Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

The Liberal Party will not be opposing the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008. We will, however, move a small number of amendments in the Senate to the Wheat Export Marketing Bill 2008 which will improve the proposed system. Wheat growers have always been our first priority and focus throughout this process and in our policy making. This is not a simple issue. Among wheat growers there is a considerable diversity of opinion about the best arrangements for wheat marketing. I would like to recognise and thank the many individual growers who took the time to contact their local members and my office, in writing, by telephone and in person, to offer their views. Some will be very happy with the changes in this legislation. Others will not be supportive. We have weighed these views very carefully in arriving at what we believe is the right decision.

The Australian Wheat Board was first established in 1915 as a wartime measure to ensure equitable returns and that limited wartime shipping capacity was allotted efficiently. Similar arrangements were instituted in 1939, with powers including a marketing monopoly for both domestic and export consumption, encompassing the concept of ‘orderly marketing’. This was considered the best way of countering the market power of private grain merchants who were judged to be operating cartels and profiting through the control of storage, transport and access to market information at the expense of struggling producers. After the war, the Wheat Stabilisation Act 1948, backed by complementary state legislation, established AWB as a statutory authority and provided it with powers for ‘single desk’ export and domestic marketing.

Over the last quarter of a century wheat marketing arrangements have undergone changes. In 1984 a permit system was introduced for direct trade between producers and consumers of stockfeed wheat. In 1989 the AWB monopoly on the domestic market was removed following a royal commission into grain handling and storage and the Industries Assistance Commission review of the wheat industry. The Wheat Marketing Amendment Act 1998 transferred the former statutory AWB’s regulatory export control functions to a new agency, the Wheat Export Authority, while terminating control over AWB Ltd and its subsidiaries and transferring the ownership and control of AWB Ltd to growers.

In recent decades the Commonwealth and state governments have deregulated single desk style arrangements for sugar, rice, barley, oats, cotton, dried fruits, eggs, oilseeds, sorghum, beans, peanuts, honey, potatoes, milk and wool. However, until now the single desk for wheat exports has remained with the support of many growers who believe it has helped manage risk and provided supply chain efficiencies and marketing expertise along with strength in numbers and a sense of control. This arrangement generally enjoyed bipartisan support until recently.

In 2001 the Labor Party election campaign policy stated:

Labor is committed to leave the single desk for wheat in place, with a review in three years time.

In 2004 Labor’s election policy stated:

Labor has always been a strong supporter of the single desk and has no plans to conduct further reviews ...

Following the exposure of AWB’s operating activities through the Cole inquiry, the coalition in government acted decisively to address the situation and removed the ability of AWB International to solely sell bulk exports. The then government also agreed that the 2007-08 wheat harvest would be the final wheat harvest to be managed and marketed by AWB International. In a statement to this House on 22 May last year, then Prime Minister Howard said:

If growers are not able to establish the new entity by 1 March next year, the government will propose other marketing arrangements for wheat exports. Let me make this clear to the House. The options available would include further deregulation of the wheat export market.

The then Prime Minister also said:

If this country is at some time in the future to move away from a single desk operation, it will need in order to justify that decision to get something decent in return from the corrupted international wheat markets that have worked so heavily against the interests of Australia.

It is unfortunate that Labor has moved to end the single desk without any concurrent requirement that such changes be linked to free trade concessions for Australian wheat growers. As a consequence, Australia has now lost a significant bargaining chip and an opportunity to extract concessions from either the WTO Doha Round or other negotiations.

It is unfortunate also that Labor was not clearer about its intentions in its last-minute election policy. In that policy, Labor said:

A Rudd Labor Government will introduce major new reforms to wheat export marketing.

Labor proposes a new model for exporting wheat which retains a single desk for the control of wheat exports and at the same time increases choice for growers by allowing a number of selling options.

This led many growers to expect that Labor would retain the single desk, which, as the exposure draft bills indicated, was certainly not the case.

We respect and uphold the right of our coalition partner to have a different position from the Liberal Party on this matter. However, the Liberal Party will support the bills with amendments that will enhance their operation. They reflect our philosophical belief in individual freedom and freedom of choice.

Wheat growing is very different today from 60 years ago in the postwar environment that saw the single desk established. Modern wheat growing is far removed from the old picture of simply ploughing a paddock, planting your wheat, spraying some weeds along the way and harvesting it when and if it rained enough to do so. Modern wheat growing is characterised by practices such as ‘no till’ farming that aims to disturb the soil as little as possible and, more recently, through ‘precision agriculture’, described by the Grains Research and Development Corporation in the following terms:

Information-rich agriculture. The use of yield maps, other spatial information and input-control technologies to better match agronomy to paddock variability. The aims are to increase profit and improve environmental management.

These technologies provide detailed information about geographic location and spatial variability in soils or crops. This information can be used by growers and advisers to improve cropping decisions, crop agronomy and the efficiency of farming operations.

…some growers may use GPS only when establishing raised beds or controlled traffic systems or for sowing into the previous year’s inter-row, or just to reduce overlap when spraying or seeding. Others use yield maps to check the performance of different varieties or the impact of a pesticide. Others again are establishing paddock management zones and using variable rate application to better match expensive inputs with potential yield.

In the same way growers have access to better information and technology when it comes to growing wheat, they also have access to better information and technology—including modern transport, storage and communication—when it comes to the marketing of wheat. The new possibilities and options presented through better information and technology, combined with the emergence of new and niche markets, make the case for change clearer. Growers now need to be able to have the choice as to how they grow and how they will market their grain.

With an end to the single desk, the export wheat business will move towards similar arrangements that apply to the domestic wheat industry, other grains and bagged and containerised wheat. They will also move towards the same deregulated system as operates for virtually every other commodity—including those that are often produced on the same farms. We believe this will bring benefits from competition, with more players giving growers a greater choice for selling their grain. This is particularly important for wheat growers in Western Australia and South Australia who are predominantly export focused and who have small or distant domestic markets. New entrants could be expected to compete, seeking out new markets, customers and the most efficient storage, handling and transport services, thereby reducing costs.

In considering our position on this issue, we carefully considered the views of the majority of stakeholder groups who either supported or did not oppose the changes. These include but are not limited to: the PGA Western Grain Growers; the South Australian Farmers Federation; Eastern Wheat Growers; the Grain Growers Association; the West Australian Grain Growers; the Grains Council of Australia, representing AgForce Queensland; the Victorian Farmers Federation; the South Australian Farmers Federation; a number of individual growers; the Australian Grain Exporters Association; the bulk handling companies, CBH, GrainCorp and ABB; and wheat marketers including Emerald Group, Southern Quality Produce Cooperative and significantly the AWB itself.

In the words of the AWB Managing Director, Gordon Davis:

... the proposed wheat export accreditation scheme provided the opportunity to introduce competition and choice with appropriate regulatory protections into wheat marketing and to lower the cost of AWB’s services to wheat growers.

…            …            …

Wheat growers should be comforted by the fact that key elements of the old wheat marketing arrangements will continue in the new marketplace including pools and estimated pool returns which will enable them to plan with confidence, secure finance and sell their wheat in a competitive environment.

To quote the PGA Western Grain Growers in their submission to the Senate inquiry:

Competition [is] the key to the new wheat marketing arrangements.

The change proposed under the new Wheat Marketing legislation will bring significant benefits to the grains industry of WA. For the first time in 70 years, export wheat growers will regain control of their own business decisions, and not be dictated to by a centralised marketing entity.

Yes, there are other groups and growers who are opposed to change, and we respect their views. Change is never easy, and the single desk for export wheat is the only system most growers will have ever known. Many groups and growers believe that the current system has served them well and could continue to do so. But the hard, economic and political reality is that it will not, and my responsibility as the Leader of the Liberal Party is to tell it as it is. I again recognise and appreciate the efforts they have made to communicate their views. As I have said, we respect them, we understand them but we respectfully do not agree with a number of them.

Yet it now seems that many of those who have been very strong supporters of the single desk are acknowledging the momentum towards change and are being very constructive in making sure the new arrangements will work. To quote WAFarmers for example:

WAFarmers in accepting that changes are inevitable has taken steps to assist our members with the transition to the new marketing arrangements and has commenced negotiations with Australia’s leading independent grains manager, Emerald, to develop a specialist wheat pooling product. This action reflects WAFarmers commitment to representing the interests of Western Australian wheat growers under the new industry structure.

Under a deregulated system, new opportunities will be available from the innovation and diversification that will arise. We believe the time has come to introduce competition and choice into the wheat export market. We will seek to give all growers and stakeholders what they seek above all else, and that is clarity and certainty.

I foreshadow that the Liberal Party will be moving several amendments to the bill in the Senate. To ensure the new arrangements promote a vibrant and competitive bulk wheat export-marketing environment, individual growers must be provided with maximum flexibility and minimum red tape through unnecessary regulation. That is why we will be moving an amendment to allow individual wheat growers who wish to directly bulk export their wheat to an international purchaser to be exempt from the system. There will be growers who have already established such relationships with overseas traders.

The Labor Party has argued that such growers would probably be incorporated and thus could seek accreditation. But the issue is not incorporation. It is the accreditation. Why should an individual wheat grower wanting to directly sell his or her own wheat have to undergo extensive accreditation and reporting requirements, given that they alone are assuming risk? If we are to truly encourage those who take calculated risks, we should make an amendment for the benefit of these growers.

We will also be moving amendments relating to bulk-handling companies. In the proposed bill, bulk-handling companies will be subject to one form of regulation for the next 16 months, but then be subject to a more onerous, heavy-handed form of regulation after October 2009. Prior to October 2009, accredited exporters who are also the providers of port terminals will simply need to publish a statement on their website outlining the terms and conditions on which they will allow other accredited exporters access to their port terminal facilities. From October 2009, accredited exporters will be required to have a formal access undertaking accepted by the ACCC. The access undertaking is, for the purposes of this clause, in force as of the date the ACCC publishes its decision to accept it. Where the ACCC has not published a decision to accept an access undertaking by 1 October 2009, the accredited exporter will have its accreditation cancelled under clause 19 or, where the accredited exporter has not yet received accreditation, be refused accreditation under clause 13.

As the legislation stands, bulk-handling companies will operate entirely under their own terms for a period of 16 months in relation to port access. Why should the bulk-handling companies then be subjected to heavy-handed regulation under part IIIA of the Trade Practices Act if no problems have arisen with the system? It is estimated that the requirement for access undertakings under part IIIA of the Trade Practices Act will, from 1 October 2009, cost bulk-handling companies between $1 million and $2.5 million per year in compliance costs, effectively a tax on business which will in turn, of course, adversely impact growers. This is a significant cost that will undoubtedly be passed back to growers, with the effect of reducing grower profits. It will also lead to a disincentive for bulk-handling companies to invest in the improvement and maintenance of infrastructure.

The bulk-handling companies should be given the opportunity to prove themselves in the new bulk wheat-exporting environment. If no problems arise then there is no need to impose heavy-handed regulation upon them, and I ask the government to seriously consider the broad merit of the amendment which I foreshadow. If problems do arise, the minister must be provided with the ability to act decisively, including with the imposition of a part IIIA access undertaking. We believe the new system should be reviewed after two seasons to ensure that any changes can be implemented well before plantings begin in 2011. The review should begin by 1 January 2010 and be completed by 30 June 2010. While changes would not be able to be implemented for the 2010 season, they would be well and truly in place for 2011, providing growers with more security. I also foreshadow that we may move some minor amendments relating to the objects of the act and transport issues arising from previous legislation.

Those of us who live in capital cities must understand and never forget that, the further you go from the Opera House or the Melbourne Entertainment Centre to the regions and rural Australia, there are millions of Australians, and more than 20,000 wheat farmers, who feel at times that they live in a different kind of Australia. It is important we appreciate the resilience of our farmers, who are the best in the world. They have done it tough in recent years. In fact, they have done it bloody tough. Wheat production is expected to be up 23 per cent in the 2007-08 growing season to 13.1 million tonnes. This is still 39 per cent below the five-year average. Looking to the 2008-09 season, ABARE predicts a bumper harvest of 25.9 million tonnes. We will all keep our fingers crossed and hope that they are right.

Australian farmers also face price fluctuations, rapid increases in input costs—especially fuel, fertiliser and chemical costs, which are currently crippling. And they face unfair competition in the form of trade barriers and subsidies for their overseas competitors. Australian farmers face challenges and live a life many of us could not to provide us with food we literally could not live without. The coalition is proud to represent the majority of electorates based predominantly in rural and regional Australia. We understand that not only our economy but our values and our beliefs as a nation have been shaped largely by the labour and land intensive industries in agriculture, fishing and forestry and mining and a rural lifestyle that has given this generation a legacy that we too often take for granted.

We understand the critical importance of ensuring the viability of rural Australia for our ongoing economic prosperity, the viability of essential industries, the preservation of our heritage and down-to-earth Australian values, minimising the growing pains on our biggest cities and, arguably, our national security. We are proud of the more than $30 billion which we in government spent on specific programs that have supported regional Australia since 1996. We are also proud of the economic prosperity and stability we provided to our farmers and their communities throughout our time in government, including in the worst drought in 100 years. We are also immensely proud of the work achiev-ed by the coalition in securing important free trade agreements and progressing WTO reforms. We will keep working to ensure Australia continues to stand up for the interests of our farmers and those in critical negotiations.

Australia’s farmers have endured fire, flood, drought, economic adversity, unfair trade barriers and Labor governments. Hard though it may be to accept change, these reforms, with some amendments to wheat marketing, will be to the overall benefit of Australia’s wheat growers. If it is good for them, it is good for Australia. I know that this will be neither universally accepted nor supported by all of Australia’s wheat growers. Change is never easy. This change is very hard and will be very hard for many wheat growers and marketers in this country. But this is all about certainty, it is about clarity and it is about a future which is vastly different from the world in which the single desk was created and which served Australia’s wheat growers and marketers for much of the 20th century. It is now time for change. We respect those who do not support it, but we do not agree with them.

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

Single desk marketing arrangements for wheat began almost 70 years ago and have served the Australian grain industry well. Over a period of several decades, single desk marketing arrangements were put in place for many commodities by governments of all political persuasions to provide some support for farmers desperate to find a way to obtain a fair value for their production. Farms were small and did not have access to sophisticated market intelligence or any dispute settlement arrangements. The farmers were completely at the mercy of local town merchants, who often grew rich while they remained poor. The establishment of single desks put some marketing power in the hands of farmers. Industries prospered, handling facilities, rail lines and storages were built and export markets were established. Organised marketing helped to build Australian agriculture and established our international reputation as a reliable supplier of quality products. Our nation was dependent on agriculture, and wool still provided over half our exports fewer than 50 years ago.

These arrangements have never been supported by the multinational traders or the capital city academics. But those people have never laboured to produce a crop only to have it sold at prices way below its worth. Over the years, key elements of the single desk have been stripped away. There has been a separation of storage and handling functions from marketing, the domestic single desk was scrapped and other sellers have been allowed increased access to the export market, especially in bags and containers. Declining grower control and the corporatisation of the Australian Wheat Board dramatically changed the operations of the marketer, and I doubt all these changes were in the best interests of the industry.

Farmers still support the single desk. Surveys show that more than 70 per cent of wheat farmers support a single desk, and support is highest in areas where the wheat industry is most dominant. Many are resigned to the fact that this government is going to take away their single desk, but they still believe in the single desk as the best way to maximise returns for the national crop, for them and for their country—and the facts support them. All the properly conducted reviews of the marketing arrangements, including those under the National Competition Policy, found that the single desk had delivered higher returns to growers. There are variations in the calculated size of these benefits. I have seen figures ranging from $5 to $70 a tonne, but they all show a net benefit.

In letters to wheat growers last year the then opposition leader, Kevin Rudd, wrote:

A study by Econtech of the premium attributed to the single desk indicates 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.

So only last year the Leader of the Opposition was not only, as he said, supportive of the single desk; he was arguing with growers that it delivered substantial financial benefits to them.

It is not that farmers are satisfied with the performance of the current managers of the single desk, AWB and AWBI. AWB under its previous management let Australia and its grain growers down. The behaviour of some of the AWB staff in Iraq was unacceptable and offensive. Some of these people will now rightly face the legal consequences of their actions.

But it is not necessary to abolish the single desk because the current managers betrayed their trust. We do not abolish pensions because some people wrongly claimed or someone in Centrelink acted fraudu-lently. We should fix the problems of the single desk, not cast it aside when it has been good and beneficial to growers.

Let us make it absolutely clear. This bill does not create a new single desk. It is the end of the single desk. The new arrangements merely create a licensing scheme for prospective exporters. While the WEA will vet applications, the government will not be standing behind or underwriting the decisions of this government agency. In an incredible precedent the new minister has already given an export permit to Glencorp, a company which has been named as corrupt for its rorting of the oil for food program and a number of other United Nations programs.

Farmers will have no assurance that their wheat will be marketed well or that their payments will be assured. Our crop marketing will not be coordinated or managed. There will be no-one to sustain long-term contracts with our international customers, no-one to manage essential carryovers to secure the nation’s food supply and no receiver of last resort for farmers if the market were to collapse. There will be no-one committed to the interests of the Australian industry in the world markets.

In Kevin Rudd’s letter to growers he also said:

Labor’s policy is to continue to support the single desk while we are convinced that there is strong economic value in the single desk for growers and the Australian economy and it retains the support of growers and the community.

While Labor gives lip service to single desks before elections, Labor state governments have systematically dismantled every single desk marketing arrangement under their jurisdiction, usually immediately after the state election. Now it is federal Labor’s turn to dismantle the marketing arrangement that has served this nation well. Labor advocates collective bargaining for work-ers but battling farmers have to fend for themselves.

Those who are applauding Labor tonight are not the farmers or the country towns dependent on the wheat industry who know their incomes and security are being put at risk. The winners are the multinational grain traders, some of those who buy Australian wheat, and our grain-growing competitors. Should it not ring alarm bells that the people who are most critical of the single desk are our competitors, those trying to sell against us in a seriously subsidised and distorted world market?

Australia is not a large producer of grain but, because of our small domestic market, we are a major exporter. Australian wheat growers are more dependent, more exposed to the export market than other national industries. We grow a high-quality product that can bring a premium on the world market or allow us to make sales in glut times when lower quality producers are unable to place their crop. The single desk has helped to develop and retain our crop quality and consistency. It has enabled the profits from blending to meet delivery specifications to be returned to farmers, not the marketers or the handling companies. It has ensured that available premiums are harvested for growers and not traded off in competition or to make poor-quality overseas produced wheats more saleable.

Australia needs a single desk for wheat because most of our customers are single desk buyers—Egypt, India, Pakistan, China, Japan, Iraq and effectively also dominant customer countries such as Indonesia. If we have a dozen companies seeking to sell our wheat to a single desk buyer, the buyer will choose the supplier offering the lowest price, and the lowest price will then be passed back to Australian farmers. No-one will be able to demand a premium for Australian farmers, as a competitor will simply undercut his bid. The price will spiral downward because there will always be farmers who cannot store their own crop or who urgently need a cash flow.

Growers’ returns will be lower as a result of the abolition of the single desk and the profitability of the industry will decline. Most of the world’s grain is traded by a small number of giant multinational companies. Many are privately and family owned, but they are all foreign owned. None of these corporations have ever demonstrated any primary commitment to Australia. Only the AWB had the international network, the market contacts and the volumes to be a genuine international trader in its own right. I have no confidence that any other Australian company, includ-ing the ambitious domestic grain-handling monopolies, can match the global marketers on the world stage. They are already teaming up with multinationals in relationships that will grow increasingly uneven.

GrainCorp, which has virtual monopoly control of the grain storage and handling system in New South Wales, Victoria and Queensland, including the ports, has already ditched its ties to growers and exposed itself to takeover. The world’s biggest trader, Cargill, already has a share of ownership. Cargill is the company which bought up most of Australia’s oil seed-crushing capacity and then progressively closed it down. Instead of being a significant exporter of oil seeds, Australia now imports vegetable oils from the US, South America and other countries where companies like Cargill are active. I fear for the future of Australia’s grain growers if—or is it when?—Cargill acquires ownership of the entire eastern states grain network. CBH in WA will also be a foreign acquisition prize, and I note moves from some of the state producers in Western Australia to change its structures in a way that would make it easier to be taken over. The bill being debated tonight is a significant step towards the loss of Australian control over our grain industry.

Internationally, most of the critics of our single desk marketing arrangements come from the United States and Europe. Most of our major customers actually support a single desk because they have had confidence in the professionalism and reliability of their Australian suppliers. US and EU farmers acknowledge that their own marketing arrangements are a shambles. However, they enjoy the luxury of almost unlimited price support and other subsidies which make them immune to the impact of marketing decisions. The latest US farm bill, which passed just a week or two ago, boosts subsidies to $260 billion, including for wheat, and ensures that US farmers pay little price for poor marketing decisions. Australian farmers have no such support and will bear the full price of any reductions in their return that might arise from this legislation.

The Nationals have been long-term supporters of the wheat single desk. It has been a fundamental tenet of our party. The industry, through the Wheat Export Marketing Alliance, was working to put together an alternative manager of the single desk, as they were invited to do so by the previous government. The new minister was initially reluctant to meet with them and, when he finally did meet with them, he told WEMA that he would not even countenance their proposal, as the government had made a pre-election commitment to abolish the single desk. So the efforts of the growers to put together an alternative to the AWB were thwarted. They were not given an opportunity to bring this idea to fruition.

This new proposal fails to address key concerns of the industry. I am concerned that the new legislation will not ensure that returns to growers are maximised in every season. I am concerned that the premiums for quality Australian wheat will not be preserved and returned to growers. I am concerned that Australian wheat stocks cannot be managed and moved on time to port when there are many buyers and exporters. I am concerned that profits from blending will be dissipated and lost to growers. I am concerned that the industry good benefits formerly required of the single desk manager will not be able to be sustained. I am concerned that a multitude of licensed exporters will not be able to compete effectively against subsidised US and EU growers, especially the single desk buyers. I am concerned that, in the absence of a national pool, long-term contracts which Australia has had for many years and which have underpinned our industry, especially in times when there was high production, will not be able to be honoured. I am concerned that there will be no buyer of last resort and no-one to fund crop carryovers to ensure that we can be a regular supplier month in and month out.

My objective in looking at the best options for wheat marketing is to maximise the returns to growers and to our nation from our wheat crop. I want those returns to go to growers and to Australia, not to multinational grain traders. I am not convinced that this legislation will deliver on those objectives, and for that reason the Nationals will be opposing the bill.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I thank the House for this opportunity to speak about something which is very close to my heart and even closer to my heritage. I look around the House tonight and I see on this side of the House—and this is not a reflection on the government side—people who spent a long time in their previous lives, and have continued that support for the industry, representing the interests of wheat growers: the member for Wide Bay, who has just spoken; the member for Calare, who will speak shortly; the member for New England, who was on the coarse grains committee of the Grains Council of Australia with me; the member for Maranoa, who got onto this list by sheer lobbying and who represented the United Graziers Association, but, to be fair to him, represented graziers who grew wheat as well; and I could not leave off the member for O’Connor, who I do not think ever had a life in agripolitics but was the bane of every agripolitician’s life.

Tonight is an opportunity to talk about the future. I have a limited understanding of the history of the wheat industry. I did at one stage of my life grow wheat. I in fact held shares in the Australian Wheat Board. I was President of the Grains Council of Australia. I actually sold to growers the new model for the Australian Wheat Board. I sold it on the basis that Australia needed a new system to market wheat, but it was not my preferred model. My preferred model was cast by the wayside. It was a model where all grower assets were combined into one marketing and handling group that did not rely on the whim and wishes of government but actually put the power in the hands of the growers through that one thing that speaks all languages, and that is financial empowerment. That was a model that the growers turned down in 1992, and time moves on and growers’ ambitions change. What we should do tonight and tomorrow with the Wheat Export Marketing Bill 2008 and the related bill is decide what is best for the wheat growers of Australia.

There is, as the Leader of the Opposition stated, a diversity of views. But those of us who have had the privilege and the opportunity to look at this industry in depth from a number of different angles will be required under this bill to make a call. It will be a call, in my case, made on what I think is best for the wheat growers of Australia. It is for that reason that I will not be opposing the bill and the Liberal Party will not be opposing the bill as proposed by the government. We on this side of the House do believe in freedom and individual choice. We do believe in the opportunity being provided to those who grow wheat to market their wheat in the way that they see fit. There are systems that have been in place in this country for a very long time that have assisted growers during the transition to the current era. As the Leader of the Opposition mentioned, we live in an age where satellites guide tractors to within 2½ centimetres and where market information is downloaded into the cabs. This sure as hell beats listening to the ABC all day, which was the only option I had when I was a farmer, or before that, when tractor radios did not even exist, relying on information that was sometimes a week or two weeks old to market your crop. These days, growers can access the most up-to-date information instantaneously over their mobile phones, PDAs, laptops and home computers.

This is a new beginning for the wheat growers of Australia. It is a beginning that this side of the House is looking forward to ensuring is done in a way which provides the maximum opportunity for the wheat growers of Australia. I do have to express some disappointment that the single desk was traded away in the international trade arena by the now government without the opportunity for some recompense. Where I come from, when I do business, if I give then I get. If I give something away which I hold dear and that is valuable not only to me but also to my competitors in the international marketplace then I would expect a concession. The indiscriminate haste of the now Labor government caused this opportunity to pass. I am not going to lament it but I am going to highlight it. The Liberal Party supports this bill. The wheat growers of Australia will benefit from this bill, assuming the right amendments are put in place, and I look forward to seeing the future of the Australian wheat industry go forward from here—God willing—with rain, but also with the right marketing mechanisms.

John Cobb (Calare, National Party, Shadow Minister for Regional Development) Share this | Link to this | Hansard source

I want to deal with one furphy straight off, and that is that all the large growers favour deregulation. That is totally untrue. The large growers are just not as frightened of deregulation as small growers, who have probably not had a lot of experience in marketing their own grain and certainly not in doing those things which bodies like the AWB, GrainCorp and others are not doing now—hedging or forward selling. I think the one thing that is beyond dispute—despite what some, including the current Minister for Agriculture, Fisheries and Forestry, claim—is that the vast majority of Australia’s wheat growers do not favour deregulation and do want a single desk for the export of their wheat from Australia’s shores. I think the most surprising feature of what the Labor Party are putting to the parliament tonight is that they are favouring, without doubt, neither farmers nor growers. It does not matter which way you put it and whether you say you are trying to protect them from various forces. Once you do this, you cannot. Once you take this step of taking away the single desk, there is no regulation and there is no protection. It is a total furphy to suggest that there is. But why would a party who purport to speak on behalf of working families, who purport to speak on behalf of the small against the big, not be favouring farmers, who are in this case the ‘small’? Why are the Labor Party favouring big business over small business? Why are they favouring corporate entities over small family farms, the hardest-working families in Australia? Why? I stop and wonder, but that is something I am yet to work out. Perhaps one day they will tell us.

Farmers recognise that perhaps the current situation is not perfect, but it does take away the necessity for them to hedge. It does take away the necessity for them to sell forward. Anyone who wonders what that means should have been in the central west of New South Wales this time last year, when people were trying to finance for the coming year. Because they were borrowing money due to the ongoing drought, of some five or six years at that stage, from banks or whoever else their particular financial entity might be, they were selling forward on a price of about $200 a tonne. Come harvest, not only did they not have a crop but the price of wheat had doubled to $400 a tonne. Your average small grower who ventured into hedging, which obviously deregulation is going to force quite a lot to do, took a bath. It certainly has put some of them out of business. Simply, their first exploration into dealing with hedging or forward selling was an absolute disaster for them. Really, the size of the operation was not the issue. The issue was not just that they did not grow wheat. You can deal with that if you have something to sell, if you forward sell. The issue was that it doubled in price in the meantime. That meant some of them had to buy out those contracts for upwards of $400 per tonne for wheat that they did not have and could not procure.

I am talking about eastern Australia where you have, as you do in the west, one entity with pretty much total control of the wheat-handling facilities. In the case of eastern Australia it is GrainCorp, which pretty much controls Queensland—it certainly controls New South Wales and Victoria. They have a very serious link with Cargill and, as I think we heard the Leader of the National Party say earlier, that is a potential partnership—it is actually one already—which has the ability to pretty much control the export, if not the movement, of all grain in eastern Australia. I tell you what: as a wheat grower for much of my life and possibly in the future, I would much rather have the AWB owning my soul than Cargill. I do not think I need to say too much about why that might be.

CBH is almost the only entity with any export facilities. I notice that to keep CBH happy the legislation had to be changed to include co-ops; otherwise the minister would have been in severe trouble from one of those large corporations or entities that I referred to earlier. Why in heaven’s name would the Labor Party favour big business over small and favour corporations over ordinary small working families, which they talk about day after day? Why have you given them the big A tonight?

It is not in dispute by anyone who has seriously looked at this that 75 to 80 per cent of farmers wish for a single desk to be retained. It has worked for them in the past and it gives security. It hedges for the farmer because some years you come out somewhat in front of world markets; some years you might come out slightly behind. But it takes out the troughs and the highs and it gives farmers security in marketing, security in their future. Once again, why is the Labor Party favouring big business over small, favouring corporations over the hardest-working families in Australia?

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to be speaking in favour of the Wheat Export Marketing Bill 2008 and I think this bill delivers on a key commitment to reform and improves the exporting arrangements for Australia’s $4.7 billion wheat export industry. The most important thing this bill does is provide growers with some certainly about their future. It is important to acknowledge the background to this bill. First of all, we had many reports which cast doubt on the value of the single desk over the years. We have had a deregulated domestic market since 1989, we had the Volcker report and the Cole commission and then we had the timid half-hearted response of the previous government. All of this left wheat growers with a great deal of uncertainty, and it has been left to the new government to make a decisive response, a decisive legislative framework, to govern our wheat exports.

The farmers I have grown up with and dealt with over the years tend to run dynamic, competent, resourceful businesses and they do not need a monopoly to protect them in the marketplace. They do not need a monopoly in the domestic marketplace, so I cannot see why they would need a monopoly in the international marketplace. Indeed, after the Cole commission and the Volcker report, a monopoly has been proved to be detrimental to our national interest.

That said, we can rely on a couple of things in this bill. First of all, it has the Wheat Industry Expert Group, which will give advice to the government about the delivery of industry development functions that were previously supplied by AWB. The recommendations of this group in relation to the provision of market information to growers is particularly important. The government is providing some support to the industry: $2.5 million over three years to assist with the collection of market information for growers; $1.15 million for information sessions for growers to adjust to the new system; $600,000 to help new marketers deliver technical market support to customers; and we are also going to assist—and I would like to strongly support this—in the creation of an industry code of conduct, which is being developed by the National Agriculture Commodities and Market Association, which will provide standards and transport-pricing practices at silos and include fees and charges, marketing rates and net return figures that will assist growers in going about their business. This has been raised with me by growers and wheat farmers in my electorate as being a key part of the export industry, so I think it is great that the government is committing some financial support to develop that code. It is critical to growers being able to operate in the new system.

Another thing that is critical to wheat farmers being able to operate in the new system is Wheat Exports Australia being able to accredit companies of good standing, which have the financial resources, the risk management systems and a record of obeying both Australian law, international law and United Nations resolutions. I think it is critical that wheat growers deal with companies that are reputable and that have a capacity to trade in the international environment.

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

Mr Windsor interjecting

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

We do not know who is going to be accredited yet. So I think that will be a critical part of the bill. The other critical part of bill is the prevention of regional monopolies, and  the role of the ACCC is going to be essential in this area. I note that the Leader of the Opposition says, ‘Why do you need two forms of regulation?’ But I think that the prospect of the ACCC’s involvement after 1 October 2009 will help to ensure that regional monopolies are not created, because the small number of operators of bulk grain facilities will know that strong regulation and strong oversight is waiting there in the future. They will also know that the bill will be reviewed by the Productivity Commission in 2010.

Given the short amount of time that I have had to speak, I do not want to unduly take up the time of the House, but the government is committed to open, transparent and competitive markets, and this bill is a perfect expression of that belief. I have every reason to believe and expect that our farming and wheat export businesses will compete, flourish and prosper under the new arrangements. I commend the bill to the House.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Housing) Share this | Link to this | Hansard source

Everyone interested in this debate on the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008 should read the conclusions and recommendations of the Senate Standing Committee on Rural and Regional Affairs and Transport at chapter 4 of their report on the bills. My position on this legislation comes from my representation of wheat growers in the electorate of Farrer, but it is also strongly reflective of the committee’s conclusions. In speaking about my electorate and the views of the wheat growers I represent, I think it is fair to say that many who were once passionate supporters of the single desk are now ambivalent about the rationale for its existence. Many farmers have accepted that the days of the single desk are over. Some are impatient for the new arrangements to begin, believing that a contestable and competitive market gives them the best opportunity to realise the maximum return for their wheat.

Many farmers have moved away from the wheat-marketing models of the past. However, many have not. The group of farmers that passionately support single-desk marketing arrangements for wheat are facing a difficult time. I accept that they hold their views with great conviction and they fear for the future of their family businesses, for their livelihoods and indeed for the very fabric of their rural communities. In meeting and speaking with them and reading their letters and emails, I am touched by their passion, which is in no way ordinary. We should treat their views with dignity and respect. Unfortunately, I cannot agree with those views. I cannot agree to requests from constituents that I support the restoration of single-desk wheat-marketing arrangements. I do not agree that such a restoration would be in the interests of Australian wheat growers, even if it were possible. I am sorry that in this instance I am unable to support the views of a section of my constituency held honestly and with conviction.

My own views, held with equal honesty and conviction, are that the best interests of wheat growers for the future lie in implementing the arrangements contained in this legislation. The Leader of the Opposition went over the time line of wheat-marketing arrangements, and I think that history very well demonstrated that over the course of the last 20 or so years there have been gradual changes to the way both domestic and export wheat are marketed. The current legislation represents a logical and sane progression through a succession of inquiries, responses and restructures as well as legislative and administrative changes, which brings us to the present situation—seeing the final dismantling of the single desk for export wheat.

AWB, for so long the operators of the single desk, appear to me to have completely lost interest in continuing with it. Their evidence to the Senate committee proved this when they said:

The reality is that Australia’s wheat export marketing arrangements have fundamentally changed over the last 18 months and there is no longer a single desk in place.

I would like to just touch on a couple of arguments put forward by supporters of the single desk. Concern has been expressed about multiple sellers competing against each other for a fixed share of the international market. I disagree. In a more competitive market, buyers will drive up the price. Multiple buyers will compete with each other to get sellers to deal with them. Although there can be no national pool under the proposed arrangement, there will still be regional pools. The current AWB pool is a series of pools that open and close in response to world grain prices. I expect reform and innovation to happen in the area of pools, allowing growers to commit early if that is what they want, with a relatively small wash-out price. In fact, AWB has already announced it will offer pools for the forthcoming harvest and has said that harvest loans, payments, regular pool distributions and incentives—in fact, all of the selling and financial features growers are familiar with—will be in place for the upcoming harvest. Banks have announced that properly accredited and licensed marketers will not mean less security of finance for farmers, who will have access to finance under the new arrangement.

There is every indication the grains industry is getting ready for the future in terms of the formation of market alliances and cooperatives that allow members to take greater control of the sale of their wheat. The ‘buyer of last resort’ argument is often made, but what does that really mean? In practice, there is no buyer of last resort because, although the Wheat Marketing Act says that the holder of the export licence must receive all grain presented to the exporter, the exporter does not have to accept it—and there is evidence to the Senate inquiry demonstrating that.

We need this legislation to pass so we can all get on with life in the wheat industry. I have listened to a great deal about this issue over the last few years. Increasingly, I find the arguments for a single desk in today’s world do not pass the common-sense test, evoking a strong emotional attachment but not much more. I am not convinced, and never have been, that AWB delivered the best returns to farmers. A number of studies have demonstrated this. Competition through the supply chain must drive benefits, particularly as a number of different marketers will be competing for wheat. AWB did not have to be an aggressive seeker of the best price in the market because they already had ownership of the wheat. In a more deregulated market, exporters will have to be aggressive in getting the best price so they can accumulate grain against the competition. Multiple sellers will compete with each other to provide the best possible service to customers, and this competition to provide the best possible service from the local grower to the overseas consumer should produce a price premium for growers.

Farmers need representative bodies that sit down at the table with key industry and government stakeholders and decide how to make the new set of arrangements work as much as possible in their own interest. The government has provided significant sums of money to carry out the industry good functions, technical support and education. I urge our farmers and their representatives to grab this opportunity with both hands, secure your share of this money and have your say about the future of the wheat industry, which I know is very bright.

Wheat farmers should not be any different from cattle farmers, horticulturalists, wool and lamb producers or indeed producers of other grains, such as barley and canola. They all operate in corrupt world markets, and returns from all would be higher if we did not have the subsidies and tariffs of our European and American competitors. But having a single desk for selling wheat will not militate against these subsidies and tariffs.

It has been argued that changes to the wheat market will disadvantage small family farmers. I believe exactly the opposite is true. In fact, I was approached by a farm adviser who explained how his clients, having made their domestic arrangements to sell wheat on a regular, possibly handshake, basis year after year were suddenly told not to send their wheat. AWB had gazumped their sale to fill a domestic contract of its own.

There are opportunities for small family farmers in this legislation. Remember the biggest export from Australia at the moment is empty containers. Not everyone will want to make their own arrangements, but nothing in this legislation prevents those who want to use pools from using pools and delivering to the same receival point they always have. The grain handlers have announced they will provide a service which essentially aggregates a crop, probably on a geographic basis, and keeps the supply line from farm to port working well and operating to capacity.

The Leader of the Opposition has foreshadowed amendments we will move in the Senate, and I seek those. Much has been made of supposed levels of support for the single desk of 80 per cent. I assume this comes from the survey from the member for New England, but I do not believe that a survey that represents 10.8 per cent of the total number of wheat growers can be used to prove this point. I submit that this legislation does act in the interests of wheat growers and a strong, competitive and secure domestic wheat industry.

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

I rise this evening to support the comments of the leader of the Nationals, the Hon. Warren Truss, because I believe if you want the facts and the truth of the issue you read the Hansard of the speeches by the leader of the Nationals—quite simply because there lie the facts for this great industry of Australia. I would like to use my five minutes to clear the record. There have been many assertions and many accusations and claims made that the proposal that the growers tried to put forward, for a grower owned and controlled company, failed or fell over. In fact, that is clearly not the case. Can I categorically state in this House that the business plan for AusWheat was not a failure. It had the support of the financial institutions. It was not given an opportunity to succeed on behalf of the growers. The policy that the coalition went to the election with last year would have been delivered through AusWheat, but it was not given an opportunity by this government as a result of the fact that the previous government lost the election.

Because the real facts have been put in Hansard, I would now like to take the opportunity to thank Graham Blight, John Ridley, Bob Iffla and all of those people who gave their time, their energy, their effort and their emotion to try to save the industry that has served them so well for so many years. In doing so, I would also like to thank my growers. They have had the worst seven years in their history but they are young and resilient. They have tried and they have risen to the cause. Every time that I have asked them to come back and fight the fight, they have stood and fought the fight, even though many of them have not a dollar to fight with. They have been backwards and forwards in many, many trips—five, six or seven trips to Canberra at their own cost—to try to save the industry that they not only love so dearly but also operate so well in.

There are around 2,800 growers in the Riverina who will have their lives dramatically and forever changed by the legislation that is being introduced into this House and that will be voted on in this House—the Wheat Export Marketing Bill 2008 and a related bill. Even today the action group that has been formed only recently—again, out of a multitude of growers right across New South Wales—has been in the House with me, desperately trying to salvage their livelihoods and the lives of the communities from whence they came, recognising that their plight is so significant that their uncertainties and insecurities will now lead to the demise of many communities.

What we have at this point in time is the demolition of Work Choices by the current government and the demolition and the removal of AWAs. The explanation for that given to us was that we were pitting the most vulnerable, the weakest and those least likely to be able to fend for themselves against the most powerful—that being so-called unscrupulous employers who would erode conditions and remove rights from workers. But what we clearly have here in this legislation is an AWA imposed on the growers of Australia, and there is no Fair Pay Commission; there is nobody to watch for the interests of our growers. We have the most vulnerable people in the most vulnerable position after a seven-year long drought now having to barter and work their way through these new rules with multinational traders who have at heart not the interests of the growers but most certainly the interests of their shareholders. I believe any allusion that the ACCC will protect the rights of the growers that all of the rural members in this House represent is an absolute furphy.

This is a sorry day. It is a sorry day for the industry. It is a sorry day for the history of Australia and a day when this government has turned its back on a class of working families that it simply will not recognise—the working families of rural and regional industry, which has competed in a corrupt world market for so long and is still competing, as Mr Truss said, in a distorted world market with subsidies in the US and the EU. There will be no supply chain efficiencies. They will be lost because we will have regional monopolies and they will stifle competition.

Could I finish by saying the Senate inquiry saw people with no knowledge and no history of growing wheat making decisions on the future of thousands of growers. I am very critical of the Senate inquiry process, one that I stayed very closely attuned to and watched with great interest and great passion. Could I thank the growers for their incredible resilience, their ability to fight and their absolute dedication to an industry that is now lost to the Australian people forever.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I support the Wheat Export Marketing Bill 2008 and the related bill. I congratulate the government for its introduction, but I do say to the minister, for whom I have a high respect, that I hope he will look very closely at the technical amendments we have brought forward. We do not think they should be dealt with in any other way than a practical way. My opinion of you will stay high if you can accommodate us in that regard. I had to send a message to Martin the other day on that issue.

There are no prohibitions in this legislation to prevent wheat growers from collectively bargaining. Those who choose to can do exactly what they have done for the last 50 years. There is also no prohibition in this legislation which requires wheat growers to collectively bargain. They have a right, which is fundamental to me and my commitment to the Liberal Party, to do as they wish. They are not required to do anything; they are given the opportunity to do as they please.

It is an interesting fact that when this government in coalition introduced the measures to corporatise the old AWB—if anybody wishes to turn to the Hansard of 2 October 1997 or in fact 1 June 1998—both my speeches raised the issues and predicted the outcome. As I said in my closing remarks in 1998:

But we will just have to wait and see how all this goes. I repeat: I am not opposing the legislation but I am not at all happy with it.

And on the previous occasion, in 1997, I said:

This is a grower model, yet as they presently propose, the structures are totally unworkable. The problem is that the proposal is to create a company that is run by its customers but which seeks over time to attract non-customer share capital. This creates a massive conflict of interest that will, at least, probably deny existing WIF contributors any chance of recovering their forced contributions through the sale of the proposed B class shares.

That is what I said when our government tried to change a well-established statutory operation. We know who did it, and I am not pointing fingers.

The reality is that, from that moment on, the single desk was dead because the corporate model could not accommodate a process of maximising grower returns. I congratulate the government again for putting some serious money up, amongst other things, to give growers a clear indication of their opportunities. I have corresponded with the trade commission to try and get a process of direct marketing, and hence one of the amendments we want. The person who came representing CBH the other day, the newly elected chairman, had once been a sharefarmer in South Australia. He told us that in the last three years his average production has been 35,000 tonnes of wheat. He, or maybe he and his neighbour, may just want to export in bulk—and I do not think they need to be protected from themselves. That just gives you an example of how that will work.

The reality is that there are clear opportunities in this modern marketplace, this international marketplace, for growers. I hope the government through Austrade and others will assist them—point out the pitfalls and point out the opportunities whereby there will be no middleman; there will be no Cargills breathing down their neck, the foreign devils. I mean, they do not have to be there. But let me repeat: if certain push polling is correct, 80 per cent of all growers are going to stay with AWB. They are going to pull up this coming season, hopefully, with a lot of wheat, have it tested in the manner that it has been tested for the last 20 years, get a receipt that tells them what that is and what weight of grain they have got, back over the grating and pull the lever. Having consigned it to the AWB pool, they can drive away and forget all about it—over a period of time someone will pay them something.

As it has been since the corporatisation of AWB, they gift their wheat to that pool. Since the corporatisation they were never even secured creditors. We hear all this rubbish about buyer of last resort, but as a grower you gave your wheat to that pool. In fact, you had no guarantee of getting your money back. I have been there and done that. One year the best offer I could get from the corporatised pool was $90 a tonne, so I fed it to cattle. That got me $200 a tonne. So do not tell me about their generosity and their capacity to get good markets. From the minute they got going—forget about Iraq—they got a Geneva desk. That was owned by AWB Limited, not the pool. They went out and chartered shipping and then turned round and charged that shipping to the pool by the tonne. The Wheat Export Authority did an exercise, and a rather brief one at that, and said that they clipped about $40 million out of the pool and out of the pockets of the growers in one year. I mean, who can stand in this place and endorse that sort of thing? Those on this side, when we were over there on that side in government, created the monster; the monster destroyed the single desk; and the government now is applying the last rites, and good on you.

John Forrest (Mallee, National Party, Shadow Parliamentary Secretary for Trade) Share this | Link to this | Hansard source

I cannot say that I am pleased to rise tonight to speak on the Wheat Export Marketing Bill 2008. I would like to take a different tack to everybody else and remind the House about the human element: the 3,166 registered wheat growers in the constituency I represent. This debate is being broadcast. They are currently out there on their tractors with their lights on taking their last chance. It has not rained, and you have just got to admire their courage and their faith. They are out there and they are listening to this debate. I think it is a great tragedy in all of this that, despite their desire to retain it, the single desk is being abolished in this legislation. I have heard the minister say in this House and other places that wheat growers accept the legislation. He, like the member for O’Connor, happens to be a man whom I do have some regard for. But I plead for the minister not to interpret acquiescence from burnt-out, sabbatical, seventh-year drought-stricken grain growers that acceptance of this legislation is right for them.

I regularly spend a lot of time with my wheat growers. It is not uncommon for the member for Mallee, when he is driving past, to pull up on the side of the road, walk into the paddock and do a few rounds with them while they are out there spraying herbicides or whatever—and latterly, when they are with their crops—even late at night, because I have that sort of admiration for them. But not one speaker tonight has focused on the human element of this. I take very seriously my role as a member of the House of Representatives, and I do not come here with some ideological view on whether there should be a free market or total regulation. I take seriously my job as a member of the House of Representatives. In fact, I like to hyphenate the word to make it ‘a member of the House of Re-presentatives’, which gives me the obligation to re-present the views of the people out there. Now, in an electorate that has 93,000 in it I suppose you might say that 3,166 wheat growers is not a large number. But if you regard each of those entities as a family—mum, dad and two or three children—we are probably talking about 10,000 people. I know, without polling them, that 75 per cent to 80 per cent of them wanted to keep the single desk. The leader of the National Party has made reference to the tragedy of what happened with the wheat for weapons scandal and the whole program in Iraq. That is a tragedy, but an enormous amount of water has gone under the bridge since then. But one of the growers in my electorate, Geoff Nalder, who does not live far from where I live, led the wheat-growing industry with a model. His group said, ‘We recognise the challenge here,’ and they put forward a model which I supported very strongly at the last election. I said to my constituents, ‘I now have to look you in the eye and say, “Send me back to Canberra; I will argue a case and work to achieve for you a grower owned entity that will take custodianship of the single desk.”’ This would have removed all of the corporate complications we have had with the former model. And if there is any commercial benefit associated with the single desk, through a grower owned entity it would automatically go to growers.

That is what I supported at the last election, and I am determined to maintain that integrity. So that is what I am speaking about tonight. That is what I told the growers I would try and achieve. This bill is so far from that that I simply cannot support it. I say to the minister that the growers, with their big tractors, are not out the front of the parliament protesting, as they normally would have been had they had successive good years. They are just punch drunk and beside themselves. They are confronted with the uncertainty of what is going to happen with the exceptional circumstances program, which for some of my regions closes down in four months time. But the growers are out there and borrowing heaps of money to take one more chance, hoping that we will get significant rain for them to grow a crop.

So I am not supporting the bill. I am opposed to it. I want on the record my fears for the future. The nation and this parliament will rue the day it has destroyed a marketing entity that other countries envied. I have spent a lot of time with the enemies of the single desk, particularly the United States, who used what happened in Iraq to their own advantage to encourage us to abandon something they deeply envied. A huge number of wheat growers said to me, years back, ‘I wish we had the orderly marketing arrangement Australia has.’ It just gives our farmers that extra edge. In an extremely corrupted export market it gives them the edge and the capacity to deliver real quality, which is what Australian wheat growers have achieved. So I am opposed to the bill and I say, on the record, that the parliament will rue the day this bill was passed.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I rise to speak on the Wheat Export Marketing Bill 2008. It is curious to me. I find it so extraordinary after coming into this House to go home to my electorate to try to explain what happens here. Here was a government elected on the issue of collective bargaining. And I worked hard for them. I spoke at trade union meetings all over the place. I carried, on my ports, workers rights stickers. I felt passionately that the worker had the right to collectively bargain, and I felt that way because I had watched what had happened to the farmers when they were deregulated.

It is an exercise in hypocrisy for the National Party in this place. I have here the memorandum of understanding entered into by the National Party, clause 8—the agreement with the ALP government of Queensland to deregulate the sugar industry. How can members of the National Party come into this place with a straight face and say they are so passionate about this—some people in that party were nearly crying tonight—after they have deregulated every one of our industries? I watched the maize silos being torn down at Atherton after they deregulated the Maize Board. I watched the tobacco industry close down. Half the main street of the city of Mareeba closed down. We had 1,500 farmers; now we have none. I watched the peanut farmers, at the Woolworths-Coles inquiry, say that they were getting the same price as they were getting 40 years ago, thanks to deregulation.

The first industry to be deregulated was the greatest industry this country had. It carried this country from its foundation, and in 1990 one-tenth of the nation’s entire export earnings came from wool. As a young man I left university and I went home. I did economics at university and I was told that if you had one person selling and hundreds buying then it was a sellers market; on the other hand, if you had two people buying—like Woolworths and Coles—and you had 10,000 sellers, it was a buyers market. That was what I was taught when I went to university. But here we are saying that we will be better off with thousands of sellers of grain. Don’t any of you people ever read an economics book? Doesn’t anybody here ever bother to think about what they are doing in this place?

I say with great passion that in the wool industry I watched a great man. I have not seen many great men in my lifetime, but Doug Anthony was one of them. He took that silly, stupid, dumb, squattocracy leadership of the UGA and told them to—well, I will not tell you exactly what he told them to do! Doug Anthony introduced, under another great man, Sir William Gunn—a man with a tonne of courage and a tonne of intelligence—the wool scheme. When they did that the price of wool was 65c; within four years they were getting $1.84.

We were told that Mr Keating was the greatest genius Treasurer in the world. That was what the OECD told us. He deregulated this industry—and the price dropped. From 1988, which was effectively the year before deregulation, it had dropped by 1995 to $3.95. So when you had collective bargaining you tripled the price; when you took it away it halved. I was at a very impressionable age. I had gone to university and been told free markets were marvellous. I began to realise that this was not correct.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Mr Tuckey interjecting

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

No, this country was earning 10 per cent of its income, $6,000 million, from wool. I heard Alan Jones say that we deregulated the industry and now we only have half a wool industry. I thought that could not be right. It’s right, all right! We had 174 million sheep; now we have got only 103 million sheep. They will not be coming back; it is gone for ever. That industry was completely wrecked by Mr Keating.

We saw what happened when you deregulated a rural industry—and you would have thought that we got the message. Did we get the message? No way, Jose! We went on and deregulated the egg industry. We were going to help the consumers. Well, the price went up to the consumers: 108c a dozen. The price went down to the farmers: 12c a dozen. And there was $288 million extra profit made principally by Woolworths and Coles. So that was a great success story! You would have thought we would have woken up to ourselves then but, no, sugar was next off the rank. We deregulated sugar on the home market, removing the protection on the home market. The price went up to the consumers, at $160 a tonne, and came down to the producers, at $219 a tonne. So Woolworths and Coles picked up $385 million of extra profit a year.

You would have thought then we would have stopped deregulating rural industries. No way, Jose! There was the big one: dairying. As I have said in this place before, I can vividly remember Julian McGauran going in and saying, ‘If you deregulate this industry, this will be the worst crash in Australian agricultural history.’ It was the only time I have ever been affected psychologically by a decision in parliament. I lay in bed the next morning and I just could not get up, I just stared at the ceiling, because I knew what was going to happen. I had 240 farmers and now I have got 80, and all of the ancillary industries in those towns closed down and crashed around our ears. In milk, did we help the consumers? No, the price went up 41c. Did we help the farmers? No, the price came down 19c. So if you multiply that 60c difference by 1,884 million litres a year you come up with a figure of $1,130 million extra profit made.

I suppose the Liberals have been consistent—consistently stupid. You people believe in deregulation, and those are the results of it. Have a look at your handiwork with deregulation. You in the Labor Party are terribly hypocritical and inconsistent. The people gave you the government of Australia on the basis of collective bargaining, and your first major decision is to abolish it. We have a very good minister, and I do not know what pressures have worked upon him in this issue. All I can do is plead with you to issue a licence only to one person, or maybe two at the very outside. You can still get out of jail on this, and I plead with you to consider doing that. To the Nats: I just cannot believe that you deregulated all of these industries when you were in government, but now that you have become an opposition you are suddenly regulators. Nobody is going to believe that. Come in here and cry crocodile tears, but do not be hypocrites.

I just say to all the members in parliament here that you have seen the result of your handiwork. There are the figures, anyone can get them, yet we are going to deregulate another industry in Australia. All I can say is I fought for the workers for the right to collectively bargain and I hope till the day I am pushing up daisies that I will push for the restoration of the regulation of farming. John Curtin said, ‘I did it.’ Ben Chifley said, ‘I did it.’ But Jack McEwen in fact did it and he would roll in his grave if he saw what was happening here tonight, and so would Chifley and so would Curtin.

Debate (on motion by Mr Albanese) adjourned.

Ordered that the debate be made an order of the day for the next sitting.