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Thursday, 23 April 1936

Senator HARDY - There is no guarantee that we will not go back to sterling.

Senator GUTHRIE - There is no guarantee at all, and therefore Australia's main industry is not on so sound a ground as the general public, and some members of this august chamber, are apt to think. The' wool industry to-day is faced with very grave difficulties. If the 25" per cent, exchange were allowed for, the price of wool would be below production costs. We know that medium and coarse crossbred wool, even at the supposed boom prices of to-day, are selling at pence per lb. below production costs. What are production costs? In 1932 the Commonwealth Government appointed a royal commission to investigate this matter. That commission found that, after allowing 5 per cent, interest on the capital involved, and adding this to the working expenses, it would cost 14d. to sell a pound of wool in Australia. I point out that this commission based its calculation of the sheep-carrying capacity of land at £3 for one sheep. Every member of this chamber, with a knowledge of freehold values, will admit that this greatly underestimates the value of the land. It is just about half of what sheep-to-thc-acre land costs. Allowing . that no interest is to be . earned, and that no managerial expenses at all are to be incurred, this com- . mission found that it would cost 11-Jd. to sell a pound of wool in Australia. That shows conclusively that were the exchange to return to normal, the industry would be faced with great difficulties. Wool-growing would continue in Australia because the Almighty has made it the greatest wool-growing country in the world, and because Macarthur and the other pioneers laid well the foundations of the industry. Whatever happens, Australia most continue to grow wool, even if most of the 97,000 individuals who are actively engaged in its production and in making wealth for the nation show losses on their operations. It may be said that the industry is prosperous because the Australian wool clip last year was valued at £50,000,000. From a national point of view, it is well that 97,000 wool-growers - the number is now probably 100,000 - continue in this industry.

If I am asked whether the woolgrowing industry in Australia is efficiently conducted, I reply that, in my opinion, it is the most efficient of all Australian industries. In support of that statement, I point out that, whereas Australia depastures 16 per cent, of the world's sheep and produces 27 per cent, of the world's wool, the value of the Australian wool clip is 33 per cent, of the world total. An Australian sheep produces twice as much, wool in money value as is obtained from the average of the sheep produced elsewhere. I do not say that an Australian sheep produces twice as much wool as can be obtained from a sheep grown in South Africa, New Zealand or the United States of America, but that the value is twice as great as that of the wool produced by the average sheep of the world. Surely no greater evidence of the sound work of the pioneers and of the flock-masters who succeeded them could be found.

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