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Wednesday, 9 October 1991
Page: 1596

Mr ANDERSON(9.01 p.m.) —-It is an absolute tragedy that the Budget as it relates to primary industry this year sees a debate centred essentially on welfare provisions. So serious has the plight of the rural sector become that the debate now centres on the provision of public moneys the Government is voting to keep farmers viable. The unfortunate reality is that there is likely to be a great deal more of that before this crisis is over.

So here we have a vital sector, a sector which is important not simply for those involved in it, but which is vital to the future of Australia as an export nation dependent on its trading performances for its economic well-being and the provision of living standards for its people in a situation where it effectively has to beg.

We are having ourselves on as a nation if we kid ourselves that we can allow the agricultural sector and farmers of this nation to sink. Its record in terms of productivity improvements and in providing much needed export income for Australia is second to none; indeed, no other sector of the Australian economy can match it. Its record is such that all participants can be extraordinarily proud of it. It angers farmers--it angers me as a farmer and as a representative of people in the farming sector--that our debt problems should have locked us in to such an incredibly serious situation, despite the best efforts of all involved in the industry.

The collapse in commodity prices that we have seen in the last couple of years, particularly in the grain and wool industries, would be enough. What is now emerging not just as a drought but as an extreme drought condition stalking its way increasingly rapidly across our land, and then accumulated with the effects of inappropriate policies throughout the 1980s, all develops a scenario of extraordinary seriousness.

We are seeing a catastrophic folding up of the rural sector. At least we are seeing despair; at worst it seems to me we are seeing constituents who are losing hope. The other day a young man of my age who has been in farming for 15 years told me that in the last 12 months he has begun to wonder whether he will ever find his way out of it. I spoke with another farmer from my electorate over dinner tonight who said that he cannot wait to sell up and get out. I do not know how many generations of his family have been on the land. That is at best. At worst all the ingredients are out there for a full-scale rural depression, let alone recession.

For many out there that is indeed the nature of the current environment. This is no ordinary downturn, no mere hiccup: this is a time when people are seeing their life's work collapse and fold up before their very eyes.

We have heard a lot in this place over the last couple of days about compassion, or some people's understanding of `compassion'. It seems that Government members opposite are determined that we should understand `compassion' in narrow and inadequate terms of welfare dependency. I put it to honourable members that real compassion for the farm sector should have started with the creation, development and maintenance of a realistic economic environment for farmers to operate in during the 1980s.

Unfortunately, since we must now look for the handout, the reality needs to be recorded that the Government has granted a couple of worthwhile concessions, just as it must be recorded that there are still some glaring holes and that, unless things turn around, a great deal more funding will be necessary. The pluses relate to the provision of rural counsellors. I pay tribute to the work that some of those men and women are doing out there in helping people hold their personal lives as well as their financial situation together. There has at last been some recognition by the Government of the reality of extreme drought.

Contrary to the remarks of the previous speaker, for example, about the provision of funding for Austudy and alterations in assets testing, the reality is that, despite the promise of the Prime Minister (Mr Hawke) to the NFF that he would fix this problem, it has not been fixed. I am told that some people are still walking off their places simply because they cannot educate their children.

To get Austudy under the hardship provisions that have now been laid down, certain criteria have to be satisfied. Firstly, the family farm has to be on welfare--but it is almost impossible to get it--or, secondly, the family must be on part C of the rural adjustment scheme, which effectively means that they must be leaving the farm and in a position where they can only accumulate more debt anyway. The family allowance supplement is also subject to a hardship provision, but again it is extraordinarily difficult to obtain and may involve spending moneys obtained from a bank or other credit institution for the purposes of carrying on the farm business, which, I would have thought, displays an appalling lack of understanding of how any small business, let alone a farm small business, operates.

As I said earlier, much of this should not be necessary. Most of our farming families would be in a far stronger position today if they had been paying internationally competitive interest rates on those average debt loads in the farm sector. If they had been paying 8 per cent to 10 per cent instead of 20 per cent to 25 per cent, as they did for up to 18 months during the 1980s, they would be a heck of a lot better off. On a debt of, say, $150,000, which is not rare out there amongst family farmers, the difference over five or six years could be as much as $150,000. That would be a far more compassionate way of providing for a downturn--to leave farmers in a position where they had a bit of fat to carry them on--than the sort of welfare provisions that we are now having to beg for.

All farmers would be in a far stronger position if farm inflation had not ripped the guts out of their competitiveness during the 1980s, when constantly high rates of inflation were the direct result of the policies of this Government and its allies in the trade union movement. Again, I use a couple of examples from my own place. A 1982 tractor that we bought cost us the equivalent of 700 tonnes of wheat. In 1990, it would have cost us 2,600 tonnes of wheat. I would not be brave enough to do the figures now, because the more wheat we grew the less able we would be to afford the tractor.

Regrettably, it appears that the ACTU has learnt nothing. It now wants to plunge us back into that inflationary spiral, and plainly members of the Government opposite are of a mind to agree with it and its ill-founded policies. The 2.5 per cent wage increase that resulted from the April national wage case is just now flowing through--it was a little delayed because of the activities of the ACTU--yet now we find that the metals industry, backed by the ACTU and the Government, wants a further 2.5 per cent from 1 November this year and a further 2 per cent from 1 January 1992. This is lunacy. It adds up to around a 7 per cent wage increase over a period when the inflation rate has been about 3.5 per cent, which is a great result even if we did get to it the wrong way--that is, by comatosing the economy. Unquestionably this approach will simply reverse the decline in inflation. It will also reverse the decline in interest rates.

The Minister for Primary Industries and Energy (Mr Crean) might explain, since he has a background with the ACTU, that such a policy will not only impact very cruelly on employment prospects for those who are still lucky enough to have a job; it will also cost dearly in terms of the prospects of those who might otherwise have the chance of finding a job from their current position on the dole queues.

While he is at it, in his role as the Minister for Primary Industries and Energy, he might also point out to the ACTU that such a policy will finish off the rural sector. All the rural industry needs now to absolutely break it is a surge in inflation, an attendant increase in pressures on interest rates and a higher and unstable dollar level again. The only chance for many in the rural sector is to survive on cheaper money--the cheapest money we can possibly secure for them.

I put it to the Minister that it is about time that we saw some runs on the board in this regard. The farm sector is vitally important. We are suffering as a result of the impost of the sort of policy approaches of this Government and the Minister's mates in the ACTU. If he is to represent his new-found constituency in the farm sector, he will have to clearly decide, and he needs to decide that what we need is an economy based on lower inflationary outcomes as a matter of great urgency if the farm sector is to survive, and if it is once again to return to its pre-eminence as a motor house of Australian export performance.