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Thursday, 20 May 1993
Page: 1027

Senator TIERNEY (9.55 p.m.) —The purpose of the Australian Wool Realisation Commission Amendment Bill 1993 is to extend the repayment of accumulated debt of the Australian Wool Realisation Commission from seven to eight years. While not opposing this Bill, because the rescheduling gives the woolgrowers an extra year to repay the wool debt, I believe it is important to join with my colleagues in pointing out to the Government the problems it has created and which it is currently perpetuating in the wool industry.

  In the last three years there has been a dramatic downturn in prices, a rapid and large accumulation of stocks and the abandonment of the reserve price scheme. This combination has placed the wool industry under a number of short to medium-term pressures. The most important of these is the cost of servicing debt incurred via the stockpile; the challenge of managing and disposing of the stockpile; the economic and social impact of a substantial decline in woolgrowers' incomes; and the need to adjust productive capacity. Add to this the disaster of one of this century's worst droughts and it should be obvious that the people of rural Australia certainly need assistance.

  Unfortunately, it is not obvious that the Government will take more effective action than the measures that we have in this Bill before us today. The very serious plight of the Australian wool industry and those players in it, including many people who are not woolgrowers, needs to be urgently addressed. The crisis extends well beyond woolgrowers and their families. The crisis involves everyone in rural communities whether they be directly employed as woolgrowers or whether they make up part of the community that services the wool growing industry. In fact, entire rural communities face nothing short of economic and social devastation if the current disastrous prices prevail in the wool industry.

  Business losses for the average woolgrower over the last three years totalled $100,000 and similar losses are expected this year. The current stockpile of 3.9 million bales has barely shifted in the last nine months and it is an ominous shadow over the future of the entire industry. The forecast total production figure for greasy wool this year is 851 million kilograms. Next year this is anticipated to come down to 805 million; however, some estimates put it as low as 700 million kilograms. This provides further scope for wool to be sold from the stockpile without necessarily depressing the effect on sales through the auction system.

  We plainly believe that the Government could have done more for the wool industry in this hour of critical need. For example, the Government has failed to address the call from the Wool Council of Australia for a 12-month waiving of the 4.5 per cent debt repayment component of the wool tax. This single measure would have helped all woolgrowers. The Government could also have taken the opportunity with this Bill to slacken the strings which control the Australian Wool Realisation Commission. It could have given the AWRC increased flexibility to go out and market wool from the stockpile rather than wait for buyers to come to it.

  The Government could have removed from public scrutiny the operations of the Australian Wool Realisation Commission so that buyers would not know how much wool the commission was selling or at what price it was selling it and, therefore, what other buyers were doing. The Government could have allowed the commission to establish more markets, develop innovative trade deals and new uses for wool, but it has not gone down that path. Above all, the Government had the opportunity to send a clear signal to the market that there would be absolutely no chance of a fire sale of the wool stockpile. The Government has failed to do any of these things.

  In this Bill the Government has chosen to extend the repayment deadline by one year. This is a welcome move, but it really only puts the problem off for another year. In fact, it gives woolgrowers unfounded confidence only for them to find that the problem is still there when the repayment schedule advances 12 months further down the track. The coalition and the woolgrowers themselves do not deny the need to repay the debt. Growers have a vested interest in the rapid repayment of the debt, otherwise they will be burdened with the cost of servicing it and paying for the stockpiling of wool. These are additional costs that this wool industry could well do without.

  The Government also conveniently ignores the fact that it removed drought from the natural disaster relief arrangements and so it is partly responsible for the crisis in many areas of the country, including many woolgrowing areas, now affected by drought. There seems to be a broad acceptance that drought is a recurring theme in this country. It is something that rural Australians have to be prepared to confront and to plan for when they can. However, given the economic climate in which farmers have been operating for the last few years, this task has been made exceptionally difficult. It is worth observing in any case that the severity of the current drought puts it into a category which no rural producer could possibly hope to plan for.

  Additionally, it is important to note that Australia's rural sector is one of the most productive in the world and that our productivity improvements in recent years have shown the rest of the Australian community what productivity improvement is really all about. It has a record of which it can be extremely proud.

  Unfortunately, this Government continues to fail to introduce the policies that are necessary to help this very worthwhile industry. This Bill is not a significant step forward in solving the wool crisis. There are many measures which the Government could have introduced along with this Bill, but it has failed to act. I cannot oppose the Bill because it does give small relief, but I implore the Government to act more effectively to help this industry by implementing some of the measures that the coalition has outlined today.