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Thursday, 9 December 1971
Page: 4462

Mr SINCLAIR (NEW ENGLAND, NEW SOUTH WALES) (Minister for Primary Industry) (9.0) - by leave - The Government has decided to accept the recommendation of the Australian Wool Industry Conference that the partial relaxation of the embargo on the export of merino rams be extended for a further 3 years. The limited relaxation will be subject to the same conditions which applied in the past 2 years. On this occasion, however, the Wool Industry Conference has recommended that the partial relaxation be for a period of 3 years instead of being reviewed annually as in the past. The conditions which apply to the 3-year partial relaxation which will commence on 1st February 1972 are:

(i)   Not more than 300 merino rams may be sold for export in any one year.

(ii)   The prohibition on the export of merino ewes, semen and fertilised ova will be continued.

(iii)   Export approvals will be issued only for merino rams that have been sold at public auction sales nominated by the State member associations of the Australian Association of Stud Merino Breeders.

(iv)   The partial relaxation will be reviewed before the end of the 3-year period.

The current period of relaxation of the embargo does not expire until 31st January 1972. It has been necessary, however, to make an early decision regarding the continuation of the relaxation so that potential overseas buyers would have adequate time to make arrangements to operate at the next Sydney ram sales which will be held early in February 1972. The merino export embargo has been a controversial subject since it was imposed in 1929. Over the years conflicting views have been held on this subject in the wool growing industry.

In November 1968 the Australian Wool Industry Conference, after obtaining expert advice on all aspects of the embaro and after thoroughly considering the matter, recommended a limited relaxation of the embargo initially for one year. This recommendation was adopted by the Government but was not implemented until 1st February 1970. The reason for the delay in implementing the recommendation was to give the opponents of the relaxation full opportunity to make representations to the Conference. In the event, however, the Conference reaffirmed its original recommendation. Again, on the recommendation of the Conference the limited relaxation of the embargo was extended for another year as from 1st February 1971. The present decision will extend the limited relaxation until 31st December 1975. Of the 300 rams authorised for sale for export in the first year of the relaxation, 222 were sold to various overseas countries. In the second year the number sold to overseas buyers was only 50. For growers there has been some uncertainty and considerable argument on the effects of the partial relaxation of the merino export embargo. There are some important issues which should be kept in mind in any examination of these arguments. Significantly there is the serious financial plight in which many and indeed most merino studs now find themselves. Ram sales have slipped alarmingly in the last 2 years and these sales constitute a major part of the income of these studs. it is important for the maintenance of the Australian wool industry that in particular the parent studs should not suffer such a contraction of income that they should move out of ram breeding altogether. Already most have been forced to diversify where this is possible. Indeed, it is claimed that through the application of the embargo on exports these studs have made a significant contribution to other sections of the wool industry in accepting that there should not be overseas competition for their rams. In the present economic circumstances of of the wool industry and of the ram breeders, it is important that no undue barrier be placed on providing some increased competition at auctions when because of slackness in demand so many of the rams have had to be sold for slaughter instead of breeding purposes. It is often forgotten that Australian merino breeders have been denied for many years the right to export their produce like most other Australians. This has deprived them of a useful source of additional income. Such income has never been needed more by our merino studs than it is today when the critical situation of the wool growing industry has drastically reduced the demand for their rams. The loss of this income plus the depressed wool prices have placed our studs in a very precarious position.

It is not my intention to canvass arguments for and against the lifting of the merino export embargo. The arguments have been examined critically by the Australian Wool Industry Conference and it is on its advice that the Government is acting. Since the decisions in February 1970, delivery of the rams has been severely disrupted by the 'black ban* imposed by the Australian Council of Trade Unions on the handling of merino rams sold for export with a view to preventing their export from Australia. This 'black ban' is still maintained by the ACTU and has a demonstrable effect on the confidence with which overseas buyers have operated at auction sales. Indeed, the action of the ACTU has caused great difficulties, expense and inconvenience to both the buyers and sellers of the rams. They have been forced to resort to making private arrangements in order to export the rams and these have been very costly. No doubt the action taken by the ACTU has also discouraged overseas buyers from purchasing rams.

Mr Daly - How does the Minister know?

Mr SINCLAIR - The honourable gentleman might be interested to know that while I was at a meeting of the Food and Agriculture Organisation I was told that a profit of several thousand per cent was made on the sale of a ram in South America, the ram having been purchased at a sale here, but because of the uncertainty of delivery the buyers were not prepared to operate in Sydney but they were prepared to operate in South America.

Such advantage as stud merino breeders could derive under the present partial relaxation of the embargo is thus largely frustrated by the action of the ACTU. The intervention of the unions is all the more deplorable as the export of merino rams is in no sense an industrial issue. This is clearly a case of the ACTU interfering for political reasons in a field which is outside its area of industrial responsibility. In doing so it has frustrated legitimate commercial transactions and interfered with Australia's meeting its obligation to overseas trading partners. I sincerely hope that the ACTU will now reconsider its position. I present the following paper:

Merino Export Embargo- Ministerial Statement, 9th December 1971.

Motion (by Mr Fairbairn) proposed:

That the House take note of the paper.

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