Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) (10:00 AM) —I move:

The Wheat Marketing Amendment Bill forms part of the arrangements to provide a funding mechanism for the wheat industry to meet the operational costs of the Wheat Export Authority (WEA). In order to raise the main stream revenue for the continued operation of the WEA it is proposed that a charge will be applied to all exports of wheat, commencing during the first half of next year. This would be implemented through regulations under the Primary Industries (Customs) Charges Act 1999.

The bill's main purpose is to provide for the appropriation to the WEA of moneys paid to the Commonwealth as the wheat export charge amounts.

With the privatisation of wheat marketing and financing arrangements in 1999 through the grower controlled company AWB Ltd, the regulatory and monitoring activities associated with the single desk for export wheat were passed to the WEA, which operates under the Wheat Marketing Act 1989. AWB (International) Ltd (AWBI), the wholly owned subsidiary of AWB Ltd responsible for maximising net returns to growers through export sales and pooling, was granted the single desk export right for wheat which had been held by the former Australian Wheat Board.

The government has repeatedly confirmed its support for the wheat single desk while ever there is a benefit to Australian wheat growers and the nation's export performance. At the same time it is recognised that there needs to be flexibility to allow other exporters to take advantage of market opportunities. This is an important function of the WEA through its consent system, which allows for both long-term (12 month) and short-term (three month) consents. These principles as they apply to this function of the WEA will be spelt out in the Wheat Marketing Act 1989 through an amendment included in the current bill.

The other key functions of the WEA are monitoring AWBI's export performance, reporting on the benefits to growers and conducting a review before 2004 of AWBI's use of its export rights. The opportunity has been taken with this bill to make a number of minor amendments to the Wheat Marketing Act 1989 to improve the operational efficiency of the WEA and to strengthen its powers to monitor compliance by exporters.

It is appropriate that the wheat industry rather than the government should fund the WEA since wheat growers are the main beneficiaries of the WEA and the single desk. Although the government receives a monitoring report each year from the WEA on AWBI's performance, it is growers and the industry which receive the potential benefits from that performance. A separate report is made available annually by the WEA to all growers so that they can make an assessment of the value of the management of the single desk to their interests.

Industry funding is consistent with the situation prior to 1999, when growers paid for the regulatory aspects of the single desk through pool administration costs. Similarly, the $6 million interim `seed funding' for the WEA came essentially from grower money held in reserves of the former Australian Wheat Board. This initial resource is expected to be fully utilised by WEA around the end of its 2002-03 financial year, which is why a new, ongoing funding arrangement is required if the WEA is to continue to undertake its statutory functions.

An export charge on wheat, combined with the introduction of application fees for consents through separate regulations not related to this bill, provides an equitable and simple means to ensure that those who benefit from the services of the WEA will meet its costs. To the extent that the charge is deducted from pool returns by AWBI, or from grower sales to exporters, only those growers who produce wheat for export, rather than those servicing the domestic market, will be funding the WEA. Consideration will be given to allowing growers some say in recommending an appropriate level of charge to meet the reasonable budget requirements of the WEA.

The Wheat Marketing Act 1989 already provides for the introduction by regulation of an application fee for consents. It is intended to activate these provisions from next year, even if the fee is only for a token amount. This will ensure that the WEA's costs related to processing consent applications will be recovered, at least partly, from those who directly benefit from the availability of export consents. A fee will also discourage non-genuine applications which could disrupt the WEA's administration and raise its costs unnecessarily.

The WEA's monitoring role and annual report to growers are important means to ensure the management of the single desk delivers the potential benefits available. These findings will feed into the 2004 review, which the WEA is required to conduct under the wheat legislation. That review will examine AWBI's use of its single desk rights and not the existence of the single desk itself. It will provide a basis for growers to decide whether or not the current arrangements should remain or be modified. If need be, they can bring forward a case for the government's consideration.

This bill, when combined with proposed export charge and consent application fee regulations, reflects the government's commitment to the future of the wheat industry and the single desk. It provides the means to secure the ongoing funding of the WEA. The wheat industry has a significant influence on the wellbeing of regional Australia as well as being a major contributor to Australia's export earnings. The 2004 review by the WEA of AWBI's use of its export rights will provide the opportunity for a rigorous assessment so that grower and community interests will continue to benefit from the arrangements.

I present the explanatory memorandum to the bill.

Debate (on motion by Mr Zahra) adjourned.