> A US
PRIME MINISTER
FOR MEDIA SUNDAY SEPTEMBER 5 1982
ELECTORATE TALK
I don't think any of us now need to be told how serious
the drought is, particularly in the Eastern States. It is
an enormously difficult situation for farmers. Both cattle
and sheep prices are down considerably on last year. Unless
there is substantial rain over the next few weeks, Australia
will face one of the worst rural disasters that it has ever
experienced. Against this background, the Commonwealth has made a number of
substantial decisions. Two of these decisions which are vastly
important will be totally funded by the Commonwealth Government
and other decisions will involve the traditional co-operative
arrangements between the Commonwealth and the States.
The Commonwealth will fund totally a subsidy for farmers on
interest payments exceeding 12% on debts. That means a farmer
will pay the first 12% on his overdraft and if he is in a
drought declared area the Commonwealth will pick up the balance.
However, if a farmer has readily available liquid assets, he
would be expected to use those to help reduce his level of
debt before he would be eligible for interest subsidy.
The Commonwealth will also provide a 50% subsidy on purchases
of fodder for livestock. This decision is very important
because in the period ahead what we have to do is make
sure that basic stock are preserved. Yarding and sales have
increased very greatly in recent weeks but if Australia's
breeding numbers fall significantly, then permanent damage
will be done to the grazing and pastoral industries, and it
would take much longer to recover from the damage of the
drought when finally the drought breaks.
In addition to these two Commonwealth initiatives, the
Commonwealth is to propose significant changes to the core
measures operating under the natural disaster relief arrangements
when Commonwealth and State Agricultural Ministers meet next
week. The Commonwealth funds these core measures on the
basis of $ 3 from the Commonwealth to $ 1 from the States once
the base amount has been provided by the States.
When first implemented, therefore, it should provide no
particular burden on the States. The core measures include
carry-on loans, freight concessions, stock slaughter and
stock disposal subsidies and water subsidies. What we are
proposing is that the core measures not only be expanded,
but that there is a more co-ordinated approach between the
States. With our own intiatives there is no reason why the
States should not accept these additional proposals. / 2
-2
Our proposals include support for local governments in sinking
bores for water supplies for farmers. That is particularly
useful in areas where the farmers run out of water and they
cannot put down a normal farm bore because the cost might be
too great. We hope that the States will accept the cost of
such bores and the manning of such bores as part of the normal
core measures for the purpose of this drought.
We will also be suggesting to the States that the limits on
carry-on loans be raised to $ 40,000 or doubled, whichever
is the greater. In some States it is already up to that level.
But in Victoria, the carry-on loans are only $ 15,000, which
of course is not going to be all that much assistance to farmers
in great and serious difficulty at the present time.
The Commonwealth will also require the money that it makes
available to the States for drought loans be on-lent by
the States at no more than 4% interest. We have been
providing these funds to the States in the past at no
interest and some of them have been charging 5% or There
are proposals to take this up to even 12%. There is no reason
why the States should make a profit on the funds that are
on-lent for these particular purposes.
We will also be suggesting that States should extend the
carry-on loans arrangements for farmers to small. businesses
in rural communities that are affected by drought. This is
already done in Queensland and we would like all States to
follow Queensland's example.
We will be proposing that the subsidy on water cartage be
set at 100% and we will be proposing also to the States that
the freight subsidy on the transport of fodder and livestock
be set at 75% which is the same as the Queensland level at
the moment. In some of the States it is now 60%. In other
States it is
We will be proposing that these six measures should form
part of the normal co-operative arrangements between the
Commonwealth and the. States. The assistance that all these
measures will give the rural sector should be complemented
by recent announcements on US beef imports and on live sheep
exports, both of which will be particularly welcome at this
time of hardship for the farmers.
Sheep farmers will welcome the fact that on 11 September a
ship will berth at Portland to load live sheep for export.
The ACTU and the AMEIU at the Federal and State levels have
agreed to the lifting of bans and restrictions on the export
of live sheep. Beef producers will be heartened by the
assurances given by the Americans that the US will meet its
full commitment to Australia and import from Australia
676.9 million pounds in 1982. There had been recent pressure
in the US from the Cattlemen's Union to restrict beef imports.
As we expected, the US government is maintaining its purchases
under our joint agreement. ./ 3
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By pursuing Australia's interests the Government avoided
the situation which occurred under Labor in 1974, when our
beef exports to the US were chopped back considerably,
and we lost all access to the Japanese market.
I am sure that the resumption of live sheep exports from
Portland and the assurances given to our beef producers
by the Americans, as well as the drought relief measures,
will give farmers greater security at this difficult time.