Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 26 November 1986
Page: 3783

Mr SIMMONS(4.20) —Having heard the comments of the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), one could be forgiven for thinking that this debate was a wide ranging discussion of the rural sector rather than on a specific piece of legislation, namely, the Fertilisers Subsidy Bill. It was my intention to confine my remarks to the nature of that specific piece of legislation now being considered by the House. However, with the indulgence of the Chair, since the Deputy Leader was allowed to make some wide ranging comments on the nature of primary industry and rural production, I feel bound to respond to some of the concerns he raised this afternoon.

It is interesting in the context of such a debate to examine the National Party's record in government. It seems a long time ago but it is in fact just over 3 1/2 years since the National Party of Australia was the junior partner in coalition in this chamber. If one relates the comments of the honourable member for Gwydir to the types of things his Party did when in government up until March 1983, all one can say is that his words were hollow rhetoric indeed. The most interesting comment related to protectionism in Australia. In his remarks on another Bill this morning the honourable member for Ryan (Mr Moore) touched on the wide ranging debate about protectionism, yet if ever a government was strongly protectionist it was the government in which the National Party was the junior partner in coalition in the Fraser period of government from 1975 to 1983.

The facts speak for themselves. One remembers the decision taken by the Whitlam Government to slash tariffs unilaterally by 25 per cent across the board. Although I do not necessarily say I agree with that decision, I am saying that at the time the then Leader of the National Party, Mr Anthony, called it a cowardly act. Yet one of Mr Anthony's colleagues, the honourable member for Gwydir, and indeed the honourable member for Ryan earlier today in a previous debate, made the point that whenever they are returned to government, at some time in the next century, the Liberal and National parties will suddenly dry out. An examination of their record over many years shows that it does not take a drying out view on the subject of protectionism. So, I dismiss many of the comments made by the honourable member for Gwydir. I have some respect for his contributions to the rural debate, particularly his contribution to the very successful trip to the United States earlier this year, but the honourable member's comments in the debate this afternoon were hollow rhetoric of the sort that is preached at National Party meetings throughout Australia.

Mr DEPUTY SPEAKER (Mr Mildren) —Order! Given that the House is dealing with the Fertilisers Subsidy Bill, I suggest that the honourable member should now address his remarks to the Bill.

Mr SIMMONS —I am happy to do that, Mr Deputy Speaker. I was saying that the honourable member for Gwydir used this debate to make wide ranging comments. I shall relate my comments on protectionism to the provisions of the Fertilisers Subsidy Bill. I and many other Labor members support the Government's general thrust in moving away from a reliance on tariffs to greater dependence on bounties in order to assist industry. I say that for the reason which has been enunciated in this chamber from both sides of the House over a number of years-namely, that such a policy forces governments to be more honest. If a bounty is to be provided, it will show up in the appropriations, and I think that is desirable.

The honourable member for Gwydir offered some trenchant criticism on the Fertilisers Subsidy Bill and dealt with comments made on the Bill by the National Farmers Federation. I interjected during his remarks and he took me to task for my comments on the Federation. One of the difficulties in quoting the views of such organisations is that at times their affiliate members seem to offer conflicting points of view on subsidy versus protectionism. We have seen that to be the case recently in the citrus industry, where there is a conflict between one section of primary industry and another. Let me relate some of my comments to the Bill. The National Farmers Federation has opposed the Government's decision and has referred solely to the circumstances under which some people will face higher fertiliser prices. The Federation claims that the decision will eliminate competition in the industry, allegedly at a cost of some $70m a year to farmers. But for each price increase there is an equivalent reduction to some other consumer. In particular, the decision does not eliminate competition in the industry. Farmers will still have access to imported fertilisers at world prices. As the total cost of the subsidy is $55m, it is clearly nonsensical rhetoric for the National Farmers Federation to claim that this decision could cost farmers $70m.

The decision will withdraw subsidies from all imported fertilisers. It will increase the subsidy on domestically produced fertilisers from $138 per tonne of phosphate content to a sliding scale according to phosphate content. It will ensure that the increased bounties are passed on to consumers by domestic manufacturers. I refer to a Press release of 19 August put out by the Minister for Primary Industry (Mr Kerin) on the day of the Budget this year in which he mentions the new arrangements for fertiliser bounty. In that statement the Minister made a number of points, the most significant relating to whether the Government will keep Australian manufacturers honest. The Minister said:

The Government will closely monitor fertiliser prices to ensure that the increased bounty is passed on to farmers.

That is a realistic statement. Clearly, no government will allow a subsidy to be paid to domestic manufacturers without attaching some conditions, as is the case with any contractual arrangement where there is give and take. In its approach I am sure that the Government, as the Minister said, will take all necessary steps to monitor the arrangements closely.

Again, I relate some of my comments to some of the other broad ranging matters mentioned by the honourable member for Gwydir. He spoke of cost increases in the context of this decision. If we look at what has happened in the recent past in relation to farm costs, again we must dismiss many of the honourable member's comments as hollow rhetoric. Contrary to many claims by the National Farmers Federation, by the Livestock and Grain Producers Association and by a whole host of other people who have at times expressed political hostility to this Government and who cannot accept the democratic decision made on two successive occasions that this Government has been returned to power and is now in government, I point out that cost increases cannot be blamed for Australia's farming problems. The honourable member for Gwydir talked about the problems facing Australian farmers as a result of the European and American subsidisation practices. In a very bipartisan spirit we all recognise that factor, yet as soon as the debate comes back into this House the Opposition returns to the tired old rhetoric of blaming cost increases.

As the Prime Minister (Mr Hawke) pointed out during Question Time, either this week or last week, the annual rate of farm cost increases, which includes interest payments, has averaged 7 per cent in the last three years, compared with 11 per cent in the previous three years, while a rate of increase of only 2 per cent or thereabouts is expected in 1986-87. If one extrapolates those figures further, one finds that had the previous 11 per cent rate of cost increase continued, then all else being equal, farm incomes this year would be some 90 per cent lower than is currently expected. We all realise just how low farm incomes are. The main reason they are low is that international prices have collapsed. Why have they collapsed? They have collapsed essentially because the United States and the trading nations in Europe are not prepared to adopt trading policies that we would regard as being sensible.

This Government has taken the decision to float the Australian dollar-a decision which, probably more than any other, has had an enormously beneficial effect on Australian farmers. Can honourable members imagine the financial plight of Australian farmers at this time if, somehow or other, the Government were still trying to struggle with an overvalued exchange rate? Quite clearly farmers would be in all sorts of strife. Yet it is Opposition members who are opposing-once more, for purely opportunistic reasons-this Fertilisers Subsidy Bill. Contradictory opportunism is how I would describe much of the Opposition's contribution to primary production. We are concerned with the fundamentals. If we can get some of the macro-economic positions correct, we will be in a much better position to assist Australian farmers. We all recognise that interest rates are a cause of some concern, not only to Australian farmers but also to people involved in business. It is a problem and we all recognise that; but surely it is not being suggested by the honourable member for Gwydir that somehow or other we should change the basic thrust of that macro-economic policy, which has been universally accepted as the right thing to do at this stage, particularly in terms of our balance of payments difficulties. We are not about opportunism in rural production or support for Australian rural production. We are concerned with getting the fundamentals right. As I said a few minutes ago in my comments on farm cost increases, those figures I quoted included interest rates. In other words, despite the fact that we all recognise that interest rates are a cause of concern within the Australian economy at present, they are still included in those farm cost figures-a figure which this year should be around the 2 to 3 per cent mark.

The Government has faced up to a very difficult period over the last three years in trying to come to grips with this whole debate on protectionism and whether we should go down the line of tariff protection or move towards a system in which we favour the payment of bounties. There is no question in this chamber at all-certainly, I would hope, not from the National Party or even within the Liberal Party-that there is any movement away from the approach that where possible we should move down the line of the payment of bounties. As I said, we should do that to keep governments honest because those particular figures show up in the appropriations. What is more, as the honourable member for Ryan (Mr Moore) commented earlier, it also ensures that people's management practices are scrutinised much more carefully.

I support the Government's decision contained in this legislation to change the present fertiliser bounties and I believe that all fair-minded people who analyse the decision will support it. The honourable member for Gwydir mentioned that the National Farmers Federation opposed it and that everyone else opposed it. As I said to my colleague, the honourable member for Eden-Monaro (Mr Snow), my office has not exactly been invaded by people expressing all sorts of horror, concern, upheaval, revolt or whatever at this decision.

Mr Snow —Neither has mine.

Mr SIMMONS —The honourable member for Eden-Monaro agrees with me. His office has not been knocked down either. Perhaps this afternoon we are giving people an invitation to do that, but I suggest if this did happen it would be a rather orchestrated event. It has not happened to date. What we are really seeing in this debate has nothing whatsoever to do with the question of fertiliser subsidies. It has more to do with the whipping up of fears in rural Australia by the National Party, by the Livestock and Grain Producers Association, by the NFF and a whole series of other vested interest groups in the community who cannot accept the fact that we have a very good Labor government in Canberra.