Address to the Meat Processing and Export Conference 2023

AUSTRALIAN MEAT INDUSTRY COUNCIL
GOLD COAST
WEDNESDAY, 1 NOVEMBER 2023

**CHECK AGAINST DELIVERY**

Good morning everyone and thank you very much for the invitation to speak with you today. 

I’d like to start by acknowledging the Traditional Owners on the lands on which we’re gathering and pay my respects to elders past, present and emerging. 

I’d also like to acknowledge all the dignitaries in the room.

This is the first AMIC Meat Processing and Export Conference held in eight years – and what a time to hold it, with so much going on in this important industry. 

Your industry supports many thousands of jobs around the country, especially in outer suburban and regional areas. 

You help feed the country and the world and your innovation and agility during the COVID pandemic kept those jobs going, as well as the supply chains for valuable proteins that kept Australians fed. 

Food processing is Australia’s largest form of manufacturing, and meat processing is our food processing sector’s largest component. 

You play a big part in our government’s plan for a Future Made in Australia and I have always seen my role, as Agriculture Minister, as supporting the whole ag supply chain – pre and post-farm gate. 

The Albanese Government certainly understands that there are challenges in the red meat market at the moment. 

As MLA, Rabobank, ABARES and others have observed, good seasons, restocking and concerns about drought are causing an oversupply and offloading of livestock, which is driving down prices for farmers. 

I recognise this comes after a couple of years of farmers achieving record livestock prices, which impacted on processors’ profitability and consumer prices. 

And I know our processors are working extra hard to take as many cattle, pork, lamb and sheep as possible. 

MLA recently reported that September was the second highest month on record for the export of lamb and mutton, with nearly 48,000 tonnes heading overseas. 

While we are beginning to see meat prices fall at the supermarket, consumers are understandably asking why there is such a discrepancy between the prices they are paying and those farmers are receiving. 

And issues like that are exactly what will be considered in the government’s recently announced review into the Food and Grocery Code of Conduct. 

That review will examine the level of transparency in the dealings between retailers, wholesalers and suppliers. Something we all have an interest in – and I encourage you to get involved. 

But importantly supermarkets don’t have to wait until that review is finalised to do the right thing – farmers, consumers, processors and retailers all have an interest in fair prices and fair commercial dealings. 

Today though, I’ve been asked to outline the three main areas in which our government is providing surety to your industry and, while there are many options to choose from, today I’ll be focusing on trade, biosecurity and workforce issues. 

TRADE

The red meat industry is one of this nation’s great export stories and the Albanese Government is keen to help that reputation grow. 

Your industry enjoys favourable access to over a hundred markets and exports more than 70 percent of what it produces, worth over $16 billion last year. 

However, your industry faces increasing competition from other meat exporting nations and protein products in global markets. 

The industry must continue to promote its comparative advantages to global customers and consumers, such as quality, sustainability and traceability. 

But in my view, the opportunities far outweigh the challenges. 

Not only do we produce enough food for our own population, but we contribute over 1.6 million tonnes of premium meat to the world.   

We’re the fourth largest exporter of beef and the largest exporter of sheep meat in the world.   

Through hard work and partnership between the Australian Government, AMIC, MLA and others in your industry, we’ve achieved a premium level of market access opportunity that is the envy of the world.  

Since our election less than 18 months ago, you would have seen that our government has made great headway in improving trade across multiple countries. 

The Prime Minister along with the Trade Minister and I, lobbied the UK Government hard to ratify the Australia-United Kingdom Free Trade Agreement. 

I fondly remember joining industry representatives at London’s Smithfield Markets at 5 in the morning after a 20 hour flight to Heathrow, to meet with eager potential buyers of Australian beef and lamb. 

Thanks to the UK FTA they will get their wish! 

And my department continues to work closely with the UK Government to simplify trade requirements so we can maximise the benefits of the FTA.  

But as was demonstrated earlier this week, in negotiations with the European Union, our government will always act in Australia’s national interest and we won’t just accept any deal that is put in front of us. 

Our job is to get the best deal that we can for our producers, our processors, our workers, and our consumers. 

Unfortunately, despite a huge amount of effort – from our government and our predecessors – the EU was just not willing to make a respectable offer. 

This agreement has been a tough one for governments to crack over the past five years and it’s disappointing to not get there. 

Negotiations will continue, and I am hopeful that one day we will sign a deal that benefits both Australia and our European friends. 

Meanwhile, our government has also been working hard to rebuild and secure relationships across Asia. 

You will have seen us begin to stabilise our relationship with China after it was trashed by our predecessor, and work with industry to diversify our export markets. 

Despite the impediments that existed, in 2022-23, China remained the leading market for Australian exports of beef, veal, lamb and mutton, with beef exports valued at $2.3 billion.  

I acknowledge that we still see some meat processing establishments suspended from this market, and our government continues to seek a resolution. 

I have raised it directly with the Chinese Agriculture Minister. Trade Minister Don Farrell has raised it with his counterpart and other Ministers have raised it as well. 

We will keep raising it until it is resolved, in the same way we’ve seen impediments removed for barley, hay, horticulture, timber, cotton and we expect for wine. 

These disruptions show how important it is to diversify our export markets, which is why it was great to have AMIC’s Patrick Hutchinson join me and other industry leaders on a recent delegation to India. 

We certainly enjoyed plenty of Aussie lamb cutlets supplied by MLA and saw plenty more on sale at premium supermarkets in Delhi and Mumbai! 

The Australia-India Economic Cooperation and Trade Agreement, which our government worked to ratify with India last year, has already delivered higher exports of Australian sheep and goat meat. 

And we’re hoping to substantially grow that market with negotiations underway on another trade agreement with the Indian government. 

In the Middle East, we also recently achieved the harmonisation of shelf-life standards for beef and sheep meat across this important growing market. 

The Gulf Cooperation Council (GCC) – a union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates - has increased the maximum shelf life they will accept for imported vacuum-packed chilled meat. 

Beef and buffalo meat has been increased to 120 days and sheep and goat meat to 90 days. 

This opens the door to more exports of chilled meat by sea, saving on transport costs and making Australian product even more competitive. 

The volume of sheep meat exports to the Middle East is already growing back to the heady days before the last drought and this change will lead to more even more opportunities. 

This is also important for the implementation of the government’s commitment – taken to the last two elections – to phase out the live export of sheep by sea. 

I’m a firm believer in following through on your promises and the Albanese Government will see this through. 

But we have also promised to do it in an orderly and considered way, that has the least impact on Western Australian producers.

In recent years, we’ve already seen the decline of live exports, alongside a massive expansion of sheep meat exports – including to the Middle East. 

I’m confident this policy will actually create even more opportunities for value adding in Australia, by lifting the proportion of sheep slaughtered onshore even higher. 

Which is good news for processors in the west, as thousands more head of sheep are sent to local abattoirs. 

In fact many processors, including WAMMCO and Minerva, have already indicated they intend to expand their operations to meet this demand in the coming years. 

I certainly acknowledge that there are constraints and issues that need to be dealt with – namely labour and housing – and that’s why we’ve said we’ll take the time to properly implement this policy. 

We will work through the recommendations of the report I received last week from the independent panel advising on our commitment, and we will work with you to implement them. 

BIOSECURITY

But we won’t be able to take advantage of these trade opportunities, unless we maintain our strong biosecurity regime. 

Maintaining our world-class biosecurity system is vital to protecting our agricultural industries and environment. 

Weeks after coming to power in May 2022, we were faced with the threat of Foot and Mouth Disease and Lumpy Skin Disease on our doorstep.  

In the face of alarmist calls from the Coalition to close the border with Indonesia, which would have severely impacted our trading relationship with them, we worked calmly and cooperatively with industry. 

And to this day, we’ve kept Australia free of both diseases.  

But we can’t rest on our laurels, which is why the Albanese Government has delivered on our election commitment to sustainably fund Australia’s biosecurity system. 

The sustainable biosecurity funding package delivers guaranteed funding from year to year – this is what everyone including agricultural producers, importers, environmental groups, non-government organisations and independent reviewers have been calling for. 

The biosecurity budget we inherited in coming to office contained cuts of 25 percent – or $100 million per annum. Unacceptable at a time of growing biosecurity risks. 

Our new approach to funding moves us away from short-term measures, ensuring a stronger and more sustainable biosecurity system. 

Under the new arrangements, around 90% of biosecurity is to be funded, in broadly equal shares, by taxpayers and importers. 

As of 1 July 2023, these mechanisms are now in place, delivering a structural shift in how biosecurity is resourced. 

And from 1 July next year, we will also introduce a new biosecurity protection levy on producers, which seeks a mere 6% contribution – or around $50 million per year - of total biosecurity funding from primary producers. A small fraction of the additional costs now falling on importers and general taxpayers. 

I acknowledge that many primary producers already invest in the biosecurity system through on-farm biosecurity and producers also support Australia’s biosecurity system through existing levies. Taxpayers and importers also do a lot. 

Biosecurity is a shared responsibility, and I think that includes contributing to the cost of safeguarding our country from the plant and animal diseases which would wipe out this entire sector.
  
WORKFORCE

Of course, to take advantage of the opportunities awaiting this sector, we need to have the workforce to do it. 

And the ag supply chain is no different to any other industry in struggling to meet its workforce needs, after years of underinvestment in training, a broken migration system and the impacts of COVID. 

Almost from our first day, we’ve been focusing on delivering the skilled workers Australian industry needs, including in agriculture. 

Just over a year ago we held the Jobs and Skills Summit, which brought Australians together to work constructively on the challenges and opportunities facing the Australian labour market and economy.  

From that we formed a tripartite Agricultural Workforce Working Group, which brought government, employer groups and unions together to find ways to attract, skill, protect and retain workers in agriculture and processing.  

Again, I want to recognise the contribution of Patrick Hutchinson to that working group. Patrick has ensured that your industry had a voice in solutions to the industry’s workforce needs.  

And those solutions have involved a number of measures – agreed through the working group - to help locals build careers in the industry, like:  

• The Government funding over 13,000 Fee-Free TAFE places for locals to build their skills in agriculture courses.
• Ensuring there are 18 certificates and advanced diplomas on the apprenticeship priority list related to meat processing, meat safety, quality assurance and retailing.
• Agreeing on the principles that should underpin national labour hire licensing, to give workers greater protection against exploitation; and
• successfully advocating for a national Food Supply Chain Capacity Study, and the development of a new Ag Trade Apprenticeship. 

The working group has also put forward suggestions on how we can attract, retain and protect overseas workers to fill gaps in the industry workforce.   

You all know the meat industry relies on those workers from various corners of the globe and we’re helping meet that need. 

And since coming to office, we have slashed the obscene waiting list of 1 million visa applications, which I dare say has delivered a large number of workers to your plants. 

In addition, the Pacific Australia Labour Mobility (PALM) scheme is reaching new heights. 

PALM is helping meet unskilled, low-skilled, and semi-skilled workforce shortages throughout Australia, while delivering valuable income to the Pacific workers who participate. 

We have committed nearly $440 million across successive budgets to responsibly grow the scheme, better support countries and employers to participate and improve conditions for workers.  

Since our election, we have reached record numbers of PALM workers – over 38,000 in 30 September 2023, with over 10,000 of them working in meat processing. 

In December 2022, at the request of your industry, we announced changes to postcode eligibility to expand access to the PALM scheme to the metropolitan food manufacturing sector. 

These changes came into force in May with meat, seafood and fruit and vegetable processing employers in urban areas now able to apply to recruit and employ PALM scheme workers, to fill crucial gaps. 

I do need to acknowledge, though, that there are some areas of disagreement between the industry and our government on workplace issues. 

We have taken steps to improve worker conditions and pay, most notably by seeking to close the labour hire loopholes that undercut pay and conditions for workers. 

We don’t think it’s fair that workers can be paid lower rates and conditions, for doing the same work, just because they are engaged via labour hire. 

We’re also increasing the Temporary Skilled Migration Income Threshold, or TSMIT, from $53,900 to $70,000 in July. 

For the past decade, the TSMIT had been frozen in place – a deliberate decision by the former Liberal Government to undercut wage growth. 

I acknowledge that these measures do not have universal support. 

But we were elected on a platform of getting wages moving again, after ten years of wage stagnation, and at a time of cost of living pressures, Australian workers are depending on us to deliver. 

And through the work of the Agriculture Workforce Working Group, we are doing everything possible to deliver industry the local, PALM and other overseas workers you need.

CONCLUSION

Time doesn’t permit me to talk about a range of other things the Albanese Government is doing to secure the future of the meat processing industry. 

Things like investing in a modern national traceability system to prove to our trading partners that we meet their requirements in areas like biosecurity, food safety and sustainability, in order to maintain and grow market access for Australian produce. 

Or how the government is finally matching industry expectations around action on climate change because droughts and disasters are posing an increasing risk to the production, performance and profitability of the sector, as well as global food security. 

Or our Government’s signature manufacturing investment, the $15 billion dollar National Reconstruction Fund – of which $500 million has been set aside for Agriculture, will help food processors value add to their products, which in turn means more local jobs. 

As you can see we are invested in working with the industry to create the best outcomes for the whole agriculture supply chain, especially in trade, biosecurity and workforce. 

I thank you for the invitation to speak today and I hope you enjoy the rest of the conference.