrobe is the more usual version and is accepted as common Police cells throughout Victoria are choked with usage. young offenders because they cannot be placed in institutions. It is an incredible situation, yet the This may be a small matter, but it is known that Minister has no answer. The Minister stands people in the Latrobe Valley regularly read the condemned. She has failed to control her department Melbourne newspapers and one would think that and ensure that young offenders are securely those august publications should spell the word housed. She has failed to prevent young people correctly for the power heart of Victoria. convicted of serious offences from roaming the streets unchecked, and they represent an addi tional Will the Ministers consult with the Place Names security risk to the community. Committee? If the committee is giving incorrect or out-of-date information to the publishers of those What is the Minister going to do about this newspapers, I ask that the Minister have the industrial dispute? It is now 23 days since the committee review the matter so that it agrees with dispute first began when officers of her department the community in the Latrobe Valley, the reporters stood aside and watched as young offenders walked of Hansard and government publications. There free. Will the Minister emulate the actions of her should be a common usage of the name and I believe officers and do nothing? it should be written as one word, as from today. Latrobe Valley Motor car traders
Mr HAMILTON (Morwell) - I raise for the l\-lr ELDER (Ballarat North) - I direct the attention of the Minister for Finance, in his role as attention of the Minister for Employment, ADJOURNMENT
Tuesday, 19 May 1992 ASSEMBLY 1447
Post-Secondary Education and Training in his time has come to do something about the neglect of capacity as the representative in this place of the education (and health) facilities more than an hour or Minister for Consumer Affairs to the Motor Car two from Melbourne. Traders Act regarding the winding back of speedometers to obtain a better resale price for Sorry to bother you with my growls but hope you can motor vehicles. Motor car traders caught winding do something to make fair dealings happen. back speedos have been taken to court and have lost their trading licences. Offenders flaunt the Act by In her letter she explained that the college had getting close relatives, in particular their wives, SOIlS, forwarded to the department a submission daughters or cousins, to apply for a motor car regarding component B for VCE library resource traders licence. By doing so they are able to continue grants on behalf of the cluster of high schools in the to operate selling cars out of the same premises. north-west Wimmera region. The seven libraries involved were from the secondary colleges at Nhill, The Ministry of Consumer Affairs should scrutinise Kaniva, Dimboola, Rainbow, Hopetoun, the practice more closely to ensure that a person Warracknabeal and Murtoa. The funds were to be who has lost a trading licence cannot continue to used to computerise libraries. operate in that way. The criterion for having grants made available, as The government should examine the circumstances compiled by the Department of School Education, in which traders have been fined by the courts. was that more than one organisation or institution Recently one trader was fined $12 000 for winding must be involved in a cooperative program for VCE back the speedometer of a used motor vehicle but he resources. It was stated that priority would be given received $15 000 when he sold the vehicle. to projects providing direct assistance to a Therefore, his net profit was $3000. The courts significant number of students from more than one should be more stringent in that regard. school and to improving access to VCE resources for groups of students disadvantaged by isola tion, This practice has cost the motor industry in Ballarat distance, disability and socioeconomic factors. enormously, particularly because of the recent media attention in that city. It has nearly killed the Priority was to be given to projects establishing or industry and it has definitely undermined enhancing information links between schools and confidence in the Ballarat second-hand motor the community and/or satisfying needs for vehicle trade. information that have arisen as a result of the new curriculum. The government should also examine the proliferation of vehicle trading licences which has It appears to me that the submission by the teacher led to a decline in standards in the motor trading meets the departmental guidelines, yet no area. Ballarat has one such licence for every 1000 consideration is given or, if there were a residents. I ask the Minister for Consumer Affairs to consideration, these secondary colleges were not tackle the problem as it particularly relates to favoured with a grant from the department. As there Ballarat. is to be a further grant of $500 000 for VCE library resources, I request that this cluster group be given VCE library resource grants the consideration it deserves so that the students have an opportunity to do their VCE on an equal Mr W. D. McGRA TB (Lowan) - In the absence basis with other students around Victoria. It is fair, of the Minister for School Education, I direct to the proper and right that those considerations not be attention of the Minister for Employment, denied to areas outside a ISO-kilometre radius of Post-Secondary Education and Training my concern Melbourne. about the grants provided under component B of the Victorian certificate of education library resource I hope the Minister has listened carefully to wha t I grants. have had to say and also his department is able to give consideration to this library resource funding so Dianne Hobday, a teacher librarian from Nhill that these students are given the same benefits as College, has written to me stating: other VCE students in the State.
I guess I am totally demoralised with Ballarat, Geelong and Bendigo being the centre of anything rural. The ADJOURNMENT
1448 ASSEMBLY Tuesday, 19 May 1992
Responses As in every dispute such as this, a number of incidents are unexplained. The union claims that Mrs SETCHES (Minister for Community incidents that have happened at the facility were not Services) - The honourable member for Bendigo caused by its members. A number of explanations East raised a matter of the dispute at Turana. He could be given for why certain things have expressed his dissatisfaction about a number of happened. I do not think it would assist in this stage things that were occurring in that dispute. of the negotiations if I went over those incidents. Honourable members would be aware that Turana has been the site of continued industrial dispute It is the government's view that the dispute should over many years. In fact over the past 18 months it be resolved in the Industrial Relations Commission has been reasonably quiet. This dispute is one of the of Victoria, where occupational health and safety longest running at Turana. Child-care officers are on matters are handled. the 15th day of strike - as it is after midnight it is now the 16th day. They claim that it is an I am in consultation on a daily basis with the occupational health and safety issue. The assessment Minister for Labour and sometimes on an hourly of the department, the Minister for Labour and me is basis. As I said, discussions will continue today, that these workers are definitely on strike. In a bid to Wednesday, in the hope of resolving the dispute. resolve the dispute, the State Public Services Federation of Victoria, the Minister for Labour and I Mr ROPER (Minister for Employment, met on Friday morning for a number of hours and Post-Secondary Education and Training) - The again on Monday for a further 4 hours to discuss honourable member for MOrnington raised matters matters with both workplace representatives and the relating to transport in the Cranboume area for the executive and officers of the union. The union was to attention of the Minister for Transport. discuss those outcomes with its work force on Tuesday, and I expect the union to be in touch with Mr COOPER (Mornington) -On a point of us on Wednesday. order, Mr Speaker, when I stood to raise the matter with the Minister for Transport he was in the House. The dispute hinges on whether the youth and On several occasions we have directed to your child-care officers at the centre should have returned attention the fact that an inadequate number of to work on 5 May following the report by an Ministers attend the House during the adjournment authorised occupational health and safety inspector debate. I think that is a legitimate complaint and I who authorised that the workplace was safe from think you acknowledge it as a legitimate complaint immediate danger, as is provided for under the Act. by members of the opposition.
The officers refused to accept the inspector's report Now a new height of contempt has been reached by and they want to be paid for this time. Of course this government. Ministers can be present in the there is no entitlement to be paid under that House when the adjournment debate starts and particular section of the Act. matters are raised for their attention, as the Minister for Transport was tonight, and then they leave. The During the time the officers have been on strike the Minister for Transport sat through all of my management and volunteers have provided the best contribution on the adjournment debate; he knew possible care for the trainees at the centre. There is a what it was all about. After I had finished, he got up rostered team of more than lOO volunteers - many and left the Chamber. Now I have had this wipe-off of whom are CSV staff - who have given up their from the Minister at the table, the Minister for time to look after the trainees and ensure that they Employment, Post-Secondary Education and are cared for and are secure. Training.
Managing a facility such as this is difficult. Incidents I know from previous experience that when I am occur from time to time even when such a facility is told by the Minister at the table, as I have been told fully staffed, let alone when it is staffed by now, that the matter will be referred to the Minister volunteers. Last week tempers at the facility were to whose attention I have drawn it that that is the high and security guards were brought in to assist. last I will hear of it. I know that I will never receive Trained youth officers were able to keep the trainees any reply. I have not had one in my seven years in occupied as well as protecting the volunteers. Parliament. ADJOURNMENT
Tuesday. 19 May 1992 ASSEMBLY 1449
I object most strongly to the way the matter I have absent, but I shall refer the matter he raised to the directed to the Minister for Transport has been attention of the Minister for Manufacturing and treated by him and by the government. It is a matter Industry Development. of grave concern to the people of Cranboume and they deserve better than this. They have been misled The honourable member for Dandenong raised the by the ALP candidate for Cranboume and now they issue of free tickets - or free grog tickets, I are being treated with contempt by the Minister for suppose - in relation to the Darren Millane matter. Transport. I shall direct that to the attention of the Minister for Consumer Affairs in another place. Mr Speaker, I realise your powers in this regard are restricted, but it is time the Premier or the Deputy The honourable member for Morwell raised the Premier - or someone with some clout in the issue of place names and problems in the Latrobe government - urged the Ministers to shape up. Valley. I shall direct that matter to the attention of They are about to be shipped out but one would the Minister for Finance. think that in the remaining few weeks of being in government they would at least put on some sort of The honourable member for Ballarat North raised a show for the people of this State and certainly some matter and, although he had difficulty with the sort of show that they do not hold this Parliament in technical term, I think he was talking about contempt! What has happened tOnight demonstrates odometers in cars in his area being wound back. a sneering contempt for this Parliament and a Obviously they are being wound back by sneering contempt for the people of Cranboume. I unscrupulous car dealers in other areas and that is object most strongly, and I want it put on the record! an ongoing problem. Over the past few years the Motor Car Traders Committee and the Ministry for Honourable Members - Hear, hear! Consumer Affairs have been progreSSively tightening up requirements in this area. I shall direct The SPEAKER - Order! As the Chair has the honourable member's comments concerning previously advised the House, the Chair has no right tampering with odometers to the attention of the or responsibility to require the attendance of any Minister. I know from my experience that the issue member in the House at any time. By raising the is regarded seriously by the Ministry and by most matter, the honourable member has brought it to the reputable car dealers because it reflects on everyone, attention of the Leader of the Government who, I am even the honourable member for Murray Valley sure, will deal with it appropriately. who had an involvement with the industry.
Mr ROPER (Minister for Employment, The honourable member for Lowan raised the issue Post-Secondary Education and Training) - I was of VCE funds for Nhill. I think he was almost pointing out to the honourable member that the suggesting that not only the metropolitan area but issue he had raised will be directed to the attention also the larger areas around the State were receiving of the Minister for Transport. The people of an advantage. I shall direct that to the attention of Cranboume are fortunate in having such an active my colleague, the Minister for School Education. candidate as Mr Bastin. Motion agreed to. It is customary for members of the opposition who raise matters to be here when they are dealt with. House adjourned 2.19 a.m. (Wednesday). The honourable member for Gippsland East is ADJOURNMENT
1450 ASSEMBLY Tuesday. 19 May 1992