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Thursday, 13 March 2008
Page: 1777

Mr TRUSS (Leader of the Nationals) (4:24 PM) —Today we have seen another abuse of the ministerial statements process. We listened to ministers give long and, in many instances today, interesting ministerial statements during question time. But now, when it comes to the actual time for ministerial statements, we have a comment by the Minister for Agriculture, Fisheries and Forestry which contains nothing new. It is the kind of speech that should have been made at the time of second reading or, alternatively, in one of his partisan press releases. Ministerial statements are supposed to be considered contributions to matters of substance, and they should be factual. Unfortunately, this statement failed on both counts.

The minister acknowledges that he does not know much about farming, and I give him credit for making that acknowledgement. But, unfortunately, it seems he knows so little about it that he is not even aware that the text prepared for him contains fundamental factual flaws. I hope he will take the time between now and when the bill comes into the parliament to better understand the industry and to make sure that the legislation he is proposing to introduce into parliament will in fact be in the interests of Australian wheat growers and the nation as a whole and not just following some dodgy ideological cause.

Can I go through some of the statements made by the minister and point out their flaws. Early in his statement he said:

The arrangement put in place in 1999 by the previous government—the granting of a legislative monopoly to a private corporation, AWB Ltd—was always destined to fail ...

He then went on to comment about some members of the former government who had some reservations about the arrangements. I had some myself. However, what he failed to acknowledge was that Labor voted for the bill. So, if it was destined to fail, why in fact was it supported by Labor at that time? There is a clear demonstration of inconsistency here by the minister and his party.

Then he went on to make the comment that AWB Ltd did not live up to its obligations as the manager of the single desk. Of course that is true. All growers are very disappointed about the revelations about the organisation’s work in Iraq. The behaviour of certain of its staff in relation to those sales is unacceptable. It also, however, has to be acknowledged that the AWB was recognised around the world as a very effective sales organisation. It competed against, and made sales of Australian wheat against, the subsidised suppliers from countries around the world. It was also very effective in being able to put Australian wheat into the marketplace, even against the corruption that was occurring in the market and the badmouthing of Australian wheat, particularly by certain US suppliers. It has been successful in a whole range of its activities, and that also needs to be acknowledged. Let me say that it was acknowledged by the minister’s predecessors: Labor’s spokesman on agriculture, Gavan O’Connor, frequently lauded the achievements of the AWB, and Senator O’Brien frequently spoke about the achievements of the AWB and chided the government for daring to in any way interfere with its activities. So the reality is that Labor was a public supporter of the AWB during all of its period as a manager of the single desk.

The minister then went on to question whether or not the AWB had actually, through the single desk, extracted on the world market a price premium that was passed on to growers. Unfortunately, he has been listening to a few too many Treasury commentators. I have listened to them as well. Let me tell him that not one of them grows any wheat, and they have not got a clue. The reality is that every review that was conducted into the single desk found that there were benefits to wheat growers from the operation of the single desk. There were differences in the range of how much the benefit would be, and those ranges went from $4 or $5 to as high as $70 in one case. I think both of the extremities are discountable. But every single review found that there were advantages to Australian wheat growers from the operation of the single desk.

You do not just have to rely on me to make that comment. In fact, I would like to refer to an authority that might be near to the heart of the Minister for Agriculture, Fisheries and Forestry, and that is a man called Kevin Rudd. Kevin Rudd wrote to many farmers within the last 12 months as Leader of the Opposition, and he said:

A study by Econtech of the premium attributed to the single desk indicates that on the benchmark of Australian premium white grade of wheat, the single desk captures a premium of between $15 and $30 a tonne. The total annual value to Australian growers of this premium on Australian premium white is $80 million. On all grades the average premium attributed to the single desk is $13 a tonne and the total annual value of the premium on all grades—

Debate interrupted; adjournment proposed and negatived.

Mr TRUSS —I will conclude that quote from the now Prime Minister:

On all grades the average premium attributed to the single desk is $13 a tonne and the total annual value of the premium on all grades is $200 million.

Kevin Rudd said when he was Leader of the Opposition that this single desk was delivering premiums to Australian wheat growers. Frankly, he was quoting the expert research and the economic analysis. What he was saying was right then and it is right today. Therefore what the minister said in his statement is a complete reversal of Labor’s view on this issue over many years and in fact clearly does not recognise the work and the studies that have been done in relation to this issue.

Let us move on to his example of how the single desk was detracting from growers’ returns, the wheat commission estimate that growers were $14 million worse off because of the absence of competition in shipping. The single desk does not do the shipping. The single desk has nothing to do with the shipping. It is true that a lack of competition in shipping may make it a little less competitive. It is also true that the lack of competition in handling may make it a little less competitive, and that is in fact the issue that was being raised in these reports: the lack of competition at the handling level was raising farmers’ costs. But the reforms that the government is proposing to make through its legislation will do nothing to address any of those issues; in fact it will make them worse because we will have the monopoly state handling authorities referred to by the minister in his comments actually marketing as well as handling. It is hard to believe how you could put a regulatory system in place which will give a fair go to those organisations that do not own the handling system, that do not control the stocks, that do not understand the issues that are involved. You are relying on an ACCC that actually approved the amalgamation of the east coast handling authorities. If that is their view of competition reform, one wonders how they could manage this issue.

Then we go on to the need for legislative change, and the minister made the point that it is important for farmers to have a probity test. This minister’s first attempt at a probity test was to grant a permit for 300,000 tonnes of Australian wheat to Iraq to a company called Glencorp. Glencorp had to pay restitution to the United Nations for corruptly abusing the oil for food program. This is a company that abused the oil for food program. It was named by the CIA as having paid bribes to the Saddam Hussein regime. It has frequently been accused of breaking UN sanctions in relation to oil supplies. This is the company that this minister gave a permit to.

Mr Burke interjecting

Mr TRUSS —Of course you should have refused the permit. If you believe in probity, you have set the test exceptionally low. You gave your very first permit—and the only substantial one—to a company that has been guilty of frequent corruption. So that clearly demonstrates that when it comes to probity the Labor Party cannot be counted on for any kind of standard— ask the people of Wollongong if you have got any doubt.

Then we move on to the minister’s statements later in relation to the bodies that allegedly support his legislation. It is true that a number of farmers are resigned to the fact that their long-loved single desk is to be abolished by this government. That does not mean they are pleased about it; they are angry about it across the country. But they know that this power-hungry government is determined to implement this legislation—not because the minister believes that it is good but because he inherited it as an election promise by his dud predecessor. His predecessor as spokesman for agriculture was such a failure that he was relegated to the back bench and the current minister was put into this position, so he inherited the policy. He has never been able to make any kind of independent determination, and he has admitted as much to the grower groups that have come to see him. He said to them, to discount their concerns: ‘This is the policy. You’re stuck with it.’ The minister may not think it is any good—although I acknowledge he did not say that—but, whether or not he thinks it is any good, this is the policy and everyone is stuck with it.

Perhaps he should also have tabled the statement from WEMA the other day. This is the Wheat Export Marketing Alliance, the body that was set up to put in place new arrangements to market wheat in Australia. It met with Minister Burke in Canberra on 4 March. It took him until just eight or 10 days ago to meet the body charged with setting up the new infrastructure for the wheat industry. It took him to just 10 days ago to even meet it. The NFF and a whole stack of other organisations have found this same locked door when it comes to access to this minister, but here he is dealing with important wheat legislation, about to distribute a draft bill, and he did not even bother to consult in advance with the very organisation that has spent months trying to put together an alternative to the current arrangements. Let me quote one paragraph from this statement:

Unfortunately the Minister and his advisers merely confirmed our long held view that the Government had sold out to the big end of town in a well scripted plan that will see many small to medium sized wheat producers put under enormous financial pressure.

So much for the Labor cliche of looking after working families.

And that reflects the tone of the press statement. So the reality is that wheat growers are not happy with the proposals being put forward by the minister. The Prime Minister acknowledged as much yesterday. He said that he knows that there will be some wheat growers against it. Let me say to you: virtually all wheat growers are against the legislation that you are putting forward. It is true that some would favour total deregulation; others want a return to the old arrangements. But there are few who consider that the arrangements being put in place by this government are an appropriate response to the issues facing the wheat industry in the years ahead.

I welcome the fact that the minister has granted a couple of extra weeks for the Senate inquiry, and I thank him for that response because there are a lot of issues to be raised. I want this Senate committee and the minister to consider a number of very serious issues before he brings the legislation to parliament. How will the new legislation ensure that returns to growers are maximised in every season? How will the premiums for quality Australian wheat be preserved and returned to growers? Have we, in fact, traded off these premiums to overseas multinational grain traders and taken them away from Australian farmers? How will Australian wheat stocks be managed and moved on time to port when there are many buyers and many exporters? How will the profits from blending be distributed? How will the industry-good functions, formerly required of the single-desk manager, be continued? How will the multitude of licensed exporters be able to compete effectively against subsidised US and EU growers, especially to single-desk buyers?

Bear in mind that most of the buyers around the world are single-desk buyers. We will have multiple sellers, many of them foreign owned, selling Australian wheat to single-desk buyers. How do you expect to retain the premiums for Australian wheat in those sorts of circumstances? Who will be the buyer of last resort? Who will fund the crop carryovers that occur every year? Around a third of the crop is generally carried over. Who is going to fund that? Which growers are going to be held responsible? How can Australia, in the absence of a national pool, sign long-term contracts that can be honoured and maintained? Are we going to throw away our best markets because we have become an unreliable supplier? Are the new arrangements compliant with Australia’s WTO and FTA negotiations?

These are critical issues. They all need to be addressed and, frankly, they have not yet been addressed by the government. They are not covered adequately in this statement or in any of the comments that have been made before. I want the premiums for growing quality Australian wheat to go to Australian farmers and the Australian economy; I do not want them distributed to multinational grain buyers around the world. (Time expired)