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Wednesday, 7 August 1946

Mr HUTCHINSON (Deakin) (1:36 AM) . - I regret that I have to discuss this bill at this unreasonable hour, but I suppose the " show " must go on. This is a small bill, the -provisions of which are printed on one sheet of paper, but like many other small things it is of considerable importance. The bill provides for the application of certain moneys which had accumulated in the hands of the Central Wool Committee during the war in respect of activities outside the provisions of the wool purchase agreement with the United Kingdom Government. The total has been estimated by the Government to be £7,000,000, but from advices I have received, it appears-that it is more likely to be £8,000,000. The bill proposes to dispose of moneys which rightly belong to the wool-growers of Australia, but of which the Government has now' taken control. The moneys are now to be placed to a trust fund which no doubt will be used on some future occasion to bolster subscriptions to a government loan so that once again the proud announcement may be made that a loan has been over subscribed. The Central Wool Committee has now been replaced by the Australian Wool Realization Commission. The bill has no. relation to the wool purchase agreement by which the United Kingdom Government agreed to purchase the great bulk of the Australian wool clip for the period of the war and one year thereafter. However, I propose to refer briefly to that agreement because of certain provisions in it which are relevant to the discussion of the measure now before us.

Although the price fixed under that agreement represented a considerable ad vance: on- the pre-war price it was nevertheless a little below the payable price as. determined by a committee which investigated the industry in the 1930's. The principal credit for the conclusion of the agreement with the United Kingdom belongs to the Prime Minister of the day, now the Leader of the Opposition (Mr. Menzies), who made personal representations to the Prime Minister of Great Britain with a view to obtaining a price which would put the industry on a payable basis. Later the price was increased to 15£d. per lb.

Mr Calwell - By this Government.

Mr HUTCHINSON - That is so. This Government took advantage of the provision in the agreement that the price should be reviewed' from time to time in the light of increased costs of production. Costs in all industries have risen since the present Government took office, and they are still rising. The price of 15 1/2d per lb., however,, was only the average price received for Australian wool sold to the British Government under an almost identical agreement during World War I. That the Australian wool industry has been able to continue on a basis of 30 years ago, speaks volumes for the enterprise and initiative of the Australian wool-growers. Provision was also made in the agreement whereby Australia would share in any profits derived from the sale of wool to foreign countries. I direct attention to that because it was one of the factors that made the agreement acceptable to the Australian wool-growers who1 recollected what happened after World War I. They had every reason to expect that on the termination of World War II. they would receive a substantial dividend from the sale of wool to foreign countries. That dividend, however, was not earned during the war largely because of the collapse of France, the overrunning of. Europe by Germany and, later, the entry of Japan into the war. These events prevented the marketing of Australian wool abroad, with the result that we accumulated a huge stock pile, which we are now in the process of liquidating. Part and parcel of the agreement relevant to the price of wool was this undertaking given in the first instance by the Minister for Commerce in the Menzies Government and renewed by the late Prime Minister,

Mr. Curtin,that Australia would, receive a share of the profits of all wool sold to foreign countries.

Mr Pollard - Visible profits..

Mr HUTCHINSON - That is so. The wool-grower looked forward to a profitable return from such sales to compensate him for what he had put into the wool pool during the war. At the conclusion of hostilities there was a profit of £20,000,000 of which the Australian share was £10,000,000 ; but the Australian share was invested in the purchase of portion of the huge stock pile of wool not sold when the war ended, which is estimated to be worth £100,000,000, and so became merged in the new scheme. The woolgrowers, therefore, will not receive a penny from the sale of wool to foreign countries, at least until the present scheme ends. The sum of£8,000,000 came into the hands of the Central "Wool Committee mainly in three ways; first, by a difference in skin values between the" table of limits " average and the flat rate adjustment price. The flat rate adjustment was really the average price at which the United Kingdom bought the season's clip, namely, approximately 15½d. per lb. Running below and above that average was the " table of limits ", which defined prices for different qualities of wool, and was designed to bring up sales of a season's clip as near as possible to the flat rate price. The "table of limits" was framed on a conservative basis; and its average never approached the flat rate price. Consequently, there was a gap between the " table of limits " average and the flat rate price, which' was bridged by supplementary payments to growers. Those payments which are made in July ranged from 16 per cent. to 13 per cent. per lb. This year, the flat rate adjustment represented an increase of the wool cheque of 13 per cent., on last year's cheque. If this. £8,000,000 were distributed to the growers they would receive a little more than the flat rate adjustment they have received this year. Now I come to the sum of £2,400,000, which comes into the hands of the Central Wool Committee from the sale of skin wools. How does that money come into the commit tee's hands? The flat rate adjustment and " table of limits " average call for examination under this item because not flat rate adjustment was to be paid on skin wools. Consequently, the fellmonger knows that when he bought skins all he could expect was the value of that wool according to the " table of limits ". The Treasurer made this clear in his second-reading speech when he said -

When the wool purchase arrangement was commenced in 1939 it was announced by the then Prime Minister (Mr. Menzies) that wool derived from skeepskins would not participate in any adjustment over and above the appraised price, which was to he the final and only price paid for such wool.

The fellmonger knew that the only value he would receive for the wool on skins was according to the "table of limits"; but this arrangement had the significant effect that the woolmonger, being paid only on the " table of limits ", valued the wool on that basis. The fellmonger necessarily offered a lower price than if there had been a flat rate adjustment.

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