,1j)> AU8TRL IA.-
PRIME MINISTER
FOR MEDIA 20 AUGUST 1985
The Prime Minister and the Minister for Primary Industry,
Mr John Kerin, tonignt gave details of the Government's
response to requests from primary producers organisations to
reduce the impact of farm costs on their income.
Mr Hawke and Mr Kerin noted that the Government's total
response to the cost-price squeeze oeing faced by farmers
involved initiatives on both costs and prices.
In tne uroader context, the Government's overall budget
strategy and sound economic management would contribute
significantly in itself to lowering farmers' costs.
As well, the general thrust of primary industry policy would
continue* to pursue efficiency and reduced costs to industry.
However, the Government had recognised that there is a need for
further measures aimed at reducing costs and this gave rise to
the Prime Minister's commitment in this regard to farmers on
1 July 1985.
In keeping with the Prime Minister's commitment the Government
has decided to:
reuate in full the diesel fuel excise for farming, fishing
and forestry uses which are currently eligible for rebate
as a result primary producers will be rebated the full
10.007 cents/ litre excise, rather than only 7.619
cents/ litre, as at present
which means that a farmer using 15,000 litres of fuel per
year will save about $ 350 per year
to remove remaining duties on imported grain harvesters
and provide local producers with an equivalent level of
assistance by way of a bounty
the present tariff of 15% adds significantly to the cost
of all out the very large imported machines for whico
concessional entry is allowed.
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This package builds on recent decisions which benefit the rural
sector. In particular:
The provision of $ 9m over three years to reduce effort and
improve competitiveness in the fishing industry
A range of new policies falling in the Primary Industry
portfolio announced tonight including the provision of $ lm
for the first stage of a meat and Livestock Industry
MarKeting Innovation Assistance Package.
The inclusion of a spot price component in the formula
calculating the Import Parity Price of oil, which has led
to a reduction in tne price of fuel
And, in recognition of the widespread concern in the rural
sector, the decision not to proceed with a 12.5%
consumption tax on fuel.
The measures outlined in the oudget will be introduced as soon
as legislative and administrative considerations permit. The
full rebate of diesel excise will be payaole from 1 November
1985 and the change in the form of assistance for grain
uarvester production will take effect from 1 January 1986. It
is estimated that extending the rebate on diesel will cost
doout $ 35m in a full year and that the actions on grain
harvesters will involve an annual cost of about $ 14m, including
bounty outlays and tariff revenue forgone.
Details of the new bounty on locally produced grain harvesters
will be announced by the Minister for Industy, Technology and
Commerce following reciept of advice from the Industries
Assistance Commission.
The Government has accepted the strength of rural concerns
aoout the costs incurred as a result-of present assistance
arrangements for the production of agricultural chemicals.
The Government will take steps to ensure that assistance
arrangements do not impose undue costs on users. However, it
uelieVes thiat any action should await the receipt of the IAC
Report on the chemicals and plastics industries which will
provide an accurate picture of the costs and benefits of
current assistatice arrangements.
The Government believes that the package announced tonight
represents the greatest possible benefit tnat could be provided
to primary producers without imposing undue costs on the rest
ojf tthe community.
In the climate of budgetary restraint, the full farm cost
package, which will have a full year cost of about
represents a major effort by the Government to meet the highest
priority needs identified by rural interests themselves.
It needs to be remembered, nlowever that primary production
obtains considerable benefits from the Government's efforts to
contain overall outlays, and to nold down the effects on
uomestic wages and prices of the depreciation of the Australian
dollar. While these measures, together with the increases in returns
brought about by tue depreciation of the currency, will ease
cost/ price pressures, the Government recognises that they will
not of themselves restore profitability to all rural
producers. Primary producers will need to continue to adjust
to the prices dictated by the marketplace. No Government can,
or should, try to prevent adjustment, even though that might
mean tnat some people will need to alter their operations. The
Government will, of course, act to reduce the costs of that
adjustment through the Rural Adjustment Scueme and relevant
social security programs.
In reaching its decision the Government has given careful
consideration to a range of proposals put forward by primary
producers, including proposals from the National Farmers
Federation.