| |
Presentation to the Australian Dairy Council AGM
Patrick
Musgrave
6 December 2000
Melbourne Park Function Centre
Introduction
Thankyou Chairman for the opportunity to provide this address. I am pleased
to be able to report on the operations of the Dairy Adjustment Authority,
and bring you up to date with the implementation of the Dairy Structural
Adjustment Program over the past nine months.
The DAA was established in April this year with the sole purpose of administering
the Dairy Structural Adjustment Program. We have no responsibility for,
nor are involved in, the deregulation of the dairy industry. Our initial
task was to make sure that dairy farmers had the opportunity to apply
for a DSAP entitlement. Currently, we have to make sure that the right
entitlements are paid to the right people into the right bank accounts.
I repeat, the DAA was established only in April this year. Although my
predecessor as Chairman and the government member had been appointed a
little earlier, the other Board members only started in April. There were
at that time a few DAA staff in Canberra working with the government member
but there were no dedicated staff in Melbourne.
These were the only arrangements in place for a programme of which the
original intention was that payments might start to farmers as soon as
practicable after the dairy industry deregulation of 1 July. As you will
appreciate, there has been a huge, almost impossible, time pressure on
the DAA right from the start and this has had a major impact on our activities.
In view of the enormous task ahead of us we enlisted specialist service
providers to work with us. The most important requirement of the DAA was
the establishment of a comprehensive database which would accommodate
the variety of dairy industry structures across Australia.
The Australian Dairy Corporation had already been requested by the Government
to set up an appropriate database. The ADC had also engaged a specialist
computer company to help design the system that would deal with the many
types of calculations of entitlements which were foreseen. Some 30000
applicants were expected to apply for DSAP payments.
Despite the fact that the ADC had already started on the project, the
development and testing of the computer system ran late and the first
processing stage was not running until late June. This presented us with
a number of difficulties, not the least being that we could not use the
system to generate letters to dairy farmers, acknowledging receipt of
their applications.
We had no choice but to develop very quickly alternative systems. This
generated new difficulties, not only in managing the acknowledgment process
outside the main system, but also in ensuring that what was done was ultimately
reconciled when loaded into the main computer system.
Because of the delays in contacting many farmers, we received before the
cut-off date many duplicate applications which generated further administrative
headaches in terms of changes to the computer system to deal with such
duplicates.
The impact on the DAA of the delay in delivery of the computer system
was huge and the effects continued throughout further processing stages.
We put a lot of work into finalising the application form in consultation
with industry leaders. In the booklet accompanying the application form
we clearly outlined our expected timetable leading up to payments commencing
to farmers in October. This was at that time the earliest realistic date
given the complexity of the project and the late start.
A Call Centre was set up, which we termed the DAA Help Line, which has
matured throughout the program and has provided an important service that
has helped the DAA staff to concentrate on processing applications. We
have logged nearly 50,000 calls at the Call Centre, running at around
two hundred calls per day for most of the time, and more than double this
during peak times.
Another challenge was that we commenced the DSAP programme knowing that
throughout the early months the legislation was likely to change. The
last amendment was only made in August of this year, so we were initially
operating under some uncertainties.
A significant part of our job has been to ensure that the expectations
of dairy farmers, industry leaders, government and many others were met.
We had to be confident that the systems we established would do the job.
Yet we had nothing to test them on. Starting from scratch meant that we
had to learn as we went.
We were obviously cautious, and for good reason. There were 30,000 dairy
farmers with extremely high expectations, to whom we had to deliver entitlements
worth tens of thousands of dollars. It was in this environment that the
DAA had to remain completely objective, stay out of the deregulation debates,
and operate strictly in accordance with the legislation that was established
for us.
To help us ensure that this was the case, we engaged a leading law firm
and a leading firm of auditors who gave us their independent advice. They
both ensured that the procedures we were using were consistent with the
legislation, and also ensured that once the procedures were established,
that we stuck to them.
In the main, all of our service providers have done their best to satisfy
our needs, and throughout the process we worked with them to establish
better procedures - not only for us, but procedures and standards of delivery
that set new levels for them as well. If this meant that we suffered some
criticism for at times not meeting everyone's earlier expectations, then
we accept that. But we defend our actions on the basis that we would be
ultimately providing an improved level of service for dairy farmers.
I have emphasised the complexity of the DAA's task. To help you understand
what we had to put into place, I now want to show you a short presentation.
This presentation is 664Kb or takes approximately 180 seconds on a 28.8k
modem to download.
AGM
PRESENTATION
Requires Macromedia Shockwave Player - Version 8.
Click
here to download Macromedia Shockwave 8 Player
So where are we now?
[Slide No 1 - Timeline Diagram]
Let's look at the original timeline that was announced to dairy farmers
at the start of the program. It starts with the establishment of the DAA
in April this year, and runs through the application submission stage,
to where we are now, processing applications, sending out Notices of Decision,
and more importantly, making payments.
In our blue information booklet issued in May, we stated that "applicants
with straightforward claims are likely to receive their first payments
in the last quarter of this year." This will happen. We said payments
would begin in October and they did.
It is important to note that those dairy farmers who have not returned
their Farm Business Assessment declaration forms will have to do so before
19 February.
[Slide No 2 - Graph of cumulative mailings of Notices of Decision]
In this slide you can see that we commenced mailing Notices of Decision
back in September. The bulk of the early mailings were for owner-operators,
which made up by far the majority of the straightforward applications.
Clearly, you can see that the initial 16,000 were relatively straightforward
to process, and we did them in good time.
The graph shows the ongoing effort required now to finalise the remainder.
[Slide No 3 - Graph of Status of Processing]
In total we have completed the processing of 24,000
Notices of Decision. As of today, we have paid 12,560 dairy farmers. There
are another 3,660 whom we could pay today, had we received back their
bank account details and other declaration forms.
There are 7,780 for whom the 28 days has not yet elapsed, and if they
have returned all their forms, they will be paid accordingly. We are targeting
to pay more than 50% of dairy farmers before Christmas.
We have some 6,000 still to process, of which 1,000 are in the extremely
difficult category, principally because of legal proceedings or issues
arising from deceased estates. Processing of these could run well into
the New Year.
The other 5,000 are requiring significant effort and are mainly made up
of complex ownership structures and/or ongoing problems with the information
initially provided in the application form. We aim to clear these by the
end of January.
In some cases, dairy farmers might have amended their form, or sent in
a duplicate form with different details, which in our system generated
a second application. We have an exhaustive process that ensures that
only correct applications proceed to completion, and it does take time.
It requires that we check all forms with the dairy farmer, with any changes
to be approved in writing. A form that is incomplete in anyway is automatically
prevented from being finalised and is required to go through another round
of processing.
[Slide No 4 - Table of DSAP payments made, by State]
As of this week around $42 million has been disbursed to 12,560 dairy
farmers across the country. These State figures show the number of farmers
paid in each State.
[Slide No 5 - Complex processing issues]
I indicated earlier that a significant number of applications were associated
with more complicated processing issues. A brief summary of these issues
is shown here. Early on, we found a substantial number of applications
had something wrong with them - ranging from missing signatures, to conflicting
information on milk revenue shares.
More than 2,500 requests for further information were sent out, and many
phone calls were made to clarify minor problems. Other requests have required
written confirmation and statutory declarations to be provided.
Outstanding quota issues have caused us some problems in some States,
and finally, there are some extremely complex dairy business structures
out there, with numerous entities involved, which we have to fully understand
before we can finalise their DSAP calculations.
It is heartening for the DAA, that of the entitlements granted so far,
there have only been a minimal number of requests for a review of our
decisions. I believe this says a lot about the integrity of our systems
and the procedures we have used.
[Slide No 6 - The payment processing timeline]
This slide gives an indication of some of the time frames for DSAP entitlement
and payment processing. It shows how a request for further information
in September, and a request for a review of our decision in November,
may cause the payment date to extend out to January next year.
In September the request for further information is sent to the dairy
farmer, who has 28 days in which to respond, and given that this happens
on schedule, and the information is provided and can be verified, the
Notice of Decision can be sent out in late October. There may be a request
for a review, which would defer the first payment date until January.
Otherwise, under this time line, the dairy farmer would have been paid
around the beginning of December. These dates are only indicative and
only show one of many possible cases.
[Slide No 7 - Title Screen]
This brings you up-to-date with our progress. I would now like to talk
about what we will be doing in the immediate future.
We are endeavouring to increase the rate of processing the difficult applications
by putting on more processing staff.
We have enhanced the facilities of the call centre to deal directly with
queries.
We're telephoning dairy farmers who have not returned their bank account
details or other forms, encouraging them to do so. This will increase
the rate at which entitlements can be listed on the Register, and actual
payments can be made.
All the processes are in place that will allow any appeals and requests
for review to be processed as we receive them, and I should point out
that the legislation allows for up to 60 days for the DAA to review a
decision should we be requested to do so. In the cases considered so far,
we are addressing these in much less than 60 days.
So let me summarise to conclude. We have completed the processing of 24,000
and have paid 12,560. We're still waiting for 3,660 farmers to return
their bank account details and other declaration forms, 7,780 are in the
system waiting for the 28 days to elapse, and we have around 6,000 still
to process.
We have increased the rate of processing, and procedures are in place
to allow the remainder of processing to continue without delay.
Finally, let me thank you again for this opportunity to review our progress.
I would like to finish by affirming my appreciation of the staff at the
DAA and my fellow Board members. They have offered themselves unreservedly
to the task and I want to thank each of them for their dedication. When
the nation was engrossed in football grand finals and the Olympics, our
staff continued processing applications, often well into the night and
at weekends. I am pleased that we were able to engage such a dedicated
team for what is essentially a short-term position.
I also would like to thank the dairy industry organisations and particularly
the Australian Dairy Industry Council for providing us with advice over
this period, and making their valuable knowledge available to us.
Thank you for your attention.
|
AGM
Presentation 