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Thursday, 2 December 1976

Mr FRY (Fraser) - I think it is quite remarkable that the honourable member for Franklin (Mr Goodluck), who is supposed to be so well acquainted with the apple industry, had very little to say about the actual Australian Apple and Pear Corporation Amendment Bill. He did not offer any condemnation or criticism of it. He said a great deal about the Australian Apple and Pear Corporation, about who was on it, what they were going to do and how they were appointed and not elected. This had nothing to do with the Bill. Yet there are some very grave weaknesses in the Bill of which he should be aware in the interests of producers. Apparently he is not aware of them at all. I generally support this Bill because it has the same broad objectives as the intended legislation of the previous Government. Unfortunately the objectives will be much more difficult to achieve because of the change in the nature of the arrangements for collecting the levy. This is what the honourable member for Franklin should be concerned about.

When the Apple and Pear Levy Collection Bill was originally suggested I understand the idea was that the levy would be collected on a per acre or per hectare basis which, of course, is the most rational way to do it. It is no problem to go to an orchard and to find out how many hectares or acres of bearing trees there are. Once you have that figure you know what the levy will be. It will be a regular amount year in and year out. Now the levy will be based not on the area but on the product. This opens up a great Pandora's Box of how the levy can be collected on fruit which is sold in a variety of ways all over the country. This proposed method will be all right for the apples that are packed in boxes and sent through an agent. Providing the agents are honest, and I think most of them are, they can collect the levy. What happens to all the thousands of cases of apples that are sold in bulk? The equivalent of hundreds of thousands of cases of apples are brought into Canberra every year from Batlow in bulk bins and sold directly to the retail markets. I would like the Minister to tell us how the levy will be collected from those people. An army of inspectors would be needed. A whole range of options is opened up for evasion ofthe levy. All this could have been overcome if the Government had stuck to the original concept of imposing the levy on a hectare or acre basis.

The Government should have learned something from the egg industry. Tremendous problems were experienced in trying to collect a levy on the eggs. The method was changed and the levy was based on the hens. Even though hens have feathers and can fly, it was much easier to keep track of the hens than it was of the eggs. This should have been a lesson to the apple and pear industry. It is not that the industry did not know. My information is that 75 per cent of the growers favoured a hectare or acre basis for imposing the levy. Why did the other 25 per cent of growers not favour that measure? My information is that the growers adopted this method of collecting levies based on the product because of a very rash and irresponsible promise that was made by a member of the present Government during the last election. I understand that the promise was made to Queensland producers to try to get a few more votes. This very unsatisfactory method of collection has now been imposed on the industry because of an irresponsible election promise. This is typical, of course, of the way in which the Government operates in terms of responsibility towards primary industries. I think the honourable member for Franklin should be concerned about this.

I understand that Tasmanian growers wanted the levy imposed on a hectare basis and not on a box basis as the box basis opens up a whole range of avenues for evasion. For instance how will the levy be collected from people who sell their fruit at the orchard? I understand there is an exemption for the first 500 boxes, but how will it be known how many boxes are sold? There is no way of checking it. There is no way of checking out the huge quantities that are sold in bulk. The levy will be so much a box irrespective of whether it is a packed case of fruit or a loose case of fruit. Anybody in the industry would know that there is something like a 20 per cent differential between a packed case and a loose case. Here again the people who market their fruit loose in boxes will in fact be paying more by way of levy than those who pack their fruit.

There is also the question of evasion through agents; some people try anything. Here again it will be very costly in resources on the government departments concerned to police this process of collection. This would have been avoided if the levy had been based on the acreage. Some people suggested that the levy should be based on the trees but this would not be satisfactory because the method of cultivation varies so much. Some areas have only 80 trees or 90 trees to the acre while others in which the hedge row method is used might have 200 trees to the acre. There is no question that the proper way would have been to impose the levy on a hectare or acre basis. I think the Minister owes some explanation to the House why that method was not adopted when my information is that that was the desire ofthe majority of the growers.

The other objection to this method of collecting the levy is that it makes it very difficult for the Apple and Pear Corporation to budget when it does not know what its income will be. It is the nature of the beast with the apple and pear industry that one tends to get an off-year and an on-year. One gets a tremendous crop one year and then a very light crop the next year. The Corporation will not know how much money it will get. How can it do a satisfactory budgeting job under these conditions? This problem would have been avoided if the levy had been imposed on a hectare or acre basis. The Corporation would then have known how much revenue it would get. The amount involved would have been lesser because everybody would have been paying something. There would not have been a large section of the produce in respect of which some method of evasion was practiced and on which the levy was not paid at all.

There are also anomalies in the way the payment is arranged. The usual arrangement is that the grower or the person who sells the fruit pays monthly. For some reason- I do not know whyone particular section of sellers, those who sell direct to retailers or to minor retailers or to roadside stalls, do not have to pay by the month at all. They get 12 months in which to pay. Why the discrimination in favour of this group? It is reducing its expenses anyway by cutting out the middle man and selling produce direct to the public. These people then get a further discrimination in their favour by having 12 months to pay their levy. Everybody else gets only one month Perhaps this was an election promise also. I did not hear about that promise but it is quite likely that it was made.

The important aspect, of course, as far as the industry is concerned, is how the money will be applied when the levy is collected. If the levies are collected, after offsetting the costs of collectionthe Bill does not say who will bear the cost of the collection of the levy- it is very important to know how the money will be applied. Will the

Apple and Pear Corporation use the money to promote a very doubtful export trade or will it apply the money to promote the domestic market? It is not clear on this point. I hope that the Corporation has enough judgment to realise that there is some question about promoting the export market. The Corporation may be much better advised to spend money on the domestic market. It has done this in the past to some extent by promotion. I hope that it will continue to pursue that avenue. Of course, it has allocated money to research, particularly research into methods of producing new fruit products which may meet a new market. I must also commend the Apple and Pear Corporation for the fact that it has made grants already to the Commonwealth Scientific and Industrial Research Organisation to carry out research into some aspects of fruit processing. Normally, of course, such research is the responsibility of the State departments of agriculture. The additional funds which may come from the Apple and Pear Corporation will be a valuable supplement to this source of research. Of course, research over the years has led to more efficient methods of production in many areas. New South Wales at least is now planted to hedgerow production which is much more efficient and labour-saving and has allowed certain sectors of the industry to survive. From what I know of the Apple and Pear Corporation it is a responsible body. I am confident that it will apply the funds in the most effective way.

I want to refer briefly to the effect of devaluation. The honourable member for Franklin (Mr Goodluck) did not mention this. Devaluation, of course, is immediately of great benefit to the apple and pear industry. I understand that the South-East-Asian markets, particularly, were very tight. Devaluation will allow the growers to stay in that market and possibly expand it. But I think that the other side of the penny has to be acknowledged: Devaluation makes it much more difficult for those same countries to sell their products in Australia. They have to protect their own balance of payments and if the import of more Austraiian apples creates more difficulties for them then they, in response, will put up import barriers or taxes to protect their own industry in some way. I think that the fruitgrowers are generally well informed people who are aware of the disadvantages and the pitfalls of devaluation as well as the immediate benefits that they may derive. Of course, they are very much aware that they are dependent on imports which will cost more, particularly the imports of chemicals for spraying and some parts of orchard machinery such as harvesting machinery, ploughing machinery- much of which is made in Australia but some of which is imported- and particularly pump equipment which is often imported. Whilst devaluation will ~~ be of some benefit, I do not think anyone in the industry should be carried away and believe that it is the answer to their problems.

Generally, I think this is a commendable piece of legislation which, because of the unfortunate and irresponsible promise made during an election campaign, will now be much more costly and difficult to administer because of the abandonment of the original idea of the levy being on an acreage or hectare basis. I want to refer now to another particular aspect of the Bill. The honourable member for Franklin referred to the superior quality of Tasmanian apples. I thought that he threatened the New South Wales growers by saying that if the situation became too tough the Tasmanian applegrowers would flood the market. I want to destroy a myth which seems to have developed. Many honourable members in this House have spoken about the apple industry and seem to believe that Tasmania is the biggest producer of apples in Australia. I do not wish to destroy a great illusion in the mind of the honourable member for Franklin but the House should be aware that in 1975, New South Wales was the largest producer of apples in Australia The census figures indicate that 5.622 million bushels came from New South Wales and 4.963 million bushels from Tasmania. So let us settle that myth once and for all: New South Wales is the largest producer of apples in Australia, not Tasmania. The great difference, of course, is that New South Wales growers are able to entice the people of New South Wales and the rest of Australia to eat their apples and they do not have to export many. The Tasmanians, for some reason or other, are unable to do this and have to send their apples all around the world. So much for the superior quality of the Tasmanian apples.

Mr Goodluck - What would you do if they came into New South Wales?

Mr FRY - We have often had Tasmanian apples in New South Wales in the past. The New South Wales apple industry is in much better shape than the Tasmanian industry, so that speaks for itself. I have eaten plenty of apples from both places and there is no question about the best of quality although, certainly, the Tasmanian apples keep much better. This has to be so, of course, otherwise they would not have an export market. But I do not think there is any real worry in New South Wales about the superior quality of the Tasmanian apples.

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