WOOL PROCEEDS FUND

Press, Volume LXXXVII, Issue 26396, 14 April 1951, Page 8

WOOL PROCEEDS FUND

ADVISORY COMMITTEE MEETS MINISTER STATEMENT TO BE MADE NEXT WEEK (New Zealand Press Association) WELLINGTON, April 13. The future of money in the wool proceeds retention fund was discussed between members of the Wool Retention Advisory Committee and the Minister of Agriculture (Mr K. J. Holyoake) to-day. A meeting had been Planned with the Prime Minister (Mr [olland), but Mr Holyoake deputised in the absence of Mr Holland through a slight indisposition. Mr Holyoake said this evening that there had been a full discussion. The question of immediate releases from the fund to meet urgent cases had been raised. Another issue was the period for which money would be retained in the fund, and the possible date on which growers could expect a pay-out. Complete agreement had been reached between the Government and the committee, Mr Holyoake said. The Prime Minister would make a detailed statement next week. £50,000,000 Yet to be Paid

With the settlement of the waterfront strike no nearer, the wool position in New Zealand is becoming complicated. Wool cheques amounting to nearly £50,000,000 have yet to be paid for wool purchased at some of the later sales before the roster was postponed indefinitely. In the meantime the wool market has eased, chiefly through the lack of American buying, and if the present trend continues it is estimated the Dominion will ’ have lost at least £6,000.000 by the time the sales are resumed. It has been suggested that because of shipping delays and the falling market, some buyers might attempt to repudiate their purchase contracts for wool already bought at auction. This possibility was denied by leading brokers and buyers in Wellington today. They said that to their knowledge no such cases had been reported. Before the waterfront strike commenced on February 5 about two-thirds of this season's wool clip had been auctioned and about one-naif shipped. By the time the wool-selling programme was suspended on March 8 more than 598,000 bales of greasy wool had been auctioned. It is estimatea that 300,000 bales remain to be sold. Many buyers operated privately after the postponement of* the sales and bought comparatively large quantities of wool by private charier of about : Jod per lb. 20 Per Cent Drop Estimated It is estimated that if wool auctions were resumed to-morrow prices would show a decline of about 20 per cent. Growers who sold wool at the last five auctions before the roster Was prstponed are still awaiting their cheques. Bills of lading have first to be obtained before buyers can operate on their credit Prompt dates for these five sales cannot be set until shipping is available and purchasers are not railed on to pay for their wool until dispatch arrangements can be made and letters of credit operated upon. From the Government's point of view it is estimated that it will have lost income tax revenue on the . £90,000,000 which, but for the waterfront strike, would have been paid out to growers before the and. of the I®* come tax year on March Si. From tne grower’s point of view those whose cheques have been held back will have to show this income in the current year’s income tax return. This, combined with the proceeds of next season’s clip, will result in these growers facing a double pay* ment, probably in a much higher income tax bracket This is one matter which is expected to be discussed with the Government by the Wool Retention Advisory Committee. Local buyers and brokers consider SMSST'SESi 1 ®!: ney sale was due entirely to the withdrawal of American competition. They state that there will stui be a keen demand from Bradford, the Continent and local mills, but the position of America and its re-entry when the roster is resumed is problematical. Russian buying has been negligible and has had little effect on New Zealand sales. It is estimated authoritatively that Russian purchase* this season would not amount to more than three or four per cent of the total