KIELY, Mr Aaron, President, Queensland Farmers' Federation [by audio link] SHEPPARD, Ms Jo, Chief Executive Officer, Queensland Farmers' Federation [by audio link] CHAIR: We will resume this public hearing and also open the subcommittee. I now call on representatives from the Queensland Farmers' Federation to give evidence. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective Houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard, attracts parliamentary privilege and is being broadcast live. I now invite you to make a brief opening statement before we proceed to discussion. Ms Sheppard : Thank you. Firstly, I just wanted to put on record how important the role of councils is for agriculture, for the supply chain and for the community. In order to be strong as a sector and to successfully be able to operate an agricultural business, ag really needs a strong community and appropriate and good infrastructure. In relation to the community, particularly in the current workforce shortage that we have, the livability of communities in the regions is absolutely critical in terms of farming enterprises being able to attract and retain skilled staff, so councils are absolutely critical to the future success of the ag sector here in Queensland, particularly as we are Australia's most decentralised state. The councils play a really strong role. We are concerned about the current and future viability of councils across Queensland. We have seen pressure increasing on councils across the state, particularly in relation to cost shifting that's taken place over the last probably two decades. Local government has been for many years calling for an increase in the allocation of funding through the Financial Assistance Grants. As a percentage of federal taxation revenue, funding from the federal government has decreased from 0.76 per cent to 0.57 per cent in recent years, which is really putting pressure on councils' ability to deliver the services and the infrastructure that they need. For a long time, we've been supporting councils in their call for increases to untied federal government funding. We are also concerned that councils, moving forward, in Queensland need to receive the appropriate support for disaster response and preparedness, from both a funding perspective and also an infrastructure perspective, and not just in relation to roads and connectivity, which is obviously critical, but also in relation to flood monitoring, Early Warning Network, local disaster dashboards and those types of things that really do support communities and councils during disaster time. We are really concerned about the current proposed changes to disaster recovery and funding arrangements from the federal government and the impact that will have on Queensland councils, as Queensland is the most disaster impacted state in Australia. Obviously, councils play a really important role in relation to the road network, and we are concerned that changes to funding may result in some of that support actually being reduced rather than increased. Probably the last thing I would say in the opening statement is that, in Queensland in particular, we are seeing a lot of changes to land use. The councils are doing their very best in terms of local government planning to appropriately manage these changes in land use. But it's really difficult at a local level because we do have a lack of visibility over the changes in land use as they take place. Currently, there's no way that a council can have a look at their current land use in their LGA in detail today or in 12 months' time, have a look at the changes that have been taking place and do a bit of an economic social analysis around whether the changing land use is good, bad or indifferent for the community and then inform their planning processes. I think that's the other area that is providing some angst for councils and certainly for the ag sector as well, and they need support in that. That concludes my opening statement. I'm happy to take questions. CHAIR: Thank you very much for appearing before the committee. In your previous submission—and, indeed, you touched on it in your opening submission as well—you noted that farmers rely on strong local councils and local infrastructure. Could you tell us more about which council services are most critical to agricultural productivity and how these council services are also supported by the state government? Ms Sheppard : Mr Kiely may also have a response after I've finished. I think roads and connectivity infrastructure are absolutely critical for the ag sector. Obviously, we're very reliant on moving product in and out in terms of the way our enterprises operate. A lot of the roads that connect farming enterprises to the more significant state and federal highways are local roads. With the increased development activity in regions, we have seen some deterioration in terms of the standard of these roads. In Queensland, for instance, we've got a significant renewable development rollout and other developments rolling out, which is seeing increased traffic on the roads. That certainly is absolutely critical. I understand that there are shared funding models in terms of all road infrastructure, in terms of what are federal roads, state roads and local roads. The state certainly does play a role in terms of assisting with funding but also maintaining the state roads, which are a critical part of the network. As a former mayor myself, I know the funding that councils receive from the federal government used to be called the Roads to Recovery grants—the untied roads grants where councils have the opportunity to actually prioritise or make their own decisions around which roads are a priority for their LGA network. That is absolutely invaluable. But I think moving forward what we would like to see is a really strong relationship between the federal government, the state government and local councils in terms of road infrastructure, with some long-term strategic planning, which is then backed up by long-term investment rather than bursts of funding, whether that comes from the feds or from the state, which is 12 months worth of funding or three years worth of funding. I think if we could get to a point where there's a real partnership between the three levels of government out longer term—10 to 15 years—so that we're actually really putting a dent in making improvements to what are quite sizeable road infrastructure networks, that would be really good. Before I see if Mr Kiely's got anything to add, I'd also like to point to the community services that councils deliver, which are really important for agriculture. The livability of the community is vital so that we can attract and retain a strong workforce, and also the supply chain that farmers rely on can also attract and retain workforce so that the whole ecosystem is strong. I think sometimes it's overlooked how many services local councils do actually provide to their local community which are critical to us from that perspective. I think, again, a shared model could make some improvements in that space in terms of making it longer term between the state, the feds and local councils, but also recognising that, for some of the regional, remote and rural areas, one size does not fit all. So having the flexibility around being open to working through different delivery models that work in different locations, I think, would also be useful. I don't know if Mr Kiely's got anything to add. Mr Kiely : No, you touched on most of the things fairly closely there, but definitely the local road networks to supply agricultural product, which is a broad range of products and diversity of products, is—definitely, that's something that needs to be worked out. Livability in these councils is something to retain workforce, which is getting harder and harder to get out in these areas. CHAIR: I'm just going to ask a follow-up question on that. Do you have regular contact with your councils about the needs of your members when it comes to some of the issues for farmers on our roads? Do you have similar engagement with the state government about their priorities for maintenance investment in road and community infrastructure across the region? Ms Sheppard : The short answer would be yes. Councils tend to have their own way in which they engage, but QFF has a strong relationship with the sector generally. We work very closely with LGAQ in terms of strategic priorities, but we also have very strong relationships with particularly some of the councils that have a lot of agriculture in their region. We have a strong level of engagement there, and we also are very strongly engaged with the state government in terms of a whole range of issues that are important to agriculture, but certainly roads is something that we're in discussions with state government on regularly. The state government, for instance, has the Bruce Highway Advisory Council, which Mr Kiely and I sit on as representatives for QFF. That's a state government engagement which is looking at the future of the Bruce Highway, which is a really important part of the road network for agriculture. It's really pleasing to see the joint funding approach between the feds and the state on that piece of infrastructure. Sorry, that's a long answer, but the short answer is yes. CHAIR: Following on from that, do you see more opportunities for better coordination between Commonwealth, state and local governments in supporting rural communities? Ms Sheppard : Yes, definitely. I definitely think there's some wiggle room there, and that's where we could really get some early wins if we could streamline and get better at or be more effective in how we engage with the feds, the state and local councils together, all in one room and with a longer term view, identifying the priorities but then collectively committing to what needs to be done strategically but also from an investment perspective. CHAIR: I'm assuming that's across not just roads but also community infrastructure and services. Would that be correct? Ms Sheppard : Yes, that would be correct. I'll use child care as an example. The child care model doesn't necessarily suit the needs of many regional and rural communities and certainly agriculture in terms of the hours of operation and the general inflexibility of the model in terms of shift working or weekend work and that sort of thing. So you could think about child care as an example and how we might be able to make improvements there in terms of making sure that model suits rural and regional Australia and agriculture. Then, if the feds, the state and the local councils could work together on a service just like that, I think we would really be able to get some effective outcomes on the ground. I think not all of it is around funding. Some of it is actually around delivery models. CHAIR: Thank you. I will hand to Ms Penfold. Ms PENFOLD: Thank you, Ms Sheppard and Mr Kiely. My first question is: what are the most significant signs that financial pressures on councils are affecting agricultural productivity? Ms Sheppard : Thank you for the question. I'll just answered in the first bit, and Mr Kiely might have something to follow on with. I think one of the things that we have been seeing in agriculture is the increased rate burden that's been passed on to all ratepayers but predominantly the farming sector. One of the reasons that contributes to that is the financial pressures that councils are now under in terms of the cost shifting. Their costs are going up extraordinarily and the amount of services that they're providing and the expectations around that are growing, but there's a disproportionate increase in terms of their funding allocation. That then shifts a lot of pressure onto ratepayers having to fill that gap. On-farm costs or input costs have gone up significantly over the last eight to 10 years, and rate increases are definitely a significant part of that story. But, in terms of the road network, that has a direct impact on productivity for agriculture. Getting our product onto farm, but also off farm to market, is absolutely fundamental. We're highly reliant on the transport logistics sector. When they're doing well, that helps us. When they're struggling—as we've seen recently with the fuel crisis—and when there's pressure on that sector, that then passes pressure onto our sector. If roads are not keeping up with demand, that certainly has a direct impact on our productivity from a safety perspective but also from a productivity perspective in terms of the time it takes to get product on and off your property, the volume of loads and roads, but also bridge networks. We've got an issue in Queensland, which no doubt you're familiar with, in the Bremer bridge, which has only been able to take half the weight that it could be taking for some time now, and work's underway on that bridge at the moment to address that. But they're the types of examples that can speak to the direct impact it does have on our productivity. I don't know if Mr Kiely's got anything else to add. Mr Kiely : Just to add to that, the transport network is the key—when we're talking input costs, we're talking damage to transport vehicles and just getting that infrastructure always tidied up. Once the costs aren't there, they're falling apart. So that's one of our key—moving large amounts of products through wet seasons and dry seasons. That's a lot of damage there. That's all I've got to add there. Ms PENFOLD: What about with regard to biosecurity? Is there any cost shifting onto local governments in Queensland in terms of managing biosecurity risks? Ms Sheppard : That's a great question. In Queensland, we're expecting the risks of biosecurity to increase by fourfold over the next decade. That's largely due to two factors. One is changing climates and new storm and wind activity coming from Asia into Northern Australia and North Queensland. But it's also directly relating to the significant increase in development in the regions in Queensland and just that sheer volume of increased movement. Local governments have a key role to play in terms of biosecurity responsibilities but also weed and pest management. I think, as a nation, that area of activity has been underfunded for many years. If you take just a pest like wild pigs, for instance, we are simply unable, at the moment, to get on top of that problem, and it's a real problem for agriculture, for the environment, for tourism and for local communities. I think often councils are looked to to provide the lead on a lot of these management issues that are not adequately funded. I think councils actually are in the box seat to provide a really coordinating role on the ground for a lot of our biosecurity requirements, but they're just not adequately funded to do that. In terms of additional funding, yes, but I think there's also an opportunity for us to look at a different delivery model in terms of where the bottlenecks are occurring, sometimes at a federal level, sometimes at a state level, and where local councils actually might be better placed to deliver, but they need to be funded to do so. I also think that, in relation to biosecurity, if we are to stay ahead of these risks, if they're increasing fourfold, which we all should be very concerned about, the three levels of government need to work really well together and closely with industry to drive engagement in sectors that aren't agriculture, because often biosecurity is sort of seen as a risk for agriculture and also a responsibility of agriculture. But somehow we need to engage a whole of community, whole of industry response to all businesses understanding that biosecurity actually is a risk to their business and there are things that they can do to protect their own business, which collectively then will point to stronger biosecurity protections for the whole of Queensland and Australia. But if we can't get that collective engagement, I think it's really going to be tough for us to keep ahead of the risks if we're relying on the old ways of doing things. Ms PENFOLD: Thank you very much. CHAIR: I just have a couple of last questions. In your view, to what extent do labour shortages affect both farming businesses and local councils? What are you seeing? Ms Sheppard : As I think Mr Kiely referred to before, we are still in the grip of a quite severe workforce shortage directly impacting agriculture but also, I would say, most businesses across Australia and certainly businesses in regional communities, which have an added challenge because of their geographical isolation. For agriculture, particularly in some sectors, I think it's important to understand that there are nuances and differences depending on what your enterprise looks like. For an industry like horticulture, which is heavily reliant on a casualised workforce and previously heavily reliant on international workers, visa arrangements working well and the backpacker scheme et cetera, they are really under a lot of pressure in the current environment. We've seen some federal IR reforms that are seeing a move away from casualised workforces. We've seen changes to visa schemes and changes to working holiday-makers, which are all really negatively impacting an industry like horticulture and making it really difficult for them to be able to attract and retain the workforce that they need, which is seasonal. Agriculture certainly is feeling the pressure of the workforce shortage, and regional communities definitely are as well. Getting back to the attraction and retention piece, for an ag business that's operating in a region, if you're successfully being able to recruit and attract someone to fill a role in your organisation but they may have a spouse who's also looking for work, and they may have children who are also in need of child care, if the local community can't respond to the spouse's workforce needs and also the child care for the children, it makes it really incredibly difficult for that farming enterprise to retain that worker. I think that, even though the workforce challenge is Australia wide, businesses in regional communities definitely have the added challenge of the geographical factor. When we think about workforce solutions and particularly visa programs et cetera, again, one size will not fit all. We have to actually think strategically: how can we attract some of that workforce that we're accessing to actually be motivated and want to go and work in the regions or in agriculture, particularly with overseas workers or holiday-makers? They will potentially have heard of Sydney, they may have heard of Cairns, they may have heard of the Gold Coast, but they certainly haven't heard of Quilpie or Emerald or Mareeba. They're simply not aware of the workforce opportunities that are available in those regions and the great enhancement of their experience actually working in that part of Australia could make for them. So I think we need to be really aware of that. I think also that technology has a critical role to play now. Years ago we were sometimes fearful of technology and automation taking people out of jobs, whereas I feel most businesses you talk to now, because they're unable to find people to take jobs, are really embracing technology where it can help them to remain globally competitive and be able to get their operations done. We need to be more targeted in terms of how we are adopting technology. This could be a federal, state, local government and industry partnership approach. But I think we need to look at sectors and look at those jobs that are really able to be automated or able to be supported by technology and we need to accelerate that, because there's a whole range of jobs across the supply chain that actually can't be automated and need people to do them. I'm thinking about things like child care and aged care. We need to free up the people that we have for those jobs that can't be automated. If we took a strategic approach to targeting the roles that really are ripe for the picking in terms of automation and make that happen and accelerate it, that will then free up people to take on the jobs that we need people for, because I think there's an awareness, and I certainly believe, that we just actually don't have enough people. I think that's definitely an approach that we could take. I don't know if Mr Kiely has anything to add. Mr Kiely : Just to add into that, one of the key issues with agriculture is that medium to high-level management. We talk about our backpackers or overseas workers, but it's also the people to bring into rural Australia to be able to manage these people as properties are growing larger. The medium to high-level management is one key issue there. Ms Sheppard touched on it as well—technology is a key to adapting to this. It's taking away from a long-term employee, but it is bringing or giving opportunity to other roles in technology, which is not all hands-on skill on farm. CHAIR: I'm just curious. Obviously, you're very familiar with the PALM scheme*--**the Pacific Australian labour market scheme—which is a scheme that since coming to government we've obviously expanded. In my area, obviously, in terms of agriculture, it's supporting vital farmers and farming businesses, but it's also supporting and working in aged care. We've extended it. Have you come across that scheme in use in Queensland? Ms Sheppard : Yes, we're familiar with the PALM scheme. Some parts of agriculture are utilising the PALM scheme, which is great. No scheme is perfect, and the PALM scheme isn't perfect, but it is providing some solutions. What I would say as positive feedback and constructive feedback is that, to really have an impact, the PALM scheme tends to be too narrow and in some instances not flexible enough to meet the needs of many agricultural businesses. It doesn't cater fully to the wide range of skills which Mr Kiely just referred to that agriculture is actually needing. So, yes, the PALM scheme, but the PALM scheme alone is not enough. I think we need to throw our net a lot broader. We need to think about other partnerships and other countries, and we also need to think about the very wide range of skills that we need in agriculture. Yes, we have shortages in on-farm workers in terms of production, picking and harvesting and whatnot, but we have a plethora of skills that we have a shortage for, so we're going to—we can't just rely on the PALM scheme. We need to cast our net a lot wider, think about the wide range of skills and also think about, again, one size won't fit all. We need to think about the needs of the different parts of businesses in agriculture and also in rural communities and make sure that we've got schemes that are catering to those specific needs. CHAIR: Thank you. I wasn't suggesting it was the only one. It's obviously a very important tool in the many different schemes and things to support. I have just one last question to wrap up. What are your two or three key recommendations to the federal government on what could be done to improve the fiscal sustainability of local governments in Australia? Ms Sheppard : The absolute No. 1 action that I would recommend is that the federal government increase untied federal government funding to at least one per cent of Commonwealth tax revenue. I know councils and industry have been calling on that for some time and that remains the key priority. The second one would be that the federal government make sure that they're providing appropriate support for disaster response and preparedness. As I mentioned earlier, we are concerned about the proposed change in funding model currently being reviewed, particularly for Queensland. Queensland is Australia's most disaster impacted state. We cop about 60 per cent of the disasters in Australia, which also means that we disproportionately are impacted by the economic impact of those disasters. While, yes, it's true that everyone in Australia is impacted by disasters at some time, here in Queensland we are disproportionately impacted in comparison to the rest of the country. I hope that's going to be reflected in the funding model because, if it's not, that is going to apply extraordinary pressure to local councils but also to industry and certainly to the ag sector. The third thing I would say is on visibility regarding changing land use. I think this is really important, and I think it's something that, collectively, we've been overlooking probably until now. In Queensland, we're seeing changing land use happen at a rate of knots. Demand for land in Queensland is really high. So we've got things to think through, and, for food security and food production, prime agricultural land is one of those considerations. At the moment, it's very difficult because we are flying blind, to a certain degree, in terms of having visibility around that land use change. There's no easy way that a mayor or a council or a premier or a prime minister or an industry person can look at an LGA and see the current land use and then, in 12 months time, look at the change in land use and then do a bit of an economic and social study on whether that changing land use is good, bad or indifferent, which could then inform land use planning and policy at a federal, state and local level. So I think that, if we could all work together on creating a tool that can provide us with visibility around the changing land use so that we can be informed in terms of how we manage that, that would be really important, not just for every level of government—and certainly for councils—but for making sure that we're managing land, which is a finite resource, in an appropriate way for the good of future generations. CHAIR: Great. Thank you. Just to finish, I know you touched on disaster funding arrangements, but I just wanted to say that, obviously, the federal government will continue to work in partnership with the states and territories. It's really important reform to make the process simpler and faster for councils to navigate. Councils have really told us that the current disaster funding arrangements are just too slow and complex, so we want to be able to speed that process up so councils aren't out of pocket. I need to conclude there, but I just want to thank you very much for your attendance today. It has been very, very useful and helpful for the committee. You will be sent a copy of the transcript of your evidence and will have an opportunity to request corrections to transcription errors. Subc ommittee adjourned at 14:50