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Wednesday, 18 March 1987
Page: 887

Senator WATSON —Will the Minister representing the Minister for Primary Industry inform the Senate of the cost to the taxpayer of a series of glossy pamphlets recently circulated in the NSW Farmers Journal detailing this Government's rural policy initiatives? Does the Hawke Government intend to continue the practice of advertising its policies in publications produced by the Australian Government Publishing Service at the taxpayers' expense?

Senator WALSH —A particular description has been put on the information sheet, pamphlet, or whatever it was, by Senator Watson. That is his description. I suspect that it is a rather biased and somewhat inaccurate description of some information which was apparently enclosed with some country newspapers in New South Wales. I have not seen the information sheet, nor do I know what the cost of it is. I will try to get an answer to Senator Watson about those matters. I note, however, that it is very necessary that somebody provide to the farming community, many of whom are suffering very low incomes, a fact which is a function overwhelmingly of the price of wheat and not of anything else--

Senator Newman —Nothing to do with your Government? Nothing to do with you?

Senator WALSH —I did not know that Senator Newman was the full bottle on agriculture as well as on everything else but, being the full bottle on agriculture, no doubt she will know that the real price of wheat in Australian dollars is now about half what it was in 1979. If we express it in United States dollars-in other words, take a world price in United States dollars-it is somewhat less than half the level which prevailed in 1979. I am sure that Senator Newman, given her expertise in agriculture, will appreciate the fact that a decline in price over an eight-year period of around 50 per cent squeezes wheat farmers' gross incomes-or at least that proportion that they derive from wheat-by about 50 per cent, and it squeezes their net incomes by a lot more than 50 per cent.

Senator Michael Baume —And what do interest rates do to them?

Senator WALSH —I thank Senator Baume for that because it gives me an opportunity to educate members of the Opposition-assuming of course that they are educable, and that is a pretty heroic assumption. Some 35 per cent of farmers do not owe any money; they actually have cash. Their incomes rise if interest rates go up. Another 50 per cent of farmers owe less than $14,000 so the level of interest rates is of little consequence-almost negligible-so far as those farmers who owe less than $14,000 are concerned. We now have 85 per cent of the farming population which either holds net cash balances or owes less than $14,000. There is a residual 15 per cent-many of whom are wheat farmers, the great majority of whom have substantial debts because they bought land at very high prices a few years ago-who are in great financial trouble. As Andrew Robb, the Director of the National Farmers Federation, was good enough to announce two weeks ago, discussions with the New South Wales banks and the NFF have revealed that around 50 per cent of New South Walwa grain growers would not, in the coming season, be able to service any of their debt-please note-either capital or interest. In other words, if the interest rate was zero those farmers would still be going backwards.

Senator Newman —Their liabilities have been galloping away under your Government; that is why. It has been cumulative over the last few years. It is getting worse and worse, and you know it.

Senator WALSH —I would have thought that even somebody as innumerate as Senator Newman often reveals herself to be would understand that under those circumstances the fundamental and, in quantitative terms, overwhelmingly important problem is--

Senator Archer —Is interest.

Senator WALSH —The problem is the decline in the real price of wheat. Senator Archer insists on saying that the problem for 35 per cent of farmers who hold net cash balances is interest rates. I would be interested to know how he reaches that conclusion. The price of wheat is a problem for many of those 35 per cent of farmers who hold net cash balances, but the higher interest rates go the higher their income goes. The other 50 per cent who owe between zero and $14,000 are hardly affected one way or the other. So the various ill-informed comments that have come by way of interjection from the Opposition demonstrate about as effectively as it could be demonstrated the need for farmers to be more accurately informed than they are informed by members of the Opposition or assorted other people who are their fellow travellers.