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Wednesday, 27 February 1985
Page: 236

Senator BJELKE-PETERSEN(12.37) —The Sugar Agreement Bill which the Senate now has before it is a machinery measure which legitimises the five-year agreement reached between Queensland and the Federal Government and which was signed on 28 June last year. The Bill is of great concern to all sugar growers. Because sugar growing is so important to the economy of Queensland, this matter is of great concern to all Queenslanders and, overall, to the people of Australia. If Senator Robertson had told me that some Labor members wanted to speak to this debate, I would willingly have withdrawn. However, this is an important debate for Queensland sugar growers and I wanted to make known my point of view. We have heard some very good speeches in this debate and Senator Boswell put the case most convincingly. I imagine that the Minister for Primary Industry (Mr Kerin) will want to do something for the sugar growers when he reads Senator Boswell's remarks in Hansard. Senator Collard also put forward a strong case for the ailing sugar industry, which needs financial assistance. As Queensland produces 95 per cent of Australian sugar, one can see why this matter is so vital to Queensland.

I wish to draw attention to a number of matters. In real terms, world prices for sugar are at their lowest level since records were kept two centuries ago. At risk are the growers themselves and also the local economies of such major centres as Cairns, Townsville, Bundaberg, Mackay-the towns right up the Queensland coast-and towns in northern New South Wales where sugar is grown. Because the European Economic Community is dumping its product on world markets, Australia's competitive ranking in world sugar markets has been severely diminished. One can add to the problem the matter of changing dietary fashions. These days it is popular to say that they will not have sugar in their tea, or that they will not use too much sugar because it is bad for them. I am sure dentists must be very upset, because people will not need to go to the dentist so often if they do not eat so much sugar. It is a sad trend for our 7,000 sugar growers and for those centres that rely on sugar for their prosperity. Those areas are under real threat and have great cause for concern. Even though in the past the sugar industry has provided this country with a massive export income-this matter was mentioned by Senator Boswell-that income is now in real trouble. However, I am pleased to say that the Queensland Government has provided positive assistance to the sugar industry in several areas. It has given $15m towards carry-on finance in 1983-84 under the rural adjustment scheme; $5m for carry-on finance to cane growers in 1984-85; $10m of special Treasury loans to six co-operative sugar mills to assist short term debt servicing commitments in 1982; $175,000, which was half the cost of a review of the sugar industry; and $800,000 towards the interest components to raise the first delivery from $160 to $180 per tonne. This assistance amounts in all to just on $31m. Prior to the Federal election in 1983 the primary industry spokesman at the time, Mr John Kerin, who is now the Minister, made the following statement:

The worsening crisis in Australia's sugar industry demands urgent Federal Government attention.

I pledge a Labor Government to giving the sugar industry first priority in the large line of primary industries neglected by the previous government.

I cannot say that I agree with that latter statement. The statement continues:

Labor will sympathetically consider any request for an industry loan and/or an underwriting scheme.

The Federal Government has now given to the sugar industry almost $16.5m. I am sure that the sugar industry is grateful for that assistance, but it certainly needs a great deal more. That amount was for carry-on finance and debt reconstruction.

I draw the attention of the Senate to the fact that every year the Federal Government receives $32m from excise on Queensland's potable spirits alone. That is a lot of money the Federal Government is receiving every year. I feel that more money could be given by the Federal Government to help our sugar industry. The industry itself has recognised the need to change direction somewhat and in so doing has set up the sugar industry review program to chart the course of the industry into the next century. It is one of the most efficient industries in the world but, even though the industry has taken this step, it is probably not enough. The world market price for sugar is now below the cost of production, and Sir Roderick Proctor, the Chairman of Bundaberg Sugar Co. Ltd, said:

. . . the world market price for sugar was at present below the cost of production for 'even the most efficient cane or beet producers,

It is very difficult indeed for the sugar producers to keep going under those circumstances. I believe that the rising costs of production are to be discussed at a meeting in March between the Government and farm groups, but it does not help to solve the problem now. I am sorry that this Labor Government seems to be running away from its commitment to aid the troubled sugar industry. When 1,200 cane growers descended on Brisbane last year to voice their concern to the Prime Minister (Mr Hawke) he said that he would undertake a financial commitment to assist them on the basis of a review. It is all very slow. These reviews take a long time and in the meantime the poor sugar farmers are going to the wall. When I was in Bundaberg prior to the last election I was met by women holding placards; they were the wives, who were terribly upset. I suppose that they were in a similar position to the milk producers in Victoria at present.

Senator Robert Ray —Did they have a permit?

Senator BJELKE-PETERSEN —Senator Robert Ray ought to know all about that. I think it is very important that some action be taken urgently about this matter. Mr Kerin, in a Press statement on 18 January last, made no specific reference to a loan to the producers, but he did say:

As the Prime Minister has indicated to the Queensland Government, across the board assistance such as was raised before by the industry has shown to be overly expensive, undirected and largely ineffective in helping those growers most in need.

Mr Kerin apparently believes that subsidies encourage use and waste, lead to an inappropriate mix of inputs, maintain overproduction, reduce incentive to minimise costs, represent an artificial improvement in one industry's competitive position at the expense of other industries, tend to get capitalised into land values and fixed assets, and can lead to an inappropriate industry structure.

Sitting suspended from 12.45 to 2 p.m.