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Wednesday, 30 November 1938

Mr CLARK (Darling) .- I support the amendment of the Leader of the Opposition (Mr. Curtin), which makes it clear that the Labour party is in favour of a home-consumption price for wheat, and that we approve of the principle of paying a bounty to those who have suffered loss from the drought, but that we are at variance with the Government regarding the method by which the scheme should be financed. We disagree with the proposal of the Government that the bread of the people should be taxed in order to stabilize the wheat industry. Even if this mistake has been made in the past, there is no reason why it should be perpetuated. There are other methods by which the scheme could be financed. The burden should be borne by those sections of the community best able to hear it. The poorer people are the largest consumers of bread, and it is not right that they should be called upon to pay most of the tax.

The royal commission which inquired into the wheat industry a few years ago reported that, without making allowance for interest payments, 20 per cent, of the growers could produce wheat at a profit at prices between 2s. 2d. to 2s. 7d. a bushel; another 20 per cent, could produce at a profit at prices between 2s. 7d. and 2s. 9d., while a further 20 per cent, could do so at prices up to 3s. a bushel. The commission estimated that interest payments represented a charge on wheat of between 7d. and lOd. a bushel. Interest is an important factor in the cost of production, and, in order to reduce that cost, mortgages should be reduced, and tha farmers financed at lower interest rates. A few years ago, legislation was passed through this Parliament authorizing an advance of £12,000,000 to be used by the State governments for the adjustment of farmers' debts. However, because of the negligence of the State governments, less than ha if of the money has been requisitioned up to date. If the interest burden were reduced, the farmers would benefit to a greater degree than they will under this scheme, which depends upon taxing the bread of the people. Some years ago, four bushels of wheat were worth £1 ; now ten bushels of wheat are worth only the same amount. Then a man had to produce only 24 bushels of wheat to pay interest on £100; now he must produce 45 to 50 bushels to pay the same amount. Thus, a far greater proportion of his production must be set aside to meet interest charges. This fact was noted by the royal commission which, at page 27 of its first report, stated -

The fall in wheat prices, notwithstanding tlie reductions in interest and other costa, has occasioned an enormous increase in the burden of the debt expressed in term's of wheat. For instance - a debt of £1,000 represented 4,499 bushels of wheat when the price was 4s. Od. per bushel on the farm. When the price had fallen to 2s. per bushel the same debt represented 10,000 bushels. If 7 per cent, be taken as the rate of interest before the depression, 310 bushels at 4s. 0d. paid the interest bill of £70. With a ruling rate of interest of 5 per cent, and wheat at 2s. the number of bushels required to pay the interest bill of £50 is SOO, an increase of GO per cent. If however, the excess of the selling price over working expenses (No. 1 costs) is considered, the increase in the interest burden is larger still. For example, if No. 1 costs were 3s. when wheat was 4s. Od. the margin was ls. Od. per bushel - 930 bushels would provide sufficient surplus to pay the interest bill of £70. With wheat at 2s. 6d., however, and No. 1 costs reduced to 2s., the margin is only 6

No. 1 costs are the actual costs of production, including the cost of operating the farm, and an allowance for the farmer's labour, but no allowance for interest. No. 2 costs are the same as the others, plus interest. Any scheme for the stabilization of the wheat industry should take interest charges into account. The farmers should be financed at reduced rates of interest bv the Commonwealth Bank, thus enabling them to obtain greater returns from what they produce.

No provision is made in this bill to ensure that farm workers are paid adequate wages. In every case when bounties are paid, the Government should insist that those employed in the industry are paid award rates. This, we shall be told, is a matter for the Arbitration Court, but in Victoria and New South Wales rural workers are not covered by Arbitration Court awards, with the result that men with families have to work for a miserable pittance of 10s. or £1 a week and keep; and pretty miserable keep it is. If the same scale of wages operated in all industries, the living standard of the people would be very low, their purchasing power would be correspondingly low, and there would be a very poor local market for primary products. If the primary producers wish to expand the local market they should insist upon the workers receiving adequate wages, and they should begin with their own employees. It is altogether unfair that farm workers should be receiving only £1 a week, when the basic wage in other industries is £4 a week. Under this scheme the workers generally are called upon to contribute through the tax on flour, but the workers in the rural industries are not assured of decent wages. If an assurance were obtained from the State governments that the price of bread would be fixed at a reasonable figure, the scheme would be more acceptable to the consumers. It is not acceptable in its present form, and I support, therefore, the amendment of the Leader of the Opposition.

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