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Tuesday, 9 November 1976
Page: 2467


Mr CARIGE (Capricornia) -Along with the honourable member for Angas (Mr Giles) I feel quite proud in supporting this Bill. This Bill makes available an additional $ 15m to match the State funds approved for carry on beef loans for 1976-77. The Commonwealth commitment to 30 June 1976 under the existing scheme was some $ 12.3m out of the $ 19.6m prescribed in the principal Act. Hence this Bill provides for a total Commonwealth outlay of some $27.3m from the inception of the scheme. I was slightly amazed to sit here and listen to the honourable member for Fraser (Mr Fry) -


Mr James - You were enlightened.


Mr CARIGE -I certainly was enlightened. I was enlightened by the ignorance of the honourable member for Fraser. He argued against himself. He admitted quite frankly that the beef industry was in a serious plight and then questioned why beef producers ought to be allowed to borrow money at a low interest rate. He said virtually that there was a rip off by the beef producers. I am led to believe that the honourable member has once or twice walked out to Queanbeyan and seen a dairy cow. I assure him that a dairy cow looks similar to a beef cow but really and truly they do not perform the same functions.

The honourable member for Fraser once again was terribly critical when describing viability. I would like to know his definition of viability. I am quite sure that it is entirely different from the average producer's definition of viability. He also went on to talk about the great rip offs by the meatworks and the processors and about them living off their fat. If the honourable member for Fraser thinks that the packing houses and processors are making such an exorbitant profit, why the devil does he not buy some of their shares? He would then understand how much capital these people have involved and therefore the interest rates they are making. He spoke at great length about the picnic being over. The primary producers in my electorate would be highly amused to think that they had even engaged in having a picnic for a long time. I will talk about that a little later. The honourable member went to great pains to explain how the Labor Party, had it still been in power, would have had a minimum price scheme. The worst price that the beef industry has had for many years that I can recall occurred while the Labor Party was in power. Why should the honourable member be hypocritical and stand up and condemn our Government for not introducing a minimum price scheme when his Party had the power to do so? His Party said that it had all the expertise and brains on its side. It even told the people in 1975 that it was the intelligentsia of Australia.

I am sure the House was very interested to hear the honourable member for Blaxland (Mr Keating). I will say a little more about his remarks later. In the meantime I draw the attention of the House to the speech made by the honourable member for Riverina (Mr Sullivan) in this House last Thursday evening. I support many aspects of his speech. In doing so I am duty bound to say that the honourable member gained the support of many primary producers not only in his own electorate but also in the balance of Australia. I am sure that in his speech there was a message of which all parliamentarians should take note. As I said, I am sure the House was interested to hear the speech of the honourable member for Blaxland. He once again showed the complete lack of understanding that the Opposition has for Australia's rural industries, a fact that will remain in the memory of all people in Australia's rural areas who suffered in desperation during Labor's 3 years in power. Actually one can describe that power as havoc, I think.

The honourable member for Blaxland was the Minister for Northern Australia for a record period of 3 weeks during Labor's twilight days. At least, I suppose, he was one Labor Minister whom we cannot blame for doing much damage. He was not there very long. Presumably he was appointed to that position because of some expertise in the unique problems of northern Australia.


Mr Millar - He went west.


Mr CARIGE - As the honourable member for Wide Bay says 'he went west'. I was thinking of the honourable member for Wide Bay when the honourable member for Fraser was speaking. I thought that as the member for Fraser maybe he would like to go up and take over Fraser Island. There are wild horses up there and the honourable member's education might be furthered in that regard. If the honourable member for Blaxland had some expertise in northern Australia it is strange that he never demonstrated that expertise here today. His ignorance of the beef industry is abysmal. No sector of the economy has been harder hit by inflation than the rural sector. No rural industry has been harder hit than the beef industry. Nowhere is this problem more acute than in my electorate.

Whilst I am dealing with my electorate, it is relevant that the honourable member for Angas spoke at great length about the plight of the

Brigalow settlers. I was very interested to see the expression on the faces of honourable members opposite. I am sure that quite a few of the honourable members opposite are not aware of what the Brigalow scheme is all about and how depressed that area is. It is in my electorate, as in the rest of Australia, that cattlemen suffer as a legacy of Labor's economic mismanagement. It is almost impossible for cattle producers to be squeezed any further. On the one hand, they are faced with costs of ridiculous proportions. Unfortunately, they cannot pass on these costs to the consumer because they have no control over their markets. They have been forced into personal indebtedness and in many cases they are leaving the land. They earn their livelihood now mainly by working on roads or upon other public works so that they can feed and clothe their families. These are the very same people about whom the honourable member for Fraser was talking as having a picnic. The position will remain until this Government can rectify Labor's economic disaster.

I have mentioned that on the one hand the producers are faced with high costs. On the other hand, they have been faced with depressed overseas markets. The honourable member for Angas highlighted some of the new markets that our Government and the Minister for Primary Industry have gone out to establish. The previous Labor Government must accept a lot of the blame for these depressed markets, our traditional beef markets. The Labor Party's foreign policy antagonised the great nations of the world. It abandoned our traditional trading partners during those 3 dark years and our trading partners very soon abandoned us. Our Government is now working to right the wrongs and to re-establish our markets. Therefore I commend this Bill because it will provide low interest carry-on finance to beef specialists. Whether or not the honourable member for Fraser agrees with that action, we intend to carry it out. With a sound asset structure these beef producers would be viable, given the return to more normal beef marketing conditions. They will be able to avail themselves of this money at an interest rate of 4 per cent. The honourable member for Fraser also questioned whether they ought to be allowed to borrow this money at 4 per cent. I personally think that a 4 per cent interest rate is far too high for them. I am pleased that this Bill recognises the special problems of beef producers in Queensland and more especially in my electorate. As outlined by the Minister, up to 2 years carry-on finance will be available with a loan limit of $ 1 5,000 a year. This applies all over

Queensland. In Queensland we are by our very nature exporters of beef.


Mr Braithwaite - Good people too.


Mr CARIGE -They are excellent people in Queensland. Their qualities are surpassed only by the qualities of the honourable member for Dawson. This eligibility to obtain funds of up to $15,000 under the current Act applies only to Queensland and the Northern Territory. But now this has been extended to all eligible producers in a pastoral zone or on pastoral or similar leases throughout Australia. In other areas the existing loan limit of $10,000 a year will apply. The Government has kept faith with the beef producers, contrary to what honourable memers opposite were saying earlier. The estimated cost of the Commonwealth contribution under this scheme will be $ 15m. The Commonwealth's commitment to 30 June 1976 was $ 12.3m. This Bill provides for a total outlay of $27.3m from the inception of the scheme. So nobody can or should say that our Government is not mindful of the plight of our beef producers.

I would also like to sound here a word of caution to all honourable members. Our beef producers are almost at the end of their tether and their problem has been compounded further by the ever-increasing interest rates that apply to the rural sector today. Only a few years ago primary producers could and did borrow money from their agricultural banks at an interest rate of about 4e per cent. But today that rate is in excess of 9 per cent and in some cases it is up to 1 1 per cent. If the producer is forced to go to private lending sources, the interest rate is often far in excess of 14 per cent. It is these interest rates that are forcing people further into the mire. I wish that the honourable member for Fraser was present in the chamber. He was condemning the Government for making money available at an interest rate of 4 per cent. The honourable member ought to keep it firmly in his mind that it is the high interest rates as well as the depressed markets that are virtually forcing our producers to the wall. Unless there is some relief in this area, one can expect to see more of our producers go to the wall because they have little or no hope of servicing their debts given the current depressed beef prices.

The export value of this industry surely indicates clearly how valuable it is to the economy of Australia. An examination of the position only up to the end of October in this calendar year shows that some 483 571 tonnes of beef and veal were exported out of total exports of all meats amounting to 695 529 tonnes. So beef is the predominant export in this field. For the financial year 1975-76 beef and veal earned $487,784,000 out of a total export earning of $653,460,000 for all meats exported. This surely indicates how valuable this industry is. If we look at the amount of subsidies that apply to the total rural sector we find that it is some $61 m, while the manufacturing industry receives a direct subsidy of $ 159m. If we take the figures of the honourable member for Wakefield (Mr Kelly) of subsidies equivalent to tariffs, we come up with the enormous figure of $3,900m. Surely this shows the very poor recognition given to the value of our rural sector. Our Government has gone a long way towards recognising its value. The Minister, the Government members rural committee and honourable members on this side of the House all recognise its value. It is a shame that honourable members opposite- strangely enough, there are only two in the House -


Mr Keith Johnson (BURKE, VICTORIA) - You are not on the Government benches.


Mr CARIGE - Yes we are. Who does the honourable member think we represent if we do not represent the Government? This is the reason for this Bill being introduced to provide low interest finance to our beef specialists. One should not overlook the other issues that have been implemented by our Government in the area of tuberculosis and brucellosis eradication. The Government has adopted the Industries Assistance Commission's recommendation. The scheme has been continued since January 1976. Our Government decided to liberalise the basis for compensation payments after 1 July 1976. The Government decided also to accept the IAC recommendation, namely, that a brucellosis slaughter compensation scheme be introduced from July this year. The scheme will operate under a joint Commonwealth-State program and owners are compensated for animals slaughtered following a positive reaction to a bovine tuberculosis test. An amount of $6.5m has been allocated for compensation payments during the year 1976-77. In the area of meat export inspection charges, our Government is providing $24. 7m. This is another area in which the honourable member for Blaxland was terribly critical. It is providing this amount instead of imposing an export levy on our exporters who in turn would have deducted that amount from the price paid to our beef producers. In the research and promotion area, we have provided $2.7m above the amount that will be collected by the existing slaughter levies.

There are many more areas in which this Government has made a positive move to assist our producers. It will be very interesting to hear what the honourable member for Darling (Mr FitzPatrick) has to say about how his Party would solve all the problems of the rural sector. I am very mindful of the fact that we still have a long way to go but at least we are trying to allow this industry to become viable once again. Honourable members opposite took only 18 months to wreck the industry completely. It took them a total package, I guess, of 3 years but in the last 18 months of office they really created havoc within that industry.

Having said all that, I now emphasise my concern about the proposed new control of beef exports to the United States of America. If the Australian Meat Board implements the Mackie scheme in its present form, my area and northern Queensland will be disadvantaged to the extent of a minimum of 10 000 tonnes in any one calendar year. This, in turn, would be a loss of revenue in excess of $5m. I must emphasise that this loss will be felt most in central Queensland and northern Queensland where, in the main, there are seasonal meat works. As I said earlier, this is the area that has been most affected by the beef recession. It seems most unfair that these producers should once again be penalised. In conclusion, I emphasise that this Bill has my full support and the full support of all honourable members on the Government benches. I am quite sure it also has the full support of each and every beef producer right throughout the length and breadth of this land.

Mr FitzPATRICK(Darling) (5.56)-When the honourable member for Angas (Mr Giles) was sitting on his side of the chamber and wearing his other hat, he made an attack on the honourable member for Blaxland (Mr Keating). He said that the Australian Labor Party had wrecked the beef industry. I inform the House that the rural policy committee of the Labor Party had many conferences with beef industry representatives. On nearly every occasion the recommendations brought down and the policies introduced were at the direct request of the representatives of the beef industry. I notice that later on, when the honourable member for Angas had run out of insults, he attacked the trade union movement. He got back on to what seems to be the old favourite of the trade union basher. He said that the trouble in the meat industry was caused by strikes in abattoirs. Of course this is the sort of attack we so often hear in this House. On the one hand the Government asks the trade union movement to accept a package deal. It says: 'We will give you full indexation'. On the other hand, it hands out investment allowances to big industries in the hope that we will, have an investment lead recovery. But the outcome is that the worker is getting less and less out of the wage indexation increases and the investment allowance goes to big companies to buy machinery that does away with labour.


Mr Carige - Let us talk about -


Mr FitzPATRICK - The honourable member for Angas blamed the trouble on the trade unions and I am just answering him. The honourable member for Capricornia who keeps trying to interject made so many misleading misquotations of the honourable member for Fraser (Mr Fry) that it will certainly take me till well after 6 o'clock to right the records on that point alone.

I support the States Grants (Beef Industry) Amendment Bill 1976 because it amends the States Grants (Beef Industry) Act 1975. 1 do not think that anyone could doubt that the long suffering and financially pressed beef producing industry is vitally in need of carry on finance. It is of some satisfaction to know that the Government is prepared to provide up to $ 1 5m to match on a dollar for dollar basis funds that have been approved for lending in 1976-77 by the States under the beef carry-on loans scheme. I notice that the Minister or Primary industry (Mr Sinclair), in his second reading speech, informed the House that the revised terms and conditions of the Bill closely followed the Industries Assistance Commission recommendations and that the States had indicated their general approval.

Sitting suspended from 6 to 8.5 p.m.


Mr FitzPATRICK -Prior to the suspension of the sitting, I had pointed out to the House how unjust it is for Government supporters to continue basiling trade unionists in order to cover up their own sins of omission in rural industries. I also had occasion to point out to the honourable member for Capricornia that he was continually misquoting the honourable member for Fraser. I note that the Minister for Primary Industry informed the House in his second reading speech that the revised terms and conditions of the Bill closely follow the recommendations of the Industries Assistance Commission and that the States have indicated their general agreement to providing low interest carry-on finance for specialist beef producers.

I want to express some concern for those in the beef industry outside the group that might be termed specialist beef producers. It would be extremely hard to define what the Minister had in mind when he said in his second reading speech that this low interest carry-on finance would be available to specialist beef producers whose undertakings would become viable on a return to more normal beef marketing conditions. It is extremely hard to understand exactly what he means by those words. Does he mean that a return to more normal beef marketing conditions would be when the price of beef rose by $ 10 per tonne or $20 per tonne or $100 per tonne? The Minister did not say. What assistance will be given to beef producers in the pastoral zone who do not meet these qualifications? This question vitally concerns me, whatever the qualifications are, because it is quite obvious that there will be a lot of beef producers who do not meet them.

I ask that these producers not be penalised to provide better market opportunities for other specialist producers in more favourable circumstances. Many pastoral zone producers are already facing severe liquidity problems. It is, unfortunately, very unprofitable for them to engage in what is called a 'turn-off' of cattle production. Freight charges are so high that, if they were to take the cattle to the market, the freight expenses would be higher than the prices they would receive for those cattle. This problem vitally concerns many beef producers in the isolated areas in my electorate. I am concerned that they will miss out not only on the freight subsidies but also on the carry-on finance.

It was disturbing to note that the report of the Industries Assistance Commission on short term assistance to beef cattle producers in Australia dismissed the value of freight subsidy because the extra supply of cattle to the present market would depress the prices. This solution might be acceptable for someone who is not experiencing the problem of long freight hauls to the market but it is a definite penalty for anyone who has to market cattle from isolated areas. In that regard, I ask the Government what notice was taken of footnote 14 on page 35 of that Industries Assistance Commission report, which states:

Several witnesses asked for assistance to support export abattoirs that were in financial difficulties, especially those servicing the remote pastoral areas. The Commission was not able to make a detailed study of any specific export abattoirs, and it is not prepared to recommend across-the-board assistance for them all. An assistance mechanism such as that provided by the Special Assistance to Non-Metropolitan Areas (SANMA) scheme would seem to be appropriate for assessing these needs. Currently the SANMA scheme operates only to alleviate unemployment arising from structural changes resulting from action of the Australian Government.

This is the vital point:

The Commission considers that the Australian Government should examine the possibility of prescribing export abattoirs affected by the crisis in the beef industry as qualifying for assistance under the SANMA scheme.

If the Government is right in its claim that it is quite closely following the Industries Assistance Commission's report it should give some consideration to that paragraph because people in isolated sections of the pastoral areas are missing out in more than one respect. They cannot get the freight subsidy because the LAC claims that it would result in the supply of more beef to the market and therefore cut down the price of the beef already reaching the market. In addition, they cannot get the carry-on finance because they do not come under the other provision that the Minister mentioned in his second reading speech, that is, that they would be viable when the markets return to some supposedly normal situation.

According to the Industries Assistance Commission's report, the Bureau of Agricultural Economics has indicated that there are 35 000 specialist beef producers and that just under half of them would have doubtful prospects of viability in the longer term. Because the Minister said in his second reading speech that the Bill closely follows the Industry Assistance Commission's recommendations, I ask: Is it the Government's intention to act on the recommendation on page 30 of the Commission's report? I refer to that recommendation, which states:

It is dear that more broadly based assistance proposals, which would affect the longer term efficiency of the industry, deserve closer scrutiny. Some of these longer-term issues are the subject of references currently before the Commission. However, they should be evaluated together in the context of the distinguishing characteristics of all sectors of the beef industry. For these reasons the Commission invites the Government to forward a reference on long term assistance to the beef industry.

If the Government is only picking out sections of this Industries Assistance Commission report and stating them to suit the Bills that it wants to put before the House, it appears to me that the people in the isolated areas are certainly going to miss out in more ways than one. I ask: Will some producers in the pastoral zone miss out on the freight subsidy, carry-on finance and this long term assistance as well? It seems to me that many beef producers in my electorate could be victimised if that is the case. I point out that when opposing the removal of the meat export charge the Opposition said that it was in favour of the provision of more direct financial assistance to the industry. We think that the legitimate charges of meat inspection services should be carried by the industry but that it should get some form of assistance and that that assistance should not go to other than those to whom it is intended to go. The honourable member for Blaxland (Mr Keating) has pointed out how a good deal of that assistance has already gone to the exporters and not the beef producers.

I am not claiming that every measure introduced by the Government is wrong. I am only asking for an answer to be given to some of the questions I have asked. Although there are not many specialist beef producers in my electoratethere are many beef producers but not many specialist beef producers- they are very critical of the action taken by governments of all colours and are also very critical of their representatives. Since coming to this Parliament I have seen problems occur in nearly every rural industry. There have been short term crises in one or another of our primary industries. There have been some facing severe economic problems due to over-production or sharp market reversals. I remember what happened not so long ago when record prices were prevailing for beef. Everyone thought that they would continue until the end of time. I can remember some of the supporters of the present Government criticising the Australian Labor Party because of the things it had done in the rural industry. Let us cast our minds back to the days of the wheat quotas and give-away wool prices when we had the emergency assistance for wool growers and the infamous rural reconstruction scheme under which some growers were to be given $2,000 if they were lucky- no one ever found anyone who got it- to leave the industry. That was in the time of the Liberal-National Country Party Government. Supporters of the Government tonight seemed to be blaming all of this on the Labor Party. Of course, it was a long time out of government at that time.

While all of these tilings are going on the rural industry is undergoing long term adjustment to overcome chronic over-production, with the resultant hardship facing many people in primary production. The mining industry is involved in this type of problem as well as the agricultural industry. I think it should be mentioned that apart from this there is also the added problem of disunity within the framework of rural industry due to the extraordinarily large number of farmer organisations. They are often at odds with each other as well as with the people they represent. Even when governments are introducing in this House Bills that representatives of the industry have requested one often finds that those governments are criticised for doing so.

I believe that primary industry must be better organised and must speak more with one voice.

But it must be realised to a large degree that no matter what governments do or fan to do, the markets will basically determine the prosperity of primary industry. This is one thing that everyone in the rural industry should realise. On the other hand, I think government has some responsibility to give a lead to the farmers that the marketing boards must be the most efficient available. In this respect I often get offside with some of my colleagues in the rural committee of my Party. I take the stand that it is not always of advantage to have a greater number of producers than experts on these marketing boards. I think that we should look for the best businessmen we can get for our marketing boards and not put a man on a marketing board because he is a producer, although, of course, the producers should have a greater say in who is to be elected to these marketing boards.

In addition, I think that government should make every effort to secure markets overseas and to lower world trade barriers. Production costs are also of vital concern. There is no doubt about that. Honourable members opposite have already mentioned the part that inflation plays in this respect. Anyone would be foolish not to admit that that is a major problem and one to which we have to give a fair amount of consideration. In the meantime I think the Government should introduce short term assistance, as it has set out to do in the Bill before the House.







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