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Thursday, 28 May 1987
Page: 3545

Mr CAMPBELL(4.16) —The Bounty and Subsidy Legislation Amendment Bill is an omnibus measure covering amendments to various bounty and subsidy Acts. As was pointed out by the Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce (Mr Barry Jones) in his second reading speech, one of the amendments covers the Bounty (Textile Yarns) Act 1981. This relates to the extension of eligibility for bounty for a proportion of the overhead costs associated with the production for export. This applies only to companies which produce at least 50 per cent of the local market. It will enable them to claim 30 per cent of the overhead costs associated with the export component of their business. I believe this is fair and equitable and, even more importantly, that it will help to encourage export development.

It is acknowledged in part by this Government that we, as a nation, must export or perish. This is not putting it too strongly. Unless we, as a nation, become more enthused about exporting, we will inevitably become a Third World country. Whilst this sounds simple, it is not so, for as a nation we must be selective about what we export. We should be seeking to develop exports in areas where we have a natural or intellectual advantage and we should be seeking niches in the export markets around the world, for we must diversify our trading base. Japan and America are apt to act with extreme caprice, and I believe they will do so even more in the future.

This particular amendment allows the manufacture of yarn at the lowest possible cost to downstream users, while correcting export anomalies. It at once helps the yarn producers by spreading their costs over bigger production, but places no impediment in the way of the producers of cloth or clothing who, through their excellence of quality or design, can sell on the export market and thereby give Australia the benefits of value added exports. Clearly high fashion is an option and run of the mill clothing manufacture is not. I would not like to be working for Third World wages, and I certainly would not like my children to be working for Third World wages. It is interesting to reflect on the policies of the Opposition, which seem to hinge very much on making Australia competitive by reducing our wages to the level of those in Third World countries. Clearly, this is not the way to go. We should be looking for the innovation and excellence of design that will help us to sell on those markets.

The honourable member for Ryan (Mr Moore) has been lamenting the problems of the rural sector. It seems to me that he has not thought through his arguments particularly well. The particular amendments mentioned in the Bill to the Fertilisers Subsidy Act 1986 are really a machinery measure to allow the payment of the subsidy to producers of the local product. It is true that the National Farmers Federation claims that this bounty decision is going to raise an additional $40m in costs for Australian farmers. I do not believe it has ever documented that claim. Even if it is true, it is also true that if there were an impost on imported fertiliser, there would be the potential for a corresponding decrease in local production. In other words, what was lost on diammonium phosphate, DAP, was gained on the monoammonium phosphate, MAP. Because of this legislation Australian manufacturers are already moving into the manufacture of diammonium phosphate.

Another extension of this legislation is the long term security of phosphate supplies for farmers. It is quite clear that the world supply is insecure. Supplies from Florida will not always be available, only on an opportunity basis. The other large production potential is in Morocco. I certainly would not like to see Australian farmers locked into a supply from an area of the world that is prone to troubles from so many sources. For instance, the interdiction of the Suez Canal could cause havoc to the supply for Australian farmers if they depended on phosphate from the Mediterranean or from the edge of the Atlantic.

The future security of Australian farmers lies in Australia becoming much more self-sufficient. Our traditional supplies are running out. There is no doubt that the Christmas Island supply is running down and that Nauru is suffering the same problem. But we have enormous potential in Mount Weld and in other places. Farmers must have security. I believe that this legislation will help to make supply from Mount Weld a certainty. It will go ahead, in part because of this legislation.

The implications of this legislation go far wider than the farming community. The overwhelming environmental problem facing Australia today lies not in forestry regrowth in Tasmania, so beloved by the middle class trendies, but in soil erosion. It is a problem that this Government has addressed. But it is interesting to note that our contribution to the solution of the problem is small compared with the amount of money we are prepared to pay Tasmania for its loss of profits.

Through this legislation I believe we can help maintain the fertility of our soils, and thus do something about soil erosion and salinity. It must be recognised that soil erosion and salinity are environmental problems that affect all Australians, whether they live in the city or in the country. They also have enormous implications for our foreign exchange. There is an element of long term thinking in this Bill that was not recognised by the honourable member for Ryan.

This Bill addresses the Subsidy (Cultivation Machines and Equipment) Act. When the Government moved to introduce the subsidy-a subsidy demanded by farmers-an anomaly developed. At the time of the enactment of the legislation the then bounty did not apply to equipment that was already manufactured and in the dealer's yard. It was clear that the equipment manufactured during the life of the bounty would be dearer. This amending legislation is designed to cover that anomaly.

The Bounty and Subsidy Legislation Amendment Bill is a very straightforward, common-sense piece of legislation. It is for that reason that it is not meeting a great deal of opposition from honourable members opposite. I note that the honourable member for Ryan read extensively from the second reading speech of the Minister for Science. One must therefore assume that he is, in large measure, in agreement with the legislation. It is the sort of legislation that has characterised this Government. It is common-sense, straightforward legislation. It tidies up existing legislation and it shows that this Government is prepared to look at issues as they arise and consider them on the basis of the facts.