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Wednesday, 25 September 1974
Page: 1394

Senator SCOTT (New South Wales) - It is my duty to speak on behalf of the Opposition to the Wheat Industry Stabilisation Bill, the Wheat Products Export Adjustment Bill and the Wheat Export Charge Bill which I believe are to be considered in a cognate debate. The Wheat Industry Stabilisation Bill is a measure to authorise the Australian Wheat Board to require the making of certain payments in respect of the export of wheat products. The other Bills impose a charge in respect of wheat and wheat products which are exported from Australia.

The ACTING DEPUTY PRESIDENT (Senator Davidson)- The suggestion has been made that the 3 Bills be made the subject of a cognate debate.

Senator Wriedt - That is acceptable to the Government.

The ACTING DEPUTY PRESIDENT-Is it the wish of the Senate that we proceed along these lines? There being no objection, that course will be followed.

Senator SCOTT -I indicate on behalf of the Opposition that these 3 Bills receive our support without amendment. It is a matter of regret that a delay of some 3 months or more occurred in the presentation of these Bills. The delay could have played a prominent part in preventing the Australian Wheat Board making the August payment of 27c a bushel on the 1973-74 crop. The agreement for the industry is of very great significance. I believe that no industry, and perhaps least of all one of the major primary industries, can exist without some firm measure of stabilisation. This agreement and these Bills contribute to a situation of stabilisation or, perhaps more accurately, define a situation of equalisation covering the next 5 years. The agreements between the various industry bodies and the Government were arrived at after considerable effort. It would be unfair to suggest that they were welcomed with open arms by the industry. I believe that there was compromise from both sides. I find that these agreements and this proposition are certainly acceptable to the industry, the Government and the Opposition. Consequently the industry, the Government and the Opposition support this stabilisation scheme.

The alternative in the negotiations, which were protracted, would have been to return to a situation of virtual chaos in wheat marketing which would have taken us back 40 years. Nobody in this country would have wanted anything to do with that situation. It is pertinent that we consider a number of things concerning an industry as great and as important to the Australian economy as the wheat industry. From time to time the industry and its members come in for a considerable measure of criticism on the grounds that it is the recipient of handouts of public moneys. So I think it is worthwhile and necessary that we look at a few of the features of this most important industry. In terms of its capacity to earn overseas credits and in efficiency this is indeed a great industry. Universally it is considered that the Australian farmer certainly ranks amongst the most efficient farmers in the world, if he is not the most efficient. I think it is worthy of mention that, contrary often to the general conception, the contribution which the Australian wheat growing industry has made to the consumption of wheat and its products in the Australian economy has been significant.

Since the stabilisation scheme was initiated, in general terms the contribution of the wheat industry has been something in excess of $400m more than the amount that the Government has been required to put into the scheme. Under this new scheme the amount to be provided by the Government in keeping a measure of stabilisation will be limited to $80m over a 5-year period. This amount is to be a grant which is repayable, and that is a distinction, and perhaps a measure of disadvantage to the industry itself compared to the previous agreement which did not involve a repayable sum of money.

I believe we should be mindful of the fact that in the buoyant circumstances of the wheat market around the world today the Australian wheat industry will make a contribution to the Australian consumer in this year of something in the vicinity of $ 100m. I merely make these points in order to clarify the situation of this industry, to clarify the situation which suggests that it is an industry which contributes to a non-inflationary circumstance in a country which is involved in a very marked measure of inflation. The grower contribution in this particular 5-year scheme is limited to $30m in any one year and the contribution ceases to be made should the price of wheat fall below $1.50. In the context of these prices- the $1.50 and the first advance for wheat of $1.20-1 believe it is pertinent to make reference to the fact that these moneys are fairly small amounts in comparison with the prices available for wheat, the ultimate payment, even in comparison with the days when the first advance was $1.10. In that period the price of wheat ultimately received by the wheatgrower varied from, again in round figures, $1.25 to $1.35 and the first advance was a gross $1.10. Today at $1.20 first advance the overseas market, the world market price for wheat, is varying somewhere between $2.50 and $3.50. 1 make this reference to draw out or to strengthen the case that there must ultimately, and probably in the near future, be a significant increase in the first advance payable in this industry, a significant increase on 2 counts; because of the inflationary spiral which is affecting the costs in this industry, as in any other industry, and because in the foreseeable future there will be a significant increase in the world price for wheat which must of itself enable a better return to be made to the grower in the first instance.

It is highly important that the wheat industry in this country remain attractive because it is one of those industries in which our natural advantages are quite superb, in which our history as a producer ranks second to none. The price is to be arrived at from year to year by the implementation of a formula which is quite difficult in appearance but which I believe is a necessary and suitable vehicle because it gives a very specific measure for establishing the price for the following year. In reference to the formula to be used I mention that there is an ingredient which concerns the amount of payment to the groweroperator, and I am sure this is an unfair situation, a situation which should be investigated, and I am sure the Minister will indicate later that it will be. As things stand at the moment, the groweroperator is to be established as a cost factor equal to a standard of payment for a leading hand in the industry based on the 1 968 figures, which are now 70 per cent below the present level. Moreover, I believe it is probably unfair that this sort of cost should be related to his contribution for labour only because the significant thing, surely, is that he is far more than an element of labour in the wheat industry, he is an element of considerable management and scientific capacity. No wheat producer in this country, indeed in any country, can exist today unless he has a considerable measure of achievement in the managerial and scientific fields as well as in the capacity for sheer labour.

I referred very briefly to the delay that occurred in the payment of 20c in the August period. This was a particularly severe and sad blow to the industry and to all those people and industries that are dependent- and there are many across the countryside and in the metropolitan areas- on the relative affluence of the wheat industry. The failure to make this payment has been excused on many grounds. I have heard that some of those grounds refer to the extremely rough seas that occurred around the Australian coast, particularly the east coast, in the June- July period, making conditions difficult for shipping. I have heard the problem of fuel and bunkering for overseas wheat ships mentioned. It was an extremely sad blow to the industry that this payment should not be available at a time when the export prices of wheat were so buoyant. Provision could and should have been made for that payment within the capacity of the rural credit section of the Reserve Bank, a section which in the case of the wheat industry was not overstrained at all at that particular time.

I think it is important that not only the members of this Parliament but the people of Australia should understand something of the relative contribution to the cost of bread that the wheat product itself provides. It is fascinating to realise that in the period of less than two and a half years since April 1972 the price of a loaf of bread in Sydney has moved from 23c to 35c; it may move even higher. Of that enormous increase, 55 per cent has been absorbed in the labour content. It is interesting to note that the amount applicable to the wheat consumed in that loaf of bread would, roughly, pay for the slicing and packaging of that loaf. If the farming industry were able to donate all the wheat from which the flour came to bake that loaf, it would still cost the Australian consumer somewhere in the vicinity of 29c or 30c for the loaf. I think it pertinent that we should consider briefly the inroads of inflation on the wheat industry because these are not only significant in the negotiations that have passed but are going to be extremely significant in the negotiations which must come from time to time in the future.

The costs of labour and fuel in the industry have spiralled, as they have in every other industry. Indeed, the industry in recent years, certainly in the last 10 to 20 years, has become quite highly capital intensive and the cost of equipment, machinery, spare parts and maintenance has spiralled in an enormous manner. These things dictate that in any future consideration of this industry there must be a more realistic approach to the cost-price structure. I am sure that the inflation of the present cost structure in this industry makes it essential that a solution is found which will permit the industry to grow because it is an industry which has one of the greatest potentials in the Australian scene. We have an enormous area of country capable of producing wheat and we have the technique and background to produce it. In the longer term it could well be the most significant of our overseas credit earners. It is, perhaps, one of the most significant areas of balance in the rural economy. If Australia's rural economy is balanced our history shows that there is balance over the entire economy.

The Opposition parties support these Bills in full. I do not want to take too much time of the Senate but in closing I want to refer very briefly once again to the significance of this industry in the Australian scene. It is of enormous significance over a wide area so far as employment is concerned. Its significance is apparent throughout country towns and throughout the organisations which produce the machinery, market the wheat and service the industry. I refer to the people who produce and spread fertilisers and the people in the chemical industry, the freight industry and our railways. All these people to a marked degree are dependent on a strong wheat industry- a wheat industry which is as affluent as the other industries in this country. I support this legislation because, as I said in the first place, it gives us after hard negotiation a real basis for the immediate future of this most important industry.

In closing, I would appreciate an assuranceone which I am sure the Minister for Agriculture (Senator Wriedt) will be able to give- that there will be adequate security for the grower funds which are held aside from year to year. We do not want to talk of amendments designed to create trusts and so forth but we have a measure of concern about the grower funds contributed to this scheme. I am sure the Minister will be able to satisfy us that these funds will be looked after properly. Mr Acting Deputy President, on behalf of the Opposition I say that we support the 3 Bills now being discussed which refer to the wheat stabilisation scheme.

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