Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Friday, 20 February 1987
Page: 376


Senator CHILDS —My question is directed to the Minister representing the Minister for Primary Industry. Did the Minister hear an interview with the National Farmers Federation Deputy Director, Rick Farley, on the AM program this morning in which he indicated National Farmers Federation support for Sir Joh Bjelke-Petersen's thrust into Federal politics? What are the implications for the farming community if Sir Joh's policies are implemented, in particular in the areas of taxation and interest rates?


Senator WALSH —In a word, the implications for farmers if the National Farmers Federation preferred policy was actually implemented would be catastrophic. However, I was not surprised to hear Mr Farley appearing as a supporter of Sir Joh. Mr Farley is an experienced snake oil salesman. Back in the late 1970s he was the Director of a redneck outfit called the Cattlemen's Union. He spent years in that capacity peddling the Cattlemen's Union beef marketing plan. That was a proposition to establish a monopoly marketing authority and then, using monopoly powers, to jack up prices on the domestic market. It was believed that by extorting the captive market the Union could increase beef producers' incomes. The catch, however, was that there was a high elasticity of demand for beef on the domestic market and the plan would have diverted about 200,000 tonnes from that market to the export market, not at the average export price but at the marginal and very low export price. So the net result of that particular brand of snake oil that Mr Farley was peddling at the time would have been to marginally decrease beef producers' incomes but provide a very large income transfer from Australian consumers to foreigners.

Nor does it surprise me that the National Farmers Federation, and particularly its President, is supporting Sir Joh's policies, because the NFF has been looking for an excuse for months to come out in support of a flat tax. The first likely effect of such a tax on farmers' taxation is that it would penalise everyone with an income below $27,000, a figure which is about double the present average taxable income of farmers. More than 80 per cent of farmers would be disadvantaged by the flat tax proposal if it were to raise the same amount of revenue. So the National Farmers Federation is supporting a policy which would disadvantage 80 per cent of the people that it purports to represent.

The alternative to that-that is, not raising the same amount of revenue and blowing out the Budget deficit-is as I described it a couple of days ago in the Senate when I presented a scenario of Sir Joh as Prime Minister. Sir Joh would call together the senior bureaucrats and say: `We are having flat tax, flat tax'. The bureaucrats would say: `But Prime Minister, if we have flat tax the Budget deficit will blow out to $16 billion or $18 billion'. He would say `Don't you worry about that, that will be all right; don't you worry about that'. The Treasury officials would then try to sell sufficient additional government bonds to cover the $16 billion or $18 billion deficit and interest rates would rise to 30 or 40 per cent. Then Sir Joh would call the senior Public Service officials together again and say `Bring interest rates down'. They would try to explain to him how it was difficult to bring interest rates down. The one of the white shoe brigade would tell him to stop the Treasury from selling the bonds and not to fund the deficit because that would bring interest rates down. Probably it would for a while until hyper-inflation took over. The farmers who are supporting their alleged leaders' support Sir Joh Bjelke-Petersen are asking for either a big increase in their taxation burden or interest rates of the order of 30 to 40 per cent followed by hyper-inflation.

My final point is that how the National Farmers Federation reconciles its alleged support for a deregulated economy and the operation of market forces with its support for the opposite sort of economy in Queensland is as big a mystery to me as how John Stone manages to reconcile his support for the flat taxers and the flat earthers with his traditional and trenchantly expressed views when he was Secretary to the Treasury. In short, Farley is a snake oil salesman of old and it is no surprise that he should support Petersen. Mr McLachlan, as always, does not represent those for whom he purports to speak. He represents John Elliott and his fellow Elders IXL directors.