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Wednesday, 7 August 1946

Mr ABBOTT (New England) .- 1 support the remarks of the honorable member for Deakin (Mr. Hutchinson) about the distribution of the accumulated fund of between £7,000,000 and £8,000,000 in the hands of the Central Wool Committee in respect of activities outside the provisions of the Wool Purchase Agreement with the Government of the United Kingdom. I also direct attention to the amount of £700,000, stolen from the wool-growers of Australia, which is in addition to the fund with which this bill is concerned. That money was stolen from, them because of the failure of the Commonwealth Government to get from the Australian woollen manufacturers the money due from them on the sale of wool to Australian manufacturers. In opening his second-reading speech the Prime Minister and Treasurer (Mr. Chifley) said -

The purpose of the hill is to provide 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.

A strong body of opinion exists, among the wool-growers themselves and their organizations, the Australian Wool Growers Council and the Australian Wool Producers Federation, that the growers are entitled to the profits on the sales which the Prime Minister claims were made outside the agreement with the Government of the United Kingdom. However, that seems doubtfuland, consequently that money should be distributed in accordance with the arrangement proposed for the distribution of the profits from the sale to the" United- Kingdom of r,4-* wool that was subsequently sold outside the United Kingdom. If the United Kingdom surrenders its share of the profits, those profits should go to the Australian wool-growers. We believe that they are the property of the woolgrowers and are held in trust for them by the Commonwealth 'Government. Under the agreement between the United Kingdom .and the Commonwealth Government, which' was made in 1939 and to which the right honorable gentleman drew particular attention in his secondreading speech, the United Kingdom acquired the Australian wool clips for the duration of the war and twelve months afterwards and 50 per cent, of the' profits on the sale of wool outside the United Kingdom was to he . paid to the Commonwealth Government to be held in trust for the Australian woolgrowers. The trusteeship was proved by the undertaking given on the 17th December, 1942, by the then Prime. Minister, the late Mr. Curtin, that the profits would be distributed to the growers. That promise has been renewed. It was also provided under the agreement that Australian woollen manufacturers should have the right to select, after appraisement, certain wools to meet their own requirements. They got those wools on the basis of a certain percentage loading to bring the price paid up to the flat rate paid by the Government of the United Kingdom. The Wool Purchase (War-time) Agreement, which really consisted of a series of letters and cables exchanged between the Commonwealth Government and the Government of the United Kingdom, but it has been summarized by the Commonwealth Government in the document that the Prime Minister promised the Leader of the Opposition (Mr. Menzies) to produce. It. provided that Australian manufacturers should, pay; for their wool a loading on the appraised price of 1\ per cent, in 1940-41; 15 per cent, in 1941-42; and 10 per cent, in 1942-43. In 1943-44 and 1944-45, the price paid by the Australian manufacturers was fixed by .the Prices Commissioner. Under that arrangement, the prices paid by the Australian manufacturers to the Central Wool Committee should have been equal to the flat rate paid by the United Kingdom to the Commonwealth Government and passed on to the Australian wool-growers. For years there has been a deficiency of £700,000 in the account in respect of the prices paid by the Australian manufacturers, but no mention in. the bill or the secondreading speech of the Prime Minister is made of its distribution along with the amount of between , £7,000,000 and £S,000,000 referred to in this legislation. That money is due to the Australian woolgrowers. One would have thought that, whatever the Government's views' might be about the accumulated fund of between £7,000,000 and £8,000,000, sheer honesty would have compelled it to ensure the payment to them of the £700,000 that should have been paid to them, apart altogether from the other money, in respect of sales made to the Australian manufacturers.

Mr Lemmon - Should that money not be placed in the same fund as that in which the money that is the subject of this bill has been placed?

Mr ABBOTT - No, because it was due from the Australian manufacturers to the Australian wool-growers, but it has never been paid to them.

Mr Scully - The Australian woolgrowers collected their money in full.

Mr ABBOTT - They did not.

Mr Dedman - They did.

Mr ABBOTT - The records of the Central Wool Committee prove the contrary.

Mr Scully - There was an adjustment between the Central Wool Committee and the Prices Commissioner.

Mr ABBOTT - Yes.

Mr Scully - But the wool-growers were paid in full. :Mr. ABBOTT.- The Prices Commissioner fixed the price of wool sold to the Australian manufacturers and the woolgrowers, are still owed £700,000.

Mr Scully - They were paid in full.

Mr ABBOTT - They -were not. I was a member of the Central Wool Committee. After I left the price paid by' the Australian manufacturers was the appraised price plus a loading to bring the price up to the flat rate paid by the United Kingdom. An amount of £700,000 is outstanding as the Minister will realize if he examines the reports of- the Central Wool Committee. The Minister for Commerce and Agriculture (Mr. Scully) and his accomplice, the Minister for Post-war Reconstruction (Mr. Dedman), can shriek and make whatever statements they like, but they will not convince me or the wool-growers that £700,000 has not been filched from them.

Mr Scully - It has not been.

Mr ABBOTT - I know that, compared with the colossal amounts that have been filched from other primary industries, an amount of £700,000, in the eyes of the Minister for Commerce and Agriculture, is a bagatelle, but it represents a lot of money to the wool-growers.

Mr SPEAKER - Order ! I ask the honorable member for New England to deal with the disposal of the fund referred to in this bill. '

Mr ABBOTT - Yes, I am coming to that. I am following the lines followed by the Prime Minister, who, on page 2868 of Hansard, is reported as having said -

The Central Wool Committee, in addition to handling the wool purchase arrangement for the 'United Kingdom Government, has carried out other activities which have resulted in certain moneys being collected on behalf of the. Commonwealth Government. These moneys have mainly arisen from the following sources: -


Only one payment was to be made to fellmongers for skin wools. I recollect that when I was a member of the Central Wool Committee in 1939 the regulations governing skin wools were so drawn as to prevent the possibility of a repetition of what happened between 1916 and 1920, when, the skin wool funds were the subject of litigation that lasted for years. I quote from the "Memorandum re profits earned by the Central Wool Committee 1916-1920 ". It states-


The report states that - " there are no profitsharing conditions in regard to sheepskins acquired on account of the Imperial Government, but the Central Wool Committee Administration Account for sheepskins, for the various seasons shows the following credit balances through savings effected .in the. appraisement, handling storage and other charges from packers' warehouses to f.o.b. Australian ports: -


After completion of audit for the season I!) 19-20 the total profits will be transferred to the wool pool for distribution to woolgrowers."

That excellent precedent should have been followed in this instance. Unfortunately, it was not. The wool-growers will receive no additional payment for skin- wools. When the purchasers bought the sheep, they allowed for the skins only the appraised value. If, later, an additional payment had been made for the skins and if the fellmongers had known that they would receive the extra payment, they would have allowed for a higher skin value in the price that they paidfor the sheep.

Mr SPEAKER - Order ! I ask the honorable member to deal with the disposition of the fund.

Mr ABBOTT - I am referring to the speech of the Prime Minister.

Mr SPEAKER - The honorable member may not take advantage of that. T have read the references in the Prime Minister's speech to how the- money was raised and whence it .came. That does not entitle the honorable member t to debate whether the money should have come from that source. The bill deals with the handing over of the fund to the Treasurer and the means by which he may apply it. The honorable member may not explore whether the fund should be created.

Mr ABBOTT - The Prime Minister said that these funds had accumulated during the war in respect of activities outside the provisions of the wool purchase agreement with the United King: dom Government. Having dealt with skin-wools, I shall now refer to wool tops, noils and waste exported from Australia, the proceeds from which amounted to £2,700,000. The Prime Minister said-

Although this involved exports, the United Kingdom Government intimated that any moneys derived from these operations were for the account of the Commonwealth Government.

Later, referring to the deferred price on wool content of manufactured goods exported from Australia, the proceeds from, which amounted to £1,550,000, the Prime Minister was very careful to repeat the same phrase -

Although this transaction related to exports, the United Kingdom Government stated that " it was agreeable to the whole of this deferred payment being retained by the Commonwealth Government.

Those statements prove conclusively that these sums of money in payment for. our wools were not outside the arranger ment made with the United Kingdom Government for the purchase of Australian wool clips. If they had been outside the arrangement, the Prime Minister would not have drawn specific attention ;to the fact that the Commonwealth Government had consulted with the British Government, which was willing to forgo its 50 per cent, of, the- profits from the sales of those wools outside the United Kingdom. Those funds should have been disbursed in accordance with the undertaking given by the late Prime Minister, . Mr. Curtin, on the 17th September, 1942, when he stated that the 50 per cent, of the funds due to the Commonwealth from, the sale of wool clips to the United Kingdom would be disbursed to woolgrowers. The particular funds tq .which

I have referred were obtained under that scheme, and should be paid to the growers.

The producer representatives on the Central Wool Committee in 1939-40 did not doubt that these profits would be included in the total scheme. The late Mr. A. F. Bell, the first chairman of the committee, assured us wool-growers that the whole of those profits would become distributable under the scheme to the wool-growers of Australia. At present, when a disastrous drought is causing devastation in the greatest woolgrowing areas of Australia, I cannot understand the Government attempting io withhold from the wool-growers this large sum of money. If it were disbursed, the large wool-growers would not derive substantial benefit -from it because the Government would recover most of it from them in taxation. But the small wool-grower, who is desperately fighting the drought, would benefit from the paymerit. A 'few days ago, I was informed of a man in the electorate of Gwydir who expended 18s. a head for feed for some 1,500 ewes, but all of them died. The magnitude of the disaster which is now overwhelming the wool-growing areas of Australia is almost incalculable. The Government should distribute these profits as the growers believed they would be disbursed and in accordance with the strict letter of the agreement with the Government of the United Kingdom. The Prime Minister, in his speech, revealed that these moneys were derived under the arrangement for the sale of wool clips to Great Britain. No difficulties would arise in distributing this amount through the broker organizations which- have handled the whole of these appraised clips during the war. A percentage could, be given to the woolgrowers on the basis of the total proceeds for their wool received during the operation of the scheme.

The bill provides that -

The moneys standing to the credit of the Fund may be applied in any manner approved by the. Treasurer, after consultation with the Ministers, for purposes associated with the W001 industry and, without limiting the generality of the foregoing, may be applied for any of the following purposes:; - >jq J ' ... .

I consider that the wool-growers themselves should have been consulted regarding the expenditure of the funds. However estimable Ministers may be, they are largely " birds of passage " who change from year to year, and do » not know as intimately as the growers how the interests of the industry generally may best be served. The bill does not provide for the representatives of the wool-growers to advise Ministers on this matter. The Prime Minister, in his second-reading speech, said, in response to a request, that wool-growers will have an opportunity to make representations to Ministers through the Wool Consultative Council. I point out that the woolgrowing organizations have not a representative on the Wool Consultative Council.

Mr Scully - They have four representatives, two of whom are members of the board on which the honorable member sits; and recently, during consultations with the council of the Graziers Association, the agreement was reached that another two members 'should be appointed to the Wool 'Consultative Council.

Mr ABBOTT - But they have not yet been appointed.

Mr Scully - There are on the Wool Consultative Council two members of the Australian Wool Board, of which the honorable gentleman is a member.

Mr ABBOTT - That board has no voice in the disbursement of this money.

Mr Scully - Of course it has. The board has acted as an adviser to the Government in this matter.

Mr ABBOTT - One of the functions of the Australian Wool Board is the promotion of the use of wool throughout the world. In this bill, the consideration . is what the wool-growers believe should be done with the surplus proceeds from the sales of their wool. The honorable member for Deakin has pointed out that it will be impossible to use thi? vast amount in scientific, economic and cost research in connexion with the production and use of wool. The Government has undertaken to provide £300,000 a year for those purposes. The enabling act has been in operation for more than twelve months, and I should imagine- that a very small proportion of the funds provided has been expended. There" is ''no point in accumulating those funds for purposes to which they cannot be devoted. The Government is not in a position to proceed with an extensive 'building programme for research in- connexion with wool. It may be able to do so if it causes more of our citizens to live in caves and gunyahs, and out in the Open.

The bottleneck in connexion with " the provision of all things' necessary for, or incidental to, the carrying out of such research" is that research scientists are not available to-day, and some years must elapse before there will be sufficient numbers. Nor can equipment or buildings "be procured. Therefore, what is the use of providing £300,000 yearly, which, within tthree or four years, will aggregate more than £1,000,000, and "taking" £7,000,000 of the accumulated profits of the wool-growers, which they urgently need? The bill also provides for "regulating or assisting the marketing, or stabilizing the price, of wool by the purchase of wool, or by other means ". When the Wool Realization Act was passed in 1945, those were functions of that legislation, and there was no provision that extra money would he taken from the wool-growers for such purposes. The Government gave that assurance at the time. That scheme was complete in itself. The amount of the carry-over wools was written down by £20,000,000, of which £10,000,000 was to be borne by the Australian Government and the .balance by the United Kingdom Government. Any profits were to be distributed among the wool-growers, and any losses were to be borne by the Governments of the Commonwealth and the United Kingdom. Yet it is how proposed that £7,000,000 belonging to the wool-growers shall be placed in a' fund to dp what the act of 1945 was intended by this Parliament to accomplish. Other purposes to which this money is to be applied are -

The provision of temporary relief for the wool industry in such circumstances and under such conditions as the Treasurer, after consultation with the Ministers, thinks just; and in meeting, in whole or in part, any ultimate loss to which the Commonwealth may be subjected by reason of its participation in the disposals plan set forth in the schedule to the Wool Realization Act 194S.

That act prescribes that any losses shall be borne by the Commonwealth Govern^ ment, not by the Australian woolgrowers*Therefore, the Government is acting most dishonestly in taking this money from the" wool-growers, particularly as they need it so desperately to repair the damage caused by the drought that has afflicted Australia.

Mr.RYAN (Flinders) [2.32 a.m.f!- - The purpose of the bill is to make a certain disposition of funds which to-day, according to the Government, are in the possession of the Australian Wool Realization Commission. The amount in question, in the view of the wool-growers and members of the Opposition, is large -between £7,000,000 and £8,000,000. It represents the surplus on the sales effected under the war-time wool purchase scheme. At the beginning of the war, the wool-growers were informed that one-half of any profits from the sales of wool exported to foreign countries would be paid to them when the operations were completed. They also believed that moneys accruing from any other source would be equally, their property. These funds have accrued in this way: £2,400,000 from the sales of skins; £2,700,000 from the sales of tops; and £1,550,000, representing deferred prices in respect of certain exports. There can be no doubt that the Government has a moral responsibility towards the woolgrowers in respect of this money. I am sure that it must admit that responsibility, because in all these wool transactions it has acted not as a principal, but as the agent of the- growers. Therefore, any surpluses that have accrued to it by reason of the operations that were carried out during the war and up to the present time should be handed to the real owners, namely, the wool-growers Who produced the wool. I am unable to understand the argument advanced by the Prime Minister in his second-reading speech, and by other speakers, that the Government should with-hold this money from the growers and devote it to a number of purposes. The woolgrowers, who believe that they are entitled to this money, are anxious'1 as to how the Government proposes to 'd'ispose of it. They fear that it will be disposed of unfairly. A large proportion of Australian wool is produced by small growers, who have suffered much as the result of events arising out of the war. Some of them have been engaged in mixed farming, either with the help of their families only, or with the help of hired , men. In any case, they suffered severely as the result of the call-up of men for military service. They also suffered because of the increase of the cost of production. Everything connected with primary production has increased in cost far above the official index figure. There has been a shortage of superphosphate, resulting in reduced production and increased costs. In recent years, there have been severe droughts, which have further reduced the profits of wool-growers. Therefore, it is only just that the Government should do everything possible to increase the price of wool, instead of taking from the growers money which is their due, and using it f or its own purposes. The a mount involved is between £7,000,000 and £8,000,000, and it is proposed that it should be devoted to research into the production and use of wool, the provision of those things necessary for research, and the promotion by publicity and other means of the use of wool throughout the world. It is also proposed to spend some of the money on the regulation of markets find the stabilization of prices. It is impossible for the Government to make use of any large proportion of the money for the purposes set out. Already, large amounts are standing to the credit of organizations engaged in promoting research into the production and use of wool. Therefore, it is not necessary that the Government should use the money under discussion. It belongs to the woolgrowers, from whom it came and to whom it should be returned. I add my protest to those of the honorable member for New England (Mr. Abbott) and the honorable member for Deakin (Mr. Hutchinson). The bill should be withdrawn and the money returned "to the growers.

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