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Thursday, 7 May 1987
Page: 2856

Mr ANDREW(8.27) —I am honoured to rise in the House tonight to address the Wool Marketing Bill and the Wool Tax (Nos. 1 to 5) Amendment Bills. I have to acknowledge the contribution made by the honourable member for Kalgoorlie (Mr Campbell) in this debate. I endorse the sentiments that he expressed about the importance of the wool industry to Australia. I add to the remarks that he made that not only is the wool industry one of the industries that export a renewable resource, a fact that distinguishes it from the coal industry, but also, of course, it is the industry that is most characteristically Australian.

I rise as the member for Wakefield, I am aware that other members in this House representing wool growing electorates would like the opportunity to speak tonight. I acknowledge particularly the presence in the House tonight of the honourable member for Corangamite (Mr McArthur) and the honourable member for Wannon (Mr Hawker), both of whom are listed to speak but whose opportunity to do so will depend entirely on the co-operation of their colleagues, such as me, in keeping their remarks brief.

It is important that I, as the member for Wakefield, have a word or two to say since Australia's key merino studs are located in the Wakefield electorate. I refer to studs such as the Collinsville stud under Neil Garnett, the Ashby studs, the well known Murdoch studs, the Hawker Bungaree studs, as well as the studs operated by Dunn, Stockman, Lehmann, Fiebig, Murray and Davidson. One could go on and on with the list of studs which characterise the Wakefield electorate. These studs and the industry of which they are a part have been a success story in Australian agricultural terms.

I am speaking in this debate at a time when the wool industry is at a high point. The South Australian Stock Journal of 2 April this year-I have it in the House for exhibition-ran the headline `Wool sales top 720c'. This is the sort of optimistic headline that the South Australian Stock Journal responsibly uses. If that were not enough, today's Age newspaper ran another story under the headline `Wool demand is likely to yield $4 billion'. An article in the Australian of 18 March written by Julian Cribb pointed out that opportunities for exports of Australian wool to China were currently booming. I quote briefly from that article in which Cribb said:

In barely a decade, China's purchases of Australian Wool have soared from 2,000,000 kg to a likely total of more than 90 million kilos in the current 1986-87 season-rising from twentieth to second-largest customer.

In value terms that represents $370 million, or more than 1.2 per cent of Australia's total export income.

Later in that article Julian Cribb states:

Another factor is that China has a thriving trade in rugs and carpets into which to pour the coarsest wools it produces.

There are two fundamental demand factors behind the growth in China's wool textile industry, says Mr Saunders.

First, the dramatic rise in national living standards has sharply boosted demand . . . Incomes have risen by 40 per cent in recent years and under the present economic plan are intended to quadruple by 2000.

China, with its long, almost unbearably cold winters, is a natural market for wool. Mr Saunders noticed that many Chinese wear up to three jumpers to compensate for the absence of central heating.

Someone has observed that, were we to get every Chinese person to wear just one woollen sock, we would change overnight the shape and the future of the Australian wool industry. Having given that background, rather than reiterating all that has been said by previous speakers, I want to set into perspective the current outlook for the wool industry. Some people have been unwise enough to say that what is often referred to as the wool boom of the 1950s is being repeated in 1987. Let us look at that in real terms. In 1950-51 the average auction price for greasy wool was 264.9c per kilogram. In 1986-87 the average auction price for greasy wool is 395.3c per kilogram.

But if we look at the 1950 figure in 1986-87 dollar terms we discover that in 1986-87 one wool grower would actually have to get an incredible $24.94 per kilogram to match the price of wool in 1950-51.

Mr Hunt —What was the figure?

Mr ANDREW —I know it is incredible; I know it is unbelievable. I have checked the figures. In real terms, wool growers would have to get $24.94 per kilogram in 1987 to match the price of wool in 1950-51. So even in 1986-87, the year in which we have had headlines telling of a wool price of 720c per kilogram, the reality is that wool growers in Australia have faced an 84 per cent loss in what their wool cheque generates compared with the 1950s. One might well ask: `What sector of the community, apart from the rural community, has been prepared to wear this sort of loss?'.

Mr Hunt —None.

Mr ANDREW —Precisely. As the honourable member for Gwydir says, no one else. I acknowledge that the Australian wool industry has survived partly because of the legislation that was before the House in 1972, which is being replaced by the Bills now before the House, in 1987. As has been acknowledged, these Bills allow the Australian Wool Corporation to be much more flexible than it has been in the past. They provide for the appointment of a part time or full time chairman. As the Minister for Primary Industry (Mr Kerin) has said in his second reading speech, if a full time chairman is appointed he will also be expected to occupy the post of chief executive officer. Under these Bills the Corporation, in co-operation with the Wool Council of Australia, will set up a selection panel, which will be a sunset panel. It will cease to exist after it has undertaken its task of selecting the directors for the Corporation. These Bills will allow the Corporation to act in a more commercial way whenever it deals with overseas money deals or in any Australian commercial venture and will allow it to borrow on a commercial basis up to 50 per cent of its net assets.

Other speakers have spoken about the way in which these Bills will change the historic ownership of some of the existing wool stores. The Wool Tax (Nos 1 to 5) Amendment Bills provide for an increase from 8c to 10c in the ceiling rate of tax on the value of shorn wool. An immediate move from 8c to 10c is not intended but this level of flexibility will be provided. This gives greater flexibility to the way in which money is allocated out of that 8c or 10c, as the case may be, to market support, to general purposes of the Corporation and to research and development.

There is no doubt that the money allocated to research and development and market expansion by the Corporation has allowed the wool industry to survive what have clearly and statistically been very difficult years. The industry has been trumpted as the flagship of Australian rural industry but there can be no doubt, when we look at my earlier statistics, that every wool grower is to be commended for having survived in what has been a real economic storm. The legislation that the industry has worked under has allowed this survival and we in the Opposition trust that the legislation currently before the House will allow the industry to survive into the twenty-first century.

I acknowledge that there are a number of parts in the Bills that I ought to have addressed but I notice that the Whip is giving me rather strange looks. So in the interest of the honourable member for Wannon, the honourable member for Corangamite and others, I simply say that the Opposition and I, as the member for Wakefield, are pleased to support the legislation currently before the House.