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Friday, 13 September 1985
Page: 528

Senator BROWNHILL —Has the attention of the Minister representing the Minister for Primary Industry been drawn to an article in this morning's Australian Financial Review which says that sugar cane farm prices have dropped by over half in the last five years; that they are still falling and, not surprisingly, there are few buyers? When will the Federal Government announce its assistance for this industry, or is it waiting until the time when there is no one left to be helped?

Senator WALSH —I have not seen the report in the Australian Financial Review which has been referred to, but I am familiar with the Commonwealth Government's policy on this question. Not having seen the report, I am not sure of the basis for the assertion that the price of sugar has dropped to half the level of a few years ago.

Senator Brownhill —The price paid for the cane farms.

Senator WALSH —That may well be so; certainly it does not surprise me. One of the causes of the problems that individual cane growers now have is the fact that they paid far too much for assigned land in 1980 and 1981. One of the reasons they paid far too much for assigned land was the expectation of tax free capital gain on that land. In other words, the absence of a capital gains tax is a contributory factor to the insolvency not only of the cane growers but also of a number of other Australian primary producers.

To return to the sugar industry, the Commonwealth has made an offer to the State Government. Given that the sugar industry is almost entirely a Queensland industry only-it is not a national industry as most agriculture is-

Senator Kilgariff —What about the Ord River?

Senator WALSH —What about the Ord River? The pork barrelling Liberal Party Government in 1967, doubtful whether it could win the third Senate seat which it needed to win in Western Australia, committed at present values $150m of taxpayers' money to that white elephant on which not only has no dividend been paid since but also on which the Western Australian Government has incurred an operating loss ever since.

Senator Button —Shameful.

Senator WALSH —Absolutely shameful. I do not know why Senator Kilgariff would raise the Ord River-

The PRESIDENT —Order! I ask the Minister to return to Senator Brownhill's question.

Senator WALSH —Certainly. The Commonwealth Government has made an offer to Queensland for an underwriting scheme which would guarantee specific prices to Queensland growers, conditional upon two things: Firstly, that there be a restructuring and a deregulation of the industry. I would expect the Liberal Party to be entirely supportive of a deregulation of the sugar industry since it purports to be in favour of deregulation in general, although to date it almost invariably votes against deregulation; for example, the Kerin dairy industry plan. The offer is conditional also on the Queensland Government matching the Commonwealth's contribution to the underwriting price.

Given that it is virtually only a Queensland industry, it is particularly important that the State Government makes a contribution. The Queensland Government has a couple of hundred million dollars stuffed away in hollow logs of various sorts. A good deal of that money comes from Commonwealth Government loans to the State Government for rural adjustment, which have been repaid by farmers but not repaid to the Commonwealth Government. The money has been stuffed instead into some hollow logs, or the Bjelke-Petersen Foundation, or whatever it is. We are not quite sure where it is, but we know that a couple of hundred million dollars is stuffed in hollow logs somewhere in Queensland. So the State Government cannot legitimately claim that it does not have the funds to match the Commonwealth contribution.

As I understand, the current position is that the Commonwealth Government's very generous offer has been rejected by Queensland. The Queensland Government has refused to make the matching contribution which is required. That was the position the last time I had information on the matter. I will ask Mr Kerin whether there is any more recent information.