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Wednesday, 19 March 2008
Page: 2219


Mr KATTER (10:36 AM) —In the state of Queensland, we have five centres of population of well over 100,000—some of them are over 300,000—that are 300 kilometres from the nearest city. In fact, a million people live 2,000 kilometres north of Brisbane. Even though we produce about seven per cent of Australia’s fruit and vegetables in North Queensland, they have to travel 2,000 kilometres down to Brisbane to the nearest markets and back again. That to me is extraordinary, but that is what happens. For those of us who live in North Queensland, for example, our fruit and vegetables have to be transported, under refrigeration, 4,000 kilometres at the very least. Under the Interstate Road Transport Charge Amendment Bill 2008, the increase in costs to us will be huge, but the increase to those 1½ million people in a decentralised state like Queensland that live in those five centres over 300 kilometres to the nearest city will be enormous. Even in New South Wales, there are two million people living 200 kilometres away from Sydney. If you increase the cost of transportation, which is built into every single item you purchase in regional New South Wales or regional Queensland, and you then add the GST, you have an enormous inflation of the price of everything in rural and regional Australia, where some two or three million—maybe even four million—people live. Some 300,000 to 400,000 Australians live in north-western Australia, in Darwin, Kununurra and the northern Pilbara, and those people are 4,000 kilometres away from anything at all. Every single thing they buy has built into its cost structure 4,000 kilometres of transportation costs, and on top of that goes the GST.

I remember a famous address by one of our vice-presidents in the early days of the National Party, when we were still the Country Party. He said, ‘The cost of a loaf of bread in Jambin is twice the cost of a loaf of bread in Bundaberg,’ and he went into why that was so. We can see that clearly in the price of petrol. In Townsville, we have about 10 petrol outlets. They are huge outlets and there are about 10 of them for 240,000 people. Each of those service stations services 24,000 people. There are three service stations in Charters Towers servicing 15,000 people. There is one service station in Julia Creek servicing 700 people. The cost structure on a service station is much the same whether you are servicing 24,000 people or 4,000 people. Obviously, the price must be higher to carry the overhead costs in a service station or in any other facility in these places.

We did a very in-depth study when I was the secretary of the Chamber of Commerce in Cloncurry. We got the James Cook University to do a CPI cost comparison in food items between the mid-west towns of North Queensland and Brisbane, and the difference was 22 per cent. If there are any doubts about that, the teachers union commissioned a study at the same time and it was 22.5 per cent. So I think we can safely assume there was a 22 per cent difference between the price of food and grocery items in the mid-west towns of North Queensland and Brisbane. At the time in that area the cost of transport was 60 per cent of the price of the potatoes. The cost of transport was over 60 per cent the price of cement. In motor vehicle parts, it was over 60 per cent. There was almost a doubling of our costs in these areas as a result of transportation costs. So, when you come in here to increase our transportation costs, we must fight tenaciously against it. If we want to be internationally competitive, then the cost structures created by government must be cheap.

If you want to be internationally competitive, your cost input items have to be at a very low price. If you look at what is carted in Australia, one of the really huge items that is carted in bulk is mining product. Unfortunately, and sadly, the vast proportion of our product from north-west Queensland is carried by road transport instead of by rail, reflecting the incompetence of the state government in Queensland. Whether we like it or not, it is being carried by road transport. The cost structure for the mining industry is in part the cost of road transportation.

Probably the biggest single item carried in Australia is cattle. The Road Transport Forum of Australia was chaired for many years by the presidents of the Livestock Transporters Association because they were the biggest operators. I cannot help but pause for a moment and pay tribute to Australia’s livestock hauliers. Kevin Pattel—the Pattel families probably own one of the biggest combined livestock hauling operations in Australia—constantly said in his heyday, ‘What industry in Australia had the same charges at the end of the war as we are charging today?’  My old dad charged a pound for a mile per deck—or per K wagon as they were called then. I think Kevin made this statement in 1978. He said, ‘Today we are charging a dollar a kilometre, which is much the same charge as we charged at the end of the war.’ What a great tribute to the competitiveness and the efficiency of the operations of these heroes.

Today I rang the Curley Transport people—Michael and Stephen Curley. Curley Transport are one of the two or three biggest operators in Australia. I asked them what the industry charges are today. Since 1978, they have gone up to only $1.25 a kilometre. So, despite a tenfold or twentyfold rise in the CPI since 1945, the industry’s charges are not much higher than 1945. But government cost burdens keep being added. Let me give one example. The member for Batman will be very interested in this. I know that he has a great interest in energy and a very receptive and questioning intelligence on it as well—and I will ask him for some things afterwards! I served on a committee with him and I say that with all sincerity. We are well aware of the price of energy. I carry around with me and I have in my office a picture of me filling up a Holden motor car in Sao Paulo in Brazil for 74c a litre. Ethanol there retails at the bowser for 74c a litre! In the United States, where 15 per cent of all gasoline is ethanol, it is 80c a litre—that is, 80c Australian. If they can get it for 80c in the US and Brazil can do it for 74c, why are we in Australia paying $1.40? Because we are in the grip of the oil companies; that is why.

If the government feels it has to go down this path, please give us some relief. The oil companies do not buy at spot market prices. They own the wells. They have a cost of production price which is exactly the same now as it was five years ago, when the price of a barrel of oil was $35. It is now $100 and the cost of production is exactly the same, so I leave to your imagination the sorts of profits these people are now making.

But let me return to the cattle industry. I have had cattle since I was about 20 years of age. I have owned cattle all my life. My daddy never owned any cattle or anything, so I have had to make my own fortune and my own way in the world in the cattle industry, and I know it intimately. The Americans are killing us in cattle. The reason is that they buy their grain for $150 a tonne. Even in North Queensland we need this grain, and we pay $250 a tonne for our grain plus $200 freight. I will tell you why they pay only $150 a tonne. It is because the grain they feed to their cattle is distillers grain, which is a by-product of the ethanol industry. By the end of next year the United States will have 200 ethanol plants, each of them producing around 250,000 tonnes of distillers grain, which is $150 a tonne. How can we compete against that? We have to pay $250 a tonne, and in North Queensland we have to add onto that $200 a tonne for freight. So how can our cattle industry compete against their cattle industry? And the PR of the oil companies is so magnificent that I have had people come up to me and say, ‘Jeez, it’ll put the price of meat up, won’t it?’ It puts the price down, not up! The honourable member for Wide Bay thinks it is funny. I do not know that there is anything funny there, but he is laughing at it. These things obviously bring him mirth. He was in government for 12 years and did nothing about ethanol, but now he thinks it is funny that we should have to pay what we have to pay.

The cost of freighting cattle was $60 a head for us in North Queensland. Perhaps a third and certainly over a quarter of Australia’s cattle industry is in Northern Australia. We paid about $60 to get our cattle down to the major markets in Brisbane or points south. If you are in Western Australia or the Northern Territory you freight them to Adelaide or Perth, and it was $60 a head. But the average cost of cartage has gone up to $100 a head. That is really to do with government charges and allowing the oil companies to run rampant and charge what they please. That has been very serious for the competitiveness of the beef industry, which at this stage is still our fifth biggest industry. So we are suffering very badly as a result of inaction by the previous government.

But the current government are not starting off well by increasing the infrastructure costs. The member for Wide Bay is laughing again. I would like that to be put in the Hansard. He obviously thinks these things are funny. I applaud the new government on their rhetoric, which has been marvellous. They say the last government handed out money on the basis of winning votes. With all due respect, the railway line from Darwin to Adelaide was done on the eve of the South Australian election. It is a railway line that runs from nowhere to nowhere through the biggest desert on earth. Who knows what it is going to carry. At dinner one night a number of Liberal members explained to me that it would help in lowering the cost of imports. So it was a $500 million subsidy for importers. I do not know whether anyone realises how ridiculous that is, but that was their argument.

If, as my colleague from New England has pointed out, we had gone with the route of the great inland railway line, which was the dream of Everald Compton and Donny McDonald up in my area—God bless them—then that expenditure would have been very logical for all of our export industries. There is one million tonnes of phosphate coming out of Mount Isa and all the minerals from Mount Isa Mines and all of that huge mineral belt. There is the giant cattle industry of North Queensland. There is the huge grain production area all the way down to the New England area and through the back of Queensland and the back of New South Wales. And then there is the wool production that we have still got—and it is no thanks to deregulation that we still have half a wool industry. All of those things could have been exported out of those areas quickly and speedily if the rail line had instead come across to North Queensland.

The point made by the government that has come in, the current government of Australia, is absolutely true: the giant spending by the previous government was on the basis of winning votes; it was not on the basis of lowering our infrastructure costs. Today we find an increase in our infrastructure costs. We plead with the government: listen to your own rhetoric; you want the savings of the Australian people to be injected into infrastructure items. Heaven only knows that we need a giant power station for North Queensland to help us to process our metals and we need a port at Karumba to facilitate export product. We need this giant inland railway to connect Mount Isa to Tenant Creek and then there is some logic in having a line south from Darwin—for a line from Tennant Creek to Darwin at least there is huge logic for this section. We are halfway to getting down to the member for New England’s area so we can take the giant export wealth out of Australia at cheap cost. That is not happening today.


Mr Windsor —Tinkering at the edges.


Mr KATTER —We are increasing infrastructure costs, with all due respect. I take the interjection from the member for New England. We are actually increasing infrastructure costs. You can redress this by introducing ethanol. You could reduce our infrastructure costs by at least 40c a litre, maybe 60c a litre. I am not saying we are going to be able to get down to Brazil’s price of 74c but no doubt we will go very close to it. There is also an increased benefit when we produce it from grain. We get benefit out of sugar cane too, I must say. The member for Wide Bay is in the House. His government told us that you could not mix petrol with ethanol. You people should be ashamed of yourselves. I went to a seminar after that statement was made. A bloke said: ‘Yes, it’s very difficult to mix them! That’s ethanol, that’s petrol and you mix them.’ He poured one into the other and said, ‘Mixed.’ That was the first lie. The second lie was that it caused cancer. They dropped that one pretty quickly. The third lie was that it was going to break your motor—


Mr Truss —Mr Deputy Speaker, I rise on a point of order. The honourable member for Kennedy has accused me of lying and I ask him to withdraw.


The DEPUTY SPEAKER (Mr PD Secker)—The member for Kennedy?


Mr KATTER —I withdraw, Mr Deputy Speaker. We had lie upon lie. Remember, it was going to cost more.


Mr Truss —Mr Deputy Speaker, I rise on a point of order—


Mr KATTER —He is just trying to use up my allotted time because what I am saying is very detrimental—


The DEPUTY SPEAKER —The member for Kennedy does not have the call. He will resume his seat.


Mr Truss —The honourable member for Kennedy has again accused me of lying and I ask him to withdraw.


Mr KATTER —Mr Deputy Speaker, I have accused his government of saying these things, each of which is clearly untrue. I completely withdraw the statement implying that he is a liar. Do not let him use it as a tool to take up my time, because that is all he is doing. I do not blame him, because what I am saying—


The DEPUTY SPEAKER —The member for Kennedy will withdraw unreservedly.


Mr KATTER —Each of these things was said in this place. The latest one to come out was the increase in costs for cattle. I have indicated how ridiculous that is. (Time expired)