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Thursday, 5 March 1970

Mr KING (Wimmera) - This is the first occasion since the last election on which the people of Australia have had an opportunity to listen to the Leader of the Opposition (Mr Whitlam). I believe they would be very disappointed to note that on this occasion the Leader of the Opposition did little to substantiate the confidence of the people who returned increased numbers' to the Opposition side of the House. It was interesting to note at one stage during the remarks of the Leader of the Opposition that he had no more than 2 of his front benchers supporting him. Most of the time he had 5 out of a total of 12. At no time did he have more than 6. At the end of his remarks I think there were fewer of his supporters in the chamber than when he started. Even I, as a mere back bencher, feel that I can claim a better percentage of support from my colleagues than he can from his. No doubt the people of Australia are very disappointed indeed.

This afternoon we heard from the honourable member for Dawson (Dr Patterson) and the honourable member for Riverina (Mr Grassby), both experienced members of parliament. They put forward their side of a situation, as one would expect. I think the easiest way to sum up my advice to these gentlemen would be to say that if they want to succeed in the future they should put forward some suggestions which are practical and workable. I believe that those three honourable gentlemen whom I have mentioned have vilified the past, distorted the present, and shrunk from the future.

Mr Deputy Speaker,I ask you to pass on my personal congratulations and the congratulations of the constituents of Wimmera to Mr Speaker, firstly on his re-election to that important position and secondly on his recognition by Her Majesty. I would like also to congratulate the mover, the honourable member for Diamond Valley (Mr Brown) and the seconder, the honourable member for Paterson (Mr O'Keefe), of the motion before the House. I believe that both these gentlemen have made excellent contributions to the debate as, indeed, have some of the other new members who have contributed to it so far. This reminds me of a statement by the Leader of the Opposition. He cannot even count; a few minutes ago he said that four honourable members made their maiden speeches this afternoon. In fact, there were six.

I take this opportunity of thanking the people of the Wimmera electorate - the people I represent - for returning me to this, the Twenty-seventh Parliament, despite all the comments which have emanated from the Opposition over a period of time that the people have lost confidence in the Government. I sincerely thank the people in my electorate for their confidence in me.

This evening I wish to make a few comments about the problems of primary industry in Australia. I think it would be fair to say that not since the 1930s has Australia faced such a challenge as it does today. That was the time of the depression when there was unemployment. A similar situation exists today, but possibly for a different reason, that reason being the cost of production to the primary industries, a world glut of our commodities and, naturally, a lack of demand, finishing up with low prices. I recall vividly as no doubt most honourable members in this place do, that in the early 1950s there was a huge cry throughout the world for increased production of foodstuffs. Unfortunately, today in most primary industries, the reverse is the position. Perhaps one exception is the wool industry. Australia can dispose of its wool at a price. If it were not for the Japanese Trade Agreement, heaven only knows what the price would be today because we all realise that the vast bulk of our wool is exported to Japan. The tendency of the Opposition is to blame the Minister for Primary Industry (Mr Anthony), the Australian Country Party, and the Government.

Mr Grassby - Hear, hear!

Mr KING - Honourable members opposite are interjecting. I am interested to hear some interjections supporting that statement.

This is what Opposition members have been doing for quite some time. This is why T. suggest that the Opposition is misleading the people of Australia. It knows very well that it is not anything that has been done by this Government that has affected the wheat industry. The trouble in that industry has been caused chiefly by a lack of demand on the overseas markets. If the Government were to be changed, as the Opposition would like, what would be seen? The wheat industry would go right back to the conditions that existed in the early days of stabilisation when the return to the average wheat grower was about £6 10s a week, with about a 3% return on capital. This is what would happen if the Opposition were to gain control of the government benches.

Let us look at some of the comments made by the new president of the Australian Council of Trade Unions, Mr Hawke. I do not have time to read them all. When he was addressing a meeting at the Monash University he declared that his organisation would strongly resist further efforts by the employers and the Government to use arguments about the cost price squeeze and its impact on farmers as a reason to hold down wage levels. I do not think Mr Hawke is a supporter of the Government. I believe the problem must be isolated and an answer looked for. Today Australians are told that they have a very buoyant economy, that they are living in prosperous times and that they have full employment. But does this apply to the rural sector? Anyone who understands the rural situation will appreciate what producers are thinking at the present time. Unfortunately, prosperous times and full employment can and do increase costs. The rural sector cannot pass on such costs.

If one looks at statistics from the Reserve Bank one finds that rural advances^ have never been higher than they are today. In 1959 they amounted to $41 lm. In subsequent years they were $980m, $993m, SI, 050m, Sl,088m, Sl,152m, $l,302m, Si, 414m, $l,608m, Sl,875m, until at the present time they total $ 1,972m. This is an all time high. If one looks at the trading banks alone one finds that advances to the rural industries have increased. The figure in 1949 was $2 14m. Today it is $939m.

This is a very big increase. In what sector of the rural industry do we see these increases? These figures exclude term losses from the trading banks which at present total S725m. We find that in 1961 the figure was S220m for the grazing industries, chiefly the wool industry. Today it has increased to $327m - a 50% increase in 8 years.

Wheat is in an even worse position. It has gone from $36m to $94m or an increase of 250%. Dairying has gone from $83 m to $102m, which is not a great deal of difference. The combination of other rural industries has gone from SI 10m to $22 1 m. If we look at primary producers throughout Australia we find that the average advance is in the vicinity of $8,000. If we are mindful of the fact that there are many primary producers with a small advance or, in many cases, none at all this means that many of them have borrowed a substantial figure. Of course, it is no good for these people to continue to borrow if they cannot service that particular debt. During the same period rural deposits have remained static so it cannot be said that because of inflation one borrows more, one has more and one finishes up with more. That is not the case at all. ft is a case of the deposits remaining static.

Many of the wheat and wool industry people are heading for a very rough time, lt is true that they have certain advantages. They have a privileged rate of interest ranging from 6% to 71%. Unfortunately, in the past I believe that this low interest rate has had a tendency to create a form of cheap money and as such this has tended to encourage people to chase land and other items which, of course, over a period has increased the price. Low interest rates have been partly responsible for increasing land values, but I am not suggesting that we should increase these rates because this would mean that people would be paying a high rate of interest on a highly valued piece of country, but I believe we should follow this thing through by perhaps reducing the interest rates even further until these people find themselves out of difficulty even if it means that we have to go to the Treasury to do so. Overdrafts are increasing and whilst they are increasing so will the costs of the primary pro- 10722/70- R-Pl ducer rise, particularly when we see in some instances an increase in costs of up to 3% in a year.

Wool prices are equal to 1949 levels. Wheat prices are even worse. In the 1947- 48 season the average return to the wheat grower less freight was $1.43 a bushel. The last year for which figures have been made available - that is the last year for which the pools have been finalised - was 1964-65 in which we saw a price of 134.9c a bushel, less freight. The estimate for the present pools that have not been finalised, will be well and truly under that figure - a very grim picture. Added to this grim picture is the fact that we are in a time when growers cannot dispose of their surplus wheat and some form of restrictions have had to be introduced. As the Minister for Primary Industry (Mr Anthony) has repeatedly mentioned in this House and in numerous places outside these restrictions were applied at the instigation of the Australian Wheatgrowers Federation and were supported by the States. But the Opposition is trying to sheet the blame for these restrictions on the Minister for Primary Industry and it has succeeded politically. The Minister is the bogyman as far as honourable members opposite are concerned. They have convinced a lot of people that this is the situation whereas in actual fact it is not.

I believe the primary industries are facing a tough time. I can bear out this statement. If we look at the taxation returns of primary producers we find that the mean income of primary producers in the 20 years from 1947 to 1967 has increased by only 50% and I venture to say that in the next 2 years or so it certainly will not be anything like 50% more than the 1947 figures. Why is this? It is, of course, because of the lack of demand from abroad for our primary products and the substantial increase in costs at home. According to a lot of people the Government has done nothing. I cannot go along with that claim. Since it came to office in 1949 this Government has contributed tremendously to the growth of our primary industries. The real question is: Is this contribution enough? If we listen to some people the answer is yes and if we listen to others the answer is no. I believe that the real answer is somewhere between those answers. I might add that that is not a political answer. But I believe, as do many other people, that further assistance could be given to primary producers, but only after negotiations with the industry concerned. The Opposition will, of course, promise the world but we must remember that it will be on its conditions and not those of the primary producers. As a member of Parliament and a member of a Party which believes in free enterprise 1 will not tell the industry what is good for it. We will make suggestions at appropriate times but it is still up to the industry itself to decide how it will handle its commodities from time to time.

During recent times the Opposition has put forward all sorts of suggestions to deal with the wheat problem and I suppose it would be fair to say that very few of the suggestions put forward would be workable. There are certainly differences of opinion amongst members of the Opposition. In fact, they are numerous. I recall that last year a Labor candidate in a wheat growing electorate in Victoria had a completely different opinion to the one held by a front bench member of the present Opposition, namely the honourable member for Dawson (Dr Patterson). These people do not even seem to get together with their ideas. A few moments ago I mentioned Mr Hawke. He, of course, believes in a shorter working week and in higher wages. He has confessed that he believes that the small primary producer is uneconomic and must go. If he gets his way these are the sort of things which will not help primary producers. I am sure he would have the support of many members of the Opposition here today.

Let me quickly enumerate some of the things the Commonwealth Government has done to help the primary producer. It has provided a depreciation investment allowance of 40% in the first year and 120% over 5 years. It also proposes to reduce estate duty by up to 50% for primary producers. A Bill covering this will be brought down shortly. Another proposal is the averaging of incomes over a 5 year period up to an amount of $16,000. In addition there are concessions on forced sales of stock in times of adversity. While on the subject of income tax, I hope that the Treasurer (Mr Bury) will take a very close look at the suggestion I have put forward to him in relation to paying income tax on what we call over-quota wheat that is not acceptable to the Australian Wheat Board. Following this case through one finds that it is possible, unless something is done about it, for a primary producer actually to be paying this year income tax on wheat that he cannot sell - it has no value at all - and, of course, next year be will find himself in a position where he will not be paying any tax at all.

There is no need for me to talk about the superphosphate bounty because its importance is well known to primary producers. The tractor bounty and the research programmes are other forms of assistance to primary producers. Let us look at wheat stabilisation. Since 1961 the Commonwealth has paid out $155m as a result of an agreement with the wheat industry. We recognise that in the early stages of wheat stabilisation the growers contributed not less than $200m to the wheat consumers in Australia. This was at a time when the price was high. We do not hear very much about that today. Of course, when that $200m was made available by the wheat growers it had a different value from what it has today; no doubt it would have been equivalent to $500m or $600m today. Under the present plan and in present conditions of wheat selling it is possible that in this year alone the Commonwealth contribution will be as much as S40m.

Then there is the Commonwealth contribution for devaluation compensation, wool promotion research, dairying and so on. These are some of the matters in respect of which I believe we must give credit to the Government. I remind the House that during the regime of the present Minister for Primary Industry more money has been paid out to rural industries than under any previous Minister for Primary Industry during a similar period. This is a great tribute to the present Minister. I thank him for what he has done for primary industry. I have complimented him on numerous occasions and I believe that when the history of this crisis is written he will stand high in the minds of the people. I believe also that State governments could make a contribution to assist in some of the areas that I have mentioned tonight. They have a responsibility for railway freights, decentralisation and things of this sort. The Commonwealth Government can help in other ways.

There is ample room within the PostmasterGeneral's Department for help in solving some of our rural problems. This idea of asking an individual subscriber to pay as much as $2,000 in order to continue his telephone service in some areas is just not acceptable. It is ridiculous to think that people must put up with that sort of thing. Then there is the unfair cost of trunkline calls between centres. Numerous people in Australia today have to make a trunkline call to their local or nearest business centre. This is a very high penalty that they must pay for living in remote areas.

I could not resume my seat without making a very brief mention of the wool industry. This is another industry which is in a desperate situation. Many graziers have paid high prices for land, stock and machinery. Their rates of all types are high because of high land values. Their normal operating expenses are high because of the increased cost of living. Yet at a time when all these costs are increasing we find that the price of wool has now reached the level of 1949 values - a very low price indeed. We cannot blame the Government for any of this because we have a free auction system and countries throughout the world can send their representatives here to bid for the wool as they wish. On two occasions the Government has advanced a proposition for the Australian wool growers, but on each occasion it has been rejected by referendum.

Recently the Government has assented to a proposal known as the cost compensation scheme which, it appears, will go the same way as the other two propositions went. On a number of occasions 1 have been asked what the Government intends to do about this, but I believe that the fundamental rule applying to most industries is based on orderly marketing with grower control. This is the fundamental principle and it is one that the Opposition at present seems completely to overlook. The growers want to have control of their own industry. Some years ago we thought the answer to all our problems would be solved by the establishment of the Australian Wool Industry Conference, the members of which were appointed by two grower organisations and finally by a third organisation. We thought that through this body a group of people would for the first lime be able to speak for the industry. Unfortunately, this was not the case. People are starting to lose confidence in that body, for a number of reasons. Possibly it will be found that the biggest percentage of growers has the smallest voice. Many growers are now asking that appointments to the AWIC be made by referendum so that the individual growers will have a voice on the Conference.

I propose now to repeat what I said earlier about primary industries. We have a free enterprise government and we must be prepared to accept the wishes of people in the primary industries rather than dictate to them. Often government dictation would appear to be palatable, but in the long term it could mean the total socialisation of the industry if we had a change of government and direction from the government. I conclude by saying that the objective should be for the industries to aim at unity among themselves through their organisations. They should present a united front and have the backing of their leaders. If they are wrong it is up to the individual's to correct the situation. The industry can then put forward a sound argument and a justified case. Subsidies are a short term answer; certainly they are not a long term answer.

Mr DEPUTY SPEAKER (Mr Cope)Order!The honourable member's time has expired. I call the honourable member for Scullin and remind the House that this is the honourable member's maiden speech.

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