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Tuesday, 23 August 1994
Page: 34

Senator BROWNHILL (Deputy Leader of the National Party of Australia) (4.02 p.m.) —Prime Minister Keating stands condemned for his callous disregard of the rural sector and for his chronic failure to recognise the devastating personal and financial heartbreak of this exceptional drought. It has long been accepted in rural areas of Australia that the Australian Labor Party does not understand and does not care about the rural sector.

  For 20 years the Labor Party has berated, bashed and abused farmers through policy and invective. We all remember former Labor Prime Minister Gough Whitlam's taunt to farmers who were facing record bankruptcies and a dramatic turnaround in their terms of trade in the 1970s when he told them: `You never had it so good.' By comparison with the grim reaper we have in the Lodge today, he was probably right.

  Paul Keating as Prime Minister is merely a more arrogant and more callous version of Paul Keating as Treasurer. Today much of Australia faces drought, not in the sense of the description that Prime Minister Keating suggests—`climate changes that are with us almost every year' or `that no longer simply fall into disaster category'—but drought in the sense of an exceptional drought, the worst drought on record.

  In New South Wales drought covers 60 per cent of the state, and without significant rain in the next two weeks this figure will be revised upwards to 80 per cent. The Darling River flow has stopped for the first time in a decade. In terms of lost production it has already cost the state billions of dollars, including $480 million from cotton, $600 million from wheat, $77 million from barley and about $45 million from canola. The loss is irreparable to the beef and sheep industries, with the slaughter of the female animals.

  In Queensland the drought currently covers 35 per cent of the state, with another third about to be included. In some areas such as Dalby on the Darling Downs—which the Minister for Primary Industries and Energy (Senator Collins) visited just recently, as did I—it is the fifth year of drought. Farmers there have eight consecutive crop losses behind them. They have no income, but mounting losses.

  Senator Collins said in question time today that the government had given $50 million in drought aid and assistance since 1992. To that I say, `Big deal.' Compared to my figures, it is only a little piddle. In both states crop plantings are down 80 per cent and many of the crops already sown are likely to fail.

  This is now the worst drought on record. They are not my words, but the advice of meteorological experts. This is not a typical El Nino; it is an abnormal series of El Ninos. Significantly, those same weather experts say that they could not predict it, that they did not predict it, and that they cannot predict when it will end, although they suggest that it may not break until next March. Prime Minister Keating suggests—unlike the weather experts—that farmers ought to be able to predict drought, that they ought to be able to plan for drought, and that they certainly ought to be able to manage through this drought.

  That is the basis and sentiment behind the national drought policy adopted in 1992—significantly at a time when much of Australia was already two years into drought. The national drought strategy objectives were: to encourage primary producers to adopt self-reliant approaches to managing for climatic variability; to maintain and protect Australia's agricultural and environmental resource base during periods of extreme climate stress; and to ensure early recovery of agricultural and rural industries consistent with long-term sustainable levels. Under this policy farmers would assume greater responsibility for managing risk, and inherent in that were increased financial and business management skills.

  The government's obligations under this policy, and I quote from the national drought policy document, were:

. . . to create the overall environment which is conducive to this property management planning and risk management approach. We will encourage producers to adopt improved property management practices through a system of incentives—

and I underline the word `incentives'—

information transfer, education and training.

On behalf of farmers throughout Australia, I must ask: where are the incentives? Where is this information transfer? Where is the support that was implicit in that agreement which was formulated only two and a bit years ago? It is this same former Treasurer, now Prime Minister Keating, who has systematically bled the rural sector and guaranteed that in all but the most opportune of seasons farmers cannot succeed.

  Let me list a few of the so-called incentives the minister's government has given to Australian farmers. It has increased primary industry charges that have seen government revenue from this sector go from $25 million to $110 million. It has increased the fuel excise. That has impacted doubly on the rural sector because not only are farmers paying higher prices for on-farm and off-farm fuel, but the cost of most of their inputs has also risen because of transport costs. Fuel excise collections are currently $8.5 billion, when in the early 1980s they were only $1 billion.

  Wholesale sales tax collections are now $12 billion. They were $3 billion 10 years ago when the minister's government came to power. The government has removed the investment allowance from 1 July this year, when rural Australia was already struggling from years of the recession we did not have to have. It has removed the exceptional circumstances provision for wool growers because it was deemed by Mr Keating that they no longer needed it. The government has refused to honour an election promise to remove the assets test for farm families for Austudy. It has imposed and extended the fringe benefits tax, the capital gains tax and de facto death duties.

  The government has gutted the successful income equalisation scheme. Today there is only $137 million in the equalisation scheme, and it is so unattractive that people are not rushing into it even if they have the money. The government has removed the wool floor price scheme, when Prime Minister Keating and the then minister for primary industries, Mr Kerin, promised that it would stay. We have high interest rates artificially engineered by the then Treasurer Keating because he wanted to stabilise the economy. Those same interest rates saw farm borrowings increase by $5 billion in five years to $16 billion, and today the indebtedness of the rural sector stands at $17.3 billion. Those interest rates moved rural loans from an average of 10 per cent to something like 24 per cent. The government has removed 8.3 per cent of farmers from their properties and, from the way it is going now, it wants to remove the rest of them because it does not care a damn about them.

  Those interest rates and all those inappropriate anti-rural policies are now impacting on the sector that is facing historic drought whilst it is being told that it is a mere climatic variability. The minister has been out there and has seen it. I hope he can knock some sense into the Prime Minister.

  I have spoken to farmers across Australia, as has the minister, and the message I receive is the same: all that farmers want is a fair go. The minister has met them; I have met them. All that farmers want is a fair go. They want to be self-reliant but, when it gets beyond the ability of the individual to cope because of exceptional circumstances such as this drought, then it is time for the government to intervene and to play its part to a much greater extent than it thinks it is doing at the moment.

  But farmers could not do it when the starting point for this new self-reliant approach came at a time when many had already spent two years in an exceptional drought. Most were still reeling from the impact of 20 per cent interest rates, a collapse of the entire wool industry, and removal of tax incentives and investment incentives such as IEDs.

  As one farmer told me only last week, `If you can't put food on the table, if you can't educate your kids as well as city people, surely then it is time for the government to take notice.' It is callous, it is cruel, that any Prime Minister ignore this plea. Mr Keating has ignored it and continues to ignore it. If he cared for rural Australia, why increase diesel fuel prices and propose an administration charge on farmers for lodging their rebate claims—a charge that would have generated far more income than the rebate scheme actually costs to administer?

  Why encourage the Reserve Bank to push interest rates up another 0.75 per cent—a move that will cost the rural sector an additional $120 million? Why talk up the Australian dollar when every cent upwards costs the rural sector $160 million? And why wait until farmers are on their knees and begging before throwing them the equivalent of crumbs? The damage is chronic and massive; the assistance provided is begrudging and paltry. The New South Wales farmers called it `Canberra's conscience money'. It is once again too little, too late.

  As the shadow minister in the other place, Mr Anderson, suggested, it is vital that such schemes as fodder schemes be reintroduced because those farmers that do survive this drought will need to keep the nucleus of their herds and flocks intact to allow them to breed their way out of financial difficulties and help Australia's balance of payments. At the moment female cattle and sheep are having their heads knocked off. But we need more. We need long-term strategies that provide genuine incentives for farmers through the tax system. The government must examine assistance in terms of debt set aside, interest relief and genuine incentives for self-reliance.

  It is all very well for Mr Keating to claim that exceptional circumstances funding is available, but the reality is that 47 per cent of farmers were rejected for that assistance. This government has been inadequate and uncaring in its help. This Prime Minister, Mr Keating, in particular stands condemned for his callous attitude in handling the whole of this drought issue. It is up to the minister to knock some sense into him. I hope he can, because the Australian people will make sure the Prime Minister stands condemned for it.

  The ACTING DEPUTY PRESIDENT (Senator Colston)—Before I call Senator Collins, I understand that agreement has been reached on the time allocated for speakers in this debate: Senator Brownhill 10 minutes; Senator Collins 20 minutes; Senator Woodley five minutes; Senator MacGibbon seven minutes; Senator Burns five minutes; Senator Crane eight minutes; and Senator Margetts five minutes. If that has the concurrence of the Senate, I will ask that the clocks be set accordingly. It is so ordered.