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Tuesday, 9 November 1976


Mr FRY (Fraser) - I should like to support my colleague the honourable member for Blaxland (Mr Keating), who presented the case for the Opposition in a very professional manner and not by any means in an amateurish way. Certainly I support very strongly his views and the criticism he made of the way in which the Government has mishandled the beef industry. I do not think there is any doubt that the beef industry is in a very bad way indeed. That is why the Opposition supports this Bill, but we would also take the opportunity to point our why the industry is in such a bad way and why this Government must take some responsibility for the present position of the beef industry. The honourable member for Angas (Mr Giles) made some play of the fact that the Government had sought out and obtained new markets. That is very good news, and I concede that the Government did find some new markets, but they were very small markets. If they had been as successful as the honourable member claimed it would not have been necessary for Australian exporters to exploit the local producers by buying meat on an over-supplied depressed market and then dumping it on the Canadian market. If the exporters had had reasonable markets that would not have occurred, and I think the Government must take full responsibility for that. It did not happen in the time of the Labor Government; it happened in the time of this Government. It knew what was going on, and it did not raise a finger to stop it. The Government was caught out and then threw up its hands in horror. It has to take responsibility for that. The Government took no action to protect the producers, and it stands condemned in the eyes of the Australian beef industry. Members of the National Country Party of Australia in this House, of course, should have been up in arms and screaming about what was going on but they were silent. The Leader of the National Country Party (Mr Anthony) and the Minister for Primary Industry (Mr Sinclair) turned a blind eye and I am quite sure that they knew what was going on all the time.

Getting back to the Bill, I notice that an extra $ 1 5m is to be provided. This raises the question, of course, of what happened to the allotment last year when $ 19.6m was made available and, I understand, only $ 12.3m was actually used. If we are asked to support this Bill, to get up and debate it and to talk about the beef industry, I think it is only fair that the Minister should come along and give us information about how that money was used last year. I think he should tell us what category of producers used that money, what size the loans were, what interest rates were paid, where the money was used and in what States the money was used. If he gave us this sort of relevant information we would be in a better position to make a judgment about whether this extra amount of money is now justified or not. I ask the Minister to make those figures available so that we can make a better judgment.

The other element of the proposition that I would question concerns the interest rates. Here again the information is quite vague. All we are told is that the interest rate must not be less than 4 per cent. We do not know in fact what interest rates the borrowers are paying. I am always very concerned about low interest rates because I always want to be reassured that these low interest rates are not being used to make an unviable proposition look viable. The conditions applying to the loans specify that the loans should be made available to people who would be viable in a normal market situation. That is fair enough, but I think that an undertaking that is viable should be able to pay an interest rate that is closer to normal interest rates. I am not suggesting that extremely high interest rates should be paid- and I deplore the present interest rates- but I think that the bottom of commercial interest rates would be a fair rate for commercial enterprises in beef production to pay.

I am always concerned that people apply for these loans because the interest rate is low rather than because they really need the money to carry on. This is always a problem when one is offering loan money at special interest rates. I would rather increase the term of the loan than charge special interest rates. Perhaps producers would be better off to take a loan over 3 years at normal interest rates rather than to try to repay a loan over 2 years at a special interest rate. Indeed the Industries Assistance Commission report on this subject notes that a low interest rate is discriminatory when we compare the beef industry with other rural industries or other manufacturing industries. It is discriminatory and the IAC did not put up any good argument or any rationale to justify a low interest rate. I have never heard a good argument to justify low interest rates, or excessively low interest rates, in respect of rural subsidy loans or any other sort of subsidies.

There is no question that the beef producers have had a very tough time. Everyone agrees with that. But it is very interesting to look at another section of the industry and to find that it has not had a tough time by any means. In fact, when we look at the figures we find that meat exporters have had a real butchers ' picnic at the expense of the producers. They have had a real holiday. I can produce figures which have been prepared by the Parliamentary Library, to support that statement. The figures show the trading results over the past 8 years of some of the leading meat export companies selected at random. F. J. Walker Ltd, a well known exporter, turned in a profit of $2.2m. Certainly this company has had a couple of bad years. But $2.2m is the biggest profit it has had in 8 years. A profit of $2.2m is a tremendous increase on that company's previous figures which were averaging about $0.5 m profit a year.

The Metropolitan Meat Co. Pty Ltd turned in its biggest profit for 8 years- from $715,000 to $2.6m in 1975-76, an increase of 350 per cent. The profit of Huttons Ltd went from $870,000 to $1.3m, an increase of 60 per cent. The profit of T. A. Field Holdings Ltd went from $736,000 to $ 1 .6m, an increase of 100 per cent. Many of these companies had already shown a good increase in profit in 1974-75 as against 1973-74.


Mr Carige - What is the percentage return on capital?


Mr FRY - I will come to that later. The daddy of them all, of course, is Tancred Brothers Industries Ltd which is of particular interest to the honourable member for Macarthur (Mr Baume) because he is one of the directors on the board of that company. I pointed out last year that Tancred Brothers had doubled its profit from $1 12,000 to $213,000. This year the profit went to $899,000. The company had a 400 per cent increase in profit after it had already doubled its profit the year before. That was a remarkable result which just follows the pattern of all the other meat exporters. Conkey and Sons Ltd increased their profit 100 per cent and maintained a 1 5 per cent dividend.

I would like to refer to the question that was raised by my friend about earnings on capital. I do not have the capital figures but it should be noted that the higher profits of 100 per cent, and 200 per cent up to 400 per cent, were made with very small increases in turnover. This is understandable because the price of cattle was so low. The sales made by Tancred Brothers, whose profit increased by 400 per cent, went up by only 10 per cent. This reflects the low price of the stock. It means that this company's bank overdrafts are low. It means that its stock values are down. As well as increasing its profit that company has been able to do so with a much smaller amount of money. I do not have the figures on the return of capital because they are not available to me at the moment. However, in view of these figures and the fact that profits have increased by 300 and 400 per cent with a very small increase in turnover- the turnover increases seem to be around 10 per cent, 15 per cent to 20 per cent- it is apparent that these companies have been performing quite well in that respect.

As I said, Tancred Brothers is of particular interest because the honourable member for Macarthur is a director of that company. I do not know whether the profit made by that company is a compliment to the economic advice he offers as a member of the board. I have noticed that in the last few months he has looked very happy. He always had a big smile on his face. I now know why he had a smile on his face- it was because Tancred Brothers had a 400 per cent increase in profit. The smile has gone lately because the game is up, the picnic has ended and the Minister has stopped the dumping of meat on the overseas market.

I often wonder what the beef producers in Macarthur must think when they are represented by a member who has a vested interest in an exporting company that is making huge profits at the expense of the producer. Perhaps the National Country Party should be thinking about running a candidate for the seat of Macarthur, someone who would possibly look after their interests. But on second thoughts, that may not be necessary because I am quite confident that at the next election the Labor member, who does not have a vested interest in the meat companies, will be returned in Macarthur. I am quite sure that he would look after the interests of the beef producers as Labor Party members have always done.


Mr King - Why did you want the National Country Party to contest the seat?


Mr FRY - I think that in its interests it should take that precaution. It should think about this because if I were a beef producer in Macarthur I would be very unhappy if I knew that my member was on the board of a meat company that had increased its profit by 400 per cent when the producers had such a disastrous year. I seek leave to have incorporated in Hansard a table showing the trading results of some meat exporters that has been prepared by the Parliamentary Library.







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