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Wednesday, 28 October 1970

Mr HALLETT (Canning) - the Bill before the House this evening is an extremely important one. It deals with what is still the most important and biggest single industry in Australia and an industry which is in real trouble. The Bill sets out the powers and functions of the Australian Wool Commission which is to be set up by this legislation. It is a tragedy that this was not done earlier, but the wool industry has been sharply divided on what should be done to assist the industry. We have seen this process developing over the years and the information coming from various sections of the industry has been of an adverse nature. The honourable member for Riverina (Mr Grassby) said that the Commission is not what the industry wants. As I understand the situation, the industry has fully endorsed the Bill. I am sure that both the major wool growing organisations and the Australian Wool Industry Conference have endorsed the Bill unanimously. I would say that as the representatives of the industry, with whom the Minister has to deal, have endorsed this Bill, they have in fact accepted it as a whole. No Bill, especially initial legislation in a field, is perfect. From year to year no doubt there will be changes to this legislation as there have been to other primary industry legislation setting up organisations such as the Australian Wheat Board. No doubt this legislation will be changed as we find ways to improve it.

The basic point is that the Commission is set up to set a reserve price so as to test the market. This is nothing new to Australia; it has been done before. The Bill will set up a reserve price plan which has proved successful in this country previously. So this is nothing new in the history of Australia. The great tragedy is that it was not carried on after 1951 when the wool industry was in a financial situation to support this type of legislation. So since 1951, when the price of wool was at its highest, we have never seen the price of wool as low as it is today. In fact it is at its lowest price since 1946 when it was 20.41c per lb. Today it is down to about 28c. In 1947 it was 32.92c; the average today is about 28c. The tragedy of the whole situation is that the industry has had no protection in recent times andprices have fallen away to their present level. Part III of the Bill sets out the functions and powers of the Commission. Clause 18 reads: (1.) The functions of the Commission are-

(a)   to operate a flexible reserve price scheme in respect of wool offered for sale at auction;

This is what has been tested in the Australian wool market before and it can be tested again. I have every confidence that given good management by the Commission it will prove to be successful. Before I sit down I hope to be able to produce -some evidence that might substantiate that. In relation to the setting of a flexible reserve price I turn to clause 19(1.) which reads

The flexible reserve price scheme operated by the Commission shall be a scheme under which -

(a)   from day to day, or as frequently as the Commission thinks necessary, reserve prices for the various types of wool being offered for sale at auction are determined by or on behalf of the Commission, having regard to the bidding at recent auctions and to all other relevant information available to the Commission;

I pin my faith on that clause and on the Commission itself, if the scheme is good enough to stand up to the situation in which we find ourselves today. The wool industry is a terrific industry, but wool prices have been moving downwards. In 1955-56 the average price for greasy wool was 50.08c per lb. In 1966-67 it was 47.38c - moving down - and in 1967-68 it was 41.75c, so continuing the downward move.

In watching this downward trend in prices one becomes a little interested in what might be happening to the textile industry overseas. We have heard a tremendous amount of propaganda from people coming here from textile industries overseas for the first time in their lives when it was understood by them and the rest of Australia that this Government was about to bring down legislation to do something about the falling price of wool. These people suggested to us that it was not in the best interests of the wool grower and that the wool industry was in trouble because of competition with synthetics. Competition with synthetics has been with us for a long time. I do not underestimate competition in any market, but I would like to see a little evidence that competition from this quarter is having a detrimental effect. One of the people I have referred to came from one of the textile factories in West Germany - the Norddeutsche Wolkammerei und Kammgarnspinneri. The capital employed in this factory in 1963, in round figures, was 22 million Deutschmarks. The net profit before tax at that time was 3,997,000

Deutschmarks. If we move to the latest figures which the Parliamentary Library has been able to get for me - all these figures were taken out by the Library - in 1967 we see that the capital employed was 23 million Deutschmarks. The net profit before tax was 4,659,000 Deutschmarks. So at that time, when wool prices started to move downwards, the net profit of this company was in pretty good shape.

Also amongst the people who came to this country and who have been buying a lot of wool from Australia were representatives of Japan Wool Textiles. Australia is very grateful to all the people who come to this country and trade but it certainly looks for a fair go. Japan Wool Textiles is a representative enterprise manufacturing woollen fabrics. From December 1966 to May 1967 this firm was operating at a profit rate of 30 per cent. From June to November 1967 the profit rate was 41 per cent; it was moving up while the price of wool was moving down. From December 1967 to May 1968 the profit rate was 36 per cent. Honourable members may think that that is an isolated case but I will cite another woollen textile mill in Japan as a further example. This mill manufactures woollen fabric exclusively and in 1967 its sales amounted to around 5,000 million yen.

Mr Daly - I rise to order. I would just like to draw to your attention, Mr Acting Deputy Speaker, to the fact that there are only 3 members of the Liberal Party in the Parliament. Does that indicate that they are not interested in wool or that they do not care for the Country Party?

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