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Thursday, 4 June 1970

Dr PATTERSON (DAWSON, QUEENSLAND) - Three real droughts. I do not know where these droughts were.

Mr SPEAKER -Order! I suggest that the honourable member for Daw.son direct his remarks to the Chair and that other honourable gentlemen refrain from interjecting.

Dr PATTERSON - Certainly, Mr Speaker. The honourable member for Mallee says that he has had J droughts in his area in the last 25 years. I know of I major drought but the other 2 droughts he talks about were not droughts by any stretch of the imagination. He should go to western Queensland or Western Australia and see the droughts in those areas. They are what I call droughts.

In Queensland today there is just as big a drought in some of the wheat growing districts as there is in pastoral areas. When huge surpluses are generated the Government should give serious consideration to the establishment of drought reserve banks based principally on 2 things - surplus grains and molasses. Molasses is a product of sugar cane and can be used on the same basis as grains. But there are 2 elements of tremendous importance in the feeding of starving stock, and we have (hem periodically in surplus supplies. Some areas of Queensland are highly susceptible to drought. I suppose we could say that in the post war period there have been 2 serious droughts in major areas every 5 years. This is about the average.

Mr Anthony - Rain there is abnormal, is it not?

Dr PATTERSON - There are people now in Queensland who are beginning to wonder whether this is the average pattern of seasons. But how can farmers survive under these conditions?

I am putting forward the suggestion, using Queensland as an example, that this State has a magnificent system of decentralised railways. I am not saying that the railways are magnificent, but the geographical location of them in relation to the drought areas is such that by utilisation of the large surpluses from time to time, instead of letting them degenerate in the paddocks, and the excess capacity of rolling stock there is a case for consideration of the establishment of these drought banks in areas such as in the western railways system, the south west railway system and so forth. Losses alone of national income and export income in the areas of western Queensland and central Queensland due to drought - and this is a correct way to evaluate the situation - would more than 'justify in many instances the establishment of the insurance banks or drought reserve banks to take advantage of when we have periods of drought. I do not believe that they would pay in southern Australia because I do not think we would get, under known conditions anyhow, the high degree of susceptibility of drought that is experienced in northern New South Wales and large parts of Queensland, principally in the sheep areas. I put that idea forward - I have given it some thought and have done some work on it. The more work I do the more I am swinging to the conclusion that it is feasible - feasible in terms of economic justification. These drought banks, if I may so describe them, would be strategically located. We know the areas that are highly susceptible to drought. It is safe to say that the past pattern of drought in this country will be repeated in the next 50 years with some degree of consistency. One could be selfish and say that it is the turn of southern Australia to have drought, but we do not want to speak that way. Let us hope that we do not have droughts in the future but, having regard to the facts of life, we know that there will be serious droughts in Queensland.

The quota system has caused some hardship to small producers. There is an inequitable distribution of quotas in terms of net income. Also, the delay in paying the second advance on f.a.q. wheat held in the 1968-69 pool is causing some concern to the small grower who is desperately in need of cash. The bigger grower may be able to hang on but the small grower wants more cash in his hand from that pool. Under the Act the Australian Wheat Board borrows from the reserve Bank sufficient funds to pay the first advance of $1.10 a bushel less freight. Until the overdraft is fully liquidated there can be no second advance. This system works when the industry is reasonably economic or self-sufficient in terms of net income but because the quota system has reduced the small farmer in many instances to the bread line, he wants every cent he can get his hands on. I would like to hear the Minister express an opinion on this matter. In these circumstances some consideration should be given to paying the second advance more quickly to those who need it. After all, it will be their money at some time.

Mr Anthony - Do you mean the second payment?

Dr PATTERSON - Yes. Under the present system the debt due for the 1968-69 pool is about $200,000. It is anticipated that this debt will not be repaid until early next year. So the second advance for the 1968-69 pool will not be paid until perhaps May or June 1971. This may not worry the bigger producer. If he has had a good season he may have enough fat to carry him through, but the small traditional producer, who has not had room to expand in the last 10 years, although he may have had a comfortable living, suddenly finds that his production is cut. He is the one whom the Government should bs considering by standing up to the big chiefs in the Australian Wheatgrowers Federation. I say nothing against their integrity but they are on the side of the big producer, not the small producer.

More and more in this Parliament we have witnessed sniping against primary industries. It is becoming rather common in every debate on primary production for members of the Liberal Party to snipe at the primary producers. Only the Country Party and the Labor Party have been consistent in their attitude of concern for primary industries. I would not mind if those members of the Liberal Party who engaged in this practice - not all of them are guilty - argued rationally or on the facts. For example, they make emotional speeches in the House condemning irrigation. According to them every irrigation system in Australia is uneconomic, lt would follow, I suppose, that every irrigation system in the world, according to the honourable member for Bradfield (Mr Turner), is uneconomic.

Mr SPEAKER -Order! 1 cannot see the relevance of the honourable member's last remarks. I suggest that he return to (he Bill.

Dr PATTERSON - 1 was making the point in passing. There is too much sniping by members of the Liberal Party at primary producers. There is more and more sniping at the wheat grower. I make it clear that there is a complete misapprehension about the financial assistance that has been given to the wheat grower by the Commonwealth. Because the first advance payment is made people think that hundreds of millions of dollars are being given to the wheat grower. The latest official survey of the Bureau of Agricultural Economics shows that only \% of the average gross income of the wheat grower can be classed as a subsidy. The subsidy element in the gross income of ยง22,500 of the average farm, according to that survey, amounted to S300. So let nobody say that the wheat industry is highly protected. II is nonsense m make such a claim. In the years following the war the domestic price of wheat was deliberately kept at a level that would ensure that not all of our production was sold overseas, but today the wheat industry is in credit to the tune of a little less than 5400m. Do not take my word for this: take the word of people who have made a study of the matter, such as Mr McKay, former Director of the Bureau of Agricultural Economics and a Deputy Secretary of the Department of Trade and Industry. He has no axe to grind. He has publicly given these figures of the wheat industry's credit position.

Mr Kelly - When was that?

Dr PATTERSON - About 4 years ago. I am pointing out that in the survey conducted by the Bureau of Agricultural Economics, taking the last 3 years, lbc average subsidy paid in the case of a farm with an income of $22,500 was only $300.

That amounts to 11% on gross income or 3c a bushel. I do not want to get onto the matter of tariffs again, but I will say-

Mr Maisey - We afford 100% protection to the manufacture of babies' nappies.

Mr SPEAKER - Order! The honourable member for Moore will not make his speech by interjection. He is scheduled to speak in the debate and will then have an opportunity to say all that he wishes.

Dr PATTERSON - I was letting the honourable member go because he was making a most valuable contribution to the debate.

Mr Malcolm Fraser (WANNON, VICTORIA) - Somebody needs to.

Dr PATTERSON - I have never heard the honourable member for Wannon make a speech about primary industry, yet he sets himself up as one of the great liberal leaders in primary industry.

Mr Giles - You have just got here.

Dr PATTERSON - I may have just gol here but you could have been-

Mr SPEAKER -Order! 1 have already asked the honourable member for Dawson to direct his remarks to the Chair. I again ask him to come back to the matter before the House.

Dr PATTERSON - Mr Speaker,I will come back to the Bill. [Quorum formed.! I was pointing out that there are misconceptions about the level of financial assistance, commonly called a subsidy, which has been given to the wheat industry. I hope I established the fact once and for all that the wheat industry is one of the most unprotected industries in Australia. I moved on to compare it, for example, with the total cash equivalent that is paid to the manufacturing industries of Australia. Just to prove the point - these are the best estimates that one can get - the cash equivalent of the tariff of the manufacturing sector of Australia runs at somewhere in the vicinity of SI. 500m per annum. The total cash equivalent of all bounties or embargoes with respect lo primary industry in Australia is a figure around S280m. lt shows quite clearly that there is some degree of imbalance. But how often do we see the trouble shooters in the Liberal Party have a go at the tariffs? That is why I was sorry the honourable member for Bradfield was not here.

Mr Turner - I have criticised the tariff.

Dr PATTERSON - Not to the same extent as primary industry. When one considers the contribution which the wheat, wool, beef, dairy and sugar industries have made to this nation's economy in terms of export income and in terms of decentralisation it is always necessary to understand that, despite the great potential of mineral development, for a very long time we will have to rely on rural exports to balance the books, taking into account current account and invisibles, to allow a high level of imports to be maintained. As I said before, there is a stimulating influence which seems to have crept into the Parliament in this session in relation to free traders - laissez-faire-ites. I am not one of them. 1 believe in protectionism and anybody who does not believe in protectionism should take a basic course in economics. That applies particularly to the honourable member for Wakefield (Mr Kelly). Let me make it very clear in the last few words I have to say that the Labor Party is implacable in its belief in protection for our primary and secondary industries, provided that resources are used efficiently. That is the measurement - provided that resources are used efficiently. That does not mean we cannot have a high tariff. Resources can be used efficiently. Of course, if one takes defence aspects, that is a qualitative matter that does not come into the argument.

Mr Malcolm Fraser (WANNON, VICTORIA) - Do you mean defence does not matter?

Dr PATTERSON - No. As far as the tariff is concerned the argument is not relevant to defence. If you want to manufacture Fills in Australia it would be very relevant in terms of economics. This Bill allows us to debate stabilisation at some length. I have attempted to range over a pretty wide field. I put forward this amendment to the 1 -price scheme and I will be making another amendment with respect to the flexible price. I will leave it at that.

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