Deregulation strategy announcement silent on Australia’s Food Safety Standards

Posted by AFN Staff Writers on 15th October 2014
Deregulation strategy announcement silent on Australia’s Food Safety Standards
Deregulation strategy announcement silent on Australia’s Food Safety Standards

The strong focus on boosting industry competitiveness in the Australian Government’s Industry Innovation and Competitiveness Agenda has been welcomed by the agriculture and food and beverage industries, but some have raised concerns about the impact on the food regulation process of ‘cutting red tape’.

The Agenda, launched by Prime Minister Tony Abbott and Federal Minister for Industry Ian McFarlane on Tuesday 14 October 2014, forms a central part of the Government’s Economic Action Strategy.

Launching the new Industry Innovation and Competitiveness Agenda, the Government said that strengthening Australia’s competitiveness was “key to future prosperity”. Prime Minister Abbott and Mr McFarlane said that while Australia has experienced 23 years of economic growth, “success should not be an excuse for complacency”.

Questions about impact on food regulation

Some industry commentators have questioned whether removing regulation to bring Australian more in line with international standards will have an impact on food safety.

As part of the Industry Innovation and Competitiveness Agenda, the Government said it would examine opportunities for greater acceptance of international standards and risk assessments.

The Government said this was “an important part of the Government’s plan to cut red tape and foster a lower cost, business friendly environment with less regulation”.

Businesses often have to undertake a regulatory approvals process to use or sell products in Australia that duplicates a process that has already occurred in other developed countries. The Government said this “adds to costs and provides little or no additional protection”.

The Government said it would adopt a new principle that if a system, service or product has been approved under a trusted international standard or risk assessment, then our regulators should not impose any additional requirements for approval in Australia, unless it can be demonstrated that there is a good reason to do so.

The Government said it would enable Australian manufacturers of medical devices the option of using European Union certification in place of TGA certification. It said this would place Australian manufacturers on the same footing as overseas competitors. The Government will also require the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) to increase its acceptance of international risk assessments of industrial chemicals made by reputable international regulatory authorities such as the European Union regulator.

However, Australia’s food safety regulator, Food Safety Australia and New Zealand (FSANZ) was not mentioned as part of the Agenda.

Agenda largely welcomed by industry

The Government’s Agenda has been welcomed by the agriculture and food and beverage industries.

The Australian Food and Grocery Council (AFGC) said it welcomed the strong focus on boosting industry competitiveness.

AFGC CEO Gary Dawson said competitiveness was the key challenge for Australia’s $114 billion food and grocery processing sector, the largest manufacturing sector in the Australian economy and employer of 300,000 Australians.

“The Industry Innovation and Competitiveness Agenda released today unashamedly backs Australia’s strengths in nominating five growth sectors for the future,” Mr Dawson said.

“Food and agribusiness is one of those growth sectors, with great potential to drive jobs, growth and investment as the mining boom tapers off,” Mr Dawson said. “This comprehensive package encourages a business friendly environment which fosters commercial innovation while also attacking additional costs caused by unnecessary regulatory duplication and complexity,” he said.

“To maximise Australia’s comparative advantage in agribusiness we need to be value-adding here in Australia, turning our high quality agricultural production into high value, premium priced food for the growing middle class markets in Asia and beyond,” Mr Dawson said.

Mr Dawson said the creation of the Food Industry Growth Centre would help drive greater innovation and assist particularly small businesses in accessing and commercialising research breakthroughs.

“It is a key building block for the future growth of the food sector,” Mr Dawson said.

Mr Dawson said the AFGC welcomed the priority areas for action outlined in the Agenda, including:

  • Streamlining of regulatory approvals to avoid Australia “reinventing the wheel” when it comes to internationally accepted regulatory standards;
  • Greater commercial focus in the awarding of research grants; and
  • Increased emphasis on science, mathematics and vocational training that is tailored to business needs;

“The strong emphasis on regulatory reform is also welcome,” Mr Dawson said. “Ongoing regulatory reform that helps reduce the high costs of doing business in Australia is vital for the future competitiveness of trade exposed sectors like food and grocery and essential to boost our trade performance,” he said.

The National Farmers’ Federation (NFF) also welcomed the release of the Industry Innovation and Competitiveness Agenda.

NFF President Brent Finlay said the agenda provided an assessment of the challenges and opportunities that Australian industries will face in coming years, and made recommendations that will help ensure businesses are not only viable, but flourish in a changing global market.

“In particular, the NFF welcomes the announcement of the Government’s Industry Growth Centre Initiative, which will be rolled out from early 2015, to lift competitiveness and productivity by focusing on areas of competitive strength, most notably, food and agribusiness,” Mr Finlay said.

“Going forward, we need to translate these initiatives into action, resulting in a stronger, more innovative farm sector and ensuring that Australian farmers remain competitive in a global environment,” Mr Finlay said.

Agenda “important step along the path of economic reform”, Government

According to the Government, Commodity prices have fallen from their peak in 2011, Government finances have deteriorated significantly since 2008, Australia’s population is ageing and multifactor productivity growth has been flat for a decade.

The Government said the Agenda was an “important step along the path of economic reform”. Its guiding principle was to focus on Australia’s strengths and not prop up poor performers.

The Agenda sets out four ambitions, which the Government said Australia “must pursue to ensure job creation and higher living standards”:

  1. A lower cost, business friendly environment with less regulation, lower taxes and more competitive markets;
  2. A more skilled labour force;
  3. Better economic infrastructure; and
  4. Industry policy that fosters innovation and entrepreneurship.

The Agenda also outlines six initiatives to boost Australian competitiveness. The initiatives will be implemented over the next 18 months.

Encouraging employee share ownership

The Government will change the taxation treatment of Employee Share Schemes to encourage start-ups to attract and retain employees and commercialise good ideas in Australia. The Government will also reverse for all companies the changes made in 2009 to the taxing point for options.

Reforming the vocational education and training sector

The Government will implement reforms to Australia’s Vocational Education and Training (VET) system to give young Australians the best opportunity to get a job.

From 1 July 2015, the Commonwealth Government will invest $200 million each year to establish the new Australian Apprenticeship Support Network to lift apprenticeship completion rates and provide employers with the skilled and productive employees they need to grow their business.

The Government will also trial two training programmes to provide employment pathways for young people.

  • The Government will invest $38 million to provide 7,500 scholarships in specific regional areas where youth unemployment is high, through the Training for Employment Scholarships; and
  • The new Youth Employment Pathway will support community programmes for 3000 disengaged 15-18 year olds in regional areas.

The Australian Government and other COAG members have also highlighted a number of priority actions to achieve a modern and responsive national regulatory system for the VET sector.

Promoting science, technology, engineering and mathematics skills in schools

The Government will implement new measures to promote science, technology, engineering and mathematics skills in Australian schools, including through developing a ‘Mathematics by inquiry’ programme for primary and secondary schools and providing seed funding for an innovation- focused ‘P-TECH’ pilot programme.

Accepting international standards and risk assessments for certain product approvals

Building on the deregulation agenda, the Government will adopt a new principle that Australian regulators should not impose additional requirements beyond those already applied under trusted international regulation, unless it can be demonstrated there is good reason to do so. The Government will review existing regulation against this principle.

Enhancing the 457 and investor visa programmes

The Government will reform the 457 visa programme for skilled migrants, while improving programme integrity to ensure that sponsored workers on 457 visas are a supplement to, and not a substitute for, the local workforce.

Consistent with the recommendations of an Independent Integrity Review, the Government will reform sponsorship requirements; streamline arrangements for existing approved sponsors; reform English language requirements and move to a risk-based approach for compliance and monitoring.

Safeguards will remain in place to ensure that the 457 visa programme is not rorted. It will continue to be a requirement that a foreign worker receives the same market rates and conditions that are paid to an Australian doing the same job in the same workplace.

The Government will also improve the Significant Investor Visa programme by involving Austrade in the process of determining eligible complying investments, aligning qualifying investments with Australia’s five investment priorities and introducing a premium stream for people investing more than $15 million.

Establishing Industry Growth Centres

The Government will provide $188.5 million to fund Industry Growth Centres in five key sectors:

  • food and agribusiness;
  • mining equipment, technology and services;
  • oil, gas and energy resources;
  • medical technologies and pharmaceuticals; and
  • advanced manufacturing sectors.

The Government said these industry-led Centres will foster better use by industry of Australia’s world class researchers so that the community sees stronger commercial returns from the $9.2 billion annual Commonwealth investment in research.

According to the Government, the competitiveness challenge “is an ongoing one”, and further reforms to promote the Agenda’s ambitions will be developed over the longer term. The Government will host a series of roundtables around Australia over coming months to consult the business community, industry associations and peak bodies, as well as academia, on the policy directions outlined in the Competitiveness Agenda.

These sessions will be chaired by ministers and co-chaired by business leaders, including the heads of the Business Council of Australia, ACCI and Infrastructure Partnerships Australia.

Competition review

The Agenda comes shortly after a review of Australia’s competition law and policy was undertaken by a Government review panel. Australian Food News reported in September 2014 that a separate comprehensive review of Australia’s competition laws and policies had been welcomed by industry bodies as ‘the most significant’ review in this area in two decades. The Harper Competition Review Draft Report was prepared by a Panel Chaired by Professor Ian Harper, and also included Sue McCluskey, Michael O’Brien SC, and Peter Anderson. The report builds on the important work of past initiatives, including The Hilmer Review and The Dawson Review. Australian Food News also reported earlier in October 2014 that the ACCC had expressed some concerns about the Harper Review’s recommendations to ‘weaken’ the ACCC.