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Wednesday, 8 November 1967

Mr HANSEN (Wide Bay) - The measure before the House provides for a loan of up to $15m, not for a loan of $15m as was suggested by the honourable member for Cowper (Mr Robinson). Indeed, the Treasurer (Mr McMahon) has made it quite clear that the immediate amount of assistance will be $10m and that consideration will be given to providing further assistance up to a total amount npt exceeding $15m. The Minister also said in his second reading speech that this assistance is being given as the result of a request from the industry for a loan in respect of the 1967 season's No. 1 Pool sugar. It will be recalled that a similar loan of $19m was made available to the Sugar Board through the Queensland Government to assist to build up the price of No. 1 Pool sugar from the 1966 crop. Was the Treasurer correct when he said that this money is being made available as the result of a request from the industry for a loan, or did the industry not ask for a loan as has been suggested by the honourable member for Dawson (Dr Patterson)? I am sure that the honourable member for Cowper reads the journal of the Australian sugar producers. At page 317 of the journal this statement appears:

The industry had requested that the loan be interest free, with repayments due annually in certain agreed price situations . . .

In reply to a question that he asked, the honourable member for Dawson was informed by the Treasurer that there will be an interest free payment of $5.8m in respect of the previous loan. The first 3 years of this loan will be interest free; thereafter ten equal annual repayments will be made by the industry. Any suggestion that the world price will improve is speculation.

The sugar industry depends on the export of 50% of its total production for its income. The loan that is being made available does not apply to sugar which is in excess of the No. 1 Pool, the amount being about 2.2 million tons. It is well to remember that whilst about 70% of our export sugar is sold at world market prices, a relatively small percentage is sold on the open market. This is one of the problems that face the industry. The stabilising of the cost of production poses another problem.

I wish to refer in passing to a statement that was made by the Minister for National Development (Mr Fairbairn) in the House last week in regard to the Nogoa scheme. He said that the State of Queensland gives No. 1 priority to this project. The members of the Bundaberg Irrigation Committee, with whom I have been closely associated and who are sponsoring the Kolan scheme, were told by the Queensland Government that their scheme had the same priority as the Nogoa scheme. I do not attach any blame to the Minister for what he said, but I do say that these people have been deceived all along the line into believing that the Kolan scheme and the Nogoa scheme have the same priority. These people have contributed to the sum of about $20,000 which has been provided by the cane growers councils and the Bundaberg and Isis mills to enable an investigation to be made into the need to stabilise the cost of production.

Sitting suspended from 6.30 to 8 p.m.

Mr HANSEN - Before the suspension of the sitting I was saying that the Australian Labor Party supports the principle of financial assistance to the sugar industry. It is worth noting that this is only the second time in 12 months and within the history of the industry that the Commonwealth has come to the aid of the industry. The honourable member for Dawson cited instances in which assistance had been given to other primary and secondary industries and he mentioned the extent of the assistance that had been given. I do not propose to repeat those figures. There is a great difference between the type of assistance that he mentioned in respect of the wheat, dairying and cotton industries by way of grants and subsidies and the assistance proposed for the sugar industry. In this instance it is proposed to make a loan of $ 10m for the 1967 sugar crop. The Labor Party believes that prejudice is being shown to the sugar industry because the loan made to the industry is repayable. It is true that no interest will be charged for three years, but nevertheless the loan will still have to be repaid. 1 mentioned earlier that I believe that the Treasurer misled the House when he said that the industry had asked for a loan. In a journal published by one section of the industry, the sugar producers, who are the millers, it was stated that the industry had asked for an interest-free loan and was prepared to repay it. Nevertheless, the form of assistance given by this legislation shows a prejudice against the sugar industry when we consider the treatment given to other industries. The honourable member for Dawson has foreshadowed an amendment to the Bill so that instead of a loan a non-repayable grant of $15m will be made to the industry in Queensland. Although this measure provides for financial assistance of up to $15m for the industry, provision for only $10m is made in this year's Budget. I have pointed out also that one of the problems associated with the sugar industry is its increased dependence on the world market. At present world prices for sugar are greatly depressed. I, with others who have taken some interest in the sugar industry, believe that this situation cannot continue.

I believe that because of the increased consumption of sugar throughout the world and because some countries cannot produce sugar at the current world prices, the industry in Australia has proved itself to be self-reliant in many respects. It is true that it has been protected and that it is assured of a market at home. It is true also that it is assured of a market for a minimum production measured in mill peaks and farm peaks. But I want to point out that there is a government responsibility in this regard. If a wheat farmer or a cotton grower produces an amount in excess of market requirements he takes a risk as to what his return will be, but growers in the sugar industry are obliged to produce a certain quantity. If they do not produce sugar then somebody else will and their assignments will be given to somebody who will produce a given amount of sugar.

The loan proposed under this Bill is being made available at a time when it is estimated that between 50% and 60% of the current crop will be left in the field because it will be uneconomical to harvest it. One of the problems facing the industry is brought about by lack of water, which has its influence on stability of production. I have already mentioned the need for irrigation for this industry and have explained how irrigation brings stability to the industry. By way of indication I have mentioned that in the Bundaberg area the growers supplying the six mills associated with the district had contributed $20,000 of their own money towards an investigation of the water resources of the area. This was an effort by them to avoid a situation which could be brought about by two consecutive years of drought as happened in 1964 and 1965. To give some indication of the value of the irrigation, the six mills in the Gin Gin, Bundaberg and Childers area have allocated peaks of 342,000 tons, valued at $28.5m, but the short fall in the 1964-65 seasons reached a value at current prices of $18,800,000. This shows what can be grown in a good season when there is an assurance of a certain tonnage per acre. This short fall occurred despite the fact that 46,000 acres in that area were under irrigation.

To give a further indication of the benefit of irrigation, in the Qunaba mill district with 95% irrigation there was a short fall of only 13%. At Millaquin with 69% irri gation the short fall was 20%, compared with Gin Gin where very few farms are irrigated and where the short fall was 59%, a short fall of 83%. All those places feil short of the mill peak production for the year 1965. 1 have referred to the Monduran dam site in respect of which the local people prepared a case and submitted it to the Government. I do not blame the Minister for National Development for inadequate water resources in that area because, as he said, the Queensland Government gave top priority to the Emerald-Nogoa scheme. I congratulate the people in that region for having received some Commonwealth financial assistance. However, I believe that the people associated with the Bundaberg District Irrigation Committee who have put in so much work are disappointed because they were led to believe and were assured by the Queensland Government that they had the same priority as people in the Emerald-Nogoa district. All that people in the Bundaberg area ask is that this dam which will have an initial cost of $20,820,000 be constructed. This will bring stability to an established industry in an area which showed a loss of $18,800,000 over two seasons. That is an indication of the plight of the industry.

The guarantee of $10m from the Commonwealth, whether by loan or by grant, will provide an assurance of a price for No. 1 pool sugar of $86 -per ton instead of $78 per ton. As the honourable member for Dawson has said, this amount represents the minimum cost of production, lt was pointed out in an earlier debate in relation to the Commonwealth and State sugar agreement that $86 per ton is the price that was returned to the growers in 1957 and was a return that they considered to be wholly inadequate. I believe that the least the Commonwealth can do is to assist this industry in its time of need as it has assisted other industries. Some mention was made of drought relief and assistance from the private banks. It is common knowledge to anyone in the sugar districts that when growers applied for new assignments they were given guarantees by the private banks and were left with the impression that the banks' policies would be determined by the return from the properties. The banks are not in a position to give guarantees today.

Some farmers, particularly in the Isis district, have received drought assistance, but they have had to leave their farms and take work with the local government authorities so that they would have some income. While they are away from their farms they are not producing sugar. These people can obtain drought relief only after they have exhausted every other avenue. They must satisfy the authorities that they cannot obtain a further advance from their own bank or from any other source. Drought relief is given only as a last resort. The industry has said that loans are not the answer to the problem. They serve a purpose only in the short term. As the honourable member for Dawson (Dr Patterson) said, this problem can best be solved by giving assistance to the industry. Perhaps the industry now will think of adopting a stabilisation scheme, as other primary industries have. The honourable member for Dawson proposed such a scheme during the campaign for the byelection at which he was elected. He was scorned and laughed at by the people who thought they knew more about the industry than he did. But now people whose livelihood depends on the industry are more in agreement with the honourable member for Dawson than with the supporters of the Government. I agree with the principle of an advance to the industry, but this assistance would better serve the industry if it were a grant.

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