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Legislative Assembly for the ACT: 1999 Week 1 Hansard (16 February) . . Page.. 97 ..

MR HARGREAVES (10.37): Mr Speaker, the destruction of the milk supply industry as we used to know it began last June. It began with this Government's determination to do away with the Milk Authority. The Government hid behind the national competition policy and it hid behind the anti-competitive clauses contained within the Trade Practices Act; but, in reality, it just wanted to rid itself of a piece of the framework. In June 1994, I think it was, Mrs Carnell was quoted as saying, "It is not the Government's business to provide services". It appears that the current Minister for deregulation follows in her footsteps, dicey as that may be.

The Government commissioned one of its own officers to do a review of the milk industry and, lo and behold, a recommendation came forth to deregulate the market. What happened? There was outcry, public demonstration against the very thought. Why do you think this happened? It happened because there was fear out there, Mr Speaker. That fear revolved around the likelihood of lost jobs, increased prices to the consumer and the loss of businesses in the home vendor market. It was predicted that the home deliveries would go the same way as home delivered bread. Does anyone here remember that time? Why were these predictions made? Because, Mr Speaker, this was the interstate experience at the time.

These interstate predictions have become even more obvious in the way in which they have detrimentally affected the industry. Victorians now pay a lot more for their milk than we do. But the Government told us that the New South Wales marketplace would be okay and that we needed to be the same as New South Wales - after all, we are an island within New South Wales and cannot go it alone against the tide of deregulation. What happened in New South Wales? It was revealed in October last year that, as a result of deregulation on 1 July, prices in New South Wales had risen 3c a litre to the consumer. It forced the farm gate price down by 3.3c a litre, cut vendor margins by 5.5c a litre and reduced margins for processors.

So far, there has been no good reason for this deregulation. But, Mr Speaker, there was a winner. Guess who it was? You guessed it: The supermarkets actually put up their prices. I quote from an article about the New South Wales experience:

... deregulation was a disaster for everyone except the supermarkets, who had reaped an extra $60m profit since July 1.

In New South Wales, supermarkets reaped a profit of $60m in three months. That equates to $240m a year. Do we really want to be the same as New South Wales? I do not think so.

Mr Speaker, are we stuck with it? We are if you believe this Government. They say that the bad guys from the ACCC will withhold our tranche payments under the national competition policy. They say that our home vendors need protection from prosecution under the Trade Practices Act for monopolistic trading. Both the TPA and the NCP have exemption clauses contained within them. Has this Government applied for such exemptions? Of course not. The exemptions contained in the competition policy agreement allow for exemptions on the ground of public interest. Similar exemptions apply in the Trade Practices Act.

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