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Monday, 16 June 2008
Page: 2135

Senator SIEWERT (5:43 PM) —As I was saying in my earlier remarks, the Australian Greens have been looking  at these bills in light of the fact that changes are urgently needed to the way that wheat is marketed. As a result of the changes that the previous government introduced last year, it is essential that further changes are made to the way that wheat is marketed in Australia. While we would in principle support a single desk, the Greens do not believe that at this stage it is possible, given that it has no support from the government. At this stage the evidence to the committee also suggests that the farming community is not in a position to be able to establish it without government support.

The Australian Greens are aware of the struggles of those living and working in rural Australia and the fact that, in many parts of Australia, they have been subjected to years of drought and many are very worried about the consequences of further deregulation of wheat export marketing. These concerns come on top of many pressing challenges facing farmers in this country. We strongly believe in supporting the future of rural communities in a sustainable, holistic way, and we are concerned about the depth of concern in the community about this legislation. That is why we are pleased to see that the government has adopted the recommendation of the Senate committee report to provide some information sessions and financial counselling sessions on the new arrangements, to assist farmers. There was a great deal of evidence presented to the committee about the concerns farmers have about working in the new system once it comes into place. We urge the government to expand this program if it proves necessary. As I understand it, they will be providing funding for the first year. We believe that these resources will not be adequate and will need to be expanded. We urge the government to expand the program to assist farmers in this new marketing environment.

The Greens have tried to review this legislation in light of contemporary circumstances—that is, the government will not be introducing another process around a single desk, so we believe it is important that this legislation is fully scrutinised to see what issues and problems there might be with this further deregulation of the system. As part of that, we think that the government’s approach to the accreditation system is certainly a step in the right direction. Because of the problems that we had with the former Wheat Export Authority, we are extremely concerned that their remit was not wide enough and nor did they adequately use their powers at the time. We believe it is important to have an accreditation system for exporters, with oversight by an independent body. We believe this is much better than going down the path of complete deregulation. It is a midway point between complete deregulation and a single desk.

A number of important concerns were raised in the course of the Senate inquiry about the scheme and the provisions of the legislation, notably about the accreditation system and the role of Wheat Exports Australia, access to essential infrastructure and the availability of important market information. These issues were raised during the discussion of the legislation. We are pleased to see the government has responded, at least in part, to recommendations of the majority report of the Senate committee and has made a number of recommendations to the draft bills. These are all a step in the right direction.

On the accreditation scheme and the role of the WEA, we support the approach taken in the legislation to the accreditation process and the draft accreditation scheme, and we support the amendment to allow cooperatives to be accredited. That was an important issue that came out during the discussion of this legislation. The scheme moves to balance two interests: ensuring exporters meet certain criteria to be eligible and encouraging numerous exporters to be accredited. Some of the companies who would be seeking accreditation wanted more of the scheme set in legislation but some wanted the WEA to be a light touch regulator. What we need, however, is an effective regulator—which the old one was not. It did not have adequate terms of reference, nor did it actually exercise its powers. The critical issue is that the scheme provides sufficient certainty for companies and their clients and confidence for growers and the broader Australian community in our wheat export market. We favour a level of discretion for Wheat Exports Australia in administering the accreditation system and will be watching it closely to see that the authority exercises its responsibilities appropriately. What is absolutely vital to the effectiveness of the accreditation process is the role and function of the WEA. The key lesson from the AWB oil for wheat scandal is that the WEA not only needs to have sufficient powers to investigate the activities of exporters; it also needs to use those powers where appropriate.

The WEA has a range of powers under this legislation: information-gathering powers from wheat exporters and other persons who may have relevant information, the power to direct an external audit of exporters and powers to suspend and cancel accreditations. We note that the minister said in his second reading speech:

Wheat Exports Australia will regularly review the financial conditions, and activities, of accredited exporters to make sure they are complying with the conditions of their accreditation.

We expect WEA to undertake this role actively and not merely rely on annual reports. We would urge anyone who has concerns about an accredited exporter to take those concerns to the WEA. Creating an appropriate regulatory culture within the new regulatory body will be a critical role of government. The government has an important task in choosing the WEA board to ensure there is sufficient expertise and skill to fulfil these vital oversight and regulatory functions. One of the other lessons from the AWB scandal concerns the responsibilities of the minister. There can be no more turning a blind eye to any problems that arise. The minister has powers of investigation that must be used if circumstances require it.

There was a great deal of discussion on the access regimes during the inquiry. One of the aims of the legislation is to encourage a competitive market with numerous exporters competing for wheat from farmers. Concerns about access to important infrastructure need to be addressed to ensure that that aim is met. Serious concerns were raised in the committee hearings about how to ensure non-discriminatory access to both port infrastructure and up-country storage and handling infrastructure. Without some form of regulation, there is a fear that regional based monopolies will form around the companies that own the infrastructure and will not also be exporting wheat.

The legislation as it stands provides that owners of port infrastructure must pass an access test which, after 1 October 2009, will require either an access undertaking under part IIIA of the Trade Practices Act or recognition under the Trade Practices Act of a state access regime before they can be accredited as an exporter of bulk wheat under the act. Concerns have been raised by owners of such infrastructure that the proposed access test is too heavy-handed and will create a disincentive for investment in such facilities. The Greens support the need for a strong access test for port infrastructure but are prepared to look at a process that, while maintaining strong access, may make it easier to ensure that prices and access are fair. The government has decided not to pursue a similar requirement for owners of up-country bulk handling and storage facilities. This was also an issue that came up extensively in the hearings. Non-discriminatory access to up-country storage and handling facilities was one of the key concerns raised during the committee hearings. The Australian Greens support the comments of the majority committee report on this issue, which read:

The committee believes there is a need to ensure effective competition in relation to access to up-country infrastructure. The committee supports additional measures in relation to up-country infrastructure, such as a mandatory code of conduct.

We are disappointed the government has not moved to introduce some form of regulation to ensure access to up-country infrastructure. The Trade Practices Act, while offering some protection in terms of anti-competitive behaviour, was widely seen as having too many practical problems. Small exporting companies and some farmers expressed concern that the Trade Practices Act processes were too lengthy and costly to provide adequate protections, and many such companies and individuals may be unable to mount the necessary legal actions to ensure fair and timely access—the word ‘timely’ here is crucial. We would have liked to see the bill include a mandatory code of conduct process for owners of up-country infrastructure who also wish to be exporters. The voluntary code of conduct presented by three bulk handlers to the committee was inadequate. But a code with legislative force linked to the accreditation scheme and that refers to the experience of the ACCC and includes a binding arbitration process would, we believe, support the aims of the bill.

We do note the minister’s words:

The government will, therefore, continue to monitor the ability of exporters to access up-country storage facilities.

Let me say here, if any problems are identified then the government will take steps to remedy the situation including, if necessary, the development of a code of conduct.

Let me say here, the Greens—and, I am sure, many stakeholders in the industry—will be holding the government to account for that statement. It is absolutely critical if this process is to work. We expect access issues to be a key consideration of the proposed review of the act and the scheme.

Another issue that came up extensively during the committee hearings was information. The point was made that information is essential for fair functioning markets. As the committee notes:

The committee observed that a consistent theme throughout the inquiry was the importance of the availability of reliable and timely information and effective price signals is of central importance to the success of the proposed changes ...

In partially deregulating the market, there needs to be a mechanism for all stakeholders to have equal access to essential information about wheat stocks. The government has announced such information will be available to the industry via a monthly report prepared by ABARE, based in part on information collected by the ABS. I will refrain from making extensive comments about some concerns I have about ABARE and the reliability of the information it provides. Nonetheless, this is an issue that is of vital importance to the success of these amendments and this new process. Again, the Greens will be watching the effect and the provision of this information very closely. We expect the government to be prepared to respond to any problems that arise in relation to the accuracy or delivery of the necessary information, and, as I said, we will be watching this extremely closely. The government will need to be ready to act, we believe, with a sense of urgency if the processes they put in place are failing.

As I articulated earlier, the Greens’ position, in principle, is that we would prefer a single desk—in an ideal world. That is not going to happen. We therefore have listened to all sides of the argument through the committee process and through individual representations made to us, and obviously we will also listen very closely to this parliamentary debate. We have decided, on balance, that the changes with the necessary protections will in fact be an area that will need to be carefully reviewed and agreed with the review process. We do have some concerns that the government has not adequately addressed the concerns of farming organisations and individual farmers around access and also the concerns around regional monopolies developing. We will all need to watch—and I am sure the farming community will be watching—the implementation of this particular piece of legislation very closely. The future of wheat farmers in this country is at stake here. We need to make sure that we get it right.