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Thursday, 21 June 2007
Page: 44

Senator BOSWELL (Leader of The Nationals in the Senate) (11:43 AM) —I am pleased to hear that the Democrats will be supporting the Wheat Marketing Amendment Bill 2007. Before I get into my speech, I want to answer Senator Murray’s question on where the Labor Party are on this issue.

Senator O’Brien —You wouldn’t know.

Senator BOSWELL —I do know, because your leader, Mr Rudd, has put out a press release and—unless this position has changed—his position on the single desk is that it will go to the Productivity Commission, which is the kiss of death for any single desk. Senator O’Brien, when you get up to speak at least be honest with the wheat growers of Australia and tell them that the single desk will be examined by the Productivity Commission. They know what that is code for: it is dead in the water. Be honest with them. Tell them when you are addressing this very important legislation.

The Senate is debating the Wheat Marketing Amendment Bill. This bill is the culmination of a lengthy consultation process with wheat growers from all parts of Australia. The measure it contains has the support of the overwhelming majority of wheat growers—whether they are from Western Australia, Queensland, Victoria or New South Wales. At all times, the majority of growers have been consistent in calling for their right to control the marketing of their product. This principle has also been The Nationals guiding light on this issue, an issue which at times has been very controversial. The deplorable conduct of the AWB in Iraq let down Australia and, more significantly, let down wheat growers. The oil for food scandal was used as a political tool not only in an attempt to divide growers themselves but also, crucially, to separate them from the single desk.

The single desk delivers, in the long term, premiums to Australia wheat growers over what they would receive without a single desk. They are not picked off one by one by multinational traders seeking to lower the price paid for wheat. We do not want to see the wheat industry become dominated, like retailing, by Coles and Woolworths. This bill is essentially a vehicle for delivering the control of wheat marketing to growers themselves—provided they establish a grower owned entity capable of doing the job by March 30 next year. The Nationals aim has been to ensure that profits in the industry stay with the growers and do not go to multinational traders. Australia’s wheat industry can be confident of a prosperous and certain future. This bill also highlights the effective and healthy coalition partnership between the Liberal and National parties.

The Wheat Marketing Amendment Bill has six key features. First, it provides the Wheat Export Authority, the WEA, with broad information-gathering powers. Second, it provides the Minister for Agriculture, Fisheries and Forestry with the power to direct the WEA to undertake certain investigations. Third, it extends the temporary transfer of the power of veto over bulk wheat from AWBI to the minister from the current expiry date of 30 June 2007 to 30 June 2008. Fourth, it empowers the minister to designate a company other than AWBI as the holder of the single desk export privilege. Fifth, it regulates the export of wheat in bags and containers and non-bulk wheat, provided exporters comply with a quality assurance scheme. I must say that that has the support of the farming groups. Sixth, it replaces the WEA with the Export Wheat Commission and changes the relevant governance arrangements in accordance with the Uhrig reforms for the governance of Commonwealth agencies.

I register my admiration for the wheat grower groups, who stepped up to the plate and took on the challenge of leading the growers in talks with government about how to resolve the complexities and controversies of the issue of wheat marketing. In particular, I acknowledge the contribution of the Western Australian Farmers Federation, specifically their grains division; the Wheat Growers Association; the New South Wales Farmers Federation; the Victorian Farmers Federation; and AgForce Queensland. The wheat industry can be thankful that there were leaders equipped for the task who negotiated strongly on the growers behalf. The bill before us is a sign that the Australian government does not hold wheat growers responsible for the oil for food scandal. That is very significant because many growers were demoralised by the actions of AWB and bore the brunt of the public’s displeasure about AWB’s actions. Growers do not deserve to be penalised by legislators.

The bill is an important step in the history of wheat marketing in Australia and reflects the primacy of the growers in the political philosophy of the Liberal-National Party coalition government. In March this year the Queensland National Party unanimously called for a grower owned and controlled single desk for wheat export marketing, as supported by the overwhelming majority of wheat growers. In a key address to the Queensland Rural Press Club earlier this year, I described the very serious situation for the 2007 national wheat crop and the investment put into the industry over generations. I said:

There is an urgent need to put strength and confidence back into the wheat industry. To dismantle the pillars on which it was built is to invite disaster.

There really doesn’t seem to be a viable alternative to a grower owned single desk.

The single desk is the only way that Australian growers as a whole can maximise returns. Policymakers have looked, wisely, to secure the single desk infrastructure of wheat marketing because it benefits the whole. The bill allows the AWB to market this year’s harvest. This is a pragmatic solution. There is simply no time left to put in an alternative arrangement for this year’s crop. The top priority is to get wheat marketing actually happening again in Australia as soon as possible. The pre Cole inquiry AWB is no longer in existence. It is unfortunate that there is little recognition that wheat marketing has moved on already from the old status quo. Functional separation has created a new design for wheat export marketing. The functional separation of AWB Ltd and AWB International was announced on 27 July 2006. It was the first step towards greater separation and the creation of a separate AWB International board and a separate audit and risk committee. A separate management team was appointed to AWB International. AWB Ltd appointed a new managing director.

Critics should also note that over 90 per cent of pool services provided by AWB Ltd are currently subject to contestable tenders by third-party service providers. The board of directors of AWB are seeking shareholders’ approval for the legal separation of AWB Ltd and AWB International. The proposed split would establish AWB International as a wholly grower owned manager of the national pool. AWB International would also retain the obligation to ensure security of payments and maximise returns to wheat growers. Note that the demerger proposal would ultimately change the board appointments process for both companies. All A class directors would be required to retire. The AWB International board would then be decided by the grains industry and wheat growers themselves.

It is argued that a demerger would enable AWB Ltd to become more efficient and commercially focused with a standard commercial constitution to facilitate the transition to a more competitive environment. I ask those who oppose this solution, like the Labor Party: where is their viable alternative? They do not have one—other than to send it to the Productivity Commission.

Senator O’Brien interjecting—

Senator BOSWELL —You should be ashamed to criticise what the coalition is doing when your decision was to send it to the Productivity Commission. The alternative, as stated in the ITS Global report, is:

Market share in valuable markets could be easily lost and would be difficult to regain once lost. Sudden removal of the Single Desk would expose growers to greater volatility in prices than they currently face and they would effectively be competing at the same level as major international competitors whose trading terms are strongly supported by significant government assistance.

That is, subsidies. The report goes on:

Unless changes to the market system are carefully managed, some Australian wheat producers may be exposed to some degree of market failure.

Those are not my words. One of the features of the government’s wheat export marketing plan is that the Minister for Agriculture, Fisheries and Forestry will retain a tight and powerful veto on wheat export licences until June 2008. This is a power that will continue to be exercised in the public interest on a case-by-case basis, but there is no intention of it being used to undermine the intent of the single desk. Importantly, the interests of growers who deliver to the national pool, and the impact on them from allowing other bulk export consents, will be part of the public interest consideration. By 1 March, growers have to choose between two options for a grower owned and controlled not-for-profit single desk: either a demerged AWB or a totally new identity. The new body could be a new company or a completely demerged AWBI, and it would take over the management of the single desk. The holder of the single desk will have to have complete legal separation from AWB Ltd.

The government acknowledges that the challenge it has set the industry is a significant one that requires strong leadership and unity within the industry. Under recent amendments to the bill, the proposed power of the minister to change the designated company that commences in March would have a sunset date of 30 June 2008. The government needs to be satisfied as to the financial viability and capacity of any new entity to be the single desk holder.

The industry supports beefing up the Wheat Export Authority. The bill makes a number of changes to the operation of the WEA. It will be given additional auditing and reporting powers to increase its ability to ensure transparency and compliance with international and domestic law by the single desk operator. The Wheat Export Authority’s increased powers include the power to issue an export permit to an organisation other than the single desk holder—but only in exceptional circumstances, including situations where the single desk operator has been precluded from a market for legal reasons and where the single desk operator has failed to develop a specialty market. But that is no open go. The authority will be provided with a power to request information from parties other than AWBI where it believes this relates to the performance of its functions. This is a significant broadening of the scope of the authority’s existing information-gathering powers. It reflects the government’s clear intention that efforts to undermine the interests of Australian wheat growers and to damage Australia’s international trading reputation will not be tolerated.

Further, the bill provides the minister with the power to direct the authority to investigate a broad range of issues relevant to its functions where he considers it is in the public interest to do so. The authority will also be provided with the ability to pass information to relevant law enforcement and regulatory bodies where it has received or uncovered information that warrants further investigation.

The export of wheat in bags and containers will no longer require consent from the Wheat Export Authority. However, the quality of each shipment will need to be certified in order to protect the international reputation of Australia’s wheat. Exports in bags and containers are likely to remain a small part of the market in comparison to the bulk export share of the market. Growers have raised concerns that wheat exports outside the current arrangements could allow the potential for rogue traders to undermine the good reputation of Australian wheat. That is why this bill makes it a requirement that all wheat exports in bags and boxes have to comply with a quality assurance scheme which will be developed by the WEA in consultation with industry. Under new amendments, the deregulation of exports in bags and containers will come into effect 60 days from the date of royal assent.

As the Minister for Agriculture, Fisheries and Forestry, The Nationals Peter McGauran, said in his second reading speech:

It has been an immensely difficult 18 months for Australia’s wheat growers. Last year they faced a devastating growing season as winter and spring rains failed and the drought continued to tighten its grip across the country.

Growers have also had to deal with continued pressure to dismantle their wheat single desk due to strong, but justified, criticism of the corporate behaviour of AWB Ltd stemming from the findings of the Cole commission of inquiry.

In spite of these difficulties and challenges of an almost unprecedented kind, growers continue to voice their desire to take control of their industry. This bill is a direct response to that call.

The Wheat Marketing Amendment Bill 2007 retains Australia’s single desk for export wheat.

With that sentence, the minister delivered the future of the wheat industry back into the hands of the growers themselves. That is why The Nationals exist. That is why we have a past, a present and a future. I put that very comprehensive statement down on behalf of the coalition and challenge the Labor Party to come up with their comprehensive plan, other than a one-page press release saying, ‘We are going to put this back; the single desk will be reviewed by the Productivity Commission.’

Senator O’Brien —No, it didn’t say that. Why don’t you tell the truth for a change!

Senator BOSWELL —What a cop-out by your leader. That just shows how much you think of Australian wheat growers.