Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

The Wheat Marketing Amendment Bill 2006 has hardly been seen by the opposition, although we have seen it and were recently given a copy of the explanatory memorandum. We were expecting that the debate on this bill would not commence before 12.30 pm. For that reason, the opposition has some significant comments that it wishes to make. The opposition will be supporting the thrust of this legislation. It is important that the ability to trade without the impediment of the veto power of the AWB be enshrined in law and the opposition will be supporting that principle.

I can also say that we are giving serious consideration to using this amendment bill as a vehicle to propose another amendment to the legislation that is in fact very similar to an amendment we moved to the Wheat Marketing Amendment Bill 2003 on 26 June 2003, I think. What we wanted to occur then was a full and proper inquiry into the exercise of powers under the legislation of what has become AWB International and also AWB Ltd in its control of the wheat pool, its veto power and the exercise of other functions under the single desk in order to satisfy growers that the system under which we were operating was the best available to create proper financial returns for growers, without paying undue and excessively large commissions or other fees to AWB Ltd for their management of the wheat market in Australia.

That is a subject which has exercised the minds of many growers and indeed many senators in this place in recent times. It is a subject which I have had conversations with many senators about and I have heard others having that conversation. It has been discussed in the media and it has been discussed across the kitchen table on many farms, I am sure. It is frankly appalling that the minister did not begin his speech introducing the Wheat Marketing Amendment Bill 2006 with an abject apology from the Howard government to every Australian wheat farmer.

The mere fact that we are debating these issues today can be seen as an admission by the government that it failed to get the structure of AWB right in the first place and that, ever since then, it has failed to adequately monitor the performance of AWB. Every wheat grower deserves an apology for the failure of a succession of Nationals ministers and leaders to do the jobs they were being paid to do. It was a former Nationals leader, Mr John Anderson, as the minister responsible for agriculture, who did much of the spade work in devising a flawed structure for AWB at the time it was privatised. It was the current Nationals leader, Mr Mark Vaile, as Minister for Agriculture, Fisheries and Forestry, who took much of the legislation for the flawed structure through the parliament. It was the deputy Nationals leader, Mr Warren Truss, who was asleep at the wheel while the Wheat Export Authority failed again and again to properly do its job as a watchdog and allowed AWB to run amok. While Australia produces just less than five per cent of the world’s wheat, it accounts for approximately 15 per cent of the total world wheat trade. That is an important factor considering how important this market is.

Lest it be said that, in my criticism of the ministers, I am biased, I want to lay some of the blame for this mess at the feet of the Liberal Party as well. The current Minister for Industry, Tourism and Resources, Mr Ian Macfarlane, must also take his share of the blame. As President of the Grains Council of Australia at the time, Mr Macfarlane was heavily involved in the development of the Howard government’s flawed structure for AWB. A number of the flaws and weaknesses in the Howard government’s wheat marketing arrangements were exposed during the Cole inquiry into the wheat for weapons scandal. Commissioner Cole shone a spotlight on AWB and exposed serious problems with its corporate culture and the performance of a number of its employees. One consequence of the oil for food scandal has been a renewed focus on the fitness of AWB to manage Australia’s single desk marketing arrangements for wheat and even on the need for the continuing existence of the single desk itself.

These are important matters of vital interest to every wheat grower in this country. Through AWB, Australia exports around $5 billion worth of bulk wheat a year to around 50 countries. As I said, although we produce just less than five per cent of the world’s wheat, it accounts for approximately 15 per cent of the total world wheat trade. In addition to bulk wheat, Australia exports a relatively small quantity of bagged and containerised wheat through AWB and other traders. Not only does this trade secure the incomes of wheat growers and their families; it sustains the economies of many country towns and rural communities.

It is worth spending a little time looking at the history of wheat marketing in this country. The Australian Wheat Board was established in 1939 with legislated monopoly power over both domestic and export grain sales. Labor has been a strong supporter of the single desk ever since it was established. In July 1999 the Howard government privatised the former Australian Wheat Board. AWB became a grower owned company under the Corporations Law and retained effective control of the single desk. 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 at least they were until trade was suspended recently. 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 bonuses that are paid by AWB International to AWB Ltd. The service fee is currently set at a minimum of $65 million per annum. After considerable pressure from growers AWB has announced that, because of the drought, the service fee for the current pool will be reduced to $39.5 million on a one-off basis. This service fee is part of a services agreement between the two arms of AWB. A key problem of the services agreement is the fact that its contents have been kept secret from growers and just about everybody else. This secrecy has become a hallmark of the arrogant way AWB has conducted its business.

AWB’s structure contains an inherent conflict of interest. Companies law requires AWB Ltd to maximise returns to shareholders whilst its constitution requires that it acts to maximise the return to growers. In granting a legislation monopoly to a Corporations Law company, the government has a clear duty to ensure that those monopoly powers are not abused. Central to the failure by the government to properly oversee AWB’s management of the single desk has been the failure of the Wheat Export Authority to do its job.

The Wheat Export Authority was established in 1998-99 to control the export of wheat from Australia and to monitor AWB’s performance in relation to the export of wheat and examine and report on the benefits to growers that resulted from that performance. It has considerable power, including the power to direct AWB to give it any information, documents or copies of documents under the control of AWB or a related corporate body. It must report annually to growers and the agriculture minister on AWB’s performance and it must also publish an annual report. Any individual or company other than AWB seeking to export wheat from Australia must get prior approval from the Wheat Export Authority. This applies to all wheat, whether bagged, containerised or in bulk. In the case of bulk wheat, the Wheat Marketing Act requires the Wheat Export Authority to seek the approval of AWB before it can authorise a shipment by someone other than AWB. These two right of veto proposals by AWB’s competitors to ship wheat out in bulk are the core of AWB’s single desk power.

The performance of the Wheat Export Authority in monitoring AWB has been the subject of criticism from Labor and from grower organisations for a number of years. The Wheat Export Authority completely missed the involvement of AWB in the wheat for weapons scandal, even though the potential impact on grower incomes was considerable. The incompetence of the organisation as it is currently staffed and structured was highlighted recently when it was revealed that it went through 2005 using the provisions of an out-of-date service agreement as the basis for monitoring AWB. It is important that the operation of the Wheat Export Authority be thoroughly reviewed as part of any process leading to improved arrangements for wheat marketing.

AWB has been given a legislated monopoly but we should be mindful of the fact that AWB is not the only company with experience and expertise in the marketing of Australian grain. The other key players in the industry are the largely grower owned grain handlers who control most of the storage, loading and handling infrastructure. They have large purchasing and distribution networks. These companies include Consolidated Bulk Handlers, a Western Australian based grower owned cooperative; ABB Grain, a mainly South Australian based largely grower owned company; and GrainCorp, a largely grower owned company that operates on the east coast. CBH and the other grain marketers have considerable interest in the outcome of this process. These largely farmer owned grain handling and marketing organisations have a legitimate interest in the fate of the single desk and it is important that they are given the opportunity to make their views known.

Others groups with a considerable interest have been the associations representing grain growers. Labor has held extensive consultations with these groups and has noted that there is considerable debate about the appropriate form for future grain marketing arrangements. For example, the Grains Council of Australia, which represents growers in all states and most state peak farmer organisations, strongly supports the single desk. In Western Australia growers are divided. PGA represents mainly the larger enterprises and the Western Australian Farmers Federation represents many of the smaller growers. PGA opposes the single desk and the Western Australian Farmers Federation supports it. The non-grower-owned grain traders are represented by the Australian Grain Exporters Association and are generally in favour of opening up the market. Because there is such a variety of strongly held views on the nature of future arrangements for the marketing of wheat, it is important that the consultation mechanism the government puts in place ensures that all these views are heard.

In 2003 Labor proposed an amendment to the Wheat Marketing Bill 2002 which would have had the effect of establishing a formal independent inquiry into all aspects of wheat marketing. The government opposed that amendment and the inquiry was never held. If the government had listened to good sense back in 2003 it may well be that timely action could have been taken to prevent at least some of the problems that have been exposed with AWB’s management of the single desk.

There have been a number of independent reviews of the current arrangements and they have generally recommended changes to the single desk arrangements. For example, the Productivity Commission issued a report in 2002 entitled Single-desk marketing arrangements: assessing the economic arguments. Its key findings were as follows. Most of the potential benefits of the single desk arrangements can be achieved without the compulsion of a single desk. In export markets where premiums might be obtained—for example, due to quotas imposed by importing nations—targeted export licences can be used to control exports and monopoly marketing of all exports is not required. Economies of scale and scope in marketing can be captured without monopoly selling, while premiums could still be ‘earned’ for high quality and customised service. Activities which deliver industry wide benefits, such as research and development and quality control, can be delivered and funded by more targeted mechanisms. It found that, whereas the potential benefits of single desk selling are likely to be small—or could be achieved in a more competitive marketing framework—the costs of single desk arrangements have the potential to be large. Single desk arrangements inevitably discourage product and marketing innovations; costs may be especially large in markets where product variety and value adding are essential for success; and, importantly, statutory marketing authorities can be reconstituted to operate on a commercial basis in a competitive environment, continuing to offer services to producers and providing a vehicle for continued grower ownership of marketing functions—voluntary producer organisations can continue to give producers a voice.

In December 2002, Malcolm Irving chaired a national competition policy review of the Wheat Marketing Act 1989. This review made a number of specific technical recommendations aimed at improving the operation of the Wheat Export Authority, and freeing up trade in containerised and bagged wheat and in bulk for specialised varieties such as durum wheat. Importantly, while there is much uncertainty as to whether the single desk arrangements produce a net benefit for growers, in conclusion the review stated:

On balance the Committee came to the view that the introduction of more competition into export wheat marketing in the future would ... deliver—

greater—

net benefits to growers and to the wider community than continuation of the current arrangements ...

The review specifically recommended:

• if no compelling case can be made by the time of the 2004 review that there is a net public benefit, then the ‘single desk’ should be discontinued ...

The government, might I say, accepted the technical recommendations of this review but reaffirmed its long-term commitment to the existence of the single desk.

The wheat marketing review of 2004 made a number of recommendations related to the corporate structure of AWB Limited and its subsidiary AWB International, calling for less overlap between the boards of the two entities. It also recommended changes in the way the Wheat Export Authority operates. In accordance with its terms of reference, the review made no recommendation as to the future of the single desk.

Proponents of the single desk, including AWB itself, the National Farmers Federation, the Grains Council and most state farming organisations, except PGA in Western Australia, tend to argue the case for the single desk along the following lines: the single desk allows AWB to establish an integrated marketing system which captures benefits for growers right along the supply chain; AWB’s constitution requires it to maximise returns for growers; having just one Australian player in the international marketplace ensures price confidentiality and Australian growers are not played off against each other; the single desk gives growers the market power to achieve supply chain efficiencies and reduce costs; through the single desk, AWB provides clear market signals and rewards growers precisely for the quality of wheat they produce; the single desk manages price and currency risk; the single desk underpins the market as a buyer of last resort.

These views were backed by a study by Econtech of the premium attributed to the single desk. This study was commissioned by AWB to quantify the benefits to growers of the single desk arrangements. The study found that on the benchmark of Australian premium white grade of wheat, the single desk captures a premium of between $15 and $30 a tonne. The total annual value to Australian growers of this premium on Australian premium white is $80 million. On all grades the average premium attributed to the single desk is $13 a tonne and the total annual value of the premium on all grades is $200 million.

It is clear that there will have to be some changes to Australia’s wheat marketing arrangements. The Cole inquiry has established serious flaws in the way AWB conducts itself, but there are such a wide variety of views about the best way forward for wheat marketing and the single desk that a formal and independent inquiry is needed to ensure we get the structure right. A number of organisations have proposed detailed models or sets of principles for future wheat marketing. These all need to be properly evaluated. The past record of the government and the National Party in particular cannot lead to any confidence that they will get the wheat marketing arrangements right this time. Frankly, a properly constituted formal inquiry is required.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I indicate to the chamber the Democrats’ support for the Wheat Marketing Amendment Bill 2006. I would also like to put on record and signal to the government the Democrats’ willingness to support further changes to the current single desk arrangements. As Senator O’Brien has just outlined, a range of different views and ideas have been put forward, most significantly from different parts of the wheat growing industry, and they will need to be considered. Also, it would be best for them to be considered a little bit further removed from the current upheaval flowing on from the Cole commission of inquiry and further action flowing out of it. The level of damage that has been done to the industry and export opportunities is obviously enormous. Precisely how enormous that is and how it presents itself will still need to be seen. In that sense, taking a bit of time to look at all the alternatives is very wise.

The simple fact is that the Democrats are prepared to support the change. We believe that change has to be made in consultation with wheat growers. Of course, there are a variety of views about that, but we believe that the future of the wheat export industry is too important to just be sorted out in the backrooms, with coalition members reaching an arrangement that has as much to do with maintaining some sort of harmony within the coalition as it does with what is in the best interests of wheat growers. There is no need for the government to have to try and do distorted deals with one or two National Party MPs to get an outcome when, clearly, others in this chamber—certainly the Democrats and, I suspect, others—are willing to work to support change. We should do that openly and with the involvement of all political parties and all people at community level rather than just have party-political deal making.

We are at this point, with this change before us today, because of the monumental failure of governance and the dereliction of duty of a number of senior members of the government. It is a clear example of hubris and arrogance, not just because many warnings were ignored by senior government ministers but also—and in some ways I find this even worse—because of their total failure to take any responsibility.

It is one thing, for all sorts of reasons, to make mistakes along the way, not notice what is going on, fail to take account of warnings and not have proper structures in place to ensure accountability; it is another thing, when all of that finally comes to light, to take absolutely no responsibility at all for the debacle and for the damage that has happened. I think this issue has focused too much on examining how much political damage might be done and how many political hits might be landed on the government or on individual ministers. There has been a continual focus on the soap opera aspect of politics. That might be exciting for those of us who live in the bubble of Parliament House, but the real issue is the damage that has been done to Australian wheat growers, to the Australian wheat market, to the reputation of Australia in general, and, I might add, to corporate culture and the notion of responsibility and accountability in corporate dealings.

Frankly, people had clear, direct responsibility under law—such as the federal government had and ministers had—for ensuring that we abided by the UN oil for food program and that we did not breach those sanctions. The people who had that responsibility and failed just went, ‘Oh well, it wasn’t my fault and I’m not going to make any changes at all as a consequence of all that has come out.’ What sort of message does that send to our corporate community? We are passing more and more laws through this place and putting higher and higher accountability standards upon them—and that is something in the main that the Democrats strongly support; indeed we have put forward some of those measures. But you cannot impose more and more accountability requirements on the corporate sector, and the not-for-profit sector for that matter, and have zero accountability at government level. The disconnect has become enormous. The hypocrisy is too much. Unless we seek to address that then it is not surprising that we will have ongoing problems in other sectors—whether it is the non-government sector, the corporate-for-profit sector or other areas of endeavour—where people will think: ‘Oh well, nobody takes responsibility at the leadership level in the government. We’ll see what we can get away with as well. We’ll just try to bluster our way through if we get caught and hope for the best.’

It is a seriously damaging attitude and a clear hallmark of a government with immense arrogance. The government now believe that the natural state of being is for them to be in government. They completely confuse self-interest with national interest. This sort of debacle is the consequence. But it is not the political damage or otherwise that I am concerned about. I am concerned about the damage to hard-working Australians, to Australia’s reputation and to those important standards of proper accountability. Contrast that with what has actually happened within AWB. They have had a complete shake-up and a change of management. That organisation has had a major upheaval—as it should have, of course. Along with a change of management there needs to be a change of culture, and that is why the signals that the government and the ministers send about this are equally as important. Clearly there is a lot of overlap between the cultural problems within AWB in the way it did business and the cultural problems within senior levels of government. In addition to that, we need more transparency into the future about the nature of export contracts. I am not suggesting that every contract should be made public or anything like that, but I think an extra level of oversight of all the variations that occur and the way that the trade operates into the future would be desirable.

There are many views amongst growers about what the best way forward is from here. A number of them are still suggesting that the existing single desk arrangement should remain, that this legislation should just be a temporary measure and that it should all revert back to the way it was afterwards. That is not a view I share and it is not a view the Democrats share. We believe there should be change. We are completely open as to the nature of that change and how quickly it should be put in place. Indeed, at this stage, we believe that it is best to remain open about it. I am highly sceptical that a single desk type arrangement actually delivered the best prices for growers in general. I think the introduction of a degree of competition in various ways will deliver better results for many growers. That is a view that I will continue to put in the ongoing debate. I am not here to try to impose my view as to what the next step forward should be, other than to say that it should not be a step backwards to the past. I accept that the existing single desk arrangement delivered more certainty for a lot of growers and often that is worth the trade-off. Having greater certainty about income flow is more valuable, in some circumstances, than the uncertainty of possibly higher or lower prices or sales not coming through once the crop is harvested. That certainty is now lost as well because of the damage that has been done by the previous AWB management and by the coalition government’s negligence.

We have reached a stage where it is time for change, but there is still a lot more consultation required to determine what that change is. I would urge the government to include all political parties in that consultation rather than have a backroom arm wrestle amongst the various competing factions and groups within the Liberal and National parties. Also, with regard to this specific legislation and the specific measure before us, I would urge the government to hand over the veto power to the agriculture minister. That step is not only welcome; it was specifically suggested by the Democrats. Of course there are specific difficulties in Western Australia at the moment. I believe this legislation will provide a mechanism to address that—although it obviously depends on what the minister does. In the current environment, I think the principle contained within the legislation is a sound one, and that is why the Democrats suggested it earlier. We are pleased that the government has acted on that.

I hope they also listen further to some of the other suggestions that the Democrats and others put forward as to where we go from here. In addition to ensuring best return for wheat growers, it is also important to ensure that that market operates in a way which is sufficiently transparent and accountable. There are obviously some reputations that need to be rebuilt here, not just AWB’s but Australia’s as a nation in export circles. I fully accept that some of that damage will be deliberately exaggerated by competitors seeking to harm our trading opportunities and boost their own. I fully accept that there is a lot of hypocrisy and there are double standards in the area of global trade, not just in wheat but in plenty of other areas as well.

But that should not be an excuse for inappropriate conduct and illegal conduct in particular. The Democrats have had before this chamber for a number of years now—perhaps six or seven years—the Corporate Code of Conduct Bill, which sought, and still seeks, to put in place mechanisms of corporate behaviour in the international arena. That is a measure which I believe is still merited and this sort of example is the reason why it is merited. We do need to lift standards more widely internationally. I am certainly not suggesting that Australian companies are worse than others. Indeed, I am sure in many cases we are better than others, but we do need to ensure proper standards of corporate behaviour wherever the company might be operating. The suggestion that what is appropriate corporate activity within Australia somehow does not apply once you leave our shores is not only an unacceptable one but also an unwise one in the long term in many cases. I think that this episode provides a reminder of why that general principle is important, and it is one that the Democrats will continue to push.

There is obviously a lot more that could be said about the government’s failure in this regard, and the responsibility they should take and must take for the situation that has now been reached and the damage that has been done. I do not want to expand on it any further. I think that I have made enough of a point with regard to that. Also, for the sake of wheat growers in particular, I think it is important that we focus attention on where we go from here and what is best for that important domestic and export industry.

Whilst it is appropriate that we do continue to point to the failings of the government, that should not be the focus of this whole debate. Ordinary wheat growers have already suffered enough damage—collateral damage, if you like—from political infighting and political negligence. We all need to try to make sure that they remain the main focus of debate around this issue. It is still important to point to the failings of government, not for partisan political purposes but as a reminder that we do need to take responsibility when we make mistakes. It is certainly a principle that I have tried to follow in the approach that I have taken in political life—a willingness to accept mistakes and take responsibility for that. It is not just because it is a nice sounding principle and a good thing to teach your kids; it actually leads to better governance, and better governance is in the interests of the entire Australian community. It means that fewer innocent people end up getting hurt and getting caught out as collateral damage in these sorts of debacles.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I am aware that there is a long list of speakers here and that we probably need to be fairly quick and to the point so I will try to meet those goals. The Greens will be supporting this amendment. We support the lifting of AWB’s right of veto temporarily. We believe that it is important as a short-term measure to allow Australian wheat growers the chance to sell this year’s crop without having to wear the risk of the fallout of the AWB fiasco. We believe that it is much better to proceed down this path of temporarily lifting the veto to enable a discussion about the longer-term future and not force a quick decision on the long-term future when, quite clearly, there are very serious issues that need to be discussed and reviewed before reaching a decision on the long-term future and the way we market wheat in Australia. This will give all stakeholders the time to give proper consideration to the best way to market Australian wheat into the 21st century so that we get the best deal and protect the interests of all wheat growers in Australia—not just the large wheat growers but also the small ones—and so that we have a system that is transparent and accountable, the good name of Australia in the wheat market is restored, the good reputation of our agriculture is protected and we never again see corrupt and shoddy deals being done and having been done in our name.

In October the four Australian Greens sent a letter to the Prime Minister requesting that he temporarily lift the right of veto from the AWB. We had recognised the looming crisis for the wheat growers of Australia, particularly the Western Australian wheat growers. It was quite obvious that the findings of the Cole inquiry were not going to be positive and that the AWB was exposed to risks that would therefore lead to our farmers being exposed to risks—particularly Western Australian farmers. We are pleased that this amendment is putting in place a temporary veto and that essentially the government is assuming the responsibility for that decision making. We asked for a temporary lifting of the veto to allow the immediate concerns to be dealt with so that everybody could have time to review the Cole findings with a cool head and a view to the best outcome for all.

The long-term changes are quite clearly needed—absolutely. It was obvious that there would be massive fallout following the report of the Cole inquiry and that time is needed to review these findings with a cool head. Farmers in WA were, and remain, concerned. They look like the only mob likely to be exporting wheat during this season because of the impact of the drought and they largely do the bulk of the exports anyway. Farmers are worried about the risks and liabilities of having to deal with the AWB during the current crisis and, as many people know, most of the wheat from Western Australia is in storage in bins, rather than being delivered to AWB.

The important thing here is the uncertainty for our farmers. Even those farmers who support the single desk are concerned. They have this massive inner conflict between wanting to support the single desk and being deeply concerned about the risks and uncertainties that they face should they deliver their wheat to AWB.

Most people are probably aware of some of the potential liabilities that AWB currently faces, such as the direct costs of the Cole inquiry, bills from the ATO, actions by shareholders, owing money to the Australian Securities and Investments Commission and actions from overseas. The list goes on and on, with AWB’s liabilities potentially amounting to between $1 billion and $2 billion. I believe that farmers have a right to certainty—and, of course, they have cause for concern. If and when these chickens do come home to roost, Australian growers who have handed over their wheat to AWB may find themselves at the bottom of a long list of creditors. They may only receive a percentage of the crop’s value. I do not need to tell you what a cause for concern this would be for farmers in normal circumstances; but, with the current drought, their margins are even tighter and, quite frankly, they need every dollar they can get from their exports.

As I said, WA growers are particularly exposed to this risk, because at this stage they are likely to be the main people exporting their wheat and are therefore the farmers who are most likely to face the biggest fallout from the AWB fiasco, paying for its incompetence and fraud in the oil for food scandal.

Of course, lifting the right of veto only addresses part of the problem that we are facing. The government still needs to answer a number of very difficult questions. Firstly, who is going to step in to bail out AWB and make sure that the growers do not end up paying for this anyway in the long run; who is going to pick up that tab? Secondly, what kind of process of inquiry will the government put in place to make sure that ongoing decision making is open and transparent and that growers and the broader community have a chance to have their say, are heard and have input into the long-term decision making on the future of the way we export wheat from Australia?

We need to properly assess the findings of the Cole commission of inquiry. In particular, we need to look at what role ministerial responsibility, the failure to oversee the current system, played. The Cole findings clearly said there was a failure of culture, but culture does not occur in a vacuum. Signals from the government, from DFAT and from the Wheat Export Authority, which I will get to in a minute, were critical. There seems to have been a series of very convenient instances of overlooking warning signals, as well as organisations—for example, AWB—not performing the functions that they are supposed to carry out.

When the Australian Wheat Board was privatised and became AWB, a system was supposedly put in place to oversee that privatisation. The agency with that responsibility was the Wheat Export Authority, which clearly did not properly carry out its functions. It not only did not carry out its functions adequately; it also had a very narrow interpretation of its functions. This narrow interpretation of its functions resulted in its failure to pick up the failings of AWB. However, it does not stop there. The WEA is supposed to report to the minister—so what did the minister and the departments do with the reports? Do they just file the WEA reports? Didn’t they check that the WEA was carrying out its functions? If they did, they might have identified the improper way in which AWB was handling its business. Quite clearly, changes are needed for the long term.

We need to decide how to market Australian wheat on the world stage in the 21st century. We need to protect the interests of our growers, both big and small. We need to protect our international reputation—first, of course, we need to restore it and make sure that we do the right thing in responding to the Cole inquiry into the Wheatgate kickback scandal. We need to have a debate in which all Australian wheat growers and the broader community have a chance to be involved and put forward their opinions on the future of the single desk and the best way to manage their interests. We need to make sure that the single desk process is open, transparent and working in the best interests of growers, not the stakeholders in a privatised monopoly. That was a built-in conflict of interest. We need to make sure that growers are involved in the decision making on how their wheat is marketed.

I am concerned that some people’s single-minded belief in the single desk has resulted in their overlooking the shortcomings of the current approach to the single desk. We need breathing space and we need to carefully review what led to the malfunction and the breakdown of the current single desk process so that we have a system that does deliver in the interests of all growers, not responding to the interests of shareholders in private companies, and that is open and transparent. We need time to discuss this, which is why I am glad that the government has responded to calls from the community and from the Australian Greens to temporarily lift the veto power to enable a much more proper process to be put in place, rather than making a rushed decision which I think would inevitably have led to a poor outcome for the Australian wheat market.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

The Wheat Marketing Amendment Bill 2006 has been brought in as a necessary measure for the Australian wheat industry. As Senator Siewert said, one of the reasons for this temporary measure is to end the impasse that currently exists with the Western Australian wheat farmers who are not delivering their wheat to the pool but are storing it on their properties—thousands of tonnes of wheat that are not going to either CBH or AWB. The government want to ensure that the single desk selling arrangements retain the confidence of growers in the short term and that growers are not disadvantaged in the long term. I urge Australian wheat growers to take advantage of the next three months of consultation to ensure that a united position is presented to the federal government on the future marketing arrangements for bulk export wheat.

There is a push for deregulation of wheat exports and there are all sorts of variations on the single desk. But the Nationals have held the line on this important issue for regional Australia and we have bought some time for wheat growers. I say to growers today: you have 17 Nationals representatives here in the federal parliament; we are your voice here, but your voice, the voice of growers, needs to be loud, clear and distinct when you give us the message to carry for you on the way you want your wheat marketed overseas. Your future is strongly linked to the future of the single desk, and make no mistake: the future of the single desk is at stake right at this moment.

The minister, under this bill, will be handed the veto for a period of six months up until 30 June 2007 before it comes back to AWB, and this gives growers time to confirm: firstly, if they want to retain the single desk, which I believe they will; and, secondly, what format the single desk should take and who should ultimately exercise the veto. I have met with representatives of the wheat industry already and understand that they are preparing to undertake a comprehensive consultation process over the next three months to confirm that wheat farmers want the single desk retained and to present all the options available to growers. I understand that Minister Peter McGauran will be writing to wheat growers soon on this matter to kick-start the consultation process amongst the farmers.

This consultation must form a basis for presenting a unified case to government at the end of the three-month consultation. The export veto power for bulk wheat has been placed with the minister as an interim measure to ensure grower confidence in the current arrangements in the short term. Putting the veto in trust with the minister will potentially reduce the chance of pool-contributing growers being left with a disproportionate share of the cost. That is one reason the bill is being put forward. An export licence will continue to be granted on terms where it will have to assist in maximising the bottom line for wheat growers. In this way, the minister’s veto will help to ensure that those who contribute to the pool are not penalised for the benefit of growers outside the pool.

When the three months are up, it is essential that growers have made a clear decision on what constitutes a single desk and who is the appropriate entity to control it. I have made my position on the single desk patently clear. The Nationals have always defended the single desk as a fundamental defence for Australian wheat growers against the protectionist policies and subsidies of our overseas competitors, totalling more than $17 billion per year or 39 per cent of farmers’ income in the EU and 32 per cent of farmers’ income in the US. While ever growers remain united and can clearly demonstrate a requirement for the single desk, the National Party will continue to support them. Most of the world prefer to buy through a single desk, so we must continue to sell through a single desk to suit our markets.

To me the single desk is defined by five clear principles: a single desk entity is grower owned; it is the operator of the national pool; it is the holder of the export veto; it is the buyer of last resort; and it provides security of payments for growers. As far as I am aware—and I am pretty certain of this—a farmer has never not been paid by the AWB; never at any stage has the AWB reneged on a payment. This is not the case in many other markets where people trade. These principles must be changed only with the support of a clear majority of growers. Most growers, the Nationals and many of our Liberal colleagues support the current definition for the single desk. Logically, the next step in the government decision-making process is determining what alternatives are being put forward that uphold the principles and definition of the single desk, and whether growers agree with any of the new proposals.

Australian wheat growers must take advantage of these next six months and ensure that they present a united position to the federal government on future marketing arrangements for bulk export wheat. I sound this warning: let there be no uncertainty at the moment; the single desk is under threat. The only way the single desk can be maintained is by a strong voice of growers who want it. That voice has got to be loud, definite and united. If a united voice is not coming through into the parliaments of Australia then the single desk is definitely under threat. So it is time for the voice of the 22,000 wheat growers to be heard and it has got to be heard loudly and clearly. There cannot be meetings where 200 growers get up and come up with 200 different variations of what a single desk is because the single desk has got to be defined out there amongst the growers. That message has got to come through into the parliament and then we, the various parties, will know what the farmers want.

There is a period of six months before the government make a decision: three months for negotiations and three months for the government to come up with a proposition. So, 22,000 wheat growers, it is over to you. If you want it, fight for it. Go out there and fight hard for it because if you fight hard you may be able to maintain it the way it is.

Annette Hurley (SA, Australian Labor Party, Shadow Minister for Citizenship and Multicultural Affairs) Share this | Link to this | Hansard source

Senator Boswell realises that the single desk is under threat. He says it is under threat now and puts the responsibility back on the growers to do something about it, which is absolutely extraordinary. It is not up to the National Party, apparently. It is not up to the Liberal Party, whose Prime Minister John Howard promised in the last election that the single desk would be maintained. No, it is now back to the growers to do something about it, which is an absolute disgrace given that we have known for some time that the single desk was under threat.

In his second reading speech the Minister for Justice and Customs (Senator Ellison) said:

To rush the consideration of these long-term arrangements—

that is, the single desk—

would put at risk the future interests of Australian wheat growers. The government’s dominant concern in the consideration of both long-term and temporary arrangements is the interests of Australian wheat growers.

What happened to looking at the long-term interests of Australian wheat growers over the past four or five years? It had become clear that the single desk was under threat from competitors who were pushing, people like CBH and ABB. The government has known for years that the single desk was under threat.

What did either the government or AWB do about it? The AWB stood where it was, said, ‘We must have the single desk,’ and refused to look at any alternative methods of dealing with all these possible competitors and the push from America and others about the single desk. It stood there and absolutely refused to look at any other ways to deal with it. Now, as a result of the inherent problems within the arrangement, we are looking at a rushed, inadequate method of dealing with this. And now we go out, now we consult and now it is the growers’ responsibility to deal with it and come up with a single model of single desk. It is not the government, it is not the AWB—it is the poor growers whose responsibility it is to come up with a sophisticated marketing model.

This is an absolute failure of this government, whose Prime Minister promised the continuation of the single desk and now acknowledges that the cracks are far too obvious and that, on the government’s watch, the AWB collapsed due to its own inherent structural problems. This is the problem for growers, who are looking at a decrease in the price for their wheat in this drought. Many of them also have shares in AWB, which has been the worst performer in Standard and Poor’s ASX200 index and has seen a 60 per cent drop in its share over the last year. So AWB loses on both fronts. These poor growers out there who now have to get together—

Debate interrupted.