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Labor senator Sterle to call for Australian Wool Innovation audit

Terry Sim, August 20, 2021

AWI CEO Stuart McCullough.

AUSTRALIAN Wool Innovation’s limited disclosure of financial reserves data while promoting a levy increase in the 2021 WoolPoll has prompted a new call for a full audit of the company.

Rural and Regional Affairs and Transport committee member, Labor senator Glenn Sterle, said AWI’s behaviour lead into WoolPoll, its recent WoolQ and election process issues, and former AWI chair Colette Garnsey’s lack of attendances at Estimates hearings indicated a need for an ANAO audit.

His comments follow those of  Minister for Agriculture David Littleproud this week that he doesn’t believe there has been a cultural shift at AWI in terms of demonstrating transparency in its operations.

“This is getting worse by the minute, they definitely need an audit,” Mr Sterle said.

On 19 July, AWI told shareholders it would be seeking an increase in the current 1.5 percent wool levy to 2pc, and has been promoting this while refusing to release the financial details informing its preference.

AWI’s timing of its 2pc levy preference announcement — weeks earlier than normal — has meant that AWI chair Jock Laurie, other board members and the company’s chief executive officer Stuart McCullough have been able to promote a 2pc levy for several weeks with knowledge they have denied AWI shareholders.

In the 2021 WoolPoll ballot, eligible levy payers will preferentially vote for either a zero levy, the current levy rate of 1.5pc, a 1pc rate, AWI’s preferred 2pc option, or the supplementary rate of 2.5pc also put forward by AWI.

AWI has rejected requests from peak grower body WoolProducers Australia, the Australian Wool Growers Australia and its WoolPoll Panel to release details on its current reserves, projected income and wool production forecasts and current project commitments.

The WoolPoll Panel was advised by AWI it could release the data early, stating that it would be available to all shareholders in the Voter Information Memorandum by the end of the month. And although panel members have had access to AWI financial data in the draft VIM, WoolPoll Panel chair Steve Bolt said panel members were not able to disclose it.

“Everything that is in the VIM wasn’t for disclosure until it was released,” he said.

AWI CEO gives reserves information to Merino breeders

However, Sheep Central has been told that Mr McCullough via Zoom disclosed to Merino breeders and others at an AWI Future Wool event at Hamilton on August 2 that AWI’s current reserves were $90-$100 million and that $45 million was needed to complete current projects.

Sheep Central was told by AWI that invitations for the event went out via the Hamilton Pastoral and Agricultural Society, but the society’s business and events manager Peta Anderson said all promotion for the event was handled by AWI. She provided the contact details of anyone who had showed Merino sheep or had sheep in the Sheepvention ram sale to AWI’s general manager, wool grower engagement, Marius Cuming.

Australian Superfine Wool Growers Association federal council member and Yulecart producer Brad Venning attended the event which he said was heavily promoted among Merino breeders. Referring to his notes, said he asked Mr McCullough why AWI had not released financial data to allow growers to make an assessment on AWI’s promotion of a 2pc levy.

“We can’t really make a decision until we know what the financials are.”

“That night he (Mr McCullough) said that AWI needed $45 million in reserve to carry out its current projects and he said that the current reserves were under $100 million, somewhere between $90 and $100 million,” Mr Venning said.

Mr Venning said Mr McCullough said AWI would release the financial data two weeks before the WoolPoll Voter Information Memorandum came out. But the wool grower believed AWI should have released the data earlier, while AWI was promoting a 2pc levy.

“It would have been nice if they are promoting something … they know what the figures are and they think they need 2pc.

“We don’t know what the figures are and what they are going to do, that’s the other thing; before we can say they need 2pc,” he said.

“They might need 3pc, if they get some really good proposals we could probably give them 3pc.

“Or if they think they are doing a good enough job with 1.5pc, well 1.5pc might be a good thing – we don’t know whether we should be voting for 3pc, 2pc, 1.5pc or 2.5pc.”

“If they are going to promote 2pc we really need to know if they need 2pc, but until we see the figures and what they are going to do with it, we don’t know.”

Mr Venning said releasing financial data two weeks before the VIM’s release might be sufficient for individual growers, but not for bodies like ASWGA, the Victorian Farmers Federation and WoolProducers Australia, or other state farming organisations to determine policy on WoolPoll.

An AWI spokesman said the Hamilton event was a public forum open to growers and was also advertised on Facebook.

“AWI informs industry stakeholders about its financial position routinely including at meetings of the Wool Industry Consultative Panel and the WoolPoll Panel.

“The $45 million is a required reserve including the exotic animal disease fund and our forward commitments if a zero rate is voted for,” he said.

He said the $45 million figure is “common knowledge” and is reported in AWI presentations.

“This is not selective leaking.

“These numbers are not privileged in anyway,” he said.

“AWI will release its full voter information guide on August 30, two weeks before the voting period commences on September 13.”

He said the most recent Review of Performance on AWI will also be released soon.

“Attacking AWI for speaking to growers is strange and offensive.”

‘Long way short of of best practice governance’ – Storey

WPA president Ed Storey

However, WoolProducers Australia president Ed Storey said it was disappointing to hear of Mr McCullough’s disclosure given the WoolPoll Panel had been told it could not release any financial details.

“So it is obviously being released selectively at AWI’s discretion, which leads to a whole lot of further questions about who, why and where.

“That’s a long way short of best practice governance and behaviour.”

Mr Storey said the event “tends toward very very very selective leaking of information to some that they want to get it to,” he said.

“And it is the exact reason when the AWI board came out and endorsed the 2pc levy option that we asked immediately that day for all data that informs that decision to be released.

“To this stage, the answer is ‘no’ (from AWI).”

He said it was important that information on AWI’s reserve levels, budgets and program spending be released to all levy payers so they have the opportunity to inform themselves.

“Not a select few that AWI want to have a particular view about and perhaps empower to lobby through their networks.

“We didn’t want select groups of shareholders to be advised of particular data and information when not all levy payers were able to access that information,’ he said.

“All levy payers who haven’t seen this information should feel extremely disappointed and let down by the AWI who have chosen to release it to a select few and not all.”

ANAO audit of AWI is needed – Sterle

Labor senator Glenn Sterle at a Senate Estimates hearing.

Senator Sterle said AWI should “absolutely” be releasing its financial and reserves data immediately.

“If that’s their modus operandi with other people’s money, I question their suitability to hold office, and if I was a levy payer, I would be rioting.”

“It’s not their damn money.”

Littleproud is ‘kicking the can down the road’ – Sterle

Minister for Agriculture David Littleproud

In Farmonline this week, Mr Littleproud said there were “a lot of cultural issues that can be rectified to make sure AWI performs a lot better.”

“I don’t think it’s broken, but I think it needs some work,” he was quoted as saying.

Mr Littleproud promised that in the future RDC funding would be tied organisations like AWI meeting key transparency and performance indicators, referring to the formation of overarching body Agricultural Innovation Australia, within a review expected to be completed by the end of the year.

“That’s not just about return on investment, that’s also about consultation and what effective consultation should look like, not just consultation for the sake of doing it,” Mr Littleproud was quoted as saying.

“We’re getting back to first principles about value to the levy payer and value to the taxpayer, because I represent the taxpayers.

“I’m making it clear to all the research and development corporations, all 15 of them that this is what I will expect moving forward.”

Mr Sterle commended Mr Littleproud for his recent statements, but added they were “not enough”.

“Experience would indicate that no, that’s not enough, because we’ve seen the behaviour and performance of AWI that once they have a blowtorch put to their feet, they can skip over a hard question and hope that it all goes away.

Mr Sterle said AWI received taxpayers’ money as well and the minister has a delegated responsibility to taxpayers.

“I would want to know what is going on there – I would want a full audit.”

Mr Sterle said Mr Littleproud’s statements on coming reform of RDCs was “handballing” AWI’s current issues.

“That’s kicking the can down the road.

“The Minister has a responsibility here because levy payers are not happy and they need to be accountable to the taxpayer.”

The RRAT Committee in 2017 considered an ANAO audit of AWI, but instead the scheduled 2018 review of performance of the company dealt with additional matters of public interest regarding governance.

“I think now if the Minister doesn’t know what to do, we will give him a hand,” Mr Sterle said.

“I have no problem recommending to my fellow committee members that we asked the ANAO to do an audit of AWI,” he said.

“We’ll do the Minister’s job for him, help him out.”

Mr Littleproud did not provide response to questions from Sheep Central this week and was unavailable for interview.

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Comments

  1. Martin Oppenheimer, August 23, 2021

    New directors and leadership needed at AWI, urgently.

  2. Donald Cameron, August 22, 2021

    Hi Jim, I suggest you email Senator Sterle direct, as he may not read this site.

    Perhaps others may also use this timely opportunity to encourage Glenn to go after those perpetrating this on the wool industry, and perhaps also help point the good senator in the right direction by detailing your grievances.

    Years of being disappointed by various Ministers of Agriculture who talk big, but act little, leaves us cynical, disgruntled, and with no choice but to support the reds in this instance. Go Glenn Sterle.

    [email protected]

  3. Paul Favaloro, August 21, 2021

    The current high passed-in wool rate has made the buyers rethink their attitude towards growers. We can have the same result with AWI. It is your money, you pay their wages. Become a shareholder now and tell AWI what you want and that it matters to you in this year’s WoolPoll.

  4. Donald Cameron, August 20, 2021

    Go Glenn Sterle. It was always obvious that the blues were too compromised and that it would take the reds to achieve any meaningful change to those in charge of our AWI. “Our AWI” sounds a bit like “Your ABC”, both BS slogans promulgated by the old school fanatics still in control of our funds.

    • Jim Gordon, August 21, 2021

      Donald Cameron, AWI is behaving more like the Taliban than the ABC. They are promising change; however, once they convince the levy payer to commit to 2 percent, they will be back to their old ways. The question has to be asked, why are so many levy payers so disgruntled with AWI? Is it the self interest, wastage and the inability to change their culture? The Federal Government needs to have a real close look at this organisation. If the tax payer gets a whiff of their $18 million being wasted, the drums will beat very loudly.
      Senator Glenn Sterle, you are doing a brilliant job. You have my vote. Forget about the audit, just wind AWI up. The organisation is unfixable. The culture is so in-grained, the executive need to be all let go. With the millions upon millions that have been spent we are still not getting the research we need.

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