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Thursday, 20 June 1996
Page: 1911

Senator BOB COLLINS(11.56 a.m.) —The opposition supports the Primary Industries and Energy Legislation Amendment Bill. Before I make a number of comments about the legislation or the principal issue, which is of course the establishment of Wool International Holdings, I want to correct in the Senate, in the same way it was corrected in the committee, as the Hansard record will show, the issue of the alleged non-appearance of Wool International. Senator Woodley indeed raised this in the committee, and the matter was corrected there. The inference that this organisation, for some surreptitious reason, did not have the courage to appear et cetera cannot be allowed to simply hang in here. That is absolute nonsense. To the best of my knowledge, and the chair of the committee, Senator Crane, can correct me if I am wrong—

Senator Calvert —He's right behind you!

Senator BOB COLLINS —Senator Crane is always behind me, Senator. He was right behind me as well when I was the Minister for Primary Industries and Energy, weren't you, Senator Crane? It is important to correct this. To the best of my knowledge, and Senator Crane can correct me if I am wrong, I attended every meeting that the committee held, both public and private. As every one of us knows, it is absolutely open to and it is simply routine for—I do not know of any occasion, frankly, when this has been blocked; that would happen on only rare occasions—any member of the committee to simply raise at a committee meeting that they want a witness to appear before the committee. In my experience in all the years I have been here, it would be in rare circumstances that this would be objected to—unless a member wants to call 50.

Unless there was a meeting of the committee that I did not attend—and I do not know of one—Senator Woodley did not make that request. I will go on the record as saying now that, if any senator on that committee had said they would like Wool International to appear in addition to presenting their written submission, I would have said there would be absolutely no problem with that.

I will go one step further than that. On the first night of the hearings certainly one but maybe two officers of Wool International were present in the hearing room. A number of technical questions were being asked by Senator McGauran in respect of Wool International, and for only that reason did I turn to the committee secretary and ask whether anyone from Wool International was there who could address those questions if they were not addressed—and I might add they were subsequently addressed by other witnesses. The secretary said, `Yes, they are over there—the bloke wearing the green tie,'—whoever that was—`They are perfectly happy to appear. They are here for that purpose if anyone wants to call them,' and asked whether I wanted to. I said, `No, I'm happy with their written submission. I don't need to call them.'

I just want to correct that. I am disappointed that Senator Woodley has flatly stated that in here because it was corrected in the committee. Wool International did not fail to appear. They provided a written submission. They attended the committee meetings. They were available and advised the committee they were available to answer any questions should any members of the committee wish to do so. But to the best of my knowledge, no senator at any private meetings of the committee that I attended did.

There are a couple of other things that Senator Woodley mentioned that I want to pick up. I do not disagree with him at all, as he knows, about the crisis that the wool industry and, indeed, the beef industry are facing at the moment. There are a lot of people in primary industry at the moment still doing it very hard in this country. This is posing major, long-term problems for the country and for the government in respect of not only those industries but the effect this is having on rural Australia generally, on small rural towns and so on.

This is one of the reasons why we established a special focus to look at the social impacts of these problems as well as the immediate impacts on the farm, particularly the problems it is imposing on regional towns. There are a lot of problems—a substantial decline in the price for beef, a substantial decline in the price for wool. I have to tell you, and it is the truth, that I wish I could actually believe the problem with the wool price at the moment—and that is causing all of the problems Senator Woodley has referred to—was the fault of Wool International.

Senator Calvert —Rubbish.

Senator BOB COLLINS —I wish it were true though, senator. Do you understand what I am saying? If I honestly believed that Wool International was the problem, then it is fixable. It is easy to fix. But it is not the problem. I wish it were so simple. Senator Woodley canvassed accurately the substantial problems out there—years of drought, a collapse of the price. We all knew there was going to be a significant collapse of the price when our single biggest customer for the commodity, China, actually withdrew from the market.

We also know that in countries such as Italy, because of its own internal domestic economic problems, the market is soft internationally for wool at the moment. I wish that were the fault of Wool International and the stockpile because that would be in our hands to fix. Unfortunately, Senator Woodley, it is not the problem. However, there is one point that I strongly disagree with; that is, the question of retaining the stockpile as it is—as an asset.

Senator Calvert —No way.

Senator BOB COLLINS —Thank you, Senator Calvert. As I said in the committee, and I want to say it here again, people have got awfully short memories in this business. I tell you what: in respect of the stockpile they have to be very short memories, indeed. You do not have to go back very far. As I said in the committee, only a very short time ago people were seriously suggesting—and I am talking about senior people in government—that the stockpile should have been burnt. As I said at the time, that was one of the most positive and, I thought, attractive options available.

I still remember the delightful interview when one of the senior leaders of the Country Women's Associated suggested that her members should knit the stockpile. It was suggested in a most positive way but it was a far more sensible suggestion than some of the desperate suggestions that were being made at the time—not 50 years ago, not 20 years ago, not even 10 years ago. It was a very short time ago, indeed. All has been forgotten.

When the price was okay and it had climbed past 600c in terms of the eastern indicator there were not any complaints about Wool International. The cold hard facts are—boy, I can relate to it and fully understand it—the major reason for the dismay and the lack of morale is the price for the product, which in many cases is below the cost of production. I say again: I wish that was the fault of Wool International because then we could all fix it right in here.

Senator Woodley and the Democrats are always concerned about trying to work out where the numbers are in terms of what position you take on an issue—and that is a very valid position to take. Senator Woodley said that he got phone calls from some growers saying that this was a good idea and phone calls from some growers saying that this was a bad idea. It is very difficult to work out where the majority lies. That is a common problem. At the end of the day, the only solution is to use your own good judgment rightly or wrongly as to what the correct position is.

One of the problems as far as I am concerned with the stockpile and one of the reasons why, as difficult an option as it is, not to introduce trigger prices or vary the fixed schedule is, I believe, the overhang on the market. That is caused by the stockpile being there in the quantities that it still is.

I go on the record here and now as saying that, despite the concerns that have been raised, despite what I thought was a positive response from Wool International to those concerns in terms of looking at ways of around the edges of varying their activities, I believe they have done a commendable job in significantly assisting what was a catastrophic problem for the industry only a few short years ago in getting that stockpile down to the point it is now. The sooner it gets back to manageable levels, which it will by June next year, in my opinion the better for the long-term future of this industry.

Senator Woodley, I do respect the validity of the arguments on both sides. But one of the potential problems—and it was raised by Senator Sandy Macdonald on the committee, and I agreed with him 100 per cent—in varying that schedule, apart from the fact that it was legislated for, is that I do not think introducing that uncertainty back into the equation is going to assist the very experiment that we are trying to get under way here now; that is, establishing a futures market.

I do want to remind people again of how that proposal was put together after the 1993 examination of the problem and Garnaut's investigation of it. That is why it is legislated for. It was put together on the basis that fundamentally—and people have forgotten this—the stockpile was not worth what was owed. For that reason, a crucial part of the solution was that the people of Australia, the taxpayers of Australia, represented as they must be from time to time by the government, would underwrite that multimillion dollar debt and, of course, continue to underwrite it.

I make no bones about saying this. I said it in the committee. I certainly would have wanted to have done this in government. I think it is crucial to the wool industry that that underwriting continue until the stockpile is disposed of, at whatever time that might be post-1997. Part of that arrangement was that the people of Australia would underwrite this huge debt, but on the basis that there would be an agreed arrangement for disposing of the stockpile.

Senator Woodley, with the greatest respect, you responded to that by saying, `How do you know what every taxpayer in Australia thought about it?' You cannot know. The best we can manage in this country is a form of democracy, which I actually think is as good as anything else around the world, where from time to time you have to assume as a government that because you have been elected you can take those decisions. I think anyone and everyone in government, indeed even in opposition, and particularly ministers—I was—has to be conscious every minute of every working day of their working lives that the money they are dealing with is not theirs but simply there on trust from the people who actually provide it. That is the reason I made that point.

I believe—I do not think it should be overlooked—that it would be, Senator Woodley, even though I know you disagree, a breach of that agreement which is still underwriting that stockpile to vary the disposal of the stockpile in the way that it was intended, to get the pile down to manageable levels by July next year.

I restate something here that I also said in the committee. There is another industry round table in August. I also believe, whilst strongly asserting that there should be no change in the disposal regime of the stockpile, that it would be to the great benefit of the wool industry if the government could indicate, as a result of those round tables in August, what the post-July 1997 regime for the stockpile is likely to be.

Senator Crane —Immediately.

Senator BOB COLLINS —Senator Crane, I am glad you agreed with that. I know that Senator Sandy Macdonald does as well. The sooner that certainty for the future is injected into the marketplace, the better for the wool industry.

I want to conclude on one point again in terms of what Senator Woodley said. Senator Woodley asserted that this proposal has been portrayed by government as a `panacea' for the wool industry. I never said any such foolish thing and neither do I believe that the current government would be saying it at all. No-one sees this as being a panacea.

I do get a bit irritated with this but it is a human trend, I suppose. It does not matter whether you are talking about the wool stockpile or about massive problems like Aboriginal health, everybody is always looking for a magic bullet—an act of parliament, an administrative measure—that will instantly fix everything. It just does not happen in the real world. I am not suggesting that this is a panacea.

What I am suggesting, and fervently hope, that it is is a useful additional option for marketing wool for growers in Australia, in the same way that it has become an invaluable option for cotton growers in Australia to in fact sell their fibre. I have to say that—the comparison has often been made, and I guess as a former grower myself, about 100 years ago, I am very conscious of it—that is an industry that has been remarkably successful in its domination of the world market in terms of the fibre and its development of things like futures. The last time I had a look, I think 80 per cent of the entire product was being sold on that basis, and the spot price in the cotton industry has become almost irrelevant.

I fervently hope this experiment is a success. I hope it will result in a viable futures market for the wool industry being developed. If that is the end result, it will be a very positive move—not a panacea—in assisting this industry, as we all hope, to have a viable future.