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Tuesday, 21 August 1984
Page: 78

(Question No. 889)

Senator Bolkus asked the Minister representing the Treasurer, upon notice, on 10 May 1984:

Will the Treasurer consider providing financial assistance to the South Australian Government for the Riverland fruit products redevelopment, given the imminent decision of the South Australian Government on the future of the Riverland Fruit Products Co-operative Cannery at Berri and that the closure of the cannery will cost the Federal Government an estimated $8-9m.

Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question:

In May 1984, the Commonwealth Government considered a request from the Premier of South Australia, Mr Bannon, for a grant of $6m to meet the capital cost of a major reconstruction of the Riverland Fruit Products Co-operative Cannery. For its part the South Australian Government was proposing to forgo past debts owing to it by the Cannery as well as providing working capital and operating subsidies for the reconstruction.

I wrote to the Premier on 31 May 1984 stating that the Government was unable to agree that Commonwealth assistance was warranted in this instance. In so doing, I noted the substantial government assistance that had already been provided to the Riverland Cannery and that, given the current state of the industry, there was considerable doubt whether the provision of further assistance would ensure its longer term viability.

Since then, the Premier has announced that the South Australian Government will provide Berri Fruit Juices with a grant of $200,000 to prepare, in conjunction with the South Australian Department of State Development, a business plan for Berri Fruit Juices to undertake new project development using the assets and some of the labour force of the Riverland Cannery. If the study plan is acceptable, the State Government has undertaken to provide up to $4m in equity finance to assist the new venture.

In announcing its decision to fund the study plan, the State Government acknowledge that the implementation of the original proposal for a major reconstruction of the cannery would have been economically irresponsible and would not have guaranteed the long term viability of the cannery.