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Friday, 20 February 1987
Page: 463

Mr HUNT —My question is directed to the Minister for Primary Industry. He will recall his assurance to this House on 22 August last year when he said that the Budget would bring interest rates down. Why are many farm producers forced to continue paying rates of at least 18.5 per cent, and some over 20 per cent and rising, in the face of record institutional farm debt now exceeding $8 billion, and the National Farmers Federation has estimated the total debt is $10 billion or more? In view of the fact that the Minister has said that the interest rate problem is the biggest problem facing farmers, will he call a debt crisis meeting with the banks, the rural adjustment agencies in the States and the State Ministers responsible to develop a strategy to assist our efficient farmers-the Prime Minister agrees that they are efficient-especially our grain growers, to ride out their current financial crisis and to help overcome the very serious financial and social circumstances facing so many families in rural Australia?

Mr KERIN —It was a pretty long question, Madam Speaker.

Madam SPEAKER —Do not make the answer too long.

Mr KERIN —I said on the night the Treasurer brought down the Budget that the Government had set in place a situation to get a lowering of interest rates-that is, we chopped the Budget deficit to $1 billion lower than the NFF had expected; we chopped the public sector borrowing requirement; and we took action in a range of economic areas that set the groundwork for a drop in interest rates over the coming year. The Treasurer did his work well. The Opposition fails to understand that we have a deteriorating balance of payments position, particularly with some commodities. We cannot simply get $1 billion less for our wheat and have as much money in our pockets. The Opposition must learn that. We cannot get billions of dollars less for coal, iron ore, and so on, and not have the situation that exists in this country today.

The Opposition, in all its prognostications and big promises to the electorate, which would take the Budget deficit to $14 billion, fails to acknowledge our external position. There is no sense, as the NFF and other bodies have said, in flooding the money markets with money and getting interest rates down in the short term if that will lead inevitably to a run on the dollar, higher inflation and even higher interest rates. That is the situation. The Opposition should learn a few economic facts. It thinks that a man coming from the north will get a few simple solutions; he will wave his finger and say `Don't you worry about that', and that will be a policy. Some Opposition back bench members endorse such nonsense, such geriatric gibberish. There are no simple solutions. We are putting in place the correct policies.

I had better quote the Deputy Leader of the Opposition on indirect taxation. Two or three weeks ago he said that the Opposition would introduce indirect taxes; now it will not. There is no sense in promising such things and--

Mr Spender —I raise a point of order. Madam Speaker, you said that you gave latitude to the Prime Minister, the Leader of the Opposition and the Leader of the National Party on matters of relevance. I pointed out the past rulings. You know the past rulings. The Minister, who is not in that category, is flouting past rulings. He should be told to abide by them.

Madam SPEAKER —Order! I point out that I have no control over how a Minister chooses to answer a question. The Minister will get round to answering the question, and be relevant to the question, as he goes. If he brings in some other problem on the way through, besides the one that he has been mentioned, that is how he chooses to answer.

Mr KERIN —Madam Speaker, we are talking about general economic matters--

Mr MacKellar —Madam Speaker, I take a point of order. If I heard you correctly, you said that you have no capacity to order a Minister as to the way in which he answers a question.

Madam SPEAKER —Except in the matter of relevancy.

Mr MacKellar —The point of order was on the matter of relevancy, and you have not ruled on that.

Madam SPEAKER —I rule that the Minister will answer the question in his own way. I expect him to get around to the relevancy of the question.

Mr MacKellar —Madam Speaker, you must ask him to be relevant.

Madam SPEAKER —Perhaps in the Minister's opinion he is being relevant. In my opinion the Minister is being relevant; is that good enough? I call the Minister.

Mr KERIN —We are talking about interest rates. What the Opposition does not seem to understand is that it is not a question of ticking a little cross and saying that we will have X percentage interest rates. This is at the heart of the most complex economic problem this country has. I was simply taking the opportunity to explain the reasons for the situation we have regarding interest rates, the farm debt problem, and the fact that many of the popular solutions being put forward by honourable members opposite are simply pie in the sky.

Mr Burr —Madam Speaker--

Madam SPEAKER —Is the honourable member raising a new point of order? I have dealt with the last one.

Mr Burr —I point out to you standing order 145 which states:

An answer shall be relevant to the question.

I put it to you, Madam Speaker--

Madam SPEAKER —Order! I have ruled that the Minister is being relevant to the question.

Mr Burr —I put it to you, Madam Speaker, that you have the authority to rule on relevance.

Madam SPEAKER —Order! I have made a ruling. The honourable member will resume his seat. I call the Minister.

Mr KERIN —Perhaps I can speak to the point of order.

Madam SPEAKER —The Minister will answer the question.

Mr KERIN —I was pointing out some of the short term solutions that are being put forward. For instance, a flat tax would cost the average farmer an extra $1,200 a year, on this year's national farm income figures, with a total cost to the rural sector of $200m. The honourable member for Gwydir has said that interest rates are the biggest economic problem faced by many farmers. Fifty per cent of the farm sector has very little debt at all. The problem lobs at one end, particularly for wheat farmers. About 12 1/2 per cent of all wheat farmers have debts of over $200,000. That is the really big problem in the farm sector. About 80 per cent of the drop in farm income is because of the situation in the wheat and grain industries. It is that end of the industry on which we are concentrating in respect of the work we are doing on the farm debt and the interest rates problem.

I cannot quite remember the dates, but I think that on 11 or 18 March I am having a meeting with all the States and the rural adjustment authorities; the Rural and Allied Industries Council is having a meeting on the question in March, and I am taking a Cabinet submission forward. We are talking to the banks all the time. This Government is actually doing something about the problem. We are not simply talking about holding meetings. I talked to the banks last night.