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Wednesday, 13 August 2003
Page: 18410


Mr CREAN (Leader of the Opposition) (3:24 PM) —by leave—I move:

That this House censure the Prime Minister for his ongoing pattern of deceit in:

(1) falsely denying on 17, 18 and 19 September 2002, that he had met with Mr Dick Honan of the Manildra Group prior to the Gover-nment's decisions on ethanol that over-whelmingly benefited the Manildra Group;

(2) falsely claiming that his misleading statements to the Parliament about the Meet-ing with Mr Honan were not relevant to the questions asked of him on 17, 18 and 19 September 2002;

(3) not releasing full details of the record of meeting or other documents relevant to the origin of the Government's ethanol policy;

(4) failing to fully disclose the documents and circum-stances surrounding the Honan meet-ing and the policy that flowed from it;

(5) misusing the resources of the Australian Government to commercially damage the competitors of Manildra so as to protect the monopoly position of the Manildra Group;

(6) applying a double standard in its treatment of two Australian businesses by protecting and subsidising the Manildra Group at the exp-ense of the smaller wholly Australian-owned company, Neumann Petrol-eum which lost $400,000; and

(7) misleading the House again today with his assertion that his discussion with Mr Honan did not involve the discussion of the import of ethanol from Brazil.


The SPEAKER —Before the Leader of the Opposition continues, I remind all members of the general warning that applies and of the obligation people have to put their remarks through the chair.


Mr CREAN —What started as a misleading of the parliament by the Prime Minister has now become a scandal and a cover-up by this government. This is `Ethanolgate'. This Prime Minister has involved himself in a process to protect a mate and he has done it at the expense of that mate's competitors. This is the charge that the opposition is making: the Prime Minister and the government entered into an arrangement with Mr Honan which was not only deliberately designed to protect Manildra from competition but also done in such a way as to cause financial loss to its competitors—in particular, to Neumann, an Australian owned company, and Trafigura.

These competitors, Neumann and Trafigura, wanted to deal with Manildra. They wanted to source their supply of ethanol from Manildra, as it was virtually the monopoly supplier of ethanol in this country, but Manildra would not deal with them. When these two companies realised that they could not get their source of supply from Manildra, they were left with no choice: they had to seek to get the product from overseas in order to keep their businesses in operation.

This has been a rort. It was an exercise designed to protect the business of Manildra and damage its competitors so that Manildra could maintain a dominant position as ethanol supplier in this country. You can ask, `What's wrong with that?' You may think that, in the normal cut and thrust of the business world, private enterprise is about trying to secure the biggest cut of the cake it can get and making sure that competitors are, if you like, put out of business.

What is wrong with it is the extent to which the government of this country was complicit in this arrangement. The government allowed itself to be used in a way which made it not open, not transparent and not fair. It went out of its way to hide its decision from Manildra's competitors, but it bent over backwards to accommodate and inform Manildra. In other words, it was prepared to protect the Prime Minister's mate and allow open access to, including secret meetings with, the Prime Minister on the issue. But, as for the competitors, it dudded them and kept them in the dark. It did this in relation to competitors, including a wholly owned Australian company.

There are allegations in the newspaper today that government resources—its embassy in Brazil—were used to spy on the competitors to understand what it was the competitors were up to in terms of sourcing shipments from Brazil. This is a case, again, of a government that has lied, spied and denied. That is what we have in evidence before this parliament around this whole sordid issue: a government that has lied, spied and denied. It tries to come into the parliament and say that it is protecting Australian jobs. If it was protecting Australian jobs, why didn't it do the right thing by Neumann? Neumann is a wholly Australian owned company seeking to source its product from Manildra. Unable to get that product from Manildra, it was forced to bring it in from overseas, for the first time drawing it from Brazil. The Prime Minister said he had been advised it was the first time ever it had been brought into this country from that source.

This is what happens when you get a virtual monopolist so in control that they can dictate to whom they supply and to whom they do not supply. Why weren't the Prime Minister and his industry minister out there ensuring that a company trading in ethanol that was prepared to base itself and operate in Australia was able to access a supply from what had become the virtual monopoly producer in this country? The government did not lift a finger for the competitors. It forced them overseas then introduced an excise on their product without telling them, and the announcement was made after the vessel left the shores.

Once the contract was signed by Neumann and the ethanol was on the water, if they had landed the product in Australia they would have incurred the excise. This was sovereign risk in its worst form. The government took a decision and knew it was taking a decision. The Prime Minister specifically commissioned a policy response, which he was advised about on 29 August. But he did not tell the Australian public or the world at large until—when was it, Prime Minister?—17 September. But you had made the decision. Do not hide behind the cabinet fiction. You were running this agenda. You had the secret meeting, Prime Minister, with Mr Honan.

It was the Prime Minister who commissioned the work from his then departmental head, Max Moore-Wilton. Do you remember him? He was the troubleshooter and fixer who shared board membership with Mr Honan on the Australian Wheat Board. That is nice and cosy. You talk about conspiracies! I let the public make their own decisions about it. These were cosy little arrangements in which the Prime Minister requested advice as to how this agreement—this scheme—that benefited Manildra, and predominantly Manildra, could be put into place. Let us understand the dimension of this. The Prime Minister mentioned CSR earlier as another provider of ethanol. Manildra is the company that benefits to the tune of 96 per cent of the government's largesse—96 per cent!

The government, and I see the member for Dawson down on the front bench, brought this up and introduced this in the context of—to use the Prime Minister's now famous term, `the context of things'—supporting the sugar industry. The fact of the matter is Manildra produces its ethanol from wheat, not from sugar. You did say it, Prime Minister. Around this country you have consistently justified the fact that you are supporting the ethanol industry by saying the government wants to support the sugar industry. But by far the greatest beneficiary of this largesse—this scheme, this rort—has been the Prime Minister's mate. That is what we have faced up to here. This is Stan Howard mark 2. The only agreement in the country that guaranteed 100 per cent of workers entitlements applied to the company that the Prime Minister's brother happened to chair. And now there is a scheme designed to protect and support the Australian ethanol industry, 96 per cent of which goes to Manildra.

Let us understand the time line in this, because it is terribly important for the record. We have a situation, and I referred to this in question time today, where on 24 July Manildra met with Trafigura, the company that the Prime Minister claims he knew nothing about until the end of August. Trafigura were seeking, like Neumann, to source their ethanol supply from Manildra. Trafigura wanted to buy their product from Manildra. Manildra advised that they did not have the ethanol available due to the high cost of wheat and that they would not be able to supply, but they would review the position within a couple of weeks. The only option that Trafigura and Neumann had in those circumstances—if Manildra could not supply—was to go overseas. They did not necessarily have to go to Brazil, because there are other producers, but given the time line and their business they had to go and source it wherever they could get it in the spot market.

What then happened was that on 7 August there was still no ethanol available from Manildra. That was when Trafigura went back to Manildra and said, `We still want to be in the market with you.' On 9 August Trafigura spoke to Neumann. Neumann, by the way, had a contract with Manildra to be supplied with ethanol, but Neumann had been told that Manildra could not meet that contract because they had no product—that is what they told Neumann. Neumann spoke to Trafigura, then both companies looked for alternative sources of supply outside.

On 20 August they bought ethanol in Brazil and they looked for a vessel. Bob Gordon happens to be the head of the Australian Biofuels Association, which represents ethanol producers. Effectively it is the lobbyist for Manildra, because Manildra is the beneficiary of 96 per cent of the subsidy. But what else is Bob Gordon? Bob Gordon is the former chief of staff of the Prime Minister. Yes, another conspiracy. Bob Gordon happens to be the former chief of staff of the Prime Minister. It is a nice, cosy little arrangement. Max Moore-Wilton sits on the Wheat Board with Dick Honan, and the Prime Minister's former chief of staff represents the company and lobbies on its behalf.

Let us understand how this time line is working. On 20 August, both Neumann and Trafigura bought the ethanol from Brazil. They have sourced it, they have looked on the spot market and they have bought it. They still had to get a ship, so at this stage there was still no guarantee as to when it would sail. But on 21 August Bob Gordon emailed the government advisers on `the possibility of fuel ethanol imports into Australia'. He said:

We have reliable advice from Brazil that a significant shipment of fuel ethanol from Brazil is scheduled to be delivered to Australia in September.

That is when the government knew, Prime Minister—and from your former chief of staff. It was not just the spies in the embassy who were working on this; it was your former chief of staff. The Prime Minister nods. He acknowledges it, yet he was bagging the Sydney Morning Herald today for having the temerity to suggest that embassy officials and staff were being used to check on this shipment. The circumstances were that on 22 August Trafigura got a phone call from Dick Honan asking if the cargo had been brought from Brazil. On 26 August, cabinet met on the so-called sugar package and agreed that officials should urgently examine the arguments for and against a mandated level of ethanol in petrol, to provide assistance to the Australian industry. The embassy was instructed to find out information concerning the ethanol shipments. The source of that was Minister Vaile, in the Sydney Morning Herald article today. So we can see the sequence of events.

Then came a very interesting piece of advice, which the Prime Minister says he is going to check. I want him to come back into the House today, before he leaves this country yet again. I want him to come back into the House and confirm the existence of this advice, sent to him on 29 August. I will read the words again. It is addressed: `Prime Minister, for information as requested,' and it reads:

You requested further advice on the possible replacement of the current excise exemption for ethanol with a subsidy for domestic ethanol producers.

Then DFAT advised that the Brazil post has confirmed that a company trading as Trafigura in Rio de Janeiro had a shipment of 12,000 cubic metres of ethanol to go to Trafigura in Sydney. The shipment was yet to leave Brazil. Prime Minister, if Trafigura was not so important in the scheme of things, why was not the reference here—


Mr Abbott —Mr Speaker, I rise on a point of order. I ask that the Leader of the Opposition table the document from which he is quoting.


The SPEAKER —The Leader of the House will resume his seat. The Leader of the Opposition has the call. Any calls for tabling can come at the conclusion of his speech.


Mr CREAN —The irony is that we asked the government to table this document and they refused. We on this side of the House sought, under freedom of information, access to all the documentation associated with this. Interestingly, this note of advice to the Prime Minister was not included in the list. It was withheld. And the Leader of the House has the temerity to ask me to table it now. I am calling on you to table every relevant piece of information associated with this sordid affair. Next time you lead with your chin, minister, think about the consequences.

This is a government that has conspired with Mr Honan on a fix that fundamentally benefits Mr Honan. This is a scheme which not only advantages Mr Honan but also disadvantages the competitors—and this from a government that talks about competition and wanting to encourage an ethanol industry in this country. An Australian based company and another company that wanted to base their ethanol production, and source it, in Australia are driven offshore because of the monopoly position of Mr Honan and his so-called inability to supply those companies or to give them any guarantees. Then, when he finds out that those companies are forced to source their product outside so that they can keep their livelihood, their existence and their people in work, the government gets the Department of Foreign Affairs to spy on them. It uses the Prime Minister's former chief of staff, who is in constant contact with the government, to advise when the contracts have been signed in Brazil. Then, in the dead of night, in secrecy, it hatches up a little scheme that will impose an excise on all ethanol products but will only rebate those companies that produce in Australia. That is a handy little arrangement, isn't it? The benefit of such a scheme is that 96 per cent of the government subsidy goes to the Prime Minister's mate's company, Manildra. That is what it means. That is the so-called level playing field.

I asked the Prime Minister before when Mr Honan knew. I asserted that Mr Honan would have known the outcome of this around 28 August. I know that the Prime Minister was advised on 29 August, but we know on the public record that Mr Honan wrote a letter to the Prime Minister on 28 August thanking him profusely for the support he has given the ethanol industry in Australia—that is, `Dick Honan Inc'. This is not an attack on Mr Honan; he happens to be the person that duped the Prime Minister. This is an attack on the duplicity of the Prime Minister—a Prime Minister who has lied, spied and denied, all to protect a mate and to sink another Australian company in the process.


The SPEAKER —The Leader of the Opposition will withdraw the statement that the Prime Minister lied. It is unparliamentary in any language.


Mr CREAN —The Prime Minister did not tell the truth.


The SPEAKER —The Leader of the Opposition has withdrawn the statement. He understands the rules, and I remind all members of the general warning. The question is that the motion of censure of the Prime Minister be agreed to. Is the motion seconded?


Mr Latham —The motion is seconded, and I reserve my right to speak.