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Thursday, 4 June 1970

Mr JEFF BATE (Macarthur) - Mr Speaker,the Opposition is supporting these 6 Bills. It seems unnecessary to speak to the Bills because under certain rules of debate in certain places if nobody objects to a motion it is passed without any argument. As 6 Bills dealing with the dairying industry are before the House, it is proper that one should explain why they are necessary. The honourable member for Dawson (Dr Patterson) has said: 'Well, this is equalisation'. What it really means is that if 1 lb of butter is sold in Australia at 47c, the price given by the Minister for Primary Industry, and overseas 1 lb of Australian butter is sold for 20c the Australian farmer receives the average or equalised price for each 1 lb of butter he produces. He receives the average of 47c and 20c. If we add those prices together we get 67c, and the price that a farmer would receive would be 33.5c. The honourable member for Calare (Mr England) has okayed my arithmetic. I am trying to make it easy for the new young players. Instead of getting the home price of 47c for each 1 lb of butter sold in Australia or receiving the overseas price of 20c for each 1 lb of butter sold, the Australian farmer receives 33.5c per I lb of butter sold. That is the equalised price for butter. The price for cheese is much more depressing.

Now, we have this situation: We mustsell slightly more than I lb of butter overseas for every I lb of butter sold . here - that is, provided we sell it. We have heard these most unhappy tales about Britain entering the Common Market. Of a total butter production for export of 110,000 tons. Britain takes 60,000 tons. This is just over half of our production. The remaining 50.000 tons goes lo Japan or meets competition in Singapore, etc.

A general election is to take place in Britain shortly. Everybody is hedging a bit on their bets on the outcome of that election. Every Britisher knows that it is madn:ss for Britain lo enter the Common Market. I will explain why in a minute. If Britain does enter the Common Market it will phase out our 60,000 tons of butter. We are in the same position as the European Economic Community. Because of its agricultural policy, I have been told that it might be cheaper to throw 450,000 tons of its butter into the North Sea. There is nothing else to do with it. We have heard this dreaded word 'pollution'. If that butter was given lo the herrings, it might make a mess of the fisheries in that wonderful shallow sea between the British Isles and Europe.

The situation is most depressing. If Britain does not enter the Common Market, if it s:ill lakes 60.000 tons of our butter and if we can sell another 50.000 tons elsewhere, we can continue with a home price of 47c per lb and an export price of 20c per I lb which, when equalised, gives lo the farmer a price of 33.5c per lb. As has been stated, this equalisation scheme has operated under a voluntary agreement, and the factories have already signed their agreements for the forthcoming year. In other words, the voluntary equalisation agreement by the factory is now operating without legislative backing. This has been done by the factories quite sensibly and rationally to prevent some big factories in, say, New South Wales, from sending butter into Victoria or some other State and swamping the market with butter. In other words, New South Wales factories are paying Victorian factories to send their butter away and the price is equalised in the capital city. Factories on the North Coast of New South Wales, in the Minister's electorate, still pay freight on butter sent to Brisbane or Sydney, and in Sydney the price is equalised between the home price and the overseas price. This might be a bil unfair. This matter has to be considered because various factories pay different freights. They incur different costs and there is a lower return to the farmers. If these unfair conditions apply it means that one factory cannot compete with the next factory.

At the present time, as Britain has not yet entered the Common Market, these Bills are designed to give legislative backing to the voluntary equalisation agreement which has worked ever since the Paterson scheme was introduced in about 1933 or 1934. I forget the exact dale; the Minister may remember it, but it does not matter. When Paterson introduced his scheme we consumed 3 lb of butler in Australia to every I lb of buller we sold in London. It meant a very neat little result. The price for the butter consumed in Australia was ls 4d per lb while the price for I lb of butter sold on the London market was ls. lt was a simple matter of adding the 4s received for the 3 lb of butter sold in Australia to the ls received for the I lb of hut er sold in London, and divided bv 4: this gave a neat average of ls 3d a lb overall. It worked beautifully.

Mr Berinson - Have you checked your arithmetic?

Mr JEFF BATE - The arithmetic is all right. This 's what happened when the Paterson scheme commenced. So long as that kind of situation continued everything was .sweet. We consumed 3 lb of buller in Australia to every I lb of butter consumed in London. But now we are sending overseas - or we look like doing so - more than I lb of butter for every I lb consumed in Australia, and there s a very grave doubt about the sale of butter overseas. There is another factor that might be very interesting. The Government has decreed in these Bills that this compulsory equalisation scheme will not be introduced unless the producers agree to it in a referendum. This is a departure from what happened when we were dealing with the legislation concerning the Council of Egg Marketing Authorities, when no referendum was held on the question of imposing a hen tax. Those honourable members who were here at the time will remember that the then Min ster for Primary Industry said: 'We want 70c a bird, bat we want authority to charge Si a bird. We hope we will not have to charge \$1.' But very quickly the levy was increased to Si a bird.

In this instance the Government has brought down 6 Bills and it has said: 'We are going to give legislative authority to the Equalisation Committee. We are going to impose a duty on the home consumption of butter and cheese to pay for losses incurred in the sale of butter and cheese overseas.' This is actually an excise or a duty. It is a tax. Once these Bills become law, I submit that the charge will be a tax. I have not had advice from the AttorneyGeneral (Mr Hughes) or from the Chief Justice or anybody else, but as 1 see it, if you impose a levy, as it is called in these Bills, on a commodity, it then becomes an excise or duty. This duty is being imposed on butter and cheese consumed in Australia in order to meet the loss incurred in the export of butter and cheese. Normally duty is imposed on imports, but the reverse situation applies here. We are charging a duty on butter and cheese consumed in Australia to pay for the losses incurred on exports of butter and cheese. But before we do this - for some reason there has been a departure - there will have to be a referendum. I can imagine the honourable member for Dawson travelling through the huge area of Queensland, including the drought areas, explaining to the fanners why he voted for these 6 Bills because the farmers will have to vote in the referendum. The honourable member for Dawson will be asked questions about this in the beautiful Hunter Valley. I imagine that this will be terribly interesting at a time when the industry is in agony, and there is no other word for it. I have listened to speeches made by members on the other side of the House and I heard the honourable member for Dawson and others talking about bankruptcies, droughts and horror upon horror. In the middle of this horror, terror and agony there will be a referendum to give authority under those 6 Bills to collect this levy, duty or excise. If it is carried this will be done in a very tidy way and it will stay there. Before it is carried a lot of things will happen. This is my feeling about it. When a referendum is held in a voluntary way very few people escape. This referendum has been requested by the dairy industry and, as 1 understand it, sought by the States and agreed to by the Australian Agricultural Council will now be given legislative authority.

If 1 heard correctly the words of the honourable member for Dawson he said that the Opposition agrees with this and that it should be done. There are 2 steps. First of all, the matter is taken out of the voluntary category which I as an antiSocialist agree with; it will be made a Socialistic measure. Before this takes place there will be a referendum. One of these Bills which we are discussing is called the Dairying Industry Equalisation Legislation Referendum Bill. When members of the dairy industry are asked to vote on this measure arguments will be put forward in favour of the proposal. We do not know of anybody who is going to put up an argument against it.

Dr Patterson - You are for it, are you not?

Mr JEFF BATE - J am interested in some of the things which the honourable member said and I am debating and replying to some of them. I think that this House should know from the people who work in the dairying industry what happens within the industry itself. We should find out what happens from those people who milk the cows and have to get up at 5 o'clock in the morning when it is still pitch dark, without a dog to assist them in herding the cows because the dog has been frightened off by driving rain, wind and thunder. Those people have to get the milk to the factory and try to sell it under those conditions. If you talk about the chain stores you must bear in mind that the corner store - the small grocer - has more than half disappeared. Surveys which have been conducted indicate that the corner stores are going out of existence and the chain stores arc now selling butter and cheese. The chain stores have large packaging machines for packing pieces of 8 oz cheese. I understand that there is a problem with mould in the use of these packaging machines and they are in some sort of trouble.

The retailing revolution has mechanised this type of packaging. This type of packaging results in the goods being placed in small refrigerated bars and the people go along to pick out what they want. The impulse buying goes on. This is the revolution in retailing which has made a great difference to farmers. The honourable member for Dawson has said. "Look out for the chain stores'. I. do not know what his supporters think. They probably go into the chain stores themselves because they think that the price is more reasonable. When William Lever started at Port Sunlight he used to get a handful of soap from a tin, put in on a scale to get about 1 lb in weight and then wrap it. Then he thought that it would be better if it were prepackaged. That was the start of the prepackaging revolution and this is what has happened with dairy products. There is a revolution in this. But there are a lot of pitfalls and a lot of people have got into trouble with it. I am not so sure that these packing machines are being properly supported.

But here we are now intervening in the industry. We are going to have a referendum. We will make legislative backing for the old voluntary equalisation scheme which was run by the industry itself under the Commonwealth Dairy Produce Equalisation Committee Ltd. This is embarking on, I think, a perilous course and I think the Minister has no doubt that any day now we face a situation where the markets overseas will fold up. There is a glut of produce. There are most unfair commercial practices going on and it is very hard to sell this material. The number of dairy farms is going down but the production is holding or even going up because of high producing cows, more cows and better efficiency in the industry. So the Government has decided to do this at the request of the industry. The industry is represented by the Australian Dairy Industry Council, the Australian Dairy Farmers Federation and the Australian Dairy Produce Board which does the exporting. Here is a set-up whereby, if the shadow Minister for Pri mary Industry takes over, he has the marketing of dairy products in his hand, ft is all set up for him and he can say to me: 'Look, you stop dairying', because he will be in charge. Perhaps it will be a good thing if he does tell me to stop dairying, because things are extremely difficult in this industry. But there remains the fight to hold the industry together, to get the best deal for it and to look for markets. Japan is becoming a good outlet for our dairy products, thank goodness, but we have to keep the social fabric, we have to keep this farming fabric going, because these farmers are the men who have for 200 years supported our export income and have produced the character that is Australian.

We seem to be embarked on a scheme to make the big cities bigger and the people in the country fewer. We are even putting urban arterial roads into the cities so that we can suck more people in, so that we can get more pollution, so that we can get more sewage running off from Sydney and so that the area is fouled with car and aeroplane smog and all the rest of it. We seem determined to build up the cities, to make them more uneconomic than they are and to make it impossible for young people to buy a block of land under \$7,500 or \$8,000. We seem intent on building up the cities and cutting down the size of the smaller towns in the country and on cutting down the number of farmers. This is going on throughout the world; it is going on in Australia. Surely the Australian Country Party should be concerned about this situation. But here are the Bills from a Country Party Minister to bring into law the Dairying Industry Equalisation Legislation Referendum Bill, the Dairying Industry Bill, the Processed Milk Products Bounty Bill and the rest of the 6 Bills; so the marketing of dairy products goes further and further into the hands of Government, into the hands of the Department of Primary Industry which will be having some of the headaches, and into the hands of the Dairy Industry Authority of New South Wales. More authorities like this will probably be coming in to other States. We understand that our cheques will be paid by the Government. We understand we will have our factories closed. All this kind of thing is happening.

Mr Grassby - By this legislation?

Mr JEFF BATE - There is some complementary legislation in New South Wales which refers to this dairy industry authority. I think it is called the single dairy authority and it is setting up a bureau where they will pay farmers cheques if there is anything to pay. There will be a lot less to pay to dairy farmers if the trend that is taking place continues and if these huge surpluses are to be dumped on world markets and got rid of. One has only to go to the European Common Market countries to see this. Unfortunately for me, 1 saw it. A couple of Labor men were there. The shadow Minister for Primary Industry, the former honourable member for Bendigo, was there; Senator Bishop was there: the honourable member for Reid (Mr Uren) was there. I am not sure that they understood what they saw but to me it was terrifying. It must have been much worse for the people of Europe. The distinguished honourable member for Cowper (Mr Robinson) saw all of this and I do nol think he has any illusions about what will happen with our markets. It is most depressing that the Government has had to bring in these Bills now and for us to have to support them.

In the very few minutes remaining to me I hope that I can make the House understand that here is another of the rural industries in Australia which is facing a terrible time. I regret that the present time was chosen to introduce this legislation. I will vote for the Bills because the industry wants what is called orderly or organised marketing. Without the equalisation system there would be utter chaos in Australia, but even with it I am afraid that in view of the fall in sales overseas and the dreadful surpluses which face us there will be chaos in a year or two. I do not know what the position will be in 5 years. I think the Minister should ask the Bureau of Agricultural Economics to do a feasibility study on it. The economists would have to be almost prophets to do it but I think we are entitled to have the study done. Any firm commencing operations in iron ore, alumina or nickel production has to make projections about what will happen on the world's markets. The dairy industry is talking about 1970 and 1971 but after that there is silence - nothing. I think we are entitled to know what will happen in 5 years.

Dairying is not like wheat farming or cropping in which a farmer crops for 1 year. This is a 5 year projection. After a dairy cow is conceived it is years before she starts to produce and a farmer has to make his plans years ahead. No-one is telling us what will happen so I ask the Minister to request the Bureau of Agricultural Economics to do for us a feasibility study, a cost benefit analysis or whatever it is called, on what will happen to the dairy industry in the next 5 years. I support these Bills reluctantly.