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Tuesday, 17 February 1987
Page: 123


Mr LINDSAY —Will the Minister for Primary Industry inform the House about the recent discussions he had in Europe and Asia on the Australian proposals to resolve the crisis in international agricultural trade?


Mr KERIN —The interjections from members of the Opposition during the Prime Minister's answer to the previous question indicate yet again their absolute intellectual incapacity to cope with the fact that we have a massive balance of payments problem due fundamentally to the corruption of agricultural markets and also-

Opposition members-Ha, ha!


Mr KERIN —Opposition members laugh. The problem is due fundamentally to the corruption of agricultural markets and also declining markets for mineral exports. That is the principal economic problem this country has today. The reason we are in this situation is basically the policies of the present Opposition over 30 years. They have left us in a situation in which we cannot capitalise on the fast growing areas of international trade. So we are expecting two sectors which have declining terms of trade-they have had that for a long time-to carry the whole external account. That is the problem we have. All the Opposition offers, if it offers anything, are a few quick-fix populist solutions. It has no real solutions. The Deputy Leader of the National Party wants to send a delegation to Washington with a begging bowl, and that is about the Opposition's policy on trade. All the Liberal Party Opposition-we will not call it a coalition any more-wants to do is to slap down wages by up to 60 per cent, and it believes that in that way we can become more competitive. It agrees with the New Right. It wants an average wage of $173. It says it agrees with everything that Joh says, but it really does not.

What the Prime Minister put forward at Davos was a practical, politically feasible, range of options and proposals that could have some effect in dealing with the terrible problem we face with the corruption of world agricultural commodity trade. The seven proposals involve a commitment to hold the subsidy escalation and to freeze and progressively to reduce the gap between administered internal prices and international market prices for farm products. There are elements of freeze in the European Economic Community today, such as the Commission's proposals on farm prices. There are also elements of freeze in the commitments made by Japan and the United States. Those elements are there due to the work being done by Ministers in this Government.

The second part of the Prime Minister's proposals was an early reduction in internal administered producer prices. We believe that we need to get action and we believe that the seven economic summit countries should provide the leadership. I say that without the efforts of the Australian Government President Reagan's proposal on agricultural policy, which is now on the floor of the Congress, would not have taken the form it did, because it proposed a 10 per cent cut in target prices over the next three years, and that will reduce the price adjustment gap that the Prime Minister has focused on with his proposal.

The third element of the proposal refers to stocks. If we can get commitment and political action we can do something about responsible stock management and remove these great stock overhangs for the market. The fourth part of the Prime Minister's proposals refers to decoupling, so that policies which are attacking the problems of European agriculture, such as rural amenity, the environment, social distress and regional problems, are decoupled from farm policies themselves that centre on production units. The fifth point refers to principles for agricultural policy. We believe that the work that is being done by officials in the Australian Government, as well as by Ministers in the Organisation for Economic Co-operation and Development, will provide the basis for setting forth those principles. That will take place in May of this year at the Organisation for Economic Co-operation and Development ministerial meeting.

If we work hard and get those things together we will get an accord regarding international agricultural reform at the economic summit in Venice, and that will prepare the way for the negotiations in the Uruguay round under the Multilateral Trade Negotiations.

I can say to this House that the Prime Minister's proposals were welcomed, that the analysis was agreed to, and that they have had a major impact on opinion leaders in the Western World. In my journey to Europe, where I spoke with people such as Sir Geoffrey Howe, Prime Minister Martens of Belgium, the Deputy Prime Minister of Thailand and the Prime Minister of Malaysia, I found there is very broad agreement for this Australian initiative-the Prime Minister's seven proposals. I believe that elements of those seven proposals will take place. Unlike the Opposition, we are focusing on Australia's main economic problems. We are taking initiatives. We are due to get agriculture put on the agenda at the General Agreement on Tariffs and Trade meeting for the first time, and that will be dealt with in the Uruguay round. With this proposal we are capitalising on opportunity, to take steps in the six months leading up to the Venice summit. We will be unrelenting in our efforts. Unlike the Opposition, we are working hard on Australia's real problems, not putting forward quick-fix populist solutions and not failing to cope with the fact that we have this problem.