TUESDAY, 16 AUGUST 2016
SUBJECT/S: Dairy crisis; Pairing of votes
PATRICIA KARVELAS: Today the Prime Minister and the Agriculture Minister met with the management of Australia’s largest milk producer, Murray Goulburn, amid concerns that dairy farmers are facing ruin following a slashing of the price they are being paid for milk. The meeting follows last night’s 4 Corners program which revealed the dairy giant had been suffering financial problems before its April decision to cut the price per litre it pays dairy farmers. Joel Fitzgibbon is the Shadow Minister for Agriculture, Fisheries and Forestry and the Shadow Minister for Rural Affairs [sic], welcome to the program.
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: Good to be with you Patricia.
KARVELAS: What do you make of today’s meeting? It appears there was no new money on the table but the Agriculture Minister, Barnaby Joyce said this is the first of several planned meetings now to work this out.
FITZGIBBON: Tragically Patricia it was a complete waste of time and of course has failed our dairy farmers. This is a real repeat of what happened throughout the election campaign – they raised expectations amongst the farming communities by announcing a so-called rescue package. I said at the time it would be of little help to them and that has now been proven. The concessional loans, either haven’t been taken up or people haven’t been able to secure them; and today’s meeting was announced by the Prime Minister just in the final days of the election campaign, again raising expectations. He made it clear he was going to go in there and knock the Murray Goulburn Board around the room but of course it has been a big flop – no announcements. I said earlier today that if they don’t walk out of that room with a commitment from Murray Goulburn to deviate from their profit-sharing mechanism and deliver some cash back to farmers, the meeting would have been a fail and of course it absolutely has been a fail.
KARVELAS: But just how much can the Federal Government do here? The corporate regulator is already looking into Murray Goulburn as is the ACCC.
FITZGIBBON: Patricia, the corporate regulators , both ASIC and the ACCC, have been looking at this now for almost four months and I don’t understand the delay. But, it is not always…
KARVELAS: But how could the Prime Minister go into that meeting and force them to change their business model – how realistic is that?
FITZGIBBON: No, there is something very simple the Murray Goulburn Board could do Patricia, and I wrote to the Chair many many weeks ago now suggesting it. When they raised capital on the market, their prospectus made it clear to all investors that there was a provision in the prospectus which allowed them to change the split of the profits. In other words, to send more of their profits back to the farmers by way of a higher farm-gate price. Now that would have immediate effects: it would raise of course the cash they are receiving in their pockets; it would reduce the debts they now have to Murray Goulburn because the retrospective nature of Murray Goulburn actions; and it would immediately increase the farm-gate price for Fonterra suppliers because Fonterra links its price to that of Murray Goulburn. This is what the Prime Minister could have done. Now I have been saying for weeks, if not months, that I very strongly believe that if the two major Parties in this country together are putting pressure on Murray Goulburn to do the right thing by their farmers, they would have no choice but to do so. But for some very strange reason neither the Prime Minister or Barnaby Joyce have been prepared to join me, nor by the way, have they been prepared to utter a word of criticism about Murray Goulburn and all of their misdeeds.
KARVELAS: OK. But you say Murray Goulburn should return money to dairy farmers, in fact they are trying to do the opposite they want money back from dairy farmers. Agriculture Minister Barnaby Joyce has said that those farmers’ repayments can’t just be forgiven because the company would go belly -up. What assistance do you feel is appropriate for dairy farmers here, from the Federal Government?
FITZGIBBON: Patricia first of all this is a co-operative, the retained earnings, the $40 Million of profits Murray Goulburn is sitting on is the money belonging to the farmers – it is a co-operative. It makes sense, I mean Murray Goulburn is nothing without its farmers and these farmers need cash now. It makes no sense for Murray Goulburn to be favouring its Collins Street investors, who in turn don’t get their money back if there are no suppliers. So first of all, these issues should never be addressed first and foremost by insisting the tax payer fund bailouts. If the company is in the position, in this case Murray Goulburn, to do something for its farmers we should look to it first. Now I wrote to the Chair of Murray Goulburn insisting that he act on his authority to change the profit split - extraordinarily he said the Board had considered that but decided not to do so. He said it doesn’t meet the criteria of “abnormal circumstances”. Now he has lost his CFO, his CEO, prices have collapsed, farmers are in debt, their whole business strategy has fallen over – if these circumstances are not “abnormal circumstances” I don’t know what is.
KARVELAS: You might have a case, but if the company is not willing and not prepared to make those changes, do you think the Federal Government should step in and open the wallet?
FITZGIBBON: No, no I don’t think the taxpayer should…
KARVELAS: But how can you force the company to take a different position?
FITZGIBBON: Well I have been in politics for a long time Patricia, and I make the point again, that if the Prime Minister of the country, the Agriculture Minister, the Deputy Prime Minister, Joel Fitzgibbon, Bill Shorten are all saying to Murray Goulburn it is time you did the right thing by your farmers I have no doubt that….
KARVELAS: You honestly think just the pressure from all of you singing from the same song sheet is enough? That that would force the company to change its position?
FITZGIBBON: I honestly do Patricia, and by the way the dogs are barking elsewhere as well, you know that people are seeking to get an extraordinary annual general meeting of Murray Goulburn, and if that has the outcome one might expect then I suspect Murray Goulburn will be changing its position in any case.
KARVELAS: Just on another thing, Nick Xenophon said today he thinks there should be a national school milk program to support Australian dairy production – what do you think? Milk in the schools? Would Labor back that?
FITZGIBBON: Well it got him a headline Patricia, and I suppose that is what he wanted.
KARVELAS: So you wouldn’t be entertaining that?
FITZGIBBON: Well in Australia there produce about 9 billion litres of milk every year and we consume less than 4 billion I think– if Nick thinks the difference there can be made up of schoolkids drinking more milk well then good luck to him.
KARVELAS: Just on another issue, the National Farmers Federation has claimed that foreign investment in the farming sector has been threatened by a lowering of the thresholds for when the Foreign Investment Review Board must step in to scrutise acquisitions – are you concerned by this? Is it something that needs to be looked at?
FITZGIBBON: We have had Penny Wong, Joel Fitzgibbon and plenty of others in the Labor Party saying the same thing for more than two years I think. The changes Barnaby Joyce and co made to Foreign Investment Review Board were a political stunt. The fact is, both the Board and the Treasurer at any time know what prospective purchases are sensitive. The Treasurer doesn’t need a threshold, the Treasurer can look at any matter he likes at any time, whether it is a dollar or a billion dollars. These were designed to, if you like, feed those ill-informed people who are excessively concerned about investment in the agriculture sector. But what they do send a very very bad signal to the international investment community. Now competition for global capital is intense, Patricia, and we need big loads of investment in agriculture, we are a small nation with a small savings pool, we have always relied on foreign investment, we always will. But these signals are sending international investors to South America and elsewhere, and are proving to be a great detriment to Australian agriculture.
KARVELAS: Joel Fitzgibbon before I let you go, Labor has refused to give the Turnbull Government a pairing of votes in the new parliament – now you said you wanted to be a constructive Opposition – this doesn’t appear to be particularly constructive and I have got to quote your own tweet, I have just seen you tweet on this - where you warn Christopher Pyne – careful mate I know your history #Chief Whip. What history are you referring to so menacingly on the internet?
FITZGIBBON: I heard some of Christopher Pyne’s hypocritical spin on radio as I was driving along – I was Chief Government Whip when he and Tony Abbott went to extraordinary lengths to deny the then minority government pairs – people weren’t allowed to be there for the birth of their children, etc, the list goes on and on. But that is not the point we were making today – we are not seeking retribution or to stoop to their standards. What we are saying is, Malcolm Turnbull has been very bolshie about his working majority – he has got a “strong working majority”, he is confident he can move forward with that working majority so if he has “a strong working majority” well then, he doesn’t need pairs . If he hasn’t got a strong working majority well then he should say so.
KARVELAS: Ok so are you going to tell me what all this history is about- is that what you mean- that history when you were Chief Whip?
FITZGIBBON: No I was just calling Christopher Pyne out for his hypocrisy. Because when I was Chief Government Whip, an example again, when I was looking for a pair for mothers with sick babies or for fathers to go home for their wife for the delivery of their baby - I was denied a pair. So Christopher Pyne shouldn’t be running around screaming about the Labor Party – he should reflect on his own behaviour back in the 43rd Parliament . But that is not the point we are making . We are making the point that Malcolm Turnbull says he has got a strong working majority – on that basis he shouldn’t need pairing , if he decides he hasn’t got a working majority he should come back and talk with us
KARVELAS: Alright Joel Fitzgibbon, thank you so much for coming on the program.
FITZGIBBON: A great pleasure