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Monday, 16 June 2008
Page: 2135


Senator STERLE (7:39 PM) —The incorporated speech read as follows—

Wheat Export Marketing Bill 2008

Mr President I rise to speak on the Wheat Export Marketing Bill 2008. This Bill fulfils Labor’s Election commitment to move quickly to restore the integrity of Australia’s export wheat marketing system and to improve the efficiency and performance of Australia’s export wheat marketing chain.

Let’s be brutally frank. We wouldn’t be here today debating this Bill if Australia’s export wheat marketing arrangements were not in disarray and had not become a total embarrassment to all concerned.

Australia’s export wheat marketing arrangements failed:

  • Because of policy incompetence on the part of the now departed Howard Government
  • Because of the failure by the Howard Government to ensure accountability and appropriate transparency in the operations and conduct of AWB (International) Limited and its subsidiary companies
  • Because of the descent into corruption at high levels within AWB at the time.

These failures badly tarnished Australia’s hard won international standing as a reputable wheat exporter.

These failures resulted in substantial economic damage to Australia’s export wheat sector.

Despite the signs, despite the risks to the national interest, the responsible Ministers in the Howard Government sat on their hands until maximum damage was done.

They didn’t listen, they didn’t look, they didn’t probe.

When the Howard Government did act its actions were piecemeal and indecisive.

It is recognised by all wheat industry stakeholders that an extension of the current interim arrangements past the end of June this year is not a viable option.

Failure to put into place the necessary reforms from 1 July this year would place an enormous deadweight in the saddle of Australia’s export wheat sector.

The Rudd Government is determined that this will not occur.

After the debacle of recent years brought about by the neglect and incompetence of the Howard Government, Australia’s wheat farmers deserve prompt and decisive government action so they can move ahead with confidence doing what they do best—producing high quality wheat for the international and domestic markets.

Mr President, this Bill has been drafted after extensive consultation and advice from all stake holders, including wheat growers, wheat export organisations, bulk handlers and the relevant government agencies.

The Bill has also been the subject of an enquiry by the Senate Standing Committee on Rural and Regional Affairs and Transport.

There is no doubt that there remains a breadth of views amongst individual wheat grower organisations and individual wheat growers of what should happen from this point. However individual wheat growers can’t be criticised for this situation, particularly given the way the Libs and the Nationals have been at each other’s throats over how the shambles that they presided over should be fixed.

This fact alone shows how fortunate it is that there is now a government willing to take a leadership role and to act decisively, based on the best informed advice available.

As one of the witnesses to the Senate committee inquiry hearing in Perth, Mr Douglas Clarke, a WA wheat grower, observed;

“This legislation moves the grain industry out of the 19th century into the 21st century where we have the same rights and abilities to do things as everybody in Australia has and to run our businesses accordingly”.

However I think it is fair to say that a number of those who made the time and effort to give evidence to the Committee were having difficulty in adjusting to the need for change and would prefer, if possible, to roll back the clock.

Mr President, the Senate Committee heard more than enough evidence to prove to a majority of committee members that this simply isn’t an option.

This is what makes the dissenting report of the National Party members on the Senate Standing Committee on Rural and Regional Affairs and Transport and Senator Scullion, representing the NT Country Liberal Party, so bewildering.

The stance taken by the Nationals in respect to the Oil-for-Food scandal is particularly breathtaking. In their dissenting report they had this to say about the oil-for-food scandal.

“The Oil-for-Food scandal has been used very successfully as a means of leverage to destroy one of Australia’s greatest wheat marketing advantages. The motivation for the contrived uproar was far from the protestation of an informed conscience but more of a financial opportunistic ploy for certain market players to set themselves up as regional monopolies with the windfall gain to those who had a financial interest in them”

One has to wonder what planet Senators Joyce, Nash and Scullion have been on over the past few years.

In other words, as far as the National Senators are concerned, Australia’s international reputation doesn’t matter, corporate governance doesn’t matter, transparency doesn’t matter.

Apparently National Senators believe we should all just get over it and act as if nothing happened.

Well this might be the way the National party operates but it sure is not the way this Government operates.

It is also not the way the vast majority of Australians expect their Government to operate.

Australians care about Australia’s international reputation. They know if you lose people’s trust, including in the international sphere, it’s very hard to restore it.

It is evident that the Nationals are willing to play a very dangerous game with Australia’s international trading reputation and with the livelihoods of thousands of Australian wheat growers.

Australians have the right to expect high levels of probity and performance by those given responsibility by government to represent Australia as a reputable trading nation as well as safeguarding the long term interests of Australia’s hardworking, and by world standards, highly efficient wheat growers.

This Bill provides for the establishment of a new agency, Wheat Exports Australia, to rigorously oversight export wheat marketing arrangements.

The reforms contained in the Bill have been designed to restore integrity and to significantly improve the performance of Australia’s export wheat marketing system.

The reforms will ensure that there is contestability in the provision of international bulk wheat marketing and transport services as well as providing wheat growers with greater selling options.

These were matters that were raised by individual wheat growers and representatives of wheat industry organisations during the Senate Committee enquiry.

The system of accreditation contained in this Bill will ensure that companies who engage in the international marketing of Australia’s bulk wheat sales meet clear and strict probity.

Further companies who wish to engage in Australian export wheat marketing will be required to demonstrate that they have the management skills and the systems in place to manage the risks associated with the international wheat trade and that they are well placed to deliver best returns for wheat growers.

The reforms contained in this Bill will restore the high level of trust in Australia’s export wheat marketing arrangements that Australia enjoyed prior to the Howard Government effectively handing over the international marketing of Australia’s annual multi-billion dollar wheat crop to a private “do as you like” monopoly.

The reforms will also ensure that wheat growers benefit from the incentive for high performance that will come with competition in the marketing of Australia’s export wheat.

The reforms will give individual wheat growers much greater room to move to adapt their wheat production to take advantages of new market opportunities as well as changes in overseas demand patterns.

The National Senators argue that a single desk selling monopoly delivers higher prices and revenue for the grower. However they have been unable to bring forward substantive evidence to support that claim.

It is a claim that has been thoroughly debunked on several occasions by independent analysis, a fact that has either escaped the attention or been ignored by the Nationals.

Without any prompting from the Government, the measures contained in the Bill have been widely applauded publicly by expert independent commentators and analysts.

In regular years Australia accounts for around 15% of the world wheat trade. It really stretches credibility to engage in the fantasy that this level of market share enables Australia to exert significant supplier monopoly power.

It is also important to note that real returns to wheat growers depend, not only on the export price, but also on how cost efficient the provision of all the services is, including marketing, storing and transporting of the wheat from producer to buyer.

Certainly the Senate Committee heard credible evidence of significant cost imposts incurred directly and indirectly by wheat growers that were clearly a result of the fact that AWB’s monopoly position protected it from competition from other potential suppliers of the same services.

I turn briefly to the situation in relation to my State of WA.

Western Australia produces approximately 40% of Australia’s wheat crop. More than in any other state, wheat growers in WA rely on the performance of Australia’s export wheat marketing arrangements for the long term economic security of their livelihood and the level of return for their efforts.

Unlike wheat growers in the eastern states who have ready access to a substantial and increasing domestic market, Western Australian growers rely almost exclusively on export sales.

Approximately 90% of Western Australia’s wheat production goes to the export wheat market. What this means is that in most years WA delivers approximately 50% of Australia’s wheat exports.

Therefore Western Australian wheat growers are heavily dependent on a reliable and efficient export wheat marketing system.

Mr President the evidence that was presented to the Senate committee was very convincing that the way the AWB wheat pooling arrangement worked resulted in Western Australian wheat growers subsidising eastern states growers in respect to pool costs.

Under the old system eastern state wheat growers not only had the advantage of ready access to a large and growing deregulated domestic wheat market, their export wheat returns were, in effect, being subsidised by Western Australian wheat growers.

Mr President that’s the sort thing that happens when you have a commercial monopoly.

It is also very interesting to note that a vehement opponent to the single desk, single seller monopoly in respect to export wheat is the Liberal Party Member for the Federal Electorate of O’Connor. The Electorate of O’Connor is the largest wheat producing electorate in Australia.

If ever there was a place and time to test the real feelings and wishes of export wheat growers, it was the large WA rural electorate of O’Connor at the 2007 election.

Mr Tuckey had no difficulty in sending the Nationals candidate for the seat packing in the 2007 Election.

The fact that the Nationals couldn’t get their candidate up in O’Connor demonstrated just how far the Nationals were out of step with electors who live and work in the largest wheat producing electorate in Australia.

Mr President it is important to remind senators that, depending on the year, Senator Joyce’s State of Queensland produces only 4% to 8% of Australia’s wheat crop.

To the best of my knowledge, the Northern Territory from where Senator Scullion comes from, and who has also signed up to the Nationals’ position, doesn’t produce any wheat at all.

Furthermore Queensland wheat growers have ready access to a growing deregulated domestic wheat market. Basically the export wheat trade is a marginal issue for Queensland compared to the main wheat growing states.

It is also relevant to note that, in recent times, there has been a massive increase in wheat grower participation in the non-regulated export wheat trade in bags and containers. In January this year the Export Wheat Commission reported very strong growth in non-bulk wheat exports since the deregulation of this trade in August 2007.

In fact in the seven months to March this year over 36% of wheat exports, by weight, was non-bulk with southeast Asian countries and Bangladesh accounting for the large majority of this trade - many of these countries are growing markets for WA wheat.

It is clear from this trend that Australia’s wheat growers are more than ready to embrace more flexible export wheat marketing arrangements that will be offered by this legislation in respect to bulk export wheat.

I would also like to touch briefly on another matter that came up during the Senate Committee enquiry on the Bill. The fear was expressed by a small number of witnesses that the Government’s proposed export wheat marketing reforms would lead to further rundown of wheat producing communities and wheat district rural towns.

I have to say that from the evidence given by other witnesses there was a real sense of excitement that the legislation will create more opportunities for wheat growers to expand and develop their industry.

This can only benefit the viability of small businesses in wheat growing districts that depend on a vibrant and prosperous wheat industry.

Hence I believe that the reforms rather than being a negative in respect to the future of towns in wheat growing districts will have the opposite effect.

The reforms will give wheat growers powerful incentives to develop and expand their wheat growing operations. This can only be positive for rural towns in Australia’s wheat growing districts.

Mr President the time has come to put the turmoil in Australia’s export wheat marketing system behind us.

We need to enable all stakeholders to get on with the job of consolidating and improving Australia’s position as a reliable and highly competitive supplier of a premium product that the world seems likely to need in increasing volumes in the years ahead.

This will demonstrate to the Australian Community, and not least to wheat growers, and to other stakeholders that they can be confident of the future of the industry and of the Australian Government’s determination to nurture and protect Australia’s international wheat trading reputation and the long term interests of thousands of Australian wheat growers.

The reforms contained in this Bill will provide a firm platform for this to occur. I would therefore encourage Opposition Senators, including National Party Senators to wholeheartedly support the Bill.

If National Party Senators reject this reform opportunity their action, while it is highly unlikely to prevent the reforms going ahead, will do nothing towards supporting the ongoing development of Australia’s wheat industry.

For its part the Rudd Government has committed itself to continue to work closely with the industry, particularly wheat growers, to insure that it remains attentive and responsive to the factors affecting the performance of this important and valuable agricultural industry.

I commend the Bill to the Senate.