26th Parliament · 1st Session
Mr SPEAKER (Hon. W. J. Aston) took the chair at 2.30 p.m., and read prayers.
– Is the Minister for Health aware that road hauliers take pep drugs to stimulate them and increase their capacity to keep awake for long periods and drive long distances? Is he aware that the use of such drugs results in a hangover which can easily cause the person concerned to fall asleep, and that as a result of this many serious road accidents have occurred? Further, is the Minister aware that one of the more widely used drugs of this kind, known as methedrine, is procurable in tablet form at motor service stations ‘on main roads connecting New South Wales, Victoria, South Australia and Queensland at a cost of $30 for 1,000, although they are retailed by chemists at $5 for 1,000? Is the Minister in a position to control the apparently unlawful sale of these drugs and also to regulate their use?
– The answer to the honourable member’s question is no. The control of drugs in this category is a matter for State legislation.
– My question is directed to the Minister for Labour and National Service. He will recall that last week I directed a question to him about the Government’s proposal to build flats for migrants, and I suggested thai he should first investigate the possibility of purchasing existing flats in the field of private enterprise. Although very little publicity was given to my suggestion I ask the Minister whether it is a fact that many properties have been offered to the Government at reasonable prices and in positions that would appear suitable. Will the Government make it widely known that it is interested in acquiring flats for migrants through private enterprise before it makes any final commitment to build through its own Department of Works or State Government agencies? Is the Minister aware that considerable savings of public money can be effected in this way because of the very heavy overhead costs inevitably associated with government departments?
– The basic requirements we have to meet with this accommodation are these: Firstly, any flats we either build or acquire should be in areas where employment opportunities exist. Secondly, there should be prospects of making long term housing arrangements for those concerned, and, of course, the housing contemplated must have a proper distribution of two bedroom and three bedroom units. The reason for this is that our experience over the years with Commonwealth hostels has shown that this is the kind of accommodation usually required by the families concerned. Given flats of the right size and standard, with an appropriate distribution of numbers of bedrooms, and in the right place, we will look at any suitable proposition with an open mind. We are aiming, with the use of public funds, to get the most suitable deal we can get to meet our requirements. It does not always necessarily follow that the overhead costs involved in government construction are high. Indeed, some State housing commissions operate with relatively small overhead costs. I repeat that the position is open. Our plans are not completely formulated, and they have to be dovetailed very carefully with the inward flow of migrants.
– Is the Minister for Health aware of reports which suggest that trafficking in and the illegal use of drugs in Australia are more prevalent and widespread than many people are prepared to acknowledge? Has it been clearly established in other capital cities of the world that drug addiction has figured largely in the rising crime rate of those cities? Is the Minister in a position to state that this is not so in our own cities? Will he consider calling a conference with all the States with a view to ascertaining whether there is an increasing rate of drug addiction among our people, what effects this unfortunate habit might be having on our people, and whether a policy can be formulated which not only will halt the growth in the illegal use of drugs but will eradicate it?
– The Commonwealth Government, through my colleague the Minister for Customs and Excise, is responsible for preventing the importation of narcotics and drugs of that type from overseas; but again I must say, as I said in my answer to the honourable member for Banks, that the control of drugs of addiction within Australia is the responsibility of State governments. My understanding is that this problem has been of concern to all State governments, which are looking at it. Any assistance that my Department can provide to State governments in fulfilling their functions in this respect is, and will continue to be. freely given.
– I direct my question to the Minister for the Navy. I refer the Minister to Press reports last week relating to a proposal to spend $3. 5m on developing a naval base at Manus Island. Will the Minister confirm the accuracy of the reports and inform the House of the basic principles of the proposal?
– I have seen the Press reports, which, as honourable members know, received large headlines in most Australian newspapers. I welcome the question because it enables me to assist members to get the proposals in perspective. The reports which appeared in most of the papers were essentially correct, but one must remember that the Royal Australian Navy has maintained a base at Manus Island since 1949 and that this base is the headquarters of the Papua and New Guinea division of the Navy. We propose to spend an estimated sum of $3. 5m there at this stage. Of the proposed works 60% will have been commenced by the middle of next year. When SA3.5m is compared with the sum of more than $US155m which the United States of America spent on this same base during the war years, at the then worth of the American dollar, it will clearly be seen that our proposals for the reestablishment of the Manus base come nowhere near to restoring it to its former state. The details which were stated in the Press - that is, that we propose to erect a primary school, messing facilities for the members of the Papua and New Guinea Division, a slipway, an 11 -ton crane and so on - are correct.
– My question is directed to the Minister for Immigration. Has there been a rapid decline in applications by British nationals seeking entry into Australia? Has there been also a marked increase in departure deferral applications from British nationals approved as migrants to Australia? Will the Minister inquire into the relationship between such developments and any adverse reports which might have come from Australia to Britain of low wages in heavy industry, increased hostel tariffs and housing scarcity?
– In the first quarter of this financial year there was a diminution in the number of applications in the United Kingdom. The extent of the diminution was something like 28% when taken and measured against the first quarter of 1966. However I am bound to say that 1966 was an exceptional year, and in fact the number of applications in the first quarter of 1967 was higher than in either of the years 1965 or 1964. Speaking from memory, 1 think that the number of applications was running at a rate of about 38,000. This figure quite clearly represents a decline from that of the immediately prior year. The circumstances which led to the decline arc not easy to assess. There are a number of factors which lead to a decline. I do not believe that the cause of the decline had any great relationship to adverse publicity given in Australia to the increased tariffs in hostels. On occasions in the past there have been increases in the hostel tariffs and those increases have not affected the application rate. So far as the increase in tariff rates is concerned, it was a matter which had to be brought to a head because, after all, the tariffs are being subsidised to the extent of S4.5m a year, lt was necessary to increase the tariff rates because that money comes out of the taxpayers’ funds.
So far as departures from Australia are concerned, there has been a most interesting examination of this question by the Commonwealth Immigration Advisory Council. The facts which the Council established in its preliminary report show that departure from Australia is at a minimum rate of 9% and at a maximum rate of 16%. The Council has been unable to identify the departure rate at a more accurate level. However, when contrasted with the rate in other countries it does not leave cause for alarm in Australia. At the same time, let me emphasise that as a matter of policy it ought to be our aim to reduce the number of departures. We will never be able to retain everybody here, because with the mobility of people nowadays more and more people are migrating to a second country and then to a third country. Just as we lose people from Australia to Canada, the United States of America or New Zealand we gain people in departures from each of those countries. As I have said, there is today great mobility of people.
With regard to the question of low wages in heavy industry, this is a matter which would be more appropriately dealt with by my colleague the Minister for Labour and National Service. However, I am quite persuaded that Australia will always remain a country of very great attraction to immigrants because of the standard of our living, the homogeneity of our people and the common purpose of our aspirations.
– My question is addressed to the Minister for Civil Aviation. I refer to speculation about the introduction of third level air services throughout country areas of Australia. Can the Minister give the House any details in respect of this matter?
– This matter is at present before the Government for consideration and I cannot give a definite reply at this point of time. However, I can say that a considerable amount of work has been done in making a proper assessment of the situation in relation to the requirement for this type of feeder service with regular charter light aircraft. In fact, we have done about eight or nine months study in this matter and have just about reached the stage where we have some idea of what the requirements will be. As soon as a decision is made regarding the matter it will be announced to the House.
– I ask the Prime Minister whether he inferred yesterday that
Mr Michael Willesee, a political journalist, could not be objective or impartial because his father was a Labor senator? Has he received a request from Mr Willesee for a withdrawal of the inference which could prejudice his career? Does he intend to make the necessary withdrawal? If not, can his failure to do so be interpreted to mean that the right honourable gentleman intends to use the forms of the House and parliamentary privilege to attack the personal integrity of, and impute improper motives to, any person who dares to criticise him or his Ministers? Does he realise that his action invites other honourable members to impute improper motives to the social, moral and business activities of members of his own family? I now ask the Prime Minister whether he will withdraw the inferences he made against Mr Willesee.
– I do not think the honourable member has served the interests of Mr Willesee by the form of question he has put to me. I leave that to the judgment of the House or of those who take the trouble to peruse the record of the House. I made the statement of fact yesterday that Mr Willesee is the son of Senator Willesee. I could have added that the senator had been elected to the leadership of the Labor Party in the Senate, for a short time at any rate. I made the comment that I had not known Mr Willesee to disagree violently with the political views of his father. I was not making an attack on Mr Willesee as such; I was drawing attention to the fact that an unofficial report, appearing in a news sheet which had no authority and no known accuracy about it, had been made the subject of a telecast by the Australian Broadcasting Commission in which those invited to comment upon this news sheet and its allegations of improper and irregular pressure by three Ministers of this Government, including its Prime Minister, were two people who, on the face of it, might not only be regarded as having political sympathies akin to the known political sympathies of the principal of the news sheet, but whose political sympathies might be interpreted clearly enough as lying in the direction of the Opposition. If that is not a fair comment in respect of Mr Willesee, the son of this very senior Labor senator, I would be very interested to hear him publicly dissociate himself from that. If he has ever voted for any party but the Labor Party during his life that would come to me as a revelation.
Secondly, I did refer to the fact that the other commentator was the former honourable member for EdenMonaro who had been a Labor member of this House for twenty-three years. If we want to deal fairly with Mr Willesee, as I certainly do, let me direct the attention to the House to the text of his comment in this particular telecast. If honourable members opposite want the facts then I am very happy to give them. It is true that Mr Willesee has written to me. I received his note and intended to reply to it when opportunity offered. I think it would have been preferable if I had been able to do it in my own way - to deal with it with him privately - rather than have these matters ventilated here, but since they have been ventilated with some rather unpleasant accompanying threats to myself and to my family-
– The Prime Minister mentioned his name.
– I did not mention his name first. He mentioned his name in this political comment during this widely listened-to telecast. Let me read the transcript. These are the words of Mr Hunter introducing the programme:
HUNTER: One man apart from those of us in the A. B.C. who has been closely following this story of the alleged changes in the A.B.C’s structure is the Canberra Political correspondent of the Perth Daily News, Michael Willesee.
Michael, what’s the background to this story?
WILLESEE: The background is that in a political news sheet called ‘Inside Canberra’, which is presented by Don Whitington, a veteran and a respected newsman, Don alleges that senior ministers are planning to take some political control over the Australian Broadcasting Commission, and Don goes so far as to suggest just how the ministers intend to go about this.
HUNTER: Does he name ministers, or does he name members of the A.B.C.?
WILLESEE: He does. The members of the A.B.C. for a start He suggests that Dr Darling will not be re-appointed after his term expires on the 30th June. He suggests that Dr Darling’s deputy Mr Dawes, won’t be re-appointed. He suggested also that the West Australian Commissioner, Mr Halvorsen won’t be re-appointed. He infers that two more Commissioners may be named, giving those who wish more control and more flexibility with the members of the Commission and he suggests that Sir Howard Beale will be the man who replaces Dr Darling. Sir Howard Beale, the former Federal Minister and a former ambassador to America. The three ministers named, starting at the top - Prime Minister, Harold Holt, the Treasurer Mr McMahon and the Minister for Labour and National Service, Mr Bury. He suggests that Mr McMahon is the prime contender in these moves.
HUNTER: Does he say whether the matter is before Cabinet?
WILLESEE: He suggests it’s before Cabinet. My information is that it hasn’t yet reached Cabinet but is being discussed by some Ministers while al the same time, other Ministers are pretty hotly against this.
HUNTER: Does he, in fact, make any allegations of interference in the past at all?
WILLESEE: Don Whitington says that in the past, all Governments - that is Governments made up of all parties - had attempted to influence the A.B.C But he says, quite categorically that the A.B.C. in the past has been free of political control.
HUNTER: Michael, from your own experience as a political journalist in Canberra, how seriously can we take this report of Don Whitington’s?
WILLESEE: Eric, I think we can take a report of Don Whitington’s very seriously. Don is a veteran newsman, a respected newsman, a respected political author, his news sheet ‘Inside Canberra’ has been going out twenty years, it’s stood the test of time in a pretty tough arena.
HUNTER: Thank you very much, Michael Willesee.
Then he calls on our friend Fraser. Let me put this as a fair inference: When a political correspondent of some experience proceeds to comment that a man who publishes a news sheet is respected, is reliable and has stood the test of lime, and when this is in relation to specific charges against three members of this Government of improper or indirect pressure on the Australian Broadcasting Commission, he is adopting those charges. He is giving some authority to the reliability and repute of the man who makes the charges, and he virtually adopts them. It is unfortunate that Mr Willesee indirectly got in the line of fire in the course of what I had to say yesterday.
Let me give this final comment from the transcript in order to set the record straight. The transcript reads:
WILLESEE: Eric, I think one hard fact of this matter is that if the allegations of Don Whitington are true, whatever chances these ministers had of success with their plan are now diminished with this publicity being given to it.
HUNTER: Thank you very much Michael Willesee of the Perth Daily News. .
I was taking no notice of these matters. I made no comment on Whitington’s original publication for the reasons I mentioned yesterday. I made no comment about the text of the broadcast, but I did draw the attention of the House yesterday to the importance of the Australian Broadcasting Commission maintaining impartiality and objectivity. I put it to the House that the circumstances of this broadcast and the material to which it related, in my view, at any rate, violated this canon of objectivity and impartiality. In my view if Mr Willesee wishes to maintain a reputation for objectivity and impartiality, then he should not lend himself to the kind of comment which appeared in the transcript that I have just read.
– Is the Minister for the
Army aware of allegations which have been made recently that a Citizen Military Forces sergeant has been discharged for approaching a member of Parliament? Has the Minister had time to ascertain the facts in this case? If so, will he make them available to the House?
– I was surprised to see this report, because a large number of members of the Regular Army and of the Citizen Military Forces approach members of Parliament or directly approach myself. The matters they put to me either directly or through other honourable members are dealt with as fairly and as properly as possible. Although it was once held that this was not a proper course of contact for a soldier to make - he was expected to go through the normal processes of command to have any possible grievance redressed - usage has endorsed the practice which I have just mentioned. Therefore I was most surprised to note that Senator Poke had alleged that a CMF sergeant in Tasmania had been victimised because of representations that apparently were made through the honourable senator. According to the examination that I have been able to make, there is no foundation for the allegations that have been made. Representations which affected about 400 members of the CMF were made to me by Senator Poke. They concerned delays in pay cheques being posted to members of the forces. But none of the honourable senator’s letters to me - indeed, none of the corre spondence on this matter - mentioned any soldier’s name. Therefore, as far as I and the Department are concerned this was a general inquiry on behalf of a relatively large number of people in the CMF.
It was proposed that this CMF sergeant be discharged on grounds that are not in any way related to the matters about which Senator Poke wrote to me. It is known that, although he has not done so yet, the sergeant proposes to put forward an application for redress of wrong. Since this is so, any discharge action will be held pending the outcome of the consideration of the redress of wrong. I am told that there was an implication in the remarks that were made in another place that the sergeant’s commanding officer would have the entire say and authority as to whether he would be discharged. This is not correct. Again, the normal channel would be through his own commanding officer to the commanding officer of Tasmania Command. Then, if the soldier so wished, his case would also be judged by the Military Board on which I sit as a member. I can only emphasise again that the action proposed in the case of this sergeant had no relation to representations made to me by Senator Poke and that the allegation is completely and utterly without foundation.
– I address a question to the Prime Minister. Yesterday, in answer to a question referring to education in Victoria, the right honourable gentleman said:
I would be surprised if there were many places in the world which could show the devotion of a higher proportion of financial resources to purposes of education.
How can the Prime Minister explain the figures in the last report of the Commonwealth Grants Commission which show that Victoria spent less on education overall and less on university and secondary education than any other State except Queensland? He does not need to go beyond Australia.
– On a percentage basis or in money terms?
– In money terms. Expenditure per head of population is shown on page 176 of the report, which is available in the Papers Room.
– I arn not in a position to comment in detail on the figures to which the honourable gentleman has referred. I do know - it is a figure which I gave to the House yesterday - that 29% of the Budget of Victoria, which is the most prosperous State in the Commonwealth, is devoted to purposes of education. We as a Commonwealth have increased our contribution to Victoria threefold over the last four years and the Victorian Government has increased its own provision for education by a very much larger amount in money terms. There may be other States of the Commonwealth in which there is a corresponding or even larger proportionate contribution to defence. Each State will try to determine its own needs. For example, in the larger States with populations scattered over a wider area, it may be necessary to outlay more money per capita for education to produce the same level of education in a child. These are not matters that can be dissected effectively in reply to a question.
– That is the standard the Prime Minister himself used.
-Order! The honourable member has asked his question.
– I said ‘places’; I was not referring to the situation inside Australia. The Leader of the Opposition, who made the comment, was making an unfavourable comparison between Australia and other advanced countries around the world. My answer was directed to showing that, in respect of housing, education and urban planning, Australia maintained a high standard relative to other countries.
– I direct a question to the Minister for Works. Does he believe that the Commonwealth should set a good example in paying due respect to town and country planning schemes and building controls formulated under State laws, even though not legally bound to comply with them? Will he ensure that no building or other development works shall be undertaken by the Commonwealth without first submitting plans to the local municipal council or other appropriate body in sufficient time to enable it at least to consider the matter and express its views to the Commonwealth before any contract is let for such building or works?
– The honourable member for Warringah is of course correct when he says that the Commonwealth has no legal obligation to take heed of local government or State regulations or laws in this matter. But it is also true that the Government and my Department are of the opinion that we have a moral obligation at least to consult with the various authorities. I can assure him that to the best of my knowledge this consultation takes place.
– I desire to ask the Minister for Defence a question. It is based on the reported decision of the Services not to release servicemen who are standing for election to Parliament. I ask the Minister whether the only alternatives are what was in the past the full discharge of a serviceman who stood for election or no leave at all. Would it not be possible to grant leave for the period of the election and if the candidates were unsuccessful at the election to recall them into the Services? I ask also whether the practice of not granting leave to men who are in effect standing as independent candidates will be extended to anyone from the Services who stands with a party endorsement.
– I think the honourable gentleman will recall that for the last Federal election an amendment of the law was made to permit national servicemen to nominate for election. This had very much to do with the issues before that election and, of course, with the concern of the national servicemen with the issues involved. This was very much a test case to see what the reaction would be. The evidence became quite clear that most of the applications from servicemen wishing to stand for election were not bona fide. We have had occasion to look at this matter. It has rested in the hands of the various military boards - the Air, Naval and Military Boards - to deal with the applications. They have been examined from two points of view. The first is the needs of the Services, especially in relation to the continued availability of men in whom a considerable amount of money has been invested by way of training and the need to have skilled people in the Services. The second is a thoroughly objective examination of the bona fides of the applicant’s intentions politically. It is for these reasons that men were either released, as in the case of two Air Force men, for the Victorian election, or were not released, as happened to a considerable number of other nominees, for the same election. There was no political implication in this whatever.
As the honourable gentleman will appreciate, at the moment national servicemen can be released and can be recalled to service in the event of their being unsuccessful in an election. In the case of permanent servicemen there is only one option, and that is to release the men from the Services. It has never been the intention of the Government or of the Services that a nomination to contest an election should be an open highway out of the commitment of the serviceman to serve out his full time appointment in the Services. However this matter is being looked at in its entirety by the AttorneyGeneral and if appropriate changes in the legislation are suggested then these will be given every consideration.
(Dr Mackay having addressed a question to the Prime Minister)
-Order! That has nothing to do with the Prime Minister. I call the honourable member for Watson.
– I rise to order.
-Order! I have already called the honourable member for Watson. There is no point of order.
– I ask the Prime Minister a question. In answering a question yesterday about Mr Whitington and Mr Willessee the Prime Minister implied that Mr Willesee, being the son of Senator Willesee, would naturally hold a biased political view. I ask: Did the right honourable gentleman hold a similar view in regard to a former colleague of his for many years, Senator McCallum, whose daughter is a leading Communist in New South Wales and has been for many years?
– The honourable gentleman has “chosen to read an implication into what I said. My statement was based not on the fact of relationship; it was based on the comment which was made. The fact of relationship gave some colour, I believe, to the comment which was made, but the honourable gentleman will not assist the case by trying to introduce what is literally a red herring from the other side. It is not itself without some significance that I am being pressed on this matter by those who entertain-
– Are they ashamed of the fact that he is a member of the Labour Party?
– I should not imagine that at all, but it does, I think, help to sustain the general comment I made yesterday that clearly there has been an attempt, by means of the membership of this Parliament, to sidetrack me from the issue that I tried to lay bare so clearly yesterday.
– I direct a question to the Treasurer. In view of the high percentage of unemployed in Queensland, relative to other States as shown in the recent March figures and which is due to factors beyond the control of the Government of that State and despite relief moneys expended by local authorities, would the Treasurer give favourable consideration to an application for increased loan funds to build urgently needed bulk wheat storage facilities, and special consideration to supplying loan funds for the purpose of providing much needed increased water conservation, and so combine the reduction of the number of unemployed in Queensland with highly important State development projects?
– It is true that the level of unemployment in Queensland is higher than that in any other State. Speaking from memory, I think that the figures are about 2.5% for Queensland compared with about 1.3% for Australia as a whole. But I point out to the honourable gentleman that the latest employment figures, which were published yesterday - and here I have to rely fairly heavily on my memory, but my colleagues will correct me if I am wrong - show a reduction of, I think, 1,331 in the number of unemployed in Queensland. So a change is taking place and a reduction is being made. I also point out that we have already paid to the Governments of Queensland and New South Wales $46m to help them overcome the distress caused by droughts in their States.
As to the actual questions asked by the honourable gentleman, I am the chairman of the Australian Loan Council but only one of its members. I am sure that if the Premier of Queensland wishes to make an application for loan funds either for the purpose of carrying out the works programme of that State or for implementing water conservation schemes he will make representations to me, as chairman of the Loan Council, in his position as Premier of the State of Queensland. The procedures arc well known and I am quite certain that if the Premier wishes to adopt this course he will do so. I might also tell the honourable member that at the moment we arc considering certain requests made by the Premier and I hope to be able to discuss this matter with the Prime Minister during the next few days.
-I want to ask the Prime Minister a question. Why has he rejected the suggestion that the three Party Leaders, namely the Prime Minister himself, the Deputy Prime Minister and the Leader of the Opposition, should appear on the same platform at public meetings during the referendum campaign, as all three Parties are united in supporting the ‘Yes’ vote? Is the Prime Minister fair dinkum? If he is, will he change his mind and arrange for the three leaders to appear together in at least two or three of the capital cities?
– The honourable member makes an interesting suggestion. He knows, of course, that the Leader of the Country Party will be absent from Australia on official business, as I announced recently, during the relevant period. The honourable member would also be aware, from public statements made by us, that the Leader of the Opposition, the Deputy Prime Minister and I have joined in presenting the combined case for ‘Yes* in relation to the proposal to break the nexus between this House and the Senate. I would think that for any literate person this would be a clear enough indication that we are all supporting the one case.
– Is the Postmaster-General aware that large commercial firms in Sydney are sending inter-capital mail by air freight on account of the unreliability of the mail services provided by his Department, and that local letters, which are normally posted one day and delivered the next, are taking three days to reach their destinations? I am speaking now of Sydney. Is he still hopeful that the Sydney sorting machine can be sold to friendly countries and that we will still retain their friendship? Does he believe that, despite its demonstrated capacity for chewing up mail matter, it is still just having teething troubles? Or is the fact simply that the organisation of his department in New South Wales is falling into hopeless chaos?
– It is perhaps unfortunate that the honourable member does not bring himself up to date before asking questions in this way. I can assure the House that to my knowledge there has been no mutilation of mail for quite a considerable period. I have seen the sorting machine in operation at the Redfern mail exchange. I repeat that there has been no mutilation of mail for some considerable time. I have no doubt about the possibility of selling similar machines overseas. I have never known of any complicated piece of machinery such as this, whether used in the government service or by industry, which has not had some teething troubles. I do not think any unfriendliness is likely to develop in overseas countries, because 1 know that the methods which are used by many overseas countries for mail sorting are very much behind those being used in Australia. I understand that there is an odd occasion when letters are misdirected. Most of our mail is still hand sorted, and we expect and are able to achieve 98% accuracy. I believe that, with mail sorted manually, this must be regarded as quite satisfactory.
– Before I ask that further questions be placed on the notice paper may I briefly supplement a reply that I gave to the honourable member for Wills in relation to expenditure on education.
– Will I have an opportunity to reply?
– If the honourable member secures the leave of the House, he may do so.
– Will the Prime Minister give the honourable member leave to make a supplementary statement?
-I wish only to give some facts for which the honourable member asked.
– Will the Prime Minister give me leave to make a statement on the same subject?
– If we are to have a debate on it, let us all be in it.
– Will the Prime Minister facilitate a debate?
– Order! The House will come to order.
– The Leader of the House has the programme of the House in hand. It is open to the Leader of the Opposition to ask for leave to make a statement.
– Did the right honourable gentleman ask for leave to make a statement?
– I did not ask for leave to make a statement.
– Order! Has the Prime Minister asked for leave to make a statement?
– May I clarify the position? I am not asking for leave to make a statement. The honourable member for Wills asked me a question, but at the time I did not have all the facts in my possession. I now have some of the facts he was seeking and I am in a position to give them to him. If he or his Leader chooses to deny me that opportunity, then the matter is entirely out of my hands.
– Order! I point out to the House that we are still in question time. Earlier the honourable member for Wills asked a question of the Prime Minister. The Prime Minister apparently now has information which he did not have before, and wishes to make it available during question time.
– The honourable member for Wills asked for details of expenditure in Victoria on education compared with that in other States. I now have a table which relates to the year 1965-66. I understand that this is the latest year for which figures are available. The table reveals that Victorian expenditure, at $43.1 per capita, is above the six-State average and above the per capita expenditure of New South Wales, Queensland and South Australia, but is below that of Western Australia and Tasmania. I ask that further questions be placed on the notice paper.
– I ask for leave to make a statement on the same subject.
– Order! Is leave granted?
Government members - No.
– Leave is not granted.
– I have received a letter from the honourable member for Dawson (Dr Patterson) proposing that a matter of definite public importance be submitted to the House for discussion, namely:
The failure of the Government to honour its election promise to provide funds for urgent State water conservation projects for irrigation, stock water, power and flood mitigation.
I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places)
– I rise today to speak of a question which I consider is one of the most important in the development field. It is becoming perfectly clear that after eighteen years of control of this nation the Government is incapable of appreciating that shortage of water is a fact of life and one of the most urgent problems facing the future of many areas in Australia today. After eighteen years of office the Government seems incapable of understanding that there is an urgent and even desperate need in some areas today for a progressive programme of water conservation. The Government seems incapable also of understanding that this is a national responsibility and that no longer can this country tolerate, nor can its economy tolerate, the position witnessed each year of devastation and misery in areas where water conservation is the obvious answer. I stress that this can no longer be tolerated in areas which are proven and established and of high productivity or which have been proved by research and backed by State governments.
In addition, we have witnessed in the last few years the deliberate policy of disintegration of the world famous Snowy Mountains Authority. This is close to a national scandal. If we look at the Government’s expenditure on water projects in its term of office in the last eighteen years and try to determine the priority for water conservation, we find the unpalatable fact that it has no priority. Finally, after almost every responsible body and organisation in this country representing all walks of life had heaped condemnation on the Government, in desperation it was driven to a promise of water conservation in its last election policy and promised to provide funds of the order of $50m over the next five years.
That, Mr Speaker, was six months ago. One must question these promises. I shall cite one case only, because this is a consideration of the question of water supply. Although no funds had been made available in the 1965 Budget for brigalow land development, during the Dawson by-election, as a matter of urgency - and as a matter of political expediency, of course - the Government suddenly found extra funds for the development of Area 3 of the brigalow scheme. The Government promised to push ahead. That, Mr Speaker, was fifteen months ago. Where is the legislation relating to the development of brigalow Area 3? It has not yet come before this House. Have we also to wait fifteen months before we get legislation relating to the conservation of water in Australia?
As I have said, it is six months since a water policy was announced by the Prime Minister (Mr Harold Holt). On 2nd March I asked the Prime Minister a question, and the Minister for National Development (Mr Fairbairn) answered a question about the disbursement of these funds. The Minister for National Development stated that a submission was being prepared for Cabinet on this subject. On 4th April when I asked the Deputy Prime Minister (Mr McEwen) a question on the subject he indicated that he was unaware of just what was happening but he stated that the initiative must rest with the States. On the same day the honourable member for Gwydir (Mr Ian Allan) received a reply stating that the Government was considering the position but had not yet reached a decision.
Then on 18th April - yesterday - the Prime Minister, in answer to a question from the honourable member for Mallee (Mr Turnbull), said that he could not say what stage had been reached with each of the State governments. In other words, the Commonwealth - according to the Prime Minister - has approached the State governments on this matter. When the Leader of the Opposition (Mr Whitlam) asked for more details the Prime Minister said that he would consider the matter and let him have a considered statement if possible.
Mr Speaker, what is happening about this subject? Why will not the Government make a positive statement on water conservation and tell this Parliament, the people and the State governments who are urgently in need of funds for water conservation, just what is happening? This is becoming more of a mystery. It is getting to the stage where we need a Perry Mason in this House to find out what is happening to this $50m. Is there no information because the Government is considering at the same time the future of the Snowy Mountains Hydro-electric Authority? -Is this the reason why there is a delay? If it is, then let the Minister for National Development tell us. There should be nothing secretive about this. Information about it would alleviate the worry of a lot of people who are seeking funds for urgently needed water conservation projects.
I asked a question in the House the other day of the Treasurer (Mr McMahon) regarding the possibility of extending credit for drought stricken areas in Queensland. The right honourable gentleman attempted to ridicule me by implying that there was no drought. He said that there had just been floods. Queensland is a big State and it is possible to have both flood and drought at the same time within its borders. I want to quote part of a report from the ‘Daily Mercury’, the Mackay newspaper, of last Monday - two days ago - concerning a visit to that area by the Premier, of Queensland, Mr Nicklin. He was shocked by the drought devastation he saw in that area. The point is that the monsoon season has failed again. The report stated:
The sight of cane already dead for want of water shocked the Premier (Mr Nicklin) during his drive. . . .
And I propose to do something about it,’ he told the ‘Daily Mercury’ prior to his return to Brisbane. . . .
Mr Nicklin said he would take the matter up with his Cabinet to try to alleviate the distress of these drought stricken areas. It is becoming more and more evident throughout Queensland that we are having a drought, and that a major drought is facing us again in areas like Nebo. There, as far as pastures and water are concerned, they are facing one of the worst winters they have ever experienced. At Gladstone the giant alumina plant is being forced to use salt water for a proportion of its production because, due to lack of proper planning, it is unable to obtain sufficient fresh water. Something like 20,000 square miles of my own electorate is drought stricken. I refer to areas around Monto, Biloela and Nebo - from the north to the south - which are drought stricken. The same thing applies to other areas of Queensland. But still we cannot get a positive statement about what is happening to these funds.
The Government’s answer is, of course, that it is spending hundreds of millions of dollars in the northern parts of Australia on mineral development, on the brigalow scheme and on beef roads. Let us have a good look at this, and see just how much the Government is spending in the north on water conservation. This area has the richest undeveloped water resources in Australia. If we examine the matter we must arrive at the conclusion that what is happening is a national disgrace. Consider southern Australia first. In eighteen years, with the exception of the Snowy Mountains project, a total of $35m has been spent on water conservation. If the Government relies on the Snowy Mountains project, let us remember that it was the Labor Party that committed this country to the Authority. Let us remember also that the members of the present Government boycotted the opening ceremony.
Let us turn now to how much the Government has spent on water conservation in the northern areas of Australia. In eighteen years it has spent SI 3m on the Ord River Scheme for the diversion dam and the reticulation of water. In Queensland, in that period of eighteen years this Government has spent nothing on water development projects. This is a lamentable record, but the Government attempts to justify this again by saying that it has provided Queensland with other development projects, such as the brigalow scheme, the beef roads, the Mount Isa railway and so on. But let us consider this assistance. In the last eighteen years, of the $3 60m made available to the States for development projects, Queensland has received $82m, but $64m has been in the form of interest bearing loans. Only $18m has been in the form of non-repayable grants. This is the extent of the Government’s sincerity about development projects. Certainly the Government can say that it has assisted to build the Mount Isa railway, but let us see what it has done in this regard. The Government made available to Queensland a loan of $34m. The interest bill on that loan is $23m. Is this the way to develop the north? The Queensland Government will have to repay not only the capital of $34m but also the interest of $23m. The same thing applies with respect to development of the brigalow lands. The Commonwealth has made $22m available for development of the brigalow, but it is a loan, not a grant. The total interest bill on that loan will be about $10m. The State Government or the settlers in the brigalow will have to repay not only the amount of the loan but also the interest on it. This is how the Government goes about developing this area. What is the position in the sugar industry? The Government made available the sum of $19m to assist the industry, but conveniently forgot to say that the interest on that sum, which was only a loan, will be about $9m.
The Government claims that the States have not advanced proposals for development. This is nonsense of the highest order. In the last eighteen years proposals to utilise the Burdekin and Herbert Rivers have been submitted on several occasions. Proposals regarding the Nathan Gorge and The Gap in the Dawson area have been submitted on several occasions, the last being in 1962. A proposal with respect to the Nogoa Dam was last advanced in 1963. We have had investigation after investigation. What is the result? We cannot get a considered statement yet from the Government on the Nogoa Dam. The Bundaberg Irrigation Committee advanced certain proposals several years ago. The Governments of New South Wales and Queensland have submitted proposals with regard to the border rivers scheme. Proposals have been submitted regarding extension of the Mareeba-Dimbulah project. Information concerning these proposals has been freely available from the Queensland Government and even in any Queensland newspaper one cares to pick up.
Queensland is in a desperate position so far as water is concerned. If the Government cannot make up its mind what to do with the Snowy Mountains Authority it should provide funds to enable the Queensland Irrigation Commission to get on with the job of developing water resources. The water and the projects are there and the need to conserve water is urgent. Notwithstanding this, regularly we have the paradox of millions of acre feet flowing wastefully to the sea in areas which are periodically devastated by drought. It would appear that the Government cannot grasp even the elementary fact that it is essential to stabilise existing industry in the proven and established areas where water is flowing to waste every year. It is essential that we avoid any repetition of the tragic effects of crippling droughts which are forever around the corner.
Water conservation is essential for the progressive development of our water resources, particularly in northern New South Wales and coastal Queensland, which are the proven and established areas of high production and which are the areas periodically devastated by drought and flood. It is essential that the Government commence without delay a progressive programme of development in these areas. Such an imaginative, progressive and sound programme of water conservation would transform most of these drought areas. It would not transform all of them, because water conservation will not solve all of their problems, but it would solve many of them. If the Government were to adopt a progressive programme of water conservation these areas would become economically viable and producers no longer would have hanging over their heads, as it were, the tragic uncertainty which exists because of this Government’s negative approach to water conservation and its pathetic refusal to take a positive stand to harness the water which, as the Prime Minister (Mr Harold Holt) has said, is our most precious asset. If this Government does not harness our water we will get no bouquets from future generations which will then have to do the job for their very survival.
– The honourable member for Dawson (Dr Patterson) appears to have two motives in initiating the debate. One is to discredit the Government. Since he sits on the front Opposition bench I suppose that is one of his jobs. His other motive is to engage in some sort of public relations stunt for the benefit of the people of his electorate. He claimed that the Government had failed to honour election promises. He makes this claim 162 days after the elections. What about the record of the Labor Party in New South Wales, which was returned to office at two consecutive elections on a promise to build the Blowering Dam and six years later still had done nothing and would not have done anything but for the fact that my Government advanced 50% of the money required to enable it to build the dam. So let us not talk of failure to honour election promises. In this field this Government has a magnificent record. I challenge the honourable member for Dawson and anybody else to say that we have not honoured an election promise.
I was interested to hear the honourable member claim that the Government is incapable of appreciating Australia’s shortage of water. He said that at the last elections the Government had been driven to a policy of water conservation. Although what he says is completely incorrect, let us suppose for a moment that there is some truth in his claim. It will be seen then that the Government was driven to this policy but the Labor Party was not. At the last electron the Labor Party made a fantastic number of promises. Newspapers made various assessments of the cost of implementing those promises. One reliable Melbourne newspaper set the figure at a total of S638m, not taking into account the Ord River scheme. We all know that at the last election all that was necessary in order to get something into Labor’s policy was to advocate it and it was included automatically, so it goes without saying that the Ord River scheme was included. In its policy speech at the last election the Labor Party said:
In Australia, the driest continent in the world, about three-fourths of the surface water is in the northern part of Australia; 36% of Australia’s water run-off is in North Queensland. The loss of that run-off into the sea is the tragedy of the tropics.
It is ludicrous of anybody to suggest that the Labor Party would develop our water resources. It would have extracted almost $700m from the taxpayers to pay for its election promises which, except for the Ord River scheme, which was included automatically in the policy speech, did not refer to water conservation in any way. We know that Labor parties have never been vitally concerned about water resources because their members are drawn not from country or rural areas but from industrial areas. Occasionally there are Labor members ot Parliament who genuinely wish to see something more done about water conservation, but they are overruled in their own party by sheer weight of numbers. Just look at the situation in New South Wales. That State had a Labor government for twentyfour years. Sitting behind me is a man who for some years sat in the Opposition in New South Wales under a Labor government at a time when the Liberal and Country Parties were trying to persuade it to spend money on water conservation. What happened? A number of dams were in the course of construction in New South Wales when Labor came to power. Most of those took about twenty years to complete. Only one major dam in New South Wales was started and finished by Labor during its twenty-four years of office. A very minor storage was completed in eleven years, but one of its walls broke.
I concede that a Labor government was responsible for the official decision to set up the Snowy Mountains Hydro-electric Authority, and I pay tribute to Labor for doing that. But let us not think that this was the only decision in the matter. The Snowy Mountains scheme was a project which had been thought about and which had been developing for fifty years. As history will show, it was the StevensBruxner Government of New South Wales which took the first steps to bring to Australia a consultant to look into the matter of establishing a Snowy Mountains scheme. I pay a tribute to the Labor Party for officially bringing the Authority into being but I join issue with the honourable member’s statement that members of the Government parties boycotted the Authority’s opening ceremony. The honourable member knows the facts. Petrol rationing was in existence at the time. The Labor Government intended the opening ceremony to be an occasion for bally-hoo in an effort to gain some kudos for the approaching election. They were in such a rush to get under way that they blew up the charge 3 miles upstream from where the dam was to be built. So let us not say too much about this.
This Government has a record of construction of water conservation which will stand up to criticism anywhere. I am glad of the opportunity to speak in this debate. I am glad to be able to make a serious contribution to let the people know both what we have done and what we intend to do in water conservation. We cannot rush into an expenditure of S50m. The honourable member for Dawson said that a few weeks after we had made the decision to spend S50m we should have made the money available. If we were to do that there is no doubt that we would make wrong decisions and regret them afterwards. Many matters have to be looked at. We have had departmental discussions and the Cabinet is now in a position to look at this matter. I do not doubt that it will take action very shortly. Let us not think that this is the only matter that has come before the Cabinet. We have received well over 200 submissions even though we have been in office for only four or five months. A number of States have already sent in proposals which we will take into consideration when we have had time to make policy decisions on the many important aspects that are involved.
The question arises as to how we should make the money available. Should we just hand it over to the States and tell them to use it, or should we select a particular proposal? How should the work be done? For instance, should it be done by a Commonwealth authority or by a State authority with the Commonwealth supervising the project? How should the money be made available? Should it be made available by loan or by grant? It has been announced already that funds will be made available by way of a grant. But these are matters that must be looked at before you can get projects of this nature under way. Should the money be divided equally amongst the States? There is no doubt that all the States will have proposals to put forward. Or should it be used, as the honourable member for Dawson with his great national outlook has said, just in Queensland?
– Near Mackay.
– I would be interested to read the Mackay ‘Daily Mercury’ tomorrow. The main reason for the proposal which has been put forward today is to help the Mackay district.
– The Premier of Queensland will be glad to hear the Minister say that.
– The honourable member sounds off down here in Canberra and knows that there will be a tremendous splash on the front pages of the local newspapers. This is obviously just a political stunt. The honourable member reminds me of an honourable member we had here once whom we hardly heard in the House. I think he asked about one question in three years. But one of my colleagues was touring in his electorate and he saw this headline: ‘SoandSo flays Government’. What we have heard today is the same sort of thing; it sickens one.
Should we use the money that is made available for water conservation for large dams or for many smaller dams? Should it be used for flood mitigation work? If it is used in that way we know that it will not be readily available for fodder conservation or the production of fodder during a drought. My own belief is that the greatest opportunity to extend our water conservation facilities so as to droughtproof this country consists in our building smaller dams which can regulate the flow of individual rivers. This also is a cheaper method, because the water can be used by settlers below the dams for pumping and thus for fodder conservation and fodder production. Some people who came to see me just recently pointed out that nine weeks after their area had received a rainfall of six inches there were restrictions on pumping from the river. Surely these are the sorts of aspects that the Government has to look at. We should not be criticised for not coming out with a cut and dried policy only 160 days after we have been returned to office. Months will elapse before everything can be looked at and policy decisions can be made. We receive requests from the various States. Then we have to go back to the States and ask them for the details and the facts they have used in assessing the various projects which they have put forward.
Then the question arises as to how we should police - to use a phrase which has been used - these matters to ensure that the States themselves do not spend less from their own funds. A lot of people are worried that if the Commonwealth provides additional money the States will opt cut of something that they are already doing. We have said that Commonwealth grants will be over and above what the States are spending, and we hope that the States will at least maintain their current spending or perhaps spend more. So it is necessary for us to get details about what the States are doing and what they propose to do in the future. These are all reasons why we cannot rush into these things. As I have said, if you do rush in with a vast amount of money you invariably find you have made wrong decisions. You are sorry about it but it is then too late.
This Government has a record in water conservation that is second to none. I have pointed out to the House previously that when we came into office the total amount of storage space in major dams in Australia was 7 million acre feet. Today is is 26 million acre feet and it will be 36 million acre feet when all the dams which are now under construction are completed. I know that a good Opposition member must always say that the sum made available is not enough or that it is too late. That is about all honourable members opposite can say. The Government realises that there are very many major projects in Australia which require finance, to say nothing of the need for money to be spent on social services, defence, roads, schools, education and other similar things. Then of course there must be some split up of the wealth of Australia. We have made available $600m for the Snowy Mountains Hydro-electric Scheme. This money will have a tremendous effect on the irrigation and power potential of Australia. It will divert internally into the Murray and Murrumbidgee rivers 2 million acre feet of water which previously flowed to waste into the sea. The Government has assisted with the Ord diversion dam to the extent of $12m. It has assisted with the Comprehensive Water Supply Scheme in Western Australia and with flood mitigation in New South Wales.
One can look everywhere and see what has been done. In addition, through the Australian Water Resources Council the Government has made available $4.5m over a three-year period for the assessment of Australia’s water resources. The Government has gone far beyond that; it has assisted with particular projects. The Government has assisted also by ensuring that loan funds will always be adequate. I do not know how the honourable member for Dawson arrived at the figure he quoted. He quoted a figure which I was quite unable to follow. He said that only a small amount bad been spent on water conservation and irrigation projects. I am reliably informed that between July 1956 and June 1965 - a period of ten years - major water conservation, supply and irrigation projects in the six States cost a total of $563 .4m and of that amount Queensland spent $59.3m. At the present time projects estimated to cost more than $90m are under construction in Queensland. I remind the honourable member for Dawson that more than two thirds of this work is being carried out north of the 26th parallel of latitude.
– How much is being carried out by the Commonwealth Government?
– The honourable member apparently has not grasped the fact that the States are responsible for conservation work. They are assisted by the Commonwealth in many ways. One of those ways is ensuring that adequate finance is returned to them. On a per capita basis, Queensland receives the second largest amount of tax reimbursement and loan funds. Therefore that State has been perfectly able to cope with everything that it is handling at the present moment, with the exception of the Emerald Dam. The honourable member for Dawson mentioned the Burdekin scheme and one or two other schemes. The reason why the Commonwealth has not advanced money for the Burdekin scheme is that during my period of office no one has asked for money for that scheme. The scheme has not been tested or assessed. The State Government has asked for money for the Emerald Dam and the Commonwealth is looking closely at this project. The first request we received was referred to the Bureau of Agricultural Economics and then referred back to Queensland because of certain faults. I finish by saying that in raising this matter, in which the Government is charged with having broken an election pledge, the Opposition has not raised a genuine matter of public importance at all. This is a piece of most arrogant mischief, a misuse of the forms of the Parliament and a threadbare attempt by the honourable member for Dawson to convict the Government of bad faith when he knows full well that we are working at this very moment to fulfill the promise made by the Prime Minister.
Order! The Minister’s time has expired.
– I support the action of the honourable member for Dawson (Dr Patterson) in raising this matter for discussion. In a country such as Australia an unlimited supply of water could mean unlimited wealth, but unfortunately we are not in the happy position of having an unlimited supply of water. However, our position with water should be much better than it is, because in the true sense Australia is not a country with a low rainfall. It is estimated that some 600 million acre feet of water flow into the Gulf of Carpentaria and the Timor Sea each year and this is estimated to be only about one-fifth of the total rainfall in that area. The Minister for National Development (Mr Fairbairn), today spoke with pride of the Government’s achievement in capturing 36 million acre feet out of a total of more than 600 million acre feet. Our problem is not actually a lack of water but a lack of activity by the Government to capture the water that is going to waste. It is the failure of the Government in the field of water conservation that is the major factor limiting our national development. Until such time as the Government does become properly active in water conservation, there is little hope of real progress being made in our north.
Just what can be achieved when water is captured and properly controlled has been shown by the Snowy Mountains scheme in the two fields of water conservation and power supply. One would have thought that the success of the scheme would have been sufficient to spur the Government on to carry out similar projects even though they may be much smaller. Unfortunately this has not happened and the Government is in fact showing very little interest in water conservation. As with the Ord project, the Government measures water conservation and northern development not in terms of their value to Australia but simply in terms of the votes that these projects bring to the Government Parties. In face of recent Press reports and a reply to a question given recently in this House by the Treasurer (Mr McMahon), I should imagine that even the most optimistic person must now be satisfied that the Government is playing politics with the Ord and will go no further with it unless forced to do so. Of course, those of us who have followed the Ord story closely have realised for quite some time that the Government never intended to proceed beyond the first stage. It was commenced purely for its political value and nothing else, and it is not likely that it will proceed any further until there is a change of government or until this Government becomes desperate for votes.
Not only has the Ord been tossed aside but the Government has not shown any interest in becoming active in any other water conservation project in Western Australia. Last year I asked the Minister for National Development in a question on notice which rivers in Western Australia had been investigated for irrigation and other purposes. I was surprised and disappointed to learn from his reply that, apart from the Ord, no river in Western Australia had received any attention at all, although it was possible that the Gascoyne may be investigated some time in the future. The Minister has frequently told the House that it is the Government’s policy that no move should be made until the State Government has made an approach. I often wonder just how much or perhaps how little co-ordination and understanding there really is between the Commonwealth and the States; it seems quite certain that in some respects there is very little.
I want to show that conflicting information is given and that this can cause confusion or misunderstanding both in this place and elsewhere. During the debate on the estimates for the Department of National Development in 1965, I referred to the importance of the Gascoyne as a project that would increase cultivation and production. I put it to the Minister that his Government should grasp the opportunity to tackle water conservation and irrigation in the north of Western Australia by investigating the possible uses of the plentiful and continuous water supply that would result if a dam were placed across the Gascoyne. I understand that some action is being taken on this matter now. I also suggested last year that the Government should send a team of experts to the area to determine the best methods for getting the project quickly under way. That was on 21st October 1965. I was most surprised and a little confused to hear the Minister for National Development, when replying to the debate on the same day, raise the old story of ‘approach’. He said:
The honourable member for Kalgoorlie discussed the Gascoyne River proposal at Carnarvon and suggested that the Commonwealth should contribute to this project. All I can say to him is that there has been no approach. The Western Australian Government may approach the Commonwealth on this matter, but so far there has been no approach and so, naturally, we have not considered the proposal.
As I said, that was on 21st October 1965. The main reason for my surprise at the Minister’s reply was that some time previously the Minister for the North-West in the State House in Western Australia had given other information on this subject. The Minister’s remarks are reported in the Western Australian Hansard of 1st September 1965. Some seven weeks before the Minister for National Development made his statement in this House, the Minister for the North-West said in the Western Australian House:
For instance it is only at this point of time that serious research has been called for to see how the waters of the Fortesque can be better controlled with the object of getting the maximum use not only for the development of a community, but for industrial purposes.
These matters have been the subject of discussion with the northern division of the Commonwealth Department of National Development and have been put forward, amongst other things, as suitable subjects for research by that division in conjunction with the Governments of Western Australia and Queensland. The Gascoyne River, likewise, has been put forward as such a subject
He went on:
The project for the greater development and the greater security of agriculture on the Gascoyne has been placed before the Commonwealth on more than one occasion as a project to be considered and as one meriting inclusion in the programme of northern development.
In his concluding remarks, he said:
It was only Friday last-
He made these remarks on 1st September 1965- that this project, amongst others, was under discussion in Canberra, when the intention and the desire of the State Government were made known, in respect not only of the Gascoyne River, but also some other rivers in the northwest, . . . The meeting on Friday last was, I think, the most successful meeting the State Government has had with the Commonwealth on the general question of northern development.
Surely it is rather strange that some seven weeks later in this House the Minister for National Development should tell us that there had been no approach from the Western Australian Government regarding the Gascoyne project. I also draw attention to the remarks of the Minister in Western Australia in which he said that other subjects and other rivers had been put forward as being suitable for research by the Commonwealth. That was on 1st September 1965. Yet last year the Minister told us in this place that only the Ord and the Gascoyne had been mentioned by the State Government.
Someone somewhere is either off the ball or is deliberately confusing the position. This disturbs me very much because members in the Western Australian Parliament, after hearing the Minister there give his explanation, could be excused for believing that any delay was the result of the Commonwealth Government’s failure to commence investigations, and honourable members in this place, after hearing the Minister for National Development, could be excused for believing that the whole fault lay with the State Government because it had not made an approach. This may be a very interesting political exercise for the Governments concerned, but it is certainly not helpful to Western Australia or Australia generally. In fact, it can do immeasurable harm by creating a situation in which members in each Parliament will wait for the other side to make a move. The remarks of the Minister in the State House are vastly different from the statements that have been made in this House. The Minister for National Development may claim that his remarks were related only to approaches for finance. But I find it hard to believe that discussions would take place between the representatives of the two Governments without finance being raised. There would have to be some idea of what finance would be available if the discussions were to reach a successful conclusion. So it would seem that either the Minister is not as close as he should be to his own Department and as a result does not know what is happening or what stage has been reached, or the States have a different idea as to what constitutes an approach to the Commonwealth on certain projects.
This thought is also disturbing, because we have been told that the Government’s policy with regard to the Snowy Mountains Hydro-electric Authority is that the approach and recommendations for projects to be undertaken by the Authority must come from the States before the Commonwealth will consider them. Therefore, if what a State Government puts as its idea of an approach or recommendation is not accepted as such by the Commonwealth, the whole proposition for the use of the Authority could collapse and we could find ourselves here being advised by the Minister that none of the States had come forward with any request for the use of the material or knowledge of the Authority. Only yesterday the Prime Minister, when referring to $50m that is to be made available, said that the approaches much come from the State governments. Obviously there is a difference of opinion between the State and the Commonwealth regarding the proposals. This may be deliberate, to confuse members of both Parliaments or to cause them to think that approaches have been made or have not been made. Whatever the situation is, the Minister should explain it to the House.
– This is one of the weakest debates that I have ever heard on a matter of public importance. Nothing new has been presented by the Opposition. However I think that something has been achieved: if we have a few more debates of this nature I think we can educate the honourable member for Dawson (Dr Patterson) to abandon from his academic approach to water conservation. My colleague, the Minister for National Development (Mr Fairbairn), and I were impressed when the honourable member for Dawson spoke about irrigation works in areas of proven industry. This is most important because the honourable member for Dawson, like the honourable member for Kalgoorlie (Mr Collard), has spoken of establishing vast and expensive irrigation projects in areas where no proven industries exist. Obviously a serious situation could develop were we to accept this academic approach rather than a practical approach to water conservation.
The Government outlayed about $13m on the Ord River scheme, but this, in essence, was for research into far northern irrigation projects. The honourable member for Dawson has complained about money being made available to Queensland by way of loan for the Queensland Government to use at its discretion, and he has referred to interest charges on such loans. My recollection is that the money spent on the Ord scheme was a grant to Western Australia. We must remember that Western Australia is a claimant State and has some rights to assistance, especially where money is being expended on an irrigation project in an area where nothing has been proven. Initial and continuing success in producing cotton has been gained in the Ord area. This is a new enterprise in the far north of Australia. However, what pests are we likely to encounter in this area in a few years time? Those of us who are associated with the land realise that one never knows what is likely to happen when something is done contrary to the laws of nature. On the Ord we have engaged in intensive irrigation cropping. How will this affect the soil? What fertilisers will be required?
What economic problems may arise? The honourable member for Kalgoorlie has suggested that we should embark on the expenditure of about $100m before we know the answers to these questions.
It is all very well to suggest that twothirds or three-quarters of the surface water run-off in Australia is in the north. The honourable member for Dawson asked why we do not trap this water, but if we do trap it, what are we going to do with it? This question must be answered. If we embark on irrigation projects we must be sure of a good return from our investment. Economic returns can be secured from only certain crops under irrigation. Sugar cane, cotton, tobacco, fruit and vegetable growing are profitable undertakings. Our irrigation areas on the Murrumbidgee River are economic, but if we establish two or three additional irrigation areas in the Murrumbidgee Irrigation area where will we sell the resultant produce? We must be sure of markets for the crops we produce. In other words, we must be practical and not academic. It has been suggested that the implementation of water conservation schemes would provide drought relief. Portions of the far west of Queensland have been suffering from drought conditions for about ten years. It was once suggested that the Burdekin River should be dammed and the water permitted to gravitate into the Diamentina
– We never suggested that.
– I know that the honourable member did not suggest it, but this was a scheme which was suggested and accepted by academics as an amazing scheme and a wonderful enterprise. However in the far west of Queensland there is an evaporation rate of nine feet a year. In examining water conservation as a drought mitigation measure we must have regard to economics. If a person lives in an area where a drought is likely to last for a few years, he does not start to feed his stock during the drought but looks for agistment in higher rainfall areas. Obviously a person could not afford to feed stock for ten years. He would sell his stock. These aspects must be considered. In doubtful rainfall areas a man assesses the situation and decides to what extent he can afford to feed his stock before disposing of them. The Commonwealth Government has assisted in these areas by providing beef roads. This has enabled the quick disposal of stock from drought stricken areas. The drought in the Alice Springs area lasted for almost twelve years during which time stock numbers dropped by about 100,000, but very few stock died, although the natural increase was lost. Motor transport was able to remove the stock from the afflicted area. In some drought areas it is hopeless to try to feed stock.
Reference has been made to the Queensland situation. Much water conservation has been undertaken in Queensland, but not by means of multi-million dollar dams that take the headlines. Smaller dams have been provided to safeguard areas of proven industry in Queensland, but these have not attracted publicity although they have stabilised agriculture. I speak of the Moogerah Dam in the Boonah district; the Leslie Dam in the Warwick district, which safeguards the highly productive areas along the Condamine up into the Darling Downs; and the Borumba Dam at Gympie. Near Inglewood the Coolmunda Dam is nearing completion. This will enable the irrigation of outback areas. These are all small dams, costing about $2m, but they are important dams. We have closer and established settlement in the areas served by those dams. However if we sought to conserve water in a remote area, the people who settled there would demand roads, schools, power plants, hospitals and other facilities that would cost more than the investment in the dam which would be responsible for the settlement.
I am glad that the honourable member for Dawson, has, for the first time, recognised the Importance of safeguarding proven areas. This is our policy. The honourable member mentioned the Emerald scheme in Queensland. He referred to the Kolan scheme, too. The Emerald scheme would involve considerable investment to start something new. Agriculture there is carried on at present on a rainfall basis, and if we introduce irrigation we must be able to answer the question: What can be grown which will prove an economic proposition after taking into account the costs of irrigation? On the other hand, if we build a dam on the Kolan River we will safeguard a sugar industry which is already in existence, and this is the important point in my view. This, I believe, must be the basis of Government policy.
As my colleague has said, the record of this Government in irrigation and water conservation is more impressive than that of any previous government that Australia has had. I remind the House that when the present Government came to office the total water storages in Australia amounted to seven million acre feet. When all works at present in progress are completed the total will be thirty-six million acre feet. The improvement shown by this Government gives it a record second to none.
– Much has been said by Ministers about the Government’s record in water conservation. The sole reason for proposing this matter for discussion this afternoon was to point out that the record of the Government in water conservation has been totally inadequate. It is all very well for Ministers to accuse the honourable member for Dawson (Dr Patterson) of advocating water conservation in areas where the water could not be used, or where it is doubtful that it could be used. Let us look at the position in central Queensland. When I have asked in this House what the Federal Government has done for national development in Queensland I have been told on numerous occasions that $104m has been spent in central Queensland on the establishment of an aluminium factory at Gladstone in my electorate. But this is not Government money, it is private money. For years past, ever since this aluminium factory was first advocated, all through the period when the land was being prepared and the works were being erected, it has been known to the Government that this venture would require two million gallons of water a day to keep it going. This has been well known. There has never been any doubt about the water being required. The aluminium plant is now in production, and what is the position with regard to water? How much water is available? How much money has the Federal Government provided for the provision of water? There is no water available at all.
– Even if a dam had been built it would never have been filled.
– If the Minister wants to set himself up as a weather prophet and commend the Government’s foresight in not having spent the money on the building of a dam because it realised that there would not be sufficient rain to fill the dam, that is a good idea from his point of view. But the fact is that the Government could make a mistake. At some time in the future the area could be flooded and then we would have no dam in which to conserve the available water. Now we find the company responsible for this aluminium plant actually trying to find a way to use salt water to keep the works operating.
– What about the Calcap Dam?
– The Minister now asks: what about the Calcap Dam? Surely he is not going to claim that he knew that no rain was going to fall in this area. This is now the tenth successive year in which there have been no monsoonal rains in that part of Australia, but we do not blame the Government for that. I exonerate the Minister absolutely for the lack of rain. But surely we should take some steps to make provision for the day when we will need these conservation facilities. Had a dam been built in the vicinity of Gladstone to provide adequate water there would have been sufficient in storage to cope with the requirements of this industry. After all, we have not been entirely without rain.
A similar position exists in respect of Rockhampton. Now a barrage is being thrown across the Fitzroy River, not with any aid from the Federal Government, let it be noted, but with money obtained entirely from a charge on the local ratepayers. We have been caught in this sort of position so often that one would imagine that even this Government would realise there is a limit to what the local people can do. What really irritates the people of central Queensland is that they are called upon to contribute their share of the money required for the Snowy Mountains scheme while providing the total amount required for their own local schemes. The Snowy Mountains scheme is not being financed entirely by the people in the vicinity of those works. It is a charge against every taxpayer in Australia. But when it comes to carrying out a water scheme in central Queensland the people are told: ‘You can do that yourselves. It will mean only another $15 or $20 a year to be paid by each ratepayer in the area. You can carry the whole burden and also pay your share of the cost of projects in other States.’
The situation is the same in respect of the brigalow land clearance scheme. The land was surveyed and everything else was done including the placing of people on the land - if they had enough money - but what was done about water? In this House we fought for a couple of years to convince the Government that inadequate arrangements had been made for providing these blocks with water. In some cases there were only two watering points for a property twelve or fifteen miles long.
Water conservation is vital to this country. There is no way in which we can develop it without water. It is no use saying that there would have been no water to fill a dam in any case. Going back over the history of water conservation in Queensland what do we find? Time after time when we have gone to the Federal Government the reply has been given: ‘The States have made no approach’. Nobody has yet specified just what the approach is supposed to be. Are the States supposed to bring their propositions to the Australian Loan Council? Are they supposed to see the Minister, or are they supposed to write letters or fill out forms? What are they supposed to do? When one goes to the State Government one is told: ‘We cannot get any aid from the Federal Government’. It looks as though we will have to appoint a Royal Commission to find out who is trying to pull whose leg. But the position is perfectly clear to the people who live in these districts and cannot get their water conserved. They see the water wasted in flood times and then they face severe drought in the dry periods.
This is not good enough. The Government must be capable of organising its programme of water conservation, if it has any. We can go back as far as we like in the history of central Queensland and we will see where plans have been made for schemes in various districts. There have been plans for development of the Fitzroy River basin area for years. There have been proposals for dams on the Nathan Gorge, and on the Nogoa River. But how many have we got? We have none, and we are told: ‘We must have plans, we must have surveys, we must have investigations’.
I can go back as far as 1928 when the Nathan Gorge dam was first authorised. When we mention that project today we are told that another investigation must be carried out. The people who did the surveys and investigations in the earlier days are now dead and gone, so that those who are now in positions of authority say they must carry out their own investigations. There must be enough documents stored away somewhere concerning water conservation projects in Queensland to keep a whole department busy for twelve months sorting them out. There have been surveys by State Governments, by Federal Governments, by universities and by local authorities. Survey teams without end come up to these places and they get plenty of publicity in the Press. Of course it is usually just before an election. Then nothing is done until another election is due, and we see another session of hand shaking. We even saw a whole party of people flown around these districts before one election. They had their own aeroplane, and it carried Ministers, experts, surveyors and others. We got everything but the dams. No dams were built and no water was conserved.
How long is this sort of thing to go on? How long will it be before someone takes seriously the necessity to conserve water in this country? As the honourable member for Dawson pointed out, this Government has committed - not spent - $900m for water conservation in Australia. This includes the amount required for the Snowy Mountains scheme. Yet the Minister himself told me, in answer to a series of questions only the week before last, that the amount applied to Queensland out of this total of $900m was nil. Well, Queensland is quite a reasonable area of Australia. The taxpayers up there, the people on the land and the people in industry, are surely entitled to more consideration than they get. We get nothing at the present time. We admit that we are not the only part of Australia that gets nothing, but surely it is not beyond the capacity of the Department of National Development to lay down some sort of programme. It is not satisfactory simply to say: ‘The States have not approached us. They have put up no proposition to us.’ What is completely ignored is that when we go to a State authority we are told: ‘The Federal people will not give us any money’. This is not good enough. Some sort of a programme involving priorities must be laid down. We should know years ahead what we are going to do about water conservation. The people in the area should be able to make arrangements about what they will do. When will we get the water? Can we develop our land? What will be our production not only in primary industry but also in secondary industry? How much water will there be for industrial use? These things must be known; otherwise the country cannot be developed.
The ridiculous position has arisen at Gladstone where the aluminium works have been completed and are entering into production. But those concerned are forced to try to use salt water, even though enough water flowed into the sea to keep production going had it been conserved in the first place. The Government cannot claim that it did not know that this situation would arise. The Government has taken years to think about building a dam and water has been wasted ever since the first bulldozer went on the site. Where will the water come from? It still is not there. The dam still has not been built, and people are trying to use salt water in this major undertaking at Gladstone.
^ I suppose it is a little unfair to laugh at people who are trying to run after a train which has already started, but it is a really good joke when at the same time they huff and puff and complain that it is running behind schedule. The real fact of the matter is that the Opposition is trying to jump on a train, or a band wagon, which the Government has set in motion. This Government has done very much more to conserve water than have all the previous governments put together. The programme it has is a continuing, accelerating and constructive programme.
Surely it is silly in this, the first session of the new Parliament, to complain that a promise made in the Government’s policy speech in November last has not ,yet been implemented. It is being implemented, because it is part of a developing and continuing policy which was contained in earlier policy speeches and which is now being augmented. The honourable member for Dawson (Dr Patterson), who has some experience of these things, is probably well aware that in the natural machinery of government this matter is currently under consideration. It would not be very surprising, would it, if there were an announcement in the next few weeks? It would be nice, would it not, for the honourable member for Dawson to be able, like the famous cock which used to crow and believe it brought about the sunrise, to say: ‘I brought it about* ?
The Government has gone about this matter in a constructive and proper way, because to our shame let it be said that the main thing we lack is information. Rainfall is very irregular, particularly in our southern States, and its cycles cannot be estimated over even one or two decades. We need to know more about it if we are to spend our money effectively. Water conservation has been the province of State governments, which I do not think have discharged their responsibilities in the last four or five decades. A few moments ago the honourable member for Capricornia (Mr Gray) complained about the lack of water for the aluminium works at Gladstone. Perhaps if the records had been available and had been properly studied we would have known that the recent drought, although unprecedented to our way of thinking, would in fact occur. Surely the first thing to do is to know something about the Australian rainfall, the runoff into rivers, and the need for an availability of water. The Commonwealth Government has sought this information. This is the first time that the Commonwealth Government has done anything about this. It set up the Australian Water Resources Council and contributed, I think, $2. 75m for the gauging of streams and the discovery of underground water. It is now proposing to raise that contribution by about 60% .
In 1965 the Australian Water Resources Council published a report which was the first reasonable assessment of Australia’s water resources and needs. Honourable members might well look at that document. Having read it, they would realise how much it was needed and how valuable it was. Until we know more about rainfall and runoff into rivers, we will not be able economically and effectively to lay out money on water conservation. But, while th;s is being done, the Commonwealth Government has also proceeded with practical works such as the Snowy Mountains scheme. I remember the genesis of that scheme. The scheme was not instituted by the Labor Government but by the New South Wales Government a way back in the 1930s. The Federal Labor Party simply put pen to paper and pinched some of the ideas of the old New South Wales United Australia Party to put forward before an election. Labor did nothing further about the scheme, however. The Snowy scheme, as developed, is the child of this Government It is a tremendous scheme of water conservation. Would New South Wales, Victoria or South Australia complain that nothing effective had been done?
It is quite true to say that we have helped the States to assess their own resources, which they should have done a long time ago. While this has been going on we have also been practical and have done more than any previous Commonwealth Government has done. In fact, we have done very much more in regard to water conservation than all previous Commonwealth governments put together. While the Snowy scheme is being completed and the Blowering Dam and the Chowilla Dam are under construction and a new dam in Victoria is under consideration, are we going to say that nothing has been done? Will Tasmania complain? In the light of the Gordon River Road and things of that nature, and the immense sums which have been made available to Tasmania for its hydro-electric development, Tasmania should not complain. Western Australia has a comprehensive water scheme, which was almost a gift from us to the people of that State. The first stage of the Ord scheme is only a pilot scheme, but it is the only real scheme that can be undertaken to see what can be done in the north. It may be that we will have to reject views put forward by the honourable member for Dawson in former days that sugar should be grown on the Ord, but we still do not quite know the best way to use this water. There is still work to be done. Let us not gauge the effectiveness of work by the amount of money that is spent This was the yardstick of the old defunct and inefficient New South Wales Labor Government, which applied Opera House principles to the construction of dams on the Hunter and near Tamworth. As a result, these dams cost six or seven times the estimated cost. Money was wasted on them. It is not the amount of money spent but the amount of effective water which can be obtained from a scheme which is important.
I turn now to Queensland, which during the decades when work should have been done had the misfortune to suffer the stagnating effect of Labor governments, which simply did not get together hydrological information relating to immense resources in the north. That task has been left to this Government and to the present Government of Queensland. The long succession of Labor governments in Queensland almost from 1900 have a shameful record of inactivity in this matter. Because they have not told us what the vital facts of the matter are, it has not been possible perhaps, in this highly variable climate where the monsoon sometimes comes south and sometimes does not, to put in the works that are needed.
Also in Queensland we have gone forward with the brigalow and beef road schemes. These are perhaps some substitution for water conservation schemes, but the water conservation schemes will come in Queensland, and this Government is at the present moment doing the right thing in collecting together the information on which an efficient and constructive plan of water conservation can be based. I had hoped - and the clock will beat me - to say something about the need for underground water conservation and the way in which money can be most effectively spent in that direction.
– Order! The discussion has now concluded.
Consideration of Senate’s amendments.
Section 12 of the Principal Act is amended -
Senate’s amendment No. 1.
In paragraph (b) of proposed sub-section (1a), leave out ‘, in the opinion of the Minister,’.
Section 15 of the Principal Act is amended(a) by inserting after sub-section (2.) the following sub-section: - “ (2aa.) Paragraphs (b) and (c) of subsection (1) of this section do not apply in relation to -
Senate’s amendment No. 2.
In paragraph (b) of proposed sub-section (2aa), leave out ‘. in the opinion of the Minister,’.
– I move:
Mr Chairman, this Bill was passed by the House on 4th April but two minor amendments made in the other place now require the further consideration of this chamber. Both amendments are concerned with the same point. Honourable members will recall that the purpose of the Bill is to enable citizenship to be granted to persons, including national servicemen, who have either completed three months service in the permanent forces or who have been discharged before completing three months service after becoming medically unfit by reason of their service.
In the preparation of the Bill it was thought that in case of doubt as to whether medical unfitness was caused by the man’s service the question should be left to the Minister for Immigration to decide, so there appeared in the original Bill the words ‘who in the opinion of the Minister became medically unfit by reason of his service.’ The inclusion of these words in the orginal Bill had in mind the fact that when a man is discharged on medical grounds a determination is not necessarily made by the Army or any other authorities as to whether the invalidity was due to service. It was envisaged that when the ex-serviceman applied for citizenship the Minister for Immigration should satisfy himself on this question by reference to all available informaiton including the man’s medical record in the Service concerned.
It was basic to this approach that in practice Ministers in matters such as citizenship applications do exercise their discretionary powers in a liberal manner. The Government has, however, accepted the view expressed in the other place that it is not essential to retain the words ‘in the opinion of the Minister’. The omission of these words will mean that the question whether invalidity was due to service will be a question of fact. Mr Chairman, the point at issue is clearly not of great practical importance but does represent an acceptable change in the Bill. I accordingly commend to the Committee the amendment to clause 3 and the corresponding amendment to clause 4.
– Mr Chairman, the Opposition has considered carefully the proposed amendments to the Bill, and I am pleased to be able to say on behalf of the Opposition that we are able to accept them.
Amendments agreed to.
Resolution reported; report adopted.
Debate resumed from 5 April (vide page 926), on motion by Mr Adermann:
That the Bill be now read a second time.
– There being no objection, that course will be followed.
– The Opposition does not oppose the two Bills which are designed to make available to the Australian dairying industry a total subsidy of $135m in the next five years at the rate of $27m a year as well as to provide for the payment of a bounty on exports of processed milk products. However, while the Opposition fully supports the Australian dairying industry, I want to make it perfectly clear to the Government that although we explicitly and implicitly believe in the principle of protectionism for Australian industries, both secondary and primary, this does not necessarily mean that we believe in perpetual protectionism for industries or sections of industries which may be proved - I emphasise that word - to be grossly inefficient to the degree that the economy of the country suffers through a maldistribution of resources which could be used far more effectively in other industries in terms of both employment and export income.
As I have said, the Opposition supports and has always supported the dairying industry. Let it be remembered that it was a Labor government which first introduced the 1947 Commonwealth dairying industry stabilisation plan, and this was the first time - in the words of the industry itself - that the dairying industry had stability. Since that first stabilisation plan the Government of the day has continued with the principle of stabilisation and the principle of protecting this great industry. There is no question about the ability of the dairying industry in terms of decentralisation and in terms of its contribution to development of country areas. It has also been an important earner of export income.
However, there are sections of the dairying industry which, because of the Government’s inertia and apparent reluctance to tackle the inherent problem of the industry in certain areas, are languishing. The economic position of certain dairy farms in certain dairying areas is worsening. Recent surveys by the Commonwealth Bureau of Agricultural Economics have confirmed this fact when compared with results of previous surveys. This is understandable, because in many areas productivity per cow in terms of butterfat per lactation period or per acre is not increasing at the same rate that costs are rising. As the subsidy has not been increased it is obvious that many farmers are feeling the pinch more and more. This fact has been established by the surveys of the Bureau.
The Opposition criticises the Government - and will continue to criticise it - about what it is doing to remedy this problem. Paying a subsidy on butter and cheese, and allowing higher prices for butter and cheese - the low income earner bears the burden principally - is not solving the basic and inherent problems of the dairying industry. There are sections of the Australian dairying industry which are economically viable even compared with world standards. Certain areas in Victoria, and the Murray swamps in South Australia, for example, are among the highest producing areas in Australia in terms of production for each cow. In fact, they are among the highest in the world. But the complete opposite is the case in other areas. In parts of northern New South Wales and certainly in parts of Queensland there are areas where we have lactation periods of less than five months. There we have butterfat per acre of less than 60 lb or 70 lb. On some farms we even have butterfat per acre of 30 lb.
Our principal criticism is that although seven years ago the Dairy Industry Committee of Inquiry made certain recommendations with respect to the rehabilitation and reconstruction of the industry, these recommendations have not yet been implemented. How long can the Government protect an industry by subsidising it, or by providing a bounty - it means the same thing - when nothing is being done to rehabilitate these major deficient areas? I am pleased to see that under this Bill the Federal Government is going to take steps, in conjunction with the State governments, to put forward a reconstruction and rehabilitation plan for the so-called depressed areas of Australia. But as I said before, it is now seven years since these recommendations and investigations - .which were supported by evidence from State governments - were made. The positive action of the Western Australian dairy industry scheme is something which could, perhaps, be used as a model for the rehabilitation of these areas. But do not let us hoodwink ourselves by trying to disguise a subsidy, and the effect which it has on the economy of Australia. It is well known that in the dairying industry there is a twoprice plan. When one considers the present import parity prices and the present value of production one finds that with the subsidy a total of about S60m to §80m has been paid to the industry on the average in the last five years. Expressed as a percentage of the total production value at near export parity, this varies from 40% to 90%.
Some economists will condemn the dairying industry because it is highly protected. On the other hand there are plenty of secondary industries which can be shown to have a level of protection just as high as if not higher than the dairy industry has. When you use this yardstick - the accepted economic yardstick - of total production valued at export parity, and take into account as a percentage the total amount of financial assistance paid directly or indirectly to the industry, you will certainly get a high figure. But people in the dairy industry - certainly those engaged in it in the areas I know - do not want to take charity, as some people like to call subsidies. They want the opportunity to take positive steps to overcome the inherent problems of nutrition, water supply and pastures. But they will have to rely on the subsidy for survival if they do not get a chance to show what can be done with the resources they have. The dairying industry is the first to recognise this. We are fast reaching the stage of being able to solve most of the problems existing today, if they are physical problems of nutrition or animal husbandry. Whether in regard to the particular soil types in Western Australia, northern New South Wales or south-east and Queensland, the very good research work being done by the Commonwealth Scientific and Industrial Research Organisation and by the departments of agriculture and stock is fast pointing to a solution to some of the most inherent problems in the industry. But as I asked before in respect to a continuation of the subsidy, can the dairy industry produce efficiently? Is it able to produce efficiently in terms of the accepted criterion of a figure somewhere near the import parity price? There are plenty of areas in Australia where for years this criterion has been met, but there are plenty of areas in which it is not being met. These are the areas upon which we must concentrate. Can we operate this industry efficiently?
Before I deal with the problems of the particular areas I intend to deal with the economic aspects of stabilisation. The economic implications of the subsidy are extremely important. The first stabilisation scheme was introduced in 1947. It guaranteed a return to farmers for all milk and cream supplied for the manufacture of butter and cheese and processed products. lt was based on a cost of production principle. If my memory serves me right there were about 1,000 farms under the auspices of the Joint Dairying Industry Advisory Committee at that time. For the first time we had stability in the industry. The second stabilisation scheme ran from 1952 to 1957. Under it there was a guaranteed price limited to butter and cheese consumed locally, plus up to 20% of that quantity. The result was that there was an upper limit of production to which the stabilisation plan could apply, and we saw a small decrease in the average return to growers, which fell from about 40c to 37c per lb for commercial butter. From 1957 to 1962 we had the third stabilisation scheme. This again gave financial assistance to producers limited to butter and cheese consumed locally, plus 20%. But there was a fixed subsidy which was to be determined each year. In actual fact the subsidy was fixed at $27m each year. In the same period, 1958-59, the Commonwealth underwrote the financial equalisation values so that factories were able to pay farmers 33c per lb for commercial butter. There is no doubt that this has made a valuable contribution to the Australian dairy industry. In the fourth stabilisation scheme, operative from 1962 to 1966, we had the same level of subsidy of $27m for butter, cheese and butter fat products containing not less than 40% of butter fat. Also in this period we saw the introduction of a bounty on exports of processed milk products. We now have before us the fifth Commonwealth dairy industry stabilisation plan, which provides a subsidy of $27m a year for five years. The amount will not be determined each year; it is set for each year. We still will have the bounty on processed milk products.
Certain economic implications of the two price scheme must be considered. The scheme is administered by the Commonwealth Dairy Produce Equalisation Committee. There can be no doubt that this scheme, employing the equalisation principle, has been a great boon to dairy farmers. But as regards farm income we know that butter and cheese prices fixed on the local markets have raised the incomes of dairy farmers on the domestic market and equalisation has ensured the protection of the dairy industry from competition from overseas countries through restrictions on imports. Another way in which the dairy industry is helped financially indirectly is by the restriction in the States on the production of margarine. Indirectly this restriction must help the -financing of the dairy industry. The Federal subsidy on butter and cheese is the third method of financial assistance to the dairy industry. Also it is claimed in some areas that artificially high prices are paid to farmers supplying city milk. All of these factors support the incomes of the dairy industry.
Despite this financial assistance over twenty years to the dairy industry, the industry still has problems and in some areas those problems are getting worse. If there is an artificially high price for the commodity produced there will be a tendency to hang on to that particular method of production and over time we shall even see a subdivision of resources in terms of land, which can perpetuate the problem if the whole basis of the economy of the farm is vitally dependent on the payment of a subsidy.
One of the greatest problems associated with stabilisation and support of any industry is the effect on land prices. Surveys by the Bureau of Agricultural Economics and other institutions have shown, ever since the surveys were started, that many dairy farmers are broke, in terms of return on capital or in terms of net cash income. The usual efficiency concept is return on capital. Yet on those farms there has been a tendency for land prices to continue to rise. It is possible with rising land prices for the farmer to get a bit more help in the way of credit from private banking systems but the problems of stabilisation and support remain for those farms which are unable to carry out necessary improvements and to overcome nutritional and water problems unless the Government or some institution can assist them financially, or technologically, to overcome their difficulties.
The effect on the consumer of higher prices for butter is one of the most common arguments against the dairy industry. The obvious effect of a higher price for butter is that the consumer pays more, but this in turn increases wages and costs of production of other industries which are competing with imports. This is one of the problems associated with a subsidy; there is put in train an economic force which, through its indirect effects mostly, causes an increase in costs of production and an inevitable increase in the basic wage. There is, of course, a drain on revenue each year to the extent or S27m. This, as I have said before, the Labor Party supports, but only as long as the Government shows some positive sign of facing up to the major problems affecting the industry. We cannot support the subsidy perpetually if the Government does nothing to help the incustry. The subsidy is a regressive one, but this does not mean that it is a criticism of the dairy industry. It is regressive in the sense that the bigger the farm, the bigger the income, the bigger the production; and the bigger the subsidy. This is one of the major problems with a regressive subsidy: often the areas which need the subsidy most arc not the areas which are getting the major benefit from the subsidy. In other words, a dairy farmer producing 10,000 lb of butterfat, with a farm highly productive in terms of production per cow. would receive a subsidy of, say, S500, but a farmer producing only 5,000 lb of butterfat would receive only S250.
– What would Labor do?
– We will hear from the Country Party later what it would do. Let us not forget that the protection devised for the dairy industry is no different in principle from that devised for secondary industry. Some organisations have argued, particularly in evidence before the McCarthy Committee and in recent publications dealing with the dairy industry, that the industry is not entitled to the same degree of protection as are many secondary industries because the dairy industry is unable to stand on its own feet. This is the basic argument advanced by some economists who have worked in the industry. In my opinion this argument ignores the point that the resources being used in some areas of the dairy industry are capable of levels of production which could make the industry efficient in those areas, notwithstanding that present production methods appear to be inefficient. Technological advice is needed. In many areas financial assistance is needed. Help with water is needed. Given those things many dairy farms which are now languishing in many areas could become highly productive. The Minister for Primary Industry (Mr Adermann) does not indicate how the Government intends to implement a programme of reconstruction or rehabilitation. Obviously close co-operation with the Commonwealth Scientific and Industrial Research Organisation and the State Departments of Agriculture will be basic to any plan.
As has been pointed out by the industry itself in recent years, the problems of the dairy industry are accentuated by the declining real income of the dairy farmer. This has been brought about because costs are rising but the unit value of their production is not rising in the same proportion. In some industries the unit value is declining.
The consumer price index for the six capital cities shows an increase of 33% from 1954 to 1966 and the basic wage has gone up by 40% in the same period. But in terms of unit value incomes have not increased by anything like this degree. This is the greatest problem facing many dairy farmers, irrespective of how efficient they might be. If their farms are not large enough their net income also is not large enough and they are faced with this cost rise. The latest information I have on the net farm incomes of dairy farmers as revealed by the Bureau of Agricultural Economics survey shows that the average in New South Wales is S2.060. Under a cumulative distribution curve a large number of farmers fall below this average. This is the final sum returned to the farmer for his own labour and management. In Victoria the average is $3,000; in Queensland, $2,000; in South Australia, $2,500; in Western Australia, $1,700 and in Tasmania, $2,300. Those figures represent the amount on which the average dairy farmer in the various States has to support himself and his family and recompense himself for his work and management of the farm.
Various investigations into problems associated with the rehabilitation or reconstruction of dairying areas have been carried out over the years by State and Federal departments, universities and the industry itself. They show that there are three main sectors in the industry. Firstly, there are the highly productive farms in terms of productivity per cow or per acre, and high net income. The second sector includes highly productive farms in terms of productivity per cow or per acre, but because of the farm size, the total net income is too small not only to support the farmer and his family but also to allow him to make replacements of plant and machinery. The third sector seems to be the one which is giving the industry and the Government the most problems. It includes the marginal and sub-marginal farms in terms of productivity per cow or per acre and total net income. This sector is found particularly in Queensland, northern New South Wales and Western Australia. It is causing a major headache to the dairy industry. It is extremely difficult to be precise about the number of farms which need assistance. One must fall back on the work carried out by the Dairy Industry Committee of Inquiry plus work carried out by the Federal Bureau of Agricultural Economics and State government departments. It would seem that .about 3,500 dairy farms have not the resources to produce a butterfat potential of 8,000 lb. On the other hand, it seems that probably about 12,000 farms are producing less than 8,000 lb of butterfat but have in fact the potential to produce more than 8,000 lb. Eight thousand pounds of butterfat is simply a rough guide taken by various bodies as the minimum production standard required for an efficient farmer to earn enough net cash income to support a family and keep up his production level.
The problem of the dairy industry can be traced to farms which for one reason or another have not the potential to produce 8,000 lb of butterfat. Perhaps even more importantly, or just as importantly, a larger number of farmers have the potential to produce this particular quantity but are not doing so. It is quite possible that because of rising costs the figure of 8,000 lb should now be increased and that 10,000 lb of butterfat is the minimum required for a farm to earn sufficient income to support a farmer and his family.
The best advice I have discloses that approximately 5,500 out of 12,000 farms in the various States that have the capacity to produce more than 8,000 lb of butterfat are not doing so. In other words, the remaining 6,500 are capable, because of their management or technological or financial assistance, of helping themselves. Of these 5,500 farms it is estimated that 2,000 are located in Queensland and 2,000 in New South Wales, the two States which apparently have the largest number of submarginal farms. On the other hand, they have the largest number of farms with the capacity to produce above the minimum of 8,000 lb of butterfat. In Western Australia the number in this category is 800 and in Tasmania 300. In Victoria and South Australia the number is relatively small, there being about 200 in both States.
The best estimate I can get from the various technological authorities shows that approximately $18m will be required to solve the problems of these farms which have the potential to produce more than 8,000 lb of butterfat. Of this amount $8m needs to be spent in Queensland; $5m in New South Wales; $3m in Western Australia; $lm in Tasmania; and Sim in Victoria and South Australia. Some farmers may have to leave the industry for various reasons. It may be because the Government puts forward a proposal to amalgamate farms. It may be that the resources of the land and the water on these farms could be used more effectively for weaner and beef production. It is estimated that approximately 1,700 of the 3,000 farmers in this group will need assistance to enable them to get out of the industry. Most of these people are located in Queensland, the number in that State being 850. The figures for the other States are: New South Wales, 400; Western Australia, 120; Tasmania, 180; and in Victoria and South Australia fewer than 200. Estimates which I have been able to obtain show that about Si 7m may be required to help these people. This money will be needed to diversify, amalgamate or buy out the farms so that the land can be used for other purposes.
When considering the removal of the subsidy one cannot ignore depopulation factors. We are inclined to consider only the dairying industry itself, but if the subsidy or financial assistance is taken away from areas in which the dairying industry is concentrated there could be a marked decline of population, particularly in areas where the problems of the dairying industry are most apparent. This is shown when one looks at the economy of the towns supported by the dairying industries. It can be argued, if one wishes to argue on the side of decentralisation, that the dairy farmer is not the only person affected. The businessman and employees in such industries as the railways and the Post Office are also affected by the problems of the dairying industry. Their future is also at stake. In many areas, where dairy farmers sold their properties to beef producers, it was not very long before the population of the township started to decline. This has certainly been so in central Queensland.
No-one can deny that there is an urgent need for a plan to extricate sections of the dairying industry from the undesirable position in which, after twenty years of subsidy, they are continuing to languish in many areas. As I said before, we can grow dairy products in some areas at very close to the import parity price. It is well known that Australia can produce beef more cheaply than can any other country. We can produce wool and grain sorghums at competitive prices. Under large scale irrigation, we can produce cotton. One must ask then why. given technological help, we cannot produce dairy products at competitive prices. The answer, of course, is that we can do so in certain areas. The problems are not the same in all areas. In fact, it can be shown that the problems are peculiar to clearly defined areas. The Department of Agriculture and Stock in Western Australia has shown that the most important problem facing the marginal dairying industry in that State is the insufficiency of improved pastures. The New South Wales Department of Agriculture has denned the most important problem in northern New South Wales as the size of farms, coupled with severe nutritional distress in the winter and spring months. In Queensland the main problem is not the size of farms but nutrition and water. These are the three main areas that need help.
The honourable member for Cowper (Mr Robinson) ridiculed the suggestion that dairy cows in northern New South Wales are producing a low amount of butterfat per acre. I will now quote from the official figures given by the State Department of Agriculture. This is the best advice available and comes from surveys and from herd records. The figures demonstrate the severe nutritional problem in northern New South Wales. The surveys have shown that in the big scrub area the average butterfat per lactation is 190 lb and the production per acre is as low as 70 lb of butterfat. In other areas associated with big scrub, the average is 140 lb of butterfat per lactation and 50 lb of butterfat per acre. In the Clarence area, the average is 170 lb of butterfat per lactation and 40 lb of butterfat per acre. The figures for the Macleay area are the same as for the Clarence area. This illustrates clearly that the major problem in the area is nutrition. The natural pastures are kikuyu and paspalum. The major problem is the amount of dry matter in the winter and spring periods. In many areas, the investigational work of the CSIRO, the State Department and the Bureau of Agricultural Economics has shown that the lactation periods are less than five months.
I will illustrate the importance of the problem of the kikuyu and paspalum pastures. Evidence shows that with kikuyu in the period from July to October there is only 200 lb of dry matter per acre per month. The position with paspalum is worse. In July and August there is virtually no dry matter at all. From September to October the dry matter per acre is less than 200 lb. The inevitable result, of course, is that there must be a short lactation period. This is the problem that the State Departments and the CSIRO are now tackling. If possible, sub-tropical legumes such as the Clarence glycine desmodiums will be introduced into the area. This will give a more balanced pasture and produce more protein, particularly at the time when the cows are calving. It is well known that paspalum does not hay well. It can be argued that irrigation is the answer, but irrigation raises problems in some areas. The area and the conditions must be right if irrigation is to be successful. There can be no doubt that irrigated pastures result in an extended lactation period and the butterfat per lactation is up to 150 lb higher than that produced from paspalum and kikuyu pastures. This contention again is supported by evidence.
As I said before the major problems in Queensland are nutrition and water, and not farm size. Production on poor quality pastures follows a seasonal pattern. If the dairying industry in Queensland is to survive the nutritional problem must be solved. Already the work of the CSIRO and the State Department is showing excellent results. It is possible to solve the problem in south eastern Queensland, northern Queensland and the Atherton Tableland where pastures have been degenerating for years and also in the drier areas where the tropical and sub-tropical legumes do not grow. The problem in Queensland in a native pasture economy is that severe nutritional stresses arise in the winter and spring months. The animals are unable to obtain either the energy requirements or sufficient protein from natural pastures. The phosphorus content is very low. Poor results flow from the chemical composition analysis, net energy values, digestible co-efficients and the protein and mineral content. All the evidence points to the poor nutrition. This is the main problem of the dairying industry in central Queensland. For years we have witnessed a serious progressive decline in the productivity of pastures. We know from experience in the beef cattle areas, located contiguous to the dairying areas, that the progressive burning of grasses has resulted in the soft blue grasses ultimately being replaced by spear grasses. It has been shown conclusively that there has been a definite degeneration in terms of dry matter per acre in almost every area where the burning of pastures has been practiced.
In the areas of south eastern Queensland the major inferior native grasses to be replaced are mat grass, blady grass, bracken fern and groundsel. All of these are inherent to some extent in all the farms and are a major cause of declining productivity. Soil fertility has been shown in northern
New South Wales and in Queensland to be a major limiting factor. Even on the virgin soils of what is called the softwood country for example there are serious deficiencies of phosphorus, nitrogen, molybdenum and potassium. This has been shown repeatedly by the analyses of the CSIRO and the State departments, but the biggest advance made in agronomy in recent years in Australia has been the introduction of subtropical and tropical legumes. It already has been shown very conclusively by the CSIRO and by the State departments of New South Wales and Queensland that there is a great future for the introduction of sub-tropical and tropical legumes. I instance siratro, for example, which is one of the best legumes we have, and which is being developed. The silver leaf desmodium is another extremely promising legume in the higher rainfall areas of Queensland. In the more tropical areas, if they are frost free, Tinaroo glycine, is useful and, if they are not frost free, Clarence glycine.
The Labor Party supports the dairy industry and it supports this Bill, lt believes that the industry has the potential to become efficient in terms of the use of its resources in certain areas through improved nutrition and water, but it is essential that this Government gives concrete proof of its sincerity to help this industry by not waiting any longer to make provision, either in terms of finance, or in terms of progressive programmes, to overcome the inherent problems that have been experienced in the dairy industry for generations and which are still with it today.
– This is a very cosy little debate. The House is not on the air so the public is excluded, and there has been singular agreement between the Government and the Opposition. The Government proposes to provide a subsidy, or bounty if we choose to call it that, of S27m per annum for the next five years to the dairy industry, and the Opposition, through the mouth of its spokesman, agrees with this. But I would remind honourable members that there is another part to this plan, because by itself it is not a plan at all.
The Minister for Primary Industry (Mr Adermann) has indicated elsewhere that this subsidy for five years is to be associated with the kind of plan that the honourable member for Dawson (Dr Patterson) has been referring to; that is to say, a plan for the rehabilitation of the marginal producers in the industry. The Government has said that it proposes to come up with a plan during the next twelve monas. Therefore my friend, the honourable member for Mackellar (Mr Wentworth), has adumbrated an amendment with which the Opposition should agree - a very simple amendment. After all, the Bill comprises about six lines only, and the honourable member proposes - and I will support him - to delete the figure ‘1972’ and to substitute the figure 1968’. If the Government is coming up with a plan within the next twelve months let us see the plan. Let us meanwhile continue the subsidy as in the past, but then let us sec the whole plan.
The Opposition ought to agree with this proposal. It is anxious to know what the rehabilitation proposals are, so we say: let the subsidy run as at present for another twelve months and in the meantime the Government can come up with the plan and we can look at it in conjunction with the question of what we should then do about the continuance of the subsidy because the two may be interlinked. I hope the Opposition will follow to its logical conclusion the argument of the honourable member for Dawson.
– The honourable member has ignored what has been done in the field of research.
– I expect a few moos from the corner paddock, but I have to get on with one or two comments. I ask the question: Can Australia afford inefficient industries, in particular the dairy industry? Australia has been called a lucky country. It has been a very lucky country. It has been carried for generations on the sheep’s back and now it is being carried forward on the wave of mineral wealth. It has been singularly fortunate, but can it expect to be lucky for all time? Can industries be as inefficient as the dairy industry is without limitation?
What of the future? At the present moment the Leader of the Australian Country Party, the Minister for Trade and Industry (Mr McEwen), is negotiating over the Kennedy Round, but nobody expects that the outcome of those negotiations will bring very much comfort to primary pro ducing countries. This is speculation, but it is the best guess we can have at this time. Yet we propose to continue the inefficiency in the dairy industry at a time when the Kennedy Round offers little comfort.
We have on the horizon the entry sooner or later - and perhaps sooner rather than later - of Britain into the European Common Market. She proposed to enter it a short time ago and was rebuffed, but circumstances are different now. At that time the parties in Britain were not united. Paradoxically the Tory Party, which has always been the banner bearer of empire, was for entry into the European Common Market and the Labor Party was not; but today ali parties in Britain are united in wishing to get into Europe. However there is still another obstacle - the same obstacle that was there before, or is it? - General de Gaulle. There arc two facts about General de Gaulle that are worth mentioning.
– Only two?
– Two that are relevant to this question. First of all he has just suffered a great electoral reverse and this sometimes makes politicians think a second time. Secondly, he was an old man then, and he is rather older now. Indeed, the shadow of the angel of death may lie upon him. I wish him no harm. Therefore Britain may sooner or later - and perhaps sooner- enter the Common Market. This would follow the discomfiture that is quite likely to result from negotiations in the Kennedy Round.
What would British entry into the Common Market mean to the Australian dairy industry? In 1965-66 Australian butter production was 205,319 tons and of this 63.3% was consumed in Australia, 30.3% was exported to the United Kingdom and a mere 6.4% was exported to other countries. One does not have to know how to milk a cow to realise that a loss of 30% of the market is very serious - perhaps even catastrophic - for the dairy industry, yet at this time we propose to continue the subsidy in the next five years as in the last five yeaTS, and apparently to perpetuate all the inefficiencies to which attention has been drawn and which are known to everybody who has given even a cursory study to this subject.
There is another question. What would the entry of Britain into the European
Common Market mean to New Zealand? New Zealand is not remote from us. It is a small country across the Tasman. It has the same people as we have and it has the same destiny in the South Seas. New Zealand, like Australia, stands on the fringe of an awakened Asia. Are we to say that, if the entry of Britain into the Common Market could prove grave for us and quite disastrous to New Zealand, we would stand by and have no concern for what happens to New Zealand, or will New Zealand turn to us and, if she does, what will we do about it?
We have to all intents and purposes excluded from our markets one of New Zealand’s most important products. I refer to forest products. The commodity that New Zealanders produce most efficiently of all - their efficiency in this field is probably equal to that of the dairy farmers of Gippsland - is butter. Are we going to do anything about allowing them to export some part of their butter production to our country? We are supposed to have a free trade agreement with New Zealand. In a common market each partner produces that which he can produce most efficiently, and surely in the South Pacific region the history of Australia and New Zealand has shown overwhelmingly and irresistibly that we must achieve this kind of integration of our economies. We shall have to look to the question of allowing some entry - not ad lib entry, but some entry - of New Zealand butter into Australia. Yet while facing this obvious situation we are proposing to go on over the next five years as if that period will be the same as the last five years. How unreal can one be?
– The honourable member is being unreal.
– I am sorry to have to direct attention to these matters because I see they are bringing consternation to the members sitting in the corner. But not only do we have to cover whatever results from the Kennedy Round of negotiations; we must also take into account the imminent entry of Britain into the Common Market, and the impact of this development not only on us but also on New Zealand.
Then there is also on the horizon the figure of Mrs Jones. Are Australian producers of oil seeds to be handcuffed as criminals? Are they to be told they must not earn a living? What is it about the producers of oil seeds that distinguishes them from dairy farmers? The main distinction seems to be that one group is allowed to earn a living while the other is not. The product of the oil seeds is a spread which is equal to butter in nutritional value, is palatable to many people and is, or can be, far cheaper. The background to this dispute extends for a great number of years. Towards the latter days of the Chifley regime prices were rising and people who were in the pockets of poverty that still exist in our community were having to buy a more expensive table spread than they needed. My interest in this matter goes back to that time, and that interest remains today because there are still pockets of poverty in this country. Yet, despite increasing population the margarine industry has not been given an increasing share of the increasing market. Again I say that although Mr Canute Chaffey in New South Wales may try to resist the tide, this is a tide that cannot be resisted. Let us face reality. Somebody exhorted me a while ago to face reality; now I ask him to do just this. Margarine producers are going to have a share of the market. But still you say: ‘Ah, let us go on in the next five years as we have done in the past. Never mind these things that are on the horizon for anybody to see. After all, there are favourable factors in this situation’.
Well, let us have a look at these factors. First, there has been an increase in the Australian population and therefore an increase in the market for spreads, whether butter or margarine. It is expected that the population will continue to increase. Well, this may be so, the pill permitting. I do not know. But let us assume that the population will increase. This has been offset by a decline in the per capita consumption of spreads - I use the word to include both butter and margarine. Let us have some figures. In 1955-56 the Australian consumption of butter was 29 lb per head and of margarine 3 lb, giving a total of 32 lb of spread. In 1964-65, nine years later, the consumption of butter had declined to 22.6 lb per head and the consumption of margarine had increased to 4.5 lb per head, giving a total of 25.1 lb of spread. So if the population increases but the same trend continues with regard to the consumption of spreads, you cannot look for much hope in this direction. Of course, the fact mat the retail price of butter in Australia is 52c per lb as against 25c in New Zealand could have something to do with the decline in Australian consumption and with the fact that the consumption in New Zealand is 43 lb per head. There may be some lesson in this for dairy producers.
Then another ray of hope is pointed to. Let us examine this also. It is the diversification of markets and of dairy products that can be sold in those markets. Yes, there is Japan, with a growing economy, where there may be prospects in time. Then there is India. It may be that the people of India will be able to afford this luxury some day. A lot of Australians cannot afford it now. Then let us consider the diversification of products and the kinds of dairy products we can sell in Asian countries. In 1961-62 our exports of sweetened condensed milk amounted to 16,000 tons, and in 1965-66 they totalled 19,000 tons. Some increase has been effected. In the same period exports of milk powder increased from 15,000 to 18,000 tons. Exports of ghee - I use the Asian term - increased from 1,000 to 1,500 tons. Well, the trend is all right, but look at the quantities. This is mere chicken feed. It is nothing at all. I mentioned earlier the small amount of butter that went to countries other than the United Kingdom. It may be that in these directions we can in time look for some assistance. It will not be in the short term or even in the medium term. The best we can say is that in the long term there may be some hope. Looking at the hopeful prophecies that are made about increasing population and about the diversification of markets and products is a bit like looking at the old picture of hope symbolised by a girl leaning over a harp and listening to the last faint sound of the note she has played - and looking more like despair than hope.
Now let us take a look at the lunatic arithmetic of the dairying industry. I do not know any appropriate term for it which would be any milder than lunatic arithmetic, for that is what it is.
– Will the honourable member include the Sydney milk zone in his analysis?
– I would love to do that if I were given time. But let us first examine this arithmetic. We will study first the return to the grower under the equalisation scheme. The return to the grower from the current local price is 40c per lb. The return from the current United Kingdom price is 23c. The equalisation return, which is in effect the weighted average of those two, is 31.2c per lb. The bounty adds another 5c, so that the overall return to the producer under the equalisation scheme is 36.2c per lb of butter. The loss sustained on exports therefore is 17c per lb, of which 5c is met by the bounty. In other words the real loss is 22c on every lb of butter that we export. I used the phrase ‘lunatic arithmetic’ and I repeat it. The conclusion is that the more butter we export the lower is the return to the producer and the louder the clamour for increased assistance from the taxpayer. This is plain and simple fact.
Continuing with this arithmetic, while the Australian consumer pays 52c per lb retail for butter, the English consumer pays for the same butter about 33c per lb. There are many people deserving of charity, aid and generosity, and I can think of others who might deserve it more than the British public. The Australian consumer, besides paying in total, in 1964-65, $3 3m more than he would pay at export parity, also provides, as a taxpayer, the annual bounty of $27m. Thus Australians subsidise butter producers to the tune of $60m per annum. What are the great advantages of this industry? First of all, it provides direct employment for a large number of dairy farmers and indirect employment for many others. Let me make it abundantly clear that nobody is talking about abolishing the dairy industry. This debate focuses on the reference by the honourable member for Dawson (Dr. Patterson) to the marginal producer. Nobody is talking about abolishing the dairy industry. So when one speaks about the advantages that accrue to the country from the employment given by this industry to the population, this is unaffected by any proposals that come from any sane member who looks at the industry. The number of farms involved in any reconstruction scheme would not be more than 3,000 to 5,000. The figures given by the honourable member for Dawson agree with mine. As I said, of a total of about 60,000 or, if one wants to be pernickety, about 61,000, only between 3,000 and 5,000 farms would be affected.
Those involved in the scheme would be better off rather than worse off. Many people on dairy farms are having a miserable existence. They and the nation would be better if the farms were taken from them.
Many members of Parliament lose their seats and must reconstruct their lives. There is no reason why they should be unwilling to see other people in another occupation or industry reconstruct themselves. Indeed, I would say that adaptation to changes is the law and history of life on this planet. The only place where there is no adaptation is the cemetery; but I would not like to see the dairy industry consigned there. Some honourable members on the corner benches seem to want it to go there.
Another argument advanced is that the dairy industry not only creates employment but also creates foreign exchange. In 1965- 66 the proceeds from the export of dairy products were of the order of $90m.
– They amounted to $104m.
– Well, S 104 m. I said they were of the order of S90m. Let us split the difference and say they amounted to $100m. That makes no difference to my argument. The bounty costs $27m and the home consumption price costs S33m. So a total of $60m was paid by the Australian public, whether as taxpayers or consumers, to earn $ 10Om of exchange. I would agree that $1 of exchange is more valuable than $1 of local currency and that we need exchange for the imports we must have, but this is rather a high price to pay. Wool, meat, minerals and even secondary products such as steel do not cost this to earn foreign exchange. Surely we can get foreign exchange more cheaply than by paying subsidies of this order.
The whole matter comes down to the final point that there must be a reconstruction scheme to deal with the marginal producer. I am sure that my friend the honourable member for Mackellar (Mr Wentworth), who is not inarticulate, will give a full explanation of the amendment which he proposes to move and which I propose to support. I have every confidence that members of the Opposition, having heard what the honourable member for Mackellar and I have had to say, will agree with me. Obviously, the logic is inescapable. Perhaps honourable members opposite Will escape, but not by any logical route.
I turn now to the report of the Dairy Industry Committee of Inquiry, which was tabled in this House in November 1960. At page 115 under the heading The Overall Interests of the Nation’ - I am a little concerned about the overall interests - the Committee made a statement of great significance. If Hansard did not have such a restrained way of publishing material, I would like to have the statement printed in bold type and underlined. I would also like to have it framed and placed, at the expense of Parliament, in the room of every Country Party member. This is what the Committee said:
The high level of excess cost of the industry to the nation, represented by the level of domestic prices and the measure of direct assistance, whilst failing to give permanent relief to the section of the industry most in need of assistance-
That is not in Gippsland - has increased the income-earning capacity of the stronger units, inflated the values of farm properties, and encouraged rather than arrested an undesirable cost trend.
This cost goes info everything produced in this country, as the honourable member for Dawson has said. The statement of the committee is a succinct way of putting the matter, and there is no argument against it. These arc the facts and they cannot be denied. The McCarthy Committee, as it is commonly called, made certain recommendations. I will not read the first recommendation, as it is not relevant to this matter. The recommendations were as follows:
I do not propose to read the figures, but they propose assistance beginning at the figure mentioned in this Bill. The amount proposed was £13. 5m, which is the same as the $27m mentioned in the Bill. The Committee recommended that this should decline year by year over the ten-year period of reconstruction to the nominal sum of $4m in 1969-70. The difference is that now we are proposing again, as in the past five years, to give $27m a year without there being any diminution over a period. The report continues:
That the form of assistance gradually move from bounty on production and be replaced by -
That the division of assistance between bounty and the methods mentioned in recommendation 4 be on approximately the following basis:
The basis showed a bounty gradually declining from £13.4m to £lm over the ten-year period. As to other assistance or grants of the kind mentioned in the report, the Committee envisaged an increase from £100,000 in the first year to £5.5m six years later, declining again to a nominal sum of £lm at the end of a ten-year period. The report continues:
The honourable member for Dawson said this might be 10,000 lb now-
A further recommendation was:
That financial assistance in recommendation 7 be made available for purposes of -
The essence of the whole thing is this: What is to be done about the marginal producers in order to make this industry efficient? I hope I have said enough to indicate that there is a clamant need for the industry to be made efficient.
In a letter which he wrote to the ‘Canberra Times’ on 6th March 1967 the Associate Director of the Forestry School of the Australian National University had certain things to say which I shall read. I do this simply to give an example of the kind of reconstruction which could happen. It is not the only kind, but it is one which deals with the problem. This is what he said:
The Commonwealth Government has, since the agreement was signed, launched into a forestry programme aiming at future self-sufficiency. . . New Zealand can produce butter better than we can, the Australian housewife would be $30m better off-
I say it would be more than that- and New Zealand would be offered a vital outlet in view of Britain’s impending entry into the Common Market.
He is not the only one who has thought of that; indeed, it is obvious. The writer of the letter went on to say:
But the spectacular success of the Woods and Forests Department of South Australia has shown that of the various forms of land use involving areas of the order of millions of acres, none can offer prospects comparable with softwood afforestation.
He quoted that department as an example. He went on to say:
The department functions as a normal commercial enterprise financed by loan money at current rates of interest. It has settled a family to twentyfive acres and shows a surplus of about $2m a year. And it has had available to it only land that was agriculturally doubtful or worse, and at 300 miles from its Adelaide market.
Then he said:
The social problem is indeed the crux of the butter difficulty, and until a solution is found for displaced dairymen neither will a genuine free trade agreement eventuate nor Mrs Jones get a chance at open competition with Daisy. A quick solution would be the absorption of dairy farmers of the more depressed areas in State afforestation projects- set up to solve the two problems with one dollar. In fact, this very thing is happening. Unimproved grazing land is being repurchased for forestry purposes and the money has given the former landholder the first opportunity he has had to set his family up in a home in the country town, and he has got a job in forestry.
I do not want to labour this matter nor would I have the time to do so. It is perfectly obvious that this Bill should have a currency of one year during which the Government should come up with a scheme of reconstruction so far as the marginal producers are concerned, and at that point of time we could look at the whole matter afresh. The Government has had five years to do this and it has not done it yet. Well, let us give it another year.
– There are only two things I want to say in regard to the speech of the honourable member for Bradfield (Mr Turner). Firstly, I would say that if he was to follow his argument to a logical conclusion he should advocate the abolition of the dairying industry altogether and not merely support an amendment that this assistance should be extended for only twelve months. I cannot follow the line of his argument or of his reasoning. He quotes from a report which recommends certain improvements and refers to steps being taken in regard to some of the marginal areas, a report which actually suggests a period of ten years. Irrespective of that suggestion, he now literally turns round and says that this matter can be solved within twelve months.
The other thing I would say in regard to this matter is that he perhaps should support the abolition of all tariffs, of all protection and of all the things which increase costs of primary production and over which the primary producer has no control. If the honourable member would support that as well, then there might be some logic in the arguments he puts forward. If he does not support it, I say quite frankly that there is no logic in his arguments. The speech of the honourable member for Dawson (Dr Patterson) and that of the honourable member for Bradfield illustrate why in certain areas the dairying industry is facing some of the problems it is in fact facing.
We have in many instances pointed to factors in the problems of primary producers. I think perhaps it might be just as well to read portion of the speech the Minister for Primary Industry (Mr Adermann) made in presenting this Bill. The Minister said:
As an clement of each of the five-year plans which have operated over the past twenty years, successive Commonwealth Governments have provided a production bounty for the benefit of the Australian dairying industry. Such a provision is regarded as being a sound investment in a vital area of primary production. The aim of the bounty is to maintain at reasonable levels the cash return* received by dairy farmers who supply milk and cream for manufacturing purposes. Moreover, the fact that the farmers receive such returns through the operation of the bounty means that the prices of butter and cheese paid by Australian consumers can be held down to levels that would otherwise not be possible. The dividends from the provision of bounty can be clearly seen in in creased production, improved productivity and increased foreign exchange earnings from the export sales of our dairy products in the face of the keen competition that exists in the international trading of these products.
Later I want to mention something in regard to our international trade and our relationship with other countries. A factor on which the honourable member for Bradfield commented was the possible entry of the United Kingdom into the European Common Market. Frankly, I think this would be a fatal step for the United Kingdom to take. I feel that those in the United Kingdom who have had a look at this matter have not really looked at its complexity and the problems associated with it. When I look at Europe at present with its increased productivity, with its modern machinery, and with many of the other factors associated not only with primary industry but also with secondary industry, I do not think that proper attention has been paid by some of the people in the United Kingdom to the problems associated with this move. However, one of the factors the honourable member for Bradfield and other critics of this assistance to the dairying industry have mentioned constantly is inefficiency in the dairying industry and particularly in marginal areas. I will have more to say about this later on, but I think that this is a bogy. It has been put forward so many times and has been shown to be incorrect on a number of occasions when we have spoken in relation to this industry over the years: also, a number of illustrations have been given in regard to it by leaders of the industry itself.
In recent years there has been an increase of 31% in the cost structure. The honourable member for Dawson said 40%.
– I said 31% increase in the price index and 40% in the basic wage.
– I thank the honourable member. This increase has been absorbed by the dairying industry with an increase of only 1 ] % in prices. Surely to goodness it is an indication that it is an efficient industry when it can absorb so much of the increased cost of production with, as I have said, an increase of only 11% in prices. Many factors are related to this problem of the dairying industry. I think it is wrong to say that no steps have been taken by the Government in regard to it. Steps have been taken, and assistance has been given by the Commonwealth Bank. The Government has provided term loans and farm development loans. These moves have been taken to assist in marginal areas so that, by means of improvements and through research, producers can increase productivity while reducing costs.
I feel that this aspect has not been given proper attention. In many instances finance has been made available to the primary producer at a rate of interest that has not enabled him to gain the maximum benefit from the research and from the new developments in the industry. I consider that this is something that will need to be looked at more closely so that the maximum benefit may be obtained from the finance made available.
Sitting suspended from 6 to 8 p.m.
- Mr Speaker, before the suspension of the sitting I was about to comment on the amendment to be moved by the honourable member for Mackellar (Mr Wentworth) and on certain remarks that were made by the honourable member for Dawson regarding the dairying industry and the Bill before us now. I mentioned the criticism in relation to the so-called inefficiency of the dairying industry. I indicated that I am getting a little tired of hearing this constant charge of inefficiency levelled at the dairying industry. There was a most interesting segment on ‘Four Corners’ at the weekend which dealt with tariffs. The honourable member for Yarra (Dr J. F. Cairns) was asked whether he would give tariff protection to an inefficient industry. Categorically he said yes. There was no hesitation about his answer at all. I spoke earlier about increased costs which have been inflicted on the primary producer, costs over which he has no control, such as those caused by tariff protection given to secondary industries. I have no objection to this protection being given provided it is examined in the correct perspective. Members of the Government Parties, particularly members of the Country Party, and honourable members from country electorates, realise the importance of the domestic market for our primary products. If continuing employment and financial return is pro- vided to those employed in secondary industry, the people employed in turn purchase the products of the primary producer. So to that degree we have no objection whatever to tariff protection being given to secondary industry in order to allow secondary industry to become established.
The question of giving tariff protection to an inefficient secondary industry raises another question. The honourable member for Yarra went on to say that he would give this tariff protection where it was required - where it was necessary to provide employment, where it was necessary to sustain a secondary industry and where it was necessary to make a contribution to sustaining a provincial town. This, to my mind, made most interesting listening. While that attitude is logical, and these factors make a contribution to the economy of Australia, I cannot for the life of me understand people who constantly advocate that this sort of thing be done, apparently without limit. Protection of this sort increases costs to the primary producer, yet the moment the primary producer receives any assistance whatever the protectionists are the first people to talk about financial assistance being given to inefficient primary industry and say it is not justified. This is not logical, or sensible, lt is completely unreasonable. Therefore I argue against it every time it is put forward.
I would ask people who put this argument forward to come into my electorate and tell the people there that they do not want them to have any protection at all, whilst they are prepared to give all the protection in the world to the industries which are increasing the costs of the primary producer. If the honourable member for Bradfield is going to talk about the cost of production of the primary producers, let him say to them that they can import their machinery, clothing and all those other things necessary for them, from the lowest cost market.
– Let him import his labour too from cheap labour cost areas.
– My friend the honourable member for Moore says that if this argument were followed through to its logical conclusion the primary producer would also import his labour from the same low cost market. The point made by my colleague, the honourable member for Moore, illustrates the idiocy of the argument put forward by these people who oppose this assistance being given to the primary producers, and their failure to accept logic. The assistance being given to primary producers lowers the cost of living. I remind honourable members that arguments that people on the basic wage cannot afford to buy butter, and such products, are taken into account when judgment is given on the basic wage. So this particular argument, too, does not hold water. Like all such contentions, it is illogical. If you follow the arguments through they just do not stand up to analysis. 1 intimated before the suspension of the sitting that the prices received by the dairy farmer had risen by 1 1 % and that he had absorbed increased production costs to the tune of 31%. This is indicative of the contribution that the primary producer is making. Yesterday in this House we discussed, as an urgent matter meriting discussion, overseas capital investment in Australia and Australia’s overseas balance of payments position. This was touched on briefly tonight by the honourable member for Bradfield. I do not think his argument held up, but he did mention the matter. But if we are going to talk about overseas investment in Australia, and of our balance of trade, let me say to those who are so critical of the primary producer that the economic foundation of Australia is its primary production. If we ever lose our primary industries and what they produce the economic stability of Australia will be in danger.
Current production of our dairying industry is now worth $415m a year. Capital investment in the industry is something like $ 1,400m. Directly and indirectly the industry supports 600,000 people. It gives direct employment to over 100,000 people. It assists secondary industry in many ways, such as providing a market for containers for packaging, and machinery. We talk about decentralisation and about trying to get people out into country areas; we talk about the tremendous costs and wastage caused by our cities becoming overpopulated; but surely it is not very sensible to talk about those things on the one hand and on the other to support actions that would undermine one of the basic industries which is helping us to answer this problem of decentralisation.
Honourable members know that the Minister for Trade and Industry (Mr McEwen) is overseas at the moment attending a very important conference relating to the Kennedy Round. The honourable member for Bradfield spoke in terms suggesting that we could not expect very much to come out of these discussions. Let me say that right now the Asian countries are looking to Australia - and I have just recently come back from a visit to Asia - to take a stand at such conferences which will benefit not only Australia and New Zealand but also some of these newly developing countries in Asia and elsewhere. We can trade with the major industrial countries, the United Kingdom and the United States of America, and we are regarded as the spokesman for many of the newly developed countries. They feel that we can put their case for them. They feel that our arguments are arguments which will also sustain theirs. Just recently there was a meeting of the Economic Commission for Asia and the Far East. At that conference it was mentioned that these newly developed countries in Asia need - and I have used this expression before in the House - a place in the sun with the major industrial countries. We must impress upon the United States, the United Kingdom and many other European countries that there is not much sense in giving Sim in aid to some newly developed country, only to allow the value of its products on the world’s markets to drop by $2m, thus leaving it worse off by Sim. In all international trade discussions this factor must be understood and accepted. It must be understood and accepted by what I might call, for the sake of differentiation, the major industrial nations. We must impress upon those countries the need not to give handouts to primary producing countries in need of assistance but to allow them to obtain for their primary exports a return which will enable them to sustain their economies. It is in this respect that the primary producers of Australia make a very valuable contribution to Australia’s economy. It is upon this contribution that the economy is built. The money earned overseas by the sale of our primary products sustains our secondary industries because it enables them to purchase the things they require in order to function. Let us never forget this.
Secondary industry will be of tremendous significance in the future development of Australia. Vast new mineral deposits are being discovered. These will be of tremendous value domestically as well as providing us with valuable overseas earnings. But if Australia were to be exposed in open competition with the already established industrial countries and without the protection and the buffer that we now have from our primary industries, I should hate to think what would happen to our economy. In our trade negotiations with these countries in respect of agricultural products we have seen what they would do, given the chance. I suppose their actions are natural; they are out to gain every advantage they can. If we are to battle with these giants - we have been doing pretty well in recent years - we need the protection and the buffer not only of our increased secondary industry but also of our primary industry. So to those who advance the proposition that our primary production is not of value I say: Look at what has happened on the international scene.
Let me refer now to the contribution made by the dairy industry towards research. A look at the statistics will show that the traffic has not been all one way. It has not been a case of the Government making contributions without any contributions coming from the industry. To date the industry has contributed $2m towards research. This is no small contribution. It is obvious that the industry as well as the Minister is concerned with the problem of farmers in marginal areas. I think everybody is aware of this problem. One of our mistakes in handling this problem has been that we have made finance available in certain circumstances sufficient only to sustain the farmer in production but not sufficient to allow him to benefit economically from that increased production. I do not suggest that the remedy always is to make more finance available, but finance should be made available at a lower rate of interest. Research has been undertaken by the Government and the industry into the problems of water conservation and the development of new legumes. The latter matter was referred to by the honourable member for Dawson. One of the handicaps with which we have been faced in New South Wales - I say this quite frankly - has been the length of time during which a Labor government was in office. During this time the farmers in the marginal areas did not receive assistance sufficient to enable them to develop satisfactorily. The honourable member for Bradfield referred to Asian markets. A good deal has been done, not only in finding export markets but also in assisting the development of countries of Asia. I refer to the dairy plants provided by the Australian Dairy Board for the Philippines and India. By these means we are helping not only the countries concerned but also the industry in Australia.
Having regard to all the facts, I submit that the dairy industry in Australia has a future. Australia’s population will increase. There will be an increased domestic market. This will assist the industry. We must face up to the situation and assist the industry now so that it may function satisfactorily and be able to take advantage of future developments and new factors. For all these reasons I wholeheartedly support the Bill. I am utterly opposed to the amendment foreshadowed by the honourable member for Bradfield.
– Mr Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– Yes. The honourable member for Lyne (Mr Lucock) claimed that I had said that the problems of the dairy industry - problems which the McCarthy Committee considered would take at least ten years to solve - could be solved in twelve months. I did not say that and I hope that the allegation will not be repeated. I said that the Government proposed within the next twelve months to produce a plan for dealing with marginal producers - a plan which might indeed take ten years or twenty years to bring to fruition. I have never denied this. I hope that there will be no more misrepresentation; no more allegations that I think the problems of the dairy industry can be solved in twelve months. Of course they cannot, and I have never said they could.
– It is five years since a measure similar to the one now before us was brought down, so it is understandable that tempers are inclined to fray. This Bill does not differ greatly from the existing legislation. Perhaps those associated with the dairy industry have become more conscious over the past five years of the problems they face and of the need to put their case before the people. This may be the reason why there is a greater wealth of information available to honourable members participating in this debate than there has been in other debates. We may be able to thank Mrs Jones for some of this. I am sure that the margarinebutter issue has given many people cause to think.
The Bill does no more at this stage than extend for a further five years the existing level of subsidy of S27m a year. It is relevant to point out that most countries which export butter - New Zealand is perhaps the notable exception - subsidise their dairy industries. Last week in the United States of America moves were being made to place further restrictions on the import of dairy products into that country. The United States wants to raise a further protective barrier against us. We in Australia depend to a large extent on our exports of butter to the United Kingdom. In fact, 83.8% of our butter goes to that country. There is very good reason therefore why honourable members should be concerned about possible effects on the dairy industry if Britain were to join the European Economic Community and we were to lose part of this market. It is interesting to realise that for every dollar that is paid in subsidy $4 is earned in export income. That is quite a reasonable return.
The Minister did not deal very fully with the Bill but he did foreshadow a few arguments that would be raised in this House and a few amendments that might be moved later to assist dairymen, particularly those in marginal areas. Also for no particular reason that I could see, unless it was a mischievous one, he referred to the margarine dispute and margarine quotas in the various States.
– I did that just to find out where the honourable member stood on the issue.
– I thought that was so. I know that the Minister supports the principle that the States should have the responsibility for fixing these quotas. The only way that he comes into the issue is as the Chairman of the Australian Agricultural Council. At meetings of the Council the Commonwealth either supports or disagrees with particular propositions. Apart from that I do not think that the Commonwealth has any great responsibility in the margarine dispute. I am not suggesting that we should dodge our responsibility, but I do not think that margarine quotas have anything to do with the measure we are discussing tonight.
– I was asked whether we would be having a debate on the margarine issue and I said that we could debate it when we were discussing this Bill. I am interested to see whether the honourable member agrees with his colleagues in New South Wales.
– If my recollection is correct it was a New South Wales Labor Government that took action against the offending margarine manufacturers.
– Now the Labor members in New South Wales are supporting the margarine manufacturers.
– The Minister has been in this place long enough to know that it was the Australian Labor Party that first introduced the payment of a subsidy to the dairy industry back in 1942.
– The industry did not want the subsidy then.
– I think I may be excused if I were to tell the honourable member for Gippsland (Mr Nixon) that he probably would not remember what took place in 1942. Today the dairy farmers are getting very close to the position they were in in 1942. Many farmers today are in very dire straits.
Recently I spoke at a Queensland Dairymen’s Organisation branch meeting. After the meeting one farmer said that if he knew what was going to happen in the next ten years he would stick with the industry. Personally I do not know what is going to happen. It is a relevant fact, I think, that in the last three years of the regime of the Country-Liberal Party
Government in Queensland more than 1,000 dairy farmers have left the industry. Some might say that it might be a solution to the problem if we were to starve them out or get them to walk off their properties. But this is not what the representatives of the dairy farmers want. The Government encouraged the dairy farmers to go into production. The farmers believe that it is the Government’s responsibility to assist them now when they find they cannot continue economically. The dairy farmers who arc in this parlous condition say that if it is necessary for them to transfer to some other industry, to extend their properties or to be given the assistance of cheap finance to improve their properties, the Government should make this assistance available.
The honourable member for Bradfield (Mr Turner) referred to members of Parliament who find themselves suddenly dropped in a pre-selection ballot or’ who are not re-elected and who have to find another position for themselves. I think the Government’s attitude to the dairy farmers is not much different from its attitude to defeated members of Parliament. I recall an incident in 1962 not long after I came into the Parliament. The Queensland Sugar Board decided that no more bagged sugar would be shipped from the wharf at Urangan. At that time there was a force of almost 200 waterside workers at Urangan. The decision of the Queensland Sugar Board meant that Urangan would be closed as a sugar port and that these men would have to find jobs somewhere else. Representations were made to the present Treasurer (Mr McMahon) who was then the Minister for Labour and National Service. I have a copy of the reply he sent to Mr Fitzgibbon. He wrote:
I am sure that you will appreciate my sympathy with the problem and that of the men concerned, particularly in view of the change in policy on the part of the Queensland Sugar Board. I have examined sympathetically your proposal for financial assistance for the men at Urangan and in respect of those who have already transferred to Brisbane.
He went on to say that the problem was that there were surpluses of men elsewhere and that it would hardly be in keeping with the idea of limiting port strength to members, thus enabling the men to get a good living, for the Government to agree to the
Australian Stevedoring Industry Authority financially assisting men to transfer to a port already having more men than were needed. He added:
To do so would be contrary to the policy followed when other Queensland ports were affected by sugar industry development.
In other words, the Commonwealth Government denied any responsibility. I hope that there has been a change in the Commonwealth’s attitude. I believe that it is very much needed.
I mentioned a moment ago that the subsidy earns $4 for every SI that is paid by the Commonwealth. It is interesting also to note that, although fewer people are employed in the dairying industry today, production has increased. There has been an increase of 12% in Victoria and Tasmania. Unfortunately, Queensland and northern New South Wales - particularly the areas outside the milk zone - have suffered from drought, with the result that production has fallen. The average production per cow throughout the whole of Australia, however, has increased. This is due, I think, to the fact that people associated with the industry have awakened to the need to improve their stock. They have realised that to stay in the industry they need to improve their properties and their stock. The dairying industry, together with the Commonwealth Government, has contributed to research, in fostering artificial insemination and in combating various diseases in cattle which affect production.
Fewer people are required in Australia today to produce a gallon of milk than are required in most other countries. This is a tribute to the dairy farmers generally; it gives the lie to those who say that this is an uneconomic industry. Reference has been made to the fact that this is a decentralised industry and that it maintains in country towns a large number of people whose work revolves around the butter and cheese factories. Those people would not be there in normal circumstances. For this reason I believe the industry deserves support. In fact, some people associated with the industry think that the support should go much further. They contend that the subsidy has not risen at the same rate as the cost of living and the cost of production have. However, we of the Australian Labor Party are willing to give our support to the industry. We reject the suggestion that the subsidy should be extended for only twelve months. If the industry is to receive assistance, the dairy farmers should be able to look a little further ahead than twelve months. They want to know where they are going. The dairy farmer has said that if he knew he would be better off in ten years he would stick with it. He has done this and, like Micawber, he has been hoping that something will turn up. Nothing has turned up yet, and the question now is: How much longer will he stay on? If assistance is extended for a period of five years, the dairy farmers will be able to plan and they will have some guarantee for that period.
The Minister in his second reading speech mentioned assistance to marginal areas. He said:
The Government has agreed in principle to assisting the industry with respect to the problem of the marginal dairy farmer but the ways in which this help can most effectively be given have yet to be worked out.
The honourable member for Bradfield referred to the McCarthy report. It took a long time for this report to be presented to the Parliament and it has taken a long time for the matters raised in it to be considered. The people associated with the industry have been encouraged to engage in dairying. They have received encouragement when seasonal conditions have been against them. In these circumstances the Government, which encouraged them to go into the industry, has some responsibility to assist them to move out of the industry and find employment elsewhere or to improve their properties. Properties cannot be improved without money. But a dairy farmer who approaches a bank manager these days must have a very good case before he will receive assistance. The honourable member for Dawson (Dr Patterson) dealt fully with the methods of pasture improvement. Quite often this has been done by professional men who are using part of their large incomes to improve their assets. In fact, for this purpose they are using money on which they would otherwise pay taxation.
– They are Pitt Street farmers.
– They are Pitt Street farmers or gentlemen farmers. A gentleman farmer was described to me as one who raises only his hat. These people have been able to improve their properties because they have capital. If capital were also available to the ordinary dairy farmer, the battler, he would be able to come through too. But at what cost? He is not earning a high income and he cannot plough any of his income back into his property. So he must look for cheap finance. I was pleased to hear the honourable member for Lyne (Mr Lucock) stress the need for cheap finance. But if dairy farmers must undertake work that will take quite a few years before it is productive, they must know where they are going.
It is pleasing to note that the Australian Dairy Produce Board has been seeking markets in countries other than Great Britain. For instance, the sales of butter to Peru, though only of a small volume, have shown a substantial increase. I was a member of a delegation that visited Peru two years ago. People there told me that when they went to the supermarkets they looked for Australian butter because they recognised the quality of it. Some eighteen months earlier, a trade commissioner, Mr McRoberts, was appointed to Peru. I believe he has now been transferred. He did a very good job in promoting Australian products in South America. The sale of butter in Peru increased from 100 tons in 1960 to 2,000 in 1965. However, we strike a shipping problem with this market, because we have only eight or ten services a year to Peru. It is all very well to establish a market, but unless we can get supplies regularly to the market we stand a very good chance of losing it.
Much has been said about ways of helping farmers to improve their properties. I remind honourable members on the Government side that the Australian Labor Party introduced a subsidy on superphosphate in 1941. It was abolished by the LiberalCountry Party Government in 1950 and was not restored until 1963. Many things happened in 1963. The Government had quite a change of heart on many subjects in 1963, and this was for a very good reason. All these benefits were given just prior to a snap election that was held in that year. Until then the Government had staggered along with a majority of one and it maintained its position by refusing to give full voting rights to the honourable members for the Northern Territory and the Australian Capital Territory. For all the years between 1950 and 1963, the Australian Labor Party at each election promised to restore the superphosphate subsidy if returned to office. For all these years the dairy farmers were denied the benefit of the subsidy. It is not often that we find agreement between the Australian Labor Party and the Australian Country Party and some members of the Liberal Party.
I want to make it quite clear where the Australian Labor Party stands. We introduced subsidies in 1942. The former member for Lalor. Mr Pollard, who was a Minister in the Curtin Government, introduced the Dairying Industry Assistance Act in October 1 942. It provides a subsidy for supplies of milk and cream to cheese and butter factories. For (he twelve months to 30th June 1943, the subsidy amounted to £1,500,000. This was introduced in 1942. Again in 1943 Labor gave assistance to dairy farmers. The subsidy was increased and for that year totalled £7,346,120. In 1944-45, the subsidy was given for a period of two years. In the first year it amounted to £6,812,000. Then in 1947 a five year plan was introduced for the first time. This was based on a cost of production figure of ls I J id a lb. The subsidy was designed to give a return on cost of production. The subsidy was not only to help the producers but also to aid the consumers by reducing the price of the commodity to them. At the time the measure was introduced butter was priced at Is 8d or ls 9d per lb in the capital cities. So the Australian Labor Party has a proud record of assistance to this industry and for (his reason it is pleased to support the bill.
– In supporting this measure I put forward an amendment which should commend itself to the House. I feel that the Government has no cause for pride in the present position of the dairy industry. I am not going to talk principally about the national interest, although that might well be spoken of, but I am going to talk about the way in which the Government’s lack of policy has betrayed the dairy farmers, because I do not think that what has been done - or, rather, what we have failed to do - has been really in the interests of the dairy farmers. We have no cause for pride, because in many areas of Australia - and I speak not about the lush southern areas but about the northern areas, particularly of New South Wales and Queensland - we have a large number of farmers living in marginal misery, and this is wrong. We do not want to have people living under these conditions.
These dairymen are working very hard; they are barely making ends meet. If they are to remain in the dairy industry as it is then they will continue to have a bad and a poor life. I put it to the honourable members who represent these seats that they should not be advocating a course of policy which will mean that these people - their constituents - are going to remain poor for the rest of their lives. 1 want to see a position in which these people in these electorates are rich,’ because they live in rich electorates. These are poor farmers - and I do not mean poor in efficiency - living on rich land. The Government policy which has brought this about is surely a wrong and bad policy, and it is bad for the people who are living in these electorates and who are being cozened into supporting a policy which is against their own interests.
But this is not the main danger. The main danger is that it is about an even money bet that Great Britain will enter the European Common Market within the next three years. This may happen; it may not happen. However, I think honourable members would agree that it is a reasonable even money bet. What will happen if Britain goes into the Common Market? I should like honourable members to look at figures. There is virtually only one importer of butter in the world, and that is Great Britain. She imports not only our butter, but also New Zealand butter. A few years ago when Britain was thinking of going into the Common Market it was said that she would make special arrangements to protect at least the interests of New Zealand. This has all gone under the table now. If Britain goes into the Common Market within three years then the position of the Australian dairy farmers will become utterly untenable. They will face bankruptcy because their product will be unsaleable. Not only the 60,000 tons or 70,000 tons of Australian butter that goes to the United Kingdom market every year is involved, but also the 170,000 tons or 180,000 tons of New Zealand butter. This cannot be absorbed in the world markets. So we put our dairy industry - not only our marginal industry but also the industry on the lush pastures - in a position of utmost jeopardy. I put it to honourable members who support this kind of thing that it is not in the interests of their constituents to run them into these unthinkable risks. I ask them to consider carefully what they have failed to do and perhaps to consider even more carefully what they are proposing to do. The warning signals were hoisted.
The report of the Dairy Industry Committee of Inquiry on the Australian Dairy Industry - the McCarthy report - was brought in about seven years ago and it advocated adjustments in the industry. They were not adjustments to hurt the people: they perhaps would have hurt some of the vested interests in the dairy co-operatives which are far too prominent in a certain political organisation. I say quite definitely that the McCarthy report was a way of rescuing these producers from their marginal misery and of rescuing the Victorian and Tasmanian dairy farmers from the kind of peril that they now face if Britain enters the Common Market. The McCarthy report talked about Government assistance - and I advocate Government assistance - to help the dairy farmers. I am advocating a great deal more to help the dairy farmers than some of their professed representatives are advocating.
I advocate financial assistance to help the dairy farmers to get out of their present way of production. I am speaking mainly of butter production; I am not speaking so much of the production of other dairy products. I do not believe that these adjustments can be made quickly. I know that they will take time. I know that nothing we do can retrieve for us the seven years that have been lost since we received the McCarthy report. This report was presented in 1960 and it was in 1962 that we adopted, unwisely, in this House a five-year plan. Because we did this we allowed these vested interests who are operating against the interests of the dairy farmers to sweep the whole report under the table. This should not have been allowed, but it did happen, and we should see that it does not happen again. We should see that the dairy farmers are given adequate help and that they are rescued both from their marginal misery in the northern parts of the State and also from the dangers which the southern dairy farmers face through the even money possibility that Britain will enter the Common Market in the next three years.
I do not believe that there is any quick solution of the problem. I believe we must have a plan, but we have not had a plan put forward yet. I am frightened that if we sign this blank cheque for five years the Government will repeat its rather discreditable policy of inaction which has militated against the interests of the people who are now engaged in dairy farming. It is time that the Government had another look at the situation, and it is time that this House refused to give it a blank cheque.
Now let me get back to basic considerations. I am speaking now mainly of butter and not of other dairy products, and I am looking at the situation from the point of view of world markets. Three things have happened in the last few decades which have changed the status of the industry. It is no use honourable members in the Country Party looking back nostalgically to the udders of yesterday. The world has changed. A substitute for butter has been evolved which is cheaper, at least as healthful and for many people just as palatable. Incidentally, I personally prefer butter. Let me make it clear to honourable members of the Country Party who are seeking to interject that I am not speaking of the Australian market at all, but of the markets overseas. In Denmark, for instance, which is predominantly a dairy products country, the people eat practically no butter; almost all of them eat margarine. But let me just say that I am not speaking of the Australian market but of the markets overseas. For the overseas market there is a substitute which is, as I have said, just as good from a health point of view and which many people find just as palatable.
The second factor in the situation is this: overseas there are organisations called peasant parties or country parties - call them what you will - which have great political power. These parties in their own countries - I am not saying in all of the countries concerned - exert strong pressures on behalf of their vested interests. They demand that the market for dairy products in their countries, including of course the butter market, be kept for their own farmers. This is a trend that is likely to continue. The dairy market in the United States, for instance, is virtually closed to us. The dairy market in the so-called European Common Market is virtually closed to us. If Britain goes into the Common Market there will be practically no market open at all in that country, at any rate during the next decade. This will be disastrous for the Australian dairying industry, and I do not like to see a group of Australian people who have worked hard and who deserve well put in this kind of jeopardy through lack of foresight and the seeking of short term advantages. What has happened overseas is that these country parties or peasant parties or groups of country people have been able to exert compelling power upon their governments, to prevent Australian and New Zealand butter from competing with what is locally produced in those countries. Because of this the Australian export trade is almost entirely dependent upon free access to Great Britain, and if Great Britain goes into the Common Market the market in that country will be denied to us in a day.
The third thing that has happened is something that has occurred in all countries. It has affected Australia as well as other countries. There has been a shift in the economics of butter production. We used to think of the lush pastures, as I call them, of the north coast of New South Wales and southern Queensland as being natural dairying areas. We have discovered that they are not. So far as butter is concerned - I do not think in this connection of whole milk - it seems fairly certain that the southern pastures of Victoria and Tasmania are very much better for production. Much more butter is produced in those areas on a proportionate basis. Therefore, of course, the land in those areas is very much more expensive. This greater efficiency would seem to stem partly from the temperature and climate as well as from the pastures themselves. There are probably many factors involved. But the fact is that we cannot get the same level of butter production out of the northern pastures as we can from the southern pastures, or at least we have not yet succeeded in doing so. If honourable members will look at the statistics of production in the various areas they will see exactly what I mean.
In addition, this kind of shift to irrigated pastures means that the farm unit in these favoured areas - and I am speaking not only of Australia but also of countries overseas in which Australian and New Zealand butter must compete - is going in for more concentrated and mechanised dairy operations, because these appear to offer real economic efficiency. This is something that the dairying industry may as well recognise. Its failure to recognise this is at the root of very many of our present troubles, and it is one of the major causes of the low standard of living which our present policy has forced on hard working dairy farmers who are as efficient as they can be in the locations in which they now operate. The Australian subsidy, which we are talking about in this debate, has gone very largely to those who do not need it. My friends from Victoria will forgive me if I say that they do not need it because the effect of the subsidy has been to inflate the price of dairy land which could produce economically without subsidy and which enjoys super profits by reason of the high price sustained in Australia for butter and the subsidy which is now given. In point of fact what the Australian people have been paying for is not a rising standard of living for our north coast dairy farmers in New South Wales; what they have been paying for is an increase of land values in Gippsland and such places. This is where many tens of millions of dollars of the subsidy have gone.
– What about the Sydney milk zone?
– My friend wants to know about the Sydney milk zone. Let me say that if the forthcoming referendum proposal for a new state is accepted, as I hope perhaps it will be, on 29th April, the north coast farmers will not be worried about the Sydney milk zone because they will have nothing whatever to do with it. The Country Party no doubt is sensitive on this point because I am afraid that, perhaps through shortsightedness or perhaps through a failure to see where they were going, they have let down their members on the north coast of New South Wales and the south coast of Queensland, and it is perfectly true that they have thrown super profits into the hands of their members in the dairying industry in Gippsland and such places where the natural pastures are so well adapted to dairying that land values have increased by hundreds of dollars an acre. They are also sensitive, perhaps, because their principles in respect of this branch of agriculture are entirely at variance with the principles they have followed - and I think rightly - in respect of such industries as wheat or meat or wool, and perhaps they have not realised that what they are doing in dairying is not only against the interests of the dairy farmer but is also entirely inimical to the interests of the wool grower, the meat producer and the wheat farmer. There is this split of real interest in the Country Party and I know that the members of that Party are sensitive on the point.
What we have to devise is a proper constructive policy for our marginal butter lands. In other words we have to help these people to get out of their present form of production into something else which will be profitable. If we do this we not only will be helping them to raise their living standards - I am all for helping them to do so - but we also will be helping the dairy farmers of Gippsland. Unless we do this, I think they will be overwhelmed in a flood of unexportable butter if Britain joins the European Common Market.
I suggest that we should be doing several things. Firstly, I think that in these marginal areas we should be looking more for whole milk and milk products. In saying that I do not mean to give any offence to the honourable member for Cowper (Mr Robinson) in relation to his comment about the Sydney milk zone. As it happens, these areas are adapted more for the production of whole milk than for the production of butterfat. Secondly, the production of meat is a possibile alternative, but money must be provided and production must be properly organised. I am in favour of this Government finding the money to help these areas. I suggest that it should do very much more with these areas than the members of the Australian Country Party, who represent them, suggest I believe that the Government must find the money to help these people to convert to other forms of production. Meat will not be profitable for them unless there is an abattoir, handling facilities and other things. Some people talk about providing a meat port for the north coast of New South Wales. I am not certain that this is not the right thing to be talking about. I am not being dogmatic about this, but I think a case can be made out for a good meat port to be established on the north coast of New South Wales - but only if we can help marginal farmers in that area to convert some of their holdings to beef production.
Forestry has been mentioned. Perhaps honourable members have seen a booklet published by the New South Wales Forestry Department only recently in regard to poplar growing and can remember that near Grafton there is at the moment the most successful stand of poplars in Australia. When one looks at the economics of the matter and considers the world shortage of timber, one realises that the production of timber offers ari alternative. But it will require money. I for one would advocate that the Government should make money available to help dairy farmers. Why keep them in the marginal misery in which my friends who represent the area apparently want to keep them? Agriculture and the production of oil seeds can be considered.
Perhaps as a New South Welshman I may be pardoned for thinking particularly of the north coast of New South Wales. Potentially this area has some of the best land in the State, and it is ridiculous that the people who farm it should not be rich. There is something wrong with the system which has kept them for so long as poor as they are, because they are hard working and, in the framework in which they find themselves, they show a great deal of initiative and industry, I do not despair. I think that land which is as good as this and which has this kind of rainfall could produce economically if only Government support were given. The Department of Primary Industry should direct its attention to this problem and see what can be done. It is a terrible thing that in the last five, six or seven years - at any rate, since 1962 - it has not been doing so. I remember that when the 1962 Bill was before the House I asked for something like this to be done, but apparently the Government has only just woken up because it is now proposing to think about it. However, it has not made up its mind what to do.
Let me read to the House the following statement which the Minister for Primary Industry (Mr Adermann) made in his second reading speech:
The Government has agreed in principle to assisting the industry with respect to the problem of the marginal dairy farmer but the ways in which this help can most effectively be given have yet to be worked out.
Good God! The Minister’s statement continues:
Much thought has still to be given to the practicable ways and means to achieve this end and there will of course need to be discussions with the industry and with State governments.
May 1 say with some gratitude that the present New South Wales Government is turning its mind to this problem in a way which its predecessor failed to do. 1 now come to the amendment which 1 propose to move at the Committee stage. I am not in favour of cutting off the subsidy to the dairying industry. Far from being in favour of reducing help, I want to increase it. But I am not in favour of giving to the Government a blank cheque to do what it has done in the last five years - that is, nothing - to meet these very urgent and pressing problems. The vested interests of some people have apparently induced the Government to defy the findings of its own committee and to put the industry in its present position of jeopardy. I know the pressures which come from the Country Party. Because I know those pressures I know that the House must keep the power to review this assistance year by year and if necessary increase the help given to the dairying industry, but it must see that that help is not wasted and dissipated as it has been over the last five years. Instead the House should see that it is made effective to raise the living standards of those who are at present dairy farmers and so remove from the industry as far as possible the terrible threat of chaos which will hang over it if Britain should decide to go into the Common Market.
Until 1962 we voted this money annually; this was a good practice. I am not saying that we should not have a long term scheme; I am quoting the Minister as saying that a long term scheme does not yet exist. When it exists, let us have a look at it; but in the meantime let us not sign this blank cheque for five years knowing that the last time we did so the money was squandered in a way which did not help the dairy farmer or the industry and which has left it in the present position of jeopardy.
I believe that the House should keep control of this in the interests not only of the country but also of the dairy farmer, who has been let down by inaction. He has been put in his very dangerous present position. I believe that the House should keep control of the future by granting this subsidy for one year and, when the Government produces a reasonable plan, it should judge that plan on its merits. This is the function of the House. If the plan requires more to be given to the industry than the Government now proposes, I will not necessarily be against it. I have every sympathy for the dairy farmer. I have every sympathy for Australian farmers who want to raise their living standards. I want to help them to do that. I do not think that our past policy gives us cause for much pride. I am hoping that the Government will see fit to accept the amendment which I have foreshadowed and that honourable members will give it some consideration.
– I rise to support in the strongest terms the Government’s proposal for a five-year provision of bounty payment amounting to $27.8m annually to the Australian dairying industry. I deprecate the proposition put forward by the honourable member for Mackellar (Mr Wentworth), which was an unworthy proposition from a member with the years of service he has rendered to this Parliament. It concerns me greatly to find the honourable member for Mackellar and the honourable member for Bradfield (Mr Turner) proposing deliberately to restrict the legislation now before this Parliament. I can only describe this as a provocative move apparently designed for political motives, whatever they may be. When one thinks of other utterances which have been made by these Liberal members of this House it appears to be a typical and deliberate move against country interests.
I recall that only two weeks ago the honourable member for Mackellar made a very lengthy statement to the ‘Sydney Morning Herald* complaining bitterly about the amount of funds provided for country roads as against the provision for the city, so his thinking seems to be running along some course better known and understood by himself but certainly not understood by the members of this House. Some of the unworthy references, such as the use of the term ‘peasant’, are sufficient to suggest to me anyhow that his comments and proposals are scarcely worth giving any time or attention. However, I would be remiss if I did not try to give some of the facts relating to the dairying industry, in view of what has been said so far in this debate.
First of all there arises the question of the wisdom of the Government in giving special support to an industry that has particular problems, an industry which is unique for one reason. Everyone is conscious of the fact that a dairy farm has to be looked after, that the work on it goes on seven days a week and twenty-four hours a day. This seems to have escaped the attention of those honourable members who purport to know so much about the industry. They also conveniently forget, for instance, that the city of Sydney from which these two honourable members come enjoys a deficit in transport that can run up to something like $13m and nobody complains about it - we just go on paying. When the railways in New South Wales lost the benefit of wheat freights because of the drought, this loss was substantially greater. Do those honourable members come in here and complain and say: ‘It is unfair that transport should be subsidised in this way, so we will move against the provision of these services and have them cut down or discontinued?’ Certainly they do not. There are many other facets of costs in relation to these matters which of course put their proposition out of consideration so far as this Parliament is concerned.
One of the remarkable features of the debate so far has been the complete absence of reference by honourable members who have attacked the dairying industry to the Sydney milk zone and to the benefit enjoyed by consumers of milk as a side effect of this subsidy. Why they would deliberately avoid a positive reference to this I do not know, but I can guess. They just did not want to reveal the truth of this matter. The Sydney milk zone, developed by the Labor Party to try to bolster the supply of milk for metropolitan consumers way back in the 1940 era, has become an iniquitous proposition so far as the overall dairying industry is concerned. It is for this reason that the production of milk for supply to the Sydney milk zone has reached the astronomical figure of about 190 million gallons annually, yet the actual consumption of milk is only about 90 million gallons annually. On the balance which is converted into butter there is complete equality so far as the utilisation of subsidy is concerned. This means therefore that some 40% of the bounty or subsidy, as we describe it, paid into the New South Wales sector of the industry in fact goes to the Sydney milk zone.
If the member for Bradfield and the member for Mackellar want to come in here and tell us all about how to run “this industry, why do they omit to make clear this particular iniquitous situation? Why do they not suggest a very positive approach to the problem by moderating the productivity within the Sydney milk zone and bringing about some reasoned equality for the whole of the dairying industry in New South Wales.
– Why does the State branch of the Country Party not do something about it?
– The honourable member for Macquarie chirps about this. His party in New South Wales had twenty-five years to solve this problem, and of course its record was to create a Frankenstein. It would take five to ten years to resolve the problem in fairness to the producers inside the zone who have been caught up in it and in fairness to the rest of the industry outside the zone. So it is in this context that we are considering a proposition for a further five years bounty support for the dairying industry. The reason for the five year period is a quite positive one.
The Minister for Primary Industry (Mr Adermann) in his second reading speech said that it was proposed in the course of the next year to introduce measures to further assist marginal producers. For any worth-while scheme to be developed based upon the present state of the industry it is unthinkable that it could be approached on anything less than a five year cycle. I say this for the reason that during the past five, six or seven years - and there has been a great deal of reference to the McCarthy Committee which was appointed in 1961 - there has been a very positive movement within the dairying industry towards a better status. I speak as one who has had some experience, having worked on a dairy farm, and having owned a dairy farm. I therefore know intimately all the involvements of the industry.
Dairying is certainly no longer a billycan proposition. There are very few farms in Australia that do not have modern equipment such as milking machines and all of the facilities to ensure their efficient use. The word ‘efficiency’ has been bandied around in this chamber in a way that has been quite irresponsible. The industry today is showing a tendency to greater efficiency than many other primary industries, and certainly so far as the smaller sectors are concerned the dairying industry is today able to set an example. So it ill becomes members like the honourable member for Mackellar to talk as he has without having gone to the trouble to look into the industry, to travel around the country and to see what is happening. Records that time would not permit me to go through are available. These records come into the mail boxes of members of this House, and they spell out very clearly what is being done in research, the accomplishments so far as extension services are concerned, and the really remarkable work that is going on throughout all dairying districts in Australia, bringing in its wake a revolution so far as efficiency is concerned.
However, this does not completely solve the cost problems, nor does it solve the difficulty that this industry does not enjoy a high realisation figure on the overseas markets. So there are limitations on the economic front. There are limitations which require this industry to be managed with great skill and with the kind of outlook that does not confine proposals and propositions to narrow bounds. It is for this reason that the five year proposal is the only one that this House should consider. The suggestion that the subsidy should be limited to one year is complete rubbish, because no planner could cope in that time with sudden alterations in the cost structure affecting the return to the producer.
I am also appalled that honourable members are so lacking in knowledge of what is happening in the dairying industry in
New South Wales and Queensland. I am particularly appalled about what the honourable member for Mackellar said when referring to the new Government in New South Wales. He should know that in its short period of office it has already implemented a feed year programme for the dairying industry. This is aimed at encouraging dairy farmers to utilise quickly the results of scientific research, investigation and experimentation. The record of this work may be seen. Results on individual farms are quite outstanding, and they remove any suggestion that inefficiency is the basic problem in the industry. Certainly there is a marginal farm problem. This is referred to clearly in the second reading speech of the Minister for Primary Industry. He indicated that certain things would be proposed during the next year. These relate directly to accomplishments on the efficiency side.
It would be folly to try to work out a plan for the industry on less than a twelve months basis. I would not like to be charged with the responsibility of sitting down and working out a plan of this magnitude for a time shorter than the period proposed by the Government. The McCarthy report, which has been mentioned, raised many of the issues referred to in this debate. Honourable members who have spoken fail to realise that in a very significant way action on many of the recommendations of the McCarthy report is well under way. The number of dairy farm units has fallen in accordance with what the report foresaw as the need. There have been significant improvements on the manufacturing side of the industry - in the processing of dairy products after they leave the farms. This was another result of the McCarthy report. These things have been going on apace ever since that report became a public document. But of course these accomplishments have been ignored by the two honourable members who have gone to such trouble to talk in destructive terms about the dairying industry.
I want to sum up the position in this way: Australian dairy farmers are, on the average, equal to the dairy farmers of New Zealand. They are equal to the dairy farmers of any other country. I say this with the advantage of having personally looked at the dairying industries in most parts of the world. I am proud to say that in Australia we are doing things that are being watched by dairy farmers in other countries. That is an indication of the technological progress in the industry in Australia. I am sure we will be followed by other nations. These are the things that the honourable member for Mackellar ought to know. If he does not know them, that is to his discredit.
The honourable member referred to another matter. He said he believed that there was no need to worry about the problems of the dairying industry. He said that the margarine industry could take care of our requirements in the future. This is another remarkable statement for a man of his standing in the community. We have just witnessed in Australia one of the most amazing processes of adventure by a business undertaking. I refer to Marrickville Margarine Pty Ltd and its nefarious activities - false advertising, false statements and so on. It is well known to the honourable member for Mackellar that a court has determined that there were in fact infringements by that company of New South Wales law. What did the honourable member say about that? Not one word. He turned the case to favour the lawbreakers. In his contribution to the debate he turned the case to favour a further extension of this sort of intrusion upon a recognised industry in Australia, the dairying industry. The dairying industry has achieved a very fine status, lt is not managed by pressure groups. In the main, it is under the control of cooperative societies. It is looked after by people who are the salt of the earth and who deserve to be nurtured by governments because they contribute to the national wellbeing to a far greater extent than these other small industries that have stooped to tactics that are unworthy of any Australian. We have seen advertisements in the Press in the last couple of weeks about Eta Super Spread, Miracle Margarine, and so on. This is another amazing situation. It is one of the greatest confidence tricks ever perpetrated on Australian consumers, if I may say so. The Marrickville company put this product on the market after it failed in an earlier attempt. We know quite positively that the product contains 90% beef tallow. The company’s advertisements admit this. Where does this tallow come from? It comes from the normal supply of tallow in Australia.
I want to refer to something that was published last year in a Queensland newspaper, ‘Country Life’. The headline was: Soap tallows for making margarine’. The article began: ‘Inedible tallow authorised for soap and similar products was being used extensively by margarine manufacturers’. If honourable members care to look into this they will find there is no doubt at all that animals that have been condemned for a variety of reasons-
– Tuberculosis. Cancer.
– Such as tuberculosis and cancer, as my friend the honourable member for Gippsland reminds me, will be involved in the supply of tallow from which this product to which I have referred is made. This is a very serious thing. One would expect that members of this House would be concerned about this sort of activity rather than come here and say that an efficient, worthwhile industry ought to go out of existence; that it ought to sell out to New Zealand and that dairy farmers should close down their businesses.
– Is the honourable member saying that Marrickville Margarine is saying this?
– I suggest that if the company advertising is in accordance with the facts then there is no alternative. The supply of tallow-
– Marrickville Margarine is advertising to tell the consumers what the product contains and what to expect. The company is not being misleading.
– My honourable friend from Barton says that the company’s advertising tells what the product contains. The company has come out with a very nicely worded advertisement telling people not to take notice of the label ‘cooking margarine’, and that the product is quite suitable to be placed on the table next to the bread board. I will leave this matter for my honourable friend to investigate for himself. I throw out the challenge. There are other aspects I want to deal with, the cost factor for example. The Marrickville company is making a huge profit out of this product - that is, if it can sell it - but I am sure that the average Australian will soon be alive to the fact that this is a product to be watched and certainly is one to be treated with caution. The use of inferential advertising can only be regarded as a further move by this pressure group to try to persuade the public away from an orthodox food and interest people to follow some course other than what would be regarded as a sound one for the average Australian.
I wish to refer briefly to some remarks passed by the honourable member for Bradfield. He advocated the use of margarine. He laid some emphasis on the fact that the production of margarine fostered the vegetable oil seeds industry. Seeing that margarine had this Australian content, he asked why we should not use it. The facts of the matter were clearly stated by the Minister for Primary Industry in his second reading speech. He indicated that the review of this matter by the Australian Agricultural Council disclosed that within their existing quota margarine manufacturers had ample opportunity to utilise the entire Australian production of edible oil seeds. The Minister stated that there was no unfair exclusion of Australian production. The relevant figures have been in Hansard for more than a week. If the honourable member for Bradfield is too tired to study them he should go back to his electorate and stay there, because he is of no use in this House.
I raise this matter for the purpose of referring to another aspect. The United States went through an experience similar to that which some honourable members hope to cause Australia to go through. In 1950 in the United States Senator Fulbright, an esteemed senator and Chairman of the United States Senate Foreign Relations Committee - a very powerful man - was able to persuade twenty-six other senators to join with him in having removed from the United States law a provision which prevented olea, which is another name for margarine, being coloured to resemble butter.
– When the senator was out here recently he did not know that we had forces in Vietnam.
– I thank the honourable member for reminding me of that fact. He has added fuel to the bonfire that I would like to light under those honourable members who have had so much to say in this House today. In 1950, as a result of the action taken in its Senate, the United States threw open the market for cotton seed oil. The result was that in that year manufacturers of oleo used 1,418 million lb of cottonseed oil. This level of consumption was continued, but for a short time only. The cottonseed oil content was about 55%, but gradually this percentage was reduced and other ingredients were used instead of cottonseed oil.
The effect of all this was to reduce the United States dairy industry to a status considerably lower than it had enjoyed previously. About 100,000 dairy farmers were lost to the industry in the United States. This was a serious blow to the economy of many districts in the country. What was the pay off? It was not long before the producers of margarine turned away from cottonseed oil and began to use other agricultural products and, of course, tallow. In striking what was almost a death blow at an established industry those who thought they would gain found that they lost. Exactly the same thing would happen in Australia if we were to move in the direction proposed by the honourable member for Bradfield. I am sure that the Government will never take steps to support such a move, either at the Federal level or at State level, where the matter of margarine quotas is handled.
I turn now to some of the general aspects of the Bill. The Government has acted in a responsible way - in such a marked contrast to the way some honourable members tonight have spoken - at the request of the Australian Dairy Council, which is a very responsible and well respected body, to provide a subsidy for the industry for a further five-year period. At the same time, as was pointed out by the Minister in his second reading speech, consideration is to be given to the provision of finance where necessary to the Australian Dairy Produce. Board and to manufacturers of dairy products.
Here I refer again to that section of the industry which deals with the product after it leaves the farm. For a long time a lot of work has been done to overhaul the efficiency of this section of the industry. This has been a good thing. I refer to the need for arrangements for bulk handling of milk where milk is kept under refrigeration on the farm, picked up in hygienic tankers and taken to the factory. It is not touched by human hands. The highest standards of hygiene apply. The task then is to manufacture the product to meet the requirements of both the domestic and export markets. To do this efficiently and to have products that will bring the highest prices we need to ensure that we adopt modern technology and modern manufacturing methods. This Bill represents a positive move by the Government further to improve the efficiency of this important Australian industry, our fourth largest primary industry.
I commend the Minister for his work in this direction. He has given once again evidence of his capacity to analyse the situation and to recommend to the Government effective, positive and practical measures to help primary producers. I am sure that the dairy industry from one end of Australia to the other appreciates what this Bill does. Under this legislation the Government undertakes to make available funds for a worthwhile plan to assist marginal producers.
I wish to refer now to statements made by some Opposition speakers. Leading in the debate for the Opposition was the honourable member for Dawson (Dr Patterson). He referred to a number of statistics, but he contributed very little of a practical nature towards solving the problems that face the dairy industry. It was impossible to know on which side of the fence he wanted to be. He advocated on one hand a reduction of the subsidy but on the other hand he said that export parity should be the aim; that we should get the dairy farmers to produce within an economic range to meet the figure of export parity and that there should not be need for a subsidy. A few weeks ago he advanced the opposite argument in respect of the sugar industry.
As regards the marginal producer, the Government and the industry already have a wealth of information. No doubt this will be drawn upon during the next year in order to put forward a plan that will accord with the work that has been done so successfully in the last six or seven years to improve the efficiency of the industry. The plan will accord with export factors, with marketing generally and with the economics of the industry. This is forward thinking. It is the only way to tackle the problem. I strongly support the Bill and oppose in every way the proposition advanced by the honourable member for Mackellar.
– Mr Deputy Speaker, I wish to make a personal explanation.
– Does the honourable member claim to have been misrepresented?
– Yes, on a number of counts. Firstly, it was alleged to be unworthy of me to have referred to a peasant party. I did not refer to any peasant party in Australia. I referred to peasant parties overseas, which is the name such parties give themselves; it is not unworthy to do that. Secondly, it was said that I should have understood what the New South Wales Government was doing in regard to the reestablishment of dairy farmers on the north coast of New South Wales. Not only do I know that, but I referred to it in my speech. If the honourable member will look at the report of my speech he will see that not only do I know it but that 1 referred to it with appreciation. To say that I do not know it is ridiculous.
Next the honourable member said I was defending local manufacturers of margarine. That is ludicrous. I said nothing about local margarine manufacturers one way or the other. Perhaps I shall do so at some other time. I spoke about margarine manufacturers overseas. It is quite wrong for the honourable member to misquote me in this way. Then he said that I made an attack on the dairy farmers, who are the salt of the earth. I made no attack on the dairy farmers. Indeed I was proposing to help them. I believe they have been let down.
– I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– Yes. The honourable member for Cowper (Mr Robinson) made the statement that I supported a reduction of the bounty. Neither I nor any other member of the Australian Labor Party advocated a reduction of the bounty. The honourable member’s interpretation of what I said is in line with the shallowness of his own remarks.
– As a member of the rural committee of the Liberal Party of New South Wales, and as chairman of the Government Members Food and Agriculture Committee I wish to give the Liberal Party policy in regard to the dairy industry. I wish to dissociate myself from the shameful exhibition of the honourable members for Mackellar (Mr Wentworth) and Bradfield (Mr Turner), who represent the people of Australia who enjoy the fruits of a high internal market but who never make an effort to export anything from Australia. If you, Mr Deputy Speaker, were to see the executives from the electorates of Mackellar and Bradfield crossing Sydney Harbour Bridge, or congested on it, for an hour every morning driving into the city in company cars while the working men and the dairy farmers pay taxes on their own transport-
-Order! I ask the honourable member to get on to the subject matter of the Bill.
– If the honourable member for Mackellar and the honourable member for Bradfield understood anything about the dairy industry, we would not have heard speeches such as they have made during this debate. The first complaint they have is about inefficiency. They do not know anything about efficiency. In some of the part truths which they uttered they did not bother to quote the milk production per cow in Australia, which between 1956- 57 and 1964-65 rose by 17i%. They did not say anything about improved techniques in the industry because they do not know anything about the subject. They spoke about the anguish and agony of suffering dairy farmers who do not want to hear anything from them. The dairy farmer has suffered from their attention.
Let me quote from a pamphlet which will show the kind of person that the honourable member for Mackellar is. The honourable member for Mackellar was in the New South Wales Treasury Department when the Stevens Government was in office. Let me mention what one Australian Treasury did to the dairy farmers. I shall quote from the publication ‘The Australian Dairy Industry’ by Drane and Edwards, which deals with the organisation of industry and postwar reconstruction by the planners. We have heard tonight from planners. We have heard from the commissars who would put the kulaks on the road. In 1942 the planners said this: . . it was becoming recognised in government circles that rural industries were to play a key part in the war effort, and consequently strenuous efforts were made to encourage rapid expansion, not least in the dairying sector. Consumption came under rationing, whilst price control ensured that- returns as well as allocations of quantities came under government regulation. The subsidy scheme, as described, was designed in part to avoid price rises, and to help insure the success of price control measures.
This was a part of the freezing of prices, wages and everything else in the Australian community. The planners picked on butter, not on ice cream or anything else. They picked on butter because it was an important item in the C series index. The only way to hold wages down was to regulate the items in the C series index. This subsidy was imposed upon the dairy industry in 1942 against its wishes. This was at the time of the Coral Sea Battle during a crisis in Australia’s history and when a lot of people in this place were very frightened. An amount of $2m a year was paid to the dairy industry as a subsidy - as I said - against the wishes of its leaders. The honourable member for Mackellar now wants to put dairy farmers off the land. Having included this subsidy in the financial structure of the industry, it cannot now be taken out.
It is clear that efficiency in the dairy industry has been increased but you would not expect men from Palm Beach and Pymble - the plutocrats - to know anything about this. The Liberal Party is part of a coalition government, and I support the coalition in this Parliament. I do not intend to do anything to damage my Party’s relations with the Country Party. That is why I am stating the Liberal Party’s policy. We have experienced increasing efficiency in the dairy industry. I do not think that the managers, executives and chairmen of directors who spend their time at the golf course every Wednesday afternoon can boast of very much greater efficiency. As I said, the dairy industry has increased its efficiency and production. When I was a boy five of us milked sixty-five cows in two and a half hours. Today, with the use of what is called the low level big pipe milk line that Dr Whittlestone introduced into this country - it has not been taken up very rapidly as yet - one man can milk from sixty to one hundred cows in an hour with very great efficiency and with no damage from disease, drying up or anything else. The use of fantastic fertilisers has helped to produce magnificent pastures in Australia. I do not refer only to superphosphate, on which a bounty is now paid. I have in mind also nitrogen and mixtures such as NPK, which is a combination of nitrogen, phosphorus and potassium. I suppose the most dramatic increase has come through breeding with the use of artificial insemination. Specially selected bulls have been used for this purpose and the result can be seen in the dairy herds. As a result, production has increased enormously.
This is a very different story from the one that fell from the lips of the honourable members for Mackellar and Bradfield, who seemed to me to be shedding crocodile tears about the dairying industry. The honourable member for Mackellar has a real hatred of the industry. He has a kind word for one dairying industry only and that is the industry in New Zealand. During the speeches of both these gentlemen, who are on the outer with the Liberal Party on this subject, they said that the Common Market will ruin the Australian dairy farmer. We could see that they hoped this would be so. But, of course, it is nonsense to suggest that the Common Market will ruin the dairy farmers of any country. Let us go through the facts of life of the Common Market. The price for agricultural products in the Common Market is very high. Every honourable member knows that the price of butter in Germany, France, Holland and Denmark is extremely high. It is more than 80c a lb. This is also the price in the United States of America. The first point that arises is that the dairying industry does not cost the community anything. It is subsidising the community because the prices here are lower than they are in the Common Market countries and in other countries. For many years the Common Market countries could not reach agreement on this subject, but at last they have come to some sort of agreement about the prices of agricultural products.
Let us examine the situation as it would be if Britain joined the Common Market. Honourable members may recall some famous words that were uttered here some years ago on this subject. I will not refer to them now. Let us get down to the facts of the situation. Britain has a policy of low prices for imported foodstuffs. Honourable members must admit that that is so. The British manufacturing complex depends on low wages and cheap food and the cheap food has come from New Zealand and Australia. It has not come from the Argentine and other countries but from Australia and New Zealand. Britain takes some 498,000 tons of butter, about 200,000 tons from New Zealand and about 75,000 tons from Australia. What will Great Britain do if she joins the Common Market? It will be faced with an agricultural price policy that sets the price of butter at 80c a lb. Britain cannot afford that. It must get its food at the low price of 30c from Australia and from New Zealand. Britain must make other arrangements about its imports of food and so we can dismiss the threat of the Common Market as a bogey. It is a bogey that has come from the honourable members for Mackellar and Bradfield. It does not exist, because Britain is buying its foodstuffs at a low price from us and will continue to do so. It is a nation of shopkeepers and it knows where to buy its goods.
We heard a story here today that the export of S90m worth of butter was costing Australia $60m. This is a wonderful story, but the trouble is that it does not stand up. The Australian producer is selling butter at a very much lower price than producers in other countries do, with the exception of New Zealand. New Zealand has a subsidy of 15c a lb, which is three times the subsidy in Australia. But the honourable member for Bradfield conveniently omitted to mention the subsidy of 15c on home consumed butter in New Zealand. The Australian producer is now subsidising the remainder of the community because he is selling butter at a lower price than that in such countries as the United States and the countries of the Common Market. The next point is the worst of all. I think if the honourable member for Mackellar were fair he would admit that at least 40% of the industries in Australia are covered by very high tariffs. If honourable members go through the tariff and excise schedules they will find that we pay $ 1,000m a year in tariffs and excise. But that is only part of the story. The domestic Australian industries manufacture under cover of huge tariffs. They do not pay a tariff because they manufacture their goods inside Australia. They manufacture polythene pipe here under protection of a duty of 60%. In the last schedules, in one instance polythene or plastic material attracted duty of $2,346 a ton. This is a fantastic duty. If we go to buy a 5 gallon drum of spray at the corner store to treat blackberry bushes, we pay £9 for it.
These facts make the contributions of the honourable members for Mackellar and Bradfield appear to be very miserable. Their constituents enjoy a very lucrative market in Australia and work under tariff and excise protection. The cost of their goods includes the tariff and they pass it on. Wages have to go up because prices have gone up. Where does it finish? It finishes with the exporter and he cannot pass it on. It stays with him. At least two-fifths of the butter produced in Australia and half the cheese is exported and these exports are affected by tariff imposts. Secondary industries are protected by tariffs. The directors of the manufacturing companies live in the electorates of the honourable members for Bradfield and Mackellar. I have not criticised them; I have merely stated the facts.
– Who boosted up the-
– I am criticising the honourable member for Bradfield. Why does he not be fair? Australians like a fair go. They think that everybody should be treated fairly. But these honourable members see one line-
– They are treated more fairly than this.
– That is true. We will come to that. They see one clean, straight entry of $27m in the Treasury papers and they hate it. But they do not look at the hidden subsidies which amount to thousands of millions of dollars and which are paid by the exporters. The costs of the wool industry are raised by 10% because of high prices and the costs of the dairying industry are also raised. They are raised against the wheat industry and against all the exporting industries. I am asking Parliament to be fair with this industry which has to export. It has to accept a low home price and then it has to export a great part of its production. It has to pay for tractors, motor cars, petrol, State imposts, local government imposts, wage rises, polythene pipes, machinery, machinery parts, paper, textiles and chemicals. It pays for these articles and the money goes into the pockets of the plutocrats of Palm Beach.
Of course it would suit the honourable members for Bradfield and Mackellar, who are disagreeing with the Government, to have a go at the $27m dairy subsidy. In the morning the newspapers, which are nourished by big advertisers and not by the dairy industry, will quote in full, if they can get the space, some black and white from the members from Mackellar and Bradfield. That is what they live upon - some of these theorists. We proved in 1942 that the theorists and planners imposed this subsidy on the dairy industry, and the industry cannot get out of it.
– That was a long time ago.
– It might be a long time before we get rid of it, too, if we want to do so. The subsidy never did the industry any good. It was introduced to subsidise the consumers, the C series index, the price freeze and the economy as we then knew it. The honourable member for Dawson (Dr Patterson), if he were in the Federal administration long enough, would know this to be true. Drane and Edwards have given us the facts in their publication of 1960. This subsidy was designed, in part, to avoid price rises. Thus it aided the consumer and helped ensure the success of price control measures. From then on it became a political football with the various governments bidding for the dairy farmers’ vote with higher subsidies.
The honourable member for Dawson might dredge this out of his memory. When Professor Copland was Prices Commissioner in 1945 the dairy industry asked for an increase in prices involving a miserable few pounds and the learned gentleman - and he always writes to me when I say this, because he knows that I have said it - said: ‘No, we will not give you a price rise, because all the men are coming back from the war, there will be plenty of labour, there will be plenty of wire netting, there will be plenty of -superphosphate and you will be set. We will not increase prices.’ Two years later the dairy farmers made the same request and
Professor Copland made a different statement. He said: ‘No, we cannot increase prices. There has just been a big drought which meant that your costs were higher, so we cannot base a decision on those costs because costs are artificial during a drought’. Do honourable members remember that he was the Prices Commissioner for a Labor Government? He damaged the dairy industry irretrievably.
We have heard about the McCarthy report from theorists who try to find something in it to help their argument. They found that the report suggested that the marginal producers would have to be helped. I think 1 heard it suggested in the debate today that it would be better for the dairy farmer and he would have a better living if he went out of dairy production. In this laissez-faire doctrine of ours when do we start pushing farmers around? If they want to stay on their farms, as far as I am concerned they should stay there, but what is really happening? No-one has mentioned this. In New South Wales in 1956 there were 16,140 dairy farmers. The last figures available indicate that there are 12,438 dairy farmers in New South Wales. In other words there are about 3,600 fewer farmers now than there were then - a loss of one dairy farmer a day every day for the last ten years. Yet some honourable members quote the McCarthy report. This is not McCarthyism at all: it is Communism or blasted Nazism when we start pushing farmers around. If a farmer wants to continue dairy farming, he should do so. It is his decision, and not the decision of the honourable member for Mackellar who wants to push him off the land and bring in milk from New Zealand.
The McCarthy report was not one that a government could rush to accept. The McCarthy report gave the economic facts; it did not make the political decisions. The McCarthy report does not decide for farmers who want to stay on their land. It does not necessarily mean that because a farmer could get an additional £1 a week elsewhere he should go off the farm where he is his own boss. He enjoys the sunlight, the glorious Australian climate and his freedom. If he wants to stay on his farm, he stays there as far as I am concerned. We know what is happening in the Goulburn Valley. We know that in the Rodney Shire under irrigation in the last four years the number of cows has increased from 16,000 to 27,000 and in some instances butterfat production has increased to 700 lb a cow in one herd and to 400 lb in plenty of herds. We know this is happening, but because it is happening there it does not mean that we should push dairy farmers off the land in the Clarence River or McLeay River areas.
I went to a meeting of the Government Members Food and Agriculture Committee at Macksville. It was a large meeting. Some women there got up and said: ‘Nothing is any good here any more. Our sons have gone; our daughters have gone. There are seven bank managers sitting here and they would not be here if they were any good.’ This was the situation at Macksville where they have had a bashing from floods and everything else. They were still on the land. The husbands of those women were carrying on-
– With whom?
– That is their choice in this kind of community. If the honourable member for Mackellar wants to laugh at some lewd remark when we are discussing a serious matter like this, that establishes his attitude to the dairy industry. I say again that anybody who makes speeches such as he made does not understand the mentality, psychology or feelings of men on the land in Australia. We have a great heritage in Australia. When one understands that people in other countries believe that the technological aptitudes in Australia are the greatest in the world and that we are leading in the Pacific area, one starts to find out why this is so. It is because of freedom, and freedom does not come with pushing people off their properties or forcing them off their properties. The McCarthy report foundered because it called for Government interference with what the people wanted to do. The marginal producer is being affected by erosion: 3,600 dairy farmers have gone off the land in New South Wales. These are the facts not known to the critical gentlemen who have spoken.
– They are going off the hard way.
– They are not going because someone is pushing them around; they would stay all the longer under those conditions. If the farmers on poor properties in the Hunter want to go to the steel works, it is their choice and not ours. There is a completely different situation in England from what we have here. England was a country bedevilled with war and it had to produce. In England the Government paid a subsidy of £7 an acre for breaking up new land and a subsidy on lime, new fertilisers and new buildings. The Government paid subsidies on everything in order to encourage greater production. In various countries in Europe enormous subsidies are paid on almost everything.
This is a country of wide spaces, and if a man wants to go on to a property and he makes a decision about what he will produce, we will let him go on to that property and produce what he wants to. That is the policy of the Liberal Government. We will vote for the subsidy for another five years and I think that intelligent people will be glad that the Government has said it will add another inquiry to the many we have already had. Perhaps it will look at aspects of the industry which are now becoming important. It may consider the possibilities of vealers, which are bringing such a fabulous price at the moment, or the possibility of allowing one man to buy another man’s property if the second man is agreeable and enters into the transaction of his own free will. Look at all these things, but do not forget that every day the production per cow is increasing and the production per farm is increasing. The technological aptitudes on our farms are the best in the world. Look at the material that Dr Whittlestone gave us. The honourable member for Robertson (Mr BridgesMaxwell) says he was the secretary of the Dairy Research Foundation. I want to assure the House that in improved pastures, irrigation, water supply, milking machine techniques, manufacture of cheese and other dairy products, the standards in Australia are equal to and probably better than those of any other country.
– I wish to make a personal explanation, Mr Deputy Speaker.
-Does the honourable member claim to have been misrepresented?
– Yes. The honourable member for Macarthur (Mr Jeff Bate) said that it was my practice to cross the Sydney
Harbour Bridge in a company car. That remark was not only dirty but was also completely and utterly untrue. Secondly, he implied that I was responsible for a policy adopted in the State Treasury in 1942. As a matter of fact I had left the Treasury seven years before that time. Next the honourable member said I was some kind of a commissar because I planned to get the marginal dairy producers into some other form of production. This was not what I said; it is what the Government planned. If the honourable member wants to say this against the Government he cannot pretend to be a supporter of the Government. He also said that I had some hatred of dairy farmers. This is particularly untrue. I am endeavouring to help the dairy farmer who has, I think, been let down by some of his professed friends who are, I believe, a little too close to the vested interests in the dairying industry.
– I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– Yes. The honourable member for Macarthur (Mr Jeff Bate) suggested that I cross the Harbour Bridge in a Mercedes. T want to say that I cross it on a scooter.
– Every five years we have a discussion on the dairying industry and it always seems to develop into a long and repetitious debate in which we manage to depart from the normal procedures of this House. For the life of me I cannot see why the subject should not be taken seriously. I hope that one of these days it will bc taken seriously and that we will be able to approach this subject quite dispassionately and without the hilarity that has accompanied the efforts of the honourable member for Mackellar (Mr Wentworth) and the honourable member for Bradfield (Mr Turner) to confuse the whole subject by throwing in a lot of thoughts that really have nothing to do with what is in the Bill before us.
The Australian economy is based on a wide range of undertakings. Primary and secondary industries are interwoven and depend on each other. Our food production, mineral production and manufacturing industries are growing at a tremendous pace. Each one of these activities has its own role and its own place in the economy. Each provides a living for a number of people and each makes some sort of contribution to the general community welfare.
In food production dairying occupies third position in importance. We have had the figures several times already in the debate but I will repeat them. The value of production in this industry is $415m, and the industry contributes to the welfare of everybody in the community. More important, however, is the number of people employed in the industry. A precise figure is very difficult to obtain, but I think we may safely put it at 100,000. It is probably higher. However, as has already been said, over the last five years and since we really began to take notice of the McCarthy report, the number of farms has been very significantly reduced, so that today there would probably be fewer people employed in the industry than there were previously. There is, however, the same number of country towns connected with the industry. There are hundreds of these places which cater for the particular needs of the dairying industry. One has only to visit any one of them on sale day to see just how important the industry is in helping to maintain the process of decentralisation which is of incalculable value to Australia.
In the various districts there are conditions which favour the production of different commodities. Differences of soil or of weather or of various other factors make for favourable conditions in one place for the production of wheat, in another for meat, another for dairying, another for poultry farming, another for fruit growing and so on. But dairying is the most versatile of all these pursuits. It can be carried on in almost any area, and one of the unfortunate results of this is that as new land is opened up there are people taking up this land who find it necessary to make some money fairly quickly, and they take up dairying because this is one way in which they can do so. As a consequence we find the dairying industry throughout the whole of the settled seaboard of Australia. Wherever people have settled they have needed milk. It is a natural food, the food that all animals provide for their young. Milk naturally has formed a very important part of our diet. After new areas have been opened up towns have developed and industries have come in, and in the manufacturing industries that have established themselves in this way we see our best examples of decentralisation.
The work in the dairying industry is harder and more demanding than in most other industries, and it requires a continuous effort. Overall, however, the industry makes a great contribution to the Australian economy and everybody is interested in maintaining the highest standards possible in the industry and for the people in it. So I am delighted to find this Bill being introduced to extend the dairying industry subsidy for another five years to June 1972. But I am most dismayed to find that it does so with no change whatsoever in the terms of the plan. The Minister for Primary Industry (Mr Adermann) said in his second reading speech that the bounty of $27m is a sound investment in a vital area of primary production, the aim of which is to maintain at reasonable levels the cash returns received by dairy farmers who supply milk and cream for manufacturing purposes, at the same time holding down the price of butter and cheese to as low a level as possible. This sums up the position in a very few words. Most of what has been said in the debate today and will be said tomorrow is really unnecessary because in those few words of the Minister the whole matter is summed up. However, because of the diversity of the feelings that have been expressed it is necessary to go on to a rather wider explanation. The Minister said that the aim of the bounty was to maintain at reasonable levels the cash returns received by dairy farmers and to hold down prices. This seems very similar to the treatment which is enjoyed by secondary industries. The purpose of that treatment is to ensure that people in those industries enjoy a reasonable standard of living or, in the Minister’s words, receive a reasonable level of cash returns. This is a reasonable policy which one would expect from any government.
We must remember, as has been forcefully stated by the honourable member for Macarthur (Mr Jeff Bate), that the subsidy paid to the dairy industry was introduced by a Labor Government against the wishes of the industry. The tact that this was done to offset costs has been fully aired. The subsidy was given because the dairy farmers, faced with rising costs, needed to increase their prices to maintain a satisfactory return. The same thing happens in every other industry. I do not see why a different view should be taken when considering the dairying industry, because butter is universally accepted as an. essential health food. The average housewife believes it is a necessary element in the diet of her family. It is now, and was more particularly years ago, an important item in our cost of living. It was considered by the government of the day to be of vital importance in the ‘C series index, which controls wages. So the then government introduced this method of assistance, the purpose being to keep down prices to the consumer and not to give more to the producer. This happens in relation to other products under the guise of a tariff.
The government of the day had to choose between an increase in the basic wage and the payment of a bounty through the butter factories - not to individual farmers. The bounty had less effect on the Budget than would have been the case if there had been a rise in the wages bill because, as we all know, a rise in the wages bill means the start of a spiral of rising prices for all other commodities. This then leads to another increase in wages, which does nobody any good. Certainly there has been a change in the wage fixing process since those days, but the subsidy is still a consumer bounty. I emphasise that very forcefully.
Back in those days, too, there was the concept of a cost of production; but this is no longer used. Because for over twenty years the industry has had both the subsidy and the cost of production concept built into the structure of its economy, they must now be regarded as essential. What surprises me is that the subsidy, which rose from about $4m originally to $27m in 1956, has since remained static. As we all know, the value of money has changed very greatly since then. The bounty once represented nearly 14% of the Treasury expenditure of the day. Now, at the figure of $27m it represents only .5% of total Treasury expenditure. It has remained static while everything else has increased. Today dairy farmers are getting only one third of the relative value of the bounty. I emphasise that I am speaking only of relative value. But this does not mean that it should necessarily stand at S27m.
It is estimated that, if we were to provide the industry today with the equivalent in real money terms, the subsidy would actually be S36m. This works out at the trifling figure of 1.6c per lb of butterfat. This amount would not overload the ability of the taxpayer to pay nor would it increase to too great an extent the amount taken out of the economy by the industry. It is an amount which would bring the bounty closer to parity in relation to the holders of whole milk contracts, meat producers and wheat farmers. The wage earner gets wage adjustments to enable him to meet the increased costs with which he is faced. The dairy farmer should be entitled to keep pace with increased costs which he faces.
In fairness to the efficient producers of the industry who are caught in the price squeeze, an increase in subsidy is long overdue. Although this has not been mentioned in this debate today, the subsidy should be increased at this time. The basic wage has been increased substantially, and margins have also been increased. White collar workers have received very generous increases in salaries. They are not associated with production, as are dairy farmers. Because various grades in the Public Service have received salary increases - some of them are now out of balance with others - and because of the relativity which has been built into our wage structure, it is apparent that there must be an increase in the salaries of members of Parliament this year. However, the only way a dairy farmer can obtain an increase in income is by increasing his own workload, efficiency and productivity. This is very often done at the expense of farm development, because the farmer does not get sufficient return to enable him to invest capital in development programmes. It is only by extra work that many farmers are able to carry on.
Some of the people who have been criticising the industry seem to think that we are still back in the bad old days when methods well remembered by some people as the mum, dad and the kids methods of dairy farming were used; but this is not so. No other section of industry has been forced to take such strong measures to increase the efficiency of the individuals in it. In the face of shrinking returns, dairy farmers have a market which consists of more health and diet cranks than one meets in any other industry. They have also had to meet some quite wicked propaganda from the margarine producers. One manufacturer in particular breaks the laws of his State and all the ethics of advertising. Frankly, I feel sorry for anyone who buys cheap margarine which he advertises in New South Wales at 38c per lb. I believe the price in Victoria is 40c per lb. This manufacturer puts a label on his product stating that it is cooking margarine. It is 90% animal fat. We all know this. The honourable member for Cowper (Mr Robinson) told us in very lurid terms what it is. I will just call it dripping; it is worth 12c per lb. Pensioners and many others say they cannot afford 50c per lb for butter, but now they are urged to pay 38c for this cheap substitute. If they had a look at the nutrition value, they would see that it would pay them to have three slices of bread and butter and then have one slice without any butter rather than have four slices of bread with margarine. They would be much better off nutritionally and no worse off financially. All I can say is that if they are silly enough to fall for this advertising gimmick and buy for 38c something which is worth only 12c, they deserve the indigestion that goes with this cheap and nasty substitute. If it is dollars and cents that count, butter is one of the cheapest foods we have today when we compare the increases that have been made in prices. Bread and meat and all the other items we use in our daily lives can go up, and beer and cigarerttes can double in price, but there is no reaction. Purchasing goes on. However, for any family to deny itself butter on the score of price is quite unrealistic.
All the time this subsidy has been paid at the level of $27m - and it has been static for ten years - costs in the industry have been increasing. We are in a market that is resistant to price increases, and consequently it has been essentia] for the industry to be able to absorb these increases. Wages have taken a jump, and freight rates, feed costs, machinery prices and the prices of a lot of other things have been increased. The official average cost of production figures show us that over this period, when the subsidy has remained static, when the farmers have had to work harder and put more into their own efforts in order to maintain reasonably the same level of income, they have had to absorb a 38% increase in costs. That is a pretty remarkable effort
During this time changes have been forced on the industry by this raising of living standards, which would have gone down otherwise. These changes have been much more dramatic than most people recognise. A lot of thought has been put into the industry by the people who are really concerned with it. Manufacturers have brought out new milking techniques. We have had quite splendid advice from New Zealand on methods that have been developed there because people in that country have made a much more intensive study of some of these items than we have done here; they have very willingly come across and shared this information with us because we have such a dual interest in this industry.
As the honourable member for Macarthur (Mr Jeff Bate) said, the design and operation of machines, with low level milking, more rapid milking and much more efficient cleaning, has made the job easier. The introduction of bulk milk chilled tanks and pickup tankers has revolutionised the whole countryside. When the first pick-up tankers appeared in my own area down at Archers Creek, I did not believe they would take on as they have done. We despaired for a while, and many people said: This is adding to costs, and it is making the game too expensive for the ordinary battler to be able to handle.’ However, the dairy factories have helped finance this development; they have gone out and assisted the farmers to put in bulk tanks for the bulk pick-up, and it has completely revolutionised the whole concept of milk transport. The savings have been passed on to the farmer in better returns. Because the factories are co-operative concerns, particularly down our way, these savings have all gone to the benefit of the farmer.
With herringbone sheds, one can handle more cows in less time. However, the farmer has to do more work. Pasture improvement, an increase in fertiliser use and other developments have made dramatic changes and given a marked increase in gallonage per cow and gallonage per acre. These things are completely overlooked by the critics we have heard from today. Because of these improvements the industry has been able to carry on. However, despite all this the position worsens each year in regard to return for effort when one compares this return with the cost of it. The return deteriorates a few cents per lb of butterfat. The gap between what we might call the notional cost and the return has grown from about 8c in 1956 to about 20c today, ten years later.
This is not the only side of the industry that has made marked improvement. In promotion and export development there has been a great change. People in charge of that section of the industry have realised the difficulties that must arise with the advent of the European Economic Community. If Britain goes into the Common Market it does not mean that a large amount of our butter is suddenly going to be unsaleable. Where are the people of Britain going to get the butter they put on their morning toast and marmalade? No one can tell me that France will be able to increase its production out of sight overnight; it could not do it. The people who are in charge of the negotiations know this. The matter is up to them. They have turned in other directions, and the measures taken are now beginning to take effect. The British market still takes 70,000 tons of butter. We would be crazy not to send butter there. However, we are turning our efforts in other directions as well, such as to Africa, Asia, the Pacific and Central and South America. We are opening up markets in these new areas. We have very nearly reached the 2,500 tons mark this year, which is not a bad effort. These strenuous efforts have been successful in diversifying the industry and anticipating lost markets. Then we have the decision to operate the milk plants in our near north, taken in 1961 as an outlet for surplus production, and the three plants set up are now operating very satisfactorily. We expect quite a steady improvement. These have been acknowledged as forward moves which are going to help the industry to get out of some of its problems.
We will derive some benefit from this Bill. We also have a Bill dealing with the payment of a separate subsidy in respect of processed milk products to enable the factories in particular areas to pay a price for their supplies comparable to that paid to the general run of dairy farmers in other parts of the country. It is a pity that that is restricted to $800,000, because this does not fully meet the position. Probably more like Sim would be required to compensate fully the producers in these areas and bring them into parity with producers in other areas.
The New South Wales Milk Board area has been mentioned. The Board has been for some time, of course, encouraging its suppliers to produce far too much milk in order to make sure that there is milk for the Sydney market, but at the same time the price in Sydney has been kept high enough to cause some limitation on the intake of milk in that market. If the Board were to reduce its price so that it could sell the extra quantity of milk that would be all right, but because it encourages the farmers and pays them a little more it is getting the benefit both ways. That section of the industry is getting a little too much benefit from the subsidy because it is already being paid for its over-production.
Another thing that I am sure is going to make a lot more difference than most people realise is the number of amalgamations going on in factories. Perhaps this has not been happening all over Australia, but anybody who looks at the picture of the dairying industry in Victoria will see what has happened through amalgamations there. These amalgamations are designed to enable farmers to get more out of their product and to be able to take up more of these costs which limit the level of their returns. Some of the factories set up in the past were able to handle only butter and cheese. All the other possible products were lost. If only butter and cheese are handled by a factory then some portion of the milk is not being used in the most profitable manner. By enlarging individual depots, by concentrating all machinery in one area, by having staff in the one place, and by rationalising pick-up methods, some of our dairy farmers in the South Gippsland area alone have made enormous savings. These progressive changes should demonstrate to the critics of the dairying industry that the industry is quite capable of looking after itself.
New products have been introduced. There is butter powder. There are special mixtures for diabetics, and special milk powders. One project that has not had nearly enough effort put into it is the sale and distribution of the instant mix products. These have an enormous export potential and there will be dramatic improvements in them in the very near future. All honourable members know that there has been a reaction against the intake of fats. This is a dietary fashion change which is inevitable. The industry has to face up to it. It has taken measures to do so. I am sure that if the opportunity is provided, the people concerned with the management of the industry are quite capable of seeing that diversification is carried out in a way which will mean that these farmers who find this a very satisfying way of making a living will continue to do so, to the very great benefit of the Australian economy.
– I want to indicate quite clearly from the outset that I support the Bill. However, I wish to lay particular emphasis on the provisions, ably set out by the Minister for Primary Industry (Mr Adermann) in his second reading speech, for an inquiry into ways and means of assisting marginal producers. I want to go a little further and make a point which, so far as I know, has not been made so far in this debate; that is that implications involved in this inquiry as it proceeds - ‘and I note with interest that the Minister has indicated that it will be proceeded with as quickly as possible - could be very significant for other fields of rural industry. In fact, they could even provide a basis for a new way of thinking about subsidising rural industries.
Prior to the middle of the last century farming methods were not mechanised. They were primitive. A combination of human and equine sweat managed to till a few acres. Although our rural population bad increased significantly since the arrival of Captain Cook we were not making any significant progress in agricultural production in Australia. But with the invention of an effective wheat stripper in South Australia in 1843, Australia began an industrial revolution on the land. This has continued to a point where today primary industry must be considered in the same business terms as any other industry. Tractors be came increasingly available after the 1914- 18 war. There was during the war a great increase in the area under wheat because it was required for war purposes. After the 1939-45 war bigger and more versatile tractors, bulldozers and a great variety of labour-economising machinery continued the process of the growth of our primary industry at an ever-increasing rate - particularly after 1949, when a progressive Commonwealth Government was brought into power.
Technological progress on the land has now reached the point where the employment capacity of the land can no longer be considered in isolation from other industries. In fact, while the number of people permanently living on the land may be decreasing, the number of people permanently employed in manufacturing, selling and servicing farm machines and producing fertilisers and other products for primary industry is increasing, and production figures continue to rise.
I would like to mention a few figures to support this contention. The figures are taken from ‘Year Book’ No. 52. In 1961 the number of people of all ages who were living permanently on rural holdings in Australia was 1,015,133. In 1965 the figure was 1,002,912, which was a net decrease in that period of 12,221. If we go back ten years we see that the decrease was even greater. Let us take the span of eight years from 1957 to 1965. The figure in 1957 was 1,039,481. In 1965 the figure was 1,002,912 - a decrease of 36,569. In the four year period from 1961 to 1965, despite the net decrease of about 12,000 people who were permanently living on rural holdings in Australia an additional 5,089,000 acres were brought into production and were under crops. Turning to the pastoral side of primary production in Australia we find that in the same period the value of production rose by about $304. 9m. If any honourable member is wondering what effect the drought had on these figures, the figure for 1963-64 - the year prior to the final year I am using - was $ 1,340.5m, or $1 19.2m more than the total for 1964-65. Of course, this figure of $1 19.2m indicates only part of the cost of that drought. But this pattern that I have shown can be expected to continue in the foreseeable future.
The dairying industry, in common with other sectors of rural industry, has been affected by this pattern of development. Part or the pattern has been created by our ever-increasing standard of living. Those honourable members opposite who may contest the claim that our standard of living has in fact been rising have only to look at the figures for themselves. Whatever index is used there is no doubt that our standard of living has been rising steadily. This situation has been particularly marked since 1949. But increasing standards of living are achieved only by constantly increasing production for each hour of work.
For some time it has been increasingly apparent that many marginal farmers do not have the productive capacity and the profitability to make the capital investment constantly required to increase production for each hour of work or to vary production to accommodate changing markets. Consequently we have a situation in which many marginal farmers, despite a considerable capital equity in their farms and long hours of work, are netting an income which does not compare very well with the basic wage. It is often less than the basic wage and, in the case of large numbers of marginal farmers, often below the average income for the whole of Australia. This does not take into account any return on capital; it is just net income.
As the honourable member for Macarthur (Mr Jeff Bate) said, the prices received for farm products have a very special relation to the way in which we calculate the indices used in arriving at the basic wage and various award rates. So farm production is in a peculiar position compared with other forms of production in that it is related very basically to our costs and the costs to some degree affect labour costs. This is the basis of the problem which now confronts the dairy industry because it would be profitable at this time if the labour content of dairy industry production costs was similar to that in other and more profitable industries. But marginal dairy farmers have a special problem, as do many other marginal farmers, in that production from the land is not as easy to change, in my view, as are some other forms of production, particularly secondary production. It is not as easy to make sudden cringes on the land. The amount of capital tied up in land and in machinery not used to its full capacity may be very considerable. I feel that for this reason the most important part of the Bill is the provision for investigating the problems of marginal dairy farmers.
All industries can be subsidised. This Bill provides for the continuation of a vital and important subsidy for the benefit of the Australian dairy industry. I agree with the Minister that the provision under this Bill of a subsidy of $27m in respect of butter, cheese and related butterfat products for each of the next five years may be regarded as a sound investment in a vital area of primary production. But again the most important thing is the inquiry into marginal producers. It is important because the subsidy was first introduced, I believe, to support an important industry vital to Australia not only from the point of view of our internal costs and our standards of living but also from the point of view of being a significant earner of overseas income.
But there must be some light at the end of the corridor. To date there has not been. In my opinion this measure, while greatly appreciated, is well and truly overdue. I am very glad to see it introduced. I think it is the result of a liberal approach in trying to help people to help themselves out of their difficulties rather than in perpetuating those difficulties by continuing the subsidy to support high cost and uneconomic farms. None of these farmers wishes to be forever supported on some kind o. breadline. I am sure they welcome the proposed inquiry. I do not think I am taking a line opposed to the views of the Country Party. At the same time I am not taking a line particularly opposed to the views of the honourable member for Mackellar (Mr Wentworth).
– The honourable member cannot have it both ways.
– I can, because so far as this aspect is concerned, I think a great deal of fat was chewed over an unrealistic series of points. 1 did not feel that the honourable member for Mackellar was against the dairy industry. In fact, I am sure that he is very interested in helping the industry as much as possible. He wishes to accelerate the improvement of the industry. In Committee he will move an amendment to reduce the five-year period to one year. I do not agree with his proposal, and I will oppose it, but there is nothing in what he said on this aspect which is prejudicial to the dairy industry.
– Of course there is. The job cannot be done in one year. It will take five years.
– To the best of my knowledge the honourable member for Mackellar did not say that the job could be done in one year. He said that the whole matter should be reviewed at the end of twelve months, at which time he would not be opposed to the spending of more money by way of bounty or to assist marginal farmers. I do not agree with his proposal because I think it will take a lot longer than twelve months before we achieve any realistic effect. I think the dairy industry deserves a five-year programme. I have no doubt that if the industry really wanted it the plan could be varied, but the Government is committed to at least this minimal provision under the new five-year plan.
The Government should not be content with finding ways to assist only the marginal dairy farmers. As soon as the current proposal achieves the first blush of success I will advocate that it be extended into many other areas of rural industry, because there are many other types of marginal farms in Australia. The best way to help them is by adopting the methods prescribed in this legislation. By adopting these methods and by making finance available we could even reach a different attitude to closer settlement and land development generally. It is not difficult to find figures to support the closer settlement schemes of the States. It is not difficult also to find figures and arguments to destroy those schemes for the simple reason that in most cases the schemes have been based on the concept of a living area. This is a highly fictitious concept for the simple reason that what is a living area as described by a particular Lands Department on Friday can very quickly become on Monday less than a living area. On the other hand, as all of us saw in the wool boom years, many of the so-called living areas became very good and comfortable living areas. However, in my view the way in which the Lands Departments of the various States considered the matter was irresponsible in that once a block was ballotted for and selected, continuing responsibility was limited to extremely minimal provisions - usually only provisions which were restrictive on the tenant. For example, they provided that the tenant had to stay on the land for seven years or for some other period. In many cases this created great hardship. In many instances the legislation was very cruel, because the living areas prescribed on a falling market became hardship blocks overnight. They became blocks which the tenants could not only not develop but on which they could hardly exist.
In my view, all of this kind of settlement could have been carried out much more effectively and quickly if the various schemes had been based on a system of financing the settlers onto their blocks. This applies also to returned soldiers. I hope that never again will we have the old system, even though the living area principle still survives. If we were to adopt the financing system there would be a continuing responsibility on the part of financing organisations to make sure that, as a result of a reasonably careful analysis of any proposition they were financing, they left enough margin to enable them to get back the capital they had lent, even if it was lent on the low interest rate of 1% or 2% over a long period. The organisation would still have a continuing interest in the person’s prosperity and perhaps an interest in refinancing him at a later stage if he found that his original capitalisation, and his productive capacity for his area was too small.
This Bill opens up the possibility of developing a new way of looking at many problems that are peculiar to our rural industries. For a long time the attitude of the Opposition has been that, having established a subsidy or a bounty, that subsidy or bounty has some kind of attractiveness. In other words, it is a direct government supply to an industry, which is then engaged in wooing the Government for ever. Such an attitude leads to the sort of statement that was made by the honourable member for Wide Bay (Mr Hansen) when he made the point - if we can call it a point-that this subsidy or bounty had not increased in proportion to the rising cost of living. I am not sure that I agree with his phrases ‘the rising cost of living’, but the point is that if every subsidy or bounty were so increased there would never be any increase in our standard of living. We can only increase our standard of living by getting more out of every productive hour. To suggest that every shortfall in the price for the product as against the cost of production should be met by an increased bounty or subsidy would, in effect, eventually kill not only the industry concerned; if it were carried throughout the whole economy, it would certainly produce a situation where we would be all on the rocks because there would no longer be any industries left to pay subsidies for the less efficient ones.
I mentioned earlier figures which show the decreasing tendency for people to live on the land. This is something we cannot get away from. Even the intensive closer settlement attempts by State governments over the last fifty years have not significantly reversed this tendency. There have been sudden local increases of people on the land in irrigation areas and in the development of sugar production. There was a recent instance of this in the production of cotton. Apart from these isolated incidents, the general pattern is for an ever decreasing number of people to produce an ever increasing quantity of products. They have to be assisted by related industries. The assistance comes from people in towns and in factories which manufacture the machinery that is necessary for the continuation of this process.
I should like to finish by emphasising that the theory of continuing subsidies for ever is a false one, and that any system which can produce in an industry the hope of sufficient economic efficiency to make that industry no longer require a subsidy is very good and necessary. I believe this would be welcomed by the people it affects even though, as some people have said, they have to get out of the industry. In effect, they are only making a change. Many of them would not so much be getting out of the industry as varying their production by producing, say, vealers in association with dairying. This is the way in which we can help not only the dairying industry but every other marginal rural industry in Australia. I am certainly conscious of the problems involved, particularly in the case of marginal producers in the dairying industry, as about 20% of the people on the south coast of my electorate are employed in the dairying industry, whereas only about 1% of those on the tablelands are so employed. From Milton, at the northern end of the south coast, to Eden at the southern end the dairying industry is of considerable importance. Of course, it is of considerable importance throughout Australia. But of even greater importance is what we can learn from the development of new systems of financing or otherwise helping marginal producers. This can lead, I think, to new attitudes towards assisting any industry in Australia. But I am thinking primarily of rural industries.
– The Bill now before the House provides for the continuation of the payment of a bounty in the same manner as has been operating for the past twenty years. The Bill is wholly supported by members of the Opposition. As the Minister for Primary Industry (Mr Adermann) pointed out, the aim of the bounty is to maintain at reasonable levels the cash returns received by dairy farmers who supply milk and cream for manufacturing purposes. The Australian Labor Party strongly supports the bounty system. I have a great deal of pride and pleasure in reminding the House, as the honourable member for Wide Bay (Mr Hansen) did earlier, that the scheme was first introduced by the former member for Lalor, Mr Reg Pollard, back in 1947. This was the first of the five year plans and was a very succesful attempt by Labor to stabilise the dairying industry. This is of prime importance to Australia when we realise that the industry ranks third amongst the Australian primary industries even though it employs only 4% of the total work force.
Dairy farmers comprise 25% of primary producers and 600,000 people are directly dependent upon this industry. The capital investment in dairy farm lands and buildings amounts to $200m, with a further $100m invested in butter and cheese factories which employ some 10,000 workers. So we should appreciate the tremendous value of the industry to Australia. Honourable members on this side of the House, members of the Australian Country Party and those members of the Liberal Party who are interested will know that rural industries encourage decentralisation. As ray colleague the honourable member for Dawson (Dr Patterson) pointed out, rural industries provide employment not only for the people engaged in them but also for people engaged in other walks of life, such as transport and the various tertiary industries that are associated with the primary industries in rural areas. Employees in associated industries owe their very jobs and their weekly pay packets to primary industries including the dairying industry. Australia has a total of some 32 million dairy cows and they produce 1,500 million gallons of milk annually. Of this 63% is made into butter, 9% into cheese, 6% into milk products and 22% is used for other purposes.
Much has been said in this debate about the Dairy Industry Committee of Inquiry. The report of this Committee was tabled six or seven years ago. It pointed to the need for diversification in the industry. Reference has been made several times in this debate to the dangers that will confront the dairying industry if Britain joins the Common Market. The possibility of this happening no doubt poses a very real threat, but 1 think we should wait until it happens before deciding on its effects. After all, we were threatened with this possibility some years ago and we are again told that it is likely to happen. However, we must always remember that General de Gaulle is still the head of the French nation. He was the stumbling block some years ago and opposed Britain’s entry into the Common Market.
We have also been told of the declining use of butter in Australia. The Committee of Inquiry did a magnificent job. It drew attention in its report to the problems of marginal farms. The honourable member for Dawson rightly pointed to the difficulties facing most producers who had not reached the standard of 8,000 lb of butterfat, which is an economic living for a farmer and his family. The problem of marginal farms is, of course, a very serious one in northern New South Wales and in Queensland. However, as I said, the industry took notice of the Committee’s report and a good deal has been done to diversify activities. Thus the industry is becoming prepared for the dangers that it will face and the possible threats to its existence.
I pay tribute to those people who manage the various butter factories and who unselfishly serve on the boards of butter co-operatives. They have used considerable skill in managing the industry since the publication of the Committee’s report and they have done a magnificent job in looking for new markets. About four years ago I was in the Caribbean when a trade delegation arrived from Australia. Members of the Australian Dairy Produce Board accompanied the delegation. The delegation was a little pessimistic because other countries had already become established in the area. For example, New Zealand had been there foi years and had a lion’s share of the market. But the delegation was not to be outdone and managed to secure valuable markets there. Not long afterwards a trade delegation went from the island State of Tasmania. lt was sponsored by the Tasmanian Labor Government and included representatives of the dairying industry. The delegation went to South East Asia and was able to capture very good markets there. As I say, I pay a tribute to these people who, seeing the dangers ahead and realising what could happen to the industry if we lost the traditional market in the United Kingdom, which takes some 17,000 tons of butter each year, were prepared to seek out other markets and to diversify their activities. This brought stability to the industry and it was able to avoid having all its eggs in the one basket. 1 was interested in a report published earlier this week in a Tasmanian newspaper. It said that the past four or five years had seen dramatic changes in the pattern of Tasmanian dairying. Although the article refers to Tasmania, it has implications for all the other States. It pointed out that, although the quantity of butter manufactured in my State has not decreased, a much greater amount of the total milk production is being used for other products. These include cheese, anhydrous milk fat, milk powders and casein. Last year had seen the production for the first time of a long life ultra-heat treated milk by a Launceston factory, the first in Australasia to venture into this market. The article pointed out that in 1963 cheese production totalled 643 tons and that in 1966 it totalled some 2,940 tons. This is a substantial increase in three years. The estimated output of more than 3,500 tons for this year would be manufactured mainly at Burnie and Wynyard, which are two of the finest cheese factories in the Commonwealth. A report of the Australian Dairy Produce Board which I read recently showed that a few years ago only 17% of Australia’s cheese production was exported to markets outside the United Kingdom but today well over 50% of our cheese production is exported to these markets. The venture of producers of cheese and other products into new markets shows a good deal of initiative and resource and prepares the industry for the bumps it may have to take later.
In Tasmania we have a butter oil factory at Deloraine in northern Tasmania. More than 1,000 tons were made last year and a much larger extension was forecast for casein and for milk powder production. To cope with this increased and diversified production new dairy factories have been built and others have been greatly modernised with new equipment. There have been great changes not only in the type of produce manufactured but also in the markets to which this has been sent. Five years ago practically the only export market available was the United Kingdom, but as I pointed out a moment ago reports of the Australian Dairy Produce Board indicate only too well that this is no longer the case and that we have been able to secure markets in various other parts of the world, especially in the East and South East Asia. In 1964 the first exports of Tasmanian cheese to Japan commenced, and in the following year cheese was exported to the United States of America. Those two countries also take most of our casein. We also send most of our butter oil to Thailand, the Philippines and Singapore. Thailand and Japan utilise most of the powdered milk that we export. It is interesting to read too, in the article, that exciting new markets in Malaysia, Singapore, Hong Kong and the Persian Gulf countries are being explored as possible markets for ultra-heat treated milk. This product should have a great impact, particularly in South East Asia and the eastern countries.
Anyone who thinks that the dairy industry is highly paid is entirely wrong. We believe that the subsidy is essential. One of the members of the Country Party pointed out earlier tonight that dairy farming is a seven day a week job and twenty-four hour a day job at that. We are very fortunate that in many parts of Victoria and in Tasmania - in choice areas like Circular Head in north western Tasmania - it is difficult to get cows to dry off even after ten or eleven months. With an assured rainfall of 60 inches a year it is an ideal place for dairying. It is one of the best dairying areas in Australia. When I was debating war service land settlement recently I indicated that King Island was a magnificent dairying area because it is assured of a good rainfall and is the only place I know of in Australia where grass grows all the year round.
In spite of all this, I do not think anyone, particularly someone from the Liberal Party or the Country Party, ought to get away with suggesting or thinking that the dairy industry is well paid. I should like to quote figures that indicate this situation only too well. My figures start from the year 1946, which was the year before the first five-year plan for the dairy industry. The following table outlines the position:
In this eight year period butterfat increased in price by 137% or at the rate of 17% per annum and the basic wage increased by 164% or at the rate of 204% per annum. It is interesting to examine the period from 1955 onward, but ..without quoting all the figures that are available I point out that in 1955 when butterfat was bringing 4s 8d per lb the basic wage was £12 9s and in 1963 when butterfat was bringing 4s 54d the basic wage was £14 14s. The price of butterfat fell by 7% during this period while the basic wage increased by 18%. Although there has been a tremendous increase in costs and in everything that the farmer has to buy - particularly replacement parts for tractors and for essential services, including transport, in respect of which 1 criticise the Government for not trying to stabilise overseas freights on our farm produce - he is getting less today for butterfat than he received ten years ago. During this period overseas freight costs increased by about 10% each year, and this is something for which the Government stands condemned.
The Labor Party believes that we should enter into the overseas shipping business in order to convey our products to and from the world markets. If we could do this we could compete with other countries on the world’s markets. The position is serious, particularly when the Chairman of the Australian Coastal Shipping Commission, Captain J. P. Williams, in his report last year, indicated that the Australian National Line at this moment could enter into the overseas shipping trade and still make a small profit. I ask the Government seriously to consider chartering ships and putting them under the control of the Australian National Line whose officers, including Captain Williams, have the technical knowhow, to transport Australian dairy products and other primary products to the world markets that we have been discussing.
Although there has been a tremendous increase in costs in the last ten years the figures I have quoted indicate that the dairy farmer is receiving less for his butterfat today than he received ten years ago. Despite this, I pay a tribute to the Australian Dairy Produce Board and wish to refer briefly to some of the work it is doing. At present two-thirds of the world’s population is undernourished and it is necessary for the nations which export primary products to use international affiliations to create agreements that will bridge the gap between surpluses on the one hand and shortages on the other. The Australian Dairy Produce Board has been developed over the years to regulate the flow of butter and cheese to various overseas markets, while the Commonwealth ‘ Dairy Equalisation Committee has handled the finance from those markets and has distributed it to the farmers. It also handles the bounty referred to in this Bill.
The United Kingdom market has achieved some stability since the introduction of the quota system by cutting out the speculator, with the result that Australia is now selling its own brand, ‘Kangaroo’ butter, at the rate of 400 to 500 tons a week at a price 35% above the pre-quota price. Alternative markets have also been sought not only by the Tasmanian Government but also by the Trade Commissioners who have been stationed in various centres overseas by this Government, and also by the Australian Dairy Produce Board, which ha> looked for markets particularly in South East Asia which is considered a very suitable area in which to promote increased consumption of dairy products. In Australia we eat 1,100 lb of dairy products per capita annually. In Europe the figure is about 800 lb, in Russia 400 lb and in South East Asia only 80 lb. In Pakistan and some parts of India it is only 2 lb per capita. Compare this with the figure I have already given of 1,100 lb in Australia.
The South East Asian countries are rapidly becoming Westernised. They have found that their people grow better with the assistance of the proteins provided by dairy products, and the Australian Dairy Produce Board has done its best to promote increased sales in the South East Asian countries. Reconstituting plants have been built in these countries with Australian money and knowhow. The result is that more than 50,000 tons will be diverted from the United Kingdom market into these newfound markets in South East Asia. The money that has been spent in this direction has been contributed by Australian dairy farmers from the amounts which remained in the stabilisation fund at the conclusion of the Second World War. This money is now invested on a long term basis.
Dairy products are also being sold in Peru. In Japan the sale of Australian cheese has increased from 100 tons five years ago to an estimated total of 5,000 tons this year. These figures relate to Australian cheese and are not to be confused with the figures I gave previously for Tasmanian cheese. The per capita consumption of cheese in Japan has trebled in the last three years. It is now 2 lb per capita compared with Australian consumption of 6 lb per capita. I want to point out to those interested in this industry that Japan is very quality conscious. Japanese doctors have visited Australia in recent years and have paid special attention to butter and cheese factories to make sure that our consignments are of the required quality. Japan is also interested in purchasing edible caseins as a supplement to baby foods. This is interesting because the use of this supplement has resulted in the people of that country growing an extra two inches in height. The local market in Australia is high enough to offset the low export price and so ensure a reasonable return to dairy farmers.
Although the industry receives the annual subsidy of $27m the producers are still $26.4m short of the cost of production based on the last official figure given for cost of production. In this connection I would point out to the House that in 1964 when there was a rise of 2d per lb in the retail price of butter spread over Australia’s production of 200,000 tons, this increase created a consumer resistance resulting in a sales reduction of 2,000 tons, and the return to the dairy farmers was eventually only .8d per lb. This is the answer to the people who think that immediately the price of butter goes up the return to the dairy farmers will be increased to the full extent of the rise in price. If the local price rose 3d per lb, consumer resistance loss would increase to about 3,500 tons, and the eventual return to the dairy farmer would be only 34% of the rise in price. Further, if the retail price rose by 6d per lb, or 5c in our new currency, over the 200,000 tons of production, and there were no consumer resistance, the increase in the return to the dairy farmer would be 51% after all equalisation and distribution costs had been taken into account.
We all agree, and I think the members of the Australian Dairy Produce Board have pointed this out on several occasions, that there will be a psychological resistance if the price of butter goes over 5s per lb. I do not know why there should be this psychological barrier associated with the old phrase ‘a dollar a pound’ but there is no doubt that this psychological reaction will result, and it is remarkable how people in such circumstances will turn to the cheaper product, margarine.
I pay tribute to the Australian Dairy Produce Board because, as has already been pointed out, its members have gone out and sought new markets and endeavoured to cushion the industry against the possible effects of Britain’s entry into the European Common Market. They have also done a great deal of work in Australia in such directions as the testing of dairy produce recipes in experimental kitchens, the publication of booklets of recipes which call for the use of dairy products, the bake-off competition held annually and the work that is going on all the time, with the help of the federal grant for promotion research which will this year be as much as £296,000, to intensify promotion.
I have already pointed out that efforts have been made to diversify butter production. I have mentioned the establishment of the butter oil factory at Deloraine in northern Tasmania from which we are exporting 1,000 tons of butter oil to South East Asia. We are also producing powdered skim milk for export mainly to South East Asian countries. This is also used locally in the manufacture of ice cream.
I am concerned about Che problems confronting dairymen in northern New South Wales and in Queensland. The latest figures I have show that during the last four years some 4,000 farmers in northern New South Wales left the industry. In Queensland as many as 9,000 people in the marginal areas have left the industry because of the high cost of production and other difficulties. The Minister himself has said that this problem will be looked at and he hopes to have an answer within the next twelve months. But whether the answer is to divert these people into some other form of production or to amalgamate some of these farms, for goodness sake let us do it now. It does not matter how much it costs the country if it will solve the problems of the dairying industry in marginal areas. Whatever is necessary must be done as soon as possible.
I remember some seven years ago, after the publication of the report that has been referred to in this debate, listening to an interesting address by a member of the Tasmanian Dairy Farmers Federation who spoke on the need either to amalgamate the farms in marginal areas or to divert them to some other form of production, such as beef production. This is one of the problems that the Government must face. As the honourable member for Mackellar (Mr Wentworth) has said, we cannot wait too long if we are to solve the problem.
I pay tribute to this industry. It is the greatest decentralising influence in this country. I pay tribute to the farmers. Much has been said about increasing efficiency. I believe our dairy farmers are among the most efficient in the world today. The people who look after the industry, the factory managers, the members of the Australian Dairy Produce Board and everyone else associated with the industry have done a tremendous amount of work in looking for new markets for dairy products.I have very much pleasure, as a member of the Opposition, in supporting the continuation of the dairying industry stabilisation plan for a further five years.
– Order! The honourable member’s time has expired.
– I have listened to this debate with interest and have read the Hansard report of the debate which took place five years ago. I am sure that honourable members would not misinterpret me if I said that Australia seems to have something in common with India in that in both countries the cow seems to be sacred. I say this because when someone criticises the industry or tries to examine it there are some extraordinary reactions. There were similar extraordinary reactions five years ago.
The dairying industry, as the Minister for Primary Industry (Mr Adermann) said when he introduced this measure, is Australia’s fourth most important primary industry. He said that approximately 100,000 people were employed in it and that approximately 600,000 people were directly or indirectly dependent upon it. The Commonwealth Statistician’s latest figures show that approximately 98,000 people are employed on dairy farms and approximately 11,000 are employed in factories. I cannot find justification for the 600,000 people mentioned by the Minister, unless dairy farmers have larger families than has any other section of the community. How ever, I will accept the Minister’s figure, because this is the core of the whole discussion today and five years ago. What is happening in the industry and what would happen if any moves were made to try to assist it, outside the artificial state in which it operates to a certain extent today, constitute a social and economic problem. I mentioned the artificial state because the industry is dependent upon the London butter market for its exports. That market seems to control world export prices. The price is artificial, as I will substantiate later.
This industry receives a subsidy of $27. 8m a year from the Government. I think it is right that we in this Parliament should examine the policies which we have adopted for some twenty years. At least, by the end of the five-year period which will apply if this Bill is passed the policies will have applied for twenty years, because the purpose of the Bill is to grant a further subsidy, or bounty as the Government calls it, to the industry of $27.8m a year for the next five years. The total bounty in that period will be $139m, which is a large sum of money. When one looks at the industry, that assistance may be justified; but one must look at this sum in relation to such other things as the domiciliary care plan which I put to the House just recently. This sum could well solve many of the problems associated with finding the capital needed to care for the aged. Five years is a long period without there being any discussion or any change in the contract. The industry has accepted it as a contract. In the previous debate honourable members, including the Minister, said that an agreement had been reached with the industry. Similar statements are being made today.
If this Bill is passed, there will be a subsidy of$27.8m for each of five years. This may well be justified, but I think we should look at what is happening in this industry. There is a continuing rise in the production of butter. The Minister has stated this in his speech. Production is rising, and so is productivity. In 1956-57 butter production totalled 190,000 tons. In the next year, possibly because of drought, production fell; but since then it has continually risen. From 1-90,000 tons in 1958- 59 it increased to 194,000 tons, in 1959- 60. It dropped in the next year to 179,000 tons. It was 197,000 tons in 1961-62, and in successive years 201,000 tons, 202,000 tons, 203,000 tons and 205,000 in 1965-66.
Although production is increasing, the figures show that in the last equalisation period there was a fall in butter consumption. The Australian Dairy Produce Board’s report for the year ended 30th June 1966 shows that in 1961 there was a per capita consumption in Australia of 24 lb. In the next year it was 23.8 lb, in the next it was 23.4 lb, and in the following year it was 22.5 lb. In 1965 it was 21.8 lb. Because of the increase in population, until two years ago there was a net increase in the total consumption of butter within Australia. In its 1964 report the Board stated that in the year 1961-62 the total consumption was 113,761 tons, that it increased in the following year to 115,593 tons, and that in 1963- 64 it was 117,470 tons. Last year, according to the Board’s report, it had fallen to 112,000 tons. The fall in per capita consumption is greater than the rate of growth of the population. On the one hand there is an increase in production and on the other hand there is a fall in consumption within Australia.
The reflection of this in terms of returns to the farmer has been relatively steady, although there has been a tendency for returns to fall. After allowing for manufacturing costs, the average return to the producer per lb of butterfat were 37.78c in 1962-63, 38.26c in 1963-64, 38.7c in 1964- 65 and 36.90c in 1965-66. The pressures on the industry occur because of the relatively constant return to the farmer with a tendency to fall. I think it has been stated in this debate that the actual return has fallen because greater costs have had to be absorbed.
So, we have a constant return to the producer, a fall in consumption of butter within Australia and a rise in total production. The reason for this is that the industry, I believe, is moving in a vicious circle. Because of the constant return, farmers are forced to produce more in order to earn more at the farm level. This in turn increases exports. If the price received in London for the exported product falls, a much more serious situation will develop. This was referred to by the Chairman of the Australian Dairy Produce Board, who said in last year’s report that Australian butter and cheese prices in the United Kingdom eased downwards throughout the twelve-month period ended 30th June 1966 and that, as indicated in the previous year’s report, the decline in butter prices was the objective of the United Kingdom Government. So we have a deliberate attempt to force down the price of butter in London. This must be considered together with the fears expressed by the honourable member for Bradfield (Mr Turner) and I believe the honourable member for Mackellar (Mr Wentworth) about problems that may well be created to the Australian industry if Britain comes into the European Common Market, and also the problem which can be created from the general economic situation in- New Zealand. The outlook in terms of butter is not, in my view, a healthy one for the industry.
Through all this is the question of the subsidy that is granted to the industry. It may be right, as has been pointed out in this debate, that the subsidy was introduced in 1942 against the wishes of the industry, and it has been perpetuated ever since. I do not know whether it has been put in this debate but is has been put to me personally that it is now in effect the right of the industry to expect the subsidy. I certainly believe that the industry in its present state needs it, but unless the core of the major problem of the industry is solved - and that is putting it on its feet so that its products on the world’s markets can be seen to be as profitable as possible, certainly more profitable to the Australian producers than they are - then the problems of this industry will not be solved. The committee inquiring into this matter certainly brought out the question of the reconstruction of the industry. I am very much in favour of this, and I have been in favour of it for a number of years, for I believe it will greatly assist the industry.
The other major trends in this industry are the movements in terms of the prices to the consumer. These are being forced up because of our need, as I said earlier, to export more on a possibly declining market and because of the constant return to the farmer. The only way the equalisation can be made, because the farmer has to produce more to earn more income as an individual, is for the price to the consumer to go up. In this regard the facts can be seen. In 1956 the wholesale price of butter was 41.67c per lb. It rose in 1958 to 43.33c; in 1960 to 44.79c; in 1964 to 46.25c; and in 1966 to 46.50c. This is a continuing rise, but the farmer is not benefiting from it because he is caught in a squeeze.
Therefore, I cast some doubts upon these policies. Nothing of an urgent nature can be done, because if we remove the subsidy suddenly we may well cause a larger depression in areas of the industry and amongst individual farmers than there is today, a fact which I think is conceded by all honourable members. In this regard, whilst I believe that we should be aiming towards reduction of the subsidy and making the industry more profitable, we also should be aiming towards trying to assist the industry by helping uneconomic units to become economic or alternatively to go into other forms of production.
As has been said in this debate, there have been some fairly considerable movements in the industry in the last few years. I have here some figures showing the changes in the farms during the period 1959-60 to 1965 in the various regions of New South Wales. In this period New South Wales, for farms having between one cow and 200 or more cows, the number has gone from 15,647 dairy farms in 1959-60 to 15,004 in 1965, so there has been a net loss of some 600 farms. However, the important figures in this are in terms of the big changes that have occurred in the north coast and the Hunter-Manning areas and to some extent the south coast of New South Wales. Those changes have occurred in the farms having from forty to ninety-nine cows.
The regional farm that the committee of inquiry referred to as the 8,000 lb butterfat farm was the one that needed critical appraisal in order to be improved. On the north coast of New South Wales, the basis of the economic unit in this regard, there has been a decline of nearly 1,000 farms in the forty to ninety-nine cow unit in this period. The number has been virtually constant in the unit above this, 100 to 149 cows, but there was a small fall from 1,051 to 1,044 farms. The fall in the smaller unit of forty to ninety-nine cows was from 4,563 to 3,596. For the Hunter-Manning areas, in the forty to ninety-nine cow group there was a fall from 2,773 to 2,264 farms. These farms have been replaced not on the coast nor by larger farms on the coast but by farms inside the ranges on country where there is sure water supply, and particularly on the south west slopes and on irrigation areas of New South Wales. These farms are able to start operations under the umbrella of the subsidy and the protection.
I have asked for figures and for information in relation to the economics of dairying in the irrigation areas, and I should like to see these figures in order to see whether or not we are going to create more problems in these areas in the future without any fluctuations in terms of prices, because there may well be problems. However, I think it is of pretty serious consequence that in the five-year period during which the last stabilisation plan has been running the Government has not brought forward the reconstruction scheme which it implied six years ago it would introduce, and farmers on the north coast and in the Hunter-Manning areas who could well have been assisted have not been assisted. On 21st March 1961 the Minister for Primary Industry, speaking of the dairying industry and the committee of inquiry during the debate on the Administrator’s Speech, said:
The committee’s report indicated that some dairy farmers are in unsatisfactory economic circumstances, and it made certain recommendations. The Government wants this situation to be rectified, and it is willing to discuss with the State governments and the industry the question of reconstruction, taking into consideration the views of the industry itself.
In the following year in the AddressinReply debate he also stated that the Government was aware of this and that it was the Government’s intention to take some action. Now, five years later, the Minister has said the same thing. There is nothing definite; he said that an investigation was taking place so that the plans for reconstruction and rehabilitation could come in. It has been stated in this debate that assistance in relation to finance has been given to the industry. I think it was the honourable member for Lyne (Mr Lucock) who said that in some respects this is inadequate and has not been effectively managed.
There has been the New South Wales scheme in relation to the grant for pastoral improvements. I think that $lm was granted some time last year. The Minister for Agriculture in New South Wales stated last week or the week before that some 45% of the farmers had taken up such grants. However, in between times nothing has been done by this Government; the only action that has been taken has been that of the New South Wales Government. Six years ago the Minister said this Government was going to do something, but it has not done it. Again in this debate the Government is saying that it is going to do something, but there is no plan. What has happened in this six year period? As I said, this is the core of the whole problem. It has a social and economic effect on the industry and the people as a whole.
– There has been research.
– There has been research carried out. There are a whole lot of other things that I have seen in reports. I have spoken to farmers from the north coast. In that area people have gone off the land and haye sought other employment. People are still living on some of these farms but they are not working them. They are working elsewhere. There is a waste. There has been an inference or a promise of assistance and it has not been given. Five years ago this Government said that there would be a five year plan and that it would not be referred to Parliament every year.
I submit that in twelve months time we should have another look at this matter because it is one of the problems facing the industry. It is a matter on which this Government should act. Because of this subsidy, because of our exports, and because of the equalisation, this Parliament does have a controlling interest in the industry. The various plans to assist the industry should be carried out on a national level. I hope to be able to deal more specifically with some of these things tomorrow during the Committee stage.
– What about the Sydney milk zone?
– I will consider that matter during the Committee stage. This is a national problem because it is a national industry. One of the problems that has faced the industry is that it has been compartmentalised and action has not been taken to solve the problems of the industry as a whole. Action that should have been taken five or six years ago has not been taken. Because of this it is wise that we should have another look at the industry and ensure that in twelve months time plans are put before this Parliament so that the uneconomic marginal areas can be assisted. In turn we will be able to assist this section of the industry. In twelve months time we will also be able to have a look at the effect of this marketing arrangement, the pricing, the subsidy and the equalisation, in view of a possibly falling overseas market.
One must commend the Dairy Produce Board for its endeavours to diversify some of the produce 0. Australia into processed milk. This is good. I think that the attempts to find for our butter markets other than the London market will be very slow and will not solve the core of the problem. The work done in research in an effort to produce new products from butter is good, but the results are very long term ones.
There are two levels of work that can be done to assist in the reconstruction of the industry. One is in relation to capital requirements for either the amalgamation of farms or, alternatively, the bringing in of new industries. New types of endeavours can be introduced. I will deal with this more specifically in Committee tomorrow when we are considering the amendment. The policies we are looking at have to be considered in terms of whether or not they are the best ones to be adopted in the industry for Australia’s benefit, for the benefit of the industry as a whole and for the benefit of the individual dairy farmers. In this regard I believe we need a closer examination of all these matters. Whilst I support the continuation of the operations as they stand at the moment, 1 believe that in twelve months time we should have another look at the industry, as was done prior to the start of this present five year period which commenced in 1962. We should ensure particularly that the reconstruction suggestions aimed at providing assistance for marginal farmers, which the Minister has once again made - as he did five or six years ago - are actually brought into operation. In all these examinations of this industry we have to look at proposals in the very long run.
I think that there is an international problem as to whether or not dairying is ultimately the most efficient or best means of producing food units. In this regard one must say that it is well known that dairying is possibly the least efficient means of producing food from the ground. To illustrate, 1 will quote figures I have worked out using tables from the ‘Year Book’ No. 52, from Agriculture - the Science and Practice of British Farming’ by Watson and More, and from ‘Feeds and Feeding’ by Morrison. I will take 467 gallons of milk as the national herd average production per cow in Australia. Using a very liberal basis of two acres for a cow to produce that amount of milk, 397 lb of starch equivalent and 75 lb of protein equivalent would be produced from that area. As against that the starch equivalent output per acre of corn would be 1,830.6 lb and the protein equivalent would be 179.3 lb. In the case of wheat the starch equivalent output per acre would be 1,328.7 lb and the protein equivalent 128.9 lb. In the case of peanuts the starch equivalent would be 543.1 lb and the protein equivalent 261 lb. A survey was made prior to the report being handed down by the committee of inquiry into other uses for dairying. These were some of the products mentioned by the 50% of the farmers who said they could transfer to other endeavours. Ultimately food will be sold on a protein and starch unit basis. At the moment it is bought by stock feed manufacturers and other processors of feed on a food unit value. In terms of world consumption and world prices, this, I believe, is the trend. It is my belief that we should consider this examination in relation to the economic effects which are happening in the industry today.
Motion (by Mr Duthie) negatived:
That the debate be now adjourned.
Thursday, 20 April 1967
Before I commence my speech on the Bill I want to criticise severely the Minister for Primary Industry (Mr Adermann) for taking the business of the Parliament out of the hands of the Leader of the House (Mr Snedden). At about 11 p.m. last night the Minister threatened that if the Opposition did not put up another speaker he would close the debate, notwithstanding that eight or nine honourable members from each side of the House were listed to speak later in the debate.
– No Opposition member listed to speak was in the House and ready to speak.
– I rise to order. It is now almost 12.10 a.m. It is the custom to provide supper at midnight if it is intended to sit well beyond that hour.
– There is no substance in the matter raised by the honourable member.
– The Opposition protests at the shabby treatment it has received tonight. It was arranged ‘with the Government that this debate would continue today. We had agreed that after disposing of this Bill we would commence the debate on the Australian Tourist Commission Bill. We were prepared to commence the debate on that Bill even at 10 p.m. I had my speakers ready. The honourable member for Dawson (Dr Patterson) was prepared to lead for the Opposition even as late of 10 o’clock. But no, the Minister was so piqued by the attack on this Bill by Government supporters, principally the honourable member for Mackellar (Mr Wentworth) and the honourable member for Bradfield (Mr Turner), that he was determined to pass the Bill tonight in order to avoid a debate tomorrow when the proceedings of this House were being broadcast.
Finally, it is an insult to the dairying industry that this important Bill should be debated at this time Of night. I am glad that the Minister for Primary Industry is not the Leader of the House because if he were there would be chaos nearly every day. We regret the circumstances in which this change came about. The change was not necessary. The Minister should not have got so angry. He should not have done this to us tonight. I shall take the full half hour for which I am entitled to speak, because this shabby treatment has been meted out.
-Order! I suggest that the honourable member for Wilmot has made his point and that he should get on with discussing the Bill that is before the House.
– I was quite prepared to pull out of the debate if the Bill went to the Committee stage at 11.30 p.m., but as the Minister is prepared to go on I am prepared to go on. If he wants to gag me he can do so.
I do not subscribe to the view that the dairying industry is an inefficient industry. On the contrary, it is the most highly organised and efficient rural industry in Australia. From farm to factory, from factory to distributor and from distributor to consumer, it is a long journey of first class organisation by hundreds of people. The vast majority of dairy farmers today are skilled, efficient, intelligent and up to date in their farm operations and management. Being a dairy farmer today even with a high degree of mechanisation is a tough demanding life. When most people are sleeping the dairy farmer is awake and at work in his cow shed. He has to do this work fourteen times a week in fine weather or in rough weather. His capital expenditure is so great, the demands on quality are so stringent and the findings of research are so varied and constant that the dairy farmer cannot afford to be lazy, carefree, slapdash or inefficient if he wants to survive.
Of course we admit that there are inefficient pockets within this vast rural industry, as there are in all industries. Some dairymen are content to let things take their course. Some cannot be bothered with pasture techniques or future planning. The science in the job is over their heads. Modern methods are either too costly or too involved for them. Some of them are poor managers. But why condemn the whole industry because of a few folk like that. We find those people in every rural industry - and in every secondary industry as well. I have before me an excellent report which has not been mentioned in this debate. It is the report of the Dairy Industry Committee of Inquiry. In paragraph 1184 on page 112 the report states:
One one-fourth of the total number of dairy farmers can fairly be described as ‘struggling’. These arc farms which have, inside the boundary fences, the potential for production at a level and at costs that will provide a reasonable standard of living, but which for various reasons have not reached that level. It must not be assumed that all of these are hardship cases. Some of the present disabilities are due to apathy, indolence and bad management, and these farms will not be raised from their present depressed and decadent position unless there is a complete change in the outlook of the farmers themselves. Increased prices and increased bounty would encourage rather than cure the inefficiency that now prevails and the public should not be required to provide either.
The report is critical of this group in the industry, lt recommends that this group which is divided into two or three sections should be gradually eased out of the industry altogether by humane and properly constituted methods. But even in spite of all this, the dairying industry is of vital significance to our Australian economy. The production of the industry is worth $41 5m a year and the capital investment amounts to $ 1,400m. The industry supports directly and indirectly 600,000 people and employs directly 100,000. It sustains dozens of towns in Australia. The stabilisation of this industry by the payment of this subsidy is a major contribution to decentralisation of industry in Australia. The equalisation payment was introduced by a Labor Government during the war years and has been continued right up to the present time.
– Can the honourable member milk a cow?
– I had years and years at it in the Wimmera district. In spite of the criticism by honourable members tonight and in spite of charges of inefficiency and statements to the effect that the industry is not worth this subsidy, the figures that are available show a remarkable story of success. In my opinion it is an absolutely fantastic story. Recently I obtained the following figures from a newspaper under a Canberra dateline:
Australia’s dairy industry is continuing to increase production.
Figures released yesterday by the Commonwealth Statistics Bureau show that productivity increased in all sections of the dairy industry.
For the seven months ending January this year, whole milk production was 1,138.6 million gallons, up 7.6 p.c. (n the same period to January, 1966, factory butter production was 363.3 million lb., up 7.5 p.c. factory cheese 112.7 million lb., up 18.4 p.c, and preserved milk products were equal to 71.3 million gallons, up 7.1 p.c.
Those figures do not indicate inefficiency on the part of farmers throughout Australia. They indicate a remarkable state of efficiency and a remarkable effort by dairy farmers.
The Commonwealth ‘Year Book’ indicates a rise in cheese production, preserved milk products and other products consisting mainly of fluid milk for local consumption. I am racing past some of these figures, but I wish to quote figures relating to consumption per head of population. In my opinion, they constitute one of the greatest worries of the industry and of the Government. In 1951-52, 31.2 lb of butter was consumed per head of population. In 1964-65 consumption per head had dropped to 22.6 lb or 3.4% below the figure for the previous year. The level of 22.6 lb is the lowest since the war. It is important that we restore the home consumption of butter. The more we sell on the home market naturally the less we have to export at a low price. The Australian Dairy Produce Board should give full consideration to increasing home consumption. I should like to commend television advertisers for an advertisement I saw recently. The advertisement pictured a delightful cow called Daisy. I hope the advertisement appeared on programmes around Australia; it has appeared in Tasmania. It was one of the best advertisements that I have ever seen on television. It should help to encourage people to buy and to use more butter.
Cheese consumption per head of population is rising quite considerably. In 1964- 65, 202.2 million pounds of butter were exported. In the year before the amount was 196.6 million pounds. Cheese exports also have increased. The United Kingdom takes 84% of all exports of butter and 59% of all cheese exported from this country. In 1964- 65, exports of all milk products were worth $1 10,230,000. That is a considerable amount of export income indeed, and anything we can do by way of properly used subsidy to keep this industry on its feet and to increase its productivity is helping to earn important income overseas. Those exports go to ninety-four highly competitive low priced overseas markets. That figure, of course, does not include the income from such sidelines as pigmeats, bacon and ham. In Tasmania, the industry has shown remarkable growth. It has been stated during this debate that the dairy industry has been going backward in some States while others have been going forward. In Tasmania, it has been going forward to a remarkable extent.
In 1956, the gross value of the industry to Tasmania was $ 13,2m. In 1966, it was S25.5m. During the past ten years, the number of dairy farms decreased by 25%. This has been the general pattern throughout Australia. On the other hand, the number of dairy cows has increased by 30%. From 25% fewer dairy farms, the total milk production has increased by 43% in Tasmania in the past ten years. The story as told by the figures is an interesting one. In 1955 there were 6,500 factory suppliers in Tasmania. By 1965 this number had decreased to 4,900. Again, in 1955 there were 110,000 dairy cows in Tasmania. By 1965, this number bad increased to 143,000. The total milk production of Tasmania in 1955 was 61,000,000 gallons. Last year it was 87,000,000 gallons. The decline in the number of dairy farms on the one hand and the increase in the number of cows and the amount of production on the other make a remarkable equation when we come to look at the matter. Most people would be led to believe that this big reduction in the number of dairy farms must mean a reduction in the number of cows and In production. But that has not been the case. Indeed, exactly the opposite has happened. This indicates to me that specialisation plus efficiency in farm management have been responsible for this remarkable result.
The economics of dairying have forced many men into other rural production and have forced those who have stayed in the industry to specialise in order to survive. They have specialised m all phases of the production of milk. Whole milk production is increasing. Transport has revolutionised many farms. There are 23 bulk tankers in Tasmania at the moment collecting whole milk from 600 dairy farms. In other words, 12% of the dairy farms 6f Tasmania are supplying whole milk. So the whole milk industry is in a healthy condition although the butterfat producer is suffering. As has been pointed out, he is suffering because of rising costs on the one hand and stabilised prices on the other. As the Minister pointed out in his second reading speech, quality has improved with specialisation and improved efficiency. For example, die proportion of choicest butter produced has increased from 69% in 1959 to 75% in 1965. All along the line, the figures indicate efficiency in farm management - the proper use of manures, attention to the soil, and attention to breeding. In fact, they indicate that all the things that we say must be done in the interest of efficiency in the industry are being done. I would say that 85% of the dairy farmers of Australia are carrying out this type of programme.
The production of milk per cow has increased remarkably in Australia also. Whereas in 1916 the average production per cow per year was 300 gallons, the average for Australia in 1964-65 was over 467 gallons per cow per year. In Tasmania, we have had as much as 540 gallons per cow per year on the average. But there are sicknesses in the industry. This we must admit. A survey conducted by the Bureau of Agricultural Economics in 1963 showed some alarming weaknesses and tensions, lt showed that throughout Australia the number of dairy farms had decreased by 15% in the ten years between 1950 and 1960. Employment in the industry fell by 14,000 employees or 6.7% in those ten years. The survey was a very intricate one. I have made a close study of it but I do not have the time to give very much detail from it tonight. I would like to mention just one point. The Bureau investigated the manufacturing sector, the all industry sector and the whole milk sector of 787 farms throughout Australia. The investigation covered all States and took three years to conclude. lt was an individual farm by farm survey. The analysis shows that, after all expenses have been paid, 14% of Australian farmers in the all industry sector and 17% in the manufacturing sector have negative farm incomes. This means that they earn nothing. How they survive, of course, we do not know. Those earning less than $2,000 a year represented 55% in the all industry sector and 59% in the manufacturing sector. They cleared less than $40 a week. The answer to the problem, of course, is to cut the costs of the dairy farmer and so try to give him a bigger net income.
There are two main running sores in this industry. They are the high and uncontrolled costs on the one hand and the controlled price for his product o.n the other hand. The farmer is at the end of the line; he cannot pass on his costs as other producers can. The Dairy Industry Committee of Inquiry in 1960 reported that the dairyman complained bitterly about the excessive costs of spare parts for motive power machinery, equipment and appliances. The Committee said that the dairyman is caught between the millstones of uncontrolled costs of industry and stabilised prices and as costs rise his net income falls. He cannot cope with increased costs. The Tariff Board should tackle the problem of the high costs of spare parts. It should have power to summon witnesses to its hearings and it should make a thorough examination of the situation.
The second running sore of the dairying industry is dear money for development and capital improvements. The Commonwealth Development Bank has been established but its money is too dear. Interest of 6% is too much for many people to pay on money they borrow for the development of their farms. The Bank is too selective and too restrictive. The Farm Development Loan Fund which was launched last year is vague and is also very selective. Its funds are to be released from the trading banks’ statutory reserve deposits which are frozen in the Reserve Bank. Interest on these deposits is only threequarters of 1%. To lend this money to the farmers through the Fund at 5% is very good business for the trading banks but doubtful business for the farmer, for 5% is still too high, in my opinion, for money for the development of farm properties.
The total economics of the industry have been analysed in the remarkably detailed survey of the Committee of Inquiry in 1960. I have had twenty or thirty of the main sections of its report photostated for use by my rural committee in my electorate. We have already made several studies of the problems of the dairying industry and we have found that the Committee’s survey is very good. I wonder why a lot of the recommendations at the back of the Committee’s excellent report have not been adopted. I have not time to read them all; they cover two or three pages of the report.
– Why not incorporate them in Hansard?
– Because they are too long. The report contains about twentyeight recommendations to improve the dairying industry, made after a very close study of it and I feel that more than half of them could be implemented within the next twelve months. Some of the recommendations have been implemented, but not many. I have studied the recommendations closely and I cannot see much relationship between them and what is being done at present.
The final analysis was that about 3,000 dairy farms are operating uneconomically in Australia and should be disposed of, amalgamated, or switched to other production. The Minister must look at this problem. He said in his second reading speech that he is prepared to study this problem in the next twelve months. I hope that when the next amendment to this legislation is debated the Government will be able to give us a solution as to the disposal of the uneconomic farms so that they may be fairly transferred to other production. Suggestions have been made to change the pattern of such farms and to terminate farms unable to produce 8,000 lb of butter fat a year. It is claimed that a dairy farm must produce 10,000 lb of butter fat a year to be assured of economic survival. These factors must be considered by the Government.
The dairying industry can be helped by irrigation, pasture research and better cattle breeding - that is proceeding at present - and by development of Asian markets, which I believe to be a very important factor. I make two suggestions: Increase the local consumption of butter and reduce exports to markets where prices are low. I believe that the Australian industry should start making fancy cheeses. Why do we have to import fancy cheeses at great cost and use up some of our overseas reserves to buy them? Cheese imports cost over $2m a year. Why cannot we produce fancy cheeses for the tourist trade and place them in hotels and motels throughout Australia. I am sure that tourists would be interested in purchasing fancy cheeses. We are producing cheddar cheese not fully matured, but we need to attract overseas tourists to buy fancy cheeses. I suggest that fancy cheeses of up to 2 lb rounds could be sold at $1 each. They could find a sale even to families to take as presents from one State to another. Surely we can use a little initiative and manufacture other types of cheeses which sell so readily overseas.
Another way in which butter consumption could be increased in Australia would be to supply more butter on breakfast plates in hotels and motels. At present hardly enough butter is provided for one slice of bread. I believe that this would be a practical way of increasing production of Australian butter.
Debate (on motion by Mr Nixon) adjourned.
House adjourned at 12.34 a.m. (Thursday)
The following answers to questions upon notice were circulated:
asked the Attorney-General, upon notice:
– The answers to the honourable member’s questions are as follows:
asked the Minister representing the Minister for Housing, upon notice:
What are the (a) dates and (b) texts of ministerial directions concerning advances in respect of a second war service home.
– The Minister for Housing has supplied the following answer to the honourable member’s question:
The War Service Homes Scheme was introduced as a repatriative measure to assist eligible exservicemen and women to establish themselves in civilian life by providing them with a home and the intention is that an eligible person should be assisted on one occasion only. In accordance with this intention Sections 19B and 20a of the War Service Homes Act provide that the Director of War Service Homes shall not, except with the approval of the Minister, grant assistance to any one eligible person in respect of more than one property.
In determining whether approval will be given for the grant of assistance in respect of a second home it has been the practice of successive Ministers to personally review each case submitted for his consideration and directions are given having regard to the circumstances of the case. In the period of almost fifty years since the inception of the War Service Homes Scheme a considerable number of directions have been given relating to assistance in respect of a second home, many of which are recorded on the files of individual applicants.
In these circumstances it is impracticable, without an extensive search of records extending over a considerable number of years to furnish the information requested. However, it can be said that it has always been the policy to approve of assistance in respect of a second home only in exceptional circumstances.
In April 1956, the then Minister gave a general direction that assistance in respect of a second home would not be considered ‘except on grounds of grave emergency’. Individual cases are being dealt with in accordance with this general direction.
asked the Minister for Health, upon notice:
– The answers to the honour able member’s questions are as follows:
Canberra - 12
Darwin - 6
Alice Springs- 3. 3. (a) One.
The Senior Dental Officer, Australian Capital Territory School Dental Service, who is also a member of the Dental Health Committee of the National Health and Medical Research Council, is engaged for 20% of his time on research, mainly in connection with the effects that fluoridation of Canberra’s water supply is having on children’s teeth. The remaining dental officers in the Australian Capital Territory and Northern Territory are engaged occasionally on research; their main duties however concern actual clinical treatment
asked the Minister for Health, upon notice:
Has any further consideration been given to introducing a national dental scheme?
– The answer to the honourable members’ question is as follows:
The honourable member is doubtless aware of the substantial financial assistance already being provided by the Commonwealth towards the costs of Australian health services. Any extension of the national health scheme must of course be con sidered in the light of the additional burden which may be imposed on Australian taxpayers.
Ways and means of improving national health services, including dental services, are continually under review by the Government. However, the Government is not proposing to introduce a national dental scheme at the present time.
asked the Minister for Shipping and Transport, upon notice:
– The answers to the honour able members’ questions are as follows:
Cite as: Australia, House of Representatives, Debates, 19 April 1967, viewed 22 October 2017, <http://historichansard.net/hofreps/1967/19670419_reps_26_hor55/>.