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Thursday, 28 May 1987
Page: 3485

Mr CONQUEST(11.54) —I would like to comment on two areas of this legislation which are covered by Schedule 5 and Schedule 6 of the Customs Tariff Amendment Bill 1987. Schedule 5 re-introduces the rates of duty which applied before the automatic reduction in the tariff on orange and tangerine juices, including concentrates, which occurred on 10 December 1986. This legislation gives legislative effect to what had already occurred as a result of the Government's decision following an Industries Assistance Commission short term review on whether temporary assistance should be given to the citrus growing industry. Customs Tariff Alteration Notice No. 11 (1986) contained the change necessary to implement this Government's decision and was gazetted on 10 December 1986.

Citrus growers in the Hinkler electorate also expressed great concern last year about the importation of Brazilian fruit juice concentrates. An Australian Customs Service investigation was positive in that it found that the concentrates were being dumped. Fortunately, anti-dumping provisions were imposed immediately. These measures at the time lifted the effective FOB cost of exports to Australia by 30 per cent and relieved some of the pressures on the industry. The Industries Assistance Commission is expected to report on longer term arrangements for the fruit and fruit products industries early next year-I understand in February.

While speaking on this Bill I would also like to record my appreciation to Michael Kearnes and Stan Reeves of the Customs Service who assisted me in my inquiries, as well as staff members in the offices of the Minister for Trade (Mr Dawkins) and the Minister for Industry, Technology and Commerce (Senator Button).

This Bill gives effect to rates which will continue until 9 December 1987, and I hope that any decision to change them will be considered only after taking note of the industry's position at that time. Growers in my electorate have recently bought the former R. M. Gow and Co. Ltd juice factory at Mundubbera. This is indicative of their commitment to, and faith in, the industry. I also note that the change applicable to this aspect of the Bill affecting citrus growers should result in increased revenue of $235,000 in 1987.

Schedule 6 of the Bill contains a range of changes. One concerns amendments to implement the new forum island countries preference scheme in regard to passionfruit products. A new preference scheme for imports from forum island countries, including Papua New Guinea, came into effect on 1 July 1986. This action was as a result of requests from forum island countries for more liberalised access to the Australian market. A review of our involvement in the South Pacific Regional Trade and Economic Co-operation Agreement between Australia, New Zealand and the forum island countries was undertaken. The result was that we would grant duty free unrestricted access to all exports from forum island countries except those goods where sectoral policies apply.

Initially it had been envisaged that the implementation date would be 1 January 1987. With the Government's subsequent revision of tariffs for developing countries to be introduced from 1 July 1986, a decision was made to align the two dates of introduction of the two revised systems. An exception was made for the passionfruit industry, where the changes were to take effect on 1 January 1987, which is what this aspect of the Bill is all about.

The forum island countries are the Cook Islands, Fiji, Kiribati, Nauru, Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Vanuatu, and Western Samoa. Again, this legislation is giving effect to what already are the current rates as stated by Custom Tariff Notice No. 12 gazetted on 17 December 1986.

The effect of this legislation altered what was previously a general rate of 10 per cent tariff on imports, with forum island countries having a 100,000 litre single strength equivalent per annum free of duty. I have been advised that around 90 per cent of passionfruit imports come from forum island countries, notably Western Samoa and Fiji. In 1983-84 almost 200,000 litres of passionfruit pulp and juice was imported. The steady growth of imports had impacted on the domestic industry for both fresh and processed products. This placed great strain and considerable pressure on domestic processors and, in turn, on growers. This resulted in prices paid to growers by processors not being increased for the five years ending December 1985.

To indicate the potential forum island countries have to affect the Australian market-place, it is interesting to note that in 1983 forum island countries were looking to increase the then applying duty free quota from 100,000 to 400,000 litres per annum. With the removal of the quota, and with the removal of any duty, one would be reasonably safe in assuming that the forum island countries would be looking to increase substantially their exports to Australia to take advantage of this new competitive position.

The National Party of Australia supports a policy of reducing barriers to trade which follows a path of gradualism and predictability. We will be keeping a close eye on the outcome of the duty free access now accorded forum island countries to gauge what effect it has on Australian growers and producers. I appreciate the intent of the South Pacific Regional Trade and Economic Co-operation Agreement in helping those forum island countries which have fewer industries with export potential. I support our helping them with some reservation. I cannot turn a blind eye to the consequences of decisions which hurt our own industries. I was advised 18 months ago of the impending closure of one of Queensland's two processors of Queensland grown passionfruit.

It was attributed to difficulties arising from increasing competition from imports. The factory did in fact close down but subsequently was reopened by a Victorian company and is presently processing fruit juices but not passionfruit products.

However the news is not all bad. Recent advice that I have received from the Committee of Direction of Fruit Marketing in Brisbane, based on figures for the first two months of calendar year 1987, is that demand for passionfruit has been exceeding supply. There are a number of reasons for this. The cyclonic weather has affected the crops in Fiji and Western Samoa and imports from those countries have been minimal. Additionally the absence of any significant one-off imports of Brazilian passionfruit products has militated against there being a glut on the market. This industry is noted for its fluctuations in demand and supply, though no regular patterns are normally observable. Just because the situation is good now does not guarantee that this state of affairs will continue for any great length of time. I am told that if supply was better the former Cenco factory would be able to process passionfruit products, as it still retains that capability.

I say again that just because the position is favourable for the industry now, it would be remiss of us if we failed to keep a watching brief on the position as it develops over time. I cannot turn a blind eye to it.

I understand that there are some restrictions on the length of speeches but before I close I would like to reply to what the honourable member for Bendigo (Mr Brumby) said. He spoke about assistance to the manufacturing and high technology industries of Australia. I agree with him that they must have assistance but I can see no short term great benefits to Australia. I believe that we will still have to rely on our primary rural industries and our extractive industries to correct the problems that we have today. Whilst the Government is giving assistance to the manufacturing industries, I remind the honourable member for Bendigo-it is a pity that he is not still in the House-that it is through almost raping and pillaging the rural sectors that it has been able to fund those industries. I will give one instance of that so that honourable members can understand how money from the rural industries is being utilised to subsidise other areas. Bundaberg rum is a famous product from the city of Bundaberg, which is in my electorate. Some $80m a year is taken from Bundaberg rum in sales tax and excise alone. That is just one industry, one factory, allied with the sugar industry, which produces for government revenue $80m a year in sales tax and excise.