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Thursday, 4 June 1970

Mr ANTHONY (Richmond) (Minister for Primary Industry) - If the principle of wind sorting chaff from grain applies, we have certainly seen it in the last 5 minutes where the chaff is on that side of the House and the grain is on this side. We have bad a wide ranging debate this afternoon and tonight on 2 minor amendments to the Wheat Industry Stabilisation Bill. I recall that when there was a really important Bill before this House 2- years ago which was to re-introduce the wheat industry stabilisation scheme for a further 5 years and introduce new principles - it was quite a momentous Bill for the Australian wheat industry - we had only one speaker from the Opposition. Today because there are great difficulties in the wheat industry and great strains and stresses on all those involved with il. the Australian Labor Party now thinks it had better get on the band wagon and start expressing a point of view. That is about all I can say for it. lt is a point of view hut certainly nothing very constructive has come out of it.

At the beginning I would like to also extend my congratulations to the honourable member for Warringah (Mr MacKellar) who took the opportunity to make this Bill the occasion for his maiden speech. It was a very good speech. It was well prepared and deeply considered. I appreciated the fact that although the honourable member comes from a metropolitan seat and did noi have to get involved in wheat industry affairs he decided to apply his mind to the subject and I thought he made a very constructive speech. I look forward to him adding to the debates on the wheat industry problems in this House.

The wheat industry is going through an extremely distressing period - a period of production surplus to what we can dispose of. It is a problem that is not unique to Australia. This problem is facing all the major grain producing countries. It is a problem that has been brought on because of improved technology and better management of wheat and other grain production in the world.

It is easy for people to come in now, in some cases with hindsight, and try to be wise and criticise what people might have done. I certainly receive my share of criticism but it is my lot to have to try to do what I can. But I do not mind criticism. I think one of the elements of democracy is that everyone has to be criticised. But I find it rather unfortunate when criticism is levelled at the men in the wheat industry who have battled to try to find answers to their problems. The most fortunate thing that every wheat grower in this country can say is that he belongs to an industry which is well organised and well united. The wheat industry has leaders of capacity who are prepared to get out and give leadership although in many cases this is most unpalatable and most unpleasant for them to have to do. But just at this time of crisis the wheat industry has been able to produce men of great substance to give this sort of leadership. I sometimes feel very sad that the wool industry is not as united as the wheat industry in the moments of crisis that it is going through at the moment. If there had not been the co-operation of the Australian wheat industry we would never have been able to introduce a new stabilisation scheme and we would never have been able to introduce some form of discipline over production. If we have a disunited industry, industry divided by States there would be little likelihood of getting the support of the 6 State governments which is absolutely vital if we are to have a stabilisation scheme or some form of quota deliveries. We could not even maintain an Australian wheat board without the unanimous co-operation of the State governments. But if the industry is divided the States will go with those sections of the industry which express a point of view. So I say that it is to the great credit of the wheat industry that it has been able to come to terms with itself and resolve issues which are extremely difficult because circumstances vary from State to State; and in coming to a compromise solution it means that wheat industry leaders and sections of the wheat industry have to recognise the problems of each other. I take this opportunity of paying my tribute-

Mr Daly - There is not a Liberal in the House.

Mr ANTHONY - I wish the honourable member would not interrupt me when I am talking about the Australian Wheat Board. I am not delving into Labor Party politics. The honourable member can save that for afterwards. I want to take this opportunity of paying a tribute to the Australian Wheatgrowers Federation and the Australian Wheat Board which have done a magnificent management job in helping to organise the supplies and the sales of Australian wheat overseas. There is no wheat organisation in the world that can compare with the Australian Wheat Board for its orderly method of management and disposal of wheat. It is keeping up to date with the latest facilities for handling and disposing of wheat.

I mentioned earlier that there has to be co-operation within the industry and between States if we are to achieve any sort of national marketing body or national stabilisation scheme. I recall 2 years ago when I had the responsibility of negotiating a new stabilisation scheme. It fell at a time when the formula which had been used for determining the cost of production produced a rather distorted figure, which put undue burdens on the consumer and on the Commonwealth Government to meet the guaranteed part which is exported. It was distorted mainly because of the rapid increase in land values during the survey period. In the course of negotiations - we had to abandon the old cost of production formula - the price for the guarantee was reduced by 22c which naturally caused a lot of concern for sections of the Australian wheat industry.

The greatest concern and opposition were: expressed by those in Victoria who felt that the Commonwealth Government was acting rather meanly and unreasonably. I went there and explained that the basis of our guaranteed price was determined on the new International Grains Arrangement price which offered a guarantee of about SI. 40 per bushel. This imposed only a slight obligation on the Commonwealth Government in the first \ ear but as costs went up in this country the burden would increase. In the first year of the stabilisation scheme, as then proposed, and on the figures on which we were calculating, it would impose a burden of S2m and the total obligation during the 5-year period would be $68m Of course, the International Grains Arrangement prices have not held. They have declined and for the first year of the new stabilisation scheme the Commonwealth will have to find no' S2m but over S30m. The contingent liability as we see it if the present pries continues for the 5-year period will he SI 70m as against an initial commitment of S68m. If the price should deteriorate lower than the eve rage price for this season then the comitment will hecome even greater. Surely nobody san say that the Commonwealth has been unreasonable or niggardly in i s approach to helping stabilise the returns and in giving a .secure return to producers in this country.

Fortunately the Victorian Government accepted the stabilisation proposals and Bills could be introduced into this Parliament and Stale parliaments to ensure a continuation of it. Following the negotiation of the stabilisation scheme it became perfectly obvious thai we were heading for a major crisis because we were producing more than wc could dispose of and putting an abnormal strain on our storage facilities. Carrying larger stocks meant a greater burden was being placed on the industry through storage costs and interest charges. So the industry again of its own volition, recognising the danger signals, came forward wilh a quota delivery scheme, lt was a scheme in which the growers asked the Commonwealth to underwrite the determined amount which they suggested should be delivered for that season - thai was 357 million bushels - requiring a Commonwealth guarantee to the Rural Credits Department of the Reserve Bank of $440m in the first year. The Commonwealth accepted it in total; there was no equivocation whatsoever. But it accepted it on the condition that the scheme would work and to make the scheme work would need the support of the wheat industry organisations throughout Austra.ia and the support of all State governments, they having the responsibility of implementing the quota scheme. The Commonwealth had no jurisdiction in this field whatsoever. The Constitution does no: give the Commonwealth any power in this area and it remains one of the sovereign rights of the States to control production and to determine prices.

Within a period of 6 weeks we had the acceptance of the entire industry, all State governments and the Commonwealth Government, to the largest orderly marketing arrangement that this country had ever seen, which imposed a discipline on wheat growers right across the country. Nobody likes a discipline, lt means that a ce, lain amount of hardship or lowering of incomes affects everybody. But the industry faced up to it. particularly the leaders who went out and sold the story to the industry, attending meeting after meeting, being lampooned, bashed and criticise.!. They kept diligently at their job. realising the importance of having the arrangement accepted because without it there would have been ultimately absolute chaos and ruin in the industry. These men accepted the calf. They had the dedication and sense of responsibility to see that this just had ;o be done and they took action and did it. That is why I do not accept anybody criticising them.

They did an outstanding job. There may be small areas of criticism; nothing is ever perfect in this world. One can always be wiser with a little hindsight and experience in matters. Surely, there will bc anomalies and distortions in a quota delivery scheme which endeavours to determine a just and fair apportionment lo growers, lt is almost an impossible task, but the industry laid down a formula as to how it should he done and the Slate governments generally accepted the formula of each industry organisation in the various States. With the first year's experience I hope they can overcome these difficulties but one can have no wide ranging principle because the circumstances of every individual vary so much. There can be 2 people with small production whose economic circumstances are completely different. One might have diversified farming interests of which wheat might only be a small part. He could have cattle or sheep producing a major part of his income. Of course, production efficiency varies very much from area to area in Australia. Some areas are high yielding while others are low yielding. In many parts of Australia seasonal circumstances vary enormously and we have to take a production average over years to determine what a grower's quota is. To take it on a previous set period does not necessarily produce a just calculation. These are difficulties that must be accepted and we must try to iron them out.

It is all right for people to get on an emotional issue and say that not enough is being done for the small man or the traditional wheat grower. The whole object of this exercise was to try to protect the small man, to try to protect the traditional wheat grower, the man who year in and year out over decades has been nothing more than a wheat grower. There are areas in Australia such as the Mallee and Wimmera districts and parts of Western Australia where farmers do nothing else but grow wheat. They have not the opportunity to diversify into other types of production and that is why we say the traditional grower needs a degree of protection.

Certainly the small man needs protection. If economic forces are permitted to run wild only the strong will survive and the small men many of whom are traditional producers will be crushed out of business. These are the people we are trying to protect. I believe we can now see daylight in our wheat situation which seemed almost hopeless 12 months ago. With the restraints that are now being applied in other major wheat producing countries such as Canada and the United States of America the calculations are that in 2 years time we will see the world's stockpiles being reduced. I am optimistic enough to believe we will not need much more cut back of Australia's present quota. If we can continue to sell the quantity of wheat the Wheat Board is expected to sell this season I think we can stabilise on a good sound industry in this country. The industry is important to this country because it earns export income but especially because it has decentralising features and provides income for many rural centres of Australia.

I mentioned that the Commonwealth had an obligation to provide S440m in the first year. This has meant an advance of $1.18 to the wheat industry, the additional 8c being for Wheat Board charges. This year the quota was reviewed again in the light of stock holding and in the light of our market potential. The Wheat Board decided that the quota figure ought to be 318 million bushels, requiring a Commonwealth guarantee of $407m. We again guaranteed that amount but we guaranteed it against the background that there was still an outstanding debt from the previous season of $250m. Special legislation had to be brought into this House last season to allow carryon finance to the central bank so that the wheat industry could continue to get this advance money. But the $407m that we are offering for the next season is an advance of $1.28 a bushel. In this case 18c goes towards the Wheat Board's management expenses. The 10c increase is mainly brought about because of the interest charges on that wheat and the high cost of storing and handling it and keeping it free from rodents and insects. So people who think that this Government has not been sympathetic and understanding to the problems of the wheat industry should look at the financial implications for the Commonwealth to understand clearly the contribution that we have made.

There has been some mention here today of black market wheat. That is the common name given to wheat which is being traded across borders under the protection of section 92. Wheat sold within a State is completely illegal and action can be taken and will be taken by the Australian Wheat Board against anybody who does this. I cannot help replying to the honourable member for Riverina (Mr Grassby) who keeps harping on this subject and claiming that extravagant amounts are being traded across borders. He quoted figures of 30 million to 50 million bushels. In answer to a question asked by him or one of his colleagues in this House, I said that the domestic consumption of stock feed wheat ranged between 16 million and 28 million bushels. I was not quite right in those figures. Actually, 16 million bushels is the average; it ranges from 9 million to 28 million. But never did I suggest that 28 million bushels of wheat was likely to be traded across the border. I said that his figures were stupid, and 1 still say they are stupid. The facts are tha: last year before »c introduced the quota scheme there were approximate!} 9.7 million bushels of wheat sold through the Wheal Board for stock feed purposes. This was before there was the great temptation to dispose of overquota wheat by selling il across the border. This year for the first 5} months the Wheat' Board is only 400.000 bushels behind the amount il sold the previous year, and it ex per ti within this 12-month period to sell between 8 million and 9 million bushels. The actual sales of wheat to millers this year are up on last year. So anybody who says thai the trading across the border, unprincipled as i: is. i.s ruining our stabilisation scheme is not facing the facts. lt is easy for the honourable member for Riverina to keep saying that there should be a payment on over-quota wheat, but he says this against the wishes of the Australian Wheatgrowers Federation which has firmly laid down the principle that there should be no payment on over-quota wheat. lt is quite elementary if a payment is made i: sabotages the whole objective of the quota scheme. The second point I would like to make is that what the honourable member for Riverina said, and I really find it difficult to understand why he said it, is also against the principles of the Australian Labor Party which were enunciated bv the honourable member for Dawson (Dr Patterson). I do not know why he wants to continue harping on this subject. He is opposing and defying his own Party's principles, and he is treating the Australian Wheatgrowers Federation with contempt.

The Australian Labor Party has moved an amentment, and I would like to speak to it for a few moments. The amendment is as follows: the Bill be withdrawn and redrafted to provide for a one-price scheme for home consumption and export wheat, being a price which will return to the grower SI. 48 f.o.r. per bushel which is equivalent to a guaranteed price nf $1.51} f.o.b. per bushel for exports up to a maximum of 200 million bushels . . .

I believe this amendment is similar to the amendment which was introduced by the honourable member for Dawson at the time of the debate on the wheat stabilisation scheme. So my argument against this amendment will be much the same as .fiat which applied at the time of that discussion. The first thing I want to say i.s (hat this amendment is contrary to what the wheat industry has put up to the Government, lt again shows that the Labor Party is saying to the wheat industry that it knows how to manage its affairs better than the members of the industry do. What this really means i.s that there will be a much heavier obligation on the Commonwealth Treasury to provide money and a lessee obligation on the consumer. Il has been one of the principles of stabilisation schemes in Australia that the consumer of Australian goods should pay a higher price or at least a price hearing a relationship to the domestic cost. We have a butter stabilisation scheme. We have a sugar industry stabilisation scheme. Without the high domestic price contained in the dairy industry for butter and cheese, or in the sugar industry for sugar sold here, they would be absolutely disastrous, lt is the money received from the high domestic prices that really supports these industries.

In the dairy industry there is an enormous taxpayer contribution through the Treasury, bill (here is also a very large consumer contribution. What we have done in this stabilisation scheme is to make the consumer pay a small amount. The amount is insignificant as far as the consumer is concerned. The price was raised as against the previous stabilisation scheme by 54 c. That is an increase of .2 cents on a 2 lb loaf of bread. The price would have to he increased by 33c lo make a lc difference on a loaf of bread. Reducing the price would mean that the wheat industry would get S8.5m per annum less or S42.5ni less over a 5-year period, lt means that the taxpayer's contribution will go up by S(>5m over the 5-year period and the taxpayers will be obliged lo pay §240m in this 5- year period instead of SI 75m. So is there any reason for the Opposition's complaint as to the obligation on the Treasury to pay these funds, or is it just hoping and expecting a rebellion from the taxpayers of Australia against increasing contributions to the wheat industry? I am afraid that I have to reject the Opposition's amendment because it is against the wishes of the industry and it would place an extra strain on the Australian Treasury.

Question put:

That the words proposed to be omitted (Dr Patterson's amendment) stand part of the question.

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