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Legislative Assembly for the ACT: 2000 Week 6 Hansard (25 May) . . Page.. 1891 ..

MR HARGREAVES (continuing):

a one-litre carton of milk. If the vendors try to match them, their profit will be squeezed. These supermarkets can afford not to make a profit on milk, because they can increase the price on other items to compensate for the loss. Naturally, consumers will be happy to pay 10c less for their milk, and many will be happy to forgo the luxury of a home delivery for cheaper milk at a supermarket. With deregulation, we are at the mercy of the large supermarkets. Those within the industry will find it impossible to compete.

The ACT has the cheapest milk-$1.22 for a one-litre carton-compared with $1.30 in New South Wales and $1.45 in Victoria. The price in the ACT has nowhere to go but up, and after 1 July that is exactly what will happen. Unfortunately, the future does not look rosy for the ACT milk industry. Prices are bound to go up, vendors will continue to walk off their runs, and more jobs will be lost than have been lost in the last few weeks. Whether they are milk runners' jobs or full-time positions, they are all very relevant. At the end of the day, the blood of the ACT milk industry is on this government's hands.

MS TUCKER (10.15): The minister said in his presentation speech that this bill represents the final phase of milk industry deregulation in the ACT. I would say it represents the final nail in the coffin of the local milk industry. This deregulation process started with the competition policy review of the legislation controlling the milk market in the ACT and the moves by the states to deregulate their markets. The Sheen report was broadly criticised at the time as being an inadequate assessment of the public benefit of deregulation of the milk industry, but the government went ahead with its deregulation agenda anyway.

The bill before us today is the final action that began with the amendments to the Milk Authority Act passed by this Assembly at the beginning of last year. Those amendments gutted the regulatory functions of the Milk Authority and set up the ending of its commercial processing and distribution functions on 30 June this year.

Since the passing of that legislation we have seen many disgruntled milk vendors leave the industry with little to show from their original investment in milk licences. The vendors who have stayed are struggling to survive. The home delivery of milk and the jobs that went with it will soon be a thing of the past. The government did establish a home vendor rationalisation scheme to assist in the consolidation of existing home vendor runs but, with the total deregulation of the market coming up, the future of the remaining vendors is very uncertain.

It is too late now to stop this deregulation, but I have to wonder what the public benefit has been. The only people who seem to have benefited are the supermarket chains and the large milk distributors. The local milk vendors have lost out. It is also uncertain whether local milk processing will continue at the Kingston plant, as it may be cheaper for the distributor to bring in processed milk from interstate. This will result in the further loss of local jobs.

This issue has highlighted the inadequacy of competition policy, in that it produced contradictory outcomes. Competition policies based on the assumption that government action to regulate industry to protect the public interest should be superseded by the principle that the public interest is best served by having industry regulate itself.

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