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Wednesday, 10 June 1970

Dr PATTERSON - I was dealing with a proposal for the establishment of a statutory authority with an inbuilt minimum reserve price plan. I was giving details of the workings of it. I said that the Labor Party had under active consideration proposals for a tariff bounty. The wool industry is Australia's most important export industry. It is recognised as the classic example of an unprotected export industry. The economic stranglehold which is being applied on the viability of wool production, particularly in the case of the small wool producer, is due in large measure to rising costs in association with low or unsatisfactory wool prices. It is recognised that the wool industry is adversely affected economically by tariffs. Some economists have measured the degree of disability at 8% on cash costs and up to 20% on total costs including imputed costs.

Mr Anthony - The Labor Party is against tariffs, is it not?

Dr PATTERSON - No. It is recognised that the wool industry receives assistance in respect of imports. In the determination of the cost disability these concessions, in the form of bounties on farm imports and the like, would have to be taken into account in order to determine the total liability or total disability. Let us remember that the wool grower sells practically all his product at world prices. He earns $800m or 25% of Australia's total export income. That export income is vital to Australia's growth, particularly as it allows for the imports of capital and consumer goods which are essential to the economic welfare of the labour intensive manufacturing sections which are highly protected by tariffs. Although the wool grower has to accept world prices for his product he is forced to purchase his essential imports at domestic prices which are affected by economic growth in Australia, by inflation and by tariffs. To put the matter simply, how do we answer the wool grower who comes to you or to me and asks the simple question: I have to sell my wool to Japan but I have to buy my spare parts, my chemicals, my urea and so on at the domestic price. How do I overcome this problem?' This is the essence of a disability being suffered by the exporter and it is time that something was done about it.

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