Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 26 November 1941

Mr PATERSON (Gippsland) . - I welcome this bill, the provisions of which will he of great benefit to the primary producers. Before the war, the prevailing price of superphosphate was £3 10s. a ton, from which the large cooperative manufacturing company in Victoria used to give substantial rebates to farmer shareholders. From £3 10s. a ton the price has risen to £6 lis. That is the price fixed by the Prices Commissioner. Deducting the amount of this subsidy, 25s. a ton, the price is reduced to £5 6s., which is still 36s. a ton more than the pre-war price.

I hope that, in the New Year, the Government will vary the present method of paying the subsidy. Clause 6 of the bill states that the bounty shall be payable to the manufacturer upon the sale of superphosphate. When a sale is made, the manufacturer makes out an invoice showing the price of £6 lis. a ton as fixed by the Prices Commissioner, and then deducts 25s. a ton, representing the amount of the subsidy. Thus, the primary producer can see from his account what the Government is doing to assist him. However, the subsidy of 25s. a ton is not paid to the manufacturer until the fertilizer is sold. Manufacturing is carried on during nine or ten months of the year, but 90 per cent, of the sales are made during February, March and April. This makes it necessary for the manufacturers to carry very heavy seasonal overdrafts, because the rock must be paid for as it is used. The price of Nauru rock has advanced from 28s. a ton, delivered to any part of Australia by the British Phosphate Commission, to 100s. a ton. Some cheaper rock is being obtained from North Africa, in small quantities, and the manufacturers are compelled by the commission to use a proportion of it. It is of inferior quality, having some vegetable matter in it which, when sulphuric acid is applied, off bad fumes. However, its use has kept down the price of rock to manufacturers to something less than £5 a ton. The co-operative manufacturing companies are not in the business to make profits, but to supply cheap superphosphates to the farmers, and they are suffering now because of the high price of the rock. They must pay for the rock on the 10th of the month after it has been made into fertilizer, hut they may have to keep the fertilize)' for six, eight or even ten months before it is sold, and they are able to claim the bounty. It would be simpler, and in all respects more desirable, to pay the bounty on manufacture, and not on sale. The benefit would then be passed on to the primary producer when the fertilizer was sold. This would remove some of the difficulties under which the manufacturing companies, particularly the cooperative companies, are at present labouring. It would also benefit the primary producers, because the price which they pay is largely determined, at any rate in Victoria, the Riverina and Tasmania, by the operations of the Phosphate Cooperative Company, which returns to its shareholders the whole of its profits in the shape of rebates. A major rebate is paid in accordance with the quantity of superphosphate purchased, and the number of shares which the purchaser owns, but there is also a minor rebate on the price charged, and this compels the proprietary companies, which are in competition with the co-operative companies, to give a similar rebate. Thus, anything done by the Government to reduce the expenses of the co-operative fertilizing company will be reflected in the rebate which it gives to its shareholders, and this, in turn, will govern the price at which the proprietary companies supply fertilizer.

Silting suspended from 1 p.m. to 2.15 p.m.

Mr PATERSON - I have the best, of reasons for believing that the adoption of my suggestion would create no administrative problem, because the payments for the rock, which has been converted into fertilizer, are made to the British Phosphate Commission, upon the tenth day of the month after purchase. The commission, which is an entirely disinterested party, could supply to the department exact figures of the quantity of rock which had been paid for by each fertilizer company month by month. From that information, it would be simple to calculate the amount of fertilizer that had been manufactured. Consequently, the department could easily be placed in possession of indisputable figures which would render it relatively easy from the administrative standpoint to pay the bounty when the rock is converted into fertilizer.

The reason underlying the proposal is that the price of rock has increased from 28s. a ton delivered in Australia before the outbreak of the war, to 100s. a ton, and it does not require much imagination to appreciate how much additional capital is required to pay for the rock; and how much larger the seasonal overdraft must be during the period between the time when the rock is purchased and the sale of the fertilizer. I ask the Minister to give sympathetic consideration to this constructive suggestion which I make with the object, not so much of assisting the .manufacturer, although it will do that, as of helping primary producers. Anything that we can do to reduce the cost of production, even if it be only the amount of interest paid on the seasonal overdraft, will be reflected in the price to the producer. There is a safeguard that that will happen because the practice of the great co-operative company which I mentioned earlier has been, and will be, to return to primary producers the whole of its profits in the form of rebates. That competition will compel proprietary manufacturers to follow suit, and the reduced price will be of considerable benefit to the man on the land.

Suggest corrections