Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Hansard source

Thank you, Mr Deputy Speaker, I will observe your ruling. AWB Ltd has two classes of shareholdings. Class A shares are restricted to wheat growers while class B shares are traded on the Stock Exchange—or they were until trade was recently suspended. We have had a situation where the proportion of shares held by growers has been steadily decreasing, as has the value of the shares they own. A particular point of contention for growers is the service fee and the bonuses that are paid by AWBI to AWBL. That service fee was set at a minimum of $65 million per annum. A key problem of the services agreement is the fact that its contents have been kept secret from growers and just about everyone else. This secrecy has become a hallmark of the arrogant way in which the AWB has been conducting its business.

As I indicated before, its structure contains an inherent conflict of interest. You have company law requiring the AWBL to maximise returns to shareholders while its constitution requires that it acts to maximise return to growers. In granting a legislated monopoly to a Corporations Law company, the government has created a recipe for disaster—an accident waiting to happen. Over and above all this we have had the failure of the Wheat Export Authority to do its job.

It was created in 1999 by this government to monitor the AWB’s performance in relation to the export of wheat and examine and report on the benefits to growers that result from that performance. It has had considerable powers with which to do that job, but, as the Cole inquiry has brought out, it has failed monumentally to do that job. Indeed, we learnt at the start of September that, to the astonishment of all, the AWB had struck an agreement with its exporting arm, AWB International, in 2004 concerning a break fee should the government decide to dismantle the single desk, and the Wheat Export Authority did not even know about this break fee. It did not find out about the termination clauses in the company’s agreement until more than a year after the contract was signed. It is just absolutely astonishing that you can have an authority that is kept in the dark and utterly clueless on these matters.

This is not without cost to wheat growers—not only in the ways I have described with the loss of the market in Iraq and the loss of Australia’s trading reputation but, at a more practical level, there is a wheat export charge to contribute the majority of funding for the Wheat Export Authority’s operations. Back in October 2003 that charge came into force by regulation, set at 22c per tonne on all Australian wheat exports. It has yielded several million dollars each year, and wheat growers have been paying that levy for the provision of what service which has been of value to them or to anybody else?

I support the remarks made by the member for Hotham. I have listened with interest to other contributions to this debate, particularly that by the member for O’Connor. I think what the government needs to do is provide some answers and to provide the House with some guidance as to what it intends to do with the Wheat Export Authority in the light of this legislation and in the light of the Wheat Export Authority’s performance as revealed by the Cole inquiry.

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