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Monday, 23 February 1987
Page: 445

Senator WATSON(5.18) —I move:

That the Senate take note of the paper.

This report draws attention to the fact that products of interest to the Australian Special Rural Research Council are expected to face continued market pressure on both the domestic and export fronts. Unfortunately, Australia is now faced with a highly competitive world market, not only for primary produce and minerals, but also for manufacturing. We believe that action must be taken expeditiously to ensure that the trend that has seen Australia drop in the world exporters league from the thirteenth to the twenty-second position is reversed. The impact of the European Community's agricultural policies of releasing some of its stockpiles into some of our traditional markets and the extension of United States subsidies on agricultural products through its export enhancement program are also having severe repercussions for Australian rural exports, in terms of both their effect on market prices and the possible loss of the traditional market share.

My own State of Tasmania is also concerned about the impact that the closer economic relations with New Zealand are having on certain pockets of the agricultural sector in Australia. I believe that we need to monitor developments in this area, and particularly movements in the relative exchange rates. I think the pressure on prices, and the other problems brought about by the loss of our overseas market share for our primary products, are matters of great concern. Of course, that is reflected in Australia's overseas debt. This is another problem that has reached an all time high of over $100 billion. The advantage to exporters of devaluation has been lost due to high interest rates, our high inflation rate, the higher cost of importing machinery and also because of international promotion.

It is essential that emphasis be given to the competitive edge that may be gained through research and development projects. To make an impact in such a competitive environment, Australian exporters need to produce quality products to meet customer demand. We must assert marketing techniques to increase the awareness of products that Australia has to offer. To this end research and development projects need to be pursued vigorously. While current research and development programs are to be commended as a step in the right direction, it is unfortunate that 90 per cent of Australia's rural research and development resources are devoted to activities in support of the larger established rural industries to the exclusion of the smaller components such as horticulture, the development of which is a matter of great importance to my State of Tasmania. The capacity of these sectors of rural industry to make significant contributions to export earnings should not be overlooked.

The time to take initiatives to restore Australia's flagging export performance is now. The report recommends extending research and development for rural industry as one way of achieving this; I commend the report. Whilst the growth of manufacturing exports will continue to be important in trying to redress the imbalance in Australia's terms of trade, more speed is needed in the rural sector. Our best bet is to get improvement through the agricultural sector because it already accounts for a very significant slice of Australia's export earnings. I commend the report to the Senate.

Question resolved in the affirmative.