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Tuesday, 14 May 1985
Page: 1898


Senator COLLARD(4.20) — The Australian Dried Fruits Corporation Amendment Bill, the Dried Sultana Production Underwriting Amendment Bill and the Dried Vine Fruits Equalization Levy Amendment Bill are all to do with the Australian dried vine fruits industry. This industry, even though it is small, contributes between $65m and $120m each year to our gross domestic product and provides an export income of between $50m and $80m a year, thus aiding our balance of trade. Four thousand growers and their families are involved in the industry and it is estimated that about 17,000 people are directly or indirectly employed in it. So we can see that this is an effective and vital industry to Australia.

Any government assistance to this industry, as indeed to all primary industries, is at a minimal level. I must state that again because there seems to be abroad in the community an opinion that primary industries are heavily subsidised, protected and all the rest of it, when in fact the opposite is true. This is one industry that needs very little assistance from the taxpayer. It has very little protection vis-a-vis the sort of protection that we see applied to secondary industry. Our manufacturing industries receive across the board about 25 per cent protection and, of course, our wage and salary earners have full indexation. As I indicated, it must be said time and time again that our primary industries make a tremendous contribution to our GDP and our export sales and exact very little in return from the taxpayer, the Government or the community.

Mr Hunt, in his speech during the second reading debate in the other place, outlined some of the protection which is afforded to manufacturing industries and gave a significant example of protection to a secondary industry which employs very few people in comparison with some of the primary industries but to which we pay $14m to $16m by way of tariff protection. As I understand it, the cost to the Government of these measures would amount to only about $2m per annum whereas the industry itself contributes in excess of $20m by way of levies to help the equalisation program.

Export prices are very seasonal in this industry. They are subject to wild fluctuations and depend almost entirely on the growing conditions in Greece, Turkey and the United States of America. Obviously, if those countries have good seasons and big crops the export market is subject to very low prices. Let me indicate how the market fluctuates. In 1983-84 the price was $665 per tonne and in 1980 it was at a high of $1,260 per tonne. Therefore, the equalisation program which has been in place, and which this package of legislation leaves in place but alters, has been very necessary. As I indicated, it is funded by a levy on growers and involves consumer transfers from the domestic market to the export market. Notwithstanding this, the retail price has not risen beyond the rate of the increases in the consumer price index, and that is probably the case with all primary industry products. Any increases have been either in line with or less than than the CPI increases.

The equalisation has ironed out the peaks and the troughs and has been of a great assistance to the industry in that buyers, knowing that they will not be subject to wild variations, have been able to plan accordingly. This has helped the food industry in particular. Kellogg (Aust.) Pty Ltd, for instance, when it is buying on the domestic market, has a fair idea of what the price will be and can plan ahead. Significantly, domestic consumption has risen steadily at about 5 per cent per annum. This reflects the careful and correct handling by the industry of possible price fluctuations. It is a very close knit industry situated in New South Wales, Victoria and South Australia. It has provided jobs and decentralisation in those States and, as I have indicated, it has provided exports and contributed to our balance of trade.

The first Bill, the Australian Dried Fruits Corporation Amendment Bill, restructures the Corporation. It is significant that once again we find a piece of legislation from this Government which means that the growers lose control of their Corporation. It increases the Corporation's membership from eight to 10. I think this chamber should be reminded that in 1978 the Corporation's membership was decreased from 12 to eight to help contain costs. It must be spelt out that such boards or corporations are funded fully by levies from the growers. No taxpayers' money goes into any of these commodity boards. I think that is significant. Taxpayers' money goes into underwriting schemes but not to the funding of the boards. In 1978 the membership of the Corporation was reduced from 12 to eight to help contain costs, yet this Government has now seen fit to increase the membership from eight to 10. That does not sit too well beside the Government's recent legislation which sought to decrease the membership of the Australian Wheat Board, which has a far bigger job, from 15 to 11. By way of amendment the Senate reduced that number further to 10 and gave the growers control of their commodity board once again.

In this instance the Government is seeking to increase the Corporation's membership from eight to 10. The Opposition will not be supporting that increase. As I said, the Corporation is financed by growers' levies. It is not a big industry and there is no need for the Corporation's membership to be increased. It is significant that if the membership of the Corporation is increased from eight to 10 the growers will lose control, as would have happened in the case of the Wheat Board. I think that point must be made about all such legislation currently coming from the Government. No taxpayers' money is used and the Corporation is fully funded by the growers through levies, yet they lose control.

The Australian Democrats are moving an amendment which seeks to give the growers control again but maintains the increase of the Corporation's numbers from eight to 10. We will not be supporting that amendment because we would prefer to see the Corporation maintain its old level of eight members, four of whom are growers.

The second Bill is the Dried Sultana Production Underwriting Amendment Bill. The present legislation was enacted in 1982. It has improved confidence within the industry by guaranteeing a minimum net return of 90 per cent of average production in the years 1982-83 and 1983-84, rising to 95 per cent in 1985-86. I underline the fact that the underwriting provisions cost taxpayers less than 20c each in 1983-84 despite the dumping action of other export competing nations. The Bill now under consideration seeks to set the guaranteed minimum rate at 80 per cent, but it changes the base of the system from all sales to only export sales. That is worthy of consideration.

The Bill effectively matches or increases underwriting payments of recent years for the dominant export variety, sultanas. Although sultanas dominate the export sales, there is a strong case for currants and raisins to be included under the provisions of this Bill. That was pointed out by Opposition speakers in the other place. Their inclusion would further enhance the confidence of the producers and could help to develop the export capacity of those varieties. I understand that the Democrats will move an amendment to the motion for the second reading which takes that into account. I hope that in the near future the Government will pick up that amendment. We will support the Democrats in regard to that amendment to the motion for the second reading of the Bill.

The third Bill deals with equalisation. I have mentioned the need for equalisation because of the wild fluctuations in export prices. It seeks to make changes in line with an Industries Assistance Commission report. We will move an amendment to go along with its recommendation, but which provides that it be stopped at the commencement of the recommendations in relation to 1988, and seek a further IAC report on the situation from that date. The Democrats will move an amendment in line with the industry request. The Opposition feels that as much as we would disagree at times with some of the IAC reports, there must be a yardstick, and it is providing us with a yardstick in this case and in relation to a few other pieces of legislation which will be debated in this chamber. So we would go along with the recommendations of the IAC report, but only to the extent of its recommendations in relation to the 1988 season. We think that the reduction in equalisation assistance for currants, raisins and sultanas to 15 per cent goes too far, is too drastic and too soon. We would ask the IAC to submit another report in 1988 which would take us on from there.

As I have indicated previously, the equalisation levy has worked very well. It seeks to equalise prices so that there will not be the wild fluctuations of prices in regard to all of our primary products. The prices on the overseas markets, the dumped markets, are corrupt prices which simply bear no relationship to the cost of production in those countries. Yet we expect our growers to compete in that sort of a market without any great assistance. This equalisation program within the industry has worked. Admittedly, there have been consumer transfers, but it still works within the industry and it has worked well. It has not needed any taxpayers' money to prop it up.

The Government amendments will, I believe-as do many of my colleagues in the other place-provide greater fluctuations which will not help the industry to any great extent. But I would expect, as in most cases in which there are fluctuations such as this, the fluctuations probably will not be passed on to the consumer. The wholesalers or the manufacturers who will purchase the fruit at more fluctuated prices will probably iron out the problem. I hope that that is true so that the consumer is not subject to these fluctuations and we do see a price that is almost as stable as it has been in the past.

As I indicated, at the Committee stage we will seek to alter the Australian Dried Fruits Corporation Amendment Bill; we will agree with the Dried Sultana Production Underwriting Amendment Bill; and we will move amendments to the Dried Vine Fruits Equalization Levy Amendment Bill.