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Wednesday, 28 October 1970

Mr DEPUTY SPEAKER (Mr Cope (SYDNEY, NEW SOUTH WALES) - I remind the honourable member that that is an unparliamentary remark.

Mr HUNT - It is a compliment, Sir. The Government has recognised the importance of the wool industry to the national economy. It certainly recognises the plight of the industry at the present time. Who in this country does not recognise it? After all, since August until 2 days ago we have seen the price for 70s fall by 15 per cent. The price of 64s spinning quality has dropped by 22 per cent and the price for carding wools has dropped by 22 per cent. Of course there is a crisis in the industry, but this Government has responded to that crisis over the last 12 months. Let us look at the record. It shows that $27m has been allocated to promotion and research; $30m has been allocated for an emergency grant to the wool industry in the last Budget;$1.5m has been allocated for objective measurement; $90m has been guaranteed as a loan to the Australian Wool Board for the building of complexes, and in this Bill there is a provision for at least $115m of guaranteed loans for the operation of the Commission. A further $12m of Government funds is to be made available. Am I correct, Mr Minister?

Mr Anthony - It is $18m.

Mr HUNT - A further $18m is to be made available for the operational costs of the Commission. The wool industry, of course, is Australia's biggest single industry, with an estimated capital investment of over $8,000m. It has certainly been Australia's biggest export income earner. Since 1948-49 it has earned$17,000m of foreign exchange, which is 40 per cent of Australia's whole export income in that time. The wool industry has made the major contribution of all industries to building up the country's economic and industrial strength. The wool industry is of national importance; it is not of importance to the rural sector alone. Australia's place in the world of wool production is the highest. In 1968-69 Australia produced 32 per cent of the world's wool, 40 per cent of the world's apparel wool and 53 per cent of the world's merino wool. But more than this, this industry is vital to the whole pastoral and agricultural inland of Australia. Vast areas of Australia, entire settlements in the inland, are dependent upon the wool growers and the industry generally. Who could contemplate the Australian inland without the merino sheep, without wool? This great industry, which has stood unprotected, earning more foreign exchange than any other industry, requiring little in the way of imported capital, remitting a very small percentage of its profits overseas, has been the mainstay of Australia's postwar progress and industral development.

It is true that Australia has ridden on the sheep's back. She rides to some extent on its sagging back today, and let no-one think that this country can do without the export earnings of the wool industry. There are far too many knockers of the wool industry and of wool. We hear people saying that wool is finished, that it represents only 7 per cent of the world's apparel fibres and that synthetics have licked wool. We hear these slogans. I believe they are nonsense. The industry is in trouble but I believe that the tide of fashion will turn and that the smart women, the fashionable men such as the honourable member for the Northern Territory (Mr Calder) and even the honourable member for Riverina, will see the light and wear woollen suits. Wool is a prestige product. I am confident that wool will ride out the present crisis with the assistance of this Government.

We hear that millers overseas are going out of business, and we hear about the great difficulty under which the overseas mills are labouring. We hear that some of them have gone broke. This may be true. But I refer to the reports from some British companies. The first one is from Aire Wool Corporation Ltd for the year ended 30th July 1969. This was before the price fall in wool. This company, which has a capital of £Stg868,334, had a profit of £St&179,774. The profit as a percentage of capital after tax was 20.8 per cent. The director's fees were Stg36,973. The dividends in that year increased by 10 per cent. Let us look at the report of Allied Textile Co. Ltd for the year ended 30th September 1969. This company has a capital of £Stg1,598,824. The profit after tax was £Stg519,895, and the company had a 33 per cent return on capital after tax. The chairman of that company said that the achievement of these results was a sufficient indication of the likely progress of the group to justify the directors' recommendation to increase the ordinary dividend.

I could go on to show that there are numerous companies that are doing jolly well out of the fibre of wool. My colleague, the honourable member for Canning (Mr Hallett), gave some of the figures for the Japanese mills. It would be foolish for us to think that there is not a ceiling in price set by alternative fibres. Whilst we may expect prices to rise as a result of getting some firm foundation for a rise, I think the wool industry will have to live with the competitiveness of other fibres, and accordingly a ceiling will be placed somewhere - I hope, above where it exists today. I am pleased to see that the Minister and the Government have recognised the need to act quickly to establish this floor. Clause 2 in Part 1 of the Bill states:

This Act shall come into operation on the day on which it receives the Royal Assent.

This, of course, meets the requirements of the New South Wales Graziers Association, whose council met during the week. They requested that the Federal Government be asked to take the action necessary to enable a reserve price to be extended over the whole of the Australian wool clip with the aim of preventing prices falling below the current levels and restoring the confidence of the wool trade; such a reserve to be maintained until the objectives are achieved or the true demand picture for wool has been restored. I believe that the Commission will provide a new confidence for the wool industry, not only for the growers but for the buyers, for the trade and for the bankers and Australia generally. This is one of Australia's most important industries. I am delighted that in this short time the Government and the Minister, in particular, have worked so patiently and well for the industry to achieve this objective.

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