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Address to the Victorian Farmers' Federation Annual Conference



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John Anderson MP

Minister for Primary Industries and Energy Deputy Leader, National Party of Australia

Address to the

Victorian Farmers' Federation Annual Conference 15 July 1998

Thank you for the opportunity to address your conference.

I would like to begin today with the observation that the Victorian Farmers' Federation is a strong organisation that has at its heart a sound democratic system that derives from its 18,000 grassroots members and carries through to it leadership structure.

Democracy is not something we should take for granted. It enables us to exercise our rights as citizens - the rights to freedom of association, of religion and of speech. It protects minorities from persecution and it guards against tyranny.

We must work to build up and strengthen our democracy, not allow it to wither. We cannot remain silent when we see it undermined.

Would you still pay your membership dues if you did not have the right to help determine the policies of the Victorian Farmers Federation, to participate in this conference or to elect your leaders? I doubt it. I wouldn't.

Across this nation we are witnessing the emergence of a new political force that wears the cloak of democracy, but is anything but democratic. I refer to Pauline Hanson's One Nation.

Its power is centralised. Its operations are shrouded in secrecy. Its members are without influence and without voice. Its policies, where they are revealed, are moving targets, ill-conceived, even down right dangerous.

Yet the juggernaut rolls on - capturing the public's attention as Pauline Hanson does what Pauline Hanson does best - gives voice to the anger and frustration many people are feeling as they struggle to come to grips with the economic change sweeping our society.

Of course, Pauline Hanson and her henchmen have a right to say what they like, but if they seek to claim legitimacy on the federal political stage, on any stage, they have a responsibility to spell out what they would do differently, and why.

I have seen no evidence that they recognise or accept this responsibility. Indeed, Pauline Hanson and company have been arrogantly dismissive of any attempts to draw them on policy.

I would like to give you a current and very hands-on illustration of democracy at work - the transformation of Australia's wheat marketing arrangements to meet the challenges ahead.

Last week we took a major step forward in the commercial evolution of the Australian wheat industry from statutory dinosaur a little over a decade ago to a fully-fledged grower controlled company that retains the single desk.

My point about democracy is this - 1 have spent the past two and a half years working closely with growers through the Grains Council of Australia to develop and deliver the best model for successfully marketing our wheat.

At the beginning of this process, if you had asked any of Australia's 60,000 growers what was the best model is for marketing their wheat, you would probably have got 60,000 different answers.

But through extensive consultation and negotiation we managed to find an outcome that has been accepted by the vast majority of the industry.

Now that process hasn't been easy. People who don't agree with the result will always be critical of it and me as Minister. That's life. That's my job and I take what criticism there might be on the chin.

But I would rather go through this process all again, letting growers determine the future of their industry, than impose something on them that they can't or won't embrace.

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As I move around rural Australia, people are telling me they might as well vote for One Nation because things couldn't get any worse. But things could get worse, much worse.

You only need to look to our north to see what happens when economic management is sub-optimal - judgement comes like a fast and furious train in the world we now live in.

The Coalition Government has worked very hard sorting out the nation's books; getting interest rates down; locking out high inflation and getting the Australian dollar down to a realistic level for our rural export industries.

All this could be lost if rural Australians lodge a protest vote with One Nation and in doing so split the conservative vote and deliver Government to Labor.

We have seen that happen already in Queensland where our research indicates voters had actually wanted to elect a minority conservative government with One Nation holding the balance of power. L

That is a recipe for disaster. Getting good laws through the Senate is already a nightmare. Look how long it took to secure the Government's 10-point plan on native title.

Look at the Senate's ongoing refusal to give small businesses, including farmers, a sensible exemption from the unfair dismissal laws. Look at the Senate's failure to pass the Telstra privatisation legislation.

More of that later.

Imagine the difficulties that would be created if the Senate became even less stable through the injection of another political grouping alongside the Greens, Independents and Democrats. The nation would be ungovernable.

This is a risk rural Australia cannot afford to take federally.

The Coalition might not have been able to match what I would argue were unrealistically high expectations of us after 13 years in the political wilderness, but we have delivered.

We are doing what all good governments should do - managing the economy well.

There are times when my colleagues grow a bit frustrated at the "so what" response they get when they make that point. I do too, but I also recognise we cannot expect too much credit for achieving what really is a mandatory first principle of responsible government.

The final point I want to make on One Nation is that the very people One Nation claims to represent are the ones who would suffer most from its policies.

I would like to focus for a couple of minutes on the Coalition's achievements.

The $1.25 billion Natural Heritage Trust is delivering real resources on the ground for sustainable natural resource management; strengthening a unique partnership between local communities and governments that is founded on the landcare ethos.

The security of Australia's food production system is being enhanced through the injection of some $76 million into the national quarantine system to make sure unwanted pests and diseases are kept offshore.

We have revamped our export and import procedures to ensure greater transparency and accountability in how we assess applications for imports and increased stakeholder involvement in the process.

In addition, $45m over 4 years has been provided to reform our meat inspection system. This has already delivered significant cost savings to the processing sector, while putting Australia at the forefront of food safety in meat processing.

In a recent survey conducted by the US authorities on imported meat, Australia once again had the lowest rejection ratio of all importing countries. Our trials of Government supervised Quality Assurance based company meat inspection are proceeding well and I am confident the US and other

major markets will soon adopt this new Australian designed meat inspection system.

Australia has an outstanding animal and plant health record. Quarantine is a kind of insurance policy that makes sure we continue to enjoy the competitive advantages that derive from being free from some of the world's most damaging pests and diseases.

We put in place Agriculture - Advancing Australia - a sweeping $517 million package designed to help the farm sector better cope with the very real and serious difficulties it has faced over the past decade - and continues to face.

The AAA package has many elements and I will touch on just a few of them today.

We are about to launch the Farm Business Improvement Program - FarmBis - and I am pleased to say that it will be up and running first in Victoria through the Rural Finance Corporation.

FarmBis is the way of the future. It will build on the excellent work being done in Victoria through Farm$mart, which uses workshops to introduce farmers to strategic business planning at the whole farm level.

FarmBis, like Farm$mart, is a partnership between the Federal and State Governments. .

It will give farmers assistance - by way of grants - to participate in the skills development activities they themselves identify as being most relevant to improving the performance of their businesses. It will be available to groups and individuals.

Activities that will be supported include farm business and financial planning and advice, farm performance benchmarking, skills audits and specialist training in areas such as risk management, but this list is by no means exhaustive.

No doubt many of you here today have participated in Farm$mart, know how it has benefited your business and will be keen to go the next step in seeking better, more innovative ways to manage your businesses. FarmBis will give you that opportunity.

The new Farm Management Deposit Scheme - replacing the old IEDs - will also be operational shortly.

It gives farmers access to a new tax-linked financial risk management tool on a par with the original IED scheme that was gutted by Labor.

Basically, farmers will be able to set aside pre-tax income from good years, earn interest on the full amount while it is invested, and withdraw it in low cash flow years when it is most needed.

Unlike the scheme it replaces, FMDs will be operated by financial institutions, meaning they will be competing for business and offering new products. It should give farmers additional leverage with their banks.

Here is Victoria, you know only too well what a feast the taxman had in the wool boom of the 1980s. Had FMDs been in place then, woolgrowers would have been far better placed to manage the horrendous price collapse that followed.

Another new program is the Farm Family Restart Scheme - the new welfare safety net that has been so badly needed for so long by farmers, whose assets and on-farm labour needs historically have disqualified them from the mainstream social security system.

This scheme provides income support for up to 12 months for farmers in serious financial hardship without them having to put the farm on the market or go out and look for a job.

It provides a breathing space for farm families to consider all their options, get some professional advice, and, if they wish to exit the industry, they can obtain a generous reestablishment grant to help them start anew.

Already more than 1000 farm families are now benefiting from the Farm Family Restart Scheme. Almost 300 of them are in Victoria.

Drought policy is another area where the Coalition has made improvements, and while I will not go into the detail today, I do want to acknowledge the plight of farmers in East Gippsland who have experienced the most cruel circumstances.-

Assistance is being delivered to himdreds of farm families in East Gippsland, but there is always more that can be done.

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I understand the Disaster Relief Fund established by the VFF has now been exhausted through paying for the transport of donated fodder into the region to help pay for starving stock and that soon it will be necessary to start charging farmers for the freight.

That is unacceptable in the current circumstances. While it is only a small gesture, I will find $100,000 from within my Department to make sure the fodder continues to move.

On another front, the Government has established the $250 million Networking the Nation program which is providing much-needed improvements to rural telecommunications infrastructure, such as expanded access to the internet at local call rates.

I mentioned earlier the fact that the Senate has rejected the full privatisation of Telstra, obstructing again the delivery of a policy that would have delivered major benefits for rural Australia. ' ξ; Those benefits were twofold - firstly, the benefit that would have flowed > from reducing Commonwealth debt by as much as 40%, and secondly, the

telecommunications infrastructure spending that would have been funded from the so-called "Social Bonus".

The Government had already announced two specific Social Bonus initiatives - a $60 million boost to Networking the Nation and the extension of untimed local calls to remote areas - and there was more to come.

There is nothing wrong with privatising Telstra.

There is no rational justification for maintaining public ownership of a service that can and should be delivered by private enterprise. Ownership is not the issue when it comes to delivering better telecommunications services.

I and my Coalition colleagues are committed to fully privatising Telstra, and when we achieve this outcome it will be done in a way that ensures rural services are not just maintained, but improved. That will be enshrined in legislation.

Farmers need better telecommunications in this day and age - we need high speed digital data access so we can participate fully in the information economy - and we need speedy, reliable service when lines go out.

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The Government has been busy working at the individual commodity level too, in partnership with industry, to bring about some major changes in the way we do things.

These reforms have at their foundation the Coalition's belief, shared by primary producers, that industries should take greater control of their own destinies. Less intervention equals industries that are better tuned into and responsive to markets.

I have already mentioned the wheat industry. The approach has been the same for the livestock, wool and sugar industries. We listen, we discuss and then we act.

Ladies and gentlemen

I congratulate the Victorian Farmers Federation's leadership for the optimistic, forward looking approach it has taken in arranging the list of guest speakers at this conference.

You have heard already from the US Ambassador on international trade issues and you will hear later today from Professor Adrienne Clark on the subject of biotechnology.

I will return to trade shortly, but first to biotechnology.

Developments in gene technology will determine the future of agriculture in this country and globally.

Biotechnology is the next industrial revolution. It has the potential to deliver productivity improvements that parallel those delivered by industrial power generation and computer technology. It really is that big.

But I am concerned that unless Australia is in the vanguard of biotechnology, its agricultural industries will be left behind. This would have serious consequences for their profitability and for Australia's competitiveness.

There is no doubt we have been the "clever country" and have led the world in innovation in agriculture. To protect this position we need to ensure we do three key things in relation to biotechnology.

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We need to invest in R&D. We need to help our farmers take up the results of this research and we need to protect our intellectual property.

There is a rapid move towards vertical integration of companies which own key parts of biotechnology processes - everything from the genes in the seeds through to their production and distribution. Livestock aren't far behind.

Cashed up multinationals are roaming the globe, knocking on doors in research institutes and buying up the rights to genetic material at bargain basement prices. They're doing it here, now, in Australia.

But the news is not all bad and, as with many research and development fields, we punch well above our weight globally.

This research needs to continue to provide commercially important gene technology products that are sought after by other countries and companies - these become our bargaining chips overseas.

The Federal Government's support for industry directed research and development corporations and the Cooperative Research Centre approach provides a strong foundation for such work.

The challenge for Government is to provide and maintain the conditions that allow and encourage industries to cope with a rapid rate of change and pursue innovation.

The challenge for industry is to develop technologies and products, encourage the uptake of results, and ensure the commercial success of biotechnology as part of Australian business.

For its part, the Federal Government is moving to set in place a clear regulatory framework, ensuring that there is public confidence in the way biotechnology is managed and ensuring that Australia can capture the

benefits of this field.

I have asked the Department of Primary Industries and Energy to undertake an examination of impediments to the more rapid uptake of genetically improved agricultural products so that we can work with industry to speed up our entry into the field.

We also need to get out and sell the benefits of these technologies to the community. At present the level of understanding of what is a pretty complex issue is fairly low and both Government and industry need to provide clear information to the public on the range of activities in the biotechnology field and their implications.

As you can gather, I am taking this issue very seriously. Biotechnology holds enormous potential for our rural industries. It is one of the key issues I will be addressing in the coming months.

And now finally to trade. Trade is our future.

Nobody knows that better than the farm sector. You know the statistics. Four out of every five Australian farmers are dependent on exports for their livelihoods. Biotechnology will probably take that to 1 in 6, and then 1 in 7, and one day 1 in 10.

The economic implications (and the social implications) arising from the relentless capacity of fewer farmers producing more food and fibre cannot be overlooked; nor will it go away. I could pretend it were otherwise, but you wouldn't thank me in a decade or two when we'd been left behind. Our national prosperity is build on trade with the outside world.

Yet despite this inalienable reality, there is a growing sentiment in this country that seeks to deny it; to pretend that we can shun the world and it will not shun us. It's time we took a reality check.

Sure, we find ourselves on a playing field that's anything but level, but I challenge anybody to show me how taking our bat and ball and going home will win us the game.

The Government is working hard to tilt the playing field more our way.

Only recently Tim Fischer returned from Geneva having played a major role in making sure agriculture was to the fore in the next round of multilateral trade negotiations.

Our objective for those talks in the World Trade Organisation is the abolition of all farm production and export subsidies that prop up inefficient farmers in other countries and corrupt overseas markets.

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Australian agriculture has nothing to fear from further trade liberalisation.

With the exception of some industries that have enjoyed protection and chosen to concentrate on the domestic market, our farmers are already among the most efficient and competitive in the world.

As a result we are now in the box seat to gain even greater benefits from further world agricultural trade reform, building on the estimated one billion dollar down payment we are in the process of receiving from the Uruguay Round through increased rural exports.

And those industries that traditionally have had a domestic focus, but are turning their hand to exports, are showing they can do it too. They are starting to see the rewards. There is no better example than the citrus industry which in 1996-97 exported 175 million dollars worth of product - three and a half times the level of citrus imports.

Unfortunately, trade liberalisation has got itself a bad name, largely I believe because it was held out as a cure all for the farm sector's ills, when in fact it wasn't, isn't and never can be.

But it is an important part of the overall equation, along with taxation reform, waterfront reform, further modernisation of the economy - all things the Coalition stands ready and willing to deliver - that must be delivered if we are to benefit from trade reform and restore the profitability of farming.

We need an open and efficient economy creating wealth and employment.

We cannot afford to thumb our noses at our trading partners - as a mob like One Nation would have us do - by erecting new barriers to their exports to us.

That's not smart when we are dependent on doing business with them to survive, but they can get their goods from somewhere else.

Let me tell you.this - 1 would rather fight and lose the domestic political battle on trade reform, knowing in my heart that I have done the right thing by our farmers, our nation and future generations.

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I would rather fight than be weak and give in to the isolationists who through their insular nationalistic sentiments would so seriously undermine the interests of those they purport to represent.

In politics, as in life, there are easy paths and hard paths. I am not one for capitulation.

I must tell you clearly what I believe to be the simple truth - that the very people One Nation claims to represent are the ones who would suffer most ··- from its policies.

Some people are now calling for the Government to abandon its policy agenda - to walk away from things like tax reform which this audience knows is critical to our future.

It would be a pretty gutless Government that changed its mind over night on a range of major policy goals that had been at the heart of its agenda and were critical to the wellbeing of the nation.

We won't be wavering from our course. The farm sector, the nation, cannot " .. afford it.