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Wednesday, 17 October 1984
Page: 1905


Senator SCOTT (Leader of the National Party of Australia)(8.58) -It is, I believe, something of a shame that we should be debating such a mass of Bills in one group as we are tonight. All sorts of elements contribute to the fact that we are doing that. I say it is a shame because these Bills, even though many of them are virtually machinery Bills, are relevant to Australia's greatest industries. Today primary industries still represent approximately 50 per cent of this country's total export earning capacity and it seems to me a shame that at this late point in the session we should be trying to debate, discuss and analyse the circumstances of this vastly important and varied area of the Australian economy. However, that is the way it is. It is a part of the Australian economy that very significantly in the last couple of years has literally brought this country out of probably the worst depression and certainly the worst drought-related depression that it has ever known. Indeed, the breaking of that drought and the resurgence of these great industries was fundamental to the recovery of the whole Australian economy. I think it ill becomes us ever to forget that fact.

These industries that have significantly raised the Australian economy in the last year or two need very understanding treatment today. Primary industry cannot pull itself out of a significant trough in 12 months, two years or even three or four years. There needs to be a very great, genuine and deep-seated concern by governments for these industries if they are to establish the sort of base that historically they have had in the Australian economy. They are confronted by a number of problems that are relevant to government today. They are confronted by the threat of capital taxation, which we have discussed on a number of occasions. That is one of the most severe problems that confronts an industry which has a significant part of its capacity involved in capital, whether it be in land or equipment. Today, somewhat ironically, the necessary equipment very often makes up 50 per cent, 60 per cent or even more of the value of the land involved. So capital taxation is of enormous concern across the board to primary industries. We have seen almost a wiping away of the income equalisation deposits which have been a significant contributor in stabilising rural industry. May be it is not yet too late for the Government to take a much more generous line in that field.

These industries have been subjected to automatic full indexation of wages and for some time to the automatic indexation of excise which, together with increases in the price of fuel, have contributed significantly to their cost structure. We must never forget that the great Australian primary industry is one of the few industries that basically must compete on a world market. It does not enjoy the pleasant situation of being able to analyse its costs, look at the sort of percentage profit which is necessary, or look at its investments, interests and responsibilities, and come up with a price. It must accept the price that obtains on the world market. Consequently, it is a problem which is not specifically relevant to a range of other determinations in the Australian economy. The loss of tax deductibility in some fields is of great significance to rural Australia. It is important that we spend at least an hour or two tonight in the discussion of these industries because they have been rather unfortunately treated by the Australian Labor Party in recent times. About 3 1/2 lines were devoted to primary industry in the Budget Papers and I am informed that in the vicinity of six minutes was devoted to the discussion of primary industry during a week-long Australian Labor Party conference. That is not the sort of involvement or the depth of consideration that the industries deserve.

I wish to indicate to the Senate that the Opposition proposes to move amendments to the second reading motions of four Bills. In respect of the Wheat Marketing Amendment Bill 1984 I will move:

At end of motion, add ', but in relation to the Wheat Marketing Amendment Bill 1984, the Senate is of the opinion that-

(a) the Board should be composed of:

(i) a chairperson, who shall be a wheat grower at the time of his or her appointment, appointed by the Minister;

(ii) two wheat growers from each of the States of New South Wales, Victoria, Queensland, South Australia and Western Australia, representing the wheat growers of their respective States; and

(iii) not more than four other members appointed by the Minister because of their special skills or expertise in relation to the marketing of wheat;

(b) all moneys standing to the credit of the Wheat Finance Fund should be paid to the Board as soon as practicable; and

(c) in determining the price per tonne for standard white wheat for human consumption in Australia, the Minister should, in addition to the matters stated in sub-clause 32 (2), be required to consider any extra costs to the wheat industry in handling, storage and caretaking of wheat provided to the flour milling industry'.

Some of those matters have been met, admittedly under pressure, by the Minister for Primary Industry (Mr Kerin) in the amendments that he has ultimately agreed to make to this wheat marketing legislation. However, it is necessary to bring these matters to the attention of the Senate tonight because they are basic to the policy of the Opposition parties. I will refer to one or two of the elements within my amendment a little later. I foreshadow that I shall move the following amendment in relation to the Fishing Legislation Amendment Bill (No. 2) 1984:

At end of motion, add ', but the Senate is of the opinion that the legislation should not have been introduced until completion of an off-shore constitutional settlement between the Commonwealth and the States formalising areas of fisheries administration'.

I turn to the Dairy Products (Export Inspection Charge) Amendment Bill 1984 in relation to which I foreshadow I will move the following amendment:

At end of motion, add ', but the Senate is of the opinion that the Bill should not be proceeded with until early 1985 when the proposed changes to export inspection practices for dairy products are introduced'.

Finally, I foreshadow the amendment that will be moved by Senator Boswell when he addresses himself to the Meat Export Charge Bill 1984. The amendment reads:

At end of motion, add ', but the Senate calls upon the Government to implement a moratorium on charges for 2 years after the date upon which the legislation receives the Royal Assent'.

I do not propose to talk about the Bills before the Senate-there are so many of them-in any sort of depth at all. I will confine my remarks basically to the Wheat Marketing Bill and the Meat Export Charge Bill with a brief reference to one or two of the others. I am sure that my comments on those Bills will be expanded upon by the distinguished honourable senators who will follow me in this debate tonight.

The Australian Wheat Board has served the wheat industry extraordinarily well over many years. The Board was founded in 1939 and was the culmination of some years of virtual chaos in the wheat marketing industry. The 1930s and even before were years when the wheat industry was suffering from competition across the board between small entities, and it was suffering a price problem that was virtually untenable. It was becoming a non-viable industry in a country with all the great natural advantages which have made it today the most efficient per capita producer in its field in the world. As a result of those problems the Wheat Board was established. It has served growers extremely well. It has proved to be, as a grower-controlled umbrella, the marketing entity that is able to move around the world so seek appropriate markets and to enable the individual Australian farmer, perhaps ironically, to survive and prosper and to become, as I said earlier, the most efficient per capita wheat producer in the world today. Basically that is because, over and above his particular skills, his initiative and his invention, he is able to rely on a very specific and strong entity to serve him in the world market, which is tough and highly competitive.

The wheat marketing plan which will come into being as a result of this legislation is an enormously important part of the five-year by five-year progress of the wheat industry. The five-year plan which is now coming to its conclusion was established in 1979 and nurtured under the ministership of Messrs Sinclair and Nixon. It has been an extraordinarily successful period of wheat marketing for the Australian industry, but that particular five-year period has come to an end and we are confronted with a new plan. There are a number of features in the new plan which we accept and adopt. There were two or three matters that concerned us very greatly. Indeed, it was the enormous reaction at the grass roots level in the industry, a reaction that saw literally thousands of people in meetings across New South Wales exhibiting very great concern about the future of their industry, plus pressure by the Opposition parties and the Democrats, that I believe caused the Minister involved to make certain changes to the legislation, or at least to leave things as they are until October 1985 when new legislation will again need to be brought down. That means that the structure of the Board will remain as it is. That is perhaps the most significant matter that concerned the tens of thousands of wheat growers in this country. That situation will remain as it is as a result of the Government's own amendments until October 1985.

In the intervening period I understand that there will be an in-depth review of the wheat industry and out of that review no doubt recommendations will flow and the government of the day will have to establish the circumstances that are to pertain in the wheat stabilisation and marketing for the following five years. The guaranteed minimum price formula is part of these particular exercises and the new formula that has been introduced whilst not totally and absolutely accepted with open arms, at least is accepted as perhaps a reasonable and responsible approach to the problem. The new formula seeks to establish a price for wheat based on the estimated price in the current season and the two lowest of the preceding three seasons. The average of the three seasons will produce the base price. The actual payment will be 95 per cent-90 per cent in one payment and the balance, in this case, by 1 March. There will be a split payment for wheat in the 1984-85 harvest.

Significantly, by the Minister seeking to leave the situation as it is until October 1985, the grower representation on the Board will be retained with a majority. The wheat growing industry has been concerned about this point ever since the beginning of the Board in 1939. It is not a situation that is pursued from a pigheaded desire to maintain a producer majority on the Board, it is a decision that relates to at least two things: Firstly, the producer has a very real contribution to make to the development of the Australian wheat industry. He has been not only a good cultivator, grower and producer of wheat, but also one of the great innovators. The Australian farmer has probably contributed more to the science of production, whether through machinery or through plant breeds, than almost anyone else in the world. The wheat farmer who seeks to have a majority on the Board has in fact contributed a very great deal to the efficiency of that industry and its importance to Australian agriculture. A second very significant reason why Australian wheatgrowers seek to maintain a majority on the Australian Wheat Board is that by so doing they maintain the difference between a nationalised and an individual dominated industry. The wheat industry sees that once the wheat grower is in the minority in the marketing of his product, he can be very simply nationalised and socialised. He is often accused of having moved towards a socialised situation. The umbrella of the wheat marketing industry has enabled the individual to survive. That matter concerns the Australian wheat industry a great deal.

Unfortunately, the second repayment of the Wheat Finance Fund has been delayed until about the end of August 1985. That matter is of great concern to the Australian wheat industry. I hope that the Minister will look at the advisability of paying it much more quickly. The payment is due by 1 December 1984. The Fund is comprised totally of the wheat growers' own money. The wheat industry would like to know where those moneys are invested and what sort of interest they are earning. It would certainly prefer the moneys to be repaid promptly and not six to eight months later than they are due. It is my information that $100m of the money owed will not be paid until the end of August 1985.

This Wheat Marketing Bill has come into the Senate very late indeed. Because it is so late it seems as though an element of blackmail was involved when the Minister sought to reduce the grower membership of the Board from a situation where the growers had a majority and virtually took the stance that, if he did not receive the legislation en bloc, if you like, there would be no legislation and no payment to growers. Of course, that is a circumstance which the Opposition or anybody with the interests of the wheat industry at heart could not stand by and observe. Consequently, in view of the extraordinarily widespread discontent and concern that was exhibited, both within the political parties of this Parliament and, more particularly, at grass roots level in the industry itself, we have avoided what could have been an extraordinarily unfortunate situation.

Just for a moment I ought to remind the Senate of the significance of this great industry in the Australian circumstance. It produces something in excess of 10 per cent of Australia's total export earning capacity. It involves the employment of a very great number of people in primary industry across the board , indirectly and directly, running into literally hundreds of thousands of people. The success and development of primary industries, and the wheat industry in particular, are relevant to the success and development of the whole cross-section of the Australian community. Certainly the towns, villages and provincial cities have a lifestyle and a capacity that is relevant to the success or failure of Australia's basic primary industries.

As I have said, the wheat industry has a number of problems that are not necessarily relevant to a whole range of other industries. For instance, it has very little protection indeed. It receives barely 30 per cent of the protection that is available to a whole range of other industries in this country. It competes daily on an open international market. It is not in a privileged position where it can establish a price and determine that that will be the price it gets. It has to contend with a whole range of imponderables-changes in climate, strange occurrences from time to time to soil structure and capacity, and pests and diseases; a whole range of measures that constantly affect primary industry in general and certainly the grain growing industry in particular.

I have already mentioned the cost pressures that are forever present in the wheat industry in this country. They relate to wage structures; taxation and the enormity of freight charges. Although freight is not specifically a Commonwealth circumstance, it represents about one crop in every four being paid away in freight alone. If we add that to other tariff circumstances as they apply to harvesting machinery and so forth, it is easy to see the sorts of problems, cost -wise, that confront this industry.

The review the Minister has indicated will take place between now and October of next year needs to be an in-depth review. Those who have the capacity to identify the problems of the industry and who are able to reveal them as they should be revealed should take part in that review. It is hoped that scientists, the National Farmers Federation and a whole range of other relevant people and institutions will be involved in bringing down recommendations for this industry .

I think I mentioned before that the wheat industry has benefited enormously across the board from the contribution of science in the areas of fertilisers and particularly chemical agriculture. Likewise, the farming community has contributed to the development of machinery that is now exported and, indeed, to the development of moisture conservation and cultivation methods that are exported to many countries, in particular to the Middle East.

I think it is unnecessary for me to speak in greater depth on the wheat industry. It has been made abundantly clear-at least I hope it has-that this industry has a very great contribution to make to the Australian economy. It is excellent that the Minister, under pressure, has seen fit at least to move forward the circumstances which apply to this legislation for decision in October 1985. By that time a committee of review will have reported and, hopefully, some responsible decisions will have been taken which will produce a stabilisation scheme and a marketing scheme under which the industry can continue.

Other speakers will address the Meat Export Charge Bill 1984 and the whole range of Bills that are involved in this cognate debate. Before I formally move the amendment to the Wheat Marketing Amendment Bill, I inform the Senate that the other amendments I have foreshadowed in relation to the other Bills will be moved by other speakers. I therefore move:

At end of motion, add ', but, in relation to the Wheat Marketing Amendment Bill 1984, the Senate is of the opinion that-

(a) the Board should be composed of:

(i) a chairperson, who shall be a wheat grower at the time of his or her appointment, appointed by the Minister;

(ii) two wheat growers from each of the States of New South Wales, Victoria, Queensland, South Australia and Western Australia, representing the wheat growers of their respective States; and

(iii) not more than four other members appointed by the Minister because of their special skills or expertise in relation to the marketing of wheat;

(b) all moneys standing to the credit of the Wheat Finance Fund should be paid to the Board as soon as practicable; and

(c) in determining the price per tonne for standard white wheat for human consumption in Australia, the Minister should, in addition to the matters stated in sub-clause 32 (2), be required to consider any extra costs to the wheat industry in handling, storage and caretaking of wheat provided to the flour milling industry'.