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Wednesday, 28 November 1973
Page: 4043

Mr McVEIGH (Darling Downs) - The Bill before the House has the support of the Opposition, primarily because it seeks -o remove from the rural sector some of tha problems resulting from low prices, high certs and bad seasons, thus enabling this significant section of our economy to recover and become stabilised. But they are only emergency measures, geared to a specific danger. I submit that these plans are merely a start. If rural Australia is to survive there must be a long range permanent toughening of the national muscle when it comes to defending rural people and people who live in rural towns and cities, with the prime objective of their having a fair share of the expanding affluence oi our society. Unless there is a reawakening of the Australian conscience to the fact that the vast majority of our export income is from primary industry, proposals such as this will still leave things up in the air.

There was a grunt need for finance for debt reconstruction, farm build-up and retraining schemes, and the wisdom and statesmanship of the Liberal-Country Party coalition has been vindicated since the commencement of the scheme in May 1971. At the first review of the scheme on 5 April 1972, it was decided that the whole of the original $10Om originally appropriated to cover the 4-year period should be appropriated for 1972-73. The total amount which the States would approve for rural construction to 30 June 1973 :vas f'21m plus $9.5m available from pre-war reconstruction schemes. It is worthy to pause and record the $3m matching provision mad-j in Queens land by the top-class Bjelke-Petersen administration following an additional grant of 83m allocated to Queensland by the Commonwealth as a result of drought conditions. I point out that one of the significant factors in the rural reconstruction scheme has been the tremendous drain on funds allocated by the Government because interest rates for the rural debt have been increased by the present Labor administration. Because of the increase in interest rates people have turned to this scheme rather than to their ordinary channels of finance because this offers a cheaper interest rate.

There has been a significant change in emphasis as between debt reconstruction and farm build-up during the existence of the scheme. Funds approved for debt adjustments have been 66 per cent of total approvals between September 1971 and October 1973, average appropriation per farmer for debt readjustment has been $26,064 and farm build-up has been $29,201. Applications for debt readjustment totalled 9,929 and for farm build-up, 3,654. It is interesting to observe that demand for debt readjustment assistance declined sharply after November 1972. From December 1972 to October 1973 the total number of applications for debt reconstruction was 478, whilst in the one month of September 1971 the number of applications for debt reconstruction was 503. In order to keep its finger on the pulse of hardship in the areas of responsibility of this legislation, the Government has decided that funds be determined annually after consultation with the States rather than the previous decisions to grant a lump sum for a full period of 3 years. There are sound arguments for this approach as we find that the initial sum was expended long before the period of time had elapsed and there were changes of pressures within the concept of rehabilitation.

It is interesting and enlightening to recall that farm income in 1967-68 following a drought was reduced to $827m. Following a sharp decline in wool prices and the introduction of wheat quotas farm income for for 1970-71 had declined from $ 1,270m in 1968-69 to $892m. To hammer home the point that interest paid on borrowings or interest allowed on capital necessary to carry out primary production can and does have a marked effect on costs, the gross farm indebtness as at 30 June 1971 was the astronomical figure of $2,973m. One can appreciate the interest burden on this amount - and, of course, interest is an element in assessing costs of production. With the background knowledge now that overseas prices have increased and the outlook for returns to the rural sector in the market places of the world are reasonably bright, it is timely to recall that at the beginning of the scheme there were few economic industries which suggested any significant increases in export prices for the major agricultural commodities.

The current situation is one of buoyant markets for almost all agricultural products. The major cause of the upsurge in commodity prices was the coincidence of extensive shortfalls in the output of a number of interrelated commodities such as wheat, feed grains and rice which resulted in a sharp rise in import demand. If national farm income remains at its present level, it is likely that the major thrust of farm policy should be designed to making farmers better farmers. When national farm income is declining the major emphasis on farm policy is likely to be adjusted programs designed to increase the rate of outmigration of farm policies. I submit that this should not be so. We must have as a deliberate instrument of national policy the retention of our rural community. The question which is being asked is: To what extent will the present buoyant conditions continue into the future? Obviously an unequivocal response to this question is impossible. Yet it is of importance to stress that the structural adjustment policies adopted as a result of low aggregate farm income in 1970-71 should be maintained for the following two reasons - (a) in the wide spectrum of reasonable farm income there are areas and pockets of great need and these require assistance; and

Let me deal with point (a). Rising aggregate statistics conceal as much as they reveal. Rising aggregate farm income levels caused by high prices in only one or two major commodities may conceal low income problems in, for example, the dairying, berry fruit, banana, and apple and pear industries. The dairy industry in Queensland has very special and particular problems. I refer, with great emphasis, to the plight of the cream suppliers in that State. With rising feed grain prices and no increase in the price of butter and the associated pig and poultry industries, these producers are rapidly being squeezed out. I make a plea that those butter producers who can change to milk be given assistance to allow them to change to bulk delivery and its associated savings. We have to do something about retaining these people on their own farms thus maintaining the economic and social viability of the rural towns and provincial cities. This is of real significance and to emphasise the point I seek leave of the House to have incorporated in Hansard the following table indicating how the number of owners, lessees and share farmers declined from 219,955 in 1964 to 191,180 in 1971 and the relative declines in relatives, employees and total employment.

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