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Thursday, 2 December 2004
Page: 99

Senator O'BRIEN (3:30 PM) —by leave—I move:

That the Senate take note of the document.

I welcome the fact that the government has now responded to the report by the Rural and Regional Affairs and Transport Legislation Committee following its inquiry: Australian Wool Innovation Limited—expenditure of funds under statutory funding agreement. This inquiry was very important because it exposed a web of mismanagement at Australian Wool Services—a web of mismanagement that I know Senator Ferris took a great deal of interest in and made a great effort to expose, as did other members of the committee. The inquiry exposed a litany of inaction over a two-year period by the Minister for Agriculture, Fisheries and Forestry, Mr Truss, and his department in the face of a growing body of evidence that all was not well at AWI. This was an organisation responsible for the expenditure of $55 million collected in levies from wool growers and $16 million provided by the Commonwealth in matching funds.

As early as February 2002 the minister was told that the accountability and control systems in place were inadequate, yet he did not take action. The minister was also warned of the problems through a series of articles in the Weekly Times, the Land and other newspapers serving the rural sector. It was not a problem that was merely internal to the company, Australian Wool Innovation, as the department tried to tell the committee. This was clearly a problem in which levy payers and taxpayers had a vital interest. It was a direct and immediate problem for the minister. Unfortunately, this minister finds it difficult to take action in a timely manner when it is required. As was the case with the drought reforms, the US beef quota and the Cormo Express fiasco, the minister sat on his hands until the situation was almost beyond control. It is clear that the legislation and the statutory funding agreement for AWI did not give adequate protection for either levy payers or taxpayers, with the minister and his department asleep at the wheel.

The committee made a number of important recommendations for improvements to the way statutory funding agreements should operate, which not only are relevant to the AWI situation but also should be looked at in relation to similar agreements in other industries. The committee formed the view that all expenditure by these private companies should be in accordance with the terms of their statutory funding agreements. It recommended that such agreements should include a requirement that all expenditure be in accordance with the strategic plan and the research and development guidelines.

With this mountain of evidence available and the clear recommendations of the committee on the table, it would have been reasonable to think that the minister would take these concerns into account when he framed the legislation and statutory funding agreements that have appeared in more recent times. Unfortunately, these lessons seem to have been wasted on this minister. The first versions of the legislation and funding agreements for the dairy and live export industries did not contain adequate protection of the interests of either levy payers or taxpayers. Once again, it fell to Labor to suggest—and indeed insist on—improvements to the documentation that should ensure that we do not have another AWI situation.

I welcome the fact that the government has now agreed to take on board all but one of the recommendations the committee made in its report. But merely implementing these recommendations will not overcome the other major problem exposed during this inquiry. It became quite clear in the course of the inquiry that this minister has difficulty taking action in a timely fashion, even when he is confronted with a mountain of evidence that urgent action is needed to protect the interests of taxpayers and levy payers. This inquiry established that, when the alarm bells were ringing for AWI, for the levy payers and for the taxpayers, this minister simply could not hear them.