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Thursday, 16 May 2002
Page: 2424


Mr NEVILLE (12:42 PM) —I alert honourable members to a crisis which is developing in the Queensland sugar industry in general and in the Bundaberg and Isis districts in particular. Let me paint a thumbnail picture. There are 8,000 people directly employed in the growing of sugarcane in Queensland and there are 12,200 employed in the manufacturing of sugar. In the Bundaberg and Isis districts there are four mills and a refinery, and these are fed by nearly 1,000 farmers and 460 field workers. The mills employ collectively 770 in a good season and, in a bad season, of which this one is quite atypical, about 650.

What does this industry mean to Queensland and Australia as a whole? In a reasonable year the industry manufactures $1.8 billion worth of sugar of which 85 per cent is exported. So its impact on the nation and on our export earnings is quite significant. This brings me to the nub of my contribution today. The international price of sugar over recent years has dropped from US8c per pound to US5½c per pound. Mr Deputy Speaker Causley, as you know, coming from a sugar area, that is the international measure. I will express that in another way.

In a good year, with a reasonable crop and a reasonable price, the industry earns about $1.8 billion. This year, even on optimistic predictions, the return will be only $1.1 billion and on a lower price projection about $1 billion. In Bundaberg and Isis the problem is compounded not only by the low sugar price but by a drought. The four-mill crop estimate, which in a good year or a reasonable year could return 5.1 million tonnes of sugar, will this year be down as low as 3.2 million tonnes. Combine that with a certain low price and the comparison is even more stark. A reasonable crop with a reasonable price in a reasonable year returns to the Bundaberg and Childers districts $220 million. But this year, based on the crop estimate and this lower price, the figure falls to $115 million optimistically, or $105 million if it is on the low side.

Contemplate what that must do to a town. Integrated within Bundaberg are growers, cane harvesters, cane harvester manufacturers, fieldworkers, millers, a refinery, a distillery and a port for the export of sugar; it is all-pervasive. The district is also short of water. The Monduran Dam, which is the main supplier of water to this scheme, is down to five per cent of its capacity. I have just received a briefing from DNR, the Department of Natural Resources in Queensland, and they tell me the underground water is at its lowest level since the early 1970s. This is a one-in-25-year circumstance or worse.

In this short contribution today, I want to signal to the parliament that in a very short time we will need assistance with this industry. We are grateful for the sugar industry assistance package. Across the state there were 10,500 claims—4,200 for income support. Out of approximately 8,000 farmers, that is quite an extraordinary figure. In the coming months, exceptional circumstances will have to be considered by the state government, and we look forward eagerly to the Hildebrand report, which will go to Minister Truss in the middle of June. This is a critical situation and I will be speaking more about it in the parliament in the coming months.