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Thursday, 14 October 1971
Page: 2402


Mr MAISEY (Moore) - While supporting the Bill before the House and commending the Government for bringing this very necessary measure of relief to the wool industry, I want to express some reservations and disappointment with the provisions of the Bill. The opportunity to make this measure an effective instrument of reconstruction has been abandoned, as has been the opportunity it presented effectively to promote the production of better and commercially viable types of wool. That these omissions have occurred obviously in the interests of petty political considerations is to be regretted and detracts considerably from the merit which would otherwise be due to the Government. The decision to make provision for the continued operation of sales by private treaty is a wise and commendable one, but the restrictions placed on the percentage of deficiency payment to these transactions is unnecessarily discriminatory and offensive.. Let me make my position in respect of private treaty selling perfectly clear. I believe implicitly in the need, for the Government to acquire the entire Australian, clip and market it through a single selling authority. This does not necessarily mean any far-reaching departure from existing machinery. In fact, the facilities of the existing wool receival organisations would be needed as much as ever, as also would their trained and competent staff. ' But I believe that a situation,, as at present, where we have every grower competing to sell his wool to a relatively few Jeeply entrenched buyers, is completely indefensible.

But having said this, let me now affirm that while this situation exists, I insist on the right of the grower to exercise his judgment as to how he will sell his wool in this marketing situation. If he decides, in his own judgment, to sell at the shed door, he must be free to do so. Any attempt, for reasons of political patronage, or indeed for any reason at all, to try to force him to market his wool across a broker's auction floor is completely reprehensible and must be resisted at all costs. If we are to have an open market, I say let it be an open market. If a grower elects to dispose of his clip privately, he reduces the necessity of the Australian Wool Commission's appraisal, the Wool Commission's reserve price support, and possible use of additional Government funds if the Wool Commission buys in the wool. Why then should this grower be differentiated against in the application of the deficiency payment? Another aspect of this proposal which disturbs me greatly is the decision of the Minister for Primary Industry (Mr Sinclair) to amend completely the list of excluded types. Under the original list declared by the Minister in his statement tabled in this House on 20th August, Western Australian growers and growers in some other States would have been eligible for a considerably greater overall share of deficiency payments due to the absence of heavy vegetable fault in any significant quantity of the State's clip. The complete about-face that has taken place regarding the types to be excluded has completely altered this position. The original list of excluded types undoubtedly was made on a strictly commercial basis and was uninfluenced in any way by political considerations. But we now have on our hands a political decision which, in its desire to spread the list of excluded types evenly over every State, has lost sight entirely of the need to exclude from the benefits of deficiency support, wool which in its natural state has little or no commercial value. At the same time a situation has been created where no merit whatsoever exists in excluding virtually any type of wool. In the interests of simplicity and reducing administrative costs, it may just as well be that we simply pay 36c per lb average on the whole Australian clip.

In Western Australia, the position has altered from that of approximately 98 per cent eligibility over the entire State clip, to about 90 per cent eligibility. In real terms this represents an annual loss to Western Australia in excess of $250,000 and is clearly another instance where Western Australia has been differentiated against for political considerations. Apart from it being abundantly clear that political considerations have over-ruled rational thought on this matter by the reinclusion of carbonising types in the eligible types for deficiency payment, it is obviously clear that much of the oversupply situation referred to in the Minister's second reading speech is being aggravated by the production and marketing of this type of wool. If we are to allow deficiency payments on poor style and heavily burr infested wool, then why discriminate against the grower who wants to sell this type of wool by private treaty and in the process save the Government and the Commission some costs and, at the same time, himself reap the benefit of this saving?

If, as we are told, there is a situation of over-supply in the market, now, and I repeat, now, is the time to discourage marketing of not only the 10 per cent of those types laid down in the first schedule of the Bill, but also to discourage production of the 10 per cent of inferior types originally excluded. Only after a combination of all these types are removed has the wool industry a real chance of recovery as a supplier of a commercially acceptable commodity, a commodity worthy and capable of demanding a firm price from the world's textile users. This will be possible only after pruning out from the efforts of wool growers the types of wool that are not commercially viable. The fact that such a large number of growers in New. South Wales and Queensland are affected by the production of inferior burry types of wool should be of sufficient significance to warrant immediate attention to the possibility of evolving a separate system of reconstruction for those growers who are unable to produce any better types of wool. In short, what I am suggesting is that those wools which previously were considered to be of sufficiently low value to be excluded from deficiency payments are still significant enough to warrant the attention by the Government to either work towards the complete elimination of, or immediate reduction of, this production which, at this stage, can only depress the ruling prices for those wools which are commercially acceptable to the trade.

If rural reconstruction measures are to abide by any criteria, surely this criteria must have regard to the economic value of the commodity being produced as well as the economic viability of the producer concerned. The world's textile processors have in the past shown, and will certainly in the future show, little concern for social and political problems involved with the production of the inferior types of wools in Australia, and neither can we: realistically expect them now to support this type of commodity in the market place. The Minister for Trade and Industry has already indicated the possibility of the need to introduce supply-management techniques for the control of production in the industry. Such a possibility would be most unwelcome and it is to be hoped that it will not become necessary on any large scale. However, the industry has reached a stage, in fact a critical stage, where the Government must face up to the problems and if over-supply is one of them, and too much badly grown wool is another, then it should go straight to these areas and deal with them.

Obviously there is an urgent need for a revision of the nation's wool-growing areas, based upon not only economic viability but also the quality of the commodity produced in those areas. Areas in Australia can be identified where management techniques have reached their optimum levels and yet it is still not possible to eliminate the production of wool which is so heavily burr infested that it has little commercial value. On the other hand, it is only too true that there are other areas where management techniques could reduce vastly the significance of burr infestation, providing, of course, we make sure that it simply does not pay to ignore this need. The role of the deficiency payment scheme should have regard to the need to promote the production of the type of wool which can claim a fully competitive role in the international textile fibre market. Conversely, what I am suggesting is that the scheme should work side by side with rural reconstruction proposals and supply management techniques to remove from the market place those wools which have little commercial value.

In the battle for a place in the textile markets of the world, is it not the time for the wool industry to retreat and consolidate itself in the production of a fibre able to compete openly and without unnatural protection? Perhaps at this stage I mould emphasise that I am perfectly well aware that as well as dealing with a Bill to assist the woo] industry, we are dealing also with a matter which does contain a great human element. Perhaps the most significant part of the Minister's second reading speech was where he referred to the fact that it has been estimated that approximately one million persons are wholly or substantially dependent on the wool industry for their living. May I emphasise that we must not allow a situation to develop where the vital interests of almost one million persons are being unduly prejudiced because we lack cither the political courage or initiative, or both, to reconstruct a relatively small percentage of these one million persons - persons or companies who are operating in an area which does not now lead itself to the production of the sort of commodity which we must produce if we are to command a place in the world fibre market. If rural reconstruction has any meaning at all, surely it means that this is an area where reconstruction should operate and it should operate to the overall good of the whole industry as well as those relatively few people who find themselves situated in the area of virtually unsaleable production.

Perhaps another most significant part of the Minister's second reading speech was where he stated that the aim in excluding the 10 per cent of inferior types was to withdraw support from wools which do not bear the full cost of the disproportionately high sale and handling costs they involve; and that the Government considered it would be undesirable to encourage delivery of such wools by increasing their value through the mechanism of deficiency payments. I could not agree more with this part of the Minister's speech, but I cannot help but feel, and feel very strongly, that this part of his speech must surely have been written in association with the original list of excluded types. The Minister continued and said that it would be seen from the first schedule to the Bill that the excluded wools were primarily locks, crutchings, and similar wools which are common to the whole clip and the incidence should be equitable as between growers. I maintain that it is not possible to produce wool in any area which does not, to some extent, result in the production of locks and crutchings and wools of this type. lt seems now that the object of excluding some wool from the benefit of deficiency payment has changed from one of discouraging the production of wool with a high and uneconomic processing cost to one of identifying a group of oddments common to all growers, so as to create the illusion of a higher average return from Government funds. If this has been the Minister's objective, then he has deceived only himself and, in the process he has seriously detracted from the value of the costly exercise we are now considering. The compilation of the original list of excluded types obviously had as its objective the discouragement of production and marketing of those types carrying little or no commercial value due to high processing costs, and endeavoured to concentrate the incentive for production in those areas of Australia where wool could be produced reasonably free from extraordinary high content of vegetable matter. I am prepared to concede that a case does exist for the exclusion of heavily stained wools and those wools containing a high percentage of foreign matter. But the very least that should be done, so far as this legislation is co'ncerned, is to bring back into the list of excluded types those types originally indicated by the Minister in his paper presented to the House on 20th August,

In his second reading speech the Minister said that in reference to the present or new list of excluded types, these wools are easily identifiable by growers and are difficult to mix with eligible wools without being readily detected, and that growers who fail to class out these types of wool will be penalised either by having their wool reclassed at their expense, or by the lower price received. If the Minister has added these words as a justification for the alteration in this list of types, then surely to goodness he must think that there is no one in this House who has any knowledge at all of the wool industry. To sug gest that it ls any easier to detect the amended list of excluded types than it would be to detect heavily burr infested woo] which has not been classed out, is surely one of the weakest arguments I have heard yet for the alteration in the list of excluded types.

I revert again to the Minister's statement of 20th August in which he said that it is quite unrealistic to suggest that the deficiency payment scheme will impede or hinder the rural reconstruction scheme by encouraging people to stay on their properties who have no long term prospects of viability. Let me say in connection with this part of his statement that by the abandonment of the list of excluded types of which this statement forms an integral part, it can now be fairly slated that this reference to rural reconstruction is no longer valid. While the original objective of the price deficiency payment scheme was to introduce a measure of assistance to the wool industry aimed at complementing the rural reconstruction scheme, the Bill presently before us cannot now so effectively perform such a function.

In the exercise dealing with a problem of the magnitude which has now developed in the wool industry, there can be no place for petty political ' considerations. The proposed enactment of this legislation means that we are establishing a precedent in an industry which has been remarkably free of this form of support. It is, therefore, vitally essential that whatever precedent we establish now should be established against the background of practical commonsense and in the long term interests of the industry in its every aspect. While I am prepared to support the Bill, I want to conclude by again expressing my keen disappointment in the Minister for bowing to what . has obviously been a political instruction. In doing so he has established a dangerous precedent in supporting wool of little commercial value, in detracting from the concept of a price support plan which would make a valuable contribution to the overall quality aspects of the entire clip, and finally, by detracting from the value of the deficiency payment as an effective instrument of rural reconstruction.

Mr BUCHANAN(McMillan)' (5.49)- One of the remarkable things about this debate is that all speakers have agreed that they will support the Wool (Deficiency Payments) Bill. Although everyone has his own slant on the future of the wool industry, it is generally agreed that this measure is purely a palliative. If honourable members cast their minds back a few years to the time when we were debating a floor price plan - it will be recalled that there was some trouble about a referendum - there were acriminious debates about who was right and who was wrong, about what should be done and what should not be done. At the time, many people came forward with the suggestion that we should have full acquisition of the clip. I was one of them. I still believe that this is .the way in which we should be aiming now. I think that the main reason why this has not been introduced is simply because those in the industry itself, with all the various organisations that claim to be speaking for the growers, have not been able to . sit down around a table and talk sense in trying to resolve what has obviously been a growing problem for many years. It is only because the position is now so bad that those in the industry simply had to come up with some sort of agreement.

As 1 said, we all agree that this is only a palliative. There is no need to go into the details of the Bill. I do not think many speakers today have done so. The honourable member for Moore (Mr Maisey) has not gone into the details of the plan as laid down in the Bill, but he has done a great deal to elucidate these political differences between the types of growers and the different thinking that they bring to finding a solution for a problem that has confronted us for a long time.

For years now people have been telling us that wool is on the way out. The fact that the actual percentage of the total fibre market that is filled by wool happens to be shrinking does not indicate that wool is not a very much appreciated fibre and that it is not very much wanted by the people who appreciate quality, or that it is anything like being on the way out. Actual production is up. It is not a reflection of world demand for wool. With approximately a 30 per cent increase in production, the individual grower is receiving for his wool only the same return as that which he received previously. It is a reflection on the ability of the people who control the industry to manage the affairs of the industry. I am amazed that we have been able to stagger on for so long with an auction system which obviously cannot give the grower the optimum results over a period. There would be days on which a particular grower would receive more for his wool than he received last year and when other growers would receive less. The wool grower is entirely dependent on the fluke of who decided to go into the market at a particular time. The wool grower is dependent on the fact that many wools grown in one area may all go on to the market on the same day and none of them receive a good price. The small grower, who has been obliged to put his wool on the market as soon as he got it off the sheep's back, in order to get himself out of the clutches of his banker, has to take the price that he can get. The big grower is able to say: 'I will take so much for it or I will take it back. And he takes it back. I cannot think of any other sensible industry in which this auction system is used, although I am always told that this auction method is still used in the stock market, in the selling of beef, lamb and so on. But even in that industry, there are the same weaknesses. Why they have stuck to this method for so long I cannot understand. Equally, I cannot understand how we can possibly have an auction system in which the Australian Government - and remember that it is Australian wool and it is the Australian Government supposedly trying to look after the grower - is coming in and buying on behalf of the grower his own product. I sincerely hope that much more thought will be put into what is to be done for the future of this industry by the time we have to come up with a new proposal, before the end of June next year. This proposal that we have before us today is purely and simply to see us through these few months. People have been talking in terms of 12 months, but this is not so. We have only until June of next year arid for the next wool selling season we must have something much better.

Sitting suspended from 5.55 to 8 p.m.







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