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Wednesday, 28 October 1970

Mr KENNEDY (Bendigo) (12:20 PM) - I would like to comment firstly on a statement made earlier this evening by the honourable member for Corangamite (Mr

Street) and to link it with a statement made by the honourable member for Mitchell (Mr Irwin). The honourable member for Corangamite refuted allegations made by the honourable member foi Dawson (Dr Patterson) to the effect that the Government had done nothing to deal with the crisis in the wool industry. The honourable member for Corangamite said that the Government had doubled the grant for promotion and research. The honourable member for Mitchell made the statement when commenting on a letter he had written to irate wool grower constituents of his, of whom there are apparently hundreds. He said that he did not refute the statement made by one of the wool growers that some 80 per cent of the wool being marketed was not going through the auction system but was going through the system of forward buying.

The point I want to make is this: The wool growers and the Government have invested a tremendous amount of money in the promotion of wool sales. I am informed that the sum total is up to about S350m now since the system of wool promotion was first introduced. We have also been told how much money has been allotted in the current financial year. The Government can continue spending millions of dollars on the promotion of wool but it will not get very far unless it gets down to dealing with the critical situation in the wool marketing system. That is the fundamental criticism which we of the Opposition make of this Bill.

I was contacted recently by a person who is very influential in the stock and station business. He asked me whether it was true that $29m had been allotted for the promotion of wool. I replied thai as far as I knew that was the case. He said: Well, you should make a very close examination of wool promotion because for all the success it has achieved it may as well have been given straight back to the wool growers'. In his view the money was being wasted. I think it is time we took a very close look at bow the money allocated for wool promotion is being used. Obviously the honourable member for Mitchell has expressed some doubt about the way in which it has been spent. I think the time has come for a very close examination into how effectively this money is being spent on wool promotion.

The honourable member for Mitchell spoke about forward buying. I want to refer the House to a comment which appeared in the 'Australian' in March. The comment related to a statement made by the chairman of the Squatting Investment Company of Melbourne. This is very important and it refers to the point mentioned by the honourable member for Mitchell. The Chairman, Mr Balderstone, said:

It has been estimated that 80 per cent of the Australian wool clip was now sold firm by wool traders before it was auctioned.

If this was so, according to Mr Balderstone, exporters had a financial interest in seeing wool prices decline progressively. There was no point in spending millions of dollars in publicity and promotion only to see its effects dissipated, he said, by unfair restrictive bidding in buyer price control at what should be competitive auctions.

Two principles are fundamental to a serious approach to the crisis which threatens destruction to thousands of wool growers. Firstly, there must be immediate action to stabilise the industry's economy on a sound economic basis for the producers. In other words, there must be immediate action to control the marketing of the product in such a way that the producer will gain, firstly, his costs of production and, secondly, a fair return on the labour and capital he has invested in his business. It must be stressed that unless the grower is getting a price that covers both these essential requirements he is progressing towards not mere bankruptcy but outright extinction. It is not necessary to highlight the disastrous effect that the present crisis is already having in country towns. Its effects are evident everywhere in my electorate and can be seen in the stagnation of the economies of country towns. It affects also the cities, as was evident in the large scale retrenchments at Massey-Ferguson (Australia) Ltd, which also hit my city. Also equally deserving of emphasis is the disastrous effects that impossible prices have upon our export capital.

What is the minimum price that the wool grower should be getting on average for his wool? In 1968-69 the overall Australian average price for greasy wool was 44.67c per lb. That was a year of credit squeeze, a squeeze on cost of production. Since then there has been an increase in costs, such as the increase in the cost of fuel announced in the Budget and an increase in the cost of merchandise. Small adjustments have been made in wages of station hands and shearing costs have increased. 1 suggest that it is hopeless for a farmer to carry on if he is receiving prices lower than 44.67c per lb. The fact is, however, that the farmer is becoming more insolvent every day. He is declining into bankruptcy. Equity in his property has vanished. It has lost its income earning capacity. Not only have livestock deteriorated in value but wool cannot be produced economically, and this means that there is no market for wool producing stock. Only last week Sir William Gunn stated that the average price for wool was 26c per lb. The collapse and threatened destruction of thousands of growers and their industry is dramatically illustrated by this figure.

The second fundamental principle required to be recognised in any realistic and serious approach to the crisis is urgent and realistic government action, not mere window dressing and confidence tricks on the eve of an election. The collapse in prices has been continuing since March. I would like to set the record straight on just how long action has been urgently called for without the call being heard. In February the average price of wool was approximately 40c per lb. It quickly fell back to 32c. The price has progressively and disastrously worsened. In June it was approximately 28.35c. It is now 26c. Only the Government has been unable to recognise the crisis. For 7 months growers have been calling for urgent and indeed radical action. They have received neither. On 21st March a meeting of about 2,600 growers was held at Moree. One of the motions passed deserves comment. A report of the resolution states:

At the Moree meeting on 21st March a resolution was unanimously adopted by the 2,600 present calling on the Commonwealth Government to forthwith establish a statutory authority to acquire and market the entire Australian wool clip, and that resolution incorporated the words 'and pursues that action with the utmost vigour'.

I stress these resolutions by grower meetings to give the lie to the half-truth, or perhaps quarter-truth, that the Minister for Primary Industry (Mr Anthony) resorted to in his second reading speech last night when he said that the Australian Wool

Commission originated in these meetings. But 1 will return to this point later on. Another meeting was held at Narrandera on 28th April, and 1,300 wool growers passed a similar resolution. It was rather interesting to hear the remarks of the honourable member for Calare (Mr England), who preceded me in this debate. He said thai procrastination is the price of government. When the matter goes back as far as this without any action being taken, it would appear that procrastination is not only the price but also, apparently, the disease of government. The meeting at Narrandera passed the following resolution:

The Commonwealth Government be requested to immediately constitute the Australian Wool Marketing Corporation as a statutory body, under the Wool Board, to acquire and market the entire Austraiian wool clip.

Mr Grassby - That has not been done.

Mr KENNEDY - No, it has not been done. In reply to the honourable member for Riverina, 1 point out that it is ridiculous to say that this Australian Wool Commission originated in those meetings, because what these meetings called for was a statutory authority, not a board, to acquire, appraise and market the whole Australian wool clip. On 14th July at Orange a meeting of 1,500 wool growers chaired by the honourable member for Gwydir (Mr Hunt) called on the Government to impose an embargo on wool leaving Australia at less than 45c per lb in order to prevent buyers such as Japan from getting away with cheap wool.

Mr Grassby - That has not been done either.

Mr KENNEDY - Of course that has not been done. No urgent action has been taken. As we see, procrastination is the price of government. In the meantime the New South Wales branch of the Country Party called for immediate action to prevent a drop in the price of wool below 45c per lb, pending the complete reorganisation - 1 stress those words - of the wool marketing system. I refer now to another meeting. In the last week of July the United Farmers and Woolgrowers Association of New South Wales expressed strong support for the ultimate acquisition of the whole Australian wool clip. I would stress incidentally that back in April the Australian Wool Industry Conference voted unanimously for the establishment of a single marketing authority to handle the enure Australian wool clip.

It is pure humbug and outright fra.ul and deceit on the part of the Minister for Primary Industry to state, as he did in his second reading speech, that the Australian Wool Commission that he has conceived has grown out of meetings such as those. His statement in last night's second reading speech was:

The proposal for such a body-

He was referring to the Australian Wool Commission- was supported at mass meetings of wool growers throughout Australia. The 2 federal wool grower organisations - the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation - resolved to press for such a body, as did the national body of the wool growers, the Australian Wool Industry Conference.

The fact was that back in April the Australian Wool Industry Conference called for a single marketing authority to handle the entire clip. I stress the deceit of the Minister in suggesting that what these bodies and these meetings of growers that I have mentioned wanted was the abortion which he has finally produced. They wanted no such thing. They wanted urgent action to stabilise the price of wool at 45c per lb and they wanted a single marketing authority. The fact that they have accepted what they were powerless to reject is merely evidence of the truth of the old saying that half a loaf is better than none at all. In this context perhaps a better way of putting it would be that it is better to have a handful of crumbs when one cannot get a loaf.

Mr Grassby - Members of the Country Party have accepted it.

Mr KENNEDY - They had no alternative. It was a matter of a fait accompli being presented by the Minister. When one asks the question: 'Does the Bill before the House deal seriously with the crisis facing wool growers?', one sees that the answer must be no. I believe that this Bill is irrevelant to the real needs of growers. Lel us look at the situation in which it is being introduced. The Country Party is desperate about the Senate elections. At a recent meeting of growers at Hay - it was held on the 12th of this month - the wool growers passed a unanimous vote of no confidence in this Government. These wool growers are people who traditionally have been supporters of the Country Party. Yet they passed a unanimous vote of no confidence in this Government. It was a very well attended meeting. A second motion to oppose all Government candidates at the coming election was only narrowly defeated.

Meantime the Government obviously is not aiming to fight the election on its chronic record in primary industry. A new and spurious bogy in the 35-hour working week has been whipped up to compensate for the waning market power of Communism at elections. This Bill has been churned out with abundant insincerity. The Government has not dared to debate it on a day when the proceedings of the House were being broadcast. It has given the Opposition 24 hours to consider the Bill. This is a fraudulent and dishonest Government. This Bill offers nothing to the wool grower. The 100,000 wool growers who are facing bankruptcy, and most of whom are completely insolvent at present, are offered nothing to stabilise their business. The Government offers nothing but a policy of escalating losses and accelerating poverty. The Bill will not restore economic income to farmers.

Let us examine the principle on which the Minister for Primary Industry has stated the reserve price will be based. This will be a reserve price based on a level slightly below the level of the previous day's operation. Last week Sir William Gunn said that the average price of wool was 26c per lb. A figure slightly less than 26c is obviously an utterly hopeless and impossible figure for wool growers. Furthermore, in announcing the Commission the Minister said that it could bring about a 10 to 20 per cent increase in prices. Even if that were true and not merely a possibility, an increase of 20 per cent on the current price of 26c is a mere 5c. This would rise the price of wool to a mere 31c. In 1968-69 there was an average price of 44.67c per lb. In that year there was a cost of production price squeeze which was recognised throughout the industry by the growers themselves, by the banks and by the wool firms which were financing the industry. At the current 26c per lb, plus the 20 per cent increase mentioned by the Minister, the average price would be raised to only 31c per lb which would leave it at 30 per cent lower than in 1968-69, 25 per cent lower than the average at January of this year and at least 20 per cent to 25 per cent below the cost of production.

Political exercises of the Country Party notwithstanding, the growers will continue to head for bankruptcy and extinction. Growers are not even given the certainty of so paltry a price rise as 10 per cent. The Minister has delivered the death blow by his promise that the Commission should not be expected to lift wool prices beyond that dictated by world supply and demand, in other words we are back to where we were. The Government's answer to disaster is continuing disaster. Not only are individual growers heading for extinction; the industry and the nation are accompanying them.

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