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Monday, 16 June 2008
Page: 2135

Senator HUTCHINS (8:10 PM) —The incorporated speech read as follows—

Mr President, I rise to speak in support of the Wheat Export Marketing Bill.

Prior to last November’s election, the AWB Wheat for Weapons scandal drew attention to the lack of accountability and competition in Australia’s single desk wheat export marketing system. In response to this, Labor—in consultation with wheat growers and traders—released a policy to reform bulk wheat export marketing arrangements. This policy was received with open arms by many in the industry.

Since the election of the Rudd Labor Government, we have been working towards implementing these reforms and delivering on our election commitments—commitments that those opposite would do well to remember we have a mandate to deliver.

Without a doubt, the major reform measure in this bill is the liberalisation of the wheat export market—allowing for the accreditation of new bulk exporters.

The new system created by this bill will not completely deregulate the wheat export marketing system—rather it will remove the monopoly currently held by the Australian Wheat Board over wheat exports and provide for the accreditation of new bulk exporters.

In essence, this will remove the single desk system that has operated in various forms in Australia for the most part of the last fifty years.

The measures contained within this bill will improve competition within the wheat export market—providing more efficient marketing services, reducing the inherent risks associated with a single desk system, and improving accountability and transparency with respect to pricing and cost information.

With the passage of this bill—for the first time Australian wheat growers will be able to choose which accredited bulk exporter they want to conduct business with. Increased competition in this area will encourage marketing innovation and the development of existing markets.

By abolishing the single desk, this bill will remove a monopsony market structure at which growers must accept the single purchaser’s price. Instead, a new price-competitive market will be put in place where growers will benefit from multiple buyers competing for the right to export their wheat.

Australian Wheat Board Limited has indicated that it will seek accreditation under any new scheme—meaning that growers will have the option of remaining with AWB or using a competitor to export their product. Any exporter under this system will have an incentive to offer growers a greater share of the actual export price than under any past arrangements.

A system with multiple buyers will enable growers to negotiate fairer prices and spread their risk across multiple exporters—which is likely to improve the speed with which they sell their wheat.

At the centre of the new export system is a new industry regulator to develop and police an accreditations system for bulk exporters—it will be known as Wheat Exports Australia.

This authority will be empowered to develop, amend, and administer the accreditations scheme in accordance with guidelines outlined in the Bill. These guidelines include probity and performance tests, consideration of the company’s access to financial resources, risk management systems the company has in place, and the experience and past and present behaviour of the company and its executives.

Further, if the applicant corporation operates a port terminal for bulk grain exports—it must have an access arrangement in place. From October 2009 these arrangements must be agreed to by the ACCC. In order to receive accreditation, all bulk exporters will be required to sign a compliance statement declaring that the company has complied with their accreditation conditions.

However, the compliance statement and the accreditation condition guidelines are just the first step to providing a more transparent, accountable, and competitive wheat export marketing system. The provisions in this bill ensure that it is able to maintain the integrity of its accreditation scheme. It has all the necessary investigative powers to ascertain whether bulk exporters have breached the conditions of their accreditation. This includes the power to require information and audit exporters. Severe penalties will apply where breaches can be demonstrated to have taken place. Further, the legislation empowers Wheat Exports Australia to revoke or suspend accreditation where breaches of accreditation have taken place.

This bill does not, however, hand over complete control to the regulator. It maintains a degree of ministerial power to direct Wheat Exports Australia to investigate issues falling within its purview and to require bulk exporters to provide annual compliance reports and export data.

As with all major structural changes, the transition from a single desk will involve some adjustment. To help the industry adjust to the new arrangements the Government is making available up to 9.37 million dollars in assistance measures.

These will include up to 5 million dollars to help the new regulatory body Wheat Exports Australia get off the ground and fulfil its duties over the next three years. This is critical to ensure that the regulator is able to properly manage the accreditations process and police the conditions of accreditation.

Up to 2.52 million dollars will be provided to assist with collecting and distributing market data and analysis to better inform growers and buyers about the state of the wheat export market.

Up to 1.15 million dollars will be made available over the next financial year to inform growers and buyers about the new accreditation system and how it will work—including details on the reforms and the marketing options available for wheat producers.

6 hundred thousand dollars will be available to new markets to assist with creating new processes and arrangements to provide effective technical market support to customers and one hundred thousand dollars over the next financial year will go towards developing and promoting an industry code of conduct on transparent pricing practices at silos.

The government takes very seriously the impacts that these reforms will have and is committed to making the transition as smooth as possible for all stakeholders. This transitional arrangements package does just that and should make the move away from a single desk as simple and easy as possible for growers and exporters.

Mr President, one of the things that has characterised Labor’s approach to these reforms has been the consultation measures and processes that we have employed.

We have extensively consulted with stakeholders on the detail of this bill. When we released our policy prior to last year’s election Labor spoke to growers and peak industry bodies from the Pastoralists and Graziers Association of Western Australia through to the Australian Grain Exporters Association. Amongst many of these stakeholders, Labor was given accolades for its policy.

GrainCorp chairman, Don Taylor, applauded Labor’s policy in a press release on the 10th of October saying the decision by Labor to dump its support for a wheat export monopoly is a major turning point and lays the foundation for a dynamic and competitive market.

The South Australian Farmer’s Federation grain council chairman, Brett Roberts said Labor had shown leadership on the issue in an Associated Press story on the 10th of October saying “Our position has been pretty well what Labor has advocated with this policy...It is a structure which is actually a mechanism that will service our customers well, service the growers well, service the industry well, and drive value chain innovation, which I think we have been lacking for the past 50 years.”

But support for Labor’s policy didn’t stop there—one of the most startling endorsements came from the Opposition’s very own Member for O’Connor. The honourable member was quoted on more than one occasion making comments like those in the West Australia on the 11th of October “We [the Coalition] have been gazumped by the Labor Party and there will be farmers and their families who will vote for the Labor Party because of it”. What a ringing endorsement—with friends like that who needs enemies!

Last year’s election itself demonstrated the level of public support for Labor position on wheat export marketing. On the 24th of November last year, Australian working families—including those in rural and regional Australian seats like Page, Eden Monaro, and Leichhardt - gave the Labor Government a mandate to implement their policy. Even those opposite recognise that! The Member for Barker, Patrick Secker, was quoted in the Financial Review saying that our reforms were sensible and the Coalition should recognise Labor’s mandate.

Nevertheless, once the bill was drafted, an exposure draft was released for public comment over a four week period and the Government referred the bill to the Rural and Regional Affairs and Trade Committee—of which I am a member—to be considered in greater detail.

Throughout this consultative process, the Government has listened and made a number of amendments to the Bill including the use of civil penalties for breaches of accreditation conditions rather than criminal penalties and making cooperatives eligible for accreditation.

But let’s contrast Labor’s consultative approach to the Coalition’s in government.

Remember the Ralph Committee that the former Government sent around Australia to find answers about the future of wheat exports? This report was never released on the grounds that it was “a report to government”. Hardly an open or accountable approach to government is it? What did they have to hide?

One only has to look at the Howard Government’s conduct with respect to the Wheat Marketing Amendment Act just last year. Where was the consultation with growers? Where was the draft bill for public comment? Where was the senate inquiry? The only consultations that took place were backroom discussions between Mark Vaile and John Howard to develop a face-saving compromise. A bit of a band-aid to keep an unhappy marriage together for the kids’ sake—just until the election.

Well Mr President, there will be no face-saving today. Those opposite have already started the bloodletting over this. You’ve got Liberal members like the Member for O’Connor and the Member for Barker publicly acknowledging that these reforms are sensible and in the national interest—and that the Government has a clear mandate to pass this legislation!

The Nationals on the other hand will no doubt do their best today to delay the passage of this bill. Just this morning Senator Nash was accusing the Liberals of selling out on farmers in the Daily Telegraph. Mr President, if Senator Nash and her colleagues want to delay or reject the passage of this bill—they will be selling out rural and regional working families who are counting on this bill to get some certainty about marketing arrangements in the 2008 harvest. Wheat growers deserve to know how they will be exporting their wheat and they deserve to know soon.

Mr President, Australia’s wheat industry has been the victim of an appalling lack of leadership under the Howard Government. The inability of the Coalition to resolve policy differences over the reform of wheat export policy continues to this day where no doubt we will see the partnership of those opposite divided on this issue.

Labor has provided leadership on this issue. We have consulted widely a developed a system that receives the broad support of stakeholders. This bill needs to be passed soon to give certainty to growers and exporters about the institutional arrangements leading into the 2008 harvest.

The Rudd Government was elected with this policy as a key part of its platform. We have a mandate to pass this legislation from the working families of Australia—including those in rural and regional Australia. This bill implements our election commitment to reform wheat export marketing arrangements and should be passed by the Senate without delay.

This bill has been put through the rigours of public and parliamentary scrutiny and consultation. Its merits and shortcomings have been debated in the media and in this place. It is with great pleasure that I commend this motion to the Senate.