23rd Parliament · 2nd Session
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid) took the chair at 3 p.m., and read prayers.
– I direct a question to the Minister representing the Minister for Trade. In a Sydney report on 23rd September, Mr. D. Fletcher Jones, managing director of Fletcher Jones and Staff Proprietary Limited, and chairman of Warrnambool Woollen Mills Limited, stated -
Nothing at present imported or made in the United States reaches the very top Australian quality woollen materials.
He said further that if Australian manufacturers captured only11/2 per cent. of the United States or Canadian markets the turnover of Australian manufactures would be enormous. Has the Minister seen the comment of Mr. Fletcher Jones? Does his comment indicate that a market is still available in the United States for Australian woollen goods, or does the United States tariff prevent Australia from expanding its market to the extent indicated? Is the Minister for Trade continuing his efforts to negotiate a relaxation of these high tariffs which America imposes on Australian woollen goods?
– I did read with interest the newspaper report to which Senator Pearson refers. I did not know to what extent there would be an available market in the United States for Australian woollen goods and that is why I was interested in the report. It seems to me to be not an easy market on which to sell our woollen goods. I am not aware of the extent to which tariffs are imposed against our manufacturers. I can only say that I will bring the matter to the attention of the Minister for Trade to see whether there are in the United States of America opportunities that would be worth prospecting.
Awards for Bravery
– My question is addressed to the Minister representing the Minister for the Army. Has he noticed in the Tasmanian press a recent announcement by the Commissioner of Police, Mr.
Delderfield, that six officers of the Tasmanian police force have been commended rightly for courage, zeal, fortitude and tenacity during the disastrous floods in the Derwent valley and Hobart last April? Does he know whether the Department of the Army is taking similar action to acknowledge the outstanding bravery and devotion to duty shown by officers and other ranks engaged in relief work while the floods were endangering lives and property in southern Tasmania? If action is being taken, when will an announcement be made?
– I notice with pleasure that awards have been given to Tasmanian police officers for their bravery and the work they did in the recent disastrous floods in southern Tasmania. I know - that the Army co-operated and did great work during the same floods. I am not aware at the moment of the position of the Army men who rendered similar service, but if the honorable senator will put his question on the notice-paper I shall obtain the information for him from the Minister for the Army. I trust that the work performed by Army officers and men during the recent floods will be recognized.
– Is the Minister representing the Prime Minister aware that Mr. Rae, the Country Party member for Gregory, claimed in the Queensland Parliament last week that he could think of no better name for the Honorable John McEwen than “ Black Jack “, and that Mr. McEwen. on the occasion of his visit to the Channel country, had nothing to say about Channel country roads or about anything to help Queensland and its people? Does the Minister know that Mr. Rae also said that the antiLabour members from Queensland, as well as members of the Commonwealth Cabinet, lacked solidity and force and were not with the people of Queensland? In the light of those statements and of the courage displayed by the Country Party member, Mr. Rae, in the interests of Queensland, will the Minister consider replacing next year the present anti-Labour senators and members of the House of Representatives with more efficient representatives, preferably members of the Australian Labour Party?
– A number of popular people acquire nicknames. I think the honorable senator will admit that very often words are used, out of their usual context, as terms of endearment.
– But not by Mr. Rae.
– I do not know Mr. Rae, and 1 did not see the statement to which the honorable senator has referred. I think the fact that Mr. McEwen has that nickname in a limited circle is a tribute to his popularity. I well remember his visit to Queensland. Contrary to Mr. Rae’s version, I know that Mr. McEwen discussed the Channel country roads and the problems of that area with the people of the area and also with the Queensland Government. As to Mr. Rae’s opinion of his own party in the Parliament, that is a matter between him and his colleagues. I should think it fair to point out that Mr. Rae’s criticism of his colleagues is not supported by the people of Queensland, who have returned a Liberal Party-Country Party Government in that State. To the question whether I would play a part in helping to replace my colleagues by members of the Australian Labour Party, I give the short answer, “ That will be the day! “ I invite Labour to do its utmost. I am certain that, as elections come and go, Labour will see the parties on this side of the chamber come back in ever increasing numbers.
– Does the Leader of the Government in the Senate remember that, on the occasion of the Federal Aid Roads Agreement coming before the Parliament, I moved an amendment designed to preserve for Queensland £1,600,000 a year under the distribution formula? Does he also recall that on that occasion not one Labour senator supported me in my attempt?
– I do remember Senator Wood’s moving the amendment to which he has referred. I also remember that, on its merits, it was well and truly lost because of the general appreciation on both sides of the chamber of the generous treatment given to Queensland under that legislation. I remember, too, that the Government’s view on that matter was supported by the Australian Labour Party.
– 1 wish to ask the Leader of the Government in the Senate, or the Minister representing the Minister for External Affairs, a question regarding the United Nations. Many interesting speeches have been made during the present session of the General Assembly, including one by Sir Garfield Barwick. Is it possible to obtain a copy of that speech? Another interesting speech was made by Dr. Castro, which lasted, I believe, for more than four hours. Would it be possible for the Government to obtain a copy of that speech so that some of us could have a look at it?
– To the best of my knowledge and belief, Sir . Garfield Barwick’s speech is not to be made until to-morrow or shortly after that. That being so, it would be impossible at the moment to obtain a copy of the speech for the honorable senator. If the speech is made no doubt a copy could be obtained afterwards. I shall have great pleasure in inflicting on the honorable senator a report of the 41- hour speech made by Dr. Castro.
– The question that I direct to the Minister representing the Minister for External Affairs also concerns the United Nations. I ask: Has the Government made any assessment of the propaganda advantages or disadvantages which may have accrued to the Russians and to the Communists generally as a result of the attendance of Mr. Khrushchev at the current session of the United Nations?
– The Government, as such, has not made any assessment of the kind about which the honorable senator asks. I should say that such an assessment would be one that had to be made by individuals in Australia and throughout the free world. Speaking as an individual, my own assessment is that the grotesque antics of Mr. Khrushchev at the United Nations have tended to sicken people who realize the importance of the great issues that are being debated there at the moment. I hope that reading about those antics is beginning to become tedious for people throughout the world. I would say, too - still speaking as an individual - that I believe that some advantage has accrued to us from the rigid attitude which has been adopted by Mr. Khruschev in the United Nations, because it has shown clearly to many people his unwillingness to make concessions for the peace that he sometimes says he wants.
– I ask the Minister representing the Prime Minister a question which arises from the answer that was given to a question I asked, upon notice, concerning the Mount Isa to Townsville railway. The answer that was supplied by the Prime Minister yesterday was as follows: -
Certain aspects of this matter are still under discussion between the Commonwealth and the Queensland Government. Full information will be given to the Parliament as soon as practicable.
As the contractors have announced to-day that they will start work next week on the first section of the Mount Isa to Townsville railway involving expenditure of £2,500,000, and as the failure to determine the terms and conditions of the Commonwealth loan could embarrass the Nicklin Government - in which, as honorable senators are aware, I am sincerely interested - and financially harass the people, will the Minister make known when the Nicklin Government and the Menzies Government are going to act in a businesslike way? Surely it is not unreasonable that, after almost twelve months, the people of Queensland should know the worst.
– I assure the honorable member that both the Menzies Government and the Nicklin Government are acting in a businesslike way. The task before us is to get the railway completed. Evidence that we are going ahead is provided by a newspaper report this morning. It is not surprising that there are difficulties in completing the documents and the contractual arrangements in a deal of this magnitude. They are taking a little time to complete. The full details will be given to the Parliament when the documents and arrangements have been completed. This delay, however, is not in any way inhibiting the progress of the work, which, as was promised by the two governments, is going ahead.
– Has the Minister for National Development received any report recently from the River Murray Commis sion about a watch being kept on the floods developing in the Snowy Mountains area and the upper Murray area as a result of the excessive rain and snow this spring? Could the Minister cause a survey to be made of such flooding so that areas adjoining the Murray, particularly in South Australia, could be adequately warned of extraordinary river levels upstream?
– There is no need to make special inquiries. Although I may not be able to give an answer off the cuff about what is being done, I am well aware that there is constant supervision and a constant relaying of information to the River Murray Commission about rainfall and river flows in the upper reaches, and variations in the level at the Hume Dam. Associated with the giving of that information is a flood warning system, which operates in accordance with variations of the Hume Weir level.
As I said earlier, the matter is under constant supervision. Senator Laught will remember that only a couple of years ago the River Murray Commission made a special investigation of the possibilities of flood mitigation throughout the whole river Murray basin. The commission presented quite a long report which, if my recollection is correct, terminated on the note that little more could be done than is now being done. The commission did recommend the erection of more levees at some spots on the banks of the river Murray.
– I ask the Minister representing the Minister for Trade whether an assessment has been made of the more stringent marketing conditions that are likely to be encountered in Europe this year in the sale of apples. Has the Minister for Trade any information about whether an alteration of freight rates is contemplated? Has he submitted to the Australian Apple and Pear Board any proposal for assistance to the industry in respect of increasing overseas freight rates?
– My recollection is that a question on this matter was asked within the last couple of weeks and that in reply the Minister for Trade detailed the present position in relation to the Tasmanian apple crop, the variations in marketing conditions that have occurred and the problems that are being faced. However, I do not think that the question contained any reference to freight rates. As I cannot recall the details of the answer to the question, I should be obliged if Senator Wright would place his question on the notice-paper. I shall then be able to get him a correct answer.
– My question is addressed to the Minister representing the Minister for Shipping and Transport. Is it not a fact that when the Bass Strait ferry “ Princess of Tasmania “ commenced operations, the then Minister for Shipping and Transport was of the opinion that if the ship carried 50,000 passengers a year and a fair average cargo load the service would be a paying proposition? Is it not a fact that in the first year of operation more than 70,000 passengers were carried and the amount of cargo carried exceeded all expectations? Is consideration being given to the possibility of a decrease in passenger fares and cargo rates because of the success of this ship in its first year of operation?
– I think it is fair to say that both the passenger traffic and the cargo carried exceeded the estimates that were originally made. The vessel has been such a success that the construction of similar vessels for other Tasmanian services is now being considered, as was recently announced by the Minister for Shipping and Transport. 1 do not know whether consideration has been given to a reduction of fares and cargo rates. I venture the opinion that if the authorities have done better from the operation of thu ship than was expected, it will, for the moment anyway, be thinking along the lines that the greater return could be expended on giving a better and wider service to Tasmania through the use of other new vessels.
– I direct a number of questions to the Minister representing the Minister for Shipping and Transport. Are any vessels of the Australian National Line engaged in trade between Australia and countries outside Australia? If so, what are the names of the ships and the nature of the cargoes carried? If not, does the Australian National Line have available any ships that could be used on overseas operations? If so, how many such ships are available and what are their tonnages? Are cargoes available? Do any agreements exist between overseas shipping interests and the Commonwealth Government which prevent ships of the Australian National Line from being used for overseas trade?
– The questions asked are rather comprehensive and I suggest that they be put on the notice-paper. I do not think that any ships of the Australian National Line are employed in the overseas trade at the moment. There have been occasions in the past When such ships have been so employed, generally on charter work, but in one or two instances on a direct cargo lift.
– I direct to the Minister for National Development a question which I preface by recalling that the Government, in its eagerness to help the search for oil in Australia, decided to employ the services of a renowned overseas organization, known as the French Petroleum Institute, in an investigation of potential oil fields in Australia. Has any report yet been made by this organization? If so, has it been made available to the companies interested in the search for oil?
– The French Petroleum Institute has completed its report. I have a copy of it, and I am now considering some aspects with the intention of tabling the report in the Parliament as a public document. I am not sure when I shall be able to do that, because some matters will need a little thought before I make a final decision.
– Is the Minister representing the Prime Minister aware that the international sporting contests known as the paraplegic Olympics have been just concluded in Rome? Has the attention of the Minister been directed to the excellent showing of Australian paraplegics in these contests? In view of the wonderful fortitude and courage of these athletes, will the
Government convey to the team Australia’s great appreciation of its efforts both in victory and defeat?
– I noticed the newspaper reports on these contests and I was very pleased with them. I will convey Senator Tangney’s suggestion to the Prime Minister.
asked the Minister representing the Postmaster-General, upon notice -
What members of the Commonwealth Parliament from -
In what sessions, on what dates and on what stations have the members concerned spoken?
– The PostmasterGeneral has supplied the following answers: -
The following members of the Commonwealth Parliament have, since the last federal elections, discussed or commented on political, social or other matters in A.B.C. radio and television programmes, other than Parliamentary broadcasts: -
asked the Minister representing the Minister for External Affairs, upon notice -
– The Minister for External Affairs has supplied the following answers: -
asked the Minister representing the Acting Attorney-General, upon notice -
– The following answer has been supplied: -
As I pointed out when the honorable senator asked his question, the answer involves consultation between the Attorney-General and the Minister for Labour. Further, it is difficult to give a short answer to some of the specific queries posed by the honorable senator without such an answer being misleading. For example, Mr. Justice Foster’s time is usually fully occupied by the maritime industry but on occasion, either by dint of working overtime or some other circumstances, he devotes some time to other matters. I suggest that better and fuller answers than can be given here by me at present will be contained in the report of Mr. Justice Kirby, President of the Conciliation and Arbitration Commission, reviewing the year’s operations of the commission and the working of the act. This report is expected to be presented shortly. That should provide a full answer to the factual questions asked by the honorable senator and the matters of policy, which his question suggests have arisen or will arise, will no- doubt be fully considered by the Attorney-General and the Minister for Labour in the light of that report.
– by leave - For the information of honorable senators I present to the Senate the third annual report of the National Radiation Advisory Committee. Mr. Deputy President, in presenting this report I feel that I must refer to the further contribution that the committee’s work has provided on matters which, until recently, were regarded with a certain awe, and were veiled in considerable doubt and confusion.
This report is the work of a distinguished group of Australian scientists, and as such bears the hallmark of authenticity. Honorable senators will be interested to learn that during the year the committee has been further strengthened by the addition of another three eminent scientists to cover the fields of public health, pathology and genetics. The report is presented in terms that can be understood by every one, and it places the various radiation questions in perspective. But what is more important as far as honorable senators and the people of Australia are concerned, its conclusions on this complex subject are most reassuring.
The committee has been able to reaffirm the assurances contained in its previous reports and states that, allowing for the most pessimistic set of assumptions, the radiation risks we face in Australia from fall-out are insignificant compared with the normal dally hazards of life. The committee concludes that, during 1959, the increase in fall-out levels in Australia from nuclear weapon tests to date was one-tenth of the increase of levels in the more densely populated regions of the northern hemisphere, and that the fall-out levels in Australia are now about one-fifth to one-fourth of those in the northern hemisphere. To learn from such a committee that Australia is one of the “ cleanest “ countries in the world is, I am sure, most re-assuring to us all.
In its last report, the committee drew attention to the inevitable increase in potential hazards to the Australian population by the increasing use of ionizing radiation in medicine, agriculture, research and industry. The committee then recommended that, in order to meet this situation effectively, the Commonwealth should accept responsibility for the legislative control of all uses of ionizing radiation throughout Australia. However, since this would present constitutional as well as other problems, as honorable senators will well appreciate, I sought from the committee a statement of the reasons which led it to such a strong conclusion. During 1959-60, the committee has devoted particular attention to this matter and its detailed report has now been received. It will be given careful study by the Government. In accordance with its role, the committee has reviewed its assessment of the biological effects of ionizing radiation and the present report revises its earlier evaluation of biological hazards associated with radiation exposure in the light of increased knowledge in this field.
Honorable senators will note that the committee’s various recommendations made in earlier reports are receiving active consideration and much progress has already been made in various directions not only with the State authorities but with the medical profession and associated bodies. When I tabled the previous report in August, 1959, I referred to the loss sustained by the resignation of Sir Macfarlane Burnet as chairman of the committee, but I am happy to say that his place has been most ably filled by Professor Sydney Sunderland, Dean of the Faculty of Medicine at Melbourne University. Despite the many other important preoccupations of Professor Sunderland and the members of the committee, they have been able to meet formally on eleven occasions during the past year as well as devoting considerable time between meetings to their committee work. The Government is greatly indebted to them for their efforts.
I commend this report to all honorable senators for their study not only because it is reassuring for Australia but also because it is an authoritative assessment of a complex subject which will continue to be of special concern to all of us.
I lay on the table the following paper: -
National Radiation Advisory Committee - Third Annual Report, July, 1960 - and move -
That the paper be printed.
Debate (on motion by Senator Dittmer> adjourned.
.- I move -
That the following Regulations be disallowed: -
Regulation No. 6 of the Financial (Military) Regulations, as contained in Statutory Rules 1960, No. 51, and made under the Defence Act 1903-1956;
Regulation No. 30 of the Air Force Regulations, as contained in Statutory Rules 1960, No. 52, and made under the Air Force Act 1923-1956; and
Regulation No. 36 of the Naval Financial Regulations, as contained in Statutory Rules 1960, No. 53, and made under the Naval Defence Act 1910-1952.
I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
.- I move -
That consideration be given to the wool industry and particularly to the following matters: -
Whether the wool industry and the Australian economy generally are being endangered by the downward trend in wool prices;
Whether an expanded sales promotion campaign would have a steadying effect on the market;
Whether a more vigorous research programme into credit facilities and production problems would materially assist the industry; and
Whether a competent independent body should be set up to inquire into all the aspects of wool marketing.
At the outset let me say that I am grateful to the Senate for providing me with an opportunity to propose this motion. I am mindful that Australia’s development and economic security depends not only on the maintenance but also the extension of this great industry on a profitable basis - and I emphasize the words “ on a profitable basis “. Any economic deterioration of this industry will affect the living standards of every man, woman and child in this country whether he is a worker, a professional man, is engaged in business or is a primary producer.
In this debate I propose to address myself objectively to the questions posed and to seek logical answers to those questions on the evidence at my disposal. On the other hand my motion is wide enough to permit discussion on every facet of the industry. I am confident that honorable senators on both sides of the Senate will have something valuable to contribute to this debate. Constructive thinking not only can add to the somewhat waning confidence of the growers in their industry, but also can sound a warning note to the manufacturers of synthetics by impressing upon them that Australia is prepared to fight to maintain the supremacy of its wool industry. This brings me to my first point which is the question of whether the wool industry and the Australian economy generally are being endangered by the downward trend in wool prices. No factual answer can be given to this most important question without a careful analysis of the situation. The subject must be considered also in relation to the national economy.
I am always somewhat loath to introduce masses of figures into a debate because I know they are not well received, but on this occasion I think I should produce some figures to support the points I shall make so that the Senate can judge whether my propositions are worthy of support. The first statistics I want to examine relate to the average prices obtained for wool over the last ten years. I emphazize the word “ average “ because far too often the wrong conclusions are reached when the uninformed pick up a newspaper and read a headline to the effect that a certain line of wool - it might be branded “ R.R. over Tasmania “ and drawn from a certain clip - has been sold for a very attractive figure. The story behind that glamour price often is revealed by the fact that the wool was a single bale drawn from a very fine clip for a special purpose, such as to advertise a stud. On the other hand, it might have been just one bale of wool of a line for which two or three buyers had orders. A fictitious set of values is created, and the uninformed are inclined to regard those prices as the average prices for wool.
In the year 1950-51, the average price for wool was 144 pence and some decimals per lb. For the sake of brevity, Sir, I shall eliminate the decimals from the statistics that I use. It will be recalled that 1950-51 was the year in which the price of wool reached an all-time high. Next year, the average price was 72d. per lb.; in 1952-53, it was 81d.; in 1953-54, again 81d.; in 1954-55, 70d,; in 1955-56, 61d; in 1956-57, it rose to 79d.; in 1957-58, it fell to 62d.; in 1957-58, it fell still further to 48d.; last year, it rose to 57d. I think it is fair to say that the price realized last year was regarded by wool growers generally as almost a profitable return. This season, however, the sales opened on a much lower note. The average price realized at the first sales was between 45d. and 46d. per lb.
The average price for the last ten years *vas 76d. per lb. I remind the Senate that that figure includes the high average price for 1950-51. When I also remind the Senate that the average price for the current season is 45d. per lb., compared with an average of 76d. over the last ten years, it is a very sobering thought. To reduce the figures to a final analysis, I point out that the prices at the opening sales this year were 10 per cent, or 12 per cent. lower than they were last year. Honorable senators may say, “ How can you talk about an average price for 1960-61 when there have been only a few sales so far? “. I know that prices could rise. On the other hand, there is no guarantee that they will remain even at the present levels. That is a very good reason why I think the Senate should make a thorough examination of the position of the wool industry and, in doing so, perhaps do some thinking that will be of value to the industry.
I have given a very brief survey of wool prices. It is not possible to make a proper appraisal of the prices received unless we also look at the costs involved in the production of the wool clip. For my authority on costing, I turn to a survey of the Australian sheep industry which has been made available by the Bureau of Agricultural Economics. Again, for the sake of brevity, I shall refer only to the last four years on which the survey reports. There is nothing significant in my doing that. All the figures are available for anyone who cares to see them, but I think that the story of the last four years adequately makes the point that I want to make. In 1956-57, the net farm income was £4,051 per annum. The figures that T cite relate to properties which are devoted almost entirely to the production of wool and on which there is very little, if any, other primary producing activity to bolster income. The net farm income to which I have referred, after allowing for the costs of earning the income, represented a return on capital invested of 9.24 per cent. In 1957-58, the net farm income had fallen to £1,888, or a return of 2.9 per cent.; in 1958-59, it was £2,133, or 3.55 per cent.; and last year, 1959-60, again bearing in mind that wool prices rose during the year, the net farm income was £2,966 or a return of 5.1 per cent.
Incidentally, the returns on capital to which I have referred were arrived at without making provision for the farmers’ own wages. Therefore, by and large, it can be taken as factual that the income of farms producing wool predominantly have fallen by about 25 per cent, in the last four years. If we examine the figures, it will be found that costs have risen by 10 per cent. No other section of primary industry is suffering that particular disability.
– What was the average cost of a property?
– I shall let the honorable senator know, if he is interested. I think that is a relevant factor, and one of great significance. I suggest that if this state of affairs is allowed to continue - and I use the word “ allowed “ advisedly because there is no easy method of checking or halting it - the industry may face a very troublesome time for the reason, if for no other, that lack of incentive will have a serious effect on both the quantity and quality of wool produced.
It may well be argued that wool producers should turn to other forms of production. Honorable senators may ask, “ Why do they not grow wheat? “ I suggest that if wool-growers were to do that they would merely aggravate the difficulties of another section of primary industry. Those who study the economics of the wheat industry know only too well that the stabilization fund which has been established by the growers is reaching the stage at which it will have to be replenished from some source or other. Expansion of the wheat industry would only make the position more difficult. We know, too, that the dairying industry depends for its economic stability on a subsidy of £13,500,000 per annum. To drive people into that industry would merely add to the problems it already faces.
The brief survey I have made must indicate to those who are prepared to listen, to analyse and to judge for themselves, that if the downward trend of wool prices persists the stability of the wool industry will be threatened. If that happens, what will be the effect on our national economy? There is no need for me to remind the Senate that 50 per cent, of our overseas credits are the direct result of our exports of wool.
– Forty per cent.
– Between 40 per cent, and 50 per cent. . Let us be broad enough in our assessment to be factual and yet not dogmatic. We use our overseas credits, of course, to bring into this country the heavy equipment, the oil, the tin, the rubber and all the other commodities on which our secondary industries depend, notonly for survival, but to enable them to develop. We must bring in those commodities in greater quantities. The Export Development Council, which we all regard as a most authoritative body, has advised the Government that over the next five years our overseas credits must be increased by £250,000,000 to meet the needs of our expanding economy.
– Does the honorable senator mean £250,000,000 per annum?
– Within five years we must augment our present overseas balances by £250,000,000. Five years hence, this country must have overseas credits which are £250,000,000 greater than our present credits. That increase must be made in order to meet the need3 of our expanding secondary industries.
– And of a greater population.
– Yes. Let me say this: We must have a balanced economy. I do not want the Senate to infer from my remarks that I am suggesting we should bolster the primary industries at the expense of the secondary industries. In my opinion, the only chance that this country has to meet its obligations in a changing world is to develop and expand every section of its economy. I remind honorable senators that although we had last year a record wool clip of about 5,000,000 bales, we received for that wool £277,000,000 less than we received ten years ago for a clip which yielded 1,380,000 fewer bales. I am reminded that the year 1950-51 was a peak year. I freely admit that. I also freely admit that no responsible Australian, whether he be a primary producer or be engaged in secondary industry, would want to see that type of peak again. I give these figures because they show that the wool industry represents very big money for Australia and that any diminution of its earning power must affect the Australian economy generally. I think it is fair to argue that no further evidence is required to indicate that a downward trend does endanger the economy, not only of the wool industry, but of the country generally.
Sir, I pose my second question, which is: Would an extended sales promotion campaign have a steadying effect on the market? As you know, 90 per cent, of our wool clip is exported. For that reason, if for no other, sales promotion faces very serious limitations. Within our own borders, we can pursue a vigorous policy of sales promotion - which is being done - but in the overseas markets we operate within limitations.
A survey of all the information available indicates that the International Wool Secretariat and the Australian Wool Bureau are making a splendid contribution to the wool industry. The Australian Wool Bureau, which is the Australian counterpart of the International Wool Secretariat, has three sources of income. It receives money derived from a levy on every bale of wool produced by the growers, it receives interest on investments of capital, and it receives funds from appropriations from the Wool Stores Fund. The major portion of the income of the bureau is derived from the levy on growers, which to-day is 5s. a bale. That is the maximum levy that is permissable under the existing legislation.
– Do the growers pay 5s. . a bale?
– Yes. Quite recently, they lifted their contribution from 4s. to 5s. a bale. The fact that they have seen fit to increase their contribution even in difficult times indicates that they have a healthy respect for the job of promotion.
– Is promotion subsidized by the Government.
– Research is subsidized, but not sales promotion. The Australian
Wool Bureau, as you know, does not physically sell wool. It co-operates with wool textile manufacturers, retailers and other groups. It promotes the nation-wide advertising of wool, wool festivals, shearing competitions and all other activities that can be associated with the promotion of wool. In other words, its chief objective in this country is to try to influence people to use more wool and to realize the great value of wool.
– The honorable senator should not forget the mannequin parades.
– 1 remind Senator Hannaford that the bureau has achieved some spectacular results in collaboration with the Commonwealth Scientific and Industrial Research Organization. Woollen garments have been produced which maintain the natural advantages of wool over man-made fibres and which also have advantages that previously were peculiar to synthetics. Senator Hannaford obviously saw garments of that kind when he was watching the mannequin parades which linger in his memory. Perhaps the greatest achievements have been in the field of shrinkproofing and pleating. I think that the statistics give some support to my assertion that the bureau is doing a really good job for the industry, because wool consumption in Australian mills increased by about 20 per cent, during the first quarter of 1960, compared with the first quarter of 1959. In my opinion, this justifies the expenditure of the bureau, which from £67,000 in 1953 to £490,000 in. 1959-60.
On the information available, it may be argued that the promotion programme of the International Wool Secretariat has been successful. The world consumption of wool has increased by 13 per cent, in the last three years. I am of the opinion that that is a splendid record, realizing that promotion outside Australia is much more difficult than promotion inside Australia, where we have a better appreciation of the worth of the product.
I come to the final point I want to make in relation to promotion. Neither ,the International Wool Secretariat nor the manufacturers of synthetics disclose the amounts that they spend annually on promotion. Therefore, it is very difficult to ascertain the amounts involved. On the information that is available, I would suggest that the synthetics manufacturers are spending £25,000,000 on the promotion of their products, which is at least from eight to ten times more than the wool industry is spending on the promotion of wool.
– Per annum?
– Yes. The synthetics people are spending £25,000,000 per annum. The wool industry must compete with the promotion plans and schemes of the synthetics manufacturers. There is ample justification for the contention that increased sales promotion activities would be of great value to the wool industry generally, but I am of the opinion that that could have no immediate effect on current wool markets, although the end result would be of untold value to the industry. If I were asked bluntly whether I thought that increased sales promotion would have a steadying effect on this year’s wool sales, I would have to say that I did not think that would be possible, but that the end result would be of untold value to the wool industry.
The next question I pose is this: Would a more vigorous research of credit facilities and production problems materially assist the industry? I believe this is one of the most interesting subjects we could debate. It is so vast that I am afraid that in the time at my disposal I shall be able to do it only sketchy justice. I do not want to go back into history beyond saying that I believe it can be argued that in the past the wool industry has been fairly well served with credit facilities for the simple reason that wool is almost indestructible and is what I would regard as being a first-class risk for a lender. Wool-growers, by means of fodder and water conservation, have been able to cushion the impact of lean years and droughts on their flocks and have been able always to obtain some income. Rarely are wool-growers faced with a total loss. Such protection is enjoyed by few other sections of .primary industry. The wheat-grower can lose the whole of his crop as the result of one drought. The fruitgrower can have his crop ready for harvest, but have it damaged by one late frost. A dried fruits grower can have his crop almost ready for harvest but summer rains can damage it to such a degree that it becomes a problem and not an asset.
I have mentioned those things to emphasize that in the past the wool industry has enjoyed facilities which, whilst not overgenerous, have made a worth-while contribution and have enabled it to reach the stage it has reached. The trading banks and the wool-broking firms traditionally have provided the short term finance that has been necessary to tide the wool-grower over his seasonal difficulties. But I am quite sure that more than short-term credits are required to-day. The grower’s profits are so slender that he cannot maintain, let alone develop, the property that he is trying to make the most of.
Lack of confidence in the industry to-day is deterring the grower from operating on short term finance. That is because, as a businessman, he realizes that the money must be paid back by a certain date and he does not know what his returns will be and whether he will be in a position to meet his commitment. He is acting cautiously. Who can blame him for doing so? Therefore, I suggest the time has come when there should be made available some means of giving him the confidence that he needs to develop his property. I suggest that the Commonwealth Development Bank, which was set up quite recently, could play a really worth-while part in the development of the industry by providing long term loans at cheap rates of interest. I emphasize that those two factors must operate parallel to each other. I express the hope that the bank realizes its responsibility, that it will seize the opportunity to make a valuable contribution to the Australian economy, and that it will set a pattern which its competitors will be obliged to follow sooner or later. If that State of affairs develops, the industry will get the assistance that I am sure it is looking for.
I believe that the wool industry is experiencing difficulty in obtaining even short term credit, for the reason that it cannot produce profitably. That brings me back to the subject of costs. I wish to refer very briefly to a matter I raised just recently. I argued that the Tariff Board played a very big part in the Australian cost structure. Let me say, in all fairness to the board, that it invariably makes its recommendations on the evidence placed before it. But almost every application made to the board has to do with the seeking of protection for some industry - generally a secondary industry. I have no quarrel with secondary industries in that respect, but I point out that every extra form of protection that is accorded to secondary industry invariably has some influence on the costs of primary industries. I believe that the primary producers particularly the wool-growers, must realize that they have an opportunity to present to the board a case that will serve their own interests. I suggest that perhaps the National Farmers’ Union would be the appropriate body to specialize in this form of representation to the Tariff Board.
Now let me discuss the question as to whether research into production problems could be of material assistance to the industry. This subject is so wide that I can merely mention only one or two points. Science has played a magnificent part in increasing production. Since 1950, the number of sheep in Australia has increased by approximately 50,000,000, and the production of wool has risen by 1,500,000 bales. If honorable senators were to ask me to nominate a contribution that has been of value to the industry I would at once refer to myxomatosis. But many other valuable contributions have been made. Pasture improvement has enabled production in many cases to be doubled and even trebled. But those benefits have brought in their train serious problems, particularly in the highly productive areas where disease makes big demands on the growers’ time and accounts for a big part of their running expenses. I believe that science can make a worth while contribution to the industry by providing cheap technical innovations to the farmer to enable him to deal with the problems with which he is confronted.
While I am dealing with the subject of research, I wish to refer to the blending of fabrics. There is a huge field to be explored in the blending of fabrics. Synthetic fibre manufacturers are producing materials 20 per cent, to 60 per cent, of the content of which is synthetic fibre. Those manufacturers claim that blending gives the best results. Of course, their promotion of blends is always slanted from the synthetics angle. I am sure that efficient research into this problem would enable us to determine whether the claims of the synthetic fibre manufacturers are justified and would make a worthwhile contribution to the wool industry. The conclusion I draw is that the provision of credit facilities and more vigorous research not only would assist the industry but indeed are an urgent necessity.
I pass to my last query: Should a competent independent body be set up to inquire into all aspects of wool marketing? Perhaps the first question that I will be asked is this: What can be gained from an inquiry? The differences of opinion about marketing amongst the federal growers’ organizations in the last two or three years have revolved around a consideration of whether a reserve price or a floor price should be adopted. Australia has two known methods of selling its wool. By and large, the auction system has served this industry well for generations. The other system - the appraisement scheme - was brought into effect during the war years. I reject completely the philosophy that the appraisement scheme is the better method of selling our wool in peace time. The disadvantages are so obvious that it would be a waste of time to discuss them.
The other scheme that I want to talk about is that for a floor price within the auction system. A scheme of this kind has been operating in New Zealand since 1952 and in South Africa since 1957. Whilst I, foi- my part, am determined that appraisement shall not be the method of selling Australia’s wool clip, I am equally sure that the auction system, in principle, must be retained. I admit - who can deny it? - that there are imperfections within the system, but I suggest that those imperfections are a challenge to our ingenuity - a challenge to improve the system. One might ask: What is meant by a reserve price or a floor price within the auction system? In general, it means fixing the floor or .bedrock price below which wool cannot be sold at auction.
– It is having a couple of bob each way.
– In general terms, it means fixing the floor or bedrock price below which wool cannot be sold at auction. If the honorable senator will permit me to develop my argument, I hope to answer his suggestion that it is like having a couple of shillings each way. If bids fall below the floor price or reserve price, the wool is bought in by an authorized organization and the grower receives the reserve price. One might ask whether this scheme would destroy the auction system. I think it can be claimed that a floor price system would not destroy the auction system. I believe that it could, if properly managed, increase confidence in the auction system by removing some of the undesirable features that I shall mention as I traverse the subject.
One might ask whether a floor price would prevent an owner from placing a reserve on his wool. I would say that any floor price plan must retain for the owner the right to fix his reserve. He is thc grower of the wool and it is his property. He must retain the right to withdraw his wool from sale if he so desires. He has that privilege to-day. Prior to the sale, the broker goes through the various clips and puts a valuation on the wool. If a grower thinks that his wool should bring, say, 60d. per lb. and if the bid at auction does not reach 60d., he may withdraw the wool or he may sell it at a lower price. Under the existing system, growers have been loath to withdraw wool from sale, for the very good reason that if a grower does so, his wool is regarded as having gone into store and he then has to take his place in the queue for future sales. He will be very fortunate indeed if, having withdrawn on a second occasion, he can get his wool sold in that season. So the grower is traditionally loath to withdraw his wool from sale. In the case of bulkclass wool and inter-lotted wool, he cannot withdraw, because his wool has lost its individuality and therefore he has no control over its destiny.
One of the most undesirable features of the present system is that it permits a dealer to buy wool to-day and to sell it at the very next sale, if he can secure a rising market. Any plan that will eliminate that type of thing is in the best interests of the industry. It may be argued that a floor price plan would tend to protect the poorer quality wools. The greatest care must be taken to protect the individual types of wool. Reserves must be so fixed that the average equates the general reserve price. No plan could succeed that failed to protect adequately the better types of wool, for the quality of our wool has given Australian supremacy. Irreparable harm could be done to the industry if any plan were adopted that did not make adequate provision for the fixing of reserve prices for the various types of wool that we produce.
– In accordance with their quality.
– Yes. One might ask whether the reserve price plan would not tend to make the price of wool too high, resulting in a boost for synthetics. I believe that the answer to that question may be found by analysing the object of the floor price plan. The object must be to stabilize values, not to create an artificial price divorced from marketing trends. If any effort were made to create an artificial price, the manufacturers of synthetics would realize that an opportunity existed to capture our markets. If our wool were being withdrawn from sale, they would be free to exploit every avenue available to them. 1 want to refer briefly to the history of the floor price plan in New Zealand, because this is the only information at our disposal upon which we can make an evaluation of a floor price plan. The plan was evolved in 1952 but was not actually put into operation until 1957-58, for the very good reason that in that period wool was selling at reasonably high prices throughout the world. In 1957-58 the New Zealand Wool Commission operated for the first time and bought in 46,899 bales. At the end of the year it had in stock 46,899 bales, the number purchased. That represented 4.1 per cent, of the total offerings. For the year the average fixed floor price for greasy wool was 41.3d. per lb., in Australian currency. The overall average price for the season was 51d. per lb.
– Is that in sterling or in Australian currency?
– That is Australian. All the prices I quote will be in Australian currency, for the sake of simplicity. I can give the New Zealand figure if it is required. In 1958-59 the commission bought in 46,401 bales, of which it sold 45,21 1 bales. It had in stock at the end of 1958-59 48,000 bales. The floor price reserve was 41.3d. per lb. The average overall price for the season’s clip was 45d. per lb.
– How did that compare with the Australian price?
– I shall complete my analysis of the New Zealand position before I make reference to that point, which is material. In New Zealand the great bulk of the clip is composed of cross-bred wool, with only a very small percentage of merino. I say quite bluntly that there is no real analogy so far as the types of wool are concerned, but there is a principle that we can examine and we can derive some advantage from the experience in New Zealand. In 1959 the commission purchased 126 bales. It cleared the whole of its stock with the exception of 415 bales, at an average of 55. 9d. per lb. The average price received for our wool in that year was 57d. per lb. I remind honorable senators that Australian wool is a much better quality wool because of its merino content. It is interesting to note that sales made by the New Zealand Wool Commission over the past three seasons showed a profit of approximately £A625,000 after cost-plus holding and selling charges had been met. I say as emphatically as I can that it is difficult at this stage to assess the effectiveness of the New Zealand plan because of the relatively short time for which it has been in active operation. I believe there is sufficient evidence in the history of that plan over the last three years to merit Australia looking into the possibility of applying it to our wool clip. The New Zealand plan met with opposition from the buyers but was generally well received by the growers and the wool-selling brokers.
I am delighted to know that since I gave notice of this motion in the Senate the two federal bodies representing the Australian wool-growing industry have asked the Minister for Primary Industry (Mr. Adermann) to set up an independent body to inquire into the selling of Australian wool. I believe that augurs well for an amicable solution of the problems that undoubtedly face us. My only comment on the composition of the committee is that it is a matter for the Government and the growers. As to the competency and independence of the members of the committee I make this comment: I want to see a committee composed of men who are competent to call and assess expert evidence and to reach a speedy but not hasty conclusion. When I say “ independent men “ I mean men who will approach the problem without bias- or preconceived ideas on the marketing of wool. Finally, I believe the holding of this inquiry is a matter of real urgency because the men who have come into the industry in recent years, particularly the soldier settlers, are facing a very difficult period. Any action that can be taken to help them is in the best interests of Australia and the industry. For the reasons I have enunciated, I commend this motion to the very earnest consideration of the Senate.
– I second the motion and reserve my right to speak at a later stage.
.- Mr. Deputy President, I am pleased that the occasion has arisen for a discussion of the wool industry. I think it is very timely. There -was such a discussion in another place in March of this year. The reason for my welcoming this occasion so readily is that it gives the Opposition a chance to put before the Senate the Australian Labour Party’s proposals for the wool industry, particularly the selling side of it. I propose to answer the questions submitted by Senator Wade. His first question was: Are the wool industry and the Australian economy generally being endangered by the downward trend in wool prices? The answer to that is simple; it is “ Yes “. Wool prices are falling. Taking 100 as the index number for the price for the three years 1937 to 1939 inclusive, the price of wool in 1947-48 represented 287; in 1949-50, 473; in 1950-51, 999; in 1955-56, 464; and in 1958-59, 362. So that those figures can be understood by people who are not used to the index method - I am not referring to honorable senators, but to those who may read the speeches of Senator Wade and other honorable senators - I will give the actual prices. The price of wool in 1947-48 was 40d. per lb.; in 1949-50 it was 63d. per lb.; in 1950-51 it was 144d. per lb.; in 1955-56 it was 61d. per lb.; and Senator Wade said that in 1958-59 it was 48d. per lb. The present position is that merino wool, which was selling for 89d. per lb. in 1954, is now bringing only 46d. per lb.
In the period from 1949-50 to 1959-60, the value of money has fallen to half its initial value. Despite the fact that the woolgrowers have increased their yields by 50 per cent, since 1949-50, their present returns in terms of real money are no greater than they were in 1949-50, although their expenses have increased considerably. In fact, one could say that, in line with increases in the cost of living, the expenses of the wool-growers have increased at least two and one-half times. Therefore, the Australian wool industry is endangered by the downward trend in prices.
A fall in wool prices has a significant effect on Australia’s balance of payments position. Exports of wool represent roughly 40 per cent, of our total exports to-day. It is true that in past years that percentage has gone as high as 70 per cent., and in the bad old days of the depression, when I think the price of wool was under ls. per lb., the percentage was much lower. In 1958-59, wool exports earned £302,000,000 for this country of the total export earnings of £807,000,000. Wool earned much more than any other export, the next largest export earner being meat, which earned £97,000,000. Between the years 1957-58 and 1958-59, when wool prices fell sharply, Australia’s income from the export of wool fell by about £150,000,000- a grave blow to the balance of payments position. Therefore, a fall in the value of wool is dangerous to the Australian economy as a whole and disastrous in its effects on the individual wool-grower.
In the “ Sydney Morning Herald “ of 20th September, 1959, Mr. E. S. Cole, of the Australian Wool Growers and Graziers Council, said -
If the present season’s average price is maintained for the remainder of the selling season Australia’s return from wool for 1960-61 will be almost £100,000,000 less than it was last year. The current average price of 46.02d. is already 20 per cent, below last year’s low average of 57.78d., and the official estimates of 1,600,000,000 lb. show a fall in production of S.2 per cent.
That weight of wool represents about 5,000,000 bales. The fall in production is very grave for the nation as a whole, and particularly for the people engaged in the production of wool. This year’s wool cheque is likely to be the lowest since 1949-50, notwithstanding the fact that the clip this year will be 50 per cent, greater than it was in 1949-50.
When it is remembered that the value of money has fallen to 50 per cent, of its former value in the same period, honorable senators will see that the plight of woolgrowers is extremely grave. One is entitled to ask why the industry is in such a bad situation to-day. I believe that the principal cause is inflation, plus the Government’s policy of lifting all controls. My friends of the Australian Country Party must bear as much responsibility for inflation as honorable senators of the Liberal Party. Another reason why the wool industry is in such a bad plight to-day is the non-existence of any real marketing scheme. I will have more to say about that later.
asked whether an expanded sales promotion campaign would have a steadying effect on the market. 1 believe that it would to some extent, but not significantly. Already the Australian Wool Bureau spends approximately £1,500,000 a year on promotion campaigns, and we are able to sell our total wool clip. In fact, in the last twelve seasons this country has sold every bale of wool that it has produced. So it is not a question of entering upon a campaign in order to sell our wool; we sell it now. Over a long period of time, a sales promotion campaign would undoubtedly have some beneficial effect on the price of wool. Some people may say that an intense promotion scheme may lead to increased competition at the auctions, but since I heard about pies I am afraid that a promotion scheme would not bear the fruits expected by the wool-growers. We must face the challenge of synthetics. Only a few articles of apparel worn to-day do not contain some percentage of synthetic materials. Nylon is widely used, and orion is used in the manufacture of cardigans and similar articles. In Victoria, articles that are made of pure wool must be so marked by the manufacturers. I hope the time will come when all articles containing wool will be required by law to show the percentage of wool and other materials used in their manufacture.
asked whether a research programme into credit facilities and production problems would materially assist the industry. At first I did not know whether Senator Wade was concerned with producers of wool or persons engaged in the marketing of wool. He dealt with the problem from the producers’ angle, and no doubt it is true that increased credit facilities would affect not only the wool industry, but every other primary or manufacturing industry. It is said that the wise man makes money on somebody else’s money; he does not always use his own money. will deal with Senator Wade’s question from the viewpoint of the producers, who are worried about what they are likely to get for their wool. Production has increased by 50 per cent, in the last ten years. I thought that Senator Wade’s question was directed towards credit as it affected wool buyers. I doubt whether the provision of additional credit for wool buyers within the present marketing framework would increase prices. As everybody knows, buyers are linked with banks and finance houses, and normally they are able to get as much credit as they need.
I agree with Senator Wade’s view that research into the wool industry has increased in the past ten years. It is apparent, also, that a continued research programme will improve the position of wool-growers. Wool-growers owe a lot to the efforts of the Commonwealth Scientific and Industrial Research Organization. The efforts of the C.S.I.R.O. are like unearned increments that have been placed in the laps of the wool-growers. We are told that five or six rabbits eat as much as one sheep. In certain of the best wool-growing areas in Victoria - around Camperdown, Derrinallum and Skipton, which Senator Wade knows well - you would be lucky to find a single rabbit to-day. The C.S.I.R.O. has given tremendous service to the wool-growers. That service has not cost them anything. Of course, if their income increases they will pay higher taxes.
– What about the research tax?
– The amount involved is infinitesimal compared to the benefits that the wool-grower has received. I do not complain about this improvement in the industry because, by helping the woolgrowers, we are also helping the nation. As far as I am concerned, Australia is the only nation that I want to know and love. Anything that helps to make this nation greater helps every person living in it. I think that research into any industry is always welcome, and undoubtedly further research will increase the carrying capacity per acre. That will mean that the wool-growers will be able to run more sheep on their land. I was rather amazed” that Senator Wade said nothing about the cost of land to-day. How much would it cost to put my son or his son on a property at the present time? It would cost almost £20,000, and the lad, good worker though he be, would need to have the luck of good seasons. The price of land is fantastic, and the Government can blame no one but itself for that fact. This state of affairs has been caused by the inflation which this Government has allowed. Members of the Australian Country Party sit calmly in their position in the corner and keep honorable senators opposite me in office. Members of the Liberal Party preen themselves and love to have it so; as long as the Country Party is sitting in the corner and the Labour Party is in Opposition, they are happy to have the ball roll their way.
I repeat that the main cause of the troubles in the wool industry is inflation. If it were not for high costs the woolgrower as well as those engaged in other primary industries would be much better off.
– Are you suggesting that we started the inflation that is worldwide?
– If what 1 am saying is pinching, I do nol mind. 1 am only making my statement, and I am more concerned about this country than about any other. In 1949, the present Government was handed an economy second only to that of Canada. The honorable senator who has just interjected because of his training, is good at checking things from books. I give him credit for his ability, and ask him to check the position for himself. The Government cannot blame any one else. It is the Government’s job to halt inflation, but it has allowed it to run riot, and now the problem of high costs has fallen right into the Government’s lap. At the present time Australia is producing 50 per cent, more wool than it did ten years ago, but in real money values growers are not receiving more, and the possibility is that the Statistician’s figures would reveal they are receiving less.
The fourth question raised by Senator Wade was whether an independent body should be set up to inquire into wool marketing. I answer “ No “, and I have a good reason for doing so. Wool-growers to-day face the greatest crisis they have ever faced in modern times, and because the wool-growers face this crisis the country faces it too. The problem demands immediate action. I do not believe we should waste time by appointing a committee. I was a member of the Constitutional Review Committee and I think that all members of that committee worked very hard; it took three years to produce its report. I am blaming myself as much as any other member of the committee for the delay. Senator Wright was a member of that committee and so was Senator McKenna; and I do not think that any one could say there was undue waste of time.
As far as the wool industry is concerned, all the facts, information and figures we want can be given by the wool-growers’ organizations, the Division of Agricultural Economics, the Commonwealth Statistician and interested bodies. I have no personal interest in this matter and do not desire to score a point, but I say that an investigation is not needed. With the exception of a few small industries that may be left out on a limb, I would say that we have all the information we need about our primary industries. As I have just said, the information can be obtained from three or four bodies which are concerned with the wool industry, and, in addition, we can draw on the experience of New Zealand and South Africa. To set up a committee would, to my mind, be only waste time. If the industry wants any further information it could obtain it from Mr. Chislett, the secretary of the Graziers Federal Council. After his recent trip overseas he published facts and figures which should prove sufficient for the industry to initiate immediate action. I believe the time for investigation has passed and the time for action has come.
I now propose to mention the kind of action that I think the wool-growers should take. There should be a floor price and an orderly marketing system for wool, just as there is such a system for wheat. I understand that Senator Wade is a wheat-grower. He may grow wool on the side, as most wheat-growers in the Wimmera do. He knows that an orderly marketing scheme exists in the wheat industry. I ask him and the wheat-growers of this nation whether they would be prepared to put their product, as it were, into the melting pot and forget all about it. The marketing scheme for wheat has been a saver to producers and as the years go by will no doubt be of tremendous advantage. I think that the wool-growers should be given the same opportunity for the orderly marketing of their product. I am not concerned about the Manifold’s and Skipton’s, or Carringballik and other big stations in Victoria, because the figures show that the majority of the parties interested in wool to-day are small men and not the big stations.
The industry should take action. Surely, it does not want to retain the present auction system. I feel certain that Senator Wade has read the report of the royal commission of inquiry conducted by Mr. Justice Cook. This is what he said about auctions as they are conducted at present -
Having carefully considered the evidence and all the arguments which have been addressed to me. I have come to the following conclusions:
Pies are a negation of the basic principles of a free auction system. They restrict competition in the market.
They deprive the market of the stimulus of free unrestricted bidding.
Their inherent purpose is to enable wool to be bought somewhat more cheaply than otherwise.
They result in some portion of the clip being sold for less than would otherwise be paid for it, and it has not been established that there is a compensating factor, namely that the balance of the clip realizes more than it would otherwise realize, so that, overall, the disadvantages of the pie system are offset by the advantages.
Those were the findings of Mr. Justice Cook. I am tremendously amused at the Australian Country Party. Candidly, I do not believe that it plays any real part in the political life of this nation. I say to the members of the Australian Country Party: “ You serve no purpose. You let others do whatever they like to the people you are supposed to represent.”
I enjoyed a portion of Senator Wade’s speech, but when he came to discuss price fixing, I intimated to a friendly senator that he was having a bob each way. Senator Wade offered no definite suggestion as to what should be done. If the people that the Country Party purports to represent more than any other party - which I query - rely on the efforts made by that party in relation to the appointment of an indepen dent body to inquire into wool marketing, all I can say is that it will be a case of “ live horse while the grass grows “.
– The honorable senator is spoiling a good speech now.
– Yes, I am spoiling it because I am not like honorable senators opposite. 1 believe in saying what I think. 1 believe that I ought to say what I think I should say, without worrying about personal affronts. I say quite openly that, having regard to the big questions that confront the nation to-day, there is room for only two political parties.
– What are you going to do with the Democratic Labour Party?
– We shall look after that matter in our own time. In any event, that party is in a different category from that of your people in the corner. I do not want to say what I said the last time I spoke in this chamber. Senator Scott is pretty good at dealing with a certain kind of animal, and I suggest that he confine himself to that field.
To show how the Australian Country Party, this valiant body, pulls the wool over the eyes of the wool-growers, I refer to a speech of the honorable member for Hume (Mr. Anderson), reported at page 1494 of “ Hansard “ of 17th October, 1957.
– Why not speak about the Democratic Labour Party for a change?
– I am sorry if I am upsetting the honorable senator. J nearly got into trouble last week because of interjections, and I now propose to be a little quieter. I do not want to ask for your protection, Mr. Acting Deputy President, although if it is a case of “ all in “ I shall not mind. I never mind. In reply to a suggestion by the honorable member for Darling (Mr. Clark) that under this Government the purchase of wool was falling into the hands of fewer buyers and that therefore prices were being forced down, Mr. Anderson said, “ That is nonsense “. He disagreed with what a learned judge found to be the facts.
Let us consider what some of the supporters of the Government know about the position of the wool-grower to-day. I refer again to the proceedngs in another place.
I do so only because we in this chamber have not had as much opportunity to discuss the wool industry as has the House of Representatives. At that time - 11th March, 1958 - Mr. McMahon was Minister for Primary Industry, a fact which makes the passage that I am about to read all the more remarkable. The honorable member for Lalor (Mr. Pollard) had asked Mr. McMahon the following question: -
In view of the recent serious decline in the price of wool and its impact on the Australian economy and primary producers concerned, will the Minister have an inquiry instituted to ascertain to what extent buyers’ rings - either rings of local buyers acting on behalf of foreign interests or foreign buyer rings- are operating?
Mr. McMahon replied ; keep in mind that he was Minister for Primary Industry ;
I feel sure that this is a figment of the honorable gentleman’s imagination. I have no evidence, and 1 have never heard it suggested, that buyers’ rings of any kind are operating in the Australian wool market. I feel reasonably confident that if they had been operating the facts would have been brought to the attention of the Government, the department or myself. . . .
That was said on 11th March, 1958, and the inquiry to which I have referred was commenced in October, 1958. I am amazed that a Minister of the Crown should not have known what was going on. I am keeping my eye on the clock-
– That is right. We are watching the clock too.
– It is about the only thing that is true this time.
– Why should I worry about naive and stupid interjections like that? Let me come to the question of pies. I have already referred to this subject. Surely Senator Wade must admit there is no answer to the problem other than the adoption of a system of orderly marketing.
– What do you mean by orderly marketing?
– I have already told you.
– I was not listening.
– I suppose the honorable senator was waiting to hear whether there would be any braying. Surely Senator Wade knows of the BritishAustralian Wool Realization Association and that it meant ?35,000,000 to the wool growers in the days when it operated. If that has escaped his memory, surely he remembers that after World War II. the Joint Organization meant ?93,000,000 to the wool-growers. Mr. Justice Cook has named certain organizations in his report, and every one knows that foreign buyers, including Japanese ‘and < French buyers, were engaged in pies. They were all in it.
If I were as important politically as the five or six Country Party members of the Ministry I would see to it that the Government did what I wanted it to do. I say to them, “ Pick up your courage. The ball is at your feet. The ground is not wet. Kick it straight.” They should realize their power and stop pulling the wool over the eyes of the country people.
We of the Australian Labour Party do not say for the first time to-day that we believe in a floor price system of wool marketing. We said it as far back as 1958, and even prior to that. We believe in a floor price. We are not going to interfere with the auction system.
– Do the growers want a floor price?
– It is true that in 1950 or 1951 - I am not sure of the year - a ballot of the wool-growers was taken. But I ask Senator Scott, who no doubt is interested in wool as well as in donkeys, to consider the conditions under which that ballot was conducted. On the eve of the ballot, every obstacle was placed in the growers’ way, because the Government did not want a vote in favour of a floor price. I am not a betting man, but if this Liberal Government were forced to decide between helping the wool-growers and the brokers, I know where I would place ray money if I had a bet on the result. What have the supporters of the Australian Country Party done for the people whom they are supposed to represent? They have done nothing. By the fourth matter mentioned in Senator Wade’s motion, all that we are asked to consider is whether a competent independent body should be set up to inquire into all aspects of wool marketing. It is the old. old story. Nero fiddles while Rome burns.
– What was the position under Labour?
– When Labour was in office, the wool-growers were not faced with the position that confronts them to-day, as Country Party senators who are making stupid interjections should know. I believe that the Government should legislate immediately to introduce a floor price scheme and should submit it without delay to the wool-growers for ratification.
– Have the woolgrowers asked for such a scheme?
– The Country Party senators are prepared to sit in their places in the National Parliament and wait for the wool-growers to ask for a scheme. Can they not lead? Is there any law or rule against their leading?
– We have not got a caucus.
– The Liberal Party tells the members of the Country Party what to do. As long as they are placed in No. 2 position on the ballot-papers they are prepared to act as meekly as lambs and do what the Liberal Party wants them to do. I say to the Country Party senators: Govern the country that you and I love. Do not pull the wool over the eyes of the people. Unless honorable senators opposite are prepared to give a lead, they have no right to sit in the National Parliament. As I have said, as long as the members of the Country Party are placed No. 2 on the Government parties’ ticket, they are willing to crawl to the Liberal Party, which only laughs at them.
This debate has afforded the Opposition an opportunity to state its views on the subject. We have done so fearlessly, because we know that what we have said is right. I conclude on this note: Place the matter before the wool-growers and let them have their say. Unless this industry is saved, the country as a whole will suffer.
– This is a timely occasion on which to bring this subject before the Senate, and I heartily congratulate Senator Wade on the manner in which he has handled it. He has highlighted the consideration which is being given to the plight of the great wool industry in Australia at the present time by the Government, the industry, and by this chamber.
Wool is receiving particular attention at present and is causing concern because of Australia’s utter dependence upon it. The present price of wool is causing grave anxiety, not only to the individual growers, but also to the Government and to every individual who takes any interest in the welfare of the Australian economy and in the prosperity of the nation as a whole. There is no doubt that the prosperity of this nation is bound up with the prosperity of the wool industry, for good or for ill. When the price of wool falls, employment throughout the nation is threatened and there is a loss of confidence throughout the whole fabric of the economy. All thinking persons will acknowledge that during the last decade we have taken great strides to build up our secondary industries in order to make ourselves more and more secure by not having so many eggs in the one1 basket. However, Australia is still mainly a primary producing country, relying on the great primary industries, particularly the wool industry, for its exports and, indirectly for the imports on which the secondary industries depend. Therefore, the employment of the thousands of people in our secondary industries is directly threatened by any circumstance which endangers the wool industry.
I am not an alarmist, and I certainly do not wish to cause any alarm by these remarks; nevertheless I do not think we do ourselves any good by pretending that there is no nervousness about the prospects for the wool industry at the present time. The market for wool is at least uncertain. Although there is no panic, it cannot be denied that we are looking for signs of a lift in the current price of wool - and such a lift would be more than welcome. Recent sales have shown a welcome tendency for the price of wool at least to hold its own. The most recent sales, those in Adelaide yesterday, confirm this view. Reports show that the trend in wool prices at present is about normal, and that wool is holding its own, without any tendency for the price to increase. When it is realized that every rise or fall of Id. per lb. in the price of wool affects to the extent of about £6,000,000 the amount of money which comes into the country, the present uneasiness is the more readily understood.
Therefore, the first question that Senator Wade’s motion asks the Senate to consider - namely, whether the wool industry and the Australian economy generally are being endangered by the downward trend in wool prices - will doubtless be answered by a resounding “ Yes “. Collectively, our primary industries provided about ?700,000,000, or about 80 per cent., of Australia’s export- income last year of approximately ?900,000,000, the wool industry providing ?400,000,000. We see, therefore, the extent to which Australia depends on its primary industries, particularly the wool industry, and how vital it is that we should be able to sell our primary products overseas on the highly competitive markets that exist to-day. Not only must our primary producers be able to compete successfully, but there must be a sufficient margin of profit reserved to them to provide an incentive to them to continue to produce.
Of necessity, the costs of production must be kept as low as possible in the primary industries. This applies particularly to the wool industry. In my speech on the Budget I said that the primary producer, in whatever industry he was engaged, had no opportunity to pass on his costs. In the main, I believe that to be so, and I am glad that Senator Wade agrees with me. The primary producer pays the ultimate cost of wages, whether they are wages paid by himself to his employees or wages included in the final cost of plant and equipment. He pays for the tariff protection which this nation affords to secondary industry, and also for the freight on produce forwarded to market and on basic materials he needs to work his land adequately. Not only does he pay those costs directly, but he cannot pass them on because his goods are sold on the open markets of the world at world parity prices. I know of no way, beyond his ability to take advantage to a limited degree of the Australian market, in which he can pass on these costs. Of course, the Australian market is growing rapidly, but as yet it does not play a very significant role in providing the primary producer with the markets he must have. In the main, the primary producer is dependent upon overseas markets, which have no regard whatever to our internal costs. Therefore, the wool industry, which is a large industry, is definitely endangered by the present downward trend in wool prices throughout the world.
Senator Wade also asked, whether an extended sales promotion campaign would have any steadying effect on the industry.
I would answer that question in the affirmative. I believe we owe a lot to our present wool promotion campaign. The competition that is being provided by synthetics can only be met in a practical way by advertising wool and woollen products and by directing the attention of Australian and overseas consumers to the advantages of wool over synthetic garments, garments containing some wool and garments containing no wool at all. The current level of wool promotion costs 5s. a bale, the amount having risen from 4s. in August last. 1 believe that, if the Australian Wool Bureau can produce results from its vigorous advertising campaign in Australia and overseas, we should be prepared to agree to an even greater contribution, if necessary. I believe that wool promotion is essential and that the best judge of the success of the wool promotion campaign is the Wool Bureau itself. Provided the bureau is able to have the advantage of the best brains it is possible to get, we should give it the wherewithal to carry on the fight. Huge sums are spent by the wool industry’s competitors - a sum of ?1,500,000 was mentioned this afternoon - and we must be prepared to match their effort if the industry is to hold its own.
A third question posed by Senator Wade was this: Would a more vigorous research into credit facilities and production problems materially assist the industry? This question presents me with some difficulty. I am of the opinion that we have provided the credit facilities required by woolgrowers. Surely in setting up the Commonwealth Development Bank we have provided another avenue of credit for woolgrowers and primary producers generally. Even at a time when credit facilities are being tightened in accordance with the Government’s declared policy, the Government has decided to allow primary producers the credit they require. The Government has done this because it realizes the degree to which Australia is dependent upon primary production in keeping our overseas trade balance in a healthy state. A lot depends upon the Commonwealth Development Bank and the use that is being made of it by primary producers generally.
I have placed on the notice-paper a series of questions dealing with this matter, and no doubt the answers to those questions will throw some light on it. I refer to question No. 1 on the notice-paper, lt has been on the paper since 16th August, and 1 sincerely hope I will soon receive a reply. Inquiries I have made lead me to believe that the establishment of the Development Bank has met with some success. At any rate, I feel it is the answer to the wool-growers’ problem of obtaining credit. In addition, there are other recognized channels from which producers have received financial accommodation in the past. 1 have in mind the trading banks, the Commonwealth Savings Bank, stock firms and the like, and, in the Slate I represent, the State Bank of South Australia.
The subject of research into production problems is a more difficult matter. The Commonwealth makes a direct contribution of 4s. a bale, which is reinforced by a sum of 2s. a bale paid by the growers themselves. This money is expended on research programmes that are conducted by the Commonwealth Scientific and Industrial Research Organization and similar institutions. 1 believe that some valuable results already obtained testify to the worth of this expenditure. I have a perfectly open mind about whether further expenditure is justified at this juncture. It may be that the inquiry visualized by Senator Wade would throw some light on the matter. I believe, however, that we should not discount, but rather should encourage, the part that is played by the State governments through their extension services, which are provided by the State Departments of Agriculture. I have a vivid recollection of what has been done by the extension services in South Australia, and I cannot speak too highly of them. For example, in South Australia we have a full time sheep husbandry officer who goes amongst the farmers and offers them first hand advice on any problems they may have. He also works through an excellent system of agricultural bureaux and is always willing to give addresses at meetings of those bodies at their convenience. I know that his work is appreciated by farmers everywhere. I believe we should be careful to avoid any overlapping of these activities. I have quite an open mind about whether the Commonwealth should undertake basic research work, and I am prepared to be guided by the experience and opinions of other honorable senators.
The last question posed by Senator Wade was this: Should a competent independent body be set up to inquire into all aspects of wool marketing? I believe such a body should be set up. I support this part of Senator Wade’s proposal most enthusiastically. Like Senator Wade, I am glad to know that the Australian Wool Growers and Graziers Council and the Australian Meat Producers Federation are united in recommending that such an inquiry be conducted. The question arises as to whether we should have a floor price for wool or whether we should continue to use the straight out auction system without any reserve price. I know that the reserve price system has been tried by New Zealand and South Africa, but I still cannot arrive at a decision on the matter. I have an open mind about it. Apparently Senator Kennelly has made up his mind in favour of the reserve price method. But I repeat that, as a grower, I have not been able to make up my mind on the matter and I would welcome an inquiry.
If we are to market wool on the reserve price system, two questions present themselves. First, who is to provide the finance, especially in the infancy of the system? Senator Kennelly has not provided us with any information about that. As far as I know, I do not think any reliable information is forthcoming from New Zealand. Secondly, would not wool which was bought in because the original price paid at auction failed to bring the reserve price placed on it enter into competition with wool currently being offered at auction and tend to reduce the price of the auctioned wool? These are questions which i am most anxious to have answered, and I do not think that we shall get the answers in this chamber. They are questions that the growers are asking, and the answers do not appear to be simple. I have no fixed ideas on this aspect and I offer no views at all, because my mind is not made up. I would welcome an inquiry by a competent body such as Senator Wade has in mind. I remind the Senate that the Menzies Government’s policy on such matters is that where a primary industry, by a majority vote of the growers, approves a scheme, the Government will undertake to provide the scheme, but at present the growers and their organizations cannot make up their minds whether they favour such, a scheme. I honestly believe that ‘the growers and their organizations are confused and cannot offer any unified advice to the Government. I therefore urge the growers’ organizations to do everything possible, in the light of the committee’s findings, to overcome their differences and to give a lead to this industry, which badly needs it. I support the motion moved by Senator Wade. I congratulate him on bringing it before the chamber and I trust that it will receive the sympathetic consideration of the Senate.
.- Senator Wade has submitted four questions to the Senate for consideration. One of them reads -
Whether the wool industry and the Australian economy generally are being endangered by the downward trend in wool prices.
For the purposes of discussion and simplification, I have dissected1 that into two questions, the first being whether there is a downward trend in wool prices. That is one of the questions that he asked the Senate to consider. He did not submit any evidence of a positive, downward trend in wool prices, and so it is left to honorable senators to make their own investigations in order to satisfy themselves that there has been a downward trend in prices. The honorable senator went further. He asked whether the wool industry was being endangered by that trend. Before we commence, we must determine what the honorable senator meant by “ endangered “. Does he mean danger of extinction? Does he envisage the ruination of wool growers, does he envisage lower incomes for wool growers, or does he envisage worsened coa?ditions for those engaged in the wool industry? I would not say that the present trend in prices put the wool industry in danger of extinction, but we know that over the last few years the industry has enjoyed a fair measure of prosperity and that if prices tend to decrease there may be less prosperity.
Senator Wade apologized for quoting figures. I do not know how one can avoid quoting figures when dealing with a downward trend in wool prices and matters affecting the economy of Australia. I propose to quote wool prices over recent years. My authority is the “Pastoral Review and Graziers Record “. This is the first time I have cited such a book in the Senate, but I find that its information is quite authentic and therefore I have no hesitation in making use of it. On 14th September, 1956, wool classified as good average 70’s - any honorable senator who has had experience in the wool industry knows what is meant by 70’s - sold at 168 pence per lb. On 19th September, 1958, the same class of wool sold at 115 pence per lb. On 25th September, 1959, the price was 133 pence per lb. and on 29th January, I960, it was 136 pence.
– All of those prices are on a clean, scoured basis.
– I have quoted the prices of one class of wool. I am glad the honorable senator mentioned that point. On reference to the other 70’s, 60’s and 50’s, whether greasy or scoured, we find the same fluctuation in prices. That is all that I wish to show. On 5th August, 1960, the price was 121 pence per lb. So in the four years between September, 1956, and August, 1960, the price fell by 47 pence per lb. Therefore, there has been a downward trend in the price of wool; we admit that much. We shall see in a moment or two the position of toe average wool grower.
The total clip for the year 1959-60 was 4,925,000 bales. In the previous year the clip was 4,734,000. The amount sold in 1959-60 was 4,929,227 bales, and 178,000 bales were left unsold in store. That shows that there is a demand for all the wool that is produced in Australia. If there is a market for all of the wool and the growers can be satisfied that it will be sold, at least they are assured of some income.
In dealing with this question from the aspect of the owner, we must consider the various categories of owners who are associated actively with the industry. For my purposes, I have divided them into four groups. There are large owners, and small owners. Then there are owners who acquired their properties prior to 1949-50, when the price of wool soared. These classifications of owners are most important in considering whether the wool industry is being endangered and how lower prices will affect the growers presently engaged in the industry. Another group of growers consists of those who acquired their properties and grazing rights since 1950. Each member of the four groups I have mentioned has a different view of the downward trend in the price of wool because each one is affected differently. It is most important that we should consider those matters when dealing with this question.
I have mentioned the number of bales sold, and I shall now give further information. In 1959-60, 4,883,000 bales of greasy wool and 45,327 bales of scoured wool Were sold. The total number of bales sold in that year was 4,929,000. The corresponding figures for the previous year, 1958- 59, were 4,739,000 bales of greasy wool, and 50,000 bales of scoured wool, a total of 4,790,000 bales. I have cited those figures preparatory to stating income received from the sale of those quantities. In 1959-60, £356,058,000 was obtained from the sale of greasy wool and £3,300,000 from the sale of scoured wool. The total income from the sale of wool in 1959-60 was £359,429,000. The income from the sale of wool in 1958-59 was £295,652,000. So, it is apparent that although there has been a downward trend in prices the total income received from the sale of wool in 1959- 60 considerably exceeded that received in the preceding year.
Let us look at the average value of a bale of greasy wool. I make the following comparisons in considering this question: In 1959-60 the average price per bale was £72 18s.1d. and the price per lb. was 57 . 7d.; and in 1958-59 the average value of a bale of greasy wool was £61 14s.10d. and the price per lb. was 48. 5d. I particularly mention that the average price per bale of wool obtained in 1930-31 was £11 3s. 9d. Here one sees the history of inflation in Australia. The price per bale of wool soared from £11 3s. 9d. in 1930-31 to £72 18s.1d. in 1959-60. It is interesting to note that the average net weight of a bale of wool last year was 302.8 lb., and that in 1958-59 the average weight per bale was 305 lb. Wool experts would be able to account for that variation because those figures are for greasy wool and the experts would be able to assess the quantity of grease and yolk in the wool.
I have proved already that at the present time there is a downward trend in the price of wool. The question is whether that downward trend will endanger the woolgrowing industry and the economy. In 1949-50, the average price of wool was 63d. per lb. and in that year the cost of production was quoted at 30d. per lb.; so the wool-grower would have received the difference between those two figures. In 1959-60, the average price per lb. of wool sold was 58d., and I have been informed that the cost of production remained at 30d. per lb. Therefore, the incomes of the woolgrowers certainly must have been less in latter years than they were in the former year. That becomes very obvious. I come now to the present financial year. At the current sales wool is bringing an average of 50d. per lb.
– The price is not as high as that.
– The honorable senator may say that, but if an average is struck next week it may be more than 50d. per lb. It is anticipated that as winter approaches in European countries, the price of wool will increase. Continuing to deal with the Australian economy, in 1959-60 the total value of all Australia’s exports was £926,000,000 and the value of exports of primary products was £740,000,000. Of course, wool was included in the primary products, and the value of the wool exports was £386,200,000 which was an increase of £84,000,000 on the figure for the preceding year. Mr. Deputy President, I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Sitting suspended from 5.44 to 8 p.m.
Senator COLE (Tasmania - Leader of the
Australian Democratic Labour Party) [8.0].- I move-
That the bill be now read a second time.
The amendment to the Commonwealth Conciliation and Arbitration Act which I have the honor to introduce concerns itself with one of the most controversial issues of modern labour law. Parliament must be concerned to maintain the structure and the rights of the trade unions in Australia’s industrial society. It must be equally concerned to maintain the fundamental civic rights of the ordinary trade unionist - the right to support the political party of his choice and not to be coerced, by virtue of his union membership, into giving financial support to a political party which he opposes. To-day, over large sectors of the economy, trade unionism is in fact, if not in law, compulsory. In fact, no person who is not a member of the Waterside Workers Federation can obtain employment as a waterside worker. Throughout the fields of heavy industry, the production of fuel and power, railway and maritime transport, no worker can hold a job if he is not a member of a trade union. Whatever the law may say, that is the factual position. As a result there are many thousands of trade unionists who are obviously supporters of the Australian Country Party, the Australian Democratic Labour Party, or the Liberal Party who, because of the payments made by the unions, of which they are members, to the Australian Labour Party - and sometimes to the Communist Party - are compelled to contribute to the funds of these political organizations. In Victoria, certain unions are affiliated to the Australian Democratic Labour Party. The same situation arises even in this case.
These political payments are of two kinds - affiliation fees on the one hand, and special donations on the other. These latter come by donation from the general funds of the union and, in some instances, by way of compulsory levies. A basic conflict of interest therefore arises out of the conjunction of three facts -
The situation which arises is a denial of fundamental political rights. This denial is accompanied on occasions by violence of the kind which disgraced Australia during the months of victimization undergone by the two Hurseys. It is necessary therefore that existing Australian law should be modified to meet a new situation not envisaged by the makers of the Australian Constitution.
Amongst the many vexed problems that confronted these great Australians was the question of settlement of disputes as between employees and their employers. I am sure I do not have to remind the Senate of the industrial disturbances of the 1890’s - unprecedented at that time - when employees in the pastoral and maritime industries struck in support of their fight for a better deal for their members. It was these disturbances that led Kingston, Deakin, Higgins and others to press for compulsory arbitration in the proposed Federal Constitution, and so ultimately the famous section 51 (xxxv.) of the Constitution came into being. It reads -
Men such as those nurtured the scheme of arbitration with its essential element of registered unions. They were successful not only in seeing it included in the Constitution, but they assisted its consistent growth in its early years, animated by ideals of a fair deal for both employee and employer. It is doubtful if they could ever have visualized a situation in which those who succeeded them on the High Court Bench would have been faced with the problem of protecting the unionist, not only against the employer, but against the union and the union official.
To illustrate the problem to which I refer, I turn to one case of very recent memory. The extracts I propose to read are, of course, taken from the High Court judgment in the now famous Hursey case. The first reference I make is to the judgment of Mr. Justice Fullagar, which was concurred in by the Chief Justice, Sir Owen Dixon. and Mr. Justice Kitto. It reads -
Between 12th February and 25th March, 1958, on twenty-five occasions the Hurseys, when they reached the wharf on which they had been rostered to work, were met by a solid phalanx of men standing shoulder to shoulder across the end of the wharf so that it was a matter of practical impossibility to get through to the place where they would commence work.
The judgment further states -
The’ forming of these “ human barriers “ has been referred to as picketing, but it involved, of course, much more than is ordinarily understood by that term. No very serious acts of violence occurred, the police being present in force, but there were threats of violence and much scurrilous abuse of the Hurseys, who were prevented by the physical obstruction in their path from proceeding to their work.
Mr. Justice Taylor concurred in the view of the Chief Justice of Tasmania, and said -
In almost every picket line there was some display of hostility. I find the inference inescapable that the mass picketing by the men on each occasion was a threat to use unlawful means of resort to physical force against the plaintiffs to repel any attempt by them to pass through.
Mr. Justice Taylor further observed ;
To my mind there is not the slightest doubt that the so-called “ picket lines “ and the tactics subsequently adopted to prevent the plaintiffs obtaining employment were the result of a preconceived and pre-arranged plan.
Turning finally to the judgment of Mr. Justice Menzies, we find he had this to say -
For two hundred people to assemble and stand together to bar a man’s way to work is by itself and without assaults, threats and abuse, intimidation sufficient to deter a man of resolution and fortitude from returning to face the ordeal again. Mr. Eggleston for the appellants pursuing the metaphor that identities a man with a stake in the ground, argued that a picket line was just a fence that prevented passage, and that leaving out of account the assaults, threats and abuse of some of those who were in the line, there was nothing intimidatory about a band of men in formation barring the Hurseys from the wharves, 7 his contention I reject.
This background of the events associated with the fight of the Hurseys is most necessary to fully understand why as a matter of principle they were of the opinion that they should not have to subscribe to a political levy which in their view was unjust. Like many unionists, we think compulsory political levies, particularly in industries in which compulsory unionism exists in fact if not in law, are unjust and that is why we bring down this bill in the Senate.
Before generally summing up the reasons for submitting this bill to the Senate for its approval, I want to refer to one of the principal legal results that have flowed in the last two years in regard to levies and contributions to political parties. This concerned a case entitled Wheatley v. Federated Ironworkers Association and a judgment given by Mr. Justice Walsh of the Supreme Court of New South Wales. Wheatley challenged on legal grounds the right of the union to pay affiliation fees to a political party, the Australian Labour Party, from general funds of the union. Shortly stated, the judge held that the rules of the union permitted payment in the manner which was under challenge.
That being the condition of the law, 1 propose to explain the nature of the amendment to the Conciliation and Arbitration Act which I have introduced. Because we recognize that unions in Great Britain as well as in Australia have traditionally paid affiliation fees to a political party with the aim of securing legislation favorable to the industrial interests of trade unionists, we do not propose that the right of unions to pay such affiliation fees should be interfered with in any way. What we do propose is that any member of an affiliated trade union who does not wish money to be paid to a particular political party in virtue of his membership should have the right to contract out. In some respects this method of protecting the rights of the individual is inadequate, since it still exposes the member who thus reveals his political opinions to the pressure of union officials, particularly those of Communistcontrolled trade unions. Since the payment of affiliation fees is the basis of a political party connected with the trade unions, the contracting out method is the best compromise which can be reached between the two competing interests - the maintenance of such a political party and the civic rights of the individual unionist. Should union officials use the knowledge given them by the contracting out method to tyrannize over their members, no doubt this provision of our amendment can be re-examined in the light of these circumstances. It is worthy of note that contracting out is permitted in all British trade unions under legislation passed in 1946 by the Attlee Labour Government.
Compulsory political levies we regard as a more dangerous violation of unionists’ rights. We reiterate it is fundamentally and basically wrong that a man should have to contribute by way of compulsory levy or otherwise to the funds of a political party which on political, moral or other grounds he could not in conscience support. What is worse, it is unthinkable, undemocratic and un-Australian that he can be deprived of his livelihood for so refusing to contribute. Yet, that is what happened to the Hurseys and will happen to anybody else in the stevedoring industry who refuses to toe the line on matters of political levies. We cannot lose sight of the fact that the job of a wharf labourer is rather unique in that there is absolute preference of unionism in favour of the Waterside Workers Federation. You are either a member of the federation or you cannot work on the wharf and - as the legal position stands - you either pay these levies or you are not a member of the federation. So boiled down, it means simply this - no levy, no work.
It is no solace, in our view, for injured parties such as the Hurseys in Tasmania, to be awarded substantial damages. A man should have the right to follow the dictates of his conscience within the law, and we say the law in this case should give a man the, right to work at his chosen avocation, be it on the waterfront or elsewhere. If he wants to support this or that political party, that too will rest with his conscience, and he should not face deprivation of his livelihood if he does not subscribe to the funds of a political party pre-determined for him by a union executive or in many cases by people far removed from the union executive itself.
Our determination to act against the principle of political levies is strengthened by the published declaration of the interstate executive of the Australian Council of Trade Unions that it too opposes the principle. Mr. Monk says that the decision was not unanimous; but there is no doubt that a majority of the A.C.T.U. has declared against political levies and that that decision is supported by the Federal Labour Advisory Committee, consisting of A.C.T.U. and Australian Labour Party representatives. When we recall the attitude of the A.C.T.U. and of the Australian Labour Party to the Hursey case - an attitude of identification with the leaders of the Waterside Workers Federation in their attack upon the physical safety and the right to work of the two Hurseys - we are perhaps justified in wondering whether these new protestations are sincere. Is it possible that in declaring against the principle of political levies, the A.C.T.U. and the Federal Labour Advisory Committee were merely seeking to indicate either that this bill was unnecessary or that the Government had no need to support it? Is it possible that having banned specifically political levies, the A.C.T.U. leaders would privately intimate to affiliated trade unions that they could still strike levies for general and unspecified purposes and make the payments to a political party out of the resultant revenue?
That is why, in drafting that part of our amendment which deals with all political payments other than affiliation fees, we have been concerned to strike not only at specifically political levies, but also at those subterfuges and camouflages for political levies which might occur to shewd and subtle minds. Accordingly this bill provides that outside affiliation fees, the rules of an organization -
shall not permit a payment (other than a payment of affiliation fees) by the organization to or for the purposes of a political party unless the rules of the organization provide -
This legislation is necessary, despite the much publicized decision of the A.C.T.U. against political levies. The A.C.T.U. decision cannot finally bind any trade union, which would still, without this legislation, be able to impose the compulsory political levies. The A.C.T.U. decision is merely a pious expression of opinion.
The A.C.T.U. decision reads: -
The A.C.T.U. is of the opinion that a compulsory political election levy should not be applied by affiliated unions. lt is thus at most an opinion, not a direction. When, in his statement on political levies last week, the Minister for Labour and National Service (Mr. McMahon), stated that the decision would be “ operative “, if passed by four of the six State trades and labor councils, he could inadvertently have given a wrong impression. “ Operative “ for what?
Mr. McMahon referred in his statement to “ compulsory political levies “. The A.C.T.U. president, Mr. Monk, speaking at Melbourne Trades Hall Council last Thursday, insisted that the A.C.T.U. decision referred to “ compulsory political election levies “ only. The Melbourne “ Age “ of 23rd September, reports him as saying: -
We do not say that we should not have any political levies and the Government has not pushed us to that stage. It was also true that the government had recognized that a union could subscribe to a political fund and if it got into difficulties could recoup the money by imposing a levy after the election was over.
A number of delegates to the Trades Hall Council have advised the Democratic Labor Party that this was interpreted to mean that the A.C.T.U. decision referred to compulsory levies at election times only. Even the recommendation against these would not prevent a union from recouping political election payments by a post-election compulsory levy, provided that it was vaguely entitled a levy for general union purposes. In these circumstances, it is understandable that left wingers and Communists on Melbourne Trades Hall Council were quite happy about the A.C.T.U. arrangement. The D.L.P. is not happy, therefore, it proceeds with this legislation.
Finally, it is worthy of note that, apart from the practice of the British trade unions, a number of Australian unions, notably the Amalgamated Engineering Union and the Clerks Union, have in their rules the contracting out provisions embodied in this legislation. I commend the bill to the Senate.
Debate (on motion by Senator Spooner) adjourned.
Debate resumed (vide page 761).
Senator BENN (Queensland) [8.25J. - Prior to the suspension of the sitting I had been dealing with the first matter submitted for consideration by Senator Wade, namely, whether the wool industry and the Australian economy generally are being endangered by the downward trend of wool prices. I had indicated to the Senate the value to Australia of the wool it exports. It is interesting to see where that wool went. Japan purchased 345,000,000 lb., at a cost to her of £95,700,000. The United Kingdom bought wool to the value of £75,700,000; France, £40,000,000; Italy, £38,500,000; Belgium and Luxembourg, £19,700,000; and Russia, £12,000,000. Communist China bought 15,000,000 lb. of our wool.
The fact that those countries purchased wool of a total value of £386,200,000 in one year indicates the importance of this industry to the economy of Australia. That introduces the subject of our overseas balances. May I point out to you, Mr. Deputy President, that over a period of seven years we had a deficit of £1,032,000,000, the deficits in six years amounting to £1,131,000,000 and the surplus in one year to £99,000,000. Notwithstanding that situation, I am not prepared to admit at this stage that the economy of Australia is endangered by the downward trend of wool prices. Neither am I prepared to admit that the wool industry is endangered by that trend. I say that for various reasons.
I believe that the wool industry will continue to function. Nobody can predict with any certainty the future of the industry. It is true that at the present time, our wool trade with the United Kingdom and the United States of America has levelled off, but in regard to other countries, some of which I have already mentioned, such as France, West Germany, Italy, Japan and the Communist countries, it appears that our trade with them is improving. While I say that, I am conscious of the competition that wool is experiencing from the synthetic fibres, such as dacron, orion, nylon, acrilan and others. The wool industry has met with fierce competition from those synthetics, and it may be confronted with that problem even more seriously in the future.
We are asked by Senator Wade to express our opinion regarding an expanded wool sales promotion campaign. I suggest that if we are to have sales promotion campaigns it is just as well to make them efficient. At the present time, we have a Department of Trade which has officers in, I think, 35 countries. They are not subject to any supervision by this Parliament. 1 think that some of us would be astounded if we had the opportunity to go to the various countries and examine what is done by the trade officers there. Who in this Senate can tell me of the trade campaign that is being carried on in, say, San Francisco, New York, Delhi and other places? We have to pay the salaries of the Commonwealth officers appointed to posts in those places, but not one senator could tell me the form of campaign being conducted to promote trade generally for the benefit of Australia. Lei us look around this chamber and see how sincere Government senators are in this matter. A sales promotion campaign was inaugurated to increase the sales of wool. How many Government senators are wearing woollen ties to-night? I am shown one. How many other senators opposite can show me a woollen tie? Senator Wade apparently is wearing one also. Only two Government senators can show me woollen ties. They probably thought that I would ask this question. I can hear Senator Kendall gabbling to himself like a drunken bottle-o. I always say that good wine needs no bush.
– I said that he was gabbling like one.
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - Order! 1 ask Senator Benn to withdraw the remark.
– I withdraw it. I have never asked for another honorable senator to be kept in order while I was speaking.
The DEPUTY PRESIDENT.- Order! The honorable senator must withdraw the remark without qualification.
– I was merely drawing your attention to that fact, Mr. Deputy President. Good wine needs no bush. If wool has the merit we say it has, it should be able to sell itself. Last year, £20,000 was spent to promote the sale of Australian wines in Australia, but with what success? Frequently as I have sat in this chamber 1 have heard Senator Laught, of South Australia, whinging about the sale of Australian wines and lauding their quality. But since the expenditure of £20,000 to promote the sale of Australian wines in Australia, very little more Austraiian wine has been drunk by the Australian community. We were told only a few months ago that the Government had spent £12,000 to promote the sale of lamb for consumption in Australia. 1 could tell the Government a simpler way than that to promote the sale of lamb. It could have been done by reducing the cost of lamb to the public.
If the Government embarked on a campaign to promote the sale of wool, that campaign would have to be world-wide. We should have to go to the countries that are importing wool from Australia at present, ls the Government prepared to do that? I am sure it is not. I would have to be assured that the campaign would be run efficiently before I would support an appropriation for it. I have had an opportunity of visiting overseas countries, and I know how inefficiently Australian goods are displayed for sale there. Apparently the Government is not prepared to provide sufficient money to enable worth-while displays to be made to advertise Australian goods overseas.
I come now to the question of credit facilities. When I opened my address this afternoon, I mentioned that there were four groups of wool-growers. One group comprises the growers who obtained their land interests 20, 30 and 40 years ago - prior to 1950, when high prices were paid for wool. A second group comprises the wool-growers who came into the business since the high level of wool prices in 1950. Those people are financially embarrassed at the present time. It is they who are seeking credit facilities, and if they are accommodated they will undoubtedly lose the glorious privilege of being independent, of which Robert Burns has written. I know of my own knowledge how dependent are many of the wool-growers, even the owners of large properties, upon the financial institutions of the Commonwealth. I know how dependent they are upon the pastoral finance companies for their existence. Because of the volume of hirepurchase business to-day, I think it would be very unwise to extend even the credit facilities which are provided at the present time.
There are other matters relating to this subject to which I should like to refer, but I shall have to be brief as my time is running out. Another question to which Senator Wade’s motion asks that consideration be given is -
Whether a more vigorous research programme into production problems would materially assist the industry.
I remind the Senate that the Commonwealth Scientific and Industrial Research Organization imported the cactoblastis insect into Queensland to eradicate prickly pear, with the result that many millions of additional acres of land were made available for grazing purposes in that State. This is one of the things that has assisted production. Then, by introducing myxomatosis, in one year the C.S.I.R.O. was responsible for increasing the value of wool produced by £30,000,000. Therefore, the wool industry has been afforded considerable assistance. 1 pass now to the Wool Research Fund. Contributions to that fund are made from the Consolidated Revenue Fund. I know that the Government has no objection to that, nor have the wool-growers, but let me point out that if the Government wants to conduct a vigorous campaign, the matter is in its own hands, because it is not handicapped by a lack of finance. At 30th June, 1959, there was a balance of £6,600,000 in the Wool Research Fund. During 1959-60, £4,400,000 was paid into the fund, and only £1,800,000 was spent during the year. The credit balance of the fund as at 30th June, 1960, was £9,200,000. If the Government wants to go ahead with a more vigorous research programme into production problems, the matter is in its own hands.
I come now to the fourth question to which the motion proposes that we give consideration, which is -
Whether a competent independent body should be set no to inquire into all the aspects of wool marketing.
I recall that it was only a couple of years ago that this question was raised promi nently in relation to the wool sales at Goulburn in New South Wales. I shall quote something that was referred to al the time. It was known that wool buying cartels were operating in all the States and that no action was being taken by some of the State governments or by the Commonwealth Government to prevent their operations. The quotation is -
In 1958, following a decision by the New South Wales and Queensland Wool Buyers’ Association not to buy wool at the Goulburn Wool Selling Centre, the New South Wales Government appointed an Industrial Commission under Mr. Justice Cooke to inquire into the trade in wool. Before this Commission, a woolbuyer, Mr. . . . is reported as having told the Commission that he was in a “ pie “ (a buying group) with eight other wool buyers. As will bc seen from the following quotation, similar practices were indulged in in South Africa: “ From the editorial of the British Journal ‘ Wool Record and Textile World ‘, 16 January, 1958: Information from Port Elizabeth, South Africa, shows that Russia has discontinued the previous practice of having representatives of various Iron Curtain countries bidding against each other Now they all buy from one agent in order to force the market down ‘.”
Are honorable senators opposite aware of what is going on? The responsibility for correcting the present state of affairs rests upon the Government. If it is not prepared to correct the situation, it will be at fault. I deliberately throw this question back into the lap of the Government.
– Senator Wade is to be commended for having introduced this subject for debate. The matter has been keenly discussed on both sides of the chamber. The honorable senator posed four main questions for our consideration, the chief one being whether the wool industry and the Australian economy are being endangered by the downward trend in prices. Every thinking Australian realizes the importance of the wool industry to the Australian economy.
Vast areas of Australia enjoy a rainfall of only between 5 and 10 inches a year, and it is in those areas that the great bulk of our wool, and our quality wool, is produced. That wool is eagerly sought by the buyers of the world. Because of the low rainfall and limited pasture and herbage no other form of primary production can be conducted successfully in those areas. Certainly no form of agriculture could be conducted so successfully. Therefore,
Australia would experience a major disaster if wool prices fell to such a degree that the industry could not carry on in those areas. People who are growing wool in the higher rainfall areas perhaps would be more fortunate than would be their brothers in the low rainfall areas, because they could turn their attention to some form of agricultural production. They may even be able to switch over to the production of meat and thereby solve some of the problems that would be associated with a decline of wool prices.
I join issue with Senator Benn when he says that the Government is not concerned about the fate of the wool-grower or the wool industry. This Government is vitally concerned with the economic position of the wool-growers. Moreover, it seeks to govern in such a way that every person in Australia is assured of economic security. Let that statement sink into the minds of honorable senators opposite. I repeat that the Government is concerned about each and every section of the community having economic security.
It is true that from 1947 to 1957 the wool-growers, whether they were in low rainfall or high rainfall areas, were in a sound economic position. That is why Australia has been able to progress. If the agriculturist and the wool-grower are enjoying good seasons and good returns, the whole economy must prosper. One had only to go around the countryside in that period to see how satisfactory were the prices that the primary producers were receiving. Their economic position could be measured by the sound improvements that had been effected. The most pleasing thing I have seen in Australia in the last ten years has been the improvement in housing conditions, fencing and, where possible, pastures. The advancement that has been made in our farming and pastoral areas is evident to those honorable senators who go out of the city areas. I am sure all of us are delighted to see that, as a result of the improvement in prices, graziers have been able to increase the size and quality of their flocks.
Very rarely is reference made to the fact that much of the extra money which flowed into the pockets of the wool-growers from 1947 to 1957 was invested in secondary industry. There we saw a happy blending of primary and secondary industries. To-day those who are engaged in secondary industry are feeling the effect of less capital invested in their businesses than the wool-growers were able to invest in the years to which I have just referred. The shrinkage of capital investment in secondary industries because of the low prices that are now being received for wool is to be regretted. I think every honorable senator who has spoken during this debate has agreed that the financial position of the wool-grower, whether he be a large or small grower, has deteriorated because of the fall in the price of wool. The price may fall even lower yet. The grower’s income is less than it was some time back in spite of the fact that he has stepped up his production by at least 20 per cent.
One pleasing feature of the wool industry is that there is no carry-over of wool. All the wool we have produced in the last ten years or so has been consumed and it seems that any increase of production can be absorbed too. We have had placed before us a great array of figures showing the prices that have been received over the years and the amount of wool that has been produced. I have pages of figures here, too, but I shall not weary honorable senators by reading them. They are available if anyone is interested in seeing them.
The intrinsic value of wool has not been mentioned so far during this debate. Synthetic fibres may have good qualities; I am not decrying them. But wool possesses all the virtues of all the fibres, and it has something extra. It has all the extra qualities given by nature, that man cannot reproduce or duplicate. When the grower produces wool, it is his own property, and he must be allowed to decide how he will dispose of it. That is his right. In any selling scheme that might be envisaged, it must be remembered that the. wool belongs to the grower. I know that when any primary producer produces anything and it is ready for sale, members of the Australian Labour Party say, “ We must sell it for you. We know all about it.”
– They would socialize the whole setup.
– That is true. Heaven help the poor sheep if there was a 35-hour working week. For 134 hours of the week the sheep would have to go hungry. I do not know how long their flocks would last under those conditions. The growers’ main object is to produce the greatest volume of wool at the lowest possible cost. The wool must possess all the qualities and characteristics demanded by buyers. The production of that wool is an art in itself. When the wool is ready for market, the grower decides upon his selling process.
I mention by way of an aside that the grower has control over some costs of production. He has control over the price that he pays for his land. He has some say on the economic use that he makes of the labour that he employs. He can improve the wool quality and increase the weight of wool cut per sheep. Those are some of the factors that are under his control. All his other costs are beyond his control.
– And he cannot pass them on.
– I am reminded that he cannot pass on those costs. I should like to revert for a moment to the selling of wool and the price received, because these are two vital elements in the industry. Over 90 per cent, of our wool - in 1958 it was 95 per cent. - is sold overseas. Traditionally, we have sold wool under the auction system, except during World War I. and World War II., when appraisement schemes came into operation. Selling under the auction system, I would say, has worked to the best advantage of the grower. Lately, a floor price within the auction system has been proposed. There are two great producer organizations in Australia, the Graziers’ Federal Council and the Australian Wool and Meat Growers’ Federation. Unfortunately, in the past they have had differences of opinion on the merits of selling at a floor price within the auction system, but the disastrous fall in the price of wool has produced in those two bodies a frame of mind from which some unanimity can be expected in the future. This is one of the good things that has emerged from the crisis facing the industry.
The first job that faces the growers is the bringing together of their organizations to iron out their problems to their mutual satisfaction. As one who has grown a little wool and been always interested in growers’ organizations, I say that their first job is to get together, and I believe that they will get together. Everything seems to point in that direction. In the past the Graziers’ Federal Council has said “ We produce the great bulk of the wool, and the Australian Wool and Meat Growers’ Federation has said, “ We have the numbers “. I suggest that any committee of inquiry into the selling system should comprise the uncommitted growers, as there is a great deal of vested interest in the two organizations. We want brokers, consumers, manufacturers and industrialists to be represented. It might be said that that representation is too wide, but every section of the community has such a vital interest in the industry that the committee that is asked to play an important part in preserving it must be wide enough to embrace all the major organizations concerned in the welfare of Australia. The situation is so serious that we must forget the mistakes that we have made in the past. It is serious not only for the grower but also for every man, woman and child in Australia. We must unite and form plans for our future. As 95 per cent, of our wool is sold overseas, our promotion must extend beyond Australia. I will not touch upon credit facilities and other subjects that could be examined by the committee.
– What would be a payable price per lb.?
– I shall give some figures that will satisfy even Senator Aylett. I am glad that he is interested in wool. Take the case of a grower who has 500 acres of land, costing £10 per acre and carrying two sheep per acre. I leave it to the honorable senator to say whether or not I am applying an excessive price. Let us take a price of 45d. per lb of good quality wool from 60 to 64, if he knows what that means. I think that he will agree that 45d. per lb is not excessive for wool of that count.
– That is pretty low. Do you consider that is a payable price? That is what I want to know.
– Let me finish. Do not be impatient. You are not gold seeking now. You are not basking in the glorious sunshine in Queensland. You are about to hear a few facts. Taking a woolgrower with 1,000 sheep, with a 3 per cent, loss of sheep per annum which is made up at the end of the second year, and the price of wool at 45d. per lb., his gross return is £2,183, with sheep cutting 12 lb. of wool a head. 1 will not go through all the costs item by item. I will ask honorable senators to accept them; I have them all written down. His wool selling costs, including commission on the wool sold, warehousing, &c, are £196. The cost of shearing 970 sheep would be £111 12s. including shed labour. 1 will call that £112. One thousand pellets of cobalt would cost only £40. Enterotoxaemia vaccine would cost £11, trenching would cost £13. All these items are reduced to a minimum. The cost of shearing and crutching 970 sheep, remembering that there is a 3 per cent, loss, would amount to £159 or about 3s. Id. to 3s. 2d. per sheep. That would reduce his income to £1,716. I shall now give a few other costs which are inescapable. The costs involved in the application of superphosphate to 500 acres would be £635 on purchase and also the cost of freight and of spreading the super-phosphate at 2s. per acre - even Senator Aylett could not do it for less. So the total cost in that regard would be £753. That reduces the grower’s return to £963.
– Not enough.
– I am glad the honorable senator says that is not enough, because I am presenting the case for the wool-grower. At least the honorable senator realizes the seriousness of the position. I am glad that has sunk in. Assuming that rates and taxes were £50, fuel for the year cost £50, insurance on fences was £20 and insurance on sheep was £10 - you cannot get a lower insurance premium than that - those costs would amount to £130. Therefore, his income would be £833, which is very little more than the basic wage. In addition he has to charge depreciation on his 1,000 wethers over a period of four years. On a very conservative estimate, assuming that he bought wethers for £2 10s. a head and sold them for 25s. a head off shears after four years, when they had become six-year-olds, his depreciation would be in the vicinity of £439. That reduces his income to £394. That does not take into account any payment of interest. I am assuming that his property is freehold. Nobody can contradict those figures: they are inescapable. That man who is not paying interest, on the assumption that he owns his property, and is not paying off a stock mortgage, has an income of £394 a year. That is from 500 acres and 1,000 wethers. Those facts are indisputable and show some of the difficulties of the wool-grower. Perhaps we cannot express them as well as the gold-diggers opposite can.
My time has almost expired, but I am glad that Opposition senators realize the plight of the wool-growers. I did not think I had the ability to present a case so effectively that it would pierce their thick skulls.
The ACTING DEPUTY PRESIDENT (Senator Wood). - Order! I remind Senator Sandford, who is interjecting, that honorable senators must address other honorable senators not by their christian names, but as senator. Senator Mattner must not be addressed as “ Ted “.
– I am delighted to think that my remarks have penetrated the understanding of honorable senators opposite and that they now know some of the problems facing wool-growers and the wool industry. Knowing that, and knowing how interested they should be in the woolgrowing industry, I again commend Senator Wade for bringing this motion before the Senate and giving the Senate some idea of the problems that face the industry. I hope that by concerted action this great industry will prosper and keep Australia literally riding on the sheep’s back.
– The motion proposed by Senator Wade is another example of something we have seen for a long time. If talk will help the wool-grower, the members of the Australian Country Party will give it to him, ably assisted by the supporters of the Government. Has this motion the purpose of enabling honorable senators merely to air their views on the wool industry and how the wool-growers can be helped, or has it some definite punch and a definite objective which might be achieved by discussion? It seems to me that what the wool-grower is particularly perturbed about to-day is the price he is receiving for his wool. If we could by a discussion such as this stimulate the Government to work on an idea which would increase the value of the wool-growers’ wool, we would all support it. There is no doubt that the wool-growers need help in these matters. The conception of the woolgrower that is held by many people is that he is a millionaire; but actually the great majority of the wool grown in Australia is grown by comparatively small farmers. There are 60,000 farmers who have fewer than 500 sheep each and 1,200 farmers who have fewer than 1,000 sheep each. So, in this industry there is a large number of very small farmers to whom every pound they receive in their wool cheque is important.
I do not think honorable senators should worry about the big pastoralist who can run 10,000, 12,000 or 20,000 sheep. To him the price is only a passing phase. History has shown him that if he can go from one season to another - of course, with his assets he can - his losses in one year are usually recouped in the next year or the year after. That has been the history of the wool industry. However, every pound is very important to the small farmer, who is living from year to year and in many cases carries all the expenses of costly land debts to the bank and improvements to his property. They are the people whom we must help. Because so many people are engaged in the wool industry in a small way 1 think that it is up to somebody to help them in a tangible way. That help might be given by turning to a floor price for the sale of wool. Senator Mattner said that in past years he had been in favour of the auction system. He did not make it clear whether he is still in favour of the auction system. Let us look at this industry and what it means to Australia. It is superfluous for me to go into details, because all honorable senators appreciate the national importance of the wool industry. Australia has a sheep population of approximately 1 50,000,000. I do not think we have ever had more sheep than we have to-day. Our sheep population represents 16 per cent, of the world’s sheep population, but we produce 29 per cent, of the world’s wool.
– Fine wool.
– I am referring to total production, not just to fine wool. We produce 53 per cent, of the world’s merino wool. . Over the years a great amount of work has gone into the industry, and our sheep yield more wool per head than sheep elsewhere in the world. Our sheep breeding has been on a high scientific plane. We have great studs in this country, and the studmasters have done a grand job for Australia in consistently improving the breeding and the yield of our sheep. I think we are inclined to forget that 7i per cent, of the wool that we produce is used in Australia. Industries engaged in manufacturing articles from Australian wool have faced considerable difficulties in the past. In the last ten years their fortunes have risen and fallen, but to-day they are once again in the ascendant. However, they cannot control the price of the raw material that is essential to their operations. The mills buy wool to-day, but before they use it the price of wool may fall, as it has fallen in the last twelve months. Several wool processing firms in this country were in serious financial trouble in the last few years because they had bought wool at a high price and subsequently the price had dropped sharply. Their difficulty is that they base their costs on the price of the raw material. I do not want to mention names, but I know of some companies that were forced to write down their stocks between £200,000 and £600,000 because of the difference in the price of wool when they bought it and the price at the time they began processing in their factories. I do not know how this difficulty can be overcome unless mill owners in Australia can buy wool on a competitive basis so that the articles that they produce in their factories are competitive not only with articles produced elsewhere in Australia, but also* with articles produced elsewhere in the world.
The wool industry is vitally important to Australia. It is interesting to see how wool consumption is increasing in this country. In its latest report the Australian Wool Bureau states -
Australian mill consumption of virgin wool rose 20% in the first quarter of 1960, compared with the same period in 1959.
For the first three months of 1960, Australian mills handled a total of 17.8 millions lbs. of clean wool. This was the highest first quarter figure since quarterly records of mill consumption were first issued in 1950 … the big increase was a significant pointer to the rising demand for wool on the local market. In the twelve months ended June 30th, clean wool processed and available lor the Australian market was expected to show a 20% rise and reach nearly 50,000,000 lbs. This was equivalent to 5 lbs. per head of the population.
The total increases for worsted yarns durnig the first nine months of the financial year was 31% and, for woollen yarn, 23%.
In the worsted section in hand-knitting yarns, production soared by 46%, machine knitting yarn by 34% and weaving yarn by 22%.
There is the paradox. While the price of wool is low and relatively stable the Australian mills buy with confidence, and have so increased their sales to the Australian people that the profits now being earned by them are very substantial indeed.
Let me now turn to the subject of a floor price for wool. A floor price has been resisted strenuously. I do not know whether that has been through lack of education or because of the feeling that prices having been high last year, they will be even higher next year. Perhaps the reason is that farmers are always hopeful of hitting the bull’s eye and getting a very high price for their wool. Getting a high price for his wool is satisfactory to the farmer if everything runs smoothly, but I can remember a time since this Government has been in power when the woolgrower got so much for his wool that the Government panicked and introduced legislation to take away from the woolgrower what it thought were ill-gotten gains. Honorable senators opposite will remember the Wool Sales Deduction Act of 1950. The Government told the wool-growers that it would take 20 per cent, of the selling price of wool as soon as it was sold.
– That is not correct.
– You cannot fly in the face of facts, no matter how good you are. The Wool Sales Deduction Act came into force in 1950-
– The Government did not say that the income being received from the sale of wool represented illgotten gains.
– That is how the Government approached the matter. I am somewhat slow, and honorable senators opposite must be patient with me. Surely they remember screaming around the country because a few pastoralists were driving Jaguar motor cars and loading machinery into the backs of high-priced English and American motor cars! But the Government must have known that only a small percentage of wool-growers were behaving in that way. The great majority of wool-growers at the time were doing something that they had been striving to do for twenty years - they were spending a few pounds on their properties or reducing their bank overdrafts. The Government should have remembered that after the years of plenty come the years of famine, which the wool-growers think they are going through .now. But at the time the Government felt that the woolgrowers should not be left with so much money. It felt that they were spending their incomes on luxuries. Fancy a woolgrower spending vast sums of money on luxuries. I do not know whether the Government now has second thoughts on this subject. But now we are having a nice little conversazione to work out a way to try to help them. Of course they should be helped not only because so many of them are small growers and need help but also because the national interest requires that they be assisted. Since the lifting of import licensing last year Australia is faced with an overseas balance of payments problem. Even the most sanguine of our Ministers fear that the situation is deteriorating at a faster rate than was expected. Figures coming to hand show that our wool export price is now becoming of fundamental importance and there will be nothing to spare over what we receive for our wool.
– Will you tell us what happened to the money the Government took from the wool-growers?
– It has taken the honorable senator a long time to think about something I was dealing with ten minutes ago. I am now dealing with import licensing, and if the honorable senator can think of some question to ask about what I am dealing with now I will answer him. Otherwise he will have to put his question on notice. I repeat that the export price of wool is important because of our balance of payments situation. It is necessary for us to get the highest possible price for our wool, and that leads me to the question of how we can do that. lt is becoming abundantly clear that Australian wool sold at auction is not fetching the best possible price in Australia or wherever the wool is auctioned. It is human nature that at an auction a group of buyers will band together in their own interest, and their interest will not be the national interest. It is well known that buyers have combined in what are called, very descriptively, a pie, because the Lord only knows what goes into a pie. The buyers have defended publicly the system of pies. For a little while they denied that such a system operated, but evidence was given before Mr. Justice Cook at an inquiry instigated by the New South Wales Government. The buyers did not deny the fact that they joined with one another in the purchasing of wool. One man did the purchasing and he shared his purchase among the other members of the pie, and the natural result was a decrease in the price of wool. The very thing that Australia does not want is a decrease in the price of wool and in the competition at the auction, but while we stand by and let these pies operate - call them what you like - the price of wool will decrease.
In New Zealand a floor price is applied at wool sales. A survey of the New Zealand system and a survey of our own system will reveal that New Zealand is obtaining more for its wool than Australia is receiving for its wool. I desire to quote from a statement made by Mr. Campbell of the Queensland Primary Producers’ Co-operative Association Limited. He said -
Had the Australian unprotected clip maintained the same relativity with the New Zealand protected clip as in 1951-52, the Australian average for the past season would have been approximately 79 pence, i.e. 42 per cent, above the New Zealand average of 55i Australian, compared with an actual average in Australia of 57J pence - benefiting the Australian economy to the extent of about £150,000,000 for the year.
Honorable senators may argue . minor points, but the fundamental fact is that whereas we received 57J pence we should have averaged 79d. in comparison with New Zealand. That is a problem to which honorable /senators should apply themselves. Can the Government bring down in the national interest some scheme based on a floor price that will bring the best possible results to Australia?
– The honorable senator should read the rest of the statement particularly the part where Mr. Campbell refers to the difference in the quality of the wool.
– That difference would have applied in each of the years mentioned. The point Mr. Campbell makes is that on that basis Australia should have benefited to the extent of £150,000,000. Honorable senators may argue on the fringe of this matter, but the fact remains that a floor price would give a greater return than we are receiving to-day under the auction system without any restrictions. I do not know whether it is true, but if the cost of producing wool is 60d. per lb. and it fetches only 57d. per lb., that is a very serious matter.
A system of orderly marketing was forced upon us on two occasions as the result of two wars, and on both those occasions the advantage was tremendous. The first time we brought in orderly marketing was in 1920 after the First World War. It was brought in because the market had collapsed; and in no time the market was restored. The second occasion was after the Second World War. Honorable senators know the story of the Joint Organization. Those two illustrations prove that orderly marketing operated to the advantage of the wool-grower. If in a time of war orderly marketing was successful, there is no reason in the world why it should not benefit the wool-grower at the present time. The most extraordinary thing about this problem is that what will benefit the woolgrower will benefit the nation. That is why we have to see that the grower gets as much as he can for his wool so that we can fill the gap caused by the lifting of import restrictions last year. We have not only to export our primary production but also make up the lag in the exports of our secondary production. When we had import licensing 80 per cent, of our imports were going direct to manufacturers and 80 per cent, of our primary production was providing the wherewithal to buy what was necessary for our manufacturing and secondary industries. These things are intertwined. One section without the other will collapse. We cannot export unless we have the money to bring into the country the fundamentals which are needed for manufacture. 1 hope that good will come out of this debate to-night. 1 do not think it will unless the Minister concerned is prepared to do something firm and strong in this matter. A very good job has been done by way of research, but I think it has only just scratched the surface. Senator Wade has produced a woollen shirt that can hardly be distinguished from cotton. It looks as good and is a drip-dry shirt. I could tell honorable senators who made that shirt, but I am not here to advertise. The material for the shirt was imported from Japan, but it was basic Australian wool that was treated in that country. We have witnessed the great impact that has been made on wool by hard-wearing synthetics. Although the wool industry has overcome some of its difficulties, I think that wool will experience this year competition keener than ever before. If, by research, the industry can produce creaseless trousers and woollen business shirts, such as have been produced in the last six or twelve months, new markets will be opened up at higher price levels, which will mean that everybody who hardies wool will get a little more return from it. So, I say that all the research that has been going on has been to the good.
The extermination of rabbits by the use of myxomatosis also has assisted the wool industry, and 1 understand that the new product, 1080, is even more vicious. The stage has been reached where it is hardly safe to be a rabbit. These developments in the industry do not come about unless there is an aggregation of brain-power. I hope that good results will come from the discussion we have had on wool. The more money that is devoted to research, the greater the drive and energy put into the selling and marketing of wool, and the sooner wool-growers appreciate that the auction system does not give them the best returns that their wool could earn, the better it will be for all concerned.
– I join in this debate because I believe that the matters raised by Senator Wade’s motion are of the greatest importance, not only to the wool industry, but also to the economy of this country. I believe” that Senator Wade, in bringing his motion before the Senate, hoped that by a discussion of the subject we could focus the spotlight on the trends in the wool industry and the position of the primary producer. I think he realized that the outlook for the primary producer gives cause for reflection, and that the primary producer cannot control internal costs in the economic circumstances in which he has to operate. I think he realized, too, that the producer has no control over the prices paid for his products on overseas markets.
I am of the opinion that a great many people in Australia think that the primary producers, particularly the wool-growers, are still receiving the prices that were received by them in the boom season of 1950-51. They still think of wool-growers as the wool barons of the beginning of the century. Of course, we know that that is far from the truth. At the present time, Australia depends on the primary industries for 80 per cent, of its export income. Furthermore, it depends on the wool industry for 44 per cent, of that income. The opening sales of the new wool season have shown once again the great fluctuations in the prices of wool that occur from one wool selling season to another. Since the opening sales, there has been a further decline in prices.
To indicate to the Senate how wool prices have fallen, I refer to a wool statistical services bulletin published by the Australian Wool Bureau, which shows that the price for clean wool - that is, scoured wool - has fallen by 24d. compared with last year’s prices. In my own State of Western Australia, the price of wool in the week ending 16th September, 1960, was 15d. per lb. lower than in the corresponding period last year.
– To what figure had it fallen?
– To 45.58d. Last year, it was 60.09d. As Senator McKellar reminds me, those are the prices for greasy wool. If we relate that fall in price to a sheep producing 10 lb. of wool, we see that it represents a fall of 12s. 6d. a sheep. On that basis, a producer with 1,000 sheep would suffer a reduction of income this year of £625. At last year’s prices, he would have received approximately £2,500 gross. It can be seen, therefore, that although a fall of 15d. per lb. in the price of wool may not appear particularly important, in fact it is of tremendous importance to the smaller producer.
Senator Benn said that he could not agree that the fall in wool prices had endangered the industry. I propose to give the honorable senator an example of the danger to the industry, and in doing so, I join Senator Mattner in referring to a publication of the Bureau of Agricultural Economics in which reference is made to a thirteen-year study of three properties in the south-east of South Australia. The properties are within a few miles of one another and were selected for their uniformity of size, pasture development, type of country and management efficiency. When we study the results of the survey carried out by the bureau, we find that the return to the wool-grower in the 1955-56 season worked out at £10 7s. 5d. an acre. However, by the 1958-59 season the return had dropped to £6 19s. 7d. an acre. At the same time, there was an increase of costs from £5 14s. an acre to £5 18s. 6d. The survey shows that the net farm income per sheep for 1958-59 was 8s. Id. I have already pointed out that a fall of 15d. per lb. in the price of wool means a reduction of income for the farmer of 12s. 6d. a sheep. In the light of that survey, Senator Benn will see that the fall in wool prices means a great deal to the farmer. If he is unable, because of rising costs and a fall in the price of his product, to get a return sufficient to give him an incentive to continue to produce and to develop his property, that will have repercussions throughout the whole of the community. If a farmer cannot get a sufficiently high return, he has to cut down on something. The first thing on which he will economize will be his plant. He will say, “The plant I have now will have to do for the next year or two “, and he will not order a new tractor, harvester or whatever else he may want. This will result in fewer orders going to the factories, which will then have to reduce their staffs. If the low returns continue, his creditors may force him to effect further economies. He may have to reduce the amount of fertilizer that he uses, and if he does that, his production will fall. That could have a vital effect upon the whole community.
Because of this cost squeeze, the woolgrowers have become very concerned. They have put forward many suggestions as to what should be done. The Australian Wool and Meat Producers’ Federation has expressed the opinion that the only way of avoiding continual fluctuations of wool prices is the introduction of a floor price scheme. ‘ 1 want to emphasize that this is not a sudden desire by the Australian Wool and Meat Producers’ Federation to overcome this problem by the introduction of a floor price scheme. I recall that in 1955 I was appointed to a wool marketing committee set up by the Farmers’ Union of Western Australia. The committee was instructed to look into the marketing situation and to report back to a conference in the following year. The committee was asked to consider whether something could be done to make the existing system work fairly or whether a floor price scheme should be introduced. So away back in 1954 or 1955 the growers in Western Australia were worried about the price of wool. That was only three years after the Joint Organization plan had been rejected by a large majority of the growers in this country.
Sir, I believe that if we had a floor price operating within the auction system we could increase the income of the wool industry by at least £100,000,000. 1 believe that that would be the best system under which to sell our wool. I think that that has been proved in both New Zealand and South Africa. Yet Australia, the largest producer of wool in the world, sells its wool on the open market. We sell our wool to the highest bidders, irrespective of the demand. No other section of industry would do such a thing.
Senator Mattner has said that he favours the auction system because under it there is no wool left over at the end of a season. There will be no carry-over of wool if the wool is practically given away. I believe that a floor price system should be introduced with a floor price fixed at the beginning of the season after a careful study has been made of the prices of other raw materials as well as of the demand for wool and woollen fabrics, and after consulting the New Zealand organizations and the South African organizations. I believe that the floor price should be what the directors or the members of the board operating the scheme think is a fair price to expect the buyers of wool to pay.
– Whom would you get to fix the floor price?
– If you have a reserve price plan, you must set up an organization comprising representatives of the industry, probably representatives of the brokers and representatives of other people concerned with the industry. After studying all the factors I have just mentioned, they would fix the floor price.
Now, Sir, let me turn to the Graziers’ Federal Council. Last year, the council sent its secretary and its president overseas to make a study of the wool industry. On their return to Australia, they made a careful study of the wool industry here. I have had a look through Mr. Chislett’s report, particularly the section headed, “ An Investigation of Wool Marketing, 1959”. I think it is a very thorough report. However, many of his submissions in that report are contradictory of his previous submissions. This leaves me with the impression that he made his report conform to a set *>£ instructions. I cannot believe that he wrote in accordance with how he saw the situation. That was the position of the Graziers’ Federal Council twelve months ago.
A recent press report stated that Mr. Chislett had said that conditions in the industry were reaching a stage at which be thought a subsidy would have to be paid to the wool-growers. Later, after some one had asked how the subsidy would be paid, he said that he thought that the subsidy would have to be paid on superphosphate. I do not believe that at any time the payment of a subsidy is of any benefit to the majority of men in the industry. A subsidy does not help sufficiently those who really need help. By a subsidy, extra money is given to people who have been established in the industry for a number of years and who do not really need any help. If we were to subsidize the Australian clip to the extent of ls. per lb., we would have to pay altogether £80,000,000 or more. Is this Government or any other government prepared to hand out to an industry from £80,000,000 to £100,000,000 a year without seeing any result? I should say that if £80,000,000 were to be applied to a reserve price plan for one year, it would be received back tenfold in the years to come and some good would be done for the industry.
I wish to go a little further on the subject of subsidies. If a subsidy of 6d. per lb. were given to the industry, it would not be long before the price would fall still further and that 6d. would be taken up. In the end the taxpayers would be subsidizing cheaper wool for the buyers. Let us look at the subsidy on superphosphate. A great many wool-growers in Australia do not use superphosphate. If we subsidize superphosphate, we help a number of growers, but there is still a large number whom we do not help.
– Do they get the same results without it?
– More or less. In the heavier rainfall areas it costs a bit more to work the land, but you get a better return. Now let me refer to Senator Kennelly’s remarks. The honorable senator said that this Government had done nothing for the wool-growers and that members of the Australian Country Party were just sitting here and doing nothing about it. He further said that, if the Australian Labour Party was in office, it would not ask the growers what they wanted but would give them an acquisition scheme. In other words, it would say to the growers: “ Give us your wool. We are going to sell it.”
– No, he did not say that.
– That is what I understood him to say.
– Senator Kennelly suggested taking a vote of the growers.
– The honorable senator says they would take a vote of the growers. I refer to the time when I was associated with the Farmers Union and when, at a federation meeting, it was suggested that a board should be established and that wool should be acquired on the same basis as wheat is acquired at the present time. There was no seconder for the motion. One organization in the whole of Australia very gingerly threw that suggestion into the ring. At the present time we have two great organizations which we cannot get together on a reserve price or a floor price scheme. So how could we get them together on an acquisition scheme? The Australian woolgrowers would not have such a scheme.
In spite of that, Senator Kennelly says the Labour Party would say to the growers, “ We are going to acquire your wool “.
– No, he did not. Be fair.
– We saw that happen to the wheat industry. Wheat was sold to New Zealand at a price far below the price we were getting elsewhere overseas. We do not want that to happen again. This Government has said to the growers, “ When you decide what you want, come to us with your proposition and we will have a look at it “. That is a common sense approach. Just recently we had one of the two great organizations of this industry asking for a floor price and the other asking for the auction system. Recently those organizations have come to the Government and have said, “ Let us have an inquiry into the industry “.
– Did you consult the people who are most interested in this matter - the workers - to see what they wanted?
– The only thing the workers want is a bigger cut out of the industry. I repeat that the two organizations have asked for an inquiry. I would welcome an inquiry, but only because the two great wool organizations have been brought together. I do not think we will achieve anything by having this inquiry. I agree with Senator Kennelly when he said that all the information that any inquiry would elicit can be obtained from primary industry.
I remind the Senate of our experience with the Bawra scheme, which was introduced after the First World War at a time when we had 1,780,000 bales of wool on hand. The growers were frightened that the sale of those stocks would have a depressing effect on the auction price, so they came to the government of the day and asked it to establish an organization so that the wool could be fed on to the market steadily without depressing the price. The result was that the government of the day introduced the legislation which set up the Bawra organization. That scheme returned the growers a profit of £35,000,000 - money which, in the form of wool, some people said should have been dumped into the sea. The first thing that Bawra did was to initiate action whereby wool could not be exported from Australia at less than 8d. per lb. That was the first time that a floor price was put into the auction system and it netted the growers, as I have said, £35,000,000.
When the price of wool fell to 8d. a lb. in 1932 or 1933, the growers went to the government of the day and asked for an inquiry into the industry. An inquiry was held and it was recommended -
That a Commonwealth Wool Executive be constituted by the Australian Woolgrowers’ Council after a new election of its personnel, comprising one wool-growers’ representative from each State, and its chairman and two representatives of the Council of Wool Selling Brokers, with five members to form a quorum.
That the Commonwealth Government by regulation or otherwise, should take to itself powers to prohibit the export of wool except under such conditions that may be prescribed, provided that such powers should not be exercised except upon the request of the Commonwealth Wool Executive.
In other words, a floor price scheme was recommended. Once the recommendations were made public, there was such an outcry from the interests at Bradford and on the Continent that the recommendations were shelved. In World War II. we saw the introduction of the Joint Organization and post-Joint Organization plans. When a vote was taken the Joint Organization was rejected by a large majority of woolgrowers. Although it may seem that an inquiry would be a waste of time since the required information is already available I hope that Cabinet will consent to the holding of an inquiry because I welcome the bringing together of the two organizations of wool-growers. I welcome Senator Wade’s motion, and I am very glad to have had the opportunity of speaking to it.
– First, I want to correct a couple of statements made by Senator DrakeBrockman. Senator Kennelly did not say that Labour would implement a plan without consultation with the growers. He asked whether the Government was or was not prepared to lead, and he said that if Labour were in power it would formulate a plan to submit to the growers for their approval. Senator Drake-Brockman also said that a report of Chislett in 1949 was, in his opinion, prepared to instructions. I have a report of Chislett dated March, I960, the preface of which states -
I have enjoyed complete freedom to express my personal views in my treatment of this subject and I have exercised it, sometimes influenced by, and sometimes regardless of, the helpful advice from my freinds in the commercial and academic fields who were kind enough to read the draft. The paper adds up to an expression of a point of view, for which I make no apology since it is one in which I believe and of which, I feel, due consideration has not been taken in our preoccupation with the development of the new Australia.
Senator Wade posed quite a few questions, the first of which was -
Whether the wool industry and the Australian economy are being endangered by the downward trend in wool prices.
I believe that there can be only one answer to that question, and that it is, “ Yes “, because Australia depends on wool exports so much for development and for overseas credits that anything adverse that happens to the wool industry must have a detrimental effect upon the economy and the lives not only of those who are engaged in the wool industry but of all the people in Australia.
Any country that is geared so closely to one primary industry with so many uncertainties attached to it must be on the lookout at all times for safeguards to protect that industry. It is true that the wool industry has become a less vital factor in our economy than it was formerly, because of the development of exports from secondary industries, but wool still exerts a very great influence on our economy. Last year, it provided about 40 per cent, of our export income. Any decrease in that export income must have a depressing effect on the economy and on the people generally. Secondary industry requires the income from wool exports for the purchase of raw material and capital equipment, and developments in the wool industry are reflected right through the economy. If wool export income declines, there is a bigger gap between exports and imports. The pamphlet “ Wool Facts “, compiled by the Australian Wool Growers and Graziers’ Council, states that there was a fall of 15.72d. per lb. in the price of wool in the first two months of 1960-61 as compared with the first two months of the previous year. The price at 31st August, 1959, was 61.74d. and at 31st August, 1960, it was 46.02d. In July and August, 1959, we sold 56,000,000 lb. of greasy wool for £14,000,000. In July and August, 1960, we sold 94,000,000 lb. of greasy wool for £18,000,000, so for an extra 38,000,000 lb. we received only £4,000,000.
A comparison of the first two months of this selling season with the first two months of the last selling season discloses a rather alarming position, particularly with the abandonment of import licensing, which will have a very detrimental effect upon our balance of payments in the absence of any compensating factors. If the wool income is allowed to decline in this fashion, we may be in serious trouble. If the drift continues throughout the 1960-61 selling season, income from wool will fall by £102,000,000. This calculation is based on the assumption that each Id. fall in the price will represent £6,500,000. We do not know what the woolclip will be this year, but I have worked on last year’s figures. I wonder whether this country can afford such a fall.
The following is an extract from “Australian Quarterly”, Volume 31, No. 1, which is published by the Australian Institute of Political Science -
If present prices of wool, which are pressing hard on many producers, are an indication that the market is not capable of currently consuming world wool production, either the market must be expanded through new outlets and more vigorous promotion, or else marginal production must be discontinued.
The only point on which I disagree with the summary given there is that up to date we have been able to sell all our wool. Senator Drake-Brockman may have some thing when he says that some of it was given away because no one wanted a carryover; nevertheless, we have been able to dispose of our wool. There are many other reasons for wool being given away. Later, I will point out a few of them. This article in the “ Monthly Review “ says -
Marginal production must be discontinued; development of the low rainfall areas must be reconsidered; pasture improvement must be curtailed; mixed farmers must return to cereals; and wool production must be reduced in favor of meat production; the economy cannot afford to subsidize high cost wool production.
– Who is the author of that article?
– I do not know who the author is, but the article appeared in the “Monthly Review”. Senator Wade drew attention to costs which are a factor in any production, but he did not give any details of costs. On page 15 of the Chislett report some cost factors are produced which give some idea of the effect of the inflationary spiral, for which the Government must accept responsibility, on wool production costs. The report states -
The reduction in costs which the producer might hope to achieve by acting on factors within his control or influence are examined in turn below. An impression of the order of costs and their change over the last ten years may be gained from the figures below, showing details of the major items on a large, well managed, High Rainfall Zone property. 1 will run through these figures quickly because, like Senator Wade, I am not overfond of citing statistics in these matters. The report contains the following figures: -
Senator Drake-Brockman said that all the workers wanted out of this industry was more wages, but an examination of those figures shows that the total costs were £9,521 in 1947-48 and £58,442 in 1957-58. Wages were £4,041 in 1947-48 and £13,782 in 1957-58. Wages represented 41 per cent, of costs in 1947-48 and 23.5 per cent, in 1957-58.
– What are those figures computed in relation to?
– In relation to the figures I have read from the Chislett report. Inflation is the cause of the increased cost, not wages. In the Chislett report he refers to the fact that wages are a large factor, but over that ten-year period wages have been a reducing factor to such an extent that in the present cost structure the percentage of total costs represented by wages is almost half what it was in 1947-48.
– That would not be caused by the rate but by the number of employees.
– The report gives the number of workers employed each year. It says that in 1947-48 permanent employees numbered seventeen and in 1957-58 fifteen, a reduction of two.
– That is direct labour, is it no.? That does not take into account wages for transport, the maintenance of machinery, or anything of that nature?
– The report gives station wages, permanent and casual, but it does not include shearers who are casual employees, of course. The article does not define the classes of employees.
The second proposition put by Senator Wade is whether an expanded sales promotion campaign would have a steadying effect on the market. 1 believe it would, but like Senator Wade I believe that its effect would not be immediate whereas the wool industry requires immediate assistance. I believe there should be an expanded promotion campaign. Unlike Senator Kennelly, who did not think it would have any great effect because at present we can sell all our wool, I believe the only prospect we have of increasing the price we receive for our wool is to create greater competition for it by surveying further markets and advising people in other countries of the value of wool and its superiority over synthetics. In that way we can create interest in wool and create a greater demand for it. That is not something that will happen immediately. On the basis of the figures I quoted for the first two months of this year in comparison with those of the first two months of last year, the wool industry requires not long-term assistance but immediate assistance. In any case, it may well be correct to say that it pays to advertise. We should be advertising our wool throughout the world to the utmost of our ability, consistent with the amount of money we can afford to spend on a promotion campaign.
The third proposition advanced by Senator Wade was whether a very vigorous research programme into credit facilities and production problems would materially assist the industry. The only comment Senator Wade made in respect of a vigorous research programme into credit facilities was to ask for long-term loans from the Development Bank at low interest rates. Senator Wade and his colleagues of the Australian Country Party support the Government that has been responsible for increasing interest rates and destroying the long-term market. When the Labour Government was in power it controlled interest rates, but this Government has allowed finance companies to take over the normal work of banking. There has been no attempt over the years by the Government to halt the inflationary spiral that leads to higher interest rates because of competition for money. All of the banks are interested in finance companies, and there has been intense competition for the available money. As a result interest rates have increased. The Commonwealth Development Bank has set a figure of 6 per cent, in respect of new business. I do not know whether Senator Wade would think that was a satisfactory rate to assist primary industries. We must look at that rate of 6 per cent, in the light of the interest than can be obtained by investing in other fields. We must ask ourselves whether we would be justified in asking the Commonwealth Development Bank to provide long-term loans at low rates of interest and in that way make the taxpayers subsidize the wool industry. it seems to me that in making a plea for long-term loans at low rates of interest the spokesman for the Australian Country Party was seeking the socialization of industry during periods of low prices. But he and his colleagues object to socialization of industry during periods of high prices. I think that was one of the factors behind the rejection of the referendum proposals. Honorable senators will remember that prices were rising and the growers wanted their full pound of flesh, but now they want assistance from the Government. They want socialization of industry during periods of low prices. 1 think that we should engage on a continuous and vigorous programme of research into the wool industry. The Commonwealth Scientific and Industrial Research Organization is doing a good job on behalf of the wool industry, but it could do more in the field of research. It should be encouraged to set up research stations in all wool-producing areas - not just some picked areas. In Western Australia, we have a research station at Kojonup - a high-rainfall area - but we should have one in the marginal area around Carnarvon. Mr. Chislett, secretary of the Graziers’ Federal Council, directs attention to that area in his report, and states that it is difficult to maintain flocks in the subtropical areas of Queensland and Western Australia because of breeding difficulties. The breeding rate in Western Australia is down to 5 per cent, and in Queensland it is a mere 10 per cent. I dealt with this matter during the debate on the Estimates and Budget Papers, and I emphasize that some research should be carried out in that area of Western Australia to assist pastoralists to improve the fertility of their sheep so that they may replace their flocks with home-grown sheep rather than be forced to import sheep from other areas. I urge the establishment of such a research programme, particularly in view of the fact that the State Government has a research station at Carnarvon which could be enlarged to cater for a further two or three scientists.
I think that the C.S.I.R.O. should do more research into pasture improvement in order to increase the sheep carrying capacity of the land. Only a few weeks ago a field day was held at Kojonup, and the research officer revealed that he had been able to run five sheep to the acre where previously he had been able to run only two sheep to the acre. When two sheep were being run to the acre the average cut was 14 lb., which meant a return of 28 lb. of wool per acre. The fleece weight fell away as the number of sheep to the acre was increased. It fell to 11 lb. a sheep but nevertheless, the return per acre was 55 lb. compared with a former return of 28 lb. to the acre. I think that the C.S.I.R.O. should do more research into this matter in order to assist the economy of Australia. We all know how dependent we are on wool to maintain our balance of payments and to enable us to import goods from overseas.
The C.S.I.R.O. should engage in research into sheep breeding in order to increase fleece weight. I know that fleece weight has been increased quite substantially over the years, and I know that the seasons have an effect on the amount of wool that can be cut from a sheep. Nevertheless, we should have further research - continuous research - into these problems.
In his motion Senator Wade asked whether a competent independent body should be set up to inquire into all the aspects of wool marketing. That was perhaps the most important part of his motion. As he and Senator Drake-Brockman pointed out, the wool-growers have approached the Government seeking an inquiry. I wonder whether the growers who have approached the Government on this occasion represent those growers who in a referendum rejected the proposal to establish a floor price, which at this stage seems to be the policy of the Australian Country Party. Senator Wade said that there was an urgent need to hold an inquiry. I submit that, with all the information available, a further inquiry would be nothing more than a delaying tactic. I believe that the big growers are not eager to enter into any plan that would give the Government some control over their industry. Because of the vital effects of the wool industry on Australia’s economy the growers know that some control is inevitable, but the longer they can delay it the better they will be pleased. I instance some of the information that is available to the Government without holding a further inquiry. After the First World War we had the experience of the British Australian Wool Realization Association, and after the Second World War we had the Joint Organization. Now we have the assistance of the Bureau of Agricultural Economics and the report of Mr. Chislett, the secretary of the Graziers’ Federal Council. Sufficient information should be obtainable from expert sources without the Government having to implement an inquiry. I do not think we would learn anything further if we did hold an inquiry. It seems to me that a large number of people have inquired into this industry and there is not much left for us to find out about it. The Government should take the initiative on the basis of the information that is available to it at the present time. It should formulate a plan and submit it to the growers for their approval or otherwise. Surely on this occasion there should be no party political implications in the conduct of the referendum.
I refer again to the “Australian Quarterly “ published by the Institute of Political Science. On page 8 of that publication of 1st March, 1959, we read -
In the event the demand for wool was such that the Joint Organization had sold all its stocks by the end of 1951. As the liquidation of J. O. became evident, the movement for the continuation of a marketing scheme gathered momentum and wool-growers were persuaded to participate in the formation of the post J.O. plan.
The chain of circumstances was such that there was no fundamental economic inquiry by the wool-growing industry as to marketing requirements before the submission of the plan by referendum and its rejection by the industry largely on political grounds.
I do not need to state what happened at that particular time, save to say that the Leader of the Country Party, having provided for a 71/2 per cent. tax then sought to apply a further 20 per cent. tax. That cruelled the opportunity of carrying the referendum.
– First, I should like to congratulate Senator Wade on his motion.
– A mutual admiration society.
– I am not admiring you at this stage. Senator Wade’s motion reads -
That consideration be given to the wool industry and particularly to the following matters: -
Whether the wool industry and the Australian economy generally are being endangered by the downward trend in wool prices;
Whether an expanded sales promotion campaign would have a steadying effect on the market;
Whether a more vigorous research programme into credit facilities and production problems would materially assist the industry; and
Whether a competent independent body should be set up to inquire into all the aspects of wool marketing.
That is a very comprehensive motion, and Senator Wade, in his speech this afternoon, covered most aspects of it. His speech indicated that he has given a lot of thought to the problems of the wool industry. If I remember correctly, he commenced by saying that the industry was Australia’s greatest single source of revenue and accounted for some 50 per cent. of our export income. He went on to say that, according to the Export Development Council, Australia would need to increase its exports by £250,000,000 within the next five years, and that the wool industry - provided it received just treatment by all those concerned with it - could play a significant part in providing a large proportion of that.
The Labour Party has asked the Government why it has not brought forward a plan. Honorable senators opposite have said that if they were in office they would say to the growers, in effect, “ This is our plan and you will abide by it “.
– We did not say that.
– You may not have said it, but Senator Kennelly did this afternoon and he added that the Labour Party had the courage of its convictions. He went on to say that if the Labour Party were in office it would have a plan. It would be a socialistic plan, no doubt, to take the wool from the wool-growers. I know it is the ambition of the Labour Party, if it gets into office, to shear not the sheep but the wool-growers.
I have been in this place for quite a time now. I was interested in Senator Aylett’s speech because I remember an occasion in 1951-52 when wool prices were reaching record levels. In order to stabilize the economy the Government decided to deduct 20 per cent, of wool-growers proceeds and hold that amount in reserve against income tax commitments for the following year. I remember only too well Senator Aylett standing up in this chamber and saying, “ The Government is robbing the wool-growers “. To-day, Senator Aylett is still trying to be the champion of the wool-growers; but heaven help them. I hope the day will never come when the party of which he is a member will have the opportunity to shear the growers instead of allowing the growers to shear the sheep.
I shall deal now with the first question in the motion namely, whether the wool industry and the Australian economy generally are being endangered by the downward trend in wool prices. During the last four years, from 1956-57 to the present time, the average price of wool has dropped from 79d. a lb. to 45d. a lb., the latter figure being the average foi this season’s clip up to date. The price fall is in the vicinity of 30 per cent, over four and a half years. It is interesting to note that the cost of production of wool has increased by more than 10 per cent, during that period. The wool-growers of Australia have to sell their clip on the open market and their costs do not influence the price they receive. They have to take what they can get and pay what they are able to pay. They are unable to pass on their costs, lt is rather interesting to note that the arbitration authorities, notwithstanding the fact that 80 per cent, of our export income is earned by primary production, bases its calculations, in fixing the basic wage, on the amount that industry can afford to pay. 1 know that the farmers’ organizations have the right to place their views before the Commonwealth Conciliation and Arbitration Commission and that they have seldom taken the opportunity to do so. I think that in the future they should take a greater interest in the wage claims that come before the commission, because if costs continue to rise, eventually a supportprice plan will have to be introduced to help some of our primary producers. I say that after consideration of events in other countries. In America, wool is sold by the auction system. In 1957, the average price of wool in that country was 43.7 cents per lb., and the price was subsidized to the extent of 17.7 cents, so that more than 40 per cent, of the price that the growers received for their wool was a subsidy from the Government. In England, there is a similar system. A wool board has been established to handle the wool clip. There is a fixed price of about 56d. sterling per lb., which represents a price of about 5 Id. net to the grower. At present, the price is subsidized by the United Kingdom Government.
When we turn to South America, we see that the governments of the woolproducing countries in that area help the woolgrowers by means of a multiple exchange system that varies from day to day, and is designed to ensure that the wool-grower is protected. We see, therefore, that in all the wool-growing countries of which I have spoken, the wool-growers receive support from their governments. I sincerely hope that that never happens in Australia.
– Because wool is our major source of income. If we have to adopt a support-price plan, the taxpayers of Australia may find it most difficult to provide all the assistance that is necessary. It must be appreciated that every variation of a penny in the price of wool represents about £7,000,000 to the industry.
– We increased the cost of the Public Service last year by £20,000,000.
– That sum would represent only about 3d. per lb. to the wool industry. It would be just chicken feed. If it were necessary to help the industry by providing worth-while support, the assistance could run to 2s. per lb., or more than £100,000,000 a year, which would be a lot of money for the taxpayers to find.
I believe that we can solve this problem if we look at it squarely. I have taken out some figures and have studied the returns that the wool-growers are receiving at the present time. It appears that, in the higher rainfall areas of Australia, the woolgrowers are receiving something less than 4 per cent, on their capital, and that does not include provision for their own wages. How long can they go on in that way? 1 know very well that people in the woolgrowing industry could change over to wheat growing if they wished to do so. They could also change to raising beef in the higher rainfall areas, or to dairying. But I think that most people engaged in primary industry are not keen to change from one form of farming to another. In past years I have seen farmers do that. In the old days before the war, when the price of wool fell to 9d. or lOd. per lb., some farmers said, “ We will go in for cattle raising or dairying “. They had to accept very low prices for their sheep and had to pay high prices for cattle. Within two years the price of wool had risen, while that of butter fat had fallen. They then said, “ Right, we will sell the dairy cows and go back to wool-growing “. They were losers all along the line.
Most farmers to-day have a fairly stable approach to the industry and are not prepared to change from the branch of farming in which they are engaged to another. I do not know that it would be a good thing if we encouraged our farmers to go out of wool production and enter the dairying industry, which is subsidized or the cattle industry. If the growers would only get together, I believe they could formulate a plan that would safeguard their interests, with the support of the Government. It is the policy of the Liberal Party and the Australian Country Party, if growers get together and come forward with a plan for stabilization, to co-operate with them in assisting their industry. I say that with a good deal of feeling, because I have made a study of the wool industry over a number of years.
– It does not sound like it.
– That may not appear correct to Senator O’Byrne, but I have done so, nevertheless. If honorable (senators study the trends during the 1914-18 war and afterwards, and follow them through, as I have, they will find that in ninety-nine cases out of a hundred, when there was not a reserve price for wool under the auction system, the buyers evidently got together, with the result that the price of wool was low.
Let me take honorable senators back to the time, after the First World War, when there were 3,000,000 bales of wool on hand to be sold, the British Government having purchased our wool for the whole of the war period. Let us come to 1921 when, at the wool sales which were held in March, the sellers could not get a bid for their wool. It was decided then to set up an organization known as the British-Australian Wool Realization Association. That body was established prior to the March sales of 1921. Prior to that date, wool had been selling for 3d. per lb. The ‘association said, “ Not one pound of wool will be sold for less than 8d. per lb.” The auctions were held and not a bale was sold. The sale for March was cancelled because nobody would bid the reserve price. An auction was held in April of the same year and the whole of the wool listed in the catalogue was sold at 8d. per lb. We went merrily on until 1924, when the 3,000,000 bales - the war-time surplus - was sold at a price of not less than 8d. per lb., which was later increased to about ls. 4d. per lb. The whole of the surplus was sold. All of the production up to that date was sold and the commission derived a profit of some £30,000,000. When the wool was sold, the growers recommended to the Government that a referendum be held to see whether Bawra should be continued. At the referendum, some 74.5 per cent, of the wool-growers of Australia voted for a continuation of the scheme under Bawra. Under the legislation at the time, it was necessary for 75 per cent, of the growers to vote in favour of continuation if the scheme was to be carried on. In that instance, the growers lost by one-half of 1 per cent. I believe that that was the initial tragedy in the industry.
We then went back to the ordinary auction system, and the price of wool fell immediately. Within three years, the price dropped to lOd. per lb., and within five years the price was even lower. The price was down to 5d. in 1929, 6d. in 1930, and 8d. in 1931. We continued to receive low prices, with the exception of a couple of years, under the auction system until World War II. broke out in 1939. The British Government then purchased the Australian wool clip, the New Zealand wool clip and the South African wool clip for 10id. per lb. sterling. The appraisement system then came into operation. The yield to Australia when the price was 10 1/2 d. per lb., sterling was about £13,140,000 in Australian currency. If my memory serves me correctly, the price was later increased to 15d. per lb. and then to 18d. per lb. All our wool was paid for on this basis during the war.
The post-war Joint Organization was set up to dispose of more than 10,000,000 bales that were accumulated by the British and Australian Governments during the war period. Some people thought that it would taken ten or twelve years to dispose of those stocks, and it is interesting to note that when the auction system started again under Joint Organization with a reserve price plan the whole of that wool was sold in six years and a profit of about £100,000,000 was made for the Australian people.
– The amount of the profit was £93,000,000.
– I was speaking in round figures. The overall figure for all the nations concerned in the scheme was about £200,000,000. The Australian Government at that time then held about £29,000,000 or £30,000,000 to carry on the scheme. A referendum of the Australian wool-growers was held-
– It was held in 1951.
– The referendum was held later than that.
– You can think what you like. I am telling you that the referendum was held in 1951. I do not make mistakes in these matters.
– All you do is to put up Aunt Sallys and knock them over.
– You do not even know when the referendum in the wool industry was held, but you come into this place and growl all the time. The members of the Government took part in the referendum and supported the scheme. I am sorry, Senator Kennelly, I apologize to you and I forgive you. I thought you were here then, but you were not. It is not fair to criticize a person who was not here. As I have said, a referendum was held in 1951 and the wool-growers in five of the six States threw out the proposal to have a reserve price plan under the auction system for the disposal of wool.
– Did you support the proposal?
– Yes. I have the courage of my convictions, and I would support another one. I do not put up Aunt Sallys and knock them over. The Government supported the proposal on that particular occasion. The leaders of our Government made speeches in favour of it through the length and breadth of this country and the growers themselves knocked it out. A very big majority of the growers voted against the proposal. Now the Government says: “ We will not go to you with a plan for a stabilization scheme. If you want a plan, you will have to come to us.”
– Is that the Government’s policy?
– It is not the Labour Party’s policy, but it is our policy. It is the Government’s policy - the Liberal Party and Country Party - policy. If the growers want a stabilization plan, the Government will enact it providing the growers have control of the industry. We do not want the control of the industry. Of course, as the Government got knocked on the proposal once, it may not now be too keen on the idea.
I still say that the only answer to this problem is to have a stabilized scheme to operate on a floor price plan, a reserve price plan. When I say that, I do not mean the cost of production. I mean that the highs and the lows should be ironed out of the wool auction system. I believe that if we have a reserve price scheme it will eventually iron out the highs and the lows in the prices being received. It is no good to the Government and it is no good to the growers if they receive 240d. per lb. for their wool in one year and 60d. per lb. in the next. Back in March, 1952, the growers received £1 per lb. for their wool, if my memory serves me correctly. By the following year the price had dropped by over 50 per cent.
– Rubbish! Wool was never that price.
– I may be wrong, but 1 know people in my district who sold wool for £1 per lb.
– That was at the March sale.
– Yes, and it was good wool. Now we are experiencing low prices. Wool is down to 45d. per lb., which is much below the cost of production in the high rainfall areas of Australia. Off the cuff, I would say that 60 per cent, or 70 per cent, of our wool is produced in the highest rainfall areas of Australia. The growers should get together. This is a very important subject.
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjuorn
Question resolved in the affirmative.
Senate adjourned at 11 p.m.
Cite as: Australia, Senate, Debates, 28 September 1960, viewed 22 October 2017, <http://historichansard.net/senate/1960/19600928_senate_23_s18/>.