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Tuesday, 10 December 1974
Page: 3310


Senator BESSELL (Tasmania) -First of all I indicate that the Opposition supports this Bill. We think that in the main it is a very good Bill. It has an added advantage over the Marginal Dairy Farms Bill in that it has been widened to take in a number of other aspects that are very important. Like Senator Hall who was faced with this situation some time ago, we are very disappointed that it is now very difficult to do anything about the two or three amendments that we proposed to move and that we thought would definitely improve the Bill. While we will mention these amendments and try to point out the advantages that would have resulted had they been accepted, we will probably now not proceed with them in the committee stage.

The advantage of this Bill is that it does encompass uneconomic dairy farms, as completely opposed to the previous definition. I suppose the only thing that could be said against the inclusion of 'uneconomic dairy farms' is that it will have to be established what in fact is an economic dairy farm and what is an uneconomic dairy farm. By making provision for assistance to uneconomic dairy farms are we going to perpetuate something- perhaps it is not a fault but a problem associated with this type of assistancethat we would prefer not to have perpetuated? In other words, will there be an encouragement of production in uneconomic areas and in areas which are marginal in any sense of the word? I think this is a sort of two bob each way situation because we find that, irrespective of whether the area is suitable or whether the property is suitable, many people who have lived all of their lives on a dairy farm wish to continue with that type of pursuit.

I do not think that people either from this side of the Parliament or from the other side of the Parliament have ever been able to come up with a complete solution to this problem, to the satisfaction of the nation. The Bill does go quite a way towards assisting the situation. Its provisions have been broadened to cover more people than were covered under the original Act. It replaces the original Act, and now we have what is known as the Dairy Adjustment Program. The assistance which is given under this Bill and which was not given under the previous Bill, to the dairy companies will, I think, be welcomed by many of the dairy companies. But the Opposition would have liked to move an amendment to give greater assistance in this regard. We know that in many areas in Australia there are very many small dairy companies, and I think that it would have been to the common good and to the advantage of the industry in general if these small companies could have been brought together as one consolidated factory. This is what we had in mind; we wanted to consolidate these types of places. In other words, an amalgam of dairy factories could be brought under the one management. That would have a number of advantages. Obviously, as we have seen with a number of industries in Australia today, it is volume throughput that is so terribly important, and that is where you get your economies of scale.

At the present moment those people who qualify will be eligible for assistance in relation to refrigeration and storage and, in some instances, in relation to the capital necessary for the purchase of refrigerated milk collecting trucks. But it would be far better- I think the Minister may agree- if we could cut down on the number of collection areas so that fewer trucks were needed. We see the silly situation in a number of areas- I can speak specifically only of my own area- where, because of a lack of rationalisation within the industry, two or three different companies collect in the one area. I know that this Bill is not intended to cover that situation but it is a situation with which the industry itself has got to come to grips. It is ridiculous to think that 3 tankers with a capacity of 3,000 gallons each should be put on to one road to collect milk from 8 or 9 separate properties. With commonsense amalgamation and rationalisation this sort of situation could be overcome.

The Bill makes provision for assistance for the purchase of refrigerated vats for the dairy industry at the dairy farm level. I imagine that there are a number of areas in Australia in which these vats are still needed. As far as my own area in north-western Tasmania is concerned, evolution in the industry has now virtually made these vats no longer necessary because people are using the system of milk storage. One of the things that we would have liked to have seen included in clause IS- and this is not covered in clause 12 notwithstanding what Dr Patterson said in the other House- is that there are a number of people who by reason of economies of scale or because they want to take up the advantages under the dairy adjustment scheme will find that the equipment which they have is no longer big enough. They would have at the present time a good deal of difficulty in establishing a need for assistance under this type of measure. This means that a dairy farmer with a 500-gallon vat will not be eligible under this scheme to get a larger sized vat. Again this comes back to the economies of scale. If it is possible for a dairy farmer to store in a vat all the milk from one day's milking it is much cheaper for the dairy company to do the collections. We know the cost of transport today.

We recognise the tremendous costs involved in collection and it is fairly obvious that if these 2 things I have mentioned had been encompassed within the Bill it would have made a good Bill an even better one. It is unfortunate that the other House is not sitting and we will not be able to seek to improve the Bill by amending it. I know that the Minister for Agriculture (Senator Wriedt) did try to have this Bill brought in on Thursday evening in time for our proposed amendments to be discussed and then for the Bill to go to the other House and to come back here, but it was not possible. So we have to accept the situation as we see it.

Coming back to the point I first raised, I think we have to ensure that we do not encourage an extension of uneconomic dairy farms in areas that are marginal or not particularly suitable. One other point to which consideration may have been given- this may still be possible- is provision of assistance to a person who wants to continue as a dairy farmer to move if necessary from an area that is marginal or is too far away from a collection area onto a property that is closer for collection purposes and is more suitable. In the past 4 years there has been a dramatic drop in the number of dairy properties throughout Australia. I think this clearly indicates one of 3 things. People are getting sick of getting up 14 times every week to milk cows, costs are too high or the unfortunate rapid increase in the price of beef has lured a few people away from the dairy industry into that industry which is now no longer lucrative. To illustrate the fall-off in the number of dairy farms I inform the Senate that over a period of 4 years from 1970 to 1974 there has been a 29.8 per cent drop in dairy properties in Australia and in the last 2 years the fall was 18 per cent. There were 48,000 dairy farms but at the present time the figure is 34, 100.

There are a number of other problems facing this industry that bear mentioning and one of course is the price of butter. The Minister will remember that just over 12 months ago he and I together with a couple of other people debated the abolition of the subsidy provided to the dairy industry. I cited some figures then but unfortunately they have changed. Let me compare the price of butter and the average weekly wage in 1964 with the price of butter and the average weekly wage in 1974, which is an easy period of a decade. The average weekly wage in 1964 was $54.10. The retail price of butter at that time was 56c or on a percentage basis 1.030 approximately. By the September quarter of 1974 the average weekly wage had risen to $138 but butter had risen to only 64c. It had dropped from its previous figure to .0046 per cent. Had the price of butter maintained its percentage of the average weekly wage- I think it is fairly reasonable to assume that in 1 964, because our consumption of butter has been fairly even over that period, it was not too dear- it should now be somewhere about $ 1.35 per lb. I do not think that anybody in the community could say that the dairy farmer has not pulled his weight in trying to keep down the costs of food to the consumers.

We often hear it said that the New Zealand dairy industry is particularly progressive, efficient and economic but it is interesting to read what the Leader of the Australian Country Party (Mr Anthony) said when he was talking about this Bill in the other House. As reported at page 4273 of the House of Representatives Hansard, he said:

We hear so often about New Zealand being an efficient producer of dairy products. How many people know that in New Zealand last year $42.2S6m was paid in subsidy to the milk producers, who of course represent most of the production of the dairy industry. It is believed that this year the subsidy in New Zealand for milk production will climb as high as $59m

This clearly indicates that, being basically a rural economy, New Zealand recognises that there is a need for support within the industry. This Bill goes a long way towards making it easier. Unfortunately, the Government has adopted a policy of gradually phasing out the dairy subsidy and of phasing out the fertiliser subsidy at the end of this month. This will add further to the costs of the dairy industry. Notwithstanding the figures quoted a while ago of the price of a pound of butter, it will probably not become very much higher than it is at the present moment. It will probably go up by only 2c or 4c a pound, yet costs will increase very rapidly.

I want to refer to another problem confronting the dairy industry. It is one of which the Minister would be aware. It is not covered by this Bill and is probably not of tremendous concern to this Parliament. I refer to equalisation within the dairy industry. We know that four of the Australian States- namely, Queensland, New South Wales, South Australia and Western Australiano longer produce sufficient butter for their own needs and have to buy it from the States that produce more than they need, namely Tasmania and Victoria. This brought about a situation last year where, for fairly obvious reasons, they wished to withdraw from the dairy equalisation scheme. They were allowed to do this to the extent of 80 per cent. But this situation has not been resolved and it is a long way from being resolved. It is not a simple question of whether the equalisation should apply all over the State for butter because so many other aspects of the dairy industry are involved.

Factories in Australia are involved in the production of dairy products, not necessarily butter. I think that Kraft Foods Ltd is a classic example of a company that produces only cheese. Many other factories produce fortified milk. Some produce powdered milk and casein, both edible and the other kind. It is very difficult to get all of these people to agree particularly when one realises that the dairy factories assess that at the present moment they are probably able to pay only 48c or 50c a pound butterfat but for full cream dried milk and casein the figure could go as high as 75c or 80c a pound butterfat. Fairly obviously, the industry has some very big problems to face up to in the near future. I do not suggest that this is one of the situations covered by this Bill but it illustrates the need for careful consideration by the Government in framing this type of legislation so that the greatest possible contingencies are able to be covered. We hope that this type of Act will not be looked upon as the be-all and end-all of the problems associated with the dairy industry. If in the coming months or in the next year or so we see a need for another look at this situation we should all be prepared to look at it with a view then of trying to keep this industry on a solid and a sound footing. One of our big problems is that about 60 per cent of the total production of the dairy industry in Australia is sold overseas on a market that does not give us anything like the prices for some of the commodities we produce that our own home market gives us. I say 'some of them' advisedly because the prices that some of the dairy products are now commanding or attracting to themselves are considerably better than they used to be.

So we come back to deciding whether this is a good Bill. As I said before, it is a good Bill. It is designed to assist the industry in as many aspects as I think we could expect. It assists the industry both at the dairy level and at the factory level. The fact that advantages will accrue to the manufacturing side of the dairy industry, I think for the first time under such an assistance plan, will be of great benefit to the industry in general. I regret that unfortunately we will not be able to give active consideration in the Committee stage to the amendment that we would so much have liked the Minister to consider. We realise all of the problems associated with trying to do anything other than what we are doing now, that is, to accept the situation as it is. It is an inevitable situation. We do not want to delay in any way the money that this industry so rightly deserves. Somebody said recently that this Bill has a long gestation period. It may well have had but we do not want the gestation period to last any longer. We hope that this Bill, with our blessing, will soon have royal assent.







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