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Thursday, 22 November 1973
Page: 3706


Mr SINCLAIR (New England) - The Wheat Industry Stabilisation Bill comes before this Parliament at a time when throughout Australia many farmers unfortunately are not harvesting the crops for which they had hoped. However, they are harvesting quite significantly large crops which are proposed to be covered by this legislation. Of all Australian rural industries the wheat industry is one of the first to be subject to the short-term ad hoc approach which regrettably this Labor Government introduced after it came into office. At the time of the change in government the Australian Wheat Federation had already initiated discussions with the preceding Government to devise ways and means by which the 5-year stabilisation scheme could be renewed. Sir Allan Callaghan, the former chairman of the Australian Wheat Board, had been commissioned by me to look at the general nature of assistance available to the wheat industry. As a result he produced a report to the Department of Primary Industry. In addition, the Bureau of Agricultural Economics had provided statistical analyses of the relevant state of the wheat industry. I think that we all accepted that it would be necessary to make some changes to wheat stabilisation.

I recognise the difficulties the new Government had in coming into office. But my first comment about the wheat industry is to note the deficiencies of appointing as Minister for Primary Industry a man who had not previously been a spokesman on primary industry. Irrespective of his personal qualities, he was, from the beginning, virtually well and truly behind taws. The difficulty he found was that he just was not able to introduce any sort of positive legislation in the short-term. The legislation now before the House in fact reflects the unfortunate consequence of appointing as Minister for Primary Industry a man who had not been a spokesman on primary industry and who apparently had had little interest in wheat matters when previously they came before the Parliament. From our point of view, and this has been expressed on earlier occasions, we regard it as equally unfortunate that he should have been a representative in another place rather than in this chamber. He is in a place where we are not able to ascertain from him the implications of statements that he makes or of policies that he introduces.

The wheat industry was one of the first of the primary industries to be subjected to the sheer lack of knowledge and the problems that he had in trying to pick up the reins of a department without having any fundamental ideas about the ground rules. Unfortunately, the problems were aggravated by successive statements he then made around the world giving his attitude towards the rural industries and people in the wheat industry, as in many other sectors of the primary industries, were beset because they were not too sure just what his intentions were. Honourable members will recall that when he attended the meeting of the Organisation for Economic Co-operation and Development in Paris early in the year he made a pronouncement which indicated that there would be quite radical changes in any future wheat stabilisation scheme. He was not telling us what they were but was saying generally that the wheat industry would have to stand on its own feet in the future. The trouble was that he had not realised that the wheat industry has been standing on its own feet for a long time. Indeed the very product of the stabilisation scheme that he is now extending is to place on the wheat industry quite significant responsibilities, but I want to come to them later. Initially I point out that this statement by the Minister for Primary Industry indicated that he did not really know what wheat stabilisation was all about.

The second criticism I make relates to the statements that were made by the Minister for Primary Industry in Australia questioning the value of Government assistance to rural industry generally, particularly to the wheat industry. All this seems quite anomalous when one considers that early this year the industry itself will be subsidising the Government quite significantly, both in terms of the differential between the price of home consumption and export wheat and also in terms of payments to the stabilisation fund. A third area was in his direct interference and tampering with marketing arrangements of the industry. This was not peculiar to the Minister for Primary Industry, and again I want to say something later about the Minister for Overseas Trade (Dr J. F. Cairns). There are 2 particular problems that concern honourable members on this side of the House - firstly, the intervention in sales to China and secondly, the intervention in sales to Egypt. The fourth area is the incredible bungling that the Labor Government committed itself to, and the Minister in particular committed himself to, over the provision of funds to control weevils in Australian storage around the various ports and inland.

Honourable members will recall the occasion when the Minister went along to a meeting with State Ministers. That meeting was predominantly called to consider wheat stabilisation. The State Ministers for Agriculture and the Minister for Primary Industry in Queensland had come to the meeting expecting the principal subject to be the detail of what the impending wheat stabilisation arrangement would be. The Minister came in and said that he was very concerned - I understand his concern - about the problems of weevils in grain stored around the country. He said he felt that there needed to be some type of accelerated campaign of eradication. That was a very commendable thought. The problem was that he said that his Government was so concerned about it that it would provide $500,000 towards a fund provided that the States and the wheat producers were prepared to contribute $250,000 each. The tragedy was that he had not bothered to discuss the proposal with the Treasurer or with his own Government. The proposal that came out at the meeting with the State Ministers was of prime importance. It was more important apparently at that time than the details about wheat stabilisation. But it finished with him not being able to get the approval of his colleagues in the Federal Government to the appropriation of that $500,000.

The Minister has been around the country saying that he is very sympathetic to the interests of primary producers but of all the statements he has made this, to me, is the most alarming. There is no use any member of the Labor Government coming out and saying: 'Look, I am terribly sorry but the Government has decided to do this. I know I am a member of Cabinet. But do not worry about it. I really spoke up very strongly for you'. That is utter ballyhoo. Every one of the Ministers in the Labor Party is a member of Cabinet - how it works I still do not know; frankly it does not work too well - and every one of them has an opportunity to speak around the Cabinet table. If any one of them gets up in a public place and says that he is very sympathetic, be it to the wheat industry, to the wool industry, or to any other sector of any other industry, and Government policy does not accord with what he says, if he is true to his convictions he should resign. The only basis under a Cabinet system of government existing in this country on which any man, as a member of Cabinet, can accept a decision by the Government is that he is in agreement with that decision.


Mr Duthie - Why did you not resign?


Mr SINCLAIR - I am glad that the honourable member intervened in that way. I have never stood up in a public place as a Minister and said that I disagreed with a decision of a Cabinet of which I had been a member, nor should any member of any Labor Cabinet do so. For this Minister for Primary Industry to say: 'Oh, I came out and spoke strongly in favour of $500,000 for weevil control', or I spoke very strongly for something else in relation to primary industry but I was rolled in Cabinet' is utter nonsense.


Dr Everingham - Who said that?


Mr SINCLAIR - Your Minister for Primary Industry put forward to the State Ministers for Agriculture a proposal that, if they provided $250,000 and the industry provided $250,000, he and the Commonwealth - the Cabinet of which you are a member - would provide $500,000 to supplement it and there would be $lm advanced for weevil control in the Australian wheat industry and all would be well. He put his head on the block when he said that he would provide it. He went to Cabinet and was rolled. It is of no use him saying, be it in that area or in any other area, that he is sympathetic to rural industries. The product of the Budget, the product of this wheat stabilisation scheme, which is an ad hoc oneyearextention, a and the product of any other of his rural policies, demonstrates either that he is not interested in rural policy and he really just accords with Labor Government policy, or that he is either not competent or not able in Cabinet to have his point of view accepted, or that he really is not prepared, as a member of the Labor Cabinet, to accept responsibility for its collective decisions. Any one of those 3 positions can be taken by the Australian people but as far as I am concerned a man who is a Minister, if he is unsuccessful in Cabinet, cannot say that he presented some alternative point of view and really is sympathetic to the rural industries, because it just is not a fact under our Cabinet system. Any member of Cabinet must be bound by collective decisions. I do not regard it as possible for any member of Cabinet to assert a point of view that is at variance with that which is held by his Cabinet colleagues.

At the present time throughout this nation thousands of Australian wheat farmers are harvesting their crops. So this piece of legislation is particularly important. Within a few more months the same farmers will begin breaking up land for fallowing, into which next year's crops will be sown. They still do not know the terms and conditions under which that particular crop will be sold, nor do they know what sort of a scheme is going to be applied to it. They do know that, because of the high world wheat prices and because of the wheat export tax which is the subject of one of the measures before the House at the moment, they will be required to pay in significant sums, considering the variance between the export price at the moment and the home consumption price, which may or may not be held for a beneficial stabilisation scheme. I say 'may not be' because already the Minister for Primary Industry is asserting a point of view that shows that there will be significant limits in the future on the amount of the funds that will be provided by the Labor Government for wheat stabilisation.

It is commendable that there should be discussions between the Australian Wheat Growers Federation and the Government to determine what the new wheat stabilisation scheme should be. The wheat farmers know already that they are providing a substantial subsidy for Australian consumers of wheat. It is important for the wheat farmers - who know already that they are paying, and are going to continue to pay under the terms of this legislation, sums into the Treasury in order to offset future wheat stabilisation arrangements - to know what terms and conditions are to be applicable to them for the future and it is important for the Australian taxpayer to realise that the Australian wheat grower is in a position where he is not doing other than paying a significant price in order to get the guarantee of stabilised income which is the whole motivation of this legislation.

Sitting suspended from 1 to 2.15 p.m.


Mr SINCLAIR - 'Prior to the suspension of the sitting I was addressing the House on 2 Bills which are being debated together and which relate to the introduction of a short term extension of the wheat industry stabilisation legislation. One of the Bill provides for the application of certain wheat export charges which requires wheat growers to pay a significant contribution to the Australian Wheat Board if, as is now the case, the export price for wheat should be higher than the guaranteed price by a margin of some 5c to offset future payments under the guarantee. The other Bill relates to the extension of the stabilisation scheme itself. As I explained previously, we on this side of the House are concerned at the implications of several aspects of the Bill. Our first concern is about the one year extension. We are concerned at the suggestion which has been made by the Government which will somewhat restrict the general character of future wheat stabilisation arrangements. We are also concerned about the ministerial direction that is involved in the Bills.

One thing of which I think honourable members generally are aware and which sets a somewhat different climate for wheat stabilisation today from that which has prevailed in recent years is the very buoyant conditions that are generally applicable to al! grain sales throughout the world. There is no doubt that if the Liberal-Country parties were in power, wheat farmers generally could look forward to a very bright future. One of the things that concerns me is that the Pandora box of goodies that the Australian Labor Party has offered seems to be concentrated on a wheat sale which supposedly has been negotiated by the Minister for Overseas Trade (Dr J. F. Cairns). Of course, it is true that the representatives of the Australian Wheat Board when they visited China last year had an offer to enter into a long term wheat contract. It is also true that this year they were offered a contract significantly greater than that which was offered last year. Indeed, if wheat had been available they could have negotiated a much greater wheat sale last year. It was not only last year that the Wheat Board has been in contact with the agency which in fact negotiates contracts for the sale of wheat to the Chinese. The Board has been in constant and continuing discussion with the officials of the Chinese Government, and there is a very close commercial relationship between them.

One of the factors about which I have been speaking which concerns me is the intervention which this Government likes to take at a political level without regard to the interests of the wheat growers. That is another one of the elements of our concern - the contrast between the projected position of the Australian wheat farmer under Labor, and the position which the wheat farmer would enjoy were we in office. Of course, that sets aside altogether the particularly onerous anti-rural legislation for which the honourable member for Robertson (Mr Cohen), who is seeking to interject, was in part responsible. The application of the taxation provisions in the Budget deny the wheat farmer the chance to spend money on property development; they deny those who this year might reasonably expect a good income the opportunity to put that money back into property development. Those of us who have been associated with rural indusries know something of the very traumatic circumstances surrounding poor prices, bad seasons and the problems that many Australian wheat farmers have faced. To see the prospect of a reasonable return this year completely negated because the Labor Party has decided that it will kick farmers to death, is not really much of a bonus for the farmer who, for the first time in a long while, has enjoyed the conjunction of good seasons and reasonable prices abroad.

I shall return for a moment to what I was saying previously. The uncertainties of the policy making of this Government are known throughout the business community. Every Australian is saying: 'If you want to know what to do tomorrow, do not ask the Labor Party because it does not know itself. Unfortunately, the Labor Party is in office and we have to live within the climate that it sets for us, and that general climate is reflected in the one-year extension to the wheat stabilisation scheme for which the Wheat Industry Stabilisation Bill and its parallel Bill provide. The concern about the future is understandable, and I believe that most wheat growers see that as the most regrettable aspect of this extension. It is unfortunate that in the extension no escalation has been provided for the home consumption price of wheat to match increasing world prices. All of us know that the formula which the Bureau of Agricultural Economics produces each year takes a number of elements into account. Unfortunately, this one-year extension does not take into account adjustments which would enable wheat farmers to enjoy some general escalation in the price of wheat sold at home. The position is even more anomalous when one considers the present position applying throughout the world. Wheat and grain prices generally are very high, ensuring for that proportion of the Australian wheat crop sold abroad a much higher price than that paid for wheat at home.

I read this week a letter which a wheat grower wrote to one of Australia's newspapers, in which he complained about the very significant subsidy that wheat growers were providing for the Australian public. The wheat grower accepts the position that in the past payments have been made both ways: The wheat grower has made payments to the Australian wheat consumer and, equally, the Australian wheat consumer has made payments to the wheat growers. It is unfortunate that other people in the community do not realise that there is this 2-way deal as far as the producers of agricultural products are concerned. Wheat stabilisation is one of the most significant areas. For example, the home consumption price is about 70c per bushel less than the current world wheat price. In other words, a very significant subsidy is provided by the Australian wheat grower to the Australian consum'er on every one of the 70-odd million bushels of wheat sold on the domestic market. In return, the Australian wheat grower expects that there should be a reasonable understanding of the necessity for some long term stability in his income. Tragically, the Bill which we have before us provides that stability for only one year, and it is that aspect as much as anything which concerns the Australian wheat growers. We in the Australian Country Party, together with our Liberal colleagues, are concerned about that aspect of the Bill.

The Government generally has ruthlessly penalised the rural sector. It has taxed the rural sector inordinately. It has reduced the confidence of farmers to expand. It has withdrawn government incentives and played with commercial negotiations made on behalf of the industry. The legislation now before the House is, of course, only a one-year extension of the previous legislation, and that gives nobody any confidence as to what the future might hold. The wheat legislation had its genesis when government got together with the industry in an effort to iron out the very savage fluctuations in prices that growers suffer from year to year, considering the variation in world market conditions and our dependence on those world markets. By the operation of the scheme, stability has been given to the industry, and I pay full tribute to Mr Pollard, a former Labor Minister who introduced the scheme. It is unfortunate that the present Minister for Primary Industry does not know as much about the industry as did Mr Pollard.

Basically, the legislation contains elements which are quite commendable and it is because, in the balance, there is in the legislation so much that is good for the industry that we on our side of politics have provided over the last 23 years successive new 5-year extensions of the wheat stabilisiation scheme. We have changed the elements relating to the percentage of the crop that is sold abroad at a guaranteed price. We have provided variations in the price of wheat sold for home consumption, and we have provided variations in the export price of wheat. We have done that taking into account the advocacy of the industry and the interests of the Australian consumer. The legislation which we are now discussing just has not done that. It is only a mark-time piece of legislation. As I explained previously, it is most unfortunate that the Minister for Primary Industry was not as sufficiently au fait with the problems facing the industry as would be the Minister for Northern Development (Dr Patterson) who is now at the table. Having been spokesman for the then Opposition on primary industry matters, he knows something of the problems facing the wheat industry. The present Minister for Primary Industry (Senator Wriedt) does not know of these problems. Consequently, the Bill before us reflects his inability to cope with the sort of long term guarantees of security that the wheat farmer needs. It is that absence of long term security that I regard as the most regrettable feature of this present legislation.

Previously I referred to the problems that we have encountered in the general intervention by the Labor Party in wheat contracts. The Minister for Overseas Trade claims that it was his intervention alone which resulted in the 3-year wheat contract with China. Certainly successive negotiations have been conducted by the Australian Wheat Board, representing the wheat industry as a whole, and some of those negotiations having been more successful than others. One of the elements that has to be taken into account, however, is the price that has been paid for and the availability of Australian wheat. At the moment wheat is in short demand throughout the world and anybody who thinks that the sale to China was negotiated in a market where the Chinese were other than willing buyers knows nothing of world market conditions.


Mr James - That is unfair.


Mr SINCLAIR - It is not unfair. Indeed it reflects exactly the circumstances in the sale of wheat throughout the world. China wants to buy our wheat, as indeed do so many other countries. If one looks at the demand for wheat, both for human consumption and for stock feed purposes, one will see that there has never been a time when world grain stocks have been lower and when there has been a higher price available in all world markets to meet the very real demand for grain in response to this overall world shortage. It is in that climate that the Minister for Overseas Trade decided to intervene in what was a strictly commercial negotiation. As a result he came back to Australia and said: 'Here am I, the saviour of the wheat industry.' That is utter nonsense. The Minister for Overseas Trade came into the deal, as did the Minister for Northern Development as far as sugar was concerned, after the industry concerned had already 'been involved in negotiations. The sugar industry had negotiations with Japan. It had negotiations with China. There were sales to China before the Labor Government came to office.







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