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Thursday, 20 April 1972
Page: 1920

Dr PATTERSON (Dawson) - Last week the Minister for Primary Industry (Mr Sinclair) introduced in this House a statement concerning a review made by the Government with respect to rural reconstruction. Honourable members will recall that the Government introduced in the States Grants (Rural Reconstruction) Bill a rural reconstruction scheme involving an agreement between the Commonwealth and the States with the appropriation of $100m for financial assistance to the States over a 4-year period. Whilst the majority of the States had to introduce new administrative machinery before they could put in motion the reconstruction scheme, New South Wales was able to proceed with the scheme fairly quickly, in terms of inviting applications for assistance and making recommendations. The interesting aspect of the Minister's speech is the decision of the Government, one might say, to somersault or to change its mind with respect to this scheme and to speed it up. As the Minister well knows, this was the subject of the major criticism put forward by the Opposition when this scheme was introduced into the House last year. In fact, the belated decision of the Government to speed up the supply of reconstruction funds to the States reveals the apparent inability of the Government at that time to appreciate the seriousness of the financial position of large numbers of primary producers throughout Australia. I believe that the Government's rejection of its original legislation which was made only 12 months ago to provide $100m to the States over a 4-year period represents an admission that it was wrong about the urgent need for reconstruction which has existed for some years. During these last 12 months and certainly when the Bill was introduced the Government was told from all quarters that $100m was not enough and, spread over 4 years, it was totally inadequate. The Government dogmatically refused to alter its decision. We know the history of the scheme. We know the problems of the States and of the heartburning in some of the States because of this problem. Now the Government has reviewed the scheme and to a large degree it has met the demands of the States to speed up the supply of reconstruction funds to those producers whose need is greatest.

Mr Duthie - Under pressure.

Dr PATTERSON - Yes, under great pressure. Instead of a 4-year financial period the Government has agreed that $100m plus an extra $18m of federal funds and a $3m matching fund from Queensland will be used over 2 years and not 4 years. So in actual fact a total of $121m will now be made available over 2 years in contrast to the amount of $100m which was to be made available over 4 years. This has all taken place in the review. I again repeat that the Opposition believes that the Government has at last realised that there is a rural crisis in certain sections of primary industry. Over at least the last 12 months the Commonwealth bungling in the field of rural policies has resulted in frustration and hardship to thousands of producers whose financial affairs have crashed as a result of droughts, ruinous wool and fruit prices in the main, inequitable wheat quotas - particularly for the smaller producers - and of course the galloping forces of inflation.

As the House knows, for the last 3 years I have argued constantly that the progressive in rural debts, which become known from time to time from official figures, demanded that immediate federal action be taken to stop the widespread collapse of many rural communities throughout Australia. When one looks at the Government's record in this field it seems that its reconstruction policies are based on what I would call a 'negative approach'. It has waited until a crisis has occurred and until large numbers of primary producers were either bankrupt or on the verge of bankruptcy or until they found themselves in an intolerable debt position from which it was impossible to recover. This is not the way to manage primary industry. The Government's refusal to face up to major economic problems when they first emerged has involved the Australian taxpayer and the farmer - particularly those farmers who had to incur more debts at ruinous rates of interest while the Government was making up its mind - in a lot of money which could have been avoided. I believe that positive agricultural policies must be concentrated on coordinating the reconstruction and rehabilitation of the sick sectors of primary industry. The overall objective must be to adjust farm production to the level of demand, both domestically and internationally, which will bring to the producer a reasonable price and a reasonable income which will support him and his family. 1 am quite dogmatic that reconstruction and rehabilitation must be progressive. It must be continuous. I am glad to see that the word 'continuous' was used by the Minister. I believe that the Government's policies should have been implemented at least 3 years ago when it was known that a rural depression would be inevitable. Treasury indicators in Australia, world economic indicators in relation to prices - particularly wool and fruit - and, of course, the need to reduce producton of wheat showed this. But the ad hoc wait-and-see attitude of the Government is to be deplored. One can say that this reconstruction is 3 years loo late. Thousands of farmers and their families together with the associated work force have been forced to leave rural areas. They have drifted to the cities, although I will be the first gladly to admit that the despair and misery in western Queensland is not quite as bad now as it was 6 months ago. This applies to Longreach,

Charleville, Blackall and all areas of western Queensland particularly where sheep producing is the major enterprise.

Nevertheless the fact remains that those towns can be regarded as stagnant. In many cases they are dying. I believe that after 22 years in power it is clearly an indictment of the Government that it is only implementing a reconstruction scheme now. It is well recognised throughout the developing nations that a fundamental objective of a viable economy in terms of agriculture should be an underwriting by a progressive reconstruction scheme or an adjustment scheme, as it is called in most countries. I believe that this scheme will become the forerunner of that adjustment scheme. It is needed. My principal criticism is that the scheme should have been implemented at least 3 years ago. The Government has at its disposal highly competent authorities such as the Bureau of Agricultural Economics to keep it continuously posted of changes taking place in the various areas of primary industry. I do not say that because I worked in the Bureau for years. I think that perhaps the BAE is the most highly competent agricultural economic adviser any country could have - not just Australia. A lot of people think that this is a statistical type of division. But this is far from the situation. It is not. It has played a major role in the development of agriculture in the post war years and up to the present time. The BAE has at its fingertips more agricultural data and records than all of the universities put together. Certainly in Australia it has more information about the economics of agricultural industries than any other Australian authority. I think that it should be used more to advise the Government when cracks suddenly occur in the foundations of an industry because it is carrying out continuous surveys into all the major industries all the time. I believe that no better authority exists in Australia to advise the Government immediately a problem occurs.

I believe that as soon as a problem arises in a particular area continuous and progressive reconstruction is essential. The reconstruction boards in the States should swing into action to try to mend the crack. The Government should put forward policies immediately and not wait until a major crisis develops. But it seems that unless BAE recommendations are in line with the philosophies of the Government then often those recommendations are shelved. For example, my mind goes back to the McCarthy Inquiry into the dairy industry many years ago. I believe that if the Government had taken notice of the BAE and some of the recommendations of the inquiry in those days we would have a more viable dairy industry today. We would have constructive policies based on years of experience. Inquiries were made by competent agricultural economists who were assisted by the valuable work undertaken by universities and State departments. This work was undertaken in order to formulate plans for the dairy industry. But the recommendations were not accepted because of political considerations. I suppose that one has to be quite fair and say that, after all, political considerations are the overriding factor in making government decisions with respect to either secondary or primary industry. On the other hand, in the long term more thought has to be given to the reconstruction of sick agricultural industries.

The present legislation provides for Commonwealth reconstruction action to be finalised by June 1973. There is no indication that this assistance will be continuous. Carry on finance is to be provided, but I would urge strongly that as soon as possible the Government should make a positive decision that finance for reconstruction purposes will be permanent; that there will be a flow of finance from the Commonwealth to the States year in and year out for the principal objective of adjusting agriculture in order progressively to solve the problems as they occur, not wait until major crises develop, as we have seen happen in this instance.

A dead-end approach to reconstruction ls wrong. The scheme has to be progressive; it has to be continuous. Policies embracing debt alleviation, progressive reconstruction and rehabilitation schemes, stabilisation schemes, and schemes to control production - whether it be the 2-tier system, such as that which is proposed for the dairy industry, or the controls used in the wheat or sugar industries - are interrelated. It does not matter whether we are talking about policies for a monoculture, such as sugar, or policies for the wheatsheep zones, they are interrelated in terms of agriculture.

The point I want to stress is that we must make certain that the economic nucleus in rural areas is viable, because if it fails the complete infrastructure fails. We of the Opposition are just as much concerned about the farmer as we are about the ancillary work force and the business work force which depends directly and indirectly on the farming community. But if the economic nucleus fails then, of course, the work force fails, and we have seen this happen so starkly in recent months or recent years with respect to the fruit industry, but particularly with respect to the wool industry in the pastoral areas of Australia.

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