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Wednesday, 9 October 1991
Page: 1585


Mr TIM FISCHER (-Leader of the National Party of Australia)(8.00 p.m.) —-The Committee is considering some very important appropriations. I draw the attention of the Committee to the fact that included in these appropriations is $45.9m for the BMR, $14.3m for ABARE and $167m for AQIS. In a few minutes, my colleague the honourable member for Groom (Mr Taylor) when speaking on the appropriations will discuss various aspects of that in more detail, as will the Deputy Leader of the National Party of Australia (Mr Lloyd). I merely signal that the AQIS figure is of great concern.

It was affirmed in February of this year that AQIS had no fewer than 60 meat inspectors in towns and cities across Australia where there were no longer operating abattoirs. That circumstance, in particular, is adding greatly to the cost burden of the red meat industry and is only slowly being addressed.

In the time available I want to say to the House, and through the broadcast tonight beyond the House, that it is my very real concern that the drought is gripping much of Australia. It is an almost lethal climatic cocktail gripping much of Australia. There is drought in Queensland and northern New South Wales, with very mixed seasons elsewhere. Ironically, in southern parts of Victoria it is the other end of the spectrum--extreme wet and severe flooding in places and damage caused by that flooding. I must admit that a much smaller part of Australia is affected by the wet than the areas affected by the dry period. There are no magical answers to that circumstance. I think it will be recorded in the history of Australia that this century Australia has faced four crises which it had to deal with: World War I, the Great Depression, World War II and the great recession and drought of the early 1990s.

There are aspects which can be addressed by the Federal Government. To some extent, steps are being taken by the Minister for Primary Industries and Energy (Mr Crean) and by Cabinet when they are not distracted with the current Medicare crisis and the undermining of the Budget produced by the Treasurer (Mr Kerin), which is now before the House and which may be changed between now and midnight and again tomorrow morning.

The drought has come at a time of extremely low commodity prices, thus adding further to the burden of the situation--international commodity prices; the subsidisation by Europe, in particular; common agriculture policy; the export enhancement program pursued by the United States and the fact that the EEP is, to some extent, almost part of the furniture. To most of my farmers it appears to be part of the furniture rather than the tactical weapon it was designed to be against the Europeans.

These are clearly issues that we will want to canvass further with the US Administration, our friends in the US embassy here tomorrow night and elsewhere and also during the forthcoming visit by President Bush. So international, climatic and Canberra factors have added to the burden of the situation. The Canberra factors might properly include the fact that interest rates were rafted up so high in 1988, especially 1989. As a consequence, they were kept far too high for too long because the former Treasurer, Mr Keating, and the bureaucrats of the Treasury did not realise the extent of damage they were causing to many small business operators, farmers and industry generally.

Farmers have reached the stage where they are facing a net farm cash income fall of some 24 per cent in 1991-92. That comes on top of the sharp decline of 36 per cent in 1990-91. For last financial year and this financial year net farm cash income has fallen by some 60 per cent. I concede there are several reasons for that, such as climatic factors and international factors but also Canberra factors. Indeed, it is the Canberra factors which the Government should address and make more effort to address. One of the problems related to the circumstances in which farmers find themselves is that of the 17 inner Cabinet members not one comes from a country electorate or rural based electorate. The nearest one is the Treasurer (Mr Kerin), who is on the edge on Sydney at Campbelltown. As the honourable member for Gilmore (Mr Sharp) points out, there is not one member of the inner Cabinet from Queensland. It is a shocking indictment of the Queensland Caucus element that that is so.

What did the Government do? It came up with this great solution of appointing a Minister from Perth, the Minister for Transport and Communications (Mr Beazley), to be the notional representative of Queensland in Cabinet. The shocking legacy of this circumstance is that not even the inner Cabinet realised the extent of the drought, because there was no-one in the inner Cabinet from Queensland, where the drought has hit hardest. There is no farmer or even country member in the inner Cabinet. That has added to the burden of the situation, and my comments will be backed up by those to be made by my deputy leader, the honourable member for Murray, (Mr Lloyd) and other members of both the Liberal and National parties during this debate. I say to the House in another sense that if there was some magic solution, we would afford the Government our support in a bipartisan way. Certainly, there has been a great deal of bipartisan work done on the rural adjustment scheme and we have been looking at parts A, B and C. We are now looking at a part D to that scheme.

Even as we speak tonight, notwithstanding the official reductions in interest rates in the last 12 months, interest rates are still in real terms twice the level of interest rates in the United States. In Australia in real terms interest rates are 6 to 7 per cent; in the United States in real terms they are 1 to 3 per cent. That means two things: there is still a distortion of the value of the Australian dollar, making it very difficult for export industries, and there is still the added burden of interest rates on those viable farmers who are still meeting their commitments.

The Government can and should take further action in respect of the drought. As the first step it should appoint a Federal Cabinet task force led by the Deputy Prime Minister (Mr Howe), the Minister for Primary Industries and Energy and the notional Queensland representative in Cabinet, the Minister for Transport and Communications, to lift the profile of this problem and to bring more direct action at the highest level in Cabinet to bear in addressing the drought and the policy ramifications arising from the drought. The second step should be to look as a matter of urgency at the continuing impact of sales tax on the farm sector. Every time the Minister for Primary Industries and Energy comes in he trips over the exemptions factor associated with the farm circumstance and keeps on producing other booklets in relation to it.

I say, very sadly, that semitrailers, road trains and the like are being used to shift stock to agistment or to shift fodder to stock on the Darling Downs and elsewhere. That fodder is being hit by a 20 per cent sales tax. The fuel tax level is a crippling burden on the operators of those transports carrying out those rescue missions, and of course there is a sales tax on the tyres and spare parts, which adds to the whole burden of the sales tax saga. That tax on transport freight and transport equipment amounts to well over $3,000m this financial year.

There is scope for this Government to take action in relation to the drought in a sensible and sensitive way. I realise that the Government cannot will the drought away, but I warn that this time around there is going to be a very slow recovery from the drought, no matter when the rains arrive. And let us hope they arrive soon. I welcome the fact that in the vicinity of Mount Warning, which I climbed with Senator Brownhill last week, there has now been some rain in the last few days. Of course, we need a lot more rain, and even huge rainfalls in the next week are not going to reverse the financial circumstances of so many farmers and small business operators. People in capital cities are also at the receiving end of the impact of this drought that we did not have to have, as with the recession that we certainly did not have to have.

So I look to my colleagues to continue to raise significant issues relating to the drought and the rural recession--the fourth great crisis of this century which has the capacity to do so much permanent damage to the agricultural infrastructure of Australia.