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Tuesday, 11 December 1973
Page: 2636

Senator LAUCKE (South Australia) -The Sales Tax (Exemptions and Classifications) Bill (No. 2) 1973 removes the exemption of sales tax on aerated waters which contain at least 5 per cent of pure fruit juice. The Bill was debated previously on 22 November. On that occasion I pointed out that the Coombs task force which was appointed by the Prime Minister (Mr Whitlam) to review the continuing expenditure policies of the previous Government recommended, with the antipathy typical of it to rural industry, that that assistance which has been very important to the fruit-growing industries be removed. At that time we expressed concern at the cavalier treatment of possibly the most deserving of rural industries, bearing in mind the difficult times through which the fruit-growing industries have passed. Other sections of rural industry have had the benefit of greatly increased prices on overseas markets, but the fruit industries have suffered depressed prices and they have suffered enormously through the effects of revaluation, in relation to which reasonable consideration had to be given to the industry. Without that consideration the industry would have been in quite a hopeless position.

I notice that it is conceded in the Coombs task force report that harm could be done to the industry by the abolition of the sales tax exemption. The report states:

There is little doubt that withdrawal of the exemption would have a marked effect on the incomes of apple growers, especially in the face of current adverse market conditions for Australian apples in the Common Market countries. The effect on citrus growers is difficult to measure but it is likely that there would be some falling off in the demand for citrus juice.

There we have an admission that harm could be occasioned to the industry were the recommendation of the task force to be acted upon. Nevertheless we have before us legislation which provides for the abolition of the sales tax exemption. When this Bill was before us previously I moved an amendment to the motion 'That the Bill be now read a second time ' in these terms:

Leave out all words after 'That', insert- the Bill be deferred until the Government reports to the Senate on the action it proposes to take on:

(a)   currency revaluation compensation for the sectors of the fruit growing industry affected by the withdrawal of the exemption;

(b)   compensation for unsalable fruit juice derivatives on hand and the losses due to assets becoming redundant as a result of the Governments decision; and

(c)   assistance for promotion and research into alternative markets for juices'.

This amendment was carried, which meant that the Bill was not read a second time but was deferred pending a report to the Senate by the

Government. This report was given to us last week. The very important thing about it is that it makes reference to $5m being made available to the growing and the processing sectors of the industry in the form of adjustment assistance. The report states that funds will be made available to fruit processors, where cases can be substantiated, to facilitate any adjustments needed as a result of the abolition of the exemption from sales tax for carbonated soft drinks containing not less than 5 per cent of Australian fruit juice. Throughout the report we have explanations of the situation, and some of these explanations are a little ambiguous and difficult to follow. For instance, on page 2 of the report it is stated:

In the two main apple exporting States, Tasmania and Western Australia, which have in the past accounted between them for over 85 per cent of Australia's annual apple exports, 1,416 growers (i.e. over 97 per cent of those eligible in these States) have been paid a total of $1,275,176 in post-revaluation adjustment assistance up to 30 November 1973.

A small amount of this sum would have been paid in respect of pear exports and of canning fruit, since the assistance scheme applies also to deliveries of canning fruit (apricots, peaches and pears).

In other States many growers involved in the apple and pear export trade also grow canning fruit and the isolation of figures relating solely to apples is difficult.

However, 85 per cent of growers eligible under either or both aspects of the scheme in States other than Tasmania and Western Australia have been paid a total of $1,402,950 up to 30 November 1973.

I want to know whether these 2 figures of $ 1.4m and $1.2m are separate and distinct or whether they have some inter-relationship. This is not very clear to me. I would like to know to what extent revaluation compensation payments to date have actually reflected the changes in currency alignments. Does the $5m now to be allotted cover completely revaluation deficiencies arising to those growers who export .the fruit? I want to know whether they are covered completely? We want to know in pretty close detailactually, I would like an undertaking from the Minister on this point- whether the full amount of $5m will be actually expended or whether it is just to be a $5m kitty from which certain payments can be made? I ask the Minister whether the full $5m is to be paid in the form of compensation for revaluations. Can he indicate whether, if the revaluation factor is covered and some money remains, the remaining money in the balance of the account will be applied to the promotion of sales overseas and within Australia? I would like a clear assurance from the Minister on these matters.

Having said that, I state that we are prepared to accept the offer of the Government. I regard this as a very important determination in regard to the fruit growing industry. The concern we felt in November we still feel today. We are happy that the Government has seen fit to come forward with this offer. Now we want to know just where the money will be applied and whether the amount in toto, and not just pan of it, will be applied to the industry in meeting a situation in which the industry feels, and is entitled to feel, that it should receive assistance. We support the motion for the second reading of this Bill.

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