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Tuesday, 30 May 2006
Page: 80


Mr TUCKEY (7:45 PM) —In the closing remarks of the member for Gellibrand, she made what I thought was a rather interesting comment. She referred to Commissioner Cole as being ‘hamstrung’—and I guess that might be the truth when one looks at the reasons for the Royal Commissions Amendment Bill 2006.

The major reason that the commissioner is hamstrung is the total lack of cooperation by AWB Ltd. This issue arose only because AWB Ltd accidentally provided a piece of information that was supposed to have been shredded. I have no sympathy for AWB Ltd. I am not going to pronounce on any aspect of what the commissioner might eventually decide, but I point out to this House that the view of many people in my electorate is that AWB Ltd is a form of public property. It portrays itself as a servant of the wheat growers. I do not know how often it has told them the truth or what it has failed to disclose, and in a moment I will return to that matter.

The legislation that is before us today certainly has merit. On reading the pious amendment moved by the opposition, I am pleased that it in no way suggests that the bill should not proceed. So I welcome the remarks by the member for Gellibrand in that regard. The purpose of the bill is to respond to a highlighted set of circumstances where a raft of information of substance might be available to assist a royal commissioner in a determination that the parliament expects them to make. In fact, as things stand after the Federal Court ruling, unless the commissioner is aware of certain information, in each case the excuse available to companies like AWB is to say nothing and hope nobody finds out. What is now becoming obvious and will be facilitated by this legislation is that a royal commissioner can oblige those witnesses that he or she calls to provide all the documentation. If there is a suggestion of legal professional privilege, the commissioner will make a determination, which is still contestable in another jurisdiction.

This makes a huge difference to discovering something by accident—that is, unless the commissioner has some knowledge that information has not been disclosed, there is no opportunity to have the matter decided in, say, the Federal Court because no-one knows about it. It does not alter the fact that a company which requests the trust of 7,000 wheat growers in Western Australia—the majority of whom live in my electorate—and which expects that trust has behaved in the fashion that it has.

I refer back to the document I mentioned earlier. It is no longer a secret; it was published after the ruling of the Federal Court. What is it about? It is about the company making some admissions to a guru in America who apparently has a very high reputation for advising people who find themselves in a situation like that of AWB Ltd. What did he tell them? He said: ‘Confess. Get in there on day one and confess, and apologise.’ What a good idea that might have been 20 days later or whenever it was into the hearing. A few shareholders might contest other statements that AWB made to the Stock Exchange and question the legal costs—which were published in financial reports in the papers on 25 May—of some $9 million that has been spent already. I should think some shareholders might be interested to know how much more of their dividends will be diluted by the procedure that AWB decided to adopt.

I also take this opportunity to make a defence of two parties: the Wheat Export Authority and, with howls of possible derision, the government. The government’s responsibility—and I will put it in the words of the parliament—goes back to 1989 when it endorsed and modified a piece of legislation that put a certain company virtually above the law. We gave it a licence for exploitation and corruption. Why did we do that? Because it was going to belong to the farmers and, to quote the Prime Minister in the earlier moments of this issue: ‘Oh, they’re good people.’ I am pleased to say that most of them are, and I know who the villains are. I have dealt with them for years. If you look at the scruffiest farms in my electorate, you will find them directing AWB Ltd.

The fact of life is that, throughout this period of privatisation, the major source of influence came from a certain group of people. This goes back further than 1998; it goes back to 1989 when, with my endorsement, the then Labor government commenced the deregulation process. They deregulated the domestic market and, when I put my hand up and said, ‘While you are about it, you had better deregulate the transport market’—which was a disgrace—they did so, and great benefits flowed from that. We continued with the export monopoly and, in the end, the legislation was passed to corporatise that activity, having extracted $600 million from wheat growers. Many of them could not afford it. For many it represented a quarter of their disposable income—two per cent at the farm gate of growers.

We accumulated this money and the people who had suggested that be done were the first to be elected to the board. We discovered the other day that the company’s chairman, a wheat grower from the state that produces for export by far the lowest quantity—that is Queensland, which produced about three million tonnes out of the last 75 million tonnes—is the chair of that board. His salary and entitlements are $220,000 a year, and he and his fellow directors put a motion before the annual general meeting to increase that by 36 per cent. When I exposed those figures to the media, a storm erupted and he and the board changed their minds about doing that. But did they have a good chance of getting it passed? Bearing all costs, they flew 200 shareholders to Melbourne for the annual general meeting. I would like to run the book on that. The company that we are talking about is still fighting the royal commission to have the rest of the facts involved in this matter exposed.

We all know—and I appreciate and support this—that, if you have correspondence with your lawyer who gives you advice and you give them certain evidence upon which they will give you that advice, that is privileged. That has always been the rule. But just to stand up and say, ‘This was transacted or handed to our lawyers,’ is a bit like Premier Peter Beattie putting all the tough stuff into cabinet so that no-one can read it for 30 years. But it is a fact of life that this legislation will differentiate that argument. Maybe it should have come before us sooner, but it has happened. It was probably appropriate to let that matter first be tested in the court so that we have clear evidence of how we now might go about it.

Apparently, the other day, the Wheat Export Authority was questioned by a Senate estimates committee for eight or 10 hours. It only has one defence and it happens to be true: this parliament denied it—a statutory authority and the watchdog, if you like—every opportunity to have some influence on the behaviour of AWB Ltd. My objection is much more about the fact that it had no control or means of stopping AWB price gouging the farmers that I represent. If somebody wants some evidence of how that has been happening, they should look to the financial announcement that AWB made the other day. It has boasted over the years of its huge profits from futures trading. The reason it can participate so strongly in the US is that it has a security—that is, all the wheat belonging to all the wheat growers who have tipped into that pool but for which the AWB has not paid. The AWB has all this wheat, it is its property and it gives you an undertaking that it will pay you one day at whatever price it can get. That is what the pool is about. To quote one of AWB’s competitors: ‘Mr Tuckey, I’d love to run that pool. That is where the farmers take all the risk.’

The AWB bets with that money. It bets on the futures exchange and it delivers profits to its shareholders—not back to the farmers. But this year, as reported, it lost money instead of making a profit on the futures exchange. Then some time ago it invested $825 million to buy a big agricultural service firm, currently known as Landmark, from Wesfarmers. Wesfarmers has a reputation, particularly under Michael Chaney, as one of the smartest businesses in Australia and Mr Chaney got the transaction through in a week. He thought all his Christmases had come at once—$825 million. What does its report tell us? It tells us that it had a drop in profits for the year of 17 per cent and it was well behind the targets by which it had justified the $825 million. So it did not make much money there.

Then we get to item No. 3, which is a 74 per cent jump in profits from servicing and marketing wheat. AWB is not allowed to make a profit on the actual sale of the wheat; it sells that virtually as an agent. These are just the fees it levies. AWB has a sycophant called AWBI—AWB International—which is supposed to run the pool, but up until recently it had no staff and the board of directors, as such, was dominated by the executive and the board of directors of AWB Ltd. They were doing business together. They settled down and decided that no matter how little wheat in a drought, for instance, was delivered to the pool, they would get $65 million for managing it and then they would get bonuses. Guess who set the benchmarks for the bonuses? It was AWB Ltd.

This is the situation that this parliament created. But it gets worse. With some credit to Labor senators 2½ years ago we had the Williams inquiry. What is more, we had to change the law to force AWB Ltd to give even reasonable information to WEA. But then we were bludgeoned again into agreeing that, when that report was written and given to the minister, the minister was not to tell anybody else about it—and we wonder how the government was supposed to find out what AWB Ltd was up to in terms of its sales of wheat to Iraq.

As I have said, we now should change that legislation. I have listened to the Labor Party’s criticism of the current arrangements and I sincerely hope that an effort is made—and I will make it myself, if no-one else will—to change these rules and put in a statutory authority with adequate powers to control the activities of a virtual monopolist, who I do not think should have that total monopoly. The best power to give the wheat authority is what was proposed.

Members might have forgotten but when a bill for corporatisation was brought to the parliament, this so-called veto power was covered under clauses 57(3), 57(3A) and 57(3B). But the bill which passed this chamber, having been endorsed by the executive, had a subsection (3C). Subsections (3A) and (3B) do not apply to a consent given by the authority on or after 1 July 2004. That is what we voted for in this place. The vetos presently in place with AWB created a circumstance of some three months to get someone else to sell some wheat to Iraq on behalf of Australia. When one looks at the act, one finds that that particular clause, which deals with the situation after 1 July 2004, is missing. When one reads that legislation today, one finds it contains subsections (3A), (3B), and (3D).

The House and the Senate removed subclause (3C) because they were bullied by the agripoliticians. I fought it to the end, as would be recognised by those present in my party room. You do not give that sort of monopoly power to any corporation anywhere in Australia, and we did, collectively. Then we made it exempt from the Trade Practices Act and the Financial Services Act. You wonder why it got a bit arrogant. It is outrageous to think that this parliament has not fixed this already. It has nothing in particular to do with the UN. It is a matter of process and it is a matter of a company having a right to extort money from wheat growers. It is all because they think, are told and are preached to that there is some special advantage in their overseas marketing. That has never been supported by the seven or eight inquiries that have been put forward, including one that included on the panel the then chairman of the Grains Council of Australia. One of them in particular was commissioned by the government. A couple said they could not see where that benefit existed; the rest gave evidence of up to tens of millions of dollars of benefits that would accrue if it ceased.

This legislation may not have come about if this government and this parliament, years ago, had recognised some fundamentals about people doing business. That does not mean that you cannot have a restricted and regulated export market. I might add that under Labor’s competition policy, which we support wholeheartedly, every state has been told to deregulate their coarse grains selling. Some, such as Western Australia, have got a halfway sort of zone, which does not seem to be working too badly. Victoria just cleaned the thing out and the farmers are receiving $30 more a tonne for their barley than the South Australians whose government, under pressure from farmers or farmers’ organisations, actually took a $3 million competition policy hit to keep regulation.

What is their farmers’ federation doing now? They are running to WA to look at the program over there where the barley is up 50 bucks on South Australia, because suddenly all of the single deskers have got their calculators out. They are the worst paid farmers in Australia for barley production. If we do not do something soon, I invite the Labor Party to do it. They can stop chatting and they can address the core problem because it is outrageous; it was wrong at the time and, unfortunately, there are honest farmers and dishonest farmers. I am not going to say who they are but Mr Cole might want to say something about that in due course. The most amazing thing is that when they all got into the Cole royal commission they never said they did anything. They were getting between 90 and 220 grand a year and they did nothing. Excuse me! I have never been so annoyed about anything in my life and I am pleased to have had the opportunity to talk about it.