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Wednesday, 10 June 1970

Mr DUTHIE (Wilmot) (12:37 PM) Any legislation to help rural industries brought down at a time of crisis within those industries must receive the earnest consideration of all members of the Parliament, including the Opposition. Members of the Opposition, in their thinking, have given the wool industry the greatest doing over it has ever had. A tremendous amount of work has been put in by our Party rural committee and economic committee as well as by individual members. We certainly appreciate what is being tried in this Bill, firstly, to relieve the industry of the cost of financing research and promotion in its battle to combat synthetic fibres and, secondly, to help the industry make savings in the cost of wool handling through integrated wool selling complexes or wool selling centres.

On the matter of quality of wool, which the handling section is devised to improve, we cannot overstress the importance of quality in wool products. 1 suppose that of all primary products there has been less concentration on quality in wool than on any other form of production for the simple reason that we have always been able to sell our wool clip. This is the only industry that is not over-produced. lt may seem amazing that legislation must be brought down to help stabilise an industry the entire production of which is sold on local and world markets, yet this is the naked fact in respect of the industry because the price being received, as has been said, is the lowest probably sines the depression years in actual percentage value. That we have been able to sell all of our wool production is no reason why the growers should do nothing more in respect of quality. Overseas prices have taken a tailspin, apparently because the quality of our export wool has been neglected. If honourable members talk to Japanese buyers they will realise how truthful is that statement. They have become very selective in buying our wool, and unless we can put on the market an almost perfect product free of dust, burrs and the other ingredients that get into wool wc will be in real trouble getting rid of it. We must not be lulled into a sense of false security. Just because we are selling all of our wool at the present does not mean necessarily that we will be doing thai for the next 12 months, 2 years or 3 years. This measure is to be commended because it is an endeavour to assist in three or tour very important ways.

I now turn to the testing of wool. The Minister in his second reading speech said that we were to try to make savings in the handling of wool. He went on to say:

Studies conducted by the Australian Wool Board show that very significant cost reductions are possible in the handling and processing of wool by the establishment, on a national scale, of integrated wool selling complexes.

Later the Minister said:

I think it can be said that all sections of the wool trade agree that the establishment of well laid out wool complexes incorporating modern mechanised handling equipment for common use by wool selling brokers for the speedy movement of wool into store, within store and out of store to the ship can introduce great efficiency into the wool selling and handling procedure. Further, such complexes could also provide a vehicle for the early introduction of other beneficial innovations such as the pre-sale sampling and testing of wool, that is, objective measurement, and the streamlining of bulk-classing operations.

I want to say something in detail about presale sampling, testing and objective measurement. I refer to an article on objective measurement written by Mr H. M. McKenzie, Chairman of the Australian Wool Board's policy committee. Mr McKenzie was careful to point out in the article that unless this scheme when introduced was carried through with the utmost care it could have later disastrous effects on the industry. The Launceston 'Examiner' of 10th June carried the following item:

Mr McKenziesaid speakers at woolgrower meetings and seminars had stressed the need for any change in the present wool marketing system to include pre-sale objective measurement.

The Labor Party has put forward tonight its plan for the handling and marketing of the Australian wool clip in the future. That must be a prerequisite of this marketing idea. The report goes on to state:

I am confident that scientific research and development being done will lead to pre-sale objective measurement on behalf of growers, but premature introduction of this as a condition of sale without sound or sufficient tested methods, could be disastrous.

Any failure could result in international acceptance of sale by objective measurement being delayed for many years'.

To get this, it was essential that the validity of all measurement techniques receive international acceptance.

He said that in any change in marketing, it was necessary to examine the costs of the existing method and estimate the savings or additional costs resulting from change.

The most desirable method of handling wellclassed wools for sale was believed to be: Weigh on arrival in store, core test, appraise or sample, dump and stack awaiting auction and shipment.

With this method, wool would be handled only once in and once out of store.

However, to get sale by this method, it would be necessary to:

Be able to guarantee within acceptable limits the accuracy of the scientific measurements and secure international acceptance of the methods used.

Develop methods for which the cost of these measurements justified their commercial acceptance.

Ensure that the purchasers were satisfied with an independent appraisal or the production of a representative wool sample of sufficient size to permit subjective or visual assessment of the non-measurable qualities such as character, strength, soundness, softness, etc. Ensure that the handling problems, including the stacking of dumped bales, were satisfactorily resolved.

With the assistance of scientific research and experimentation eliminate completely or reduce to a minimum the number of qualities requiring visual assessment.

The two factors vital to the introduction of presale objective measurement are that it would permit the marketing of the clip at reduced costs and that the objective measurement certificate and appraisements (or samples) would be reliable, accurate and comprehensive enough for buyers to assess the value of the wool for the particular end use for which it was being bought.' Mr McKenzie said.

Two other areas in which objective measurement offers prospect of direct or indirect benefit to woolgrowers are:

Reduction in the claims made on wool buyers by their principals, arising from alleged shortfall in wool performance specifications; and research by the Bureau of Agricultural Economics saying that objective measurement can reduce wool manufacturing costs.

Experiments with pre-sale sampling, pre-sale testing and selling by sample are being investigated.

However, 1 must stress that we are striving to achieve commercial acceptability rather than academic perfection,' Mr McKenzie said.

He said, 'I urge the Government and the wool industry to see that changes in wool marketing involving objective measurement are not adopted until it is clear that their introduction will produce both short and long term net benefits to the woolgrowers.'

He said the wool characteristics were being measured scientifically for commercial purposes.

Measurement of yield in 'shipping lots' is widely practised and the methods of tests are laid down in specifications which have international acceptance.

In general the accuracies of testing appears to be good.

Vegetable matter is also measured.

The only method of measuring greasy wool fineness, for which an international standard exists, is based on the use of a microscope.

Mr McKenziepoints out various methods of testing. He said that today's costs and handling charges based on post-sale testing operations were as follows:

Yield: $1 per bale for sampling, plus $9 to $10 a lot for a certificate.

Fibre diameter: Airflow method, $4 a lot; microscopic method, $11.50 a lot. (If fibre diameter measurements were done in conjunction with yield, there was no additional charge of sampling).

The article continues:

It is important to realise that the introduction of pre-sale sampling and testing could result in a substantial reduction in these charges,' he added.

I have quoted most of what he said because it relates to a vital part of the Bill which is before us. This system must not be rushed into headlong. It will have to be tested, experimented with, and assessed perfectly accurately so that it can become an international standard accepted by buyers from the countries which purchase our wool.

Another point I mention is promotion. Is too much being spent on promoting only fine wool and so limiting the impact of Australian wool in manufacturing? Some criticism has been levelled against the amount spent on promotion by the Australian Wool Board. It has been said we have over-stressed the fine wool qualities and have not sufficiently promoted our other wool. There is some truth in this. I think promotion should include all types of wool so that we can tell the world and show the world that we can do a lot with wools other than fine wools in clothing manufacture and the like. The low prices that now exist in the industry - they are possibly15c a lb less than they were at this time last year - had a beginning. A very significant event took place a couple of years ago. It might have been less than 2 years ago. I can remember the scream that came from our motor car industry that too many Japanese cars were coming into Australia and that these imports must be stabilised - not increased. The 2 giant companies which manufacture Ford and Holden motor cars and earn a profit of about $30m a year between them screamed to this

Government to do something about the tariff on Japanese motor cars. The Government lifted the wall of tariffs against these cars.

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