Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Primary Industries, Fisheries and Forestry) Share this | Hansard source

I withdraw that term. The fact of the matter is that this government has failed the wheat industry and failed it on a regular basis. It failed when it introduced the current wheat marketing arrangements in 1997-99, when it went through the process of setting up the current model. It set up a flawed single-desk model which, frankly, is the basis of the difficulties that the industry faces today. And, despite many authoritative warnings, time and again, year after year, the Howard government ignored calls for reform. This model, which came into effect on 1 July 1999, converted the Australian Wheat Board from a government owned corporation to a private company—AWB Ltd—which was owned and controlled by growers, and AWB Ltd’s subsidiary, AWB International, was established to manage the export single desk. In doing that, the Howard government legislated a protected monopoly status for a private company.

This government’s second failure was when the Wheat Export Authority provisions were put into legislation. In our view it was designed to fail. When the single-desk model established the Wheat Export Authority it should have given it sufficient powers to oversee AWB and its subsidiaries. The Wheat Export Authority should have been provided with adequate powers to ensure that AWB’s corporate conduct was not only ethical but lawful. The Wheat Export Authority should have been able to act before AWB was allowed to engage in corrupt conduct in relation to the wheat for weapons scandals. The board of the Wheat Export Authority should have been sufficiently independent of industry and the executive, and appointments should have been based on expertise in business and marketing. These were failures inherent in the model that the Howard government established, and they resulted in a lack of transparency, a lack of accountability and major failings in corporate governance. The government ignored warnings about these governance failures from the national competition policy review in 2000 and from a Senate inquiry in 2003. It ignored multiple warnings from the regulator itself as well as repeated calls for reform from grower groups. Despite these warnings, the government failed to introduce any substantial reform for the Wheat Export Authority.

This government’s third failure was not to resolve the conflict of interest between AWB Ltd and AWBI, and many on the government side have been keen to raise that very issue over the last four or five years, so it is not an issue which has been unknown to the government. As I said, the problem was inherent in the model that the government established. It was identified by the national competition policy review in 2000, and that review recommended changes to remove the inherent conflict of interest. But the coalition ignored the recommendations, and the arrangement has persisted to the detriment of wheat growers.

Under the model, one of the key functions of AWB Ltd was to provide services to AWB International to enable it to manage the pool. A total of 77 separate services were provided, and there was no requirement that they be contestable. As a result, returns to growers from the pool have not been maximised because the cost of operating the pool has not been minimised.

The government’s fifth failure was the failure of accountability. It ignored Senate recommendations—unanimous cross-party recommendations—on things such as the regulation of boxed and bagged wheat back in 2003, reforms to governance and the WEA’s oversight of AWB International, and measures to address the conflict of interest. These were unanimous recommendations from the Senate Rural and Regional Affairs and Transport Legislation Committee, which included members of the coalition, and the government and the National Party minister ignored those recommendations. We are now seeing an attempt to remedy another of the failures, which was the regulation of boxed and bagged wheat. Only now, after almost eight years of operation of this scheme, are we seeing that there is a move to deregulate boxed and bagged wheat, which, as I say, was recommended four years ago.

The wheat for weapons scandal and the damage that that has caused Australia as a trading nation is, in every way, a direct responsibility of this government in the way that it has failed to equip the regulator to oversee AWB Ltd and AWB International. Over a period of seven years, between 1998 and 2005, there were dozens of warnings received by the highest level of the Australian government from official agencies, including the Australian UN mission in New York, the Canadian government, the United Nations, Australia’s US trade commissioner, the Department of Foreign Affairs and Trade and the Iraqi Provisional Coalition Authority. But the Howard government failed to take any action and preferred to accept AWB advice that the allegations of corruption were unfounded.

We then saw the Cole commission, which the government successfully corralled so that it could not focus on the government’s failings, but Commissioner Cole did make a critical recommendation in relation to wheat marketing. His report stated:

... that there be a review of the powers, functions and responsibilities of the body charged with controlling and monitoring any Australian monopoly wheat exporter. A strong and vigorous monitor is required to ensure that proper standards of commercial conduct are adhered to.

The government still has not responded in any adequate way to that recommendation. To all intents and purposes it has ignored Commissioner Cole’s recommendation. The Prime Minister has acknowledged the need to address the Wheat Export Authority’s powers to oversee wheat marketing but, in terms of what is in this bill, I would say that the changes are minimal.

Last month the Prime Minister referred to the critical opportunity for the government to take a strategic decision in relation to the AWB and wheat marketing generally. It was an opportunity to prove to Australia’s farming and investment community that he actually had a plan for the wheat industry, but pretty clearly, from this legislation, we see that the government only has a plan for the next election. And, in relation to that, it will be very interesting to see what the industry is going to do with the model that the government puts forward.

Isn’t it interesting that when the government has come forward with a piece of legislation which says, ‘Well, we really aren’t going to be in a position to tell you what we’re going to do until after the election; we’re really not going to be in a position’—