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Thursday, 21 September 1972
Page: 1847


Mr BUCHANAN (McMillan) - I apologise to the House and particularly to the Hansard writers for the state of my voice but I will do my best to make it audible. There is provision in the Budget Papers for expenditure of about $33m for the dairying industry. This is a considerable drop from the amount for last year due, it is said, to the improvement in the marketing situation. As a result the factories arc very pleased and are naturally seeking every gallon of milk that they can get their hands on. Fifteen years ago the butter and cheese subsidy was set at S27m because the leaders of the industry decided that they wanted a fixed sum rather than accepting the uncertainty that accompanied the old cost of production basis which most people have forgotten. Farm incomes overall have picked up from the last few years of depressed prices but they are declining in comparison with average incomes in the rest of the community. The farmer is asked to overcome this by working harder, putting in longer hours, investing more aids to production, and spending more in pasture management. For the rest of the community there is acceptance of a steady increase in average earnings. But this does not apply to the farming industry.

In the manufacturing and tertiary sectors of the economy everyone wants a 35-hour working week, and there is no doubt that everyone will get it in the next few years. Indeed, many already have it. For these circumstances I find it incredible that the Government has cut back the total subsidy for this year and continues to use an amount of $27m as the basic subsidy for butter and cheese without making some adjustment upwards to compensate for the change in the value of money. The dairy industry is disadvantaged compared to the rest of the community. I do not think it should be. The subsidy is not a subsidy to the farmer. It was introduced as a subsidy to the consumer to keep the retail price down and to lessen the impact on the consumer price index which legitimate increases should have made with an effect on everybody's cost of living.

At the present time the price of dairy products is at an all time high and factories this month are paying out millions of dollars to suppliers in the final adjustments for the year. But this does not justify the freezing of the government contribution to the rather complicated pool from which factories are able to make this final payment. In order to maintain the relative benefit arising from government assistance I have regularly asked that the base rate of subsidy should be updated. I am most disappointed at the failure of industry leaders and especially members of the Australian Country Party to give me their support for what I regard to be an essential Budget move.

I turn to the estimates for the Department "of Trade and Industry. One of the greatest worries in Australia today is the level of unemployment. We all have to do something about it. Everyone in the country has to do something. At 2.14 per cent, using seasonally adjusted figures, it is considerably less than it was in 1961, in spite of attempts by the Opposition to paint the picture as worse than in 1961. The calculated number of 120,000 is slightly more than the 1961 number of 117,000, but the work force has increased by 20 per cent since then. So the position is not really as bad as in 1961 and certainly it is not nearly as bad as it was in the depression years of the 1930s. But the position is too bad for any of us to accept as being at a reasonable level. One of the reasons for unemployment is the brake that has been put on manufacturing industry by the atmosphere of uncertainty as to the future national policy for industrial development.

An unreasonable agitation for an appreciation of the dollar is one area of uncertainty. I have seen no argument that can show that a curb on capital inflow, if that is one purpose of revaluation, would have a counter effect on inflation. The present level of unemployment is due to a falling off of employment in manufacturing industry which naturally is reflected in falling employment in the service industries. The service industries are completely dependent upon manufacturing industry for their existence. Any action, such as tinkering with the value of the dollar, which would divert demand from Australian production to imports would cancel out the whole Budget strategy of stepping up demand so that idle capacity in industry will be taken up and employment stimulated.

Another unreasoned agitation is for tariff cuts which would be damaging to the whole economy in the same way. If Australian manufacturers are forced into the position of having a smaller share, of the Australian market and so finding themselves selling less they must manufacture less and there will be less employment of Australians, with a corresponding boost to the employment in overseas factories, with Australian money going to pay the wages of workers in Japan, Hong Kong, China, Europe, America and the rest of the world. I prefer to buy Australian, and so should everyone who wants- to stop the present widespread unemployment. This includes the crazy decisions by the Australian Gas Light Co. to buy pipe from Japan, as was mentioned by the honourable member for Cunningham (Mr Connor), with whom I completely agree. To build a pipeline from the Moomba field to Sydney would provide a terrific amount of employment to the people who make the pipe. It should be made in Australia. It can be made here. Instead of talking of tariff cuts the Government should be introducing quantitative restrictions as has been done in the case of shirts and hold back the flow of imports taking the bread out of Australian mouths.

Inflation created by wage and salary increases far outstripping productivity is another reason for hesitation in the expansion of manufacturing output. There is no encouragement to new investment when there is no curb on the hard bargaining being indulged in by militant unions. Unless we can put some curb on the excessive wage and salary demands that have done and are still doing excessive damage, not only to Australia as a whole but to the people whom the unions claim to represent, whole sections of industry will be in trouble.

The Tariff Board's policy is another area of uncertainty. Judgments are proposed as to whether Australia should have a particular industry on the entirely specious argument that it requires rates classified as high, medium and low - a judgment made by the entirely inefficient processes of Tariff Board inquiries. The Government has no way of determining whether the Tariff Board's advice is sound because it does not have full access to the whole facts. The uncertainty as to the future of export incentives is another factor inhibiting healthy growth. Export business is slender margin business subject to erosion. We are due for renewal of our export incentives. 1 do not have time to expand on that point. I would like to. With all these considerations in mind I again urge the Government to establish a ministry of manufacturing industry to give Australian secondary industries the same sort of stimulation and encouragement as is enjoyed by primary industry. The Ministry of Trade and Industry could act as co-ordinator for both of these ministries in relation to all international activities, but the Office of Secondary Industry, whilst serving a most useful function, does not do justice to the future potential of Australia's industrial development. The Office of Secondary Industry does its best, but it cannot hope to perform as well as a separate department.

Progress reported.







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