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Tuesday, 12 November 2002
Page: 6079

Senator LUDWIG (2:34 PM) —My question is to Senator Minchin, the Minister for Finance and Administration. Does the minister stand by his guarantee that all funds from the proposed 3c a kilogram tax on sugar will go directly to producers? Can the minister confirm that the administration costs of this new tax over its five-year life will be of the order of $4 million and the cost of servicing the consultative structure the government proposes will be in the order of $10 million? If the government's latest tax impost is adopted, will these administration costs be met from consolidated revenue?

Senator MINCHIN (Minister for Finance and Administration) —The government is very proud of its package of support for the Australian sugar industry. Unlike the Labor Party, we are concerned to ensure support for industries like sugar that are in stress. This stress is imposed by corruption in world markets—corruption in the sense of the extraordinary subsidies which are provided to world players in the sugar market, most particularly Brazil, of course, which is a major producer. This means that it is very difficult for Australian sugar producers to compete on world markets, despite their levels of efficiency and the low prices which Australians enjoy in relation to sugar products. We put a very comprehensive package in place. We have noted that it is a package that follows a previous endeavour to assist sugar producers. It is generous. I think it is $120 million on the part of the Commonwealth over several years. It is matched by $30 million from the Beattie Labor government, which of course strongly supports this package. The Beattie Labor government has joined with us in supporting this package.

Senator Ian Macdonald —Including the levy.

Senator MINCHIN —The Beattie Labor government, as my colleague Senator Macdonald notes, strongly supports the levy which we are using to ensure that this package can be funded. We are different from the Labor Party: we actually think that you should run the economy and the budget in a fiscally responsible fashion and that, when packages of this kind are required to ensure the health of industries like sugar, you do not just fiddle the till like Labor always used to do and keep adding these things to the bottom line and end up leaving this government with a $10 billion annual deficit. We are going to fund this package out of this special levy. We have put a lot of work into ensuring that this levy will apply at 3c per kilo of sugar.

I am very pleased with the way the community has accepted this very small impost to aid our brothers and sisters in the Australian sugar industry and to ensure that they can, with dignity, be allowed to restructure their industry or to phase out of that industry if that is their choice. We have no shame whatsoever in standing up to proclaim the virtues of this great package, to proclaim the virtues that will ensure that it is funded responsibly out of this levy, set at only 3c— with a specific time period on it—which will match the cost of the scheme. We have funded the scheme at $120 million all up. The programs that we have put in place are for the benefit of farmers. The levy is set at a figure to cover, as I understand it, the costs of the benefits to sugar farmers. We have no qualms about the wisdom of this, and we look forward to a much improved and reformed sugar industry as a result of this very good package, which is, as I said, fully supported in every respect by the Beattie Labor government.

Senator LUDWIG —Mr President, I ask a supplementary question. The minister failed to answer the question that I asked: can the minister confirm that this sugar tax administration cost will be met from consolidated revenue? Can he confirm that the projected budget surplus for this financial year is $2.1 billion? If this figure is accurate, why has the government chosen to impose a new tax that will disadvantage the food manufacturing sector to fund modest assistance for the sugar industry?

Senator MINCHIN (Minister for Finance and Administration) —Yes, the surplus for this year is forecast to be $2.1 billion. But, of course, the surplus is threatened by your utterly irresponsible actions in this chamber of blocking very significant budget moves, blocking our attempts to reform the Pharmaceutical Benefits Scheme, blocking our reforms to the disability support pension and blocking our attempts to ensure decent responsible budgeting for this country. You should be ashamed of yourselves.