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Tuesday, 11 October 1983
Page: 1570

Mr DRUMMOND(8.00) —No objective observer of this Budget could fail to conclude that the rural sector has come off badly. In a Budget where total outlays are up some 15.8 per cent on last year, the sum allocated to the agricultural and pastoral industries of $337m, which is down by more than $35m from last year, is a reduction of nearly 10 per cent.

Mr Cunningham —What about the drought?

Mr DRUMMOND —I will come to the drought. Strategists in the Hawke Government have obviously concluded that cutbacks can be made and promises broken in the rural area without threatening the electoral survival of the Australian Labor Party. The ALP holds very few rural seats as distinct from provincial and mining electorates. In the short term the Government's strategy may work, but it should realise that its neglect of primary industry will damage the whole economy and cost jobs in the cities as well. How quickly some people are forgetting the lessons of the 1982 drought.

The largest single reduction in aid for agriculture is the cut of some $62m in drought assistance. On the surface this might appear reasonable, until we realise that the Government has taken actions contrary to the procedures of the previous Government and contrary to its own election promises. The fodder subsidy was axed as of 30 June without reference to the fact that, in some areas , including many parts of Western Australia and in the southern area where I live-I declare my pecuniary interest-the drought had not yet broken. The interest subsidy scheme will cease on 31 December, rather than a full 12 months from the lifting of the drought. Such measures show a lack of appreciation of the problems of farmers in becoming viable after the devastation of drought.

There are other areas of rural assistance where amounts allocated are in direct contradiction of election promises made only a few months previously. Twenty million dollars has gone towards wool promotion and not the $28m promised. One million dollars has gone to the soil conservation program for which $4m had been promised. I do not believe it is good enough for political parties of any complexion to make such specific promises and then break them. It would seem that this Government has sought to assist soil conservation on the cheap and gain revenue by axing tax deductibility for land clearance. This is a clumsy and unjust method of gaining a desirable end. Experience in the south west of Western Australia, particularly in the rural, eastern side of the seat of Forrest, has shown that the only fair means of preventing land degradation by overclearing is for the State Government to have sufficient courage to institute clearing bans. This happened some four years ago in the catchment areas of the Blackwood River. Although the then State Government and the Liberal members of parliament for the area incurred short term flak, the sense of the decision came to be appreciated. In fact, the Liberal vote has held up in that area far better than in many other places. Yet, if there is no danger of erosion or salinity through clearance there is no case for blanket removal of this deduction.

Other areas of the Budget affect the rural community. Meat inspection fees for cattle have risen by 300 per cent, and rural export charges in general are doubled; $18m in receipts, rising to $36m. The increase in the petrol excise of nearly 2c a litre will have an adverse impact over the entire rural community. The removal of the sales tax exemption from oils and lubricants and their taxing at 20 per cent will be a further cost to primary industry. This Budget, of course, does nothing to redress the damage done to the rural community in the May mini-Budget. The petroleum products freight subsidy scheme, a largely unseen but useful support to the rural community, has been watered down by widening the gap of the freight differential from one cent to 1.1c-a widened gap that moreover is itself indexed. The tax incentive was removed from income equalisation deposits, again in contravention of an election promise.

Far worse for the electors of Forrest was the decision to abandon the supplementary program of the bicentennial water resources program. The Budget has confirmed the destruction of the two most valuable projects in the south west confirmed by the previous Government. These were: The Harris Dam at Collie, and the extension of the Harvey Dam. The building of these dams would have created, both directly and indirectly, far more jobs in the south west than the community employment program can ever hope to create. Apart from the stimulation of the local economy, these water resource projects have intrinsic value to the rural community. The Harris Dam would have provided fresh water to mix with the water from the existing Wellington Dam whose salinity restricts its current use. The Harvey Dam enlargement could increase the potential of an established rural area where vegetable growing has joined irrigation dairy farming as a major industry. It is also worth remembering that in 1964 part of Harvey town had to be evacuated in the severe floods of that year because of a feared weakness in the existing dam. The enlargement of the dam would have removed any such future danger.

Another aspect of this Budget that shows lack of interest in the rural community is the projected form of the assets test for age pensioners. The farming community will suffer-for example, the retired farmer who leaves his property to be run by his children, derives little or no income from it, but keeps the title to the farm. This is not some artificial scheme. It is very natural that a person who has done so much to build up a property should want to retain formal possession in his lifetime, or at least until sons and daughters are fully settled into a farming career. Such a person will be denied a pension, despite lack of possible income. The position of a farmer living on the farm also is not yet fully clarified. We are unsure whether only 10 per cent of the farm's value will be assessed, or whether 10 per cent will be exempted. The confusion and concern that many less wealthy primary producers are now experiencing is a measure of the disregard that this Government has for the rural community.

It could well be argued that some of these broken promises and policy failures are directly related to that symbolic downgrading of the rural sector by leaving the Minister for Primary Industry (Mr Kerin) outside the Hawke Cabinet. It is true that much nonsense is often talked by people who think they are solving some abstract social problem by making somebody a Minister or putting him in an expensive office. Yet it is quite illogical for a major department of State, overseeing a vital section of the national economy, to be excluded from the inner sanctum of policy making, when a comparatively minor department, such as the Department of Immigration and Ethnic Affairs, is thought worthy of a Cabinet seat. The interests of thousands of rural dwellers have been subordinated to petty intraparty political considerations. If the current Minister, whatever his good intentions, lacks the necessary clout for a Cabinet seat, then the portfolio had better be given to someone who has it.

Finally, the winegrowers in the Margaret River region and the southern areas of my electorate of Forrest are glad that they have escaped a general excise on table wines. This relief, however, must be tempered with concern at the Government's action in respect of fortified wine, once more breaking an election promise. They are left with a feeling that what has prevented a wine excise is the inability to devise a workable system of application rather than considerations of broad principle or real concern for the future of a developing rural industry. I must emphasise that wine growing in the south west is a developing industry where many small vineyards are often still seeking long term viability. Any new tax imposition at a time of general recession could deal them a severe blow. The most damaging type of excise is the one levied on fortified wines, assessed on alcohol content rather than sale value. As with many other features of this Budget it deals with the rural sector. It is not so much the actions of the Hawke Government that offend country people as the cynical breaking of so many undertakings given before the March election.

Rural dwellers are being told that they are expendable. The rural industries of Australia do not seek a free ride. Rather, they want a fair deal. Secondary industries are protected through many mechanisms such as tariffs, quotas and the like. Many service and tertiary industries are insulated by national wage determinations, different tribunals and the like. The rural industries stand alone against all the fluctuations of world trade, including the lack of access to markets and the dumping of surplus production by some countries.

The CHAIRMAN —Order! The honourable member's time has expired.