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Thursday, 5 December 1935

Senator BRENNAN (Victoria) (Assistant Minister) . - I move -

That the bill be now read a second time.

The object of this bill is to bring into operation a plan of organization to apply to wheat the principle of a home consumption price, by means similar to those already operating in respect of dairy products and dried fruits. Every one knows the difficult position in which the wheat industry has been placed in recent years owing to the consistently low prices which have ruled. It is an industry which is of very great importance in the national life of Australia. It engages the principal attention of nearly 70,000 farmers. In times of reasonable prices they have produced crops valued at £40,000,000 annually. In more recent times the value of the crop has declined to approximately £25,000,000. The decline has been due entirely to reduced prices - not to reduced production - for every one will remember the splendid response made by wheatgrowers throughout Australia to an appeal by thu Commonwealth Government early in the depression to "grow more wheat ". It is necessary in the interest of the nation that wheat producers should be paid a price which will enable them at least to carry on. The Commonwealth Government has aimed at affording them a homeconsumption price in respect of that portion of their product which is consumed in Australia. This, to some extent, affords them price conditions similar to those afforded to secondary industries, with this difference - the wheat-growers have to export a large proportion of their product, and in respect of that proportion neither the Government nor the growers can influence world prices. Action taken to bring about a homeconsumption price will establish a firm starting point for a comprehensive rural rehabilitation scheme by supplementing effectively the steps already taken to adjust farmers' debts by means of composition arrangements through the grant of £12,000,000 to the States under the Farmers' Debt Adjustment Act.

While looking forward to a permanent solution of the wheat problem, the Government has not overlooked the need for temporary expedients to bridge a time of crisis. The grants made to the industry by this Parliament in the last few years have been as follows : - -


It is recognized that the industry should not be permanently dependent upon annual grants in its times of adversity, and the Commonwealth Government in 1933 appointed a royal commission for the purpose of investigating by what means it could be placed on a permanent and stable, basis. The last grant of £4,000,000 for the 1934-35 season was made on the recommendation of the commission. One of the principal recommendations of the royal commission was that a home-consumption price should be paid for wheat, and it framed suggestions regarding the means by which this objective could be achieved. As a temporary expedient the continuation of the flour tax or excise duty was recommended, but as a permanent solution it was further recommended that a compulsory marketing scheme should be devised as a means of achieving the objective of a home-consumption price. When the Government received the report, it gave effect to its policy of consulting the Australian Agricultural Council, which was established for the purpose of securing the co-operation of all the Governments of Australia on major agricultural problems. The legal and constitutional aspects of the different means of assisting the wheat industry were considered by the council at its conference in May, 1935, and a resolution was passed that legislation should be enacted by the Commonwealth and State Parliaments to provide for organized marketing of wheat, on the lines in operation in the dairying industry. At a further meeting held in October, and attended by representatives of the Commonwealth and State Govern ments and of every section of wheat interests, the matter was again exhaustively discussed. On that occasion four proposals were considered -

(1)   Commonwealth and State compulsory pools.

(2)   State compulsory pools, with an excise on wheat imposed by the Commonwealth to enable a home-consumption price to be paid.

(3)   Continuance of the flour tax.

(4)   A plan submitted by the Commonwealth based upon the principles already embodied in legislation regarding dried fruits and dairy products.

The general plan for compulsory pools was considered impracticable, because there was no unanimity on the subject among the State Governments. The flour tax was regarded as a stop-gap measure rather than a permanent solution.

The following principles laid down by a sub-committee of the conference on which the wheat-growers and wheat dealers were represente'd, were unanimously approved by the conference: -

(1)   That a home consumption price for wheat should be established.

(2)   That the Commonwealth and State Governments should take the necessary action to provide the means to secure this homeconsumption price.

(3)   That provision should be made to license flour-millers, and

(4)   That wheat receivers should be licensed under a warehouse plan.

In view of the differences of opinion expressed in the conference as to how these principles should be applied, Commonwealth and State Ministers met as the Australian Agricultural Council, and, after exhaustive discussion, passed the following resolutions unanimously: -

The conference of State Governments generally approves the Commonwealth plan of securing a home-consumption price for wheat, and State Ministers will favorably recommend its adoption to their Governments.

If insuperable obstacles unfortunately delay implementing the plan for the coming harvest, the conference urges the temporary reimposition of the flour tax to enable a homeconsumption price to be paid.

The home-consumption price for wheat recommended by the conference is 4s. 9d. per bushel f.a.q., f.o.r. at seaboard.

The success of our marketing plans as applied to dairy products and dried fruits depends on the agreement between the organized units of the industries concerned in regard to the equalization of export and home-consumption returns, and on the existence of some concentrating agency through which the product passes, namely, the butter factory in the dairying industry, and the packing shed in the dried fruits industry.

Difficulties were found in applying the same type of legislation to the wheat industry, because of the absence of concentrating points similar to the factory and the packing shed. It was found that those difficulties could be overcome in the wheat industry by the licensing of receivers of wheat, which very markedly reduces the number of units to be dealt with and makes possible an effective plan. In a State like New South "Wales, where the silo system is well developed, the plan will work with very little -additional machinery, and a system of licensing wheat warehouses that the plan will initiate should stimulate a long hoped for reform in other States, and prove a great advantage in safeguarding wheatgrowers.

In general principle, the legislation proposed for wheat follows that already in existence for dairy products and dried fruits. That legislation has been in force for some time, and has operated satisfactorily. The State legislation for wheat will bring into existence wheat boards analogous to the dairy products boards. It will impose on the wheatgrower the obligation to consign his wheat to licensed receivers, and to furnish an authority which will enable the receiver to pass a duplicate copy of the receipt for the wheat to the State boards, which will issue te the farmer a homeconsumption warrant in respect to that part of the wheat delivered by him which corresponds to the quota fixed for home consumption in the State concerned. The farmer will receive an export warrant for the remainder of his wheat. The Stats wheat boards will have power to sell home-consumption warrants, at the homeconsumption price, to the millers who require wheat to grist for domestic consumption, and the State Boards will be empowered to enter into arrangements to make the necessary adjustments as between the States.

The Commonwealth Parliament is simply required to legislate to ensure that interstate trade will be regulated in such a way as to make the State legislation effective. The bill now before the House provides for this. Farmers in one State may deliver their wheat to licensed receivers in another State under condition set out in the bill. Once the wheat has been delivered to a licensed receiver it will be dealt with in the same way as wheat delivered from farmers in that State. The federal bill provides for the issue of licences in respect of interstate trade, and processors will be required to fulfil the same conditions in respect of their interstate trade in wheat products as they are required to fulfil under the State legislation in respect of their trade within the State.

I have already mentioned that the Australian Agricultural Council carried a resolution, approving of the Commonwealth plan. Prior to the adoption of this resolution, the council considered very carefully an alternative proposal submitted by the merchants and millers. Under this it was proposed to ensure a home-consumption price for wheat by means of a graduated excise fixed quarterly according to changes in the export price of wheat. It was claimed for this plan that it had the advantages of simplicity and inexpensiveness in administration over the plan proposed by the Commonwealth. Federal and State Ministers carefully examined it, and came to the conclusion that it did not have the advantages claimed for it over the Commonwealth plan. They examined also the criticism by the millers of the present plan and came to the conclusion that those criticisms were not well grounded. I need not go into detail as full information was given in the speech of the Minister for Commerce (Dr. Earle Page) delivered in the House of Representatives on the 7th November last. The Governments of New South Wales, Victoria, Queensland and South Australia have already introduced legislation into their parliaments to give effect to the plan agreed upon, and the Government of Western Australia also has advised that it proposes to introduce legislation. I understand that the bill has now been passed by the New South Wales Parliament.- This present bill merely gives efficacy to the bills which will be passed by the State parliaments. Until such bills are passed this bill can have no effect. The Commonwealth Government is proceeding with its legislation so as to enable the plan to be brought into operation when complementary State legislation is enacted.

Silting suspended from11.48 p.m. to 12.30 a.m.

Friday, 6 December 1935

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