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Tuesday, 17 March 1987
Page: 772

Senator WATSON(3.45) —I move:

That the Senate take note of the paper.

The 1985-86 annual report of the Australian Wheat Board gives an overview of its operations for the year, including detailed statistics and comparisons with the previous year. Australia was the only major wheat exporter of the world's five major wheat exporting countries to increase its exports during this period. Our sales amounted to 19.1 per cent of the total wheat trade. We have achieved this despite ruthless competition, particularly from America and the European Economic Community, in an environment of overproduction on the world market and in a situation of a low-valued Australian dollar.

The Board was rationalised last year and I think its achievements are to be commended, particularly in the current economic climate. All too often today we find that wheat production is no longer viable for farmers, many of whom have been forced to abandon their farming properties. I take this opportunity to say that to some extent Australian banks have contributed to this farming crisis by some irresponsible lending practices. Many banks have lent large sums of money with profit on those loans in mind when in fact the people receiving the loans were often not in a financial position to service such debts, let alone have any hope of meeting repayments. Regrettably, the prudential guidelines of the past appear to be discarded today, but with their disappearance we have seen greater human suffering by many of the borrowers, particularly in the grain growing industry where farmers have seen their plants and properties confiscated under mortgage type arrangements.

In 1985-86 wheat was responsible for exports worth $3,600m or 11 per cent of Australia's export revenue. This excellent performance was achieved with virtually no government support whatsoever. This is quite an impressive achievement, yet we find that high costs and inefficiencies, particularly in the handling, storage and transport of grain, have been of concern to producers for quite some time. Sales of grain overseas have been limited because of excessive distribution costs. Let me give a few examples in the remaining minutes. The distribution charges, expressed as a proportion of net returns, increased from 15 per cent to 22 per cent between 1979 and 1986, and are expected to reach 25 per cent by 1987. The international competitiveness of Australian industries-their ability to export or replace imports with little or no government support-is a matter of national interest. Recent events have shown only too clearly that improved international competitiveness is essential if the value of the Australian dollar is not to decline further and if Australian living standards are not to be significantly eroded. The establishment of the Royal Commission into Grain Storage, Handling and Transport was certainly well overdue and I hope that the Commission can make an early report.

The world is still unaware that the devastating impact of the collapse of world commodity prices has forced our balance of payments into a precarious situation and has affected the value of the Australian dollar. Of course, we must not overlook the contribution of the Government's efforts in forcing down the value of the dollar. The size and the urgency of the current account imbalance should not be seen as justifying almost any means to increase exports and reduce imports; rather, they should be seen as providing an added incentive initially to remove many of those impediments to the flow of resources to export and import competing industries. I commend the report to the Senate.

Question resolved in the affirmative.