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Wednesday, 16 August 1972
Page: 248

Mr GRASSBY (Riverina) - It is not the purpose of the Opposition, as the honourable member for Lalor (Dr J. F. Cairns) indicated, to oppose the extension of the agricultural tractors bounty for 6 months but I want to echo the plea of my colleague for tariff inquiries to be extended considerably. I believe that the minister for national protection - after all, that is what the Minister for Customs (Mr Chipp) is, or should be - should interest himself in the end result of government protection and in the end price of the product. The present tariff reports are truncated. They do not go far enough. They stop a long way short of getting to the end result, to the actual purchaser. Perhaps the excuse might be offered that the Tariff Board is not adequate for this purpose. If so, that lends weight to the Opposition intention to establish a national protection commission.

This Agricultural Tractors Bounty Bill is part of the fabric of protection which has been erected in our country over the years and which has been very largely extended by this Government over the past 23 years. It has been estimated that the sum total of bounties such as this - that is, subsidies of various kinds - as a cash equivalent of tariff protection, exceeds $3,000m each year. That sum of $3,000m annually covers primary, secondary and tertiary products and it has been estimated that the rural sector of the economy receives about $300m of that total. Even the most extravagant of estimates as far as the rural sector is concerned has not gone above $600m in total. That is an unsubstantiated figure but it is the highest that has ever been mentioned in that context.

Tonight we are dealing with the extension of the Agricultural Tractors Bounty Act for a further 6 months and I ask the Minister for Customs and Excise whether he will examine the figures for the cost of tractors in Australia as they apply to the people who buy them to determine whether they reflect the Government's intentions or not. I believe that when the Government provides a bounty, or provides support or protection, it has a duty to look at what happens at the end of the line - at the actual price that is paid. The price of tractors in Australia is made artificially high because of the way in which they are bought. The price of tractors ranges from $3,200 to $6,000 or even $8,000. A tractor is a key item, a vital item, on the farms of the nation. But what does the farmer actually pay for a tractor? In nearly half of the cases he pays more than $1,000 above the price that it would appear should be paid if the Government checked to find out what the price range of tractors might be on the showroom floor. The farmer pays $1,000 more than that.

Let me show honourable members how this comes about. In the pre-war days, a farmer who wanted to buy a new tractor went to his bank, arranged an extension of his overdraft to cover the money he needed and paid the current interest rate, which could have been 5 per cent or 6 per cent. Today, between 45 per cent and 50 per cent of all tractors sold are bought under hire purchase. If we take the case of a tractor priced at $5,000 we find it is common for the purchaser to put in either a trade-in or cash to the value of $1,000, leaving him to find $4,000. The interest rates of private finance companies vary from 11.4 per cent flat to 19.3 per cent flat, and these days often it is customary to relate repayments of that regimen to the harvests. So if we take it that there will be 3 years for repayment at the minimum rate the price of the tractor is increased by $1,168.

Has the farmer an alternative? Where else can he go? The private banks, although having money available at Ti per cent, do not lend for such propositions. In fact they refer such inquiries to hire purchase companies. There is no competition in relation to the money rates available in the private banking system or the rates available under hire purchase. One might say that the Commonwealth takes an interest in this through the Commonwealth Development Bank which offers money at 9 per cent for the purchase of farm tractors. Yet so far as other farm requirements are concerned, such as bores and structures, it makes money available at 4i per cent. The difference, when we compare 9 per cent reducible to 22 per cent reducible under hire purchase agreement, is very great. It is the difference between $1,168 in one case and $740 in the other; and, if the rate of 4i per cent is applied, it is $350.

Referring to the cost of protection and the intention of protection, I plead again that it is desirable when there is a report on matters such as the one before the House that there should be an extended inquiry to cover all the other aspects of the product being made available otherwise we are making these decisions in a completely unreal atmosphere. I want the Minister for Customs and Excise, the Minister in charge of national protection, to initiate such inquiries. I would like him to confer with the Treasurer (Mr Snedden) about this matter. The Minister might well say that the Government brought in this protection measure and that it has been accepted by the Parliament. But we are not quite sure what the end result will be. Should it not be quite clear? If such an inquiry were carried out might not an instruction be given to the Commonwealth Development Bank to begin to publicise its services? The muzzles might be taken off it. In fact an initiative could be taken which is not taken at the moment. Presumably that is by decision of the Government.

It is no use our dealing with these measures in this way unless we are going to take the whole story together. I am suggesting that decisions should not be made on protection in any event unless there is a complete assessment of the benefits and the end results. I suggest that the farmers of the nation are not getting the benefit of any price level that has been determined by either the Government or the Tariff Board. The system of purchasing tractors is very germane to any consideration before the House at the present time. I conclude by suggesting that protection is not just a matter of looking at one item in this totally limited way. We must look at the full result of the Government's decision as to what it thinks ought to be paid at the end of the line. My submission at the present time, Mr Deputy Speaker, in relation to tractors is that the farmer pays far too much and this should be a matter for review and adjustment.

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