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Wednesday, 10 December 1986
Page: 3691

Senator CHANEY —My question, which is addressed to the Minister representing the Minister for Primary Industry, concerns the submission put to the Government yesterday by the National Farmers Federation. I ask the Minister: Does the Government agree that farmers have been hard hit by the high interest rates which continue to exist in Australia? Is there any real prospect of a significant reduction in interest rates in the near future to relieve some of the burdens of rural industry? Further, does the Minister agree with the National Farmers Federation that a wages freeze and further cuts in Government spending would help reduce pressure on interest rates by removing the need to use interest rates to support the dollar? Will the Government act in these critical areas to relieve the crippling interest rate burden on Australia's farmers?

Senator WALSH —In respect of the wages freeze I make the same observation as the Prime Minister made; that is, that the National Farmers Federation, like the Opposition, is pursuing two mutually exclusive policies-a deregulated labour market and a wages freeze. They are two diametrically opposed policies. The National Farmers Federation has displayed the same degree of intellectual sloth on that question as has the Opposition. I am not surprised, therefore, that the Opposition is eager to take up the National Farmers Federation's proposition and endorse it. The Minister for Primary Industry will deal with the National Farmers Federation's submission in the professional way that he normally deals with submissions from anybody. As to the operations of the Reserve Bank of Australia, the Reserve Bank is presently operating in a manner very similar to the manner in which the Australian Wool Corporation operates its reserve price scheme-something of which I understand the National Farmers Federation approves.

I think the Australian Broadcasting Corporation described Mr McLachlan's action yesterday as a piece of grandstanding, which I think is a fair enough description. Indeed, I believe that Mr McLachlan has used the people he purports to represent-that is, the farmers-over a very significant period to prop up his own political campaign. Nowhere is that more apparent than in the high profile role the NFF has taken in opposing the fringe benefits and capital gains taxes. I note with considerable satisfaction that a number of the people whom Mr McLachlan purports to represent and whose trust he has misused have realised that they were being taken for a ride by him. I cite the Merredin zone of the Primary Industry Association of Western Australia, which recently carried a motion condemning the PIA and the NFF for running a high profile campaign in opposition to fringe benefits and capital gains taxes, which are of peripheral, if any, relevance to the concerns of the agricultural sector. So some of them have woken up and I am very pleased that that has happened.

On the question of government spending, I think one would have to acknowledge that, if government spending were to be slashed drastically, the dollar value would rise, interest rates would fall, or, more likely, a little of both. I note, however, the Oppositions's consistent pattern of obstruction of this Government's attempts to reduce government spending and its promise to overcome the country's economic problems by bringing back the boozy free lunch, the tax deductible Mercedes, and paying pensions to millionaires. All those things would either force the value of the dollar down or interest rates up or, again more likely, a bit of both. I note also, of course, the Opposition's clear intention to sabotage yet again a vital piece of legislation that is before the Senate today which would have the effect of both increasing revenue and reducing government outlays to a quite significant extent. If that were to happen, in other words, if the Australia Card legislation were to be passed instead of being defeated, as these vandals and saboteurs--

The PRESIDENT —Order! The Minister is now clearly debating the matter and is getting well away from the question that was put to him. I ask him to come back to the terms of the question that was asked.

Senator WALSH —Very well, Mr President. I just observe that one way of reducing government outlays by a significant amount and bridging the Budget deficit by an even greater amount because of the elimination of tax evasion would be to pass the Australia Card legislation.

Senator CHANEY —Mr President, I wish to ask a supplementary question. I am sure that the farmers of Australia will be much cheered by that splendid answer from the Minister. I ask him whether he admits that high interest rates are crippling many farmers. Does he agree that the Government is pursuing a high interest rate policy? Will the Government change that and do something about high interest rates?

Senator WALSH —As pointed out in the publication put out by the Livestock and Grain Producers Association of New South Wales from which I quoted a week or two ago in the Senate-this is the LGPA's estimate and I am not able to verify it-30 per cent of farmers have cash credits. They would be the beneficiaries of high interest rates. It is certainly true that a number of farmers are in difficulty because of the size of their debts in the first instance. The present historically high level of interest rates-although they are not as high as they were when John Howard was Treasurer-is a serious problem for a number of farmers. The size of their debt, of course, is almost invariably a function of the fact that they paid too much for land in the early 1980s, partly in the expectation that they would receive untaxed capital gains.