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Wednesday, 8 December 1976

Mr DEPUTY SPEAKER -Leave is granted.

The document read as follows-



Mr SIMON - Victorian dairy farmers were the recipients of benefits in 1533 cases out of a total of 2475 recipients in Australia as at 6 August. The effects of the drought in Victoria and of the world glut of skim milk powder are reflected in these figures.

However, my experience was that many people involved in primary industry did not qualify for unemployment benefits, notwithstanding the fact that they were in receipt of no income. For example, many farmers were not able to leave their farms. In the case of carry on finance, some were share farmers who did not have the support of the registered proprietor of the farm in Victoria to offer security for such finance. Many would not even apply for unemployment benefit because they considered that if they did they would be sponging on the community. They should not be condemned for adopting that attitude. The household support scheme will assist many farmers who for a multitude of reasons, personal and regulatory, would not receive income in times of extreme financial hardship. Household support must not replace the farmer's entitlement to unemployment benefit. I refer briefly to the nature of the assistance. I quote from clause (3) of Part 7 of the Agreement:

(a)   An advance provided for one year sufficient to raise the applicant's estimated future income from all sources to the level of payment which would be applicable to him if he were eligible for unemployment benefits. An extension to two years may be allowed at the discretion of the Authority in those cases where a demonstrable effort has been made to move out of farming.

Paragraph (e) states:

If the Authority determines that an applicant does not have a viable enterprise he will be eligible for household support assistance, and any interim assistance he may have received will be regarded as household support assistance.

Paragraph (i) states:

At the end of the first period of six months for which a farmer receives household support assistance the advances made to him may be converted by the Authority to a grant.

Paragraph (j ) of the same clause states:

If the farmer adjusts out of farming within three years of the time he first received household support, any advances made to him and not already converted to a grant may be so converted by the Authority.

The benefits contained in this Bill will prove of considerable advantage to the rural community. It is socially desirable that farmers be assured of income when either markets collapse, natural disasters occur, or other matters beyond thencontrol intervene to provide them with a basic income to sustain a lifestyle in rural Australia.

I trust that the Government and the respective State governments will closely monitor the practical application of the terms of the Agreement to ensure that the intent of this Bill is honoured and that the impoverished farmer receives the benefits thereby granted. It is pleasing to note that the Agreement provides for a review in the terms of clause 24, which states:

The operation of the Scheme in relation to all of the States will be reviewed from time to time as appropriate by the Commonwealth and the States in the light of experience in its administration.

The following clause states:

The Authorities of the States and appropriate Commonwealth officers associated with the Schemes for Rural Adjustment will meet together as appropriate and at least once in each year and exchange information on any matters pertinent to the Schemes.

I commend the terms of the Bill to the House and reject the amendment moved by the Opposition.

Mr FitzPATRICK(Darling) (1 1.52)- I support the States Grants (Rural Adjustment) Bill 1976, together with the sensible amendment moved by my colleague, the honourable member for Blaxland (Mr Keating). I think I can say that all honourable members would regret the necessity to present a rural adjustment Bill to this Parliament. No doubt it would be a matter of great satisfaction to any government if its Minister for Primary Industry could report to the House that there was no need for rural adjustment schemes and if resources moved in and out of an industry according to the demands of the prevailing market situation.

Although it is admitted that a decline in advancement in market demands does play a big part in the viability of our rural industries, I think it can be said that if resources were put into and taken out of the industry to meet only a current and what could be short term situation, many valuable resources would be wasted and, additionally, the full potential of our national resources would never be properly developed. Because governments recognise this fact, nationally organised and supervised reconstruction and adjustment schemes have been adopted, not only in Australia but also in most other developed countries.

I believe that an examination of the situation in the beef industry indicates the value of a properly organised national adjustment scheme. We had over-production of thousands of heads of cattle and thousands were destroyed so that the healthier cattle could survive and produce the next generation of cattle. There is no doubt that government measures did provide some assistance in this area, but probably if our rural adjustment schemes were conducted on a continuing basis, as is intended with this scheme, greater assistance could be given.

Unfortunately, many people seem to think that primary producers are businessmen, the same as any other businessmen; that they make a business decision to go into extra production and if they misjudge the market situation they should suffer the consequences. This argument does carry a lot of validity. To a large degree, it is exactly what does happen in our primary industries. When I entered this Parliament many farmers in my electorate had properties worth $160,000. Within a couple of years they were heavily in debt and could not sell their properties for $60,000. 1 think this is a good indication that primary producers do take a business risk, the same as any other section of our society. Indeed, they suffer the penalties not only of a bad business decision but also of variations in weather conditions and a lot of other things.

It is not intended that this Bill should beimplemented to change that situation. What it will allow will be some adjustment and reconstruction to take place once farmers find themselves in difficulty as a result of those adverse conditions. It will prevent valuable resources being lost and will permit those farmers to remain in the industry, thereby producing further wealth for this country. The second reading speech of the Minister for Primary Industry (Mr Sinclair) includes a statement similar to the following, which appears at page 3 of the Industries Assistance Commission report:

Much of the adjustment which is necessary and appropriate to the long term economic situation in the rural sector has occurred, and will continue to occur, autonomously.

I have no argument with that. But the IAC report goes on to state: not all resources respond to economic change in a manner which would achieve their more efficient utilisation.

Further on the report points out:

Timely government intervention can provide welfare assistance to seriously affected farmers as well as providing the financial means to ensure that resources continue to be used in those industries where their earning power is greatest.

No doubt the Bill was drawn up with these things in mind. Unfortunately, when worthwhile legislation such as this Bill comes before the House it is not always readily accepted. I believe this is because so many of our rural assistance Bills have provided assistance to the wrong people. Much of the assistance has gone to people who are not in need of assistance. Often little assistance goes to those most in need. Honourable members no doubt remember the situation with the superphosphate bounty, which was a good example of this. Seventy per cent of the assistance provided by that bounty went to 20 per cent of the farmers.

The National Times of 23 February 1976 reported that 472 users benefited by more than $5,000. If we want to go a little further, I think other papers reported that the Prime Minister (Mr Malcolm Fraser) received $50,000 in 10 years. I do not know whether that is right; he may have received only $49,000. But it is nice to know that this Bill is not intended for that purpose. I merely mention that to point out that in one part of the Bill this superphosphate mentality shows its ugly head again. But I do not think it is the intention of the Bill to provide that sort of assistance. It is meant to provide assistance to applicants whose prospects are sound but who are unable to obtain finance to carry on and are in danger of losing their property or other assets.

Part 3 of the Bill provides for farm build-up, which provides for the amalgamation of properties, whereby someone on an uneconomic property can buy an adjoining property if he can prove that by doing so he will become viable. I think that this is a praiseworthy measure. Unfortunately, I have some doubt about other paragraphs of that Part which allow an economic property owner to buy an uneconomic property to help him to become more viable or profitable and the other chap on the uneconomic property to get out of the industry. The section about which I have some doubt is that which allows the economic owner to borrow money through the rural reconstruction scheme. The Bill in another Part sets out that if one can borrow money through normal borrowing sources one should do so. It appears to me that if someone is on a farm which is already economic and he wants to make it more profitable, then he should borrow through the normal resources and not take money which is badly needed by people who are struggling to remain on the land.

It seems to me that most of the complaints I get in my electorate are from people who have suffered because of this situation. They point out to me that people who did not need the money, who could borrow money from other sources, have taken the money from this scheme and people in need have been denied assistance. I am not too clear from the Bill whether opportunity has been provided for people in uneconomic circumstances to appeal against the decision. I ask the Minister whether he can explain where provision is made for that. I think the worst section of the Bill is found in Part 7, Household Support. I have no argument about the intention of this Part, which reads:

To provide assistance for up to one year to non-viable farmers having insufficient resources to meet living expenses and who are in need of assistance to alleviate conditions of personal and family hardship while the farmer considers whether to adjust out of farming.

Another paragraph goes on to provide:

An advance provided for one year sufficient to raise the applicant's estimated future income from all sources to the level of payment which would be applicable to him if he were eligible for unemployment benefits.

I have no complaint about that proposal, either. But I think we see this superphospate mentality in paragraphs (1) and (m). These provide for severance pay of $3,000 if the farmer desires to move out of the industry and if the Authority considers the payment warranted. Unfortunately, the amount of money which the farmer has already received in what might be termed social service benefits to bring him up to the amount he would receive if he were receiving social service benefits is deducted from the $3,000. I think this is an insult to any primary producer. It shows the thinking of the LiberalNational Country Party Government. More than 20 years ago members of trade unions were receiving severance pay. They started off at $5,000 and it was all plus on top of that. It seems to me it is an insult that an amount of $3,000 is provided under this scheme. It could be that a man is on the land and is battling hard to stay there. At last he finds that it is hopeless. Paragraph (m) provides that a farmer has adjusted out of farming when 'he has effectively disposed of his productive resources'. Probably the money he gets after disposing of his resources has gone to pay his debts. Any money he has received in the build up to equal the amount of the social service benefits is then deducted from the $3,000. It is easy to understand that not a great deal would be left. I think that is an insult. The Government should have another look at this Part- $3,000 is enough- and at least make the amount a straight out payment without any deductions. I am sorry to note that all these things are happening at a time when the primary producers' income is declining. According to the statement which I received from the Parliamentary Library, in 1970- 71 the average farm income was $4,713. In 1971- 72 it was $5,982. In 1972-73, the first year of the Australian Labor Party Government, the amount rose to $9,342. In 1973-74 the next year of the Labor Government, the amount increased to $15,902.

Mr Ian Robinson (COWPER, NEW SOUTH WALES) - Where did you get those figures?

Mr FitzPATRICK - I got them from the Parliamentary Library. If the honourable member wants to verify them I ask him to have a look at the statement of the Minister for Primary Industry. He made a statement just recently on this matter and his figures correspond with the figures I have here, which I obtained from the Parliamentary Library. I shall incorporate them in Hansard it the honourable member wishes. The amount dropped to $9,672 and then to $9,194. According to Mr Sinclair's statement of 23 November, which he sent around to every honourable member, the amount is projected to drop to $6,545 in 1976-77. I do not blame the honourable member for singing out because it is a bad record after 12 months of LiberalNational Country Party government that such a situation has arisen. Surely we can say after 12 months of Liberal-Country Party Government that things have never been so bad. Much hope has been pinned on the ITA per cent devaluation.

Just as the primary producers begin to think that there is some hope we see that 2.5 per cent has already been taken off the percentage devaluation. Not only that, but in answer to a question I asked the Prime Minister (Mr Malcolm Fraser) he would not give any guarantee that in a few months' time the exchange rate could appreciate to what it was a couple of weeks ago. So what great hope has this Government given the primary producer? Also, there has been a big deterioration in the provision of other amenities to primary producers. When the Labor Party was in power 12 months ago we were waiting for a television station at Menindee. It was ready to go into operation within a couple of days but we are still waiting for that. We have seen a reduction in the air service and also in the mail service in the country areas. I could go on to criticise this Government in lots of ways. But it is not my intention to do that because I believe that this continuing rural adjustment legislation is a good idea. We certainly want to iron out some of the anomalies in it. I think that if we are sensible about the matter and adopt the worthwhile amendments moved by the honourable member for Blaxland, and if we have a look at some of the matters I have pointed out, maybe we will be able to assist some of the primary producers who are badly in need of assistance.

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