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Thursday, 24 March 1994
Page: 2252


Senator WOODLEY (4.25 p.m.) —I was just making sure that we had taken full cognisance of how many shearers there are in the Senate.


The ACTING DEPUTY PRESIDENT —I thought it was the poetry and delivery that left us all dumbstruck.


Senator WOODLEY —I welcome the opportunity to contribute to today's debate on National Wool Week. Someone once said to me, when we were talking about western Queensland, `Its a great place to live: 50 million blowflies can't be wrong'. I guess the same might be said about Australia being a place to live because 140 million or so sheep cannot be wrong. On a more serious note, however, as is my inclination, I want to concentrate my remarks today on the human side of our wool industry. In particular, I want to pay tribute to all Australian woolgrowers and to all people involved in the wool industry in this country.

  I want also to outline the Democrat's blueprint for what we believe is needed to address the problems faced by our woolgrowers and by Australians in all rural areas. Of all the primary producers, our woolgrowers have had perhaps the toughest time of all over the last few years. The history of the collapse of the reserve price for wool is well known to all by now, and I do not want to revisit that debate. Since that time, however, returns for Australian woolgrowers have been decimated. Late last year when we were considering the Garnaut report into Australia's wool industry, I had the opportunity to meet with a good many woolgrowers and certainly had my faith restored in their determination to stick to Australia. I hope that, through this debate and certainly many other things we do in this place, we as Australians might also stick to them.

  I pay tribute to people such as those in the Balmoral branch of the Victorian Farmers Federation who provided a contrary point of view to many others in this place, but, nevertheless, put themselves on the line in seeking to help all of us understand what was needed. I hope that the structures and procedures put in place by the legislation which emanated last year from the Garnaut report will see the wool industry return to profitability in a short period of time. I note that the Australian Bureau of Agricultural and Resource Economics, ABARE, has estimated that the average wool market indicator price for this financial year will be in the order of 485c per kilogram. Importantly, ABARE also estimates this average will rise to 530c in 1994-95.

  Recently, due mainly to an increase in the demand for the finer grade wools, we have seen something of a recovery in wool prices to the point where the eastern market indicator is currently at around 566c. Still, there is a belief amongst many in the wool industry that before wool growing returns to profitability the price will need to rise to around 600c. As we all know, the major obstacle to that happening is the existence of our enormous wool stockpile. Again, ABARE estimates that sales from the stockpile during the next year should see it reduced to around 3 million bales.

  I noticed recently that Wool International has actually begun trialling sales of small quantities of the stockpile prior to the commencement of the fixed schedule sell-off due to begin on 1 July this year. I can only hope that the optimistic future for wool that many painted for it when the legislation establishing Wool International was debated last year is actually realised. As we all know, poor returns over a number of years have seen many woolgrowers forced out of the industry while the survival of many of those who remain in the industry is only marginal. That is a tragedy of mammoth proportions.

  I noted figures recently released showing the area in Australia, as defined by postcodes, with the lowest average taxable income was Archdale in western Victoria with an average income of just $14,790. It turns out that Archdale is a sheep and wool farming area. The Australian Democrats believe the government needs to undertake a whole range of measures to help support our wool industry and more generally to support all primary producers and rural communities such as Archdale. As honourable senators will be aware, the Democrats earlier this week submitted measures to the government that we saw as priorities for this year's budget.

  I would like to go over just a few of those measures as they apply to woolgrowers and to our rural communities. As an illustration of what I want to say, I cite a copy of a letter by a Dr P. Michelmore who lives in one of these areas, Karoonda, in the heart of the Mallee. In writing this letter, he appealed to a number of people in this place. He said:

Rural Australia wants to help itself in this period of readjustment, but the many problems need to be recognised and solutions found by working with government—Local, State & Federal to ensure viable rural communities survive and grow into the next century.

I cannot read the whole of this letter. Therefore, I seek leave to have it incorporated in Hansard.

  Leave granted.

  The letter read as follows—

Dr P R Michelmore, MB BS (Hons, Adel), Dip RACOG, FRACGP

Karoonda, South Australia 5307

Phone: (085) 781001

Fax No: (085) 781241

16 March 1994

Mr Neil Inall

Chairman Rural Adjustment Scheme Advisory Council

GPO Box 858

Canberra 2601

Dear Mr Inall,

I recently presented a paper at a "Rural Crisis"—Grain farmers meeting in the `Mallee'—Karoonda, S.A. The content of my talk mostly centred around the health aspects—emotional/physical of the continued stress and uncertainty caused by the severe economic downturn in the rural economy—in short the "Rural Crisis". It is easy to say "Rural Crisis"—I think I have said it a thousand times since coming here to work as a solo country G.P. 5 years ago. This crisis has certainly been a very real entity to me—stress related illness is at an all time high. It's probably been the most difficult in the last 2 years, with a worsening of the commodity price situation. We have seen it all in the last 5 years—poor rains, severe winds, hail, thunderstorm damage, too much rain, mouse plagues, frosts etc. In the normal cycle of things natures little temper tantrums would be accounted for, but not now. This year is critical for the survival of not just 10-20% but just about all—sheep/grain growers in this district despite near record harvest yields over the last 2 years—yes record harvests. Prices have been so low that the normal "recovery" with a good crop hasn't occurred. The crisis continues and this district just like most of Rural Australia is suffering from the lack of coordinated approach to management of these problems. A crisis by definition needs to be managed—"a time of extreme trouble or danger"—"a crucial stage or turning point in the course of anything". I believe that the extent and depth of the rural crisis hasn't been addressed adequately by our governments. There is no doubt that "change" is imminent and that more families will leave the land, but I fear if certain issues are not addressed quickly the critical number will be reached, the damage will be irreversible, resulting in the complete collapse of "hinterland" Rural Australia. There maybe dramatic social and economic effects. Are we to have no rural economy?

Government of course cannot do the impossible—the fickleness of nature and overseas markets are to a certain degree out of our control, but a government can ask the following question. Does Australia want a Rural Recovery/Industry? If the answer is YES then everyone concerned—Farmer Organisations—State—Federal Governments alike need to look at all possible ways of bringing relief to give viable farmers a chance to survive the next 5 years and reshape/reorganise a new rural industry, hopefully stronger and more profitable. More profitable for every Australian—hopefully a strong rural economy means jobs.

One issue that can help is for a relaxation of the Assets Test when applied to farming couples at retirement age, who may seek some financial security through the old age pension. I have counselled many patients relating to their frustration on this issue. I am sure that many farming families are trapped—the senior couple may still have their name on the land title. They have in effect a unrealisable asset—they are unlikely to sell "their share", if their son/daughter is carrying on with the family farm. Presently the son/daughter may well not be able to buy them out either, so Mum & Dad continue to depend on the struggling farm for their livelihood—unable to retire, unable to in many situations obtain the aged pension because of the "assets". I might add that in many instances the valuation put on the land bears little relationship to "real" values in this rural depression. The method of valuation needs scrutinizing ? values at today's prices or those higher levels of 5 years ago. There appears to be some social injustice in this issue.

Governments need to totally rethink the eligibility criteria for those farmers reaching retirement age and with family willing to continue on with the farm. If the younger farming family is to have any chance of survival, then Mum & Dad must get off the farm. People are suffering because of this anomaly. If it were redressed then some farms may just be helped enough to survive. It's one thing that could help.

So a lot of farmers may well go and leave the industry—if you are 40 or 50 years old you hopefully will have a chance of retraining but ? what hope if > 60 years old with the unemployment levels presently endured. If the older farmer has large debt he/she may be very fortunate to leave with some cash, many may have little equity and consequently have no funds or at most the $45,000 adjustment figure if they are `lucky'. They will struggle to re establish themselves ? where will they live ? will they apply for a housing trust home and go on the end of the list behind thousands of other unfortunate Australians looking for housing options. I offer the following solution to be given serious thought as we—Karoonda District Hospital & Karoonda East Murray District Council—already foresaw this problem and have established a Community Housing Committee to oversee the redevelopment of some disused and derelict railway homes. We were fortunate to be successful in gaining $24,000 from a Local Government Housing Grant (yes $24,000 only) which enabled us to buy the two houses from the State Transport Authority. The money to refurbish the houses (now almost complete) has come directly out of our already struggling community—1/2 Hospital, 1/2 Council. The houses have been done up relatively cheaply re low capital costs and provided employment for local people—taken on by local builders who have done the rebuilding and hopefully will house local/district people disadvantaged and/or displaced from their farms. Those farmers near retirement age are our priority, especially if they may also have medical problems.

I believe our project is worthy of further analysis and if we could get some further support we may acquire some other houses—some government owned and do the same. The victims of the rural crisis need to be housed like anybody else—why not keep them in Rural Australia where they want to be and help keep our town and others alive.

Karoonda has focused on developing a good environment for retirees—excellent Hospital facilities with focus on age care, good retirement facilities etc. We want to survive and the idea of becoming a retirement town for rural people is something worth pursuing. We have had some help with establishing a "dementia care unit" and day care centre—all we need is for continuing support to build on our assets. We are well placed geographically to fulfil this objective. Many rural people can no longer think of retiring to regional towns or holiday resorts. The costs have largely outstripped their resources. The concept of locally controlled rental/public housing specifically targeted to "rural retirees", I believe deserves merit. We can do it cheaper because of reduced input costs—land/ housing etc.

The consequence of letting the "crisis" work itself out, "unmanaged" may be more costly than the intervention. Consider the scenario of large blocks of land not being actively farmed, particularly in this area—because the farmer owners have left or not been given finance. Land may not be sold and therefore who carries on the land management—it's no good ignoring it, as a block may quickly become weed/vermin over run and pose a threat to neighbouring land still being worked. ? What is the answer I don't know, but the consequences of not looking at the problems are again potentially quite severe—environmental degradation.

I have raised a few issues, which are hopefully, noteworthy of analysis and further consideration. I ask that you please consider the consequences of the ongoing `rural crisis' / debt in economic and personal human terms. The last few years have been stressful for everyone living in Rural Australia. The issue of the eligibility/assets test is important and needs urgent redress in the next 12 months/budget calculations. I believe the housing issue is also very real and worthy of some thought ? I am sure there would be other towns in this and other states that could take on this focus with some support from Government.

Rural Australia wants to help itself in this period of readjustment, but the many problems need to be recognised and solutions found by working with government—Local, State & Federal to ensure viable rural communities survive and grow into the next century.

You just have to watch the TV—current affairs or read the paper to realize many sections of the Australian Community are "hurting". The problems facing Rural Australia and particularly agriculture/wool producers are no more or less important than Metropolitan Issues—they are equally important and need to be addressed with equal vigour and

endeavour by rural people and those elected representatives in Parliaments and other rural organisations.

Thankyou for your concern and for addressing these important issues in the interest of social justice for rural people.

Yours sincerely

DR P R MICHELMORE

c.c.  Hon Senator Mr Collins—Federal Primary Industry Minister.

  Hon Mr Brown—Premier South Australia

  Hon Mr Baker—Primary Industry Minister S.A.

  Mr G Blight—President National Farmers Federation

  Mr T Scholz—President SAFF

  Mr I MacLaughlin—M.P. Member for Barker S.A.

  Mr R Roberts—M.P. Shadow Primary Industry Spokesperson S.A.

  Senator Grant Chapman S.A. Senator

  Mr Peter Lewis M.P. Member for Ridley S.A.


Senator WOODLEY —Let me turn now to just some of the measures which we believe are important and which we would press on the government in the coming period of budget discussions. Firstly, we would extend the investment allowance for primary producers. Our farm sector is just starting to see some decent farm incomes after years of very low, and in the case of the wool industry, often negative incomes. In the current financial year the government provided the business and farming sectors with access to a 10 per cent investment allowance to assist in retooling plant. For corporate Australia this has been useful, as with its return to profits it has been able to take advantage of the allowance.

  For farmers, however, the recovery of incomes has been much slower. This has greatly reduced the capacity of rural industries to take advantage of the allowance. In recognition of this, we believe we need to provide an extension of the investment allowance for rural producers for the 12 months to December 1995, and we note the support of the National Farmers Federation for this proposal.

  Secondly, the Democrats would provide far greater access to our social security system for farm families. We have pointed out many times in this place that rural families are often asset rich but income poor. As a consequence, they are unable to access government support despite being in dire financial straits. We have long campaigned for the government to exempt the family farm from the assets test for basic and additional family payments, and we reaffirmed this in our submission for this year's budget.

  I was horrified to receive a fax recently which indicated that people are currently being denied access to the interest rate subsidy available to all farmers on the grounds that they receive an additional family payment and, therefore, supposedly, are unable to cover farming costs. This is clearly unfair, particularly in view of the fact that family payments are made in recognition of the value and costs of raising children. The Democrats will be urging the government to rectify this problem immediately.

  We have also proposed to the government that the home care child allowance be doubled. This would provide greater benefit to farming families than the alternative of income splitting, as canvassed by some in the opposition, because of the low level of tax often paid by farmers. Thirdly, we have called for a regional environmental employment program to not only increase employment opportunities in rural and regional areas but also address major rural environmental problems such as erosion, re-vegetation, farm forestry, weed control, conservation management, biodiversity projects, feral animal control, waste management and recycling.

  Fourthly, we advocate increased funding to maintain government services in rural areas. This has been one of the most devastating factors in the decline in population in rural areas. Because so many government services have been withdrawn, country towns have suffered. The trend must be reversed. Our budget submission has proposed $50 million to finance community service obligations in order to maintain government services in rural areas where the withdrawal of those services would have a significant adverse impact on employment.

  We have also proposed a major boost to public investment in infrastructure to include such things as upgrading of rural freight facilities and waste water management. We have pleaded with the government, and would do so again, that the rural counselling scheme be maintained and not cut by $2 million, as has been proposed in 1994-95. We believe that the scheme should not be cut but extended.

  The rural counselling scheme, which aims to provide financial and other advice to farmers to explore their options, has been a cost-effective and well received scheme. Funding must be maintained at its 1993-94 level.

  Finally, I bring to the attention of the Senate the need to address large differences in prices paid for fuel in the cities compared with country areas. I am convinced that rural people are subsidising petrol price wars in the city and believe this trend must not only stop, but be reversed.


Senator Panizza —And you want to do away with the diesel fuel rebate!


Senator WOODLEY —Woolgrowers and others in rural Australia often face inflated petrol prices. To reply to Senator Panizza, I point out that our measure would do much more than simply return the $1.50 a week which we calculated the excise has, on average, cost rural people.


Senator Sandy Macdonald —It's more than $1.50 a week.


Senator WOODLEY —That is our calculation. Senator Macdonald can come up with other figures if he wants to. The Australian Democrats see the inflated prices that country people are forced to pay as evidence of a major market failure, and with the Industry Commission report due shortly, we believe this issue should be a priority in the 1994 federal budget. We want to pursue a more efficient energy market, appropriate mechanisms to encourage lower prices and competition in country areas, with pricing regulation and subsidisation if necessary. Each and every one of the measures I have just mentioned is essential for securing the future of our woolgrowers and, indeed, of our rural communities. We will be looking for these measures in the coming federal budget.

  I conclude my contribution today by acknowledging the unique and marvellous properties of wool itself and by encouraging all Australians, as consumers, to consider woollen products when purchasing goods. When one buys a woollen product one will not only be purchasing a top quality and highly durable product but also supporting what is, perhaps, Australia's greatest industry.