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Thursday, 11 May 1989
Page: 2362


Senator SHORT —I seek leave to make a statement on these Bills for a period not exceeding 30 minutes.

Leave granted.


Senator SHORT —The Bills now before the Senate contain several important changes in the structure of the marketing arrangements for the Australian wheat industry. By far the most important changes are those that remove the remaining restrictions on the operations of private traders in the marketing of wheat on the domestic market and allow greater competition in the transport and storage of grains. To an important degree these Bills represent another stage in the evolution of a more efficient and effective marketing system for wheat in this country. Some very significant statements have been made about the import of these changes. I believe that there has been quite a degree of misinformation and misunderstanding about the nature of the changes that are in fact now being proposed as distinct from what the Government originally had in mind. The changes now being proposed, as I say, represent an evolution along the way rather than a radical change. I say that because the Bills, in terms of marketing, are restricted to the marketing of domestic wheat for human consumption which approximates something like 10 per cent of the total Australian wheat crop. The Bills therefore do not apply to something like 90 per cent of the total crop.

Having said that, though, the fact remains that the Bills have caused very great concern throughout wide areas of the wheat growing industry. I have seen that at first hand myself. I have had the pleasure, I think would be the appropriate word, and certainly the very enlightening experience, of attending a meeting with Senator Panizza and some of our other colleagues--


Senator Stone —Where was that?


Senator SHORT —That was in one of the centres of the wheat growing industry, particularly in Western Australia, near the town of Merredin, which I believe is a region famous as being the birthplace of two of the Senate's more notable current crop of senators, in the form of Senator Panizza and, of course, Senator Stone.


Senator Stone —What about the Minister for Finance? He comes from just down the line, from Doodlakine.


Senator SHORT —I did not have the pleasure of getting as far as Doodlakine, but had I known that Senator Walsh was from Doodlakine I am not sure that it would have enhanced the likelihood of my wishing to go there. Perhaps I should have gone to see what it was that has produced these certain qualities in Senator Walsh that he has exhibited over so many years in this chamber.

Nevertheless, it would be absolutely foolish and wrong not to recognise that these legislative proposals before us have caused a great deal of heartburn throughout the wheat growing industry-a great deal of concern, as I say, based largely on misinformation-and also great tensions between the Liberal Party and the National Party. That is clear for everyone to see. We saw that within both parties as well. I think that the result is that that legislation is vastly different from the original proposals that this Government had in mind. There is no doubt that the original proposals that the Government had in mind did not have any inclusion at all for reform of a micro nature in the areas of transport, handling and distribution, nor did the original proposals be restricted to the marketing of domestic wheat. There is no doubt in my mind that certainly Mr Kerin, the Minister for Primary Industries and Energy-I am not sure about Senator Walsh-who is responsible for the legislation, had in mind the deregulation of the export market as well, certainly, so far as wheat for other than human consumption was concerned. The fact is that we have now a Bill which is very different from the Bill originally proposed, very much more in line with the interests and requirements of the wheat industry. The wheat industry is an enormously important industry; wheat is Australia's most important crop and it is a major export commodity. It is an industry in which production fluctuates severely, but in the five years to 1985-86 wheat accounted for approximately 65 per cent of Australia's total grain production. Eighty to 85 per cent of our wheat is exported and we have heard the figures earlier in this debate about the value of exports. Again, they fluctuate markedly from year to year. In 1985-86 they totalled $3.2 billion; in 1986-87, $2.3 billion; and this year it is estimated that they will be of the order of a little short of $2 billion. But they are very significant figures in the context of the major problem that this country faces-that is, our external crisis; the simple fact that we cannot pay our way in the world due to a variety of factors, top of the list of which is--


Senator Stone —The most important one of which is the presence of the Labor Government.


Senator SHORT —The presence of the Labor Government, and the absolutely disastrous economic policies that it has been pursuing for the last five years. These are policies which have led us now to become the Argentina of this part of the world and have led us to having a debt to the rest of the world of something of the order of $110 billion-the third largest external debt, I think, of any nation in the world and a debt the implications of which for the future of our economy are very disastrous indeed.

So the wheat industry is very important in that context and, to the extent that we can make the wheat industry more productive, more efficient and more profitable, these steps are all the more to be welcomed. I believe, although this does not directly touch, as I said, the export of wheat, that the changes proposed in this legislative package will have at least indirectly some beneficial results in that way, not least because there is every prospect that the proposals will encourage the increased export of value added products based on grains.

The Liberal and National parties, as I said, in their approach to this legislation have done a great deal to ensure that the disastrous disparity between costs to growers and the prices they receive does not continue. If that disparity that has developed over the last 10 years is to continue, then we are not going to have a wheat industry in this country in many years time. The prices for wheat that Australian growers now receive are not much different from what they were 10 years ago, but the costs to wheat growers of transporting, handling and loading wheat onto ships for export have increased threefold. Quite obviously we cannot go on having threefold increases in costs with no increase in price and expect to maintain a viable industry. Since 1984 the marketing of stockfeed wheat on the domestic market has been essentially deregulated.


Senator Walsh —Not quite.


Senator SHORT —Not quite, but it has been essentially deregulated. The marketing of wheat for domestic human consumption or human food processing remains under the monopoly control of the Australian Wheat Board and this Bill, as we have said, proposes the deregulation of the marketing of this domestic wheat for human consumption and removes any remaining regulatory aspect of other domestically marketed wheat. I must say that I have a large degree of sympathy and agreement with the remarks that Senator Walsh made in his speech tonight about the role of monopolies and the inefficiencies that monopolies cause in virtually every environment of an economic nature. I agree with him, and I am glad to see that the Government has come to agree with the Opposition that the retention of the monopoly power of the Australian Wheat Board in relation to exports is a power that should be retained. But if we look at the general role of monopolies in the economy, there is no doubt that they do cause inefficiencies and they give the wrong market signals, and to that extent they are very inappropriate. As I said, the Wheat Board will maintain its total monopoly on the marketing of all wheat for export and all parties are now agreed on that.

The legislation before the Senate is a far cry from the Government's initial thoughts. The Government originally had in mind the deregulation-or appeared to have in mind the deregulation-of certain aspects of the export market, and fierce opposition from the industry, with strong support from the Liberal and National parties, forced the Government to change its view on that. Also, as I intimated earlier, the Government originally of course had no intention whatsoever of linking these Bills with the micro-economic reform so necessary in respect of deregulation in the areas of transport, handling, storage and waterfront services. At least now the Government has been forced to take steps in these directions, although there is a very long way to go. The Government has been extraordinarily heavy on its rhetoric about micro-economic reform, but if we look at its actual performance record, that record is absolutely pathetic. It is essential that the Government be continually forced to move in these areas. It seems incapable of doing so, but if it is not forced in the way it has been in respect of this legislation then we are never going to get anywhere. The undertakings that the Liberal and National parties have wrung from the Government in these Bills is a very important start. It must be maintained and it must be built on.

Wheat marketing arrangements in Australia go back a long way. The comprehensive marketing arrangements that have become a feature of the Australian wheat industry were first brought together in the Wheat Industry Stabilisation Act way back in 1948. That Act embodied the four main features arising from concepts of price stabilisation and so-called orderly marketing, which have remained fundamental objectives of all subsequent legislation-namely, guaranteed prices, a home consumption price, the Australian Wheat Board, and the stabilisation arrangements. That Commonwealth legislation of course has been complemented to a certain degree by legislation which impacts on the wheat industry. In the first instance, of course, complementary State legislation exists to transfer certain powers to the Commonwealth, thereby giving effect to the Wheat Board's powers of pricing and acquisition. State governments are also very heavily involved in the transport, storage and handling of wheat and it is in this area that the Government is proposing to act in relation to the State governments. Whilst there is a real issue there relative to the question of State rights-an issue I have always felt very strongly about myself-there is an inherent conflict of interest between that issue on the one hand and the need for more efficiency in the transport, handling and distribution areas on the other. I think I could not do other than agree that the Government has acted correctly in respect of that in this instance.

The legislation carries the potential for considerable benefit. It is a potential which still has to be proved to be realised. Of course a point that must be stressed-particularly to wheat growers because I do think there has been a misunderstanding here-is that the Wheat Board will still be the major buyer of wheat. Not only will it continue to be the monopoly buyer in relation to exports but, if it is efficient and if it operates in the way that we all believe that it should and will as an efficient marketer of wheat, it should also retain a pre-eminent position in the domestic market. There seems to be a presumption around in some quarters that the proposals in this legislation are going to somehow or other remove the Wheat Board from marketing in the domestic market. That, of course, is not so. If the Wheat Board is highly efficient, then it will continue to be a major and pre-eminent marketer in that domestic market as well.

The value of the proposals as I see them lies in other areas, including the real opportunities they create for entrepreneurial, innovative growers to be able to market their wheat and to produce forms of wheat which take the best advantage of the opportunities in the market. The 1984 legislation of course allowed the feed wheat market within Australia to be deregulated. That has allowed growers who wanted to take advantage of this to do so. Of those who have, many have done very well indeed. There are numerous examples of growers who believe that they are now receiving a higher price per tonne over their whole crop because they have been able to utilise the marketing skills and, to use the jargon of the day, the niche marketing that this deregulation provides an opportunity for. That is an important opportunity, but it is an important opportunity that growers will have to capitalise on. It is not going to come to them automatically but at least it does provide them with an incentive to look at different products and different marketing methods. It should also, as I mentioned earlier, produce better export opportunities for value added grain products.

Of course, only through having some real competition on the domestic market will the inefficiencies in the storage, handling and transport that have been outlined in the McColl Royal Commission into Grain Storage, Handling and Transport-about which much has been said-have any real chance of being achieved. These will be real savings to growers if they can be achieved. The McColl Royal Commission estimated that savings in the order of $10 per tonne over the whole crop are to be made if the efficiencies that have potential for implementation are in fact implemented. Under the Bill now before the Senate-improvements in which the Liberal and National parties, along with the wheat industry, can take considerable credit for-the Wheat Board will clearly have the power to implement the changes to bring in those efficiencies.

The Opposition has proposed a range of amendments to the Bill. They are amendments which I urge the Government to consider very carefully indeed. They are significant amendments relating to such important and fundamental matters as the underwriting guarantee. They deal with the structure of the Wheat Board, demanding a wheat grower chairman and five wheat growers out of the nominated eight people on the 11-person wheat board; the provision for more say by the Grains Council of Australia in the spending and management of grain grower money, which would be paid into the levy fund; and, very importantly, the deregulation of labour market practices which have proved to be so costly indeed not only to the wheat industry but to the whole of the Australian economy. It is in the prospect of freeing up the labour market and freeing up the other inefficiencies and highly regulated and controlled industries that associate with not only the wheat industry but rural industries generally-and, for that matter, a vast range of other industries in the economy, particularly the transport industry-that the real potential benefits of this legislation lie.

But the current move to deregulate part of a major statutory marketing board, which of course this move is, represents a significant and positive development. Wheat, of course, is the only industry subject to Commonwealth regulation which has a domestic marketing monopoly. Not only will farmers as a result of this change have more freedom to choose and the opportunity of higher returns but also the more competitive climate will encourage increased efficiency in a range of service industries. It should never need saying but let me reiterate that certainly the Liberal Party, along with its National Party coalition colleagues, is absolutely committed to the well-being of the rural sector of Australia. It is the lifeblood of our external account. It is a very important part of our total quality of life. Rural Australia is a part of Australia which has an importance in the overall attitudes and aspirations of this nation that well outweighs its population. There are the attitudes and the values, I think, that stem from the rural sector, and they are attitudes and values which have served this nation so well throughout our history. They have been the backbone of the sort of nation that we have traditionally been. We will lose those at our peril if we wish to see an Australia of the future that builds on the best values and traditions of the past. This is a very important part of that process. The wheat industry has been and I hope will continue to be a fundamental part of that sector and I would expect that the legislation before the Senate, provided that there are adequate amendments to it, will provide an important further step along the way to improving the efficiency and the well-being of the wheat industry and therefore the rural sector of this nation.