Time for an era of reciprocity

The Australian Dairy Products Federation (ADPF) welcomes the prudent balance of fiscal responsibility with investments for a stronger post pandemic economy, as outlined in the Labor Government’s first federal budget.

ADPF Executive Director, Janine Waller, said that dairy processors share the Treasurer’s concerns about food inflation and will, where possible, do their part to moderate dairy processing and manufacturing’s contribution whilst balancing significant supply chain cost pressures.

“Dairy processing wants to build a relationship with the Albanese Government built upon reciprocity,” Ms Waller said.

“To limit inflationary pressures arising through dairy products, ADPF and its members are calling on the Federal Government to partner with industry to deliver relief after the floods and from escalating energy prices, improve access to the people and skills dairy processing needs, promote greater market access abroad in the medium term, and co-invest in the advanced manufacturing long term future that dairy powerfully represents.

“The best way for the Government to assist dairy processing’s ability to make a greater contribution to national economic growth, is to help improve raw milk supply.”

As Ms Waller explains, Australian dairy processors believe it is important to recognise the significant contribution to the improved budget deficit position arising from the higher value and volume of dairy exports.

“Treasury’s improved revenue gains are assisted by higher corporate tax receipts flowing out of Australia’s 138 dairy processing sites and higher income tax receipts flowing from our 70,000 strong workforce,” she said.

“Australian dairy exports have grown from $3.3 billion to $3.8 billion in value over the 12 months to end June 2022.  So, it’s not only Australia’s mineral resources that are doing the lifting in improving the national budget deficit position through the course of 2021/22.

“ADPF supports the now confirmed budget investments in our biosecurity system, the funding of regional trade events including the second Dairy Symposium, the $20 billion plan to rewire the nation and modernise Australia’s electricity grid, and funding to establish the Regional First Home Buyers Guarantee,” Ms Waller said.

“However, Australian dairy processors do need the Government to deliver policies that limit the risks presented by fast rising gas and electricity costs. The dairy supply chain, from farmgate through to providing a nutritious, ‘ready to use’ product, is inherently energy intensive and warrants government support in time of crisis so to preserve Australia’s food production base.

“Dairy processors also consistently struggle to find and retain the skilled workers that industry needs, with access to housing in and around dairy towns a big contributor to the problem, and we want to see a significant portion of the 10,000 places under the Regional First Home Buyers Guarantee being directed to regions who support dairy processing.

“The Government’s preparedness to provide $5.4 billion over seven years to support economic growth and development across regional Australia is positive, and would like to see plenty of the 29,000 additional in-training support places under the Australian Apprenticeships Incentive System in dairy processing plants and supply chain businesses.

“The new Regional Precincts and Partnerships Program can support many dairy communities through place-based investment in country towns that is refreshingly strategic in purpose and mindful of the role infrastructure plays in making dairy areas great places to live, work and raise a family.  The intersection between place-based food marketing and place-based infrastructure investment is well worth investing in.

“The Government’s budget funding to expand and enhance the Pacific Australia Labour Mobility scheme is a move dairy processors are extremely interested in, but we need to see the scheme extend beyond the farm gate and into food processing and manufacturing sites.”

With the Federal Government having recently signed up to the Global Methane Pledge, Ms Waller believes this can create long-term opportunities for dairy processing.

“The emissions reduction pledge aligns with the industry’s ambitions as detailed in the Australian Dairy Industry Sustainability Framework,” Ms Waller said.

“In accepting the Government’s decision, ADPF notes the significant number of opportunities arising from the announced $1.9 billion Emissions Reduction Fund, with partnerships between industry and government being the cornerstone for sustainable emissions reductions in livestock-based industries.”

With new challenges arising from the ongoing floods, especially in northern Victoria, Ms Waller said the Federal budget confirmation of funding to help rebuild the Norco Ice Cream Factory in the Northern Rivers of New South Wales is a confidence builder for other dairy processors currently being impacted.

“While disaster payments qualification requires direct impact on plant and facilities, they do not adequately account for the huge challenges and expense dairy processors face from significantly impacted milk supply due to flood waters.  The ADPF will engage the Government on these natural disaster management system improvements in the coming months,” said Ms Waller

“This budget can be the start of a new, stronger, more innovative relationship between public policy makers and dairy product makers. There is much work to do.”

ENDS