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Wednesday, 17 April 1985
Page: 1297

Mr KERIN (Minister for Primary Industry)(5.26) —I move:

That the Bill be now read a second time.

The purpose of the Bill is to amend the Dried Sultana Production Underwriting Act 1982 to take account of recent Government decisions on future assistance arrangements for the dried vine fruits industry. The present underwriting scheme for sultanas covers the 1982 to 1986 seasons, relates to the average ex-packer returns for the whole dried sultana production of a season, and guarantees a minimum return at a proportion of the estimated average of equalised returns for the current and two preceding seasons.

This Bill will continue present arrangements up to and including the 1985 season only. Between the 1986 and 1990 seasons the Government will underwrite the overall production of each season on the basis of the average export return at the free on board-f.o.b.-level. The guaranteed minimum export return rate for a particular season will be 80 per cent of the average of the f.o.b. export returns for the preceding three seasons. If the average export return for the particular season is less than that guaranteed minimum, an underwriting payment is payable over all sales at the amount per tonne by which that average export return falls short of that guaranteed minimum.

The new arrangements are expected to provide roughly the same amount of assistance on average as at present. However, with the system being based on returns from exports only rather than returns from all sales, underwriting will be more sensitive to sharp falls in world market prices and thus will be more effective in providing the protection intended. Basing the system on f.o.b., rather than cost including freight-c.i.f.-as recommended by the Industries Assistance Commission, removes the freight and insurance costs, which are not specific to the dried vine fruits industry, and enhances this sensitivity. Also the new arrangements make it possible to determine the guaranteed minimum return for underwriting much earlier than under existing arrangements.

It is not feasible at this time to estimate reliably the dried sultana production or average export returns for the 1986 season, or the average return over the three seasons 1983 to 1985 inclusive. Accordingly no reliable estimate is available of the cost of the new arrangements to the Government through any underwriting payment in respect of 1986 or later seasons. However, a comparison of the new and the current systems on the basis of data for the 1982 season, the latest for which an underwriting payment has been made, indicates that an underwriting payment of $61 per tonne would have been payable under the new arrangements. Under the current arrangements, $16.38 per tonne was paid. As 1982 production of sultanas was 80,655 tonnes, $4.92m would have been payable under the new arrangement, compared with $1.32m actually paid. I commend the Bill to honourable members.

Debate (on motion by Mr Braithwaite) adjourned.