FOR PRESS 6 AUGUST 1978
ELECTORATE TALK
The strength and health of our great rural industries affects
the lives of every Australian. One of the most important
messages your Government is-. trying to make clear is that
there can be no permanent prosperity in the great cities
of Australia, unless there is prosperity in the countryside.
City and country are interdependent. If farmers are not
producing, are not selling, then they' are not adding to
their farms, not makifig improvements, they are not investing.
This has direct impact on companies in the cities producing
farm machinery, equipment, fencing and even affects the
local general store trade. On the other hand, if factories
and industries are not going well in the cities, the whole
country is adversely affected. That is why the Government
determined from the very first days to seek to work in the
interests of all Australians irrespective of where
they live.
We have given considerable assistance to our great rural
industries. We make no bones about it. For too long, farming
communities bore the brunt of inflation and operated in very
depressed markets with low prices and rising costs.
Slowly, the farmer's lot has, improved. For the first time in
maybe a decade, the men and women on the farms and the great
pastoral areas of Australia are looking ahead with confidence.
They are optimistic about the future.
There are a number of reasons, but the key is the fall in
the inflation rates. No group feels the effects of raging
inflation harder than farmers. Costs take of f, prices
remain low and farmers were caught in the squeeze their
incomes weren't indexed like most of the community.
Inflation is now down to 7.9 percent and it is falling, and
that has given farmers new incentive, and new ability, to
compete again. There is confidence in the great rural
communities for other reasons. Sheep prices are reasonable,
wheat and wool prices are good, and the beef industry is now
moving out of its trough. A bonus for farmers is that the
damaging drought of recent years has broken for most of Australia.
/ 2
-2
One of the real strengths of the Australian rural economy
is that the wool marketing operation is working extraordinarily
well. It has put a floor in the industry and that floor
has been steadily increased by the Government. The stabilisation
scheme has given the industry real backbone and protection
during difficult times.
Overseas, great markets are opening up for our beef industry
the industry that has probably been hardest hit in
recent years. The renewed United States interest in our
beef, for a variety of reasons, including a desire to keep
domestic prices down, is a boon for cattlemen and the cattle
industry generally.
The additional 200 million Oounds weight that the United
States wants imported before Christmas is a first step.
I believe that quota will have to be increased, otherwise
meat prices will rise again to unreasonable levels in the
United States and add to inflation and inflationary expectations.
At the same time, we are vigorously seeking increased access
to the great markets of Japan, the European Community, the
Middle East and other markets. Beyond that, we have been
pressing for a more general liberalisation of international
trade. Our attempt to gain increased access for agricultural goods
has been recognised as fair and reasonable by other world
leaders, and by the world press. President Carter has recently
written to me about international trade negotiations and
in his letter he said: " I will not consider these negotiations
a success unless they lead us towards a significant
liberalisation of world trade in agricultural products".
The British Prime Minister, Mr. Callaghan, and the Foreign
Minister, Dr. Owen, have also recognised the cost to the
European consumer of the European Economic Community's
total protection of agriculture.
We do not intend to desist from trying to get a fair go for
Australia in the world's largest and richest market. I am
sure that no-one in the rural community or people in the
cities want us to stop trying. Farmers know, better than
most, that greater access for our agricultural goods would
bring benefits to all Australians.
All of these factors combined better prices, markets opening
up, increased beef exports, a strong wool marketing scheme,
and drought breaking mean a greatly improved farm outlook
for Australia.
It is estimated that average farm income will increase
substantially this year, although from a low base, and this presents
a better outlook for families in rural Australia than for almost
a decade.
-3
Farmers traditionally have shown they will spend their
incomes on investment and property improvement. That has
impact on confidence, impact on jobs, right across Australia.
Of course, one of the key factors that will help the great
rural industries, and all industry, is a continuing fall
in interest rates. The level of interest rates is important
to farming coaunities. Farmers require considerable cash sums
to buy expens..: ve machinery, equipment, and for stock.
Next week's Bud', et will show we are determined to keep on
the path to lower inflation, because this is the way interest
rates will keep coming down.
The GovernmentL is mindful of the special cash flow problems of
the farming community. That. is one reason the Government
recently asked the Commonwealth Development Bank to give
special attention to the financial needs of purchasers of
rural machinery and equipment. Legislation already passed
enables the Bank to finance the purchase of replacement as
well as additional items of rural plant and equipment.
The new Primary Industry Bank of Australia is close to
opening and beginning operations. The Bank will aim to
commence lending as soon as possible.
I am most optimistic about the prospects for rural Australia.
With inflation falling, interest rates coming down, prices
improving and markets opening up, the signs are good.
A strong rural community will benefit all Australians.
City and country people need no reminding that, above all
else, we are all Australians with great interests in common.
000---