Australia’s wool industry “in good shape” despite criticism over governance and animal welfare.
Australian Wool Innovation (AWI), a not-for-profit company owned by more than 24,000 woolgrowers, has told parliament the industry is in “very good shape” despite criticism about its management and animal cruelty.
Chairman Wal Merriman gave evidence to the Rural and Regional Affairs and Transport Legislation Committee as part of Senate Estimates, a process where government expenditure is examined as part of the annual budget cycle.
AWI invests in research, development, innovation and marketing, funded primarily through a wool levy and a matching contribution from the Federal Government for research and development.
Mr Merriman told the committee wool prices in US dollars had risen 22 per cent.
“The US is the main trading currency for the wool industry,” he said.
“This has been in the face of an increase in supply, so anyone who tells you that it is just supply driven is not correct.
“We have had a 5.5 per cent increase in supply and a 22.5 per cent increase in price.”
Mr Merriman said the market was trading at record levels.
“So things are good in our industry,” he said.
“As well as that, the mutton price has gone up some 15 per cent.”
Relocation a tense issue
Despite the positive start, the hearing turned tense under questioning from Senators.
As the federal Agriculture Minister Barnaby Joyce stepped up his bid to relocated peak agricultural bodies away from capital cities like Sydney, Senator Carol Brown questioned if AWI had been asked to move.
Mr Merriman said the issue had been discussed, but he had advised Mr Joyce against it.
“My advice to him was that the shareholders of AWI have voted for a 60/40 split in the way we spend our money,” he said.
“Sixty per cent is on marketing and 40 per cent is on research.
“We do not think that if we move to Burke somewhere we can conduct our marketing activities as well as we can in Sydney.
“You just cannot promote yourself in a tin shed in Dubbo or somewhere.”
He said the headquarters had traditionally been in Sydney, and it was critical for direct access to the fashion industry.
“I am talking about when you get Italian brands like Zegna and Loro Piana and these people at the very pinnacle of fashion and you take them to a shed in Boorowa where I live or somewhere like that,” he said.
“It just doesn't gel. In Sydney you have all of the yard and fashion people.”
The matter will be subject to a further senate inquiry.
Mr Merriman and AWI chief executive Stuart McCulloch also faced tough questions about the redundancy payments to nine staff that were retrenched as part of a restructure.
Mr McCulloch told the committee the generous payments were due to a number of factors, but he was reluctant to reveal details for fear of breaching confidentiality of those employees that had left.
“They are important questions … they are about transparency,” committee chairman Barry O’Sullivan said.
“This committee cannot form any view about what your industry may have done with this without the facts.”
After a brief recess, it was revealed at least one of the workers, who had been at AWI for nine years, was paid $531,371 at termination.
“There are a number of factors in this,” Mr McCulloch said.
“The first one is that of course you have to pay them the annual leave that they have not used, then you have to pay them the long service leave that they have not used, then you have to pay them a notice period, which is part of the AWI contract.
“Then there is a human element that comes in. Some of these people were in their 60s, some of these people were single mothers with three kids.”
Animal cruelty case a “wake-up call.”
Meanwhile, the case of four shearers faced a combined total of 60 animal cruelty charges in a Victorian Magistrates Court.
The men were accused of punching, beating and stomping on sheep, with evidence including footage secretly recorded by animal rights group PETA.
Shearing Contractors Association of Australia secretary Jason Letchford told the ABC the case had “forever changed” the industry.
"We're all shocked, upset and embarrassed as an industry. It's been a wake-up call," he said.
The men pleaded guilty and will be sentenced later this month.