Mr ANDREW(4.49 p.m.) —I am pleased to have an opportunity to participate in this debate on the Farm Household Support Amendment (Restart and Exceptional Circumstances) Bill 1997 and to follow the member for Grey (Mr Wakelin), an electoral neighbour of mine in boundary terms. While I am on my feet, I recognise that there is probably no-one in this House more familiar with the role and importance of this legislation than the member for Grey. There will be those in the gallery and many in the House who will not be aware of the fact that the member for Grey's electorate takes up 92 per cent of the surface area of the state of South Australia. It includes all of the vast Eyre Peninsula, stretching, as his electorate does, from the fertile valley of Clare across the Eyre Peninsula to Western Australia and north to the Northern Territory border. It is scarcely surprising then that he should have a certain passion for this debate, particularly as much of his Eyre Peninsula area includes some of the marginal grain farming areas of South Australia. As he has indicated, he has witnessed people leaving the farm with little more than that in which they stand up.

This government, recognising that farming families frequently find themselves in difficulty through no fault of their own and frequently find themselves being chased by the banker simply because unpredictable seasonal conditions have moved against them, has endeavoured to find a way to allow farming families to stop, reassess their farming situation and, if necessary, leave the land with a level of dignity that was not possible before. I join the member for Grey and the recently appointed Minister for Customs and Consumer Affairs (Mr Truss), the member for Wide Bay, and the member for Corangamite (Mr McArthur), all of whom are familiar with farming in Australia, to celebrate what has been done by the Deputy Leader of the National Party, the Minister for Primary Industries and Energy (Mr Anderson), in this legislation.

There is sadly a popular view abroad in the community that Australia is teetering on the brink of economic collapse, as if all was wrong with the nation and the parliament was to blame, not the Liberal Party, the National Party or the Labor Party. The reality is quite different. The perception of economic disaster hangs so gloomily over this chamber largely because of the sort of nonsense that has been advanced by people such as the member for Oxley (Ms Hanson), suggesting that the major thrust of the government and of the opposition when it was in government has been in the wrong direction and has been to the disadvantage of Australian farmers and Australian farming families.

It has been tough on the land. It has been tough on the land for reasons of international trade. It has been tough on the land because in parts of Australia, particularly in Queensland, there have been major environmental and climatic situations which have been quite unpredictable. What needs to be recognised is that in a portion of Australia's manufacturing area—that is not in primary industry or mining, but in our manufacturing base—things have been heading in the right direction.

Australians seem to believe that everything that is happening in this country right now is simply the result of imports coming in and of exports being thwarted, but the facts are that Australia's export performance is on the mend. The fastest growing area of Australian exports has astonishingly not been the agricultural goods directly referred to in this legislation but manufactured goods.

I ask you: how many Australians, if you stop them in Collins Street, could tell you that among the dramatic improvements that have occurred in the Australian economy over the last 10 years—I am not being political, let me hasten to add—has been the level of export manufactured goods leaving our shores, to the point at which Australian manufacturing exports now rival both primary industry and mining in their volume? Australian manufactured exports now sit as I understand it at approximately $30 billion of all that we export. The figure for both primary industry and mining is a comparable one.

So not all that has been done by this parliament has been in error, in spite of the popular opinion outside this place. Our performance in manufacturing has been dramatically different. The area that has been most frustrating for the parliament has been the area of primary industry because the reforms that occurred in international trade that allowed us to so effectively improve our manufacturing sales overseas were not running hand in glove with similar reforms in agricultural trade. It has been difficult for farmers under the terms of trade that existed to penetrate the grain markets that they wanted and to succeed in the wool markets that they would have sought.

The member for O'Connor (Mr Tuckey) has joined us. In an electorate like his he will be even more familiar with the difficulties that many farming families have faced. As a result of these difficulties and as a result of the terms of trade largely being dictated by corrupted trading arrangements overseas in agricultural product, many Australian farmers and many Australian farming families have found it difficult to remain in farming production. It is not that they have been poor farmers. In some cases they have been farmers on tracts of land that have proven progressively to be too small to be viable. In many cases they have found themselves with farming equipment that has been ageing. For those reasons they have not been able to be as efficient as they would wish and they have found themselves caught in a vicious cycle because they were unable to replace the farm equipment since the production was too low to service the debt that would be incurred with new farm equipment being purchased.

I pick up the comments of the member for Grey. Briefly, but in a sustained way over the last 18 months, it has been possible for farmers to be both more productive and more profitable. This is partially because the government's economic management has been such that interest rates have been down and, as the member for Grey has indicated, up to $6,000 per farm has been saved as a result of sustained lower interest rates kept in place by this government. In fact it takes a fall of only one per cent in interest rates to produce a saving of $2,400 per annum for a farm.

So the government has taken action by setting the economic parameters where they ought to be. But that is not the only action we have taken. The government can also proudly claim to have built on the trade reforms that the former government had initiated to the advantage of Australian farming families. As I indicated in my opening remarks, manufacturing exports had improved because of the trade reforms that had been initiated. Now we are in a situation where Australian agricultural exports are improving as well.

While we are here in this chamber, our Prime Minister (Mr Howard) is on his way to, or has arrived at, CHOGM, the Common wealth Heads of Government Meeting, where in fact the focus of the meeting will be on trade liberalisation, principally in agriculture, and where the Prime Minister will be putting the case for Australian farmers to ensure that the same sort of trade liberalisation that has advantaged manufactured goods can be used to advantage our farmers as well.

Trade liberalisation, Mr Deputy Speaker, as you understand from your period in government, has a great deal to do with market access. Australian farmers have been denied access to those markets in which they could have most effectively sold their goods because the markets were being filled by agricultural product produced in countries that subsidised their farmers, making it impossible for us to compete. There have been those who have suggested that Australia ought to subsidise its farmers as well. But the grim economic reality is that Australia with some 12 million taxpayers cannot hope to match the subsidy base of Europe or the United States of America with over 200 million taxpayers.

Here we have a bill before the House which allows those farmers who find it difficult to compete in international terms to leave the land with dignity. I am not here suggesting that bigger is better. I am not here suggesting that, in some strange way, farmers should simply work from larger farming bases in order to be effective and efficient farmers. In fact, in my own area of Wakefield, among the irrigation areas there are those in intensive crops who have moved out of one form of farming into another, who have moved for example from horticulture into floriculture and who have found that small areas can in fact be very viable if they select the crop that is most appropriate to the area.

But for the Mallee farmers represented by the member for Grey and for the farmers who are part of the electorate of O'Connor, the reality is that, unless they are on a large enough area to be economical, it is hard to find a way out of the continuing spiral downwards that catches them in terms of their economic management because, as I said earlier, they find themselves unable to produce enough to replace the machinery that is needed to be efficient in Australian farming. They are, as we all know, the classic case of people who are asset rich but cash poor because they have an asset that is valuable but not generating sufficient income for them to maintain a viable farming base.

They are also the people who, in spite of their financial difficulties, are least likely to go broke. They will ultimately use up all of their capacity to borrow money from the bank. They will ultimately find themselves in a situation in which the bank is no longer prepared to use the farm as part of the collateral against which the banker lends them money. But it takes time. If they are in a corner store and are not generating income, they find themselves rapidly pushed out of business by costs, rates and taxes. But many farmers on small farms simply contract. They refuse to replace the truck; they refuse to replace the header or the tractor. They choose to do all sorts of extraordinary things like keeping a cow to minimise the cost of buying milk and starting a farm garden. Slowly they find that their asset base contracts, but their capacity to generate money also contracts. Finally, they are forced into a position of sale.

The government is proposing that farmers in that situation should be able to access the farm family restart scheme through this legislation. Under the farm family restart scheme, it should be possible for them to qualify for the newstart allowance and for the partner allowance and to get that form of income support for at least 12 months while they determine what the future of the family farm ought to be. That is a very useful step because it means that they are not forced off the land, but in that 12-month period they have an obligation to seek advice from a professional financial adviser on the future viability of the land. In counselling with somebody else, they can make a decision about what will suit them best.

The government proposes that they should be able to access a maximum under this legislation of $45,000 of re-establishment grant so that they can leave the land with some sort of dignity. If their assets have run down to the point at which they sell the farm for a cleared price of $90,000 or less, it should be possible to top up that money with $45,000 and re-establish themselves somewhere else without feeling that they have in any sense been a failure. Frankly, they have not. What has caught them is circumstantial arrangements rather than any failure on their part to run an efficient and effective business.

The truth is that this bill gives Australian farming families the opportunity to make a decision to stay on the land, to enter into a partnership with a neighbour, to enter into a share farming agreement, to enter into a leasing agreement, or, if they wish to leave but not be financially disadvantaged by so doing, to decide to leave before they are at the point at which all of their assets have been exhausted.

As the member for Grey said, the bill that we are currently considering deals with the question of exceptional circumstances and drought relief and the way in which we go about offering farmers support where some change in the weather conditions, some prolonged period of drought or some exceptional circumstance has forced them into a situation in which they would otherwise be viable. The bill offers more generous exceptional circumstances grants to allow them to make a decision on what their future will be.

The exceptional circumstance grants apply where the normal farm risk management—that is, the normal risks that you would expect if you were farming an area that is marginal—has been exceeded and where prolonged drought—a drought such as would not be a part of the normal cyclical drought of Australian farming—triggers the exceptional circumstances provisions in this bill.

Let me conclude where I began. There is not really a reason for a great deal of despondency about either the nation or its farming viability. Because this nation has farmers and primary producers that have not been subsidised, that have not been subject to all sorts of insulation from the reality of world markets, we find ourselves producing agricultural product that can be sold overseas into any non-corrupted market at a profit. That is something every Australian primary producer should be proud of. The changed trading arrangements have meant that our dairy industry, our grain industry and our viticultur al industries have been enjoying relatively buoyant times. The buoyancy of the grain industry is largely conditioned by the seasonal arrangements in which it finds itself.

It is fair to say that some horticultural industries, the wool industry and, until about six weeks ago, the beef industry have been having an exceedingly difficult time because of changed marketing arrangements. Nonetheless, the access that we as primary producers in this nation now enjoy to markets that were once closed to us is a very promising sign. As the member for Wakefield, I will be hosting a Supermarket to Asia conference in my electorate in two days time, on Friday, to allow some of my farmers and their processors to look at ways in which they can maximise the inroads they can make with primary products into the Asian market.

The Supermarket to Asia Council, as the House is well aware, has been a creature of this government. It is chaired by the Prime Minister and includes a number of front bench members. The purpose of the Supermarket to Asia Council is to ensure that no stone is left unturned in the effort to maximise our penetration of the promising Asian market. As someone who represents South Australia's key viticultural area, I am very conscious of what has been done to improve the access of primary products into overseas markets, particularly wine, as a result of the present trading arrangements under which we operate.

We confidently believe those trading arrangements will be further liberalised to the advantage of every Australian primary producer. Our role as a parliament is to ensure that those primary producers who do not want to move into the new era of agriculture that is emerging can leave the agricultural industries with dignity. This bill allows them to do just that.