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Wednesday, 25 September 1974
Page: 1376

Senator DEVITT (TASMANIA) - My question also is on the subject of devaluation and relates principally to its effects on primary industry. Can the Minister for Agriculture indicate whether the 12 per cent devaluation of the Australian dollar will be of any benefit to primary producers? Can he give any indication of the extent of the benefit which might flow from this significant move on the part of the present Labor Government?

Senator WRIEDT (TASMANIA) (Minister for Agriculture) -The effect on rural industry of the devaluation will vary. It means essentially that in those industries which are particularly strong at present because of the strength of the market demand for the products the price position will not alter. But one can assume that the full benefit of the devaluation will come back to the exporters of those products. In areas such as meat and, to a lesser extent, wool, the effect is more likely to be reflected in an increased volume of export rather than increased prices, because of the relatively weak demand. There is also the question of the effect it will have on freight rates because the rates are normally expressed in U.S. dollars or pounds sterling. It will be expected that the shipping companies will increase those freight rates as a result of devaluation and one would have to expect also that there would be an increase in the cost of imported agricultural machinery. That is one side effect which should not be overlooked. Generally speaking the benefits to the rural sector could be in the vicinity of $250m to $300m, but with one or two of those side effects which must be taken into account when trying to assess a net benefit

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