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Tuesday, 7 December 1971
Page: 4171


Mr GRASSBY (Riverina) - Briefly, in reply to the honourable member for Balaclava (Mr Whittorn), he was quite right, of course, in seeking details of expenditures in this and every other sphere from the public purse. I was most taken with his thought that the $1.7m that is involved in the advances by the Federal authorities and the State authorities to the Leeton Co-operative Cannery would provide each grower with $4,000 cash. A very quaint thought indeed! I think he has probably been here long enough to know that whenever a grant is made in the name of the growers the grower usually receives the least, not the most. Certainly no money will be going directly to growers in the Leeton district. I will deal with the detail of that a little later on.

I say in reply to the doubts expressed by the honourable member for Balaclava about the usefulness of the canned fruits industry that we are dealing with an industry that is worth $55m, and $30m of this is represented by export income. The Australian canning fruits industry over the last 25 years has earned more money in exports for this country than has the Australian automobile industry over the same period, although the automobile industry is now catching up. Its limited franchise has permitted it to expand a little more than it has in the past. The fact is that the automobile industry also gets protection of 40 per cent or 50 per cent per car internally, so the canning fruits industry is not getting very much from the public purse generally. This industry came into being as a result of an active policy of Government. The Government sponsored and encouraged the industry from the growing right through to these canneries. The Leeton cannery with which I am principally concerned, the largest in New South Wales, began its life as a State cannery. So the industry was born directly under the umbrella of Government sponsorship and Government trade arrangements, particularly with the United Kingdom. In fact the Government was the midwife, if not the father, of the industry. Let us be clear about this. In his second reading speech the Minister for Primary Industry (Mr Sinclair) set out the reasons for the troubles in the industry, but I would summarise them in this way: The Government sponsored the industry and government decisions have brought it into some difficulty. The Minister said:

In the first place, devaluation of sterling left each of the canneries with a considerable loss on sales made forward" without exchange cover.

This is true. Devaluation was a considerable blow. The problem of the canning fruit industry today in a general sense is also that there is a vacuum about its future. It was born under the umbrella of government sponsorship. It is there. Now the big question is: ls the umbrella to be taken down? What is to be the national commitment to this industry to which the nation gave birth? It might be said that obviously these Bills dealing with Shepparton and Leeton have shown that the nation has some commitment to the industry, but I think it should be said also to the honourable member for Balaclava that when it comes actually to examining where the money is to go I have done this in respect of the Leeton Co-operative Cannery at any rate and, very simply, the money is to go to meet the debts incurred under Commonwealth sponsorship, and the State of New South Wales will find no money at all. There will simply be a book entry which will wipe out some of the old debts. All that the State of New South Wales will do will be to forgo a little interest. That is all that will happen with this seemingly very large sum of $1.7m. It will go to adjust in the books some old debts and there will be some saving in interest. I think we should understand that pretty plainly and definitely.

Let us have a look at this industry. The industry is vital and important to towns and cities such as Shepparton, Mildura, Renmark, Griffith and Leeton. It has done a fine job over the years in production, moving up from about 1 million basic cartons in 1926 to Hi million cartons in 1970, so there has been a steady expansion. It might be asked: What of the future? Mr George Mackey, the Deputy Director of the Bureau of Agricultural Economics, when addressing the National Canning Convention the other day, said:

Your industry has expanded sales into newer markets in recent times and there are prospects of further increased sales in Asia and in some of the newly developing countries.

Sitting suspended from 6 to 8 p.m.


Mr GRASSBY - Mr Mackeywent on to say:

Secondly, unlike the wool industry for instance, you do have a market at home for a significant proportion of your output and this market can be expected to gradually increase as population grows.

His summation was as follows:

As 1 see it, the outlook is not one of unrelieved gloom.

I wanted to put that on record tonight. It has been assessed by many in the industry who are charged with selling that there are greater problems for the canning fruits industry than those created by the British entry into Europe. The Leeton Co-operative Cannery has seen that the problems which it faces - these are the problems that all the canneries in Australia face - are greater than those of the British entry into Europe. Mr B. G. Lowe, the General Manager of the Leeton Co-operative Cannery Ltd, is reported as having said:

.   . a 25 per cent increase in shipping freights lo the United Kingdom could add 20 to 30c a carton of canned fruit to costs. lt should also be realised that South Africa, one of our competitors in the canned fruits field, is able to export its products to Europe at half the cost per ton and per mile that we must meet. We have to face this situation. It has also been pointed out by Mr Lowe thai the Broken Hill Pty Co. Ltd would be unable to supply one-third of the tinplate needs of the Leeton Cooperative Cannery, and the cost of importing tinplate would add another $25,000 to the cannery's costs. Here we have 2 factors under the control of this Government. The first is the shipping freights situation. We pay double the freight that our competitors pay. The second is that, because of the structure of the steel industry, we are being forced to import Japanese steel and to meet the difference in the bill. Another leader in the canned fruits industry. Mr Angus Martin, made a series of very effective points. He said: . . the questions yet unanswered were: Would there be a transitional period for canned fruits, would the external tariff bc reduced after Britain's entry and how long would it take for British wages to rise to compensate for higher food hills.

In other words, he was saying: What has our Government done about the renegotiation of British tariffs and British preferences to enable us to trade and to help this industry, which was fostered by Government, to remain viable.

The Leeton Co-operative Cannery, which is the subject of the legislation before the House, has a higher export component than has any other cannery in Australia. Therefore, all of the things that touch on export costs affect it most seriously and most grievously. It must grow by 50 per cent if it is to meet its international competitors such as Libbys and Del Monde. One might think that this Bill, which provides $1.7m, enables it to do just this. Let us be quite clear. It does no such thing. The honourable member for Balaclava made a very thoughtful contribution to this debate. But one of the things I want to say to him is that all this Bill does, from the State point of view, is to enable a book entry to take place. All it does, from the Commonwealth point of view, is to enable some Commonwealth debts to be serviced. It certainly does not enable this cannery, which is the largest in New South Wales, to grow to a size that would enable it to meet its competitors in the international sphere on an equal basis, because to do that the cannery must grow by 50 per cent.

In the Murrumbidgee Irrigation Area, which is the largest canning fruits area in New South Wales, there is a cannery called the Griffith Co-operative Cannery Ltd. We had an incredible situation in which for a very long time no-one knew what the future of that cannery would be. I mentioned this in an address to the Parliament when the Minister for Primary Industry, who has been away for a white, was here. He heard my address and I spoke to him about it. The Griffith Co-operative Cannery, which operated with grower shareholders, had grower capital of $500,000. The cannery had not paid for a whole season's deliveries by growers, which amount to $250,000. I put it to the Minister that the cannery would be forced into extinction and that this would mean that 160 people would be unemployed at a time when the countryside was in the grip of the worst depression for 2 generations.

We saw many things happen, but the main thing that happened was that the New South Wales Government said that it was not able to meet the request to keep this particular unit going because it involved $200,000 - not in cash, but in a bank guarantee. It was beyond the resources of the State, said the Premier of New South Wales, Mr Robin W. Askin. I took this matter up with the Federal Minister for Primary Industry. I do not want to mention his name improperly, Mr Speaker, but we have had an Acting Minister for Primary Industry while the Minister has been away. I took the matter up with the Minister for Primary Industry (Mr Sinclair). He contacted the New South Wales Government. When he was away I had further contact with the Acting Minister for Primary Industry (Mr Nixon). He said: 'I cannot quite understand the situation because we have not had any requests from the State of New South Wales, particularly in regard to this co-operative cannery'. I accepted that completely. What happened was that in the end the New South Wales Government said in relation to this cannery: 'We are not in . a positon and we have no resources o help. We cannot assist you'.

The Acting Minister for Primary Industry found this a bit surprising. I do not blame him for that. Within 3 or 4 days of the deadline for preparations for the harvest, which will start in 14 days time, we were faced with a situation in which there was no movement from the State Government and no movement from the Federal Government. Gordon Edgell Pty Ltd, which is not an unknown canner in our country, came in and said: 'We will make you an offer'. The offer was to rent this particular cannery, to meet all the commitments and interest for the current year, to pay the growers on 30 days and to keep all the jobs going at a time when we need them. That was the offer and it was accepted. Concurrently with these negotiations an offer was made, not directly by the New South Wales Government but indirectly, that the grower part of this co-operative should be given up - that is to say, the capital asset, which was $500,000, should be given up - and that all the moneys owing to growers for the last season, which amounted to $250,000, should also be given up. The offer was that they should then pay a levy which would enable them at least to find a home for their fruit in the season which begins in about 14 days time.

This was the only offer before them, that they give up$500,000 in assets, that they forego every penny of what was owing to them for fruit delivered in the past season - $250,000 - and that they pay a levy to see that what they had for the coming season was processed. That was an offer that came indirectly from the Government of New South Wales. The instrument used was the Leeton Co-operative Cannery. But let us be clear; the financial management of the Leeton Co-operative Cannery is in the hands of the State Government in association with the Federal Government, so it is not making decisions of this type. This is important in relation to a matter I will mention in a moment or two. So what it decided to do was to accept the offer to lease to Gordon Edgell. Gordon Edgell had moved in to the extent that it was prepared to receive fruit which will be coming off the trees in 14 days time.

But now we cometo an interesting situation where just today there has been an offer made by 3 canneries. SPC - which is Shepparton Preserving Co. Ltd - Ardmona Fruit Products Co-operative Co. Ltd and Kyabram Preserving Co. Ltd. They have come together at this hour to say to the Griffith Co-operative Cannery: 'We would like to take you over on the following terms.' I do not vouch for the detail of the terms and I hope the Minister will note this. But the general terms are that they would settle the long term debts, they would pay out all the cannery's liabilities and take over its assets, they would pay 50 per cent of all that was owing to the growers of last season and they would process all available fruit from this cooperative cannery this season starting in 14 days time. That is a most generous proposition. This situation in which we found ourselves, though, is an incredible one. We found that the New South Wales Government was saying that nothing could be done because it was beyond the full capacity of the sovereign State of New South Wales to find $200,000, not in cash but in a bank guarantee. So this is what it said: 'We could not find it. We have not got it. So all we can say is that you must die peacefully.' But underground it said: Listen, if you give up all your assets and give up all that you owe we might be able to manage to instruct the Leeton Cooperative Cannery to process your fruit'. That was about all they were able to do. Now, in theory I suppose that t'v:re is a corpse in Griffith to be picked. The other canneries are now saying: 'Well, let us now have another look at it'. What I want to direct to the Minister is the question as to whether the Commonwealth is in fact extending a 'helping hand' to the growers concerned by sponsoring this offer because, as we all know, it was a unanimous decision of the Parliament. So let there be no misunderstanding about it. An amount of $4.2m was given as a loan-


Mr Lloyd - As a loan.


Mr GRASSBY - I know it was as a loan, as my friend from Murray says. It was given to help the Shepparton cannery overcome its difficulties.


Mr Sinclair - The answer is no. We are in no way sponsoring it.


Mr GRASSBY - I have not finished-


Mr Sinclair - You asked me a question.


Mr GRASSBY - The Minister has been away for a while. I suggest he hear me out and catch up with events. It is pretty important, as I think he will agree. The honourable member for Balaclava (Mr Whittorn) spoke as a member of Parliament not on a party basis but just to ask some questions. Ali I am doing is asking some questions. If the Minister needs time to answer we will wait. We are tolerant people. But let me put the position to the Minister. It is an extraordinary situation that this Parliament agreed, just a few months ago - it was a unanimous decision and there is no criticism of the Minister so he can relax-


Mr Sinclair - I am relaxed.


Mr GRASSBY - 1 am glad that the Minister is relaxed. But 125 members of the Parliament determined that the loan of $4.2m to the Shepparton cannery was in order. All I am asking now is: Has the Government had some second thoughts about what should be done with the money, because if there is an offer by Shepparton, Ardmona and the other cannery associated with them to take over another cannery in New South Wales on most generous terms - it may be a very good offer - let us have the facts of the situation. This is all we are asking for in this debate. In summation - I have only a very short time left - all I want to say is that we have heard a great deal said about the growers but the growers associated with the Griffith Co-operative Cannery have had no money for last season. We have asked the Commonwealth, we have asked the State - the request is in orbit. We have also asked the Commonwealth for all the assistance that can be given to those growers because some growers have had help and some have not. All good government is based on equality of treatment and they have not had equality of treatment. So I am asking that this should have the Minister's attention. I am also suggesting to him that when it comes to the voting of money for all sorts of purposes while we may be happy to have it, I do not think that the Minister has to give an explanation to the House particularly tonight and I ask that he should give it.







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