Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 1 June 1987
Page: 3697

Mr SIMMONS(3.50) —The Government certainly agrees with the objective of reducing inflation and interest rates, which has been identified in this matter of public importance today. The Opposition, in its present multi-faceted divisions, has the problem that only the Hawke Government is capable of achieving these reductions. I think it is significant in this debate today that we have heard the lead speaker for the Sinclair-led faction of the National Party followed by a member of the Sir Joh-led faction of the National Party as the second non-Government speaker. Even more significant is the fact that not one Liberal Party member-not even the shadow Minister for Primary Industry, the honourable member for Hume (Mr Fife)-is prepared to participate in this most important debate today.

The National Party talks about the critical need to reduce inflation and interest rates, but let us not forget that for seven long years in coalition-as it then was with the Liberal Party-the National Party helped rather unmercifully to tear our agriculture industry to shreds. What was the then coalition's record? Inflation was 14 per cent in 1976-77, and in the seven years between 1976-77 and 1981-82 it was an average of 10.25 per cent. Who insisted on an overvalued Australian dollar in the Fraser-Howard years in the absence of a decent wages policy? None other than the then Treasury Secretary, and now Joh's economic adviser, one John Stone. What were the effects of this advice? The effects were very clear and included the destruction of the competitive position of Australian manufacturing, and the rural sector was held back from reaping the advantages of a relatively buoyant prices period in the early 1980s. Remember what happened to the National Party in the early 1970s when the Whitlam Government cut tariffs across the board by 25 per cent? What did the then Leader of the National Party, Mr Anthony, have to say? He accused the then Government of cowardice. Between 1976 and 1983 there was no effective action against international protectionism by the then Treasurer the honourable member for Bennelong (Mr Howard), who is the current Leader of the Liberal Party.

The Government welcomes this matter of public importance debate. On the two issues identified by the National Party it is clear that what the Government will do, and has done, is much better than honourable members opposite could ever hope to do-and their record is a sorry testament to that. They stand condemned from their own mouth on the two issues selected for this debate this afternoon. What does that leave? It leaves the sort of paranoia reflected in the wording of the matter of public importance about enabling `primary industry and family farmers to survive'. The fact of the matter is that, if the previous Government's policies had continued-if we still had farm cost inflation at 11 per cent and if we still had an overvalued currency-farm incomes would have been completely wiped out some time ago. In this context it is interesting to point out that a one per cent change in farm costs brings about a return of some $130m to Australian farmers, and a one per cent change in currency brings about an additional $100m in farm receipts. So most thinking farmers can see for themselves the beneficial effects of the currency depreciation that has occurred under this Government-a government which has had the guts to take the big decisions, including floating the Australian dollar.

We all acknowledge that there are problems in Australian agriculture at present, but it is at least pleasing to see the honourable members opposite not using the term `rural crisis' as if to imply-as they have in the past-that there is some sort of broad brush problem in Australian agriculture at present. We know, as the Minister for Primary Industry (Mr Kerin) has indicated, and I am sure as the Deputy Leader of the National Party (Mr Hunt) is prepared to concede, that there are problems of low prices for grains and some other commodities as a result of the international agricultural trade war. However, these problems are by no means universal among Australian farmers. Of course, there is a great deal of diversity in Australian agriculture across commodities, across regions and certainly across individuals. Even among the grain growers of Australia, the Bureau of Agricultural Economics estimates that less than 20 per cent are at risk of financial difficulty. By July 1987 there is an expectation that the average farm in Australia will be worth $624,600 and the average farm debt will be $74,000. That leaves average equity of 88 per cent in Australian farming. As I have indicated, 35 per cent have no debt at all. However, the highest 12 1/2 per cent of farmers-mainly those in the grains industry, who are having extraordinary difficulty at the moment because of the international trade wars-have debts of $163,500 on average. However, other industries are doing relatively well because of the policies of this Government.

We have seen wool prices at record levels and, as a result, no sheep farmers are considered at risk by the Bureau of Agricultural Economics. While some farmers have very high debt loads, as the figures have indicated, and hence face some difficulties from the present high interest rates, the fact remains that the vast majority of farmers are in a very reasonable position as far as interest is concerned. It is not true that the future of the sector itself is at risk. We have this crisis mentality, this constant talk of crisis across the Australian agriculture sector from an Opposition which is just devoid of economic policies and policies in the agriculture scene that would do anything about it. The latest forecast from the Bureau of Agricultural Economics, interestingly enough, is for a 30 per cent increase in farm incomes this year. That is certainly welcomed by this Government, which appreciates that there have been some difficulties, particularly with respect to Australian farm incomes, for some time. However, the sector will survive. It is a very resilient sector which will survive because the policies of this Government have given it a competitive position so that it will be able to survive. We recognise that there are individuals at risk-and that is why it is important that we have wound up the rural adjustment scheme to record levels. Most people concerned with the agriculture scene at present would recognise that the rural adjustment scheme is currently financing 10 times the proportion of total farm debt that was the case under the previous Government. However, we hear the Deputy Leader of the Sinclair faction of the National Party-and again this sentiment is echoed by his colleague from the Joh faction of the National Party who spoke earlier this afternoon-trying to suggest that this Government does not care for agriculture, that we have some sort of callous approach to people involved in the rural sector. I think actions speak louder than words. This Government has the runs on the board.

The Minister for Primary Industry has indicated, and most reasonable people would accept, that there are good reasons to explain the present quite high interest rates in Australia. Many honourable members would recall the Prime Minister (Mr Hawke) and other Ministers in this House making the very valid comment that no government in its right mind would have some sort of masochistic approach to keeping interest rates at a continuing high level. That is not good economics, and it is certainly not good politics if one wants to look at it in that sense. So there is no masochism. We are taking policy initiatives in order to reduce interest rates, but it takes time to do that. Unfortunately, there is no acknowledgment from the other side of the House of the steps that we have taken. Only this Government has been able to do something about unwinding the rather pathetic legacy left to us by the previous Government. We have a firm fiscal policy that will reduce the 1987-88 prospective deficit by more than $4 billion to ensure that the task of winding back the $9.6 billion deficit that was left to us by the current Leader of the Opposition (Mr Howard) in 1983 continues. So much for fiscal restraint when compared with some of the Mickey Mouse actions of the so-called Liberal Party razor gangs in the 1970s. Our wages policy is adjusted for inflation and is actually creating jobs. We have created over 780,000 new jobs since March 1983, in contrast with the sorry record of our predecessors.

Mr DEPUTY SPEAKER (Mr Leo McLeay) —Order! The discussion is concluded.