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Wednesday, 25 February 1987
Page: 642

Senator GARETH EVANS —Minister for Resources and Energy) (7.10)-I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

The purpose of this Bill is to amend section 15 of the Wheat Marketing Act 1984 to correct anomalies that have become apparent following advice from the Attorney-General's Department. As it is currently drafted the Act provides for the determination of a guaranteed minimum price, GMP, for Australian Standard White Wheat, ASW, and other prescribed categories of wheat on a basis which was not intended by the Government, which is inconsistent with other sections of the Act and which would run counter to sound and broadly acceptable accounting procedures as currently used by the Australian Wheat Board.

The current methodology adopted by the Australian Wheat Board for calculating the GMP for ASW wheat involves inclusion of the actual value of ASW wheat sales and an imputed value for sales of other categories of wheat on an ASW basis. This methodology has been employed by the Australian Wheat Board for both the 1984-85 and 1985-86 seasons. Advice from the Attorney-General's Department is that section 15 (2) of the Act as it is currently drafted only provides for the actual value of ASW wheat sales to be included in the calculation. However, the Government considers that the current methodology being used by the Australian Wheat Board is consistent with understandings reached with the Australian wheat industry at the time the current wheat marketing arrangements were formulated. While the current Act provides for the determination of GMPs for categories of wheat other than ASW, the intention was to continue the practice of the Wheat Marketing Act 1979 under which a single pool based on ASW wheat would operate. The ASW GMP would therefore be the benchmark against which GMPs for other prescribed categories of wheat would be determined. If the methodology implied in the advice from the Attorney-General's Department were used it would involve a move away from this approach towards separate pools for separate categories. This was not the Government's intention and hence my proposal to amend section 15 of the Act to properly reflect the current methodology. Section 15 is also not consistent with sections 16 and 17 of the Act which provide for the calculation of the net pool return rate. This latter figure when compared with the GMP for ASW wheat determines the size of any underwriting commitment. It is also intended to amend the Act to clarify the treatment of interest on credit sales and income on investments. It is proposed that these items be included as revenue in the calculation of gross returns for ASW wheat. Pursuant to sub-section 15 (1) of the Act, the Minister for Primary Industry is required to determine and gazette the guaranteed minimum price for all prescribed categories of wheat by 1 March of each season. If such gazettal notice has not taken place, the AWB is not empowered to make the final advance payment to growers, which would, in the normal course of events, take place about two weeks into March. The Minister for Primary Industry has already indicated that there is the possibility of a payout under the underwriting arrangements for the 1986-87 pool. Any payout depends on exchange rates as well as export returns and so a precise figure cannot be fixed on Government commitment until the pool closes in about three years time. The amendments themselves should not involve any additional Commonwealth Government costs, savings or revenue. The Australian Wheat Board is currently employing accounting procedures which would accord with the Act in its amended form.

Mr President, the Bill amends the current Commonwealth legislation so that it conforms with the Government intention, and with current methodology used by the Australian Wheat Board. It conforms with understandings and expectations of State governments and industry.

Passage of this legislation this week will allow for the expeditious payment to growers of money owed to them. It will allow for the appropriate levels of payments.

Mr President, I commend the Bill to honourable senators.

Debate (on motion by Senator Kilgariff) adjourned.