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Thursday, 5 December 1935

Senator BADMAN (South Australia) (2:35 AM) . - I do not intend to deal with this measure in detail. I am surprised at the attitude adopted by various States with regard to the agreement adopted at the wheat conference held recently in Canberra. These representatives agreed to return to their respective States and to enact legislation this year to provide a homeconsumption price for wheat, but we find now that such legislation will not be passed this year and as a consequence the wheatgrowers will be deprived of something like £700,000. The revenue derived from the flour sales tax which I understand will be continued for another twelve months at the rate of £2 12s. 6d. a ton will yield about £1,S50,000. On the other hand if a home-consumption price for wheat of 4s. 9d. a bushel were given to the grower, and about 6d. a bushel were deducted from that amount for railage, nearly £2,400,000 would have been available for distribution among the growers. The Leader of the Opposition contended that the Government should have established a compulsory pool in preference to a home-consumption price as is provided for in this measure. I remind the honorable senator that the first recommendation made by the royal commission which inquired into the wheat industry was that assistance should be afforded by the Commonwealth Government to the wheat industry through the fixation of a home-consumption price for wheat by imposing an excise duty on the flour used in the Commonwealth. I would have preferred an excise duty on flour because it is a form of revenue easily collected and would not require the setting up of a department in each State. However, because of the representations made on behalf of the growers and because the royal commission so recommended, it was thought wiser to introduce a home-consumption price.

Senator E B Johnston - What about the commission's third recommendation which is prefaced by the words " in any case " ?

Senator BADMAN - I am taking the first recommendation of the commission. South Australia would have preferred an excise duty on flour which would cost so little to administer and from which the farmer would derive the greatest possible benefit. However, in order to arrive at a flour sales tax capable oi providing benefits equal to those which would accrue from a home-consumption price of 4s. 9d. a bushel less expenses such as railage, the flour sales tax would need to be raised from £2 12s 6d. a ton to about £3 5s. or £3 7s. 6d. a ton. I contend, therefore, that, through the procrastination of the States in failing to pass promised legislation in time for the present harvest, the wheat growers of Australia stand to lose something like £500,000, if no further increase of the present flour tax is made.

Senator Arkinswas hopelessly out in the figures he quoted in relation to the world's carry-over of wheat. Prior to the depression the average world carryover was from 150,000,000 to 180,000,000 bushels. On the 31st August of each year a computation is made by Broomhalls, of London, of -the annual carryover. Senator Arkins says that the carry-over at one time averaged 600,000,000 bushels annually and that it had gone as high as 1^100,000,000 bushels in one year. Apparently the honorable senator misquoted figures in this respect. The carry-over may have reached 600,000,000 bushels in one particular year, but to view this matter in its proper perspective, we must study conditions existing before European countries, principally France, Germany and Italy, in order to encourage the local production of wheat, imposed high duties on wheat from Australia, Argentina, Canada and the United States of America. Those countries which formally imported 200,000,000 bushels of wheat annually were by 1930 producing their own requirements. From that time the world surplus of wheat piled up rapidly, and three years later it amounted to 600,000,000 bushels. In 1934 there was a world export surplus of wheat of 1,152,000,000 bushels, of which about 600,000,000 bushels were absorbed by the importing countries, leaving 500,000,000 bushels on the market as a carry-over. This year, however, the export surplus, according to Broomhalls, has been reduced to 875,000,000 bushels of which the importing countries require 600,000,000 bushels, leaving at the present time a carry-over of approximately 300,000,000 bushels. The position is gradually righting itself, and would have been completely remedied to-day, but for the fact that the pooling system was adopted in Canada. It may be a serious statement to make, but I believe that had Canada unloaded its wheat on the world market in 1930, 1931 and 1932, the price would have dropped considerably, but then the farmers in Canada would not have been encouraged to grow wheat in the belief that the world required it. They were misled in this respect, and went on increasing their yield of wheat in the expectation of getting good prices. However, the pool authorities held over large quantities of wheat with the result that at the present time Canada is holding about 200,000,000 bushels of last year's wheat. No one knows how that wheat is going to be disposed of. If it were placed on the market, it would immediately bring down the . price. I am opposed to a policy of encouraging wheat-growing by compulsory pooling, and holding up supplies which at some time or other have to be liberated.

The Leader of the Opposition (Senator Collings) commended Queensland for having adopted a compulsory pool for wheat. I hold the view that Queensland can only encourage wheat-growing by means of subsidy, because wheat can be imported at a cheaper rate from southern States than it costs to grow in that State. I recall that during the debate on the sugar agreement .to-day, it was made clear that Queensland wants southerners to buy its sugar. Yet it is prepared to keep out southern wheat by subsidizing its own growers. This to me is selfishness in the extreme, ihe people of Queensland expect the people of the south to buy from them, but they refuse to buy the produce of the southern States. They insist upon fostering in the north a wholly unnecessary wheatgrowing industry. I support the bill before the Senate. It does not give the' farmers all they are entitled to, and I hope before the 1936-37 harvest a more comprehensive measure will be introduced, unless by that time the price of wheat has risen to such an extent that an arbitrarily-fixed home-consumption price will no longer be necessary.

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