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Tuesday, 25 November 1986
Page: 2722

Senator SIDDONS(9.58) —I rise to speak to Senator Vigor's amendment. I do not support it. I have great sympathy with his concern for farmers but the point I made originally in my speech at the second reading stage was that the $13m subsidy to importers that this legislation seeks to eliminate has already been passed on to farmers in the form of lower prices. The cost of single superphosphate has been reduced by $1.30 per tonne. TSP and DAP fertiliser costs have been reduced by $10 per tonne and MAP fertiliser by $11 per tonne. Farmers are benefiting from those price reductions as of now. The manufacturers of fertilisers negotiated with the Government and agreed to reduce prices. They have been reduced. There has been no price increase, as has been stated by some honourable senators in this debate. Farmers are getting the benefit of those reduced prices now. So the $13m subsidy taken from imports has been passed back to the farmer in the most direct, simple and straightforward way that is possible.

The fact remains that if we defeat this legislation we are in effect saying that the Government should continue to subsidise an import. All honourable senators have expressed concern about the size of the Government's trading account deficit. The fact is that this country does not have the money to subsidise imports. We are the only country which has ever attempted to do so. For a country which is on the verge of bankruptcy to continue to subsidise an import is the height of irresponsibility, I would have thought.

The price reductions that have already been put in place have considerably benefited, for instance, farmers in Tasmania. The facts in regard to imports of fertiliser to Tasmania are as follows: One hundred and twenty thousand tonnes of single strength superphosphate and 3,000 tonnes of high analysis phosphate fertiliser are imported. So the price reductions that have already been put in place have been, and will continue to be, in effect, a subsidy to the farmers of Tasmania because there is no way in which the industry can suddenly increase prices without reference to the Government. The Australian Customs Service polices these subsidies very closely. If the industry is being irresponsible and increases prices domestically above a level that does not reflect the full subsidy that is being granted by the Government, the Customs Service will move in and threaten to take the subsidy away.

It is not an irresponsible industry. The industry is earning very low returns on its investment in comparison with most industries in this country. The fertiliser industry is very much a service industry. Its record shows that it is a responsible industry. Certainly, the administration of the bounty to the industry by the Government is policed continuously. There is no way in which irresponsible price increases can be effected. Of course, imports of fertilisers can still continue. Nobody is saying that we must stop importing fertiliser. All that is being said in this legislation is that the Government should cease to subsidise the importation of a product-in this case fertiliser-simply because it can no longer afford to do so.