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Tuesday, 26 March 1985
Page: 903


Mr CUNNINGHAM(3.32) —It amazes me to think that the two previous speakers for the Opposition, the honourable member for Gwydir (Mr Hunt) and the honourable member for Wannon (Mr Hawker), have attacked what seems to be the John Cain decision, which was reported to be an agreed decision of all Ministers. We know from what the Minister for Primary Industry (Mr Kerin) has told us and from the record that for 14 months the States had been coming together to try to thrash out an agreement on an Australian Dairy Industry Conference plan. They could not agree. Pressure built up in Victoria to a point where blockades were put in place. Many people were showing their concern. The Premier of Victoria brought the matter to a head by bringing all Ministers together. We are told that everybody agreed. Of course when the Federal Government sat down and assessed the agreement that had been reached, we had to make our judgment as to whether that agreement would be for the good of the industry throughout Australia. The decision of the Cabinet and this Government was that it would not be for the good of the Australian dairy industry, and it moved to another direction.

The speakers on the other side, a member of the Liberal Party of Australia and a member of the National Party of Australia, pointed to headlines and talked about this national agreement. I can produce headlines as well as they can. The Courier-Mail of Thursday, 21 March stated:

Doumany job stirs NP row over Minister.

It referred to a former Liberal Minister, Mr Sam Doumany, who was appointed to a $40,000 a year job as head of the Queensland Milk Board. The article stated in part:

News of the appointment yesterday brought to a head Government backbench dissatisfaction with the performance of the Primary Industries Minister, Mr Turner.

He was down here at that meeting on the Friday and this was the following week. This is what the National Party people were saying. They got together and wrote a letter to their beloved leader, Bjelke-Petersen. They attacked the Minister in Queensland and said:

Anybody who criticises him just gets the sarcastic treatment. He did not tell us he was going to Canberra to agree with the Federal Government proposal that we prop up the Victorian dairy industry by paying a 2c-a-litre levy on all milk we produce.

No-one was told, yet Russ Hinze's family--

we know Russ; that poor dairy farmer-

now cops a $15,000-a-year bill to cover the levy.

That is the sort of agreement that was reached on the Friday. Within a week the States were once again starting to tear it apart. Yet the Opposition expects this Federal Government to take it to the Cabinet.


Mr Lloyd —Madam Deputy Speaker, I raise a point of order. Does this mean that the honourable member for McMillan has no faith in the veracity of the Premier of Victoria?


Madam DEPUTY SPEAKER (Mrs Child) — Order! There is no point of order.


Mr CUNNINGHAM —The argument that has been put forward today is that this Government took an incorrect decision and that all the States had agreed. We know that for 14 months they could not agree. We know from this newspaper article that within a week in Queensland alone they were starting to take all sorts of actions and back off. Let us look at it. The Hawke Government has to take a nationally responsible position when it makes decisions. For too long agricultural industries in Australia have had foisted on them policies based on sectionalism, the sorts of policies that have put the dairy industry in the situation it is in today. Let us look at the problem. There is no way we could have a situation where in some States producers get 28c a litre and in other States they get 11c or 12c a litre. Pressure was going to build up regardless of what plan was put into operation, whether it was the ADIC plan or the Kerin plan, as I like to call this one-the one that is going to rejuvenate the industry.

The industry was based on a program where the cake was put out and everybody in the industry was entitled to come forward and have a nibble at it, regardless of their cost structures, their ability to sell or their ability to be efficient. They all took out their share. In transport, for instance, they could be running five or six milk trucks up the one road. There was no problem with that. It was quite simple because the cake was there for everybody to have a bite. At the end of the day, when this policy had been developed and the cake had been eaten, the producers got what was left over, and the producers in Victoria were getting 11c or 12c a litre. How long could we expect that to continue while the producers in New South Wales and Queensland, because of their systems, were able to get 28c a litre? The problem had to come to a head and it had to be looked at on a national basis. We have to throw out that mechanism, that so-called private enterprise approach, taken by the conservatives. I do not know where they get it from, but there is nothing to do with market forces in establishing a system whereby a cake is put up for everybody to chew and the ones at the end, who get a very few crumbs, are expected to cop the result. Yet the conservatives purport to represent those people who are copping the crumbs at the bottom. The farmers are the ones who have to pick up the crumbs.


Mr Kerin —They kept them in poverty for years.


Mr CUNNINGHAM —For years and years they have been kept in poverty. The very structure that the conservative governments of this country have put in place has been the cause of the total breakdown in the industry. The new plan that has been put forward has taken into account that the market position has to be considered. We have not completely taken away support for the industry. It has not been deregulated, but we have certainly put it in a position where some of the milk factories around the country have to take more responsible decisions. They cannot just sell their products on the world market and expect that somebody else will pick up the bill. That is what has been happening for too long. No indication has been given to the industry as to what it will get for a product. Factory managements and factory directors have put themselves forward to get on to dairy boards, dairy corporations, dairy this and dairy that, committees here and committees there. The only reason they put themselves forward is because they know they have to be in there to get their share of the cake, and the ones who are missing out are the ones who cop the crumbs at the finish. The farmers in the community and those listening today should not fall for the trick. They have had enough of copping the crumbs, and enough of them are well aware of how the structure has put them in the position they are in today. I can guarantee that many of them will support the proposition put before the Government today. We will find that out in the very near future. There are going to be changes. They are going to have to make decisions.

In the three or four minutes I have left I should like to give an example of how this will work so that those listening will have some idea of what goes on. Under the old system an average export market return could be $1,245 a tonne. An exporter would receive this return from the export pool whether he sold his product for $2,000 or for $800. A stabilisation levy of $1,170 is imposed on all domestic sales-in other words, a transfer from the consumer to the exporter. Hence, the manufacturer must receive an average export price return of $1,245 a tonne plus the amount of the levy, or a total of $2,415 a tonne, for a domestic sale-that is, a sale on the Australian market-for it to be as remunerative as the export sale. This created a situation in which people could sell on the world market, knowing full well that, regardless of what it would cost to sell, somebody else would pick up the bill. The new proposal will change that situation.

The new system can be illustrated by taking the example to which I have referred and showing how the proposed new system would work in 1985-86. At present, domestic prices are supported by a system of levies on prescribed products. In the case of butter, the levy is, as I said, $1,170 a tonne and that is required to support the theoretical minimum domestic price of $2,415. The new system involves a levy on all milk and smaller levies on butter, butter oil and cheese, with the latter levies ultimately being phased out. For 1985-86 the milk levy would be about 1.5c a litre and the levy on butter would be $557 a tonne, on the assumption of an average export price for 1985-86 of $1,200 a tonne.

Market support payments would be $420 per tonne to achieve the 130 per cent market support target, and a further $237 per tonne as a result of the distribution of the levies on butter and cheese. This means that an exporter receiving $1,200 from an export sale would have his return built up to $1,858. As the levy on butter is $557, the same exporter would have had to receive a return of $2,415 on the domestic market to be as well off. The figure of $2,415 is the current domestic value for levy purposes-DVLP, as we used to call it. The rates of supplementary market support and levies for butter have been calculated so as to produce this result for 1985-86.

This is a quite clear indication to factories when they do their calculations for next season that, if they have markets that they can put forward under this scheme, they will be able to indicate to their farmers what price they will be able to pay. It is very important to make the point that the plan does not state that the industry must immediately cut back to 4.6 billion litres. Those decisions are still a long way down the track. If the marketing people get out and sell their product, and if the shackles are taken off, this industry can prosper.


Madam DEPUTY SPEAKER (Mrs Child) —Order! The honourable member's time has expired. The discussion is concluded. (Quorum formed)