Ian Macdonald (Queensland, Liberal Party) Share this | Hansard source

I am pleased to enter this debate in support of the bill to effectively put ethanol into the regular taxation treatment of fuels.

The government's role in facilitating the success of Australian industries has to be balanced against the government's debt, the cost of future prosperity of Australians and fiscal policies that do not maintain a sustainable trajectory back to surplus. Of course getting the budget back to surplus is this government's principle goal in this term of parliament. For those reasons, the government has decided to move domestically produced fuel ethanol and biodiesel into the excise system and apply excise with reference to energy content. This approach is consistent with the government's approach to alternative fuels and will ensure that fuels are taxed fairly and transparently.

The approach in these bills recognises both that biodiesel is a close substitute for conventional diesel and that fuel ethanol has a lower energy content than petrol or diesel. This treatment in respect of domestically produced biodiesel and fuel ethanol is consistent with Australia's longstanding government policy to tax alternative fuels at half the energy equivalent rate. This policy recognises not only the potential benefits of these alternative fuels but also the desirability of tax neutrality across alternative fuels. This puts in the hands of Australians the choice of fuel; rather than it being dictated by its tax treatment. But biodiesel and ethanol will still be treated more favourably than other fuels, and I am hopeful that that will mean that some of the proposals for increased ethanol production from sugarcane will reach fruition.

The growing of sugarcane is one of the major industries of North Queensland, the state I represent in this Senate—not only growing sugarcane but manufacturing raw sugar from the sugarcane and sending it to the various mills up and down the coast of Queensland. The raw sugar industry has been going in Queensland for more than a century and has been the reason for much of the decentralisation of Queensland.

Cane has been one of the sustainable and longstanding crops that support so many communities in Queensland—towns up and down the Queensland coast. Originally it was around Maryborough, Childers and Bundaberg; then up to Sarina, Mackay, Proserpine, Ayr, Home Hill—where I live in the Burdekin district—Ingham, Innisfail, Mossman and, more recently, the Atherton tablelands, around Mareeba and Atherton. So it is a very important industry to Queensland.

It of course has its ups and downs—with the world market price and with various climatic conditions at times. Although climatic conditions are not as critical these days as they were in the past. In the area where I live—the Burdekin delta, Ayr and Home Hill—we irrigate all of the sugarcane from the Burdekin River dam, an initiative of Malcolm Fraser when he was the Liberal Prime Minister of Australia. That has meant that the industry in the area I am from is particularly sustainable. There are very good arguments for additional dams in the north of Queensland that could drought-proof various other parts of the sugar growing industry, around Mackay, Ingham and elsewhere, which at times do have difficulties with lack of rainfall.

But there are opportunities for new uses of sugarcane and that is where this bill before the parliament is relevant. There is a group based in Ingham, just north of Townsville, called the North Queensland Bio-Energy Corporation which is looking at additional uses for sugarcane in biofuels and ethanol, and looking further into plastics and other innovative uses of sugar. I believe John Hewson is now a director of that company. I know that the company—very well-led by Mr Robert Carey—is seeking financial support for this entity as it goes into so-far-uncharted waters. If it does get off the ground with a flourish, then it will be very good for the economy of North Queensland and northern Australia, and will provide yet another use for sugarcane.

In my own community of Ayr, Mr Geoff Cox has for years been looking at the financial viability of another sugar mill in that town, mainly focusing on ethanol rather than raw sugar production. It has never been easy, but these pioneers of northern Australia continue to work towards a whole new use of sugarcane.

Just last Friday, at the launch of the northern Australia development white paper in Cairns, I met up with Mr Peter Scott, the mayor of the Cook Shire. For those who are not aware, the Cook Shire covers most of Cape York Peninsula and it is based, obviously enough, in Cooktown. The mayor was telling me that there is a real opportunity for another dam at Lakeland Downs; a dam in that area could secure additional agricultural production, including sugarcane, in that part of the world. This would be a great boost to employment, and therefore population, in the north and it would give jobs to many people, including many of the Indigenous people of Cape York. Regrettably, at the moment the area does not have the economic activity up that way that would support long-term sustainable employment for many of the Indigenous people in Cape York.

I sometimes wonder at people in this chamber and elsewhere in the community who seem to be doing their damnedest to stop opportunities for employment for Indigenous people, particularly in Cape York. Just recently I noticed the ABC running a story headed, 'Knitting nannas trek Cape York in stand against coal seam gas industry'. The article on the ABC says:

Environmental activists, the Knitting Nannas Against Gas and Greed … will walk along the deserted and often dusty roads of Queensland's Cape York Peninsula in protest of the coal seam gas … industry.

That is very interesting, because there is no coal seam gas industry in Cape York—as I understand it, there is no coal seam gas in Cape York and there was certainly never ever any intention of having a coal seam gas industry there—and yet this group of environmental activists, no doubt encouraged by the Greens political party, is making this highly public trek up there to stop something that was never going to happen anyhow.

As well-intentioned, perhaps, as these people might be, as misinformed as they might be, it would be great to see their efforts used to address the real issues in Cape York, which is what I am talking about. Instead of opposing the non-existent coal seam gas, it is a pity these ladies and the Greens political party were not more interested in the huge unemployment in that area, the lack of infrastructure and services, the high youth suicide, the high prices and cost of living. All of these are worthy causes that the knitting nannas could address, but rather than do that they choose to address a non-existent issue, which they can obviously claim success for stopping as the coal seam gas industry is not likely to happen.

Senator Waters would know all about this; I have heard her talking about the non-existent coal seam gas industry in Cooktown. It always amuses me that someone obviously intelligent enough to be a member of this chamber can still not understand that there is not any intention—I do not think there is any gas up there; the early trials from many years ago showed that there was no coal seam gas up that way. Nevertheless, it is a political platform for the Greens political party and obviously the knitting nannas as well. But I urge the knitting nannas, if they want to do something seriously—I give them the credit of wanting to do something for Indigenous people in Cape York—then look at unemployment, the lack of infrastructure and services, the high youth suicide, and the high prices and cost of living because they are the real issues up there.

One of the ways that unemployment and suicide can be addressed is by new economic activities. Again, I mention the proposal for a dam around the Lakeland area on a river that runs out to the Coral Sea. That dam could double, treble or quadruple the amount of agriculture in the Lakeland area, and that could well include sugar for ethanol. So these are important issues for Australia.

That brings me to the issue of greater activity right across the north of Australia, where there is so much potential and so many opportunities abound. Naysayers will say, 'You did have an attempt at a sugar industry on the Ord some years ago, but it failed,' and certainly both of those statements are correct. But there were reasons for the failure, which I will not go into here, but they are not insurmountable problems that could not be addressed. Energy from ethanol and biodiesel are areas that could be looked at.

There were reports some months ago of a big Chinese development company buying into the Ord stage 2 in order to—as I recall from the newspaper articles—enter into sugar production for both raw sugar and energy purposes. I have not seen much further detail on that, and in the time this morning before this debate I have not been able to look further into it, but that is the sort of thing that I think that we need. I have no concern about it being an investment of a Chinese investment group into Australian land. Some people around the country will say, 'We're selling too much to the Chinese.' As I point out to them, they can never take the land back to China; it will always be in Australia, and whatever activities occur in places like that will always occur in a manner that is governed by Australian law: workplace and health and safety and conditions will always be governed by Australian law. I welcome that sort of investment, because it does in fact encourage investment into northern Australia. It encourages investment into agriculture that can be used for energy.

I am also aware of a group who have done a lot of work on the Gilbert River, which runs into the Gulf of Carpentaria. The Gilbert proposal is by a group called IFED, which is chaired by Mr Keith De Lacy. He was, many years ago now, a Labor Treasurer of the Queensland government, and he is now a very successful businessman. It is a proposal that is mainly agricultural, but it has an element of energy involved in it. It is a project that was more or less ready to go. Unfortunately, with the change of government in Queensland earlier this year, there was a bit of a pause on that project. There was a pause because, as you would know, Acting Deputy President Bernardi, in Queensland the Labor Party win elections because they get preferences from the Greens political party; without the preferences from the Greens political party, Labor would not win anything. In that way, the Greens political party always have this oversight—this final veto, one might say—on legislation that goes through any parliament where Labor is in charge and where Labor are there because of the preferences of the Greens political party.

The Greens have never liked this particular proposal; everybody else does, but the Greens political party and the Wilderness Society are totally opposed to it. I understand that there was a pause on that IFED proposal. I understand that a lot of work has been done, and there has been a bit of internal friction within the Labor government. The last news that I had was that it could go ahead with some other restrictions. But that would be good news, because that is another project in the north of Australia involving agriculture and involving alternative forms of energy that could be of particular use.

So whilst some would say that this legislation is putting an excise on ethanol that has not been there before, it is important to note that at all times under this regime, under these bills, there will be a concession to the ethanol industries so that you should always be able to buy blended ethanol petrol cheaper than the full price of petrol. This legislation retains that concession to the ethanol industry. While it is a long-term project, there are a lot of difficulties with the ethanol industry; one of them is getting enough ethanol to mandate a greater percentage of ethanol in petrol. But these things will be improved in an incremental way. In Brazil ethanol is a huge component of fuel, but the sugar industry in Brazil at the moment is in very, very dire straits. That does show that ethanol production is not the panacea for growing sugar cane. I think that these bills deserve the support of the parliament, and I would certainly urge that senators do vote for the bills.