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Thursday, 20 May 1993
Page: 1023


Senator WATSON (9.29 p.m.) —Tonight the Senate is debating the Australian Wool Realisation Commission Amendment Bill 1993, which we support because it extends to the wool industry the period of the Government guarantee from seven to eight years to cover the additional year of debt. The wool industry would be in a much better position to trade its way out of its entrenched troubles if there were fewer bodies administering and handling its various activities.

  Essentially, this Bill is all about the activities surrounding those people whom I might call the liquidators—the people who have the responsibility of getting rid of the wool. What people have not realised is that there is a vast difference between a marketer and a liquidator. Their approaches to selling and distribution are entirely different. So we have a fundamental problem with the attitudes and philosophies of a group of people who have the job of liquidating wool.

  One of the biggest mistakes the liquidators made was having a schedule of their realisation over time. If you have to sell a commodity over a definite period, you never send out a signal to your customers as to the quantity and value of the commodity that you are going to dispose of over the various time schedules. The sooner we get back to a system of trying to market our wool internationally in a proper way, the sooner we will be able to trade our way out of difficulty. That means some restructuring, such as getting rid of a number of the bodies that have a finger in the wool handling pie.

  There is some hope on the horizon; in recent weeks there has been some increase in price. I remind the Senate of a matter that I have raised in my own State. We must recognise that nowadays, in effect, we have two stockpiles. There is the official stockpile, which is causing so much heartburn, and there is another one which is equally as important and which requires consideration. That is wool which is stockpiled not only in farmers' sheds, brokers' houses, warehouses and other places, but around the world in noil form, semi-processed stock and so on.

  We have to be careful when we start talking about burning wool, giving wool away and so on. A solution requires the pooling of the various managerial ideas that have been around, including one from the Country Women's Association about encouraging people to knit more. Obviously with the price down, more people will feel encouraged to knit.

  One of the problems in marketing wool is that industry leaders and Ministers have not visualised the sort of industry they want in the long term. In the past the industry has been based on a high price for that section of the clip known as the fine micron end, from 19 microns down. But if we are going to return to buoyant earnings across the spectrum, we have to refocus on wool as a broad use, multi-use fibre and not just as an exclusive fibre commanding very high prices. We have to look at more average prices, and focus on an increased demand for the product as a whole rather than on wool as a specialty fibre. If we concentrate in the next few years on wool as a specialty fibre there will be no future for this great industry.

  I add a word of warning as one who spent a number of years in the wool industry. A lot of people do not realise that by withholding supply we are wrecking the long-term interests of the industry, because wool must flow through the system. Once the processors stop using wool and move to synthetics, it is very hard to get back. Because of the low prices in eastern Europe and elsewhere, we have a great opportunity to get people back into producing woollen products. For this purpose, we must restructure. We must have a sense of direction regarding where the future of this once great industry should lie.