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Thursday, 14 October 1971
Page: 2433

Mr SINCLAIR (New England) (Minister for Primary Industry) - Because so many questions have been asked I think I might follow the honourable member for Dawson (Dr Patterson) and try to reply to the question he has raised initially. First of all he asked about the definition of producer in clause 4. What the honourable member said is not quite correct. Under the definition of producer in clause 4 I am told that the holder of a lien over wool or a mortgage over sheep is not the producer. Certainly that had not been the intention. In fact the farmer is the producer within the intention of the definition in clause 4. However it is also true that under some State laws relating to mortgages and liens the mortgagee or holder of the lien owns the wool immediately after it is shorn and so would come within the words of paragraph (a) of the definition of producer.

However by the words following paragraph (c) of that definition the person having the equity of redemption is deemed to be the owner of wool or sheep, and this is the farmer who is given the lien. Although it has been said that the holder of a lien or a mortgage is not the producer, under clause 9 of the Bill he may well have a right, so that the effect of what the honourable gentleman said is correct, but the way in which he said it is applied is technically incorrect. Clause 9 provides for the person who holds the lien the right to take payment in accordance with whatever obligation there might be under the lien. But the definition in clause 4 specifically relates to the producer, and it is npt intended that that definition should refer other than to the farmer himself.

The second question that was asked was in relation to clause 6 and excluded wools. The position with these excluded wools is set down in clause 7, sub-clauses (1.) and (3.), of the Bill. The Australian Wool Com mission will be appraising the types of wool that are within each price averaging plan pool, whether it is three or four, and the exclusions will be made in accordance with the types that are scheduled in the attachment to the Bill. The next question that was asked was in relation to clause 6 (3.) which provides that where a deficiency payment has become payable in respect of any wool by reason of any act or transaction a further deficiency payment is not payable in respect of the same wool by reason of a subsequent act or transaction. The honourable member for Dawson wondered to what extent there would be a capacity for the Government to stop wool cycling and so attracting more than one payment. The provisions of the Bill in this respect are in clause 16 (13.), which places an obligation on the Commission to determine that a deficiency payment should be eligible only when there is delivered to the Commission a claim for the payment in a form approved by the Secretary, containing such relevant information and calculations, and accompanied by such relevant documents, as are required by the form and verified by declaration, as required by the form. Clause 16 in general sets out the requirement that certain registered persons shall be responsible for administering the scheme, and then under clause 30 there are certain penalties involved for those who attempt to manipulate the scheme to their own advantage. Clause 16 is really the operative provision of the Bill, and it is through the operation of these registered persons and the Commission that it is believed there will be sufficient safeguards to ensure that wool is not recycled.

Similarly I believe there are difficulties associated with persons who, whilst engaged in the business of butchering, also hold land and perhaps might grow wool on their own behalf. It was for this reason that the specification is included that the only wool owned by a butcher which should be eligible for the deficiency payment is that which is held for a period of not less than 3 months immediately preceding the day on which the shearing of the wool was commenced. The intention is that there should be for those who are butchers and wool growers deficiency payments only when there is for the wool growing side of their business an entitlement which would apply to any other wool grower. Again the protections are covered within clauses 16 and 30.

I deal next with the questions asked relative to the excluded wools in clause 7. If honourable members care to compare the first Schedule of the Bill with the originally tabled list they will see that there have been some changes. The honourable member for Dawson has mentioned the exclusion of some carbonising fleece wools. In fact they are the principal exclusions. I can assure the honourable gentleman that the changes have not been as a result of pressures on me but have been made because there was seen to be a quite distinct prejudice of certain wool growing areas which are in essence more dependent on wool growing than are perhaps other areas which may be better placed in the original list, so it was felt that there should be some adjustment in the list.

Certainly both the Australian Wool and Meat Producers Federation and the Australian Wool Growers Council representatives have seen me and spoken to me on this matter, but specifically the changes were made after consultation with the industry but not exactly in accordance with the ideas that industry put to me. The position is that it is felt that in present marketing circumstances there would appear to be some surplus of wool and that in these circumstances it is difficult to deny the validity of all wool growers sharing in a responsibility to keep off the market some types of wool. They may well opt to send those wools to the sale, but in doing so, as I think I mentioned in my second reading speech, they may well find that the costs of handling in fact deny them any ultimate payment. For that reason I believe that all wool growers should take serious count when they consider whether or not excluded wools should be offered under present marketing circumstances. It was intended that there should be an effect on all wool growers, and for that reason the changes were made. If the carbonising fleeces had been retained in these exclusions it would have meant that very large areas of Australia almost entirely dependent on wool growing would have been very substantially denied any assistance under this scheme. It being a one-year scheme, and the scheme itself being intended to try to facilitate rather than hinder adjustments within the industry, it was felt that there was an entitlement which wool growers should not be denied.

The final question related to clause 9 of the Bill. I tried to explain briefly in reference to the first question raised by the honourable member for Dawson that clause 9 of the Bill is the operative provision. It means that if a person has a charge on wool that person is entitled to receive the proceeds as if the payment were the proceeds of wool itself. The reason for this is that it is believed by the Government that it is essential to keep the whole normal financing of the rural industry going and if we were to pull out the security which traditionally has been the base on which the whole of the wool industry has operated it would be difficult for those people who traditionally finance the industry to continue to do so. There is obviously a major problem in ensuring adequate finances for the wool industry, and indeed all pastoral and rural industries at the moment. It was felt that to deny those who hold liens the normal entitlements they would have from wool proceeds could not be sustained.

I think this is further substantiated if I again refer to the fact that this payment is not an ordinary subsidy. It is not a subsidy in the sense of lc or 2c per lb. It is a subsidy that is intended to be related to a price which, at the time it was originally conceived, might have been expected to be paid in the market place, and because it is related to what was expected to be a reasonable market price it could well have been that prices paid at auction this year might have been above the 36c per lb, if we think of it in the old non-metric terms. If that happened, of course those funds, those proceeds of wool, would have gone to the person who held the charge or held the lien. For all those reasons it was felt that the proceeds of the wool price support should go as the proceeds of wool itself.

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