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PRIME MIN, STER
MOR PRESS NOVEMBER 81 ) 976
OPENIN' OF~ WOOL HOUST&
I was very pleased to receive your invitation to open W~ ool
House the' new home of the Australian Wool Corporation.
The Australian Wool industry has been fortunate in having
such a body as the Australian Wool Corporation to work onF
The Wool Corporation and its predecessor organisations
have worked with great dedication and resourcefulness to meet C
the challenges confronting the industry and to promote the
welfare and best interests of the wool industry as a whole.
The major challenge facing wool growers over the years has
been to strengthen their selling position in a market
situation where some 100,000 sellers face only few buyers.,
This has meant an extensive and continuing effort on the
part of growers to promote their product and to iimprove
Product marketing arrangements. K
It has also produced a remarkable and sustained research
effort. to improve the quality of the product itaelf.
T he wool industry has always sought to stand on itp, own feet.
All its efforts have emphasised self-help-of strengthening the
industry bv its own efforts.
This pattern was clearly set in 1936 when the original
Australian Wool Board was established at the request of
wool~ grower organizations. The Board was established to
promote the greater use of wool and to sponsor research of
benefit to the industry.
Woolgrowers, at the time, asked the Government to levy them
f or the purpose and this self-imposed levy has been maintained
ever since with the rate being changed only at the request of,
or after consultation with the industry.
At about the same time in 1937 a major step was taken to
promote the use of wool through the formation of the International
Wool Secretariate. Represenitatives of Auistralia's partners in
the International Wool Secretariat axe here today,
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Promotion and research to support the efforts of growers have
developed greatly since that time. Since 1945 the Government
has contributed to wool research designed to enhance
productivity and assist wool in competition with synthetic
fibres. Research has already yielded benefits worth many millions of
dollars to the wool industry and no doubt much more can be
achieved in the future. Sound and adequate arrangements must
therefore be ensured for the continuation of wool research.
Since 1964 Government and woolgrowers have been partners in
financing the promotion of wool.
The present arrangements for joint financing of wool research
by woolgrowers and the Government will expire in June next,
as will arrangements for the funding of wool promotion.
The Industries Assistance Commission has made recommendations
as to how wool promotion and research should be financed in
future years. These recommendations formed part of comprehensive
reports on the funding of rural research and promotion in
general. The Government is studying the Commission's reports and
re-appraising the principles which should be followed in the
future. In these deliberations the particular circumstances
and needs of the wool industry are receiving close attention.
The issue of wool marketing came to the fore in 1970 with
a disastrous slump in wool prices.
As a major step to improve marketing conditions a reserve
price scheme was established and administered by the former
wool commission. Twice in the past five years this scheme
has averted a situation of catastrophic price decline.
The scheme, of course, is now under the Australian Wool
Corporation, and it continues in an even more positive way
to protect the industry from price collapse, and to put a
friend in the market which will enable the growers to sell
from a position of strength and confidence.
Through the scheme, the Corporation has exerted a powerful
stabilising influence on wool prices, and it has the complete
support of the Commonwealth Government.
In July this year, the floor price for wool was increased to
234 cents per kilogram clean whole clip average a rise of
14%. It has further been announced that the floor level for
next season will not be less than the level decided upon for
1976/ 77.
Further changes in marketing arrangements must be judged against
the Government's intention to give stability to the floor price
for two years ahead.
It ought to be remembered that the floor we have announced is
a minimum. c
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We very much hope that market conditions will enable the'
floor price to be raised further in the review which will
take place towards the start of the next selling season.
The measure that we have taken so far in this regard reflects
the confidence of the Government in the future of the
, wool industry.
These arrangements are, of course, being funded by the
woolgrowers themselves. Not only are the Government loans
now being steadily repaid but the Corporation is returning
in addition, very substantial amounts by way of interest.
To date the Government loans have returned some $ 60 million
in interest payments.
That surely gives the lie completely to anyone who suggests that
what the Government has done is an unreasonable subisdy to the
wool industry.
It is a loan at a profitable rate of interest.
There is, of course, a contingent liaibility resting on the
Government. As a result of these market arrangements therefore,
the Government has a responsibility which cannot be put aside.
Because of our undertaking to back the Ccrporation, the
contingent liaibility broadens our responsibility to the
whole community. That cannot be ignored in evaluating
any proposals for reform.
Another circumstance against which future changes in marketing
arrangements must be assessed is the capacity of any such
changes to reduce handling costs.
Handling costs for wool remain a major problem.
No grower can be pleased at a situation where levy, handling
and selling charges which are met by growers absorb some
of the value of the clip. In addition, growers also meet
shearing, classing and transport costs which absorb almost
a further estimated 15% of the value of the clip.
The Australian Wool Corporation has advanced comprehensive
proposals which, if adopted, would significantly reshape
the present system of wool marketing. The previous Government
had the proposals studied at great-length by an indepartmental
committee but was unable to reach a decision on them. / 4
My Government has exanined the carlier studies and arranged
for further scrutiny of aspects not covered previously or
requiring a fresh appraisal.
However, areas still remain in which judgements arc difficult.
Let me say that the objectives of the proposals are worthwhile.
Ho\ wever, the proposals themselves are far-reaching of their
nature and would reTqire fundamental changes in marketing
arrangements.
We need to have in mind that changes in arrangements which
would be irreversible must lcave no doubt about their success.
The Government is therefore determined to explore thoroughly
all policy options including ideas advanced since the Corporation's
proposals were formulated, to ensure that any changes ultimately
adopted are in harmony with the best long-term interests of the
wool industry.
The wool industry has contributed greatly to Australia's growth.
If it were not for the overseas funds this industry earns, and
has earned, the standard of living of everyone in Australia
would be considerably less.
Let me reaffirm my Government's confidence in the contribution
the wool industry will continue to make to the future of Australia
and to the standard of living of all Australians.
The Commonwealth Government has stood firmly by the industry
in the past and it intends to fully maintain that backing
for the future.
In doing so it will continue its support for the vital role
of the Australian Wool Corporation.
The Corporation is a substantial organisation. It has offices
in all Australian states, and has market liaison representatives
in various overseas locations.
The new Wool Douse provides appropriate accommodation for the
Corporation. The wool industry has been well served by the Australian Wool
Corporation and its predecessors.
It is with much pleasure that I now declare Wool Bouse open.