STATEMENT BY TH. I PRIMEI MINIST Mi. HARCLD HCLr,
IN THI; HOUSE CF REPRESENA'rIVES
21STCCTCBER, 1966
ORD RIVER PROJECT.
I desire to make a-statureni a tio, co the Ord River Project.
This matter has been raised by the Honourable Member for Dawson ( Dr.
Patterson). It is. of course of wide interest, and especial interest to
Honourable Members from Western Australia. The Cabinet has given
very close consideration again and extensive consideration to the
request which had come to us from the West Australian Government for
financial assistance for the development of stage two of the Ord River
Scheme. Mr. Cleaver What more needs to be done?
I have sent a letter, following the decision of the Cabinet, to
Mr. Brand, the Premier of Western Australia indicating the Government's
decision not to commit itself to provide financial assistance for stage two
of the Ord River Project at present. In this letter I indicated that major
uncertainties still exist in regard to the future prospects of the scheme,
which the Commonwealth Government felt could be clarified only in the light
of further experience with the pilot project comprising stage one of the scheme.
These uncertainties are, of course, related to the request that the
Commonwealth commit itself to funds in excess and perhaps over the years
substantially in excess of $ 70 million over the next 15 years, and to the
present considerable commitments on the Commonwealth's limited resources.
More importantly, in the context of the project itself, our
uncertainties are closely tied in with unresolved doubts about the viability
of the scheme. The terms of the letter in order to save time were
telephoned through to the W'est Australian Premier's Department. I have
since received a telegram from the Premier in which he comments that he
has received my telephone version of the letter and that he found it difficult
to believe that such a decision had been made. He asks: " What more can
be done to satisfy you on the Ord? What other evidence do you want? Cur
belief is that the Ord River project could be the forerunner of similar
developments in the north. A great vision for Australia is being unduly delayed.
The telegram ias just reached me. This Government would
emphatically deny that we are lacking in any way a vision for the
development of this country which, during the period of office of my
predecessor and of the Parties which I now have the honour to lead in
Government, has made the greatest surge forward in its development. We
have created the environment for development. We have encouraged projects.
We have maintained the economic policies which have produced these results.
In Western Australia very considerable sums are currently being outlaid
and have previously been outlaid to encourage development in that State.
However, we also have a responsibility to the whole of Australia that our
resources shall be wisely employed. Our resources are not unlimited, and
when considering a project which involves a commitment of upwards and I
repeat perhaps substantially upwards of $ 70 million then we are bound to
make the closest examination of it.
Dr. Patterson Spread over 15 years.
The Honourable gentleman says " over lb years", but every year the
Government has other commnitments. A $ 70 million commitment does not
become less than $ 70 million simply because the payments are spread over a
number of years. We are spreading payments over a number of years in
respect of a great range of items, some in the field of defence, some in the
field of development.
Let me.. indicate-some of the difficulties which had to be considered by
us. First, we looked at the world market outlook for cotton. It is generally
a breed that this project at present stands or falls as a cotton project. It is
strictly a monoculture project. There has been no attempt to argue that
there is any alternative which would make it a viable project at the present
time. It has been suggested that there are supplementary crops which
could be grown in assistance of the cotton project but it is as a cotton
project that the venture must basically be considered.
Cotton is a surplus commodity in world markets. In recent years
world production has exceeded consumption and large stocks have accumulated
particularly in the United States Recent UI. S. legislation will probably
put more U. S. cotton on world markets and further depress prices which
have already fallen appreciably in recent times. In fact prices have fallen
since the U. S. legislation came into effect on 1st August, and market
investigations indicate that there could be further falls in the long term.
As to cotton yields, average yields have improved considerably.
However, it remains to be seen whether the farmers can attain a level at
which, without cotton bounty, they would' be protected against likely increases
in farm costs and possible further falls in world cotton prices. We acknowledge
that there is a possibility of average yields reachiAng 1, 00j~ A lb. of lint per
acre, but our technical advice is that this will require intensive research
and a high standard of farming and handling of the crop.
Now I come to the suggestion about stud cotton. One of the arguments
advanced was that the practise of producing stud cotton, that is of allowing
the cotton plant to bear for two seasons, would improve the overall economics
of the scheme. But the experiment was tried out on only 35 acres, and our
investigations overseas suggest that the stud cotton method is not a practice
that is at all widely favoured. Indeed there is some evidence to the effect
that it could attract additional pests and could weaken the prospects of the
venture over the long term. Although considerable cost savings are
claimed for this practice experience to date has been far too limited for us
to draw greneral conclusions about its effect on production costs, yields and
quality. As to supplementary crops, such as wheat and sorghum, these have
not yet been grown commercially in the region and it is necessary to consider
this project fundamentally on the basis of cotton. As to the cattle industry,
the economic and practical feasibility of feeding cotton seed or grain to cattle
in the region has not been demonstrated.
There are a few other circumstances that a national government has to
bear in mnind. The project would involve a considerable expansion in local
production of cotton for sale on world markets, but, as I have said, cotton is
a product that at present is surplus throughout the worldl and the market
outlook for it is most uncertain. In this situation, and haviiag regard
particularly to the fact that the area concerned is relatively isolated, in a
relatively remote part of Australia we must be all the more careful not
to appear to throw out any assurance to those who would hazard their
capital and energies there that we have beconie completely convinced of the
viability of the scheme.
In this situation there is a need to be clearer on the future possibilities
of cotton before committing ourselves or potential Crd farmers to the larger
Ord project. The success of the project is of great importance not only for the
farmer but also from the point of view of our international trade relations
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including-our relations with many less developed countries to whom cotton
is an important project. In all probability, exports of cotton from Australia
would have to be subsidised. Some $ 17 million has been spent by the
Commonwealth and State Governments in constructing stage one of the
project as a pilot scheme. It is not unreasonable, having regard to the
uncertainty still persisting and the implications of failure, to allow stage
one to fulfil its function as a pilot scheme more completely before
proceeding to the full project.
I think enough has been said to indicate that this matter has been
most carefully considered. This Government, no less than any other
Government and no less than any other political party, wants to do things
which please the people who ask it to do things. But more than popularity,
and more than approval from the government or the people of a State
or from the people of the country as a whole, are involved here. What is
involved is the responsibility we have as the national government to ensure
that development will proceed as affectively as we can contrive and that
we will make the best use of our limited resources of finance, manpower
and the other elements required for an undertaking of this kind.