Benefits seen in plan for Wool Bd funding

Press, 4 November 1983, Page 3

Benefits seen in plan for Wool Bd funding

PA Wellington The Wool Board yesterday told farmers’ representatives that new plans for funding would mean farmers would pay more but would give the board a sound financial footing and free it “from the apron strings of central government.” The board put its plans to a combined meeting of the electoral committee, and the meat and wool section of Federated Farmers, and will take it to farmers in a series of meetings planned for the next 10 days. The chairman of the Wool Board, Mr Douglas Mcllraith, said that as late as last Thursday he had expected that, provided farmers’ support was forthcoming, the board’s proposals would be acceptable to the Government. However, since then the Government had raised two major points, which would be discussed by Cabinet on Monday, with a decision expected the next day. The board wants to change legislation to allow it to strike a general levy to provide for capital reserves, administration, promotion, and research and development. The board would have the responsibility of determining the amount of levy, and it would not have statutory limitations as it does now.

The board also wants to lift the general levy to 6 per cent. The present levy for promotion and research is 3 per cent. The extra would allow it to finance the Minimum Price Fund. The board has asked the

Government for a ceiling on the fund of $7O million. When that was reached, the levy would cease and be used for other purposes. The board plans to discuss with the Government the application of commercial rates to the Minimum Price Fund account at the Reserve Bank, which has an interest rate of 1 per cent at the moment. “The M.P.F. fund has been in credit far more than it has been in debit and had, for example, an interest rate of 11 per cent been applied over the. last five years, the board would have been worse off ‘by $32.5 million, but the M.P.F. account would have benefited by $4O million,” Mr Mcllraith said.

“Therefore, woolgrowers as such would have received a net gain of $7.5 million.

Mr Mcllraith said the Prime Minister, Mr Muldoon, had raised two main points: • Concern about the adequacy of the proposed target level for the Minimum Price Fund (of $7O million). • Concern about the availability of the entire fund for the purpose of the board’s market support operation. Mr Mcllraith said he bad had a good response from farmer representatives at the meeting. “So far the main point of concern has been the belief that the Government should contribute by grant to the International Wool Secretariat,” he said. However, he said the board would not proceed if it felt that one in three farmers was against the plan.