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Wednesday, 25 March 1987
Page: 1531


Mr HAWKER(7.30) —Tonight, along with two of my colleagues, the honourable member for Riverina-Darling (Mr Hicks) and the honourable member for Gippsland (Mr McGauran), I would like to take umbrage at some of the points made by Government members about the real state of the rural crisis. Over the last couple of days the honourable member for McMillan (Mr Cunningham) has come into this place and made certain statements which I find offensive. Talking about the problems in the rural industry he said of Opposition members:

It is time that they were honest, before they create a situation where wool growers, who have money rolling into their pockets, gobble up some of their neighbours in the wheat industry and buy their farms for practically nothing . . .

That demonstrates typical politics of envy and is surely an indication of someone who does not understand what is really going on, despite the fact that the honourable member claims to have travelled around so much of Australia. Yesterday in the debate on the matter of public importance the honourable member for McEwen (Mr Cleeland) made a most extraordinary statement when talking about the interest rate crisis. He said:

The crisis which has been caused by the world trading situation, by the price for wheat, is driving interest rates.

Earlier he had said:

. . . a large number of farmers would still be in massive difficulty simply because of the prices they are getting for their commodity, namely, wheat. It would not matter if they had no interest rate charge at all.

I find both of those comments offensive. They show a total lack of understanding of the real situation and of the rural crisis as it affects various individuals. In order to demonstrate how the crisis is affecting individual farmers, I seek leave to have incorporated in Hansard a table which shows two case studies of farms in the Mallee.

Leave granted.

The table read as follows-

Two Mallee Farms

80/81

81/82

82/83

83/84

84/85

85/86

$

$

$

$

$

$

Liabilities...

117,500

77,000

168,000

183,000

180,000

146,000

Assets...

540,000

600,000

580,000

660,000

350,000

277,000

Valuation-land...

400,000

457,000

400,000

457,000

183,000

137,000

Equity...

88%

93%

83%

84%

66%

65%

Liabilities...

124,000

123,000

238,000

208,000

258,000

251,000

Assets...

152,000

159,000

148,000

148,000

219,000

182,000

Valuation-land...

968,000

1,100,000

1,100,000

1,250,000

750,000

375,000

Equity...

89%

90%

81%

85%

73%

55%


Mr HAWKER —I thank the Minister. These two case studies of farmers in the Mallee area of Victoria show what has happened to their farms from 1980-81 until 1985-86. The table demonstrates clearly the devastating impact interest rates have had on farmers over the last few years. Interest rates, more than any other single factor, have put these farmers in a situation from which it is virtually impossible for them to recover. The first example shows that the net assets of the farmer for the period of five years covered by the table have dropped from $940,000 to $414,000. In other words, the value of his net assets has almost halved. The equity in his farm has dropped from 88 per cent to 65 per cent. Yet his overdraft has increased by only 25 per cent. The effect is felt not just on one farm but on all farms. In this case the value of the farmer's land dropped to one-third. That can be directly attributed to the fact that there are no people around who are still buying land in this area simply because of high interest rates.

In the next example the net assets have dropped to less than half and the land value has dropped one-third. These figures do not take into account the effects of inflation. They show what a serious situation these farmers are in and indicate the seriousness of the situation in the Mallee. When the honourable member for McEwen says that interest rates are not a factor in the rural crisis he is really having himself on. If it were not for such high interest rates these people would be able to survive. They would be able to trade their way out over time. However, interest rates, more than any other single factor, are killing these people and putting them in an impossible situation. They are finding that over five years their net assets have more than halved. I suggest to honourable members that they would be less flippant when they talk about the problems facing people in the country if they saw examples of real cases, of the people who are really suffering. My colleagues, the honourable member for Gippsland and the honourable member for Riverina-Darling, will continue this debate. They will point out how serious the situation is and how interest rates, more than any other single factor, are killing people in many areas of the bush. They will point out how the Government should be facing up to the fact that its high interest rate policies are causing the problems.


Mr DEPUTY SPEAKER (Mr Leo McLeay) —Order! The honourable member's time has expired.