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Thursday, 7 May 1970

Dr PATTERSON (Dawson) - Approximately 2 weeks ago the Government introduced a debate in this House on the Vietnam Moratorium Campaign. Now that the Moratorium has gathered a ground swell throughout Australia the Government, in the midst of the debate on one of the most important pie;es of legislation for the health of the people of Australia - the National Health Bill - has decided to postpone that debate and to reintroduce the debate on the Moratorium. The National Health Bill is 1 of the great measures we have been hearing about from this Government. It concerns the health of the people of this nation. But now we hear nothing but a smearing, rotten campaign by the Liberal-Country Party. Government against the Labor Party. This is the type of debate into which the Liberal-Country Party Government has allowed the Parliament to degenerate. It has reduced the standards of the Parliament to the lowest levels of political filth that we have ever witnessed in this House. We have seen before and we now see again the consistent kicking of the so-called Communist can.

The Acting Prime Minister (Mr McEwen), who is the Leader of the Australian Country Party, one would have thought would have taken the opportunity tonight to talk about the serious plight of primary industry in Australia. But with a fanatical gleam in his 70-year-old eye he told us about the Communist can. So desperate has the Liberal-Country Party Government become that it has to delay the important economic measures of this nation to give us a dissertation to try to associate the Labor Party with the so-called Communists. I wonder how many honourable members on the opposite side have ever seen or heard or met a Communist. The Attorney-General has a grin on his face like a hyena. Going by his dress he looks like one, too.

Mr DEPUTY SPEAKER (Mr Drury)Order!The honourable member must not make such comments.

Dr PATTERSON - 1 am paying him a compliment. Mr Deputy Speaker.

Mr DEPUTY SPEAKER -Order! Personal reflections are out of order.

Dr PATTERSON - I was saying that what the Government, and particularly the Acting Prime Minister, has attempted to do is to smear every decent Australian who has taken an intelligent view on the IndoChina war, as it is today, and to try to associate them with the Communists. The Acting Prime Minister, when he finished speaking, sat in the corner of the front bench with a grin on his face. The honourable member for Chifley (Mr Armitage) described him aptly as an actor. As I said before, he is a 70-year-old actor. I ask: What has this great man, the Acting Prime Minister, the Leader of the Country Party, contributed tonight? Let us look at his record in relation to the Communists. He is the person who formulated the agreements and policy to sell wheat and food to the Communists. He is the one who is sponsoring the selling of wheat to the Communist Chinese. They in turn are sending it to the Communists in North Vietnam who are killing Australian and American troops. This is what the Liberal-Country Party Government is doing.

Mr Hansen - But there is a quid in it.

Dr PATTERSON - Yes, and that is the difference. They do it for a dollar. Yet they get up in this Parliament with a sanctimonious attitude and try to condemn decent Australians for taking an intelligent view on Indo-China and the Vietnam war. Did the Acting Prime Minister or the Minister for Defence (Mr Malcolm Fraser) mention anything about the 4 boys and girls who were shot dead in America because they dared to dissent about the filthy war in Indo-China? Not a word was mentioned. Look at them grinning and laughing at the present time. One would expect that. Four boys and girls were shot dead because they dared to dissent against the action of the President of the United States of America in sending American troops to invade Cambodia. If any honourable members looked at television tonight and saw the father of the girl who was shot and listened to what he had to say, they could only bear shame for being associated with the feelings of this Liberal-Country Party Government and its sanctimonious attitude in the chamber tonight.

I raise another point with respect to the Government's sales of wheat to the murderous Communists, as somebody described them here tonight. The Government is prepared to sell food to Communist China which in turn sells that food or gives it to the Communists in North Vietnam who are killing our troops. The Government sells it at prices less than those at which they will sell it to owners of starving stock in Australia. This is the Government that stands before the Australian people and utters this type of tripe about Communists. As I asked before, where are all these Communists? I would like to know how many Communists the honourable member for Angas (Mr Giles) has ever met in Australia in his fife. Why does he not get up and tell the truth? He has probably never seen one in his entire life, let alone met one. It was quite interesting to note that a member of the Nazi Party has now decided to hand out literature backing the Government's stand in Vietnam and Cambodia. We all know the association of the Liberal Party with the Fascist Party. One has only to look at the faces of some of the Liberal members to recognise the association.

The debate tonight happens to be a debate on supply, a debate on the economic and financial measures of this country; but it has degenerated into a kicking of the Communist can. The Government does not like receiving some of its own medicine. This kicking of the Communist can around the country is done by a Government that is selling food to Communists who are selling it to the North Vietnamese who are killing Australian and American troops. This is the type of hypocritical government we are faced with in this country. Is it any wonder that the combined vote given to the Australian Labor Party was 300,000 more than the combined vote given to the Liberal and Country parties in the last election? When the next election is held we will see that 300,000 so significantly increased that this hypocritical Government will not be here with the majority it has today. Instead of attempting to smear and instead of making such a shocking and disgusting display as it has made tonight the Government should have been hanging its head in shame at being associated with actions of the American Government. I have mentioned it before and I say it again. Those 4 decent boys and girls were shot dead. The honourable gentleman who was so magnificently castigated by Mr Chamberlain does not like to hear what I am saying. ] mentioned earlier that this debate was on supply. One would have thought that the Leader of the Country Party and Acting Prime Minister would have taken the opportunity to speak on matters relating to the crises in the country areas. He did not do so. However, we had the Minister for Defence (Mr Malcolm Fraser), who is the member for Wannon and a wool producer, taking the Labor Party apart because it apparently dares to suggest that the people who support the Moratorium should march through the streets of the capital cities. The same gentleman - the Minister for Defence - did not say one word about the 10,000-odd farmers who marched through the streets in Melbourne a month or so ago. He did not say anything about the time when he got onto the truck in the park and he was booed and treated with contempt by the farmers of Victoria. They occupied the streets very effectively and I am quite certain that the people tomorrow will occupy the streets in a similar fashion.

I intend to devote the rest of my time to matters relating to the tariff and matters relating to primary industry. One would have thought that at some time in this debate tonight we would have at least had some discussion on the crisis in primary industry and the steps which this Government intends to take in the future to alleviate the problems, but all that we have heard about, as has been usual in the last few weeks, is buck passing and waiting until the industries of Australia come to this Government with some plan. We are still waiting and while we wait inflationary growth and cost of production continue to increase. The tar fT originated as a means of raising revenue by taxing imports into Australia. It was in fact 1 of the main avenues for raising revenue. Economically it was exactly the some as excise tax, sales tax, income lax, wages tax, property tax or probate tax. In other words, it was indirect tax for raising revenue. It is now significant that as a revenue earner the tariff has declined relatively in proportion to the total amount of revenue collected in Australia. Another purpose of the tariff has been to conserve foreign exchange or to use as a technique to conserve foreign exchange by dampening down the inflow of imports. Another measure which has been commonly used is to generate employment by the tariff. This was used effectively after the depression. The Scullin tariff has been debated al length. This was primarily a tariff to generate employment.

The tariff is a deliberate use of a high protection policy to stifle imports so that an infant industry can be established and then grow into a virile industry which might in turn export goods. Often, however, this type of use of the tariff can backfire. The simple use of a technique to provide high protection to an inefficient industry, an industry inefficiently using resources, can frequently mean a generation of further industries which use capital goods or their equivalent in imports so that the final result is that there is an overall increase in imports and it has defeated the prime purpose of that tariff. There is one basic factor, however, about a tariff. Tt causes an increase in costs in a similar manner to indirect tax. Irrespective of how one looks at a tariff and the various economic measures which have been utilised some sector of the economy gets hurt because directly and indirectly increases are caused in production costs or marketing costs. Over-use of tariff or improper use of tariff through the protection of inefficient use of resources can frequently lead to a serious imbalance in the economy. It transfers resources from efficient industries in terms of resource use to inefficient industries which under a free economy or a laissez-faire economy could not possibly survive or which with even a low level of protection could not survive.

The point to which I now want to go is that there are many people in Australia who take great interest in knocking primary industry. Primary industry is subjected to attacks by those who seem to have various obsessions against the primary sector of the community and they usually base their obsessions on the quantitative or tangible figures given in the White papers or the

Budget in relation to subsidies or bounties or hand-outs to primary industries. They say, for example, that the total annual figure made available to primary industries by way of bounty or subsidy could be in the vicinity of about $200m a year and this is in fact a subsidy to primary industries. But what they do not take into account is the effect of the tariff on secondary industry and how that can be measured in quantitative terms, both directly through increased costs and indirectly through the flow of the first prime movement through the economy. The best estimates that one can get on the effect of the net subsidy equivalent in relation to secondary industry shows that an estimate - rough as it is - is in the vicinity of $ 1,500m per annum, which is the value or the net equivalent of the subsidy to secondary industries. If we take the same calculations for the primary industries we will find that the total value to primary industry of subsidies and bounties, including embargoes, is about $270m per annum. This is the total subsidy and bounty equivalent as opposed to the net subsidy equivalent to secondary industry of approximately $l,500m. When we consider that 60% of our balance of payments, represented by export income, is derived from sales from the primary sector surely there is a good case for the provision of the equivalent of a tariff to efficient primary industries.

Mr Deputy Speaker,it seems that I have stressed this before in the Parliament but I do so again. [ consider there is a need for the establishment of a permanent independent Commonwealth agricultural authority to advise the Federal Government on the justification of the protection of export primary industries along the same lines as the Tariff Board operates in respect of secondary industries.

Mr Kelly - There is the Rural' Industry Board.

Dr PATTERSON - Is that what the Rural Industry Board does? We have been saying this in this Parliament. I have said something about an equivalent to the tariff at least 4 times in the last 18 months. I said it in Western Australia recently. I am glad to know that is what the Rural Industry Board does because I have not been able to find what it means. In addition to the recommendations on the justification of levels of protectionism to efficient primary industries, such an independent authority would also recommend precise levels of bounty after a thorough examination of the marketing prospects for the industry concerned. Primary industries should be given at least equal treatment to the policies governing the provision of tariffs or hidden subsidies to secondary industries.

The apparent indifference displayed by the community to the cost problem which is undermining the economy of the export primary industries is based more on ignorance than on any degree of intent. As I said before, it is estimated that the cash subsidy equivalent of the tariff to secondary industry is of the order of $l,500m annually and the cash equivalent of all payments and taxation concessions made to the primary industry as well as the val'ue of the equivalent of embargoes such as I have mentioned - sugar is an example - totals only $270m annually. As I have said, we should keep in mind the contribution that export primary industries make to the economy of Australia. Over 60% of export income is earned from primary industry. No-one can argue that the wool industry, for example, or the beef industry or sections of the dairy industry and the sugar industry, which are our main export industries, are not entitled to some compensatory finance equivalent to the disability caused by the tariff and other factors.

The Government's encouragement of high tariff protection for manufacturing industries without any measure of prices control throughout Australia has resulted in continuous increases in the cost of production, particularly in the primary producing sector, and indirectly in living costs in Australia. Coupled with growth policies of full employment, particularly in the cities where most manufacturing industries are located, the high level of immigration and these inflationary characteristics are virtually wrecking many of the unprotected rural industries.

The tragedy of the situation is that the financial stranglehold being exerted by the cost-price squeeze will worsen and in turn can only accelerate the death of small farms unless positive action is taken. The getbigorgetout policy of this Liberal-Country Party Government is to be condemned. The

Government consistently refuses to accept the economic truth that high levels of tariff protection for manufacturing industries are causing serious cost disabilities to the export rural' industries. The best estimates available suggest that the direct and indirect cost disability suffered by the most important export rural industry, wool, is in the vicinity of 25% of total costs. The report of the Committee of Economic Enquiry, known as the Vernon Committee, and others worked out a figure of about 10% on cash costs: but allowing for the increases in costs and allowing for the total costs including imputed costs, this figure is now estimated to be around 20% disability allowance which is being suffered by the wool industry.

The direct cost of tariff action affects the prices of farm products, spare parts and materials and the indirect costs are reflected in the wage structure and the general costs of materials and services. For example, the high wages that need to be paid to a man driving a transport truck are to a degree determined by the tariff protection related to the spare parts, the tyres and the component parts of that vehicle. The absurd situation which sees a Federal Government giving every encouragement to the growth of manufacturing interests and foreign controlled mineral development to the neglect and at the expense of the primary sector must be changed to allow at least a balanced economy. The progressive deterioration of the economic position of the primary sector - that is of farmers - calls for less buckpassing and the implementation of more positive action by the Government. The Australian export industries are powerless at present against the cancerous-like increases in costs which are destroying the economic heart of the once vital major rural industries.

The latest Treasury data published only last week once again reveals the serious economic consequences for export rural industries as a result of inflationary measures and inflationary growth policies in this country. At present, of the export industries in Australia only beef and sugar enjoy some measure of economic satisfaction because the export prices of the two commodities are at reasonable levels and can offset to a degree the insidious increase in farm costs which are forever marching on. But both beef and sugar are walking an economic tightrope. Anyone who has spoken to the Americans who were out here in the last few days would know full well the intent, the pressure and the lobbying that are going on in America to try to cut down the level of beef exports from Australia to that country. We know what can happen and we have suffered. The sugar farmers of Australia, including those in my own electorate of Dawson, have suffered because of the insidious increase in farm costs on the one hand and the unrealistic collapse in some areas of world prices on the other hand. It is to be hoped that world prices in both of these industries continue at a satisfactory level. It is to be hoped that this Government will take action to stop the insidious increase in farm costs sweeping over this country.

Some people will still argue that there is no such thing as a cost price squeeze in Australia. One has only to look at the published figures to see clearly that the stagnant sector of our economy today is the rural sector. No matter what index you take the same conclusion must be reached. Whether it is the percentage increase in the gross value of rural production or the net value after taking costs into account, all of the indicators show the very serious consequences flowing to the primary producers of this country. As I said earlier, the situation in the primary industries has degenerated because this Liberal-Country Party Government has failed to face up to the real issues confronting primary producers. I can imagine what the farmers of Australia were thinking tonight when they were listening to the Acting Prime Minister and Leader of the Country Party, who failed to say a word about primary industries and the sufferings of small farmers. All he could do was kick the Communist can. This is what the Country Party thinks of the farmers of Australia.

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