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Tuesday, 13 August 1974
Page: 790

The PRESIDENT -Is leave granted? There being no dissent, leave is granted. (The document read as follows)-

The purpose of this Bill is to extend to 30 June 1976 the operation of the Marginal Dairy Farms Agreements Act 1970, which will otherwise expire on 26 July; and to provide legislative authority for a substantial part of the dairy industry adjustment program announced by the Government on 8 April. Our earlier commitment to such a program was confirmed in the Labor Party Rural Policy Speech delivered at Goulburn on 1 May 1974, as follows:

The announced program comprises three elements: First, a continuation and broadening of the Marginal Dairy Farms Reconstruction Scheme; second, the provision of interest free loans with flexible repayment periods, to assist the changeover of producers to refrigerated bulk milk supply, with concurrent assistance as necessary to factories; third, relocation assistance for displaced dairy farmers and displaced factory workers.

The present Bill comprehends those elements of the program which can be brought into effect within the context and spirit of agreements made with the States under the Marginal Dairy Farms Agreements Act. A further Bill in the Budget session will provide for elements not included in the present Bill, principally the provision of assistance to factories. For reasons explained in the preamble, the assistance to be provided under the 2-year adjustment program from 1 July 1974 to 30 June 1976 will be exempted from the need for reference to the Industries Assistance Commission. In essence we believe the national interest requires that reconstruction already commenced should not be interrupted and that legislation for extending the adjustment process in accordance with announced policies should be proceeded with without delay. The question of Government assistance to the dairy industry after 30 June 1976 has already been referred for inquiry and report by the Industries Assistance Commission.

I turn now to the details of the Bill. The 1970 Act defined a marginal dairy farm so that the operation of the scheme was concerned predominantly with small scale dairy farmers supplying the manufacturing sector of the industry. The present Bill extends eligibility to marginal dairy farms in the market milk sector. It also maintains the authority for assistance for amalgamation of marginal dairy farm land and considerably develops and strengthens the existing arrangements. The new features, included in clause 4 of the Bill, are as follows: Provision is made for direct conveyancing in the amalgamation of land, thereby overcoming a mechanical difficulty that has caused delay in the completion of transfers of land under the scheme in certain States. Authority is also conferred to enable the writing-off of redundant assets on the home property. Previously the writing off was confined to assets on the acquired property only. The arrangement now proposed will permit the farmer to make the best use of the structural improvements irrespective of where they are located.

Authority is provided to enable interest free loans to be made to dairy farmers so that they can purchase and install vats and make such other improvements on the farm as are required to enable them to be able to supply refrigerated bulk milk. The installation may necessitate such things as modification to the dairy, connection or alteration to electricity supply to the dairy, changes to water supply and so on. Such modifications related to the installation of a refrigerated bulk milk vat would be eligible for interest free assistance. Improvement in the access road on-farm to enable the bulk milk tanker to collect the refrigerated milk would also be eligible for this type of loan, where in the opinion of the State authority such improvement is warranted. Marginal farmers who supply milk in cans or whose vats are only water cooled will also be able to apply to convert to refrigerated bulk milk supply.

The interest free loans will also be available to those who borrowed to install their vats on or after 23 July 1973. This date marked the announcement of the decision by the Government that bounty was to be phased out and replaced by enhanced assistance for adjustment. For grant of interest free loans only one test is to be applied: Will the producer have reasonable prospects of economic viability after assistance? If he lacks the prospect of viability, then it would be pointless to make assistance available to him out of public funds. Producers who would not be able to become economic will be eligible for relocation assistance, about which I will speak in a moment. The Bill goes on to provide authority to enable the development of a marginal dairy farm into an economic unit including provision for carry-on loans during the period of development. These forms of assistance were not available under the 1 970 Act.

The Bill also strengthens the provisions for encouraging diversification. Where a marginal dairy farm is being converted in whole or part to rural uses other than dairying, loans will be available for the purchase of additional land, for making structural improvements, for buying livestock or equipment and for carry-on purposes during the period of conversion, and grants will be available for the writing off of milking plant, - bails and so on that would cease to be needed under the new form of land use. The Bill also develops the present scheme by providing for finance to enable the incoming producer, after amalgamation, to develop more readily the full potential of the enlarged property. The present Bill makes provision for loans again for structural improvements, purchase of livestock and equipment and for carry-on loans during the development period after amalgamation. These forms of assistance for development and diversification will be subject to the test that the State authority would have to be satisfied that the person to be assisted has been unable to obtain a loan on reasonable terms from normal financial sources.

The Government has also given further consideration to the welfare of those who will be leaving the industry. The Bill provides that outgoing marginal dairy farmers can be accorded relocation assistance. It is intended that such assistance will be of a range and to an extent similar to that accorded to other out-going rural producers under the general rural reconstruction scheme. Of the $2Sm provided for use as needed under the original marginal dairy farms reconstruction scheme, some $15m has been expended to date. The Bill therefore provides for anticipated expenditure under the expanded dairy adjustment program by adding $28m to the amount already spent. However, because all of the money which could have been made available under the earlier scheme was not used and because of the difficulty in putting a firm figure on a scheme which involves voluntary participation the Government is prepared to consider provision of further moneys if necessary after agreement between the Minister and the Treasurer.

I am pleased to acknowledge the assistance received from State government authorities and from industry organisations in the considerations which led to the development of the present scheme. The States have been associated with the administration of the existing arrangements since their inception and the Bill provides for the continuation of this association under arrangements to be made by agreement with each State. Arrangements for consultation with them to make the necessary revisions to existing agreements are well in hand. It must be recognised that no single program will resolve all of the problems being faced by this important industry in the rural sector. There should also be a ready acceptance that planning for its future is primarily the responsibility of the industry itself but with support as appropriate from governments both Federal and State.

The program I have outlined represents the Australian Government's contribution aimed at encouraging natural adjustment already under way within the industry. It seeks to make a direct attack on industry problems. In particular, the aim is to consolidate at a reasonable income level those who remain in dairying whilst giving encouragement to low income producers who wish to do so to move out. It encourages diversification of less suitable dairying land into other uses and makes a direct contribution to the problems of cream suppliers. The total program will provide appropriately for necessary aid to factories where this is necessary in association with supplier changeover to refrigerated bulk milk delivery, and will give assistance to displaced factory workers so that they are treated equitably in relation to displaced producers. I commend the Bill.

Debate (on motion by Senator Webster) adjourned.

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