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Wednesday, 5 December 1973
Page: 2492


Senator MURPHY (New South WalesAttorneyGeneral and Minister for Customs and Excise) - I ask for leave to make a statement relating to the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1973.

The ACTING DEPUTY PRESIDENT (Senator Byrne)- Is leave granted? There being no objection, leave is granted.


Senator MURPHY -This report is submitted to the Senate following the amendment on 22 November 1973 of the motion for the second reading of the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1973, Hansard, page 2097. The amendment provided that: the Bill be deferred until the Government reports to the Senate on the action it proposes to take on:

(a)   currency revaluation compensation for the sectors of the fruit growing industry affected by the withdrawal of the exemption;

(b)   compensation for unsaleable fruit juice derivatives on hand and the losses due to assets becoming redundant as a result of the Government's decision; and

(c)   assistance for promotion and research into alternative markets for juices.

In regard to (a) above, revaluation adjustment assistance following the December 1972 appreciation was payable to industries which were facing difficulties and problems of adjustment at the time of appreciation, and would experience particular difficulty in bearing the consequences of it. The sectors of the fruitgrowing industry affected by the withdrawal of the sales tax exemption provided in this Bill are the apple sector and, to a lesser extent, the citrus sector. Only the apple sector is both affected by the withdrawal of the sales tax exemption and eligible for currency revaluation assistance.

As announced by the Minister for Primary Industry (Senator Wriedt) on 6 February 1973, and elaborated on in his further statement of 4 May 1973, post-revaluation adjustment assistance of up to $1,500 per grower was made available to growers of apples and pears for export, following the December 1972 currency appreciation. In addition, supplementary grants of $1,000 are available to such growers if they had applied for clear-fell assistance under the fruitgrowing reconstruction scheme by 30 June 1973, and are found to be eligible for that assistance. In the two main apple exporting States, Tasmania and Western Australia, which have in the past accounted between them for over 85 per cent of Australia's annual apple exports, 1,416 growers- that is, over 97 per cent of those eli- gible in these States- have been paid a total of 1,275,176 in post-revaluation adjustment assistance up to 30 November 1973. A small amount of this sum would have been paid in respect of pear exports and of canning fruit, since the assistance scheme applies also to deliveries of canning fruit- apricots, peaches and pears.

In other States many growers involved in the apple and pear export trade also grow canning fruit and the isolation of figures related solely to apples is difficult. However, 85 per cent of growers eligible under either or both aspects of the scheme in States other than Tasmania and Western Australia have been paid a total of $1,402,950 up to 30 November 1973. The remainder will be paid as soon as possible. Disbursement of the supplementary grants takes longer, depending as it does on the administration by the relevant State authorities of the clearfell provisions of the fruitgrowing reconstruction scheme.

In Tasmania apple growers have made an appreciable use of the fruitgrowing reconstruction scheme. In that State, to 30 June 1973, 241 apple growers had applied for clear-fell assistance under the scheme. Of these, 175 applications have been approved and 36 have yet to be processed by the Rural Reconstruction Board. If the present average rate of approvals is maintained, a total of more than $200,000 could be payable to Tasmania apple growers by way of supplementary grants in respect of currency revaluation assistance. It is estimated that payments in Western Australia- the other main apple exporting State- could be of the order of $10,000.

When announcing the September 1973 appreciation of 5 per cent in the exchange value of the Australian dollar, the Prime Minister (Mr Whitiam) said:

As on the occasion of the December 1972 revaluation, the Government stands ready to examine sympathetically the position of any industries which are seriously affected by, and find it particularly difficult to bear, the consequences of (the) appreciation.

The Senate will be aware that growers of apples for export also benefit from the operation of the apple and pear stabilisation scheme. Payments by the Austraiian Government to apple growers under this scheme since its inception in 1 97 1 have averaged $2.6m a year. For the 1973 season, the payment to growers will be lower than payments in previous years, reflecting the increase in export prices for apples in the 1973 season. As regards longer-term adjustment, the re-structuring needs of the apple and pear industry were stated succinctly by the Minister representing the Minister for Primary Industry (Dr Patterson) in his second reading speech in the House of Representatives on the Apple and Pear Corporation Bill, as follows:

Such restructuring of the industry must be directed towards tailoring production, in respect of both quantity and quality, to the needs of remunerative outlets; to adaptability in introducing the most economic techniques and practices designed to reduce costs; and, most importantly, to the consolidation of viable farm units. Allied with the need for the restructuring of the industry on a broad front is the need for the industry to have a highly skilled, effective and nationally-organised body that can come to grips with the marketing problems that beset the industry.

The proposed establishment of the Australian Apple and Pear Corporation is designed to facilitate the longer-term adjustments required in the industry. The Corporation will supply the need, referred to by the Minister, for a highly skilled effective and nationally-organised marketing body.

In addition to the assistance to be provided by the Corporation, the industry has available to it the provisions of the rural reconstruction scheme and, more particularly, the fruitgrowing reconstruction scheme. The clear-fell provisions of the latter scheme assist those leaving the industry, while the partial-pull provisions aid those remaining in the industry who need ' financial assistance to help them change the pattern of their production. By the end of October 1973, 500 apple growers had applied for assistance under the fruitgrowing reconstruction scheme. On the basis that State administering authorities maintain the existing average rates of approvals and levels of assistance, approvals in respect of these applications could be expected to amount to about $lm. Approvals in respect of the 288 applications processed in Tasmania alone by 3 1 October 1973 amounted to $418,000.

With regard to point (b) specified in the amendment, the opportunity is taken to inform the Senate of the Government's decision to make an amount of $5m available to the fruitgrowing and fruit processing sectors of the industry in the form of adjustment assistance. Funds will be made available to fruit processors, where cases can be substantiated, to facilitate any adjustments needed as a result of the abolition of the exemption from sales tax for carbonated soft drinks containing not less than 5 per cent of Aus.tralian fruit juice.

As announced by the Treasurer (Mr Crean) in the Budget Speech and reiterated by the Minister for Primary Industry in a Press statement on 17 September, the Government stands ready to provide reconstruction assistance to any part of the fruitgrowing industry that may be affected by the removal of the sales tax exemption. In his Press statement on 17 September the Minister for Primary Industry announced also that the Government was prepared to make available an amount of up to $20,000 to meet possible losses arising from the processing into juice of surplus lemons from the 1973 winter crop in New South Wales. At the same time the Minister invited other sectors of the fruit growing industry to submit claims co-ordinated by appropriate industry organisations for special adjustment assistance. A case has just been submitted by the Australian Apple and Pear Growers' Association and is under consideration in the Department of Primary Industry.

Turning to point (c) which deals with promotion and research, activities in this area could be of significance in assisting with the adjustment problems arising from the withdrawal of the sales tax exemption. Part of the $5m to be made available to the fruitgrowing and fruit processing sectors of the industry could be utilised for such activities, where appropriate.

This apart, as mentioned above a Bill has been introduced to set up the Australian Apple and Pear Corporation in place of the Australian Apple and Pear Board. The development of new markets will feature prominently in the functions of the Corporation. With the trends in trade which are occurring in the traditional markets it will be imperative for the Corporation to investigate all measures in order to develop new markets. As the Minister has stated, one important aspect will be for the Corporation to conduct an expanded promotion program both in Australia and overseas for fresh fruit and processed products. It is also intended that the Corporation itself should be able to engage in trading operations to a limited extent, for the purpose of developing markets.

The Government has in mind that the Corporation will also have an important role in the research field. It will be able to encourage and, if necessary, initiate research into all aspects of the industry with emphasis on improvements in quality and the introduction of cost-saving practices, and in the development and improvement of processed apple products. It is considered that there is considerable scope for the development of apple products and work in this field should produce positive benefits for the industry.

In general the measures referred to above are generous and far reaching. They will do much to assist the necessary re-structuring of the apple and pear industry. They should also ensure that the abolition of the exemption from sales tax for carbonated soft drinks containing not less than 5 per cent of Australian fruit juice will result in a minimum of inconvenience for the fruit industry.

Motion (by Senator Murphy)- by leaveagreed to:

That the order of the day for the second reading of the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1973 be restored to the notice paper and that it be an order of the day for the next day of sitting.

Sitting suspended from 6 to 8 p.m.







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