Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

I am very pleased by the action the government has taken to transfer the veto on the international marketing of wheat from AWBI to the Minister for Agriculture, Fisheries and Forestry for a period of six months. By so doing, the government has provided a solution to the immediate problem for West Australian wheat farmers, who face financial disadvantage under the current arrangements, whereby the Australian Wheat Board effectively has the power of veto over international sales. As has been said by other speakers, WA largely produces wheat for export. Were the WA farmers to sell their wheat through AWB this year, their financial returns—given the severe drought they face—would be less than would be the case were they able to sell it through the CBH or Co-operative Bulk Handling.

The transfer of the veto to the minister will be for a period of only six months, which will allow the government an appropriate period of time to fully consider the long-term future of AWB’s management of the national wheat pool. As I understand it, the review of the management of the international wheat marketing system will be done in full cooperation with the wheat growers of this country, which will ensure that the final decision arrived at is a consensus of both the government and the growers of Australia.

There has been concern expressed over the last few years about the way Australian wheat is marketed internationally. Earlier this year I attended the annual general meeting of the Pastoralists and Graziers Association of Western Australia, where the sentiment was very strongly against the maintenance of the single desk marketing operation under the auspices of AWB.

Members of the PGA strongly believed that the single desk was denying the wheat growers of Western Australia the opportunity to sell their wheat at maximum return around the world through other agencies such as CBH. However, subsequently it has become apparent to me that there is a division of opinion amongst wheat growers in Western Australia and that those in the West Australian Farmers Federation, or WAFF, are not necessarily in agreement with the PGA on the subject of the abolition of the single desk as a marketing tool.

Furthermore, in November I received correspondence from the wheat exporters of Australia, a group which represents farmers involved in the wheat export trade, which made some criticisms of both the AWB and AWBI which I do feel warrant further evaluation. This wheat exporters group wrote to express concern about the relationship between AWB Ltd and AWBI in terms of the profit which is derived from providing services to AWBI, as well as concern about the fact that AWBI is exempt under the present regulatory regime from: (1) having to obtain export licences from the Wheat Export Authority, (2) the requirements of the Trade Practices Act and therefore ACCC oversight of its terms in dealings with its client base, and (3) the Financial Services Reform Act. They were also concerned about the fact that, under section 57 of the Wheat Marketing Act, AWBI has a complete veto over the government regulator, which is the Wheat Export Authority, in granting bulk export licences to any other entity, including individual wheat growers seeking to sell their own wheat, and that they must be consulted on container load shipments, thus meaning that advance commercial knowledge is given to them so as to effectively gazump any prospective sale or frighten the potential customer off through the suggestion of future supply problems.

While I do not pretend in any way to be an expert on the wheat industry or the marketing of wheat, it seems clear from the views which have been put to me over this year that there are some problems in this industry. Accordingly I believe the decision of the government to review this industry over a six-month period is a very wise one and will enable a full assessment to be made of the needs of the growers marketing wheat internationally so that, if appropriate, the wheat marketing system can be reformed.

One solution which is fairly consistently put forward by Western Australian growers is that, while the single desk has been a good marketing mechanism and should be retained, at the same time there is a case to be made for some flexibility in its operation to enable growers such as those in Western Australia to sell their wheat in individual spot markets at times. Because of the serious financial consequences which would face Western Australian growers if this legislation were not passed without delay, I urge all my colleagues to support it—bearing in mind that the whole system of wheat marketing is to be reviewed over the next six months by the government. I commend this legislation to the Senate.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

As a wheat grower from the central west in New South Wales, I am only too aware of how important this issue is to wheat growers right around the state and right around the country. I am a very strong supporter of the single desk. I accept that there are diverse views on this issue, but it is certainly my belief that the majority of wheat growers are very supportive of retaining the single desk. While the majority of growers are supportive of retaining that, I will certainly continue to support retaining the single desk. This is about growers and what growers want.

The reasons that the single desk was set up certainly still exist today. As my leader, Senator Boswell, said yesterday, the single desk is defined by five clear principles. I think it is important that we just take a moment to look at those again. A single desk entity is: grower owned, the operator of the national pool, the holder of the export veto, the buyer of last resort, and it provides security of payment for growers. As my leader also said yesterday, these principles must only be changed with the clear support of a majority of growers.

The Wheat Marketing Amendment Bill 2006 gives the veto power to the minister for six months. It is a very sensible temporary solution to allow us to deal with the issues in Western Australia of drought and the growers’ cash flow requirements over there. I would also point out though that it does not compromise the position of growers who have already delivered to the pool. It is certainly The Nationals who have made sure that growers are able to have their say on the future of the single desk and the future of their industry. There is no doubt that there is a push out there towards complete deregulation. There is also a push out there towards changes to the current system.

I think it is very sensible that The Nationals have now secured a three-month period of consultation where growers can have their say. This is an opportunity for growers to have their say, to say loud and clear what they want for the future of their industry. I urge growers: if you do not want deregulation, if you want to make sure that you keep the single desk, then you have to rise up and tell us. Your future is in your hands—it is you, the growers, out there who now need to come together and tell this government what it is that you want for the future of your industry. The Nationals will absolutely, without doubt, continue to fight for growers. But the growers’ voice, your voice, has to be heard loud and clear. We can fight for you. We can continue to fight for you, and we will do that, but we need to make sure that your voice is heard so that the future of the industry is the future that you want.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

The Wheat Marketing Amendment Bill 2006 establishes new arrangements for controlling the export of wheat from Australia. Therefore, as a wheat grower, I declare a personal interest in the legislation.

This bill was flagged by Prime Minister Howard following the tabling last week of the report of the Cole inquiry into AWB Ltd and AWB International’s corruption of the United Nations oil for food program. It puts into place the Prime Minister’s promise that, in formulating its response, the government’s dominant concern would be the interests of Australian wheat growers and that the federal government would consult widely with growers and the industry before finalising any changes to wheat export marketing arrangements.

Australia has a long history of regulating wheat marketing. The Australian Wheat Board operated from 1915 to 1921 and from 1939 to 1947 under wartime emergency provisions to acquire and market the Australian wheat crop under a pooling arrangement to ensure price stability for growers and appropriate management of this vital foodstuff during wartime. However, it was in 1948 that legislation established the Australian Wheat Board to have a similar marketing role for the first time in peacetime.

My late father, who died in 1999 in his 94th year, was instrumental in this postwar establishment of the Australian Wheat Board. As President of the then Australian Wheatgrowers Federation, which more recently has become the Grains Council of Australia, he led the negotiations with the Chifley government in the immediate postwar period for AWB’s establishment and the operation of the single desk for wheat marketing. This was consequent on his role as one of the leaders in establishing, in the early 1930s, an organisation to represent wheat growers in South Australia, devastated by the collapse in wheat prices during the Great Depression, who were further ripped off by market manipulation by grain merchants. He saw the benefit of the single desk and fought hard and successfully for its permanent establishment after World War II.

The release of the Cole report would have been a sad day for him if he were still alive. A principled and ethical man, he would have been devastated by the antics of AWB Ltd and AWB International revealed in that report—organisations he helped create, albeit operating now as listed commercial entities rather than as a statutory authority. The release of the Cole report has clear implications for the operation of the single desk system for Australian wheat exports and this has caused significant concern to growers, both immediately and in the longer term.

The bill transfers from AWB International to the Minister for Agriculture, Fisheries and Forestry, until 30 June 2007, the right to veto applications for bulk wheat export from exporters other than AWB International. It is a temporary measure to address current concerns in the industry about the wheat marketing arrangements, particularly in Western Australia, where there are fewer domestic marketing options than in the eastern states. It is also an inevitable consequence of AWB’s unacceptable behaviour.

South Australian growers have discussed with me their concerns about the impact of changes to the single desk system on the wheat pool and prices. Their concerns are compounded by the current drought resulting in lower yields this season, rendering it essential that the government’s decisions ensure that maximum and sustained financial stability is available to growers.

Currently, Australia exports wheat to more than 40 countries and, although we grow only about three per cent of the world’s wheat, our total wheat exports represent around 15 per cent of the world wheat trade annually. The Australian government has worked hard to maintain the single desk arrangement as part of all trade agreements, such as those in the World Trade Organisation and the Australia-United States Free Trade Agreement, on the grounds that it offers a transparent and commercial operation. The veto powers conferred by this bill do not represent a change to the Australian government’s single desk policy. For the six months to 30 June 2007, during which the minister will hold the veto, AWB International will remain exempt from requiring export consent from the Wheat Export Authority and will continue to be the buyer of last resort.

In a corrupted international wheat market, where most other exporting countries substantially subsidise their growers and where, in a number of instances, there is a single purchasing authority, I believe the single desk continues to provide benefits to Australian wheat growers. This view is reinforced by the fact that growers and marketers from other countries have lobbied hard over many years for the dismantling of the single desk. Clearly they see it as an advantage to Australian growers. Hence, if a majority of growers seek its retention during the next three months of consultation, I will support them. However, careful consideration will need to be given to the way in which the single desk and the veto are to be administered in the longer term. It is no longer tenable for them automatically to be the bailiwick of AWB Ltd.

This legislation will provide the Australian government with the opportunity to address the current and urgent concerns of wheat growers while allowing the government to develop future long-term wheat marketing arrangements, taking into account all of these issues. I commend to the Senate the speedy passage of the bill.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

The Wheat Marketing Amendment Bill 2006 will bring the most significant change to the wheat industry and its selling arrangements since the deregulation of the domestic market back in 1989—legislation which I also spoke to at that time. The purpose of this bill is to amend the act through the transfer, on a temporary basis, of the right to veto bulk wheat export applications from AWB International to the Minister for Agriculture, Fisheries and Forestry. The transfer will be effective until 30 June 2007. This is achieved through including a new part in the act.

These changes do not amend the functions or objectives of the Wheat Export Authority or AWB International’s authority to engage in export activities. The WEA will continue to control the export of bulk wheat, but now requires the agreement of the minister for each application. The changes mean that the WEA will not be required during the period to 30 June 2007 to have written approval from AWB International before making a decision on bulk export applications. In cases where the minister does not agree with the WEA, he is able to direct it to approve or reject the export applications. As the minister’s second reading speech says:

The movement of the veto does not represent a change to the Australian Government’s single desk policy.

As he said:

These temporary arrangements are also intended to address the uncertainty caused by the ongoing debate and consideration of the long term wheat marketing arrangements in light of the Cole Inquiry.

I come to this debate as a single desk purist, a long-time supporter and defender on all grounds—economic, social and political. So, to a purist, the taking away of the veto from AWB International—or the Wheat Board, as we traditionalists would call it—is very hard to accept indeed. In March 2004, when I last addressed the matter of wheat, I said:

… the bottom line is that only within the industry can the single desk be undermined. That is a timely reminder to farmers not to flirt in any way with changes at the edges of the single desk. Do not chip away at this Rock of Gibraltar, for any change no matter how slight or how seductive will bring down the single desk.

Ian Campbell (WA, Liberal Party, Minister for the Environment and Heritage) Share this | Link to this | Hansard source

What an erudite quote. Who said that?

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I did, Minister. It was pre the Cole commission of inquiry. I cannot take your interjections, Minister, as I am under such pressure regarding time.

Ian Campbell (WA, Liberal Party, Minister for the Environment and Heritage) Share this | Link to this | Hansard source

You just did!

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Anymore, that is. That was pre Cole, but I must say—and the minister should know this—that it is getting harder to remain a pure supporter of the single desk, with the devastating effects of the Cole inquiry on the integrity of the AWB. And there is more to play out on that.

As I say, it is due to the Cole commission of inquiry that these changes have been brought in. Things can simply not stay the change. From the time the Volcker inquiry was handed down, the government has acted speedily and vigorously to expose the truth of the corruption that occurred between the AWB and the then Iraqi regime. We are determined to implement the findings and recommendations of the Cole commission of inquiry. What is being acted out today is a consequence of that culture and that behaviour, and the government has no choice but to make that decision and does not flinch from doing so. I regret that I only have the time allocated to me, but it is for those reasons that I fully support the bill before the Senate.

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

I would like to thank other members of the chamber for facilitating my participation in the debate on the Wheat Marketing Amendment Bill 2006. As outlined when this debate started yesterday, those of us in this place, from all parties, understand the need to pass this legislation and the need to give some certainty to the wheat growers of Australia. Of course, coming from Western Australia there are some particular issues associated with it. The issues are a bit more complex than perhaps they are in other states, so I rise to make a brief contribution.

Yesterday when Senator Boswell was making his contribution he was heralding the great job that those in the National Party had done in, as he alleges, looking after the needs of wheat growers. I have to say to Senator Boswell that the wheat growers in Western Australia do not vote for the National Party, so I do not know that he can claim a mandate on behalf of all of them. A percentage of them are known to support my side of politics, and of course there are the others who support my fellow Western Australia representatives—people such as Senator Johnston and Senator Adams. But these days there are not too many of them who vote for the National Party, so perhaps Senator Boswell should choose his words a bit more carefully. It is not his mandate and his mandate alone to represent their views in this place.

In Western Australia the wheat industry is a bit more complex than perhaps it is on the east coast. The wheat farmers in Western Australia do not have the same choices that those on the east coast do about where they choose to sell their wheat. Transport and other costs do not make for the ability to decide whether you will export or sell within the internal Australian market. It is not quite as economically smooth for the west coast. The wheat tends to be consumed within Western Australia or it is exported. Therefore, there have been issues concerning wheat farmers who choose to use CBH, and their desire to export their own wheat and the role of AWB in using their veto to exclude them.

There does need to be certainty, but I think there also needs to be some flexibility regarding how wheat farmers in Western Australia market their wheat and who they can sell it to. As I say, if we in Western Australia decide to farm in Western Australia we do not have the luxury of deciding whether we will sell in New South Wales or in Queensland. That is economically prohibitive. In my view, we do need to open up the market a bit more and allow some of the most efficient wheat farmers in the world the flexibility that they deserve and, in doing that, we need to give them certainty.

Labor will facilitate the passage of this legislation, but we also need an open and accountable inquiry into how we will progress this. It cannot just be the fiefdom of one political party. We actually need to get everybody on board. We need to have an open and transparent process, where we consult with all of the players—including the major players in my home state—and come up with certainty and a system in place to guarantee the survival of what is a very efficient industry in my home state. I would say it is more efficient in my home state than in many other places.

We need an open and accountable process and we need to consult with all of the players—not just the players that want to toe the line of any one political party—to ensure that we give wheat growers the certainty and the structures that they need so that they are not disadvantaged, whereby they perhaps have to protect some more inefficient growers. Whilst I am happy to facilitate the passage of this legislation, we do need an open and accountable process. We do need to know where we are going from here. We need to implement the stopgap measures, and we need to consult with everyone in the industry, not just the fiefdom of the National Party.

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

On this issue, I am guided by and appreciative of the assistance I get from my Liberal Party colleagues—in particular, Mr Ian Macfarlane, from my home state of Queensland, who, as everyone knows, is very involved in the grains industry and is a wheat grower himself. I also appreciate the assistance of my Liberal colleagues Senator Judith Adams, Senator Grant Chapman and Senator Alan Ferguson, all of whom are wheat growers and have a very close and important interest in this. I also pay tribute to my colleagues Senator Johnston and Senator Adams for putting forward a private member’s bill which has encouraged our government to address this matter urgently, because obviously something had to be done in the very near future.

Time is against us all—which, I agree, is something of a shame—so I will confine my remarks very directly to the Wheat Marketing Amendment Bill 2006. People have spoken in this chamber about everything being done in the interests of wheat growers. I like to think that bills and things done in this chamber and by the government are done in the national interest of Australia. In this issue, that will mean, I think, the interests of wheat growers, but, at times, it is broader. I will not be taking part in the committee stage of this bill but I would like to raise publicly a matter I raised with the minister. In section 63 of the bill, the minister, for the purposes of deciding the things that he does, is required to have regard to the public interest. In understanding how things around this place work, I have a concern—perhaps as a lawyer—that ‘the public interest’ is a very broad term and it is nowhere defined. I certainly hope that, because the whole process of this bill is a narrow six months, it will not involve litigious action by the various interested parties on what exactly the public interest means.

Another issue I want to touch on briefly, which I have raised with many of my colleagues, is my concern that this bill is only for a very limited period of time and that, once this bill concludes—once the sunset clause is reached—if nothing further is done, the initiative will return to AWB. I think everyone agrees that should not happen.

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

So support my amendment!

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

Thank you, Senator O’Brien. I had not been aware of your amendment—and I will not be supporting it. I have had an assurance from those who are in control of this that something will be done after the three-month period of consultation. I want to place on record my acceptance of that assurance and indicate that I will ensure that the assurance is committed—and I have no doubt that it will be. People on our side do not give assurances without intending to have them met. But it is something that must be addressed, because we cannot allow this to automatically revert to the AWB at the conclusion of the sunset clause. I commend the bill to the Senate.

Jeannie Ferris (SA, Liberal Party) Share this | Link to this | Hansard source

‘A government grant, by legislation, of a monopoly power confers on the recipient a great privilege. It carries with it a commensurate obligation. The obligation is to conduct itself in accordance with high ethical standards.’ This was on of the most important statements in the recently released Cole report into the AWB’s actions in Iraq. Australian wheat growers, along with the rest of us, were devastated by the revelation of lies and deceit. Australian wheat growers deserve the best international market access without interference from the Australian government or the AWB. I have always believed passionately in this issue and, on behalf of Australia’s wheat growers, I have fought passionately for it during my 10 years in this parliament. During hearings in Perth in 2003 into the Wheat Marketing Amendment Bill 2003, I asked a number of questions about the WEA, the AWB and the impact of the AWB’s corporate dealings on growers. I was not satisfied with the responses that I was given at that time by various AWB executives—and I have felt that way even more strongly as the years have gone by.

I have always believed that the WEA is a toothless tiger, fundamentally flawed in its concept of keeping watch on the wheat board. Just last month we saw the AWB use its veto power to stop the CBH group from exporting wheat to its own flour mills in Vietnam, Malaysia and Indonesia. This is despite the fact that the CBH group was willing, in principle, to pay to farmers a higher premium than was on offer from the AWB. The Wheat Marketing Amendment Bill 2006 seeks to amend the Wheat Marketing Act to temporarily transfer the right to veto bulk wheat exports from AWB and AWBI to the Minister for Agriculture, Fisheries and Forestry. While the WEA will continue to control the bulk export of wheat, agreement with the minister must be reached for each application.

Questions over the actions of the AWB in the international market have intensified following the release of the report of the Cole inquiry into Iraqi kickbacks. While members opposite have used the release of the Cole report to attack the government, it is important to remember that it was the AWB and its executives whose actions were found to require further investigation and possible prosecution. Commissioner Cole found that, had the AWB cooperated with the inquiry by promptly providing the documents it had already assembled, there would have been a considerable saving for Australian taxpayers, not to mention Australian wheat growers. Australian wheat growers and the AWB have not benefited from this inquiry in the sense of costs. AWB presented a facade of cooperation with this inquiry but, in truth, it did not cooperate at all. It should be ashamed of itself.

The Cole inquiry has been a landmark inquiry in terms of the government’s openness to forensic examination of its internal processes. That examination has extended far beyond government departments—to ministers and their offices and to intelligence agencies. Three senior ministers—the Prime Minister, the Deputy Prime Minister and the Minister for Foreign Affairs—were examined, gave evidence, provided sworn statements and were exonerated.

In recent days the South Australian government has announced moves to remove the barley single desk in South Australia and there has been pressure in this parliament to remove the single desk for wheat. That argument is yet to be had. I look forward to watching very closely as the consultative committee moves around the country and to seeing the report that comes back.

There is no doubt that, rightly or wrongly, wheat growers are split on the question of retaining a single desk—a buyer of last resort for wheat—and a debate over the future of the single desk is something that we will undertake at another time. However, at this time, as an imperfect answer to a difficult problem—and particularly bearing in mind my Western Australian colleagues—I commend the Wheat Marketing Amendment Bill 2006 to the Senate.

Alan Ferguson (SA, Liberal Party) Share this | Link to this | Hansard source

I too rise to support the Wheat Marketing Amendment Bill 2006, which is before us today. I have been a wheat grower for most of my working life and in recent times a holder of AWB shares, but I can inform the Senate that, as I no longer own a farm and I have divested myself of my AWB shares, I do not feel as though I have any conflict of interest in representing the interests of wheat growers in supporting this bill.

Australia’s wheat growers have been going through very difficult times, partly brought about because of the drought over most of Australia—in some places that drought has continued now for three or four years—and partly because of the recent activities of the Australian Wheat Board and the necessity of having a full-scale inquiry, which we know now as the Cole commission of inquiry. While that inquiry was being undertaken, there was nothing that could be done to make any definitive moves about the sale of export wheat from Australia to other countries around the world. During the long time that the Cole commission took to report, the government always said—and government members on this side heartily concurred—that nothing could happen until that report was handed down and that an adequate and appropriate response would then be made by the government to the recommendations in the report.

In the meantime, growers in Western Australia, one of the few areas of Australia where reasonable wheat harvest has been gained by growers, have been left in an untenable position; many people did not have faith in the Wheat Board, so they have sought to warehouse their wheat while a decision is made as to what can be done in relation to exporting.

This decision of the government is the only decision that could have been made at this time. It is important for a variety of reasons. One is that we must take the concern out of the minds of the wheat growers as to whether they will get paid for their wheat, how much they will get paid for their wheat and who will be selling it for them. The provisions of this bill allow the veto to be taken away from AWB and put in the hands of the minister and the cabinet. In those hands, judgements can be made as to who should be selling the wheat from this season’s crop.

We also need to take into account the feelings of wheat growers around Australia. I have no statistics to back this up, but I have a view, and the consensus and anecdotal evidence would suggest, that there is still a majority of wheat growers in Australia who would prefer to have their wheat exported through a single marketing authority, whoever that authority might be. Some say it should still be the Wheat Board. That is yet to be determined.

In bringing this bill before the chamber, we have given ourselves some breathing space, some time to consult extensively with industry and with growers around Australia so that we can do what is in the best interests of the growers of Australia. I unashamedly represent those growers and not anybody else, because it is the growers who have to take the risk and it is the growers who, up until now, have had only one opportunity to sell their wheat through the Wheat Board. Some insist that that is the way they would like things to remain, but I know there are many others moving for change, especially amongst the younger generation of wheat growers, those aged 35 and under. They have taken to modern technology and modern communications. A price is offered each day: they can tap into the internet and find out the value of wheat. They have a knowledge and understanding of wheat futures. A whole range of issues that young people and young wheat farmers in Australia now take into account were simply not available to their grandfathers in the 1930s, when the marketing of wheat in Australia became such a shambles through agents varying prices and through the pressure put on growers, particularly smaller growers, at the time of harvest.

I wholeheartedly support this bill, because it gives us time to ask the growers whether they still want to maintain a single desk or whether they would like to move to some other form of marketing. It will give us time to consult the industry itself, apart from the growers, as to what it thinks is the best form of marketing for our grain and for the export of wheat in Australia. The bill in its present form is one that I hope receives the support of everybody in this chamber.

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

In the past month, I have received more than 100 emails and telephone calls from wheat growers in Western Australia seeking to explain their views and concerns with respect to export wheat marketing in Australia, particularly with respect to the 2006-07 crop. I have taken considerable time to speak to many personally and to write to them to explain my concern as to the wisdom and propriety of permitting AWB to continue to operate the statutory export wheat marketing monopoly as established by the Wheat Marketing Act 1989, as principally amended in 1998.

I pause to say that AWB has displayed contemptuous corporate culture with wheat growers, with shareholders—both A and B class—and with the general public. Alarmingly, the arrogance and contempt continues to this day, notwithstanding the commissioner’s finding. It seems to me that this company, amazingly and incredibly, harbours a victim mentality to its current status. The real victims in this sorry saga are the courageous and trusting wheat growers, mainly from Western Australia and South Australia, who have relied upon this company to provide stability and reliability in the production and sale of wheat by our country.

I have heard many speakers in this chamber talk about the fear campaign relating to AWB. Let us have a look at this company, which I maintain has not learnt any lessons from the Cole commission. It has conceded, begrudgingly over a long period, that the legal fees associated with the running and defending of its position in the commission amounted to $35 million. I am yet to see proper accounting for that.

Shareholders and growers should be fully informed, as should the market. As you know, Madam Acting Deputy President, a task force will be established as to the prosecution of 11 AWB personalities. I am yet to see a proper accounting of and provisioning for the legal fees associated with that matter—for defence of the likely charges to flow from the task force inquiry. So we have a huge contingent liability rivalling the $35 million on the horizon for this company.

I turn to the taxation situation of this company. This company apparently claimed $A290 million as a tax deduction, which it paid to Alia. Those of us familiar with the laws relating to taxation assessments know that upon reassessment this company will be required to put on the table the cash differential of what it paid and what it should have paid whilst we await the outcome of its objection to the assessment. My estimation of that is somewhere between $100 million and $150 million in cash on the table.

Moving on, I draw the chamber’s attention to the Statoil case in the United States, which was prosecuted under foreign corrupt payments legislation. Statoil had paid $5 million in a bribe to the Iranians to secure an oil and gas contract in Iran. It pleaded guilty to the prosecution case and was fined $21 million. Extrapolating that figure means that, were AWB to be charged and convicted, the fine is likely to be somewhere around a billion dollars. I also mention that there is a class action looming. Those involved are being egged on and encouraged by Senator Harkin and Congressman Peterson from Minnesota. A class action against AWB would involve considerable expense, given the nature of the legal fees to defend it and any outcome.

Even worse than any of those things is this. AWB is currently the largest grain trader on the Chicago board of trade. Were it to lose the right to trade there and were this entity to retain the single desk operating rights, growers would be left without a hedging possibility on the largest grain-trading market in the world. In other words, this single desk monopoly holder would be failing growers if it were to be banished from participating in what would be a risk management exercise in the nature of hedging. Lastly, the Iraqi government wants the $290 million that was apparently paid to Saddam Hussein.

The account I have just given has been said by senators in this place to be fear mongering and part of a fear campaign. Let me say that it is so frightening that AWB Ltd gave an indemnity to AWBI over legal fees and tax. If it is a fear campaign, why would the company that runs AWBI grant an indemnity—an indemnity that has never been fully explained or fully set out? Is it in writing? If so, what are the terms?

The issue of the demerger we saw last week was not adequately explained, which says to me that this whole thing was simply a charade to try to look good and to be seen to be doing something. Even worse than that, and this is in answer to the allegation of a fear campaign, AWB has set up trusts which it brazenly acknowledges are to protect individual pool years from creditors. That is the cat out of the bag. If they have got to set up trusts to quarantine and insulate each annual pool—and they have acknowledged to the Stock Exchange that they have done this—the question is: why? The answer is that the liabilities on the horizon for this company are huge and dangerous. This company has betrayed the trust and faith of wheat growers.

Chapter 5 of the Corporations Law deals with insolvency. The authorities will stroll through these trusts as if they are having a Sunday walk in the park. This is a sham, and it will be seen to be a sham. So, when we see a demerger of AWBI from AWB, what is the end result? No advance explanation for growers and absolutely no assistance to them as to where they stand. In Western Australia growers have voted very accurately according to what their understanding is, and they have not given their wheat to this corrupt company for good reason. This bill solves that problem.

Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Link to this | Hansard source

It would be fair to say that the matters around the Wheat Marketing Amendment Bill 2006 have been very well canvassed, so I do not want to go through the reasons the bill should be supported. However, I will briefly deal with one issue that has been raised—that is, the definition of public interest. It is not possible to specify in advance what the relevant matters may be for determining what is in the public interest. That will depend on all the circumstances involved in each industry application that the minister will assess. Some of the issues that the minister may potentially take into account include the interests of growers participating in the national pool as well as the interests of growers in the industry as a whole. We as a government believe that broader considerations need to be taken into account than simply what may be in AWBI’s commercial interests.

In relation to the amendment proposed by Senator O’Brien, I quickly indicate that our view is that the type of review proposed would be time consuming and unnecessary. The government has already committed to extensive consultation with industry, and the minister will be writing to all growers seeking their views. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.