As we have just heard, Australia has a well-earned international reputation for producing clean and green food. This is our competitive advantage and one we need to protect and guard. It is a competitive advantage that should never be taken for granted just as our biosecurity should never be taken for granted.
The measures contained in this Primary Industries (Excise) Levies Amendment (Dairy Produce) Bill 2014 will assist the industry to maintain that advantage, and the bill itself is supported by industry.
Like the previous speaker, the member for Gippsland, I have repeatedly said that in my opinion many Australians take our locally grown amazing quality food for granted. Western Australia’s dairy industry is a prime example of this. It is an efficient producer of high-quality milk sold to both the local and South-East Asian markets.
The dairy industry is very important industry in Western Australia particularly in the south-west of my state and in my electorate. Farmers in my part of the world milk all year round, every day of the year. We have internationally competitive production costs. Western Australian processors—our manufacturers—are at the leading edge of technology in the transport of our fresh and extended shelf-life milk products. We see this in the activities of Harvey Fresh and Brownes, for example, Harvey Cheese and Bannister Downs Dairy, just to name a few.
They are modern processing facilities owned by local and international companies. The state’s fast and efficient transport links are really a key. It is an advantage we have in delivering high-quality fresh products in the shortest amount of time to both our domestic and international customers. I see this as a real advantage in Asia particularly.
Western Australian milk has been identified as some of the cleanest and highest quality in Australasia. How many people out there know that? Well, I am telling them that it is and it is produced by farmers every day.
The quality attributes include low bacterial counts and good flavour and colour, things that are very important in the market, and there are several farms producing milks with specific added health benefits. WA has a very high herd health status, free of any disease like foot and mouth or bovine spongiform encephalopathy.
WA has good access to markets in Asia and in the Middle East, which are large and rapidly growing consumers of dairy products. This is our opportunity. WA’s dairy industry is relatively small in size but it is highly reputed for its innovation and high-quality products.
I am a dairy farmer so you could say that I have got a vested interest in the debate. My son and my husband right now, as I speak, are working on the farm. I have a history here, Mr Deputy Speaker Vasta, and I hope you will indulge me. My father was the very first milk carter for Brownes’ factory in Brunswick Junction in 1942.
The factory has grown and developed over the years, changing ownership several times, but it is still processing locally produced milk. So many communities in the south-west have historic links to the dairy industry, and what is also often underestimated and undervalued is the fact that dairy industries in so many communities right around Australia actually underpinned local economies and local communities.
The other thing that is important is that these are the people who go along and support the communities. They are the volunteers. They are the people whose tractors, whose machinery, whose labour and whose knowledge actually get things done in communities. They are doers, not talkers, and that is so important in regional communities.
The family of one of my neighbours, Graeme Manning—and I am talking about history here—was the second dairy farmer in Western Australia. The Mannings milked their cows around the edge of Mounts Bay Road—Kings Park is above that—just a few cows, and they used to supply milk on a yoke to the households in St Georges Terrace at the time.
When Kings Park became a reserve, they left South Perth in 1895 and moved to Myalup close to where we are and then some of their descendants moved into the area where I live now and where they farm. John Daniel Manning was that first farmer in 1852.
Then we had Ernest John and Ernest David and now we have Graeme Manning, and you look at how they have evolved as a family and as a dairy business, going from just a back-out dairy to a walkthrough dairy to a swing-over dairy and now a double-up dairy. This is a typical example of an industry that has evolved and been on the front foot.
Graeme Manning is now the fifth generation of Mannings to actually dairyfarm in Western Australia—and it his birthday today, and I think that is a great thing! He has a sixth-generation Manning family member working with him.
I said to him, ‘You have experience and knowledge in the industry. Yours is a very well-respected family. What are the issues that you see as the critical issues for the dairy industry in Western Australia?’ Of course he said the current price of milk, the cost of production and keeping young farmers in the industry, the farmers of the future.
That is a real concern. Across all sectors there are young farmers who are going to be the farmers of the future—and what is their access to finance? They have great potential, an enormous amount—five generations of farming knowledge sit behind Graeme Manning. It is really difficult. My own son carries a couple of generations of knowledge nurtured on the farm, the knowledge of how to farm your particular area. This is something that is very difficult to teach. Graeme also said that farm debt levels are also an issue.
These are matters for the industry ongoing, and they are also matters for us. In Western Australia it is an industry that has had huge challenges and it still faces significant challenges.
We have seen hundreds of farmers exit the industry, and in my view that is a massive loss. One of the greatest losses is the intellectual property that went, perhaps, not only with the senior farmer but the young farmer who has had to go on to do other things. We have lost the experience and the investment and, often, that critical next generation to learn and hone their craft—because it is a craft—as part of a family business.
There are approximately 160 or so dairy farmers producing this highest-quality milk in Australia, mostly in my electorate. As you can tell, Mr Deputy Speaker, I have enormous respect for my fellow dairy farmers. Yes they farm by choice, but they take great pride in what they do in the full knowledge that it is one of the toughest forms of farming.
When I used to promote dairy products at the royal show and I had a sign that said, ‘G’day, I’m a WA dairy farmer,’ I cannot tell you the number of people who said, ‘No, you’re not.’ The answer is, ‘Yes, I am.’ But how many simply could not take on the job? They are not prepared for the intense nature of the industry, or the investment required or they simply do not have the diversity of skills.
A dairy farmer has to be a jack-of-all-trades. To manage the dairy herd alone, you need skills in feeding and nutrition, herd management and reproduction, genetics and livestock health and diseases. Wrapped up in this is needing to calve cows at any hour of the day or night and dealing with all forms of herd health. Y
ou have to have the skills to manage your pasture to produce fat and protein in milk—that is what you are paid on. You need to know the correct fertiliser regime for your particular property, the necessary cattle management skills, and how to manage irrigation systems.
There is the machinery; you have to understand your machinery and to have an ear for when you are working the gear too hard. You have to be able to build your own equipment; you have to cut your costs, so you need to be able to weld. As well you need to have really good mechanical skills, staff management, business management and be across finance and taxation issues—all of the same things that affect small business.
That is not all; that is just some of what you need. There are the early mornings, the working in all weather and the routine of having to milk the cows twice a day every single day of the year. There are the challenges of management, and this is something that is forgotten in the whole dairy debate.
We have to manage one of the most perishable products in any form, and that also exposes us in the market. Of course, having a perishable product also exposes us to the constant vagaries of challenging and changing weather, water shortages, dry winters and an increasing cost base. As I said, we have had the challenges of the two major supermarkets. In Western Australia what that has done to the industry is that the majority of milk is sold on the domestic market.
We have heard about the carbon tax price and we have talked about costs of production being an issue. Let me tell you that the carbon tax had a significant impact on the dairy industry, and this is where the members opposite actually need to get on board and reduce costs so that farmers like Graeme Manning and like those in the industry right around Australia can get on and do what they want to do, and do best, which is to produce this fantastic quality product that so many take for granted.
There is the tax on refrigerants. I tell you, I was absolutely appalled at the proposal to put a seven-cents-a-litre additional tax on transport fuel. Every single thing that is delivered, pretty well, that we use on our farm, and on most farms around Australia, comes on the back of a truck. And there was going to be a seven cents increase on transporting milk, refrigerants—you name it. This tax has to go. We actually have to reduce the red and green tape burden as well.
As if this were not enough, our competitors in the market did not have this tax. But, hey, we did. This comes on the back of tough years in the WA dairy industry. We have had dry winters, we have had increased feed costs and rising costs of production that included the carbon tax and red and green tape.
So really, what all small businesses want is what the dairy industry and the dairy farmers want: they want government to get out of the way. They are there to do a job and they do it very, very well, but they do not need additional cost and they do not need additional red tape burdens.
We should be in the business here, in this place, of assisting business to do their business and to do it well. That way the whole country benefits. One of the things that has concerned me very much in Western Australia is actually the fall in milk supply.
This is another reason for us to get rid of the carbon tax—the cost, okay? That is impacting on farmers. We have seen another decrease in milk production volumes this year; we are down 6.1 million litres on last year so far and down 18.7 million litres compared with the last half of 2010.
Why does that concern me? Because I think the next six months will be very interesting. If this trend continues, the annual WA milk supply could be quite low—perhaps in figures that we have not seen since the 1990s. This is another good reason to lower the cost of production so that farmers can produce milk efficiently and effectively, as they have. That is why getting rid of the carbon tax is so important.
This industry is one that constantly works on improvement. You have heard a simple one, the Manning’s story. There are many others in my part of the world and around Australia. The issue of biosecurity is critical not just to the dairy industry but to all primary producers.
The focus on biosecurity by the previous government was not what it should be, and I have spoken previously on that issue. Of course, we do need to continue to foster good industry and efficient producers like my dairy farmers and to continue, as a government, to offer them increased access to markets. That is where government can help and that is where government should help.
As we have heard previously, it is a very tough and competitive industry. This is not an industry for the fainthearted; even with your investment—when you put your hand up and actually invest—it is a significant investment and it is one where your cost of production is the issue for you and your business.
Like all small business, you look at your costs and the things that you can control. But you cannot control it when the government comes and whacks a carbon tax on you and then says, ‘On top of that we are going to add another seven cents for transport to this industry and right across Australia!’
If the previous Labor government were still here, then come about June or July the industry would have been looking down the barrel of an increase in the carbon tax on transport. Just for dairy farmers it is a huge issue; for all of regional Australia it is a huge issue that was underestimated by those opposite.