26th Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
Senator POYSER presented a petition from 13 citizens praying that Parliament will make legal provision for certain ownership and development rights for Aboriginals living on reserves.
Petition received and read.
– My question is directed to the Minister representing the Postmaster-General. I refer to the controversy over the Australian Broadcasting Commission’s television programme People’ and Mr Sanders. 1 notice that in the answers the Minister gave yesterday there was a difference between those in relation to the programme ‘People’ and Mr Sanders, and those concerning “This Day Tonight’. In relation to ‘This Day Tonight’ there was a clear denial of any pressure from the Government or any political party, and in relation to the other programme, People’, and Mr Sanders, there was a denial that political pressure had had any effect in terminating the contract. Would the Minister request the Postmaster-General or the ABC to inform the Senate what complaints have been made by or on behalf of any Minister, member of Parliament, political party or other political organisation during 1968 about the programme ‘People’ or its conduct by Mr Sanders?
– First of all, in reply to the first part of Senator Murphy’s question let me say that there may have been a slight difference between answers, but each answer was given in reply to the question that was asked and all the questions were not exactly the same. As I read the answers, they were replies to the individual questions. I have noted the question that Senator Murphy has asked concerning complaints during this year. I will take that matter up with the Postmaster-General.
– I direct a question to the Minister representing the Minister for Primary Industry. On 5th November he stated that meetings would be held in New Zealand this month to consider the question of imports of peas and beans from that country. Have the meetings yet been held? Is the Minister in a position to give any information about the result of the discussions?
– The Minister for Trade and Industry has given me the following information:
The meetings were held in New Zealand earlier this week, and the delegation will return tomorrow and report. However, reports have been received on the outcome of these discussions, which concluded in Wellington yesterday. Honourable senators may recall that arrangements had been made for a series of meetings involving processors, growers and officials of both countries. The meetings were arranged to consider the problem which arises from the expected surplus of peas and beans in both countries from the 1968-69 crop. The meeting agreed that the likely surplus posed a threat and that close co-operation between the two industries and orderly marketing are necessary.
The representatives from each country will be recommending that a joint New Zealand-Australia pea and bean industry panel be established. The proposed panel, comprising the interests involved in the meeting - growers, processors and officials - would meet again early in 1969 and periodically thereafter to study the supply, demand and price situation and make recommendations on the marketing of these products on both sides of the Tasman. The Australian and New Zealand Governments will be asked to co-operate with the proposed panel by providing up to date industry information. It is clear that the conference has made a very useful start in working towards a solution of this very difficult problem. Each industry appreciates the need to avoid disruption in the market of the other, and I am hopeful that they will work together to achieve a mutually beneficial result.
– My question is directed to the Minister representing the Postmaster-General. To settle the argument as to whether Bob Sanders was sacked by the Australian Broadcasting Commission because of his alleged preference for left wing interviews or because of his audience ratings, will the Minister table in the Senate the audience ratings of all1 interview sessions conducted by the ABC?
– Let me say once more, as I said yesterday, thai the Australian Broadcasting Commission has complete autonomy in its programme arrangement or rearrangement. I will be pleased to put before my colleague, the Postmaster-General, the point that the honourable senator has raised concerning viewing and listening ratings.
– My question is directed to the Minister representing the Minister for Civil Aviation. As it has been stated that the aerodromes at Perth. Kal1goorlie, Port Moresby and Longreach are under investigation for further development for use by jet aircraft, can the Minister answer the following questions: Has the investigation of the Longreach aerodrome been completed? If not, when is it likely to be completed? When is work on the jet strip at Longreach likely to commence?
– Longreach is at present being considered by the Department of Civil Aviation for the development of an al’ternative aerodrome for the Brisbane to Mount Isa route. It is hoped that the location of this development can be decided within a matter of a few months. I am sure that the honourable senator realises that in a decision such as this other sites have to be taken into consideration and the Department of Works has to be consulted. The present situation is that the Government is giving consideration to this matter. Various airports will have to be looked at before any approval is granted. It is expected that the project will be of considerable magnitude and will require the consideration of the Public Works Committee. Tn view of the steps which must be taken and the investigations which must still be made into the project it is not really possible at this time to predict when the work will start or when it will be completed.
– I ask the Minister representing the Minister for the Interior: Is it a fact that the Government is considering alterations to the relevant legislation with respect to the residential qualifications of senators so as to make it mandatory for a senator to maintain a home in the State he is elected to serve in the Senate?
– It is hardly necessary for the Government to bring down this type of legislation. I think all honourable senators will readily agree that electors believe it is vital that a senator they elect will at least live in the State that he represents.
– In directing my question to the Minister representing the PostmasterGeneral I apologise for doing so and express the hope that it will not irritate her too much. Is it not a fact that independent Australian Broadcasting Commission programme audience measurement surveys show that the number of people watching the television programme ‘People’ in Sydney and Melbourne has dropped by 50% since the Australian Broadcasting Commission commenced the programme ‘This Day Tonight’? Is the ABC expected to retain on its staff highly expensive comperes merely because they pander to left wing views and despite the fact that the Australian public is no longer interested in watching their programmes? Is it not also a fact that Mr Sanders, aware of the drop in his programme ratings, has been seeking other employment during the past 4 months?
– -T am unable to give the honourable senator detailed replies to the questions he has asked. I will take them up with my colleague the Postmaster-General and get answers for him.
– I ask the Minister representing the Postmaster-General whether the Postmaster-General has yet made a decision with regard to assistance to rural telephone subscribers to upgrade their telephone services when automatic exchanges are installed in their areas?
– The matter of the upgrading of telephone services has been raised with me before. Speaking from memory, I believe that the Postmaster-General said that the matter was being considered at that time. My information at the moment is that the Government has considered the matter and questions of substance have been determined. However, further investigation is required. It is hoped that a decision will be made before the end of this parliamentary session.
– I address my question to the Minister representing the Minister for Social Services. In the light of the Government’s newly-found interest in social services, has any move been made to undertake a departmental poverty survey throughout Australia? If such a move has not been made, and since this would be essential to a national approach to this question, will the Minister seriously consider initiating such a survey? What is the present actuarial position of the National Welfare Fund which was set up by a Labor government in 1943 for the purpose of meeting the growing needs of social services, including such matters as poverty and economic need, but which was discontinued by the present Government in 1952?
– It is not fair to imply that this Government has not always been very conscious of and concerned with social service matters.
– This is Socialism.
– I am sorry, but I thought the honourable senator referred to social services.
– That is right.
– We seem to be at cross purposes. If the honourable senator was saying that this Government has not been concerned with social services, which is what f thought he said because he went on to speak of surveys in connection with this very matter, then I disagree, I inform him that this Government has been concerned, and is concerned always with social service matters. The Prime Minister has set up the Welfare Committee of Cabinet which has been studying various points, all of which are associated with the wellbeing of the people of Australia and with social service matters.
– My question is directed to the Minister representing the Minister for Civil Aviation. Can the Minister advise me what work is involved in the improvements to Adelaide Airport? Can he state when the work will be completed and the cost involved? Will the Minister consider installing refrigerated air conditioning instead of the water evaporation system at present envisaged?
– The terminal building is to be extended so that it will be several times its present size. The building extensions and work on the airfield pavements are expected to cost more than $1.78m. An additional $403,000 has been allocated for runway improvements. It is expected that these works will be completed by the end of 1969. Air conditioning is to be provided in the extensions. The evaporative system is to be used because Adelaide is in the zone in which evaporative cooling is the normal means of adjusting air temperatures in Commonwealth buildings. Before there would be any change in the type of air conditioning to be provided at the Adelaide terminal, a survey would have to be made. The problem of rezoning the areas concerned would have to be considered before refrigerated air conditioning could be installed.
– I direct my question to both the Leader of the Government in the Senate and the Minister representing the Minister for Immigration. By way of preface, I mention that in another place yesterday the Minister for Immigration made a statement on the contemplated revision of the Nationality and Citizenship Act. Members of the other place subsequently spoke on the types of revision they would desire. I now ask: Will those honourable senators who specialise in immigration matters get a similar opportunity to advance suggestions or will they have to wait until next year and then be faced with a virtual fait accompli?
– Later this afternoon I shall be seeking leave to read to the Senate a statement which the Minister for Immigration made last night in the other place. Under the forms of the Senate it is customary, after such a statement has been made, to move that the Senate take note of the paper. As I understand the position, the statement may then be discussed. I shall therefore leave this matter until I have made the statement to which I have referred and the honourable senator can then decide what action he wishes to take.
– I ask the Minister for Supply whether there is any truth in the report I have received that the air frame repair section of the Department of Supply at Parafield, South Australia, proposes the retrenchment of employees later this year, to culminate in a complete close down of the section in May 1969. If this is the proposal of the Department can the Minister advise what plans, if any, have been made to find other employment for these skilled workmen? If no plans for reemployment have been made, what provisions for long service leave, superannuation payments and other benefits are available to employees whose employment is being terminated?
– There are very grave problems associated with the continuation of the Parafield factory in South Australia. The bulk of the Parafield work load has been the overhaul and maintenance of DC3 - Dakota - and Winjeel aircraft. With the phasing out of service of these aircraft this work load will no longer be available in sufficient quantity to justify the continuation of this factory. As a short term holding proposition we were able to redirect to the factory certain work on the Canberra aircraft. Nevertheless it is true that, after most careful investigation, it is apparent that there will not be sufficient future work load to maintain this factory in a viable condition.
The honourable senator has asked me a series of follow up questions. 1 am very conscious of the points he raises, but I expect that I shall be making a statement or an announcement picking up the points that he has very properly posed this afternoon. 1 shall do that as expeditiously as I can, having regard to all the responsibilities 1 have in relation to this matter.
– I wish to ask a question which concerns both the Minister representing the Minister for Health and the Minister for Customs and Excise. I am not sure to whom it should be addressed.
– You had better make up your mind.
– I think you should make up your mind. That is what you are paid for. Firstly, in view of the fact that the high tar content of cigarettes has a direct relationship to lung cancer, is the Government prepared to pass legislation compelling cigarette manufacturers to label each package of cigarettes with its tar content? 1 presume that that question would relate to matters concerning the Department of Health. Secondly, is the Government prepared to increase excise duties on an increasing scale for low to high tar content cigarettes in order to help lower the incidence of lung cancer?
– As to the first part of the honourable senator’s question, which I think concerns the Minister for Health, whom I represent, T remember that last week, when the estimates for the Department of Health were discussed, I gave to the honourable senator details of the conference which had been held with State Ministers concerning this very matter. I remember also that the answer I gave the honourable senator revealed a very real appreciation by those concerned of the points which the honourable senator had made from time to time. 1 will therefore lake the matter up with my colleague the Minister for Health.
– I address a question to the Minister representing the Minister for Air. I remind the Minister that some 3 years ago a Government spokesman claimed that runway strips of 6,000 feet would be sufficient for the Fill aircraft. Can the Minister inform me whether it is a fact that the runway at Amberley in Queensland is being increased to 10,000 feet at a cost of almost S3m? Does this indicate a further weakness in the Fill in that it will not be possible to land the Fill on any aerodrome in Australia other than some capital city aerodromes and the proposed new strip at Amberley?
– I am not in a position to give the information asked for by the honourable senator but I would not think that these would be the only aerodromes in Australia on which the Fill will be able to land. As the honourable senator probably knows, modern planes which land at very high speed are fitted with a parachute which is opened shortly after the plane touches clown and pulls it up very quickly. 1 do not know whether the Fill has that attachment. 1 would not think for one moment that the airfield to which the honourable senator has referred would be the only one on which the Fill could land.
– Does the Leader o£ the Government in the Senate agree that the sooner Australian Labor Party and Australian Democratic Labor Party senators cease firing shots at the alleged left and right wings of the Australian Broadcasting Commission, the sooner the body corporate of the ABC will be able to continue to operate satisfactorily free from political interference under a Liberal-Country Party Government?
– I think Senator Dame Annabelle Rankin, who represents the Postmaster-General in this place, provided the answer to Senator Marriott’s comments when she said that the Australian Broadcasting Commission is an autonomous body which has full responsibility for programming and personnel. I agree that the references which have been made in the political arena here have not helped the situation in relation to the ABC. When a general complaint exists this is the place to air it. but when the matter is picked up in the political sense and is kicked around like a football I think it only does damage to the ABC and to the system of communications which the Commission undertakes
– Can the Minister representing the Postmaster-General indicate the Government’s attitude to the introduction of colour television? In view of the expert committee’s announcement that it is within our range and could be introduced without difficulty, when can colour television be expected in this country?
– This is a matter which I know has interested many people for a considerable time, and I think the best reply I can give to the honourable senator is to refer to a speech made by the Postmaster-General in another place on 19th September this year which is reported on pages 1276 and 1277 of Hansard. I shall refer to one or two points made in that speech because I think they are important. The Postmaster-General said:
It is the responsibility of governments to have regard to the total economic effect of the introduction of colour television, and that economic effect has :i relationship to the colour standard which is selected.
He also said that he had asked the Australian Broadcasting Control Board to continue its investigations into all systems now operating and those to begin operating in the future. He said it was expected that these investigations would be completed by the end of 1968, when the Board would make recommendations as to the system of technical standards to be used in Australia. The Minister went on to say that when the Government reached a firm decision about the introduction of colour television in Australia it would give 18 months clear notice so that set manufacturers and station operators would have time to prepare.
– My question to the Minister representing the Minister for Civil Aviation follows upon that asked by Senator Young. Will immediate consideration be given to varying the zoning requirement relating to Commonwealth Government policy on the air-conditioning of Commonwealth buildings in South Australia so as to permit the use of other than evaporative cooling systems at the new Adelaide airport buildings?
- Mr President, it is beyond my powers to say whether the Commonwealth is prepared to consider rezoning the areas where air conditioning is installed in government buildings. It is a very interesting question. Some of our capital cities have hot climates - there are some very hot climates in Australia - and government departments are entitled to the best method of refrigeration that is available. It is up to the Government in its wisdom to decide whether it wants to bring the whole of Australia into this area by rezoning. That is as far as I am prepared to go in answer to the honourable senator’s question. But I will say also that, because of the interest of the honourable senator in the Adelaide Airport terminal, I will take up with the Minister for Civil Aviation the matter of rezoning the Adelaide area for the purpose of providing air conditioning and see what action he can take to meet the request from the honourable senator.
– The Minister representing the Minister for Civil Aviation no doubt is aware that in 1967 a plan was evolved which would lead to the equipment of Trans-Australia Airlines with four types of aircraft- the Boeing 727, the DC9, the Fokker Friendship and the Twin Otter - involving only three different types of engine which would offset increasing costs, limit fare increases and provide a more adequate service to the public. In view of the intolerable position in which Trans-Australia Airlines is placed because the 10-year-old Lockheed Electras are to remain in service until 1970 and will cost $200,000 in reworking, besides the loss in depreciation that will occur, will the Minister review the economically and operationally insupportable policy being imposed on TAA? Will the Minister give directions for speeding up the placing of orders and the delivery of further DC9 aircraft without which the travelling public, who use TAA, will continue to be deprived of an adequate service?
– The decision relating to the extension of the period of operation of the Lockheed Electra aircraft to 1970 is made, no doubt by Trans-Australia Airlines in its own right. I would like to tell the honourable senator that this month TAA and Ansett-ANA each will bring into operation a further DC9 aircraft. In 1969 the two companies will be introducing into service an extra Boeing 727. Further DC9 aircraft will be allocated to both companies.
I disagree with the honourable senator when he says that the Government is strangling TAA and making it use obsolete aircraft to a later date than it was expected these aircraft would be used. However, this is not the answer to the problem as far as I know. In view of the interest of the honourable senator, I will take the matter up with the Minister for Civil Aviation and obtain a further answer to the part of the question about which the honourable senator requires information.
– I ask a question of the Minister representing the Minister for the Interior. Is there likely to be any delay in the presentation of the report of the redistribution commissioners on the proposed new Queensland electoral boundaries - this matter was referred back to the commissioners for further consideration - in view of the reported statement that Mr Weise, the Chief Electoral Officer in Queensland, has broken his leg while playing golf?
– 1 am very sorry indeed to hear that such a wonderful sportsman as Mr Weise - I refer to his choice of golf for his recreation - has broken his leg while playing the game. In view of the fact that the Government in its anxiety to have an election this year was not able to get an issue from the Opposition on which to fight an election, there will be ample time for the redistribution commissioners to have a further look at the boundaries in Queensland before the next Federal election.
– I direct a question to the Minister representing the Minister for the Navy. Further to the answer to my question last week regarding the number of Royal Australian Navy personnel in Queensland in which it was revealed that there was only one person, a lone petty officer at Townsville, stationed on a 1,500 mile coastline from Brisbane to Cape York, I am wondering whether the Minister can supply me with the following information, provided of course that it does not jeopardise the defence of Australia: What provision has been made in the past or will be made in the future for the relief of this petty officer when he desires to take his annual holidays? Is the true situation that the eastern coast of Queensland from Brisbane to Cape York is left unguarded for 3 weeks every year when this petty officer takes his annual holidays?
– If the question is put on the notice paper I hope to supply an answer which will not be as facetious as the question.
– I direct a question to the Minister for Works, ls it a fact that when the Parliamentary Standing Committee on Public Works examined the proposal to enlarge the Adelaide airport no South Australian member of Parliament gave evidence or expressed an opinion regarding the construction of the airport?
– J have no knowledge of the witnesses who gave evidence to the Public Works Committee, but I am in a position to say that the Committee’s report, which b;:irs the date 31st October 1957, recorded that plans then provided that the new accommodation would be served by roof mounted evaporative cooling units fitted with hot water coils for heating, and exhaust fans. It was the position that this area was then zoned for evaporative cooling and the decision lo adopt evaporative cooling was based upon the excessive costs, from both an operational and a capital point of: view, of refrigeration in this area. I suggest thai it has to be borne in mind by the Parliament that as recently as October 1967 the Public Works Committee offered no objection to this method of ventilation in the proposed enlargement of the Adelaide airport.
– I address a question to the Minister representing the Minister for Labour and National Service, ls the Minister aware that on Friday last eleven Australian civilian skilled workers were notified by the United States Navy by whom they are employed at the Harold E. Holt Communication Station at Exmouth Gulf that they were redundant, and thai they have been offered employment as labourers until January 1969 when they will be dismissed? ls he aware that this action was taken despite the fact that they had been offered employment for periods of 12 months in some instances and 2 years in others and had made domestic arrangements accordingly? ls the Minister aware also that on a number of occasions in the past trade unions in Western Australia have complained about the employment of American Seabees at the station in occupations for which Australian workers are available? In view of the concern which these matters are causing among skilled workers in Western Australia, will the Minister take action to ensure, firstly, that there is not a further reduction in the number of Australian workers employed at the station: secondly, that the numbers of Seabees and other members of the United States forces employed at the station will be reduced to a minimum so that there will not be a threat to the employment possibilities of Australian workers: and thirdly, that adequate compensation will be paid by the United States Navy to its Australian employees when it breaks agreements as to their employment at the station?
– lt will be realised thai the honourable senator’s question refers to industrial conditions in a particular area, the details of which have not come to my knowledge. The matter will be examined at the instance of this question and any information we have with regard to the matter will be provided by way of an answer lo the honourable senator.
– Can the Minister representing the Minister for Civil Aviation say which Australian terminals have refrigerated air conditioning and which have the water evaporation air conditioning system?
– It would appear to me that there is one which will have a water evaporation cool’ing system installed in the very near future. I ask the honourable senator to put the other part of the question on the notice paper and I shall obtain an answer from the Minister.
– 1 direct a question to the Mnister representing the Minister for Primary Industry with reference to the closure of the Brisbane abattoir. Is he aware that blame for the closure of the abattoir is being placed on Commonwealth meat inspectors employed by his Department? Is he aware that the meat inspectors concerned are angered by these imputations? Is he also aware that the supervision by his inspectors is being impeded by the Brisbane abattoir authorities who place continuity of production above hygiene? If so, what action will’ the Minister take to protect the reputation of his officers and uphold the standard of their supervision?
– I presume this refers to Cannon Hill.
– The position is, of course, that the authorities were warned about the condition of the abattoir and did not take any action to rectify it. As a result of this lack of action the abattoir was unable to be registered for export production, and until the work that has to be done is carried out, to the best of my understanding it will not be registered for export production. So the remedy is in the hands of the authorities themselves.
– My question is directed to the Minister representing the Prime Minister. I preface it by reminding the Minister that the Queensland Aboriginal and Island Affairs Department makes it extremely difficult for persons other than Government representatives to visit Aboriginal reserves in Queensland and this has now been extended to the nonavailability of boats for transport between Thursday Island and Moa Island on 22nd November when a co-operative bakery is to be opened on the latter island. Will the Minister advise the Senate whether the Commonwealth Office of Aboriginal Affairs and the Minister responsible will take the appropriate action to ensure that a boat is made available for this very important occasion?
– I do not know of the circumstances, but 1 shall have the honourable senator’s question directed to the Prime Minister’s Department and hope to get an answer expeditiously for him.
– I direct a question to the Minister for Customs and Excise. By way of preface I refer to my earlier question on drug addiction in Sydney in which I mentioned specific references lo a drug ring by the Rev. Ted Noffs, of the King’s Cross Wayside Chapel, and the feature writer of the ‘Daily Telegraph’, and the Minister’s tendency to play down these allegations. I now direct the Minister’s attention to an article by a ‘Sun Herald’ feature writer, Paul Carpenter, repeating allegations of a drug ring. Is it a case of the mountain and Mahomet? Will the Narcotics Bureau inter view these people or does it expect them to make the first move and visit the Narcotics Bureau?
– I am not inclined at any time to play down the seriousness of drug addiction in Australia, particularly amongst our young people. If any person, including Mr Ted Noffs, would like to give information to the Department of Customs and Excise, the Narcotics Bureau or the New South Wales Police we would be very anxious to have his co-operation. As the honourable senator believes that it is our duty to go to everybody who lays a complaint, I will see whether this can be done. In fact, I will make sure that suitable approaches are made in respect of some of these complaints laid by people in Australia.
– I direct a question to the Minister representing the Minister for Air. Does the fact that a substantial number of the aircrews sent to the United States of America to bring the Fill aircraft to Australia have now returned without the aircraft suggest either that we will not get the aircraft or that we are no longer prepared to take the chance of flying them to Australia?
– The answer to the honourable senator’s question is no. I think the Minister for Defence has already made a statement to the effect that there will be some delay in the delivery of these aircraft and that, seeing that this delay is longer than was expected and that the training of the aircrews has been completed, they are now being brought home pending the delivery of the aircraft.
– I direct a question to the Minister representing the Minister for Social Services. Has the Minister considered the request expressed by Mr Peter Nixon, the Minister for the Interior, when opening the seventh annual general meeting and conference of the Association of Superannuation and Provident Funds of Australia on 31st October 1968, for the establishment of a pension research council to look at the short term and long term needs of the Australian people? If not, will the Minister give consideration to this suggestion?
– 1 have seen reports referring to the suggestion that the honourable senator has mentioned. I am quite certain that my colleague, the Minister for Social Services, will have been giving it his consideration. If he has not, I will place the honourable senator’s comments before him.
– I preface my question, which is directed to the Minister representing the Minister for Shipping and Transport, by saying that on 17th September last I asked him whether he would refer to the Minister for Shipping and Transport the suggestion for a general inquiry into the safety of the trimaran type yacht. I have received today a reply from the Minister for Shipping and Transport stating that his Department is investigating the possible need to exercise some form of control over small vessels proceeding on ocean voyages. However, he did not reply directly as to the holding of an inquiry into the intrinsic safety of the trimaran design and as to whether any special control should be imposed on the use of trimaran type yachts. I ask the Minister to refer to the Minister for Shipping and Transport again the particular aspect which I have mentioned, so that some authoritative determination on whether or not they are unsafe may be made. No doubt this would be done with respect to the design of an aircraft or a motor car, and it could be done in relation to a boat or yacht.
– I am informed that a committee of the Australian Transport Advisory Council is making a survey and will be reporting to the Minister for Shipping and Transport on the problems of small vessels not carrying passengers and/or cargo proceeding on ocean trips. The committee will report to the Minister on the action that it believes should be taken in the interests of the safety of people making these trips. I ask the honourable senator to place on the notice paper that part of his question which is related to the safety or otherwise of trimaran type yachts, so that a further reply can be obtained from the Minister.
– Can the Minister representing the Minister for National
Development advise the Parliament whether any applications to mine coral reefs in the area north west of Darwin for the purpose of cement manufacture have been lodged and/ or granted?
– I am sorry; I am unable to answer that question. I am looking for further information. I would be obliged to the honourable senator if he would place his question on the notice paper so that the Minister may supply an answer.
– My question is addressed to t-he Minister representing the Prime Minister. Has a foreign fishing vessel recently been boarded by Australian officials in Papua and New Guinea waters as a result of fishing within prohibited waters? Can the Minister give details of this incident?
– I have no official information on this matter available to me at this time. I have heard a report, but no information has been conveyed to me in an official way. Therefore I am not in a position to make a firm statement.
– I have some information concerning this matter and with the concurrence of honourable senators I will give it to Senator Laught. It is true that a foreign vessel was detected in the Madang area. In spite of warnings by the Australian Government to the Formosan Government about vessels coming within the 12-mile limit, that vessel was found to be within the limit. It was boarded at, I think, 2 o’clock this morning. Its occupants, or at least some of them, were arrested and charges will be laid against them by the Australian Government.
– I ask the Minister representing the Minister for Social Services: What progress has been made towards reaching a reciprocal social services agreement with Malta? When can Maltese people residing in Australia expect to receive the benefits of a reciprocal social service agreement between Australia and Malta, similar to that reached between Australia and other Commonwealth countries such as Great Britain and New Zealand? The Minister will recall that this matter was discussed in Canberra between the Minister for Social Services and Mr Mintoff about 10 months ago.
– I do not have the details requested by the honourable senator. He has referred to an important matter. I suggest that he place his question on the notice paper and I will get an answer for him.
– Has the
Minister representing the Prime Minister seen a statement attributed to the New South Walts Minister for Agriculture that drought stricken farmers in the Bega Valley in New South Wales have been squealing like stuck pigs? Will the Minister agree that irrespective of which government has the responsibility to render assistance to that drought stricken area, the farmers there are in very great distress and have every justification in the world to appeal to both the New South Wales Government and the Commonwealth Government to help to keep their livestock alive? Will the Minister agree that the phrase ‘squealing like stuck pigs’, as reportedly used by the New South Wales Minister for Agriculture, is not merited by the facts, is ill advised and certainly does not do justice to farmers who have been very gallantly fighting drought in their area for about 4 years?
– I have read a number of reports on the matter referred to by the honourable senator. As the honourable senator himself said about the phrase to which he has referred, it is ‘as reportedly used’. I think in all the circumstances it would be appropriate to wait for precise information as to what was said. I woul’d think that use of the words referred to by the honourable senator in the context described would be extremely regrettable.
– My question is directed to the Minister representing the Postmaster-General. In view of great public concern over the independence of the Australian Broadcasting Commission and the generally held view that the freedom tradi tionally enjoyed by the Press should be extended to television and radio stations, will the Government ask the Chairman of the ABC for his opinion on the legislative or administrative measures necessary or desirable not only to ensure the independence of the Commission but also to ensure that the public can be satisfied that the ABC is independent and free from improper pressure?
– I will1 place before my colleague the PostmasterGeneral the matter raised by the honourable senator.
– My question, relating to the aircraft industry, is directed to the Minister for Supply. The Minister will recall that on 24th October, in answering my questions on redundancy in the Australian aircraft industry, he referred to a proposal to manufacture in Australia certain wing sections of an aircraft designed by the General. Aircraft Corporation of the United States of America and to negotiations then being conducted. Is the Minister now in a position to give any further information about this important project which will assist the Australian aircraft industry?
– Yes. As a matter of fact, executives from the American organisation are due in Australia the week after next. They will be coming to Parliament House and I am to have conferences with them here. They will be in conclave with officers of the Department of Supply concerning negotiations which we all hope will result in improvement to the order book of the Australian aircraft industry. Until they arrive and until this series of conferences is concluded, I think it would be premature for me to make any further comment. I can say that I am most hopeful and, indeed, anxious that as a result of these negotiations we will be able to give tremendous assistance to the aircraft industry in Australia.
– My question, which is addressed to the Leader of the Government in the Senate, follows concern which I understand is being expressed abroad as a result of the visit to Australia of three ships of the South African Navy. Does the visit of those ships in any way indicate that there is some military or naval understanding between Australia and South Africa? As the visit has been described as a goodwill visit, does it in any way indicate that Australia reciprocates this goodwill, particularly towards the South African policy of apartheid?
– Mr President, I think it is a tragedy that people see sinister implications in anything which takes the form of goodwill. I suggest that this view is completely inappropriate in this instance. The visit by the South African vessels was not peculiar because such visits happen all the time. Ships of navies of various countries come to Australia. I suggest with great respect to the honourable senator that he should not read into the visit any more than the fact that it was a visit.
(Question No. 517)
asked the Minister representing the Minister for National Development, upon notice:
– The Minister for National Development has provided the following answer:
(Question No. 531)
asked the Minister representing the Prime Minister, upon notice:
What did the Prime Minister mean by his statement, some weeks ago, that he has in mind the establishment of an Israeli type citizen army in Australia?
– The Prime Minister has provided me with the following answer to the honourable senator’s question:
Such a statement has not been made by me. At a Press conference at Mascot Airport on 2nd June 1968 I said that in replying to a reporter’s question in the United States I had sought to define what an Israeli type army in the Australian context could be considered to be. I suggested this was a regular army allied to a citizen military force. I told the Mascot Press conference that as Australia grew a citizen military force would build up and be belter equipped. This, of course, is existing policy.
(Question No. 563)
asked the Minister representing the Treasurer, upon notice:
What companies operating in Australia and controlled or substantially controlled by overseas interests have borrowed moneys in Australia, and what are the amounts borrowed?
– The Treasurer has supplied the following answer:
Companies wholly or substantially owned by overseas interests have been requested to consult the Reserve Bank before negotiating loans from any source in Australia. The information provided to the Reserve Bank by such companies is confidential. It would not be appropriate for the Government to reveal details of the financial operations of individual companies. However, the Commonwealth Statistician has advised that the paid up value of debentures, unsecured notes, loans, and deposits of Australian subsidiaries of overseas companies held by Australian residents amounted to $675m at 30th lune 1967.
(Question No. 570)
asked the Minister representing the Minister for Health, upon notice:
– The Minister for Health has furnished the following reply:
To make proposals to the Medical Statistics Committee for surveys of smoking habits and attitudes in Australia, and to carry out and report to Council through the Medical Statistics Committee on such surveys as are approved by the Council.
(Question No. 615)
asked the Minister representing the Treasurer, upon notice:
– The Treasurer has provided the following answer:
(Question No. 627)
asked the Minister representing the Minister for Civil Aviation, upon notice:
Pilots ls concerned at the congestion at the Moorabbin Airport?
– The Minister for Civil Aviation has furnished the following reply:
(Question No. 631)
asked the Minister representing the Minister for Primary Industry, upon notice:
Will the Minister advise why he was able to supply Senator Lawrie, a member of his own political party, with information concerning the sugar industry but has been unable to obtain a reply for a similar question on the sugar industry asked by Senator Keeffe on 10th October?
– The Minister for Primary Industry has supplied the following answer to the honourable senator’s question:
The question asked by the honourable senator was not in fact similar to that asked by Senator Lawrie. It was much broader in content and required research before a considered reply could be given.
(Question No. 656)
asked the Minister representing the Minister for Civil Aviation, upon notice:
– 1 have received the following reply from the Minister for Civil Aviation:
(Question No. 669)
asked the Minister for Customs and Excise, upon notice:
– The replies to the honourable senator’s questions are as follows:
(Question No. 706)
– It is with some diffidence that 1 submit question No. 706 standing in my name, which was placed on the notice paper on 23rd October - exactly 3 weeks ago - for the reason that T. feel I would be contributing towards making a greater farce of question time than it really is. It will be remembered that a week or so after this question was placed on the notice paper I was able to inform the Minister for Customs and Excise that the Minister for the Interior had supplied the answers to my questions and that 1 congratulated him upon the excellent liaison which existed between them. Now it is proposed to give me the replies that were given in the other place 3 weeks ago or thereabouts.
– I thank the honourable senator for those nice remarks about me and about the Minister for the Interior, whom 1 represent here. As the honourable senator has not bothered to ask the question I do not think I should read the reply. I will not delay the Senate any longer. With the concurrence of honourable senators I incorporate the question, and answer in Hansard. The question reads:
The answer is as follows: 1, 2, 3, 4 and 5. On 24th October 1968 I directed Messrs 1. F. Weise, E. F. Lane and E. Smith, the distribution commissioners appointed for the purpose of redistributing Queensland into divisions, to propose a fresh distribution of that State into divisions.
– by leave - It is 20 years since the Nationality and Citizenship Act was passed. There have been eight amending Acts since then. These were concerned with specific matters requiring attention and none represented a comprehensive revision. A general review has now been undertaken and approved by the Government. A Bill to amend the Act is in the course of preparation and I expect it will1 be introduced next year. In the meantime the Parliament will wish to be aware of the policy decisions reached.
Giving Primacy to the Status of Australian Citizen
The Nationality and Citizenship Act was passed by the Parliament in 1948 to give effect to the decisions of a conference in London in 1.947 initiated by the British Government to consider the national status of the citizens of the different countries of the Commonwealth. Prior to the introduction of ‘citizenship’ legislation in Commonwealth countries following that conference, the only national status possessed by the peoples of those countries was that of British subject’. The scheme of citizenship legislation drawn up in 1947 at London contemplated that each Commonwealth country would (a) define its own citizens; and (b) declare them, and the citizens of other Commonwealth countries, to have an additional common status. Our Nationality and Citizenship Act 1948 describes the common status of the citizens of Commonwealth countries as ‘British subject’. The legislation of the other ‘old’ Commonwealth countries provides for the use of either this term, or ‘Commonwealth citizen’, to describe the common status. The ‘newer’ countries have used the term ‘Commonwealth citizen1 exclusively. We could not use the term ‘Commonwealth citizen’ without confusion, Australia being itself a Commonwealth.
The status of a person born in Australia is that of a British subject and Australian citizen. A person born in England, however, is a British subject and a citizen of the United Kingdom and Colonies. When a person with this status comes to Australia he does not acquire Australian citizenship unless he applies for it. An alien migrant (that is, a person not already a British subject) upon naturalisation becomes both a British subject and an Australian citizen.
During the period since 1948 there has been considerable change in the general usage and understanding of the term British’. This is now used by the United Kingdom authorities, as well as other countries and people in general, to signify matters pertaining to the United Kingdom only; for example, ‘British High Commission’, ‘British passport’, ‘British migrant’. Many migrants from non-British countries, of whom 570,000 have been naturalised since 1945, find difficulty with the fact that naturalisation in Australia results in their becoming not only Australian citizens, as they wish to do, but ‘British subjects’. They associate the term ‘British subject’ with citizenship of Britain rather than with the common status.
The status of ‘British subject’ is very important to the great majority of the Australian public who would wish that status to be retained. Quite apart from historical and sentimental associations, the laws of the Commonwealth and States (for example, electoral laws) still use the term ‘British subject’ in prescribing status as a qualification for various right and duties.
The Government considers it to be desirable progressively and by whatever means is reasonably possible to give primacy to the status of Australian citizen. It has decided that the title of the Act should be changed to ‘Australian Citizenship Act’. In that Act there should be inserted a section to the effect that, whenever Australians are required to state their national status, it will be sufficient to state ‘Australian citizen’ rather than ‘British subject’. Most Australians have to complete forms of various kinds which call for a statement of nationality - for example, the census form, or the passenger card completed when leave and returning to Australia, or the form of enrolment as an elector. The question whether it is a correct and sufficient answer to stare ‘Australian citizen’ will be settled by the legislative provision I have just described. To complement this, it will be necessary to provide also that a reference to ‘British subject’ in any other federal legislation shall be deemed to be a reference to ‘Australian citizen and British subject’.
I expect that the State governments, which have been informed of the proposals, will give consideration to making similar provision in State legislation referring to British subjects’. I emphasise that our legislation will be so drawn that a person will not be in any way disadvantaged under either Commonwealth or State law.
For example, a person whose status is now that of a British subject and United Kingdom citizen will continue to have just the same rights and duties as at present, whether as to voting, or entry to the public services, or otherwise. He will not of course be able to describe himself as an Australian citizen if he has not acquired Australian citizenship. I shall deal shortly with the manner by which he may become an Australian citizen.
The Status in Australian Law of the Citizens of Commonwealth Countries Generally
At present, section 7 of the Act provides that a person who is a citizen’ of a Commonwealth country ‘shall by virtue of that citizenship … be a British subject’.
I have made reference to the misunderstandings arising from Australian citizens being British subjects. It is even less appropriate that citizens of the newer Commonwealth countries - some of them Republics - should be declared to ‘be’ British subjects, when by the law of these countries there is not a comparable provision in relation to Australian citizens.
The Government has decided that it will fit the facts better, and accord with the laws of other Commonwealth countries, if the Act is amended to provide that a citizen of a Commonwealth country (including an Australian citizen) ‘shall have the status of a British subject.
Again, it will be necessary at the drafting stage to take account of the provisions of other laws which refer to persons who are British subjects so as to avoid loss of rights and duties by individuals (especially British migrants) through’ this amendment.
Means by which Citizens of other Commonwealth Countries may become Australian Citizens
People from other. Commonwealth countries who have settled in Australia since 1944 do not become Australian citizens unless they apply for a ‘Certificate of Registration eis an Australian Citizen’. This may bc granted if the applicant has lived here for a year or more, is of good character and meets other requirements. The processing of applications usually takes a few weeks.
As our laws stand at present, British migrants have nothing material to gain from becoming Australian citizens, as they already have the right to vote, to be appointed or elected to public office, lo practise in all the professions, etc.; and of course after living here for 5 years without committing serious offences they pass beyond the deportation provisions of the Migration Act. As a result only some 40,000 British people have become Australian citizens by registration since 1949, while some 800,000 have not applied.
People from the United Kingdom who come to settle in Australia have a close historical and sentimental identity with us. It is natural that after living in Australia for long periods they think of themselves as Australian citizens; and when they wish to travel abroad, they are very surprised and hurt to find they cannot obtain Australian passports. It is a very common occurrence that they do not have time, before travelling, to obtain certificates of registration and are obliged to obtain British passports from the British High Commissioner. The Government has decided that they should have an extremely simple and quick way of becoming Australian citizens.
The amending Bill Wm propose that settlers admitted for permanent residence from other Commonwealth countries who have lived m Australia for 5 years (without having committed any crime for which they could be deported) should be able to become Australian citizens as of right, by a simple notification to the Department of their wish to become citizens - this to become effective from the date of the notification, which would be duly recorded. It would be a provision that this simple method of notification shall be ineffective if the person concerned has been convicted of a crime committed within 5 years after entry to Australia which would have rendered him liable to deportation. In such cases the person would have to make application for citizenship by registration in the method now provided.
Quite frequently cases arise where the existing provisions of the Act prevent the grant of citizenship in cases where its withholding is a matter of great emotional distress for the relatives of the person concerned.
The Government has decided that sections 12 and 15 of the Act should be amended so as to enable the Minister to exempt, from the need to demonstrate an adequate knowledge of English and of the responsibilities and privileges of citizenship, persons over 60 years of age, and persons suffering from severe disability in hearing, speech or sight. At present a person of unsound mind who is under 16 years of age can become an Australian citizen by inclusion on the parent’s certificate, which is the usual practice. However, if he is over 16 years of age he can never become, as the law now stands, an Australian citizen, because he can then only apply for citizenship separately in his own right and this cannot be granted because he cannot comprehend the nature of the oath required to be made. This has created some quite severe emotional hardship. The Government has decided to exempt from the need to be of sound mind any person (of whatever age) whose father or mother is (or was at the time of death) an Australian citizen.
Question of Reduction of the Residence Requirement for Naturalisation
The normal period of residence required prior to the naturalisation is 5 years. Careful thought has been given to differing views which have been expressed, for or against reduction of this period.
The Act at present empowers the Minister to waive or reduce considerably the residence requirements for minors, the spouses of Australian citizens, members of the Forces, former Australians, and persons who have lived in other Commonwealth countries or served in their Forces.
Cases are continually arising where nonBritish migrants are suffering disadvantage in their employment through not being naturalised. For example, a good many people working in the Commonwealth and State Public Services and local government service cannot be given permanent appointments. In consequence they miss opportunities of advancement. These are usually people who have an excellent command of English, written as well as spoken, and who exhibit all the other indications of having become integrated into the community.
The Government sees good reason nol to delay the grant of citizenship to such persons provided they have the qualities of which I have spoken as well as the other usual character requirements. However, the Government does not feel there is sufficient grounds for a general reduction of the qualifying period of 5 years, which does not impose hardship as a general rule (indeed the majority of aliens do not apply for citizenship until they have been here for 8 years or more). The period is generally in line with thelaws of other countries. Also it is consonant with provisions of the Migration Act relating to deportation (for crimes committed within 5 years after entry). Once a person is naturalised he will be immune from deportation even if, under this provision, his residence is for a period less than 5 years. An Australian citizen, of course, cannot be deported.
The Government has accordingly decided that the Act should be amended to permit the grant of citizenship after 3 years residence to persons who satisfy the Minister that they:
Children born in wedlock outside Australia may become Australian citizens by birth, through registration of the births at Australian consulates, only if their fathers are Australian citizens. There have been cases where Australian women living abroad and married to men of other nationalities have wished to have their children become Australians by birth. The Government has decided that it should be possible for a child to become an Australian citizen at birth, through registration of the birth at an Australian consulate upon the application of either parent, if that parent is an Australian citizen and if no court order exists giving custody to the other parent.
The DEPUTY PRESIDENT- There being no objection, leave is granted.
– I move:
That the Senate take note of the statement.
I ask for leave to make my remarks at a later date.
Leave granted; debate adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Scott) read a first time.
– I move:
That the Bill be now read a second time.
This Bill seeks the approval of the Parliament to an agreement between the Commonwealth and the States of New South Wales and South Australia. The agreement embodies arrangements for construction of a new standard gauge railway between Cockburn and Broken Hill. The Bill also seeks the authorisation required for expenditure for the purposes of the agreement.
Honourable senators will know that the proposed new railway is the final section of a through standard gauge link between the east and west coasts of Australia. This standard gauge link will enable revolutionary changes in the transport of passengers and freight between east and west. As far as the Western Australian end is concerned, the physical linking of the standard gauge railway between Kalgoorlie and Perth with the Trans-Australian line east of Kalgoorlie was celebrated in August. Interstate freight trains will operate from Port Pirie to Perth in November, but narrow gauge operations between Kalgoorlie and Perth will continue for some time to handle local traffic. Passenger trains will run direct from Port Pirie to Perth from about next May. In South Australia, work on the new standard gauge line is well advanced. The main line track from Port Pirie to Cockburn is expected to be substantially complete by the end of the year, although signalling and facilities in the major yards will not be completed until the second half of 1969.
The new line covered by this Bill will be the final link in the east-west standardisation project. The new route selected will be about 5 miles shorter than the existing narrow gauge route which deviates from the direct course to serve the former mining town of Silverton. The need for a railway service to Silverton has long since disappeared. lt is therefore possible by the use of a more direct route to take advantage of operating savings resulting from a shorter line distance. Another important advantage of the new route is that it will enable the elimination of twenty-one open level crossings in the Broken Hill area. To assist the Senate in considering the matter, I have circulated a sketch map illustrating the proposed route.
The preparation of the agreement now before the Senate involved complex negotiations between the three governments concerned. These arose because the line will handle traffic basically of interest to the South Australian railways, although construction of the railway will take place in the State of New South Wales under the statutory authority of the Government of that Slate. Many of the fundamental questions of planning and control affected the interests and legislation of New South Wales.
The agreement covers two groups of work. The first group deals with the new railway itself and the new standard gauge facilities which will be required at Broken Hill to handle traffic which at present uses the narrow gauge railway. The opportunity has also been taken to provide in the new agreement for a second group of items which the Commonwealth Government is prepared to finance as part of the Port Pirie to Cockburn standard gauge project, but which it is believed are outside the scope of the 1949 agreement under which that project is being constructed and financed. This second group is covered in sub-paragraphs (d), (e) and (f) of clause 3 (1) of the agreement. In brief, they cover certain items of rolling stock which probably could not be provided under a proper interpretation of the 1949 agreement, and also contributions towards the cost of converting certain privately owned sidings and tank cars which the Government has agreed could reasonably be met from Commonwealth funds.
Most of the work will be carried out under the control of the South Australian Railways Commissioner. An exception is the work to be done in the New South Wales railways marshalling yard at Broken Hill, which will of necessity be arranged by the New South Wales Commissioner for Railways. The target completion date for all the work is 1st October 1969. The financial terms of the agreement are those generally adopted for rail standardisation projects. The Commonwealth provides the whole of the finance required for the work, and the beneficiary State - in this case South Australia - is to repay 30% of the total cost, with interest, over 50 years. The detailed terms of the agreement follow the usual lines for standardisation projects, and include provisions to ensure the necessary cooperation between the States and the Commonwealth in respect of the planning and supervision of the work and the control and audit of expenditure.
The opportunity also has been taken in the agreement to record the recission of clause 23 of the 1949 agreement. This clause provided that the Commonwealth should take reasonable steps to acquire the Silverton tramway and vest it in the South Australian Railways Commissioner. The decision to build the new line on a direct route, which I mentioned earlier, has made the clause redundant. Honourable senators will no doubt be concerned at the effect of the proposed standardised rail link between Cockburn and Broken Hill on the present operator, the Silverton Tramway Co. Ltd. While legal advice indicates that there is no obligation to compensate that company it was recognised that the newline will substantially affect the business of the company. Accordingly the company was offered an ex gratia payment of a sum of Slim. This sum was agreed by all three governments involved as adequate in all the circumstances. The company has at this stage declined to accept the offer but discussion between the Government and the company are continuing. The future course of the matter is in the hands of the company and it accordingly would be inappropriate to make further comment.
As I indicated earlier, construction of the new railway under the provisions of this Bill will complete a revolutionary development in Australian transport with widespread benefits to a large number of industries and individuals. Although detailed timetables and freight schedules have not yet been completed, freight costs between Sydney and Perth are expected to be reduced by around121/2%. Even more importantly, the time it takes to move freight by rail across the continent will be cut from the present 8 or 10 days to less than 4 days. Moreover, passengers will be able to travel from Sydney to Perth without changing trains, and the overall time for the journey will be considerably reduced.
The increasing volume of freight and passenger traffic gives prospect of reasonable economic utilisation of the trans-continental facilities. At a time when methods of freight handling are undergoing such radical change, and when people are both able to afford and have the inclination to travel about Australia, it is particularly opportune that this final section should be undertaken. The advantages to be gained are such that the three governments are determined to work for the earliest possible completion of the project. I commend the Bill to the Senate.
Debate (on motion by Senator Bishop) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Anderson) read a first time.
That the Bill be now read a second time.
The Australian Universities Commission has been operating with the assistance of staff employed under the Public Service Act and occupying positions in a Commonwealth department, originally with the Prime Minister’s Department and now within the Department of Education and Science. However, the Government believes that it would be more appropriate for the statute which governs the operations of the Commission to provide for the employment of its staff.
The Bill provides for the staff necessary to assist the Commission to be employed under the Public Service Act and for the Chairman of the Universities Commission to be given powers under that Act in relation to the Commission’s staff similar to those exercised by a permanent head in relation to the staff of a department. This follows the legislative pattern that has been adopted for a number of statutory authorities, for example the Australian Broadcasting Control Board and the National Library.In line with the provisions that are contained in the legislation establishing those other bodies, the Bill also provides for the Chairman to delegate his powers in relation to staff where it is appropriate for him to do so.
Debate (on motion by Senator Murphy) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Anderson) read a first time.
– 1 move:
That the Bill be now read a second time.
The purpose of this Bill is to increase the rates of the weekly payments of compensation provided by the Commonwealth Employees’ Compensation Act 1930-1967. Under this measure, the introduction of which the Treasurer (Mr McMahon) announced in his Budget speech, the weekly rate will be increased from $25.35 to $28.15 for a totally incapacitated adult employee.
Consistent with past practice, the rate for a minor has been fixed at 75% of the amount for an adult employee and this means an increase from $19.00 to $21.10 in the weekly amount payable to a minor. In addition the weekly allowances payable for dependants will be increased from $6.00 to $6.80 for a dependent wife or other female and from $2.45 to $2.50 for each dependent child under 16 years of age. These new rates will provide a total weekly payment for a man with a dependent wife and one child that compares very favourably with the comparable amount provided under the legislation of the States in this field.
Under the Act, a weekly payment for an amount equivalent to the weekly allowance for a dependent child of an incapacitated employee, is payable in respect of each dependent child, aged less than 16 years, of a deceased employee and the new rate of $2.50 per week will also be payable for such dependants. Honourable senators will recall that, in a Ministerial statement to the Senate on 1 2th June 1 968, it was announced that the Government expected to submit a Bill for a new and revised Commonwealth Employees’ Compensation Act during this session. The drafting of that Bill, which is, by any standards, a major one, has been proceeding as quickly as possible but, unfortunately, it will not be completed in time for its introduction this session. Provisions regarding the new weekly rates could have been incorporated in that Bill but the Government arranged for the preparation of a separate Bill for this purpose so that payment of compensation at the increased weekly rates can be commenced with as little delay as possible.
Debate (on motion by Senator Bishop) adjourned.
Bill received from House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Scott) read a first time.
– I move:
This Bill amends the Seamen’s Compensation Act to provide for increases in the amounts of weekly payments of compensation payable to seamen and their dependants. The increases are similar to those proposed for Commonwealth employees under the Commonwealth Employees’ Compensation Act. A Bill to amend that Act for these purposes has already been introduced in the Senate, lt is customary and desirable that changes in the monetary rates of compensation determined by Commonwealth legislation under the two Compensation Acts which the Commonwealth administers should, as far as possible, be kept uniform and be effected simultaneously.
The amendments envisaged by this Bill include an increase in the amount of weekly payment, where a seaman is incapacitated for work by injury or disease attributable to the nature of his employment, from $25.25 to $28.15, and for increases in weekly amounts from $6 to $6.80 in respect of the seaman’s wife and from $2.45 to $2.50 in respect of each of the seaman’s children. In addition, the amount of weekly payment for incapacity in respect of a seaman who is a minor is increased from $19 to $21.10. Also, where a seaman dies as a result of injury and he has a child wholly or mainly dependent upon his earnings, the weekly amount in respect of that child is increased from $2.45 to $2.50.
Because rates of compensation in respect of seamen are paid by shipowners, and not by the Commonwealth, these amendments do not give effect to a Budget decision, as is the case with the complementary Commonwealth Employees’ Compensation Bill. It is intended to introduce a Bill making a number of changes in the Seamen’s Compensation Act along the same general lines as the comprehensive changes that are envisaged in relation to the Commonwealth Employees’ Compnsation Act. This Bill will be introduced after the proposed Bill for a new and revised Commonwealth Employees’ Compensation Act has been introduced.
Debate (on motion by Senator Bishop) adjourned.
Bill received from the Mouse of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Anderson) read a first time.
– I move:
That the Bill be now read a second time.
As announced by the Treasurer (Mr McMahon) in his Budget speech on 13th August 1968. the Government has decided to liberalise the present treatment under the Gold-Mining Industry Assistance Act of receipts by subsidised producers from sales of gold at prices in excess of the official price of $31.25 an ounce. Under the present provisions of the Act, a gold producer entitled to subsidy has his subsidy entitlement reduced by the full amount of any excess over the official price which may be received from sales of his gold. The reason for this is that subsidy is related directly to a producer’s cost of production and the rates of subsidy have been fixed in relation to the official price of $31.25 an ounce. Since 1951 producers have been permitted to make sales of gold on overseas markets at prices in excess of the official price and this arrangement was recently extended to local sales of gold for industrial use in Australia. Under present provisions, subsidised producers have little incentive to sell in free markets. Unsubsidised producers, of course, receive the full benefit of sales at premium prices.
The Bill now before the Senate will amend the Gold-Mining Industry Assistance Act to allow subsidised producers the benefit of 25% of the excess of prices received over the present official price while that price remains at $31.25 an ounce or less. The amendment will take effect as from 1st July 1968. Because it is difficult to predict future movements in the free market price of gold, a firm estimate cannot be given of the extent of the increase in subsidy payments by reason of the amendment. Were the premium above $31.25 an ounce to average $3 an ounce during 1968-69, payments to subsidised producers would bc increased by about $300,000. I commend the Bill to honourable senators.
Debate (on motion by Senator Cant) adjourned.
Debate resumed from 12 November (vide page 1 882), on motion by Senator McKellar
That the Bill bc now read a second time.
Upon which Senator Wilkinson had moved by way of amendment:
Leave out all words after ‘That’, insert ‘tha Bill be withdrawn and redrafted to provide for a one price scheme for home consumption and export wheat commencing with a price which will return to the grower SI. 48 f.o.r. per bushel which is equivalent to a guaranteed price of $.1.51+ f.o.b. per bushel for exports up to a maximum of 200 million bushels from the crop of any season’.
– 1 rise to support this Bill and to oppose the amendment moved by Senator Wilkinson on behalf of the Opposition. The main purpose of the Bill is to fulfil the Government’s role in providing for stabilisation of the wheat industry and orderly marketing of wheat for a further period of 5 years. Before I come to the main part of my speech I wish to refer to the amendment that Senator Wilkinson moved yesterday. In his speech he set out in reasonable and rather mild terms the Opposition’s attitude to the Bill. I think he realises that the Opposition has not very much to complain about in the circumstances of the wheat industry today. I do not disagree with what he said about a section of the wheat growers which supports the proposal for a one price scheme, as mentioned in the Opposition’s amendment. But I am sure that I speak for the wheat growers generally when I say that the vast majority of them at this time would be horrified by the Opposition’s amendment, which provides for the withdrawal of the Bill and the reconsideration of the matter.
I say that because of the time factor involved. We have to realise that if the amendment were carried the Government would have to give consideration to it and would have to refer the matter back to the Australian Wheatgrowers Federation. 1 believe that the carrying of this amendment would be an irresponsible action on the part of the Senate, bearing in mind that at this very time wheat is flowing into the silos in Queensland and New South Wales country districts. Indeed, I would not be surprised if some applications for money from the Australian Wheat Board have been made already. Bearing in mind that the present agreement ends on 30th November next, which is about 2 weeks away, I believe that the growers would regard the carrying of this amendment as irresponsible. I say that without any malice at all.
I think everybody would recognise that this Bill is of great importance to all sections of the community - the wheat growers, the rural communities which depend on a prosperous wheat industry, the economy and a big section of manufacturing industry which provides machinery for the wheat industry. Let me go into a little more detail on this point. We have to remember that there are about 55,000 wheat growers in Australia. That means that on a reasonable estimate about 150,000 or 200,000 people depend directly on the wheat industry for a living. As one who lives in an inland district, I know how much all sections of the rural communities and the inland towns depend on the wheat industry. I refer to the business people, the shire councils, the employers, the transport operators and the people who supply fuel and other requirements. They all look to a prosperous wheat industry to enable them to carry on their normal activities.
In regard to the general economy, we have to recognise that, after wool, which provides about $700m to S800m of export income each year, wheat and meat usually make the greatest contribution to our export income each year, namely from $250m to 5300m, depending on the production of each industry. In regard to manufacturing industry, I feel pretty confident in saying that the section that provides machinery for the wheat growing industry is one of the largest. It is dependent on the wheat industry being prosperous enough for the wheat growers to purchase machinery from it. This is a vital matter in a country which has a considerable number of migrants coming into it all the time,
In the last 6 years the area producing wheat has doubled. There are several reasons for that. One is that wheat brings in a quick return. The seed is sown in the autumn. If a good season follows the wheat growers receive a quick cash return. Because of the unprofitability of the wool industry over the last few years, many stock owners found it necessary to change to wheat growing in order to earn a profit. Improved varieties of wheat in the last few years have resulted in higher yields. Many recently developed varieties have greater resistance to disease than varieties grown many years ago.
Great improvements which have occurred in the mechanisation of the wheat industry have been of much assistance. I think it is fair to say that the efficiency of wheat farmers makes them second to none on that score. By their efficiency they have increased production, thus helping themselves and the Australian economy. In 1960 Australia produced 274 million bushels of wheat. In 1966-67 production rose to a record level of 466 million bushels. This year the crop is estimated at between 440 million and 470 million bushels. Those figures indicate the tremendous growth of the wheat industry in the last few years. A study of the incomes of various primary producers shows that wheat, growing is one of the more profitable occupations. This is proved by a survey taken in 1966-67 by the Bureau of Agricultural Economics. The survey showed that the average annual net return of primary producers contacted during the survey was $9,400 over the 3-year period. That must be acknowledged as a very good income for wheat growers.
– That is an average figure. Many wheat growers would receive much less than that.
– I agree. The honourable senator might find interesting a study of the figures resulting from the survey by the Bureau. There is not the slightest doubt that some sections of the wheat industry are not completely satisfied with the arrangements made for the next 5 years. Some people claim that the cost of production formula has been whittled away, except for a small percentage of the crop. Other people advocate a one price scheme, at $1.48 a bushel, as provided for in the amendment moved by the Opposition. I think all honourable senators should acknowledge that in view of the profitability of the wheat growing industry as illustrated by the survey of the Bureau of Agricultural Economics the legislation we are now discussing is reasonable in every regard. 1 remind honourable senators that a one price scheme at SI -48 a bushel would cost the taxpayers an additional S67m over the 5-year period. 1 ask honourable senators opposite to keep that in mind in considering whether to support the amendment.
– I mentioned that factor.
– 1 did not say that the honourable senator had not referred to it. In view of the fact that the Government is giving a considerable amount of assistance to the wheat industry I think the extra cost involved would be unwarranted, particularly as the wheat industry is showing a reasonable profit for wheat growers. Other honourable senators have said that the home consumption price of SI. 70 a bushel will bring about a rise in the consumer price index. I think it was said yesterday that the rise of 5.5c a bushel will result in an increase of 0.2c in the price of a 2 lb loaf of bread. That is a very small increase. I am not suggesting that over the 5-year period of operation of the plan the price of bread will not increase by more than 0.2c a 2 lb loaf. The main reason for that increase is the rise in costs involved between the purchase of wheat and the point of sale of bread to the consumer. 1 think it is quite reasonable to ask consumers to pay an increase of 0.2c in the price of a 2 lb loaf of bread.
The price paid for fodder for the poultry industry influences the price of eggs, but again this is a marginal factor to which objection should not be taken. Australia’s home consumption price of wheat compares very favourably with that of other countries. In fact, it is the lowest in the world at Si. 70 a bushel. Calculated in metric tons and United Stoles dollars our home consumption price is SUS69.9 a metric ton. I emphasise that it is the lowest in the world. In Canada the home consumption price for a metric ton is SUS72; United States of America SUS96; Mexico, SUS96; France SUSI00; Italy $ US.104; Spain $US 14; and Sweden $US1. 15. Those figures demonstrate forcibly that Australia has the lowest home consumption price of all wheat exporting countries. 1 strongly support what has been said by the Minister for Primary Industry (Mr Anthony) and other members of this Parliament that this legislation provides a reasonable and realistic arrangement for the next 5 years.
The plan is strongly supported by the majority of members of the Australian Wheat Growers Federation, which 1 regard as a most responsible organisation in every way. The support of the majority of members of the Federation indicates their attitude towards the plan. The export price for 200 million bushels of wheat is to be set at S 1.45 a bushel f.o.b. for the period under review. For subsequent years the 5-year agreement price will be adjusted according to movements in cash costs, including interest rates which must be paid, rail freight and handling charges. If costs increase in the 5-year period wheat growers will be reimbursed accordingly. In considering the plan honourable senators should keep in mind that a surplus of about 30 million bushels remains of last year’s production. Huge stocks of wheat are held in all wheat exporting countries. The plan assures Australian wheat growers of receiving slightly more than $1.48 a bushel for 200 million bushels, or about 60% of the estimated crop for this year. The balance of about 40% of the crop is to be sold on the world market.
The International Grains Arrangement will provide a guarantee of a little less than $.1.40 a bushel, but because of the huge surpluses of wheat in all wheat exporting countries a doubt must exist that the arrangement will be adhered to in its entirety. We hope that it will, but because of pressure to sell on a world market that is not particularly anxious to buy at present, a doubt must exist. Some weeks ago 1 saw the figures relating to wheat stocks in other countries. They are probably much the same today. Canada had a carry-over from last year of 675 million bushels plus good prospects for this year. No doubt the Canadian wheat already has been harvested. The United States of America, France and Argentina all had surpluses and good prospects. So far as importers are concerned, prospects are not quite so good because we find that India and Pakistan have become less dependent on Australian wheat and. as usual, little or nothing is known about the position in China and Russia. We do not know whether they will bc importing wheal.
In these circumstances, Mr President, I believe the Government has acted fairly realistically towards the wheat growers and with responsibility to the consumers and the general economy of Australia. For the Government to have acceded to the earlier representations of wheat growers for a large portion of the crop to be covered by the cost of production formula, it would have put a heavier burden on our taxpayers, to the extent I have mentioned, and deprived other rural industries of a share of assistance from the Government. There are industries in Australia, such as the dairy industry, the fruit industry and the wool industry, which at the present time are not nearly as profitable as the wheat industry. It would not have been in the long term interest of the wheat growers for the Government to have acceded to their earlier request. I am referring now particularly to those growers who depend solely on wheat and I suppose they represent a reasonable percentage of the 55,000 growers I mentioned earlier. We have to remember that if a considerably larger amount had been guaranteed to the wheat growers we would have found more and more acres devoted to wheat production; we would have found it more and more difficult to get rid of the wheat produced; and a larger number of the marginal areas would have been used for wheat production. In the long term, and bearing in mind the difficulties facing the exporting nations at this stage, this could have been disastrous to the Australian wheat industry.
I want to refer to the first advance payment announced by the Government. I congratulate the Government on making this first payment of $1.10 a bushel less freight. I know something of the problems of the smaller wheat growers. They are in debt to many of the business people in the towns near which or in which they live. The advance will be of great assistance to them at this stage. Because we are going to have some difficulty at least in selling our wheat another advance from the pool is unlikely for a considerable time.
It is not my custom to adopt a party political attitude to matters such as this, but I feel I would be failing in my duty as a member of the Parliament if 1 did not pay tribute to the work of the Minister for Primary Industry. He has handled extremely well this situation involving the wheat growers and others concerned. He has been tolerant to those with opposing views but at the same time has acted with firmness and as a responsible member of the Government in looking after the interests of others affected by this wheat plan, such as the consumers and the taxpayers.
– He has been courageous.
– That is so. I want to pay tribute to him for the work he has done in this regard. I support the motion and oppose the amendment.
- Mr President, at the conclusion of Senator Wilkinson’s remarks yesterday he indicated that there were two Bills associated with wheat on the notice paper. The Minister in charge of the Bills happened to be temporarily absent from the chamber at that time. Senator Wilkinson asked whether both Bills could be dealt with at the same time.
– I am happy for that course to be adopted.
– I thank the Minister for Repatriation. This means that both Bills will be dealt with speedily. I hope the Opposition’s amendment will be carried by the Parliament. I support the amendment that has been moved because the attitude of the Australian Labor Party to the Wheat Industry Stabilisation Bill is that we believe it is not in the best interests of the majority of Australian wheat growers and is not supported by them. The only real opposition to the amendment that Senator Bull revealed in his remarks seemed to be confined to the time factor involved in having the Bill withdrawn and resubmitted along the lines suggested by the Opposition. It was interesting to note this point. 1 want to make it very clear that the time factor is not the fault or the responsibility of the Australian Labor Party. When we consider the time schedule associated with the stabilisation plan, the Bill was presented to the Senate at a late hour.
Contrary to the view of Senator Bull, I think the Minister for Primary Industry (Mr Anthony) acted far from competently and far from efficiently in the negotiations associated with this stabilisation plan. Looking back to the history of the plan, we find that proposals were first submitted by the
Minister in late March or, at least, not later than the first week in April, to representatives of the Australian Wheatgrowers Federation. The proposals were kept secret and confidential until the Minister announced in August that there were the final proposals. He presented them as an ultimatum to the Australian wheat growers without their having had a real opportunity to meet and discuss the proposals in order to be able to direct their representatives as to how they should vote during the negotiations that were to take place.
I would like the Minister to tell me during this debate who was reponsible for denying Australian wheat growers knowledge of the Government’s proposals for so many months? Were the representatives of the Wheatgrowers Federation responsible or was the Minister responsible? Did the Minister insist that the matter remain confidential for such a long time? These proposals were not acceptable to the Wheatgrowers Federation and the proposals in the Bill are very little different from the original and confidential proposals of the Minister. Yet we find that it was not until October that the Australian wheat growers could meet and discuss at a rank and file level the proposals of the Minister that were accepted by some members of the Wheatgrowers Federation and not by others. We know that the Federation had a number of meetings and that its members were split right down the centre for weeks and weeks before the Federation came to a final decision as to whether it would accept this plan.
I want to say here and now that so far as Victorian growers are concerned, and, I believe, so far as Western Australian growers and many other growers throughout the Commonwealth are concerned, the plan was accepted under duress in order to save the stabilisation scheme and for no other reason. If growers had had a proper opportunity to meet, discuss the formula and send their representatives away with counter proposals, and if the Minister had not adopted a take it or leave it attitude, I believe the Senate would have before it now an entirely different proposition. If, as the Government says, it is now too late to do anything, then the responsibility for that rests entirely with the Minister who has dilly-dallied about the matter for many months. I believe that a stabilisation plan of the importance of this one is very necessary to the industry and to the nation. But I also believe that it is equally essential that the Houses of Parliament should have a much longer time to discuss it and much more opportunity to amend it than we have been allowed on this occasion. When I remember that yesterday we were able to put through in something under 1 hour an urgent Bill relating to another matter, a Bill which had passed through the House of Representatives only a few minutes before, and have it signed by the GovernorGeneral 1 hour later, I can only say that all this talk about a fortnight being too short a time to give proper consideration to the Labor Party’s amendments is utter nonsense.
– Some of the State Houses are not sitting.
– The Houses that are silting could not alter this legislation, anyway.
– They have already approved the scheme.
– The Houses in those States could be called together again to approve any amendments that may be made by us. The honourable senator is saying in effect that the Senate has no right to amend this legislation because of other machinery operations within the country. He is saying that because other parliaments are not sitting the growers must be denied an effective stabilisation scheme. The responsibility for this state of affairs rests entirely with the Government. The Opposition is not responsible in any way whatever. lt is my belief that this legislation could have been placed before the Parliament during the autumn period this year or, at the latest, during the early weeks of the Budget period.
To tell us that this legislation must bc passed through the Parliament by 30th November or the stabilisation scheme will be null and void is tantamount to political blackmailing of the Opposition, just as the growers were subjected to political blackmailing when the proposition was placed before them.
– I do not think the majority support you.
– I think the majority of the wheat growers in Victoria support me.
– Not the majority of the Australian Wheatgrowers Federation.
– I would refer the honourable senator to the leading articles published in some of the country newspapers in Victoria. The compliment they pay to the Minister is far different from the one which the honourable senator endeavoured to pay to him today. They charge the Minister with standover tactics. They charge him with adopting tactics that no Minister should dare to engage in. I refer the honourable senator to an article appearing in ‘The Australian’ of 5th November 1968 headed: ‘Wheatgrowers get $1.10 advance - and a warning’. The article states:
The Federal Government has decided to maintain its first advance payment of $1.10 a bushel to wheatgrowers on this year’s big wheat crop.
But this will be reviewed if Victoria does not pass complementary legislation backing the controversial wheat stabilisation scheme.
Announcing this last night, the Minister for Primary Industry, Mr Anthony, also warned Australia’s 60,000 wheatgrowers not to expect the same treatment in future.
In other words, he told the Government of Victoria that if it did not legislate entirely in conformity with the proposals now before us the $1.10 would be withheld at least from the growers in that State. And I presume that this threat would also move through to other States. If these are not standover tactics designed to force through this Parliament and through the Victorian Parliament something that is not acceptable to the growers, then I have yet to see what are.
I have moved amongst the growers a great deal discussing this matter with them and I agree with their assertion that they have had no real opportunity to examine this proposition. They have had no real opportunity to go to their representatives and say what they want. They were presented with a fait accompli when the Minister announced his scheme. And this scheme is the result of secret negotiations. The rank and file of the wheat industry were not permitted to know what was being proposed by either side. If this type of thing was done in the trade union movement every one of its leaders would be sacked. The workers would sack every one of their leaders if they engaged in secret negotiations such as took place here in connection with such an important matter as this in which the whole of the production of the wheat growers of this country over the next 5 years will be involved.
For two reasons we of the Opposition support a one price scheme. One is because it is the wish of the industry. I believe that if a referendum were held, the industry would wholeheartedly support the one price scheme. But a much more serious factor in my view is the fact that the Government’s plan for a home consumption price of $1.70 will inevitably lead to an increase in the price of bread and in the prices of other processed wheat products hi this country.
– Do you think of that when you support wage rises?
– Wage rises come only after the cost of living has risen, and if this legislation goes through in its present form there will be another increase in the cost of living.
– Is there one price for butter?
– No, there is a two price system for butter. The Australian people are subsidising the English consumers to a great extent. The position with relation to bread is that although the Minister has stated that the total increase in the cost of a 2 lb loaf will be only one-fifth of a cent, this represents only the minimum increase. 1 suggest that the actual increase will be at least lc, and by the time this develops through the various processes I can see a possible increase of 2c in the price of a 2 lb loaf.
The important point about all this is that the increase hits hardest the people in the lower income bracket. There is no doubt whatever that the man in the lower income bracket with a big family will meet most of this cost because the staple diet of his family is bread. There is no doubt that the pensioners will meet some of the cost. They live almost entirely on bread for the simple reason that they cannot buy the other more expensive foods. I know personally some pensioners who eat meat only once a week. They cannot afford to have it any more often. It is on these groups of people that the Government is imposing a penalty. This represents a tax upon the consumer, the purpose being to save the Commonwealth Treasury from meeting its commitments as it has done in the past.
– What difference does it make to the price of bread?
– I think it will increase by 2c a loaf. Of course, with their incomes and their wealth honourable senators opposite will find no difficulty in paying the extra 2c; but I suggest that the pensioners in Tasmania will not be very happy if, as a result of the action of honourable senators opposite in this chamber this afternoon, they are faced with an increase in the price of their staple diet.
The situation is that a tax is being imposed upon the community to pay for the proposed stabilisation scheme. If our suggestion were adopted the Commonwealth Treasury would be required to pay an additional $67m over a period of 5 years. The Government is trying to convince us today that the manufacturers of bread and the manufacturers of other processed wheat products are prepared to absorb this $67m in their costs. In other words, the Government is seeking to have us believe that if the proposal now before us is adopted there will be no real increase in the cost of bread or other processed wheat products. This is utter nonsense. The Government suggests that its policy is to curb the inflationary spiral, that it is endeavouring to reduce costs to the farmer and all other members of the community. But in actual fact, by the policy it adopts today it is giving impetus to the inflationary spiral1. Surely the Government realises that the cost of bread will rise as a result of its proposal of a home consumption price of $1.70. That must automatically follow. As against that, if the Labor Party’s proposal is carried and the price is set at $1.40 free on rail, which is equal to $1,511 free on board, it wil’l be possible to reduce the price of bread. Therefore, our proposal must bring down costs and so have a deflationary effect upon the economy. It follows as naturally as night follows day that if the legislation were amended to embody our proposal costs coul’d be reduced to the consumers of bread and other processed wheat products.
The Government places before us today an entirely new scheme which represents a departure from the old system of finding the cost of production. The reason the Government has had to depart from the old formula is that costs have got completely out of hand. That is why the Government has had to break down the found cost of production system and introduce a system that has no relation, or very little relation, to cost of production. I will prove that conclusively in a moment.
It is true that there has been a tremendous increase in the acreage sown over the past few years and that there has been an increase in yield, but there has been also an increase in the divisor that is used to arrive at the found cost of production. It is interesting to note that in 1948-49 the cost of production was 66.667c a bushel and that in 1966-67 it had risen to 155c, well over double the cost of production some 18 years earlier. When one examines the position carefully one finds that the divisor in 1948-49 was only 12 bushels and that in 1963-64 through to 1966-67 it was about 17i bushels. If one relates the present position to the 1948-49 cost of production on a 12-bushel divisor one will see how costs have spiralled out of all consideration. The reason is that the Government has had to take a different view now from the view it has taken in the past to arrive finally at a situation where it could get what it claims to be a realistic cost of production.
One learns some very interesting fact3 from an examination of acreages sown, in 1930-31 some 18.164 million acres were sown to wheat in Australia but there was a downward trend in 1943-44. I agree that that was the period just after the war and there probably were many reasons why production declined in relation to acreage. In addition, if I recall1 correctly, in 1943 there was a rather severe drought, at least in Victoria. 1 do not know whether other States had the same problem.
– It did not have any effect on the acreage sown. People do not sow wheat if they cannot plough.
– In Victoria, if they cannot seed their properties because the properties are too dry they sow far less wheat than otherwise would be the case. That could well have happened in 1943. In 1955-56 some 10 million acres were sown but there was a decline to 7.8 million acres in 1956-57 although it rose slightly again in the following year to 8.847 million acres. Another very significant factor comes into this question. At that time the Government altered the system of land valuation. Previously it was based on approximately 60% of the market value of the property but the Government, in an endeavour to encourage people to return to wheat production - 1 think this was another deliberate action on the part of the Government because of problems with overseas funds, the availability of markets and the fact that markets had dropped so alarmingly - altered the system and provided that 100% of the land value should be included in the cost of production.
– Was not that a request from the Australian Wheatgrowers Federation?
– lt could well have been, but it happened. Now after 10 or 12 years spiralling costs have forced the Government to abandon it completely. That is the situation in which the Government now finds itself. It has abandoned completely any real attempt to arrive at a true cost of production. The Minister has admitted that. In his speech he said quite clearly, in my view, that the cost of production formula had been abandoned by the Government and there was juggling and manipulating to get to the figure he wanted while getting agreement with the Federation on the $1.70 home consumption price. In closing the debate on the motion for the second reading of the Bill the Minister for Primary Industry said in another place:
When I began to negotiate with the Australian Wheatgrowers Federation I said that the Governnent did not want to stand by the old principle of determining a price based on the cost of production because it would have to juggle the figures to arrive at a satisfactory price. The Government suggested that the home consumption price ought to be $1.70. The industry came back and said that it would like to maintain the principle of cost of production and that it was prepared to manipulate the figures-
I emphasise those words - to arrive at a cost of production of $1.70. That is what the industry did. By altering the yield divisor it arrived at a price of $1.70.
I always understood that the yield divisor bad developed as a result of investigation over a number of years by the Bureau of Agricultural Economics. The divisor was the average yield over that period, lt was by using that divisor that the true cost of production was found. That is the theory that I understand has been followed, yet on this occasion the Government has departed completely from land values and from the divisor, obviously as found by the Bureau of Agricultural Economics, and has juggled and manipulated the divisor to find the figure it wanted - not the figure that might be the true figure in relation to the cost of production. The Australian consumer is now being asked to pay the $1.70 which has been arrived at, not by investigation but by manipulation and juggling as the Minister himself admitted in the other place.
– He did not use those terms.
– Did you not just hear me read them?
– I heard you but he did not use the word ‘juggling’.
– Those are the very words he did use - juggling and manipulation. Now we, as a Party, have submitted what we believe to be the answer to these problems. We are hoping that our amendment will be carried. We are hoping that members of the Country Party who have been vociferous in their various areas from time to time about this plan will come out in the open and support us on this side of the House. In another place two members of the Country Party for the first time in their long political careers voted with the Labor Party against the Government on this very important question because of their dissatisfaction with the plan and a third member of the Country Party declined to vote.
The honourable member for Mallee (Mr Turnbull) told a public meeting of 700 growers at Bendigo that as far as he was concerned the Minister for Primary Industry was merely a messenger boy for Cabinet. I think that is borne out by the fact that the Treasurer (Mr McMahon) could not have wanted it better. This was the plan that he would want to implement, not in the interests of the growers, not in the interests of the consumers, but in the interests of the system of indirect taxation that he likes to impose on the Australian people. He likes to be able to say to the people at election time: ‘We are not touching your income tax in any shape or form. We are keeping income tax as it is’. But these other methods of taxation are creeping in all the time. This is a tax which will cost the consumers of this country about $67m over the next 5 years. I suggest that our amendment should be regarded with great seriousness, because I think it is something that the growers throughout the Commonwealth would be ready and willing to accept. I am sure that a referendum would establish that fact very clearly.
As to the time factor, I am certain that if this Bill were recalled and the amendment accepted in the form in which we have submitted it, or in like form, the wheat growers very quickly would get together and make their decision in relation to it. If the situation were desperate, as the Government tells us it would be, there would be no problem with some of the State parliaments which have gone early into summer recess and which will not resume until about the middle of next winter.
Our position is: We support this plan because we believe that it is the right one. We believe that it has the support of the industry. We believe that the growers have been given the rawest deal in history by the Minister for Primary Industry who has kept from them the terms and details of his proposals. We believe that wheat growers have had no opportunity at the rank and file level to talk to their representatives and discuss prices in the places where they should be discussed. All in all, it has been a shabby deal, t feel that the only Minister and the only member of Parliament who will be very happy about these proposals is the Minister for Shipping and Transport (Mr Sinclair) because I am quite certain that he can see the crown of the Minister for Trade and Industry (Mr McEwen) resting very nicely on his head after the fiasco of this Bill.
– Mr Acting Deputy President, it needs no apology for anyone to get up and speak on this Bill. The wheat industry is Australia’s second most important export industry. Indeed, the wool industry, which is our leading export industry, depends to a great extent on the complementary activities of wheat growers. It is not necessary to remind the members of this Senate who obviously are well informed people that although the Government has provided over the past 9 years the sum of Si 55.8m to the wheat industry, the wheat industry through exports has earned S2,458m and has produced wheat worth $3,993m. For a trifling amount in relation to the overall value of production, the Australian community and the economy of this country have derived tremendous benefit from the wheat industry. Therefore, I am pleased and proud to be given the opportunity to speak on the Wheat Industry Stabilisation Bill that is before the Senate. This Bill does represent a new phase in the development of the stabilisation of the industry.
In speaking to the Bill, I hope I may be forgiven if I relate my own associations with the wheat industry for, as a boy, I worked one of the earliest models of the H. V. McKay harvester. One of the first Australian industries that derived from the wheat industry was the manufacture and development of this harvester. In fact, it illustrates the partnership between secondary and primary industries because the wheat industry owes a great deal to the ingenuity and ability of those who developed machinery to match the needs of the industry. Another example is the development of the stump jump plough, (n short, this was a 5-foot wide machine. It had a wooden frame. It was pulled by 4 horses. It did a jolly good job. For years I carted wheat with horses. I think I was the first farmer to cart wheat into our local siding by motor truck.
As a university student, I became interested in the problem of cost of production. At a time when there were no agricultural economists as defined now, I evolved a method of calculating the cost of wheat production which was accepted by the Economics and Historical Society of Western Australia as an original and valid contribution to this field of economics. The method I then used has been used since with some refinements and still is the method used in arriving at calculations of the cost of production. However, 1 decided to try the practical side of agriculture. I went farming, grew my first crop in 1929 and survived, by some miracle, the 1930s. This explains why I frequently become very angry when 1 read that some writers in our newspapers state that the high prices, socalled, of wheat have produced the present upsurge in wheat production.
Sitting suspended from 5.45 to 8 p.m.
– At the suspension of the sitting I was discussing the movement of wheat prices in relation to production. It is clear to any observer that it was the falling prices of the 1929-31 period which produced the phenomenal area under production in 1931 of 18.165 million acres - an area farmed and a crop produced with the use of horses, lt is interesting to note that in Victoria in 1930-31 a total of 4,600,000 acres of wheat was sown. Victoria has never since accomplished that acreage. In 1967-68 Victoria planted only 3. 324~ million acres. In 1930-31 South Australia planted 4.181 million acres and in 1967-68 that State planted 2.872 million acres. So the tremendous upsurge of wheat production was the result of falling prices in 1929. 1930 and 1931. But wheat acreage remained high despite desperately low prices for the next 3 years until bankruptcies and farm abandonments reduced acreages to 11.957 million in 1935-36, after which acreages rose again, despite low prices, until the oubreak of war in 1939. At that time the lack of adequate manpower, superphosphate and materials reduced the acreage sown to an all time low of 7.875 million in 1943-44. With the return of men from war service and the restoration of supplies of materials, wheat acreages rose to 13.88 million in 1947-48.
The first wheat stabilisation scheme was inaugurated in 1948. The price of wheat then was $1.43 a bushel which, when related to the 1953 cost index, was equal to $2.50 - the highest price in terms of purchasing power ever obtained by Australian wheat growers. Significantly, after that the wheat acreages steadily declined until 1956-57 when wc were down again to the same acreage as in the worst of the war years, that is, 7.874 million acres. I would say that without doubt the wheat prices during the period 1946-54 were the highest in real value ever known to the wheat growing industry, and yet we witnessed a steady decline to an all time low in 1956-57. So much for the theory that wheat acreages are increased by high prices. It was in 1952 that the Australian Agricultural Council was urged to initiate measures to stimulate wheat plantings because of the then desperate balance of payments crisis. In 1952-53 the first advance on wheat was increased to $1.02 a bushel. In the next year it was $1, and it remained at about that figure until 1957-58 when the present figure of $1.10 was introduced. Since that date prices have remained fairly steady, but have declined in terms of purchasing power.
In order to understand fully the virtually constantly increasing wheat acreages since the drastically low levels of 1957, one has to consider the various factors involved. Firstly, except for those in certain marginal areas, the wheat grower obtains on average about only half his income from wheat. Sheep, wool and grain other than wheat make up the balance of his income. In order to make his farm enterprise pay, if his income from wool falls he must do something about it. With a wheat stabilisation scheme in existence he grows more wheat, not because prices are high but because the overall profitability of his farm enterprise otherwise would fall. In other words, he does what a factory manager would do; he reduces unit costs by increasing output. We have heard from various sources that the wheat grower has been expanding production without regard to land usage, that he has been doing it at the expense of other items of production, but this is completely unsupported by the evidence. The report prepared by the Bureau of Agricultural Economics shows that in the Past 5-year period 49% of the wheat growers’ income came from wheat. In the earlier period of 5 years, 52% of his income came from wheat, and in the 5-year period before that 40% came from wheat. So there has been no great or disproportionate increase in the amount of wheat produced on existing farms.
The other main factor in acreage increase has stemmed from the various incentives that were introduced by the Government in the period from 1952 until 1963 for the purpose of increasing agricultural production in order to increase our exports and to meet a serious balance of payments situation. The opening up of new farming lands has varied somewhat according to the availability of such land, but in general, besides stimulating development on existing partly developed farms, taxation incentives have brought the investor into the picture. I shall later quote from authentic evidence to support this assertion. These people who are now investing, of course, never contributed to stabilisation in the earlier days of the scheme and are now simply cashing in on the benefits of stabilisation as well1 as substantial taxation benefits, which are enhanced also by the fact that 120% taxation write-offs are available for the big machinery that they can purchase. It is strange that the experts who have been pressurising the Government to reduce the guaranteed price for wheat have never directed any attention to this aspect of the wheat expansion problem. Instead of ascribing the high land values currently observed to the desire of the land investor to achieve capital gains to save income tax, they have been attributed almost wholly to the socalled high wheat prices. One of the readily accepted beliefs in the present situation is that in the calculation of the cost of production figure the major factor in the increase has been interest on farm capital. If we look at the published figures we find that in 1962-63 the figure was 64.02c and in 1967-68 it was 63.05c. In other words, over the 5-year period of the survey the actual cost figure attributed to interest on land has declined.
Where the confusion exists it lies in the lack of understanding of the Minister’s statement that for the next 5-year period, if the new basis of farm values were taken, there would be an inordinate rise in the cost of production figure. But up to the present time this capital cost has not resulted in any very substantial rise in the cost of production figure.
– But that is not on the interest; the substantial rise takes into account the increase in the value of land.
– I do not intend to be diverted by that irrelevant interjection. If I may be permitted to follow through my earlier comment, this leads to a discussion on the Government’s decision to abandon the cost of production concept as used until now in the stabilisation scheme. Where a farm unit producing several crops is examined it is virtually impossible to produce a figure for one of these commodities and call it a cost of production figure. Firstly, it would have to be an average of the costs of all the producers, and by the very nature of the fact that it is an average half of the producers could not exist on that figure - they must go broke - so it is necessary on an industry base to select a figure somewhat higher than the average. The cost of production figure has always been fiddled, and in this regard I acknowledge Senator Poyser’s remark although he wrongly attributed certain remarks to the Minister. I am prepared to admit that the cost of production has always been a manipulated figure - call it what you like. That figure has been adjusted to what the Government was prepared to make available to assist the industry and maintain a responsibility towards stabilisation.
I suggest that we should give the old cost of production figure its right name and call it the ‘accepted’ price or the ‘negotiated’ price. It never was a cost of production figure in the true sense of the word. It has always been an accepted price. I suggest that that is what we should call the figure which the Government is prepared to meet.
– It was a notional cost of production.
– The honourable senator may call it what he likes, but in the true sense it was never a cost of production figure. If we do this, we will overcome the situation described by Professor Lewis in an article in the book ‘Agriculture in the Australian Economy’ when he said:
It used the name of agricultural economics to lend respectability and an air of objectivity to the annual haggle over cost assessments. This criterion is a particularly difficult one to apply meaningfully when more than one commodity is produced on the farms concerned.
Although 1 do not normally call upon professorial assistance, in this case 1 simply refer to the Professor’s views. The incentive tax rates have had a differentia] effect on farm profits, showing a decided advantage to the big farmer or the more profitable farmer. Later on in this connection I will refer to an article by A. W. Hooke, also published in ‘Agriculture in the Australian Economy’. Thus, while we hear much about the need to increase the size of farms to meet rising costs we have by deliberate - though well intentioned - policies accentuated the relative advantage of the large farm and by sub-section (7.) of section 57aa of the Income Tax Assessments Act removed the option of spreading the tax over 10 years, which would be of some benefit to the smaller taxpayer.
I would like to turn now to an examination of the figures contained in the Press statement by the Minister, that is, figures derived from the Bureau of Agricultural
Economics survey. I want to point out that over the period of the past three 5-year stabilisation periods the farmers have increased their acreage sown by 57%, increased wheat production by 80%, increased other crops by 13%, increased sheep numbers by 50% and increased the area of improved pasture by 87% - and farmers cannot increase the area of improved pasture with incurring heavy capital costs. These are real gains in absolute terms, positive gains to the economy. Let me refer to net farm income. I would like honourable senators to note that this is not income per farmer but income per farm, which is a different thing. There are more farmers involved than the number of properties, for only 15% of the properties in the survey had a sole owner. Sixty-seven per cent were family partnerships and 18% were companies - generally private companies. Although many of the farms would be husband and wife partnerships, many would involve two or more working partners, so it is wrong to compare net farm income with the income of individual producers in other industries.
But just taking the net farm income figures for comparison over a period of three terms, bearing in mind positive production in real terms of 50% to 80%, we find that farm income expressed in Australian dollars - which by no means constant in value - has increased from $6,208 to $9,398, or an increase of 51%. This sounds fair enough until one compares this sort of increase with the average weekly earnings over the same period, which increased by 70%. During the period 1954-55 to 1966-67 personal income as revealed by the Commissioner of Taxation increased by 114%. Wage and salary income increased by 132% and other personal income by 77%, so this is the sort of comparison we must apply to the figures for wheat production when it is claimed that the wheat growers are prosperous. When we compare the value of money with the increase of production in real value of wheat and sheep, we have a group of people in industry who, while attaining this increase in production, have had the return from their product decrease in real value. If this is prosperity it is certainly not relative to the rest of the economy.
– Do you dispute the Minister’s proposition?
– I do not dispute it, I add to it the interpretation that it should have in terms of the value of money. I must say that I support the new proposal without reservation - I refer to the home consumption price - although it does have a very slight effect on the general cost to the economy. I wonder what would happen to a trade union leader who refused to negotiate higher wages when faced with increasing costs of living on the ground that it would increase costs. I do not think he would remain a trade union leader for very long. What would happen to the sugar industry if it reverted to world parity prices for sugar sold in Australia? What would happen to the dairying industry, the dried fruit industry or the egg producers? Why should the wheat industry be the bunny to suffer all the effects of cost increases and still sell its product to the Australian consumer at world prices? lt is so nonsensical that it is not worth considering. The Minister has quite rightly pointed out that the wheat industry bears the cost of storing grain as a reserve, not only for the milling industry but for stock feeders of all kinds and as a drought reserve. In drought time all other fodders increase in price but the wheat price is fixed irrespective of the demand. This is of great value to other industries.
In any case, the home consumption price is no more - I am referring to the figure of $1.70 - than import parity. Why in the name of good sense should an industry producing under the Australian cost structure be expected to sell1 its product at export parity? I battled in the depression years as a member of the old Wheatgrowers Union for a home consumption price for flour. We achieved that and it operated from 1938 to 1946. Then, during the years from 1947-48, when the home consumption price was 6s. 3d. a bushel, which was about one third of the world price, the Australian consumer - not the Australian taxpayer - received tremendous benefits. Why should we be mealy mouthed about the slight increase in the cost of living that may ensue, when every rise in wages, whether awarded or negotiated, has the effect of increasing the cost of living? I wonder what reception would be given to a trade union leader who advocated freezing wages as determined by industrial tribunals and increasing the level of wages by raising money through the
Treasury; in other words, asking the government to subsidise wages. This is completely ridiculous, but it is what the Labor Party is saying in opposing the new home consumption price for wheat. 1 turn now to the other excellent alteration provided for in the Bill, namely, the increase of the export guarantee to 200 million bushels at $1.45 a bushel f.o.b. against whatever price is realised on the world market. In other words, the Government is now underwriting the world price, whatever it may be, on up to 200 million bushels. This is in addition to the benefit conferred by the increase in the home consumption price. The amount involved in the increased export guarantee may be relatively small or large, depending on how well the International Grains Arrangements operate. We all hope that world wheat prices hold. Under the Bill the price is guaranteed for 5 years, although the Arrangements are for only 3 years. I contend that the Government is conferring a tremendous benefit on the wheat growers in this stabilisation scheme. I believe that this is one of the major features of this scheme as compared with prior ones. It increases the width rather than the height of the umbrella.
I said earlier that I would like to give the Senate further justification of my statement regarding the effect of taxation incentives on the expansion of the wheat industry into new areas and the breaking down of the economic structure of the small farmers as against that of the large ones. I quote from a book called ‘Taxation In Australia; Agenda For Reform’. The authors are R. I. Downing, H. W. Arndt, A. H. Boxer and R. L. Mathews, and it was published for the Social Science Research Council of Australia. Paragraph 354 reads:
Secondly, business and professional income can be converted into untaxed capital through taxdeductible developmental expenditure on farms. This results in nominal trading losses which can be offset against the taxpayers’ business or professional incomes, while the appreciation in the capital value of the farms which results directly from the developmental expenditure is not subjected to tax even when the farm properties are sold. To deal with this, we suggest that losses resulting from the operation of special tax treatment for primary producers should not be allowed as offsets against profits or incomes derived from non-farm sources.
In ‘Agriculture in the Australian Economy’, Mr Hooke says this, in talking about the
Australian system of depreciation and investment allowances:
First, it is defective on distributional grounds. Since the deductions are made from taxable income they benefit the high income much more than the low income farmers. In fact, many low income farmers may fail to benefit at all from the concessions. Secondly, it distorts the allocation of resources by encouraging investments among farmers according to the distribution of income rather than the distribution of investment opportunities. . . . Since wealthy farmers can reduce the incidence of tax on them by buying, developing and selling properties, the prices of the less developed properties have increased considerably.
We have been led to believe that the evidence for the prosperity of the wheat industry is the high cost of land. This article reveals pretty clearly what has pushed up the price of land. It continues:
As a result, new farmers who are forced to compete with wealthier ones for properties have to use more of their own funds and/or more borrowed funds, in order to acquire properties.
I have one final quotation in support of the contention I have put forward. Taxation concessions and incentives have increased the wheat acreage and have achieved what the Government set out to achieve; but I am afraid that they have been too effective and have produced the present situation in the marketing of products. I refer the Senate to an article entitled “The Effect of Australian Income Tax on Initiative’ which was written by Dr J. K. Connor, LL.B., J.D., and which is contained in the ‘Taxpayers Bulletin’ of 13th August this year. Dr Connor says:
At the outset of this paper 1 referred to the diversion of capital resources into areas which are made artificially attractive by our tax system. The most common example is that of the Pitt Street farmer who compensates for his very high rate of personal income tax by purchasing a farm property and spending very substantial amounts on its improvement. Most expenditures of this type are deductible to him and if be plays his cards in the right fashion he will not be taxed on his gain when he eventually sells the farm, once it has been developed.
This type of diversion of capital probably in part accounts for the high prices currently prevailing for agricultural land within a reasonable distance of the capital cities and explains the rather low rate of return which is common in primary production.
I wanted to refer to those passages because the industry has been subjected to a barrage of criticism for increasing production. I welcome the Bill as a reasonable measure maintaining the stabilisation principle and our marketing arrangements. 1 particularly commend the Minister for Primary Industry on his part in achieving this measure. I especially commend the Government on its decision to pay $1.10 a bushel as a first advance on this season’s wheat, as announced on Monday. I reject the amendment as being frivolous in that it confers no benefit whatever on the wheat growers.
– In a computerised speech, heavily loaded with statistics but endowed with very little logic, Senator Prowse has done his best to confirm the belief of those of us who sit on this side of the chamber that the Australian Labor Party has proposed the right amendment to the motion for the second reading of this Wheat Industry Stabilisation Bill. He certainly went at least as far as to confirm the submission made by Senator Poyser this afternoon to the effect that the cost of production figure which has been used as a basis for some time past has been a manipulated figure. 1 will have more to say about that later. On his own cost of production argument. Senator Prowse seemed to be arguing against this own case and that of the Government when he asked rhetorically: What would happen to a trade union leader if he, on behalf of the members of his organisation, went into a conciliation conference or arbitration hearing asking for increased wages for his members and then accepted a lower rate of wages than they had been receiving?
– 1 did not say that at all.
– Surely that is the position of the wheal growers under the Bill now before the Senate. If one studies the report of the Australian Wheat Board for 1966-67, one sees that the cost of production, as assessed in 1966-67, was 155c a bushel f.o.r., whereas under the scheme embodied in this Bill the wheat growers will receive, on an average, only 148c a bushel f.o.r. So what Senator Prowse is saying in fact is that the Government has negotiated a lower return of 7c a bushel to the growers. This Bill is one of the most important pieces of legislation concerning primary industry to come before the Australian Parliament because, to a very large extent, the future success of our export sales is involved. Further, the costs to Australian consumers of flour products - 1 refer mainly to the wage and salary earners - are closely related to the measures proposed in this Bill’.
The Bill provides for the fifth stabilisation scheme for the wheat industry and introduces a two price stabilisation scheme of $1.70 a bushel for home consumption wheat and $1.45 a bushel f.o.b. for export sales of wheat up to 200 million bushels. The scheme is to operate for a period of 5 years. The Opposition has moved that the Bill be withdrawn and redrafted to provide for a one price scheme for wheat for home consumption and export, commencing with a price which will return to growers SI. 48 a bushel f.o.r., which is equivalent to a guaranteed price of $1.5li a bushel f.o.b. for exports up to a maximum of 200 million bushels from the crop of any one season.
The Labor movement’s case was put very plainly, forthrightly and succinctly in another place by the honourable member for Dawson (Dr Patterson), and in the Senate by my colleagues Senator Wilkinson from Western Australia, and Senator Poyser who this afternoon delivered an excellent dissertation on the situation confronting wheat growers and consumers as a result of this legislation. In short, we say that the scheme as proposed by the Government is beneficial principally to the Treasury. There is involved a shifting of the burden of the subsidy from the Treasury to low income earners, to the consumers. The scheme will not ensure, as seems to be contended by the Government, that consumers will have assured wheat supplies at a stable price. 1 will show, as my colleagues have done, that the proposed scheme is beneficial to the Treasury. One needs to consider only the remarks of the Minister for . Primary Industry (>Mr Anthony) in a Press release of 23rd August for confirmation of my claim. The Minister said in his Press release that if the results of the survey conducted by the Bureau of Agricultural Economics were taken into account in the traditional way to determine the guaranteed and home consumption prices, the prospect would be for a rise to unreasonable and unbearable levels in the Commonwealth’s financial subvention to the industry and also in the home consumption price. I rely on those words of the
Minister for proof positive of the rightness of our contention that this is a scheme proposed by the Treasury with the intention of benefiting the Treasury.
The estimated cost of a one price scheme as proposed by the Opposition, based on a price of $1.48 a bushel f.o.r. for home consumption sales and $1.51i a bushel f.o.b. for export sales up to a total of 200 million bushels, has been estimated at $135m over a period of 5 years. That is the estimated cost of the scheme proposed in the amendment moved by Senator Wilkinson on behalf of the Labor movement. The estimated cost to the Treasury over a period of 5 years of the scheme proposed in this legislation is $68m. Surely this means that the Treasury over a period of 5 years is being saved $67m by directly imposing a higher price level to be paid by consumers of bread and other flour products, and eggs.
For some time past under the old stabilisation scheme Australians have subsidised the wheat industry in two ways: Firstly, as consumers they have subsidised the 60 million bushels a year consumed locally by paying for it a price above import parity; secondly, as taxpayers they have subsidised wheat exporters by paying to them each year from Commonwealth revenue the difference between the guaranteed home consumption price and the proceeds on the international market of the first 150 million bushels of wheat exported. The stable diet of pensioners is bread, butter and eggs. Under this proposal the home consumption price of wheat is to rise by 6c a bushel and the guaranteed export range is increased from 150 million bushels to 200 million bushels.
The separation, envisaged in this legislation for the first time in a wheat stabilisation plan, of the levels of the home consumption price and the guaranteed export price must mean increased costs all round. Wage and salary earners naturally will have to pay more for their bread, flour products and eggs, in reply to a question I asked earlier this session about the proposal we are now debating it was admitted by the Minister for Repatriation (Senator McKellar), who is at the table - as it was by the Minister for Primary Industry, whom he represents in this chamber - that increased prices for bread and flour products will result. In fairness to Senator McKel’lar I should say that he remarked at the time that in his opinion any increases would be small. The fact is that both Ministers connected with primary industry - Senator McKellar has been connected with the wheat industry over a period of years - have admitted that consumers will have to pay more for the products that are associated directly or indirectly with the wheat industry.
The New South Wales Minister for Agriculture, a member of the Australian Country Party, is reported to have said yesterday that the dairy farmers in the drought affected area on the south coast of New South Wales were squealing like stuck pigs. He went on record early in August as saying that there will be rises in the prices of bread and eggs and increases in the price of stock feed for primary producers.
This afternoon Senator Bull said that the majority of members of the Australian Wheat Growers Federation support the Government’s proposal. I now tell him that a prominent rural figure in New South Wales - Mr F. M. Davidson, Chairman of the Agricultural Committee of the Graziers Association of New South Wales - as recently as 2nd October said it was to be hoped that the Commonwealth Government’s decision to reduce financial compensation to the wheat industry would be accompanied by positive Government action to curtail the rising production costs that are crippling the primary export industries. Mr Davidson went on to say:
The Commonwealth Government’s insistence on implementing a ‘two-tier’ price system in which the home consumption price will rise by approximately 6 cents to S1.70 in 1968-69 could have severe inflationary effects.
He added that in view of the cost price squeeze in which Australian primary export industries were caught, the Government’s overall policy objective in raising the home consumption price of wheat was difficult to understand. He also said:
The Graziers Association’s proposal for a single price for both export and home consumption wheat would have escaped the inflationary effects of a ‘two-tier’ price. The Association’s concern about the increases in cost that might result from the implementation of the Commonwealth Government’s proposal was shared by most State Governments.
What Mr Davidson said - and apparently it is the opinion of most of the State governments - is what is being expressed by the
Labor movement in this chamber. Increases in costs to the consumer mean increases in the consumer price index affecting wage and salary earners. This, of necessity, must be reflected eventually in increased wages which in turn will uplift prices and be reflected in the cost structure of primary producers.
We must consider also statements made from time to time by the Minister for Primary Industry. Recently in Adelaide he said that unless increasing costs are checked the export markets of Australian primary industries may be very seriously threatened. One can see that this proposal could have repercussions, to say the least, on the future of Australia’s primary producers. The guaranteed price of Si. 45 f.o.b. for export wheat up to’ 200 million bushels appears to be related to, but not altogether tied to, the 1967 International Grains Arrangement. Apparently the formula arrived at for the International Grains Arrangement starts with the price of United States No. 2 Hard Red Winter Wheat at the Gulf of Mexico. lt took into account shipping freights from the Gulf of Mexico to the United Kingdom and from the United Kingdom to Australia. Using that formula,, one seems to arrive at the minimum price for Australian wheat of fair average quality. I understand from my survey of this situation that on past experience this has ranged from $1.38 to $1.43. So apparently, looking at the matter from the point of view of a guaranteed price, it has been estimated - to use the word of my friend Senator Poyser, it has been juggled - that $1.45 in this instance is a reasonable figure. This is 2c higher than the most optimistic figure and 7c higher than the most pessimistic figure.
Referring now to the home consumption price, obviously the attitude taken by the Government and the Treasury advisers is that because the wheat grower to some extent appears to have subsidised the consumer in the past, the consumer now should be prepared to pay something over and above, an estimated cost of production figure which - and on this Senator Prowse agrees with Senator Poyser - has been a manipulative figure. This is to be met by the low income earner. While this attitude has been adopted for the consumer, the Department seems to have shifted from a cost of production figure to a farm income basis in finding a base for the scheme for the primary producers. I say that because on 23rd August the Minister for Primary Industry said that the Commonwealth Government considered it was no longer appropriate for the principle of cost of production to be used for setting the guaranteed price. The Government uses the cost of production to assess a home consumption price for consumers but appears to adopt a different tack in assessing a base for tha scheme for the grower.
Earlier this afternoon Senator Bull said that huge stocks of wheat were piling up in all exporting countries. He and 1 both represent New South Wales and we know the situation developing in relation to the wheat crop in the north western part of that State. I know that this year’s crop is causing real problems for all people connected with its harvesting, storage and shipping. I understand that the New South Wales Department of Railways is very concerned about the financial difficulties it will be faced with because of inadequate facilities, silos and shipping. I think that stripping in the north west of New South Wales began 10 days or a fortnight ago. However, already, the silos at Newcastle are overflowing with wheat and those at Rozelle in Darling Harbour are full.
– ls not the Grain Elevators Board responsible, not the Government?
– I am simply telling the honourable senator that the problems are great and serious, no matter where the fault lies. Having pointed out to the Senate that the silos at the Newcastle wharves are full and that the silos at Rozelle, Darling Harbour, also are full, let me now refer to the shipping situation. One ship is loading at Newcastle this week. Another ship will be half loaded at Newcastle and will then come to Rozelle to complete loading. However, I understand that there will be only one other ship for the rest of the season. I am told that the railway authorities do not know of any other shipping arrangements being in sight.
It is rumoured that the Australian Wheat Board representatives recently returned from China without obtaining additional orders for Australian wheat. Perhaps the Minister can say whether the rumour has any foundation. He moves among wheat growers more than I do and would be in a better position to know. If they have returned with orders then one may fairly ask: What amount of wheat has been ordered? However, should it be true that the Board failed to negotiate further wheat contracts with China, wheat farmers in north western New South Wales could well find, if there is a wet summer and they cannot get their wheat under cover, that their wheat will rot. I know that the New South Wales Department of Railways is very concerned about the position. Surely Australian wheat growers, realising the difficulties confronting them and the nation so far as export markets are concerned, are entitled to know the real situation in respect of the future of the industry. We of the Labor movement strongly support stabilisation schemes generally, and we are great advocates of orderly marketing arrangements; but so far as this measure is concerned we feel that the Australian wheat grower eventually will be burdened with higher costs because of the measures proposed to be taken under the legislation, and that accordingly the low income earner will have to meet a heavier hurden so far as the overall cost structure of the economy is concerned. Therefore 1 support the amendment that was moved by Senator Wilkinson that the Bill be withdrawn and redrafted to provide for a one price scheme for home consumption and export wheat commencing with a price which will return to the grower $1.48 f.o.r. per bushel which is equivalent to a guaranteed price of $1,514 f.o.b. per bushel for exports up to a maximum of 200 million bushels from the crop of any season, and I sincerely trust that the Senate will overwhelmingly carry it.
– 1 am not one of those who believe that Government policy is a sacred cow or that it needs no criticism. Nor am I one who believes that Ministers are infallible. Nor do I believe that the legislation does not need some criticism for I am very disappointed with a number of points in it. On the other hand, I believe there are points in it that I can support wholeheartedly.
I cannot agree with Senator Poyser and Senator McClelland that the wheat growers are getting a raw deal, perhaps the rawest deal they have had. Many of us who have been growing wheat for 20 years or more will readily recall the deal that was made by the last Labor Government when it sold wheat to New Zealand, when we had no wheat stabilisation scheme, for 5s 9d a bushel while wheat on the overseas market was bringing 10s 5d a bushel. Many of our younger growers have forgotten that, and it is all very well for Senator McClelland and Senator Poyser to tell us here tonight what a raw deal the wheat growers are getting.
– Who introduced wheal industry stabilisation?
– Who did?
– The Labor Party.
– Yes, and immediately did what 1 have just said it did. The two Bills before the Senate propose to continue in existence organised marketing of wheat through a single selling authority, namely, the Australian Wheat Board. The Wheat Industry Stabilisation Bill is one of the most important Bills affecting primary industry to come before Parliament and one that has caused mote controversy during recent months than any of its predecessors, lt is a Bill in which some important changes will be made in the principles previously adopted to determine the guaranteed price for home consumption and export wheat. Yet we are debating it in ‘an atmosphere where already complementary legislation has been passed in some States.
– And promised in others.
– That makes the controversy even worse. This makes it impracticable, I believe, to do anything now without endangering the industry’s marketing structure. With harvesting operations already going on in many parts of Australia and wheat deliveries to sidings being made, 1, as a responsible senator, cun see no other course open to me than lo support this legislation.
I must, however, express my great disappointment with the way in which negotiations were handled by both the Government and the industrial organisations representing the growers. Much has already been said of the magnificent contribution the wheat industry has made to the internal economic stability of this country over the past 20 years and I will not, therefore, cover the same ground. But one finds it very hard to see why it is suddenly regarded as wrong for an industry to be profitable. Let there be no misunderstanding so far as I am concerned. The wheat industry is only more profitable than other primary industries because it was wise enough to choose a marketing method with a single selling system and realistic enough to overhaul that system when it found it necessary to do so.
I believe it is most disturbing that the rank and file growers were not told of the details of this proposal when it was first presented to the industry very early this year. This at least would have given the man in the paddock time to fully assess the significance of the Government’s intention to abandon the principle of stabilisation based on a cost of production figure. While on this question of cost of production I want to say that I have been unable to discover any annual conference or any special conference of industrial organisations which gave its delegates any mandate at all to accept any scheme which made such a radical departure from the traditional principle of stabilisation. In fact, the most recent annual conferences of some State organisations specifically directed their delegates to maintain the principle of a cost of production base. Again, earlier details of this proposal would have given the grower time to express his views through the rather slowmoving machinery of industrial organisations. It would have also given him the opportunity of reassessing his cropping programme in the light of what was then being proposed so far as export guarantee prices were concerned, and it would have alerted him to the prospect of some review of the level of the first advance payment. lt is very pleasing to all, even those remotely connected with the wheat industry, that the Government has seen its way clear to again authorise the payment of $1.10 as a first advance on this year’s deliveries. However, let me say that I would be doing less than my duty if I did not express some concern at the sort of production figures which the industry is now compiling. It is my hope that the Australian Wheat Board will be able to continue to find satisfactory markets for this volume of grain.
– If not, do you believe in restriction of production?
– I did not say that.
– 1 am asking you.
– I do not want to be sidetracked by the honourable senator. I just ask him to listen to what I am going to say. May I be permitted to go further and say that if at any time during the course of this 5-year plan production exceeds these limits, then the Government will not hesitate to take effective action to protect the essential interests of what I call the family wheat grower - that is, the man to whom wheat growing is a personal way of living - from the activities of the sort of production flowing from big companies who have simply turned to wheat growing because the norma] activity of their vast properties - wool growing - has become unprofitable. I express the belief that a graduated first advance payment, should this ever become necessary, would be a practical means of damping down the activity of these big companies, some of which are producing more than I million bushels.
Now I shall refer to claims in my own State that the cost of producing a bushel of wheat is $1.70 f.o.r. and that the Government has in fact used this cost of production figure to justify the home consumption price. However the Government was prepared to guarantee a price of only $1.45 which is 28c below the cost of production for the quantity of wheat under export guarantee. To answer this claim I need only repeat the following statements made by the Minister for Primary Industry (Mr Anthony) in another place:
When 1 began to negotiate with the Australian Wheatgrowers Federation I said that the Government did nol want to stand by the old principle of determining a price based on the cost of production because it would have to juggle the figures to arrive at a satisfactory price. The Government suggested that the home consumption price ought to be $1.70. The industry came back and said that it would like to maintain the principle of cost of production and that it was prepared to manipulate the figures to arrive at a cost of production of $1.70. That is what the industry did. By altering the yield divisor it arrived at a price of SI. 70. What is the cost of production? [ mentioned in my second reading speech that for the past 15 years wheat growers have been receiving a return less than their cost of production and yet the industry has continued to flourish and expand. If we look at the cost survey that was carried our during the 3-year period of the current scheme we will see that the net farm income of all wheal growers has gone up from $7,700 to $9,400 a year.
Latex the Minister said:
When we were negotiating wilh the industry to arrive at a new base price for the cost of production, as I said earlier, the industry was prepared to manipulate the various factors such as owner-operator’s allowance, yield and all the other ingredients to arrive at a figure of SI .70 a bushel. So the amount of $1.70 does include the owner-operator’s allowance, with the exception that there will not be an annual adjustment of the wage content. We do not include the owneroperator’s allowance in the annual adjustment because it does not have any direct bearing on the income of the farmer. If a farmer has a good season and prices are high, it does not matter what the wage movement is during the year. In these circumstances, his income will depend on his yield and the price at which he sells. This determines his net income.
So let me say clearly and distinctly that $1.70 was never claimed by the Minister or any of. his departmental officers to be the cost of production. Obviously it cannot and does not cost $1.70 to produce a bushel of wheat. If it did or does then every wheat grower should have been bankrupt long ago because he has never received a return of $1.70 a bushel from any of the pools.
I will not traverse the ground that has been traversed already but I want to say that at this late hour 1 cannot do other than support the Bill.
– I support the Bill and oppose the amendment. As has been pointed out already, the Bill will stabilise the industry for a further 5-year period. This is the fifth 5-year period of stability and organised marketing. The Bill ratifies the agreement with the six States and the Australian Wheatgrowers Federation. lt took months of negotiations to arrive at this agreement which takes into account and preserves a balance between the interests of wheat growers, consumers, taxpayers, the Federal Government and the six State governments. Those interests are diverse. Implementation of this measure and of the complementary legislation in the six States means that the industry and all connected with it, either directly or indirectly, will have security and stability and will be able to plan for the future. This will give confidence and will promote further development in rural areas. This planning also covers all services in the area.
Much has been said about increased production in recent years. I believe that is substantially the growers’ answer to spiralling costs. They have become more efficientthey have had to do so - and like people in many other rural Industries they have mechanised their activities and have used modern methods and bulk handling to produce more with the same work force. Thus they have contained costs on the article unit produced. I believe - many other people do, too - that you cannot penalise efficiency.
The wheat industry is Australia’s second biggest overseas income earner. It has supported many country towns and districts and has contributed to the prosperity of many city industries amongst them being the farm machinery industry, the fertiliser industry, the transport industry, the industry which produces fuel, oils and tyres, and many others. Huge wheat storages have been built in many country districts and at seaboard terminals. The fertiliser industry is largely dependent on the wheat industry. World wheat production today is estimated at more than 10,000 million bushels. Australian production this year could be near 500 million bushels, which is 5% of world production. As I have said, this industry is a major contributor to Australia’s export income and the comparatively small amount that must be invested by the taxpayer to stabilise this industry is a very good investment for Australia and Australians as a whole.
This Government has negotiated the International Grains Arrangement which, amongst other things, provides a floor price for the world’s wheat. Another major breakthrough achieved by the Government’s negotiators is an arrangement for a contribution from countries which do not normally export wheal, to those countries which are short of wheat for food. This means that instead of the 4 or 5 nations which formerly donated large quantities of wheat to countries which were short of food, most countries of the world now are prepared to contribute. The agreement and the proposed stabilisation plan mean a lot to Australia because world production of this crop varies from year to year. In many years there is only a small margin between a surplus and a shortage. We are told that today there is a considerable surplus in the world because of good crops in certain other countries.
As I have said, I oppose the Opposition’s amendment. I will now stale my reasons.
As I said earlier, the Wheat Industry Stabilisation Bill 1968 ratifies the agreement between the six States and the Australian Wheatgrowers Federation. Any amendment to or deferment of this Bill would mean virtually an end to organised marketing as the term of the present Australian Wheat Board is due to expire in a very short time. Without the Australian Wheat Board there would be chaos in the wheat industry. The defeat or delay of this Bill would mean that there would be no time to renegotiate the agreement. The negotiations with which the Bill deals have taken many months. Any delay in passing this legislation and in the passage of the complementary legislation in the States means that the Australian Wheat Board will go out of existence. Honourable senators know the implications that go with the Australian Wheat Board ceasing to exist. There will be no organised marketing. No authority will exist to sell the balance of last year’s wheat if this Bill is not passed very quickly. “There is no authority to borrow about $500m from the Reserve Bank of Australia to pay the $1.10 advance which has been approved for wheat growers. No authority is available to pay that advance.
With regard to harvesting, the wheat harvest has been completed in the area in which I live. I refer to central Queensland. Much of that harvest has gone to the seaboard and some of it has even been exported. I wish to quote to the Senate one or two points about wheat grown in central Queensland. An extraordinary expansion has taken place in the crops. Central Queensland had a record yield of 3.8 million bushels of wheat last year. This year, the crop is anticipated to be between 6.5 million and 7 million bushels. To date, 4.3 million bushels have been taken in. These are small figures compared with wheat production in some other parts of Australia, but central Queensland is a rapidly developing wheat area. The wheat grown is mostly premium grade. A shortage of storage space has caught up with the wheat industry in that district. The Courier Mail’ article from which I have quoted the earlier figures states:
Farmers are putting wheat into everything but the bathtub,’ Queensland Grain Growers’ Associa tion secretary (Mr Howard Cobert) said in Toowoomba yesterday.
I have referred to that article to illustrate how essential it is that this Bill be passed and passed quickly so that these growers can be paid. They cannot be paid in the present set of circumstances. Much of the wheat from the Darling Downs and northern New South Wales is in. As has been mentioned, the harvesting of the rest of the Australian crop is well under way. The extension of the wheat stabilisation plan must be approved by this Parliament. The Opposition wants a still further delay in the legislation. The responsibility for any breakdown in the wheat industry through a delay in the passage of this Bill, with the resultant chaos, would be on the heads of Australian Labor Party members of this Senate if the amendment moved by the Opposition was carried.
I wish to mention briefly some of the figures which have been quoted in regard to wheat production in order to clear up any misapprehensions which may be in the minds of people who are not wheat growers - I refer to listeners to the broadcast of these proceedings and honourable senators here - so that they will understand the position fully. A figure of $1.70 per bushel for the home consumption price has been mentioned frequently. That is the price for approximately 60 million bushels. It is the f.o.r. price at the ports. It is not the price at the farm. For the first 200 million bushels of wheat for export the guaranteed price is $1.45 per bushel f.o.b. That means that freight still has to be paid. It must be understood that the figure does not represent the net return to the farmer. In addition to these two categories, all wheat exports over 200 million bushels must be sold on the open market at whatever price the wheat brings. The prices received for each of the three groups - home consumption, the first 200 million bushels export and the remaining export wheat above that 200 million bushels - are averaged to arrive at the payment to the farmer. The average price arrived at is very much under the figures that have been quoted today in the Senate as being the net payment to the farmer, as freight and handling costs must be paid. So, I point out that the net return to the farmer is very much under the figures that we have heard quoted here.
I wish to mention another point about the arguments put forward by the Opposition. Much capital has been made by the Opposition of the possible increased cost of bread to domestic users as a result of the introduction of this new stabilisation scheme. Apparently honourable senators opposite cannot understand that the cost of bread will be only 0.2c per lb dearer and not 2c per lb dearer as has been quoted many times today.
I support this Bill. As 1 have mentioned, it is possibly not all that many growers might have desired, but it will have the effect of continuing stabilisation in the wheat industry from the 20th year to the 25th year of the operation of this scheme. It will make possible development, expansion and stability in a large part of rural Australia. This is what it will mean to rural towns and people in business in many areas. I means prosperity and everything that goes with it. This legislation will enable services to be planned. It will enable farmers to know where they are going in the future. Those who are dependent on the industry will be able to make financial arrangements for development and expansion. This Bill is in the best interests of Australia. I very definitely oppose the amendment. I appeal to the Senate to carry the Bill in its present form.
– Before dealing with specific matters arising from the Wheat Industry Stabilisation Bill, I feel that there are two points that should be clarified. We have heard so many people express the misconceived idea that farmers are very affluent members of society. Quotations have been made this afternoon with regard to the statistics as supplied by the Bureau of Agricultural Economics. 1 was pleased to hear both Senator Wilkinson and Senator Prowse say that farmers are not as affluent as many people believe. The Bureau of Agricultural Economics has quoted the average farm income at approximately $9,400. I want to say that this is the farm income, lt is not the individual income. This can represent the income of 1, 2 or 3 families on a property. In many cases it would be the income of a father and son combination on a property. So, we must relate this average farm income back to the realities of life and realise that it is the farm income and not the individual income.
Having said that, I also wish to say that this is the average income. When an average is struck a lot of people are found to be below the line of the average as well as a number of people being above that line. So, a great area is concerned here. To obtain a clearer picture, I look at the total number of farmers in Australia. I find that we have approximately 55,000 farmers. Of that number, 27,600 grow fewer than 10,000 bushels of wheat. So, even though the figure quoted as the average farm income is $9,400, we must realise that a number of people are below the line where the average is struck.
For a long time, the farmer has been faced with many great problems. He has had the problem of rising costs. This problem has come on a lot quicker than he has been able to increase his productivity, in addition to the problem of rising costs, the farmer has been faced with a low return for his produce. The farmer has developed a very efficient industry to counter the lower net returns. This fact is borne out by figures which show that the average production per acre in 1948-49 was approximately 12 bushels while this year the estimated average is about 20 bushels. A great deal of this increase has resulted from the direct contribution of the grower himself via wheat research. Better methods of farming have been introduced and the fertility of the land has been increased.
But even with this type of development we also find that the gross indebtedness of farmers is increasing, it is interesting to note that the average gross indebtedness of farmers at 30th June of this year was approximately $13,600 or 10% of the capital of each farmer. I wanted to mention those points to clear up this aspect because so many people smile when they hear that the farmer is to receive some part of his cost of production. They consider that the farmer is an extremely affluent member of society. The second point concerns the word subsidy which has been bandied about so much. We have heard it referred to in the Senate tonight. We heard Senator McClelland refer to the subsidy and the way that the consumer is subsidising the wheat industry. We read in Hansard that the honourable member for Dawson (Dr Patterson) in another place, in leading the debate for the Opposition, referred to the wheat industry being subsidised.
I propose lo refer to a statement by the Auditor-General in which he says that since the commencement of the stabilisation plan in 1946-47 payments to growers from the Wheat Prices Stabilisation Fund of the Australian Wheat Board have approximated S295m, of which $173m was derived from levies from the growers and SI Om from invested funds. Here, again, it is the growers’ money. All that the Treasury has contributed so far to the Stabilisation Fund is $112m. lt has been estimated that during the initial period of this plan the wheat industry made a contribution of about $400m to the Australian economy because although it could have obtained at that time an overseas price of about $2 a bushel, it was prepared to accept 60c, 70c or 80c a bushel. It has been estimated that in this way the wheat industry would have contributed about $400m to the economy and the consumers of this country. Until such time as that $400m is used up by the wheat industry it. cannot be said to be subsidised. 1 refer to a statement made by the chairman of the wheat committee of the Australian Primary Producers Union which 1 think is very important. 1 have not checked his figures, but I shall quote them. During the last 20 years the average price received by the grower for all his wheat was 133c a bushel. During the same period the average cost to consumers was 128c a bushel. The average price received for exported wheat during that time was 145c a bushel. This can be summed up as follows: If growers had received an export price for all their wheat for the last 20 years they would have been 12c a bushel better off. On the other hand, if the consumers had paid the export price they would have been 17c a bushel worse off. They are very pertinent comments which have relation to the commonly expressed view that the wheat industry is being subsidised at present. It has been said that the industry is secure. One must agree that if the industry is as secure as some people say - I consider that it is because of the Stabilisation Fund that it is secure - it has been due in no small measure to the foresight of growers and a willingness by them to accept a lower cost of production price instead of cashing in on inflated overseas prices in the initial period of the stabilisation plan. I say that it is all credit to the wheat industry for having the foresight to establish security within the industry via the stabilisation plan.
Referring briefly to the history of the stabilisation plan, honourable senators will be aware that when it started we had one overall price for both home consumption and an export quota of wheat of 100 million bushels. As time went on, as has been pointed out tonight, there was a great increase of production for some of the reasons that I have mentioned already. Eventually production rose to such a figure that the industry approached the Government and finally the guaranteed price on export was extended to 150 million bushels which gave the industry a guarantee covering 210 million bushels of wheat. However, in the last few years we have seen a great increase in production. In fact it has gone beyond what could be described as an increase; it has virtually become an explosion in production in the wheat industry because of drought, lower prices for wool and because so many people have been cashing in under the umbrella of security of the stabilisation scheme. The situation has become of great concern not only to the Government and the Australian Wheal Board but also to the wheat industry itself.
We have seen an increase in acreages under wheat from 10.4 million acres in 1958-59 to an estimated 26.4 million acres this year. The production of wheat has increased from 215 million bushels 10 years ago to an estimated 520 million bushels this year. However, because of seasonal conditions, it is expected that production this year will be back to about 440 million bushels. This has become a big problem to the Government, to the Wheat Board and to the industry. Something must be done to try to counter this great explosion of production. It is all very well to stand in this place and glibly, with tongue in cheek, say that we should now have a one-price scheme, we should have a maximum price and we should encourage the further great expansion of wheat. If we continued to do this we could quite possibly hurt the wheat industry. I have mentioned already that we have many fringe growers who have come in under the security of stabilisation but who have an alternative form of production, whether it be meat or wool. They have taken advantage of the stabilisation scheme but they are affecting and endangering the future security of the smaller wheat grower who produces 2,000 or 3,000 bushels or perhaps 9,000 or 10,000 bushels of wheat. In the main these are genuine wheat growers who virtually have no alternative means of production. They are reliant upon the wheat industry and the profitability of that industry.
I feel that the Government after discussions with the Wheatgrowers Federation has very wisely proposed in this Bill a two-price structure for the wheat stabilisation plan proposed for the next 5 years. It has been mentioned that the home consumption price which relates to about 60 million bushels - no doubt this could increase as our population grows - will be $1.70 a bushel free on rail. The guaranteed price for the 200 million bushels for export is to be $1.45 a bushel free on board. We must bear in mind that the increase from a guarantee of 210 million bushels to a guarantee of 260 million bushels becomes very important. A calculation shows that a guarantee of 260 million bushels at $1.48 a bushel returns about 8c less than we would have received from a similar calculation under the old scheme.
I mentioned that one price is quoted free on rail and the other price is quoted free on board. The difference between the free on board and the free on rail price is about 3.5c a bushel. But this will remain a constant figure so that the export price, which is quoted on the basis of f.o.b., is 1.41c a bushel when related to ‘the home consumption price. The reason for quoting the export price as free on board is that it fluctuates according to the cost of the stevedoring operations involved in loading the wheat onto a ship. These costs are borne by the wheat industry and are deductible from overseas sales, as Senator Lawrie said earlier this evening.
On the other hand, the f.o.r. price which is associated with the home consumption price is or can be a variable figure because it is affected by rail freights. So whatever the movements in rail freights be, whether they go up by lc or by 10c a bushel, this amount will be added to both the home consumption price and the export price. This is a very important matter that has not been mentioned by Opposition speakers tonight. They have been quoting a figure for the export price and virtually saying that it is a static thing and will remain ad infinitum irrespective of cost. This is not so. Here is one area where the variable cost will be relative to both the home consumption price and the export price. These are factors that come into calculations. Here we look to the base year for both the home consumption price and the export guaranteed price. These will have the factor of interest rate taken into calculations. Incidentally, the interest includes not just the cheapest rate which can be obtained but also interest paid on hire purchase by people who cannot get their money from a bank and go outside. The calculations also take into account the long and short term bank rates. Then we have the movement costs of the grain handling authorities. These factors all come into it. The second reading speech of the Minister for Primary Industry (Mr Anthony) states:
The Government recognises, however, that growers are faced with changes in the costs of materials such as fuel and fertilisers, of other inputs such as labour, of interests on debts and of freight, storage and handling. It is therefore proposed that annual adjustments be made to take such changes into account on an index basis in determining annual variations in both the guaranteed price and the home consumption price.
In other words, these will affect both the export price - which will cover 200 million bushels - and the home consumption price. So let us get away from this misconstrued idea that the export price is a fixed price irrespective of variable costs which will be coming into the wheat industry in the next 5 years. Earlier tonight Senator Poyser criticised the Government. In reply I would refer him to the following part of the Minister’s second reading speech:
The Government has also recognised that there is a need to establish prices which are at once fair to the consumer and reasonably remunerative to the grower. The home consumption price of $1.70 per bushel, plus the freight loading to Tasmania, represents an increase of 5ic per bushel over that of the current season. In considering this, it is well to bear in mind that this price is based on a cost structure ascertained from the Bureau of Agricultural Economics survey to which I have referred. It is well to remember also that for a number of years in the earlier days of stabilisation the home consumption price was heavily in favour of the consumer.
I shall have a little more to say later on with regard to comments about the $1.70 being forced on the wheat industry by the Government and the industry not having a chance to look at it. I shall also be quite honest and say that there are a couple of areas of criticism where ! feel that perhaps there could be improvements made, more in the machinery than in any other way. I refer to the owner-operator allowance. The comment has been passed tonight that the owner-operator is virtually not taken into calculation. The owner-operator is taken into calculation but only on the base year and this factor is maintained at a static or constant figure and is calculated on the average male wage paid during the previous 5 years. This was virtually an agreed rate of some $2,760. As I said before, this remains a constant figure and this is one area of criticism.
I am not happy with the idea that this should remain a constant figure. Why should the owner-operator’s allowance remain as a static figure when everybody else’s wages or salaries - whatever they might be - do vary through inflationary trends or wage increases throughout the nation? But the owner-operator is expected to maintain a constant rate, both managerially and operationally. 1 feel this is one area which should be given consideration by the Government next year when the calculations are again made for the home consumption price, because the wheat industry has made concessions on this occasion. This is one area where perhaps it has conceded a little too much.
This year the Minister has had discussions and negotiations with the Australian Wheatgrowers Federation, but I hope that in future years he will continue to have discussions with the Wheat Index Committee. This Committee has discussed the figures and calculations of the Bureau of Agricultural Economics and arrived at a cost of production figure ever since the establishment of the wheat stabilisation scheme back in 1947-48. 1 feel that this is one essential area with which the Government should work in the future, because this Committee has proven its worth and responsibility and can be of benefit to both the Government and the wheat industry. Likewise I would hope that the Minister will continue his discussions - as no doubt he will - with the Australian Wheatgrowers Federation. Fears have been expressed by many people that because we have a two price scheme we are breaking away from the old tradition of the single price scheme.
– It is not a new principle in primary industry, is it?
– It is a principle that has been established. I agree that this is so, but let us also face the fact that we have had a great change in conditions and it is a case of trying to streamline an industry and take it further than this. So it is necessary that the industry try to help itself as much as possible and not get to the stage eventually of begging to the nation for help. This could have happened. I do not say that it would have, but it could have if we had continued with a one price scheme under the old system of calculations. The main thing that I want to emphasise again is that the Government should continue to have these negotiations with the Australian Wheatgrowers Federation. It is a very responsible body, one that has played its part and made its contribution to both Government and country over the years, as has the Wheat Index Committee.
With this two price scheme, despite all the criticisms, we have seen an increase in the security to the wheat industry represented by an increase from 210 million bushels to one of some 260 million bushels. When we look to the exporting side, which has been mentioned by quite a few honourable senators tonight on both sides of this chamber, we have quite a few problems on our plate. Even though one must always be realistic and not pessimistic the future perhaps is not so bright as we would like to see it with regard to marketing possibilities. But the Government has seen fit to increase the guarantee on exports to cover a further 50 million bushels of wheat, and here I feel the Government has made a concession to the wheat industry.
– Would you not regard that as a subsidy?
– I will not regard it as a subsidy until such time as this $400 m is used up.
– It is government aid, is it not?
– No, it is a return of interest free capital which has been given by the wheat industry to the Australian public, and until such time as this $400m is used up I will not accept any other contention. With regard to export potential at the present time we have mentioned here the production expansion which has taken place in Australia, not all through increasing broad acres and putting in more and more crops. This has come about through improved varieties of wheat and better farming methods. We can look too to our markets in Pakistan and India. Only 3 years ago both of these were customers. Today Pakistan is virtually self sufficient. It is estimated that India could be self sufficient within a couple of years as a result of the wheat varieties that it is now growing. Russia was once a very good customer of Australia, but today it is reaching the stage of being an exporter rather than an importer. Our big market is China. But, as was mentioned earlier tonight by another senator, our information is that members of the Australian Wheat Board went to China earlier this year to make sales and returned home without having made any.
– Leaving China aside, where is the export future for Australia’s wheat production?
– I only wish that the honourable senator could tell me. 1 would be much happier if he could.
– We expect the honourable senator to tell us. Me is engaged in the industry.
– Yes, 1 am, but I am not on the Australian Wheat Board on the marketing side. I am one of the problem children who grow the wheat.
– People such as the honourable senator are growing it in excess of the market demand.
– That is the very point that I have been making tonight. This explosion is the big problem and could be the cause of great concern to the industry. That is why I believe that the two-price scheme will be far better and far more effective for the wheat industry in the long term than the single price scheme, which could encourage a far greater explosion. Senator Gair has helped me to make my point. 1 thank him very much.
– The honourable senator is advocating the restriction of production.
– No, I am not doing that at all. What f advocate is the taking of action to avoid an explosion. There is a great difference between restriction and explosion.
– It is elementary in commerce and industry that people produce only what they can sell.
– We are still hoping that we can sell the wheat, in the short term we may have a problem. Australia has a surplus of about 40 million bushels of wheat. We know that the United States and Canada also have surpluses of wheat. So, as I said a few moments ago, in the short term we could be faced with problems in the sale of our wheat. The fact is that the Government has seen fit to extend the security of the wheat industry in respect of a further 50 million bushels for export. This is an excellent contribution that the Government is making to the wheat industry at this stage.
One point that I want to make is that we people in the wheat industry have had rather a fright in the last few weeks as a result of Press statements to the effect that there could be a reduction in the first advance for this year’s wheat. These statements have caused concern not only to individual wheat growers but also to financial institutions. I hope that in future years the Minister for Primary Industry, irrespective of whether he feels that there will be a reduction in the first advance, will let the industry know the position as soon as possible, firstly to allay any fears within the industry and secondly lo allow it to obtain financial security if that is necessary.
– Will the development of this new high protein wheat of belter quality make any difference to the saleability of wheat?
– At this stage the higher protein wheat is not being grown in the two countries that I described as being close to self sufficiency. They are producing wheat of very low protein value. Nevertheless, it stops people going hungry, and that is the point. I do not know whether the honourable senator is aware that Australia grows a fairly wide range of wheals, from the soft wheats through to the hard premium wheats. We have quite a range of climates, quite a range of soil types and quite a range of wheat qualities and varieties.
– Queensland would grow the best, would it not?
– That is a debatable point. I had better see the honourable senator afterwards about that. A comment made by Senator Poyser rather disturbed me. He virtually made an accusation of blackmail. He went on to say that the negotiations with the Australian Wheatgrowers Federation were kept completely secret and hushhush, and that that was the situation for months and months. T have been associated with primary industry all my life. I have been associated with the politics of primary industry for a great part of my life. I know the occupants and responsibilities of the senior positions within primary industry organisations, including the Australian Wheatgrowers Federation. I wish to correct the misstatement that was made by Senator Poyser. The responsible men of the Australian Wheatgrowers Federation came to Canberra. Of course they negotiated with the Minister for Primary Industry. They had their negotiations and their disagreements. That is what negotiations are about. All of these men returned to their States and to their organisations. All of these organisations have their executives and wheat committees. No doubt all of the executives and wheat committees got together and were given the full facts.
Would Senator Poyser expect them to go around the countryside bugling inside information while they were conducting negotiations? If he expects that, I suggest that he join one of these industry organisations and learn the facts about them. There is responsibility in negotiation, responsibility of position and responsibility to industry. These responsibilities were carried out by the Minister and the officials of the Australian Wheatgrowers Federation. There has been no political blackmail. There has been no unnecessary secrecy. There has been a commonsense, logical approach to negotiations, with people doing the best they could and getting the best they could for the wheat industry. They all agree that they got for the industry something that is very good for it when it is related to the circumstances of the present time. Therefore I support the legislation proposed by the Government. I oppose the amendment. 1 say thank you to the Australian Wheatgrowers Federation and to the Minister for Primary Industry.
– lt is not my intention to delay the proceedings of the Senate by making a lengthy contribution to the debate on this very important measure. It is an important measure because it concerns a very valuable and important agricultural industry. Whether the Bill will be carried or whether the amendment will be carried will be determined by the way in which the members of the Australian Democratic Labor Party vote. 1 make that statement in view of my observations in this chamber this afternoon and this evening and the debate that has taken place.
Because my colleagues and 1 recognise our responsibility, we have gone to the trouble of considering this legislation very minutely. We have read everything that has been written and published about it. We have discussed the matter with people interested in the industry. We have received deputations from wheat growers. We have made it our business to be informed by experienced and expert advisers. Having been equipped to that extent with the pros and cons of this new stabilisation plan, we have come to the decision that the plan, as contained in the Bill submitted by the Minister for Primary Industry (Mr Anthony), is a reasonable one and the only one that could have been arrived at, having regard to all the dramatic changes that have been taking place in the wheat industry.
Great increases in production have taken place. Markets have diminished. As I said by way of interjection, it is elementary in commerce and industry that people do not produce something that they cannot sell. In the production of commodities it is allimportant that we know whether we can or cannot sell them. It is inevitable that over-production will bring instability to an industry. The sugar industry, one of the best organised industries in the world, recently got into trouble because the people who control it believed that strife in Cuba would greatly’ increase the market possibilities and potential of the Australian industry. They appointed a commission to report whether the industry should be expanded. I am not now being wise after the event. I made a statement then that any expansion of the sugar industry at the time the commission was appointed should be undertaken through a policy of gradualism and caution. However, expansion was approved with the result that many people entered the industry and took over the new assignments for cane growing. World prices fell and markets are uncertain. Many newcomers to the industry are in difficulties. The well established members of the sugar industry probably will weather the storm.
I am not a scrap surprised, with my experience, that this legislation has been received with mixed feelings. When any section of primary producers accepts a plan with unanimity, or even near unanimity, it will be a time of miracles. I do not know of any other section of the community that is so divided and so lacks the ability to organise itself. Only a year or two ago wool growers were divided on the question of marketing their product. A great feeling of bitterness developed amongst wool growers on the question concerning marketing then submitted to them. On the question of a wheat stabilisation plan Victorians are almost violently opposed to the scheme. Production of wheat has increased in Western Australia probably more than in any other State. The wheat growers there are indifferent to the scheme. Wheat growers in New South Wales and Queensland have approved of it.
I will take advantage of Senator Little’s absence from the chamber to remind honourable senators of the old saying that you can tell Victorians anywhere but you cannot tell them very much. That is probably because Victoria is such a small State, about one-seventh the size of the State I represent. I listened very attentively to the debate today hoping to learn something more about the wheat industry, about which I confess to knowing very little.
– If the honourable senator buys a farm he will soon learn.
– I would be fearful even to intimate that I had a desire or intention to buy a farm. I know that the people who have already got farms would want to increase their prices, inflate their land values. They would expect to receive a lot more for their properties than the amounts they represent as their worth tonight. In any market, there is a great difference between being a buyer and being a seller.
– The honourable senator is a canny old man.
– Yes, and my hair does not get in my eyes. We have heard the whole mournful story about primary producers. Senator Young is very sensitive about the term ‘subsidy’. He is almost hypersensitive. He asked us to believe that the wheat industry has never been subsidised by the Government.
– I said, the stabilisation plan.
– Very well. Let us be realistic about these things and face the facts. Last year about $43m was taken out of the Treasury for the wheat industry. What is that? What would Senator Young call that?
– Repayment in part of S400m.
– Where does it come from? It comes from general taxation receipts which are paid into Consolidated Revenue. What is it? It is a subsidy to the industry. In the 5 years of operation of the proposed plan the cost will be about $95m. Where is it to come from? ls Santa Claus to bring it?
– The wheat growers put it in there so it should still be there.
– The wheat growers did not put it all in. The total payments to the industry by the end of this year will be about $156m. Where is that to come from? fs it to be supplied in answer to prayer? Is it to fall from the heavens? Of course not. In listening to the debate today I accepted those remarks about the subsidy as so much humbug, just as I accepted the arguments from the Opposition on the question of inflation. After listening to Senator Poyser and Senator McClelland one could have been led to believe that a great inflationary trend would result from the wheat stabilisation plan. In fact, it will have little or no inflationary effect. Let us be consistent. The same gentlemen have been associated with trade unions and industrial tribunals. They know very well that every application for increased wages that is approved in whole or in part by an industrial tribunal has an inflationary effect upon the community. Increased wages for transport workers, tramway or railway employees, bring about increased fares. Increases granted to bread carters result in increased prices for bread. Let us not engage in a lot of political humbug and hypocrisy.
Let us examine the proposed legislation. We do not know a lot about the wheat industry. The wheat growers know most about their own industry and they cannot agree on the best action to take. As they cannot agree on the best course to follow, on whether the Government’s plan is right or wrong, it falls to someone else to make up their minds for them. That is our responsibility tonight. I listened to what Senator Wilkinson said when he opened for the Opposition in this debate. He made a moderate and balanced speech. He expressed appreciation, as I would, of the difficulties that confronted the Minister for Primary Industry and the Government. He went so far as to say, as I would say, that there must be a limit to how much can be taken out of Consolidated Revenue to prop up any industry, whether primary or secondary. Any industry that needs excessive propping is unstable and the day that the prop is removed the industry will topple. That is elementary and factual.
I was in accord with most of what Senator Wilkinson said. But he spoilt a very good speech by moving an unrealisticamendment. He would have been right if he had not moved that amendment. He would have made an excellent contribution to the debate. The dual price system has been worked out by agricultural economists and other people, bearing in mind the dramatic changes that have taken place and the need for a guaranteed home consumption price for wheat. After all, is not the home market the best market for any primary industry? That is indisputable, and continues to be so. It amazed me when I heard that the honourable member for Dawson (Dr Patterson) had moved this amendment in another place. He represents a sugar area. I would like to hear him talk about a single price in his area. He might find out how the sugar producers feel about this. He would find they are not as sweet as they are represented to be.
In conclusion all 1 want to say is that the amendment is unrealistic. To adopt the amendment and defer this scheme would throw the wheat industry into a chaotic state. My colleagues and I are not prepared to do this. Having made a close examination of the pros and cons, I repeat that we will stand by the submission of the Minister as represented in this Bill and will vote for the Bill.
– 1 am very pleased indeed to hear that Senator Gair and his colleagues will stand by the submission of the Minister for Primary Industry (Mr Anthony) in respect of this Wheat Industry Stabilisation Bill which we are now debating. The Bill provides for a further 5-year period of orderly marketing and stabilisation of the wheat industry. I wish, first of all, to make a few references to the history of wheat stabilisation. Since 1948 the Australian Wheat Board has been the sole authority for the marketing of wheat in Australia and for the marketing of wheat and flour exported from Australia. Prior to the establishment of the Wheat Board, wheat marketing and production was controlled during the period of the two world wars but no permanent authority had been constituted. The Wheat Board, comprising representatives of growers, millers, employees, finance and commerce, was established under the Commonwealth Wheat Industry Stabilisation Act of 1948. Complementary State Acts were passed also because under the Constitution the Commonwealth has only limited powers in respect of the marketing of primary produce. The existence of the Wheat Board continued under later legislation and today it operates under an Act passed 5 years ago.
I refer briefly to this historical background because I think it desirable to pause for a moment, while consideration is being given to another extension of orderly marketing and stabilisation in the wheat industry, to reflect on the real benefits which have accrued to the industry and to the nation from the existence of the Wheat Board. The industry has been given a sound background. Some 50,000 farmers have been able to budget ahead with reasonable confidence, and commerce and industry associated with wheat have benefited from this stability. Vitally needed overseas funds have accrued from increased wheat exports.
In all, wheat stabilisation history in Australia constitutes a real success story. 1 am mindful of the services rendered by the pioneers of the system, especially the
Honourable T. C. Stott, O.B.E., now Speaker of the House of Assembly in South Australia, who, as general secretary of the Australian Wheatgrowers Federation and the then general secretary of the Wheat and Wool Growers Association for South Australia, played a most significant part as author and architect of the plan. As I pay tribute to this man, I do also to the many dedicated men in the industry who have served magnificently the whole of the industry to ensure its welfare through the years. I am mindful at this moment of the part played by men such as Tom Shanahan and Max Saint of South Australia. I commend these gentlemen who, with their colleagues in the industry, working on a broad front and after long negotiations with the Government, have arrived at the scheme now before us.
Estimated deliveries to the Wheat Board from this year’s harvest are expected to total 440 million bushels. I note that large areas of land are being cleared in southern Queensland for increased acreages to be sown to wheat next year. The problem is: Can we continue to find markets to place more than 500 million bushels of wheat in one year? This, on world viewing of wheat stocks and production potential, is extremely open to question. It certainly calls for continued and accentuated application to sales, to holding old markets and to seeking out new markets. Last season the People’s Republic of China purchased no less than 106,287,000 bushels of total Australian exports of 293,958,000 bushels. Without continuing trade with mainland China we certainly will be struggling to sell the whole of the coming crop. Reports from China to date are not encouraging. China normally imports large quantities of wheat but reports indicate that there has been a very good season in that country. Because of the high foreign exchange costs involved, mainland China will be unlikely to depend indefinitely on imports of wheat in large volume. Last year the United Kingdom was our second largest customer, taking 14.5% of the crop. If she joins the European Economic Community her imports of our wheat will certainly be reduced. Our next largest customers were the Middle East countries which took 28,408,000 bushels, followed by India, who purchased 28,268,000 bushels and Pakistan, who purchased 19,535,000 bushels. Both India and Pakistan expect to be self sufficient in wheat production in about 3 years time. I am quoting these figures to give a background to the challenge which lies ahead with respect to selling our wheat overseas.
asked Senator Young where he felt there could be openings for increased sales of our wheat. I have some figures which I shall quote in a moment, but let it be said to the credit of the Australian Wheat Board that there are now no fewer than thirty-eight individual countries buying wheat from us, and their purchases are increasing each year. For example, last year Japan bought 5 million bushels more than she bought in the previous year. The Middle East countries increased their buying from 16 million bushels to 28 million bushels. Malaysia increased her purchases from 5.4 million bushels in 1965-66 to 8.9 million bushels in 1966-67. Singapore increased her purchases by roughly 1 million bushels in a year. Purchases by the United Kingdom have been static. In 1966-67 West Germany bought a total of 1.7 million bushels as against nothing in the previous year. Holland last year bought 3.3 million bushels and nothing in the previous year. Norway purchased 4.3 million bushels last year compared with 1.3 million bushels in the previous year. So I say to Senator Byrne that there is evidence here of a really good sales programme through the Wheat Board seeking to diversify sales. 1 submit that those figures go to show that much is being done by the Board by way of a virile sales approach on a world wide basis. T have one more example of this excellent endeavour on the part of the
Board. In 1966-67 Brazil purchased from us no less than 7.5 million bushels compared with nothing in the previous year. So we have before us evidence that there is an opening for the disposal of increased quantities of wheat provided we have a continuation of the application to sales which has been shown thus far by the officers of the Australian Wheat Board.
I am very pleased to see that one of the purposes of this Bill is to provide for a greater freedom to the Board in negotiating forward sales by the extension of the marketing provisions for two seasons beyond the duration of the stabilisation plan. This will enable a continuity of the Board’s operations in that it removes the present handicap to its effective business operations of limiting its negotiation to the period of renewal of the stabilisation plan. In other words, the Board is now to have the ability to sell ahead for 2 years after the expiry of the present stabilisation scheme whereas it is now hemmed in to chopping off its contractual arrangements at the end of the 5-year period. This I regard as a major step forward in rendering more flexible the sales policies of the Wheat Board.
The Board is assisted in its great task of clearing successive large harvests on export markets by the inherent excellent qualities of our wheat. Nothing annoys me more than to read disparaging comments about Australia’s wheat. We have two types of wheat. We have the hards and semihards and the softs or fair average quality. Each type has attributes which are peculiar to it and which are deserving of the highest praise. Because of these attributes our wheats can blend in with milling programmes anywhere with the best of wheats produced anywhere else in the world.
I feel that it is vital that these attributes be not impaired. The attributes to which I refer are the healthy brightness of colour, freedom from disease, high bushel weight, ease of milling, high extraction figures of flour of excellent whiteness, low moisture content and, in many varieties, a direct correlation of amount of protein to quality of protein.
Research and development of desirable varieties have played a significant part in achieving these qualities. But they must be maintained. The danger as I see it lies in going for extremely high yielding varieties at the cost of these qualities. Mexican dwarf derivatives are remarkably high yielders but miss out badly on the accepted qualities of wheat as we know them now. Any variety which tends to be a woolly wheat must be avoided as such wheats are extremely difficult to mill and dress and would be immediately looked on askance by overseas millers. It must not be forgotten that every bushel of wheat produced will be sold either as stock feed or as a base for breakfast foods or for milling programmes for bread and cake manufacture.
The biggest buyers of our wheat are the overseas millers. This means that the wheat is purchased by overseas importers for specific purposes. A tittle while ago I was speaking to a miller in Europe who has a very big mill and who imports a lot of Australian wheat. He said to me: ‘We can certainly use more Australian wheat if you pay every attention to the separation of your semi-hards from the soft varieties’.
– Is that one of the solutions?
– It is a very important aspect of providing that which is being sought by the purchaser. The purchaser himself can blend in accordance with his requirements, but he cannot handle a mixture of varying varieties of wheat of quite different basic character.
I believe that the- wheat and the flour milling industries are integral and that the interests of both are complementary. As the flour side of the industry has not yet been referred to in this debate I feel it my duty to make some reference to it, because there are two avenues through which wheat might be disposed of overseas. One is in the form of whole grain. The other is in the form of flour. In 1965-66 we sold 158,104,000 bushels of wheat as whole grain. This was increased to 293,958,000 in 1966-67. In the same years flour sales accounted for approximately 16,520,000 bushels and 19,120,000 bushels respectively. In other words, we sold the wheat equivalent of 359,161 tons of flour overseas in 1965-66 and the wheat equivalent of 415,464 tons of flour in 1966-67. The total milling capacity of Australian flour mills based on a three shift run - that is, 1 20 hours a week of running - and used to the fullest extent would yield 1.98 million short tons of flour a year. This would require 88.03 million bushels of wheat.
Flour exports have come back from just under one million tons in the post-war years to the 415,464 tons I have just mentioned for last year. The reduction in exports is due to a number of factors. Firstly, there is the unfair uneconomic competition in traditional Australian flour markets overseas by exports extremely heavily subsidised by European millers such as the French, the West Germans and Italians. As an industry, the Australian milling industry is as efficient as any milling industry anywhere else in the world but it is beyond the efficiency of our local industry to overcome this competition by heavily subsidised flour exports. Secondly, the reduction in our exports is due to the self sufficiency of countries which formerly were our customers for flour. Mills have been erected in such major markets as Singapore, Malaysia, Hong Kong and the Philippines. Of course those countries offer wheat markets, but whereas flour sold there previously was 100% Australian wheat we do not now enjoy the full wheat equivalent.
Every effort must be made to maintain the sale of our product, be it in the form of wheat or in the form of flour, because wheat is a perishable commodity and a very costly one to store. It is pleasing and gratifying to note the excellent work of the Australian Wheat Board through the years in ensuring, as far as possible, the clearance of production year by year. However from now on there will need to be a stepping up of these activities to ensure the same situation in the future as has applied in the past, bearing in mind the stocks in the hands of overseas exporters and the general programme of increased wheat production in many of the countries which now buy our wheat.
Under the Food Aid Convention importing and exporting countries will make available 4.5 million metric tons of wheat, or the cash equivalent, for needy countries. This year Australia, Japan and the United Kingdom will contribute 5% each, Canada 11%, the United States 42%, the European Economic Community 23% and other countries 9%. Although the Food Aid Convention provides for gifts of wheat, or the cash equivalent, I think that where possible our aid, whether it be for Indonesia, India or Biafra, should comprise as much flour as is acceptable to the recipient countries. By this means an industry which is of national importance and vital to the wheat industry itself will be assisted.
I say these things for no other reason than to refer to an aspect of the industry which, as far as I am aware, has not been mentioned in the debate to this point. I congratulate the Minister on the Bill now before us and for the decision to maintain the traditional Si. 10 first payment on the coming season’s wheat. There are many holes in the farming economy which need to be plugged financially. The advance of $1.10 will be of great assistance in overcoming the financial problems which have arisen over the past year in many areas as a result of very adverse conditions. I am concerned at the position in which some farmers inevitably will find themselves this year in being unable to deliver their crop at harvest time, either in full or in part. Some farmers in the early districts will be able to deliver their wheat into the silos that are available but farmers in later districts will find that the silos are full and they will have to hold their wheat on the farm.
The farmer who, through a quirk of nature and the location of his land, has a late maturing crop could find himself without the funds that he requires for the conduct of his farm whereas his fellow farmer, some miles along the way, will have received his full return on the first advance. This is a situation which will cause a lot of heart burn and a lot of pocket burn. 1 wish some way could be found to attain that which I have sought thus far, namely, that a pro forma payment be made, not for the full amount of wheat on a farm but on the basis of a low estimate of the wheat held pending silo space being available. This would give the farmer an income to enable him to carry on just as his neighbour who has been lucky enough to deliver his wheat, receives a payment to enable him to carry on. I have pleasure in supporting the Bill and in rejecting the amendment.
– At the outset let me signify that having studied the amendment proposed by Senator Wilkinson on behalf of the Opposition I just cannot go along with it. I congratulate
Senator Gair, the Leader of the Australian Democratic Labor Party, for his statement tonight that his Party intends to support the Government on this measure. The honourable senator’s decision is very important to the wheat industry because the industry will be assured of a return over the next 5-year period of $2,000m - it could even be between $3,000m and $3, 500m - which is greatly in excess of the $ 1,600m which the industry received over the last 5-year period.
I do not intend to cover the subjects that were covered by honourable senators in the debate but I want to refer to two items. One relates to an agreement between a previous Australian government and the New Zealand Government by which the New Zealand Government bought our wheat at an average price of 61c a bushel when the average price on the world’s markets was 148c a bushel. This disparity was made up, as Senator Wilkinson would like the new scheme to be made up. by the taxpayers of Australia. It is interesting to note that the agreement was that in those 5 years the Australian Government would sell to the New Zealand Government 18 million bushels of wheat at this average price. The deficiency, according to the Auditor-General’s report of 1949-50. was $ 14.2m. In other words. SI 4.2m was taken out of general revenue to pay the farmers by way of subsidy the amount represented by this deficiency. The figures show where we would be going under a Labor government. For every 18 mililon bushels of wheat that we sold, the Australian taxpayers would have a commitment of S 14.2m. If we multiply that figure 20 or 30 limes - because that is what we are selling today - we find that over S400m would have to be found by the taxpayers to subsidise Australian wheat growers. I mention this matter because it is factual and I want it recorded in Hansard for further reference.
– That was 20 years ago.
– Yes, but that is probably why the Labor Party is out of office today. The Labor Party is out of office because of the stupid actions it has taken.
I wish to raise only one other point which 1 think is of considerable interest to all honourable senators and to the wheat growers of Australia. The Minister for Primary Industry (Mr Anthony) has had considerable difficulty over the last 5 or 6 months in persuading Australian wheat growers that the action that the Government is taking in respect of this next 5-year stabilisation scheme is in their interests. When I have travelled in Western Australia and attended meetings I have found that quite a few people, particularly in the country areas, are of the opinion that the customs duties on imported machinery used in wheat production are having a very large effect on their cost structure. For the purposes of the record I would like it to be clearly stated - and 1 intend to state it clearly - that the present duties on agricultural machinery have followed on a 1934 report by the Tariff Board. Realising that the agricultural industry as a whole was facing this problem, the Minister in October 1967 placed before the Tariff Board, for investigation and report, a reference dealing with all items of machinery affecting primary production, lt will be interesting indeed to read that report when it comes to hand.
The Department is very conscious of the fact that duties, etc., can affect the cost of primary industry. In the Tariff Board report of 1934 concerning tariffs on agricultural machinery, duties ranged from 20% to 40% (General) and 5% to 10% (Preferential). But tractors manufactured in Australia are protected not by way of duty but by way of bounty. The Commonwealth docs pay up to S900 for some of the tractors that arc manufactured in Australia. The duties that I have just mentioned do not apply to all imports because concessional by-law rates are applied to imports when suitably equivalent goods are not reasonably available from Australian production. The bylaw concessions provide considerable benefit to users of agricultural machinery. This is illustrated by the duty treatment of the three largest import items.
I mention, first, combine harvesters in respect of which the normal duty is 20% (General) and 5% ( Preferential). The value of imports of combine harvesters last year was S7.75m. The interesting point is that combine harvesters valued at S5.5m were admitted duty free under by-law. I mention next forage harvesters on which the normal duty is 374% (General) and 10% (Preferential). The value of forage harvesters imported last year was SI. 75m. But $ 1.25m worth of goods under this item was admitted duty free under by-law. Finally, I refer to hay balers. The normal duty on this item if 274% (General) and 5% (Preferential). Hay balers valued at $1.5m were imported last year but hay balers to a value of $300,000 were admitted duty free under by-law. Honourable senators will see from these figures that the Government is conscious of the problems facing the farmer. The machinery that has been imported duty free under these by-law provisions has been of considerable benefit to Australian farmers. These are the two points that I said I would raise. I have very much pleasure in supporting the Bill. I assure the Senate that I will not be supporting the amendment moved by Senator Wilkinson on behalf of the Australian Labor Party.
– First of all, 1. thank those honourable senators who have taken part in the debate this evening, this afternoon and yesterday. 1 think eleven speakers have participated in the debate, which has been very interesting indeed. 1 am quite sure that a number of us are wiser regarding wheat growing than we were before this debate started. I am hoping that this Bill will be passed before the Senate rises tonight because it is fairly important thai it should be. I have received from the Minister for Primary Industry (Mr Anthony) a telegram that was delivered to him today. It reads:
Victorian Farmers Union no longer objects to the introduction of wheat stabilisation legislation. Bill will bc introduced Tuesday next. Regards Chandler Minister for Agriculture.
Complementary legislation will be introin New South Wales soon. A couple of the States have been awaiting the passage of this legislation through the Commonwealth Parliament before proceeding to deal with the legislation. 1 deprecate the criticism that has been levelled against the Minister for Primary Industry by one or two speakers during the course of this debate. 1 refute that criticism very strongly indeed. The Minister has done a marvellous job with respect to this stabilisation scheme. He started on 19th April of this year. That was when the first meeting was held. He has been criticised on the ground that a decision should have been reached before now. However, I remind the Senate that one man cannot make a decision concerning this scheme. Any one party entering into negotiations with other parties cannot make agreements. Meeting after meeting was held. In this period, the Minister had to go overseas but negotiations were carried out in his absence by the Minister for the Interior (Mr Nixon) who acted for him. In spite of the absence of the Minister for Primary Industry overseas the negotiations did continue. The reason that it has taken so long is that it was very hard for the wheat growers to reconcile themselves to agreeing to the proposals that were put to them. It should be stated also that these proposals were varied from time to time.
The Minister for Primary Industry had trouble not only with the wheat growers; he had to convince Cabinet that the scheme should be adopted. As he said in his second reading speech, he felt that the scheme was in the best interests of wheat growers and in the interests of the Australian community. He was sincere when he said that and this measure results from this action. As everyone knows, there was dissension and there were differences of opinion in his own Party as to the best plan to adopt. But in addition to all this he had to convince the State Ministers for Agriculture and get them on side. When we consider all these things, rather than criticise the Minister for Primary Industry I think we should, as a number of speakers have done already tonight, express our appreciation of the very good job that he has done for the wheat industry. A lot of poppycock has been talked about the extra cost involved. I use that word deliberately.
– We did not say anything about that.
– it did not come from the honourable senator for once.
– 1. am defending my colleague.
– He can defend himself. A lol of poppycock was talked about the extra cost to the consumer as a result of the increased home consumption price, but the increase has already been stated accurately. An increase of 5.5c a bushel in the home consumption price will result in an increase of 0.2c for a 2 lb loaf of bread. So much for all this rubbish about the proposed scheme increasing the cost of living for pensioners and others. I make that statement early in my remarks because I believe that the situation should be made clear.
The Opposition has submitted an amendment by which it proposes that the price should be $1.48 a bushel, but this would cost an additional $135m over a period of 5 years. But even if there were not a financial aspect involved, it would be totally impracticable to accept the amendment, lt would involve further consultations with the Ministers for Agriculture. Further, in some States the legislation has already been passed, lt is all very well for honourable senators to say that the delay has been caused by the Minister for Primary Industry, but in fact the delay was not caused by him. It was brought about by the difficulty in arriving at a plan acceptable to the Minister and to the representatives of growers.
There has been the criticism that the rank and file of growers did not have an opportunity to know what was being done, but what are we to do in a situation of this kind? These organisations were represented by men whom they had selected to represent them and the representatives were given the power to negotiate agreements. It was at their request that secrecy was applied to the early meetings. Generally this secrecy was maintained very well, although one or two gentlemen let the cat out of the bag, which I suppose was to have been expected. The secrecy was maintained over a period of months because negotiations were at a rather delicate stage.
The Minister was criticised because he did not go first to the State Ministers for Agriculture. In my view he did the right thing by first consulting the industry leaders. If he had gone to the Ministers for Agriculture and then to the representatives of the wheat growers they would promptly have said: ‘You politicians have ganged up on us and made an agreement without consulting us first.’ He would have been confronted with this charge. I think he has performed his job in the right way. I was pleased to hear Senator Young explode this myth about the community subsidising the Australian wheat growers. I hope that Senator Gair is listening to this. When the day comes when the amount paid to Australian wheat growers by the Commonwealth Government reaches $400m he can talk about subsidising the wheat grower, but not before then. That stage has not been reached. The amount that has been paid to the wheat growers has totalled about $ 1 1 2m, so there is quite a way to go yet.
– The Government is progressing at a pretty good rate. I have no doubt that it will reach that figure.
– Nor have I. I suppose that it was about 15 years ago that I pointed out to a wheat growers organisation that the day would come eventually when it would be necessary for the Commonwealth Government to subsidise the industry in the way that it will be doing when it has repaid the $400m. I said that in spite of the fact that the wheat growers at that time were accepting a lower price for wheat for home consumption than they could have received overseas. But after that time the wheat growers made a contribution up to a certain ceiling of as much as 18d a bushel to the Wheat Stabilisation Fund. After a period of years the Fund was then exhausted, lt was only then that the Commonwealth Government started to pay into the Fund the amount which has been spent over the years.
This is not the first time that the Senate has heard me talking on this subject and I suppose it will not be the last. 1 want to make the point also that the domestic price of wheat in Australia is as low as the price which obtains in any major wheat producing country. We are not stuck out on a limb and charging an unduly high price for wheat for home consumption. Perhaps some of the younger members of the Senate would not realise that only 5 years ago the Commonwealth Government was guaranteeing a payment for wheat sold overseas up to an amount of 100 million bushels. Today it guarantees payment up to 200 million bushels. This is a very significant step forward. We have heard a suggestion that the growers are not satisfied with this guarantee, but this suggestion is not correct. The majority of growers are satisfied. After all, they are quite level headed. I agree with Senator Gair’s remark that we probably will never see the day when two primary producers agree on anything, but one of the reasons for that is possibly that the very nature of their calling puts into them a spirit of independence. They are dependent on the weather and they are dependent also on their own initiative. They have this streak of independence which honourable senators may call stubbornness, if they choose, but perhaps in many cases it could also be called intestinal fortitude. This is one of the reasons why we have this difficulty in getting the vast majority to agree. In New South Wales the growers recognised early in the piece what a situation the wheat industry was in and they were content to go along with the stabilisation plan. They showed common sense. One of the troubles which has been mentioned is that there could be considerable difficulty in disposing of this year’s crop, but in spite of the difficultiesI find it rather ironic to think that some people seem to be sorry that we are faced with what could be a record crop and talk about the difficulty we will have in selling it. Admittedly the crop will not be as great as we thought it would be a few months ago, but. still it will be a record. We should be feeling thankful that we have a record crop. With this first payment of $1.10, within 6 months $400m will be released into the Australian community. This will be of tremendous financial benefit to Australia and very few people will not benefit from it. So instead of feeling worried about the position we should be throwing our hats in the air for joy. Let us look at our situation and compare it with that of Canada. There they have a crop of about 700 million bushels, half of which is still stored on the farms. For this 350 million bushels the growers have not received a penny so far as I understand the position. Mention was made of the difficulties that could be experienced if a wet season sets in. It has been proved pretty conclusively that it takes a lot of Tain to hurt wheat - even bulk wheat - stacked out in the open. So I do not think we need to lose too much sleep over that. I do not know that there is very much more I need to say because this matter was covered pretty extensively in the debates in the other place and it has received a lot of space in the newspapers. 1 express my appreciation for the contribution made by Senator Gair and for the decision that his Party has made.
– Why only Senator Gair.
– The honourable senator had the opportunity to speak earlier and did not take advantage of it. I only hope we can have a speedy passage of this Bill through the Committee stage and have it finished by 11 o’clock.
That the words proposed to be left out (Senator Wilkinson’s amendment) be left out.
The Senate divided. (The President - Senator Sir Alister McMullin)
Majority . . 4
Question so resolved in the negative.
Original question resolved in the affirmative.
Bill read a second time.
Clauses1 to 6 - by leave - taken together, and agreed to.
Clause 7 (Guaranteed price).
– This clause is the most important part of the Bill as far as our
Party is concerned because it determines the way in which prices are to be fixed from year to year. Therefore, I move:
That the clause be postponed. as an instruction to the Government:
That increases or decreases in the guaranteed price shall be based on changes in:
The clause provides in sub-clause (1.) that the guaranteed price commencing on 1st October 1968 will be $1.45. Sub-clause (3.) provides that the Minister will determine whether this will continue. He will take as a basis the amount that has been fixed by sub-clause (1.) and make such increases or decreases, if any, as he considers appropriate by reasons of increases or decreases in prices, wages, or rates of charges, including rates of interest, payable in connection with the carrying on of the business. 1 have no objection to this. What I have objection to is that in setting out the method by which the price is to be determined no consideration is being given to the capital value of the property that is producing the wheat, or to the depreciation of plant and machinery. These should be included in any consideration of a price, as I said in my speech in the second reading debate.
-(Senator Drake-Brockman).- Order! In conformity with the sessional order relating to the adjournment of the Senate, I. formally put the question:
That the Chairman do now leave the chair and report to the Senate.
Question resolved in the negative.
-I will be brief in order to enable the Bill to be passed this evening. I expressed in my speech in the second reading debate the reasons why I consider that the price should take into account the owner-operator’s allowance, depreciation on plant and machinery and interest on capital. This should be an index which would enable the Minister for
Primary Industry to determine a rise or fall in the price on the basis of the price that we fix for this year. It seems to me that any business at all should be able to take account - if it does not, it goes out the window - of the interest on the capital that is invested in it in any consideration of whether it is progressing or regressing. These are only commonsense and reasonable suggestions as to the way the Minister should determine the price. I am not saying that this is any more than an index. But I believe that it should be at hand. It should not be left out of account as it is specifically left out in the Bill that we have before us.
– I point out to Senator Wilkinson that the matters that he has raised tonight have been the subject of discussion at the meetings that have been held over the past months. The position is that the wheat growers have agreed to a scheme and we have just passed the motion for the second reading of a Bill to implement it. The Government cannot accept the amendment at this stage.
That clause 7 be postponed (Senator Wilkinson’s amendment).
The Committee divided. (The Chairman - Senator T. C. Drake-Brockman)
Majority . . . . 5
Question so resolved in the negative.
Clause agreed to.
Remainder of Bill - by leave - taken as a whole, and agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Senator McKellar) read a third time.
Consideration resumed from 5 November (vide page 1651). on motion by Senator McKellar:
That the Billbe now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Motion (by Senator McKellar) proposed:
That theSenate do now adjourn.
-I wish to raise a matter which is of great concern to my colleagues in the metal trades in Brisbane. If the submissions made to me are valid, the issue involves not only Queenslanders but Australians generally. It italleged that a Japanese firm has been given preferential treatment to the disadvantage of a Queensland company in respect of the allocation of a contract. The allegation has its foundation in the fact that Commonwealth Engineering (Queensland) Pty Ltd, an engineering company situated at Rocklea in Brisbane, successfully tendered for the supply of 200 steel wagons to Hamersley Iron Pty Ltd, a company operating in Western Australia. This successful tender was accepted in the face of tenders by other Australian companies and overseas tenders. Commonwealth Engineering commenced work on the contract and when it was partly completed Hamersley Iron Pty
Ltd called for tenders for the supply of an additional 120 steel wagons and 10 ballast cars. Naturally, Commonwealth Engineering submitted a tender. As the preparation of blueprints or such material was not involved and as its machines were tooled up for the construction of the wagons the company believed that it was in an advantageous position to have its tender accepted. It therefore slashed its tender price below the price originally submitted in gaining the first contract. To the amazement of the company a Japanese firm was awarded the contract.
I repeat that this is of concern to my colleagues in the metal trades in Brisbane because as a result work will be taken outside Australia. Commonwealth Engineering (Queensland) Pty Ltd is a renowned company which does particularly good work. It employs a splendid body of tradesmen. 1 think it is generally acknowledged that its work is of superior quality. It is now possible that the company will have to put off staff because it was unable to obtain the contract for the additional wagons. On behalf of the company I ask the Minister for Customs and Excise (Senator Scott) to investigate the tenders lodged for supply of the additional wagons. It appears almost inconceivable that Commonwealth Engineering did not submit a lower tender price than any other tenderer, for the reasons 1 have outlined.
It appears possible that dumping is occurring, as was the case with Japanese motor cars. Employers and employees in Australian industry are entitled to ask the Australian Government for assistance. IF any form of dumping is taking place I suggest that it is in the interests of the Government and the people to have the allegations investigated. If the Minister accedes to my request it will indicate that the Government favours the policy of ‘Buy Australian made goods’. If the Minister fails to agree to my request both employers and employees in industry in Queensland may be led to believe that the Government has declined to act as an Australian Government should act; that is, in the interests of the welfare of Australian industry.
I have been informed that the wagons could be imported into Australia without payment of duty at the rate of 471/2% to which they are liable, by being classed as mining equipment which is subject to duty at the rate of 10%. The Minister may have some information about that aspect. If such is the case I suggest that the Government should consider the matter in the same light as it considered the dumping of Japanese motor cars on the Australian market. I ask the Minister to investigate the matter I have raised so that action may be taken to relieve the minds of people in Queensland who are involved.
– I have listened with considerable interest to the remarks of Senator Milliner. He mentioned that Commonwealth Engineering (Qld) Pty Ltd of Rocklea, Brisbane successfully tendered for the supply of 200 railway wagons to Hamersley Iron Pty Ltd, that Hamersley then called for tenders for an additional 120 wagons and that although Commonwealth Engineering submitted a tender price lower than that of the original tender its second tender was not accepted.
– Does the Minister think that more dumping by Japan is involved?
– I will tell the honourable senator what 1 think as 1 go along. Senator Milliner asked whether I would have my departmental officers examine the tenders. I am not sure that the Commonwealth Government possesses the power to act in that way. I would be very surprised to learn that it does. Hamersley Iron Pty Ltd, an iron ore company, advertised throughout the world for tenders for the construction of wagons for its railway line operating between Mount Tom Price and Dampier. I believe that the imported wagons are subject to duty at the rate of 471/2% when suitable equivalent goods are readily available in Australia. It would be quite appropriate for overseas manufacturers to tender for the supply of the wagons, on the understanding that they would have to pay duty at the rate of 471/2%, as stated by Senator Milliner.
I understand that the Heavy Engineering Manufacturers Association of Australia has approached my Department with allegations that the ore wagons ordered from Japan may be imported at dumping prices. I can assure the honourable senator that my Department will make a very careful examination to determine whether the wagons are being dumped in Australia. If it is found, after thorough investigation, that they are being dumped here, suitable action will be taken.
– May I say a few more words now about this matter?
The ACTING DEPUTY PRESIDENT (Senator Laught) - Order! It is not proper at this stage to discuss this matter any further.
Question resolved in the affirmative.
Senate adjourned at 11.21 p.m.
Cite as: Australia, Senate, Debates, 13 November 1968, viewed 22 October 2017, <http://historichansard.net/senate/1968/19681113_senate_26_s39/>.