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Wednesday, 24 September 1958

Mr LAWRENCE (Wimmera) .- 1 rise to support this measure, which I am pleased to see is supported from both sides of the House. Having said that, it might appear that the best thing I could do would be to resume my seat; but I believe there are one or two things which can stand repetition and emphasis. It is obvious that a new stabilization plan to operate for five wheat years from the beginning of the 1958-59 season is regarded as highly desirable by all Australian governments and the Australian Wheatgrowers Federation, to ensure continuation of our established wheat marketing system and to provide an effective method of operating government price guarantees. This is proved by the fact that neither the States nor the Australian Wheatgrowers Federation want a ballot to be taken. These polls are expensive, and the States which would have to conduct the polls agree with the federation that growers strongly favour stabilization.

The first attempt to stabilize the price of wheat in Australia occurred in 1938 when the Commonwealth enacted the Wheat Industry Assistance Act 1938, which supplemented the legislation passed by each of the several States. The main purpose of these acts was to stabilize the price of wheat used for home consumption. It was in 1946 that the Commonwealth passed the Wheat Industry Stabilization Act, and that was the first legislative measure which attempted to establish a permanent wheat marketing organization on a nation-wide basis. All States, however, did not pass the complementary legislation necessary to give effect to that proposal, and, consequently, in the absence of Commonwealth powers in respect of internal marketing, the 1946 act did not function, except for the establishment of a stabilization fund into which tax contributions levied under the Wheat Export Charge Act 1946 and the Wheat Tax Act 1946 were paid.

In July, 1948, a further attempt to establish a permanent wheat marketing authority in Australia was made, and it was at that time that the Commonwealth Minister for Commerce and Agriculture and State Ministers for Agriculture, in conference, reached agreement on certain modifications of the 1946 plan. After a poll of growers was taken, the requisite legislation was introduced by the present honorable member for Lalor (Mr. Pollard) and subsequently was passed by the Commonwealth and State governments prior to the end of 1948. That was the first time in the history of the industry when a peace-time plan for the internal and external marketing of wheat was established with one central marketing authority.

The provisions of the 1948 plan and those of the 1953 plan have been substantially maintained in the present legislation, but with modifications to fit in with changing conditions in the industry to meet the wishes of the growers and to have a scheme which is fair to the growers and to the taxpayers as a whole. I would like to direct the attention of honorable members to the new features in the new plan. There is a change in the home-consumption price provisions. Whereas under the old act the homeconsumption price was calculated on a complicated formula which involved consideration of prices of 14s. a bushel and Australia's selling price under the International Wheat Agreement, under this measure it is proposed that the home-consumption price shall simply be equal to the guaranteed price, subject to an important review, without commitment, of this basis of pricing before the 1959-60 season commences.

This year the Commonwealth will guarantee a return of 14s. 6d. a bushel to growers on up to 100,000,000 bushels of wheat exported from the crop of the first year of the plan. This guaranteed return of 14s. 6d. is based on the findings of a recent survey of the economic structure of the wheat industry conducted by the Bureau of Agricultural Economics, and is to be adjusted in each of the following years of the plan in accordance with movements in costs revealed by a cost index established by the survey that I have mentioned. In this revision of wheat costs, the Bureau of Agricultural Economics has taken into account changes in the structure of the industry since the previous survey some years ago presented a major problem in regard to the selection of farms for costing, and in costing procedures. The bureau's survey confirmed that in the years between the two surveys the acreage under wheat had contracted, plantings of other cereals had increased, and more live-stock, particularly sheep, were being run on wheat farms. Associated with the increased running of live-stock is a trend towards wider rotations in wheat cropping, with a greater area being sown to pastures.

All the data collected by the bureau in this survey was examined by the Wheat Index Committee. This committee consists of the director of the bureau as chairman, a representative of the Australian Wheatgrowers Federation and a representative of the Australian Agricultural Council. The committee made certain submissions to the Government on what are called imputed cost items. I do not want to refer to all the various costs involved, but I shall deal briefly with the more controversial ones only. On the matter of yield the federation suggested a divisor of 14i bushels an acre. The index committee's majority decision was 15i bushels, and the minority decision, by the Australian Wheatgrowers Federation representative, was 14.8 bushels. The final Government decision was for 15i bushels an acre.

In accepting the majority recommendation of 151 bushels, the Government was conscious of the need to maintain balance between this and other decisions it was called upon to make. It also recognized that all other items of cost had been brought up to date in the light of the changed situation in the wheat industry in the post-war period, and decided that in the circumstances it would not be realistic to go back beyond that period.

On the owner-operator allowance the federation's recommendation was for £1,040 subject to Arbitration Court variations made after 1st May, 1958. The Wheat Index Committee made no majority decision, but a minority decision was reached for £1,040 subject to Commonwealth basic wage adjustments during 1957-58. Taking these recommendations into consideration, the Government's decision was for £1,040 for the first year of the new plan.

The Australian Wheat Growers Federation recommended inclusion of the farmer's home with the value of the land, but a select committee agreed not to press this item. The Wheat Index Committee made a unanimous decision to exclude the farmer's home, although Mr. Stott, who was the representative of the Australian Wheat Growers Federation, in subsequent discussion with the Minister indicated that he considered that the homestead should be included for costing purposes. The Government decided to adopt the recommendation of the Wheat Index Committee.

On the question of the method of valuation of the land, the Australian Wheat Growers Federation and the Wheat Index Committee recommended that the " fair market value " method should be used, and the Government adopted this recommendation.

I am aware that the Australian Wheat Growers Federation is not completely satisfied with two points of the present plan, the first one being the yield divisor of 15i bushels an acre used in the calculation of the guaranteed price of 14s. 6d. a bushel for the first year of the plan, and the second one relating to the profit margin on wheat sold for home consumption. The federation can be sure, however, that the Australian Agricultural Council, at its meeting on 15th August, gave these points full consideration before agreeing to adhere to its original decisions.

With an anticipated world surplus of wheat this year and an expected Australian crop of approximately 180,000,000 bushels, it will be a great comfort to the growers of Australia to have this new stabilization plan behind them. This could very well be a time when taxpayers generally could be called upon to supplement the stabilization fund. If they are asked to do so, I know that they will do so willingly, knowing what a fine contribution the wheat industry has made to the Australian economy for very many years past.

I have very much pleasure, Mr. Speaker, in supporting the bill.

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