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Thursday, 14 August 2003
Page: 13683


Senator O'BRIEN (3:46 PM) —I move:

That the Senate condemns the Prime Minister (Mr Howard) for his ongoing pattern of deceit in relation to his dealings with the chair of the Manildra Group, Mr Dick Honan, prior to a Cabinet decision that delivers direct financial benefits to that company.

The Prime Minister has a well deserved reputation for dexterity with the truth. Sadly, the ethanol scandal is just the latest in a growing catalogue of incidents in which the Prime Minister has failed to tell the parliament and the Australian people the whole truth about his conduct. Once again, he has been caught red-handed and once again he has failed to take responsibility for his behaviour. It is the sort of thing that would not become a child, but it is the behaviour we have come to expect from the current Prime Minister.

A number of matters relevant to the Senate's consideration of this matter are beyond dispute. The first is that on 17, 18 and 19 September last year the Prime Minister told the other place that he did not meet with the Chairman of Manildra, Mr Dick Honan, prior to the government's announcement of its Manildra-friendly ethanol package on 12 September. We know, through the release of a meeting record obtained under freedom of information, that Mr Howard and Mr Honan did meet on 1 August last year. That was a meeting that obviously Mr Howard wanted to keep secret. It was only revealed when I obtained a small number of heavily censored documents from the Prime Minister's department under freedom of information.

The record of the meeting shows us that these two men—the Prime Minister and one of the coalition's biggest donors, Mr Honan—discussed just two matters. One topic of discussion was so sensitive that the Prime Minister's department has refused to disclose its nature. The second matter was the ethanol industry. What did that discussion include? According to the meeting record, the Prime Minister and Mr Honan discussed:

... the payment of a producer credit to ethanol producers to enable Australian ethanol producers to compete with the cheaper Brazilian product.

A production subsidy and industry protection are exactly what the Prime Minister delivered to Mr Honan and Manildra six weeks after that meeting took place. Over recent days the Prime Minister has run the argument that a reference to competition from cheaper Brazilian product did not mean they talked about Brazilian imports. We have heard some outrageous distortions of the truth from Mr Howard in the course of his prime ministership, but the suggestion that a reference to competition from Brazilian ethanol did not mean that the two of them talked about ethanol imports defies belief. How does cheaper Brazilian product become a competitive item if it is not imported into this country? One wonders where the Prime Minister's thinking was. The Prime Minister expects the Australian people to believe that he had a discussion with Mr Honan where, his own minute-taker records, they talked about competition from cheaper Brazilian product but somehow, he suggests, that does not imply the product had to be imported. It defies belief.

We also know that a week before Mr Honan met the Prime Minister his company told two of its customers, Trafigura and Neumann Petroleum, that Manildra could not supply them with ethanol. Mr Honan knew that if Trafigura and Neumann wanted to stay in the fuel ethanol business and could not get a supply from his near monopoly company they would have to go to CSR—which, as I understand it, also had no ethanol available for sale, CSR being the only other local producer of any note—or they would be forced to import ethanol from overseas. Obviously, ethanol from overseas was the only real alternative option. It was this knowledge that Mr Honan carried to his meeting with the Prime Minister and it was this knowledge that they both had when they discussed—and I will quote from the record of the meeting:

... the payment of a producer credit to ethanol producers to enable Australian ethanol producers to compete with the cheaper Brazilian product.

The second matter of relevance to this debate is the failure of the Prime Minister and other senior ministers to disclose full details of their involvement in this ethanol scandal. The first failure was the Prime Minister's failure to disclose his meeting with Mr Honan—the meeting that occurred six weeks before the government announced its Manildra-friendly ethanol policy. The second failure is the continuing failure of the Howard government to comply with a Senate order for the production of documents related to ethanol policy, that order falling due on 21 October last year. On 21 October the Manager of Government Business in the Senate, Senator Ian Campbell, told the Senate that the government would comply. He said:

I can indicate that the government intends to comply with the order as soon as possible and fully expects to be in a position to do so shortly.

That did not happen. On 12 December last year Senator Ian Campbell gave another commitment to the Senate. He said:

While consideration of the documents is close to conclusion, the government has not been able to provide its final response by the close of business for this, the final sitting day—which is something that I had certainly hoped to achieve since I had given an undertaking to the Senate. I have spoken to the minister tonight about it, and I have actually also spoken to Senator Kerry O'Brien and have given him an undertaking on behalf of the Minister for Industry, Tourism and Resources ...

He went on to say:

The minister is happy for me to commit to tabling those documents out of session by Tuesday. I am confident, dare I say—the Hansard might be quoted back to me next year!—that we will achieve that, and I have said that to Senator O'Brien privately and now on the record.

He was right. On 5 February this year, Senator Ian Campbell told the Senate:

Over the summer recess, the documents have been thoroughly gone through in regard to the normal protocols that apply to tabled documents responding to a Senate return to order.

Later, he went on to say:

The government is seeking to conclude its consideration of these documents and its compliance—albeit very late—to the order of the Senate. My latest advice is that the government will respond as soon as possible.

The government has not complied with the return of order. It has not complied with it many months after those statements by the Manager of Government Business in the Senate. He must be sorely embarrassed by it. But why has the government not complied? It is pretty clear—because it has plenty to hide. That is what we have been finding out by pursuing, through the freedom of information process, material which has now become public.

The third matter of relevance to this debate is the failure of the Howard government to release all documents pursuant to my freedom of information application lodged in January this year. Clearly, I was far from convinced that the government had an intention of complying with the orders of the Senate, notwithstanding the assurances of Senator Ian Campbell, he having been put in the position by ministers from the other place that he was promising compliance but being left with egg on his face when they failed to give him the documentation to allow him to do so. The Senate is familiar with the censored record of the meeting recording the details of the Prime Minister's discussion with Mr Honan on 1 August last year. I have received other documents relating to my request and most of the documents have a common characteristic—lots of blank paper.

The third key failure is the refusal to answer a series of questions that remain on the Notice Paper in relation to ethanol, including questions about the government's knowledge of the aborted importation of Brazilian ethanol by Manildra's competitors. If the Prime Minister and other members of the government had any interest in clearing up this matter, they would have done three things. Firstly, they would have released in full the meeting record of 1 August without censorship. Secondly, the government would have complied with the Senate order for the production of documents in full. Thirdly, the government would have answered my questions on notice about the actions of the Prime Minister and other senior ministers in preventing the importation of ethanol by two companies unable to get it any other way.

The final failure of the Prime Minister is his refusal to apologise to the parliament and the Australian people and to correct the misleading answers he gave to the parliament last year about this matter. Labor was unable to hold the Prime Minister to account in the other place because of the government's refusal to allow the Prime Minister's behaviour to be referred to the Privileges Committee. In my view, it was an abuse of the executive's power over the legislature—just one of a series of abuses of the parliament for which this Prime Minister and his government have been responsible. The pattern of deceit noted in the question before the Senate does matter. It matters because the government has taken a policy decision that has delivered to Manildra millions of dollars and will deliver to that company many millions of dollars more.

Manildra exercises a near monopoly position in the Australian fuel ethanol industry. In less than 10 months last year, the government gave Manildra $20,857,998 to do exactly the same thing it did the year before without the subsidy. The only other company to receive a subsidy was CSR. It received $845,182. With more than 96 per cent of the subsidy total paid to Manildra, it is indisputable that the company got a very good deal from the Prime Minister and his government. There are not too many other companies that would knock back import protection with production subsidies of more than $2 million per month.

It seems, however, that Mr Honan is not happy with the deal he has. In June he was threatening to close his Nowra plant because the 1 July regulation regime for ethanol blending was imminent and the government did not propose to agree to mandating ethanol in petrol. Regrettably, it seems that threat has come to pass—at least in respect to part of his operations. On 7 August a letter sent to Manildra staff at the Altona site in Victoria, under the heading `Partial closure of the Altona site', said this:

The Manildra Group has decided to partially close the Altona site. Legislative restrictions have recently been introduced limiting the amount of ethanol which is permitted in domestic fuel. This has had an adverse impact on our ability to sell ethanol, and as a result we are forced to reduce our ethanol production.

It is a matter of profound regret to me and to the Labor Party that, despite the protection regime that the government has put in place and despite the payment of tens of millions of dollars to Manildra, Mr Honan has decided to sack up to 50 members of his work force. If Mr Honan and the government had agreed to the imposition of a cap many months ago, the impact of the 1 July change to blending would not have had the impact it clearly has. It is very clear, of course, that the regime that has been imposed—that is, a limit of 10 per cent on the blending of ethanol—has been imposed at the behest of the motor vehicle industry, their representative organisations and the ACCC, which suggested that lack of a limit of ethanol in fuel may have amounted to a deception of purchasers of petrol.

I want to turn to another matter, and that is the matter of political donations. The return of $50,000 to Manildra by the ALP, consistent with the party's donations code of conduct—



Senator O'BRIEN —I understand that Senator Brandis would marvel at the idea of a political party having a code of conduct, as his obviously has none. The donations code of conduct has excited considerable interest. Much less interest has been paid to the Howard government's record as a recipient of donations from Manildra. According to AEC returns, the Liberal Party has received hundreds of thousands of dollars from Manildra over recent years—hundreds of thousands of dollars. Those donations include a single donation of $10,000 to the Prime Minister's re-election campaign in Bennelong and $10,000 to Tony Abbott's campaign in Warringah. I suppose he is smarting after being left dangling by the misrepresentation of the facts with regard to the sackings that he trotted out in question time yesterday, only to be knocked back into his place by the following question from Nicola Roxon.

We have heard from the government a claim that political donations do not buy access. I understand that, since Mr Howard has been Prime Minister, Mr Honan has had almost unfettered access to him, including at least four meetings in Canberra and another three in Sydney. That is the sort of access probably even denied to Mr Sinodinos, his chief of staff. Mr Ross Cameron, the Member for Parramatta, has received a $20,000 donation from Manildra, despite the risk to motorists in Western Sydney from unregulated ethanol blends in petrol. The May budget reveals an extension of the ethanol regime. Since then the acting industry minister, Mr Hockey, has announced tens of millions of dollars more in capital grants. Manildra has also been granted the services of an exclusive facilitator to help it through tough commercial negotiations.

All of this, which I would categorise as bad policy, has sprung from a bad policy-making process—a process shrouded in secrecy that gets more murky as more details of the Prime Minister's pattern of deceit are revealed. I think honesty matters in Australian politics, and I regret that the Prime Minister does not agree with that. I regret that those opposite do not seem to care a jot either, especially when small companies like Trafigura and Neumann Petroleum are affected.

The parliament and the people have been let down. Mr Howard met Mr Honan on 1 August last year. An industry assistance scheme, including production credits and import protection, was discussed at that meeting. Mr Howard denied the meeting occurred when answering three questions in parliament over three days in September last year, and he has avoided responsibility for those answers when challenged in the parliament this week. This is a pattern of deceit—a pattern that includes and follows the `children overboard' outrage and the provision of false information to the parliament about Iraq's alleged uranium imports from Africa.

Mr Howard usually tries to hide behind his staff and his bureaucracy, but in this case he does not have that opportunity. He can hide no more. The Australian people, if one can interpret the commentaries appearing regularly in the media this week, are no longer going to be satisfied with his excuses. It is clear that he has been flushed out. It is clear that there is an acceptance he has not told the truth to the Australian people in this circumstance. This is the pattern of deceit of this Prime Minister that has been revealed and which he will now carry to the next election. In relation to that, this chamber and this parliament should not be satisfied with anything less than compliance with a transparent process, which means this government must provide the documentation that the Senate has asked it to provide by resolution. The resolution of the Senate yesterday to defer the ethanol legislation until that is provided is one example of the insistence of this chamber—


Senator Coonan —It is an absolute disgrace!


Senator O'BRIEN —to get this government to account for an outrageous policy framework that it has put in place, where policy is being set for its mates and not for the Australian people. That is the outrage, Senator Coonan. It is outrageous that you would ask this Senate to carry legislation when you are not prepared to present to the Australian people the detail of the bargaining—(Time expired)