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Thursday, 30 April 1987
Page: 2237

Mr BARRY JONES (Minister for Science)(10.01) —I move:

That the Bill be now read a second time.

The purpose of the Wool Marketing Bill 1987 is to introduce legislation to replace the Wool Industry Act 1972. The Bill will govern the operations of the Australian Wool Corporation and the wool auction system. It introduces a number of changes consistent with the Government's policy statement `Reform of Commonwealth Primary Industry Statutory Marketing Authorities'. The Bill also introduces additional administrative arrangements including measures for quality assurance of the Australian wool clip.

Associated with the Bill are five Wool Tax Amendment Bills 1987, which I will address separately. The package of wool Bills that I am introducing today has been developed with a high degree of consultation with the Wool Council of Australia, the Australian Wool Corporation and other elements of the wool industry. It is intended that they provide the framework for the marketing of Australian wool over the next decade.

The Minister for Primary Industry (Mr Kerin) believes it is most appropriate that the Wool Marketing Bill be introduced to this House at a time when the Australian Wool Industry has re-emerged as Australia's leading rural export industry and in a year when wool exports are likely to contribute almost $4 billion to our balance of payments. The present legislation for the wool industry, the Wool Industry Act 1972, commenced on 1 January 1973 in starkly different circumstances to those currently enjoyed by the industry. In the early 1970s the industry was on its knees. It was through bold leadership of the wool industry at that time by such men as Bill Vines, Bill Gunn and others, including David Asimus, the present Chairman of the Corporation, and the initiative of Ken Wriedt-a great Tasmanian--

Mr Hodgman —The one I beat in 1980.

Mr BARRY JONES —Is that the one?-that the reserve price scheme was established, the decline in the wool industry arrested, and the basis for a sound reconstruction laid. The recovery of the industry since that time can in no small way be attributed to the arrangements set in place in the Wool Industry Act. The Australian Wool Corporation has operated effectively in its support of the market through the reserve price scheme and wool growers have strengthened the position of wool in the world textile market by their continued investment in wool promotion and research and development.

Notwithstanding the present buoyancy in the wool market, the industry faces enormous challenges in the future. We should not let our record wool exports hide from us the fact that wool is a special fibre occupying a small and declining share of total textile consumption. It presently accounts for only around 5 per cent of overall world textile use against a 47 per cent share for cotton and a 48 per cent for synthetics. Furthermore, in those areas where wool is relatively strong, its share is declining. Wool had 33 per cent of the menswear market in 1970; it has about 18 per cent today. Similarly, its share of womenswear has fallen from 27 per cent to 14 per cent and knitwear from 40 per cent to 27 per cent.

It is extraordinary to reflect that there does not appear to be a single member of the National Party of Australia in the chamber today for this Bill, which is very important to the wool industry. One begins to wonder what is happening. These markets are extremely volatile and subject to the vagaries of shifts in world fashion and alternative expenditure choices available to consumers. We must remain vigilant to the need to maintain high levels of investment in wool marketing, promotion and research and development, so that wool continues to be profitably sold overseas.

On the supply side, members are aware of the present disruption in world agricultural markets and the potential for a continued shift in resources away from other farm enterprises, in particular cropping, to wool. Sheep numbers have grown rapidly from 133 million in 1983 to an estimated current flock of 160 million. A continuation of this rate of growth poses a longer term challenge for the wool industry and this must be monitored. We must have flexible marketing arrangements in place to meet any crisis in the supply of wool arising from an expansion in sheep numbers.

In addition to demand and supply considerations, the wool industry must also remain aware of the future options which may emerge in the whole chain of events from the production to the consumption of wool. At the moment the Australian wool industry can stand proud. It clearly surpasses all other wool producing nations not only in the quality of wool it produces but in the way that it is harvested, handled, sold, stored and distributed. It has an outstanding record of innovation. However, the industry cannot rest on its laurels. We compete not only against other wool producers, but also against other fibres and other options for the consumer to spend his or her dollar. The industry must therefore remain cognisant of the need continually to innovate, adapt and modify, to ensure that wool is moved from the sheep to the consumer in the way that presents the best product to the consumer in the most cost effective way.

That means that the wool industry must think creatively in working out better ways of doing things and how new technologies can be embraced in the industry. In many cases this will involve an extension and improvement in present techniques. For example, it is likely the industry will continue with manual shearing for many years. But there is considerable scope for researching the ergonomic basis of shearing and to research shed management to improve the process to the benefit of both wool growers and shearing teams. But, in addition to incremental changes of this kind, there is still scope to make dramatic changes in the wool logistics system through a re-examination of the location of present facilities and the way wool is stored, handled and sold. In this respect it is anticipated that the industry will make significant breakthroughs in the coming years in the computerisation of the selling system linked with sale by description. Also there is potential for significant gains in the on-shore transportation of wool.

Further to the above, the Government is of the view that there is considerable scope for further processing of wool in Australia. Vision will need to be applied in working out how this can best be done and in marshalling the necessary investment funds. Nevertheless, the potential benefits for the community and the industry in employment, infrastructure development and in ensuring long term contracts for sale of Australian wool are significant. The Government will continue to examine these opportunities, in particular, as part of the textile initiatives being introduced by my colleague Senator Button, the Minister for Industry, Technology and Commerce.

This brief outline of pressures on the industry and possibilities open to it illustrates the extent of change the industry inevitably faces. Continued success in the industry, as in any other business operation, will require that change process to be properly understood and effectively managed. It is timely, therefore, that the process commenced in the late 1960s and early 1970s be extended to cover modern demands and to position the industry to prepare for the circumstances it will encounter in the 1990s and into the next century. It is for this purpose that the Minister has developed new arrangements in consultation with the wool industry. The result of this process is the Bill now proposed to the House.

The Bill focuses on four principal objectives. First, the Bill seeks to place the Australian Wool Corporation on a sound commercial footing so that it is equipped to respond now and into the future to the pressures of the market-place. Secondly, the Bill is designed to introduce appropriate arrangements to ensure that the Corporation is fully accountable to industry and government without disturbing its commercial performance. Thirdly, the Bill introduces new arrangements for the quality assurance of Australian wool. Finally, the Bill has the objective of providing modern businesslike legislation for the industry which will guide the industry towards the next century.

I would now like to comment in more detail on the Bill in relation to these objectives. This Government has distinguished itself in comparison with the previous coalition governments in that it has introduced significant market deregulation and opened the way for better commercial operation by Australian enterprises. It has abandoned conservative rhetoric and given the market the chance to work. The initiative of this Government is particularly evident in the approach it has taken to the changed administration of its government statutory business enterprises and to the reform of its statutory marketing authorities.

The Australian Wool Corporation has been successful in its commercial operation. But the Corporation, like other statutory marketing authorities, has been constrained by the need to comply with numerous government controls which have presented difficulties for it in its market operations. The Government has already, in its general reforms of statutory marketing authorities, made a number of changes to the operations of the Australian Wool Corporation. These are outlined in the Government's policy statement `Reform of Commonwealth Primary Industry Marketing Authorities', released as a White Paper on 29 January 1986. Many of the reforms outlined in that document have been discussed in this House in respect of the meat, wheat, dairy and wine and brandy statutory marketing arrangements. I do not propose to discuss these reforms in detail-unless, of course, honourable members insist- except where the wool statutory arrangements are significantly different and where this Bill removes further controls on the Corporation to place it, where possible, on an equivalent footing to commercial business corporations. If the Corporation is to operate on an effective commercial basis, it is essential that its Board comprise the best available talent. To this end, a number of changes will be introduced.

The Minister will continue to select and appoint the chairperson of the Corporation as well as the Government director. However, in keeping with best commercial practice it is believed to be appropriate that there be flexibility to make sure that the person appointed to chair the Corporation is the best available and that that appointment is made on the most appropriate basis for the Corporation at that time. The Bill will therefore provide for the chairperson to be appointed on a part time or full time basis. Where a full time chairperson is appointed, that person will also be the chief executive officer of the Corporation. Where, however, the chairperson is appointed on a part time basis, a managing director will be appointed by the Board as an additional director of the Corporation and that person will be the chief executive officer. Honourable members will agree that it is imperative that the Corporation be headed by the best available person and the increased flexibility provided by the Bill will enable this to be the case.

The wool industry has been fortunate to have David Asimus as its Chairman for the past eight years. Mr Asimus has been an outstanding Chairman and has piloted the Corporation to its present successful position. He has publicly announced his intention to retire as Chairman of the Corporation when his current term expires at the end of June 1988. He will be sorely missed and he will be a most difficult person to replace. The new arrangements in the Bill will give the Minister more options to work with in trying to fill the gap that David Asimus will leave. The Minister has said that he will ask David Asimus, if it is at all possible for him to do so, to stay on to serve the industry in some capacity. There are numerous positions a person of his talent could ably fill. One which occurs to the Minister is Chairman of the International Wool Secretariat. In the past the Australian Wool Corporation and International Wool Secretariat Chairman roles have been filled by two people, although in recent practice the full time Chairman of the Australian Wool Corporation has also been the Chairman of the International Wool Secretariat. So the new arrangements could open up the option for Mr Asimus to continue as Chairman of the International Wool Secretariat.

In respect of other appointments to the Australian Wool Corporation, the Bill provides for nine other directors, in the case of a part time chairperson with a full time managing director, and eight other directors in the case of a full time chairperson. At present there is a Chairman-in this case sex is not in doubt-a Government member and eight other members, four grower members appointed on the nomination of the Wool Council of Australia, and four special qualifications members selected and appointed by the Minister. The Australian Wool Corporation has been served well by its members and these have been of the highest calibre. Nevertheless, this procedure will not always result in the best available persons being appointed.

The Bill proposes a selection arrangement for the purpose of seeking out the best persons for appointment as directors of the Australian Wool Corporation. The procedure to be used has been worked out with the Wool Council of Australia and is unique to this Bill. The arrangement acknowledges that the Wool Council of Australia as the body representing the growers who contribute to Australian Wool Corporation funds should be represented on the Committee given the task of selecting the best persons for appointment to the Corporation.

When a vacancy on the Australian Wool Corporation occurs the Wool Council of Australia will nominate between three and six persons to represent them on the Selection Committee. Those persons will join the presiding member of the Committee, who will be a statutory office holder appointed by the Minister for a term not exceeding three years. I note for the benefit of the Opposition shadow Minister, the honourable member for North Sydney (Mr Spender), who is in the House, how much more complex and detailed this is than appointing High Court judges.

The wool industry Selection Committee, so comprised, will select grower and other special expertise persons for nomination as the eight selected directors to the Australian Wool Corporation according to selection criteria specified in the Bill. In undertaking its task the Selection Committee may employ staff and engage the services of a personnel search consultant. The Committee will be required to advertise for nominations in a newspaper circulated throughout Australia-I think that includes Queensland-and the presiding member will be required to consult with the Chairperson of the Australian Wool Corporation on the skills and qualities that should be reflected in the membership of the Corporation.

Members of parliament, members of the Wool Council of Australia and members of the Selection Committee established to select persons for nomination to a particular vacancy will not be eligible for nomination to the Corporation. When the Selection Committee has completed its task it will be abolished by the presiding member. When another vacancy arises the presiding member will write to the Wool Council of Australia so advising it and requesting nominations of persons to represent it on the Selection Committee. He will then establish to select persons against that vacancy or vacancies. The wool industry Selection Committee will therefore be an ad hoc committee established for the purpose of nominating persons to a position or group of positions and will dissolve once appointments are made. The one permanent appointment and obviously the pivotal position will be that of presiding member.

It has always been the Minister's intention that a leading business figure would be appointed as presiding member to provide guidance to Selection Committee members on the requirements of a balanced corporate board and on selection techniques. I have pleasure in announcing on behalf of the Minister for Primary Industry that Sir Roderick Carnegie has agreed to serve as presiding member for an initial three-year period. As members of this House will be aware, Sir Roderick is an outstanding Australian. He will serve the wool industry with great distinction. If I may interpolate a few words of my own, he is also serving with distinction on the new Board of the Commonwealth Scientific and Industrial Research Organisation. In the interim all current members of the Board of the Corporation will continue in office as directors under the new arrangements until their terms expire.

Members will be aware of the sophistication of modern financial markets and of the complexities involved in present day financial management. Any corporation which is not structured so that it can control its cash flows, place its money and borrow at the best rates and adapt to changing circumstances is vulnerable. In this context it is worth noting the financial demands on the Australian Wool Corporation. It presently has in excess of $1 billion to the credit of the market support fund, sells wool internationally in various currencies and could, in the event of a severe downturn in the market, be required to spend heavily in purchasing wool to support the market. The Australian Wool Corporation can on a financial transaction basis be equated with larger Australian private corporations.

It is not appropriate in this regard for the Australian Wool Corporation to be hampered in its ability to operate commercially. It cannot be expected to seek frequently ministerial or government approvals for corporate financial decisions. It is also fundamentally wrong for major decisions on the finances and market operations of the Australian Wool Corporation, such as decisions on the minimum reserve price, to be taken in a political environment. If the Australian Wool Corporation is to act as an autonomous commercial body it must have its financial arrangements established, as far as possible, on a commercial basis like any other business organisation. The Bill introduces a number of changes to ensure this. It also establishes a proper relationship on financial matters between the Australian Wool Corporation, the Government and the Wool Council of Australia.

At present the Minister for Primary Industry determines the market indicator floor price each year for the reserve price scheme. This is inconsistent with the Government's objectives of maxi- mum commercial flexibility and autonomy. Accordingly, the Bill provides for the Corporation, as the commercial operator, to set and announce the minimum market indicator reserve price and the reserve prices for the various wool types, after agreement with the Wool Council on the minimum market indicator price. This arrangement recognises not only the commercial role of the Australian Wool Corporation but also the role of the Wool Council of Australia in representing the wool growers who provide the funds through a tax paid on the shorn value of wool sold. If the Corporation and the Council are unable to agree, the Minister will determine and announce the minimum reserve price for that year.

The Corporation will be required to furnish information relative to the setting of the minimum market indicator reserve price and the proposed levels for minimum reserve prices in the annual operational plan for the Minister's agreement. Moreover, the Minister will continue to require the Bureau of Agricultural Economics to advise him on the factors underlying the supply and demand for wool and the appropriate floor price level and to publish this information to provide another viewpoint to assist the Wool Council in the consultation process.

Recently the need has been demonstrated for more flexibility in the rate and apportionment of wool tax. In particular, the present experience of a healthy market support fund has been accompanied by a shortfall in funds for promotion arising from the depreciation of the Australian dollar. As a move in this direction the Bill provides for the Wool Council, after consultation with the Corporation, to decide how its wool tax should be allocated each year. Minimum allocations of 2.5 per cent to market support, 2.5 per cent to promotion and general purposes of the Corporation and 0.25 per cent to wool research and development have been specified. In other words, 5.25 per cent of the wool tax on the shorn value of wool will be committed each year, leaving the Wool Council free to allocate the remainder of the tax among these areas of activity.

The Minister will shortly be introducing complementary legislation to increase the ceiling rate of wool tax from 8 per cent of the shorn value of wool to 10 per cent. This will give greater flexibility to the Corporation to respond to pressures on the reserve price scheme and promotion funding needs. I should add, hastily, that the increase in the ceiling rate does not mean that the operational rate will automatically change from the current 8 per cent. Any request from the Wool Council for an increase in the present ceiling rate will be studied very carefully by the Treasurer and the Minister before making a decision. The responsibility for determining refunds will rest with the Wool Council.

Current arrangements, whereby the Corporation can borrow up to $200m without ministerial approval, and at least a further $200m with approvals, are inflexible and inconsistent with statutory marketing authority reform policy. In the event of a sudden and significant downturn in the market necessitating heavy buying by the Corporation, it is vital that the Corporation be able to fund purchases and maintain market confidence in the floor price through immediate access to substantial funds available under previously arranged lines of credit. This Bill provides for the Australian Wool Corporation to borrow, without ministerial approval, up to 50 per cent of its net assets, valued at the end of the previous financial year. Borrowings beyond 50 per cent of Corporation net assets at the end of the preceding year will continue to require ministerial approval.

In effect, this means that the greater the net value of assets the higher the permissible level of borrowings with approval. To place this approach in perspective, it would have implied borrowings of about $500m if applied in 1986- 87. This arrangement allows the Corporation to borrow to the extent of a 50 per cent debt to equity ratio which is a conservative level when compared with leverage levels of modern business enterprises, particularly in light of the Corporation's conservative valuation of some of its assets. The Australian Wool Corporation has an outstanding record of financial stewardship to support this arrangement and will have a high calibre expertise-based Board to oversight its implementation.

The Bill also provides for the Corporation, after consultation with the Wool Council, to appoint a commercial auditor should it so wish. It if does seek to use a commercial auditor, the Minister for Primary Industry will be responsible for the appointment of the auditor subject to the Auditor-General's agreement that the auditor is suitable and to the agreement of the Joint Parliamentary Committee on Public Accounts. This provision is an important step in increasing the commercialisation of the Australian Wool Corporation.

Under the existing legislation the precise ownership of some wool stores which were vested in a predecessor of the Corporation in 1953 has been uncertain, particularly in view of the defence provision dating back to World War II which allows the wool stores to be reacquired in the event of threat of war. This Bill removes the defence provision which has been rendered obsolete and clarifies the ownership issue by fully vesting all wool stores in the Corporation.

Simultaneously the Bill upgrades the status and visibility of the wool stores operation by establishing a separate Wool Stores Board of Management as a sub-committee of the Corporation to administer the stores to the benefit of wool growers. The Wool Stores Board of Management will be required to prepare corporate and annual operational plans and an audited annual report, with full visibility of financial accounts, to the Corporation for inclusion in the latter's annual report.

The wool stores managed by the Corporation are an important aspect of the wool marketing and logistics system in Australia and it is of paramount importance that they be established on an appropriate management basis. In addition the stores are a significant asset of Australian wool growers. They should be managed so as to ensure the best commercial returns to wool growers and growers should be appraised of the location and other relevant information on the stores and on the results of their management. Provisions in the Bill will achieve these goals. The third objective I stated for this Bill was that of ensuring accountability by the Corporation in a way which does not disturb the Corporation's commercial performance.

Under the arrangements proposed in the Bill there will be a significant devolution of responsibility to the Corporation to allow greater operation flexibility by freeing it from the need for constant reference to the Minister for approval of each major activity. This redirection is essential to the proper commercial functioning of the Corporation. Whilst they give additional freedom to the Corporation over commercial matters, these changes can in no way be taken as reducing the level of its accountability by the Australian Wool Corporation to government and wool growers. The changes I have mentioned are accompanied by provisions to ensure proper accountability. These provisions are interlocked in the Bill so that the Corporation will be required to operate on a corporate strategic basis both in its management and in its dual accountability to government and industry.

The Bill, as discussed previously, clearly defines the role of the Australian Wool Corporation and ensures that it has the wherewithal, including the necessary skills at Board level, to perform its role in a commercial manner. In this respect the Selection Committee comprised essentially of Wool Council of Australia nominees will have an important accountability role. The Minister will select and appoint the Chairperson of the Corporation and that person will be his principal point of contact with the Corporation. The Minister will relate with the Chairperson throughout the year and in particular he will request that he or she report to him on any substantial policy matters, pertinent to the Corporation's relationship to government policy, following each Board meeting. The Minister will also select and appoint the Government Director who will be a special appointee knowledgeable in matters of Government policy and public administration. The Government Director will not, however, have a reporting relationship to the Minister on Corporation business which is any different from that of any of the other directors. In this respect the Minister will expect that person, like any other director, to perform a two hatted role-maybe this could happen if he had two heads but in the absence of that, the two hats will have to do-in respect of the separation between the corporate role as a director of the Corporation and any other role normally filled.

In keeping with modern corporate practice, the Corporation will be required to prepare each year, after consultation with the Wool Council of Australia, a corporate plan for the ensuing five-year period and an operational plan for the next financial year and submit these for the Minister's agreement at least one month before the commencement of the period. These plans will address the strategies the Corporation intends to follow and the Corporation will be required to state its strategies in respect of wool stores, research and development and its equal employment opportunity program. The Wool Research and Development Council will also prepare a five-year research and development plan for presentation to the Corporation for later submission for the Minister's agreement.

The Corporation will also be required to present an annual report for the latest financial year to Parliament and to the Wool Council of Australia within a specified time frame. This report is to include full particulars of the Corporation's activities with full visibility of the financial accounts pertaining to each activity. I am inclined to think, Madam Speaker, that something historic is happening in cockies corner at the moment.

Mr Spender —Be careful or you will run out of time and I will not move for an extension of time for you.

Mr BARRY JONES —The honourable member would not be like that. In particular the report will contain an assessment of the Corporation's performance during the financial year against the corporate goals agreed with the Minister for that year. The Chairman of the Corporation will be required personally to present the report to the first meeting of the Wool Council after it is tabled in Parliament and to be available to answer any questions arising from the report.

Apart from the accountability procedures mentioned above, there is also a provision for the Minister to give directions to the Corporation in exceptional circumstances. I do not envisage that the Minister would use such power with any frequency. It is in the nature of a reserve provision and there are strong caveats against its capricious use including the requirement that any directions issued to the Corporation be in writing, gazetted and tabled in Parliament. (Extension of time granted) I thank the honourable member for North Sydney and the House. Honourable members will be relieved to know that there are only six pages to go.

The corporate strategic arrangements I have outlined here provide the Australian Wool Corporation with both a modern management system for its operations and an effective strategic basis for its meeting its accountability obligations. In respect of the wool quality assurance objectives of the Government it is important to recognise the value of wool to Australian agricultural producers and the wider community. Wool is our number one rural export, as I said earlier, and Australia is the dominant world supplier of apparel wool. We must do everything possible to preserve that market dominance of Australian wool and its competitive position relative to other fibres. This includes taking whatever measures are necessary to safeguard the integrity of Australian wool.

The wool industry has, essentially through self-regulatory approaches, sought to institute sound quality controls in the selling system and has participated on Corporation advisory committees in the establishment of wool selling regulations and clip preparation standards. The Australian Wool Corporation also operates a voluntary scheme for registration of wool classers. Notwithstanding these measures there are reports from overseas mills of wool being delivered which is not to standard, contains contamination or in some other way does not conform to desirable levels of quality. When one examines present procedures and the prospect for unscrupulous operation, the need for change is real. This will become an increasingly important issue as wool is sold by description with further introduction of automated processes in modern textile mills. There is also a growing community concern about the quality of commodities generally and with the pesticide issue. I believe that more has to be done to build industry co-operation and the Bill introduces a number of new quality assurance provisions with the Australian Wool Corporation playing a pivotal role.

The Bill provides for compulsory registration of wool classers classing wool to be sold at auction, prohibition of sale at auction unless classed by a registered wool classer and deregistration of wool classers for up to two years where such classers have been found consistently to flout industry agreed standards for presentation of wool for auction. The scheme, to be administered by the Corporation in consultation with appropriate industry advisory committees, will cover owner classers, professional classers and classing houses. Although aimed at auctions for practical administration reasons it is expected that the benefits will flow over to wool sold outside auction.

It is expected that deregistration action would be an infrequently used deterrent but would have a significant impact on the industry. Any deregistration action would be subject to appeals to the Administrative Appeals Tribunal. The Minister will request the Corporation to form a committee comprising all relevant industry organisations, including the Woolclassers Association, to develop this scheme.

Pesticide residues in wool and wool by-products such as lanolin also pose a threat to our exports. Pesticides such as Dieldrin are illegal under State legislation for use on livestock-and I am sorry Madam Speaker is not in the chair to hear this-but at present there are no adequate control mechanisms to ensure that sheep are not improperly treated. I will explain that later.

Mr DEPUTY SPEAKER (Mr Leo McLeay) —I think you have just libelled the Speaker somehow.

Mr BARRY JONES —No; she would acknowledge it, gladly. Pesticide residues can be detected only through chemical analysis and this Bill enables the Corporation to acquire samples from wool testing houses, to ascertain the ownership of wool found to have excessive levels of pesticide residue. The Corporation will then be able to provide a warning to the grower and, if necessary, to inform the relevant State authorities for action under State legislation.

Reserve powers are also provided in the Bill to allow the withdrawal from auction of any wool which the Corporation, advised where appropriate by its industry advisory committees, considers does not meet industry standards of preparation. This also includes action to stop the use of second-hand wool packs. These reserve powers will require the offending bales and documentation to be noted accordingly, with such notation to be withdrawn once the wool has been re-prepared in accordance with acceptable standards. The intention is to invoke such powers only if industry agreement and action on a self-regulatory approach is not forthcoming.

A further matter which affects wool quality is shearing. The Minister is concerned at industry reports that the present high level of wool production will lead to shortages in the availability of quality shearers with adverse effects on the industry. The Minister has specified a function in the Bill for the Australian wool corporation to encourage and facilitate the training of shearers with a view to ensuring the availability of shearers for the industry and a standard of shearing suited to its needs. The Minister has also asked his Department to investigate what more can be done by the Commonwealth Government in this respect and will introduce further policy changes if necessary.

I make the comment, in regard to the quality assurance provisions of the Bill, that these issues have been around the industry for many years. Recently a report was released by an industry committee set up to prepare a code of practice for preparation of Australian wool clips. Apart from that report the questions of poor clip preparation and contamination, classer registration, use of second-hand packs and pesticide residues are all issues which everyone has been aware of and nobody has acted on. This Government is not prepared to shirk the issue. The risks from exposure under present legislation are too high and this Government has acted decisively to introduce real change.

The final objective I mention is that of providing modern, business-like legislation to govern the operations of the Australian Wool Corporation and the auction system. We have through the Bill sought to establish a new modern commercial approach to the administration of wool marketing in this country. I seem to have said that about six times. If we are to be successful in this endeavour, the new arrangements must provide a sound good management practice and be expressed in such a way that its provisions are clearly communicated to and understood by participants in the wool marketing system. This Bill is expressed, as far as possible, in what is commonly called plain English terms-offensive as this may be to the legal profession. Much of the detail of the Wool Industry Act has been removed and the Bill is organised on the basis of a clear logical structure. There is a clear specification in the Bill of the objects and functions of the Corporation. The Bill comprises nine integral parts, including a new part introduced to cover the finance of the Corporation. Each part is self-contained with a statement of the object, functions and powers of the Australian Wool Corporation in respect of that part.

I have outlined as far as possible, the most significant reforms to the administration arrangements for the wool industry since 1972. I have considered a number of changes in detail and have alluded to the Government's reforms for statutory marketing authorities which include adoption of equal employment opportunity procedures and the power to establish subsidiaries, subject to ministerial approval.

Because the reforms are so extensive it has been considered logical, as proposed, to repeal the existing Wool Industry Act 1972 as frequently amended and replace it with this Wool Marketing Bill, a title more representative of the content and orientation of the legislation. Many sections of the Wool Industry Act have been retained, notably the 1986 amendments to wool research and development. The old section relating to refunds from the market support fund was essentially a set of administrative procedures and guidelines and these have been removed to be redrafted as regulations to be made under the proposed legislation.

I am confident that the new Wool Marketing Bill will enable the wool industry to better respond to future marketing challenges. The proposed reforms are not expected to impose any additional costs on the Commonwealth. Indeed, it is expected that there will be indirect savings, albeit modest, in administration through devolution of responsibility to the Corporation. I commend this Bill to honourable members, and table the explanatory memorandum.

Debate (on motion by Mr Spender) adjourned.