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Wednesday, 27 February 1985
Page: 232


Senator ARCHER(12.08) —In speaking to the Sugar Agreement Bill 1985 I must say that the sugar industry has been, and I hope always will be, a great Australian industry. However, it is an industry in trouble and, as a big industry, it is in big trouble. The aspect which I wish to look at concerns the fact that the problems of the sugar industry are symptomatic of problems in the production industries generally and in the food industries in particular. That is what really matters. The importance of the sugar industry to Australia has to be clear to all. We have had a listing of the various problems that the industry faces and we have had some suggestions from previous speakers as to what might be done. I am not sure, having listened to those speakers, that that is where the problem lies. One honourable senator implied that it was a socialist problem. I do not necessarily go along with that. I think it is a social problem. I will come back to that later.

We must face the reality that in all developed countries the consumption of sugar in sugar form is declining and that it is likely to continue to do so over the following years. At present the undeveloped and underdeveloped countries are increasing their consumption of sugar. Not only are they increasing sugar consumption but they are increasing sugar production. There is a drive around the world for countries to become self-sufficient not only in sugar but also in a variety of other products. Australia, incidentally, has also been successful in that we have undoubtedly become the major producer in the world of equipment used for the production of sugar. We have become so good at it that we have even sold our equipment to all of our competitors. We are making them far more able to compete with us on a price basis than they ever were before, or than they ever would have been without our equipment.

Until 10 years ago, or perhaps less than that, it would have been absolutely unthinkable that the sugar industry could have faced the crisis that it is now facing. We have the problems of declining consumption, overproduction and lack of international marketing. The point I return to is that the present problems are absolutely mammoth. But the history of the sugar industry over a period has been very good. It has been well managed and well organised and, in regard to marketing and security, other primary industries have a very considerable amount that they can learn from the sugar industry. Governments, incidentally, should also see the applicability of this to other industries.

The prohibition of the import of foreign destabilising sugar has been of great interest and great value to the sugar industry and its development, stability and profitability in Australia. I hope that this Government and a future Liberal government will also see the applicability to other industries of what has been appropriate for the sugar industry. Australia generally needs to consider the fundamental needs of its productive sector and the food producers in particular. More and more overseas countries are producing food and more and more of them are reserving their local markets for their own producers. Australia must surely be the only country in the world that is watching its food producing industries gradually decline and run the risk of disappearing.

If Australia has a desire to remain self-sufficient in food production, it must follow this policy through in regard to a range of other food products. I am not talking about questions of efficiency, locational suitability, aptitude, state of mind or anything like that. We need to remember that in Australia we can produce a range of food products as economically and efficiently as any other country in the world. We should be doing it so that at least we can feed our own people. I will mention one or two industries that at present are worth considering. What about products such as asparagus, mushrooms, peas and beans, avocadoes, dried fruit, citrus fruit and citrus juice, or berry fruits? We are just watching those industries disappear from Australia. What worries me is that the dairy industry is following and now the sugar industry is following. It is all very well to consider propping up the sugar industry at this stage. But we are providing aspirin, and that is all. I believe that the whole problem is much more deep seated and requires a lot of attention other than just providing aspirin.

Australia simply cannot get to the stage of being dependent upon other countries to provide its food. Every time we bring in products that destabilise Australian production, we lose something Australian forever. We usually lose Australian jobs, Australian capital investment and specialist knowledge. While the number of people involved in the sugar industry seems to vary according to who is speaking, the figures that were provided to me showed that there were approximately 6,000 sugar farmers and about 100,000 people directly employed in the industry. If we let the situation get out of hand by allowing the industry to disperse and disappear, what will happen to those people, that capital, that knowledge and all the things that go with it?

I willingly acknowledge that support can lead, and in some cases has led, to industry inefficiencies. But it does not have to do so, and with reasonable planning and reasonable management it will not. Industry generally, when confronted with circumstances of this nature, is perfectly capable of facing reality. In return for industry maintenance it can operate at a price and at a production level that is appropriate. Surely, the producers of food in Australia deserve national support. I think it was in today's Age that I noticed a large advertisement bearing the name N. L. Gallagher, asking the Victorian Government to support the producers of food, namely milk, in Victoria. I believe that at last we are on the right track. If we could get people to support the producers of food in the same way as they support the people who are on wages, we would have no problem in this area. But at present it is left to the producers of food to balance the national budget. It seems that the Government expects the producers of food to be the people who control the degree of inflation, the cost of living, or both.

I was interested to see in one of the annual reports that were before the Senate yesterday a graph which showed that in 1973 food had a price index of 138. By 1984 food had risen to 404-an increase of 292 per cent. In 1973 wages had an index of 175, but by 1984 had risen to 750-a rise of 428 per cent. In other words, the index for wages, which are a direct cost in production, rose 68 per cent faster than the index for food. Of course that will have a destabilising effect on production costs; of course it makes us less competitive with overseas producers; and of course it reduces the profitability of the people in Australia who are trying to feed the people of this country. But one cannot control costs in one area without controlling costs in the other. That is why I say that it is a social cost and not a socialist cost. The country as a whole has allowed our wage system to get ahead of our productivity system. Until we can bring those two systems back together, the food producing industries of Australia, and any other productive industry, must be set to decline.

As one who has a minor involvement in food production, I do have some knowledge of the business, the people involved and their problems. They deserve to be paid an appropriate return for what they produce. In return, of course, they must apply appropriate constraints to production. This is, of course, noticeably absent in the European Economic Community and in other countries in which, in many cases, the minute any backing or support is given by government, production goes up and a surplus situation ensues. We do not want that to happen. I will be looking to the Government to produce similar legislation in support of other food producers. I am not asking for anything that is not appropriate for the sugar industry to be done for similar industries. I was pleased to note that the Governor-General's Speech specifically stated that the Government was committed to the 'achievement of high social goals of equity and fairness'. As the Government has made that pledge in the Governor-General's address, I certainly trust that it will be carried through to the food producers of Australia generally and, in this case, to the sugar industry.

I support the legislation. I trust that it will be just one of the ways in which the Government will seek to look after the sugar industry. I noticed that the Governor-General in his Speech referred to the Government's plan to 'restructure and revitalise the industry'. I trust that this legislation is one of the methods that the Government will use to start on its program but I concede that it will not in itself put the sugar industry right. The point that I wish to make most strongly is that the sugar industry's problems are symptomatic of the problems in all the productive industries, in particular the food industries. I believe that if we are to restore these industries to a reasonable level it will have to be done on the basis that they get a reasonable return for reasonable production.