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Tuesday, 15 March 1966

Mr GRAY (Capricornia) .- The New Zealand-Australia Free Trade Agreement which we are now discussing has come into prominence because of the items taken from it which impinge unfavourably on our domestic primary production. The items contained in the schedule are extensive, and apparently any of them could be brought forward on to the free list. There are nearly 30 closely printed pages in the schedule which commences with live horses, asses, mules and hinnies and concludes with antiques of an age exceeding 100 years. It would be impossible to say how many items are covered because many of them are multiple. For instance, "other live animals" could mean anything.

It is interesting to note that wool is included. I imagine that if the Government made any attempt to import wool it would have another hornet's nest about its ears.

Mr McEwen - The honorable member does not know what he is talking about. We import a lot of wool from New Zealand. We always have.

Mr GRAY - This agreement grants the right to import all types of wool, not only wool for carpet making. In this instance we are concerned particularly with cheese and pig meats. The Government surely could not expect the farmers to accept this proposal without some protest. It is very easy for the Deputy Prime Minister (Mr. McEwen) to state, as he did in this House during the last sessional period, that this might mean a matter of only £2 or $4 a year to the average farmer. Although no pig meat has yet been imported into Australia under the provisions of this Agreement, the effect of the proposal in the area from which I come was immediate. It must be remembered that in Queensland pig meat is sold at auction. The immediate result of the Agreement was a fall of 6d. per lb. in the price paid at auction. The price fell from 2s. 8d. to 2s. 2d. No-one would need to know very much about farming to realise that this is a lot more serious from a financial point of view than an average £2 or $4 a farmer. The 6d. per lb. which was lost to the farmer reduces the profitthat he normally receives. Anything that is lost to the farmer comes out of his profit. He still has to meet the same production costs. The amount he pays for his feed, fuel and rates does not fall. A loss of 6d. out of 2s. 8d. is a very serious matter for this particular industry. This agreement is political dynamite in areas in which there is a large number of dairy farmers. The Government learned that in the Dawson byelection. The Government lost in districts which it used to win by two or three votes to one because the farmers resented the agreement as an attack on their standard of living.

It is very easy for the honorable member for Mackellar (Mr. Wentworth) to suggest that perhaps the dairy farmer could go into grazing. A lot of them have done that but we must remember what this involves. In the final analysis, if the average dairy farmer wished to go into grazing he would need possibly 10 times as much land as he now has for dairying. The average dairy farm is not a place upon which to engage in grazing if one wishes to make any money out of the enterprise. We must remember also that the average dairy farm is improved to a much greater extent than is the average grazing property and, acre for acre, would be worth probably 10 times as much. Are we then to suggest seriously to dairy farmers that they should sell their land at a loss or that they should invest a larger amount of capital, if they can get it, to earn exactly the same return as they earned previously? Surely that is not suggested seriously.

The fact remains that to some degree this treaty must adversely affect the interests of the people concerned - the producers of cheese and of pig meat. No pig meat has yet been imported. Although the treaty has been agreed to on both sides of the Tasman, the Australian Department of Health has delayed the importation of pig meat because of a disease which is prevalent in the pig industry in New Zealand. It could be that repercussions might cause the Government to seize upon this opportunity to ensure that pig meat does not come into Australia. However, this could be considered by some people as a breach of agreement. The Government, therefore, is caught between the two sides of the question. During the recent Dawson by-election campaign I heard a dairy farmer, referring to our good friend, the Deputy Prime Minister - the right honorable gentleman probably heard it himself - say: "Now that pig iron Bob has departed from the scene we have pig meat Jack ". This became almost the battle cry of the dairy farmers in the district with disastrous results to the Government forces.

The honorable member for Mackellar also mentioned that the dairy farmer worked very hard for very little money.

That is an accurate statement of the conditions under which the dairy farmer struggles today to get a living. He has to fight against an increase in the amount of margarine that comes on the market in competition with his butter; he has to battle against the fact that the price of his product is increasing on the market, thus decreasing the amount that he sells; he has to fight against floods and, when he gets over that, he has to fight against droughts which leave the countryside dry and then he has to fight against bush fires. These are some of the factors which confront people in this industry. They have to work 365 days a year because no-one has yet succeeded in producing a cow which works only 40 hours a week. If you are in the dairy industry - I have been in it - you work all day every day and if an accident occurs or if illness befalls you, then you have to rely on neighbours to have your cows milked. Working a dairy farm is a continuous operation. Surely these people are entitled to What they get. Surely these people are entitled to some protection and consideration by those who govern the country.

It is easy to say that only £2 a year is involved, but if we import 1,000 tons of cheese into Australia we displace 1,000 tons of cheese produced in this country. This means that the amount of cheese exported has to be increased. Cheese that is exported brings a lower return than does cheese sold on the home market and, with the equalisation scheme which now operates, the producer's income is reduced. The producers do not need any suggestion that they go into grazing to encourage them to leave the industry. Since the war, 1,500 dairy farmers have gone out of production in my area alone, and that is only one small portion of central Queensland. Tens of thousands of farmers have left the industry. People have left or are leaving because the work is too strenuous for them, or because the younger generation will not engage in the industry, or because it no longer pays them to stay in the industry. All that this Agreement can do is to cause still more people to leave the industry.

The Government says that it is putting several hundred people on the land in central Queensland under the brigalow scheme, but this will still leave us short. If 500 people are put on the land under the brigalow scheme and if we have already lost 1,500 dairy farmers, we will still be 1,000 people short on the land. Recently I travelled with a farmer over a 20-mile stretch of road in my electorate and on the way we counted, within sight of the road, 21 dairy farms which are no longer operating. The houses and the people have gone. The farmers have left the land, and we will not get them back on to it. Why should they go back unless it is made profitable for them to do so? They find they can get jobs in the cities, working only 40 hours a week, and that in the cities there are better facilities for educating their families. It is no longer a reasonable proposition for them to stay on the land. No longer is the net return per annum of dairy farmers greater than what they could obtain in the cities. They have to work twice as long for what they do get. There is no doubt that this Agreement will accelerate the drift from the country to the cities.

I am certain that if the Government were to propose something in the nature of a common market in this part of the world it would receive a great deal more support. We must keep in mind that the New Zealanders will be able to export certain items of primary produce to Australia, selling them here to their advantage, without in any way risking other markets which they may have. If they joined with us in an actual common market, .there would be common exports. But what do we find now? Under the present arrangements, they will be able to use the profits they make here to help them push us further out of the European market. It is well known to this Government that the Reserve Bank of New Zealand provides finance for the marketing organisations of the New Zealand primary producers at an interest rate of only 1 per cent, per annum. Such cheap finance is not available in this country. This alone means that the New Zealand primary producer is able to reach overseas markets at a lesser cost and to sell at a cheaper rate than his Australian counterpart is able to do. This gives him a tremendous advantage. Some of the cheap finance made available in New Zealand must percolate through to the primary producer himself. If that scheme is good in New Zealand, if the New Zealand economy can carry such a scheme, why is not a similar service extended to the primary producer in Australia by our Reserve Bank? We have many Government members here allegedly representing the primary producers, yet they will not extend to them an advantage which is given to farmers in New Zealand.

There can be very little doubt that the New Zealand primary producer enjoys an advantage when he markets his export products abroad. Now it is proposed to give him an added advantage which will help him push our produce off the European market and other markets. If the New Zealanders joined in a common market with us, presumably we would provide similar financial facilities here and the produce exported from both countries would go abroad under the same conditions. In other words, New Zealand would be in the same position with regard to continental Australia as Tasmania is. I think this is something which every Australian and probably every New Zealander would very much welcome.

The honorable member for Mackellar touched on this point to some extent. I am sure that he realises that what is proposed under this Agreement is a slightly different proposition. By this Agreement we are not entering into any arrangements for a common market area; we are entering into an agreement with New Zealand which makes Australia a free market, so far as tariffs are concerned, for certain items of New Zealand primary production. In return for this, apparently we are to have a free market in New Zealand for certain items of our secondary production. This, of course, will increase our exports. Without doubt, the proposal is aimed at assisting the New Zealand Government with its balance of payments position, but there will not be very much assistance in the final analysis if we balance our imports by exporting other types of goods of equivalent value.

The Minister for Trade and Industry stated on a previous occasion that we should consider the countertrade that will be generated and the additional employment that will be made available in Australia in the industries which manufacture the items concerned. Without doubt, those are factors which are worth considering, but it can be pointed out also that one of our greatest problems in connection with secondary industries is the degree' of automation that is coming to them. I am very much afraid that the advantage we will gain from being able to export certain items to New Zealand will be completely overshadowed by the problem we will have to face as a result of the displacement of labour from secondary industries by automatic and semiautomatic processes.

So, for the moment, the question boils down to the effect which the Agreement is going to have on the primary industries in this country. Despite what the Government has had to say, despite the fact that it has pointed out that safeguards are included in the Agreement and that these safeguards can be invoked to protect any industry which is found to be unduly suffering as a result of the Agreement, I am afraid the Government has not succeeded in convincing the primary producers whose industries will be affected immediately by the importation of the articles concerned. We must not lose sight of the fact that this country still depends greatly upon what it produces from the land. If our primary producers are to be attacked here in their own market, and if what is proposed in the Agreement is to be part of the Government's policy, have we any guarantee that this will stop at cheese, pig meats and processed vegetables - which are also included?

Has the Government taken the trouble to find out exactly what effect this Agreement will have in Tasmania, where large numbers of primary producers on large areas of land are engaged in producing vegetables for processing and sale on the mainland market? I doubt very much whether it has. Of course, if the Government is determined to enter into the Agreement, no doubt something has got to be sacrificed. But it is very little consolation to those who find that their industries have been selected for the sacrifice to know that in the opinion of the Government some concession must be granted to a sister Commonwealth country which is so near at hand geographically.

Although we fully sympathise with the position of our New Zealand relatives, I think the Government should give a great deal more attention to the effect which the Agreement is going to have on the dairying industry, which is one of the most precarious of all primary industries in this country at this particular time. It has been hit very hard by its normal marketing pro blems, it has been hit severely by the drought and it is losing at a greater rate than any other primary industry in the country the people who are necessary to maintain it. It is this industry which the Government has selected, at this time and in the existing circumstances, as its victim. The blow which is to be struck can have no effect other than to drive more men and their families out of the country districts into the cities. We are told from time to time that this is not the policy of the Government and that it believes in decentralisation and is trying to reverse the drift from the land to the cities, yet this treaty can have no effect other than to do the very thing which the Government claims it is trying to avoid. I feel that too little attention was given, in this instance, to the section of industry selected to be the victim of this Agreement.

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