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Thursday, 11 June 1970

Dr PATTERSON (Dawson) - The Loan (War Service Land Settlement Bill) is one of those Bills which come before the Parliament each year in order to authorise the raising of loan funds. This Bill this year relates to the authorisation of loan funds amounting to $4. 5m for war service land settlement in Western Australia, South Australia and Tasmania during the 1969-70 financial year. As indicated in the second reading speech of the Minister for Primary Industry (Mr Anthony), the money will be made available to the 3 States concerned as follows: Western Australia, $l.9m; South Australia, $ 1.964m; and Tasmania $654,000. Of the estimated requirement of $4.5m, about $4m will be needed directly by the settlers to finance working expenses, for stock and for plant, wherever necessary. As was stated, this sum of $4m is expected to be matched by repayments of advances made to settlers during the early years of the scheme.

This debate is held each year and honourable members on both sides of the Parliament take the opportunity to refer at length to some of the experiences of the preceding 12 months or those experiences which have become apparent as the years go by relating to the specific problems of closer settlement, particularly war service land settlement. I now move the following amendment to the motion: 'That the Bill be now read a second time':

That all words after 'That' be omitted with a view to inserting the following words in place thereof: whilst not opposing the provisions of the Bill, the House is of opinion that a Select Committee of the House should be appointed to inquire into all aspects of War Service Land Settlement in Australia in order to formulate guidelines for any future land settlement scheme'.

The Rural Reconstruction Commission met during the closing stages of World War II, and after the war, and very thoroughly investigated the performance of war service land settlement in Australia after World War I. It met with the admirable object in mind of attempting to ascertain the great mistakes made after World War I. The war service land settlement scheme was referred to commonly as a disaster, lt was the aim of the Commission to see that those mistakes were not repeated after World War II.

The Rural Reconstruction Commission laid down certain guidelines which would help the Commonwealth and the agent States concerned with the war service land settlement scheme. In the main, many of the guidelines laid down proved to be of great value. Then it became apparent that there were serious problems in the field of war service land settlement closely associated with any closer settlement scheme, such as it was. Although the basic assumptions underlying the commencement of the scheme by the Commonwealth and the agent States were such that the guidelines were principles to be followed - and they were followed - it became apparent very soon after the first settlers went onto the land that problems were arising. Those problems have become magnified in certain areas, of course, and in certain farming industries and land types.

The honourable member for Braddon (Mr Davies) will follow me in this debate on behalf of the Opposition. He has lived with this problem in Tasmania, at King Island, for the past decade. He knows the great difficulties being suffered by soldier settlers in that part of Australia. He has mentioned those problems in this House on many occasions, not only on behalf of the settlers but also on behalf of all people concerned with closer settlement. 1 do not think there is a more emotional type of activity carried on by a government than closer settlement, particularly when it involves taking land from one person to give to another. One of the first jobs I had when I joined the Bureau of Agricultural Economics in 1949 was to go to Coomealla in connection with certain problems of war service land settlement in that area. Emotionalism was not as great a problem there as it was in Western Australia and the grazing areas of New South Wales where large tracts of land simply were taken away, sometimes at quite unfair prices so far as the owners were concerned; nevertheless the problem was emerging. There have always been the knockers who have said that land settlement would fail. Every closer settlement scheme that has been undertaken in Australia has been criticised by these people. Of course, some of the schemes have failed; there is no doubt about that. The one thing that can be said about war service land settlement after the Second World War is that it illustrates the lack of adequate planning. Adequate planning is essential in land settlement and 1 will deal later with the closer settlement scheme in Queensland known as the brigalow scheme for which there was planning over a great number of years. Before any closer settlement was actually adopted most of the basic answers were known.

In a war service land settlement scheme it is difficult to know at any point of time what the variables will be. The size of the farm itself is material. No person can accurately predict whether, because of its size, it will be a success. Ten years ago sheep properties running 3,000 sheep were in a reasonably good financial position, but today, because of the increase in costs and the static or declining real price of wool, properties of the same capacity are on the breadline in terms of income. This has happened to a lot of war service land settlement people. When the size of the farms was determined just after the Second World War the determination was based on conservative estimates and favoured the settler. We did not want peasant farms; we wanted larger farms or middle sized farms. But nobody could forecast what would happen in terms of the 2 crucial variables - costs and prices. The cost-price squeeze which has hit heavily major sections of the primary industry has also hit war service settlers. As has been pointed out in this House time and again, it does not matter how efficient a farmer might be in terms of productivity per acre, per manhour or net income per acre or whatever it might be, unless he has sufficient gross income which is directly correlated to the size of his farm he will be unable to support his family at a reasonable standard of living and amortise his assets in the farm.

I just mention these variables in passing. 1 am quite certain that everybody learns by mistakes and that the administrators of the war service settlement scheme have also learnt by the mistakes which they have made. Just after the War there was a tremendous amount of emotional pressure exerted on governments to settle people on the land. On the one hand there were the ex-servicemen returning to civilian life who wanted a piece of land. They saw the big grazing areas which were often held by the landed gentry and this is the land upon which they fixed their eyes. Tremendous pressure, particularly in New South Wales, was applied on governments to cut the land up as fast as was possible so as to get those men and their families on the land. One basic fact which must be learnt from any closer settlement scheme whether i. be a war service or civilian scheme is the great need for financial equity. The person who goes on the land today with practically no money is heading for disaster. This is something which all governments and all political parties should heed. It is just airy fairy idealism to think that a person can develop land today with a small amount of money behind him.

I suppose that in the history of all civilian land settlement schemes in Australia the lack of money to develop the land has been the most important factor which has caused failures. Even in the highly favourable brigalow scheme - highly favourable in terms of planning and resources - a few failures have occurred. Those failures were due principally to the fact that the people did not have sufficient capital when they first went on to the land. Then came the drought period and the people were even more heavily in debt. It took those people some years to recover from the effects of the drought, and, faced with the large principal and interest repayments, they had no chance of recovering. In effect, they had a chain around their necks and they had no possible hope of recovery.

I think I have said sufficient to illustrate the point that in any closer settlement scheme it is essential to have proper planning. It is for that reason that I wish to refer further to the brigalow scheme. That scheme was rejected as a war service land settlement scheme for a number of reasons, including technical ones; yet it consists of the greatest areas of undeveloped fertile soils in Australia. One day it will be the richest agricultural livestock area in Australia an a large scale, under dry land conditions. The soils, as we know, are amongst the most fertile in their natural state in Australia. Despite the temptation to rush into the scheme and to pull down the brigalow it was not until the1960s that both the Queensland Government and the Commonwealth Government had sufficient technical knowledge and planning know-how to reach a decision that the development of the brigalow for closer settlement would be a success. Let us contrast it with some of the other closer settlement schemes, including war service settlement. In the first instance there was the virgin brigalow - Acacia harpophylla - which is a tremendously difficult wattle to handle. They are colonies of trees through their root system, and if they were ring-barked there would be immense re-growth. If the scrub were pulled the same thing could happen if there was not a successful burn. There were technical problems which had to be overcome.

I recall in 1950 going to a place called Cypress Downs which is very close to where the honourable member for Maranoa (Mr Corbett) lives. The first experiment involving hormone spraying of brigalow took place in that district. The experiment was carried out in conjunction with the Queensland botanist Selwyn Everest. It was a partial success in terms of killing the parent trees but the re-growth was such that it ruled out this type of large brigalow eradication. After that initial experiment further experiments were made until it was realised that the only successful way to clear brigalow country was with ball and chains, or chains alone, to stack the timber in wind rows, to get a good body of native pasture and then to get hot burn. If the finance were available the land was then ploughed. That was the only successful way to eradicate the re-growth of brigalow. Alternatively if a person had good animal husbandry conditions he could stock the land heavily, particularly with sheep, and control the suckers in this way.

The second step involved work by agricultural scientists and economists on testing the economics of the carrying capacity ot the land itself and the productivity per acre or number of acres. This went on for a number of years in various parts of the brigalow country. I can recall going to a place called Giligulgul in Queensland where one of the first men to do crop fattening of cattle on brigalow land was considered by many people to be a crank. He was called a crank because he put the plough into brigalow soil. That was unheard of in that part of the country. The only people who ploughed were farmers, not graziers or cattle men. But this man soon showed the people in the Miles district who was making the money. The same thing happened at Cypress Downs at Bendemeer. The plough went into brigalow soil. This then became the commercial answer to the experimental tests. It showed quite conclusively that the development of this type of soil under those conditions was a most successful operation.

From there on the experiments spread further into the lighter rainfall areas with the different types of brigalow - the acacias, wilgas and other varieties like that. Over a period of years it became apparent that this type of country was suitable for high productivity. In its virgin state it was running about a beast to 60 acres and under most difficult conditions. Brigalow trees can grow to a density of six thousand trees an acre. The costs of clearing were very low. The people who were clearing with D8 and D9 tractors, and later with chains, soon showed the others in the area what could be done. The low cost clearing in association with excellent soils, the quick establishment of Rhodes and other grasses produce a heavy carrying capacity in comparison with the virgin areas. The stage was set for a major closer settlement scheme, but that stage was not reached until the technical and scientific planning had been finalised.

The next step was for the agricultural economists to come in and give their verdict not only on the scheme and the different soil types but also on whether or not a farmer who went there would be successful under certain assumptions. This was done in conjunction with people skilled in transport economics. Good roads were essential. The whole scheme crystallised into a major civilian land settlement scheme. It was thoroughly investigated by the Bureau of Agricultural Economics in conjunction with the State departments. The end result was a Cabinet decision. The right honourable member for Fisher (Mr Adermann) was the Minister in charge of the scheme at the time. A Cabinet decision was given to go ahead with this civilian scheme. If there is one criticism of the brigalow scheme it is, as I said before, that there is a great temptation for people to go onto the land today without having enough capital. To develop fully for agriculture a block of 12,000 acres, 50% of which contains brigalow, would cost, over time, Si 50.000. Any person starting from scratch and trying to amass that amount of money on credit has not got a hope. What he does is struggle along, hoping that it will rain and that prices will stay up. If anything untoward happens, as it did in a closer settlement scheme that had 2 years of drought, the unfortunate people without capital reserves simply become further and further in debt. But this does not detract from the efficiency of such a scheme when there is proper planning. The people who had finance behind them, as was the case with the war service land settlement and brigalow, have not looked back, unless there was something physically wrong with the property.

The brigalow scheme will be one of the most successful closer settlement schemes in Australia because it was properly planned and was based on scientific research over a number of years. The one thing which could make a project fail would be the farmers having insufficient money behind him. The absurd practice of trying to settle people without money on the land must be stopped. It is no good saying that the Government will give them loans at low interest rates or at no interest charge. If they have not enough money to go on to the land now and do the basic work and have some cash reserve the chances of failure are very high. Yet large numbers of people come, I suppose, to every member of Parliament, point to some fellow and say: 'Look, he has too much land. Why can I not have some of it?' The answer is: 'You can buy some of it if you want to and are prepared to pay the price.' The next thing they say is: 'I have not any finance. I want to get some money from the Development Bank.' One has to sit down patiently, show them a set of figures and budgets, and tell them that they are facing a hopeless proposition without adequate finance. The days of the axe and the bark hut and living off the land are over. One has to have finance to go into any settlement scheme, whether it be a war service land settlement scheme or a civilian land settlement scheme.

The reason for moving this amendment is that there are lessons to be learnt from First World War experience and Second World War experience, and from other closer settlement schemes in Australia such as Humpty Doo, Esperance and the brigalow scheme. We have living examples to compare and to learn from. The amendment is designed to enable us to sit down and study past experience so that guidelines can be laid down for the future and so that we can learn from our mistakes. In conclusion I want to say one thing about closer settlement. As I said early in the piece it is an emotional type of objective. I suppose that everyone who has some leaning towards the land would like to own a farm. Of course, a lot of people on farms these days would like to get off them. It is a way of life which is recognised only by those who are close to the soil. Great philosophic arguments are starting to develop about the size of farms. Other than markets, the most urgent, pressing problem for this Government or any State government is the position of the small farmer. That is the case not only in Australia but also overseas. What is to become of the small farmer? All political parties are on his side; he is regarded as the salt of the earth, the backbone of the nation. We must protect the small farmer. I have said so myself and I think it is a high ideal. When one looks at the cold, hard facts of economics and technology and the substitution of capital for labour one has to face the fact that the small farms must become bigger. There is no other answer. I do not mean that they must jump in size from A to Z, but the small farm must become bigger.

This problem faces the sugar industry, with which I am closely concerned at 'he present time. The small farms are efficient but costs, including labour costs, are going up. When one substitutes capital for labour by buying harvesting machines worth about $25,000 to $30,000, the farmer finds himself pressed financially. The rates of interest, depreciation and amortisation are such that these people will be down the drain in terms of repayment unless they can get good seasons every year. But if they amalgamated with their neighbours they would become more efficient in terms of the use of resources and in terms of net income.

How do we tell people these things? lt is a most difficult thing to do. This is a way of life for them. Yet, closer settlement is something which, in some areas such as the brigalow areas in Queensland that I have mentioned already, still should be carried on. This can be done, provided the properties are not too small. Let me point out the fallacy in this respect. The fault of many closer settlement schemes has been to try to settle too many people on the land. It is far better to have 20 prosperous farmers than to have 23 starving farmers in the one area. It might be just one or two extra farms which makes the difference in planning.

This problem must be faced. It is no good running away from it. We are all guilty in this respect because we often put politics before facts. It is up to us. We must face the fact that, in every primary industry in Australia today, the size of farms, particularly the situation of the small farmer, is becoming one of the most impressive problems. Irrespective of what government is in power, a decision which forces people to amalgamate will not be one seen favourably by those people. This does not mean that 1 believe necessarily in the plantation type of agriculture. I have this type of agriculture in my own area. It is highly efficient. One has only to go to the estates at Fairymead and Bingera to see it in operation.

If one looks at the computer work carried out by the Colonial Sugar Refining Co. at the stage when consideration was being given as to whether sugar could be grown on the Ord River - not economically but physically - the agronomy study snowed that the optimum size of an irrigated farm was of the order of 500 acres. That finding would absolutely shock most cane farmers. A cane farmer would be shocked to be told that that was the best size for a sugar farm. But when heavy capital involvement in plant and machinery was taken into account, it became evident that this was a sound answer. Would the Government put forward a proposal such as this? We are all politically biased in this regard. We try to settle on the land in a certain area as many people as we can.

This has been the greatest possible mistake that has been made in closer settlement schemes throughout the world.

What is the answer? In closer settlement, if an area is made too big, we are criticised. If an area is too small, we are criticised also. I remember the position that arose in relation to the brigalow scheme. The Queensland Government wanted the average size of each holding to be based on 800 head of beef cattle. The Commonwealth Government showed imagination and courage here, lt did not take long for the Commonwealth through its officers and their investigations to convince their equivalent officers in the Queensland Government that that type of property was doomed to failure in the end if anything serious happened to beef prices. Farms of that size would operate with a too high risk factor. The result was a substantial increase in the area of each block so that those farms could almost double their carrying capacity. This meant, in terms of net income, that instead of having a dozen struggling blocks in that scheme we have 7 or 8 prosperous ones. The Brigalow scheme has proved to be highly successful.

I wish to conclude on that point. There are lessons to be learned in regard to closer settlement. We, both in government and opposition, can and should learn from the mistakes of the past. We should try to see that these mistakes are not repeated. The variables in agriculture are such that no person is able to say at this time which is the best type of farm to get into in terms of agriculture. No-one is able to say what is the right size for a farm. We do not know what will happen to wool through the use of synthetics or what will happen to the beef industry because of the use of synthetics. Already, synthetic products are on the market - soya beans and so forth - which are substitutes for beef. 1 have tasted some of them. I did not like them. The point is that, every time prices come into consideration, people seem to develop tastes for such substitutes. One thinks of the position with margarine and butter. People have developed these tastes. Once substitutes are introduced, it is the thin edge of the wedge. Has anyone the right to stop them? Again, that is the question.

Have we the right to stop margarine coming into the country to replace the market for butter?

Mr Anthony - If it is in the public interest, yes.

Dr PATTERSON - My views on this matter are well known. As long as this country has large settlements which are dependent on the dairy industry for their existence and where jobs are involved, an obligation exists to support that industry unless some equivalent alternative is proposed. This is a difficult problem. I emphasise that the problem is the great difficulty in being able to forecast accurately in advance what will happen in terms of land. Any person who goes on the land today goes on under a great risk. If that person goes on as a new farmer with insufficient capital, the chances are that, unless he is favoured in the first 10 years of development with good seasons and reasonably good prices, he runs the grave risk of failure. This has been the history of closer settlement schemes throughout Australia since the first such schemes were started.

Mr DEPUTY SPEAKER (Mr Jarman)Isthe amendment seconded?

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