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Wednesday, 1 November 1967

Mr McEWEN - Yes, I made a speech in opening the annual conference of the National Farmers Union. This speech was reported in various newspapers. Unfortunately, the 'Canberra Times' got its decimal point wrong. The 8.5 which the honourable member has mentioned is not a percentage. The 'Canberra Times' reported me as saying that the additional cost to wool growers of the tariff on the items which wool growers buy in New South Wales was 85c per lb - not 8.5% as the honourable member said - which is a little heavy. The figure that I quoted was 0.85c per lb. Might I put the position-

Mr Buchanan - That would not worry the Australian'.

Mr McEWEN - lt was the 'Canberra Times'. I want to deal with the question and the misconception that exists about the cost to wool growers of the tariff on the items which they themselves are required to buy. To this purpose I turned to a report which the Bureau of Agricultural Economics had made on the costs of wool growing in New South Wales, which is the biggest wool selling State, and found that there existed a report which set out in a table the quantities of items purchased by the average wool grower in New South Wales. It set out separately both the percentage of his income which was derived from the sale of wool and the weight in pounds of the wool produced and sold by the average woolgrower. So having these facts which came from the Bureau, which is the Government's principal adviser in this respect, 1 then asked the Department of Trade and Industry to set out in simple terms the extra cost due to the tariff levied on each item; and to get the thing in the correct perspective, where there was no tariff but a bounty paid to reduce costs, to set out also the benefit to the wool grower by way of bounty.

The Department of Trade and Industry simply turned up whatever the item was, took the weight used by the average wool grower and said: 'His cost was this'. It looked at the amount of superphosphate used and said: 'His benefit from the bounty is this'. Upon relating the costs and the benefits to the proportion of income derived from wool, 52.7%, it was found that the burden on the average New South Wales wool grower arising from tariff on the items which he himself bought in the course of his production, amounted to 0.85c per lb. The benefits which he received from Treasury by the payment of superphosphate bounty or other bounties, were equivalent to 0.75c per lb. Therefore the difference is 0.1c per lb. That is the net burden on the production of wool resulting from the tariff imposed on items bought by the producer and the benefits he receives from the payment of bounties. I observed that 0.1c per lb was a microscopic cost and that no important relief could be afforded to wool growers by removing all the tariff from the items which they bought. I said that if a reduction in tariff were to be the means of giving relief to the wool growers then we would have to turn, not merely to the items which they buy, but to the protective tariff which applies over the whole spectrum of protected Australian industry which is the basis of most Australian employment.

I finally observed, as I do now, that it is a pity that wool growers are led to believe that their problems arise from tariff burdens, which are capable of being altered. This prevents them from seeing in the true perspective where their problems lie. This is the position: Ten years ago when all wages and costs were lower than they are today, the average price of wool which was running at about the normal level was 66.4c per lb. Recently the average price of wool has been 43c per lb. This puts the wool growers in the intolerable position which they occupy at the present time but it is due demonstrably to the fall in the price of wool.

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