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Tuesday, 23 August 1994
Page: 41

Senator MacGIBBON (4.38 p.m.) —The matter of public importance before the Senate, in plain English, expresses contempt at the way the government has totally neglected Australia's rural industries. These industries provide one-quarter of Australia's export earnings, even in times of reduced output, and over half a million Australians are employed in the food industry, either in producing food or processing it for the Australian community and export. We are in the grip of one of the worst droughts in living memory in Queensland and New South Wales. I declare an interest here as a grazier who has been involved in this drought in Queensland for 3 1/2 years as a beef producer.

  I look at the forecasts from the weather bureau and I find there is no chance of significant rain before April 1995. If that is correct, it means that in my state of Queensland we will not get rain until the wet season in January-February-March 1996. So we are looking at a four- or five-year drought. That is a huge imposition on the industry. It is being put on an industry that has been weakened by very low profits in the last 10 to 15 years. The sugar industry and the beef industry have had very low commodity prices and difficult climatic conditions. There is no fat in the system. Money has not gone into improving properties the way that it might have done in previous times.

  What happens when rain comes? If the drought breaks grain producers should get a cash flow back between four to six months after they get a crop off. But it is not like that for cattle producers or sheep producers. They are looking at a very much longer time before they can get a cash flow re-established. It might be that they are looking at a period of at least three years before that cash flow is re-established. So there could be something like eight years of either negative incomes or at best breaking even for an industry.  There are not too many blocks of eight years in a human working life. It is not as though producers would have those bad times for eight years only out of an effective working life of 35 or 40 years. They have to reckon on the fact that they will probably have one drought of 12 months or so duration every three or four years.

  The other problem for the rural industry at the present time in Australia is that the boom periods do not compensate for the bad years. We do not seem to get the periods like we enjoyed, admittedly on rare occasions in our history, where we would get one or two good seasons and be able to cover the loss of some years preceding that.

  Things are genuinely very tough out there. The concern on this side of the chamber is for the total lack of concern demonstrated by the government to the needs of the rural community. We have a Prime Minister who, when he goes to Queensland, says `Oh well, you've got to expect bad times. That's your lot. Just put up with it and don't complain.' If those bad times were suffered by urban Australians, the human misery would be met by welfare and support programs, and quite properly so. But our rural communities are tied up under rules which prevent them from getting the entitlements that so many of their cousins in the city areas get. If the rural industries themselves existed in a visible and vital role in the urban area, there would be something done for them.

  The Prime Minister has not even visited the drought areas of Queensland. He has been to Port Douglas on his numerous holidays. He is reported today in the Courier-Mail to have been at Sanctuary Cove looking at yachts to buy. All I can say to the Prime Minister is to echo the words of a famous Australian poet:

You had better stick to Sydney and make merry with the push,

For the bush will never suit you and you will never suit the bush.

Admittedly, the Minister for Primary Industries and Energy (Senator Collins) has been up there, but it took him 3 1/2 years to get there despite the fact that many of us on this side, myself included, drew attention to the needs of rural Australia because of the drought.

  All that the government has done is support the rural adjustment scheme. Whatever hopes we might have had in 1992 about the rural adjustment scheme, it has proved to be a failure. It just does not work. The `exceptional circumstances' case has far too stringent a set of criteria to support the rural community. For the lesser dry periods, the IED scheme is a farce. When we were in government, something like $2 billion was involved in deposits under the IED scheme. Today the amount is estimated to be $100 million.

  We need to do something about that. The minister was saying he wanted to know what to do. I will tell him what to do. First of all, he has to recognise that there is a big difference between having a dry season for 12 or 24 months, which, if we support producers with realistic taxation policies and provide them with the ability to cope with those, they will get through them and the major droughts, such as the four-, five- or six-year situation we are involved in now.

  In relation to the shorter term cases, it is clear that we need to provide financial incentives so that people can store fodder and water. As a rural producer, I find it anomalous that I can get a 27 per cent depreciation allowance on my personal computer but a dam, which is vital for me, attracts a seven per cent depreciation rate. It is absolute nonsense. In the particular case of one dam I am thinking of, it has had to be rebuilt twice in the last five or so years. There ought to be realistic depreciation rates so that improvements can go into properties when times are good. That of course makes the assumption that times are good and that the profits are there to go into it.

  The terrible impediment we have of the fringe benefits tax makes it very difficult for us to employ people on properties. That tax is ideologically driven. There is no need for a fringe benefits tax in the way it is written and applied at the present time to rural employers. Let us have a fair fringe benefits tax, something that is simple and cheap to administer. Why do we have to pay excise duty for road maintenance on trains hauling freight out to rural properties? It is absolute nonsense. The money raised from that excise does not go to the railway lines.

  Let us do some commonsense things. I think we have to look at the national disaster relief organisation again because the rural adjustment scheme in the extreme circumstances simply is not working. Nothing is being done by the government at the present time. The people out there are suffering and suffering enormously. (Time expired)