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Thursday, 5 December 1935

Senator ARKINS (New South Wales) (2:11 AM) . - This is an important bill, because when I attempt to look into the future I am forced to the conclusion that Australia will experience great difficulty in discontinuing the system of bounties and price-fixing in connexion with wheat. In the whirligig of time and the aftermath of war a revolution seems to have taken place which, although unseen, is nevertheless real, for practically every primary industry is unable to stand on its own economic feet. The only exception is the wool-growing industry, and even it is granted remarkable concessions in reduced freights.

Senator Abbott - No.

Senator ARKINS - On another occasion I shall show that the Railways Department of New South Wales grants valuable concessions to the growers of wool. I do not say that that is unwise, but I shall not pursue the subject now. At an earlier hour the Senate discussed the sugar agreement which, according to those who ought to know, means that from £4,500,000 to £7,000,000 a year will be paid from the purse of the consuming public to assist the sugar industry. A few days ago we had a measure before us to grant . assistance to the dried fruits industry. This morning we are dealing with wheat, and T understand that before the House rises for the Christmas recess, a measure to assist the dairying industry will come before us. It would appear that when all factors are taken into account, butter is granted a measure of protection greater even than that given to sugar. Since 1931-32 the Commonwealth has paid large sums to assist the wheat-growers of this country. In that year it paid to them the sum of £3,296,464; in the following year a special grant of £2,000,000 was made; in 1933-34, as a result of the imposition of a tax on flour, assisted by amounts taken from other sources, the sum of £3,000,000 was paid, and last financial year about £4,000,000 was expended to assist the industry. This year the sum involved will probably be £3,000,000, if not more.

Since 1931-32, therefore, no less than £15,000,000 has been spent to preserve the wheat industry of this country. I do not complain about that; we could not do otherwise; but the fact is that, to protect the wheat industry, every person in the community is called upon to contribute towards its support by paying a tax on bread, a commodity essential to the preservation of life. It cannot be denied that the primary industries could not exist without the secondary industries and that the secondary industries could not carry on without the support of the primary industries. They are complementary to each other. Therefore, although we must do everything to develop our primary industries, we must also be prepared to extend a modicum of protection to the secondary industries. Any problem confronting the primary industries dovetails into a like problem confronting the secondary industries in all their ramifications. Let us recognize that each must live, not forgetting the fact that secondary industries offer employment to the great bulk of the wage earners. Of what use would be the primary industries if there were no people engaged in secondary industries to purchase their products ?

What is the problem confronting the wheat industry? In 1930-31, 1 think the peak production year, Australia produced 214,000,000 bushels. In the three following years, it produced 190,500,000 bushels, 214,000,000 bushels, and 375,000,000 bushels, respectively. When the Australian production of wheat exceeds 200,000,000 bushels, we must export SO per cent, of the crop and half of it must be sold to foreign countries. Great Britain's imports of wheat have not, so far, exceeded 200,000,000 bushels, and, as the exports from Australia and Canada alone amount to 400,000,000 bushels, it can readily be seen that a foreign market must be found for at least 200,000,000 bushels. The enormous problem which faces the export industry can also be readily seen. Because of the recent intense economic nationalism developed in Italy and Germany and even in the Balkan States - in fact, in all the European countries - which has led to the placing of high duties on the importation of wheat, few of those countries which formerly purchased our wheat are buying it from us to-day. At one stage, Germany's import duty on wheat was £1 ls. a bushel; Italy, likewise, imposed a prohibitive tariff on wheat. So much for the position overseas. In Australia itself, the position, as stated by Senator Hardy, is that, although a compulsory pool might have its virtues, the immediate and particular need of the wheat farmer is the fixing of a home-consumption price. I quite agree with the honorable senator that the only virtue in a compulsory pool is that it enables orderly marketing of the pooled product, but it is problematical if it would greatly assist in increasing our export of wheat. It has not always worked to the advantage of the growers, whereas, the virtue of a home-consumption price is that every bushel of wheat sold on the local market for home-consumption yields to the grower 4s. 9d. As world parity for wheat to-day is about 3s. 3d. a bushel, there is thus .an advantage of ls. 6d. a bushel for the Australian wheat-grower, and that amount, multiplied by the 31,500,000 bushels consumed locally, gives the total cost to the consuming public of Australia of preserving one of the greatest primary industries in Australia as approximately £2,250,000. Which is the largest wheat-producing country in the world to-day? Not Russia, Argentina, or Canada, but, perhaps, the most unexpected, China ! China is in the position to-day of being able ro produce something like 800,000,000 bushels of wheat a year. Not only does it threaten the rest of the wheatproducing countries in the world by the competition which it offers by its huge production, but also, we are told by experts, some of the wheat lands of China are among the best wheat lands in the world. Though they are practically undeveloped, their development is increasing to such an extent that, eventually, China will dominate the world, not only in the quantity, but also in the quality of its wheat. So far as quality is concerned, the wheat grown in China is far superior to that grown in India and similar countries, and is> equal to thai grown in Argentina, Russia, Canada, and Australia. A few years ago China was unknown as a producer of wheat; to-day it threatens Russia in the markets of the world. The normal carry-over is 660,000,000 bushels; in 1933, it stood at 1,104,000,000 bushels.

Senator Badman - The normal carryover is not more than 660,000,000 bushels.

Senator ARKINS - I agree in part with the honorable senator.

I impress upon honorable senators the fact that the problems associated with wheat, flour and bread are becoming increasingly difficult. In fact, the problems facing the whole of our important primary industries, not only the wheat industry, but also the sugar, butter, fresh fruits, dried fruits, and citrus fruits, and even tropical fruits such as pineapples and bananas, are becoming more acute. Practically every primary product to-day is coming under internal protection, just the same as the secondary industries have external protection. These problems are being rendered increasingly difficult of solution because of -the increased use of machinery in production, the more extensive use of fertilizers, and improved scientific methods. More and more is produced from each acre, and the quality of thb product is being continually improved as the years go by. The whole trend of this development in the primary industries has been towards making every country able to produce the whole of its requirements. The application of scientific methods in secondary industries has increased to the same extent. A few years ago a cobbler at his bench took practically a whole 'day to turn out a pair of boots. To-day that great Czechoslovakian boot manufacturer, M. Barta, turns out 100,000 pairs of boots daily. Under the conditions that exist to-day the secondary industries are carrying a form of taxation, which is paid by all people, that goes in its turn to meet the cost of bounties and other payments made to the rural industries of this country. Only in this way is the outbalance between the primary and secondary industries stabilized to any degree. The sooner we acknowledge that fact the sooner will we be able to attempt to solve the difficult problems that confront us. Despite the lateness of the hour, I have felt bound to speak upon this measure, which is of increasing importance because of the fact that the wheat industry has been stabilized and maintained in the last few years by the imposition of a flour tax which is passed on in the increased price of bread. This is one of the necessaries of life, and its price affects everybody. At some future date, I hope to be able to go more fully into the peculiar developments which are taking place in the primary industries.

Senator Hebert Hays - They are more serious than " peculiar ".

Senator ARKINS - That is so. The welfare of primary industries is most vital to the welfare of nearly all countries and particularly Australia, because we are a great primary producing country. We are committed to enormous expenditure in the future in respect of primary industries.

Senator McLeay - Is the honorable senator suggesting an alteration to the hill?

Senator ARKINS - No, but it could be altered with advantage in some respects.

Senator Herbert Hays - Does the honorable senator know of any country that has prospered solely on agriculture?

Senator ARKINS - No. I do not think that any country could exist on agriculture alone.

Senator J V MACDONALD (QUEENSLAND) - Those who engage in agriculture live under ideal conditions, but they do not make much money.

Senator ARKINS - We have to remember that the standard of living of the average man to-day is far superior than it has ever been in history. At the present time, the artisan lives under conditions which were not enjoyed by many princes about 500 or 600 years ago. Secondary, as well as primary, industry has been responsible for this improvement; one is complementary to the other. We have to preserve our primary industries remembering that many thousands of men, women and children are dependent for a livelihood upon them. Particularly is this so in respect of the wheat industry. We are aware also that according to the royal commission which investigated the wheat industry the debts of that industry total £138,000,000. I believe that every Australian is willing to help the man engaged in primary production ; secondary industry is willing to do so. I hope that before long the Country party will see eye to eye with the United Australia party on this matter, and realize that sectionalism in such matters is unwise from a national point of view; I hope that it will realize the fact which I have stressed - that primary and secondary industries are complementary, and that all sections of the community must co-operate in attempting to find a solution of the problem which confronts both of these main divisions of industry.

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