Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    
Wednesday, 19 May 1993
Page: 896

Senator Cook —On 17 December 1992 (Hansard, page 5341) Senator Boswell asked me as the Minister representing the Minister for Primary Industries and Energy:

  My question is addressed to the Minister representing the Minister for Primary Industries and Energy. I refer to an article in this morning's Australian Financial Review which pointed out that the latest estimates from ABARE indicate that real wool prices will grow by only 6c to 551c between now and 1997. In light of these poor predicted returns for the industry, can the Minister give an assurance that the wool tax rebate of 3.5 per cent will not be abolished during these hard and difficult times?

  The Minister for Primary Industries has provided the following answer to the honourable senator's question:

  The wool tax rebate is a mechanism of distributing surplus Australian Wool Realisation Commission (AWRC) funds that are not prudently required for debt management purposes. In calculating the amount of any surplus towards the end of each financial year, the AWRC considers several factors including the market outlook for the following year, the level of debt compared to the balances specified in the debt reduction schedule, and AWRC's performance to date in the particular financial year. Under the Australian Wool Realisation Commission Act 1991, the AWRC then advises the Minister of the amount of surplus funds (if any) and the Minister, following consultations with the Wool Council of Australia, the Treasurer and Minister for Finance, then determines how any surplus is distributed.

  The 3.5 per cent rebate of wool tax for the 1992-93 wool selling season distributed the AWRC's surplus funds derived from its better than expected performance in 1991-92. For the 1993-94 season, I announced on 28 April that the Government considered there was no capacity to continue to provide a rebate beyond 30 June 1994, but in view of the current economic circumstances facing the industry, the total rate of the wool tax would be reduced to 8.5 per cent. This means that, subject to the normal statutory consultation process, the return to the prescribed level of tax will be postponed for one year.

  In order to avoid a situation in which the AWRC would be forced to sell wool from the stockpile into the depressed market in order to meet its debt repayment schedule (with negative impacts on woolgrowers' incomes), the Government has also decided to extend the repayment schedule by one year to eight years from 1991 and to introduce greater flexibility to the schedule, including the removal of the requirement for the Commission to repay any debt beyond the funds it currently holds for that purpose. In future the annual targets for

repayment will be indicative, with actual targets to be determined by the Government each year according to market conditions.