The PRESIDENT: Pursuant to standing orders the question is: That the motion proceed as business of the House.

Question resolved in the affirmative.

Motion by Mr Ian Cohen agreed to:

That the matter proceed forthwith.

Mr IAN COHEN [2.39 p.m.]: I move:

That, under section 41 of the Interpretation Act 1987, this House disallows the Prevention of Cruelty to Animals (General) Amendment (Laying Fowl) Regulation 2007, published in Government Gazette No. 157, dated 26 October 2007, page 8182, and tabled in this House on 6 November 2007.

The Prevention of Cruelty to Animals (General) Amendment (Laying Fowl) Regulation was introduced to improve conditions for caged hens in the egg production industry. While on the face of it the regulation has been championed as improving the welfare of hens, the increase in cage size is so minimal it is laughable. It amounts to little more than an increase in floor space equivalent to two credit cards per bird. However, this will come at a high cost for egg producers because they are likely to remain entrenched in caged production at a time when many other nations are moving away from this cruel method of egg production to the preferable barn-laid and free-range approaches.

This regulation will entrench the cage-based industry for at least a further 20 years because once farmers invest the money to upgrade cages they will want to hold on to them to recoup their investment. All this will be for such a minimal increase in size as to make virtually no improvement in the quality of life for caged hens. The treatment of caged hens is utterly appalling. As background, I will detail the conditions that caged hens endure for their short lifespan. More than 90 per cent of eggs sold in Australia come from caged birds. Caged eggs come from 10.5 million caged hens in battery farms. A single battery farm can contain thousands of battery hens, stacked in cages five rows high in enclosed sheds.

Battery hens suffer intensely and continuously throughout their lives. A battery hen spends her entire laying life cramped inside a shared cage. She will never see the sky. Each cage holds between three and seven birds. Each hen's floor area is about three-quarters of the size of an A4 piece of paper. With her wings outstretched, a hen is twice the size of the typical battery cage. A battery hen cannot perch, preen, roost, scratch, dust, bathe or spread her wings. Inside the cage it is impossible for her to walk or exercise. She cannot fulfil her most fundamental instinctual drive to lay her eggs in the nest. Hens are so desperate to nest that they will even lay their eggs in the rotting corpses of other chickens.

Stressed and overcrowded hens peck each other; cannibalism can occur. To stop this, a heated blade is used to cut half the upper beak and one-third of the lower beak, but chickens are commonly found with even more savage mutilations to their beaks. This is called debeaking. Debeaking severs the sensitive nerves in the hen's beak. These nerves rarely heal so the hen suffers constantly. Many hens die from ulcers, infections and simple starvation. Half of all chicks born are male. As they are considered useless by the industry they are killed by crushing, mincing or suffocation at one day old. In order to eat, crowded hens push against the wire cages. This rubs off their feathers, leaving raw spots on their necks, chest and other tender areas. These sore spots are pecked, ripped and easily infected.

In a natural environment a hen's claws are worn down from walking. As battery hens never have the opportunity of walking, their claws grow long, sometimes curling under the wire floor, making movement impossible. A battery or caged hen must spend her whole life trying to stabilise on wire flooring. As the result of confinement and overproduction of eggs, caged hens develop extremely brittle bones. In cages, bones break easily and frequently. By the time hens are finally slaughtered, many are unable to stand and 56 per cent of them have untreated bone breakages and fractures. To produce more eggs, artificial lighting is used to trick hens into unnatural laying cycles. This increases prolapse and tumours, and produces acute calcium deficiency. Eventually the hen's body is weakened, and many hens do not survive.

In a battery or caged farm hens past their laying peak are considered useless. In a natural environment a hen lives for 10 years; a battery hen will be spent at around a year old. Hens past peak laying are dragged from their cages, stuffed into crates and trucked to slaughter. There they are hung upside down on a conveyor belt to wait for slaughter. Their remains will be used for pet food and soup stock. So what do the Government's changes to battery cage requirements in Australia mean? Not much. The increase literally amounts to an extra surface area the size of two credit cards per hen. As a result of increasing public concern about the use of battery caging in Australia and international developments, in 1999-2000 there was a political consideration about the future of egg layer hen welfare and particularly about the future of battery caging.

At a meeting in 2000 State and Territory Ministers made the decision that they would not ban battery cages; nor would they signal a phase-out date. Instead, the Ministers made a series of decisions related to enforcing more modern cage design and phasing in a slightly larger space per hen in cages. These initiatives were subsequently translated into a fourth edition of the Model Code of Practice for the Welfare of Animals—Poultry. Australia is far behind other developed countries with respect to the welfare of egg laying poultry. For example, Sweden, Finland, Switzerland and Norway have banned battery cages. European Union countries are phasing them out, and they will be banned by 2012—announced in 1999—and since 2003 all battery caged hens in Europe have had to have a minimum of 550 square centimetres each.

Battery cages are due to be banned across the European Union from 2012 under the Laying Hens Directive, but the egg industry and many member states are keen to see this delayed by up to 10 years. In a recent answer to a parliamentary question, the United Kingdom Government confirmed that it would support the implementation date of 2012 in European Union discussions. This week it has gone even further by stating that the ban will come into force in the United Kingdom in 2012, whatever happens across the rest of Europe. Last month in the United Kingdom, Lord Rooker announced at the egg and poultry industry conference that the United Kingdom ban on battery cages will go ahead despite opposition from the egg industry.

Consumers are increasingly demanding barn-laid and free-range eggs. The National Breast Cancer Foundation has pulled its Pink Ribbon (Battery) Eggs Campaign. It has asked egg producers to remove its logo from future boxes of caged eggs. Further, the foundation will no longer accept any money from the sale of caged eggs. The majority of Australian citizens will support the freeing of hens from battery cages, and be willing to pay a few cents more for their eggs when it will achieve a better quality of life for hens. A report recently found that for the first time British consumers are eating more eggs laid by free chickens than by battery farmed birds. Sales of free-range, barn-laid and organic eggs from chickens allowed to roam outdoors accounted for just over 50 per cent of total sales last year—a huge turnaround from five years previously.

It is one of the most startling illustrations of how the trend towards buying ethical food is bringing huge changes to the food industry. Sainsbury's announced this year that it planned to phase out battery eggs by 2012. Given the complete absence of the battery cage system in Switzerland since 1992 and moves already underway in European Union countries to phase out battery cages, to stay behind the pace of such reforms in Australia may have the reverse effect of having our community feel its country has failed to keep up with raised animal welfare expectations that are now so routinely accepted in the developed world. Recent scientific research published in the Veterinary Record found that eggs from battery cages were significantly more likely to carry salmonella than free-range or organic eggs. Some 23.4 per cent of caged hens tested positive for salmonella, compared to 4.4 per cent in organic flocks and 6.5 per cent in free-range flocks.

In August 1998 the Federal Government's independent Productivity Commission was given the task of examining the implications of Australian Capital Territory legislation regarding caged eggs. This was the first time an animal welfare law had been subjected to this test in Australia. The Productivity Commission report's major findings were: first, that a ban on the use of battery cage systems would lead to improved hen welfare, particularly in the longer term; secondly, that the cost to each Australian Capital Territory resident of phasing out the use of battery cages in the Australian Capital Territory is estimated to be no more than $2.85 per person per year, diminishing as the ban progresses; thirdly, that the benefits of the legislative amendments relating to labelling, to assist consumers in their choice of eggs from various systems, outweigh the costs; and, fourthly, that the Australian Capital Territory Government should seek a second exemption to the Mutual Recognition Act in order to make the labelling requirements, of eggs produced from various systems and sold in the Australian Capital Territory, and their consequences even more effective.

The Greens strongly support the phase-out of battery-cage egg production. The regulation will simply entrench the use of caged egg production at a time when the world-wide trend is away from such a cruel method of production. The regulation provides for extremely minimal increases in the size of the cages with negligible welfare improvements, while, at the same time, costs will drive out small producers and lead to an even greater monopolisation of the industry.

I have great concerns about that monopolisation. The Government is working with a powerful but small sector of the industry that has control. Disallowance of the regulation will have no effect on those in the industry who have already made the transformation to modern-style battery cages; they still produce eggs. If their method is so effective, they will still make their fair share of profits. However, the disallowance is designed essentially to cut out competition and to assist what one would see colloquially as the big end of town. The regulation is socially unfair, it is inhumane in terms of animal welfare, and it impacts very significantly on the small producers who make up 20 per cent of egg producers in New South Wales. I commend the motion to the House.

The Hon. RICK COLLESS [2.51 p.m.]: I speak on behalf of the Opposition to the motion to disallow the Prevention of Cruelty to Animals (General) Amendment (Laying Fowl) Regulation 2007. I congratulate Mr Ian Cohen on moving this motion because some parts of the regulation must be addressed. It is very poorly constructed; some of its paragraphs are confusing, ambiguous and difficult to understand. For example, paragraph 17H (2) states that the floor area requirement for cages containing one laying fowl is to be 1,000 square centimetres if the laying fowl weighs 4.5 kilograms or less. I do not know a lot about chooks but I know that a 4.5 kilogram chook is a very big chook! My colleague in another place the member for Orange, a former poultry producer, advised me that the average size of a laying fowl is 1.6 kilograms, which is nothing like 4.5 kilograms. The nonsense in the regulation continues. Paragraph 17H (1) states:

(b) if the laying fowl weighs more than 4.5 kilograms, the area is calculated by allowing

(i) 1 square metre for each 26 kilograms of the total weight of the fowl in the cage,

The regulation implies that some chooks weigh as much as 26 kilograms. I have yet to see that. The term "laying fowl" is identified in the regulation with the species name Gallus gallus. I have yet to see a chook that weighs 4.5 kilograms, let alone 26 kilograms—even chooks that are bred for meat production. A supermarket size 8 frozen chicken weighs 1.8 kilograms, and that is the dressed weight. For cattle the general rule of thumb is that the dressed weight of a carcass is about 50 per cent of the live weight. I am not sure what the situation is for chickens, but if the same calculation were to apply, the live weight of a 1.8 kilogram frozen chicken would be of the order of 3.0 kilograms—which is still a lot less than 4.5 kilograms, and a hell of a lot less than 26 kilograms.

The introduction of a revised cage design for laying fowls has polarised the egg industry in New South Wales, with two very distinct camps having two very distinct views on the introduction of the regulation. The larger egg producers, who collectively make up approximately 20 per cent of egg producers, produce about 80 per cent of eggs. They are generally in favour of the new regulation and, in fact, many of them are already compliant. However, others in that category had held off redesigning their farms pending the gazettal of the regulation, for very good reasons. Installing new cages is expensive and the new regulation guarantees that newly installed cages will be able to be used for at least 20 years from the date of installation without further interference from animal welfare zealots who believe that cages should be banned for all birds.

Some producers have been unwilling to commit to that expense until such time as their right to continue their operations has been confirmed by the gazettal of the regulation. In that regard I support the gazettal of the regulation to give those producers the 20-year guarantee that they require. On the other hand, smaller producers comprise approximately 80 per cent of egg producers but produce only about 20 per cent of eggs. They are in a far more difficult position. Those small producers now face a huge expense relative to the large producers, as they are unable to secure the economies of scale that the larger producers are able to secure, and the comparative cost of recaging is higher, potentially forcing many of the smaller producers out of business.

The Minister should strive to achieve the best possible welfare conditions for caged birds and the most secure future for large and small producers in the industry. The regulation appears to fail on two grounds. I have serious doubts about the best possible outcomes for caged birds and about the best possible outcomes for the smaller producers in the industry. The regulation provides that older cages, those installed prior to 1 January 2001, may continue to be used until they are 20 years old. It is my view that such cages should be used indefinitely as long as animal welfare conditions are met. My point is that many of the smaller producers say that they can modify their older cages to improve the animal welfare conditions, and, in many cases, give their birds an improved welfare condition provided by the newly designed stacked battery cages that have been introduced.

The smaller egg producers wish to have the regulation modified to remove subparagraphs (2) and (3) of paragraph 17E, which will remove the restrictions on cages that require sections of the cages to be less than 40 centimetres in height. This component of the regulation seems to be directed at the smaller producers to prevent them from using such cages, even though the producers are more than happy to reconfigure the cages to meet the new requirements with respect to floor area, feeding and drinking points, and support for forward-pointing toes of all birds in a cage. Such reconfiguring would improve animal welfare conditions for the birds, and as the cages are singularly mounted, rather than multi-stacked, the birds will be able to stretch their heads through the top of the cages to more comfortably swallow their feed and water. This ability to comfortably feed and drink when coupled with the other requirements would indicate to any sensible, practical person that such conditions would mean that birds in the cages would be far less stressed than if they had to twist their necks to eat and drink.

The second amendment that is favoured by smaller egg producers is for the doors to the cages to be a minimum of 22 centimetres wide and 20 centimetres high, rather than the full width of the cage or a minimum of 50 entimetres. That also makes good logical sense as a door that is as wide as the full width of a cage will make it extremely difficult for workers to get birds in and out of a cage safely, and will encourage—or even compel—workers to pick up three or four birds at a time, by one leg each, and force them into the cage. Such handling could damage the birds, causing broken legs and other serious injury. If workers attempt to load birds individually, the birds already in a cage will attempt to jump out as workers attempt to load the next one. Narrower cage openings will prevent that from happening.

I ask the Minister to give an undertaking in the House to amend the regulation to include these changes, as we undertake not to agree to the disallowance motion. This will allow the larger producers to obtain the guarantees they seek and will allow the smaller producers to get on with their business, which they can continue to make viable. At the very least, the Minister should give an undertaking that the smaller egg producers will not be forced out by the introduction of this regulation.

The Hon. ROBERT BROWN [2.59 p.m.]: I support the disallowance motion moved by my colleague Mr Ian Cohen. I will not read out the motion or refer to all the changes to the regulation that are required by small producers as my colleague the Hon. Rick Colless covered those items. I am pleased that the Hon. Rick Colless gave the Minister a way out by seeking from him an assurance that 40 families will not be put out of business. After all, we are talking only about 40 families. It is unconscionable that this Labor Government, which purports to support small business in outer regional areas of Sydney—a Labor heartland area—wants to put at risk 40 family businesses by refusing to make a few small amendments to this regulation. The Shooters Party is so opposed to the continuance of the regulation as it stands that I even agreed to a joint press conference with Animal Liberation New South Wales and the Greens—a very unusual position for the Shooters Party to take.

The Hon. Marie Ficarra: A new alliance.

The Hon. ROBERT BROWN: Yes, a new alliance. When I first became a member of this House small producers approached me, voiced their concerns and showed me photographs that demonstrated the relative animal welfare attributes of their small single-layer cages and the cages proposed by these changes. I understand that fully automated cages are imported from Europe—they are not made in Australia—and they cost about $40 per bird, or about $250 a cage. To ensure that production is viable using these facilities, producers have to keep about eight birds in each cage, and they have to be kept under a low light for extended periods to ensure that they do not cannibalise. The New South Wales Farmers Association made representations to me and presented me with some scientific data to try to repudiate some of the claims that I just made. However, the evidence did not impress me.

I looked at photographs of relative scheme layouts. The proposed regulation requires small single-layer cages to be replaced with multilayer cages, about seven feet in height. As those cages will be located in long sheds where there is forced ventilation rather than natural ventilation a power failure could result in the death of 100,000 birds on a hot day. The inspection procedures to be followed by the operators of large automated cages is much more difficult than the procedures that are followed by small family-owned farms where birds are inspected daily and all the birds can be seen with a passing glance. No-one has to get down on his or her hands or use a torch to look at the back of the cages to establish whether or not there are dead or injured birds.

Generally speaking, the Shooters Party was extremely dissatisfied with the response level from the RSPCA. I wrote to the RSPCA and asked it why it supported the continuance of this regulation, given that it has commercial arrangements with some of these large producers, but the answer that I received was nonsensical. The RSPCA is supposed to look after the rights of animals, in particular, the rights of battery hens. The Shooters Party does not necessarily support immediate changes to the egg industry to require egg producers to supply only barn-laid or open-range eggs, as that just will not happen. There is a market for eggs that are produced by battery hens. As the Hon. Rick Colless said, 20 per cent of farmers control about 80 per cent of the market and they have made investments upwards of $1 million.

It is not the intention of the Shooters Party to disadvantage the big producers. In fact, the installation of automated cages should increase their productivity and, therefore, give them a price advantage over smaller producers. But smaller producers must be allowed to continue their family businesses; we cannot just wipe them out because of a few words in a regulation. The Government said that this regulation is necessary to comply with national standards. We can comply with national standards and, at the same time, enable small farmers to adjust to an industry change. Some of these small farmers are being forced to invest $200,000, $300,000, $600,000 or more to change their cages, which is unconscionable.

Forty small egg producers require this Government to step up to the plate, admit that it has received bad advice, and admit that the advice has not been thorough. The Government must ensure that producers will not be disadvantaged by this regulation. If I do not receive an assurance from the Minister that he will deal satisfactorily with those 40 small farmers, the Shooters Party will support the disallowance motion moved by Mr Ian Cohen. I congratulate Mr Ian Cohen on moving this motion.

The Hon. IAN MACDONALD (Minister for Primary Industries, Minister for Energy, Minister for Mineral Resources, and Minister for State Development) [3.05 p.m.]: I will deal in some detail first with the motion moved by Mr Ian Cohen and then respond to the comments made by the Hon. Rick Colless and the Hon. Robert Brown. The Government opposes the motion moved by Mr Ian Cohen. We have to be careful with a motion of this type. Inherent in what the honourable member is suggesting is a continuing cloud of uncertainty for an important industry in New South Wales. This would have negative flow-on effects for the people of this State, and consumers and other secondary industries would suffer. Consumers and secondary industries rely on a steady supply of eggs and egg products for their wellbeing.

The layer hen industry in New South Wales, which is not an insignificant industry, has a gross farm gate value of $115 million. The Government fully appreciates the importance of a productive and viable layer hen industry in this State. The tactic of the Greens is to shift the focus away from the facts. A thorough review process and lengthy deliberations led to changes to the Prevention of Cruelty to Animals (General) Amendment (Laying Fowl) Regulation 2007. The Greens seek to substitute some emotional arguments for the facts. As I have said, there is a long and significant history to the changes that will be introduced by this regulation.

It is important for honourable members to understand the extent of the consideration, consultation and discussion that have taken place in developing this regulation. Discussion occurred at both a national level and a State level to develop new standards that this regulation will introduce. The regulation arises from agreements that the Agriculture and Resource Management Council of Australia and New Zealand made in 2000 and 2001 to change the housing requirements of layer hens. The Agriculture and Resource Management Council of Australia and New Zealand, the predecessor of the Primary Industries Ministerial Council, comprised agricultural Ministers from Australian State and Territory governments and the New Zealand Government.

In 1999 the council oversaw a review of the conventional cages and alternative layer hen housing systems. The outcome of that review was presented in a report entitled "Review of Layer Hen Housing and Labelling of Eggs in Australia" that was released in 2000. The review observed:

Any evaluation of layer hen housing quickly leads to the realisation that this is a complex matter.

Mr Ian Cohen seeks to oversimplify a complex matter by presenting only some of the facts. He also seeks to distract us further from the facts by using scare tactics and by presenting emotive arguments. The report entitled "Review of Layer Hen Housing and Labelling of Eggs in Australia" emphasised what a complex matter this is by stating:

Appropriate layer hen housing embraces a range of diverse issues including [of course] hen welfare [which includes hen health], production costs, food safety, occupational health and safety and environmental issues. In evaluating the acceptability of different types of layer hen housing systems, different people place different emphasis on the relative importance of the aspects listed above. Trying to identify a middle ground on these issues is difficult and there is no easy way forward.

The outcome of the review resulted in all members of council agreeing—that is, all members of the ministerial council—to measures to improve significantly the welfare of caged layer hens by increasing the size of the cages and the conditions in which they were kept.

One of these measures was the requirement that all cage systems commissioned after 1 January 2001 provide a minimum floor space of 550 square centimetres per bird. This new standard is reflected in the regulation and is a 25 per cent improvement on the requirements under the old code—the Model Code of Practice for the Welfare of Animals: Domestic Poultry 1995. The old code required a floor space of 450 square centimetres. It is unrealistic and irresponsible to pretend that a majority of egg production could come from uncaged hens.

As the review report stated at the time, 91 per cent of the national commercial flock of layer hens are kept in cages. It is important also to understand that layer hens kept in cages suffer from much lower levels of parasitic infections, such as coccidiosis and roundworm, compared to hens kept in sheds or barns. Mortality rates generally are lower in cage systems. It is difficult to understand that disease as a welfare concern frequently is overlooked by some groups in our community. Many other additional issues are generated in the cage system, such as lower levels of feather pecking, lower incidence of other diseases, and biosecurity.

This regulation was developed in close consultation with industry and the community and will bring New South Wales into line with other States. I assure the House that these standards were not dreamt up in a vacuum and were not plucked out of thin air. Not only do these new standards reflect national agreements, but also the New South Wales Government established a Layer Hen Welfare Reform Committee in 2005. The Government established the committee over two years ago to assist in the development of standards and to ensure that industry was aware these changes were coming, although I believe everyone in the industry knew from 2000-01 that the changes were coming and what they were.

The committee is made up of members representing large and small producers, the New South Wales Farmers' Association, the RSPCA and the Department of Primary Industries. I now provide some specific details of the new regulation. The Prevention of Cruelty to Animals (General) Amendment (Laying Fowl) Regulation 2007 will take effect from 1 January 2008. The clear objective of the regulation is to improve the welfare of poultry kept for commercial egg production in New South Wales. The regulation does this by changing the rules governing the dimensions of layer hen cages. It provides for more extensive and improved requirements for cage floor sizes, cage heights and size of cage doors. The regulation provides also new standards for stock density, that is, minimum cage sizes, and welfare inspections.

The regulation goes a step further and specifies minimum standards for laying hens kept in sheds, in particular in relation to food and water, the size of nests and nest boxes, the height of sheds and the number of hens that can be kept in a particular area. The regulation is not just about caged hens: it covers barn hens as well. It introduces also standards to improve the welfare of hens kept in multideck structures. In particular, producers will be required to ensure that an assessment of the animals' welfare can be undertaken and that animals in lower cages are protected from those in cages above them. This regulation is not just about size issues relevant to caged hens, it deals also with structures and barn hens.

Indeed, the House should note that under the new regulation any producer who keeps layer hens in a cage or a non-caged structure, such as a shed, will be obliged legally to visually inspect their animals every 24 hours to ensure their welfare. This is an important requirement. It will be an offence to contravene this new obligation. The minimum cage size requirements that have applied since 1995 will continue to apply to cages installed before 1 January 2001, but only until those cages are 20 years old. Contrary to what the Greens would have us believe, the new regulation strikes a balance between enhancing the welfare of layer hens in New South Wales and maintaining a viable layer hen industry in order to guarantee a steady and reliable supply of eggs for the people of this State.

This reasonable proposal will provide certainty for the industry by establishing clear standards and providing a defined path to the implementation of improved standards. Investment in new layer hen production facilities, including cages, is expensive—no question about that. As the review report stated in 2000, and the New South Wales Government endorses completely, industry requires as much certainty as possible in policies set by governments. Uncertainty about long-term standards for cages will discourage industry and financial institutions from investing in new systems. It is important to understand that industry has to deliver these two standards. The regulation sets out the new standards clearly and the time frames in which they must be implemented. The new regulation provides certainty for industry. Everyone knows clearly what they have to comply with in the future. I put on record also my efforts to gain support for a national egg industry restructure package. At the May 2004 meeting of the Primary Industries Ministerial Council I put forward the issue of structural adjustment payments to egg producers. I made the following request:

[the] standing committee to examine the option to provide structural adjustment assistance to those egg producers whose cages do not meet the 1995 Code of Practice and are being required to dispose of, or substantially modify, those cages before they reach their imputed economic life (up to 30 years or more in many cases), and who are staying in the industry and are upgrading or have upgraded their cages to meet the 2008 requirements. This would include consideration of assistance being provided through the establishment of a national levy on the retail price of eggs, collected at the wholesale level as proposed by the Australian egg industry.

I repeatedly pressed the previous Federal Minister for Agriculture, Fisheries and Forestry, the Hon. Peter McGauran, and previously Mr Warren Truss, to provide funding for a restructure package. At the April 2006 meeting of the Primary Industries Ministerial Council I again pressed the Minister to provide structural adjustment support, but without success. The Australian Egg Corporation Limited has acknowledged my role in lobbying for a national egg industry restructure package.

The Government is committed to ensuring that industry understands the new standards. To this end the Department of Primary Industries is developing a comprehensive communication strategy in partnership with the Layer Hen Housing Reform Committee, some of whose members have spoken to members of this House or people associated with them. We will make sure that all parts of the industry understand the new requirements. In addition, the department is recruiting an industry development officer to assist industry to adjust to the new standards. It will have an environmental engineer also to provide technical advice to producers about options for new cage installation.

Given the diversity of views on this issue—this motion is evidence of that diversity—the New South Wales Government is committed, along with other States, to introducing the standards agreed to by agriculture Ministers. Victoria and Queensland also have implemented legislation needed to deliver the agreed standards of the Agriculture and Resource Management Council of Australia and New Zealand. These States also are working towards introducing the new standards by 1 January 2008. The standards in this regulation deliver on the Government's commitment with the Commonwealth and other States to meet the 1 January 2008 implementation date.

I want to say something about the program we are embarking on by employing an officer and technical officer to assist the industry. I am prepared to give the House the commitment that we will not pursue the small number of family businesses and businesses that do not meet this regulation. We want to work with the industry to find ways for businesses to become compliant over time—that is why we are employing people. It is regrettable that structural adjustment is not available to assist the way industry has met this change. We must remember that now over 80 per cent of eggs come from complying businesses.

[Interruption]

It is not that figure. The figure is more 50:50. I give the House the undertaking that I will raise this issue at the next Primary Industries Ministerial Council meeting to see if we can get a breakthrough on structural adjustment. In the meantime we will deal with each individual business and undertake an education and development program to be managed by the officers we employ, but the regulation does not constitute a rush to force out small businesses. We know we will need a close working relationship with them to ensure we reach a satisfactory resolution, and that will not include prosecutions. We will work with family and small businesses to reach a level of compliance.

[Interruption]

I do not propose to amend the regulation without discussing that at a national level. The Government made a commitment at a national level. Since 2001 we have maintained a clear commitment to implementing the regulation by 1 January 2008. The regulation complies with a national commitment, although some States are tougher. [Time expired.]

Reverend the Hon. FRED NILE [3.20 p.m.]: The Christian Democratic Party shares concerns expressed by other speakers, particularly the Hon. Robert Brown who represents the Shooters Party, about the 40 small operators who are affected by the regulation. I seek an assurance from the Government that it will allow the small operators to continue in business. At a number of meetings with the Christian Democratic Party the small operators indicated a preparedness to adjust the cages to comply with the regulation, but not to the extent of spending $600,000 or $1 million—money which they do not have—to install a completely new set of cages that will be stacked seven cages high.

I should mention that from the photographs we in the Christian Democratic Party have seen, the new cages seem to be less humane than the old ones. It is strange that the new cages, which are the result of lobbying to improve the welfare of hens, seem to be less humane than the superseded ones. However, that is another issue. The concern of the Christian Democratic Party is for the 40 smaller operators. Just as the old cages seem to be more humane than the new ones, from my observations the new ones seem to be designed to facilitate mass production rather than improve the welfare of hens. I note that the Government has indicated it will not prosecute small operators during the lead-time but rather will work with them, and that its intention is to genuinely give those operators time to make adjustments to the cages to avoid their spending a huge amount of money to install brand-new cages. The smaller operators contend that they can easily adjust the old cages to effect compliance.

Adjustments will cost between $200,000 and $300,000, but the small producers are prepared to spend that sort of money if they can obtain an assurance from the Government that, when the adjustments are made, the cages will not be declared illegal and ordered to be scrapped and replaced with brand-new cages. That assurance is not exactly the response the Christian Democratic Party had hoped for: I had hoped the Minister would agree to amend the regulation to reach a compromise with the 40 small operators. The Minister's alternative offer is to refrain from undertaking prosecutions, but I do not know whether that will be satisfactory from the small operators' point of view because the proposition only now has been announced in the House. I will have further discussions with the small operators to decide whether that proposition is acceptable to them. In the meantime, I accept the Minister's assurance that he will allow the smaller operators to keep operating in our State.

Mr IAN COHEN [3.23 p.m.], in reply: I thank all members who participated in the debate that certainly has thrown further light on the issue. I express my disappointment at not being able to persuade the Minister to act in a more constructive fashion. Part of the debate showed clearly that large producers, who are better resourced and who have the ear of Government, have made themselves compliant and are well on their way. They can cope with this change in the structure of the industry and their only problem currently is the smaller producers—the small but irritating legitimate competition. The regulation will knock out that small sector of competition.

It is a well-established fact that the new cages are imported and are expensive. This change to the industry represents a loss of jobs in New South Wales and the compulsory purchase of expensive imported goods to effect compliance with the changeover. Small producers have offered to recondition their cages because that is a cheaper alternative for them. That will provide them with greater flexibility in the future, should there be further restructuring and the possibility of compensatory funding being provided by the Federal Government, which may present an opportunity for them to phase in a different form of production, either cage or barn-laid production, in the future.

As a member of the Greens, I am certainly not happy with hens being in cages, but it must be said that the current cages and reconditioned cages allow the hens to stretch out their heads. I believe the current cages are more humane than the new cages, particularly as they allow the hens to feed and drink. While I am not happy with the cage style of egg production, it is important to recognise the advantages of the older-style cages. The new cages will be multilayered. The roofs of each cage will act as conveyor belts instead of having open wiring. The hens will not be able to stretch even as much as they are able to stretch in the current cages, so it has to be said that the new cages create a greater propensity for cruelty and difficulty in conditions endured by the animals. I do not accept that the new cages are more humane.

Moreover the multilayered cages will be much more difficult to inspect than are the current cages. Inspections must take place every 24 hours. Does the Minister really think that a worker who understandably has become desensitised to the welfare of hens kept in cage-production conditions will check every cage each day? I do not think so. I do not think a worker will be climbing a ladder to inspect a cage at the top of a stack of seven cages, nor bending down to inspect the hens in the cages at the bottom of the stacks.

The Hon. Robert Brown: It is not so hard for the smaller producers.

Mr IAN COHEN: As the Hon. Robert Brown interjects, small producers have cages on one level and that arrangement facilitates a greater opportunity for inspection. That is a really big issue that needs to be addressed, particularly as it also involves conditions for workers. It is very likely that workers will not carry out adequate inspections under the new arrangements.

I am not convinced that the Minister's undertaking really protects the smaller egg producers. The RSPCA has failed in the context of animal welfare and has produced a very poor response to this issue. It is obvious that the RSPCA has a commercial arrangement with larger producers. In those circumstances, the RSPCA is not the appropriate body to assess the circumstances of production in this particular case. I understand that other members do not necessarily look toward barn-laid eggs as a solution to the problem: we must agree to disagree on that. However, I suggest that if they support the disallowance and adopt a more flexible attitude in dealing with this problem, they will create a choice for producers, particularly smaller producers, to either adopt barn-laid egg production or apply for funding to adopt a more modern technique, and in all other respects also will create greater flexibility for producers.

The Minister claims there is a cloud of uncertainty surrounding the disallowance of the regulation. Why does he make that claim? I do not regard the disallowance as creating increased uncertainty for the larger players, except perhaps for the uncertainty associated with awaiting an outcome. The larger players are pretty well set up for monopolistic practice in this industry. As with so many other industries, the Government supports big business against the smaller players that will result in aggregation of the industry. I predict that the industry will become stuck with battery hen production against the wishes of the public. The most recent Federal election demonstrated that public opinion is generally far ahead of the views of politicians. The public wants free range and barn-laid eggs as well as reasonable conditions for animals used for egg production and for the supply of other products for human consumption.

A general convention is beginning to emerge that happier and healthier animals kept in good conditions result in quality products in the market and that that in turn results in better quality food for consumption by the general population. I believe the multi-deck structures will cause inspection problems and not enhance the welfare of birds. I stand by the position I have outlined. It is appropriate and timely to make a change that will benefit many producers in the industry, particularly small producers, and the condition of birds. We need a more flexible system in future. I have received letters from some of the major food outlets that are extremely interested in production methods. They are concerned that their customers require a certain level of ethical responsibility, which this motion addresses. It responds to community feeling that we must act to protect both our smaller producers and the welfare of birds to make the industry more acceptable to consumers. I commend my disallowance motion to the House.

Question—That the motion be agreed to—put.

The House divided. Question resolved in the negative.

Motion negatived.