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Friday, 16 August 1974
Page: 1095


Senator WEBSTER (Victoria) - It is possible to pressurise the waterfront for action and it is possible to pressurise bulldozers in a roads Bill, but it is impossible to make the cow move quickly. I am afraid that my comments in relation to the Marginal Dairy Farms Agreements Bill must take some time. There are few industries in this country which are of more importance than the dairy industry. Indeed it can be generally recognised that this is the one industry in the background of Australia's history which has given the opportunity for persons wishing to have a rural aspect of life to commence where a cash cheque is available on a regular basis for their produce.

The industry produces the basic food commodities used in this and most other similar societies. In the commercial sense some dairy farmers have good reason to be proud of the achievements of their life's work. Australia is rightly proud of the great contribution this industry has made. Its products have been distributed throughout the States and have proved to be viable on world markets. Where managment is sound the Australian dairy farmer can look forward with quiet confidence in the knowledge that his product will be in demand now and at the end of this century. Assistance to marginal dairy farms was originated by the former Liberal-Country Party Government and the Labor Party, at that stage, supported the proposals. Indeed, all political parties were interested to support the great Australian dairy industry. That original scheme is now being endorsed by the Labor Party. In several ways, following discussion in the future with the various States and the Federal authority, there is to be a broadening of the provisions of the former law.

The Opposition supports this Bill and wishes the Minister for Agriculture (Senator Wriedt) well in his initial reversal of a policy of taking away every aspect of assistance previously provided for the well-being of rural aspects of Australian life. This Bill carries with it a stamp that it provides $28m. That is incorrect. This Bill actually conveys $18m with a re-usage of $ 10m not formerly taken up. The Bill continues and broadens the existing scheme. It provides interest free loans and extends terms of repayment to allow improvement to certain milk producers. There is also provision for assistance to factories although it is apparently intended to introduce other legislation which will affect the manufacturing end of this industry in the future. There are a number of variations to the existing marginal dairy farms reconstruction scheme. I would like to list and discuss each one of those variations, but I realise that time does not permit me to do that. The inclusion of whole milk suppliers in the scheme is a very welcome provision. There is provision for direct conveyancing to a purchaser who is combining in the marginal dairy farm reconstruction scheme without the necessity for the vendor first to transfer the property to the State authority. This will be a very helpful provision.

There are many other such helpful provisions, but one in particular which is of great benefit to my State of Victoria is that of interest free loans to help suppliers to change to refrigerated milk supply. Suppliers who change to refrigerated bulk milk supply after 23 July 1973, which was the date that the Commonwealth Government announced the cessation of the dairy bounty scheme, will also be eligible to have any loan obtained for that purpose taken over by the Government. I believe- I ask the Minister to note this-that it is most likely that my State of Victoria will avail itself of this provision more than any other State. But the problem that my State and probably many other States will have will be to interpret the scheme and to know the limitations of such a marginal scheme. I ask the Minister whether he can give some assurance that with the broadening of this scheme into the general dairy industry this matter will be discussed at a meeting of the Agricultural Council or, more particularly, be made the subject of an address by the Minister.

The fact is that the dairy industry today is in reasonably good health. But there is the necessity for this marginal scheme. Take the position in my State of Victoria. As at 1 July 1974 there were some 1,900 water cooled bulk tanks, all situated in the southern districts of that State. During 1 973-74 approximately 1,000 farms converted to refrigerated bulk milk vats. The average cost for the vat and modifications was in the vicinity of $5,000. 1 suggest to the Minister that it would suit my purposes if he would give some assurance that the confinement of assistance to a marginal farm may be looked at by him in the near future. The actions of the Australian Government in this Bill are very creditable. But as I mentioned earlier, this Bill represents a reversal of some of the bad schemes that have been undertaken by this Federal Labor Government. I think it is time for the Labor Party to show that it is changing its attitude towards rural people.

We must realise that the economic strife in Australia at present must be due to the actions of the Australian Government. Whilst Ministers may protest and the Prime Minister (Mr Whitlam) may find a scapegoat in the economy, it is the Federal Government which is the responsible party to handle the Australian economy. The Treasurer, Mr Crean, has said that the change to a socialist dominated society will not be calm. It is all very well to introduce a scheme such as that which is contained in this Bill and to speak of assistance that will be given to rural producers, particularly those engaged in the dairy industry. But we have seen the damage that has been done by creating higher interest rates and by the elimination of tax deductibility in respect of certain items of expenditure. For example, annual expenditure on dams, silos, internal fencing and water drilling could be written off against taxation. We know of the very expensive communications costs which this Government has landed on the rural community. We have seen road schemes taken away from rural areas, the discouragement of the use of superphosphate through the withdrawal of the superphosphate subsidy and the elimination of the fuel equalisation subsidy. Again, electoral recognition has not been given to the disparity suffered by rural industries.

All costs to the dairy industry have increased as they have in all areas of rural production in Australia. The consumer must eventually pay. That is what this Labor Government does not realise. I plead with the Government to undertake some reversal of the actions they have taken in past years, even if it is only in the interests of the metropolitan consumer.

One matter of immense importance which I wish to mention is the recent decision by the Minister for Agriculture to phase out margarine quotas by 1976. 1 question the Minister's motive in taking that step. Does he wish the Australian Agricultural Council to be maintained as a reasonably respected body? Does he wish State Ministers to take the same action as he apparently has been instructed to take, to depart from an agreement within the Australian Agricultural Council by making that unilateral decision that at least the Labor Party will not support quotas in 1976? In what way does he say all members of the Council should perform in the future? Again he has created a precedent. I believe this action was taken without due thought being given to the effects. Why did the Minister come to this decision to phase out quotas? Why did the Labor Caucus take this step? I noted that the other day in the Senate we overlooked the words of an honourable senator who said: 'For whom does the Minister act?' or 'For whom does the senator act?' I think that question is very appropriate in this instance. The Minister has before him a Green Paper on rural policy in Australia. Certainly the recommendations in that Paper in relation to this industry have not been followed. I ask the Minister: What encouraged the Labor Party to allow one margarine manufacturer into the Australian Capital Territory? Was encouragement given to the Party to permit that to be done? The Minister knows as well as I do that there was an application by a different manufacturer from the one that was allowed into the Australian Capital Territory. The Minister has never told us why that action was taken.

The Minister assured the Senate that only 300 tons of margarine would be produced in the Australian Capital Territory. He gave that assurance to the Australian Agricultural Council. The Minister knows as well as I do, and his advisers know, that over 1,000 tons of margarine have been produced in the Australian Capital Territory. The Minister is not concerned about this. I would like to know the reason. What encouragement was given? The benefits that will follow from the lifting of margarine quotas will certainly not be for the consumer. The demand for margarine has been satisfied except for the occasional artificially created shortages. Certainly the benefits which will follow from lifting the quotas will not go to the Australian-owned companies that manufacture margarine and which are currently meeting consumers' needs. Certainly the dairy farmers will not benefit. What is prompting the Labor Party and the Minister to phase out the quota arrangement? The Green Paper advocates that certain steps should be taken. But I put it to the Senate that the only beneficiary- I imagine the Minister will be aware of this through his advisers- will be one of the huge multi-national corporations in Australia.

I have great regard for the multi-national corporations. I think that in some instances they perform a good service in this community. Again I ask the Minister to explain why the Labor Party took this decision. The large Unilever company has a small share of the polyunsaturated market but the sudden lifting of the table margarine quotas will open the way for Unilever to use its great advertising funds at the expense of the housewife to grab the lion's share of the market, and I believe that the Minister knows this. I ask him to comment on it when he replies. Who will get the benefit from the lifting of the margarine quotas? I hope that the Minister's smile is not an indication of what is behind this.

During the last couple of days there was mention in this place of the use of advertising by companies to capture a market. Does the Minister know that in fact a cooking margarine company has been able to capture the market for this product which is not controlled by quotas? Does it impress the Minister at all that 9 years ago in 1 964-65 Unilever held 1 5 per cent of the cooking margarine market? In 1973-74 it holds 54 per cent of that market but the benefit is not passed on to consumers in lower prices. I understand that Unilever products are, on the average, 3c a pound dearer than similar products. Honourable senators would be aware that Unilever is one of the great trading organisations in the world today. Its strength is indicated by its world-wide sales of $7,020m and its profits are approximately $525m. The Labor Party has expressed a wish to see Australian organisations sustained, lt is very difficult to believe that Australian companies can compete with an organisation such as Unilever.

The Minister for Agriculture apparently happily runs along with the wishes of the Labor Party concerning advertising that margarine will do your health some good. Somebody has to pay for the advertising which is being arranged by unions. What a great scheme it is for unions to spend their members' money on advertisements advocating that margarine quotas be abolished! I wonder if the Minister can suggest to us where those funds have come from. This is a difficult problem. I believe that the phasing out of margarine quotas should be as is stated in the Government's rural policy. I think that Sir John Crawford indicated that he certainly had no view on the matter. He indicated that there ought to be a full discussion of the principle involved in this matter by those people who wished to give evidence one way or another to a dairy industry inquiry.

I believe a six year phase-out of the margarine quotas, or even a larger period, if there is a decision to phase out quotas would give dairy farmers time to adjust and fit in with the expanded rural production of oil seeds which, incidentally, are not at all harmed by the dairy production market at the present time. There was an import of a particularly large volume of oil seeds in the 1 1 months to May 1 974. There were 65,000 tonnes of oil seeds and 39,000 tons of oil imported into Australia. The Australian oil seeds man does not need to be pushing this particular fact. An adjustment would give dairy farmers an expanded rural production so that oil seed production could expand at a similar rate. It is a most important matter if, in a scheme such as this, we see the Federal Government taking a particular step in relation to a small section of the industry. We support it. Overall, the industry needs to be stabilised. If Labor, in its wisdom, in 1 8 months of office has considered the factors I have mentioned and has now announced that it will within 2 years eliminate margarine quotas altogether, it will find that we will be in a position such as exists in New Zealand. I do not know whether the Minister knows that whilst polyunsaturated margarine sells at a price much in excess of that of butter in New Zealand today, it is still eroding at the rate of about 10,000 tons a year the butter market of New Zealand.

The marginal dairy farm reconstruction scheme is really too narrow a base on which to form an Australian dairy adjustment program. But I believe that it is a generous program of assistance. It is designed to improve the quality assurance of all dairy products and the granting of credit facilities to meet the special circumstances which will arise in the years ahead both in respect of marketing and other aspects of production of dairy products.







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