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1, A USTRA IA
PRIME MINISTER
FOR PRESS 20 NOVEMBER 1978
AUSTRALIAN WOOLGROWERS' AND GRAZIERS' COUNCIL
CANBE RRA
This is the first time, and as you know probably the last time,
that I will be addressing an A. W. G. C. convention. The Council
can look back with pride on the many achievements it and its
predecessors have made since the formation of the Pastoralists
Federal Council in 1890.
Particularly we can recall the successful campaign in the
1930' s to win the support of the industry and the Government
for a wool tax to finance wool promotion and research a move
which led to the formation of the Wool Board in 1936.
Now the Council is in the forefront of the negotiations to
establish a national farmers federation. I welcome the
proposed establishment of the federation, and I congratulate
this council on its determination to achieve a strong, united
voice for Australian primary producers.
The Government is committed to consulting closely' with
representative organisations on rural policy. Our task is made
far easier, and the consultations far more effective, if the
rural community speaks with one voice.
One issue on which all sections of the rural community have
long spoken with absolute unanimity is the need to reduce
inflation and keep rises in farm costs to a minimum.
We recognise that the continuing viability of our export industries
depends on our success in controlling inflation. The farmer
is not generally protected by indexed prices for his products.
His ability to make profits depends on his costs being low
enough to enable him to sell his produce at competitive prices.
The rural recession which we are only now pulling through was
in large part due to a crippling increase in farm costs. In
1974/ 75, these rose a devastating 30 per cent in just 12 months,
at the very time when prices for farm products were actually
falling. The result was that real farm incomes almost halved
in that year. / 12
-2
The farming community was in dire straits yet Mr Whitlam
had told them in February 1974: " You've never had it so good".
Today better prices, a far lower rise in farm costs and good
seasonal conditions are reflected in renewed optimism among
farmers. The combination of these three factors will lead to
an expected rise in over 30 per cent in average farm incomes
in real terms this year.
This expected increase is significantly helped by the good
trends we are seeing in beef prices, which are far better now
than for some years. This is partly as a result of the efforts
made to get fairer and more secure access to overseas markets.
Sheep and wool prices are also reasonably good, and we have this
year moved up the wool reserve price by a further five per cent.
The wheat industry is experiencing a boom year with a huge
crop and good prices.
The improved outlook for farmers is also good news for country
towns and all those industries supplying equipment and services
for our rural community. Farmers are now able to re-equip and
undertake long-deferred investment in their properties and
this will mean more jobs for those whose livelihood depends on
supplying the needs of rural producers.
We should never underestimate the close interdependence that
exists between country and city. A depressed and impoverished
rural sector depresses the entire economy, and conversely, an
optimistic and strengthening outlook for farmers can provide a
real boost to all sectors of our economy.
Prospects for farmers will further improve as inflation keeps
on falling, for we are far from satisfied that it is low enough
yet. We are determined not to let up in the fight against
inflation. Our aim is to get Australia's inflation rate well
below that of our trading partners and competitors, and well
below that of other countries which compete with us for investment
capital. In this respect, I note that fundamental principles of the
economic policies we have been pursuing are increasingly being
embraced by many countries overseas, including such Socialist
governments as the British Labour Government. They know, as
we do, that is is essential to beat inflation, and that high
rates of unemployment, which are a matter of great concern to
us all, will never be eradicated unless inflation is cut right
back. Our success to date in reducing inflation has also enabled
wide-ranging cuts in interest rates. Interest rates for home
loans were reduced last February. Interest rates for small
overdrafts, personal loans and short term loans were cut by the
trading banks three weeks ago, and a further cut in housing
loan interest rates was announced last Friday. / 3
-3-
Falling interest rates provide a substantial boost to industry,
to home buyers and to small businessmen. The cut of one half
a per cent in the rates set by the new Primary Industry Bank
will be of direct benefit to many rural producers.
Because of our commitment to the continuing strength and
viability of our rural industries, the Government has assisted
farmers in a variety of ways to get through the recent rural
recession. This has been a high Government priority, even
during a period of severe budgetary restraint.
The special assistance we have made available to the beef
industry and the new and comprehensive Rural Adjustment Scheme
we introduced have helped a significant number of farmers through
this most difficult period. Total payments under the Beef
Incentive Payments Scheme alone have exceeded $ 100 million.
The beef industry was particularly hard hit by the cost-price
squeeze, and our support at a critical period enabled many
cattlemen to remain in the industry and to take advantage of
the higher prices now being experienced.
We have also given high priority to such measures as the Fuel
Price Equalisation Scheme, re-introduction of the Phosphate
Bounty, increased support for rural roads, and the abolition
of Estate and Gift Duty.
Individual rural industries have received strong support too.
Immediately upon coming to office, the first advance wheat payment
was raised; the wool reserve price was increased; approval was
given to the Australian Wool Corporation to borrow overseas and
reduce its interest charges; new underwriting and marketing
arrangements for dairying were introduced; and further help
was given to the fruit industry.
We have also introduced various measures of tax relief: Income
Equalisation Deposits; a fairer system of tax averaging; Stock
Valuation Adjustment which the Government extended to include
livestock; the Investment Allowance; and tax indexation.
In addition, even taking into account the temporary tax increase
for this financial year, tax rates have been cut substantially.
Now that farmers' incomes are improving, these measures which
prevent sudden tax increases through inflation or fluctuating
incomes will be of great assistance to the rural community.
I would expect Income Equalisation Deposits, which currently
stand at about $ 65 million, to become much more popular with
farmers as their incomes increase. / 4
1.
In our endeavour to minimise increases in farm costs, the
Government is giving considerable support to industry
research programmes. Recently the Minister for Primary
Industry announced a grant of $ 12.5 million for sheep and
wool research this financial year.
In the meat industry, with its long and involved market
chain, there would appear to be scope for significant
cost savings.
We hope that the work now under way with our support on
meat classification will achieve an acceptable system,
leading to a significant breakthrough in meat marketing.
The release of the recent IAC Report on the Wheat Industry
has, I know, sparked an intense debate on marketing reform
in the industry. The Government has decided not to make
a decision on this all important matter until growers have
had ample opportunity to debate the matter fully. You may
be sure that when the Government finally takes a decision in
consultation with the States, your views will be given every
consideration. The most efficient production and marketing systems are of
little effect, however, unless the products can be shipped
out of the country. We are determined to take every step to
make sure that the deplorable interference with some rural
exports which we have witnessed in the past 12 months is
not repeated. Because we found during the live sheep export
disputes that the relevant legislation had some deficiencies,
we are moving to overcome them. on 26 October the Government
introduced into Parliament new legislation to amend Section 45 ( D)
of the Trade Practices Act, to provide a more effective legal
remedy against any recurrence of such disruption.
As a trading nation we are dependent on our sea and air links.
These links must remain open so that we can export and import
at times most favourable to our seasons, to our economy and
to our balance of trade. Any disruption of overseas trade
adds to the cost burdens borne by all of us. It strikes at
the heart of the prosperity of our economy.
I believe that the new legislation will be widely endorsed
as a positive and effective measure to enable individuals
and governments to deal quickly and decisively with crippling
boycotts.
A major objective of the Government during our term of office
has been to help exporters, particularly agricultural exporters,
to secure fair and adequate market access overseas for
their produce. We have pressed our case with far greater
vigour than in the past. We have made it clear that we are
not prepared indefinitely to tolerate restrictions which
completely close markets to our products unfairly
discriminating against Australian farmers who in many cases
are some of the lowest cost producers in the world.
The aim of our bilateral negotiations with the EEC has
been to seek changes in the Community's Common Agricultural
Policy which are quite marginal in their effect on the
Community yet are quite essential for our primary producers.
After two years of concerted effort, our arguments are
beginning to have their effect.
I have been much encouraged by the devastating criticism made
by senior members of the British Government against aspects
of the Common Agricultural Policy during the past week.
Last Monday, Mr. Callaghan called for three changes in
the a more liberal attitude to agricultural imports;
more controlled use of subsidies for exports of food
surpluses; and reconsideration of the Community's policy
of annually increasing price supports for foodstuffs which
are already over-produced.
I note that criticisms of this kind are also increasingly
being reflected in responsible European journals. The support
we are now getting from many quarters gives me real hope that
we will ultimately achieve a mutually satisfactory resolution
of this important issue.
Concurrently with our negotiations with the EEC we have been
actively participating in the Multilateral Trade Negotiations
in Geneva. Whether these negotiations can achieve a satisfactory
solution still remains to be seen but from the outset we have
made one principle absolutely clear to all parties involved
in those negotiations. In our view, the negotiations cannot
be completed or regarded as a success unless a new deal for
agricultural commodities forms an integral part of the
final agreement.
Our prime aims in these negotiations are to secure better market
access and to improve the trading rules, in particular
restraining the use of subsidies on exports. At the same time,
we are seeking to develop appropriate commodity arrangements which
will provide greater stability in trade.
In a genuine attempt to assist in securing a satisfactory
conclusion to the negotiations, Australia is offering a phased
reduction over eight years in industrial tariffs but this offer
is conditional on Australia receiving fully reciprocal offers
from other nations, particularly a fair deal for agriculture.
Leaders at the Bonn Summit in July requested their negotiators
to come up with an agreed package by 15 December less
than a month from now. Yet significant differences still persist.
We can only hope that, during the next few weeks, the major
trading blocs will demonstrate a real commitment to achieving
a fairer and more rational trading system. This will require
further concessions to be made. / 6
6
We are all watching their actions over the next few
weeks, trusting that the many assurances they have given
will be reflected in the final outcome of the
negotiations.
Mr. President, the rural industry and the Australian
economy have both been through most difficult times.
Just as the prospects for farmers are now looking better
for the first time in some years, so the prospects for
economic recovery for Australia are improving.
What is required for full economic recovery to be achieved
is the wholehearted commitment of all Australians, by
working together, to put this country back on its feet
so that we can once again achieve the growth, development and
prosperity desired by all Australians. In the decade
ahead, there is every reason for confidence that we can
achieve this goal. With confidence in our ability, with
faith in Australia's future, we can together make this
country the great country we all know it can be.
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