Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

I take pleasure in resuming my comments on the Wheat Marketing Amendment Bill 2006 after the delay. Could I put on the record my condolences and thankyou to Kim Beazley and his family at this difficult time, before I continue my remarks.

As I was saying, the Prime Minister, when commenting on the move to shift the veto powers to the minister, said in a press conference during the week:

... you couldn’t get a proper outcome while the veto lay with AWBI because AWBI is not only, how shall we put it, a player, but also the holder of the veto ...

One can ask, as I said, by this sort of logic, why did AWB International ever hold the veto power? ‘Why indeed,’ I can hear the Treasurer saying. The Cole inquiry has been a very timely funeral for the single desk for many in this place but not for the majority of Australia’s wheat growers. The NFF said this week we must remember that, while the Cole inquiry was scathing of the AWB, the innocent bystanders throughout this saga have been Australia’s wheat growers. Not so innocent bystanders were the government and its officials—condemned not by Cole but by their ignorance, deliberate or otherwise, of what was going on.

Growers who have contacted me want to know the answers to several key questions. Firstly, what guarantees can be given that this transfer of veto power will not undermine the financial security of the national pool system and will not lower returns to growers, given that the application by CBH of Western Australia to export wheat to Asia was rejected on the grounds of undermining existing markets and jeopardising the national pool? Analysts predict that the CBH application will now be approved by the minister, diminishing the amount of grain available for AWB to export, costing AWB between $15 million and $30 million in lost earnings. AWB’s marketing position and its grower shareholders will be greatly disadvantaged.

Secondly, what are the plans for marketing the current national pool to ensure certainty for growers? Who will market stocks from the remaining 2005-06 pool? How is the government going to protect the equity of the 2005-06 and the 2006-07 national wheat pools? Thirdly, what impact will the changes inherent in this bill have on growers facing severe drought and downturn in income for this and the 2007-08 crop, with the possibility of no seller of last resort underpinning price and confidence and potentially no player in the market with a charter of maximising returns to growers?

These are some of the questions that I have been asked. The only way of addressing these concerns in the short term is to absolutely guarantee full consultation through proper survey and polling of all growers—the sentiment inherent in the proposed amendment from the member for New England, which I strongly support.

I must say, to cover the other side of this debate, that I have received one strong submission from the central west from a wheat trader who criticises the single desk. This operator employs 40 people and the business has grown through the containerisation of grain for export, which is not an unusual feature of the grain industry. Further expansion of this business would be welcome, but the company is hamstrung by the veto power of the AWB. There is concern that the surrender of export details, customer details and so on is a surrender of market advantage to the AWB. This company is concerned, with the all-encompassing power of the current veto arrangements and what appears to be the ad hoc issuing of licences for container export, that this company is severely disadvantaged. The suggestion is that the single desk be at least taken away from AWB International; that comes from this particular supplier. That suggestion has been made elsewhere. I have heard strong arguments from wheat growers why this should not happen. The grower shareholders in the company and the impact that the loss of the single desk would have on that investment is one major reason that is given.

So we have differing views. But I believe we should not throw away a marketing advantage that the majority of growers want—that is a major pool and a single desk. The member for New England’s amendment, giving wheat growers the opportunity to vote on options for change, is necessary to recognise that strong desire from growers struggling with the worst drought on record and most concerned about their pool return for last season, this season—if any—and next season, praying that the drought breaks. We owe our growers that, and this is a test of the government’s bona fides and their true concern for the fortunes of rural Australia. I will also be supporting the opposition amendment in the interests of absolutely fair and open scrutiny of our wheat marketing arrangements, with a view to securing the outcome that the majority of the industry wants.

John Forrest (Mallee, National Party) Share this | Link to this | Hansard source

I rise to speak to the Wheat Marketing Amendment Bill 2006. My remarks tonight will be brief in view of the hour and in view of my determination to ensure parliament does not get up tonight without having this important legislation in place. I wish to place on the record my reaction to the amendments that have been foreshadowed both by the member for Hotham and by the member for New England.

As the member for Mallee representing fundamentally the wheat belt of Victoria, the great regions of the Mallee and the Wimmera, in my view the member for New England’s suggestion to conduct a plebiscite of growers is not necessary at all. I spend an enormous amount of time with my growers. Over their harvests it is not uncommon for the member for Mallee to pull up, wander into the paddock and do a few rounds in the tractor and the header. I am absolutely convinced that the view of my growers is that the significance of the single desk in the great majority is paramount.

We cannot change what has been done. I would like an opportunity to rebut the comments made by the member for Hotham. I have never been much for the silly games that get played in this place but as I listened to the member for Hotham’s contribution I thought, ‘Here’s a pitch for a portfolio if ever I heard one.’ The suggestions in his amendment are just far too prescriptive. I have absolute confidence in the industry that it will join in partnership with the government to resolve this difficulty. Paramount in my hardened mind is the interests of growers.

There are three things that have to be done. One is that, whatever the outcome of this six-month period, it will be in the interests of growers. The single desk is not the prerogative of the government or any member in this place. The single desk is what growers want. It is not up to us whatever our positions and philosophies are on the free market. Growers continue to make it clear. I know from my close consultation and regular contact with the wheat and grain growers of the Wimmera-Mallee that at least 85 per cent, if not higher, are anxious to ensure that something similar to our current arrangements with the power of veto stay in place. They are convinced of the benefit to them.

I have complete confidence in the minister. I say to all those people out there saying that the power of the veto has gone: it has not gone; it has been placed in the sure and safe hands of someone who understands this industry and is going to take good advice from those members who represent and spend the most time with wheat growers. I am really confident and assured of that. We cannot undo what has happened. It is true that the sacred chalice was handed to AWB for them to behave responsibly with this important power they had—the capacity to veto the opportunity for other participants to share in the market.

My priority is the interests of my growers. I can assure you I will be conducting extensive consultation. I have just been listening to the discussion about everybody having a peaceful and quiet Christmas. I can assure you that will probably not be the case for the member for Mallee. I will be out there. I am already out there—by telephone—having discussions with the thousands of wheat growers that I represent. They elect us to come to this place as the members of the House of Representatives and our obligation is to ensure that when we ‘re-present’ we are in touch with the views of the majority. That is the confidence they place in us when they elect us to this place.

I think a plebiscite, a ballot or whatever is completely unnecessary. It is an additional expense. What I want to see is expeditious action, and I am confident that the minister will deliver. I want to commend this bill to the House so it is dealt with expeditiously. Then we can all go home to the Christmas we celebrate.

On indulgence, through you Mr Deputy Speaker, I would like to endorse the remarks made about the season we have come to celebrate. I do not apologise for the fact that this is the birthday of someone who is the centre of my faith—the rock of my value system. I make no apology for that. It inspires us to pursue that goodwill and the challenge to overcome our human frailties and to extend that goodwill to the people around us. I commend this bill to the House and look forward to it being dealt with expeditiously.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I will not go through the whole wheat debate again, because I think people do want to get out of here tonight, but I do have an amendment that two members have already referred to. The member for Calare is supporting it and the member for Mallee suggested he will not, at least—I am not sure what the government’s view will be. But there are a number of issues that I would like to raise in this debate on the Wheat Marketing Amendment Bill 2006.

Every member of parliament who has spoken on this issue in recent months has spoken with great concern for the wheat grower. The member for Mallee did just a moment ago. He has great concern for the grower, the people he pulls up and talks to. The minister spoke about the wheat grower, how paramount this issue is to the wheat grower. The Leader of the National Party and Deputy Prime Minister at the rally in Victoria told the wheat growers that, if there were going to be significant changes to the wheat marketing arrangements in terms of the single desk, there would be a poll taken of wheat growers so that wheat growers could express their views.

The member for Mallee has a strong view. I appreciate his view that something similar to the situation the wheat growers have now should be maintained into the future. I think that is a view that is held fairly strongly by the wheat growers. I just cannot see why a poll of their views on the options that are going to be presented to them is a threat to the system that the member for Mallee believes in. Surely it would be a support if that is what the growers want. The Deputy Prime Minister is going to put his trust in the—

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Mr Bruce Scott interjecting

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

The member for Maranoa says that there is going to be consultation. Thank you very much. The Deputy Prime Minister says a similar thing. He has gone back on his commitment to growers that he would poll them about significant changes. He is saying that he will consult with the industry. Let us have a look at who that is. I used to be a member of the Grains Council of Australia. I do not know whether the system has changed, but when I was a member, I represented the New South Wales Farmers Association and I was a coarse grains member on the committee. A coarse grains member does not necessarily grow wheat. In my case, I did grow wheat, but I had a say on the wheat industry. What you could have are people who do not grow wheat having a say through the Grains Council of Australia about the future marketing arrangements of the wheat industry, which could have implications for other grains that may or may not be exported.

If you look at the recent history of the Grains Council of Australia in advocating for grain growers—they are not there for the wheat industry; they are there for grain growers—you will see that they have been more interested in the future of the feedlot industry. When the ethanol and biofuels debate was taking place, the Grains Council of Australia, which is supposed to be there representing grain growers, came out and condemned a mandate of ethanol on the basis that it believed that the motorists of Australia should have choice and that it could have an impact on feedlotters. If that is the group that the wheat growers of Australia are going to put their faith in, God help us. If people took the time to look at the recent history on the various visions of wheat marketing, they would see there are a number of other things. Some work has been done—some by American related consultants—that I will not go into at the moment, but I urge others to.

The other peak body that the Deputy Prime Minister and, I presume, the Minister for Agriculture, Fisheries and Forestry would put their trust in would be the National Farmers Federation, which is supposedly a peak body representing farmers. The people on the National Farmers Federation come from constituent bodies, but they do not necessarily come from grain growing areas. I regard the President of the New South Wales Farmers Association, Jock Laurie, as a friend. He does not grow wheat—he is a wool grower—but he is on the National Farmers Federation. He may well have a critical part in the decision-making process on the future of our export arrangements.

If we look closely at the performance of the National Farmers Federation in recent years, do we see an organisation that has represented farmers? I think not. Look at the issue of Telstra. All the polls that were taken, including some that were done by farm organisations—constituent members of the National Farmers Federation—did not want Telstra to be sold, but they voted to sell it. They endorsed the government arrangement by saying that they had been promised a letter that would deliver equity of access for country people to broadband and basic telephone services. No-one has ever seen the letter, but Barnaby Joyce voted for the sale in the Senate on the basis of that commitment. The commitment is absolutely gone. These are the people that the government is going to put their faith in to make a major decision about the future of one of our greatest industries. We are all well aware of the corrupt activity in world markets. The point that I make is that a lot of these people are not particularly interested in the wheat industry and a lot of these people have other agendas behind the scenes—political agendas or a whole range of other agendas. The only way, Minister, that you can find out what the growers want—and it does not circumvent the course of government—is to ask them. Ask these constituent bodies, but do not let them be the final arbiters.

I suggest—and what the amendment does this—the industry groups, the Wilson Tuckeys of this world and others put up options. Given the discredited nature of the Wheat Board, we should be looking at options. My particular view is very similar to that of the member for Mallee: that is, we should end up with something that is not all that dissimilar to what we have now—that is what I think growers are saying, but I have not spoken to them all; there are 20-odd thousand of them. But there may be a slight modification. There may be other options and this is a time when those options should at least be aired.

The various media reports I have seen today suggest that there will be some options prepared by various people within industry. All I am suggesting is that when they are prepared, those options—with the arguments for and against—be mailed out to the people whose livelihoods are going to depend on the decision that the government makes so that they at least have a say. They can sit around their own kitchen table—away from the political view, away from the agripolitical view and away from this parliament—and come together with their own communities and ask, ‘What do you think of this?’ and take advice, but let them have a vote.

That vote does not have to bind anybody. In fact, it would actually give government and the minister some guidance in terms of what the growers actually think. The cabinet is quite at liberty, given our parliamentary process, to make a decision that is completely different. But, if we do not really consult the growers on an issue of this magnitude, when we all go through this palaver about how we are so concerned about the wheat growers—the blokes on the tractors—I think we are doing them a great disservice.

So I would suggest again: produce the option, take the time to mail out the option and ask for the wheat growers’ personal opinions. I do not just mean shareholders of AWB. A lot of them are not wheat growers. A lot of them have other interests. I would suggest that the poll actually reinforces the argument of the member for Mallee, if in fact he is representing the people in his electorate—and I have no doubt that he is.

The other issue that I would like to raise in relation to the poll is that, if this amendment is voted down today, I intend to poll the growers. It is possible to do. I intend to do it, because I feel very strongly about this. Those people deserve a say. You cannot go out into the countryside, as the Deputy Prime Minister did, and say to people, ‘If there’s any change, trust in us’—with placards up in the background saying how great you are—‘and, if there’s any significant change, we’ll come back to you.’ He did not say, ‘We’ll come back to David Crombie or Peter Corish or Jock Laurie.’ He said to the people of Victoria, I think in the member for Mallee’s electorate, ‘We’ll come back to you on this’—not to the industry leadership group but to the farm community.

If anybody suggests that those people who drive those tractors are not capable of making rational decisions about their own future, I think that is an extraordinary insult. If this amendment is not supported today, that is essentially what this parliament is doing. It is saying: ‘We feel for you; we understand about the $300 million that has gone berserk in Iraq and the $30 or $40 that the Western Australian grain growers are going to suffer this year. We recognise the problem. We have put in place a commission to look at the administrative problems. But we don’t trust you to be part of the decision-making process.’ What if the ones that we do trust are the traditional lackeys of the system—who do not represent farmers, in my view? Others may have a different view. I have been critical of the NFF for some time now, and I think it is a great tragedy to see an organisation that could be leading the farm sector degenerate into the representative body that it is. I think it is a great shame—I was involved with it quite strongly some years ago—to see it fall away the way it has. I have had no-one ring me up and condemn me for attacking the National Farmers Federation.

I say to the minister once again: if you are serious about grain growers, you have an enormous responsibility on your shoulders for the next six months. You have the grain industry in your hands. I will be voting for you to take that responsibility. But do not assume that that allows you to just talk to a few people in a room somewhere and make some deal that you believe will solve a few political problems in here and then convince a number of the key wheat growers that that is the way it should be done. That is not the way the rhetoric has been conducted. I urge the parliament to support the concept of a non-binding poll of every registered wheat grower so that you can get their view before any final cabinet decision is taken.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

I want to say at the outset, as I rise this evening to speak on the Wheat Marketing Amendment Bill 2006, that I realise we are short of time and we have agreed that we will spend limited minutes on this bill. But I want to say how very proud I am of The Nationals members in this House who have fought solidly to retain the single desk and the option that we have on the table at the moment. I would like also to make reference to the member for Pearce, the Hon. Judi Moylan, for her absolute, solid commitment to the facts and the issues that are confronting the growers in Western Australia. My admiration for the member for Pearce is extreme, and I want to thank her for all that she has done within this debate as well.

I think everybody who stands and represents growers is very passionate about this issue, an issue that has been foisted upon us through no fault of the growers and through no fault of the politicians. As might have been alluded to in this House, there are people who have a different opinion from me, but let me say that the members who represent wheat growers are very, very concerned about the position that we find ourselves in and are very passionate to ensure that we come up with the best possible outcome. Thus my thanks go to the Prime Minister for working through this with the Deputy Prime Minister, Mark Vaile, Leader of The Nationals, and the Minister for Agriculture, Fisheries and Forestry, the Hon. Peter McGauran, for working through this process and listening to the concerns of their backbenches and being able to find a way forward to enable our growers to have a say.

I would like to refer to what I have found to be the most succinct and stable point of view that I have heard in this whole process. I am not going to mention the name of this person, but they are a Western Australian grower. Western Australia has obviously been very much at the forefront of this whole process. I am going to quote from this email, simply because it stacks up and succinctly says where we need to be. This person says:

I don’t mind improvement. I am very keen on being the best out there. But I am really not keen about being a political football. I am irate that my income, livelihood and my children’s future being used for someone else’s political purposes. Momentous changes of wheat marketing for this season are going to be voted on by those who have little understanding of the complexities of our daily lives and industry. For many, that is no fault of theirs, it is a set of complex inter-relationships and global business is understood by few. We have been poorly served by both our political representatives and our grower organisations.

…       …            …

I do not believe there is anything to be gained by precipitous action and if anything, dreadful mistakes can be made that cannot be rectified. I believe that calm, information (not media hype and innuendo)—

which we have seen happen in this House time and time again—

balance of many factors as this is not just marketing overseas we are talking about. This is a commercial, integrated, organised, national industry. It stands to be chopped up, bureaucratised with no economies of scale and pitting grower against grower, state against state, grain against grain.

United we stand and divided we shall fall. If we do not make our voice heard and it seems it is going to have to be individually, why would any politician worry about farmers?

This person says:

Please do not feel inhibited by your thoughts of “I cant make a difference” or “I’m not good at this”…

This person then goes on to say:

… you can by just making a few comments. The politicians need to know you really do care.

The email continues:

West Australian wheat growers, along with the vast majority of the nations’ growers, ask the Senators of the Australian Parliament to put the stability of our industry first.

Obviously this was written when there was the threat of a private member’s bill in the Senate. It continues:

We, your constituents in many parts of Australia, request that you vote against the Private Members Bill calling for the power of Veto to be removed from AWB International, the export marketing subsidiary of AWB Ltd.

We need certainty of marketing for the 2006 Harvest. We need an orderly marketing system. We need the Government to give certainty to the AWB 2006 pools. We must not have a change in the rules midway through this harvest. The time is critical. The harvest is drought affected and historically critically tight supply for both domestic and export customers.

This person, as a Western Australian farmer, says:

WA Farmers are warehousing grain as there is no market certainty. If you remove the power of Veto and introduce multiple sellers into the wheat market at this late stage you will give the kiss of death to the AWB 2006 Pool. Many growers, Australia wide have already delivered into these pools. The costs have to be divided between those growers. A pool has to be managed from early this year, well prior to planting even starting and for the following 18 months. Pools take every and all grades and types. Those opportunists who claim to be concerned for growers returns this year, promoting the introduction of this bill, can only market certain types and grades leaving many growers completely exposed. It is critical in this drought year that our long term customers are serviced, growers have certainty to use all the avenues of wheat marketing available to them and to maintain the viability of the current and past pools.

This person goes on to say:

WA growers are particularly exposed.

Now this person has put up the following suggestions:

2.

Maintain the current marketing arrangements for the current and past pools

3.

Review, with extensive consultation of growers, wheat marketing of Australia’s grain post 2006 harvest

Australian Wheat Growers need a strong national system of wheat marketing. WE enjoy no subsidies, we are the most efficient farmers in the world with the poorest soils, high input costs, high labour costs. We produce the highest quality wheat in the world and our productivity gains have been massive over the last 20 years. We are technological innovators, we are leading edge in farming and grain growing .We have wives, children and families in remote rural areas. We take pride in looking after ourselves, being independent and maintaining the strongest communities we can. We are the base of rural towns and industries and we are in trouble.

We ask only one thing of the Australian Parliament and that is to market our grain to the world from a position of strength—a single seller into a distorted global market.

I am saying to you, Mr Deputy Speaker, and to the House: if every member gets involved, growers will be spoken to because they are all represented by members in this House. The more involvement we have, a greater voice we have. I suspect that the members of the House are the ones who should be consulting with their growers on an individual basis.

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

We have been having a debate in this House this week about responsibility and the need for the government to take responsibility for the areas of public policy which matter in this nation. But there can scarcely be more striking and dramatic an example of this government’s failure to accept responsibility, its refusal to accept responsibility, than the way in which it has handled the AWB scandal. It has effectively suggested that nobody is to blame; we did nothing wrong. They are not going to chastise anybody. You hear nothing about action within the Public Service or anywhere else to seek to bring home any accountability for what is the greatest scandal in this nation’s history.

Hearing the contributions of some members opposite, it seems to me they are living in fantasy land, they are living in a dream world. This is the government which set up this debacle with its legislation to privatise AWB. We have the member for Gwydir in the chamber. For decades the single desk operated without controversy, but that was not good enough for this government. It brought in legislation which killed the goose that laid the golden egg. It set up a conflict of interest whereby AWB is obliged, under its legislation, to give its first loyalty to wheat growers and, under the companies legislation, to give its first loyalty to shareholders. It is said in the Christian Bible: ‘No man can serve two masters.’ That is indeed the case.

The government set up a conflict of interest. It has been an accident waiting to happen. The government now says, ‘We are taking the monopoly back from the AWB and we are giving it to the minister.’ The question I want to raise is: what is going to be the role of the Wheat Export Authority? It has emerged from this debacle as smug, complacent and clueless. Indeed, one of the options available to the government was to pass the monopoly powers to the Wheat Export Authority. The Prime Minister was asked about this and he said, ‘The Wheat Export Authority was commented on by the Cole inquiry’—and indeed it was, in very unfavourable terms. It is absolutely extraordinary that the Wheat Export Authority could have conducted an inquiry into how the AWB was performing at the time when all these kickbacks were occurring and yet have found no evidence of the payment of kickbacks—frankly incredible.

My question to the House and to the minister is: what is the Wheat Export Authority’s role now? Are its staff not effectively being paid to sit down and do nothing? It seems to me that that has been the case all along—it was either the ‘wheat export rubber-stamp authority’, so far as the AWB was concerned, or the ‘wheat export refusal authority’, so far as everyone else was concerned. It is now blindingly obvious that this is an authority which is lacking in any legitimate function or purpose.

The Wheat Marketing Amendment Bill 2006 is an admission by the government that they failed to get the structure of the AWB right in the first place and that, ever since then, they have failed to adequately monitor its performance. This debate ought to be accompanied by an abject apology from the Howard government to every Australian wheat grower. You have Minister Vaile saying, ‘We’ve been cleared by the Cole inquiry,’ utterly without shame. The fact is that the wheat market in Iraq has been lost. They are not even trying to go there anymore. Great damage has been done to Australia’s international trading reputation, but we have a government which is utterly without shame and refusing to accept responsibility.

Every wheat grower deserves an apology for the failure of a succession of National Party leaders and ministers to do the jobs that they were elected to do and have been paid to do. We had the member for Gwydir, who as agriculture minister devised that flawed structure for the AWB at the time it was privatised. We had the current National Party leader, who took this legislation for the flawed structure through the parliament. Then we had the now deputy National Party leader asleep at the wheel while the Wheat Export Authority failed time and time again to properly do its job and allowed the AWB to run amok. This has been a disgraceful failure on the part of the National Party representatives to look after the people whom you claim to represent and were elected to represent.

In 1999, your government privatised the Australian Wheat Board and the AWB became a grower owned company under Corporations Law.

Greg Hunt (Flinders, Liberal Party, Parliamentary Secretary to the Minister for the Environment and Heritage) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: I would ask that the speaker be urged to address his remarks through the chair.

Bob McMullan (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

The standing orders do require him to address his remarks through the chair, but if he did he would be the first in this debate. I call the member for Wills.

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

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

At the outset I thank the member for Riverina for her very generous comments. As I speak to this Wheat Marketing Amendment Bill 2006 I must say it is undeniable that the Iraq wheat saga has been a shabby affair and the wheat growers of Australia have been very badly let down by those responsible. The Cole commission of inquiry has brought down its finding, and I do not propose in the short time available to comment further. It seemed inevitable, though, that this event would once again open discussion about the future of the single desk. Growers have long argued the merit or otherwise of the AWB holding the power of veto and marketing the bulk of Australia’s export wheat through the single desk.

Foreshadowing that discussion, I called a meeting in York in the Pearce electorate to seek the views of growers. At that meeting the majority of growers strongly expressed a view that the integrity of the single desk must be maintained. In the wake of Cole, WA growers have also confronted a serious drought and a locust plague. These events have had a devastating impact on rural communities as the economic viability of associated businesses declines, with a roll-on effect well beyond the farm gate.

Farming is a risky business and the management of the export wheat pool from a single desk helps to minimise a number of risk factors on behalf of growers. These include prices, exchange rates, wheat quality and seasonal and market volatility. Growers tell me that the risks will be greater for most growers if the AWB or a similar grower owned entity is unable to take a longer term strategic approach to selling wheat in the intensely competitive international marketplace.

Currently, the European Union maintains price support for wheat in excess of 40 per cent of its total value, and the United States similarly maintains price support of 30 per cent—in other words, a $3.3 billion handout to growers, as well as the advantages of export credits and food aid operated by the United States. Under the single desk system growers tell me they have benefited from premium wheat prices and an integrated package of services. One man wrote to me to say that he had been well served by the single desk for something like 70 years. The international marketing activities undertaken by the AWB have secured market share, delivering reasonable consistency and certainty to growers for many years. That is the message that my growers have given to me.

Time does not permit me to go into all of the arguments put to me by growers in Pearce. However, it is clear that the majority of growers who have taken the time to comment want the single desk system to continue. This includes some young, energetic growers. I spoke to one on his harvester the other night who related to me his experience selling wheat outside the pool. There can be no benefit in a knee-jerk reaction to Cole by dismantling a system that has produced a reasonably consistent result for growers. In this volatile commodity market and time of drought, it would create further hardship and greater uncertainty.

The bill gives the power of veto to the Minister for Agriculture, Fisheries and Forestry, the Hon. Peter McGauran, for a period of six months. Growers have expressed some nervousness about how the power of veto will be exercised in the hands of the minister and whether it may compromise the AWB’s ability to operate so as to maximise the returns to the majority of growers. I believe that this minister fully understands how important it is to the majority of growers to maintain the integrity of the single desk, and I am quite sure that the minister will exercise his power accordingly. Along with this interim measure, the government has announced a consultation process. Over the next three months, growers and grower organisations will have a chance to examine the options for the future of wheat marketing and to make comment. I urge growers in the electorate of Pearce and beyond to fully participate in that process.

I agree with much of what the member for New England has said—indeed, I think in some respects supported by the member for Riverina. As the minister is in the House, I make this point very strongly: we should not be talking only to grower representative organisations, because it does seem, as the member for New England has pointed out, that not all of those organisations fully understand the issues for wheat growers or they are pushing a particular barrow. I do think that we have to ensure that our consultation process not only is with those organisations that represent different sectors of the rural community but also extends out to the individual growers within our community. I agree with the member for Riverina that that responsibility really rests very much with those of us in this House charged with the responsibility of properly representing our communities. So, as I said, I will be urging the growers in Pearce and beyond to fully participate in this process.

I actually read with interest the comment of the Grains Council in their press release today, where they are calling for a well-structured, independent process for consultations. I support that notion. I hope that, with the passing of this legislation, our growers can get on with running their businesses, growing and harvesting wheat, getting it to markets and getting a return for the tremendous work and effort that they put in—and the contribution they make to this nation should always be acknowledged.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise to speak about the Wheat Marketing Amendment Bill 2006. I understand we are at the end of a long sitting and everyone is very keen to wrap up this debate. I appreciate that the Minister for Agriculture, Fisheries and Forestry is at the table this evening, and I note he is listening very carefully to the contributions, particularly those that have come from this side of the House. This bill will transfer the power of veto—very importantly on a temporary basis—until 30 June next year. It does not alter the functions or the responsibilities of the WEA , but they now will have to consult with the minister. Overriding that, what has to happen as part of that process is a resolution of the impasse that has manifested itself in Western Australia at the worst time of the year for any wheat grower, which is during the harvest period. At the end of the day I know that the minister will act in the best interests of Australian wheat growers, and I think that is of paramount importance. The major responsibility of the WEA has always been to ensure that the wheat growers’ interests are of paramount importance.

It is important at this time to think about why we have had the AWB running the single desk, the national pool, with the power of veto. It is important to reflect on why, under the legislation, those powers were given to AWB in the past. They are important powers. Through the Cole commission of inquiry we learnt that certain individuals—former employees and maybe some who are still in the employ of the AWBL or AWBI—let us all down. They brought great discredit to the wheat growers of Australia. But what was not on trial was the single desk export status of AWB, the management of the national pool or the power of veto. That was not in the terms of reference and was certainly not on trial during the Cole commission of inquiry.

It is also important to reflect on why we have had a single desk marketing arrangement for Australian wheat which has served the wheat growers of Australia well for decades. Wheat growers have to sell their product into world markets that are distorted by the subsidies paid by the Europeans and the United States of America—two very powerful economies that subsidise production of their wheat which ends up in international markets. They are not going to wind back those subsidies. In fact, through the Doha Round of World Trade Organisation discussions, which we could probably say have collapsed, they have failed to move on that very fundamental point of world trade reform. So, as wheat growers, we have to sell into distorted markets against the two most powerful economies of the world. The AWB have done an incredible job in the past and I know they can do it in the future, because they will have to into the future. The minister will have to consider this point when he considers how to exercise his veto power and make sure that we do not undermine the AWB and their operation of the national pool.

The other thing I am mindful of in this debate is that for decades and decades the wheat growers who have delivered to the national pool have known that they will get paid for their commodity. You cannot say that about every rural commodity. I have growers and livestock producers in my electorate who have sold valuable commodities which cost an enormous number of dollars to produce only to find that the company they sold them to has ended up in receivership and they will not receive anything for that year’s work. There is a record as long as my arm of companies that have gone broke and the farmers they have received produce from have not been paid for it. That is another one of the great benefits of the AWB and the way they have marketed wheat over many generations: they have never defaulted on a payment to wheat growers. They have always ensured, which is their charter, to maximise returns for the Australian wheat growers, despite selling into distorted world markets. In markets around the world where others would like to cherry-pick parts of the Australian wheat crop, AWB have developed those markets, gone to those markets and shown those people who buy Australian wheat how to get the most out of it—they have an after-sales service as well, if you like.

One of the important things that must happen over the next six months is consultation with wheat growers as to the way forward. There has been a lot of discussion in this place, mainly coming from those on the other side of the House, who would like to tear up the Wheat Marketing Act. They would like to put it through the shredder, judging from comments we have heard in the corridors.

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Link to this | Hansard source

The AWB achieved that on its own!

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Here we have the former Minister for Primary Industries and Energy in the Keating government saying he would like to shred it now. There must be consultation with industry, with the wheat growers whose industry it is, during this period, and I would like to think it could be concluded before 30 June next year. The Grains Council of Australia commented today that they would like to see it concluded within the next three months. I do not want to put that sort of pressure on growers as we go into the holiday period, and it may be difficult to get a lot of feedback during this next six to eight weeks, but we must give time to growers and we must hear from growers because it is their industry that we are dealing with.

In a season my electorate of Maranoa produces probably 80 per cent to 90 per cent of the wheat that is grown in Queensland—that is, when there is a season other than the worst drought in 100 years, which they are dealing with out there now. My electorate has also proudly produced three of the last four chairmen of the Australian Wheat Board. My electorate’s wheat growers will not be receiving a wheat cheque this year. There are a few who have chanced rain and have delivered some wheat, but overwhelmingly the Queensland crop is probably the worst on record.

The drought bus has been in my electorate for the last two days and I spoke to the staff on it today when it was in Ballon. They are getting a tremendous response as they travel around. In St George, where they were yesterday, there was no wheat delivered. Forty-five people turned up for the drought bus, and only two of them were people in receipt of EC payments. That is a demonstration of how, when you take the services to people to help them in this exceptional drought, this sort of interest from people will come forward because they are so remote from that face to face service. When I spoke to the staff at three o’clock this afternoon, in the small town of Ballon, 15 people had turned up. That is an example of the need for this service to travel out into those communities.

In conclusion, I thank Minister Joe Hockey for that initiative, and I know that the Minister for Agriculture, Fisheries and Forestry, who is at the table, was supportive of it and pushed very hard for it. I am sure he is very heartened to hear of the sort of support that is happening. I spoke to the staff on the bus this afternoon. I think they were having a bit of a problem dealing with the heat in western Queensland, but they are appreciating the opportunity to hear firsthand from small business and the farmers. In two days, they have had at least 70 people turn up, the majority of whom have not received any EC payments in the past and are new to them and wanting to know what they would be eligible for. I support the legislation before the House and look forward to working with my electorate’s growers to bring feedback to the government during the next six months.

Barry Wakelin (Grey, Liberal Party) Share this | Link to this | Hansard source

I have a few words to say about wheat growers, the drought and the circumstances around the Wheat Marketing Amendment Bill 2006. There are three or four basic things that I want to say about recognition of the single desk for export wheat. Effectively, in this year of severe drought there is really one state of the Australia Federation which is directly affected—that is, Western Australia. My own region of Eyre Peninsula in South Australia may have 200,000 or 300,000 tonnes of grain for export.

It is also important to recognise that AWBI, which did have about 80 per cent wheat farmer ownership, is now down to about half of that. Farmers have indicated that, for whatever reason—

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

They need the money.

Barry Wakelin (Grey, Liberal Party) Share this | Link to this | Hansard source

That is part of it, Member for New England, but I also think many of them have decided that wheat growing is more important than share trading. In respect of the issue of the single desk and the debate about the premium, now is not the time to talk about it, but there is also going to be a debate about where the single desk premium lies.

Wheat will always be a product with a value. From my own personal experience, I have sold a lot of other agricultural products—wool, meat and other grains—and have always been able to have those payments honoured. I guess I have been fortunate. I have always valued the AWB for its surety in payment. To sum up, the single desk for export wheat in the season of 2006-07 really is about Western Australia and a small part of South Australia. There may be other very small parcels of wheat throughout the rest of Australia. The ownership of AWBI has now passed pretty much in the majority sense from the wheat growing industry to other hands.

We have a financial system now which, thank goodness, in my experience in agriculture—I have been a wheat grower since 1970—has been able to honour all payments. To the minister, I say: you have a very tough task. I cannot see any other way that the government could have got through this, because of the circumstances that we all know about. It is important to remember that the marketing of wheat is actually a lot simpler than the growing of it, in my experience, and therefore, as tough as it looks, I am confident that we will ride this out. I have every confidence in you, Minister McGauran, and in the government that we will find the solutions and that the wheat growers, particularly the export wheat growers, and Australia’s best interest are represented in this bill.

John Anderson (Gwydir, National Party) Share this | Link to this | Hansard source

I seek to make a few points. I support the Wheat Marketing Amendment Bill 2006. I wish it were not necessary, but it is in the current circumstances. At the outset, I acknowledge my interest, as a wheat grower, in this whole debate. The Australian wheat industry is a very high-quality industry, and it would be not be such if it were not for the fact that its marketing arrangements are also very good. It is very easy indeed in the current circumstances to rush around saying: ‘The skies are falling in,’ and, ‘It’s a corrupt organisation and it’s this, that and the other.’

The reality is that Australian wheat is very highly regarded. It is in great demand. There is an enormous disaggregation of wheat types, of quality, of standards and of reflected payments for those standards right through from the different types and styles of wheat through to the Golden Rewards program and what have you. The industry has matured into, I believe, the world’s best. I make the point that that has been made possible in large part because of the performance of the AWB, and the Wheat Board before it, over a very long period of time. In short, I do not accept the arguments that it has stifled innovation and held the industry back. I think the evidence for that is to be found in its recognition globally as an outstanding industry which provides a very high-quality product that, in turn, is able to extract a premium.

As part of that debate, I would also point out that I suspect there is no more competent or capable trading desk in this country than the AWB’s. Given that nobody could have possibly foreseen what was going to happen to the spot price for wheat, the reality is that, in its hedging and preparation for the future, the AWB probably did a pretty good job. I suspect it does a better job year in, year out than almost any other hedger of any agricultural product in the country, and we ought not to destroy it because in one year spot prices reached unprecedented highs. It also ought to be noted that, as CBH’s offers have come down, AWB’s estimated pool returns have gone up. If you add Golden Reward price increases, the reality is that they are probably pretty much lineball at the moment. Those are factors that the minister will have to take into account when he takes up the veto power and seeks to use it to bang heads together to extract a bit of common sense in the current very difficult circumstances.

Let me make a couple of other comments. There are many things I would like to say, but I will not. I will keep myself as brief as I can tonight. I have publicly indicated my very strong support for the single desk. I would like to note that, even with the most cautious of deregulation or playing with a veto, if we are not very careful it will result in the effective dismantling of the single desk. That is something that growers are becoming increasingly aware of, and I would countenance that very careful note be taken in this House and beyond. There are many who say that the single desk ought to go. I am aware that, if there is any electorate in Australia where there would be a substantial body of wheat growers who would like to see change, it is probably in the northern end of Gwydir. But, having said that, there is no doubt whatsoever that the clear majority of growers want it retained and, at the very least, would say we would be mad to give it up until we see some decent trade reform in the rest of the world.

I want to say very clearly and without equivocation that there are friends in America who are saying that they want examinations of how much damage might have been done to their wheat growers by the behaviour of the AWB. Hang on a minute: perhaps it is time that our minister ensured that we had some pretty good armoury ready to defend ourselves with. Remember that the World Bank, no less—an authority in its estimates of the impact of American and European protectionism on agriculture—put a figure of some $30 billion a year lost to Australian farmers as a result of the corruption of global marketing and production and trade in agricultural products. So let us be very careful indeed if we are to have a discussion about who has damaged whom in global trade.

No-one defends the actions of those who behave corruptly but I would again say: let us keep some perspective about this. Any business structure is capable of being corrupted by people who do the wrong thing. The simple reality is that mankind has not devised a corruption-proof legal entity, company entity, political entity or private entity. It does not exist. We are always heavily dependent upon people with appropriate law qualifications and appropriation actions and goodwill on the part of people who are involved in any sphere of human activity.

Nobody condones what has happened, but we need to be very careful lest we do great damage to Australia’s wheat growers at a time when, to put it bluntly, it is not only the drought and the behaviour of the AWB that have made their lives much more difficult but also the governmental practices of many other countries in the world. We ought to remember that we owe it to our wheat farmers to point that out vigorously every time they and we are attacked. We have at great cost gone out and exposed ourselves to the world—made ourselves vulnerable—through an in-depth investigation of the AWB. It has emerged that a number of people have behaved highly inappropriately—or at least the charge can be made and is likely to be made to that effect—but we need to keep this very unfortunate incident in some perspective lest we find that the cure is worse than the disease, for wheat growers at least.

Let me say that I understand—I really do!—the immediate attraction of a poll, but the minister is in a very difficult position. This will not be easy for the minister; I know, I have been one. When it comes to industry consultations, you will have information coming at you from everywhere. I remember in the days when we were talking about the Garnaut report into the wool industry, I personally conducted 23 meetings around rural and regional Australia so that people could approach me directly with their views. And it was an exhausting exercise. I am not going to put the wood on you to do the same thing, but I am going to say that it is very important indeed—

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Link to this | Hansard source

You needed a Labor government to give you that sort of consultation.

John Anderson (Gwydir, National Party) Share this | Link to this | Hansard source

I did the consultation that the shadow minister at the table did not do, even though we ended up cooperating very well on that issue. Fair’s fair!

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Link to this | Hansard source

An independent review; that’s what our amendment suggests.

John Anderson (Gwydir, National Party) Share this | Link to this | Hansard source

Let me just say this: you will have to pull a lot of divergent views together, and you will have to take proper account of them, but I do say to you that I think the government has the responsibility for pulling all of this together, having collated carefully the views not only of the industry and of individual growers but also of backbenchers, whose responsibility it is to hear the views of their industry representatives and their growers in particular and to feed those views into this place via the normal process in the party room.

We have to be practical about this. The government must listen but, as the body that gifts the single desk, it has a responsibility to secure the confidence of wheat growers and the trade internationally in the future. I support the proposal before us from the minister. I again emphasise the importance not only of listening very carefully to the growers but also of accepting that the government has the final responsibility in this matter.

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I wish to thank the members of the government and the Independent members for New England and Calare for their constructive and supportive contributions to this extremely difficult and complex issue, in both economic and social terms, during this debate on the Wheat Marketing Amendment Bill 2006. The members for Wills and Hotham, predictably, tried to make politics largely out of their contributions. If it is out of their systems now and they can now move on to debate the merits of the issues that lie ahead then we will all be well served.

The government believes that removing the bulk veto power from AWBI will give growers greater confidence in the accountability of export decisions following the Cole inquiry. The change will also provide for clearer separation of the commercial and regulatory functions of the current wheat marketing arrangements. These temporary arrangements will provide greater flexibility to government to manage the single desk in a way that maximises returns to growers while it considers the policy moving forward.

The temporary measures will address current concerns in industry about the wheat marketing arrangements, particularly in Western Australia, where there is not the same range of options for the sale of wheat because the domestic market possibilities are not as available to them in any real sense as they are in the Eastern States. The government will consult widely over the next three months at the grassroots level so that the interests of wheat growers are considered in any future policy on wheat marketing arrangements.

I have been asked on more than a few occasions in the 72 hours since the government made its announcement to transfer the power of veto to the Minister for Agriculture, Fisheries and Forestry under what circumstances it would be in the public interest to waive the veto. It will depend on the circumstances in question. Each situation will be different and any guidance that I may give now could not reflect all of the complexities likely to exist and the balanced judgements needed.

In approving or rejecting a bulk wheat export application, I do not want to create two classes of wheat growers—those who are winners and those who are losers. I will not allow the very livelihoods of farm families to be decided by a lottery of who acquires and exports their wheat. This will almost certainly require compromises by the parties involved. Not everybody will get everything they want during this interim period. Instead, it is up to the industry and government over the next few months to decide permanent arrangements. Fairness is paramount and will be the government’s guiding principle.

I will turn now to the amendments. On the amendments to be moved by the member for Hotham, I should simply say the type of review proposed would be both time consuming and unnecessary. The industry has been subject to review after review. Do not delay the hard decisions that have to be made by one and all. The government has already committed itself to a process of consultation with growers and stakeholders as to the future of wheat marketing arrangements.

Looking now at the more thoughtful amendment to be moved by the member for New England, needless to say, there has already been considerable discussion about those future wheat marketing arrangements. I have been presented, in company with, I would suspect, many members of the government and a spattering of those opposite, with numerous industry proposals. These proposals have represented not only positions that are for or against the single desk but also a range of intermediate positions. A poll to determine the level of support for the single desk would not allow in practical terms consideration of these intermediate positions. In light of this I do not anticipate the government will be conducting a poll to determine the level of support for the single desk. Instead it is for individual members representing their constituents, being accountable to them for the judgements they make, to represent their views and come to a fixed position. Already during the course of this debate a number of members have declared that they support a single desk in much the same form as it exists today.

Instead, I hasten to assure the House and wheat growers far and wide that it is my intention to write to all growers to inform them of the consultation period and seek their views on the crucial issues. The government will consider the proposals put to it and determine what arrangements will best serve the wheat industry into the future. The views of Australian wheat growers will be at the forefront of our deliberations. I commend the bill to the House.

Question agreed to.

Bill read a second time.