A model is developed to analyze the effects of income tax policy on the optimal timing of replacement for farm machinery. The impact of some forms of tax investment incentives on optimal replacement age was found to be substantial, while the influence of different tax depreciation methods is minimal.

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In July 1993 the Wool Industry Review (Garnaut) Committee presented its recommendations on disposal of the wool stockpile, on wool marketing, and on organizational arrangements in the wool industry. This paper focuses on the Report's treatment of two issues central to the future economic benefits to Australia from wool: the approach to the industry's stockpile‐related debt, and disposal of the stockpile. There are strong grounds for thinking that the Garnaut Committee's recommendations on these issues– accepted by the government–are contrary to the best interests of the wool industry and Australia.