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Wednesday, 30 May 1973
Page: 2859

Mr McVEIGH (Darling Downs) - Like the honourable member for Wakefield (Mr Kelly), we of the Australian Country Party support the bounty on agricultural tractors. We do this for 2 reasons. We believe that the local tractor industry should be encouraged. We realise that this Bill gives a security to the industry until 31 December 1976. Like the honourable member for Wakefield we share the concern that the bounty does not apply to the smaller type tractors. We submit that the best way of protecting the tractor industry and reducing costs is to have the bounty extended to the smaller tractors also.

There have been investigations by the Tariff Board into the agricultural machinery industry in 1925 and 1934 and an inquiry in 1967. In 1970, the Agricultural Tractors Bounty Act was passed extending the bounty until 30 June 1972 as an interim measure pending the submission of the Tariff Board's report which was submitted on 30 June 1970 and published as Parliamentary Paper No. 4 of 1971. In 1972 the then Minister for Customs and Excise, the honourable member for Hotham (Mr Chipp) in his second-reading speech after introducing a Bill to extend the bounty for a period to 31 December 1972, stated that the Bill was an interim measure pending the submission of a further report by the Tariff Board.

Now the present Bill is presented in similar words, with similar aims and similar objectives. Those who depend on this industry, and those in rural industry, like the honourable member for Wakefield and the honourable member for Moore (Mr Maisey), either as consumers or producers, would like to know what are the guidelines and what is the Government's thinking on a long term basis. Even though the Government has extended the bounty until December 1976, the present occupiers of the Treasury bench - and I submit, with due deference to you, Mr Deputy Speaker, that they are not showing much interest in this very important matter at this stage - rather gleefully pointed out all the things that they have achieved in their first 100 days of office. However, of late we can criticise them for being all talk and not too much action.

The employees in the tractor manufacturing industry are concerned as to their future. The bounty on locally produced tractors, unless implemented on the long term basis, will price the local product out of the market. The amount of bounty paid by the Commonwealth Government in 1970-71 was $2,750,000 and in 1971-72 it was $3,160,000. As the production of tractors was in the vicinity of 5,000 per year the bounty per tractor is approximately $575 to $600, which is a subsidy, in effect, to all stages in the tractor production process.

The Australian Country Party has always fought for the right of all to be employed. I would like to remind you, Mr Deputy Speaker and through you the House, that last year prior to the elections on 2 December the rate of unemployment in Australia was lowest in Queensland - a State, incidentally, which has a Country Party Premier. So we are not only concerned about unemployment; we promote public policies to do something about it. We recognise the dignity of labour and we are thus very alarmed at any curtailment of the tractor manufacturing industry and because we appreciate the resultant hardship it might cause to employees.

Indicative of the trying times over recent years through which primary industry has gone - and will continue to go on account of the respective Ministers' refusing to give any meaningful help in revaluation compensation discussions - is a recent report of the Commonwealth Statistician that the age of tractors on Australian farms is increasing. This must serve as a warning. Farmers are keeping their tractors longer, not on account of choice but through sheer economic inability to take advantage of new techniques and discoveries in agricultural engineering. This is having some effect on economic growth in the respective quarters. For the year ended 30 June 1967 the number of new tractors was 18,543 and notwithstanding the fact that in the following year the definition of 'tractor' was changed to include certain types not included for statistical purposes prior to this period the number has fallen progressively to 17,723 in 1970 and 12,177 in 1972. This is a serious state of affairs and we must do everything in our power to safeguard this Australian industry. We want to look after the jobs of the workers, the distributors, the service personnel and the salesman. We stand for a balanced Australia - balanced in its approach to job opportunity reward and selfexpression.

It is interesting to peruse the Tariff Board report for 1970. The Australian Wheatgrowers Federation, a body to which the honourable member for Moore gave many years of distinguished service, maintained that a bounty was preferable to a tariff because users of machinery covered by the Tariff Board reference were in the main exporting production. I have spoken in this House on a few occasions on this matter. Notwithstanding our high internal costs we have to compete in the cut-throat, knock-'em down tactics of international marketing. In addition, as has been stated, we have had inflicted on us a great cancer - a government which is completely incapable of understanding even the basic preliminaries of international financing in regard to marketing.

The Government refuses to pay compensation amounting to $28m to the Australian wheatgrowers and an amount of $10m to southern Queensland sorghum growers which is needed because of its deliberate contemplated action in the currency alignment negotiations to discourage exports. Tariff duties do have an influence on the cost of production and farmers can no longer absorb any increase in costs. Because Australia has great potential to produce we have to export the greater proportion of our crops, our beef and our wool. On the one hand we have to accept the world prices which are offered and on the other hand the high internal costs which according to a recent newspaper report are escalating at an alarming rate following the present Government's assumption of office.

Last year the Australian production of tractors amounted to slightly in excess of 40 per cent of total sales. The retention of the bounty for the term envisaged under this legislation and for the future will also encourage another most desirable feature. Over the years there has developed a very close relationship between the manufacturer, distributor and farmer. A sturdy interdependence has grown up, This involves the manufacturer in having a vital interest in the wellbeing of the agricultural sector and it involves the agricultural sector in an interest in the continuing operation of companies engaged in the production and design in Australia of machinery best suited to meet the farmers' needs. It is probably true to say that Australian farmers have been supplied by fellow Australians with efficient machinery which is constantly being improved and which, with some exceptions in the case of spare parts, is available at reasonable prices compared to those obtaining in other countries. But the fact remains that agricultural machinery costs are not the only major element in production costs.

In the report to which I referred the Australian Wheatgrowers Federation assessed the cost in producing a bushel of wheat attributable to the cost of farm machinery as 12c to 15c. This is a big factor in the cost index in view of a somewhat increasing trend by some overseas firms not to have spare parts readily available. It is worth giving encouragement to the maintenance of a viable Australian tractor manufacturing industry for this reason alone. Where an industry is based in Australia at least any spare part is reasonably accessible to most Australians. A complicating factor in obtaining spare parts from overseas when they are not in stock in Australia is the savage air freight charges which are applicable. The payment of a bounty has the support of those of us who sit on this side of the House because it provides some measure of assistance for local manufacturers to make tractors available to farmers comparable to worldwide imports. But we do express some concern that the present Labor administration did not set its sights wider and include in the bounty provisions the smaller type of tractors which are at present excluded. The smaller type tractors have a particular place in the row crop industry in my own State and in some of the other row crop industries in the other States. We would have been very pleased if the Government had extended this bounty to include the smaller type tractors. But we do appreciate that the Australian tractor industry, the manufacturers, the distributors and the consumers have some knowledge that the tractor bounty will be paid until 31 December 1976 because we were somewhat concerned that the present Government which places great emphasis on adopting an ad hoc approach to solving problems would have adopted a similar approach in regard to this very important matter.

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