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Thursday, 14 October 1971
Page: 2385

Mr COLLARD (Kalgoorlie) - The Bill we are presently discussing proposes the adoption of a scheme which carries the title of wool deficiency payments whereby the wool growers whose wool does not sell at or above a certain price at auction or by private treaty will receive, as a result of this scheme, some amount of money which will be determined on the actual price they receive for the wool as against the notional price of approximately 36c a lb greasy. Because it is impossible to accurately or even approximately forecast the future state of the wool market and as a result the approximate auction or return price for wool, it is also impossible to determine the actual or even approximate amount of money that will be required to finance the scheme. In addition, it is an across the board scheme whereby every wool grower, irrespective of his means, will qualify to participate and to obtain payment. The only qualification to be met is that the wool grower must have received for his wool at a normal sale a price below the amount laid down. Furthermore, it is impossible to know what amount of wool will sell short.

Notice of this Bill was given in the Budget Speech of the Treasurer (Mr Snedden) last August and the estimated amount of expenditure he gave for this year was $60m. I do not know whether he was simply trying to fool the taxpayers or had himself been badly advised, but the fact of the matter is that an amount of $60m will be nowhere near sufficient if the present price trend continues, and is more likely to be in the vicinity of $120m or $130m. I would like to think that $60m would be more than sufficient to meet the needs, but it is most unlikely that this will be so. Before I go any further let me just say that I, and all other honourable members on this side of the House, are fully aware of the very serious situation applying in the wool growing areas. We fully realise the extreme difficulties which face so many people who grow only wool, wool and wheat or wool and something else. We are fully appreciative of those difficulties and are very anxious to see them overcome, but the money which will be required to finance this scheme will not necessarily be channelled into the areas or the pockets where the assistance is desperately needed and to which it is entitled to go. In fact, it would appear that the highest level of assistance or the more substantial amounts of subsidy - call it what you like - will go, to a large degree, to the very people who are in the least need and, in fact, taking their overall situation could be described as reasonably well off.

I know very well that size of farm or size of flock is not necessarily a proper guide. I know that a large wool grower could be worse off than a small wool grower and vice versa, and one cannot arrive at a proper conclusion on assistance simply on that basis. But surely the main object and the real target of any assistance scheme, especially where large amounts of taxpayers' money are involved and where the assistance is in the form of an emergency grant, must be to ensure that the money goes where it is most required and where it will do the most good. Unfortunately, under this scheme such will not be the case. In fact, a great injustice can be done to some taxpayers. On this point I cannot help but recall at this time that one particular wool grower who, I am quite certain because of his means would not be suffering to any great extent as a result of the depressed wool prices, refused point blank to support a proposal for additional assistance for gold mining but who, from his remarks on the same day on the question, would nevertheless be ready and eager to accept from taxpayers in the gold mining industry some part of their hard earned cash by way of a wool subsidy to further swell his already well furnished bank balance.

On the other hand I am pleased to say that to the best of my knowledge he was the only wool grower in that district with such a shortsighted and selfish attitude. But even forgetting that person's peculiar outlook, surely where taxpayers are obliged to contribute to an emergency grant, one to meet special needs, they should be safe in the knowledge that their contribution will find its way to where it is really needed and not into the pockets of those who do not need it. Apparently Government supporters claim that it would be very difficult to apply a means test to a proposition such as this deficiency payment scheme. Quite frankly I fail to see why. I have a lot of wool growers in my electorate. Many of them are very good friends of mine. I could adopt the attitude of members of the Country Party and give away principles for votes, but I am not prepared to do so. If a wool grower is in financial difficulties through no fault of his own and he needs assistance, he should get that assistance but he should have a good idea why he needs it, and it should not pose any great difficulty for him to show why. I would be surprised if it were not a fairly simple matter for him to do so. After all, wool growers keep books of some sort. Surely they all make taxation returns. Surely they all know or could quickly work out what their income from sources other than wool may be.

I do not accept for one moment that any great difficulty would arise. If a wool grower requires some short term or long term assistance to overcome real problems, I would be one of the first to come down in support of him, and this goes for any farmer or anyone else irrespective of who he is or where he may be. 1 find it very difficult to support a proposition under which taxpayers with very meagre incomes are obliged to contribute to people whose net incomes are substantially in advance of the contributing taxpayer, and 1 do not think that any self-respecting wool grower or anyone else would accept such a situation either.

Speaking of supposed difficulties in submitting statements of means, let me again refer to the assistance to gold mining. That assistance is not granted to large producers across the board as a fiat rate. The producers have to submit proof of their qualification for entitlement to assistance. If a company considers that it is entitled to assistance it is obliged to submit documents to show what it cost the company to produce each ounce of gold, if that production cost is more than a certain amount determined against the actual price of gold, the company may be entitled to assistance, but the amount of assistance will not necessarily be the maximum. It may be only a minor portion of it or if may be a substantial portion, depending upon what the cost of production actually is. It is this Government which required and still requires the gold mining companies to produce those figures, and I think properly so. But if those companies arc expected to do this and can show just how much it costs to produce an ounce of gold, it should not be difficult for a wool grower, particularly a company, to show actual overall financial circumstances.

After all lt must bc kept in mind that every person who grows wool is not engaged solely in rural activities, nor are all people who grow wool solely dependent upon the returns from their rural interests. There are the so-called Pitt Street farmers, the Collins Street pastoralists and the St George's Terrace graziers who have business interests in the city, live there in very fine style and great comfort, and employ a manager to look after their property - and in some instances a very poorly paid manager at that. Then there are doctors, solici tors, land agents, stock firms and even members of Parliament who have substantial interests in wool growing. Surely a labourer on the main roads, a foresty worker, a miner or an attendant employed in this House should not be obliged to pay additional tax to provide members of Parliament and those other people to whom I have referred with additional income dimply because they are having a lean time in their wool growing activities but are 0 !herwise well off.

If such people have incomes from other sources sufficient to give them quite a good living they should not be permitted to qualify for Government assistance or to participate in a scheme such as this - an emergency grant. It must be remembered also that by disqualifying such people we would not be doing them any injustice or causing them any hardship, but on the other hand it would mean that those who really needed assistance and who could be put on the road to recovery would receive from the available finance a more realistic and useful amount. As I said at the beginning, that should be the real target of an emergency grant.

Let me return to the total amount of money that is likely to be required to finance this scheme, and in addition let us look at the amounts of individual assistance that the different wool growers could be expected to receive. When F «,ay different wool growers I am talking about the size of flocks. With a wool market such as we have today and with no real prospect of any sufficient upward movement in the price of wool for at least some months we can only arrive at the conclusion that under an across the board scheme such as this practically every pound of wool that is sold will attract some subsidy. In that regard it seems reasonable on price trends to estimate an all-round or average deficiency figure of 6c a pound.

I am unable to say with any accuracy how much wool will be produced and sold between the beginning of July this year and the end of June next year, which is the period this proposed scheme will cover, and unfortunately or perhaps unavoidably the Minister for Primary Industry (Mr Sinclair) did not give us any estimate either; but if we use the 1968-69 figure as a guide - I know of course that sheep numbers between 1968-69 and now could have been greatly reduced, but these are the latest figures I could obtain from the Parliamentary Library - approximately 2,000 million lb of wool will be produced during this period. This then would mean that the amount of money required to satisfy the demands on the scheme would be in the vicinity of $120m or double the estimate given us in August by the Treasurer. However, whatever the amount should be, whether it be $120m or $60m or some other amount, the important point is that it should be used in the manner by which it will do the most good - and not simply the most good for certain individual wool growers but the most good for the wool industry as a whole. That is the important point.

I am quite certain that every member on both sides of this House would want to see the wool industry recover to its former solid position, and anyone else with any sense of responsibility must surely feel the same way. The mere fact that the industry has been such a very large export income earner for Australia in past years is an obvious and sufficient reason in itself why we should all want to see its return to a similar position as quickly as possible. Therefore it is natural and indeed very proper that we should in turn want to be very sure that the money provided by this scheme or any other wool assistance scheme is used to the best advantage of the industry as a whole. In fact Parliament has a responsibility to that end.

But how can we decide whether money being provided is being used for its best purpose if it is to be distributed without any knowledge of the actual overall circumstances of those who apply to become beneficiaries. In that regard let us examine how the SI 20m or the $60m, or whatever it should be, will be distributed without any investigation of the receiver's overall financial circumstances. Whatever the amount, the same principles and the same comparisons must apply. According to the statistics I obtained from the Parliamentary Library there are 10 rural holdings which carry flocks of 50,000 or more sheep each. This means that on a 9 lb fleece average those 10 holdings would each receive at the very least $27,000. Some would receive more, perhaps $32,000 or even more again. Certainly I find it extremely difficult blindly to accept simply on an application basis without any particulars of actual financial circumstances that one holding and indeed perhaps one person should be entitled to receive an amount of $27,000 or $30,000 of other taxpayers' money.

The money to be paid out under this scheme is an emergency grant, yet no-one is obliged to show that he is in an emergency situation. If it were a loan, even a very low interest loan or even an interest free loan, it would be an entirely different situation. But this is a straight out grant; it is a gift of cash; it is a gift to one person of money from another person, from a taxpayer or a group of taxpayers. In these circumstances, when in fact some of the actual givers are much worse off than are the receivers, I fail to see how a government or this Parliament can justify gifts of $20,000 or $30,000 to individuals or companies without first conducting a proper inquiry into their overall position to ensure that they are in real need. As a matter of fact I fail to see how a gift of even $100 can be justified without proper inquiry.

This is not our money; it is not the Government's money. It is the taxpayers' money and the taxpayer is entitled to expect protection from the Parliament in matters such as this. If wool growers or anyone else expects assistance they should be prepared to make available, not to Parliament where it would become public knowledge but to a committee or a department, where it would be dealt with in confidence, whatever information is required to substantiate their claim. It must be remembered that this scheme, or one like it, may need to be continued beyond one year. If that is so, and certainly there is no indication that it will not be so, an even greater amount of finance will be required. In those circumstances, surely the committee or the department is entitled to know what real advantage has come from the scheme in its initial stage and, if that is not known, how can any future proper conclusion be reached by this Parliament?

There are 248 holdings with flocks of between 20,000 and 50,000 which each will receive assistance of between about $11,000 and $27,000. On that basis, using an average of $18,000 - I would be surprised if it were less - it will be found that an amount of some $Sm will be distributed amongst 258 holdings. I would suggest that a number of those holdings would be run on an absentee ownership basis with some of them even being owned by persons such as Hollywood film stars whom I would suggest are not exactly on the poverty line. At the other end of the scale are the growers who run flocks of between only 1,000 and 2,000 sheep. In this classification there are just over 2,500 holdings. Those growers will receive between $540 and $1,080 each, depending on the actual size of their clip. I certainly cannot imagine an amount of $500 or $600 making any significant contribution towards putting such people on the road to recovery or towards easing their particular problems if they are in real difficulties. Yet, if $60m, $120m or some other amount is available to assist the wool industry in getting back on its feet, it could well be that a proper investigation would show that a payment of $5,000 or $6,000 rather than $500 or $600 to each small grower would be of much greater advantage to the overall industry than would be a payment of $20,000 or $30,000 to each of 10 or 12 large producers.

If individual applicants were required to submit details of their overall circumstances and their total income from all sources, it may well be that something higher than 6c a lb could be given to those who really need it and who, if they were properly assisted over this year, could become self-sufficient from then on. Statistics show that 15 per cent of the wool growers produce approximately 60 per cent of Australia's total wool clip. This in turn means that 13,500 growers out of a total of 90,000 growers who run 200 or more sheep could receive between them approximately $72m while 76,500 growers would receive only $48m between them.

On this basis, we would find that very large amounts could go to people who are on very large properties and who could never be properly re-established or become self-sufficient for several years even if the price of wool increased substantially. The fact is that the properties have been overstocked and have never had anything ploughed back into them by way of pasture improvement or control. They are completely run down and will need spelling for several years before they can again become anything like a reasonable sheep grazing proposition. Many of these properties are owned by stock firms and any money which is received by them through this scheme will not be put into the properties concerned but will be used for other purposes. This scheme, like others produced by this Government is a hit and miss, hotch potch affair which will do little, if anything, to solve the real problems of the wool industry. The money is more likely to go where it is not needed than lo go where it is needed. What is needed is the introduction of the policy of the Australian Labor Party which states:

Labor will legislate for a statutory wool marketing authority to acquire and/or market the Australian clip in the most efficient way. Reserve Bank funds will be made available to Finance the Authority. Labor will reconstitute the AWIC and the Australian Wool Board on a democratically elected basis and have an investigation and an evaluation of wool promotion and research.

I would not think that anybody would dare to criticise that policy. As I said earlier, I have a proper appreciation of the industry' difficulties. I realise what its value shoud be to Australia. I know how important it is that it should be firmly re-established and I am prepared to give my full support to any scheme or proposition that has the means of doing this. Unfortunately, the scheme now before the House can, at its very best, only slightly assist towards that end. It will assist only a few of the genuine, bona fide wool growers while many others will receive practically no help at all. It is only because some deserving growers will be assisted that I am prepared to support this Bill, if our amendment is defeated. However, at the moment, I support the amendment.

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