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Anderson pushes to finalise AWB structure

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DPIE98/2A 20 January 1998

Primary Industries and Energy Minister John Anderson has called on the wheat industry to recognise the need to quickly finalise the restructure of the Australian Wheat Board (AWTS).

Mr Anderson said he expected the remaining elements of the restructure to be finalised within the next few weeks so the necessary legislation and transitionary arrangements can be put in place.

Mr Anderson rejected the notion of a re-examination of a grower co-operative alternative.

“The consultants to the restructuring Working Group have advised that a co-operative does not stack up against the dual share class Grower Corporate Model, and I am therefore not going to compromise the interests of Australian wheatgrowers, “ he said.

“A co-operative would be less attractive to capital markets, which would in turn affect the ability of the AWB to raise funds to maintain adequate first advance payments to growers.

“In addition, under a co-operative model, it is not possible to have vote weighting for grower shares, which is something that Western Australia in particular has fought strongly to secure.

“Many farmers have a substantial equity in the Wheat Industry Fund (WTF), and the co-operative model would not enable growers to readily realise the full market value of their investments.

“For these reasons I wouldn’t even contemplate the proposal.

“The dual class model was proposed by the Grains Council of Australia (GCA) as a means of ensuring grower control, and was accepted by Cabinet last year,” he said.

Mr Anderson again dispelled concerns that listing on the Australian Stock Exchange would require a sunset on either the single desk or grower control of the AWT3.

“As long as the AWB is primarily involved in grain trading activities - and the definition of that is very broad - there will be no requirement to review the structure of the organisation.

Mr Anderson said the proposed taxation arrangements are fair and reasonable, with tax exemption for WIF contributions from 1989 to 1997, including an adjustment for inflation.

“Furthermore, capital gains tax will only have to be paid if and when a grower decides to sell shares,” he said.

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Mr Anderson said the Grower Corporate Model also incorporates express provisions to ensure pool returns are maximised while costs are minimised, something which should be welcomed by wheatgrowers.

“As promised all along, wheatgrowers will get a commercial, market focused operation with grower control and the single desk secured,” he said.

Media contact: Robert Haynes 026 277 7520 / 0419 493 511