Research & Development

AWI WoolPoll supplementary levy rate of 2.5pc is ‘unnecessary’

Terry Sim, July 16, 2021

AUSTRALIAN Wool Innovation’s inclusion of 2.5 percent as the supplementary rate in the coming WoolPoll levy ballot has been branded as unnecessary and unjustified.

Under the Wool Services Privatisation (Wool Levy Poll) Regulations 2003, AWI is able to add a supplementary levy rate to the legislated levy options, and it can separately recommend a preferred rate to levy payers.

The current levy rate until June 30 2022 is 1.5 percent. WoolPoll regulations prescribe four levy options that must be put to levy payers: zero, the current levy rate of 1.5 percent, 1pc and 2pc, and a supplementary rate, if needed, can be proposed by AWI.

Sheep Central was told by an AWI spokesman yesterday that the board has not yet decided on the rate it will recommend to levy payers. Any recommendation of a particular levy rate has to be made in a stand-alone document, which could be included in the WoolPoll voting pack.

WoolProducers Australia president Ed Storey said putting 2.5pc as a levy option indicated AWI board members “continue not to listen and it continues to be about them as directors.”

Mr Storey said at the last WoolPoll in 2018 only 3.23 percent of voters voted for a levy above the status quo of 2pc. In the 2018 WoolPoll, before preferences were allocated, 2.07pc of votes were returned for 2.5pc and 1.16pc votes favoured 3pc. Of valid votes returned, 43.51pc were for 2pc, 44.77pc were for 1.5pc and 8.49pc of votes were for zero. After preferences were allocated, 47.18pc of votes favoured 2pc and 52.82pc voted for 1.5pc.

The percentage of valid votes returned for a levy greater than the status quo before preferences has been falling. In 2012 it was 6.95pc, then 6.69pc in 2015 and 3.23 in 2018.

“So to put another option that caters for a tiny section of the levy payers indicates the board is not listening to levy payers,” Mr Storey said.

Mr Storey said he “pretty sure” AWI has opted for a 2.5pc supplementary option to ensure that 2pc isn’t the highest on the 2021 ballot paper.

“That’s what they are about and from that number going in there I think we can predict what their preferred option is going to be…”

By putting the 2.5pc option in, Mr Storey agreed it looked like AWI’s preferred option in the 2021 ballot will be 2pc.

“2.5pc is unnecessary, no-one votes for it.

“It indicates they are going to use the setting of the options to try to influence the final outcome, which is a disappointing use of their discretionary powers in respect to setting another levy option.”

2.5pc had never been a realistic option – AWGA

Australian Wool Growers Association director Robert Ingram said for most wool growers 2.5pc has never been a realistic option in a WoolPoll ballot.

“That vote (greater than 2pc) has been decreasing forever, so to me, this is actually wasting shareholders’ money yet again, developing an argument to justify 2.5pc.

“The very comprehensive WoolPoll Review set out a clear framework as to what the four rates should be and if AWI wants to put in a supplementary rate they can,” he said.

He said past WoolPoll voting figures showed that wool growers have never substantially supported a levy rate above 2pc and a 2.5pc option could not be justified in terms of past voting preferences.

“It just shows again the arrogance of the board in not looking at what wool growers are telling them in terms of the number of votes.

“The culture of the organisation in terms of the way it treats its shareholders is appalling.”

2.5pc is not a superfluous option – AWI

An AWI spokesman said the five options provide wool growers with a wide variety of levy rates to consider.

“Wool growers will make up their own minds on what to support.

“It (the 2.5pc) is not a superfluous option,” the spokesman said.

Now you see them, now you don’t

Sheep Central was told yesterday afternoon by AWI that the AWI board had decided “today” on the WoolPoll supplementary rate of 2.5pc, despite also later confirming that the levy option had been declared in the draft WoolPoll papers that were prepared weeks ago, but not released publicly.
Sheep Central was also told growers looking at the WoolPoll website had seen the 2.5pc supplementary option included in the levy options on Thursday morning, before the board’s decision was disclosed to media, but the options were then taken down, before being put back up again later in the day.

The WoolPoll rates – now you see them.

The WoolPoll rates – now you don’t.

 

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Comments

  1. Paul Favaloro, July 18, 2021

    Where there is smoke there is fire. AWI, you are reaching for the fuel hose, not the water hose.

  2. Peter Small, July 17, 2021

    I desperately hope that all growers ask themselves before committing to vote: What is it they look to AWI to achieve for them and their industry?
    Is it relevant for a board immersed at the grassroots in Australia, to be involved in marketing at all? With 90 percent of the wool purchased by China and an increasing amount consumed by wealthy Chinese, what do we know in Australia about the Chinese market? And isn’t the shortage of quality wool the problem? And of non-mulesed wool?
    As I have repeated here and elsewhere over many years, it’s those owning the product that are best able to promote their product to the market and it is foolish to promote a product you do not own.
    The greatest need in the wool industry is to increase productivity, and as Professor Bill Malcolm at the University of Melbourne keeps reminding us, it is productivity that is the key, not production. Productivity comes as a result of a well-resourced, well-led research industry. That is what growers should be looking to find a way to fund. Not a tired old lot of codgers in ‘wool house’.

  3. Chick Olsson, July 17, 2021

    Surely its time to introduce blood tests to see what the directors are on before board meetings maybe? Magic mushrooms perhaps?

  4. Jim Gordon, July 17, 2021

    A 1 percent levy is enough. If the AWI board and the executive wants 2.5 percent, they can pay it themselves.
    The levy payer is not running a charity service.

  5. Martin Oppenheimer, July 16, 2021

    Why does the AWI board continue to do this? Do they like pain?

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