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Wednesday, 22 August 1984
Page: 159


Senator PETER RAE(5.14) —I move:

That the Senate take note of the paper.

Agricultural wheeled tractors have long been a troublesome area. The Industries Assistance Commission has made a number of reports in relation to it. Only one manufacturer of agricultural wheeled tractors, Chamberlain John Deere Pty Ltd, is now left in Australia. It receives a very significant bounty which it is proposed to continue. However, at the same time a discounting war is taking place in Australia between various importers and distributors which has led to the situation whereby, notwithstanding the very significant bounty given to Chamberlain John Deere last year, it made a net loss of $17m with some 18 per cent of the market share. In other words, every per cent of the market share it gained cost the company $1m.

An apparent unreality has crept into the marketing of tractors. The television program Sixty Minutes dealt with the Russian Belarus tractors, their defects and the fact that servicing of them has not been able to be maintained. A whole series of problems was described during that program. Six hundred and five different models of tractors were imported into this country last year with 55 different distributors. It seems that the existence of a bounty is not really helping to preserve an Australian industry. It is not really helping to enable Chamberlain John Deere to remain profitable or even to remain in existence. The bounty is merely enabling it to play a part in the discounting race that is going on between all tractor distributors in Australia. The net result is that only two such distributors who apparently have not been engaging in the discounting war-Ford Motor Co. of Australia Ltd is one of them-have been able to make any sort of profit. I am told that the profit of the Ford tractor division last year was about $6m. That is because Ford has been prepared to accept a lowering of the market share but not a lowering of price. It has kept up its distributorship because of the Ford name and because of the wide section of distributors throughout Australia of Ford products. People have continued to buy and to rely upon a good product which is well serviced from the point of view of both servicing and parts.

I do not want to take a lot of time-I do not have a lot of time-to debate the matter in detail. However, I think it is important to refer very briefly to the fact that a bounty does not necessarily solve a problem. If Chamberlain John Deere continues to lose $17m per annum it will need a very much bigger bounty than it is getting at the moment to remain in business. Perhaps some of the suggestions that have been made by some members of the industry should be followed. One such suggestion is that a form of self-regulation should be introduced into the industry to get some semblance of order in the industry before we have complete chaos which could lead to a situation whereby many farmers could be harmed if there were no servicing or spare parts arrangements. There would not be the follow-through which is necessary, because even if farmers were temporarily to gain an advantage by buying a cheaper tractor it could wind up as a very expensive tractor if it could not be used. I think this is a matter of some concern and should be looked at by the whole of the industry and not just ignored. It is an area in which perhaps fairly urgent steps need to be taken to prevent chaos from taking over and spreading to the agricultural implements area where somewhat the same sort of procedures seem to be developing .

Question resolved in the affirmative.