Mr TEHAN (Wannon) (20:56): I rise tonight to talk about our agricultural industries and to ask the trade minister to ensure that any decisions he makes between now and election time are very much in the national interest and especially in the interests of our agriculture producers. Our agricultural producers are doing it tough. There are a number of things?adverse weather conditions, the dollar, the carbon tax, the re-regulation of the workplace?which are working against producers at this time. I will give you a couple of examples of the types of issues that they are confronting. We have dairy farmers in the south-west of Victoria in my electorate who, due to late rainfall, are now facing having to feed their dairy herds for the next three or four months, paying feed bills of $15,000 to $20,000 a month additional to what they would be normally paying at this time of year and putting extra costs on their business. And obviously with the dollar where it is, demand for our agricultural commodities is soft and prices are soft, making it harder and harder for farmers to operate in the current climate. On top of this they are facing additional costs of anywhere between $5,000 and $10,000 because of the carbon tax. There is also a carbon tax cost on the processors they are selling their milk to?for instance, Murray Goulburn is facing a carbon tax bill of up to $15 million. When you look at what has happened in Europe under the emissions trading scheme there, the dairy processors in Europe have been given access to free permits: they are allocated free permits for up to 93 per cent of their emissions. So not only do the European farmers get subsidies, but their ETS is also subsidised in their favour?whereas our farmers at home get no subsidies and face a carbon tax which gives them no relief whatsoever. The carbon tax is also having a significant impact on our beef industry. One of the abattoirs in my electorate, Midfield Meats, is now sending carcases by air to the Middle East to have them processed over there because the carbon tax has added additional costs to doing that business here in Australia. So they are now airfreighting the carcases to the Middle East because it is cheaper to process them over there. When you combine that with what has happened in the north of Australia as a result of the live export ban and the fact that that is still washing through Australia’s beef industry, prices are obviously down and the dollar has impacted on that and we have seen a real decline in the profitability of our beef farmers.
Why do I mention this and also refer to the trade minister having to act in the national interest? I do this because there is a chance that we could see a free trade agreement concluded with Japan before the election on 14 September and there is a remote, outside chance that we could see one concluded with South Korea. If the Japan one is concluded, the trade minister has to make sure that it is not one that is done for the sake of expediency. Japan is our largest dairy market. We have to ensure that, if we are to conclude a free trade agreement with Japan, our dairy farmers and our dairy processors get proper access into that market. It has to be proper access that reduces tariffs and means that we get into that market at a lower cost than what we are now.
I call on the government to make sure that they liaise closely with the Australian dairy industry in finalising any deal when it comes to dairy in that Japan free trade agreement. I would ask that they do the same with our beef sector. Obviously when it comes to our beef sector, the free trade agreement that the government should look at is the one that South Korea has negotiated with the US. That has given improved access to US beef producers into the South Korean market and, over time, the tariffs reduce down to zero per cent. We have to ensure that, when it comes to Japan and, in the future, when it comes to South Korea, we get access to those markets similar to what the US has into the South Korean market.
We cannot say, ‘Sorry, we are not prepared to negotiate on auto,’ or ‘Sorry, we are not prepared to give any ground on investor-state dispute resolution,’ as we will give up seeking proper access to those markets for our farmers. We absolutely have to ensure that when we negotiate on behalf of our farmers with Japan and with South Korean, we do what is in the national interest, that we do not do what might be the case and think, ‘Wouldn’t it be good to get a signature on an agreement before an election,’ because this would make the government look good but it would not be in the interest of the country as a whole. So I call on the trade minister to ensure that he does negotiate in good faith.
There are real outcomes that can be achieved. If you look at, for instance, what New Zealand has achieved in their negotiations with China?and this is another agreement that we need to get on the table?you see that the New Zealand dairy industry now has a tariff advantage over Australia of over eight per cent when it comes to getting access for their dairy product into the Chinese market. We have to put the China free trade agreement back on the table as well and we have to make sure that we can get access there. But that is something that will have to wait until after the election.
The one which might occur?and there is a real chance that it could occur before the election?is with Japan. What we have to ensure there is that the trade minister does the right thing by the nation. I would like to put the trade minister on notice: we will be watching if you do look to conclude an agreement before the election and we will be making sure that you are liaising properly with the NFF, with the beef industry and with the dairy industry and ensuring that they are comfortable with any agreement that is finalised. If they are not comfortable with that and if they are excluded in an endgame, which is all about getting a political outcome, then we will make sure that the Australian people know what that agreement is about?it is about political expediency and it is not about what is in the best interests of our nation.
At a time like this, our dairy producers, our beef producers and all of our agricultural sector need a government which is fully committed to reducing the cost of exporting just as they need a government which is fully committed to reducing the cost of production domestically.
Sadly, I think what are going to need is a change of government to see that occur domestically and what we have to make sure of between now and election day is that we do not have a government which comes and makes the cost of exporting remain the same because they think it is in their political interest to get an outcome on a deal.
In summary, what we have to make sure of is that this government between now and the election day does not do anything, because once a deal is signed, they cannot be unravelled and it is almost impossible to go back to the table and push for extra access to push for new sectors to be put on the table. That will all have to be postponed until the Trans-Pacific partnership negotiations take place seriously. Once you have set a precedent in bilateral FTAs in the region, it is going to make it harder for us to negotiate meaningful access through that regional process, so, Mr Trade Minister, be careful; we are watching.