By Matt Keogh MP

27 October 2020

Watch Matt's Speech here

I rise today to speak in favour of this bill. I also move an amendment to the second reading that has been circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House expresses concerns over deficiencies in the bill, including:

(1) that the bill provides the Minister with powers to create new measures without proper parliamentary scrutiny;

(2) while the bill fixes concerns raised by the sector and Federal Labor over two years ago, it has taken too long to be enacted, causing uncertainty for Australian manufacturers; and

(3) despite the Prime Minister and the Minister often citing the importance of Australian manufacturing, their proposal in the bill to require a bar chart on complementary medicines will hinder, if not deter, manufacturers from keeping their production processes in Australia".

Labor has been calling for the government to address the issue that has caused great uncertainty in the complementary medicine sector since 2017. It took more than a year for the Minister for Industry, Science and Technology to respond to Labor's calls and act to stop an industry worth over $5 billion to the Australian economy from being forced offshore, which would put close to 30,000 jobs at risk.

The delay in addressing the definition of substantial transformation, so that manufacturers could claim safe harbour provisions when making Australian made claims, caused much uncertainty in the complementary medicines industry. While this bill will address the issue of what constitutes substantial transformation, it is the proposed information standards and regulations that will follow the passage of this bill that have created new uncertainty about the impact this will have on Australian manufacturers, particularly the requirement to include a bar chart stating the percentage of Australian ingredients.

The industry is calling for the regulation amendment that has already been introduced to be maintained and that no further action in relation to the information standards and regulations is required. Many of the companies affected have made significant investments in manufacturing in this country, including Sanofi's $40 million investment in their Brisbane manufacturing facility. Household names like Blackmores, Swisse, Nature Zone Health and Cenovis were all affected by the previous dithering and delay by the government. This requirement will have further detrimental effects.

While the interim regulations were welcomed by these and other companies, several of them have raised concerns regarding the requirement for complementary medicines to be required to display a bar chart on their packaging that displays the breakdown of Australian ingredients. Specifically Blackmores, in their submission on country of origin labelling, said: 'To be very clear from the outset, the proposed changes will damage a thriving Australian industry and hurt Australian jobs.' Further, they noted that the changes are unnecessary and unjustified. Despite the minister's often repeated aim of reducing red tape, this regulatory burden is unnecessary in an already heavily regulated sector and it demonstrates, as always with this government, that they are all announcement and no follow-up.

The requirement for a bar chart was introduced for food and beverages following the importation of contaminated berries from overseas that caused a hepatitis A outbreak. This was the right thing to do. However, it is unnecessary for the same requirement to now be placed on complementary medicines. Complementary medicines are regulated by the Therapeutic Goods Administration and are therapeutic medicines. They are manufactured in state-of-the-art facilities under the strict manufacturing protocols that apply to the manufacture of pharmaceuticals. This is Australian high-end manufacturing. The nature of complementary medicine manufacture means that certain ingredients are sourced from different parts of the world depending on seasons and supply chains. Many of these ingredients are not grown or produced in Australia. So whilst they may have to be imported the value-adding by transformation of those ingredients is worth $5 billion to the Australian economy every year.

To require manufacturers to display this bar chart means that many will have to assess their raw product and change their labels for each batch, depending on where they can source ingredients from time to time. This is a costly and cumbersome imposition, considering the economies of scale that are involved in preparing labelling. Blackmores have already had to change their labels due to a change in TGA regulation and that cost $7 million. The bar chart requirement would mean they, and all affected manufacturers, would have to scrap those labels and have to spend a considerable amount of money to comply with the proposed regulations.

The submission to the country of origin labelling for complementary medicines has claimed, 'The proposed changes will damage a thriving Australian industry and hurt Australian jobs.' This is one of the few manufacturing industries in Australia that isn't currently declining, so you would that think this government would be doing everything to protect it. But it was only on Sunday that we learned that less than three per cent of the funding slated in the budget for Australian manufacturing will be spent this financial year. COVID-19 has already demonstrated why we need a strong, sovereign manufacturing supply chain here in Australia. Let's not put that at risk. These changes are unnecessary, and the government should listen to the industry and not proceed with the requirement to add the bar chart.

The Australian Made logo gives our manufacturers a competitive edge, especially in Asian markets. Some manufacturers have said that, if, due to the regulatory hassle and the added cost of the bar chart, they aren't able to claim that their products are being made in Australia, they see no benefit to retaining their local manufacturing operations. This is a government putting in place regulations that will literally drive Australian manufacturing offshore.

When the complementary medicines industry and federal Labor first raised the prospect of many of our manufacturers potentially losing their 'made in Australia' status, Minister Andrews stated that the industry 'should be assured that I'm doing all that I can to assist'. Well, here is an easy fix that will assist industry, and the minister can do it today to give this important sector of our economy the confidence that they can continue to operate as they have under the interim operations introduced this year. By not prioritising the issue of country-of-origin labelling when Labor first raised it, the government has hurt Australian manufacturers, workers and consumers. By dragging its feet on this, the government puts close to 30,000 jobs at risk in a $5 billion industry.

The complementary medicines industry has said clearly and loudly that this requirement is not only necessary but potentially dangerous. These products already require strict dosage and duration controls, and, as I said earlier, they're already regulated by the TGA. Australia is one of the few countries in the world that regulate complementary medicines as a therapeutic good. If the government doesn't make that distinction between complementary medicines and food, at the very least it should class them as the same as highly processed foods, such as food for special medical purposes, and exempt them from the bar chart regulation.

Australian products that can claim to be made in Australia have a significant competitive advantage internationally, and we should guard the integrity of that scheme. But the bar chart requirement will prove costly and burdensome, with no benefit. The government's lackadaisical approach to these matters puts a multibillion dollar industry at risk. Australians agree we need to support our manufacturing industries even more than we are now, and even the government is saying this. But the government must now deliver, not just show up for the photo op.

The DEPUTY SPEAKER ( Dr Gillespie ): Is the amendment seconded?