Australian Beef Association – Australian Beef Association

Following is part of the Senate submission by RMAC

 perhaps this is why the ship is sinking…

OTHER QUESTIONS

(Which are not addressed elsewhere in the Report)

 Q I             What impact will the new arrangements have on the commercial ‘bottom line’ of industry participants?

 A               MLA can not, and should not, be held responsible for prices received or costs incurred by industry.  MLA can only assist and facilitate improved market performance.

 Producer levies are expected to continue at around current levels for the time being.  They may increase or decrease in the future.  They will however be under the control and influence of producer members within the company they own.

Producer members will have enhanced voting rights and consequently more direct say and control over expenditure of their monies.  They will also have more say and accountability through their Peak Councils. There will be a higher level of accountability and improved measures of performance.  There will be improved communication between the company and members.

 Monies spent will be better targeted and there will be improved efficiency through savings in administrative  costs and monies-spent being focussed at priority issues.

 The new company will be forward looking and client focussed.  

 Processors and live exporters will no longer pay statutory levies and will

contribute to MLA’s operations through AMPC and Livecorp.  Their commitment

to funding for 1998/9 is $12.929m and $0.827m  respectively.  For 1997/98, processors and live exporters were estimated to have contributed  $51m under the statutory levy arrangements.

Processors and live exporters will, for the most part, conduct agreed projects with MLA through use of commercial contractual arrangements and through these, will have control of activities and performance.

Q2        The new structure  looks complicated – is it?

 A          Looked at in its entirety, it may appear so. However, each part has a logical and practical function and relationship, and each sectoral interest should be able to easily identify and follow those funding flows and activities of interest to them.

Q3        Who is in charge of deciding future levy amounts and will some of these monies accumulate as reserves?

A         Peak councils, following advice from and consultation with MLA  as to funds necessary to carry out the programs which are required by industry, will make recommendations as to levies.  Peak Councils recommendations will be formalised through  consultation with respective constituents prior to MLA’s AGM.  Each member  sector, cattle, sheep, goat, and lot fed, will be entitled to vote to accept or reject the recommendations of their respective Peak Councils

Q4       Is the AMLC owned  building a part of reserves?

 A          Initially at least,  the building will form part of the reserves. Its future will be decided by      the funds  manager on the basis of the commercial  interests of the industry  and they may choose  to either hold, or divest ownership of the building.

Q5      Why are processors no longer required to pay for promotion  activities?

 A                                                                        Processors may contribute some monies to promotional activities, but at a significantly                   reduced level.

 However, processors, the retail sector and butchers may decide to fund, under contract and separate from existing  arrangements, promotional activities on the domestic market and  overseas.

Q6                  The Minister said levies would be reduced by around half.  Is this the case?

A                                                                               No. The  Minister indicated that total monies spent  may come down  to around

            $80m.   There was also the clear expectation that contributions  from livestock exporters      and processors would be significantly reduced from the levels paid by these sectors under compulsory levies.  Actual  amounts spent by each sector  will be a matter for each sector to decide upon, having  regard to their minimumobligations under the Memorandum of Understanding.

Q7          Lot feeders will now be in charge of their own levies.   How will this work?

 A                                                                                       Title definition of a lot feeder, for the purpose of collecting  and directing levies is ‘Lot      feeder  means a producer  of grainfed cattle that are eligibile for YF or GFYG certification or third party audited certification approved  by A USMEAT attesting that cattle are being fed to at least these AUSMEAT minimurn  standards for grain fed beef’.

A.LFA wiII have the responsibility for recommending levels of levies to the AGM to be voted  on by lot feeders.

Q8              Why has the transition  process taken so long?

A                 This  has been a complex  and detailed negotiation. Those involved had the responsibility to do the job properly.  There were no shortcuts as this could have cost the industry dearly in the future.  The last 12 months has involved: establishing five new companies under corporations law and Safemeat; preparation for the termination of AMLC, MRC and MIC; negotiation of the MOU; selection of Boards  of companies, CEO/MD’s; new staff arrangements; detailed  legal work; consultation with affected parties; management and transfer of ongoing functions; and negotiation of new levy and funding arrangement, to name  but a few.

Q9        How much has the transition cost and who will pay for those costs.

 A           Final costs are not know at this stage.  They could  be in the order  of $4m–$5m.

These  costs will be met from industry reserves.

 Each  body in fulfi1ling their responsibilities as members of the meat reform Transition Team may incur costs up to the limit of $200,000. The costs incurred by MLA and other companies in meeting their obligations during  the transition

period  are also part of the transition  arrangements. There will be substantive legal and other consultants costs.   Costs will continue  to be incurred  up to 30 June

1998,  and will be audited.

Q10              Some  people consider  that there has not been sufficient consultation. Is this a fair comment?

A           There  has been extensive consultation. In developing the policy for the new arrangements there was consultation with all parties,  over an extended period of

18 months. · During the transition there was also extensive consultation through

the structures of the Peak Councils. It would have been impractical to consult with all individuals in the industry on the enormous amount of detail  involved. The job would have become  impossible. Reliance  was placed  on industry  leaders.

Q11      Who participated in Meat Reform  Transition  Team  during its operations?

A           Chairman

CCA SCi. ALFA ALEC AMC NMA MLA

 Tim Roseby

John Wyld, Justin Toohey

Jim Martin, Peter Klein

Malcolm Foster, Kevin Roberts, Rob Sewell

Graham  Daws, Ian Mcivor

Jack Ware, George Gil bertson, Christopher Creal Gary Hardwick, Michael Caredes,  David  Abba Bob Graham, lan Watson,  Richard  Brooks

 Keep going down, and remember AMPC means Aust Meat Processors Council!!

Q12      Who will sign the MOU?

Mr John Maher

Michael Gray, Claire Grose

Bruce Standen

Ian McCausland

Greg Read,  Stephanie Whitelaw

Sue White,  Mike MacNamara

Minister for Primary Industries and Energy.

Q 13      How have  concerns  about ‘split  species’ been addressed?

 A         The marketing and promotion  functions of Meat & Livestock  Australia will be split along species  lines with separate and  independent  management operations to ensure accountability to levy payers.

 There are many shared activities between  the cattle and sheep sectors which  will be handled through  other structures in MLA, dealing with issues such  as research and development, safety and hygiene, and market access.

 The benefits to industry will be through  improved  efficiency  and costs savings, (ie elimination of ‘duplicate’ costs  of separate Boards,  staff, communications, accounting, legal etc)

 Each sector will vote on their own  levies and be able to plan for and measure performance of the services  provided  to their sector.

Q14….         Will the AMPC  and MRC  hold an annual general meeting  before  they are woundup.

A              No.  Annual generai  meetings  are held at considerable cost to industry, and there are no known current issues concerning these authorities that need to be resolved by levy payers.   Also, under the new arrangements there “‘willll be full transparencyanoJ  accountability· or.. •r.,e compru-.u’es to memo.ers.

Ql5      When will MLA hold i:s first  AGM?

 A          Under  Corporations Law, MLA  is required  to hold an AGM within  1 8 months of it being  registered as a company and thereafter ·within 5 months  of the financial years end.