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Wednesday, 16 November 1983
Page: 2782

Mr McVEIGH —I direct a question to the Treasurer in the absence overseas, permanently it seems, of the Minister for Primary Industry. Does the Government agree with the National Farmers Federation estimate that agriculture will contribute almost two-thirds of the overall real growth in the economy in the coming year, notwithstanding rising costs over which that sector has no control? If so, why has the Government discriminated against the rural sector through such decisions as the 200 per cent increase in meat inspection charges, the imposition of anti-dumping measures on nitrogenous fertiliser and the imposition of a 15 per cent tariff on imported grain harvesters, decisions which the NFF says are costing farmers $60m? Will the Government reverse these policies to improve the international competitiveness of our agricultural industries and act on the NFF's four proposals, which are aimed specifically at redressing the decline in our international competitiveness?

Mr KEATING —I would have believed, from the comments of the Director of the National Farmers Federation in recent times, that relations between the Government and primary industry were at an all-time high. I see no basis for the complaint underlying the honourable gentleman's question. He refers to the component of growth to come this year from the farm sector. I am pleased to report that there will be a very strong fillip to growth generally from the farm sector and that, if anything, farm growth will be even higher than we may have thought it would be at the time the Budget numbers were put together. As the farm sector represents about 7 per cent of gross domestic product, any substantial increase in farm output would, in the totality of the growth picture for this year, be diminished by the relative size of the farm sector versus the non-farm sector of the economy.

As far as the budgetary treatment by the Government of the farm sector is concerned, the Budget Papers record the generous treatment afforded that sector this year. The thing that any Commonwealth Government can do for the farm sector , in terms of the restoration and maintenance of international competitiveness, is to deal with the underlying problems which threaten competitiveness. Of course, over recent years there has been the runaway inflation which occurred under the previous Government. However, one sees the decline already in evidence in the rate of inflation, and the prospect for inflation, which the Government has forecast at 7 1/2 per cent, yearly average, for 1983-84. That will have an effect upon interest rates, which have been falling. The farm sector will require, of course, more capital for carry-on finance and will be advantaged very much by the fact that interest rates have been declining. Also, its international competitiveness will be enhanced by the decline in the rate of inflation which is in prospect for this year. Finally, the other element that the honourable gentleman alludes to on the question of competitiveness is the exchange rate management problem. I simply indicate that in that respect--

Mr McVeigh —I wish to raise a point of order. Mr Acting Speaker, I draw your attention to standing order 145 which states that an answer needs to be relevant to the question asked. The Treasurer is not answering the question, and under this Prime Minister Question Time has become a farce. It is questions without answers.

Mr ACTING SPEAKER —I regard that point of order as frivolous and strongly recommend to the honourable member that he cease indulging in that practice.

Mr KEATING —He is more to be pitied than despised, Mr Acting Speaker. I was referring to an aspect that was very relevant to that element of the honourable gentleman's question relating to competitiveness. He alluded to remarks made in recent days about the exchange rate. I simply add to the remarks that I have already made about that by saying that indeed the Australian dollar has moved up to a level that at the moment is just a little over what it was in terms of the trade weighted index in March but there still has been a substantial decline from the peak of 18 months ago, as our competitiveness has been eroded by inflation. Indeed, the problems facing Australian competitiveness, whether in the primary export sector or any other, will not be changed by adopting any simple notion that we hold the exchange rate and cop a poultice of capital inflow or take the other options available to try to mop it up, with the attendant effect on interest rates and, of course, the likelihood that this would then be followed by more capital inflow. If that is the argument that the honourable gentleman is alluding to, it is one that I do not think holds water.