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Thursday, 28 October 1993
Page: 2810

Senator CRANE (8.22 p.m.) —In rising to speak to this package of wool bills, I once again declare my interest in this subject, being a woolgrower, but I doubt whether anybody in this chamber is not aware of that by now.

  In addressing this legislation, I want to look more at the future than the present, but in the 10 minutes available to me there are a couple of things about the present that I would like to comment on as well. Firstly, I believe it is tragic that, once again, we are back in here debating the future direction of the Australian wool industry, the greatest industry this nation has ever had. I have no doubt about the future of it. It will return, in due course, to its greatness in the Australian economy for its contribution as an export earner and also, very importantly at this time when we have such high levels of unemployment, to the pride of place it once held amongst the industries that provide direct employment and, as a flow-on, indirect employment. I have no doubt about that at all.

  I would like to make a couple of points about what Senator West said, particularly with regard to price. If price did not matter, if it was not important, why did the stockpile blow out as it did when the reserve price went to 870c? The simple fact is that, through the changes that were made to the wool legislation in 1987 and the flow-on from it, we priced ourselves out of the contemporary market in a very competitive textile world market scene. Price does matter. It is vital. If the competitors—to us that means the cotton industry, the synthetic industry and others—are given a price advantage in the marketplace, purchasers of wool, and, ultimately, consumers, will shift. The price on the garment will not change because it will be made out of something else and purchasers will not be buying wool.

  I certainly accept Senator West's proposition that what state governments do is important, but what federal governments do is also fairly important. The decision in the government budget with regard to putting up fuel excise and sales tax will impact very dramatically on the wool industry in the component of transport. That will flow directly back to the producers and make the recovery of the industry more difficult.

  In talking about the future, which I think is very important, I refer to the hearing of the Senate Standing Committee on Rural and Regional Affairs which was held last Friday. I want to deal with two of the committee's recommendations. The first is the one urging the Minister for Primary Industries and Energy (Mr Crean) to consult fully with the industry on the further development of Wool International. As we know, the bills on Wool International are skeleton bills. They have to have the nuts and bolts and detail put into them.

  I do not accept the proposition, as has been stated by previous speakers tonight, that there was full and proper consultation with the industry. In the industry I include the processors and the exporters as well as the producers. I think it was Mr Lionel Ward, who gave evidence at the committee hearing last Friday on behalf of the processors, who said that if this opportunity for consultation had taken place some months ago, we would have been much better placed in terms of dealing with the problems from the processors' point of view. This was confirmed by Mr Booth, President of the Australian Council of Wool Exporters.

Senator Woodley —Very true.

Senator CRANE —I thank Senator Woodley for that interjection. It is a fact. I think it is wrong of Senator West and others to come into this place and commend people for that consultation process when, in fact, that consultation process was very poor and very weak. I urge Senator Sherry, in his capacity as Parliamentary Secretary to the Minister for Primary Industries and Energy, to take this message back to the minister, because I think it is important in the next phase that that consultation process is improved. I say that in a genuine endeavour to make sure we get it right, not to criticise, because that is past us. The future of one hell of a lot of people is depending on what we do tonight and over the next two or three months.

  Even with the welcome rises in price we have seen in this selling season, wool producers cannot go on losing $4 or $5 per head. As a wool producer, on my own figures last year, which fit with the figures from ABARE, I can tell the Senate that the losses are about $5 per sheep on the current market price. On 10,000 sheep, that means a loss of $50,000 a year. That just cannot go on and emphasises very strongly why we have to get this legislation right. The part that Wool International will play, coming out of the Garnaut report, must facilitate all the links which exist in the wool industry, because they all depend on one another—right from the lamb, when the wool is grown, to the finished garment, when it is worn in Paris or elsewhere.

  My next point relates to the third recommendation in the report regarding the future of funding for wool promotion. I think it is absolutely vital and imperative—I cannot stress this enough—that the government reconsider its position on promotion. It is vitally important. When I look at the money that the government makes available in a whole host of areas in our economy, for the wool industry to be told that this is the last year in which the government will be providing funding for promotion, is a situation that cannot be allowed to continue.

  Even with the current situation, with the growers losing money they are still putting 3.5 per cent of their gross proceeds into promotion. It is almost impossible to get a direct contribution out of the other components of the industry, such as the International Wool Textile Organisation, that will make any significant difference to the IWS, which is the International Wool Secretariat.

  One thing that is crucial to this recovery phase is the government's reconsideration of its position on promotion and its continuation of its contribution. If these bills are to be a confidence builder and provide stability, as other speakers have mentioned, it is absolutely crucial that the government shows the same sort of confidence and makes a commitment for at least another five years. I know that we did not win the last election, but the coalition made an ongoing commitment at the last election.

  I very strongly urge Senator Sherry to do all that he can to have this aspect of the wool industry reconsidered; as I have already said, it is imperative. At the end of the day, I came down slightly in favour of the Garnaut report after what occurred in our hearings the other day. I certainly had a leaning towards a minimum schedule with a price penalty on top of any wool sold above the schedule. But, after considering the explanations that Professor Garnaut gave us and the various aspects of all the evidence and information that we received, I think that probably the best track for us to be on is the one that we are now going down, subject to these couple of points that I have raised.

  Finally, we cannot be in this place next year or the year after debating this issue again. We have made a decision, and we must stick by it. The Wool Council of Australia has said that it will stick by the decision that has been made. There have been too many statements in the wool industry, such as the one that the 700c price was immutable and would never be changed. One could go through a list of them.

  This legislation is now before us. We are making a decision about a fixed schedule for Wool International and it must stick. We cannot accept the situation whereby 12 months or so down the track we will have another inquiry and the whole thing will be rewritten, because that will destroy the wool industry.