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Wednesday, 29 April 1987
Page: 2164


Mr TUCKEY(12.20) —These pieces of legislation-namely the Egg Industry Research (Hen Quota) Levy Bill and the Egg Industry Research (Hen Quota) Levy Collection Bill-are not opposed by the Liberal Party of Australia. Nevertheless, as has been said by a previous speaker, the Liberal Party is concerned about the failure of the Minister for Primary Industry (Mr Kerin) to consult with this industry group on any action the Government intends to take in that regard. As far as I am concerned it is imperative, particularly in legislation of this nature which is not particularly contentious, that the Minister does not forget that the constituency of Australian farmers, in this case Australian egg producers, is entitled to proper representation on these issues. It is frequently misunderstood what costs of even half a cent per hen might mean to the economics in these days of very large-scale ownership of hens and hen quotas and things of that nature. Although apparently there is still to be some consultation in that area-the Minister in his second reading speech has told us that the levy, which can be up to a maximum of 10c per hen, will be more of the order of three to four cents-these matters are all part of the consultation process that, quite simply, should be taken prior to legislation of this nature being brought before the Parliament.

It is only recently that, again, quite simple legislation which is beneficial in general for the wheat industry was brought into this Parliament. When I sent urgent copies of the Bills-faxed them in fact-to the Primary Industry Association of Western Australia Inc. and the Pastoralists and Graziers Association of Western Australia they were stunned to find that printed legislation could be brought before the Parliament without any consultation with their industry on a matter which, although in this case appeared to have a positive effect in terms of dollars for them, nevertheless involved a substantial amount of money. Maybe it could have involved even more money for them had they had the opportunity to consult. The Liberal Party does complain about the Minister's failure to consult and we will ensure that under a future government that sort of situation does not occur.

The Bills themselves are necessary because of change in the industry. The original hen levy was intended to equalise amongst producers for the disposal of surpluses. But, as the Minister advised in his second reading speech, it is now quite clear that the State governments have managed to reduce the amount of surpluses that occur through changes to hen quotas and funds are now required only for research. We support all activity for research. We know that in this very competitive world today it is only through research and the increased efficiency of animals' ability to produce-whether it be eggs, beef or whatever else-that we can remain competitive in world markets where, of course, there is no regulation. There is no international egg board, no international wheat marketing board and no international beef marketing board. Once goods leave our shores we are in the wilderness; we are there to fight for our market share. Might I add in that regard that the market share that the Australian Wheat Board currently manages to achieve for Australia-some 16 million tonnes per annum-has to be protected at all costs. It is ridiculous to think that in Australia we can let the international market influences affect the amount of wheat we produce while expecting that at some time in the future our current buyers will come wandering back to Australia when they have got into the habit of buying from someone else.

Although in many areas market influences are good because they have the result of forcing the price back up to reasonable levels when a substantial quantity of product is removed from the market, unfortunately in international terms Australia does not produce a substantial quantity of product, and there are such huge surpluses in other subsidised countries that the removal of even 50 per cent of Australia's export production of grain would have no effect on world prices. It is imperative that this Government and future governments ensure that mechanisms are available to maintain our wheat production and current markets. I have been in many areas of retail marketing and when a competitor down the road dropped the price I had to meet with him. It sometimes was painful. In this case it would be far too painful for our individual producers of grain to do this and so it must be the case that `Australia Incorporated', takes an interest in the welfare of our wheat growers who, of course, are providers of the major food product for the egg producing industry. Unless we are prepared to ensure that `Australia Incorporated' can keep its market share during these difficult cyclical times we will face great difficulties in the future. That is one of the points that needs to be made.

Apparently, the levy-if set at around 3.5c per hen-will collect about a quarter of a million dollars per annum from the industry. The Government proposes to match that amount dollar for dollar, giving us some $500,000 per annum of research expenditure. This effort on behalf of the industry is to be commended. I understand that since this legislation has been in force-since about 1965-some $3m has been contributed by the industry and this amount has been matched by government to ensure the development of this industry. The industry is essential to Australia. We are well aware of the benefits of a regular supply of eggs, and of the benefits of eggs in the family diet.

I mentioned a little while ago some of the circumstances of the costs for this industry. Naturally the cost of feed is significant. To most egg producers feed means wheat processed into pellets of one sort or another with other additives. As I have just mentioned, the wheat industry is in dire straits and this industry is primarily responsive to world market prices. This has given some benefit to the egg industry because there has been a fall in price, particularly now as recent legislation has allowed for direct negotiations with farmers in many areas.

The international situation has to be recognised for what it is. On the world scene, in recent years fuel prices have dropped to almost half their previous level. Also on the international scene, interest rates have dropped by around 20 to 25 per cent. I remind the House that when interest rates were last high in Australia, of the order that they are today, they were high all around the world. This time world interest rates-the world price for money-have dropped to about a quarter of what they were a couple of years ago. These costs are affecting the ability of nations to buy our exports. The big purchasers of grain around the world, Russia and China, are quite dependent on fuel exports for foreign exchange. As I have just said, fuel costs to the egg industry-for parts of the year egg producers have to heat their sheds-on an international scale have dropped to half of what they were which has had an effect on the ability of other countries to buy the products we want to sell them such as grain. I just ask the House to consider that, if this Government had been able to pass on to Australians a reasonable cost for fuel and an international cost for money, how easy might it be for our producers, with just those two areas of saving, to be able to meet the market-place internationally-particularly in regard to the international price of grain which has slipped so dramatically.

Primary industry is carrying the burden of government policy in these areas because of the extravagance of this Government in expenditure and its consequent borrowing which has put the pressure on the interest markets and created this international aberration whereby only we and the banana republics have interest rates in excess of even 10 per cent. Ours are still high, even with the falls. I was surprised to hear the Prime Minister (Mr Hawke) boasting yesterday of falls in interest rates. My goodness me, it is like his boasts whenever the trade deficit drops below $1,000m; it is something to celebrate! The reality is the numbers. When a trade deficit is still of the order of $700m, that is nothing to crow about, and when interest rates in Australia are double and triple what they are to business people, home owners, hen producers and others in other parts of the world, that is a disgrace, whether they are falling or not. These issues must be addressed. It is fine to see the Government come in on the minor issues of delivering some research funds to an industry. We are not opposed to that in any way. We just want the macroeconomic issues to be addressed so that our primary producers in whatever area-whether it be egg production, chicken meat production, wheat production or all the others-have the opportunity to compete. The reality is that they must have the cost structures of their competitors if they are to meet the international market price on those issues. I say again, were fuel to be at the international price in Australia and were money charges or interest to be at the international price, so they would.

I do not have anything to add. We do not oppose these Bills. We sincerely hope that the Government will recognise its responsibility to this area and to farmers. The fact that farmers occasionally bother to tell the Government the truth in some of the areas I have just mentioned is no reason to ignore them; it is no reason to blindfold them on issues. I made some remarks yesterday about the membership of the Wheat Board and how the Government had created a situation that would have been intolerable for farmers; it was only through the efforts of the Opposition that this matter was resolved in the farmers' interest. They can rely on our interest and their welfare will be guaranteed by future governments from this side of the House. I am determined, bearing in mind my responsibilities, to see that is so. We certainly will not allow them to operate in an environment where their cost of money, the interest charges, are four times the national rate and where, accordingly, their fuel prices are greater. Whether it be eggs or anything else, farmers are subject to freight on an inwards and an outwards basis. They must freight in their feed and they must freight out their product. Of every $7 spent in Australia, $1 is spent on freight. Of course, that expenditure is affected at every level by the cost of fuel and the cost of interest, because the industry today consumes large quantities of fuel and is capital intensive. I close on those remarks and thank the House for its time.