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Wednesday, 24 September 1958

Mr WHITLAM (Werriwa) .- Several wheat industry stabilization acts have been passed by this Parliament and the State parliaments since the war. This, however, is the first such bill to be passed since a recurrence of drought. I regret that the various governments and the wheat-growers have not seen fit to deal, in this latest stabilization legislation, with that problem. It is a problem which frequently confronted us in Australia before acts of this kind were introduced. During the last drought affecting the wheat industry, in 1944 and 1945, as in the last season, wheat had to be taken from one State to another. On the last occasion the Commonwealth paid the cost of transporting the wheat from States that were not affected by drought to those that were. New South Wales had to import wheat from Victoria, South Australia and Western Australia, and Victoria had to import it from New South Wales. I should point out that although Victoria was also exporting wheat to New South Wales, but of a different grade, Victoria also imported wheat from Western Australia. In all those cases, except the last-mentioned, the Commonwealth paid the cost of transport, and in the last case the Australian Wheat Board itself paid the cost of transport.

For reasons not concerned with drought, but due merely to inadequate production, Queensland had, some years after the war, to import wheat from other States.

Mr Brimblecombe - That is wrong. Get up to date. We are exporting.

Mr WHITLAM - I will bring the honorable gentleman up to date. In 1945-46 Queensland had to import wheat from New South Wales and South Australia, and in the following year from those two States and Victoria as well. In each case the cost of transport was borne by the Commonwealth. In 1950-51, Queensland had to import wheat from South Australia, and the cost of transport was borne by the consumers in Queensland. In 1951-52. up till the end of March, 1952, Queensland again had to import wheat from South Australia. This time, the freight was borne by the Australian Wheat Board. In April, 1952, and in May and June of 1952, it had to import wheat from South Australia, in each case the cost of transport being borne by the Commonwealth.

Mr Hamilton - Have you the quantities there?

Mr WHITLAM - For which particular month does the honorable gentleman want the quantity?

Mr Hamilton - The total quantity for the season would do.

Mr WHITLAM - I shall mention the last month I gave. For May and June, 1952, 853,713 bushels were imported by Queensland from South Australia, the bill for transport being paid by the Commonwealth. Are there any other months the honorable gentleman wishes me to deal with?

Mr Turnbull - What is the point, anyway?

Mr WHITLAM - I have not the time to make that plain to the honorable gentleman who last interjected. In 1956-57 and 1957-58, once again Queensland had to import wheat from South Australia, and on each occasion the cost was borne by the consumers in Queensland. Last season, not only did Queensland have to import wheat, but New South Wales also had to import wheat. It had to import it from Western Australian, South Australia and Victoria, and the cost of transport had to be borne by the consumers in New South Wales alone. It was not borne by the Commonwealth as on the last occasion when wheat had to be imported by New South Wales, and it was not borne by the Australian Wheat Board, as has happened with imports by Victoria and Queensland.

Drought presents a new problem under the wheat stabilization scheme. It is a problem which we know will continue to arise in Australia, where we have always had droughts and presumably will continue to have them. Yet this legislation perseveres with the notion that Australia, economically and climatically, is in six watertight - I do not know whether that is the apt word - compartments. The idea I want to put is that this legislation ought to provide for wheat to be available in every State at the same price. It is a principle which we acknowledge and always have acknowledged in this legislation, and it is repeated in the present bill in respect of Tasmania, which always has to import wheat. The principle that has been adopted always in the act, and which is reproduced in clauses 23 and 24 of the present bill, is for an additional 2d. to be added to the home consumption price of wheat so that Tasmania can get its wheat at the same price in its ports as wheat is delivered in all other ports in Australia.

I should think that that is something which we should have introduced in the new circumstances which have arisen. It should not be beyond the statesmanship of the Commonwealth and States and the wheat-growers themselves, because it requires a partnership between all three to bring in such an amendment. The difficulty is that the effects of drought cannot be isolated in Australia as long as we have section 92 of the Constitution preventing the erection of barriers between the water-tight compartments. This is a matter which affects all consumers and all processors of wheat. I am particularly aware of the consequences because I have more poultryfarmers in my electorate than has any other honorable gentleman. Poultry-farmers rely on the by-products of wheat, but they are not the only people affected by this disparity of prices between the States. Pigfarmers, biscuit manufacturers and flour millers are also affected. The trouble is that as long as there is this disparity in prices between the States, there is a snowballing effect. In respect of all our primary industries, except wool, that portion of our production which cannot be consumed in Australia must be sold overseas, and sold at a loss. The game, therefore, between all Australian primary producers is to see how much they can sell in Australia and how much they must sell overseas at a loss.

Various stratagems are adopted to overcome this difficulty. One stratagem is that adopted in this legislation where the Commonwealth Government undertakes to pay the losses on exports up to a certain amount. Another stratagem adopted is that used in the electorate of the honorable member for Mallee (Mr. Turnbull), where the dried fruit growers get control of the packing sheds. A blend of both methods is adopted by dairy-farmers, who get control of butter and cheese factories, and then secure a subsidy for those factories. In all these cases, if you can get control of the processors or if you can persuade the Commonwealth to subsidize the producers, some orderly marketing can be achieved. But in some of the other industries where no elaborate processing is required, as in the poultry industry, or where the Commonwealth will not pay a subsidy, as in the poultry industry again, the disastrous consequences of this disparity between the States can be seen.

The products of the poultry industry are more easily carried, since they are produced in a packaged form, than the products of any other industry. Anybody who has a truck can take his eggs across the State border, and thus take advantage of the fact that he can sell all his production in Australia and avoid selling any of his surplus production overseas. The Commonwealth, as well as the States, can do nothing about that as long as section 92 applies to marketing. The difficulty that has arisen in the last year in the wheat industry is that in order to pay the cost of transport from Western Australia, South Australia and Victoria, which were not affected by drought, to New South Wales, all consumers of wheat in New South Wales had to pay an extra 4s. id. per bushel for their wheat. It was inevitable, therefore, that the cost of biscuits baked in New South Wales, the cost of flour milled in New South Wales and the cost of eggs and pig meat produced in New South Wales all rose very much higher than in the neighbouring States. Therefore, producers in Victoria and South Australia were able to deliver their products to New South Wales at a lower price than it cost the producers and processors of those products in New South Wales to get their goods on the market.

The effect of the fragmentation of the Australian economy does not end with the fact that those products inevitably cost more to produce in a drought-affected State than in a State that is spared drought. The States that are not affected by drought can immediately cash in on those that are affected by drought. I know that, when my proposal sinks into the minds of some Government supporters, it will be said, " Are you suggesting an impost on the wheat-farmers? " I am not suggesting anything of the sort. Ever since we have had this stabilization scheme for the wheat industry, the Australian consumers of wheat as a whole have subsidized the cost of transporting wheat from, the mainland to Tasmania. What I am suggesting is that the same device should be used in order to see that the price of wheat to all consumers in Australia is the same. I want to avoid this discriminatory charge which is at present imposed on consumers in the drought-stricken States. Queensland has been drought-stricken for two seasons, and

New South Wales was drought-stricken last season, but any of the States could be drought-stricken in the next few seasons during the currency of this agreement.

The contribution by consumers - not producers - of wheat in Australia as a whole to meet the cost of transporting wheat to Tasmania is very clearly set out in clauses 23 and 24. A flat rate of 2d. a bushel is made. If the Australian Wheat Board, however, reports to the Minister for Primary Industry that that charge is more than is required, or less than is required, the Minister can reduce the amount or increase it. I suggest, Sir, that if, on the same principle, there is drought in any particular State or States, the Australian Wheat Board can make a similar recommendation to the Minister, and he can implement it.

The charge made for Tasmania and proposed for drought-affected States is not a charge on the wheat-grower; it is a charge on the wheat consumer. The proposal involves a smaller charge on the wheat consumers in Australia as a whole than is involved at present in the discriminatory charge on the consumers of wheat in any State which, from one season to another, happens to be stricken by drought.

Sir, Iapprehend that there will also be the argument that this measure has been agreed to by the States and by the Australian Wheat Growers Federation. But, as I mentioned earlier, it takes all three parties to make this agreement. First, the wheatgrowers must agree to any stabilization scheme, because, if they do not want to come into the scheme, we cannot make them come into it while section 92 of the Australian Constitution remains. Then, Sir, the State parliaments have to pass legislation, because it is necessary for them to apply the home-consumption price for wheat sold in their borders. Lastly, this Parliament must pass legislation, because under the Constitution only this Parliament can impose duties of excise, grant bounties on the export of goods and control overseas trade. It may be true that we shall not have a stabilization scheme unless the Wheat Growers Federation agrees and unless the State parliaments agree. But we shall not have it, either, unless we in this Parliament agree also. I would think it should not be beyond the resources of statesmanship in this Parliament to see that this desirable amendment of the stabi lization scheme was made. It is simply not true that we have to wait for the States and the wheat-growers to come to some agreement on this. We can give a lead. In fact, some of the proposals in this scheme did not initially commend themselves to the wheat-growers, but the growers later came round, and accepted them.

There is no penalty whatever on growers in the scheme which I have suggested. They have always acquiesced in the continuing necessity for a charge on consumers in order that Tasmania may have the wheat which, otherwise, it could get only at a higher price than is paid by the consumers in any other State. Sir, I would think that the States likewise would appreciate a lead in this matter, because it may be, as I have said, that, although Queensland has been drought-stricken in the last two seasons, and New South Wales was drought-stricken last season, any of the other States - and perhaps the same ones again - may be drought-stricken within the currency of this agreement. Since the Commonwealth foots the bill for all losses on wheat exports when we have bountiful seasons and produce too much for our own needs, and1 have a carry-over, and therefore have to sell overseas, I think it is not unreasonable that our leadership and our views in this matter should be considered.

I reiterate that this suggestion involves no charge on the wheat-growers. It involves an equal charge on the consumers as a whole. The wheat-growers will not be prejudiced in any way by the suggestion which I have made. The wheat consumers in any State which is stricken by drought will be very greatly benefited by the suggestion which I have made. It is a suggestion which, in all fairness, should be accepted by the wheat consumers in every State. It is quite anarchic and archaic that, in Australia, we should regard ourselves, geographically, climatically, and economically, as six different States. We are, in fact, one community, geographically, climatically, and economically. We should have provided in this stabilization agreement for a fair and uniform approach to an industry on which everybody in Australia, wherever he lives, and whether or not there is a drought, so greatly depends, and on which, in reasonable times, we also depend quite largely for our export income.

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