Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 20 September 1973
Page: 1335

Mr GORTON (Higgins) - There is no doubt that meat prices recently have risen considerably. There is also no doubt that they have risen from what was a very low base.

There is no doubt that over the years the prices of meat have not increased more than have the prices of other commodities or average wages. It is surely the wish of this House that meat producers or any other producers should not by artificial means be reduced to a peasant class by making them produce and making them subsidise the rest of the community from that production. Those of us who signed the minority report urge the House to reject the majority report. We believe that the recommendations are a classic example of an attempt to attack the problem of prices from the wrong end and in a counter-productive way. In any case, the thinking behind the proposals would be wrong. When we are dealing with an industry which does not set its own prices but depends on supply and demand, which does not produce to a set price as factories do, which is subject to all the fluctuations of the market and which is subject to great variations in seasonal conditions and the hazards of drought and flood, that wrong thinking becomes a tragic approach.

Furthermore, the action suggested will have no significant effect, in our view, in reducing the domestic price of beef. It will be harmful to all producers and particularly harmful to beef producers in the northern half of Australia. It will place in peril our future access to overseas markets which we had desperately needed and fought for in the past and which surely will need equally desperately in future. The major result of this approach is likely to be only the employment of large numbers of civil servants sitting in room after room busily collecting an immoral and sectional tax and other great numbers of civil servants in other rooms busily engaged in paying most but not all of it back, all at the cost of the revenue. Another significant result is likely to be a reduction of the incentive to producers to produce more beef of the kind that the Australian market needs and therefore to lead to lower production than at present. This in consequence will mean higher not lower prices for meat for the housewife.

Let us examine the principal recommendation more closely. It is to impose an export tax of an unspecified size, but the honourable member for Eden-Monaro (Mr Whan) says that it will have to be a very high export tax to have any effect at all. This unspecified export tax is to be placed on all exported beef and most but not all of it is to be paid back again. The recommendation is to collect the tax from exporters and to repay most of it not only to those exporters but also to those who do not export. In short, it will penalise the northern export meat producers, will damage northern development and will give a present to southern producers of prime beef for the Australian market. That is the intention but will it be carried out? After the tax is collected, to whom is it to be paid back? Is it to be paid to the man who owned the cattle at the time that they were sold to the butcher? If so, it will be paid to a dealer and not to a producer of prime beef. In 9 cases out of 10 it will be paid to a dealer. The beef may have changed hands two or three times before the sale for export. To whom is it to be paid back? Nobody has considered that and I do not believe that the intention would be carried out.

The argument advanced by the Government for this convoluted approach, as I understand it, is this: If an export tax is imposed at such a level that the importing country cannot or will not pass it on to foreign consumers, the foreign demand for Australian beef will drop and therefore producers will sell more on the home market and less on the foreign market. Therefore there will be a drop in prices to Australian producers for the Australian market. That is the argument as I understand it. Of course, it is simplistic. I think the Chairman of the Committee used the word 'simple'. It was well chosen. It is a simplistic argument and at first glimpse it is slightly attractive in theory but it will not stand close examination. In the first place one cannot talk properly about taxing beef as though all beef were the same, because it is not. Nor can one talk properly about foreign countries importing beef as though all countries imported the same quality and amounts. They do not. Japan and Britain import prime beef. The United States of America imports mainly low quality beef for which there is no ready market in Australia. To ignore those differences is at the very start to cut the heart out of any possible argument that can be advanced to support the recommendations.

The northern part of Australia - Queensland, Northern Territory and Western Australia - produce a quality of beef which is and always has been almost all exported. This year about 83 per cent of Queensland's beef production was exported as was S6.6 per cent of Western Australia's beef production and, I should think, almost all the Northern Territory's beef production. There is no major market for such beef in Australia. Similarly of the beef produced in the south a not insignificant quantity consists of cuts which do not sell readily on the Australian market. What would be the immediate effect of imposing a tax on this kind of beef? Firstly, the demand abroad would be such that importers could pass the tax on to the consumer, in which case the volume of meat exported would be the same and the return to all producers in this ideal situation would be increased by the proportion of the tax returned to them. That would mean that a producer could have sold at a price on the overseas market without that tax, if the people were prepared to pay it, but he would not be allowed to get the price at which he could have sold it because the tax would intervene and he would get only some of it back. But what is significant is that because there would be no effect on volume at all, as we are told that the demand is inelastic, that people will pay these prices, there would be no diversion and therefore there would be no effect whatever on the Australian market and no effect at all on prices.

Alternatively, the importer would not be able to pass on the tax to the overseas consumers in which case the producer would find the volume of his exports reduced. He would have no alternative market because we are talking of meat for export. He would not be able to sell it on the Australian market. Therefore again there would be no effect whatever on the Australian market, no effect on prices to the Australian housewife. But there would be other effects. Future export markets would be jeopardised; we would damage our reputation as reliable suppliers. I repeat that we would have rooms and rooms full of civil servants all paid by the community busily collecting taxes and sitting around paying them back again, if they could ever think to whom they should be paid, but retaining an unspecified proportion for something that the meat industry has not requested - a promotion campaign.

Have honourable members ever heard anything more ridiculous than saying: 'Not enough meat is produced, we can sell all the meat we have got and more, but let us take money from the producers for a sales promotion campaign'? There would also be no effect on the Australian market and not 1 lb of beef of this kind would be diverted to it. On the other hand, northern producers, northern development and future export markets all would have been damaged for nothing. In the south the same conditions would apply to other than the prime beef which is demanded on the Australian market. I accept that if overseas consumers would not pay the price plus tax required for the prime beef then the producers would be affected.

Debate interrupted.

Sitting suspended from 1 to 2. JJ P.m

Suggest corrections