 |
18 March 2003
The wool levy should drop to 0.5 per cent in 2004 and to zero by 2007, the Australian Wool Growers’ Association (AWGA) announced today.
AWGA Chair, Will Crozier, said the levy, which is currently set at 2%, should be lowered in the wake of the drought and falling sheep numbers. Strong wool prices have also seen a windfall to research and development funding in recent years and a focus on investing in projects yielding a commercial return.
“It was the intention of the former Board of Australian Wool Innovation to make the company fully commercial by 2007 and AWGA will be pushing for the levy to drop to 0.5% when a wool poll is taken later this year.”
AWI is required under its Constitution to conduct a wool poll on the rate of the wool levy every three years. The next vote must take place by 1 January 2004.
Mr Crozier said the reduction in grower contributions should not affect the matching Federal Government contribution.
“AWI is one of 12 rural-industry based Research and Development Corporations (RDCs) funded by the Federal Government on a matching dollar-for-dollar basis up to a maximum of 0.5% of the industry's gross value of production. It expects to receive $56m in taxes from wool growers and $14m from the Federal Government in 2003.”
“If the levy drops to 0.5% (approx. $14 million based on the current year forecasts) then the Government contribution will remain at $14 million under the formula used to assess the matching funds.”
Mr Crozier said the two investment goals of AWI under the McCaskill Board
were to:
- Improve the long-term profitability of wool production in Australia
through application of innovation; and
- Over time, reduce the reliance on the statutory wool levy without reducing
the overall level of funding for research and development.
“Maximising value of intellectual property, achieving returns on funds and developing a sustainable capital base were the ways the AWI was going to achieve these goals,” Mr Crozier said.
“This clearly indicates that the Board believed research and development in the wool industry was a commercial enterprise and that the company should not continue to rely on wool growers to fund an endless list of projects, as occurred in the past.”
“When you consider the billions we have invested in AWI and its predecessor organisations over the decades and what this investment has realised, there clearly has to be a change of direction.”
AWI must be able to stand on its own two feet and be weaned off the levy.”
“If not, then we are effectively saying that research and development
is never going to realise commercial benefits for the wool industry.”
News Archive 2003
Discussion Papers
Media Links