This afternoon I rise to speak on the Agricultural and Veterinary Chemicals Legislation Amendment Bill 2012 on behalf of our local agribusinesses in my electorate. According to a recent Australian Bureau of Statistics survey, 16 per cent of all businesses in my electorate are agricultural in nature. They represent a significant sector of our local economy. They are an important local employer and, notably, a crucial provider of local product which ends up on mums' and dads' kitchen tables right around Australia. So, as you can imagine, I take a very keen interest in all things that affect our agricultural sector. I always have and I always will. When you have worked in the financial and transport sectors in rural towns, as I have, you get a keen appreciation of its vital importance to our primary producers.
We should never underestimate the challenges that the rural sector has faced in recent years, and continues to face. There is a lot of discussion and concern about the many factors impacting on the future of the manufacturing sector. Well, the agricultural sector has similarly faced a whole range of challenges, including those mother nature throws their way. Earlier this year, many producers in my electorate were devastated by the Australia Day floods. Their fields were destroyed, their crops were washed away and the devastation to farm infrastructure was enormous, notwithstanding the 10 years of drought they had prior to that and, for my dairy farmers, notwithstanding the price pressures that are currently under consideration in that industry. They are putting up with shrinking margins and, in some cost of production numbers, dairy farmers are working for as low as $7 per hour. I have and will continue to work with local farmers to ensure they are able to recover and rebuild as soon as possible.
One of the most important things any government can do, aside from the direct practical assistance to help rebuild, which is welcome, is to ensure that their policies do not add to the financial pressures already affecting farmers. The fact is that this bill, in its current form, is likely to add to costs for agribusinesses. For that reason I support the amendments put forward by the shadow minister for agriculture and food security, and state my opposition to the bill in its current form.
I remind the House that the CEO of CropLife Australia, Mr Matthew Cossey, has stated that 'In its current form this bill will only serve to hinder agricultural productivity.' I am sure it is not the intention of this government to put a bill up that inhibits our agrisector. Why on earth would any government in its right mind plough ahead with legislation that is likely to hinder productivity? Well, like so much of what this government does, this legislation has unintended consequences. In resolving to solve a problem they have managed to make it worse. In trying to cut red tape, they have actually added to it instead. In attempting to make the processes more efficient, they have actually made them less efficient. In attempting to strengthen the Australian Pesticides and Veterinary Medicines Authority, they will in effect burden and weaken it with this legislation. The bottom line is that the red tape impost in this bill will flow on to agribusiness and ultimately to consumers.
The background to this bill is quite extensive, beginning with the 2008 Productivity Commission research study into the existing arrangements for the regulation of chemicals and plastics in Australia. Amongst other things, the Productivity Commission concluded:
The efficiency of APVMA assessments could be further improved by rectifying the currently dysfunctional arrangements for registering low regulatory concern products and through greater use of international assessment data.
In 2010, the Labor Party promised that it would improve the regulation of agricultural and veterinary chemicals in Australia through the APVMA. They said, 'A key focus will be on the efficient assessment of lower-risk agricultural and veterinary chemicals while ensuring that higher-risk agvet chemicals are assessed appropriately.'
After a discussion paper and public consultation, this bill was referred to the House of Representatives Standing Committee for Agriculture, Resources, Fisheries and Forestry for inquiry and report. That report was tabled a few weeks ago, on 28 February 2013, and contained a considerable dissenting report from the coalition MPs expressing concern over the impact of the bill and recommending that the 'reregistration requirement' be removed and that the commencement of the bill be delayed for 12 months. These are the two amendments that are before the House at the moment. These two amendments make a great deal of sense given the level of concern in the sector about the unintended consequences of the bill.
Labor's haste is typical of their approach. They say, 'Something must be done, this is something, so we must rush this through.' It is not a considered approach; it is thought-bubble politics and it certainly is not in the national interest.
Yes, there are issues with the current operation of APVMA, yes, we need to improve the efficiency and effectiveness of assessment processes, and we must ensure that APVMA has the capacity to identify and review suspect chemistries. Absolutely. But this bill is not the answer. Imposing an extra regulatory burden, in the form of a mandatory re-approval and reregistration scheme, is not the answer. This provision on its own has the potential to make costs skyrocket, not to mention adding another layer of red tape and bureaucracy, rather than removing it.
The coalition is not arguing that the current system is perfect. Nor do we contend that every aspect of this bill is incorrect. In general, the bill makes a number of changes to arrangements to manage agvet chemical registration and improvements to compliance and enforcement arrangements, most of which try to improve efficiency. As such, industry supports the measures, and so do we.
Certainly the intent of the bill is right. However, in its entirety, the bill only adds to the problem. Our amendments will improve the bill and ensure that the implementation of those aspects that are positive can proceed in an effective manner. We believe that the timeframe for implementation of this legislation is simply way too short—commencement of the bill is scheduled for 1 July this year.
We believe that APVMA will need to put in place a risk management framework and road test it to ensure that the application requirements can be met and other efficiency measures are supported. It must be remembered that the APVMA operates on a cost recovery basis. In 2010-11, payments of application fees, levies and annual fees by the ag-vet chemical industry were about 96 per cent of the APVMA's total revenue. So you can see that when the APVMA get a hit they are going to pass it on and it is going to end up coming out of the pockets of our farmers.
In its 2010-11 mid-year economic and fiscal outlook statement, the government announced, as part of the reform agenda, $8.75 million of funding over four years to implement reforms to the regulation of ag-vet chemicals in Australia. This funding is not ongoing. It is just over the forward estimates and will apply only to the initial establishment and implementation of the reforms. When you have a mechanism in place where you have an organisation searching for fees and levies, it becomes a great place for them to generate coin. In other words, the burden of the ongoing assessment regime will be placed on the ag-vet chemical industry, who in turn will pass it on to farmers, who then have no choice but to pass it on to consumers. And the government wonders why the cost of living continues to skyrocket under their policies. Every regulatory burden they impose puts pressure on the cost of living. That is why the coalition has committed itself to cutting unnecessary red tape by $1 billion. Our amendment to this bill will have that objective in mind: wherever possible we must reduce the regulatory burden on Australian business, on Australian farmers and on the agribusiness sector.
The major regulatory burden is the mandatory reregistration and re-approvals process, which requires that a product after a certain time period must go through the approval process again, regardless of whether there have been any issues whatsoever with its use. The product may have been on the market for many years being used safely without any problems whatsoever, but it seems it still must go through the whole process again after a set period of time. This is clearly a huge regulatory burden. There has been no cost-benefit analysis as to the benefits of this mandatory re-application process. We do not know that this huge burden will improve safety one iota. And the fact is that the existing regime already contains the capacity for reviews if there are any safety concerns.
Existing section 31 of the ag-vet code allows the APVMA, at any time, to reconsider an approval of an active constituent for a proposed or existing chemical product, the registration of a chemical product or the approval of a label for containers of a chemical product. In addition, it can invite the public to propose products which should be reconsidered. So there are already mechanisms for review. There are very real concerns that this an onerous process of mandatory review and will ultimately mean that currently used chemicals are removed from the market, particularly those which are off-patent and will no longer be available to the farmers who rely on them.
The coalition do not seek to make amendments lightly, but we believe they are vital to make this legislation workable. I would have thought that all members of this House would share the objective of ensuring that the agricultural sector is not further burdened with unnecessary red tape. I can tell you that so many agricultural businesses are doing it tough, from our sheep industry to our cattle industry to our horticultural industry. As I move through my electorate, I am constantly being met by people who say, 'This is as tough as we have ever seen it.' Certainly, those in my electorate who are just beginning the slow rebuilding process after the floods do not need extra costs down the track because this government acted in haste yet again to introduce legislation that ultimately does more harm than good. That being the case, this House should not support the legislation in its current form. I certainly will not be supporting the legislation in its current form. On behalf of the agricultural businesses in my electorate, I implore the government to rethink the haste with which they are implementing this legislation, to rethink the extra layer of red tape that they are imposing and to amend this bill as the coalition has proposed.
I associate myself with the words of my coalition colleagues, who represent farmers and the agricultural sector and live and breathe and rely on that revenue to make communities vibrant. In my opening comments, I spoke about the ABS statistics that show that 16 per cent of economy in my electorate is derived from the agricultural sector. I suggest that the minister who introduced this bill into the House, whose electorate is no more than 42 square kilometres in size and within a stone's throw of the Sydney airport, has little or no understanding of how this will impact people on the ground. In fact, I do not know many sitting Labor members who actually represent agricultural electorates.
Of late, three types of bills have been introduced into this House. The first type of bill they bring in introduces some type of new tax or places some type of impost on mums and dads where money is being taken out of their pockets. Secondly, they introduce bills that give more power to their union mates. Thirdly, we see the introduction of bills with some type of increased regulatory burden. So this style of bill is not a new concept for the current Labor government. I implore you, in considering this legislation before the House, to revisit the legislation and accept the amendments to be moved by the coalition. They are sensible. We do accept the intent of this bill, but we implore that our amendments to be moved to this bill be accepted.