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Thursday, 12 November 1998
Page: 253


Mr VAILE (Trade) (10:19 AM) —I move:

That the bill be now read a second time.

The purpose of this bill is to give wool growers greater involvement in setting the strategic direction of the Australian Wool Research and Promotion Organisation. The amendments contained in the bill will allow wool tax payers greater involvement in the work of the Australian Wool Research and Promotion Organisation and a greater opportunity to express their views on the directions of wool promotion and research and development.

The bill arises from recommendations from the wool industry which were considered by an industry-government working party. I believe the thrust of the changes will be welcomed by wool growers. The current legislative framework governing the Australian Wool Research and Promotion Organisation allows wool tax payers—that is, wool growers—only a minimal involvement in the organisation.

These restrictions were a response to the difficulties experienced with the decision making process of the old Australian Wool Corporation and its management of the Reserve Price Scheme. While wool growers showed strong support for the Australian Wool Research and Promotion Organisation—in the wool tax ballot in late 1997—these statutory arrangements have left them feeling they are, to some extent, disenfranchised from the process of setting the future directions of their industry. In practice, the extent to which the Australian Wool Research and Promotion Organisation could interact effectively with wool growers has been limited by the existing legislation.

In summary, the bill will give the wool growing industry more involvement in the selection of members of the board of the Australian Wool Research and Promotion Organisation, and will ensure there are more wool growers with appropriate expertise on the board. It will open up the annual general meeting of the Australian Wool Research and Promotion Organisation to allow individual wool growers to put their views directly to the organisation that is responsible for spending their wool tax dollars. And it will allow greater flexibility in future ballots to set the level of wool tax.

AWRAP Board

The bill provides that the Australian Wool Research and Promotion Organisation Board be increased from nine to 11 members. This will allow the number of wool grower members on the board to be increased to four, not only reflecting the importance of this skill on the board but also greatly assisting communication on the business of the organisation with growers spread across the country.

However, the board will retain the wide range of expertise and the mix of skills and experience necessary for it to efficiently perform its function, much of which is, of course, well beyond the farm. In addition to their wool production background, the additional grower members will be expected to have broader commercial, processing or other skills and knowledge to contribute to the board.

The board will remain an independent and professional body, with appropriate skills, but with better avenues of communication with the industry it serves and, hence, greater accountability to growers.

AWRAP Chair

The bill provides that the Chair of the Australian Wool Research and Promotion Organisation will be required to `have had involvement in wool production' as well as relevant board experience, and experience in the other areas of expertise outlined in the act. This will give sufficient scope to appoint a capable and independent Chair suited to heading a large, commercially focused organisation.

Selection committee

The Australian Wool Research and Promotion Organisation is a statutory authority, and appointments to the board will continue to be the responsibility of the government. However, through this bill the selection process for board members will be revised, to increase the role of the industry in the process, while ensuring that board members will be selected on the basis of their expertise, not their affiliation to industry groupings.

The board selection committee will include:

. a Presiding Member and another member appointed by the government

. the Chair of the Australian Wool Research and Promotion Organisation, and

. two members nominated by the Wool Council of Australia, in consultation with the Australian Interior Textile and Carpet Wool Council.

Annual General Meeting

In relation to the annual general meetings, at present growers are only allowed to vote on a motion approving the annual report, or if a motion of no confidence is lodged. These restrictions are out of date and are a major contributing factor to the low levels of grower participation in the annual general meetings.

This bill will allow wool tax payers to put motions to the Annual General Meeting, bringing forward potentially useful ideas for consideration by the board, without mandating the acceptance of these ideas. The board will then be required to explain to the industry any decision it makes regarding such motions.

Corporate plan—consultation

Enhanced consultation with the peak industry councils during development of the corporate plan will allow the Australian Wool Research and Promotion Organisation to draw more fully upon industry expertise and the desires of wool growers, while still maintaining the professional independence of the organisation.

Wool tax ballot

This bill will remove unnecessary restrictions on the conduct of the wool tax ballot, which will also contribute to satisfying wool tax payer requests for more involvement in the direction of their industry. There is also increased flexibility in the form that the ballot may take.

Other changes

The other amendments provided for in the bill are of an administrative nature. They include clarifying situations where the Australian Wool Research and Promotion Organisation is operating on behalf of the Australian wool industry and the government under implied, rather than express, powers. This recognises the organisation's move towards more commercial practice, such as charging for the provision of services, and the use of the Woolmark brand by licensees.

This allows the Australian Wool Research and Promotion Organisation to seek much needed additional funding to supplement the wool tax and the government's research and development support, leveraging funds available for promotion, and allowing the organisation to enhance its interaction with manufacturers and retailers.

The calculation of the gross value of production of wool, which is used in calculating the government's contribution to research and development funding, is also to be amended to ensure consistency with legislation governing the other primary industry research and development authorities.

Conclusion

The amendments contained in this bill signal a further step towards curtailing unnecessary government involvement in the wool industry. However, I would stress that these amendments are not about enhancing grower representation within the industry or jeopardising the high standard of corporate governance already established by the board. They are about giving the Australian Wool Research and Promotion Organisation greater access to the skills and experience that reside within the wool industry, enhancing accountability to wool taxpayers and fostering industry `ownership' of its main service provider.

These changes also fit well with the organisation's continuing evolution towards a corporate structure operating along commercial lines. The government supports the move by the organisation towards more commercial approaches to its operations, and notes that this process will continue. If there are further worthwhile changes the industry believes are appropriate, the government will, of course, be prepared to consider further amendments to the act in future.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Ms Macklin) adjourned.