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Wednesday, 28 October 1970

Mr SPEAKER -Order! There are far too many interjections coming from my right.

Dr PATTERSON - I may say. Mr Speaker, that we let the Minister for Primary Industry make his speech in silence. If the reserve price is to be kept secret the! Commission will have to take the responsibility for it. There are no penalty clauses in this Bill. Does the Minister think that we are so naive as to think that if a top wool broker or wool buyer is appointed to the Commission he will never ring up his firm and say that the reserve price tomorrow morning or in a few hours will be so many pence per lb. Does the Minister believe that we will say: 'No. they are honest men and they would never contemplate a thing like that'? This is a very important point and it should be made clear in the legislation. If the reserve price is to be kept secret there should be some penalty provisions within the Bill. The other point I would like to make with respect to the reserve price concerns the way in which the bidding will work. I assume that someone from the Commission will be on the auction floor watching the prices. Will he make a bid or not? This is another thing which is not contained in the Bill. If he did make a bid the reserve price would bc there for all to see. This is another serious deficiency in this legislation.

Honourable members will see in the second clause relating to the reserve price the words 'is prepared'. The words are not that the Commission 'will not buy' or 'shall not buy', but it 'is prepared to buy'. But this does not mean that it has to buy. We can only assume from the looseness of the wording of that clause that the Commission will buy. A very important point arises here. Will the growers be able to veto the Commission? Suppose a grower says 'I do not want the Commission to buy my wool. I want to submit my wool through my broker and I want the market price for that wool.' I do not want the Commission to interfere.' There is nothing in this Bill to say that the Commission has the power to acquire this .wool compulsorily. Apparently it has not got that power. This is another item which needs some explanation.

Is there anything to prevent « broker himself from offering wool on the auction floor? There is nothing in this Bill to prevent a broker who has purchased wool on speculation and who is prepared to wait for the right moment, from putting in his wool once he knows the reserve price. There is nothing in the Bill to say that a broker or a dealer cannot offer wool in this way although the objective is that it should go from the wool buyer to the broker. There is nothing in this Bill to prevent some nefarious practices creeping into this new system.

Another point I want to make is: What is the time limit for the Commission to pay the growers for their wool? There is nothing in the Bill to say that the Commission has to pay a grower when it purchases the wool. Surely there should be a stipulation in the Bill that the Commission will pay the owner of the wool, either through the broker or directly within, say, 14 days. Indeed there is nothing in the Bill to say that the Commission has to pay whether within 14 days, 1 day or 3 months. We can only assume that the Commission will pay the grower at some point of time.

I now come to the reselling of the wool. This is referred to in clause 19 (c) which states:

(c)   the Commission, as and when it thinks expedient, re-offers for sale at auction, or otherwise disposes of, wool acquired by it under the scheme.

That is one of the most dangerous clauses in this Bill from the viewpoint of liability. I assume that it has been deliberately included in the legislation. There is no mention of price. The growers - whom honourable members opposite represent - will want to know the price. The taxpayers - whom we all represent - will also want to know this. Does that clause mean that the Commission can offer the wool it purchases under the flexible reserve price at any price it likes, even at a very tow price, or is the Commission obligated to sell that wool at the best possible price it can get? It is for this reason that the Opposition will move an amendment to put in the words 'that the Commission, when it reoffers that wool, should offer it at the best possible price'.

I have already mentioned the possible brokerage charges which will be incurred when the Commission having purchased wool re-offers it for sale. That is one reason why 1 said that brokers are very well off. In some instances there may be - although it is not stated in the Bill - a double lot of brokerage charges. Throughout the Minister's second reading speech there is frequent mention of the word 'advances'. I am not talking about the advances under the price averaging plan. I am talking about the advances in respect of the wool which is taken in to a voluntary pool over 3 lots: It is said that the Commission will pay advances. Do any honourable members know whether the advance will be 60 per cent of the reserve price or just what it means? There is nothing in the Bill to say what it means. This is important. If this wool is not to be said at auction and if the Commission arranges it so that the wool does- not go through auction but is put in the voluntary pool, what price will be paid for that wool? In his second reading speech the Minister said: 'It will receive a price very close to the reserve price'. But where is this stated in the Bill? The point I make is that the Minister makes these important statements about the price in his second reading speech but they have no foundation in . the Bill itself. The Minister in his second reading speech said:

The Commission is empowered to purchase wool in two ways - through the operation of its flexible reserve price scheme ... or, with the consent of the grower, before the wool is offered at auction ... In the latter case, the Commission would pay the grower a price equivalent to its most recent reserve price for the particular type of wool . . .

This is a good provision. But why is it not contained in the Bill? When it comes to a matter of law the Minister's second reading speech is worthless. These things should be contained in the Bill. If the Commission in acquiring wool other than through the auction system is to pay a price approaching the reserve price then this should be set out in the Bill.

The next point I will deal with is with respect to the very sweeping powers of the Government regarding the reserve price scheme. It is mandatory that the Commission comply with that direction. This is set out in clause 19. In other words, we can read into the Bill that the Minister has a right at all times to veto completely the reserve price scheme. This is not good enough. Guidelines have to be laid down in a schedule to the Act or in legislation regarding the operation of the reserve price scheme. There are no guidelines and we can leave it to our imagination as to how the scheme will work. At all times within this fortnightly period the Minister could have the right to veto the scheme if he wanted to. T submit that this type of legislation is not satisfactory and cannot work smoothly.

Also, it would appear - again this is something that is not clear from the Bill - that under clause 21 (b) the Commission has the power to acquire wool other than at an auction direct from the broker if that wool can be classed as being detrimental to the auction system. This is fair enough. But I ask: Has the Commission the power to do this? What will happen if the buyer says: T do not want the Commission to take my wool; I want a broker to sell my wool for me'? What the Government has put forward is not a compulsory acquisition scheme. Tt would seem that the Commission does not have the right to acquire wool under these circumstances. But the Commission should have the right to acquire the wool otherwise, as the Minister pointed out and as the Bill points out quite correctly in regard to the objectives and functions of this legislation, in certain cases there could be a detrimental effect on the auction system. Can the Minister tell the broker to take that wool off the floor if in fact the buyer is not prepared to allow the Commission to have it?

The other point I want to make concerns the open ended nature of the Bill. I appreciate that it is difficult to put a precise figure on loans and operating expenses. Sir John Crawford has estimated on the best advice he can get that the figure would be about SI 33m which would be made up of $11 5m for capital and $18m for operations. T assume - this has been one of the criticisms that I have read in the newspapers - that the Government will look very closely from time to time at the. operations of the Commission with respect to the reserve price and whether stocks are accumulating. It is quite clear that as no limit has been placed on the volume of stocks, very large sums of money may be involved not only for the taxpayer but also with respect to the effect of putting these stocks on to the market and the effect that this will have on the reserve price advanced by the Commission.

The other point I want to make concerns the financing of the scheme through the banking system. Although the loans have to be approved by the Minister, the Labor Party believes that finance should be provided through the reserve banking system and not through approved banks or through some other lending institutions such as pastoral companies. The rate of interest on the loans should be rigidly controlled because, after all, clause 25 indicates that the Government will underwrite all the losses of the Commission and will also guarantee all the loans and interest repayments of the Commission.

Mr Barnes - This worries you?

Dr PATTERSON - I happen to have some responsibility as regards the taxpayer. The Minister probably has none. This does not worry him but it worries a lot of people.

Mr SPEAKER -Order! The honourable member's time has expired.

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