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Thursday, 14 October 1971
Page: 2375


Mr KING (Wimmera) (Assistant Minister assisting the Minister for Primary Industry) We have just listened to an oration from the honourable member for Riverina (Mr Grassby) and he appears to me


Mr Turnbull - Be kind to him.


Mr KING - I always try to be kind to the honourable member because I believe he does need sympathy from time to time when he is discussing issues such as we have before us at the moment. We have heard quite a bit from him. But the honourable member for Dawson (Dr Patterson), who spoke this morning, and the honourable member for Riverina did not put forward one proposition to try to rectify the problems within the wool industry.

The honourable member for Riverina made great play of a point about people refusing to accept the 36c wool deficiency payment. But he made no mention of what the Opposition would do. I want to answer some of the matters raised by the honourable members although 1 should not be wasting my time on them. However, I would like to refer to the suggestion that the Australian Country Party should leave the coalition because this contention should be answered. 1 believe that one always has to look at such a suggestion and see what the alternative is. This is the simple way of doing it. It is pretty obvious to me what the result would be if the Country Party left the coalition. If they did, as some members on the opposite side would like it to do, the growers would not get even 36c per lb for their wool. They possibly would get no more than 30c, the ruling price today. If the Country Party left the coalition we would have a crises in government, the Government would eventually resign and we would have to go to the people. Maybe the Opposition through promises would win the government benches. If it did - and I agree with my colleagues that I do not think it would - a lot of time would have elapsed in the meantime and we would be half way through the wool selling season and all of the wool that had been sold in the first 6 months would have been sold for about 29c plus per lb. That would be the advantage that the Riverina wool growers would get.

I will not answer any more of the hypothetical questions raised by the honourable member for Riverina because I know, as this debate proceeds, that his arguments will get knocked over one by one. Over the years this Parliament has debated many important subjects and some minor ones, but there has been no more important subject of benefit to one section of the community than the one we are dealing with right now. The purpose of this Bill is to give approval for making a deficiency payment to wool growers and so assure them of a reasonable return for the year's labour. This legislation will not create a lot of millionaires as has been suggested by some people, particularly by the members of the Opposition who have spoken today. But it certainly will help growers to survive through a most difficult period - no doubt the most difficult period in their history.

The actual sale prices today are running at about the equivalent of 1947 prices while our costs, naturally, are at 1971 levels. If we compare returns with costs the result must be classified as an all-time record low. I would like to ask for leave to incorporate in Hansard a table taken from the 'Wool Outlook' of August 1971. I have spoken to the Minister for Primary Industry (Mr Sinclair) about this and he is agreeable.


Mr DEPUTY SPEAKER (Mr Hallett

Is leave granted? There being no objection, leave is granted. (The document read as follows) -

TABLE 10

AVERAGE PRICE RECEIVED FOR WOOL AND GROSS VALUE OF PRODUCTION: AUSTRALIA

(a)   Before 1968-69 the average price refers to greasy wool only. From 1968-69 it is an average for greasy and scoured wools. The quantity of scoured wool sold is negligible. (b) Subject to revision.

Sources: National Council of Wool Selling Brokers and Commonwealth Bureau of Census and Statistics


Mr KING - The total return to the Australian wool grower as quoted in the table for the year 1970-71 is less than $550m compared with $840m 2 years ago. I say that we cannot take a third of a grower's income away from him without the loss having some drastic effect on him financially.

In supporting this legislation one naturally must" ask the question: Why has the price declined and how can we have it improved? As a representative of a large wool growing electorate - and no doubt most honourable members know and appreciate the point that I am a grower myself - I have, like a lot of other honourable members, devoted quite a deal of my time to trying to find the solution or answer to some of the questions which have been raised. If one were to ask the growers generally for their answers one would expect to hear a great variety of solutions. These would vary from floor price schemes, guaranteed minimum price, total acquisition ranging right through to a leave it alone and it will right itself type of policy. Although the last idea is in the minds of some people I do not think it would go very far in the electorate today. I believe that the Government and the industry and indeed, the Opposition, have a very great responsibility in helping to find a solution. If the Opposition is not prepared to help the Government find a solution without bringing up hypothetical arguments, it is certainly not a responsible Opposition. A solution will be found only by very sound thinking, discussions and negotiations by all parties that are really concerned about the industry's future.

I deplore the comments of some of the people who are crying doom and who try to make cheap political capital out of the misfortunes of wool growers without offering any type of solution or constructive criticism. No industry can expect to develop without some form of confidence and unity within itself. While some people are urging disunity within the industry, real solution naturally will never be found. Before we can secure an answer to any problems we must sort out the reasons and the causes of such.

The simple answer is that buyers do not appear to want to pay satisfactory prices. Why is this the case? This is what we really have to find out. I believe that this situation has been brought about by a number of reasons, the chief one being that the quantity of apparel available to the consumer is at a record high level. Man-made fibres have increased beyond all expectation over the last 2 decades. While woollen products have in the past been recognised as a top class commodity this unfortunately is not the belief of some people today. They have turned to the brighter colours; they have accepted the cheaper type, changing styles with quick repurchases and replacements. While wool is still a top class material the controllers of it have not been able to keep pace with its competitors. This has had its effect on consumption and thereby on demand and consequently the actual prices. Countries like Japan virtually overbought some 2 years ago because of the drop in demand from the United States. In this morning's Melbourne 'Age' there was an article in the financial pages entitled: 'The US Economy - Nixon Puts deadline on textiles'. The article read:

Washington, October 13. - President Nixon yesterday threatened to take steps against Japan and other countries if they fail to show this week that they will agree to curb textile exports to the United States.

Mr Nixon,using his toughest language so far in the long wrangle over textiles, publicly confirmed the United States had set an October 15 deadline for breaking the deadlock in the negotations.

Later the article stated:

However, officials in Japan, Korea, Taiwan and Hong Kong have said the United States has threatened to impose quotas on non-cotton textile imports.

There is not a great deal of difference between 99 per cent and 101 per cent but it can certainly make a very big difference in the outcome because, as I said, whilst there is very little difference it does mean on one hand a shortage and on the other a glut. So this is the position we are in today. We have more wool available than the buyers are prepared to purchase at reasonably economical prices.

The Australian Wool Commission established last year to a degree has taken part of the shock by its purchase of those wools which were not securing a reasonable price on the day of auction. For the life of me, I would not hazard a guess at what would be the position today if the old system was still the order of the day. The growers and the present Government have, over a number of years, contributed a considerable amount of money in an endeavour to increase the demand for wool. They have been partly successful but not sufficiently successful. They, through the Australian Woo! Board and the International Wool Secretariat, have spent large amounts of money on research and promotion.

Over the last 2 years the Government has contributed a considerable amount of money for promotion and research. I think that the amount 2 years ago was somewhere in the vicinity of $15m for promotion and research and for the last financial year the amount had increased to $28.9m, almost double the figure of 2 years ago. We have all had our ideas as to its success or otherwise and while there has been some success in the promotion field I believe that promotion will never solve the problems of a surplus if the goods which we are trying to sell are not of the quality which the purchaser demands. This is most important. This is the position in the wool industry today.

We have quite a record of achievement in research but despite this it is not sufficient. Under the circumstances I believe that the IWS has used to the best of its ability the amount of money that has been made available to it.I might add that unless we continue to increase our financial contribution to the IWS we will find that the activities of this organisation will doubtless slacken because of the increased costs in the field in which it operates. Japan is a typical example in terms of successful research and promotion as far as the IWS is concerned. I was privileged to visit Japan recently and I took the opportunity to explore many areas of the wool trade. I spoke to people in the consumer field right through to the manufacturing section. It is very evident that the IWS has had a lot of success with its research as well as with promotion. The IWS has been able to convince the Japanese people that wool can be used successfully to replace many other commodities such as manmade fibres, cotton and even silk.I have personally seen commodities which were previously 100 per cent silk and are now made entirely of wool. I do not believe that this was brought about by accident but rather is it a case of sheer determination by members of the IWS to dispose of our wool. Again I say that had the IWS not been so active then the consumption of wool in this part of the world would be much less than it is today.

In the United Kingdom, which is the headquarters of the Secretariat, the people involved there have not been idle in respect to either the promotion or research side of wool. The Secretariat now has a treatment known as chlorine hercosett. It is a liquid treatment used in the early stages of wool manufacture. It was originated at the Geelong research centre of the Commonwealth Scientific and Industrial Research Organisation and it is now being implemented in various parts of the world including Ilkley, near Bradford in the United Kingdom. Early tests have proved that as a result woollen goods can be machine washed with no ill effects. If this treatment can be introduced Into the trade as a general practice then I believe that we can expect to see a great lift in the demand for wool.

There is no need for me to elaborate on the effects of Woolmark. Woolmark is having a very big effect throughout the world in retail stores. The recent decision of the IWS to include blends is one that, as I have already said, has been overdue for some time. It is a major decision and I believe that it will be very successful in the long term. Unfortunately we have a surplus of wool right now. The present supply exceeds demands. In 1967-68 the estimated world production was 2,690 million kilograms and for 1970-71 this estimate had increased to 2,704 million kilograms. I would seek leave to have incorporated in Hansard a table on the estimated world wool production. I have spoken to the Minister about this.


Mr SPEAKER - Is leave granted? There being no objection leave is granted. (The document read as follows) -

 


Mr KING - During the time when we have had this rather slight increase in wool production it can be seen that the actual consumption of wool, particularly last year, dropped by some 2 per cent. It was not a very great drop but I do not believe that we should allow this trend to continue. If it does the price must continue to fall unless we create some method of jacking up the price of wool. This is what we are endeavouring to do at this time with the establishment of the Australian Wool Commission and the introduction of deficiency payments. The establishment of the Wool Commission last year was the first move in a real effort by the Government to try to solve this problem. I think honourable members would admit that this Bill now before us could be regarded as the second move in guaranteeing a reasonable income to individual growers. It is very easy to say, and the honourable member for Riverina was very critical of the Wool Commission, that 36c per lb is not enough. I suppose if it were 40c per lb it could be said that it was insufficient. I would like to see it ever so much higher than it is. But I do not want prices such as those in the old days some 20 years ago, in the early 1950s, when wool was £1 per lb. No doubt we are now feeling the effects of those days of high prices.

A multitude of suggestions have been put forward as to how we can improve the return to the growers. I believe the answer lies in introducing a number of these ideas but not necessarily in this order: Mention was made of the acquisition of the entire clip at a reasonable return to the growers. Of course we have to consider acquisition and all types of acquisition as the honourable member for Wakefield said earlier this afternoon. Another suggestion was continued activity as far as the Wool Commission was concerned. Naturally this is very important. A further idea proposed by members of the Opposition was the extension of the provisions of this Bill to guarantee a price return beyond the 12 months period. Naturally this suggestion will be considered. Another proposal was that we should take advantage of new selling methods such as sale by sample. Again I think it was the honourable member for Wakefield who referred to this matter. No doubt there will be plenty of other comments on this before this debate is concluded. As I said at the outset, we could have a combination of more than one of those proposals.

I am a firm believer that our objective must be to improve the quality of the finished article, and we must carry through the ideas and innovations of the various research centres, which are playing such a magnificent role at the present time, into such developments as machine washable woollen goods. This is an absolute must. I think it would be fair to say that the first question asked by potential purchasers of wollen goods as soon as they walked into a store would be: 'Can you throw this thing into a washing machine? If not, I am not interested.' I think that if we can overcome this difficulty of making goods machine washable then we will have gone a long way towards solving some of our problems. This legislation is a move to assist the wool industry. It is not the be-all and end-all of Government assistance. Nevertheless I believe it is a determined effort to help the industry. I only hope that as a result of the discussions taking place today in this debate the Government will be able to find a long term solution that will put this industry back on its feet. I have not covered as many aspects as I would like to have done simply because time does not permit me to do so in this debate. I do know that some of my colleagues on this side of the House are very anxious to make a contribution to this debate.







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