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PRESS RELEASE Q ΞΞ£^ γ,8 τ ε πCANBERRA AMENDMENT TO WOOL TAX RATE TO FINANCE WOOL PROMOTION, RESEARCH AND A.W.C, MARKETING ADMINISTRATION EXPENCES

The Minister for Agriculture, Senator Ken Wriedt, announced today that the Research and Promotion component of the Wool Tax will be increased from its present rate of 2.75% of the sale value of shorn wool to 3%. This increase will become effective as from the

commencement of wool sales on 19 August, 1975.

2. Senator Wriedt said that this increase in the Wool Tax was necessary in order that woolgrowers may be able to meet their contribution towards the costs of the projected budgets for wool research, promotion and the marketing administration, expenses of

the Australian Wool Corporation in 1975-76.

3. It is expected that the total budget for wool promotion will be $32.8m, for wool research financed from the Wool Research Trust Fund $18.3m, and the marketing administration costs of the Australian Wool Corporation $2.Om. The Government has undertaken

to contribute $20.Om towards the approved wool research and promotion programmes for 1975-76 of which $11.8m will go to research and $8.2m for promotion.

4. The Minister said that the need to increase the levy raised by the Wool Tax for these purposes had been the subject of detailed consultation between the Executive of the Australian Wool Industry Conference and himself. Both parties to these

consultations would have preferred to avoid any increase in the rate of levy in the present situation of the industry. However the Minister said that, having regard to all the factors involved he had been reluctantly forced to the decision that the Wool Tax

rate for wool research, promotion and A.W.C. marketing administration expenses should be increased to 3%. "

5. The increasing costs of both promotion and research activity were a source of concern to all parties involved, the Minister stated. He went on to say that he had asked that a review of all research projects be undertaken immediately to

ensure their relevance to the wool industry. This review would be instituted by the Australian Department of Agriculture in conjunction with the Australian Wool Corporation and the recipients

of the major share of grants from the Wool Research Trust Fund.

Canberra 19 August, 1975.

AUSTRALIAN DEPARTMENT OF AGRICULTURE CANBERRA, A.C.T. 2600 Telephone (062)723933

Reference: Information for editors

BACKGROUND NOTES - WOOL TAX

Following the recent increase of

total Wool Tax levied on the sale value of

in Australia will be 8%.

2. The Tax has two components. The smaller

component, now to be 3% Of sales proceeds, has been

levied under various arrangements since 1936. Together

with an agreed Government contribution, it is applied

to meeting the cost of production, textile and economic

research supported by the Wool Research Trust Fund and

to promote the use of wool in Australia and overseas.

A third use of the levy is to meet the marketing

administrative expenses of the Australian Wool Corporation.

3. During 1974, with the agreement of the Australian

Wool Industry Conference, an additional tax of 5% was

imposed on wool sold on or after 2 September 1974 and

before 1 July 1975, in order to provide a Fund to meet

any losses resulting from the floor price the Australian

Government has authorised the Australian Wool Corporation

to maintain at wool auctions during 1974-75.

0.25%, the

shorn wool

2

V

4. This second component of the Tax was extended

to 1975-76 as a necessary element of the Government's

decision to continue the floor price scheme for another

year. The continuation of the Tax for this purpose was

agreed to by the Australian Wool Industry Conference.

5. In accordance with the Wishes of the wool

industry, the proceeds of the 5% levy and their use are

separately identified and accounted for. To this end the

Wool Industry Act requires the Wool Corporation to establish

a special fund, known as the Market Support Fund, into

which all revenue from the 5% levy is channelled.

6. The Act provides that moneys in the Market

Support Fund may be used by the Corporation to purchase

wool under the reserve price arrangements, to pay advances

to growers the sale of whose wool has been delayed because

Of supply/management policies operated under the scheme,

or they may be invested.

Canberra,

August 1975.

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