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Wednesday, 17 December 1930

The PRESIDENT (Senator the Hon W Kingsmill (WESTERN AUSTRALIA) -I ask the honorable senator to confine his remarks to the bill, which deals with wheat advances.

Senator GUTHRIE - It is claimed that there are 62,000 wheat-growers in Australia. That is a considerable proportion of the population; but I remind the Senate that there are 80,000 woolgrowers in this country. The bill provides that the wheat-farmers of Australia will be paid 3s. a bushel for f.a.q. wheat, f.o.b., less costs. Is the Senate aware that it will cost more than 6d. a bushel to place their wheat on shipboard? It costs 6d. a bushel to truck it to the capital cities. In reality, the assistance now proposed to be given to the farmers of Australia is a guarantee of from 2s. 4d. to 2s. 6d. a bushel gross at the nearest railway station, the price varying according to the distance from the seaboard.

Senator H E ELLIOTT (VICTORIA) - That will not lessen the total liability.

Senator GUTHRIE - The figures quoted by Senator Duncan are absolutely absurd. The suggestion to pay the farmers from 2s. 4d. to 2s. 6d. a bushel for their wheat at the nearest railway station is equivalent to granting them, say, 5d. or 6d. a bushel, above to-day's open market price. It falls far short of the promises made at the last federal election by certain Labour candidates, at least one of whom said that a Labour government would guarantee the farmers 6s. 6d. a bushel for their wheat, and of the 7s. 6d. a bushel promised by Mr. Lang during the recent election campaign in New South Wales.

Senator Duncanspoke of an exportable surplus of 180.000,000 bushels of wheat. The proportion of this year's crop which will be available for export will not be so great as that. The latest estimate of the wheat yield this season is 180,000,000 bushels. This decreased estimate is due to the recent succession of rain and hail storms throughout the principal wheat belts of Australia. From this quantity, 18,000,000 bushels must be deducted to meet seed requirements, for which no provision appears to be made in the bill.

Those who have had crops will retain sufficient seed wheat to meet their requirements, but the quantity will have to be deducted from the liability of £4,000,000 which it is said will accrue. Further, the quantity of wheat used for local consumption has also to be deducted. This, apparently, Senator Duncan overlooked. For some years past the quantity of wheat consumed locally has averaged about 31,547,950 bushels, which, when manufactured into flour, represents 657,249 tons. It is estimated that the quantity of wheat required in Australia for gristing purposes during the coming year will be 32,000,000 bushels, which is slightly greater than that of last year, owing to the increased population and the fact that the price of bread is slightly lower than it has been. With a revised estimate of a 180,000,000 bushels harvest, less 18,000,000 bushels for seed purposes, and 32,000,000 bushels for gristing into flour, there remains 130,000,000 bushels to be affected by this measure. If in selling that quantity overseas a loss of 6d. a bushel is incurred, £3,250,000 will be involved. But if it could be arranged, as is being attempted, to fix the price of the 32,000,000 bushels used for local consumption at 4s. a bushel, a profit of1s. over and above the guaranteed f.o.b. price, would reduce the liability under this bill to £1,650,000, or almost exactly5s. per head of the total population. Surely a payment of 5s. a head is not too greata recompense for the wheat-growers of this country, who are providing so much national wealth and also cheap food for the masses of the people. I know it is said there will be difficulty in fixing the price at 4s. for local consumption, but I. sincerely hope that the Government will be able to do so. I notice that the bill contains a proviso to the effect that there shall be no interchange of wheat for local consumption between the States at a price less than 4s. a bushel, which, if definitely arranged, will reduce the liability of the Commonwealth to very much less than £2,000,000 instead of the £7,000,000 which Senator Duncan mentioned. The Premier of Victoria (Mr. Hogan) is proposing to fix the price of wheat for local consumptionat 5s. a bushel, and if that policy is adopted the liability of the Com- monwealth Government will be further reduced. I should have preferred some definite provision for raising the money to reimburse the Treasury the loss which seems certain, and which will amount to £2,000,000 or more, according to the world's market price for wheat. To-day the price is lower than it has been for 37 years, so that there should be every possibility of the price increasing rather than decreasing. Had the Government imposed a sales tax of £6 a ton on flour, it would have provided an extra 6d. a bushel above world's parity for our wheatgrowers. The imposition of such a tax should not increase the cost of living. The price of wool has no effect on the price of a suit of clothes, and the price of wheat has very little to do with the price of bread. It would have been better to impose a sales tax on flour than attempt to coerce the Commonwealth Bank to finance this scheme, which must place a very heavy strain upon it. I am strongly opposed to any attempt being made by the Government or Parliament to influence the Commonwealth Bank Board. The imposition of a sales tax on flour would not have increased the cost of living. Recently my share-farmers in New South Wales, who have been forced to selltheir wheat ex New South Wales silos at1s. 7d. a bushel, have been compelled to pay1s. for a 4-lb. loaf, which I understand is the price at present charged in Canberra. Although the price of wheat is lower than it has been for 37 years,1s. is still being charged in many parts of the Commonwealth for a 4-lb. loaf, while in others the price is 9d. and11d. I have seen contracts at 6d. a 4-lb. loaf which have been made by men who are not making bread for the fun of it. The price of bread in Australia with wheat at 2s. at country sidings and 2s. 6d. seaboard is as high as when it was 7s. a bushel, and is therefore quite out of proportion to the present price of wheat. In Great Britain, where from 40 per cent. to 50 per cent. more is being paid for wheat than is being paid by the millers in Australia, a 4-lb. loaf of bread is sold at 8d.

Senator Rae - This Parliament has no power to control prices.

The PRESIDENT - The honorable member is straying from the subjectmatter of the bill.

Senator GUTHRIE - I am contending that it would have been better to impose a sales tax on flour, rather than provide for a guarantee as is proposed in this bill, which the Commonwealth Bank is expected to finance. It is fairly evident that the wheat merchants will not take any hand in financing the scheme as they have in the past. In New Zealand, the price of wheat is 6s. to 6s. 2d. at country sidings, sacks extra, which is equivalent to 6s. 3d. to 6s. 4d. a bushel. Although the New Zealand farmers are receiving more than 300 per cent. more than the Australian farmers for their wheat, the price of a 4-lb. loaf of bread is not any higher than it is in Australia. A heavy duty is imposed by New Zealand upon wheat importations. It is absolutely absurd that the people of Australia should be exploited asthey are and charged the same price for bread as when wheat was 7s. a bushel. In New Zealand, where wheat is 6s. 3d. to 6s. 4d., the charge is11d., and in Great Britain where wheat is bought at 50 per cent. more than is charged here, the price is 8d. This is an anomaly which will have to be removed. The primary producers and the consumers are not getting a fair deal. The primary producers, in particular, are being slaughtered as the result of the legislation of this Government.It is exceedingly difficult for them to carry on and sell their products in the markets of the world. Although the prices of wheat, wool, meat, and other primary products have beenenormously reduced, the consumers are not getting the benefit.

Senator Barnes - This Government has no power to fix prices.

Senator GUTHRIE - I realize that; but I understand it is making a very definite attempt to control the price of wheat sold to millers which is to be fixed at 4s. a bushel. I again wish to emphasize the unfairness of bakers who are selling bread at1s. a 4-lb. loaf, as they are in Canberra, when the price of wheat is abnormally low. On the 8th October, of this year, when millers could buy wheat at 3s. a bushel, flour was quoted at £9 15s. a ton and pollard at £5 15s. a ton. Forty-eight bushels of wheat at 3s. represents £7 4s., less. 880 lb. of offal at £5 15s. a ton, which is equal to £2 10s. 7d., leaves £4 13s. 5d. For . 2,000 lb. of flour, the farmer receives £4 13s.5d., equal to 1.65d. per loaf.

The PRESIDENT - The honorable senator is departing from the subjectmatter of the bill.

Senator GUTHRIE - I submit that my remarks are relevant. I am endeavouring to show that, although the bill requires the Commonwealth Bank to provide several millions of pounds to finance the Government's scheme, if the farmer is to get the equivalent of 3s. per bushel f.o.b., the actual price to be received by the grower for wheat delivered in bags at country railway stations will be from 2s. 4d. to 2s. 5d. per bushel ; further, that while this is so, theprice in Canberra is 4s. 6d. per bushel, and the 4-lb, loaf of bread costs1s. At present prices for wheat, a farmer has to sell three bags of wheat to buy 1 lb. of tobacco.

The PRESIDENT - The honorable gentleman mentioned that fact before.

Senator GUTHRIE - No, Mr. President; nor did I mention that it takes one bushel of wheat to buy one bottle of beer, or that while a70-lb. bag of sugar costs 29s. 2d., the wheat-grower has to sell 60 lb. of wheat for 2s. Although the Government's proposal will mean an increased return to the wheat-grower, it is a poor recompense for his labour and outlay. It is absurd to think that, for the quantity of wheat necessary to produce 2,000 lb, of flour, the farmer gets only £4 13s. 5d., or the equivalent of 1.65d. per loaf, while the miller gets £51s. 7d., or the equivalent of 1.80d. per loaf. Despite the fact that he gets such a small return, the farmer has to provide interest on the capital cost of his land, pay instalments on his machinery, purchase his superphosphate and seed wheat, pay for his labour and wait for eighteen months before he can get a return from fallowed land.

Although this measure is imperfect in many respects, it is an indication that, at last, this Government recognizes that the wheat-farmer is of some value to the community. But even under this scheme all that the farmer can expect' is to be in a position to pay something to his storekeeper, and something off the cost of his tractor, farm machinery, harness and fertilizer account. Anything that we can do, directly or indirectly, to help our primary producers, who have carried the burden of high costs for so long, and who are now facing ruin, will be of benefit to the nation. I approve of the Government's proposal, but I would prefer to see action taken in another way. All that the farmer can hope to get is 2s. 4d. or 2s. 5d. per bushel, and everybody knows that the average cost of production is at least 3s. 6d. per bushel. The farmers, early in the present year, were exhorted by the Prime Minister and the Premiers of the various States to grow more wheat in order to save Australia. They responded to the appeal. They made up their minds to work longer hours so as to produce a record harvest and save the finances of the Commonwealth. But the provision now being made for them is quite inadequate and out of all proportion to the expenditure which they have incurred. They are, however, lion-hearted men. However difficult may be the situation, they always stand up to their job, which is to produce more and more wheat, and increase the national wealth. The bill offers them a poor reward for their effort, but since half a loaf is better than no bread, I intend to support it.

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