Economic and Finance Committee: Essential Production and Supply Chain Security in the Context of Emergency Circumstances in South Australia

Mr COWDREY (Colton) (11:35): I move:

That the ninth report of the committee, entitled 'Inquiry into essential production and supply chain security in the context of emergency circumstances in South Australia', be noted.

On 13 May 2020, the Economic and Finance Committee resolved to investigate this issue, primarily in light of the COVID-19 pandemic and, to a lesser extent, the 2019-20 bushfires. However, the inquiry sought to safeguard continuity of essential production and supply chains during other potential emergency circumstances in the future.

Between 23 September 2020 and 31 March 2021, the committee received 16 written submissions and heard evidence from 32 witnesses at nine hearings. In February 2021, the committee was privileged to conduct one of those hearings in Mount Gambier to help understand the perspective of the Limestone Coast community. The committee also conducted site visits to the Woolworths Adelaide Regional Distribution Centre at Gepps Cross, on 21 October 2020, and the Kimberley-Clark Mill at Millicent, on 9 February 2021.

The committee heard evidence from essential producers in the forestry, viticulture, horticulture, livestock, dairy, seafood and pharmaceutical industries. Supply chains that supported essential producers by freighting, distributing or selling products also contributed to the inquiry. Community-based organisations from the Limestone Coast Region, the Local Government Association, Regional Development Australia Limestone Coast and other business groups also described the experience of cross-border communities living and working under emergency directions and restrictions.

The lack of serious issues encountered during this inquiry is an absolute testament to the South Australian business community's resilience, resourcefulness and cooperation during the pandemic. One of the most important outcomes of the inquiry was the way that South Australians turned the negative situation of a major emergency into positive benefits for essential producers, businesses and their supply chains. I felt great pride in hearing local success stories of profitable new commercial opportunities, particularly using e-commerce as an alternative retail strategy. The committee also learnt of new partnerships as like-minded businesses from different industries shared their knowledge, skills and resources on new ventures.

The inquiry examined the impacts of emergency directions, such as the border closures, on South Australian exports, imports, freight, retail, distribution, inventories and the labour force. The committee found that prior to the COVID-19 pandemic many South Australian businesses relied heavily on international and interstate export and import markets. The pandemic exposed this over-reliance as a vulnerability when businesses lost access to the markets that underpinned their supply chains and revenue streams.

Overall, the transport and logistics industry adapted well to emergency circumstances due to its flexibility, adaptability of transport modes and heavily regulated environment. However, businesses relying on airfreight to transport products were heavily affected by increased costs and fewer flights. Some businesses benefited from collaborations with the federal government to subsidise international airfreight.

Supermarket retailers provided evidence that they could not always meet unprecedented consumer demand for popular items, such as toilet paper. The committee found goods shortages to be caused by panic buying rather than due to retailer or distributor supply chain issues. The COVID-19 pandemic also highlighted supply shortages in the pharmaceutical industry. Classification of essential sectors, travellers and workers under emergency directions was a major issue for businesses, as it determined who could work during lockdowns and cross borders with relative ease to undertake tasks such as servicing equipment or managing contracts.

Border closures at times thinned recruitment pools, as international and interstate employment markets closed to South Australian primary producers, particularly in the viticultural industry. Regional businesses experienced many of the same impacts as metropolitan businesses, but the COVID-19 pandemic brought a unique set of challenges for our cross-border communities.

During our visit to the Limestone Coast in the South-East, the committee listened to the experiences of people with economic and social interests spanning the South Australian and Victorian border. We heard time and time again from businesses that the pandemic exacerbated existing difficulties attracting and retaining labour in the area and that jobs, from the technical to the unskilled, often remained unfilled, partly due to a lack of affordable housing.

The inquiry highlighted that the way the South Australian government implemented its emergency directives also at times impacted essential producers and supply chains. Hearing firsthand from those businesses about how emergency directions were communicated and delivered was instrumental to the success of this inquiry.

The committee made 35 findings and 11 recommendations in its report to address these issues. To counter over-reliance on outside markets, the committee recommends encouraging businesses to diversify into a broad range of export and import markets. It recommends continuing access to successful road and freight collaborations with the federal government and other jurisdictions.

A recommendation to establish a retail supermarket task force with representation from all major and independent supermarket operators is aimed at coordinating responses to panic buying and other sudden changes to supply or demand. A recommendation to review the national medical stockpile will encourage greater sovereign capability in pharmaceutical manufacturing.

The committee dedicates three recommendations towards the easing of pressure on regional South Australia: firstly, to consider measures to address the labour supply issues exacerbated by both national and domestic border closures and a lack of affordable housing; secondly, to consider limiting the geographical scope of future emergency directions; and, thirdly, to consider working with the Victorian government to create and implement border bubbles to minimise the impact of border closures on businesses and communities straddling both states.

As Presiding Member, I believe these recommendations will futureproof essential producers and our supply chains against emergency circumstances. More importantly, they will help us to ensure that South Australians continue to receive their food and medicine, that businesses continue to operate and transport their goods to and from markets and that vacant jobs will stand a better chance of being filled.

On behalf of the committee, I would like to extend my gratitude to the organisations, the businesses and community groups that submitted evidence to the inquiry. I would also like to thank the witnesses who travelled to Parliament House or presented evidence to the committee via teleconference. I would particularly like to extend my gratitude to the local businesses and groups that devoted time from their busy schedules to present evidence at our hearing in Mount Gambier. This regional perspective was absolutely invaluable to the committee's findings.

I do note that, while not primarily involved in the issue of the China tariff regarding wine, this was something that certainly was addressed through many submissions to the inquiry. It was an issue that interlaid and overlapped many of the discussions that we had. It is important to recognise that as we note this report.

It is also important to note that since the finalisation of the report there has been an emerging issue in regard to timber shortages within the construction industry. Obviously, the committee is only able to identify and report on issues that were ventilated through the committee process and that existed at the time. I note that the South Australian government is working constructively with the relevant stakeholders within those industries to address that issue.

Can I thank the members of the committee on the government side, the members for Chaffey, Schubert and Newland, and on the opposition side, the members for Enfield, Lee and Wright, for their contributions to the committee during this inquiry. I also thank our secretariat who do a fantastic job both in ensuring that the committee is able to hold hearings without any issues but also for their research and good work in ensuring that we continue to present the best possible information for this parliament to consider. With those remarks, I recommend that the parliament adopt and note this report of the Economic and Finance Committee.

Ms MICHAELS (Enfield) (11:45): I rise briefly to support the comments by the member for Colton and show my appreciation to him and my fellow committee members for putting this report together. I also want to thank Dr Jo Hocking and Adam Marafioti for their support in preparing the report. It showed the resilience of South Australian businesses through bushfires and COVID. Through the recommendations we picked up a number of issues particularly affecting regional South Australian businesses, including the housing shortage in regional South Australia and labour supply issues. As the member for Colton said, the China issue was raised, and it will continue to have an ongoing effect on South Australian businesses. We hope that matter is resolved promptly.

I want to express my appreciation to all the South Australian businesses who adapted through the bushfires and particularly through COVID and who managed to get us through to the point that we are at now. Again, I commend the report to the house and thank the member for Colton for bringing it to us.

Mr COWDREY (Colton) (11:46): Quite simply, I thank the member for Enfield for her contribution to the debate today. I think it is an incredibly important point to make, and it is important to end on this note, that the resilience of our South Australian small business owners through this period has been unprecedented. Their dedication and commitment to ensuring that their small businesses continue to support both their employees and, in general, the economy of this state makes them very truly the backbone of our economy. Their work during this period is well respected on all sides of this house.

Motion carried.

Mr COWDREY: Mr Speaker, I draw your attention to the state of the house.

A quorum having been formed: