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Thursday, 11 May 1989
Page: 2353


Senator SHEIL(7.05) —We are debating a package of seven wheat Bills, the main one being the Wheat Marketing Bill itself and the others being enabling economic measures associated with it. One can only wonder at the drafting of legislation such as this, when the Government brings it into the House of Representatives and has a couple of dozen or more amendments to its own legislation, the Opposition has a couple of dozen more amendments to it, the Government refuses most of those amendments-except its own, of course-and then it sends the Bill here, where it knows that those couple of dozen amendments can be carried with the support of Democrats and the coalition. I have had experience with legislation of this nature before, where the Government has brought in revolutionary type legislation and the Opposition has worked like steam to amend it and amend it to try to turn it into decent legislation. On each of those occasions the legislation that has come about has been bad legislation and has led to a crippled administration of those Bills.

The massive economic problems that are being experienced generally in our rural industries today started back at the turn of the century when the debate between the protectionists and the anti-protectionists was won by the protectionists. This was not unusual and it was not out of kilter with what was going on in the rest of the world. Nearly all trading countries opted for protection of their industries. But what this did was cause enormous distortions to our own internal economies and corruption of the world economies.

The effect of our tariff protection to our big industries in the metropolitan and urban areas has been to turn them into high cost industries. Those high costs have been passed on to the rural sector and, of course, the rural sector has to trade on world markets where it has no protection. This really was what led to the formation of the Country Party, as it was. I am grateful that a political party was formed because at least it gave it some clout. The supporters of the Country Party were requiring subsidies to offset the effects of protection of the urban industries which were turned into high cost industries and passed on their costs to the rural industries. It is also for this reason that our political opponents refer to the Nationals now as agrarian socialists. But that is completely untrue. Whenever they refer to us as that, they never refer to the high tariff protection that their supporters enjoy and that is causing the problem that they have had to organise themselves to beat.

After the Second World War, the wheat industry experienced a time of desperately low prices engineered by forces outside the wheatgrowers' control. So they decided to organise, and they did. They got together and decided that they would build storage out on the farms, they would concentrate on their transport and communications systems from the farms to the ports, and they would build storage and loading facilities at the ports. All of that entailed no government money at all. But it was an enormous cost. As part of their structuring of the wheat industry, they formed the Australian Wheat Board. They decided that they would pool all their wheat and pay a levy towards the running of the Wheat Board and to pay off the enormous cost of the capital works that had been instituted to handle wheat. The State governments cooperated in that effort and, by and large, the Wheat Board functioned very well and everyone was happy with it. Even the Wheat Board's customers were happy with the operation-with the grading, classification and quality of wheat.

Prior to this legislation there was no great bleating cry from the industry for re-organisation. The Federal Government, of course, as part of its commitment to develop an export industry such as this, underwrote the wheat crop each year in the case of failure so that the Wheat Board would have some feeling of security. For years and years, since the war, the Government did not have to shell out. But recently there was a failure, and the Government had to stand by the Wheat Board and inject funding to meet the guaranteed price. I feel sure that this is why the legislation was introduced. If the wheat industry had received money from its own levy to underwrite its own crop, there would not have been any need for Government interference in the industry. The Government would not have been given a lever with which to enter the industry and bring about such deregulation.

However, from listening to the debate, it is quite obvious that the Government feels that the people involved in the wheat industry largely do not support it, so it has turned its guns on the wheat industry itself instead of on areas which could have generated massive savings, such as the wharves, coastal shipping, railways, and labour generally. The report of the McColl Royal Commission into Grain Storage Handling and Transport stated we could save $2 billion just by straightening out our wharves and coastal shipping and the unsavoury work practices that are involved in those areas. The wheat industry earns about $2 billion, so, all in all, we are talking about earnings and savings of $4 billion, which is a massive amount of money. We have heard in this debate about the costly work practices in Brisbane and Mackay. At one stage in Mackay, $10,000 was paid out for 40 minutes work.

Wheat exports, like sugar exports, total about 80 per cent of the crop. Twenty per cent is used for the domestic market. Of that 20 per cent, about 10 per cent is used for stock feed and 10 per cent for human consumption. The domestic market is already two-thirds deregulated. These Bills, of course, introduce measures to finish the job. I had two extended trips to the wheat growing areas. The industry wants two things: orderly marketing, and grower control of the Wheat Board. Again, this is not agrarian socialism in action, because although the boards are given statutory powers, that is done at the request of the industry, and the industry is controlled by the growers. The Government had only a minor role, except, as I say, for this contract to underwrite the crop, and I am sure that that forms the basis of this Bill. So the two fundamentals I found everywhere I went were orderly marketing and grower control.

The Minister for Primary Industries and Energy (Mr Kerin), in his second reading speech, repeatedly confirmed that the Wheat Board would be protected. He said it would be strengthened and the Government's role would be minimised. But when one looks at the Bill, one sees that this is not the case. The Board has been reconstituted so that now there is an unacceptably low level of grower representation on it. The Board will have to seek the permission of the Minister before it can borrow or spend any money, spend the growers' own levy, or start a subsidiary company. In other words, the Board will be more under the control of the Minister than it was previously. There are at least 20 instances of ministerial interference in the Board's affairs-even after the massive amount of amendments that was moved by the Government in the other place. The Bill that is now before us still gives the Minister far too much power to interfere. The Minister assured us that the Australian Wheat Board would remain the dominant force in this new, deregulated domestic market, but the current legislation runs out on 1 July. The Government has been unable to convince any of the States to pass complementary legislation. This procedure is absolutely necessary if this legislation is to come into force.

I know the Government has put heavy pressure on the Victorian Government to pass complementary legislation. The Victorian Government is making noises that it will do so. New South Wales is in the same position; the South Australian Parliament is in recess at the moment, so the State Government will be hard pressed to introduce any legislation. Nobody has heard about Western Australia; it has probably been forgotten, in the consideration of this legislation. Queensland is in a different position because it has its own Wheat Board and could probably cooperate with the legislation if it saw fit. The provisions that were contained in this Bill meant that it was being forced on the States, which of course earn revenue from the transport of wheat on their trains. In fact, the only real areas of profit for State government railways are the carriage of coal and wheat, so they would not like to see any loss of earnings in those areas. Maybe there will not even be a loss in those areas, because export wheat will still be transported by train.

As I say, the current legislation runs out on 1 July. I wonder whether the Minister expects the Wheat Board to continue operating outside the Constitution after that time, or whether the States will challenge this intrusion into States rights in the High Court. The Government will have that little problem ahead of it. What is going to happen to the remnants of the current pool on 1 July? It is fortunate that the coalition has been able to retain the Wheat Board's export powers, or the whole industry would be in chaos.

The natural consequence of these Bills is that growers will have to accept world prices on the home market. I point out that the world prices are corrupt prices; they are not commercial prices. The United States subsidises its wheat by up to $80 a tonne; the European Community subsidises its wheat by up to $50 a tonne. Any excess that is produced because of the huge subsidies that are offered is then dumped on world markets. The anti-dumping provisions in this legislation are not strong enough to hold water and do not reassure our wheat growers about the prices they are likely to receive.

Our wheat industry is hurting. Our tonnage is down; our acreage is down; our markets are down; the prices are down; and, therefore, our income is down. Australian wheat growers receive no subsidies, unlike their counterparts in the United States, Europe and Canada. Previously, they received the best export price for their wheat, but under this legislation they will receive only the average export price. Those average export prices are low because of the subsidies of other nations. They are not commercial prices.

No other industry in Australia is being forced into such a position. There are 45,000 wheat farmers and they are going to be forced to accept corrupt world prices. As I said, they earn Australia about $2 billion a year in export income, yet they are being sacrificed by this so-called deregulation. We should start by looking at the sheltered waterfront, coastal shipping and railways, where costs have been escalating-costs which are passed on to our wheat growers, and all other exporters, for that matter. This legislation looks at the wrong area. The Grains Council has been imploring the Government to implement the recommendations of the McColl Royal Commission into Grain Storage, Handling and Transport. But after all those recommendations have been made, the Government turned around and reassured railway workers that their jobs would be protected, that no jobs would be lost. Under this legislation, the Government wants the Wheat Board, not the grain handling authorities, to deal with the railways. Why will the Government not deregulate the labour market in the transport and grain terminal system? That is provided for in one of our Opposition amendments. We would then not have the fiascos which I described before which occurred on the Mackay waterfront.

Clause 88 of the legislation gives the Minister enormous powers over any product of the soil; thus it is a clear intrusion into States rights and the rights of growers of commodities. This clause will be the subject of Opposition amendment in the committee stage. Underwriting is to be funded by a levy on the industry. That is the correct move. As I said before, the industry should pay into its own fund to underwrite its own crop, but the funds raised by the levy are to be used to compensate for an inadequate government underwriting scheme. Although the Government has underwritten it for years, it did not have to put out a penny, except in one recent year. As I said, I am sure that is the basis for the harassing legislation.

The Minister's veto powers, many of which are unnecessary, are to be amended during the committee stage. I agree with that move. We want to allow the Wheat Board or growers to be compensated for losses that could be caused by bad ministerial decisions. If the Minister is going to interfere in the industry so much, why should he not be responsible for the decisions he is making? I understand the Government has given an undertaking that it will consider this matter, or it will give the Minister longer to deliberate before he makes a decision so that he does not make too many bad ones. We want to allow the Board to employ finance consultants free of legislative restraint. It is important because the type of people that are required to give economic advice on these massive flows of money need to be experts if they are going to keep the industry ship-shape. But the Government has resisted most of these amendments. We will move them in the committee stage and send the Bill back to the other House. We wonder whether it will accept the amendments.

The Wheat Marketing Bill 1989 and associated Bills contain a number of major features including the removal of the Australian Wheat Board's acquisition and price setting power for wheat destined for domestic human consumption; the retention of the Board's export monopoly; and the reduced underwriting guarantee from the current 95 per cent to 90 per cent, then to 80 per cent, until eventually, in 1993, it will be phased out, after which time the industry is to carry the levy. The legislation includes the removal of an acceptable level of wheat grower Board membership-the lack of such an acceptable level has the industry very worried-and the virtual prohibition of the Wheat Board from intra-state trading and a threatened restriction of its pool on interstate trading.

The Bill also gives the Board the ability to negotiate better rail freight arrangements, with the use of the exports power. Clause 88 also provides the Federal Minister with the ability to override, or even terminate, State commodity marketing authorities, other than in wheat. This causes justifiable and considerable opposition. Wheat growing is a major rural industry. In the 1988-89 year the Australian Bureau of Agricultural and Resource Economics put the gross value of farm production of wheat at $2.37 billion, with exports worth $1.88 billion, which represents about $40,000 of exports per wheat grower this year and up to $70,000 per wheat grower just a few years ago. I support Senator Stone's second reading amendment. The amendment reads:

At the end of motion, add ``, but the Senate:

(a) deplores the Government's betrayal of the wheat farmers of Australia.

(b) condemns the Government for weakening the position of the Australian Wheat Board as a strong trader in the domestic wheat markets; and

(c) regrets the Government's failure to negotiate adequately with State Governments over their respective responsibilities, including in regard to State statutory marketing authorities''.

As I said, on previous occasions bad legislation had been introduced-legislation which the Government has had to amend in a major way, and which the Opposition has tried to amend in a major way. We have tried to turn such legislation into decent legislation. In every case, there has been maladministration of difficult Bills. Although the Bill that will be returned from the Senate is entirely different from the one that was introduced here, we will have to see what happens to it in the House of Representatives. As this stage, until I see what happens, I oppose the Bill and support Senator Stone's amendment.