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Wednesday, 15 May 1957

Mr OSBORNE (Evans) (Minister for Air) . - I move -

That the bill be now read a second time.

The purpose of this bill is to extend the operation of the flax fibre bounty for one year. At the present time production of flax fibre is undertaken by the Flax Commission operating mills in the six country districts in Victoria and at Mount Gambier, in South Australia, and by the Blackwood Go-operative Company Limited, at Boyup Brook, in Western Australia. Products manufactured from flax include canvas goods, cordage, fire hose, twine and ropes and linen thread.

It is gratifying to hear from the Tariff Board that the flax fibre produced locally is eminently suitable for Australian requirements and that spinners 'regard both the quality and grading as satisfactory. Australian production supplies practically the whole of the local demand, which is increasing. The board also found indications that the growing of flax had become accepted by farmers in their rotation of crops and that much of the reluctance to undertake this form of agriculture in most districts had disappeared.

Under the Flax Fibre Bounty Act 1954, a bounty was payable on flax line -fibre produced during the two years ended 31st October, 1955 and 1956 from flax plants grown in Australia. Bounty paid on flax fibre sold during the year ended 31st October, 1955, totalled £49,022 and for the year ended 31st October, 1956, £61,661. There were still some 82 tons of fibre on hand on 31st October, 1956, which will attract bounty of £4, 1 1 8 as sales are effected. The bounty rate commenced at the basic figure of £35 a ton of flax fibre, fell to £30 in December, 1954, and then fluctuated somewhat until November, 1955, when it stood at £70. The current rate, as determined, is £125, but bounty has been restricted to £50 a ton on sales since 1st April, 1956, in order to keep the total payment for the year within the annual limitation of £70,000.

A comprehensive review of the necessity for .the further .maintenance of the industry, including the operations of the Flax Commission and the form of assistance, is now being undertaken by the Government. The bounty aspect has received the attention of the Tariff Board, and in its report of 8th February, 1957, tabled in the House to-day the board has recommended a three-year extension of bounty. Consideration will be given to the recommendation in conjunct tion with the wider issues involved when the' current review is completed. Meanwhile,it seemed only fair to all concerned for" the bounty to apply over the current year, that is the year ending 31st October, 1957,- since trading transactions have been entered into in the reasonable expectation that bounty would be payable.

The bill provides for a rate of bounty of £50 a ton of flax fibre for the first half of the year till 30th April. This will meet the needs of the industry under the circumstances then prevailing. Provision is made for the rate to vary in the second half of the year according to fluctuations in the price at which flax fibre of an equivalent quality to our standard grade could be imported into Australia. This follows the recommendation of the Tariff Board. Whilst the basis of calculation has been changed, the ultimate rate will bc the same as that prescribed under the present act, except that a maximum rate of £75 a ton will apply.

Apart from the extension of the period of the operation of the bounty, this bill also provides for amendments of the principal act, for administrative reasons, to shift the emphasis on the payment of bounty from "production" to "sales". Honorable members will know that the existing act provides for the payment of bounty on fibre produced in a particular year. The fibre must, however, be sold for use in Australia and the rate of bounty varies according to the date of sale. This necessitates identifying the fibre sold with that produced in a particular year as the fibre is not always sold immediately after processing. Complications also arise in the application of the annual limitation on the amount of bounty payable inasmuch as the bounty entitlement of each applicant cannot be ascertained under the present legislation until the whole of the production has been sold and this may be a long time after the close of the year. The amendments apply to flax fibre produced after 31st October, 1956, but bounty will only be payable on sales made during the bounty year. This will mean that stocks of fibre on hand and unsold at the 31st October, 1957, will not attract bounty unless the act is further extended.

Finally, the bill provides for an extension of the annual limitation on the payment of bounty for the current year from £70,000 to £1 12,500 as recommended by the Tariff Board. I commend the bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

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