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Monday, 22 April 1985
Page: 1570

Mr KERIN (Minister for Primary Industry)(3.22) —There were elements of responsibility in the comments of the honourable member for Gwydir (Mr Hunt). It is a pity that they were confused with a bit of muddle-headedness. I understand that the honourable member for Gwydir, who is a gentleman, has to do things every now and then to keep cockies' corner quiet, but today's performance takes the cake in terms of logic. He said that he is against the cost-price squeeze. That is really like saying that he is against taxes or nuclear war. Nothing much is new in what he had to say.

When I was a farmer through the l950s and l960s, I was concerned about the cost-price squeeze. I joined the Bureau of Agricultural Economics in l97l. One of the major work programs of the BAE then was the cost-price squeeze. The word that the honourable member did not mention is 'productivity'. To the rural industries' credit, the thing that keeps the primary sector going is productivity increase. A lot of cognisance should be taken of that by our policy makers. I continue to say that the best thing that any Commonwealth Government can do for the farm sector is to get the economy right.

If I have time, I shall answer some of the honourable gentleman's--

Mr McVeigh —Madam Deputy Speaker, I take a point of order. Standing order l07 requires that, for matters of public importance, eight members of whichever party is proposing the matter be present. There are only three Labor members present.

Madam DEPUTY SPEAKER (Mrs Child) —There is no point of order. The honourable member will resume his seat. I call the Minister for Primary Industry.

Mr KERIN —The honourable member for Darling Downs also thought this was being broadcast, I assume. The problems--

Mr McVeigh —I take a point of order. I am the member for Groom. Can the Minister now show me common courtesy?

Madam DEPUTY SPEAKER —Order! The Minister will take note of the fact that the honourable gentleman is the honourable member for Groom. I should like less interruption, thank you.

Mr KERIN —I must say that I did not know from where the honourable member came. I am amazed that the Opposition has the gall to propose such a matter of public importance:

The effect on the family farm and all Australian farmers of the failure of the Government to contain the cost-price crisis facing agricultural industries.

I am amazed because, quite frankly, the record of the conservative parties, containing the so-called farmers party, the National Party-even in the last Government there were six farmers in the Cabinet-was appalling. If I were the honourable member for Gwydir I would not be seeking to draw attention to the fact that the previous Government was the conservative party that failed. The National Party was involved too. Key Ministers were members of the National Party. They failed the rural sector. Under Mr Fraser and the honourable member for Bennelong, Mr Howard-high tax Howard-encouraged by the then right honourable member for Richmond, Mr Anthony, and the right honourable member for New England (Mr Sinclair), the family farm in Australia was brought almost to the point of extinction. With the general rate of inflation raging, farm costs increased by an average rate of over 17 per cent during the reign of the farmers Cabinet. There were six farmers in the Cabinet and through that period, between 1977 and l982, farm costs doubled. Honourable members opposite come in here today and criticise this Government which is getting the economy right.

The farm income of family farms in high tax Howard's last year as Treasurer was minus $2l0. Under this Government, the general rate of inflation has been more than halved. The rate of increase in farm costs has been pulled back to around 5 per cent per annum. Farm income on family farms has increased to over $l2,000 in l984-85. We are working to ensure that farm incomes continue to improve. The figure was minus $210 in the last year under good old Malcolm and it is $l2,000 under us in l984-85. Members of the Opposition come in here grizzling and complaining about the obvious-that there is a cost squeeze on. Their record in this regard stinks.

The problem faced by Australian farmers is twofold: There is the problem of internal costs and, secondly, the prices received for the commodity. I guess the problem faced by Australian farmers is that Australia is a democratic, pluralist society and there are non-farmers in it, that is, people not contained by and dependent upon Australia's l74,000 farm units. These people, rightly and wrongly, also make demands on government. All governments, including the high protection Liberal Party governments, are very much aware of that. Australia's primary production represents about 5 per cent or 6 per cent of total gross national product and contributes the same amount to our employment. Its enormous value to Australia is its contribution to exports, about 40 per cent or so. While no one denies that costs are a major problem, just as big a problem is prices received, and these are shrinking. The problem for the rural sector is that it is 70 per cent exposed on international markets, and it is up to 90 per cent exposed in some commodities. The problem is that we are price takers on those world markets. World commodity markets and agricultural products are notoriously thin and they are more and more exposed, damaged, by agricultural subsidisation and protection by the industrial giants.

What phonies the members of the National Country Party are. I think that is the latest name for the Party in this place. The National Country Party has been in power for all bar five years since l949, always in coalition and always with at least six farmers in the Cabinet. We must face the fact that farmers, like lawyers, are always over-represented in the Parliament as a proportion of the population. The National Country Party is not a party of principle or policy, certainly not rural policy. It is a user party. Sometimes its members are radical populists if it suits. Sometimes they are socialists if it suits.

Mr Slipper —I raise a point of order. I would like the Minister to take note that the correct name of my Party is the National Party of Australia, not the National Country Party.

Madam DEPUTY SPEAKER (Mrs Child) —The Minister did correct himself by saying 'the National Party'.

Mr KERIN —The name of the Party keeps changing from State to State. It is the National Party, rightoh. Occasionally it is a free trade and market oriented party, but not very often. What it is always doing is leeching on to the Liberal Party, which takes no interest at all in rural policy. The only place where the National Party-I am not sure what it is called in Queensland-is not interested in leeching on to the Liberal Party is Queensland. The Queensland Premier is paranoid about having to go back into coalition with the Liberals. Queensland, of course, has the real cockies government. It is a government of popular prejudice, ignorance, division and insularity, which has an enormously high internal cost. The National Party does not have any agricultural policy.

Mr Slipper —I raise a point of order. As a National Party member from Queensland I take strong exception to the terms used by the Minister with respect to the National Party Government in that State.

Madam DEPUTY SPEAKER (Mrs Child) —Order! There is no point of order. The honourable member will resume his seat.

Mr KERIN —Is it the pea and thimble or the pea and slipper? The National Party really does not have an agricultural policy when in government because it simply acts as a party of government, nothing else. It has no policy in opposition but opposition itself. At present the Leader of the National Party is not particularly interested in rural policy. He is not interested in the sugar industry. He hopes that it will continue to suffer so that he can get its votes and kick a few heads. That is the approach of the Leader of the National Party. He is not interested in the dairy industry or its problems or in the policies being put up, but only in the fact that there is a political opportunity to kick heads.

I must point out how interested the National Party is in agricultural policy. All through l984, when the honourable member for Groom (Mr McVeigh), then the honourable member for Darling Downs, was Opposition spokesman on primary industry, he asked me two questions without notice and put four questions on agricultural issues on notice. That was his interest. Then, at election time, his Party came out with a pathetic policy. What is the record of the conservatives for all the time they have been in power, nationally and in the States, with cocky Cabinets, gerrymanders, malapportionment and a parliament full of rural legislation? As I have already said, costs doubled between l977 and l982. They allowed a wage explosion in l98l-82. The fuel tax take went up by 300 per cent in the time they were in office with their import parity policy. The overall costs to the Australian consumers went up by 230 per cent and to farmers by l30 per cent.

The honourable member for Gwydir talked about Commonwealth debt. Under dear old Malcolm Fraser it went up from $20 billion when he came into office to $39 billion by the time he got out. The Opposition parties all but doubled the international debt for this country, and we wear that round our neck today. It has gone up by another $7 billion under us, but the rest of the debt comes from the States and local government. Of course, the previous Government was a taxer, not an axer, but it always posed as an axer. Inflation was up to record levels when it went out of office.

What did honourable members opposite do in the trade area? They sabotaged the beef industry in Japan in l977. They also sabotaged our sugar industry in the International Sugar Agreement in l977, brought in the General Agreement on Tariffs and Trade subsidies code and signed the closer economic relations agreement with New Zealand. That is what they did for trade. They did not have any wages, prices and incomes accord to try to hold down the high cost of wages in this country, they did not go for bank entry, they did not float the exchange rate that will give our farmers an extra $525m this year and they did not bring in foreign exchange markets. No, they just sat there because they do not have any policy ideas either in government or in opposition.

Let us compare the performance of this Government with that of the Government of which the honourable member for Gwydir was a member in terms of the number of key components of farmers' costs. It was the Fraser Government that introduced the policy of import parity pricing for fuel in l978 and sent fuel prices skyrocketing. Between l978 and the end of l982 fuel prices increased by over l30 per cent. Under this Government, fuel prices have increased by only l4 per cent. There it is-l30 per cent compared with 14 per cent. A major factor in the increased import parity price for fuel now is the decline in the value of the Australian dollar. However, let me point out that the decline in the value of the Australian dollar, as I have already said, brings some significant advantages to Australia's primary producers. The devaluation is likely to add directly about $500m, or l2 per cent, to the net value of rural production in l984-85.

Let me now turn to wage costs. When the honourable member for Gwydir was a member of the former Government, wage costs spiralled, increasing by over 50 per cent. Under this Government, they have increased by roughly 11 per cent. Here is the comparison again-50 per cent for honourable members opposite and ll per cent for us. The Opposition would again subject the family farm to spiralling wage costs. It wants to throw away the Australian Conciliation and Arbitration Commission and bring in some crazy market-directed system whereby we would have seven arbitration systems. That would create absolute chaos. That is in contrast to the Hawke Government's carefully structured approach to wages policy. The Opposition's policy is a leap into the unknown. The Opposition proposes a system of centrally determined minimum wages and voluntary agreements between employers and employees covering other increases in wages or improvements in working conditions. That is a disastrous recipe. We would have one sector chasing the other on some mad ratchet basis. The l98l-82 experience of the metals round offers a clear indication of what can be expected in this approach. Award wages grew by l6.9 per cent in the year to March l982, inflation during 1982 was over 10 per cent, employment fell by l86,000 people during l982 and there were historically high levels of industrial disputation during that period. That is what honourable members opposite want to go back to.

The Hawke Government has done more than any other government to reduce the burden of costs on Australia's family farms. This Government recognises, as do the major farm organisations, that what matters most to farmers in Australia is the capacity of the Government to manage the economy. This Government has shown that it is more aware than any conservative government of the contribution that the rural sector can make to the Australian economy and of the need to ensure that the sector's potential to contribute is maximised and is not thwarted by careless economic policies such as those resorted to by the conservatives.

Mr Hunt —Like the tariff on headers?

Mr KERIN —Who brought in the tariff on headers? It was the National Party. Tonight the Government will be sitting down with the National Farmers Federation-and the fishing industry-to discuss the issue of farm costs. At the first such meeting the NFF produced a farm costs balance sheet. There was some uncertainty over the way in which the NFF had arrived at its figures. It now seems to have become one of the myths in the land that, in a four-and-a-half-hour meeting, the discussion about the load of secondary industry protection carried by the farm sector-that is, exporters-took about five minutes. When there was such a disparity between the two figures, the Prime Minister (Mr Hawke) suggested, and Mr McLachlan of the NFF agreed, that we set up a technical working party to look at that issue to one side. Then the meeting got on with discussing the issue of farm costs themselves, wage determination, et cetera. Now we have the figures agreed to by the working party. There again there is a slight disparity, between $3,000 and $6,000 per farm.

What I am saying-I am sure that the honourable member for Gwydir will agree-is that it does not matter whether the figure is $2,000 or $20,000; the principle is the same. High levels of secondary industry protection cost exporters, whether they be rural product or mineral exporters, rather than consumers. But the problem is-I referred to this earlier-that there are other people in the Australian society. When the Whitlam Government cut tariffs by 25 per cent across the board the then Leader of the National Party, Mr Anthony, described it as a cowardly act. The Liberal Party piled in saying that it was absolutely disastrous. The National Party realises that the Liberals are the high protection party.

Madam DEPUTY SPEAKER (Mrs Child) —Order! The Minister's time has expired.