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Thursday, 4 June 1970

Mr GRASSBY (Riverina) - I extend the warmest congratulations to the honourable member for Warringah (Mr MacKellar) for his eloquent and scholarly exposition on the wheat industry at this time. He could not have applied himself to a more important issue for the national Parliament and he did so particularly well. Being the first speaker to follow him I. would like, on behalf of all honourable members, to extend warmest congratulations, f also want to commend his concern for the economic security of the wool grower. I thought he put his finger very much on the problems that confront us in this debate in relation to the future of wheat. He recognised in his address that wheat growers had been encouraged to grow more wheat. He referred in specific terms to the fact that they had doubled acreages in general terms over a period of 10 years, that yields had doubled in that time and that this was a tribute to the Increasing efficiency of this- important rural industry.

Everything had been going particularly well with the wheat industry for a very long time. It might be said that there had been a combination of fortuitous circumstances. But let us be quite blunt. There always has been pretty good competition in the sale of wheat throughout the world and Australia, through the Australian Wheat Board, generally has done quite well. The Austraiian Wheat Board, shackled as it often has been by inadequate backing, particularly at the monetary and guarantee level, has done an extraordinarily good trading job over the years despite the disadvantages. The growers had improved their efficiency and our sellers had done a particularly good job when they were able to do so. This occurred against the disadvantages imposed on them and to which 1 have referred. All was going well.

But then suddenly came the moment of panic which followed an extraordinarily big harvest. I think the moment of panic was recognised by the honourable member for Warringah when he said that the industry had been encouraged to expand. What have we now at present, perhaps 3 years later, after a time of active encouragement? We now have an active period of discouragement following the decisions made in relation to the 1969-70 season. What were the decisions? The Minister for Primary Industry (Mr Anthony) said on many occasions: Of course I issued warnings. Everybody knew in general terms what was going to happen'. I do not want to over-stress what he said or to paraphase it but I think he said on many occasions: 'I warned that we would be unable to take in all of the crop and pay for it in 1969-70 as we had done in the past'. But he had in mind a harvest of something like SOO million bushels, which became eventually 400 million bushels, and the actual harvest amounted to about 340 million bushels. Nevertheless the Commonwealth Government and the Minister, in their wisdom or their panic - and honourable members have a choice - decided that steps should be taken to curb what had been the accepted scheme for a whole generation. In fact growers had already expended money in establishing crops and putting the wheat in the ground. When all this had been done they were told that there would be quotas.

It has been said that 1 have confused the issue by saying in this House of Representatives that the quotas are a matter for the States. I want to sum up the position by saying that the quotas were initiated here and they were implemented in the State*.

I would repeat that, so that there may be no doubt about the thought that most people have in their minds.

Mr Pettitt - The honourable member is wrong again.

Mr GRASSBY - It has been said that I am wrong. I am amazed. 1 find it rather shocking that people who purport to represent wheat growers should accept a situation which has brought about hardship without one word not only of protest but of suggestion for its amelioration. This is an extraordinary abdication of responsibility on their part. Let us be quite clear. The decision was made by this Government in Canberra, whether it was by the Treasurer of the diem, Mr McMahon, or whether it was the Minister for Primary Industry. It does not matter who made the decision. It was made by the central government. It would not go along with what had been done for a generation. It said: 'There will be a ceiling this year. You can do what you like in terms of the ceiling but we are imposing the national quota.' That is what it amounted to and that is how it has been.

Then it was necessary to implement that decision. I know that a lot of attempts have been made to use growers' organisations as whipping boys for this decision. But the growers were told very clearly by the holder of the purse strings: 'This will have to be done, otherwise there might not be any stabilisation scheme at all'. This financial stick is a big stick. It is the supreme one. Whether the growers' organisations agreed or whether the States fell into line, let me be quite clear and repeat that the central and i 11 i t i al decision was made by the Government here and was agreed to by the States. The scheme was put forward by the Minister for Primary Industry, so he must take the responsibility. I am not saying that he did not do it in good faith. He did it because he felt it had to be done. I am not quarrelling on those issues. But I am saying that this decision was made and we should now look in retrospect at what happened.

At the time the quotas were introduced an extraordinarily large harvest was feared. It is extraordinary that we had to fear it. but there was this fear. At the time people in public office and government were going to bed at night praying that we would not have a large production so that they would not have the resultant headache. This was an abdication of their responsibilities and also an indication that they had pushed the panic button. I say that now, and I have said it consistently over the whole of the period in which this has been an issue. 1 am saying nothing new at this time, so I am consistent in my submissions on this matter.

Mr Pettitt - The honourable member is not being fair.

Mr GRASSBY - I will be fair now. I thought I was being fair when I said that the decision was obviously made in panic. But let us accept that it was made in good faith. I do not question this. The panic was there, so the Government said: 'We have to do something. This is what we will do: The growers had better fall into line or else. The States had better come into this or else.' So everybody fell into line. Let us go forward from there, accepting that the decision that was made was an error but that it was made in good faith. I would like to enter a plea at this stage that the error be recognised, that we recognise that we did not get 500 million or 400 million bushels. In fact, we may get 340 million bushels. Let us not go back in bitterness over what was done. Let us look now at the present situation and let us see what we can do to ameliorate the effects of a decision made in panic even if it was made in good faith.

I want to draw attention to what the New South Wales Minister for Agriculture has said about the present situation. If members of the Government who speak on behalf of the Government, and who undoubtedly will follow me, wish to argue these matters I am putting forward, I hope they will also deal with the submissions that were made only recently in the Riverina district by the New South Wales Minister for Agriculture, Mr Crawford. He said that he recognised that quotas are having a disastrous effect on all sections of the rural community. He went on:

It is only natural that people and country towns are going to be hurt . . . some severely hurt.

I respect the sincerity of the Minister for Agriculture in New South Wales, as I respect the sincerity of the Minister for Primary Industry. What the New South Wales Minister said is that the countryside at the present time is suffering from a severe hurt. In the statements he has made he attributes most of that hurt to the wheat quota system. He was questioned by many growers, who said: 'How does this come about? ls the system well founded? Can we accept that what is being done at the present time is the best possible system?' Mr Crawford said that the basic blunder of the whole quota system was the original declarations. He agreed that they were ill founded and rotten to the core. This is the measure of the acceptance by the New South Wales Minister for Agriculture of the quota system declarations on which the whole of the superstructure of rationing is based in the State in which I happen to live.

What is the answer to a situation in which thousands of growers and many country towns are suffering from a rationing system which was introduced in the middle of a season? Every aspect of rural life is suffering as a result of this. 1 refer again to the New South Wales Minister for Agriculture. He said: 'How does this come about? How could it be that the Commonwealth would do this?' The Commonwealth Government and New South Wales Government are of the same political colour; yet the Minister for Agriculture in New South Wales has said that the reason for the hardship in this scheme which he admits was founded on something that he described as rotten to the core and that the reason is also to be found in the panic with which it was introduced. He said:

If we had had 12 months to plan the introduction of wheat quotas then everything would have been all right.

This is not the criticism of the honourable member for Riverina but the criticism by the New South Wales Minister for Agriculture, who introduced these quotas, I am sure, with tremendous reluctance. I seem to remember taking part in the debates in the Legislative Assembly of New South Wales. 1 seem to remember saying that because there had been this panic, because it was impossible to have an equitable system in the time that had been given following the Federal decision, we should not in fact have had quotas for the 1969-70 season. The Minister in that State stood firmly. He said: 'We must do this. If we do not, the Commonwealth will destroy stabilisation'. This was the full implication of his remarks. 1 accept what has been said by the New South Wales Minister for Agriculture. After all. he was talking, as a responsible Minister, of the details of a rationing system. He was talking to growers in the towns in the wheat area which had been hard hit. He said: 'Yes, the present system is wrong. lt is not good. I recognise (his. We did not have adequate time in bringing it in'. That is what he said. In this House, in one of those graveyard debates - because after midnight surely that is what they are, and few bodies are alive here at midnight - I have quoted, and 1 repeat it in the context of this debate, a statement by Mr L. M. Ridd, a grower member of the Grain Elevators Board, who said that under the present rationing system the growers who are the most dishonest have received the biggest quotas for last season. He tended to support the view of the Minister for Agriculture that what was done in panic must be repented.

Mr Pettitt - What did Mr Ridd say about you?

Mr GRASSBY - If the problems of the countryside are to be discussed on the basis of personalities, it is rather tragic. I refer the honourable member to the statements that have been made, published and accepted. I would ask him to address him-, self to those statements and to the issues with which they deal. Towards the end of last year T felt a deep and continuing concern that this hastily, ill-advised and inequitable system that hud been introduced would lead to some breakdown in orderly marketing. After all, we are concerned to preserve orderly marketing. Because of my concern I got in touch with the Minister for Primary Industry and with tho Treasurer (Mr Bury). I do not want to do any injustice to anyone so this afternoon I will quote from the Treasurer's response to my request that additional money be made available. That is what T asked him to do. I said: "After all, the harvest is going to be below the national quota so let us have some additional finance - not very much finance but some additional finance - 'to take in the whole of the 1969-70 crop, and let us pay the $1.10 for it.' I might say that the Treasurer did not agree, but one thing that he did say was that he had made the money available or, to be more precise, had agreed to the guarantee of finance and this was what he would keep to. 1 refer the House to his reply to me in which he said:

The Commonwealth has agreed to give practical support to the scheme by guaranteeing finance to be advanced by the Reserve Bank to the Australian Wheat Board to enable the Board to meet its expenses and to pay to growers a first advance of SI. 10 per bushel, less freight. The amounts guaranteed by the Commonwealth for these purposes in recent years have been very substantial. . . The ceiling of $440m for the 1969-70 pool is a generous one having regard to all the circumstances. It has been exceeded only twice and the funds will be made available at a time when the Wheat Board will still be very heavily indebted in respect of last season's wheat . . . In these circumstances I could not recommend to my colleagues that the agreed proposals for financing the 1969-70 wheat pool should be varied.

That was signed 'Leslie Bury, Treasurer'. We must accept this. He said: 'I am not willing to make any more money available. I will not make any additional money available'. However, he indicated that he would stand by the arrangements that had already been made regarding the crop. What were the arrangements? The Government made $440m available to pay a first advance on the 1969-70 crop and to meet pool expenses. The marketable crop will not be more than perhaps 345 million bushels. In fact, I doubt whether it will be more than 340 million bushels and the amount of quota wheat is only about 308 million bushels. If the situation remained constant the Government would be able to avoid finding credit with the Reserve Bank to the extent of $53.9m, plus pool expenses of about 17c to 18c a bushel. I know that that figure will be subject to adjustment because an announcement has been made, and I welcome it very warmly, that there will be a payment of perhaps 20% or 40% - it does not seem very clear and I hope that the Minister for Primary Industry might indicate exactly what percentage is going to be paid before the end of this calendar year - on the over quota wheat that has been delivered. Undoubtedly there will be, according to his announcement, some payment there, but my submission was then and is now that in view of the fact that the national allotment of finance and the national shortfall are such that without finding any more money from the Reserve Bank - any more credit, because it is only credit, and I stress that we are talking about credit and not actual funds; not actual taxpayers' money, because Government guarantees are not taxpayers' money-

Mr Turnbull - They can be. '

Mr GRASSBY - That is true, but they very rarely are in respect of primary industry. The taxpayers have done extraordinarily well out of a stabilisation scheme which, on balance, still owes the growers, if we want to express it in these terms, something like $300m. What I was saying was that in view of the fact that there has already been a softening of the Government's attitude in relation to the payments that are to be made for the 1969-70 season - and whether it is to be 20% or 40% I am not clear and I ask the Minister in all sincerity to clarify that point - would it not be reasonable, in view of the crisis in the countryside, to use the credit which the Treasurer has made available to him to pay the $1.10 on the 1969-70 pool and start off afresh? I put that forward as a reasonable way of keeping a great many people in this industry in a viable position. We have said this consistently.

I know that there have been arguments about what is to be done with State shortfalls and that sort of thing, but when the Minister for Agriculture of the largest State in the Commonwealth points out that because of the inadequacy of the notice - in effect, because of the panic decisions that had been made - he was not able, nor was his government able, to come up with something that was sound, solid and equitable, surely that is a devastating criticism. All right, honourable members opposite can say: 'We acted in good faith and did our best', but is this not the time to clear it up for the 1969-70 season? Honourable members opposite may say: 'We are not going to do this for various reasons that we have in mind'. I am sure that there is a pigeon hole chock full of reasons for not doing anything very much at all. It is the biggest pigeon hole in government. If the Government does not do anything at all and simply says: 'Well, we will take a percentage, but we will let the rest swing' we have to recognise the existence of a black market. I realise that in drawing attention to this I will draw continuing criticism for many reasons, but I put it to the House that a person does not solve a problem by putting his head in the sand and just refusing to recognise it. In relation to the black market I quote from a Press report which appeared yesterday and which stated:

Black market wheat sales could force oats and barley prices down even lower than they are now . . Falling export demand has already forced prices to their lowest levels in years. The secretary of the union's grain section, Mr R. C. Edwards, said that black market sales had already affected prices in New South Wales.

The effect of the added hazard of black marketing would be felt when growers found their stocks of oats and barley piling up in the coming months.

Mr PeterBushell, Temora branch manager for the New South Wales Farmers and Graziers Cooperative Co. Ltd, said the low prices for wheat had caused a slump in the coarse grain market with oats bringing only 35c a bushel and barley 45c a bushel.

Wheat from farmers' stockpiles was being sold at 60c to 70c a bushel compared with the Australian Wheat Board retail price of $1.43 to $1.52.

Mr Bushelladded: These are the lowest prices in many years.'

It is no use running away from this problem or saying that it does not exist. It is no use turning our backs on it and saying: 'No, we must not acknowledge this at all'. Whenever I have referred to the volume of trade outside the Board, I have quoted the prices which has been paid already. I have quoted the volume that has been put on the road.

Mr Corbett - Did the honourable member quote 50 million bushels?

Mr GRASSBY - I find that it is necessary for me to reiterate what I said on a previous occasion. I said that estimates of outside the Board trading had put the figure as high as 50 million bushels. Certainly, it would lie somewhere between 30 million bushels and 50 million bushels. What the figure is, I do not know. I have never claimed to know and I never said so. What I did say was that it was certainly more than had been claimed by some interested members of the Government who had said that it was 6 million bushels. Let us have a little reality about this matter. The volume is there. Because I knew that this debate was coming off, and because I know how important the subject is, I arranged to have an investigation carried out. That investigation was carried out in the hours of darkness over a 72 hour period. In that period-

Mr Anthony - The honourable member would quite like that

Mr GRASSBY - I like to have some facts to bring to you, Mr Minister.

Mr Pettitt - How many people did the honourable member report?

Mr GRASSBY - Well now-

Mr Pettitt - Come on.

Mr GRASSBY - That is a pretty sad remark for a man who purports to be a representative of a rural community to make - 'how many people did the honourable member report?'. I have made it very clear, when his administration was talking about prosecuting and gaoling people, that I would stand with them. If he finds the same courage he will be worthy of his people. That disposes of it, Mr Deputy Speaker. I suggest that he goes outside and communes with himself. He has something to answer for.

Mr Daly - Talk to his friends.

Mr GRASSBY - That is right. I am going to say this-

Mr Pettitt - The honourable member is running away from it.

Mr DEPUTY SPEAKER (Mr Lucock -Order!

Mr GRASSBY - Running away from what? If the honourable member for Hume (Mr Pettitt), who is also interjecting, wishes to follow me in this debate and has any particular challenge to issue, I will be delighted to listen to it. I am always delighted to listen. I have listened to the honourable member for Mallee (Mr Turnbull) for some considerable time but I think that he has had his share of attention. I do not mind interjections.

In relation to this matter I was giving a report of what happened in a 72-hour period in the hours of darkness. The investigation touched on more than a dozen centres in south-west New South Wales. For the very reason that I do not intend that anybody on the Government side should exploit the information, I refuse to identify either the centres or the people. But I am going to say that 22,000 bushels of wheat were moved in that short time. I wonder whether there is anyone prepared to deny that this is a volume of considerable dimension or whether anyone is prepared to deny that this is a matter of considerable concern.

I put it to this House that this should be the crux of government decision at this time.

In the countryside at the moment, a great deal of complaint has been made about the state of the rural economy. But the state of the rural economy and, of course, the hardships being suffered are attributable directly to the decisions of government. I am suggesting that the Government can catch up on a decision that was made in error and in panic by doing the one thing that is open to it clearly and simply at this time in relation to the 1969-70 crop. That is to take all the wheat in. I would think that almost all of the wheat is in at this time, but not all of it has been delivered. Quantities of wheat are being held on farms because the mcn concerned are not game to deliver that wheat. These men are not game to deliver because they are not sure what they will get for it. These men are not game to deliver their wheat because they do not know whether they should give it to the Board. If these men do not receive money for what they deliver, they will be out of business.

Do not blame the wheat grower. Most of the expansion that was undertaken was undertaken in conjunction with banks, stock firms and other people who are in the business of lending money across the nation. They were all part of this expansion. The New South Wales Minister for Agriculture used the term that there were no guilty men among the wheat growers. Well, let me say that if there were no guilty men among the wheat growers we must recognise the fact that whatever operations they undertook they undertook with the support of banking institutions, public and private, and private enterprises which operate to service them with money.

This is the situation that we face at the present time. I wish to make a plea to the Government. I think that my colleague, the honourable member for Dawson (Dr Patterson), who moved his amendment on behalf of the Opposition did so in good faith as a solution to the problem that we face at the present time. I come back to the point in relation to the 1969-70 crop. My plea to the Government is that it should undo the harm that was caused by its panic decision and should put some collateral and some confidence back into the countryside where they are needed at this time.

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