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Thursday, 8 August 1946

Mr LEMMON (Forrest) .- I rise to support the bill, because it gives power to devote to specified purposes money which, but for its passage, would pass into Consolidated Revenue and consequently would be lost to the wool industry of Australia. In the early hours of this morning, the Leader of the Australian Country party (Mr. Fadden) expressed concern as to the present location of the large amount involved. Clause 4 of the bill reveals that it is in the possession of the Wool Realization Commission, a body constituted under the Wool Realization Act 1945 to assume the functions of and deal with the funds held by the Central Wool Committee. If the act be wisely administered, it will do more for the wool industry of Australia than probably has been done by any legislation introduced by any other government. The honorable member for Deakin . (Mr. Hutchinson) definitely stated at the outset of his remarks that this money was hot connected in any way with the wool agreement between Australia and the United Kingdom. Then the honorable member for New England (Mr. Abbott) took an entirely opposite view. He said, that the transactions were affected by the agreement entered into by the United Kingdom and the Commonwealth Government in the. early part of the war. The next speaker was the Leader of the Australian Country party, who did not offer an opinion as to whether or not the transactions were connected with the agreement, but said that the Commonwealth Government was trustee "of the fund.

Mr Fadden - The Prime Minister himself said that the matter was not connected with the agreement.

Mr LEMMON - The honorable member for Deakin (Mr. Hutchinson) said the same thing, but the honorable member for New England declared that the Prime Minister (Mr. Chifley) had said the exact opposite. All this shows that the matter is fairly technical and, as three honorable members on the opposite side entertain three separate opinions, it also indicates that the subject is controversial. The honorable member for New England said that the Prime Minister had declared that although the money in question was derived from the sale of wool tops, and from the export of manufactured goods, the Government of the "United Kingdom had agreed that it should be put to the account of the Commonwealth Government. This, he said, was proof that the Government of the United Kingdom must have had an interest in the money; and as, under the agreement, profits were to be divided equally between the Government of the United Kingdom and the Commonwealth Government, and the Government of the United Kingdom had waived its claim, the money should be given to the Australian wool-growers, according to the promise of the late Prime Minister, Mr. Curtin, which was repeated by the present Prime Minister in a statement made late last night by the Minister for Commerce and Agriculture (Mr. Scully). Let me refer to the agreement itself which states-

The Australian Government acquired and sold to the United Kingdom Government, and the United Kingdom Government purchased from the Australian Government at the price ' decided upon, all stocks of nun] situated in Australia on the 2nd clay of September. 1039, and al! wool produced in Australia after that date, except so much- nf the stocks and of the wool produced as in the opinion of the Australian Government was required from time to time liv top-makers and manufacturers in the Commonwealth.

Therefore, wool which was treated and processed here was not to be included.

Mr Abbott - But the wool was processed in Australia for export.

Mr LEMMON - That is the point .1 am trying to make. The' wool from which this profit was made was export wool, but. not export wool within the terms of the agreement. The wool tops exported and the blankets sold to India, did not come under the agreement. However, because the wool was going out of Australia, the Government of the Commonwealth 'believed that it ought to consult the other party to the agreement, the Government of the United Kingdom, which declared that the wool did not, in fact, come within the terms of the agreement. In effect, the Government of the United Kingdom declined ownership or interest in the wool, and that is why it was excluded from the agreement. Therefore, there wai excluded from the scheme money received from flat-rate adjustments on skins, export of tops, and export of manufactured goods, and the fund now under discus-, sion was established from those three sources. The honorable member for Deakin argued that the money should be distributed among the" growers. He sai'd that bad the fell-mongers known that they would be. able to get the appraised price., plus a fiat-rate adjustment- in spite of the fact that the Menzies Government had declared that they would receive only the appraised price - they would in fact have paid more for the sheep skins. Assuming that to be true, then the money should be divided, not only among those who sold the sheep skins, but also among those who sold sheep which ' were eventually slaughtered, because from those slaughtered sheep came the. skins in question. I maintain that, in the first place., there is no legal ground for the claim of honorable members opposite. It would be morally wrong to divide money received from one section of the trade amongst those engaged in another, section. It might be argued that some of the money should be paid to the fell-mongers. Because of the fixing, of profits and margins, the fell-mongers were denied the right to trade freely. The same argument, could be applied to the distribution of profits under the other two categories which I listed. It has been said that the fund was accumulated from profits derived from the sale of wool. That is true, but the profits were made after 'the , growers had received the full flat-rate . price guaranteed to them under the agreement between the Commonweath Government and the Government of the United Kingdom. The wool-growers receive a flat-rate price for all wools which come within the wool purchase agreement with the United Kingdom. This fund has been built up as the result of the war-time economic policy of the Government, and its proceeds would normally be paid into Consolidated Revenue. Certain profits were derived by the Ships Chartering Committee during the war. Do honorable members opposite suggest that those profits should be paid to the ship-owners? They were rightly paid into Consolidated Revenue. The proceeds of the wool industry fund will be wisely expended by the Government to the great benefit of the wool-growers of Australia. Under the Wool Use Promotion Act a fund was established by the Government for research in tho production and use of wool. Prior to the passing of that legislation a levy of 6d. a bale had been imposed but the amount raised in that way proved entirely inadequate for the purpose. The honorable member for Deakin complained that the fund established as the result of that levy was insufficient to achieve much in the promotion of what is our major primary industry. He drew attention to the fact that one soap company in Australia had expended £130,000 in advertising in one. year alone, and 'that the advertising account of one furniture company in Australia amounted to .100,000 per annum. I point out that in 1937 the British Rayon Company expended £2,000,000 in advertising and research, and that in the United States of .America over £6,000,000 a year was expended in pre-war years on research and publicity in respect of the production and use of synthetic fibres. T cite these figures to demonstrate the necessity for research in the production of wool and the promotion of the use of wool in order that this great Australian industry, which is worth approximately £70,000,000 per annum to the nation, may successfully meet the challenge of the manufacturers of wool . substitutes. On the 20th October, 1944. Mr. Hitchins, president of the. Western Australian Wool Producers Federation, said -

We have tin* greatest quantity nf host quality material designed by nature to clothe mankind. We have excelled in its production. We have failed lamentably in its distribution. We have reached a point where artificial products are being produced in volume, and weight, slightly in excess of the total world production of wool. It is going into consumption while wool surplus stocks are mounting up. It is cheap, while wool fabrics are relatively dear. Wool fabrics are always relatively dear, no mutter how cheap the ra w wool.

The assertion that artificial fibre publicity is merely competition within the industry, is as false as it is 'dangerous. Fortunately, few people would be so ill-informed as to l;elim-e this. The propaganda is directed definitely, specifically and directly against wool. It ia an industry almost entirely controlled by a few industrial enterprises, with definite international alliances. Its capital resources are as boundless as ite future ambitions. It employs to the full, and will continue to employ, all the scientific knowledge which brains can produce and money can buy. Its policy is further expansion, and in order to maintain even ite present output, it - must retain all present markets and find new- markets . . . Its sales promotion is skilful, subtle, thoroughly efficient, entirely unscrupulous, and openly aimed at wool. Their products are claimed to be "like wool", "equal to wool" and even " better than wool ".

Positive evidence of all this comes to me regularly from the United States nf America, where there is an organization created by the wool men that has demonstrated their ability to fight, the battle for wool equally efficiently, and with marked success, but they do nut underrate their enemy. They know that the synthetic fibre interests have allocated between 50.000.000 dollars and fiO.000,000 dollars for publicity and sale promotion, in the United States of America alone, for this current year. Against such an organization the money expended and the efforts made on behalf of wool may be likened to a force armed with bows and arrows against a modern army.

A month earlier, in pointing out the inadequacy of the funds provided for wool publicity and research, Mr. G. Herbert, a prominent wool producer at Nungarin, said - -

Our lines of attack are still further improvement of our commodity on the one hand and adequate advertising on the other.

Synthetic substitutes for wool have come to stay. There is room in the world for them, but those financially behind them are hungry.

Wool will have to fight for its place in the world's markets and the total amount of '4*. per bale is probably all too little to pit against the purse of the makers of competitive substitutes.

The inherent quality nf our product is not enough. We must employ science to enable us to improve it. in its raw and manufactured state, and again science to market it. render both these headings there is unlimited' scope.

We must avail ourselves of every advance science can make or lose our position in the world of to-morrow.

I quote these statements to show that even at that time there was great concern among wool-growers as to the future of their industry. Uncertainty as to the future still exists and will increase as long as the huge stock-pile of wool remains unsold. We know the economic effects of the recent inflationary trend in the United States of America, and we have an understandable fear that it will be followed by a period of deflation and depression. The dangers of these trends are very real and may jeopardize the successful continuance of the wool industry. The bill- provides scope" for the effective use of the money in the fund, and I hope that most of it will be used for publicity, because I believe that a high pressure publicity campaign would make possible disposal of our wool pile at a profit, which, according to promises, would ultimately be distributed to the growers who supplied the wool during the years of low prices. I consider that the allocation of the money in the fund in the manner provided for will be of great benefit not only to the Australian wool industry, hut also, of course, to the Aus-' tralian economy. This legislation is in harmony with all other acts of policy in relation to the wool industry put into operation by the Government. In 1941 it negotiated with the Government of the United Kingdom an increase of about 15 per cent, in the price paid by that Government for the Australian wool clip under the wool agreement. That, in normal years, meant £9,000,000 more a year to the Australian growers. It followed that by the establishment of the Australian Wool Realization Commission in 1945 and it joined with the Governments of Great Britain, South Africa and New Zealand in the setting up of a joint authority for the disposal of their wool clips. It also recognized the rights of the small wool-growers' organizations by giving them equal representation on the Australian Wool Realization Commission. Under the former agreement 1-Hd. per lb. was paid by the United Kingdom for Australian wool. Under the new arrangement the guaranteed return to the Australian growers will be 18d. per lb., less the contributory charge of 0.91d. per lb., making the minimum return 17|d. per lb. So our minimum to-day is -lj-d. per lb. above the former maximum. Moreover, whilst we have levied only a 5 per cent, contribution. New Zealand and South Australia have levied 7^ per cent., and, although I consider that probably next year there will be room for a reduction of that 5 per cent, levy, the fact is that our levy is 50 per cent, below that of the other two countries. Moreover, we have waived a charge of 2s. a bale upon growers, which will be taken out of the fund created by the 5 per cent. levy. The money covered by this bill was made by the Government's application of sound policy and it is to be applied for the benefit of Australia and its wool industry.

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