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Thursday, 14 October 1971
Page: 2429

Mr SINCLAIR (New England) (Minister for Primary Industry) - I will respond to the Bill. I might add that I find it somewhat incredible that I should not speak on that other matter. This legislation relating to the wool industry has been debated fairly exhaustively during the day. lt is legislation which is of tremendous importance to everyone in the Australian community. An amendment has been moved by the Opposition and the Government rejects it. It is an amendment covering 2 principal matters, the first being that there should be a means test provision included in the Bill, designed to exclude no-one knows now many of those who are wool growers in the Australian community. I have mentioned on several occasions in the House that there are several very valid reasons why no means test has been included in this legislation.

The first of these is that there are obvious difficulties in setting down criteria which are sufficiently exact to achieve what is intended. Genuine wool growers, who in many instances have spent years of their lives, as in some cases have their forebears, tilling the soil and working the properties, are because of either investments outside their farms or investments in cattle or agriculture excluded from receiving benefits if we apply a means test. This was the case in respect of the $30m wool emergency scheme introduced last year. On several occasions I have pointed out to the House that because of the nature of the criteria some whom we believed to be in genuine need were excluded from eligibility simply because of the inclusion of a means test. The second reason is that there is, as honourable members will know, a responsibility for the funds received under the wool price support scheme to be included in a wool grower's income tax return. These funds will be assessed on the same basis as other wool income and consequently the large wool grower will be penalised and the smaller wool grower will be advantaged. Therefore, there is a distinct difference between those in receipt of little income and those in receipt of considerable income as far as the wool price support scheme is concerned.

The third reason is that the whole purpose of the Bill is to try to approximate wool incomes from prices which were assessed not so very long ago by the Bureau of Agricultural Economics as being likely in the early 1970s to attain about 40c a lb, plus or minus 10 per cent. The 36c was not a figure drawn out of the air. It was a figure which related specifically to the most recent statement by the BAE that it was not in a position to revise its earlier long term assessment of wool prices but that the trend would be towards the lower end of its assessment and not the higher end. For that reason I believe that the 36c price was one which could well be attained by the wool market during this selling season. Were it not for the 10 per cent import surcharge, the restraints generally and the uncertainty in international currency exchange, wool prices might well have been at that level today. So the 36c per lb is a price which relates to a figure which, it was assessed, might well have been the price paid at auction for wool this season and it was on that basis that that figure was included in the Bill. If we look at it in that light 1 believe it would not be just for us to exclude any category of wool grower, as sought in the first part of the Opposition's amendment.

The second part of the amendment relates to 2 propositions. The first is the establishment of a single statutory marketing authority to acquire, appraise and market the entire wool clip. Obviously there will be changes necessary in the marketing of the Australian wool clip. We are conscious that there are diseconomies under the system which existed for so long. Indeed, the BAE has produced several studies of the present system of selling wool. A good deal has been said in the course of this debate about the advantages that could be gained if core testing and sale by sample were universally applied and if tests satisfactory to both vendor and buyer could be established. I believe that when that happens this part of the amendment may well be a practical alternative to present selling methods. I do not believe it is a practical alternative at the present time. There are other things apart from the establishment of a single statutory marketing authority that we must look at. I certainly think it is one of the alternatives which could well provide some very substantial help to the industry in the future and I would not exclude it, but at this stage one has to look beyond the single statutory marketing authority and work out how we will achieve a better price for the product and how we will be able to display it, promote it, research it, sell it and finance it. This resolution does not contain any of those answers which are to my mind as essential as any change per se in the marketing arrangements themselves.

The other part of the Opposition's amendment seeks to implement a progressive reconstruction and rehabilitation programme. There are 2 parts of the Government's wool selling process at the moment The first embodies this legislation and the second seeks support for the operations of the Australian Wool Commission. The Australian Wool Commission is a commercial organisation working under the auction system and maintaining a firm reserve price and is at this stage helping to ensure that woolgrowers are getting a better price for their product than would otherwise be the case. Of course, that price1 is then sup plemented by the wool price support scheme and the legislation we are now discussing. The long term future of wool relates more to the price paid in the market place and for that reason the operations of the Wool Commission must be seen as quite vital. Were it not for the Wool Commission I believe that the whole future of the industry would be in much more jeopardy.

Reconstruction and rehabilitation come on top of the Wool Commission and the price support scheme and are, of course, essential. The Government has introduced a very substantial measure of help in the scheme that has already been under consideration in this House. The $40m allocated this year represents a substantial part of the originally intended 4-year $100m scheme. I believe that it is possible that changes in the scheme may be necessary but I do believe that it is not true at this stage that there is any reason why any of the States should feel that they have not adequate funds to administer the scheme. For example, in New South Wales the position is that in the last financial year that State received $4m. This financial year it received $ 11.5m of the $12m it sought. In addition some $2.5m of the pre-war funds were available to it. So the New South Wales Government has available some $18m to be advanced for rural reconstruction. I understand that up to the end of December $8.1m of these funds has been spent. Taking the respective allocations up the end of October, I understand that some $ 11.6m of the $18m had been allocated. In other words, out of the funds available for New South Wales there was still over $6m which had not been spent. It is true that originally the scheme was intended, over the 4 years, to provide $100m - approximately 50 per cent for farm build-up and 50 per cent for rural reconstruction. But surely in the implementation of a scheme the administering authorities have a capacity to determine the need on the cases which are before them.

On that basis I do not believe that at the moment the scheme in New South Wales is foundering because of a shortage of finance. If all the States sent to us their reports on the operation of the scheme an early review and discussion could be worth while. I understand that only last week one

State brought down its legislation to introduce the scheme. There are and have been very real delays in the implementation of rural reconstruction in many States. For this reason I believe that the legislation that is before this House does give to all growers a very real measure of assistance for the current wool selling season. Supplemented by the Government's support for the Australian Wool Commission and the finance contributed to rural reconstruction, I believe the total package gives the wool grower the ability this year to look ahead and work out where he and his industry are going.

Speeches have been made in this House today and tonight which indicate the general concern for the future of the industry. I think it is an industry which must look very seriously at its present and prospective problems. The solutions that are provided this year may not be the best way of helping the industry indefinitely in the future, but they have bought 12 months for the industry. That 12 months grace is the purpose behind the 36c wool price support scheme. For that reason I commend the Bill in its present form to the Parliament.

Debate interrupted.

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