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Wednesday, 8 May 1985
Page: 1866


Mr KERIN (Minister for Primary Industry)(5.03) —I move:

That the Bill be now read a second time.

The purpose of this Bill is to amend the Wool Industry Act 1972. The Bill makes provision for the apportionment of wool tax receipts, imposed by the Wool Tax Acts (Nos 1 to 5) 1964, among market support, wool research and the general purposes of the Australian Wool Corporation, that is, wool promotion and market administration expenses. The Bill also makes provision for greater flexibility in the apportionment among the end uses through regulations being made to vary such apportionment. The apportionment provisions of the Wool Tax Acts (Nos 1 to 5) 1964 are more appropriately contained in the Wool Tax Industry Act 1972. Accordingly the complementary Wool Tax (Nos 1 to 5) Amendment Bills provide for the removal of the apportionment provisions.

At present the five Wool Tax Acts and regulations provide for a levy on wool growers of 8 per cent of the sale value of shorn wool. Receipts from the wool tax are apportioned under the Wool Tax Acts and associated regulations as follows. Five per cent is allocated by the Wool Tax Acts to the Australian Wool Corporation for market support. The remaining 3 per cent is allocated under the Wool Tax Regulations as 2.5 per cent to wool promotion and market administration expenses and 0.5 per cent to research. The Wool Tax Acts provide for the Wool Council of Australia to make recommendations to the Minister with respect to variations in apportionment to promotion and research. The Council is seeking the flexibility to be able to vary the wool market support component of tax receipts between four and five percentage points and to make corresponding variations in the allocations to wool promotion and research.

In the short run the Council is particularly concerned that the depreciation of the Australian dollar against a range of international currencies could result in an increased contribution to the International Wool Secretariat budget of the Australian Wool Corporation of up to $25m in 1985-86. Hence, it is important to have this amending legislation in place before the 1985-86 selling season to allow regulations to be made varying the apportionment to wool promotion as recommended by the Wool Council of Australia.

Wool is sold in an extremely competitive and fashion conscious market and in the longer term we need to ensure that it is not disadvantaged in any way in competing with other fibres. The wool industry's continued growth and prosperity depend very much on meeting the demanding marketing challenges of the world textile market and financial support of the International Wool Secretariat's promotional activity is vital.

The Government recognises the marketing challenges which face the industry. Last year it introduced arrangements setting the Government contribution to wool promotion at 1.2 per cent of the gross value of wool sales for each of the five years to 1988-89 subject to the wool industry at least maintaining its present level of funding for promotion. The increased flexibility sought in this Bill would enable the wool industry to compete more effectively in promoting wool by directing additional funds to promotion when necessary. The Bill involves no additional financial cost to the Government. This Bill and the complementary Wool Tax Amendment Bills are essentially procedural amendments facilitating the variation in apportionment of industry funds. I commend this Bill to the House.

Debate (on motion by Mr Braithwaite) adjourned.