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Tuesday, 1 May 1984
Page: 1419


Senator ARCHER(9.22) —I too support the amendment moved by Senator Scott. I accept that the Government can tax and has a right to tax as it sees fit. However, the tax should be reasonable and the Opposition has a responsibility to ensure that the costs of that tax should be appropriate to the circumstances. For instance, let us look at the context in which we are dealing with this matter. Only a month ago these industries suffered yet another 4.1 per cent pay rise. There is nothing in any of this legislation that will tell them how they can start to compensate for these sorts of extra costs. We have to remember that in Australia we are price takers on all of these products. We are producers and suppliers on a world market. For items that come on the domestic market one pays a domestic cost and receives a domestic return. To export one pays the domestic cost and gets a world return. Every time we do something to stupefy our own costs it is at the expense of the producer, not the purchaser. If we wish to drive these various industries into extinction this is exactly the way to go about it. We continue to load them with costs that they cannot pass on and costs that are non-comparative with other competing countries. This legislation is the perfect example of that.

When one looks at what even a wage rise amounts to one must multiply it a few times to allow for the costs incurred by the time the goods eventually reach the wharf. Can the producers pass them on? No, of course they cannot. It is all at the cost of the producer. As I have said, on the world market we are price takers competing with a group of countries which are cost conscious competitors. We are competing with countries which seek to build exports, which want the development and employment that go with it and which act accordingly. We are involved in world trade and in primary industry areas we are competing with countries such as the European Economic Community, New Zealand, Canada and the United States of America. Do they tax their exports? No, of course they do not. We are the silliest country in the world when it comes to this sort of thing. Why would we do a thing like this now?

The Australians who are now getting the huge pay rise, which is out of line with that received by people in other countries, neither understand the export tax nor realise what it will do to their own jobs and the national productivity and prosperity that go with it. As we were discussing earlier today, without export income Australia cannot survive. As we know, our coal and iron industries are in trouble as are our beef and dairy producers. Apparently it is necessary that we add honey, fresh, frozen, canned and dried fruits and vegetables as well . What an appalling state of affairs. I do not see why, because we have got most of our industries in trouble, we should ensure that we put the rest of them in that position too. I and I suppose most of the producers of these commodities are terribly impressed with the publicity given to rural booms. I have talked with vegetable processors, onion exporters, honey producers and fruit growers and regrettably they all seem to have missed out on any boom. In the last 12 months costs generally have ballooned. One needs only to consider the rises in fuel, wages and taxes generally to see what has happened to all these price taking industries. I do not know how many times the Government believes that it is possible to keep squeezing the lemon dry.

I think the Government is also of the opinion that primary producers are wealthy barons of the soil. That sort of attitude constantly lets them down. The vast knowledge of the productive sector that is so noticeably absent in honourable senators opposite is again upon us and the exporters involved. We do have a system of export incentives under the export market development grants. As such we have apparently decided to give the export market development grant on the one hand and take it back on the other with an export tax. I ask: Is that economical, particularly when one considers the added costs on both sides of such a transaction? Do we want exports? Does our economy depend on exports?

Let me look briefly at the products involved in these Bills. At the moment legislation regarding fresh vegetables has been withdrawn. However, I was not impressed when I talked to an onion producer and found that at a time when he was exporting 200 tonnes of onions a day he was charged $1,000 a day for the wages of one man, plus overtime of $5,000 or $6,000 a year into the bargain. I cannot see that that is reasonable in any way, shape or form. I think he is entitled to be charged only what is reasonable.

As far as processed vegetables are concerned, either frozen or canned, the vegetable producers whom I know produce only a relatively small quantity of their production for export. However, it is very difficult to go through the processing mechanism and to decide which tins will be exported and which ones will not when one is in a normal production run. They have no option but to pay to have them all inspected for export purposes. A person from one factory to whom I spoke reported that it would cost something like $20,000, to the producer of course, not to the processor. Processors are operating marginally at the moment and their profitability is very doubtful. But this factory will pay another $20,000 for export inspections, yet another producer tax.

Another point that was raised was what an absolute farce it was to pay $20,000 a year for an export inspection charge to Department of Primary Industry qualified inspectors when the factories have inspectors and quality controls that are far higher and far more scientific than those required by the Department. Yet these factories have to pay the additional cost from which they stand to receive absolutely nothing in any way, shape or form. I have a telex from the Edgell-Birds Eye division which covers the matter fairly adequately. I seek leave to incorporate a copy of that telex in Hansard at this point.

Leave granted.

The telex read as follows-

The Honourable,

R. J. L. Hawke, A.C., M.P.,

Prime Minister

Parliament House,

Canberra 2600

Dear Prime Minister,

REFERENCE: RECOUPMENT OF EXPORT INSPECTIONS COSTS OF HORTICULTURAL PRODUCTS.

We write to acknowledge receipt of the media release, emanating from the office of the Minister for Primary Industry, dated 22nd December, 1983, advising of the intention of the Australian Government to introduce a scheme to recoup, allegedly, 50% of the cost of the Department of Primary Industry export inspection costs from the horticultural industry.

We lodge a strong protest at the imposition of these charges and have written to the Department in the past giving voice to our disagreement to such a move but to no avail.

We have not even received the courtesy of an acknowledgment.

We believe the costs of running a government department are the responsibility of that department and the Federal Government at large. All such costs should be shared equitably across the community and those costs, if at all necessary, should be borne by those who legislate the rules and regulations within Australia and should be paid for by the department concerned from taxes gathered to run that department.

The levy and inspection charges are in fact another method of ''double taxation ''.

In our particular industry, i.e. canned and frozen vegetables etc., we employ our own quality control food technologists in every production centre. The majority of these technologists would have far superior qualifications than any D.P.I. inspector we have ever encountered and would be in a far better position to judge whether raw material and finished product were to the standard required for export.

We therefore suggest that, in most instances in our industry, D.P.I. inspectors are an unnecessary luxury.

If New Zealand can export similar commodities (as we do from our New Zealand plant) without the encumbrance of D.P.I. inspectors, then there appears no reason why we in Australia could not do likewise.

At a time when the Federal Government and politicians are proclaiming the necessity to foster the manufactured goods segment of our export trade we find sections of this trade are being lumbered with additional costs-costs that were previously and should still be borne by the Federal Government.

Having carried out costing exercises covering the months of November, December, 1983 and January, 1984 we have assessed that the additional costs work out at a value of 1% of our dollar value sales-a hefty charge in a field where nett profits are minimal.

Further, the levy on canned and frozen fruit and vegetables is $10.00 per consignment plus 0.85 cents per kilo of the nett weight.

Consider that a can of 440g nett weight has an average drained weight of 285g, this then means we are paying 0.85 cents on the export of 155g of water.

The way this imposition on an already bled white industry has been introduced is but a further example of beaurocratic bungling by public servants who are completely out of touch with the realities of the marketplace.

Not only is it a further nail in the coffin of exports of manufactured goods but one can no doubt look forward to being charged a subscription to the Department of trade's Publication, 'Overseas Trading' or the introduction of a levy to maintain Department of Trade Posts Overseas.

May we suggest the simplest method to cut the costs of the Department of Primary Industry would be to do away with the inspectors and rely on those in the canned and frozen fruits vegetable and juice, and fresh vegetable and fruit industry to use their common sense in ensuring only top quality production is exported.

We welcome your reply on this subject and an indication of what the Government intends doing to assist the industry rather than hamper it.

Yours faithfully,

Edgell-Birds Eye Division of

Petersville Industries Limited


Senator ARCHER —What has really upset the primary producers in all these areas is the inability of the Department of Primary Industry to come up with a complete analysis of the costs and detailed information as to how these levies are to be spent. A few months ago and after some delays, the Department was able to provide me with details of the export meat inspection service. I certainly hope that by the time we finally deal with this legislation the other costs will be available. The dried fruits producers especially are unable to stand any additional charges of any sort. Recently I was quite impressed to receive a very practical solution from one of my correspondents. The solution was a recipe on how to make an empire Christmas pudding. It appeared in the Daily News newspaper of 6 June 1925. I also seek leave to incorporate this recipe for Christmas pudding in Hansard.

Leave granted.

The recipe reads as follows-

HOW TO MAKE AN EMPIRE XMAS PUDDING

(as taken from the Daily News Newspaper of 6.6.1925)

Take one cupful of each of the following ingredients:

Flour

And also add-

Raisins

1 cooking apple

Sultanas

4-6 eggs

Currants

1 teaspoon pudding spice

Brown sugar

1 wineglass of rum

Chopped mixed peel

Sufficient milk to mix

Beef suet, or butter

Bread crumbs

Grated rind & juice of lemon

Mix well

Place in greased basin

Cover with greaseproof paper, and

tie on cloth

Steam or boil for 6 to 8 hours

* Delicious when served with cream or ice cream.


Senator ARCHER —If this pudding is made, as is suggested, by every household in Australia every couple of months it would not only be beneficial to the health of Australians but also would solve the dried fruits problem at the same time. I commend that as being a very worthy aim indeed. As has been stated, the honey producers are having considerable difficulty in trying to determine just exactly what sort of range their costs are likely to be. I have had discussions with the producers and they advised me that in the past they just used to wait for an inspector to come in and pick up a jar of honey off the desk and disappear. It now seems as if they are going to be charged something between $4 and $24 a tonne for exactly the same service. Again, these are small industries. They require fostering. They can do with all the help that they can get. To have an open ended charge that they do not understand in any way, shape or form, that nobody can explain to them, is absolutely ridiculous. We are told that the $4.70 is temporary, but we are not told whether it will be more or less and when that is likely to happen. I do believe that an industry that is going to be called upon to pay is entitled to be told just that. I would like to make it clear that exporters generally support and approve of export inspection. However, they object to the totally senseless, expensive and counter productive aspects. I feel exactly the same. If I thought I could understand more of what we are trying to achieve and what the results of these charges will be I would be much happier about it. Do we, as a nation, seek to expand exports? If we do we know that while items like the 4.1 per cent can be added to domestic industries and domestic products for exporters it will be absolutely disastrous. Do we seek to expand or contract? Does the Government want to be remembered only by the primary and export industries it has closed down and put out of business? I ask: Where is it expected that the national income will come from? All the industries we are talking about use local capital, local labour, buy from local shops and are essential to the whole national economy. Profitable operation and policies clearly demonstrating security and future progress are prerequisites for industrial and export expansion. As is so clearly demonstrated in these Bills, policies of higher taxes will achieve only the opposite.

I appeal to the Government to rethink the effects and the appropriateness of these charges. The effects on small producers and small exporters in particular has obviously had no thought at all. The other half of the argument is that we increase our costs by levy, taxes, charges or whatever so the threat of imported produce increases. The dearer we make our own goods, the more likely we are to be invaded by imports. Are we trying to import more processed vegetables or honey, or are we not? I support the amendment.