Senator HARRIS (1:06 PM) —I wish to comment on the Customs Tariff Amendment Bill (No. 2) 2003 and the Excise Tariff Amendment Bill (No. 1) 2003. I indicate to you, Madam Acting Deputy President, that I will be seeking some rulings from you on some issues relating to the second reading amendment moved by Senator O'Brien. I would like, firstly, to speak directly to paragraph (1) of that amendment, particularly the words `after the government fully complies with the order for the production of documents'. My question is: what standing order covers the production of those documents?

The ACTING DEPUTY PRESIDENT (Senator Knowles)—It is standing order 164.

Senator HARRIS —My second question is: who determines that the government has fully complied with the orders for the production of documents? We now know that the request is made under standing order 164, but my question is: who then decides when that has been complied with?

The ACTING DEPUTY PRESIDENT — That is ultimately a decision for the Senate. It always has been.

Senator HARRIS —Again, a question to you, Madam Acting Deputy President: how is that decision to be made? According to the way this first paragraph is framed, this legislation cannot come back until that decision has been made. So, if it is a decision of the Senate, how do we arrive at that decision?

The ACTING DEPUTY PRESIDENT — Senator Harris, that has always been a judgment for the individual senators and it has been a judgment that has been exercised, of course, by the mover of the motion, generally, as to whether they are satisfied with the documents that have been presented to the Senate.

Senator HARRIS —Thank you. So there we have one of the real problems—the conundrums—of how this amendment has been framed. We know the standing order under which the request for the documents has been made, but there is no very clear-cut indication to me, if I should support this motion, of when this legislation will come back on if it is at the behest of the person who moved the original motion. The second section on which I would like some clarification, Madam Acting Deputy President, is paragraph (2), which says:

Under what standing order can that be granted?

The ACTING DEPUTY PRESIDENT — That is just the order of the Senate, Senator. If the Senate agrees to that, that is the way it is and it always has been.

Senator HARRIS —Thank you for clarifying that for me, Madam Acting Deputy President. So we have the situation that there is no standing order to cover this issue, but if this second reading amendment is successful that will be the authority for each of the speakers who have already spoken to speak again. So we have a second reading amendment that is actually creating precedents.

Senator O'Brien —No it is not. It has been done before, in 1995.

Senator HARRIS —I acknowledge Senator O'Brien's interjection in order to speak to it: clearly, it is.

The ACTING DEPUTY PRESIDENT — Senator, can I clarify what I said before, and that is that the Senate standing orders have the same status as an order of the Senate that is made at any time. We are not trying to create a precedent; what I am trying to say is that those positions have been in place for a long time.

Senator HARRIS —Thank you, Madam Acting Deputy President. Let me now speak to the actual second reading amendment. I realise that Senator O'Brien has spoken to the bills, so this may make it a little difficult to get an answer other than as an interjection, but the first issue I want to raise is: would Senator O'Brien commit a future Labor government to making public the notations that are made by a departmental person when they are in a private meeting with a future Labor Prime Minister of this country? If the Labor Party is not willing to commit to doing that, then this motion is a complete hypocrisy. One ought not ask of the present government something that one would not be willing to do oneself if one were the government. That goes to the total basis of this second reading amendment. We are exposing our public servants, who are working for us, to the possibility that they may be required to do that. I do not believe that that is in the best interests of the function of either this chamber or the House of Representatives. I hear what you say and I accept your rulings, Madam Acting Deputy President. I will rephrase what I said earlier in relation to making a precedent. No, this is not a precedent, but it is bringing forward very publicly a process under which bills could be held up— and this bill is particularly important. One Nation wants to place very clearly on the record that One Nation does support both of these pieces of legislation.

I will now commence my comments on the bill itself. It is very interesting to note that we have a lot of speculation about the possible damage that can be caused to motor vehicles with the introduction of ethanol. I think we need a history lesson. If we go back to when Henry Ford originally designed and built the model T Ford, it was designed to run on 100 per cent ethanol. Yes, we have had changes in technology, but if the original model T Ford had the capacity to run all those years on 100 per cent ethanol, to put it in very plain English, it makes it a little difficult to swallow the issue that is being bandied about that ethanol is bad for engines. As I said earlier, One Nation supports the development of an Australian fuel ethanol industry. I believe it is important to support the industry and One Nation also supports the mandating of ethanol content at a minimum of 10 per cent. Such a move would create 90,000 jobs and the vast majority of those would be created in regional Australia.

Most of our ethanol in Australia today is a by-product of the grains industry. It is part of the value-adding process of wheat. Ethanol is also produced from molasses for the chemical industry. Queensland cane growers currently receive no benefit from existing ethanol plants. However, there is a great potential for ethanol production to become an additional source of income for cane growers in the long term. Fuel ethanol cannot solve all of the problems of the sugar industry, but all the options must be considered. One Nation believes that the sugar industry needs to diversify its product range so that it is no longer totally dependent on the vagaries of a distorted world sugar price. The industry needs funding for the establishment of an ethanol industry and the development of biodegradable plastics, high-grade proteins and pharmaceuticals. Support from the federal government would be useful, as would mandating the use of ethanol. This would breathe new life into many regional sugar and grain based communities. As well as providing economic benefit for rural Queensland, ethanol will reduce our dependence upon petroleum products.

Australia's reserves of crude oil are considered to be low, with the reserves to production ratio estimated at below 10 years. This indicates that Australia's resource of crude oil will run down in the not-too-distant future. Many top academics and petroleum geologists are pointing to the fact that the world has reached the peak of oil production and our reserves are now slowly dwindling. The transition to other fuels is timely and a necessary step, but it is not necessary that the multinational oil companies should be in control of that transition. The transition to alternative fuels should be viewed as an opportunity for Australian owned businesses and Australian products to benefit.

I now comment on the bill. Let me summarise the current situation relating to the excise tariffs on ethanol. Firstly, the government intends to impose an excise on ethanol at the same rate imposed on unleaded petrol, taxing it at 38.143c per litre. At the same time, the government intends to introduce a production subsidy of 38.143c per litre for ethanol to offset that excise. Finally, the government intends to impose a duty on ethanol imports at 38.143c per litre. All of this will have the effect of protecting the domestic ethanol industry from imports. Let me reiterate: this will help our domestic ethanol industry by putting a tax on imported ethanol so that it is more expensive than the locally produced product. The situation raises some very important questions. The proposed subsidy is creating a protection regime. This must surely be at loggerheads with both the Liberal-National government stance on free trade and Labor's position. At APEC, via the Cairns Group and the WTO on a broader level, the Liberal-National and Labor parties have strongly supported the removal of protections—liberalisation for Australian industry and agriculture. We have only to look at our farming, textiles, clothing and footwear sectors to see the awful impact of that liberalisation. Letting industry compete in the global market places it without any protection. That is usually the death knoll of any industry. That is the reason our farmers are working away from their land. It is the reason our industries are moving to the Third World, where companies can access sweatshop labour.

But here we have a bill to protect domestic industry—a bill that demonstrates that the government is capable of protecting an industry. The bill indicates that we do not have to kowtow to the WTO's trade liberalisation agenda. Through you, Madam Deputy President, I ask the minister how she is going to explain to the struggling farmers in Queensland that the government can introduce a bill to protect domestic production of ethanol but is not willing to provide protection for other industries, such as the sugar and dairy industries.

In Australia it is said that the ethanol industry could be of great assistance to our cane farmers, who are facing stiff competition from Brazil's sugar. Our cane farmers are paying First World costs and receiving Third World prices. Just to explain that, cane farmers in Australia pay current First World prices for all their fertilisers, chemicals, water and, more importantly, for their labour— the people they employ. Our sugar industry is being asked to pay all of those relative costs here in Australia but only receive the same payment for its sugar that a person in Brazil, or any other country, would pay in relation to their costs.

The government has argued that Australia must show the way for other countries in the global market, so it has removed tariffs for the sugar industry; yet here is ethanol production being subsidised and promoted as a diversification option for farmers. Quite clearly, ethanol has become a political football. You have to wonder whether the concern for ethanol is more a matter of meeting Australia's Agenda 21 commitments than a matter of getting the industry going in the long term. You have to wonder, given that the budget proposal mooted this year would result in the withdrawal of assistance for the ethanol industry by 2008. In other words, the industry would be left out in the cold after that date.

If our sugar producers in Queensland are to participate in a developed ethanol market, any revenue from ethanol production must actually flow through to the farmers. The returns need to go to mills that are cooperatively owned by farmers, not by corporations like Bundaberg Sugar or Tate and Lyle. In cooperative mills, the benefits that go to the mill from production from the by-products ultimately do assist the cane farmers. Where a corporate entity owns the mills, once sugar reaches the mill and goes through the first crushing process the ownership transfers to the corporate entity, and any benefits from that point on go to the corporation, not the farmers.

When the government look at any subsidies that are going to flow from this into the ethanol industry, it is absolutely critical they see that any assistance goes to cooperative mills to get the benefit back through to the farmers. I realise that state legislation affects that, and it would be necessary to address the issue through the Queensland Sugar Act. Resolving the issue would not be difficult or impossible, given the propensity of the federal and state governments to operate together on important issues through COAG.

Let me give a brief snapshot of the ethanol industry in Australia at present. The bulk of ethanol is produced on the east coast and sold in New South Wales through independent outlets. These outlets are in the main supplied by the Manildra Group, which manufactures ethanol from wheat waste in Nowra, New South Wales. The major oil companies are assessing the manufacture and supply of fuel ethanol, and BP is marketing a 10 per cent by volume ethanol blend fuel in south-east Queensland.

The use of ethanol in Australia at present is small. The total output is around 135 million litres, of which around 50 million litres is being used in fuel blending. A study by the Australian Bureau of Agricultural and Resource Economics estimates that if fuel ethanol were to capture 10 per cent of the petrol market by 2010 the annual loss to government revenue in the form of zero excise would be about $688 million. So here we see the reason for the proposed reintroduction of the excise, the production subsidy and the import duty and the reason why the subsidy will end in 2008. The government is having a bet both ways. If the price of petrol increases due to scarcity, ethanol may well be produced more cheaply than petrol, or at least on a par with it, and the government will win by obtaining excise. If the cost of producing petroleum continues to be less than the cost of producing ethanol, the subsidy can be removed, and the industry could quite quietly collapse.

In conclusion, the day of ethanol is dawning globally. The establishment of viable ethanol plants based on renewable products such as sugar cane has the potential to make a vital contribution to regional development and reduce Australia's dependency on costly oil imports. I place on record that One Nation will support both the government bills and vote against the second reading amendment moved by Senator O'Brien.