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Tuesday, 20 June 2000
Page: 17785

Mr KATTER (9:14 PM) —I rise to speak to the budget this evening. It is indeed a historic occasion because last week the OECD report on tariffs and trade was released—a document of over 200 pages. That document is the funeral hymnbook of economic rationalism in this country. We in the agricultural sector in Australia were told that the level playing field that would emanate from WTO would enable Australian agriculture to go forward, to reach and achieve very great heights because the access we were deprived of in years past would be removed by a lowering of tariff and other barriers.

I have not brought the 200-page document along, but I have brought some extracts that have been in the newspapers. Over the next few weeks, we will see it throughout the Australian newspapers as the implications of this report sink in. The year before the introduction of the WTO—or should I say two years before, because everyone put their tariffs up in anticipation of the WTO coming in—was the year 1981. In that year, the average OECD agricultural protection throughout OECD countries was 40 per cent. According to the dreamland fantasy visions of the economic rationalists who have manned prominent positions of power in this government for some 15 years—it has abated somewhat under the new government but it was most certainly the hallmark of the Keating years—by 1999 we did not have the average protection and support level of 40 per cent that we had in 1981.

In 1999, we had an average protection level of 70 per cent. In other words, whilst Australia sacrificed every single piece of protection and support mechanism that it had available to its agricultural sector, the rest of the world was doubling theirs. In a moment of rage, while we reeled over the proposed milk changes, I said that, in 10 years—and I meant it in a metaphorical sense, of course—this country would be a net importer of food. Having meant it in a metaphorical sense, I was very regretful that I had used the expression `10 years'. I could have said that, in the near future or in the immediate future, we would be a net importer of food. Having said 10 years, I then had to face the music.

I went to the library and I asked them for the figures for the exports and imports of 1982 through to the most recent figures. If you take a 15-year timeframe, you will find that exports have increased 167 per cent but imports have increased ominously to 415 per cent. So, in some 20 or 30 years time, we will be a net importer of food. But that does not tell the full story. The full story is indicated by a very appreciable quickening of pace. Imports have grown at a far greater pace more recently and exports have declined at a greater pace. If you take the last three years, you find that imports have risen 26 per cent and exports have declined 4.9 per cent. If you say we will maintain the present rate of imports and exports, then I was wrong. It is not 10 years. It is nine years. Within nine years, the greatest food producing country on earth will be a net importer of food.

This should not really surprise me because, when the World Heritage Declaration went in in North Queensland, the source of some 3,000 jobs in the electorate of Kennedy, there were some 26 timber mills operating in the area at the time. I have had telephone calls today to say that four of our last six are about to close; that will leave us with two of the 26 timber mills. Needless to say, this country became a net importer of timber products. We have an intriguing situation in North Queensland, or in Queensland for that matter, where the Great Barrier Reef Marine Park Authority has decided that we should not fish in Queensland waters. If we are not allowed to trawl in Queensland waters, we might be able to farm prawns and fish. But other instrumentalities have decided that this is the only country on earth where it is extremely damaging to the environment to have prawn and fish farms. So they have succeeded in closing more prawn and fish farms than we have been able to open. So, in the field of fish and prawn product, if you cannot trawl it and you cannot farm it, how do you get it? There is only one way you get it; you import it. When you come to think of it, you should not really be surprised when you realise that, within nine years—and that is assuming we hold our present pace and it does not quicken any more, though of course it will—this country will be a net importer of food.

Let me take a second damning document. There is a country called Australia that has decided to launch a new theory of economics. I call it Lamarck economics. The French biologist Lamarck said that in one lifetime of an organism the environment could change its genetic composition which would be passed on to future generations of that organism. This, of course, was a theory that appealed greatly to Joseph Stalin, so he launched into Lamarckian agriculture. He neither watered nor fertilised any of the crops in Russia because that would make the plants weak. He carried out an experiment in which the plants were grown without assistance to see whether that would be beneficial for agriculture. Within a few short years, some 7½ million Russians died of starvation, and it was decided that Lamarckian agriculture was not a good idea.

We have had Lamarckian economics in Australia for the last 15 years. Let us see if all the industries in Australia can stand on their own two feet without any assistance from government whatsoever. Surprise, surprise, they cannot! They cannot because in, say, the third greatest exporting industry in this country—the sugar industry—they have to compete against their biggest competitor, Europe, and against a 340 per cent subsidy level. For over 120 years in this country my family had shops, and if our competitors in the clothing store business had had prices which were one-third of our prices we would have gone broke real quick. That is what is happening to our country.

We have come here today to speak about the budget, and I regret to say that our emphasis has been on balancing the budget. Far more important than balancing the government's budget and the government's books of account is balancing the nation's books of account. The nation's books of account are in an absolutely disastrous state. We have a current account deficit running at over $30,000 million per year. When the current account deficit went over $20,000 million, the then Treasurer, Mr Keating, said, `This country is in danger of becoming a banana republic.' When it hit $24,000 million, the then Leader of the Opposition, now Prime Minister John Howard, quite rightly said—as did Mr Keating, for that matter—that this was far and away the most serious problem that this country had and if it was not arrested then it would be terminal. That was when it was $24,000 million. The last figure I looked at showed that it has now hit $32,000 million.

But there is another country called Japan, and it works on the exact opposite theory that it is the responsibility of government to create jobs, to develop the economy and to help industry at every available opportunity. The net result of that policy can be clearly seen when you look at the performance figures of the United States. The latest figures I have available are only 1994 figures, I deeply regret to say—the library was not able to update them—but I am quite sure the trend has continued. Australia has a per capita gross national income of $18,000 per head—which is all right. The United States has a per capita GNI of $27,130 per head—about 50 per cent more, it would appear. Japan has a per capita GNI of $US36,980, which is 50 per cent higher than the United States. So let us see who is successful: Australia at $18,000 income per citizen or Japan at $37,000 per citizen? Clearly, we desperately need the policies that were once the hallmark of the Australian government—policies of which the late and great Sir John McEwen was the architect—to be returned today.

I remember clearly a letter written by Edward Granville Theodore to the then Prime Minister of Australia, John Curtin, and he said that the responsibility of government is, above all else, to provide worthwhile employment for its citizens and to develop the resources of our country. The current account deficit in Australia in the last year for which I have figures—which are very kind to Australia, actually—was $US18,000 million. The United States had a current account deficit of US$221,000 million. Japan did not have a current account deficit at all; it had a current account surplus of $121,000 million—by far and away the greatest current account surplus recorded in world history.

So we must ask ourselves: who has the right policies and who has the wrong policies? Looking to that part of Australia that I represent, which is rural Australia, regional Australia, coastal Australia, outback Australia, there are five pillars of wisdom that we require for our survival and without those five pillars of wisdom we simply cannot survive. Upon these five foundation stones, agricultural rural Australia was built. Each of those five pillars of wisdom has been removed and they have not yet been restored. They were removed by the Keating government and have yet to be restored. The first is our right to collectively market our product. When it was removed in the wool industry, by Mr Keating and Mr Kerin, the income for wool dropped from $6,000 million down to about $3,000 million in the 2½- to 3-year period after the removal of that scheme—in sharp contrast to the increase of 300 per cent in the income for wool in the three years following the introduction of that scheme by Doug Anthony, the then Leader of the National Party.

We can clearly see, in what is happening right now to the dairying industry in Australia, what happens when you remove the right of farmers to collectively market their product. In the dairying industry, we have 13,500 farmers facing off against three retailers—arguably only two—and those people have seen their share of the Australian food market rise from 68 per cent to 81 per cent in just three years, the three years up to 1996. I am certain that is right; it may be 1998. So where you have only two or three buyers and 13,500 sellers, clearly the sellers are going to be slaughtered—and clearly they are being slaughtered. Large sectors of the Australian dairy industry have already seen their incomes drop from 43c a litre down to 27c a litre, and I deeply regret to say that many more are going to see their incomes drop much, much more dramatically.

In sharp contrast to that is the sugar industry which has had just a tiny bit of help—all we are asking for is that the government loan to us the money at the same interest that they can borrow it for. What I am saying here is a great pillar of wisdom is our right to collectively market. I am switching now onto the development bank concept, as well as the statutory marketing concept which is inherent in the sugar industry. There is no assistance involved here. All we are saying is, `If you can borrow it at five per cent, Mr Government, you loan it to us at five per cent,' and every person of towering intellect that has been through this place has come to exactly the same conclusion—whether it be King O'Malley, Theodore, Chifley, Black Jack McEwen or Sir Robert Menzies. Every one of them came to exactly the same conclusion, that you needed a development bank; to be able to ride the roller-coaster of the international commodity market, you need the ability of a long-term, far-sighted bank.

When I talked about this in the media, people said, `Oh, a handout.' I said, `No, we made unconscionable profits out of the development bank in Queensland.' In fact, the QIDC, which was the responsibility of myself and a very great Queenslander, Mr Bill Gunn, the Deputy Premier, rose from a little tiny agricultural bank, in the space of about nine years, and $250 million in loans, to a giant bank of some $3½ thousand million in size. We made an awful lot of money out of the development bank. But that development bank enabled those farmers to get their interest rates at exactly the same interest rates that were available to the government. The sugar industry, reeling under nine and 10 per cent interest rates at the present moment, should be enjoying development bank interest rates of five per cent and, if the government puts 0.2 on that, the government would make a profit out of it.

Almost all this industry, with its collective marketing arrangements, which we have fought for and successfully kept, along with the development bank finance being made available to them, will pull through an absolutely disastrous situation which has prevailed now for the last three or four years made up of the most adverse of seasons and the most dreadful prices that we have ever seen in the industry's history. Another thing this country needs desperately is money for dams. We hear a lot about the Murray-Darling.

Mr Snowdon —Money for jam, did you say?

Mr KATTER —It is very sad. You should be talking about this because the north-west of your state is one of the places most greatly endowed with water in all of the world as a matter of fact, along with the north of Western Australia and, of course, the Gulf Country that I represent. In fact, 75 per cent of Australia's water is in your territory, Mr Haas's territory and the territory that I represent, and I am not even including the super wet belt where it rains all the time. I am talking about the gulf streams and their periphery. We hear about the Murray-Darling. The Murray-Darling has a meagre 20 million megalitres of water. Two of the rivers in the north-west of Australia have 20 million megalitres of water. But in the Gulf Country, we have 120 million megalitres of water. So while we are trying to jam 40,000 farmers down on 20 million megalitres of water, the whole of the north of Australia lies totally underdeveloped. We are awash with water. We need money for dams. In the last 20 years this country has not built a single dam. Isn't that sad? Our nearest neighbour has 100 million people going to bed hungry of a night and we cannot find it within our ability to be able to build a single dam to produce any more food than we are producing at the present moment.

We need anti-trust laws to break up Woolworths and Coles, not to mention the oil companies. We desperately need anti-trust laws—and capping and divestment would be part of the anti-trust laws. The honourable member for Grey, Mr Barry Wakelin, who represents almost all of South Australia, like me knows only too well that we have lost some $800 million or $900 million from rural roads, in the main through Mr Keating, but also through the current government. But that $900 million must be restored to rural Australia for road systems. My old state electorate has nearly 1,500 kilometres of bitumen road, all of it 30 years old. All of it officially does not exist and there is no program to even do 15 kilometres a year. It is totally collapsing. If that $900 million goes back in, national competition policy restrictions, I am sure that Mr Wakelin here would agree with me only too well—

Mr Snowdon —Absolutely.

Mr KATTER —Mr Snowdon over there would agree with me. If that is removed then that will put some 20,000 to 30,000 jobs back into rural Australia. We were at little Julia Creek recently. Of 1,000 people in the town, they would get 23 jobs out of a scheme of that nature. That would be a fantastic thing for Julia Creek. So we need collective marketing and money for dams and you would show a 300 per cent yield on the return on the money for dams. (Time expired)