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Tuesday, 25 November 1986
Page: 2720


Senator GRIMES (Minister for Community Services)(9.46) —There are several problems with Senator Vigor's amendment in regard to the Fertilisers Subsidy Bill. He is proposing that we pay a bounty to the end users of the product. There is a certain problem with that, called the Australian Constitution, which says that bounties shall be paid on the production of goods. It is contrary to the law to try to pay a bounty to the end users in this way. That is the first problem. The second problem is that Senator Vigor suggested that the bounty should be paid, somehow, by way of rebate, using the diesel fuel rebate mechanism. This presumes that a duty or an excise has been paid, and then a rebate given. In these circumstances no duties are paid so what is there on which to pay a rebate? The third problem is the sheer weight of numbers. There are 170,000 user-farmers in the community, which makes the administration of a rebate scheme of this type almost unworkable.

It is one thing to come in here and advocate, as Senator Vigor does, that we should get rid of all this stuff and subsidise our farmers directly, honestly and openly. That would make for an interesting debate in this place by the free enterprise experts on the other side. Senator Vigor is of French origin and that is what is done all over Europe. We do not like it much there but I suppose that we could do it here and pay them back a bit. We are applying a bounty, but the condition of getting that bounty is that its advantages are handed on to the end user. I do not think that there is much subterfuge in that. It is in the legislation. Senator Vigor and I can work it out so it must be pretty clear. He worries that the Bill will adversely affect farmers who must continue to purchase imports of high analysis phosphatic fertilisers. We believe that this will diminish. The manufacturers who have already stepped up production in this area and committed funds to increase their capacity will be able to continue to do so. It is important to remember, as I said in summing up the second reading debate, that all manufacturers have lowered their prices recently and importers appear to be matching these prices. I do not understand some of the problems raised by Senator Vigor. I certainly do not see his suggestions of somehow paying a bounty to a consumer rather than to a producer as being constitutionally, economically or socially acceptable. It certainly is administratively not acceptable. Therefore the Government rejects the amendment.