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
Monies collected will be utilised for projects implemented by MLA and will not accumulate as reserves. As a commercial entity MLA should carry a prudent level of working capital, and no more.
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
A CCA, SCA, NMA, ALFA, ALEC, MLA, AMPC, Livecorp and the
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.
Q16· What will be the standard form of business at general meetings held by MLA?
A To discuss the company’s financial position and performance, to elect directors, to vote an levy motions: to elect the selection committee representatives for the
future director selection process and further responsibilities as consistent with the
Corporations Law.
Q16· What will be the standard form of business at general meetings held by MLA?
A To discuss the company’s financial position and performance, to elect directors, to vote an levy motions: to elect the selection committee representatives for the
future director selection process and further responsibilities as consistent with the
Corporations Law.