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Monday, 13 December 1993
Page: 4380

Senator BOSWELL —My question is directed to the Minister representing the Minister for Industry, Technology and Regional Development. I refer the minister to the proposed Mackay joint venture sugar refinery which would have moved Australia into the expanding $5 billion a year refined sugar export market for the first time, and which the Trade Practices Commission refused to authorise. I refer also to support for entry into the refined sugar export market from the Industry Commission, support for the project from Kelloggs, ABARE and the Prices Surveillance Authority, strong support for the project from the Queensland government and the Department of Primary Industry and support from the government's own Department of Industry, Technology and Regional Development. Like its own departments and agencies and Labor state government, does the government also support the joint venture going ahead? If so, what does it intend to do to ensure that it does proceed?

Senator SCHACHT —Senator Boswell has been well noted for his interest in small business issues in this parliament, particularly the role of the Trade Practices Commission. In the past he has insisted on the Trade Practices Commission taking action to ensure that competition is allowed and that small business gets a fair share. He has often asked the TPC to be pro-active in intervening in that way against monopoly activities. Therefore, it was with some surprise initially that I heard that he supported this merger taking place and that he is now criticising the TPC decision. He has made these representations to me on a number of occasions.

  Although part of this matter is dealt with by my colleague the Treasurer and the Assistant Treasurer, represented by Senator McMullan, it is true that there are industry aspects about this that are important. It is true that the Department of Industry, Technology and Regional Development closely considered the joint venture, for which applicants sought approval from the TPC. The department concluded that the application was likely to result in: firstly, a significant increase in real value of exports; secondly, the fostering of business efficiency; and, thirdly, rationalisation resulting in more efficient allocation of resources. My department made it quite clear that it saw a number of merits in the proposal.

  On 8 December the TPC—which, of course, is an independent statutory authority—released its final determination rejecting CSR's application for authorisation of a joint venture involving other sugar refineries. The TPC found—and I summarise—that CSR's involvement in the project was likely to, firstly, substantially lessen competition which would otherwise arise from the presence of new competitors. Secondly, enhanced exports would constitute a public benefit, but this benefit was not attributable to the proposed joint venture. It found that enhanced sugar exports are likely to occur with or without the joint venture. Thirdly, it found that the benefits of rationalisation were not likely to flow through to the public. Fourthly, there were not sufficient public benefits to outweigh the anti-competitive detriments, and for this reason the TPC refused that application for authorisation.

  As you can see, Mr President, the advice from my own department, when it considered this matter, made a number of positive points. The TPC obviously took that and other information on hand and it came down against the proposal. I emphasise also that the TPC is the government's independent competition expert and it would be inappropriate for the government to interfere with its administrative proceedings. While the government has power to direct the TPC to place special emphasis on particular matters, it cannot direct the TPC to come to a particular decision in authorisation proceedings relating to individual cases. The joint applicants are able to lodge an appeal from the TPC's decision with the trade practices tribunal within 21 days of the determination. That tribunal will be able to independently assess the decision of the TPC and that is the proper and legal process to go through. It is up to the participants, particularly CSR, to determine whether they wish to take that choice.

Senator BOSWELL —I thank the minister for his answer, in which he quoted extensively from the TPC report. I advise him that I can read the TPC report as well as he can. My question was: does his government support the amalgamation? If it does—I would suspect it does because everyone else does, including CSR, the sugar industry, the milling industry, the Queensland government and, I suspect, most people—what does it intend to do about it?

Senator SCHACHT —I thought I had clearly indicated DITARD's response. As minister for the department, I can state that our view is that there were a number of positive things about the merger for the future of the industry. However, I emphasise that the TPC is an independent body and I would imagine that some members opposite would be the first to scream if the government interfered in the independent processes of the TPC, so we are damned if we do and we are damned if we don't. However, because of Senator Boswell's consistent interest in this issue, I will have further discussions with my colleagues—the Treasurer and the Assistant Treasurer—and come back with a further response, but I emphasise that the company does have the right to appeal.