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Thursday, 14 November 1985
Page: 2181

Senator VIGOR(3.59) —I move:

That the Senate take note of the paper.

I would like particularly to bring to the notice of the Senate one aspect of the report, which deals with the way in which the Industries Assistance Commission assesses how much assistance is given to a particular industry. Two aspects of this come out in the report. The following statement is made on page 56 of the report:

Assistance provided through discriminatory domestic pricing arrangements in 1983-84 was higher than in 1982-83.

This implies that Australian consumers are paying more for the product by some type of control process which is introduced by the Government, that they are paying some type of subsidy towards exports. Reading the report, I am disturbed to find what I believe is an anomaly in this area. Where Australian manufacturing is done by multinational companies which are also responsible for manufacturing similar products overseas, such as happens in the chemical or pharmaceutical industry-in those areas there is very little competition between imported goods and those manufactured locally-the company itself is assessed as having very little assistance because there is nothing to which the price structure can be compared. The local Australian price for those products may be well above prices for similar products enjoyed by the other countries but nobody is importing them to Australia other than the same multinational companies. Where the world manufacturer of a particular class of product is dominated by such a multinational organisation, the IAC's assessment of the level of assistance enjoyed by that industry is low.

Where production is in the hands of locally owned business, especially where imports are marketed by large overseas corporations or governments, the international price of those products is often artificially depressed or supported. This means that the IAC assesses the level of support to local industry as being the difference between the world price for the products and the local Australian price, even though what is really being measured is the level of assistance provided to overseas industries for exporting.

For example, let us just take the wheat industry. The domestic price of wheat is set by the Australian Wheat Board in order to prevent the few purchasers and converters unduly exploiting the many small wheat producers and farmers. This orderly marketing was set up to give equal strength to the sellers and the buyers within Australia. Australian home consumption prices for wheat are set by the Board to reflect in some measure the cost of production. Yet I point out that the margin of profit for wheat growers on their investment and work is very low. If the farmer were to be paid for his labour at a rate commensurate with his skills and hours worked, Australian wheat would be seen to be sold at a loss on domestic markets. The world price of wheat is declining. This problem is not due to the farmers. It is not because other countries are producing cheaper wheat than Australia. Australian farmers are the most efficient in the world. However, the Government is giving no direct support to any grain industry. The same problems that I have mentioned in the wheat area hold for peas, barley, and many other grains. I believe the IAC should re-examine its method of assessing how much assistance is being given to a particular export industry.

Question resolved in the affirmative.