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Thursday, 27 March 2003
Page: 13790


Mr HAASE (1:08 PM) —I rise today to address the Wheat Marketing Amendment Bill 2002. I have some disappointments, I confess, with the bill because in my opinion it raises many more questions than are, at this stage, satisfactorily answered. The bill's main purpose is to provide funding to meet the operational costs of the Wheat Export Authority by the wheat industry. The authority was designed to regulate and monitor the activities of AWB International Ltd, the wholly owned subsidiary of the AWB Ltd that was granted the single desk for export wheat. AWB International Ltd operates under the Wheat Marketing Act 1989 and is responsible for maximising net returns to growers through export sales and pooling. The Wheat Export Authority was established in July 1999 after the transfer of the government's wheat marketing and selling role to the grower owned company, the Australian Wheat Board Ltd.

One of the key issues of concern for the Australian wheat industry is the independence of the Wheat Export Authority. There is a general feeling that, in its current state, the Wheat Export Authority is not doing its job. The Wheat Export Authority is expected to carry out two functions: firstly, to control the export of wheat from Australia; and, secondly, to monitor the performance of AWB International Ltd in relation to the export of wheat and to examine and report on the benefits to growers resulting from that performance. In performing its functions, the Wheat Export Authority is required to work closely with AWB International Ltd. At issue is the perception of insufficient autonomy in the relationship between the parties, resulting in problems with transparency and accountability. At this juncture, I would point out the fact that the general consensus across my very extensive wheat producing area is that the Wheat Export Authority, at this stage, is not performing satisfactorily and, therefore, the question of how it ought to be funded is perhaps secondary to whether it should be funded or not. That is an alarming consideration, given that we are moving for the passage of this bill. At issue, as I said, is the perception of insufficient autonomy.

Subsection 57(1) of the act provides that a person shall be prohibited to export wheat unless the Wheat Export Authority has given its written consent. But, under subsection 57(1)(a) of the act, this does not apply to the AWB International Ltd. Subsection 57(3)(a) requires that the Wheat Export Authority consult with AWB International Ltd before issuing consent for bagged and container wheat exports, and must obtain approval from AWB International Ltd before issuing approvals for bulk wheat exports. This places significant limitations on the Wheat Export Authority's power to execute its responsibilities. The power of veto that AWB International Ltd has over the export of any of wheat outside its own export pools may potentially influence the Wheat Export Authority and its decision to issue consent.

It is also impossible for the Wheat Export Authority to monitor AWB International Ltd's performance, when it relies on AWB International Ltd to provide the data required. The system of the Wheat Export Authority granting export consents, case-by-case, can bring delays and, as such, impede the development of small markets of wheat outside the bulk market maintained by AWB International Ltd. As these exports are usually niche markets developed mostly by grower-owned and operated business, there is the potential for the loss of business and resultant export income for these companies. The government has continued in its support of a wheat single desk and will maintain this backing whilst there is a benefit to the Australian wheat growers and the nation's export performance.

There must also be some form of flexibility in the consent system for the export of wheat in containers and bags so that the small exporter can capture the niche markets. The Wheat Export Authority must broaden its monitoring and reporting performance of AWB International Ltd. They must broaden their reporting because it is imperative that in 2004 the WEA hand down a report on the single desk and its operation and efficiency, and on its benefits to growers. Therefore, we have this conundrum: we have to fund the Wheat Export Authority to do the job and hand down a vital report in 2004; and we have this niggling concern that they are not doing their job satisfactorily. We also have this urgent consideration as to how to fund them. As I have already said, we want to have a situation that is both transparent and above board.

This amendment bill is to provide for alternative funding of the Wheat Export Authority. I consider it is appropriate that the wheat industry should fund the regulatory body as the wheat growers are the main beneficiaries of the Wheat Export Authority and the single desk. I do not agree that taxpayers meet some of the authority's costs. I do agree that we ought to be charging for export licence applications. The argument that the government should contribute to the funding of the service, as a key role of the Wheat Export Authority is to inform the minister in detailed quarterly reports about the performance of AWB International Ltd, does not constitute the Commonwealth as being a user.

The former Australian Wheat Board directly controlled the single desk, and growers paid for the regulatory aspects out of pool administration costs. The Wheat Export Authority has been funded by a $6 million grant that essentially came from grower money held in reserves from the former Australian Wheat Board. If the former Australian Wheat Board could be self-funded, there is no reason why the Wheat Export Authority cannot be self-funded by the growers. The proposition that only exporters should fund the Wheat Export Authority should be dismissed. All wheat producers should fund the Wheat Export Authority, not only the exporters.

The reason I make much of that statement is that in my state of Western Australia 95 per cent of the wheat grown is exported. It is also the case that in South Australia a very high proportion of the wheat grown is exported. In fact, it is fair to say that South Australia and Western Australia collectively produce the wheat exported from Australia. It is not the case generally that wheat produced on the eastern seaboard is for the export market. It would be unfair, however, to simply say that the exporters of wheat should fund the Wheat Export Authority, because there is a direct nexus between the overseas price for exported wheat and the domestic market price for wheat. There is that direct nexus, and I do not believe anyone would argue that point.

It therefore seems absolutely logical that all producers ought to carry some responsibility for the cost of supporting the Wheat Export Authority, given that part of the authority's role is to maximise returns to growers. If they are doing their job and maximising the overseas price for Australian wheat, and that is tied to the domestic market price of wheat, it follows that all producers enjoy the activities of the Wheat Export Authority and therefore should contribute, on the basis of their production, to the financial support of the WEA. The sellers will always chase the best price, and the fluctuations of the domestic market and export market prices are directly relative. If all the wheat growers in Australia contribute towards the funding of the Wheat Export Authority in the form of a fee per tonne of production, the shared cost across the industry would be demonstrably significantly less. I can recommend this bill to the House as long as it finally reflects a situation that places that cost of support for the WEA across the broad range of wheat producers in Australia.

I thank the member for Braddon for his significant contributions to this debate in outlining the detail of the legislation. I do, however, feel that he fell down on the significance of the Tasmanian wheat product: we could put the Tasmanian wheat production into a very small part of the Western Australia production. We are proud of being wheat producers in Western Australia and I am very proud to have a very large number of those producers in my vast electorate.

I look forward to the result of the Senate committee's deliberations, which will have a great bearing on the final passage of the bill. But it cannot be overlooked that all wheat producers must contribute to supporting the Wheat Export Authority. The authority need to be more independent and to prove to growers that they are more independent. The fact that is there is suspicion that they are not independent is enough to call for changes to be made eventually that will indicate that they are truly independent. Whether they are going to continue to do their job will depend upon the significance of their report in 2004, and the existence in the long term of the single desk will depend on the appropriateness and thoroughness of that report by the Wheat Export Authority. Even though I accept that there are many more questions to be answered, generally I applaud the passage of this legislation because I recognise in practical terms that we have to give teeth to the Wheat Export Authority so they can do their job, because their job will determine the destiny of the single wheat export desk in this country.