Wool Board 1999 Results Unsatisfactory

28 September 1999
PR103/99

WOOL BOARD 1999 RESULTS UNSATISFACTORY

Federated Farmers' Meat and Wool Section is disappointed that the Wool Board has again experienced a budget over-run.

In response to the Wool Board's announcement of its 1999 financial results, Federated Farmers claims the reliance by producer boards on levypayer-owned reserves encourages loose financial management and consequent over-expenditure.

The Wool Board needs $11.4m from reserves, after budgeting on a $9.9m shortfall.

"This year's budget over-run of $1.5m is modest compared to last year's blow-out", said Federated Farmers Meat & Wool Section Chairman Chris Lester.

"None the less, this deficit again demonstrates how the Producer Boards can rely on growers' funds to prop up ineffective financial management."

"What would levypayers be saying to the boards, were there not substantial reserves available to mop up after the loose financial management that results in these frequent over-runs."

"Given growers' perceptions about the board's effect on farm gate prices, I doubt growers would be happy to put their hands in their pockets to bail out the Wool Board."

A shortfall in the board's levy income of $3.5m and in investment income of $3.6m accounts for the major discrepancies.

"I acknowledge that the board expends a substantial proportion of its budget in offshore markets and therefore had the fluctuations of a number of currencies to manage. Even so, most growers expect the board to accurately predict budget variations and the consequential effects on its financial results," concluded Mr Lester.

ENDS

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