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Monday, 25 February 1985
Page: 119

Senator WATSON(3.34) —I move:

That the Senate take note of the paper.

In 1983-84 the coarser wools bore the brunt of the appreciation of the Australian dollar but now these wools have benefited from the recent slump in the Australian currency. It has given a renewed lift to them, making them competitive with sources in New Zealand, South Africa and South America.

I believe that the Australian Wool Corporation should look very closely at situations in which, a reserve price having been set for the season, there are Australian currency appreciations. One of the failures to adjust prices in these situations was partly responsible for the Corporation's high acquisitions. On the other hand, its decision to maintain store stocks overseas is desirable in offering a facility for quick delivery, given many of the industrial problems in Australia and particularly among maritime unions.

Wool production was up 4 per cent last year despite the drought, and production is expected to rise a further 6 per cent in 1984-85. Unfortunately, apart from the United States of America, wool textile activity in 1983 remained rather weak and the lift in the Chinese purchases in the previous year unfortunately was not sustained. The importance of the industry I think is illustrated by the fact that there are 81,000 growers in Australia and the Wool Corporation had a turnover of nearly $124m. Australian wool processors use about 23 per cent of the Australian clip and retain about 3 per cent for domestic consumption.

An attitude is prevalent in some sections of the AWC that the Wool Corporation should control the marketing of wool through total acquisition of the clip. Such a concept might be acceptable to those with a socialist doctrine but it denies the skills and excellent commercial responses of a highly trained private sector operating in the wool industry. Some of the actions of the authorities are quite bewildering. I have referred on previous occasions to the lack of customer acceptance of pre-sale dumping of wool and the entry of the Corporation into otherwise normal wool broking activities with the private sector. At times I believe the Corporation is overly defensive and over-reactive at some of its senior levels. On the other hand, it does have an abundance of ambitious people with a sense of power. It has excellent skills in most areas which are, by inclination, more responsive than planning orientated.

As a result of pressure from the growers and criticism by users, over the last two years the Australian Wool Corporation has tried to reduce costs and improve the quality of the clip. This is recognised as a mammoth task and has been encouraged by all sectors of the industry. Because of lack of planning, ability and commercial expertise within the AWC the dominant response mechanism sought to appeal to growers during a weak market by hastening the implementation of two alleged cost-benefit arrangements. Pre-sale dumping is one and additional measurement is the other. Pre-sale dumping, I believe, was poorly researched, totally misunderstood and badly timed. The same can be said, I think, of additional measurement.

Because of diminishing net returns there has been a tendency in all sectors to reduce costs. This has manifested itself in a problem of lack of uniformity and control within the clip. This must be addressed at all levels within the industry commencing at the farm. Hobby farmers in particular have a responsibility to ensure strict segregation of black fibres in presenting wool for sale. I think some of the company amalgamations in the wool industry have possibly gone too far with the result that the service to customers is depreciating. One must query the viability of some of the smaller companies. Elders, IXL and Dalgety now dominate the wool broking area. However, I would like to pay a tribute to a local Tasmanian company, Webster Ltd, which is matching some of the other organisations with a modest expansion to the mainland and offering high grade service to the industry.

In conclusion, I would like to take this opportunity to congratulate the Australian Wool Corporation for sponsoring the uniforms for the Australian women athletes at the Olympic Games. The use of the wool in the heat of the Los Angeles summer indicated wool's exceptional qualities. The award for the best dressed women athletes at the Olympic Games recognised the versatility of lightweight woollen fabrics made from Australia's finest 19.5 micron fleeces. I commend the report to the Senate.