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Transcript of sugar announcement, Bundaberg, Qld.

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29 April 2004



Well thank you very much John Anderson, the Deputy Prime Minister, Mayor, Paul Neville, Jim Pederson, Mike Horan, my other parliamentary colleagues, ladies and gentlemen.

The plan that I’ve come to Bundaberg to announce today on behalf of the Government is the culmination of a process that began a couple of months ago at the conclusion of the Free Trade negotiations with the United States when as John has indicated we were not able to gain additional sugar quota and I did say to him and to other colleagues the weekend that that became apparent that we had an obligation to respond to the particular challenges that your industry faces as a result of a set of circumstances largely beyond your control and certainly not of your own making and the plan that I announce day will offer hope. It is a realistic plan. It is generous in its scope but the generosity is based on long term realism and the proposition that reform and change is not only necessary, but unavoidable. In putting the plan together I’ve not only taken into account the views that were expressed to me and my colleagues when I went to Cairns and Mackay earlier this year, but also it follows very extensive discussion and consultation with the industry.

They’ll be some who will not think it adequate. They’ll be some in other parts of the country that will think it is too generous. I think it strikes the right balance between the obligation we have to the Australian taxpayer to spend his or her money wisely but also a special obligation we have to a group of decent hardworking Australians who are doing in tough because of a profoundly corrupted world market and through circumstances beyond their control.

So this plan is about providing hope, sustainability and reform. It’s a partner ship between the industry and the Government and it will require leadership, unity and a strong commitment to reform. The plan will involve the provision to the sugar

industry of assistance of $444 million. The programme is comprehensive and it reflects that the Australian Government has listened very closely to the industry’s concerns. We are prepared and willing to help it through its current crisis. We want to assure that the industry has a sustainable future.

You will remember that in March of this year I announced income assistance for those growers and harvesters in most genuine need of help. That was a down payment on the Government’s commitment to assist the industry. I am now able to announce as part of the plan the following measures.

Firstly, we will provide a one-off sustainability grant to mills and growers. The grant will take into account the industry’s immediate difficulties and will sustain growers and millers through a transition phase as the industry moves towards reform. This sustainability grant will be paid in two instalments. In June this year and January of next year. It will cost about $146 million. This will give growers and millers a peace of mind and allow them to undertake business-planning advice and to take the right decisions about their future.

I intend inviting the State Governments of Australia to contribute towards the cost of this sustainability grant and I make it very plain that if they decline to contribute the Commonwealth Government will nonetheless make the entire amount available. So in no way is this announcement of a sustainability grant conditional on the State Governments coming to the party. But if they want to they will be warmly received. To drive reform and restructuring in the industry, industry groups will be asked to sign up to a statement of intent on behalf of the industry signalling a commitment to undertake reform prior to t receiving the first instalment of the sustainability grant and payment of the second instalment will be dependent upon satisfactory progress with industry reform.

We decided after a lot consideration to settle on this sustainability grant in the knowledge and the belief that unless the industry were given a basis to continue for a period of time until they could properly assess their future there was no way that

people could make rational, medium and longer term decisions about their future in the industry. And we hope that the scope and generosity of this sustainability grant will give to individuals in the industry a degree of security over a period of time so that they can take longer-term decisions.

Additional elements of the plan will provide incentives for the industry to improve its efficiency and to rationalise and restructure and to diversify into other end uses. You are aware at the present time that there are re-establishment payments of $45,000 in the Sugar Industry Reform Package that was announced in 2002. At previous meetings with the industry I’ve been told that this amount was not enough and a more generous re-establishment grant was needed for those people who chose for a variety of reasons to seek their opportunities elsewhere and I’m therefore pleased to announce today that in the first year there will be a one off re-establishment grant of up to $100,000 to be provided to eligible growers to help them leave the sugar industry or agriculture altogether if that is their judgement.

Lesser amounts are provided for re-establishment grants in later years to help spur reform sooner rather than later. To help people in the industry make decisions about

their future, we are providing business planning assistance and this will allow them to fully assess their individual circumstances and situations and consider their future in the industry or to consider alternatives. We are also increasing the capacity of existing financial counselling and family support services in sugar regions through funding for crisis counselling. The Government, as an element of this plan, will also

provide up to $75 million over three years for a competitive grants programme for regional and community projects across the sugar producing areas of Australia to assist the medium and longer term restructuring of the industry.

This assistance will be aimed at improving the efficiency and the viability of the industry and the regions. It will help provide for a range of initiatives, for example - further exploration of opportunities for diversification, value adding, co-generation and alternative products. Once again, this is specifically in response to many representations which were made to me.

During my visit to north Queensland, or far north Queensland earlier this year, many people put strongly to me the difficulties under existing social security provisions of inter-generational transfers of properties. And therefore, one of the elements of this plan is the adoption of what we described as an inter-generational transfer scheme. This scheme recognises calls from both younger and older generations of canefarmers about the need to help to assist generational change and it will allow sugar farms to be more readily handed from one generation to the next during the current industry downturn.

The Government will legislate to enable eligible growers a three year window of opportunity to gift their sugarcane properties to their children and apply for the aged pension without the existing restrictive gifting rules being applied and this will specifically address a need that was put to me very strongly and very cogently by many people during my visit to Cairns.

This industry has asked for other assistance such as stamp duty holidays and changes to planning laws. They are of course principally the responsibility of state and local governments and I propose writing to the Premiers of Queensland, New South Wales and Western Australia asking that in augmentation and in addition to what I’ve announced today, consideration be given by those governments through that provision. Once again, I stress that what I’ve announced is in no way conditional on the state governments coming to the party.

A key part of delivering the reform programme will be an industry oversight group that will oversee progress on reforms and this group will develop a strategic industry vision and align regional plans with vision. Regional advisory groups consisting of local sugar industry and community representatives will be responsible for identifying the local industry’s key challenges and the most appropriate solutions. Through this industry and regional network the industry will be able to provide the leadership, the unity and the commitment to make the industry sustainable.

Ladies and gentlemen, it is a large package but it is necessarily so. A half-hearted response would not have been enough. It is a combination of generous assessments in the short term to keep people going, but also a recognition that in the medium to longer term change and restructuring will be necessary. Some people will want to

leave the industry. I hope the industry. I hope the majority will find the opportunities of this package as such that they can see for themselves a brighter, more positive future in the industry.

It’s not easy being in your industry at the present time. I understand that. It’s very hard. You work long hours and you haven’t had any return, many of you to speak of for years. And you’re being buffeted by a set of adverse world circumstances which are extremely unfair and extremely punitive. The best way that we can respond to that, having failed at a bilateral level and a multilateral level to get a better trade deal for Australia’s sugar industry because simply there’s such an over supply and the world market is so badly corrupted, it’s impossible to break your way in to somebody else’s market where like circumstances are prevailing. It’s therefore incumbent on the rest of the Australian community through the Government in a sensible but generous fashion to try and help you.

Now this is a comprehensive package. I believe it strikes the right balance. It gives you that short term assurance so you can plan for the future. It helps in a more generous way those people who have decided the best thing to do is to leave the industry. It tackles full on the inter-generational transfer issue. It encourages diversification and rationalisation at a regional level. It also provides incentive and help for people to develop alternatives in a way that I think will be very constructive.

So I do warmly commend the package to you. It does involve, as I say, an overall provision of $444 million and it is absolutely unconditional. If the states want to add to it, that’s fantastic. If they don’t, well we’ll still provide the $444 million - and I want to make that absolutely clear. I care about this industry. I was struck when I came to Cairns and Mackay earlier this year with the sense of despair that many of you had, but also a faith that if you put your case strongly there would be a fair and decent response from the Government.

I hope you see this package as being that fair and decent response. I commend it to you. I hope it works. It’s up to all of us to work together to make it work and in concluding can I thank in particular Warren Truss the Minister for Agriculture and all of his colleagues on the sugar taskforce for the contributions they’ve made. And very particularly, my colleague and the Deputy Prime Minister John Anderson who’s been side by side with me in putting this package together over the past three months.

We come genuinely concerned about your industry and we commend this package to you. Thank you.