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Thursday, 29 October 1970

Mr CORBETT (Maranoa) - I too welcome the Bill. I should like to pay a tribute to the Attorney-General (Mr Hughes) for the efforts made by him and those who assisted him to have this Bill brought down during this session. It was very important that this should be done. I think he deserves credit for being able to achieve this result in the time that has been available to him. It is necessary, as he pointed out in his second reading speech, to remove any obstacle that the Bankruptcy Act may present to the operation of compositions or schemes of arrangement entered into. It is rather a striking testimony to the change in rural industry to note that this provision which is being brought back into the Bankruptcy Act was first inserted in 1933. In 1962 the Commonwealth Bankruptcy Law Advisory Committee presented its report which stated that the affairs of very few farmers were administered under various State Acts to which section 57a of the repealed Bankruptcy Act applied. Because of the changing circumstances that have come over much of primary industry an alteration to the Bankruptcy Act has become necessary.

It is common knowledge that the drought in Queensland is the worst ever experienced in that State, both in intensity and in the area affected. Only by the strenuous efforts of the State Government in farm reconstruction and debt reconstruction can many areas of primary" industry be retained and the people concerned be enabled to remain on their property. The situation is as serious as that; it is a matter of great concern to Queenslanders generally. Quite some time ago, in recognition of the problem which was facing primary producers in Queensland, Country Party members of the Federal Parliament formed a drought committee. We have been conferring with the Queensland Government and the Federal Government to bring about, the co-operation which will be required if worthwhile assistance is to be provided. There is no doubt that if the amount of assistance which is required is to be made available, the Federal Government will have to provide some of it. 1 should like to pay a tribute to Senator Lawrie for the work he has done in this field. 1 am sure that the Minister will agree that Senator Lawrie approached him on a number of occasions on behalf of the Committee.

There is no doubt that reconstruction in Queensland is vital. It is equally certain that an amendment to the Bankruptcy Act is necessary to enable the Rural Reconstruction Board in that State to operate effectively. I appreciate what the honourable member for Dawson (Dr Patterson) has said on this subject. He mentioned a number of factors that were worthy of mention but which I will not repeat except perhaps to emphasise the great increase in indebtedness that has come over the rural community.

Mention has been made of the need for some further action. Of course, the Minister for Primary Industry (Mr Anthony) is presently and urgently engaged in a review of this situation to find the best methods to approach this position. It is a very serious position and of course we have to look at it from the Federal angle - from a Commonwealth wide point of view. The Parliament may decide to give measures application over all of the Commonwealth. I believe that very often there has been a good deal of criticism of people who represent rural areas. It is said that these honourable members have a parochial outlook. I want to say that in recent times the order of priority of the work of members of Parliament from rural constituencies, however broad their outlook may be, has necessitated their concentrating on rural matters. 1 reject the suggestion that because honourable members who represent rural constituencies speak quite a lot on rural matters we do not have as broad a national outlook as any other member in this House.

The value of rural industry to the Commonwealth hardly needs emphasising. Although the wool industry is suffering hardships it is still providing 20 per cent of our export income. Where would our economy be without this contribution? What will happen to our economy if the wool industry collapses? However, these remarks are widening out a little from what I intended to say. The hour is late and I shall not expand this subject as much as I would like to expand it. However, I would like to mention that the methods by which finance has been arranged comes under various measures. Finance is secured mainly from the trading banks, pastoral finance companies, life assurance companies, the Commonwealth Development Bank and non-institutional lending. The problem that we face in this field is that the normal sources of finance for rural industry are drying up. The demands on these financial institutions have reached a maximum capacity. I do not condemn the institutions for what they have done. I believe that they have endeavoured to try to cope with the demand but that it is getting beyond them.

There will be a need to cover the requirements of rural industry. I believe that this will be done under such measures as the proposed rural reconstruction board in Queensland. I would like to quote from an article by F. G. Jarrett of the University of Adelaide. This article is contained in a book entitled 'Agriculture in the Australian Economy' which was first printed in 1967. The article indicates what the trends should be if we are to maintain our primary industries, lt was fairly obvious even when this book was printed what means would have to be applied to keep our primary industries moving as they should and as we would like to see them move. 1 want to quote inter alia from this article. Mr Jarrett states:

The bulk of institutional credit provided to agriculture conies from the trading banks and to a less extent, the pastoral firms. The overdraft form of lending has undoubtedly served agriculture well but it is questionable whether it is the most appropriate credit instrument for presentday agriculture. Since many of the new technologies in agriculture require relatively longer periods than in secondary industry to 'pay off, farmers need to be assured of a continuity in credit availablity which is not always assured under the overdraft form. Yet it is probably the technologies most needing intermediate credit which will make the greatest contribution to agricultural productivity and through it to economic development A beginning was made with term lending^-

Of course, this is well known; it was done in this Parliament - in 1962, and the speed with which these resources were committed suggests farmers' needs for inter-, mediate length loans for stated periods were not being met by the then existing credit arrangements. The increase in March 1966 in the term lending fund and the establishment of a farm development loan fund will provide useful additions to the supply of intermediate and long-term lending funds available to agriculture.

So it was patently clear then that this was developing. Of course, the very grave fall in prices and the very unfavourable seasonal conditions have aggravated the position tremendously since that time. In the last 2 paragraphs of his article Mr Jarrett stated:

In the context of low-income agriculture, the distributive aspect of credit would suggest the provision of credit with some element of subsidy. The identification of the low-income farmer presents a puzzle but presumably they could be identified if sufficient efforts were put into the task of finding just who or where the low-income farmers are.

It would not be very difficult to find them today. The article continues:

Recently work by Hoffman and Hume suggests that the income disparity between farm and nonfarm incomes in Australia is nowhere near as large as exists in countries such as the United States, for example.

I believe that situation has developed very considerably since this article was written. It continues:

Even so, there may be pockets of poverty in Australian agriculture. It may be doubted whether subsidised credit is the most effective way of tackling any low-income problem, generally associated with inadequate farm sizes. Indeed, the provision of such credit may delay the consolidation of farms into economic units and perpetuate the resource misallocations which already exist.

That article sets out very well the need for farm reconstruction even then and the need for a different approach to rural finance. So I indicate to honourable members how very much I welcome this measure. 1 have spoken with the object of trying to give some appreciation of the need for this Commonwealth Government to take an interest in rural finance, particularly under the conditions which exist today. 1 want to draw attention to the fact that there have been fluctuations in rural industries over many years. The crisis which is facing Queensland at the present time is the worst it has known. I know that other States are affected as well but perhaps not to the same extent because the drought position has not been as bad in other States as it is in Queensland. In these circumstances, 1 believe that the Commonwealth Government should come to the assistance of primary industry. The situation has fluctuated. I believe that the man has not been born who can accurately forecast world markets in almost any field. Only recently we saw a dramatic change in the wheat situation in world markets. Because of the tremendous value of agriculture to the Commonwealth of Australia we must preserve our agricultural income; we must preserve our agricultural industry. We can do this only if the Commonwealth Government makes some contribution. I believe that the industry has earned this help over the years. To my mind, the present situation is only a passing phase, although it is probably worse than it has been before. But with the growth of the world's population we will be looking to our agricultural industry to continue to make this country the nation that it can become.

Friday, 30 October 1970

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