LIVESTOCK PRODUCTION

The Hon. T.J. STEPHENS (14:54): I seek leave to make a brief explanation before asking the Minister for Agriculture, Food and Fisheries a question regarding livestock production.

Leave granted.

The Hon. T.J. STEPHENS: With water prices increasing from $2.75 per kilolitre in 2011-12 to $3.45 per kilolitre as of 1 July 2012—which I note is almost a tripling of the price from the 2007-08 period—costs for the agricultural industry are on the rise yet again. These increases can be attributed to this Labor government's poor budget management and investment in a superfluously oversized desal plant. Couple these increases with the government's recent decision to lift pastoral leases by up to 230 per cent and many producers in this state are starting to feel the pinch of this government's quest to rake in more money from taxpayers to fix a budget left ruined by a decade of Labor mess.

The agricultural industry is just starting to recover from years of drought, only to be faced by greater financial challenges posed by a government more interested in fixing their budget mistakes than ensuring the viability of our state's livestock industry. My questions are:

1. Given the almost tripled cost of water brought on by this government, what impact does the minister see this extra cost burden on South Australia's agricultural industry having on the viability of running livestock in our state?

2. Will the minister admit that the tripling of water prices, other mounting costs and the government's decision to increase pastoral leases by up to 230 per cent are threatening the ability of livestock operators to bounce back after long years of drought and minimal income?

The PRESIDENT: The minister should disregard a number of opinions in that question.

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (14:56): Thank you, Mr President, and I thank the honourable member for his important questions. Indeed, the livestock industry is a very important industry to South Australia, contributing just over $3.6 billion to South Australia's gross food revenue, which I understand represents an increase of 8 per cent on the previous year.

There is a wide range of cost inputs that affect the industry as well as cost outputs. The industry, like most other areas of primary industry, is subject to the fluctuations of state, national and also global responses. We have seen things like the cost of the Australian dollar, which was very high for some time. It is very pleasing to note that it has come down recently, but that very much impacted on the price of our exports. However, we have also seen, for example, the United States at one time have a huge domestic beef industry and now that that has completely shrivelled and almost disappeared.

The Hon. J.S.L. Dawkins: This is a question about water prices and the South Australian livestock industry, not America's.

The PRESIDENT: Order!

The Hon. G.E. GAGO: I thought we were talking about livestock, Mr President.

The Hon. J.S.L. Dawkins: Yes, we are, and you're talking about America's.

The Hon. G.E. GAGO: The Hon. John Dawkins doesn't realise that beef are livestock at some stage. When they are alive, they are livestock; when they are dead, they are—

The Hon. J.S.L. Dawkins: Dead stock!

The Hon. G.E. GAGO: —dead stock. The Hon. John Dawkins obviously doesn't realise that beef—

The Hon. J.M.A. Lensink: I think he knows a little bit more about it than you.

The Hon. G.E. GAGO: He obviously doesn't know, because he is asking me to talk about livestock—and that's exactly what I am doing. I am talking about all the cost influences and impacts on the viability and sustainability of our livestock industry. The Hon. Terry Stephens seems to suggest that water is the only element that has any impact, and what I am trying to point out is that there is a number of matters that impact on the viability and sustainability of the industry.

It is just a shame they do not get it on that side. They actually do not understand the industry. They do not understand the wide range of different impacts on the industry, domestically, nationally and internationally. They do not realise that in fact we do have an export market that does impact on the price of our beef. As I was pointing out, there is a wide range of different issues that impact on the viability of our livestock industry, and the cost of inputs such as water is only one of those.

The management of our pastures and the cost inputs to those, the ability for us to export and the cost of the dollar all impact on us. The American market, as I said, was a net exporter of beef at one time and now is a net importer of beef. That offers opportunities for the Australian beef industry. So as we see, these things are often cyclic. They rise and fall, as do climatic conditions, opportunities and threats from national and international markets.

I absolutely do acknowledge that at this present time there are many challenges for our livestock industry. In terms of water, the national agreement is that we charge the full cost of water. South Australia is doing that; other states are also doing it. We have high costs in South Australia because we are at the end of the river, and we are the driest state in the driest continent. That has cost impacts on water as well.

As I said, there are many issues that impact on the long-term sustainability of our livestock industry. What we do see are impacts that come and go, that can have a devastating impact one year and the next year we have a plethora of opportunities in front of us when prices come good, and the industry does extremely well.