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Thursday, 18 October 1984
Page: 1942

Senator KILGARIFF(11.32) —I find it remarkable that we are debating cognately 20 Bills relating to the rural industry. Within the seven groupings of the 20 Bills are six pieces of legislation on wheat marketing. There is the Dried Vine Fruits Equalization Amendment Bill 1984, the Canned Fruits Marketing Amendment Bill 1984, the Canned Fruits Levy Amendment Bill 1984 and the Canned Fruits Levy Collection Amendment Bill 1984 (No. 2)-four pieces of legislation; two pieces of legislation on the fisheries industry; two pieces of legislation on the meat industry; two pieces of legislation on the dairy industry; three pieces of legislation on the egg industry; and the Live-stock Slaughter (Export Inspection Charge) Validation Bill 1983, totalling 20 Bills. Significant pieces of rural legislation have been bundled together in one cognate debate.

As honourable senators can speak on a Bill for only 30 minutes the effect of making this a cognate debate is that honourable senators-particularly Opposition honourable senators-have to express their views and interests on 20 pieces of legislation in 30 minutes, the time normally allowed to debate one Bill. It is very important legislation relating to the rural industry. I find it amazing, despite the fact that the Senate is in the closing days of the session-perhaps it has a week to go-that the Government should take this action and compress this important debate in the way it has. Twenty pieces of legislation have been grouped together in a cognate debate. I think that this is a disgraceful effort by the Government. Perhaps the fact that it is compressing the debate to such an extent is indicative of the way it feels towards the rural industry. There are very many important pieces of legislation here and the Opposition is endeavouring to cover the different aspects. Various senators will speak on particular pieces of legislation and some amendments have been foreshadowed.

I shall speak briefly on the Meat Export Charge Bill 1984, the purpose of which is, as stated in the explanatory memorandum, to impose a charge on the making of certain applications in relation to the export of meat and meat products. I shall speak against this Bill because I am well aware of the difficulties that are currently being experienced in the cattle industry. These problems are immense. I believe that many producers in this industry will go out of business. Some have already gone out of business because of the problems they are experiencing.

The cattle industry is very significant in Australia, particularly the Northern Territory, which I represent. It provides a good deal of the Territory's income. Indeed, on an Australia-wide basis, meat exports are our fourth biggest export earner. This industry is now in jeopardy. These new proposals have been criticised by virtually all the major associations concerned with the meat industry, including the Australian Meat Exporters Federal Council, the Cattle Council of Australia and the Sheepmeat Council of Australia. That is little wonder when one considers the disadvantage to which this proposal will put the export sector of the meat industry. That export sector is the one most exposed to international competitiveness, yet the Government is putting in place a cost which simply is not paid by exporters in other countries. The Government is imposing a crippling tax on the industry and at the same time it is expecting it to be competitive.

The move has been seen by some media commentators as a blunder by the Minister for Primary Industry, Mr Kerin, and the Labor Government. In the post-drought recovery boom the Government was wrongly advised on which rural industry was able to take a cut for the sake of budgetary constraint. The mistake was in imposing higher charges on an industry which was contracting, with declining profitability. It is difficult to see what justification the Government could come up with in the circumstances in imposing the new rates for meat inspection.

Before this Labor Government came to power the rate was $1.80 per head of cattle. From 1 October 1983 this was to be increased to $5.40 a head, an increase of some 200 per cent. The meat export industry cannot afford that level of increase in inspection charges and if anyone doubts this, he or she has only to look at the facts relating to the situation. For instance, in export meat works 10,000 jobs have been lost since 1979 with further stand-downs likely to occur. This is a constant situation within the industry. It is not over; the stand-downs are continuing and the numbers are increasing. More than 40 meat works have closed in the past five years and cattle producers have made a negative rate of income on capital for every year since 1976-77. The increased inspection costs will add millions of dollars a year to the industry's costs, while meat inspections in Australia's major competitors-the United States of America, Canada and New Zealand-are publicly funded.

The Minister, in his second reading speech, made the point that the cost per head of inspection had been reduced as from 1 July 1984 from $5.40 to $4.35. The Minister referred to this as a reduction of 20 per cent. He totally ignored he fact that the figure of $4.35 is still a substantial increase on the previous price of $1.80. Following the uproar in the industry over the imposition of the substantially high charges for inspection, the Government, in an attempt to continue with the facade of consultation and consensus, set up an Interim Inspection Policy Council. We know all about that because it was debated at length several months ago. The Council, which had the support of the Cattle Council of Australia, the Sheepmeat Council of Australia and the Australian Meat Exporters Federal Council, made a number of recommendations in connection with the inspection levy and the costs imposed upon exporters generally. It appears that consensus on this matter began and ended with the setting up of the Council because, as I understand it, when it came to the crunch, the Minister would not even put all the recommendations of the Council to Cabinet. In particular, its key recommendation for a two-year moratorium and a retrospective reduction in the charging base back to October 1983, when the 200 per cent increase took effect, was completely rejected. As I say, as I understand it, the Minister did not even put it to Cabinet.

I support the recommendation for the two-year moratorium put forward by the industry and I am disappointed that the Minister, who professed to be in favour of the recommendation, was unprepared to put it to his Party colleagues. He probably realised that his Party's blatantly anti-rural bias would have meant that the proposals would never get off the ground.

It is the policy of the Opposition not to vote against Government Budget legislation, and therefore I will not vote against this Bill, although naturally the case is there. But I point out that my opposition to this measure is that it will further strain the already difficult situation which is faced by the meat export industry. Only today the Australian carried a story predicting a 29 per cent decline in production in the rural sector over the next year. The story said that Australian meat exports were expected to fall by some 14,000 tonnes to about 425,000 tonnes.

I believe that the cattle industry is in a most difficult situation. I shall take a few minutes to review some aspects of the situation as I see it, particularly in relation to the industry in the Northern Territory. The industry is the third largest in the Territory and is probably the oldest in the Territory, if not Australia. First, I wish to look at the state of the cattle industry and its markets. The United States cow price has fluctuated but in real terms it has not altered for the last three to four years. If it were not for the differential between the dollar of the two countries, exporters would not be able to pay present prices. This is superficial and it does not give an assured base for rebuilding the national herd. Japan and Korea are acceptable markets but in this case they do not relate to the Top End cattle of Australia.

The Australian cattle number at present is around 22 million, reduced from some 32 million in the 1970s. This has forced widespread competition between the remaining abattoirs, which is returning present day price levels. This is one of the problems now-the fact that the herd numbers are still decreasing. The size of the herd has already dropped by 10 million in one decade and at the rate the situation is going now, with increased costs and the problems that beset the industry, I think we will see-and I do not wish to be a pessimist but a realist- the cattle industry decline more and more if it is not given sufficient assistance and recognition by those in authority. To bring in further charges against an industry which is so beset by high costs and problems is rather ludicrous.

The cattlemen are justifiably concerned that if the United States currency softens we will outprice ourselves on their domestic market of dairy and commercial beef, which is now above normal United States slaughterings. One of the greatest difficulties comes about from the brucellosis and tuberculosis eradication campaign. The Northern Territory Cattlemen's Association is concerned that the brucellosis and tuberculosis eradication campaign-the destocking program-will force many cattlemen, especially in the Top End and other remote areas, off their properties. The Association has made this point to the Bureau of Animal Health and the Bureau of Agricultural Economics, using examples of the far north of South Australia and northern Queensland. In these areas property owners have, through no fault of their own but acting on the advice of the departmental veterinary officers, destocked. In practice, this has meant no income for two to three years while the cleaning out of the last infected cattle takes place.

The Bureau of Animal Health and the departmental veterinary officers will argue that the destocking program was not forced on the cattlemen but was done with agreement. That does not hold water. The movement restrictions placed on these producers gave them no option. No one wants to address the welfare problem, and the Northern Territory Cattlemen's Association policy is that whatever number of cattle are destocked, the same number should be replaced. This is getting to the root of the overall problem. The question to which the Bureau of Animal Health will not address itself is the thorny problem of money. For example, a station could have destocked 4,000 breeders in 1982, at $90 a head. To replace them in 1984 would cost $400-plus per breeder. That is a ratio of about 4:1.

The Northern Territory Cattlemen's Association is a new association. I believe it is a very desirable association because it means that the producers speak with one voice. This Association argues that government must pick up the difference and allow an interest-free holiday on the repayment of that amount, until the original turn-off is once again accomplished and interest payments can be met. It could be a further three years before cattle are old enough to be turned off, so the situation is very serious. With the destocking programs, the compensation that has been paid is quite insufficient for the cattle producer to restock. I believe that the problem is growing to quite alarming proportions and people are moving off their properties because of this destocking program.

It is in Australia's interests that the brucellosis and tuberculosis eradication program be carried out-but not at the cost of putting the industry completely under, when it will be most difficult for producers, particularly the small producer, to survive and once again to raise his head and make his living on his property. As I say, I am very concerned because I have very many acquaintances and friends in the outback, and I see them practically on their knees now. Young people with young families are wondering how on earth they will get out of this situation. They just do not have sufficient finance, having destocked, once again to be able to buy fresh, clean stock, new breeders, at a much higher cost-in many cases, at four times the original cost.

The problem is now. The urgency of the situation is that they have no income because they have no cattle. It is a national problem. If we wish to see the survival of many aspects of the industry, the problem must be recognised nationally. The running costs of some of the properties must be met by government in the form of a grant. People cannot pay back money if they have no capital with which to generate an income. If the authorities do not believe in the principle of giving financial assistance to these battlers on the land, that will be the finish of these people. The meat industry will continue to deteriorate, and the national herd numbers will decrease from about 22 million and will continue to fall away. I suggest that there should be long term loans of, say 30 years, with interest-free holidays, until cattle numbers are back to what they were before the destocking.

We must also bear in mind that at no time has it been the fault of the people of whom I speak that they have been placed in this predicament. They have merely fallen into line with the desire of the country that the infected cattle should be found and disposed of in the national interest. Even so, having fallen into line, they are now in a predicament-the predicament of survival. The Northern Territory Cattlemen's Association policy is to keep all cattle and buffalo producers on their properties. It says that if we do not do so and they are forced to walk off, the areas concerned will become a feral pool for reinfection with the disease. That is a very important point. An example of this is Mount Dare in northern South Australia, on the South Australian-Northern Territory border. The owner has been forced to sell out and the South Australian Government has purchased the property. It was a very viable station in a very arid area. The family concerned had lived on the property for many years, and the sons had taken over. Under the brucellosis eradication campaign, the cattle were shot out-I have forgotten the figure, but it ran into thousands-to such an extent that the station was no longer viable. The people did not have the necessary money-in some circumstances they did not receive compensation-so they were unable to restock. The foolish thing about the whole situation was that although authority moved in and had these cattle shot out, there are still cattle in the desert, and these cattle may or may not be infected. It is now being recognised that the area cannot be shot out to the last beast, so the situation is much worse than it was previously. What, then, was the whole idea behind this? Here is a station that has been put out of business, like many others. What has been gained if there are infected cattle still in the desert?

The Federal Government, the Bureau of Animal Health and the Bureau of Agricultural Economics are procrastinating over this urgent and pressing welfare issue. Perhaps they believe that it is not their responsibility; but if it is not their responsibility, representing government, whose responsibility is it? Are we to allow cattle numbers to continue to fall? Are we to allow people to be forced to walk off the land? Is it desired, for the future of the industry, that people walk off the land and sell up, that cattle numbers continue to decline, and that the industry as we have known it over the years should deteriorate? I believe that the Federal Government, State governments and authorities must act now to stop the further decimation of a herd that is genetically bred for the northern areas of Australia and which has taken a century to build up, so that we shall still have a cattle industry in northern Australia at the conclusion of the brucellosis and tuberculosis eradication program.

One could continue at length on the whole situation. It is deplorable when one sees what is happening, and I have indicated only a few of the problems the industry has experienced, that we in the Federal Parliament see fit to levy increased costs that very many people in the industry cannot afford to pay. I also regret that, following the inquiry that took place, the Government is prepared to levy increased charges but not to accept the recommendation that there should be a moratorium of two years. If a moratorium is recommended, surely it is in the interests of all to accept that recommendation. A moratorium for two years will allow the industry and the individuals about whom I have been talking to get their house in order to some extent. If they are hit now, beset with further costs, we will lose them. In the interests of Australia and the industry why should they not be given this moratorium which is so necessary? I have pleasure, as I believe it is the most realistic step to take, in supporting the foreshadowed amendment for a two-year moratorium.

In conclusion, I regret that this brief debate has had to cover such a large number of Bills which are so important to the rural industry. As I said before, six industries are affected by 20 pieces of legislation. The Opposition is being asked to deal with them in a cognate debate. Each industry should have the opportunity to be heard and to have its problems voiced, as I have endeavoured to do in a small way regarding the cattle industry of Australia, particularly in the Northern Territory. This debate is insufficient; however it is the wish of the Government that this legislation should be bundled through the Senate, and so be it. At least we can be heard to some degree. Amendments are proposed to the second reading of the various Bills and these indicate to some degree the feelings of honourable senators on this side of the chamber regarding the problems faced by the various industries.

Regarding the Meat Export Charge Bill, I ask the Government very strongly to consider that part of the inquiry's recommendation that there be a moratorium for two years. If that moratorium, which has been recommended by the very able people within the industry, is not held there will be a further falling away within the industry. Perhaps the big operators, the large business concerns that can attract capital from here and there and move it across the board, will survive. But I am thinking of the small operator, and there are thousands of them in Australia. There are thousands of people living in the outback. There are thousands of young people who have taken over properties from their fathers and probably their grandfathers. It is these second or third generation people who are perhaps more on their knees now than their pioneering forefathers. Unfortunately, some of them are going. It is hard to ascertain to what degree, but the numbers are falling off now. Those people are leaving their properties now. They are having to sell up or they are being sold up. Some of them foresee that in the next year or two, because they have followed suit, particularly in participating in eradication programs and what have you, they will be placed in a situation in which they have a cattle property, no cattle and no financial return.