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Wednesday, 26 November 1986
Page: 3791


Mr TUCKEY(5.14) —The difference of opinion in this Parliament as to who should prosper and who is best able to help Australia prosper is quite remarkable. It is quite clear, as far as this Government is concerned, that if people manufacture anything, however inefficiently, they should prosper. If they happen to be some of the few people who have managed through great pressure and through very difficult times to be still competitive in world markets, they are seen as the milking cow. It is quite okay for them to have a bit more of a struggle. If a person happens to believe in free enterprise and the right to make a living, and consequently supports the policies of the Liberal Party or the National Party of Australia, that is just another reason for this Government to deal it to him.

This legislation is all about transferring assistance from the farmer, the user of fertiliser in this country, to the fertiliser manufacturers, who on a State by State basis produce a product that is freight intensive at every stage of its production and use. It is not a product, therefore, that can be easily shipped from State to State. There is a national monopoly because, although we have individual manufacturers in different States, we find that generally the tyranny of distance, perhaps leaving aside the borders of New South Wales and Victoria and Victoria and South Australia, means that there is no competition. Of course, the tyranny of distance is magnified by the policies of our State governments and in particular by their regulation of transport. If we wanted to freight some fertiliser down from Queensland to Victoria it would cost $45 a tonne. A farmer can buy the same fertiliser in Florida and have it transported to a port in Australia for $15 a tonne. One does not have to be a very good mathematician to know the substantial additional distance involved.

Regulation and the forcing of Australians to use outmoded rail systems contributes substantially to that cost. Even the trucking industry, given half a chance, would probably do that trip cheaper. We have the opportunity to use sea freight but we know that sea freight around Australia is the most expensive and unreliable means of shifting anything. One day I heard you on the radio, Mr Deputy Speaker, bemoan the fact that only 3 per cent of our exports leave Australia in Australian ships. I bemoan that fact too. I bemoan the fact that we are missing the chance to give so many Australians a job and retain our international reserves. But I also know the reason. The participants in that industry will not play fair. They want stupid labour manning arrangements, they want to work five months in every year for $40,000 or $50,000, and when they get on board the ships-I have had this from the horse's mouth-they are so lazy that even the cost of maintaining a ship in dry dock is substantially increased because of the maintenance that is not done at sea but would be done on ships of competing nations.

That is the situation we are confronted with, but the Government is going to help the manufacturers. Of course, the Government has this special clause in the Fertilisers Subsidy Bill to which it draws attention-clause 22, registration of premises. This is probably the most remarkable thing in this legislation. It says that the manufacturer must pass the subsidy on to the consumer. Of course he will. He will work out all his costs and profit, and he will deduct the subsidy. But there is no control on the manufacturer putting up the price by $10 a tonne because he says his costs have increased. I was driving around my electorate before last Christmas and I heard that one of the companies targeted by the metal unions for a superannuation push-an illegal superannuation push-was our State superphosphate manufacturing concern, Wesfarmers-CSBP. I wrote to all the directors and said: `If this push is applied to you, tell the unions that you will lock your doors and just become an importer, because that is what the unions deserve for such stupidity'.

Here is an industry that is whingeing its head off but which put up the price of single super in my State by $18 a tonne last year as soon as it won a di-ammonium phosphate anti-dumping case. The industry tells us how efficient it is. DAP was becoming a direct competitor with single super in Western Australia. One farmer said to me that he could get the nitrogen for nothing. That is how the competition was operating, and that is why the manufacturers wanted an anti-dumping case on DAP. At that stage they were importing DAP and selling it to the farmers. They were not even prepared to manufacture it. They could profit better by that scheme, but they were worried about their single superphosphate production. These are the sorts of things with which we are confronted. We see just how good competition is when it is around. Let us consider the competition with urea. Urea manufactured in Queensland is sold in Toowoomba at $306 a tonne. That is a captive market. But in the competing areas of the Riverina the same urea can be sold for $242 a tonne. That is pretty good, is it not? It can be transferred all that distance and sold for less.

When we see this sort of monopoly control, I am always reminded of how it worked in the circumstances with which I was confronted when transporting goods in and out of the town of Carnarvon where I live. We had free enterprise all right. We had a government granted monopoly, a franchise. When we complained that it was getting too expensive-it had not always been too expensive in our view-the Commissioner of Transport told me: `Mr Tuckey, it is impossible for them to do this work for any less'. I relate this to the decision to pass on the subsidy. The Commissioner said: `We checked the books. We checked their costs of production. They could not possibly freight goods into your town cheaper. We monitor their every movement'. Eventually we had the opportunity to tender to the Government for our own work. We formed a co-operative and put a transport company together. We put in a bid 30 per cent lower than the price that the Government said was the lowest possible price at which this operator could perform. It took us eight years but we got the business. Everybody said we would go broke. We were still operating eight years later. In fact, eight years later we eventually arrived at the same price that the other company wanted. We asked that it be left there as our competitor. It ended up with 10 per cent of the business, and it was prepared to do the 10 per cent at our price-30 per cent less than what it claimed was the price it needed to do 100 per cent of the business.

All I am trying to prove is that it is only competition that will set a price. It does not matter how good the bookkeepers are. It is just an absolute farce for the Government to say that it will ensure that this particular subsidy is passed on to farmers. It is a manufacturing subsidy; it cannot be passed on to farmers in any sense other than the most artificial one. When the superannuation push is imposed on the fertiliser manufacturers-as it now will be; they have a little bit of fat in the system and the metal workers and others will want to drag it out-their costs will increase. The manufacturers will increase the price and then they will deduct the bounty. What a joke it is! They will go on doing that until their price, including the subsidy that they are given, reaches the price for the imported product.

That is what will happen. We know it will happen and that is why we oppose this legislation. That is what the farming communities know through their organisation, the National Farmers Federation, and that is why it has asked us to oppose the legislation. They have done their sums; they have had surveys done; they know that it will cost them more. The fact is that high analysis fertilisers are made only in certain places in my State. I am the member for farming in Western Australia. I have an electorate which is as big as Victoria; but there is only one place in Western Australia where one can buy DAP. It is Kwinana. Single superphosphate is manufactured in my electorate in Geraldton but DAP is not manufactured there, so it has to be freighted on the hugely expensive rail system that farmers are forced to use for that product, unless they take a vehicle down to Kwinana and bring it back themselves. This is quite ridiculous. In the past they have brought imported fertiliser into Geraldton. That is the difference. Farmers cannot benefit by this legislation; they will be stuck with the manufacturing system that is imposed upon them, and that will not change.

Let us look quickly at the other problems that are facing farmers, to which this subsidy measure is just an added burden. All these measures are about supporting the Australian system. We know that international prices are low; we know that they have been low before. We know that once Australia thought that it could not sell more than five million tonnes of wheat a year and so it imposed wheat quotas. Now we are selling 15 million tonnes, which shows the foolishness of that decision which was taken by our side of politics. But the reality is that we will compete, given half a chance. I represent people who average five bags of wheat per acre. Once they had an input cost level of two and a half bags of wheat per acre. Now they have one of four and a half. Of course, they just cannot stand that. It is the same with freight. Twenty years ago one could shift one's freight to market for two bags in the tonne. Now it is four bags in the tonne. Who is getting the money? That is on a tonnage basis; that is not mentioning dollars. This is what it is all about. That should never happen in a modern environment. It is absolutely ridiculous to say that it should.

We have wharfies who are so busy imposing wage levels on foreign ships that they increase the freight in and out for our farmers. If they believe in that, that is all right. But why do they not go and picket the factories of Taiwan and Korea and demand that they pay the same sorts of wages? Why do they harass shipping when it comes here? They think they are beating the international shipowners. Of course they are not. They are just imposing freight premiums on Australian exporters and importers. That seems pretty silly to me.

To digress just a little, Ralph Sarich told me personally as he flew back from the meeting where the decision not to manufacture his invention in Australia was taken that the reason for this decision was the Australian waterfront. He got all the way through his processes of calculation to that point. He could manufacture the engine and do everything else, but the unreliability of our waterfront, and the stocks of his product that he would consequently have to carry overseas to meet just in time assembly, are the reasons that the Sarich motors are not being made in Australia. That is a disgrace. Nobody is dealing with the problem and it just requires a bit of essential services legislation to do it. We oppose this legislation. We think it is wrong. We thing that the subsidy has always been presented as a subsidy to farmers. This is a subsidy to manufacturers and as such it will eventually cost the farming community, which cannot afford it, a lot more.