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Thursday, 10 October 1985
Page: 1020

Senator BROWNHILL(5.49) —Before the debate was interrupted I was talking about why our trade performance has been so poor. There are a number of reasons for this. As I mentioned, there is our lack of competitiveness on world markets and rising costs for our farmers are making our products more and more expensive. Over the past five years farm costs have increased by 44 per cent, while prices receive have increased by only 12 per cent. Return to capital on the farm is averaging 1.5 to 2 per cent. Input costs have soared in such areas as fuel, excises and taxes. This has been exacerbated by inflation because farmers are price takers; they are unable to pass on increases in farm costs and must absorb them. This, of course, they have done to their disadvantage-more and more in the past 10 years. Yet, despite their increased cost pressures they have been able to lift their own performance enormously in the past 15 years.

Another reason for our lack of ability to influence world markets has been the unfair trade policies of other countries. The European Economic Community was for many years a major importer of Australian primary produce. Over recent decades, however, the penetration of this market has become increasingly difficult. This has come about by the increasingly unfair protectionist policies enjoyed by farmers in the EEC countries. Clearly, if Australia is to improve its trade performance it cannot ignore such a large market as the EEC, but it is one area into which Australian governments must make inroads.

I was interested to see that we recently had a visit to this country by Mr Andriesson, the Vice-President of the Commission of the European Communities responsible for agriculture and fisheries. Mr Andriesson had talks at both an official and informal level with the Government and farm leaders. The attitudes of the EEC and its officials should be of great concern to Australia. While he was here Andriesson gave a personal assurance that the proposed sale of the 800,000 tonnes of beef held in storage by the EEC would be monitored to ensure that it did not interfere with Australian sales. Additionally he said that there would be no subsidised beef exports to our markets-Japan, South Korea, Taiwan, Malaysia and Singapore. Additionally, when Australain officials expressed their worries over EEC policies he pointed to the cuts in the EC's internal support price scheme. He pointed up the introduction of the quota systems for sugar and milk. But while he said all those things he also made it very clear that he, and presumably the EC itself, do not recognise the argument of a traditional market. In other words, if it suits them, they can at any time release that great enormous beef pile or, indeed, any one of a number of primary commodities onto the world markets, especially those markets which we in Australia have for years regarded as ours. When one considers that the EC fluctuations in some commodities are more than our entire production one realises the David and Goliath situation we are in. But I do not believe it is beyond hope. The EC policies are changing, and the fact that Australian primary producers are among the most efficient in the world, compared with farmers in those countries which are among the least efficient, means that there is hope.

The Senate recently discussed the release of a paper on trade with China. It is markets such as this in which Australia has a real chance of performing well. Our trade with China has, in recent years, been a promising light in a rather dark tunnel. Business with China has increased in the last few years by over 73 per cent. It is now worth over $1 billion annually. China has risen from being our tenth most important export market to our fifth, in just over twelve months. The biggest single item, with 28 per cent of the trade, was wheat. Here again we see the valuable importance of our primary products. Another item, which I believe is even more important, is our sales of wool. Sales of greasy wool have tripled. Sales to China alone are now worth over $144m. I believe this is due, in no small way, to the Australian Wool Corporation and particularly its Chairman, David Asimus, who has spent a great deal of time and energy in China and other overseas countries such as the United States. China is a market with enormous potential for both rural and manufactured products. With Australia's difficulties with the EC, we must be prepared to seek out and develop new markets. China is one of the few areas with both the population and the financial resources able to afford Australian goods. It is interesting to note that at about the same time as the Government was announcing our successful trade performance with China, the Bureau of Agricultural Economics issued a rather depressing report on the agricultural and economic policies of the EC. While we have gained an export market in China worth $1 billion, we lose that amount each year through exports lost because of restrictive EC policies.

A third reason for our relatively poor trading performance is our atrocious reputation. We are considered to be an unreliable supplier. Our industrial relations record, especially as it affects the shipping and transport of products overseas, is disastrous. A recent National Farmers magazine article claimed that the typical Australian export farmer would this year face a bill for $2,000, courtesy of the waterfront unions. It claims that that bill will be for:

A rising level of waterfront stoppages and delays for which Australia holds the unenviable title of second worst nation on earth.

This year Australian waterfronts are estimated to lose over 250,000 man-hours. In the 11 months to 30 August, Australian ports lost loading time sufficient to load 1.5 million extra tonnes of grain, at a carryover cost of $30m. Delays, both industrial and operational, account for two-thirds of the time the average ship is alongside an Australian wharf. Australian produce is lucky to reach the customer's port within 24 days of schedule, whereas from the United States produce can be there within 24 hours of schedule. It is estimated that the wheat industry alone pays out $1,250 per grower each year in additional freight charges to cover the cost of delays and stoppages in Australia. Yet Australia this year is to rely on its export sector to contribute 3.2 per cent of the projected 4.5 per cent of national economic growth. I am a fair betting man, as I know other senators here are also, but I am not prepared to bet that with our appalling strike record the 3.2 per cent growth will be reached if we continue along the same disrupted strike path that we have been on.

The performance of our trade officials is another area which could and should be improved. I am pleased that the Government is to establish the Australian Trade Commission to start next year. However, the May mini-Budget saw a cut-back in Department of Trade estimates of $2.5m for the current financial year, and it is hoped staff cuts reaching around 50 can be achieved. I am not, and never have been, a supporter of big government, but I do not believe the trade area is one that we can afford to cut back on. We need people with the highest level of marketing and diplomatic skills, people able to get into new markets and to hammer away at old markets. Overseas income derived from export trade is the life-blood of a nation. Those exports give all Australians our standard of living. It is, therefore, essential that any encouragement that can be given to exporters, through the export market development grants scheme or other assistance, be given. It is not just a matter of giving help to a privileged sector of our community. It is only through improved and increased trade performance that Australians can continue to enjoy a lifestyle to which we have all become accustomed.