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Wednesday, 25 March 1987
Page: 1313

Senator BROWNHILL(4.03) —The matter of urgency that is now before the Senate reads:

The need for the Government to bring down the crippling interest rates, record levels of taxation and the other costs which are devastating Australian farmers and small businesses in country towns.

Having just listened to Senator Macklin and Senator Maguire, I was wondering to what debate they were referring in their speeches, because I do not think they were at all relevant to this debate which was led by my colleague Senator Crichton-Browne. I am surprised in the current rural crisis that any Government senator, including Senator McKiernan, who will speak later, would have the gall to stand in the Senate to defend this Government's performance. It is appalling by any standards. One only needs to look at the record of this Government to see why Australians, and particularly rural Australians, are in such a mess.

It is well known that this Government cares little for the rural sector. It argues that there are few votes for the Australian Labor Party in country areas of Australia. On that basis, therefore, the Government feels that it can ignore the rural sector and the people who live in the rural towns and cities. The Prime Minister's task force recently indicated the depth of concern and understanding in the Labor Party for those people outside the metropolitan area. The chairman of that committee claimed that farmers are doing okay. He said that he had spoken to lots of farmers and, for many, things have never been so good. That is shades of the Whitlam years-the famous Whitlam statement.

Senator Tate —He did not say that. He has never used the term.

Senator BROWNHILL —It was quoted in the paper. I am quoting what I have read in the papers. I would like to meet any farmer who is happy to be paying three times more than he should be in fuel excise. It is over three times more than he paid when the Hawke Government came to power some four years ago. I would like to meet any farmer who at the moment is happy with inflation, which is four or five times the rate of our major trading partners. Again, I would like to meet any farmer who is happy with his rates and taxes increasing by 83 per cent in the last five years while in some areas of Victoria land has gone down in value by as much as 40 per cent.

This urgency motion talks of `crippling interest rates', and that is the only description of them. They are crippling, and do not just affect the foolish risk takers, as some senators, including the Minister for Finance (Senator Walsh), would have us believe. All businesses run on credit. Money is borrowed on overdraft, loan or through credit companies for a range of items. Farmers are encouraged to do so by their banks and accountants. When interest rates were stable and affordable it was a wise business decision to make. Any business person to be successful must be a risk taker, and farmers are probably the biggest risk takers of all. By necessity, they must gamble on the size of their crop, the value of their wool and the return from their cattle and other produce. Only a few short years ago it was wise economics to borrow to upgrade machinery and purchase more land if it became available. But today that has all changed. Today those same farmers, the same risk takers who made forward plans based on interest rates of 12 to 14 per cent, are facing charges running at 21 per cent or more. Bankcard interest rates are now some 22.5 per cent and rates on small overdrafts are more than 20 per cent. Senator Maguire earlier quoted, I do not know from what, figures which do not apply to people who want to borrow money from banks. Despite the claims of Senator Maguire and of the Labor Party that it is only the bad farmers who are in debt today, the facts are that thousands of farmers, good and bad, have been caught in this interest rate spiral.

Senator Peter Baume —Why don't we circulate Senator Maguire's words around the bush?

Senator BROWNHILL —I think we should. With these higher interest rates come higher wages, higher inflation and higher prices. In 1983 a farmer needed to sell some 35 steers to afford to buy a Holden utility. Today, despite good cattle prices, that same farmer needs to sell 52 cattle to buy that vehicle. If it is being said by Labor senators that prices are going down and interest rates are not affecting the position, I think that the economic rationale of the Hawke Labor Government must be found wanting, as the people of Australia will prove at the next election. The simple facts are that no matter how well farmers and small business people are able to do they now have to work that much harder to stay in business than they did four years ago.

The Government claims that it is working on the problem, that it is containing costs and providing tax cuts for people. To start with, tax cuts are only of benefit if a person is earning sufficient income in the first place to pay any. Secondly, we all know that the so-called tax cuts are illusory. Single income families with dependent children are still worse off now than they were four years ago-in fact, much worse off. The figures I have show that Australians are now $31 a week worse off with their disposable income than they were when we were in government.

Senator Maguire made some very rash statements about interest rates. I wish to correct him and point out that the Bankcard rate in December 1984 was 18 per cent; it is now 22.5 per cent. In December 1984 prime interest rates were 13.5 per cent; they are now 18.5 per cent. In December 1984 small overdraft rates were 14.5 per cent; they are now 20.5 per cent. Anyone who is listening to this broadcast might reflect on the figures that Senator Maguire has been touting around the place. Obviously, this is the economic rationale of this Government and its disregard for country people. Because of these interest rates it is not surprising that our bankruptcy rate increased by more than 35 per cent in the first six months of the current financial year. That means that more than 8,000 people are likely to go to the wall, compared with the previous worst record of 6,408 in 1985-86. But, of course, we keep being told that things have never been better. Senator Maguire said that again here today. But we know how high interest rates, spiralling wages and prices and falling land values are affecting every individual in country areas.

Certainly, we in rural areas know that the Government cares little for the individual; but what is happening to whole communities is even more frightening. Whole towns are disappearing. Some country areas have more vacant shops than open shops, more people looking for work than in work and more people selling than buying. Rural industry is not in a position to pass on its costs and so, increasingly, it is attempting to absorb them. Some businesses are failing and the blame for that lies squarely at the feet of this Government. People in rural businesses in rural towns are trying to help some of those in the farming community by carrying the debts that those farmers cannot afford to pay. Those same businesses are having to pay the exorbitant interest rates foisted on us by this Labor Government. A recent survey conducted by my office of 300 regional businesses in New South Wales showed the effects of the fringe benefits tax. That is just one tax that this Government has foisted on us. It has also foisted additional capital taxes on us. Of those 300 businesses, most said that the fringe benefits tax definitely had adversely affected them. Some of those businesses that I surveyed only five months ago are now not even in existence. The burdens of loss of sales and spiralling interest charges have killed them. They have become another statistic in the unemployed scrapheap that the Hawke Labor Government has brought on this community.

The same is happening on farms throughout Australia. Farmers are walking off their properties. Some are in so much debt that they will never be free of it. What they once hoped would be an inheritance for their children has now been taken away by government actions and government inactions-inaction in dealing with the spiralling interest rate problem that besets this country at present. There are actions and remedies that this Government could take if it cared enough. The National Farmers Federation attempted to put a submission to the Government on cutting interest rates, spending and inflation. But it was not even given the courtesy of a decent hearing. The New South Wales Farmers Association has put a similar submission to the Government. It has also been ignored. I quote from an article that quoted that the President of the New South Wales Farmers Association, Mr Tooth. The article read:

Mr Tooth said the effects of the Government's high interest rate policies were being carried solely by those who borrowed-and he claimed this would include nearly all those engaged in agriculture.

The article went on:

``This Government will allow borrowers, and that accounts for most farmers, to continue to hurt,'' he said.

In other words, this Government is an uncaring government towards the people who produce export income for this country and who give people such as Senator McKiernan a standard of living which be obviously enjoys. The Government is not interested in doing anything constructive.

The National Party has just recently completed a paper on rural adjustment arrangements and, if the Government is not prepared to do something positive, the Opposition will at least attempt to stir some action. The Opposition parties appreciate the extent of the problem and the urgent need to do something about it. The Government must not ignore the problems any longer. More funds must become available to assist with the interest rate burden. More must be done to assist farmers in determining their viability, to assist them in coping with the present crisis and to advise them how best they should restructure their debts. Help must be given to farmers who are viable in the long term but simply cannot pay the crippling interest charges they are being charged at present.

If we do not take immediate steps, the very fabric of our society is threatened. The long term effects of this crisis will be catastrophic and irreversible. Country towns will shrink even further and with them the services, such as banks, schools and hospitals, which have been built to look after the people in those areas. Once those facilities are closed they are unlikely to be reopened. If a local machinery dealer loses his mechanic because the farming community has been crippled with high interest costs, he will not get that mechanic back easily from the city. More people will drift to the cities looking for work and more people will become chronically unemployed and unemployable. There is a very real prospect of large city ghettos starting as more unemployed people go to the cities-people who are qualified only in skills that are no longer needed in country areas. That will mean that more money will be required from the taxpayers to pay social security benefits to those people who have been put out of work, thrown off the land or thrown out of businesses in country towns.

We can all talk all day in this place about the statistics of the crisis. We can argue that 10 per cent or 20 per cent of farms are at risk because of high interest rates. What it comes down to is that this crisis involves families; it involves real people. It is more than machinery repossessions, more than politicians arguing about who caused it and how. Senator Macklin went on about this at some length. The problems are real and the poverty is becoming widespread. The crisis is spreading and remedies must be more than words. There must be action and it must be taken now, not later at the whim of a Labor government that wants to stay in power and will do anything to stay there.