Senator HARRIS (2:26 PM) —My question is to the Minister representing the Minister for Agriculture, Fisheries and Forestry. Is the minister aware of a media campaign in Queensland highlighting the extreme hardship of the producers in the sugarcane industry? Minister, this hardship is a direct result of the government policy that is forcing world parity pricing, based on Third World costs, onto Australian producers, who have to pay developed world prices for fuel, fertiliser and water. In recognition of the desperate plight of the sugar industry, will your government resile from the fuel tariff issue and support the ethanol industry in Australia?

Senator KEMP (Minister for the Arts and Sport) —Thank you, Senator Harris, for that question. You asked whether I am aware of the recent media campaign; I thank you for bringing it to my attention. As a result of your intervention, I am aware of the campaign. I am advised by the minister responsible that the advertising campaign staged by the so-called sugar reform committee is misplaced and ill-informed. Much of what this group is calling for—for example, the removal of the ministerial directive and the retention of the single desk—can only be changed by the Beattie government. You have to ask yourself: what has the Beattie government done for the sugar industry? Very little. There have been failed loan schemes and the recent promise of project funding, all amounting to less than half a million dollars—a very poor performance by the Beattie government.

I am also advised that the people behind the sugar reform committee would be better harnessing their energy on trying to come up with realistic solutions for the industry and for putting pressure on the Beattie government to reach a deal with the sugar industry that protects the rights of growers and secures the future of sugar milling regions. The federal government has demonstrated its strong commitment to assisting the sugar industry through difficult times. Since the year 2000 over $80 million in assistance has been provided to cane growers and their families under the current reform package and the previous assistance package. This short-term assistance was designed to stabilise the industry as it overcomes its current problems. As part of this most recent assistance package, all recipients were provided with access to business and financial planning assistance.

We have entered into an agreement with the Queensland government under a memorandum of understanding. As part of this agreement, the Queensland government is committed to reforming certain elements of their Sugar Industry Act. The Australian government has always made it clear that the Queensland government must engage and consult industry leaders before reforms could be implemented. However, I am sorry to be advised that it was not until very recently that the Beattie government has been prepared to deal with the sugar industry. Therefore, we have been unable to complete the negotiations with the Queensland government on a satisfactory system of reform of the industry to secure its future.

We are naturally anxious that those issues be resolved. Prices for sugar in the world market have been in steady decline over recent months, and that puts increasing pressure on the industry. It is clear to everybody involved in the industry that there needs to be some reform to secure everyone's future. We are happy to be part of that change. The sooner these changes are made, the better. Any delays will just delay the opportunity for the industry to recover. Mr President, I notice that time is running out and I do have more information. If Senator Harris would like to ask me a supplementary question, I would be very happy to supply him with some more information.

Senator HARRIS —I do wish to ask a supplementary question. Currently the octane rating in fuel is supplied by aromatics and fuel additions. Aromatics in fuel are currently set at 42 to 48 per cent. As these are gradually reduced to meet clean air legislation, the refining industry is restricted in providing a suitable octane rating while maintaining low emissions. Ethanol is a renewable, environmentally sensitive source of octane. Will the government ensure that the benefits of octane produced from sugar cane flow through to the farmers in the industry?

Senator KEMP (Minister for the Arts and Sport) —Senator Harris asked whether the government will support an ethanol industry in Australia. Let me restate that the government has a comprehensive support package for biofuels, including ethanol. This package aims to increase the use of ethanol in Australian transport. The government will provide $37 million to fund a one-off capital subsidy for projects that provide new or expanded biofuels capacity. Among other things, there is $10 million in short-term assistance to all existing ethanol producers as a measure to assist in the transition to the 10 per cent standard blend mentioned by you in your supplementary question. This was announced earlier this year. These actions further supplement actions already taken by the government to support fuel ethanol production. In this year's budget, the government announced that it would extend the 38c per litre temporary excise and the production subsidy arrangements for ethanol until 2008. (Time expired)