Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 21 June 1949


Mr POLLARD - The facts that I am about to relate will be very unpalatable to honorable members opposite. No interruption or display of spleen will deter me from furnishing the House and the country with this very startling revelation.

Mr Holt Mr. Holt interjecting ,


Mr POLLARD - These facts are of some importance and I crave the decency of the Opposition so that I may be able to give them without interruption, and so that honorable members opposite may be able, at their own time, and the honorable member for Indi, after going into a huddle with Mr. Teasdale, to reply to the statement that I am. . about to make. The facts are that on the 30th October, 1947, the general manager of the Australian Wheat Board informed me that certain decisions had been made by the board. Those decisions were -

Wheat Price. - The board raised its price to 19s. 6d. per bushel bulk basis f.o.b. as from 24th October, 1947. This was for the purpose of keeping in line with Canadian and United States prices.

Export Commitments. - We have reserved 75,000,000 bushels (wheat and flour combined) for United Kingdom and other areas supplied by the United Kingdom Ministry of Food This is in conformity with the Government's decision.

In accordance with the board's policy,we propose to make contracts in advance for each quarter's shipments.

For the first quarter, we have offered to the Ministry of Food the following: -

(1)   Offered to the United Kingdom Ministry of Food - 250,000 tons of wheat (9,500,000 bushels) shipment to United Kingdom, December-February at 17s.6d. per bushel bulk basis f.o.b. 200,000 tons of flour (10,500,000 bushels wheat equivalent) based upon that wheat price if shipped to United Kingdom and upon 18s.6d. if shipped elsewhere.

Note. - Our general price war 18s.6d. per bushel when the offer was made, and as you know, we allow a discount of1s. per bushel for shipments to United Kingdom to cover freight margins. 35,000 tons of wheat (1,250,000 bushels) to Eire, shipment December-February on the basis of 18s. 6d. per bushel bulk.

That was in fact, the actual offer made by the board to the Government of the United Kingdom in October, 1947. I emphasize that the board announced at that time that its policy concerning the fixing of prices was determined in accordance with Canadian and United States prices. The offer which it made to the United Kingdom Government was based on quarterly deliveries of certain quantities, and, in accordance with its general policy, a discount of1s. a bushel was to be allowed to the United Kingdom to cover so-called freight margins. The board's note to me stated that the price of 19s. 6d. a bushel had been fixed because the board wanted to aline the price for Australian wheat with that charged by Canada and the United States of America. The Canadian price for commercial export, No. 1 northern grade wheat, for the week ended the 25th October, 1947, averaged 333£ cents a bushel, which was the equivalent of 20s. 8£d. in Australian currency. The board's price f.o.b. Australia based on the Canadian price was 19s. 6d. a bushel at the end of October. Those figures form a commencing point from which to assess the loss or gain which would have resulted from the board's decision to sell to the United Kingdom the entire 1947-48 wheat harvest, of approximately 80,000,000 bushels, at 17s. a bushel f.o.b. I have previously quoted correspondence to show that the board's policy was to fix a price in advance to the United Kingdom each quarter until the entire crop was delivered. I have also quoted from the minutes of the board to show that it decided to allow the United Kingdom a discount of ls. a bushel on wheat shipped direct to that country. Over 50,000,000 bushels were sent direct to the United Kingdom, which represented a discount of approximately 8d. a bushel for the entire crop. If Canadian prices at the commencement of the several quarters during the period of delivery of the 1947-48 crop are converted to Australian currency on the basis set out in the board's note of the 30th October, 1947, and allowance is made for the board's policy of granting a discount to the United Kingdom, it will be realized that the Government's intervention resulted in a substantial gain, instead of a loss, from the sale of the full quantity at the firm figure of 17s. a bushel. The board's actual prices for export, calculated on its own basis, would have been 19s. 6d. a bushel for the first quarter, 15s. 5d. for the second quarter, 15s. 4id. for the third quarter, and 13s. 9 1/2 d. a bushel for the fourth quarter. Prom the proceeds the discount, which amounted to an average of 8d. a bushel, would have had to be deducted. Acceptance of the board's price would have resulted in a higher return being received for the wheat shipped during the first quarter and a lower return for shipments made during the succeeding quarters, than that fixed by the Government. So that the figures may be recorded for purposes of subsequent comparison I have prepared a table showing Canadian prices and their Australian equivalents during the period October, 1947, to November, 1948, which is as follows : -

I emphasize that had the board's offer to supply 20,000,000 bushels for the first quarter been accepted the contract into which the board desired to enter would have been based on the Canadian price which was ruling at that time, less ls. a bushel for freight concession. Of course, no such contract was entered into. The United Kingdom Government stated that it did not want a quarterly contract and it appealed to the Australian Government to intervene in the negotiations. The Government then took the matter out of the hands of the wheat board, and thereby saved the wheat-growers of this country a sum estimated at from £6,000,000 to £7,000,000. Had a contract been made on the basis of the board's original proposition, which would have entailed the sale of 20,000,000 bushels each quarter, the wheat-growers would have gained ls. lOd. a bushel for the first quarter over the price that was actually fixed by the Government, which would have resulted in a gain of £1,830,000. However, in the second quarter they would have lost 2s. 2d. a bushel, or a total amount of £2,250,000. In the third quarter the wheat-growers would have lost 2s. 34d. a bushel, which would have amounted to £2,290,000; and in the fourth quarter the loss would have been 3s. 10 1/2 d. a bushel, and would have amounted to £3,875,000. However, the agreement made by the Government with the United Kingdom made a profit for the growers of about £6,500,000, not a loss as alleged by the honorable member for Indi. Indeed, that calculation is rather generous to our opponents, as it is very doubtful whether the board could have sold 20,000,000 bushels each quarter. As is well known there was transport trouble at the time, and the rate of delivery for the first half year fell 10,000,000 bushels short of the estimated rate of delivery. In December, 1948, at the end of the season, 12,000,000 bushels still remained undelivered. The world price for wheat declined by ls. 4d. a bushel on the price for the March quarter, which was 4s. 3d. a bushel less than the price quoted by the hoard at the opening of the season. In other words, the Government, by disregarding the recommendation of the wheat board, for which it has been denounced by the Opposition, saved the Australian wheat-growers probably £7,250,000, or £750,000 more than indicated in the conservative estimate which I mentioned a few moments ago. The figures given by the board at the time it made its proposition assumed that it would be able to ship 20,000,000 bushels each quarter. I again point out, however, that transport and shipping difficulties prevented the board from shipping that quantity. I ask leave to continue my remarks at a later hour.

Leave granted; debate adjourned.

Sitting suspended from 6 to 8 p.m.

Suggest corrections