O'Connor Damien: Wool Industry Restructuring Bill — Second Reading Instruction to CommitteeCWH In Committee Third Reading 
O'Connor Damien: Wool Industry Restructuring Bill — Second Reading Instruction to CommitteeCWH In Committee Third Reading 
[Volume:609;Page:7106] 
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) 
 on behalf of the 
 Minister of Agriculture 
: I move  
That the Wool Industry Restructuring Bill be now read a second time 
. The Wool Industry Restructuring Bill was introduced to the House on 11 December 2002. It had its first reading on 19 March 2003 after which it was referred to the Primary Production Committee for consideration. The committee received and considered 33 written submissions on the bill. 
This bill facilitates the regulatory and structural reform of the wool industry. It provides for the dissolution of the statutory New Zealand Wool Board and the allocation of its assets among woolgrowers. That will enable a greater separation of commercial and industry-good activities and will give growers greater control of their industry organisations. Growers will be allocated shares in the commercial entities and the industry is separately working to seek grower approval for a levy to fund industry-good activities under a new organisation. 
 The bill provides for the conversion of the Wool Board into the Wool Board Disestablishment Co. The disestablishment company which will be known as “Disco” to the trendy wool industry will be responsible for dealing with the residual liabilities and commitments of the board and for implementing a restructuring plan including the allocation of board assets to growers. The disestablishment company will also be responsible for the collection of an interim levy on wool and its expenditure for industry-good purposes after consultation with SheepCo or a successor body established to undertake wool industry-good activities. The restructuring plan will specify that portions of the board’s assets will be allocated to merino growers through Merino Grower Investments Ltd and to another company Wool Equities Ltd for growers of non-merino sheep. 
The bill contains provisions concerning the constitutions of the two grower companies Wool Equities Ltd and Merino Grower Investments Ltd. Those provisions relate to restrictions on share trading during the first 2 years which were agreed to by growers in the May 2002 referendum and to voting rights which will provide added security for grower assets. The bill provides for a grower’s share entitlement to be based on either the average number of sheep the grower has farmed as at 30 June 2000 2001 or 2002 taken over the years that the grower had sheep or the number farmed at 30 June 2002 whichever is the greater. That ensures that growers who have progressively increased their sheep numbers over the 3 years are not disadvantaged compared with those who have recently entered the industry. 
The Government will be introducing a Supplementary Order Paper to make minor technical amendments to two clauses. The Supplementary Order Paper will amend clauses 20B(2)b and 20C(2)b. Those clauses deal with the allocation of shares to growers and the changes will ensure that such allocations are fairly made to growers who have both merino and non-merino sheep. Growers of sheep other than merino sheep will have the opportunity to cash in their redeemable preference shares or to convert them to ordinary shares in Wool Equities Ltd. Because Merino Grower Investments Ltd considers it has sufficient capital the disestablishment company will redeem the redeemable preference shares and merino growers will be paid the appropriate amounts. 
The Minister of Agriculture must approve the restructuring plan including the plans for share allocation before its implementation can commence. The Wool Board’s preferred restructuring day is the first day of September 2003. That date if met would enable share allocations to be made to growers by the end of this year. To that end the board is working towards having its restructuring plan ready for submission to me later this month. Wool Equities Ltd and Merino Grower Investments Ltd are respectively aiming to have a prospectus and information memorandum ready to be distributed to growers with a notice of their entitlements shortly after the restructuring day. 
Minister Sutton and I would like to thank the members of the Primary Production Committee for their consideration of the bill and for the report tabled on 16 June 2003. I commend this bill to the House.