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Wednesday, 12 September 1984
Page: 1134

Mr KERIN (Minister for Primary Industry)(3.52) —I thank honourable members for the contributions which they have made to the debate on the estimates for the Department of Primary Industry. The honourable member for Eden -Monaro (Mr Snow) in this debate spoke about feral goats and pigs and fish and made a very worthwhile contribution. The honourable member for Leichhardt (Mr Gayler) made a very worthy contribution on the economics of the sugar and tobacco industries. I was interested also to hear from the honourable member for Wakefield (Mr Andrew) who made some substantial points about the economy. I think it is very important that I reply mainly to the Deputy Leader of the National Party, the honourable member for Gwydir (Mr Hunt), who also made quite substantial points. I think that all honourable members with a strong rural interest understand the essential nature of primary industry and that its survival depends on the macroeconomic management of this economy and the maintenance of international competitiveness.

The Hawke Government has made a far greater contribution to the prosperity of primary producers by getting inflation down. Just one percentage point fall in the rate of inflation drops farm costs by $111m. A one percentage point fall in interest rates means that the farmers' interest bill falls by $35m. There was also the underlying theme of the comments of the honourable member for Gwydir who said that we should subsidise farm inputs. To subsidise input costs to achieve results, similar to those we have achieved through constructive economic management, would really not, in the long haul, add to the international competitiveness of the rural sector. The whole problem in respect of the subsidisation of farm inputs is that eventually it capitalises into the land and does not address the question of competitiveness. It also raises distributional issues.

More than anything else this Government has achieved a lot with respect to the macroeconomic management of the economy in the interests of farmers. This Government has done far more for farmers in their international competitiveness than the past Government did. We floated the currency which gave us enormous flexibility and enormous returns to primary producers. We brought in off-shore borrowings for the Australian Wheat Board. This saved that industry tens, if not hundreds, of millions of dollars. That was opposed by the honourable member for Darling Downs (Mr McVeigh), a former wheat grower. He does not really understand much about these economic matters. The Liberal Party at its conference in May 1982 had a resolution on its books-I do not know whether it is policy now; I never understand the primary industry policy of either the Liberal Party or the National Party-to wipe out the Wheat Board.

Under the Fraser Government the cost of fuel rose nearly three times. No one in the Opposition, then in government, really complained much about that. All the dutiful National Party people went along with that and justified it. Under the Fraser Government inflation was about three times higher in Australia than in the countries of our competitors-the people we sell against on the international markets. We have to understand that it is true that about 85 per cent to 90 per cent of the product of the wheat industry, which the honourable member for Gwydir concentrated on, is exported. We are in a very tough international competitive situation. We have done a lot in the 18 months we have been in government to pay attention to the macroeconomic issues. As I have said, we have tried to give our farmers greater international competitiveness.

The honourable member for Gwydir also raised questions in respect of the crisis in the wheat industry. I answered a question about that yesterday. There is always a crisis in every industry in Australia; we can always find the statistics for that. The figures of the Bureau of Agricultural Economics-the Bureau surveys most of the major primary industries in this country-show still that the wheat industry has the highest farm cash operating surplus of any primary industry in Australia. In 1982-83 the average wheat grower had a farm cash operating surplus of $61,500. In the drought year of 1982-83 the cash operating surplus was $16,200. In 1983-84 the surplus was $66,441. This is an average over the past three years of $48,000. That is way ahead of the other major agricultural industries. I am not saying that wheat farmers are well off. I am not saying that the cost-price squeeze is not on. I am not saying that I disagree with the Deputy Leader of the National Party that off-farm costs are a major concern. There is no sense coming in here and whingeing and grizzling in any party political fashion. The National Party when in government-which all National Party members fall about slavishly and adoringly remember-is just as bad as any other government in extracting every penny it can from wheat growers and coal miners.

Another point which the honourable member raised was in respect of income equalisation deposits. I say very frankly that only 7.44 per cent of farmers have a taxable income over $30,000. They are the people to whom the income equalisation deposits scheme meant a lot under the previous system. That scheme was linked to the taxation rate. Anyone taxed at the rate of 60c in the dollar certainly gained a lot from the IEDs. The problem was that very few people participated in it. Something like 80 per cent of farmers have a taxable income below $20,000. The new IED scheme brought in by the Treasurer (Mr Keating) advantages those farmers more. If I had time I could go through some examples of that. Perhaps I should provide to the Opposition examples of how the new IED scheme benefits smaller producers more in terms of the philosophy and underlying principles behind an income equalisation deposits scheme.

We have indexed the fuel freight subsidy. The Opposition has been kind to us about that. We are doing what we can. However, there is no sense in talking about the fact that the Fraser Government raised fuel prices by a factor of about 300 per cent. The honourable member for Gwydir also raised the tariff debate which he has also raised at some recent conferences of the National Party . What he said is true. Our exporting industries do carry the burden of some $4 billion worth of secondary industry protection. I could take him back to the days of Mr McEwen who gave us this great level of secondary industry protection. I point out that many of our primary industries are just as protectionist as our secondary industries. We have only to look at almost every horticultural industry, the sheep meat industry, the dairy industry, the rice industry, the sugar industry-which has an embargo-to see this. The problem we face is that Australia really is not big enough to buy all the produce of the Association of South East Asian Nations, China and Japan. Even if we did devastate our secondary industries, I am rather unsure about the extent to which those countries would buy our goods.

What we are proceeding to do in respect of secondary industry is to restructure it rather than carry on with this tired, sterile debate about free trade versus protection. What my colleague, the Minister for Industry and Commerce (Senator Button), is doing is restructuring those basic industries, whether they be steel or cars. We are continuing with the previous Government's policy in respect of clothing, footwear and textiles.

The honourable member for Wannon (Mr Hawker) raised the question of the Export Inspection Service. I will reply to him with a detailed letter in case he really does not understand the situation. He talked about the 22 meat inspectors at Tennant Creek who gave evidence before the Woodward Royal Commission into the Australian Meat Industry. He said that they were actually receiving additional income for additional services performed. This had nothing to do with meat substitution or any criminal action. Due to the fact that the United States Department of Agriculture has regulations which require the Australian industry to meet certain standards-standards that are practised in the United States- these people were suspended.

The problem was the new Northern Territory legal system. It took such a long time to get those people to court, and these were criminal charges. The first people we put up were not convicted by the jury. I will not comment on the decisions a jury or a court takes, but the jury did not convict. It took a long time to get them to court and then the jury would not convict. The advice of the Crown Solicitor was that there was no sense in proceeding against all the other people. Once that had occurred, under the Public Service Act-I point out that under the Public Service Act we cannot sack these meat inspectors, nor can we shoot them-we took them through the proper procedures. Those 19 people were penalised quite severely in terms of their rate of pay and were again employed in the Public Service.

The honourable member for Wannon also quoted figures which indicated that 153 people are not employed at present. I will be bringing before the House today legislation on which Cabinet has taken a decision. It will mean that the costs of those people who are not effectively engaged in meat inspection at present are not charged to the industry but are charged to the taxpayer. I point out also that the industry could do a lot more in terms of costs if it chose to do so. If I had the time I would give examples of that. We are working quietly and patiently with the industry to try to find better ways in which it can utilise the meat inspection service. For example, the time of start, the fact that some abattoirs run three concurrent chains rather than chains in sequence-there are lots of ways to save money if the industry is prepared to look at them.

The constant labelling of the Export Inspection Service as inefficient really is pretty irresponsible stuff. In earlier periods the demand was put on the Government to take on inspectors. We have to take on people who are trained. It takes about a year to have people trained in the system. They need a basic level of training, probably not as high as in some State services, and then they have to have on the job training. We just cannot switch inspectors on and off. The demand through 1978, 1979 and 1980 was very high indeed and extra inspectors were hired. Then came the downturn of the economy and the breaking of the drought. As I said, we cannot sack these people and we cannot shoot them. I will not tolerate constant accusations that the Service is inefficient. If I had time I would go through all that is being done by the Export Inspection Service in the interests of efficiency in terms of negotiating with the State governments, with industry and with the unions themselves. As I said, I will get back to the honourable member for Wannon with details of that.