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Wednesday, 16 March 1977
Page: 285

Mr DRUMMOND (Forrest) -In entering the debate on the Address-in-Reply I would like to say, firstly, that long will I remember 8 March when that gracious lady, Her Majesty the Queen, opened the second, session of the Thirtieth Parliament of Australia. She, I believe, received a wonderful reception here in Canberra, as she has done as she has moved around the continent. I feel quite sure that wherever she goes in Australia from now on she will get the same sort of reception. I thought that the Press reports that she received a mixed reception when she came to Canberra were quite misleading. When one thinks of a mixed reception one has in mind something like 50 per cent of the people not receiving the Queen graciously and perhaps 50 per cent of the people receiving her graciously. Let me tell the people of Australia that when the

Press reported that she received a mixed reception it meant that there was a tiny group of people who perhaps were not welcoming our Queen in the manner in which she should be welcomed here and as we would all like to see her welcomed.

I think I could best sum up the reaction to the Queen's visit here by referring to a small cartoon which appeared on the front page of the Australian on the day following her visit and which depicted the situation so well. The cartoon showed 2 typical Pickering figures holding signs which read 'Republic'. One of them had a very shaky smile on his face and his banner was lowered to the ground. He said to the other fellow who looked quite sternly at him: 'I think she smiled at me'. I think that our Queen, our monarch, has that ability, with one gracious smile, to produce a different reaction completely even in those who want to change to a republican system. I also compliment the Services on their splendid display. Their preciseness and brilliance on that day, I thought, were magnificent and were a credit to them. I can imagine the amount of work that went into that exercise. I say to them that I believe that it was more than worth while and I thank them for the part that they played on that day. It really was a memorable day in our lives in Canberra.

The Queen's speech outlined the Government's intentions for the future. At the beginning of her speech she said in part:

As I look back over Australia 's development since my first visit in 1 954, 1 am impressed, as you must be, by this nation 's many social, economic and cultural achievements.

Today the qualities of the Australian people, the character of Australian society and the resources of the Australian continent hold out a great promise and a great challenge.

What she said is so true. We still have opportunities available to us. We still are, without any doubt, the lucky country. The maintenance of that position is something that we have to earn. It is not our right and it is not something that we have inherited from the work and foresight of our forefathers. It is not something that we can keep for ourselves without doing the necessary work and without having the necessary dedication to achieve the greatness that this country has the riches and the resources to enable us to achieve. It does not matter how many riches we have; we have to exploit them wisely. We have to earn them.

I would like to say a few words about the Government's record over the last 15 months. Its record has been surprisingly good, considering the state in which we found the economy when we took it over 1 5 months ago. It is worth repeating today some of the economic indicators that we are enjoying. The recovery in business profitability is evidenced by the increase in the profit share as measured in the national account from 12.4 per cent in the final quarter of 1975 to 14.4 per cent in the September quarter of 1976. In the September quarter of 1 976 company profits were 39.4 per cent above those of a year earlier. That situation, of course, is essential to the revival of business confidence. National production began to grow in 1976. Between the December quarter of 1 975 and the September quarter of 1 976 there was a 7.5 per cent rise in real gross non farm product. Real growth in the non farm section is expected to be at a rate of around 4 per cent in this financial year.

Industrial production has been expanding overall in recent months. In December the ANZ Bank's index was 9 per cent above its low point in mid 1975. An increase in private consumption 4.2 per cent as an annual rate- was recorded over the first 3 quarters of 1976, despite a slight fall in real household disposable income in the 3 quarters to June 1976. Disposable incomes rose in real terms during the September quarter of 1976, revealing the effects of personal tax indexation and the new family allowances. The Opposition would say that that is not good enough. I believe that that is an indication of the steady improvement that has taken place over the 15 months that this Government has been in office.

One must recall just what the economic and political situation was like 1 5 months ago. One must recall what sort of economic trouble we were in as a result of the 3 years of mismanagement by the Labor Government. It is not easy to go back to the situation which existed prior to 1972 when we had economic growth, low inflation rates and all of those good things that were part of our economy at that stage. It is not easy, following the fairly traumatic 3 years that we have been through, just to leap back to that situation. Going back to that situation sensibly must be done steadily without dislocating the community too much and without fuelling the fires of inflation.

I would like to take this opportunity to speak briefly about the Government's decision to devalue. The devaluation decision was, as we recall, forced upon this Government for the reasons that we know about. I do not wish to canvass them at this stage. It became apparent that it was essential that devaluation should take place. It was essential because there had to be a return to balance- some type of balance and justice to different sections of the community. The situation had reached the point where our exports and rural industries and manufacturing or import competing industries were not able to survive. It gave to the manufacturing industries, certainly, and also to the rural industry the opportunity to improve their position.

For devaluation to be an effective economic weapon, a few measures have to be taken by all sections of the community. Those industries which have gained substantially- there are many of them, such as the exporting and rural industries and those manufacturing industries which have found themselves with a windfall gain because of the tariff situation- have to be careful over the next few months to make sure that we do not lose the value of devaluation.

I turn to the manufacturing industries and those other industries that are put in a more profitable position. Profits from these industries must be ploughed back into productive development or used to lower the cost to the consumer. There must not be a situation where the wage earning section of the community can quickly take up the slack of the profitability that has come about quite deliberately by devaluation. If that happens, very quickly we will be back in a 1974 situation where any productive gain was quickly swallowed up by a vast increase in wages and we found ourselves continually falling behind. I do not want to knock the wage earner. Goodness gracious, we all are wage earners. I belong to a particular section of the community. I come from a rural area of Australia. We all wish to see our lot improve as time goes by, but this can come about in Australia, mainly because we are a vast trading nation, only through increased productivity; there is no other way. There is no way we can continually try to take more out of the system than we put into it. We cannot continue to live beyond our means.

There are sections of the community that have no protection. I should like to speak briefly about the rural sector. It has been particularly hard hit over the last few years because of inflation. That has been pointed out time and time again. Anyone who has anything to do with that productive sector of our community knows that.

Mr Donald Cameron (GRIFFITH, QUEENSLAND) - And the Labor Party's anti-rural policies.

Mr DRUMMOND -Quite right. Being in general heavily dependent on export markets, primary producers for the most part have been unable to pass on the increases in their costs of production in higher prices for their products. Chiefly because of rising costs, farm income fell by $ 1 ,32 1 m or 45 per cent between 1 973-74 and 1975-76 and was predicted by the Bureau of Agricultural Economics to fall by a further $495m or 30 per cent in 1976-77. When allowance is made for the effects of inflation on the purchasing power of the dollar, farm income in 1 975- 76 was 56 per cent less than in 1 973-74 and a further fall of 36 per cent is expected for 1976- 77. The decline in primary producers' incomes would have been considerably greater if they had not cut back substantially in their expenditure on farm inputs. To a significant extent, however, these cuts have been of a type which, if continued, eventually will lead to a running down of the farm assets, a reduction of productive capacity, cuts in maintenance expenditure and fertiliser use, etc. Net farm income has been forecast to fall to around $126 a week this year- less than half what it was in 1 973-74.

Of course, a comment like that does not really show up the differences between the various rural industries. For sure, some are doing quite well, such as the grain and sugar industries. But, if they are doing quite well and we end up with an average weekly income of $ 126, how well are the lower echelons doing? How well are the people in the horticultural, apple and beef industries doing? They are receiving far below the $ 1 26 a week. It is a very poor return to the farmer for his hard day's work and for the capital he has invested in his land, plant and machinery. On the other hand, average adult male earnings have increased by more than half since 1973-74, to somewhere in the vicinity of $185 a week. The farmer's income is not indexed, as that of the trade unionist is. The last increase of 2.2 per cent awarded for the last quarter by the Conciliation and Arbitration Commission would have further worsened the imbalance between people living in the rural and urban sectors. Even with the projected increase in farm income to $143 a weekthis is after devaluation- in 1976-77 net farm income will be down on that of 1 975-76. So there is still a long way to go before the farmer once again enjoys the same standard of living as his urban counterpart.

Primary producers export about 55 per cent of their production, in terms of value, and must remain competitive against the alternative overseas suppliers. The devaluation will help the primary producer regain his competitive position. The $4,500m of export earnings from agricultural products is vital to the economy. Devaluation has given us, the whole community, an opportunity to have this country really motivated again. We should not jeopardise this in any way. The wage earners, the unions and the business people who are in a position to invest today must use this opportunity wisely and well if we are to prosper in Australia as the Queen in her Speech said we have the opportunity to do. She admired what has been done in this country since her visit in 1 954. She can see, as we all can, the opportunities that we have. I appeal to those who are out in the market place and who have the ability to influence the economic future of this nation not to be greedy about it, to take the long range look and to see that Australia does recover and prosper as it should.

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