Minister Littleproud Press Conference

6 May 2020

DAVID LITTLEPROUD: Well, thanks for coming. Look, if we've learnt nothing out of COVID-19, we should never take for granted the ability of Australians to produce their own food and fibre, and it's important that every sector gets fair support during. So, back in February, I started conversations with our supermarkets about getting an appreciation of the support they could provide to dairy farmers. We've lost over 500 dairy farmers in the last 12 months. There is considerable structural reform that needs to take place within the dairy market, and we are undertaking that through the dairy code of conduct and we'll continue to do that in a calm, methodical way. We've expedited it as quickly as we can. But there needs to be some short-term support and we've continued to ask the supermarkets around the voluntary levy in which they've imposed to support dairy farmers to get it back to the farm gate. And they supported that and we were able to break that $1-a-litre nexus back in February last year, through a lot of pressure and a lot of negotiations between myself and the supermarket. Some of it wasn't pleasant, I'll be honest about that. But the reality is they came to the party. Australians need to understand that dairy farmers don't get that full 10 cents. They're only getting a small portion of that. And some of that's for many reasons, one around the fact that for every litre of dairy milk that's created, not all of it goes into fresh milk. Some of it goes into butter and cheese and yoghurt. And also, some of the branded milk doesn't also have that levy. So, we asked the supermarkets to work with processors to ensure there is a better mechanism to get more back to the dairy farm gate, to help dairy farmers survive through the drought, the fire and now COVID-19. 

Now I had those conversations in February and in fact, also have written to them formally. I've giving them some time because they've been stacking shelves, and they've done a good job of that and I've given that time, but time's up now. They've done pretty well out of COVID-19. They've stocked the shelves and they are making a quid. And it's important they now review their pricing mechanisms with processors and ensure that a fair price has gotten back to the dairy farmer. The ACCC found in April 2018 that there was an imbalance in the marketplace. We're fixing that with the dairy code of conduct. And I think there could be some more reform that we need to explore and I'm doing that with the Australian Dairy Federation and other industry players themselves to ensure we do that. But I need time to be able to achieve that balance in the marketplace that wasn't there, and in which the ACCC has identified. 

So, it's now time for the supermarkets to stump up. Let's be honest about this. They've done pretty well not only out of COVID-19, but they've been found to have been underpaying their employees. One of them was found not to be passing this levy on appropriately in the first place. This is an opportunity for them to rebuild trust in the community. Yeah, they did a good job restocking the shelves but that's just one thing. That makes them a quid. They've got a moral responsibility to ensure that we have a dairy industry after COVID-19 and into the future. 

I'm not asking this for perpetuity. I'm asking for time - time for the Government to be able to put in place reforms that will ensure the survival of the dairy industry; that will ensure they and Australian consumers can continue to enjoy dairy products. I don't want to see Australians get to a point where we're importing fresh milk, to a point where we have to rely on another nation to supply that. This is a critical juncture. We've all got a role to play. We've got a moral responsibility. I'm asking the supermarkets and processors to get on board and do something about it. They've proven they've got a mechanism before to do it. They can simply do the job now. 
Happy to take questions.

QUESTION: So Minister, do you envisage retail prices rising on the back of your call today?

DAVID LITTLEPROUD: Well, that's actually at the behest of the supermarkets and processors, but all the dairy farmers are asking for is a fair price for what they're producing and ensure that it's reflective of, in some respect, to their cost production. And the ACCC found that there was an imbalance. In fact, they clearly defined that they said that the processors was a barrier to the farm gate in getting prices- a rise to reflect their cost of production. That's a serious allegation and one that we're fix with the code of conduct. But the supermarkets have a role to play in this too. Because if you talk to a processor, they say: no, no, no. Hold on. That may be the case but we've got the supermarkets sitting there over the top of us, telling us if we don't do what they ask, effectively we'll go and find our supply somewhere else. 

So, in theory, the ACCC is right. In practice, from what I heard from processors, was that supermarkets weren't the only ones that were guilty in terms of some of their behaviour. And this is what we have to clean up. This is what the code of conduct will clean up. And it's important to understand- I think all Australians would understand that it's only about fairness. We're a fair country and dairy farmers aren't asking for charity; they're just asking for a level playing field. This is an opportunity, I think, for supermarkets and processors to lead and to be able to ensure that that happens. They have a responsibility to not only supply their own shelves but to supply the Australian public with the best dairy product in the world.

QUESTION: Australia exports a lot of dairy products as well. And I think it's fair to say that if there were higher demand for domestic dairy products the prices would be higher as well. Are there too many domestic producers in dairy in Australia?

DAVID LITTLEPROUD: No. In fact, we're starting to see- continuing to see production levels reduced. So while there is an export market and we always will have that; there will always be a strong demand for Australian dairy, particularly fresh milk.

QUESTION: But are there too many producers?

DAVID LITTLEPROUD: No. I don't think there is and in fact, I think we're at risk of getting to a juncture where we won't have enough unless the marketplace is sorted out and the ACCC clearly identified that there was an imbalance and in fact, that there was an adequate number of dairy farmers out there. But they needed to be treated fairly and what the ACCC found is they weren't. If they're not treated fairly, then we're going to hit a tipping point where there won't be enough dairy farmers in this country to continue to supply fresh milk to Australians right around right around the country. And we shouldn't take that for granted. Australians shouldn't think that they're just going to be able to roll up every day if we don't do something about this and pick fresh milk up off the shelf. So we're taking pre-emptive steps with a code of conduct but we're just saying in the short term, supermarkets, do some heavy lifting with us. You're doing okay out of COVID-19, now's your time to give back in the interim.

QUESTION: Are you honestly saying that Australia's milk supply is at risk?

DAVID LITTLEPROUD: If we continue to lose the number of dairy farmers that we have over the last 12 months, we are in a situation, at a juncture, where the dairy industry itself won't be able to sustain all the demand in this country. There is a potential of that. You cannot continue to lose 500 dairy farmers a year and expect that there is another cohort wanting to take it up. This is an intensive industry and if we don't protect what we've got now and support it, fairly. I'm not saying give them a competitive edge, I'm just saying fairly and the marketplace has been proven to be unfair. The ACCC said that, not the Government.

We are going off of the basis on which the ACCC has indicated to us and the measures needed to rectify that and I think there's some others. I think the step up provisions within the code of conduct need to be looked at because they are skewed not so much for the farmer to have any discussion about the necessity for a step up predicated on costs of production.

And I think also the non-exclusive and exclusive contract provisions have been proven, particularly in the northern production systems, to have some flaws where we are seeing processors use market knowledge to their advantage and I've asked the ACCC to look at that. And I think that these types of reforms need to be looked at so that it is a pure market. 

But until you've got a pure market, and it is predicated on pure market forces, then it's very hard to sit there and say that dairy farmers are getting a fair go and if they're not, well unfortunately, they're going to leave the market. Ultimately, you've got to be able to make a quid. If you can't make a quid, you get out. And that's why we've lost 500 and if we continue to see them go, we're going to continue to see significant issues.

QUESTION: Minister Littleproud, on another matter, just with John Barilaro's text to Mr McCormack, what does that say about his character?

DAVID LITTLEPROUD: Oh look, those were private texts; they were conversations obviously as well as dialogue between the Deputy Prime Minister and Mr Barilaro. They're for them and I'm not making any commentary on that. I'm not privy to those conversations or to those texts. I'll leave that for people to judge those who make public any statements or private statements they make to one another.

QUESTION: These obviously leaked to the media and public. So what does that say about his character…?

DAVID LITTLEPROUD: Well I think the public will judge rather than- rather than me adding any commentary to it. I don't think that'll add any value to this Parliament, to this nation. I think people would rather us be focused on them not ourselves. And I think that's an indulgence that I don't intend to get into.

QUESTION: Does he have point though- Does he have a point though, in terms of Michael McCormack's leadership, is it weak at the moment?

DAVID LITTLEPROUD: No. We're obviously in a position where we'll make a decision whether we run in Eden-Monaro. Mr Barilaro expressed considerable interest in that but he himself ultimately made that decision not to. No one is stopping in the National Party. Let me tell you, the only people that will stop you are the branch members. They're the ones that will decide whether you are the candidate or not and ultimately, they were the ones that make the determination. But you firstly, have to be prepared to put your hand up and to put your name forward in front of those party members and they make that determination. So it was a decision, and as I understand, Mr Barilaro made with his family - a personal one. One I respect and one I congratulate him on what he's been able to achieve in the New South Wales Parliament. He's a talent and a great talent, but there are a lot of talented people out there that don't end up in this place. That's the unfortunate nature of politics, there's only been about 1500 people that have been fortunate enough to be in this Parliament over- since Federation and some get here and some don't.

QUESTION: Are you disappointed though, that such a high National, would have been very competitive in this seat, isn't running? Which would have boosted the Nationals numbers in Cabinet.

DAVID LITTLEPROUD: I'm disappointed John decided not to run. I think we would have given it a red hot crack and we still will. If we decide to put a candidate up, make no mistake, we are a separate part the Liberal Party and that's not a bad thing. We're in Coalition; diversity of ideas and values aren't a bad thing within a coalition. Diversity is good and that's what the National Party will bring and I think we'll still give it a red hot crack if we decide to run a candidate. But John Barilaro definitely would have provided some real competitive tension in the race for Eden-Monaro. But ultimately, we shouldn't get into self-indulgence about who owns the seat. It's ultimately the people of Eden-Monaro who own that seat and they'll make the determination predicated on the policies we put forward. And I think John would have done a good job of putting that forward and if he came to Canberra, I think he would add a strong voice to our party room and adding to that, diversity, that we enjoy.

QUESTION: Minister, another topic - the cluster at the Melbourne meatworks is now at almost 50 cases. Three weeks ago the first case was confirmed. If it's a school, the schools are closed immediately and there's a deep clean. Why did this not happen in the Melbourne meatwork cluster down there?

DAVID LITTLEPROUD: Well, that's a question for the Victorian Government. They are responsible for the health outbreaks in their individual states. Obviously, I have some concern in which I'm investigating because there were Commonwealth departmental people going through those abattoirs doing inspections. And I'm just getting to the bottom of when we were notified, because obviously they make an inspection in one abattoir and move to another. So I am - before I make any statements - I want to understand when we were notified and how we were notified because potentially, those Commonwealth, Department of Agricultural personnel, who were in that abattoir and then moved to another one, potentially could have spread the virus. So I want to get an understanding of what Victoria state officials undertook in that, so it's very careful. Before we start pointing the finger, I think we need to understand what's happened and we learn from it. This is unique circumstances that Australians are trying to get used to and circumstances and government agencies are trying to work in the best way they can. So I'm not necessarily sitting and pointing fingers, but I want to get understanding of how we get in place protocols, that will protect everyone quicker and better. But can I say that FSANZ standards are in place in all our abattoirs and people should not fear any meat that was processed through the abattoirs. It cannot be transmitted through processed meat, that's been quite clear. So there is no panic needed on that, our supply chains are secure. Australia should have comfort that not only our farmers, but our meat processing sector has been forward leaning on making sure they have adequate protocols, but where they haven't been, we'll learn and we'll act quickly.

QUESTION: Have any of those federal employees been tested or forced to quarantine due to your concerns they came into contact with workers at the Melbourne meat plant?

DAVID LITTLEPROUD: I'm waiting on that advice. But as I understand, no one within the department, working in that part of the department has tested positive at this stage, but I'm waiting on that advice. This is a fluid situation and we're obviously trying to piece together the chain of events and that's very important we do that and we do that calmly and methodically and provide support to each one of those employees that were in contact through that facility.

QUESTION: The US meat processing sector's take a big plunge because of coronavirus. How confident are you that we won't see that replicated here?

DAVID LITTLEPROUD: I'm very confident. In fact, I'm very proud of our meat processing sector. I think they've been very forward leaning, making sure that they had social distancing protocols put in place within their facilities, not only on the on the floor of the abattoir but also in their lunch rooms and making sure that people are distanced out. This is very important for them. They need to keep supplies moving through to make money and they need to keep health standards up. So, I'm very confident I think this is an outlier. I'm confident that my conversations with industry, I think we should be damn proud of them. In fact, I think they were ahead of the game, before we even started to putting FSANZ standards in place for them. They led the way and I'm very confident that our meat processing sector will hold up and our supply chains will continue to hold up to the demand, not only here but internationally. Thanks guys.