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Thursday, 15 September 1983
Page: 940

Mr FISHER(8.40) —Earlier this week I informed members of the Government back bench of the disastrous impact of the excise which the Treasurer (Mr Keating) and the Minister for Primary Industry (Mr Kerin) had imposed on grape spirit used in the production of fortified wines. We know that when calculated as part of the cost of a tonne of grapes used in fortified wine production this massive tax will increase the cost of grapes by up to $250 per tonne. This will have a number of effects. Firstly, it will result in a reduction of grapes required and received by wineries and so reduce returns to growers. Secondly, it will result in reduced sales of the manufactured product. Thirdly, it will necessitate increased borrowings by winemakers. Fourthly, it will stimulate increased imports and further restrict access to the domestic market by producers. Tonight I bring to the attention of the Parliament and to the Minister responsible for Primary Industry other serious problems that exist and will be aggravated by this outrageous decision, a decision that I remind the House broke a promise made by the Hawke Government to grapegrowers in Griffith in the heat of the election campaign in a desperate but dishonest attempt to win the seat of Riverina.

Mr Howard —That attempt failed.

Mr FISHER —Fortunately for the House and for the people of Riverina, as my colleague the Deputy Leader of the Opposition says, that attempt failed and Riverina re-elected the honourable member for Riverina, (Mr Noel Hicks) and rejected this promise as the gimmick and the sham that it obviously has now proved to be. By their nature, products of the Australian grape industry, which include dried fruit, fresh table grapes and wine, are complementary and the fortunes of each are very rapidly reflected upon each other. Therefore, the resulting surplus of wine grapes, which could well be in the vicinity of 150,000 tonnes this vintage will place an unbearable oversupply situation on an already depressed dried fruit market. I do not intend to pursue the reasons for the difficult world market scene, except to say that it is due to a combination of oversupply, overseas subsidisation of inefficient industries in some producer countries and, of course, our own high domestic costs of production.

My grievance tonight is the failure by the Government to respond rapidly and appropriately to these very real problems. I acknowledge that the Minister for Primary Industry has called for an inquiry into the industry by the Industries Assistance Commission and that the circumstances in the dried fruit industry prior to the introduction of the wine tax were not the Government's making. The terms of reference of this inquiry state:

. . . the following matter to the Industries Assistance Commission for inquiry and report within 12 months of the date of receipt of this reference-whether assistance should be accorded to the industry producing dried vine fruits in Australia for the 1985 and subsequent seasons, and, if so, what should be the nature, extent and duration of such assistance.

The reference goes on:

. . . pending its report in accordance . . . the Commission provide a report within 90 days of the date of receipt of this reference on whether short term assistance should be provided during the 1984 season and, if so, the nature and extent of such assistance.

In relation to the IAC it continues:

specify that in its reports . . . take into account the alternative uses of multi purpose grapes, the regional concentration of the industry and the prospects for alternative crops and include advice on:

(a) the efficiency of industry marketing arrangements

(b) whether assistance accorded to the industry by means of underwriting should be varied, and

(c) whether the existing provisions of the Rural Adjustment Scheme, including its household support and rehabilitation provisions, are adequate to meet the immediate or emerging adjustment and welfare needs of producers of multi-purpose grapes.

I appreciate that under the legislation of this Parliament the Minister has no alternative than to introduce an IAC inquiry into developing or changing the long term specific measures of assistance to any Australian industry. I acknowledge that the Minister has had discussion with the Australian dried fruit industry and I agree with the matters that are to be looked at. These include the need for rationalisation of production in the areas of on-farm efficiency and a reduction in reliance on export markets. The inquiry is to look at the predictability of returns by means of alternative crop financing methods, with particular reference to the powers of the Australian Dried Fruits Corporation and the use of a government guarantee. Other matters to be looked at include whether there should be an increase in the underwriting level for dried sultanas for the 1983 and 1984 seasons from 90 per cent to 95 per cent of the three-year average of returns; the collection of better statistics through vineyard registration to provide better information on productive capability; and the interrelationship of dried fruits and the vine grape industry, with particular reference to the effects on dried vine fruit production of multi-purpose varieties; wine grape pricing legislation; and the possible tax on wine. They also include the functions of equalisation of returns from dried vine fruit production. Of curse, this inquiry will also be looking at the retention of the Australian market for Australian producers, something that I think the honourable member for Macarthur (Mr Hollis) was referring to in his remarks a few moments ago.

This inquiry, which of course is a political inquiry, means that there will be a delay of at least 15 months before any long term recommendations are made in relation to the grape industry. Unfortunately, many individuals cannot live through such a delay. Problems are immediate. I ask in a bipartisan way for the Government to seek short term measures to alleviate the serious social aspects of communities in these horticultural areas. I am advised that in the Sunraysia region alone over 500 fruit growing blocks are on the market with little prospect of sale. A significant number of these growers have not even been able to pay their rates this year. Last year a significant number were not able to pay their water rates; they are two years in arrears. These problems are acute, particularly in some sections of the ethnic community. An article in the Age last Tuesday, 13 September, states:

Poverty, debt and the spectre of bankruptcy is the reward for many families' labours according to the president of the Turkish Association . . . families made less . . . from their fruit blocks last year. For one in five Turkish families, there is no hope of staying in business . . .

Moreover, many of the region's 65 Turkish growers bought in in 1980, a year when prices for fruit and therefore also fruit blocks, were unusually high . . . high interest payments are now a big problem.

The result is that many of the areas 65 Turkish growers have virtually no income and must take second jobs, if they can find them . . .

Many Turkish families are being summonsed for unpaid bills; many of them have already borrowed heavily from relatives just to stay afloat. Of course this situation is tragic. Similar cases exist in varying degrees throughout the industry. Many established growers are having to dig very deep into their reserves to carry on. I propose that two immediate and short term measures be implemented, firstly through the social security system to families in immediate need of household and income support; and secondly, through the operation of the rural adjustment scheme. I know that some discretion and flexibility will be required in the administration of both these areas, but my Government was able to respond in earlier years to similar crises. I mention in particular the dairy industry crisis in the early 1970s and the devastating hail storms that occurred through the Sunraysia and Riverland areas in the mid-1970s.

The grape industry is today suffering a very severe recession. The announcement of the IAC inquiry means a long period of uncertainty for growers. Other short term measures are now needed to meet the adjustment already taking place, but it must be accompanied by many instances of severe financial and social hardship. I conclude by pointing out to the honourable member for Macarthur, who made a very interesting speech tonight in relation to some of the imports into this country, that it is only by importing that this country can also expect to trade some of its highly efficient rural and manufacturing exports.