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Friday, 26 May 1989
Page: 2849


Senator LEWIS(1.04) —The Senate is debating a package of Bills dealing with the horticultural industry at a time when the Treasurer (Mr Keating) has left this country to visit the Soviet Union to examine the art and architecture of the First Empire and at a time when the Reserve Bank of Australia has signalled that it is tightening monetary policy. It is a time when the Government is likely to be forced to tighten monetary policy further and a time when home mortgage interest rates are reaching a record level of 16.5 per cent and will possibly go to 17 per cent. As Mr Geoff Kitney in the Australian Financial Review of today said in summing up the national accounts figures which were released:

In fact, the national accounts figures were virtually a mirror image of the economic picture the Government has been attempting to draw. All the rises are where the falls should be and the falls are where the rises should be.

During the debate in this chamber in the last couple of days, the Government has been endeavouring to present to the people of Australia the complete reverse of the state of this economy as revealed by yesterday's national accounts figures. Meanwhile the Senate presses on trying to deal with legislation while the economy collapses in ruins around us.

The debate on the Horticultural Legislation Amendment Bill 1989, the Horticultural Levy Amendment Bill 1989 and the Horticultural Export Charge Amendment Bill 1989 gives me the opportunity to demonstrate that free enterprise is alive and flourishing despite the Hawke Government, a government that has created a dangerously overheated economy, an economy bleeding from the jugular vein. It is so overheated that, as I said, the Government is tightening monetary policy further and forcing interest rates even higher while the Treasurer slips away overseas to look at some lovely art and architecture in Leningrad. Those interest rises will hurt the entrepreneurs in the horticultural industry because they need to borrow funds to further expand, especially to expand their export opportunities.

The horticultural industry is essentially a free enterprise industry which comprises largely many small business people. It has the capacity to be a major export earner for this country from a relatively nominal capital base. Between 1986 and 1988 the export of grapes has grown from $16m to $38m. The export of fruit and nuts has grown from $128m to $154m. The export of plant seeds, flowers and bulbs, and live plants, has grown by an additional $2m. The export of cut flowers has grown from $5.5m to nearly $11.5m-over double. The total value of horticultural products exported from Australia has gone from $199m to $262m in two years. That is a substantial growth of which this country can be proud. But the potential for growth in this industry is absolutely enormous, and we should be doing more to assist this industry to become the major export earner that it could be.

The Government believes that this package of Bills will provide an incentive to those organisations which remain outside the embrace of the Australian Horticultural Corporation which was established in 1987 to join that Corporation. In fact, only the Australian Apple and Pear Corporation and the citrus industries were the original participants. Other horticultural industries fought shy of joining, despite financial incentives from the Government in the form of dollar for dollar funding to those industries joining the Horticultural Research and Development Corporation. Some industries which might have joined recognised that the legislation made it uneconomical or impossible for them to join because of the way the levies and charges are paid. Others were wary of the bureaucratic constraints they could be exposed to. Their wariness was justified. The cost of collecting an estimated $600,000 in citrus levies per annum is about $122,000. This legislation proposes changes that will allow State bodies to collect the levies for the Commonwealth and that cost is estimated to be about $5,000 or, in the worst case, up to $20,000. The levy is to be increased from 2 per cent to a maximum rate of 5 per cent. With inflation running at somewhere between 8 and 10 per cent under the Hawke Government the trend is to impose the maximum levy to avoid the changes and amending legislation that would otherwise be necessary to keep up with inflation.

The nursery industry has already reached agreement with pot manufacturers to have the levy collected on the pots at the time of purchase, and these Bills will permit this. The Opposition applauds this as a sensible move. Other industries may prefer to pay their levy when they buy the trays they pack their fruit on. The horticultural industry now has the flexibility to allow economical collection of the levy to suit the producer, and levy collection costs should no longer be a barrier to organisations joining the corporations. The fact that more organisations have not displayed an interest in joining the corporations raises concerns about whether the levy difficulties were the sole barrier.

The growth of exports between 1986 and 1988 suggests that private enterprise flourishes best without bureaucratic oversight or constraints. I have previously drawn to the attention of this chamber and the Minister the bureaucratic difficulties experienced by horticulturalists in export inspection charges. That experience would be enough to keep many organisations away from any avoidable contact this bureaucracy. The Government should look to its bureaucratic practices and to its Business Regulation Review Unit, which we referred to during Question Time.

As I said before, next week the Government is to come up with a so-called micro-economic reform package. We can predict today what it will be. It will do away with the Industries Assistance Commission. It will do away with the Business Regulation Review Unit. It will combine them in a so-called Industry Reform Commission, which is like reorganising the chairs on the Titanic. Instead of addressing micro-economic reform measures, which the Government should be doing, it is reorganising the organisations which report to the Government about micro-economic reform. The Government should look to its bureaucratic practices for the reasons why in this industry organisations are staying away from these corporations. The Opposition does not oppose the legislation, but has reservations about the effectiveness of the corporations and the low number of organisations joining them. The corporations and their effectiveness will be reviewed as soon as we get into office.