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Thursday, 12 May 1994
Page: 759

Senator BOSWELL —My question is directed to the Minister for Primary Industries and Energy. On 14 March he told the Senate:

Despite the fact that that rain has been received, it will take growers some time to recover from the drought. The recovery period for those people who are turning off livestock, rather than those who grow grain, will be even longer.

Does the minister recall that? Since 4,400 out of the 8,500 RAS approvals received exceptional circumstances funding this year—that is, over half the client base—and the minister has publicly acknowledged that it will take a couple of years for farmers to get back on their feet, why has the government allocated only a paltry $2.5 million to extend drought exceptional circumstances funding for a mere six months and ended wool exceptional circumstances funding altogether?

Senator COLLINS —The government introduced the exceptional circumstances provisions in 1992. The only way we will be able to maintain the integrity of exceptional circumstances is if this funding—and it has been very significant—is used for a short term for truly exceptional circumstances.  In the last budget I made it very clear that we were extending exceptional circumstances assistance for Queensland drought-affected farmers.

Senator Boswell —$2.5 million.

Senator COLLINS —The total is $4.5 million—$2.5 million for exceptional circumstances and an additional $2 million for Queensland for the normal rural adjustment scheme in anticipation of the additional demands on that scheme by Queensland drought-affected farmers. That money will be directed to those farmers who are still officially drought declared or those drought-affected farmers who cannot restock completely because of sustainability problems.

  As far as wool is concerned, the same thing applies. When the exceptional circumstances funding was started for specialist woolgrowers in April last year, the indicative price for wool was around 380c and, in terms of the 19 micron indicator, it was just over 500c a pound.

  Senator Boswell interjecting

Senator COLLINS —In fact it was 381c. As of last May, those figures had gone to 587c and, for 19 micron wool, in excess of 900c. Just yesterday I noted that the eastern indicator price reached 606c, which is the first time I have seen it top 600c since early 1992.

  So the facts are that the situation with wool prices, although they are not as high as we would all like them to be, has firmed to the extent where the current price levels—and that is why the exceptional circumstances money was paid in April last year, when the market was all over the place and was at a catastrophic low—can no longer be considered to be exceptional. In fact, the market is giving a clear message to growers, to which many of them are reacting, as we would expect them to, that they will have a very good bottom line if they move to higher quality wools. I cited the current 19 micron indicator, which is currently running in excess of 900c, but the other day I was talking to two growers of superfine wool who were getting significantly more than that.

  The facts are that exceptional circumstances money has been extended for Queensland farmers in this drought and, so far as the exceptional circumstances wool money is concerned, because it was paid on low prices the situation in the wool industry in terms of price can no longer be considered to be exceptional by any measure.

Senator BOSWELL —Mr President, I ask a supplementary question. That is extraordinary—saying that the way out of the wool problem is to change the micron.

Senator Collins —I didn't say that at all.

Senator BOSWELL —Senator Collins did. I would like to tell the minister that rural Australia is getting pretty sick of ministers flying into the bush on white chargers and then leaving people to look at the back end of the cow. Can the minister give me an unequivocal guarantee that he is not going to phase out RAS interest subsidies to farmers?

Senator COLLINS —I am not sure what the question means. In this budget, in terms of subsidy assistance to farmers, this government approved funding levels of $252 million over the next three years under RAS for interest subsidies. So the answer to Senator Boswell is yes. On the question of exceptional circumstances and moving to finer wools, the facts are—despite all the experts opposite—that growers are doing precisely that. The reason I make that point is that the growers who are doing that have access to the normal rural adjustment scheme 50 per cent interest subsidy provisions for moving to that finer grade wool.