Senator STEPHENS (3:20 PM) —I too rise to take note of the answers to questions asked of Senator Minchin and Senator Coonan this afternoon in relation to the whole issue of ethanol funding. My concerns are twofold: firstly, the Prime Minister's direct interference in the debate and the decision making on providing the subsidy to the ethanol industry; and, secondly, the fact that his interference will do untold harm to the ethanol industry, which previously held significant hope for both Australian agriculture and the alternative biofuels industry.

I think it is important to place on the public record that Labor is intent upon—and definitely supportive of—having an alternative biofuels industry, but this is not the way to do it. The government's subsidy has certainly been criticised by other players—other than Manildra, that is, of course—notably CSR, which is the other main domestic producer of ethanol. Recently CSR's managing director, Mr Alec Brennan, was on the record as saying that the government's package provides no long-term certainty for the Australian industry at all, and CSR has indicated that it is unlikely to proceed with plans for another ethanol plant under the current regime.

The real problem that we have is that, despite all the claims of the government, ethanol may not deliver environmental benefits. Certainly, this proposal does nothing to help struggling sugar growers. It actually supports just one key player in the market, and that is Manildra. Ethanol is actually three times more expensive than ordinary petrol, and so the idea of being able to encourage people to take up ethanol as an alternative fuel is one that both Shell and Caltex have been warning about for some time. They both have said there are significant problems remaining that prevent ethanol being accepted by motorists. Last year we heard all of those complaints about the damage that ethanol was doing to motor vehicles.

Senator Minchin today was being a bit too clever by half in his response to the questions I asked him about the government's modelling of the ethanol based industry and the decisions of his department. He acknowledged, I think, that there were no benchmarks, no analysis done of the alternatives and no modelling taking place about this process and how this would actually deliver some benefits to the industry at all. This hardly passes the test of good public policy.

CSIRO, ABARE and the Bureau of Transport and Regional Economics are about to embark, or have just embarked, on an investigation of the environmental benefits of ethanol. It would seem very sensible to me that any decision on the precise nature of government support for ethanol production should sensibly await the outcome of that research. That to me would be the foundation of some good public policy for an important environmental industry that we want to promote and support. So rather than being so clever and evading and skirting around the whole issue of accountability by the Prime Minister, and the protection that has been afforded to the Prime Minister by Senator Coonan and Senator Minchin in this chamber today, we need to be very mindful that there are broad ramifications for the kind of interference that has taken place in this debate. We need to be very careful of the increasing power of executive government in making those decisions and overruling and overriding the important work of government departments to ensure that there is some transparency in the processes of decision making. These are the kinds of issues the Labor Party will be taking up at Senate estimates.

Question agreed to.