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Legislative Assembly for the ACT: 2000 Week 6 Hansard (25 May) . . Page.. 1892 ..

MS TUCKER (continuing):

Governments have removed regulatory barriers to competition, supposedly to create a more level playing field in a particular industry sector. But in the end this has allowed the big corporations to reduce competition themselves by using their market power to push out the small players. Public benefit gets transformed into the economic benefits of the corporations. The benefit to individual members of the public gets lost along the way.

The local milk industry has been sacrificed on the altar of competition policy. I guess we will have to wait and see whether the promised benefits of deregulation come about. I have my doubts. We may get cheaper milk-even that is questionable-but will it be worth the cost of the local milk industry?

MR OSBORNE (10.18): There has been conflict and discontent within the ACT milk industry ever since local graziers began supplying the Canberra population and construction camps in 1910. Competition within the industry is not new, nor are inquiries into its structure and operation. The industry has been led by successive governments, both Commonwealth and territory, through several evolutions in structure. The repeating pattern has been one of market failure followed by government intervention.

However, a strong measure of stability came with the establishment of ACT Milk Authority in the early 1970s. Economic control of milk was vested in the authority, and complaints about the local market all but ceased with its introduction. While the industry enjoyed stability for nearly three decades, the late 1990s produced perhaps the greatest threat of all to its very existence. As members are aware, the industry has come under attack because it was based around a government-controlled monopoly. The Hilmer competition policy reforms, signed off on behalf of the ACT by the former Follett government, strongly opposed such government monopolies, which meant that the ACT milk authority had to go.

Further, attention was drawn to the Australian Constitution, which provides for free trade between states and territories. This meant that the Canberra market had to be opened up to interstate milk processing companies. While no interstate traders had made an attempt to enter the Canberra market since the late 1960s, it was only a matter of time before one did. This was proven true in mid-1998, when Woolworths supermarkets refused to sell Canberra milk and instead only stocked Pura and Woolworths brands. After just a few weeks, Woolworths recanted on their exclusion of Canberra milk products from its shelves.

In the meantime we saw the release of the Sheen report on the milk industry, which to no-one's real surprise supported full deregulation of the market. That report was nothing more than a complete sham, as has already been well documented by the experts in both economics and competition policy, and needs no further comment from me.

The writing on the wall having been seen as far back as early 1997, my concerns for our milk industry have been twofold: protecting local jobs and ensuring as much as possible a future for home deliveries. People sometimes wonder why such a fuss should be made about milk. Perhaps they forget that milk is worth around $26 million a year to the local economy and supports in the vicinity of 650 jobs, most of which are associated with the distribution side of the industry. Home deliveries of milk are not a convenient novelty as some critics have tried to make out. Rather, they are a very important part of life for those who are elderly, disabled, housebound or simply do not have ready access to a car.

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