Finance plans

Press, Volume CXI, Issue 32736, 13 October 1971, Page 2

Finance plans

(New Zealand Press Association) WELLINGTON, October 12. Details of proposals the Wool Board intends to make to the Government on financing the planned wool marketing corporation were given today by the board’s chairman (Sir John Acland).

In a speech to a joint meeting of the Wool Board, the electoral committee and the meat and wool section council of Federated Farmers, Sir John Acland said that the following proposals would be made: The sum of ssm should be transferred from the Wool Commission’s assets to the corporation for its use in floor price protection. This could be augmented by further sums as mentioned later.

The commission’s assets ($48.2m at June 30 this year) should be divided in the ratio agreed when the corporation was founded—the corporation to receive 75.79 per cent (about $30.2m) for marketing, and the Wool Board to receive 24.21 per cent (about $9.7m) as an addition to its special reserve account. LOSS PROVISION Sir John Acland said these figures allowed for estimated losses in the commission’s activities this financial year. If those losses were smaller than expected there would be a balance of up to $2.5m,

which should be added to the ssm supplementation fund. The interest on the special reserve account should be payable to the Wool Board free of tax, but capital payments would need consent of the Minister of Agriculture. The Wool Board would ask the Government to pay the existing debt to the Reserve Bank of $4.25m. The Wool Board should have the right to receive such other payments as are agreed with the corporation with the approval of the Minister of Agriculture. LOW INTEREST The corporation would use the wool stocks and the liquid assets, together with accruing interest, transferred from the commission to finance its marketing and to provide running expenses of the floor price scheme. The corporation should be exempt from tax. The corporation should seek the use of Reserve Bank finance at 1 per cent interest for working or trading capital.