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Tuesday, 19 April 1966

Mr ROBINSON (Cowper) .- I rise to make reference to what I believe to be quite forward developments as far as the economy is concerned in the rural sector. The decision of the Government recently to establish a Farm Development Loan Fund for primary producers will make a valuable contribution to the advancement of Australian farmers. It is, I believe, a great break through at a time when primary industry needs help in order to maintain and expand economic production. The Government believes it is desirable to provide the farmers with greater access to immediate and long term capital for development purposes through private banks and Government trading banks. Under the Farm Development Loan Fund scheme the trading hanks will set up accounts with the Reserve Bank containing a total of $50 million as an initial amount for this special purpose.

In addition, of course, $21 million was added to the existing Term Loan Funds recently for the purpose of assisting, in particular, primary industry. I want to speak about the drought aspect before dealing in some detail with the Farm Development Loan Fund. There seems to be in New South Wales and, I understand, in Queensland, some misunderstanding concerning the provision of special funds for farmers in necessitous circumstances. In this House from time to time there have been very clear statements - statements made as far back as last October by the Prime Minister of the day - announcing progressive and forward steps to look after the interests of drought victims. Unfortunately, we find that there is a good deal of misunderstanding in this field.

The statement on the economy made by the Treasurer (Mr. McMahon) in this House a fortnight ago made particular reference to schemes which will look after the interests of primary producers who cannot obtain bank finance because of their particular position from an equity point of view. These schemes are being administered by the States of New South Wales and Queensland, and the action taken is quite revolutionary. There is no precedent for it. The provision of funds through this channel will enable primary producers in drought areas, where there was a declared drought within Pastures Protection Board districts at any time since 1st January 1965, to obtain loans of up to £10,000 at a concessional rate of interest as low as 3 per cent., with repayment over 10 years and no repayments in the first two years.

There has been a good deal of criticism of the Government's attention to the effects of the drought on primary industry. The House will recall that the Opposition was very critical of the initial announcements by the Prime Minister (Mr. Harold Holt) regarding this matter. I believe that action taken provides primary producers with the means of moderating the drought problem. There is no question but that a great deal more will have to be done if the drought continues, and the vast problem of restocking is something that cannot be solved overnight. But it is important that primary industry should have a clear understanding of what is being done.

I now return to the subject of the special Farm Development Loan Fund which has been set up. Primary producers will welcome this new credit facility, which inevitably must lead to higher productivity and a situation in which farmers are able to meet more effectively future drought problems. Some of the praiseworthy aspects of the new Farm Development Loan Fund scheme are that advances will be available for long terms - 15 years, and in some cases more than 15 years. This will greatly assist farmers and particularly, young farmers. It will enable a reorganisation of many properties where it is deemed necessary that there should be an amalgamation of farms and that sort of thine. The rate of interest is the special concessional rate applied to primary producers. This, too, is a commendable move.

The trading banks have complied with the Government's wishes to provide this special facility and I have no doubt that within the next few weeks every trading bank in the rural areas of Australia wi'l have a clear knowledge of this new scheme and will be able to advise interested primary producers about it. There was some suggestion that this special measure was related directly to the drought. This, of course, is not true. The scheme will be applicable equally to the ordinary everyday aspects of primary industry. Naturally, special consideration will be given in drought areas, but it is intended to serve the interests of primary industries on a broad scale.

One of the heartening things about this new scheme is the fact that young farmers who are anxious to make their own way on the land will have the chance of approaching banks to obtain finance for the purchase of land, the development of the land, and the whole range of aspects that are involved in developing a farm property. This, of course, is much more practicable when they are able to obtain loans of this kind over a long term. For many years there has been a demand for this kind of arrangement to assist young farmers. I am sure that the young men who qualify through agricultural colleges, through the junior farmers' movement and through many other spheres, will take great advantage of this opportunity.

I believe that it is timely for us to think in terms of the importance of the primary industry sector when we review the economy. Primary industry has done a remarkable job in the past 15 years. In fact, there has been an increase of something like two thirds over that period in total output, and the rate of increase per year has averaged about 4.3 per cent. If we assess this and relate it to the position of other countries, we find that the Australian scene is a very heartening one indeed. In Europe the rate of increase has ranged up to 6 per cent, and in the United States it has ranged up to 7.3 per cent., but of course conditions in Australia are very different from those experienced in those countries. The effect of this, of course, is to give primary industry a greater overall economic strength. But the great disability confronting the primary producers is that this has barely arrested the cost rises that primary producers face year by year. A very substantial proportion of this improvement over the 1 5 years has been offset by domestic cost rises, and there is, of course, no way in which the primary producers are able to pass on these increasing costs because their returns are determined very largely by world market prices and by other factors which are well beyond the control of an Australian Government and well beyond the control of the farmers themselves.

I believe that it is timely for us to look at this problem in a practical way. lt is reasonable to assume that a similar trend in the next 15 years would present the rural sector with a very great problem indeed. There are undoubtedly many avenues that can provide means of cushioning the effect of this trend, but it is not a simple matter. It is one, I believe, that is worthy of very special attention by the Government. When we think in terms of farm development, of course, we must relate it not only to the world pattern of trading but also to the advances being made scientifically and in other directions. All of this gets back to the fact that economic viability is a vital consideration. Farming enterprises can succeed only if there is sufficient capital and sufficient incentive. Good management comes from the opportunity to do a job of work in a way that produces a profitable result. This can only be achieved if action is taken along the lines that the Government recently announced. That is, by ensuring that the farming sector does have enough capital to do a worthwhile job.

I should like to refer to some other important factors which I believe are worthy of special mention. In recent times the employment situation has improved tremendously. This is very heartening, lt is a complete answer to the pessimists and the critics who for a long time have challenged the Government in regard to its overall approach to budgeting and the like. While we have a developing economy and have the responsibility of meeting a huge defence commitment we will have the problem of finding sufficient finance for our needs. Because of the remarkable upsurge in production, particularly in regard to minerals, Australia's future is very heartening indeed. This Government must be given credit for very good management, particularly during the last two and a half years.

The undertakings that were given by the Government at the last election have been honoured and have proved to be a very sound approach to the management of the nation's economy.

While we have progress at the economic level and as we meet our commitments in various directions, there are sections of the community that face problems. 1 say quite clearly that the position of the pensioners is not an enviable one. Undoubtedly this is a sector at which the Government will have to look very carefully as soon as possible. Likewise, persons who are on fixed incomes, such as the recipients of superannuation benefits, face a problem. The problem is not dissimilar from that which confronts the primary producer and which I mentioned a little earlier. All these people find themselves in a marketing, income or wages situation which shows no rise even though there is norma] growth within the economy.

On the other hand, there are matters that we in Australia tend to take for granted a little too much. One is the fact that in regard to taxation the people of Australia are placed in a very favourable position when compared with the people of other countries. The Government has been able to hold taxation at a level which compares more than favourably with that of most other countries. This is a tremendous accomplishment. In 1963-64 taxation per capita in Australia was approximately .£ 1 80. During the same period the corresponding figure in Canada was the equivalent of £A230, in Great Britain $A210, and in the United States of America £A383. lt is clear from these figures I have quoted that the position in Australia is quite favourable.

One of the great problems to which we should pay more attention is that of rural development and decentralisation. The word " decentralisation " is worn out. lt has been overworked, particularly in the Commonwealth and State Parliaments and in provincial centres where there is a great clamour for more to be done in this direction. It is reasonable to assume that unless we can produce an answer to the tremendous growth of the cities we will not see the balanced development that this nation deserves. Figures disclose that the growth of Sydney every 10 years produces the equal of another Adelaide. Growth in the city of Sydney each year is at least equal to the size of any of our provincial cities. If this development in metropolitan areas continues without relative growth in other regions, ultimately we will be faced wim a great economic problem in the servicing of the metropolitan areas and there will be a still wider gap in the ability of the nation to provide funds for roads, water, electricity and the like. So many views have been expressed under the heading of decentralisation that people are sick and tired of hearing the word.

However, we cannot leave the matter there simply because we have failed to produce an answer. The Opposition might ask: " Why does not the Government do something about it? " I remind honorable members that Australian governments of all political colours have attempted to tackle this problem but thus far have failed to produce a conclusive answer. I believe that the fundamental need is to find a new approach to Commonwealth anu State relations. A little later this year the State Premiers and the Treasurers will visit Canberra to seek loan funds and tax reimbursements to continue the major public works programmes. Most of the public works that are financed by loan funds are within the jurisdiction of the States. As I mentioned earlier, these embrace the provision of roads, bridges, electricity and ports. Unless we are able to produce a new formula, not in respect of the allocation of funds, but in respect of the relative importance of works programmes, we will run into serious difficulty within the next decade. That certainly would be a tremendous blow to the progress of the nation. Whilst on the one hand there is excellent management of the economy, if on the other hand the very precious funds that we have at our disposal are channelled in directions which do not become revenue producing and are not developmental in character, we will not achieve a proper result in the long run. This is a field that requires a lot of special attention. I urge not only the Commonwealth Government but also the State Governments to adopt a more realistic approach to the balanced development of the nation.

I compliment the Treasurer upon his exposition on the economy. The pattern unfolded in the Minister's statement gives us great confidence for both the immediate and the more distant future. We are a fortunate nation indeed. I believe that Australia is destined to go a long way towards attaining a standard of living for our people that will be the envy of many other nations. We can take a great deal of pride in the fact that good management has laid a sound foundation for the situation that we enjoy today.

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