Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 11 April 1946

Mr DEDMAN (Corio) (Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research) . - I submit to the House the following statement on the utilization of funds accumulated by the Central Wool Committee.

During the war, the Central Wool Committee, which was established to administer the wool purchase arrangement entered into between the United Kingdom and Australian Governments, accumulated moneys arising out of activities which were outside the limits of the wool purchase plan itself. The present credit balance resulting from these activities is approximately £7,000,000, and it is anticipated that, by 30th June next, when the activities will in the main be discontinued, the total will be somewhat greater. The funds to which I refer have been derived principally from the following sources: -

Flat-rate Adjustment on Skin Wools -£2,400,000. - When shorn wools have been appraised each year under the wool purchase plan, the suppliers have been paid appropriate prices, according to the table of limits. At the end of each wool year, an adjustment has been made by a pro rata payment to each supplier of shorn wool of an amount sufficient to bring the average price paid in Australia for the whole clip up to the flat rate purchase price paid by the United Kingdom Government. This statement is known as the flat-rate adjustment. No such adjustment has been made in respect of skin wools sent in for appraisement by fellmongers and others. When the wool purchase arrangement commenced in 1939, it was announced by the then Prime Minister that wool derived from sheepskins would not participate in any surplus over and above the appraised price. The

Central Wool Committee, at the end of each season, supplemented Mr. Menzies' announcement by a press statement and official advice to all wool selling brokers that the suppliers of all wool derived from sheepskins would be paid appraised value only, and that the appraised price would be the final and only price paid for such wool.

The amount of £2,400,000 which has accrued under this item represents, for the seasons 1939-40 to 1944-45, the difference between the appraised price paid to fellmongers and other suppliers of skin wools, and the purchase price paid to the Central Wool Committee by the Government of the United Kingdom.

Deferred Price on the Wool Content of Manufactured Goods Exported from the Commonwealth Pursuant to the Provisions of the National Security {Price of Wool for Manufacture for Export) Regulations- £1,550,000: - In accordance with the arrangement made by the United Kingdom and Australian Governments at the outbreak of war, wool used by Australian manufacturers was excluded from the wool purchase agreement. Australian manufacturers have paid, for wool selected by thom, prices lower than the export issue prices. In respect of this wool, as in the Case of all other shorn wool, Australian growers have received, each year, the appropriate price according to the Table of Limits, related to the flat-rate purchase price. In the event of goods manufactured by Australian woollen and worsted manufacturers being submitted for export, the exporter has not been permitted to take the whole 'of the profit on export, but has been required to pay to the Central Wool Committee, and recently to the Australian Wool Realization Commission, a deferred payment, so that the total amount paid for the -wool used in the manufacture of those goods has been equivalent to the Export Issue Price.

Surplus on Wool Tops, Noils and Waste, Exported from Australia under the Control of the Central Wool Committee, pursuant to the National Security (Wool Tops) Regulations - £2,700,000 : - Pursuant to its control of the export from Australia of wool tops, noils and waste, the Central Wool Committee allowed to all topmakers the cost of the raw wool used in the manufacture of tops, plus interest and other charges, and a charge for combing which returned to the topmaker a reasonable margin of profit. The difference between these costs as determined by the Central Wool Committee and the price paid by the overseas buyers for the tops, noils, &c, was taken by the Central Wool Committee. Furthermore, in order to increase the production of wool tops, the Central Wool Committee arranged for tops to be combed on a commission basis. When the wool tops control commenced, the United Kingdom authorities agreed that all surplus from the operations referred to herein would be for the account of the Commonwealth Government.

Of the other items responsible for the credit balance of the accumulated funds, the most important is the interest earned on the moneys at credit from time to time.

The Government has carefully considered the disposal of these moneys, which have accrued outside the administration of the wool purchase arrange^ ment, and are the result of good and careful management by the Central Wool Committee. The moneys will not be taken by the Government into Consolidated Revenue, and will not be used for any individual distribution to woolgrowers, nor to the fellmongers, topmakers, and manufacturers concerned The Government has decided, however, that these accumulated moneys, shall b» used for the benefit of the wool industry in connexion with research and promotion of the use of wool. The Government has drawn up proposals for the use of the fund in these directions, and will take an early opportunity to discuss them with representatives -of wool-growers. As J indicated above, the basis of our discussions will be that the money will not be paid into Consolidated Revenue, and will not be distributed to any section of the wool industry, but will be used in the interests of the wool industry, particularly for research and promotion of the use of wool.

This is the only Government statement that has been made in explanation of the sources of this particular fund and of the prospective use of it. The moneys involved have no relation to the possible profits arising out of the Wool Purchase Arrangement, which provided that the United Kingdom Government would pay to the Commonwealth Government 50 per cent, of profits made by the United Kingdom Government on Australian wool sold for use outside the United Kingdom. The late Prime Minister of Australia, Mr. John Curtin, pointed out on the 17th September, 1942, that it would not be possible to take an account of the profits until the purchase arrangement was wound up. On that occasion, Mr. Curtin said, in reply to a question in this House, that the Australian share of profits would be distributed amongst the growers in proportion to their contributions of wool to the whole scheme during its operation.

Honorable members are aware that the war-time wool purchase agreement was not completely wound up, but was incorporated in the long-term plan which is now in operation. As a part of the longterm plan which was unanimously accepted hy the wool-growers organizations and by this Parliament, the accrued credits in the divisible profits account have been taken into account in the transfer of assets from the British Government to the joint ownership of the British and Australian Governments. As is now well known, the British and Australian Governments will, throughout the period required to dispose of the present large stocks of wool, fix annually appropriate reserve prices for wool, jointly provide any money required to buy in wool which does not realize the reserve price at auction, and share equally any profit or loss resulting from the undertaking.

I consider that it would be unwise at this stage to make any predictions as to what will happen to any profit or loss, realized as a result of the long-term plan, which goes much further than the wartime wool purchase agreement, and entails considerable financial outlay and liability to the Commonwealth. .

Debate (on motion by Mr. Sheehan) adjourned.

Suggest corrections