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Time for Federals to come clean on Iraqi wheat debt.

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MEDIA 05/079



Time for Feds to come clean on Iraqi wheat debt The Federal Government should take over the risk of the remaining $98 million of debt on Iraqi wheat exports rather than leaving it up to struggling Western Australian wheat farmers according to the Australian Democrats.

A Senate Inquiry is holding hearings on the Iraqi wheat exports issue in Canberra today, having met in Perth yesterday.

Democrats Agriculture spokesperson Senator John Cherry said it was time for the federal Government to 'come clean' on the nature of the Iraqi wheat debt and admit that it has done 'no favours' for wheat growers in forgiving 80% of the debt.

"The truth of the matter is that wheat growers paid insurance premiums of over $130 million to the Federal Export Finance and Insurance Corporation and that the Federal Government's funding of 80% of the debt forgiveness was no more than the contracted insurance cover," he said.

"The $98 million that the Federal Government has left growers to collect from Iraq has been made difficult to recover by the Government agreeing to a 23 year repayment schedule for the Iraqi Government, with the first repayment not due until 2011.

"Given these debts are already a decade old, it is grossly unfair for the Federal Government to make a Government to Government agreement with Iraq extending the repayment schedule and leave the risk sitting with wheat growers.

"Iraq's wheat debt was a direct result of the first Gulf War and economic sanctions against Iraq, just as the extended repayment schedule is a direct result of the second Gulf War. These were Federal Government polices, not policies of wheat growers, and the Government should carry the risk.

"The Federal Government should definitely be paying growers the money owed to them before considering any contribution towards a Kimberley canal," Senator Cherry said.

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