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Legislative Assembly for the ACT: 2000 Week 1 Hansard (15 February) . . Page.. 46 ..

MR HUMPHRIES (continuing):

number of milk retailers, home vendors, in the ACT to be reduced on the assumption that the problems in the industry would be somewhat alleviated if there were fewer operators with greater economies of scale able to deliver milk to Canberra citizens. To achieve that, given that previously there had been in place a plan to divide the Territory basically into suburban-based milk runs and to allocate these to particular purchasers, it was felt that there needed to be some scheme to reduce the number of operators without limiting the choice of those who wished to stay in the industry and to provide a reasonable return for those who wished to get out.

Mr Speaker, the plan the Government has put in place involves the sale of the Belconnen milk depot and using the proceeds of that sale, or the savings achieved from the sale and not having to distribute milk via the Belconnen depot, for a fund which in turn is available to pay those vendors who wish to exit the industry an amount, as Mr Osborne has indicated, of $7.50 per litre sold over a designated period.

Some features of this are important to bear in mind. First of all, the scheme is not compulsory. A person who wishes to remain in the ACT industry is perfectly at liberty to do so, and a number have indicated to us they intend to stay as they are. They are perfectly happy to sell milk as they do now. For example, some have this as a part-time job as well as perhaps a job in the Public Service. They are quite happy to make some money on the side. They do not wish to have a larger milk run. They would not have the capacity to handle it. Others, however, do wish to get out, and for them the availability of this option is quite important.

There has been some criticism from the Milk Vendors Association. The expression from the association was that vendors would find this an unacceptable offer and would not take part in the process. I can advise members that as of today there are 35 vendors who have indicated a desire to have their run put into the auction which will take place either late this month or early next month. Those vendors will have the chance then to sell their run, receive the $7.50 per litre and exit the industry. Clearly, the Government would hope that as a result of the process a number of existing players would come in and purchase runs being relinquished, or possibly other new players would enter and buy a number of runs so as to be able to have a large enough operation to provide for an efficient and effective milk delivery system notwithstanding the new competition in the industry.

Mr Osborne asked me what people would do if they do not wish to exit the industry. Well, there is no compulsion to stay there. It is true that the value of those runs has declined, but that is not merely because there has been deregulation of the industry, a process which has now been on-running for a number of years and which originally was signed up to by the former Government, not necessarily specifically for milk. The competition policy generally was signed up to by the previous Government. Those who wish to stay can still do so.

The decline in value is not wholly due to deregulation. It is also due in large part to the changing patterns of purchase by Canberra residents. These days fewer people purchase their milk at home, for a variety of reasons, convenience or whatever. That is also a reason why there has been a decline in the value of those runs. The argument is whether the Government should step in and compensate people for the decline in the value of those runs. You could argue that we have no more obligation to do that than we would in

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