Senator ALLISON (10:43 AM) —The Democrats will be supporting the government's recision motion to bring on the Excise Tariff Amendment Bill (No. 1) 2003 and the Customs Tariff Amendment Bill (No. 2) 2003. Consideration of these bills was postponed on 10 September last year until the government complied with the order for the production of documents that was made on 16 October 2002. As the minister has indicated, the government has now tabled a number of those documents and responded to the ALP's freedom of information request by providing documents on the list that I understand the minister will also table and which I have. As I understand it, the documents requested of the Department of the Prime Minister and Cabinet were provided in June 2003, and those that were requested of the Department of Agriculture, Fisheries and Forestry were provided in December last year.

The Democrats are keen to see the government take the matter of documents much more seriously than they do, and for this reason we supported the return to order and the adjournment of this debate. The delay in dealing with these bills and the energy grants bill has been very productive. The breathing space may have saved the alternative fuels industry. However, we do not support the motive behind the ALP's interest in these documents and we do not think the ALP are sincere in wanting to know the `full information', to use their language, on the government's consideration of policy on ethanol. I think the Prime Minister did make errors of judgment and his response to questions about meeting dates does not match the information in documents that were discovered under FOI. It is also obvious that the government have lurched from one knee-jerk reaction to another on this issue. This is not a sensible way to run the country.

The Democrats say it is appropriate for the government to take steps to protect the local industry from unreasonable competition from overseas. The Prime Minister set a target of 350 million litres of ethanol going into petrol by the year 2007, and ethanol imported from Brazil would wipe out any prospect of a viable ethanol fuel transport industry in this country to meet that target. The ALP managed to persuade the press that the imposition of a 38c a litre excise on ethanol, offset by a grant for the same amount to the local producers, was a massive subsidy. In fact, it cost taxpayers nothing. The decision did affect Trafigura Fuels and Neumann Petroleum—two fuel suppliers who were in the throes of importing Brazilian ethanol at the time—and in my view their costs should have been compensated. However, the arrangement will protect all ethanol producers and the future of the industry. This is a rare case of governments in this country putting Australia's interests ahead of the ideologically driven level playing field, which we are so accustomed to seeing governments—including ALP governments—do.

It is the case that Manildra produces around 80 million litres of ethanol a year, which is 90 per cent of the ethanol used in transport fuel at present, as a by-product of wheat starch and waste material. With the passage of today's legislation, there will hopefully be many more producers around Australia over the next few years producing ethanol from a wide range of feed stock. The ALP is not interested in the policy reasons for establishing a viable ethanol, biodiesel or other alternative fuel industry in this country; it is not interested in the environmental benefits of E10, CNG or LPG. If you look at the debate on this issue, you will not find much from ALP senators on the air quality benefits of ethanol, even though its blends reduce carbon monoxide, total hydrocarbons, one-to-three butadiene, benzine, toluene, xylene and, in some cases, nitrogen oxides and smog. You will not find much by way of debate from the ALP or the government on the advantages of ethanol as a renewable energy fuel or on the fact that its production costs are a lot higher than those of petrol.

Production costs are a lot higher for ethanol than for petrol, at least for now. I think new technology is going to make a difference to that in the future, as will economies of scale as production increases. Even large ethanol producers in Brazil, which in total produced 12 billion litres of ethanol a year—quite different from 350 million litres—and in the US, which produces seven billion litres a year, receive government assistance for this very reason. The ALP were quite happy to see excise imposed on alternative fuels in 2008 and made no complaints about it being set at the same rate as petrol for energy content. They are very happy to see LPG's excise free status as a drain on revenue, even though we do not hear a word about the fact that the freeze on petrol excise indexation is costing this country billions in revenue forgone.

The ALP says these documents would reveal special advantageous arrangements that apply to Manildra in return for political donations. It turns out that Manildra has received nothing that other ethanol producers are not also entitled to. The so-called subsidy and the capital grant of 16c a litre for new or expanded facilities to a maximum of $10 million until the total production reaches 350 megalitres or until 30 June 2007, whichever comes sooner, are available to the whole industry. We think it is important for us to deal with this legislation today. The ALP has scored its political points off the government. It is true that the key beneficiary of the arrangements that are currently in place is Manildra, but that is because Manildra produces the most ethanol. There is not much we do not know about who met with whom and on what date, and there are good reasons to support all the ethanol and biofuel producers. A reasonable time frame is now in place, as of yesterday's passage of legislation, for phasing out the grants that offset the excise. I think it is time for us to wrap up this debate, and we will be supporting the passage of the bills.

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