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Thursday, 4 May 1961

Mr DEPUTY SPEAKER - Order! The honorable member's time has expired.

Mr. BANDIDT(Wide Bay) [12.01.- In the short time available to me this morning I propose to discuss the special difficulties of Queensland. From time to time over recent months I have been in communication with various Ministers, pointing out the special difficulties that Queensland has experienced and is still experiencing. Let me mention some of them.

The first main difficulty was caused by the very severe drought that lasted for most of last year. As honorable members know, a State that relies principally on primary production for its income is very severely affected by drought The State's income drops according to the severity of the drought. The worse the drought, the lower the returns, and, as 1 have said, the drought that extended over the greater part of Queensland last year was quite severe.

A further difficulty was caused by the restriction of credit. It is well known, Mr. Deputy Speaker, that the banks have been doing a good job generally and that they have restricted advances. But when one studies the available figures, it seems clear that over a fairly recent period the value of the advances made by the banks to persons engaged in primary industry, expressed as a proportion of the total advances, has declined. In short, the banks regard primary industry as a less attractive field for investment than they did in years gone by. The decline in bank advances to primary industry, coupled with the fall in incomes due to the drought, has created obvious difficulties for primary producers. The position will not be greatly improved this year, apparently, because within the past few days the Department of Agriculture and Stock in Queensland has stated that weather prospects for the coming winter are poor. In fact, at the present time in my electorate, and in many other parts of Queensland, a partial drought is still being experienced, and it is likely to continue through the winter and the spring. In Queensland, on the average, four out of five winters and springs are very dry. We may be lucky this year and have a wet winter and spring after the dry time that most of the State has been experiencing, but this is unlikely.

I concede that the Government should be commended for the courage it displayed in imposing certain credit restrictions. It did so for a purpose. I think the position is well summed up in the words of Mr. Ian Connell, who is reported in " Canberra Comments ", the official organ of the Associated Chambers of Commerce of Australia, as having said -

There is no reason to doubt that Australia will be able to stem the drain on her international reserves without sending the economy into a forced recession.

The report goes on -

The balance of payments problem, he said, was not a new one and was certainly not caused by the removal of import controls. It bad, in fact, been mainly due to the combined effects of a fall in export prices and the increased demand for imported raw materials and capital equipment resulting from the internal boom which developed rapidly in 1959-60.

Mr. Connellcontinued

The credit restraints which have been applied are, in fact, an orthodox weapon of economic policy. If Australia is to keep her costs in line with costs overseas, she cannot afford to become a hotbed of inflation in a world that is becoming increasingly competitive.

I cannot go into this matter in detail, but I will say that the Government has been successful to a marked degree. In the first place, the Treasurer has made it clear to us that the overseas balance position can be expected to be better at the end of June than it was at the end of December last. That is a remarkable achievement.

Mr Cope - It is borrowed money; it is not ours.

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