John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

In speaking on the Wheat Export Marketing Amendment Bill 2012 I would like to say that on behalf of the coalition I move:

That all words after "That" be omitted with a view to substituting the following words:

"the House declines to give this bill a second reading and:

(1) calls on the government to extend the operation of the Wheat Marketing Authority for not less than six months after the resumption of the 44th Parliament to enable the government of the day to modify Wheat Exports Australia or replace it with a another body, to better represent the needs of the wheat industry; and

(2) notes that the coalition commits to a consultation process that will commence immediately and provide stakeholders with a forum to outline what wheat industry issues need to be addressed."

I propose the second reading amendment to this bill as the government has once again abrogated its responsibilities in relation to the wheat industry—we should be used to that. The coalition, through the shadow cabinet and joint party, has resolved to move this amendment. The coalition has further resolved to oppose the bill if the amendment fails.

This bill demonstrates once again that the government has got no idea about how to develop and implement policy. The coalition has been forced to act, as this government has done a pathetic job of consulting with industry about this bill. The Productivity Commission investigated this issue very early on, after Wheat Exports Australia was formed, reporting on changes from the single desk before many of the issues had surfaced. Those in politics understand that policies are rarely perfected on the first attempt and that the sensible thing is to improve the arrangements to manage issues as they arise. But this government, instead of trying to understand the issues, has just looked for the first opportunity to wash its hands of the industry. To do this, the government set up a task force dominated by the large grain marketers who, naturally, would rather not have any oversight of their operations. Surprise, surprise, the task force concluded that the WEA should be abolished! The government has used the Productivity Commission review and the task force to justify its position.

The Wheat Export Marketing Amendment Bill proposes to abolish the Wheat Export Accreditation Scheme and the Wheat Export Charge on 30 September 2012 and wind up Wheat Exports Australia on 31 December 2012 so as to give it time to complete outstanding tasks such as its final annual report and the Report for Growers 2012-13. The requirement for providers of grain port terminal services to pass the access test as a condition for exporting bulk wheat was to be retained until 30 September 2014. However, this ignores the fact that the eyes of the ACCC on this issue, the WEA, would be gone and unable to provide information to the ACCC. The access test was to be abolished on the condition that a non-prescribed voluntary industry code of conduct covering access to grain export terminals was put in place. However, a number of issues have been consistently raised by individuals and groups from industry, including fair and equal access to wheat stocks information for all industry participants; management of the wheat export supply chain and port capacity information; port access issues, including regional monopolisation of port terminals by bulk-handling companies; the effectiveness of a voluntary code of conduct to manage supply chain issues; the reputation and integrity of Australian grain exports as a whole, including quality and the need to include containerised wheat exports; the record and success of the WEA accreditation system; and the consequences of complete dissolution of WEA.

The dissolution of WEA is a complex issue about which there are many views. We in the coalition have consulted heavily with industry and it is our firm view that the majority of the industry would like to retain the existing arrangements until the issues identified by industry have been addressed. This is complicated by the fact that Australian grain growers, grower representative groups, grain markets and bulk handlers do not have a unified position, there being differences in philosophy and approach both geographically and throughout the supply chain. However, the majority of the people that I have spoken to on this would agree that, while this is a very dynamic industry, there are issues which need attention. Currently 32 companies have been approved for export by WEA, all of which have operated effectively. Importantly for growers, none have gone broke and been unable to pay farmers, so WEA have done their job in making sure that only credible entities are given licences. Of those companies, 19 are actively exporting. While 18.5 million tonnes were exported last year, only seven companies exported more than one million tonnes. If we look deeper into the exports we see that the regions are mostly dominated by the established regional bulk handlers. In fact, 13 of the 16 ports are dominated by the exporter that owns the port. That would seem to suggest that there is still more that could be done to facilitate competition.

I will break it down by topic. There is a strong view within industry, both grower groups and non-bulk handling export marketers, on the importance of wheat stocks information as a mechanism to create maximum competition in determining pricing levels throughout the wheat export supply chain. Many from industry have expressed that there is an imbalance in the availability of information to different stakeholders in the wheat industry, resulting in dissatisfaction amongst grower groups, market and price discovery inefficiencies, and an inability for growers to make informed decisions on what crops to grow.

In the Senate inquiry on this bill representatives from the Australian Stock Exchange stated that it would be desirable to provide wheat stock information to develop market certainty. As the Senate report states:

Grain grower groups strongly advocated for greater availability and transparency of information on wheat stocks. The broad sentiment reflected in a number of submissions highlighted a concern that wheat stocks information does not adequately flow through the wheat export supply chain, reducing the financial return obtainable by grain producers.

For example, GPA submitted that:

The system is crippled by a lack of information and accurate description of the crop as it is harvested and delivered into the central storage systems. The bulk handlings companies (BHCs) effectively operate regional monopolies and restrict and control the intelligence around up country stocks quantity and quality. This lack of transparency severely impacts the ability of producers and traders to make informed decisions in delivery and compete in the aggregation of cargoes

The broad sentiment reflected in a number of submissions highlighted are concerned that wheat stocks information does not adequately flow through the wheat export supply chain, reducing the financial return obtainable by grain producers.

GPA submitted that:

The system is crippled by a lack of information and accurate description of the crop as it is harvested and delivered into the central storage systems. The bulk handlings companies (BHCs) effectively operate regional monopolies and restrict and control the intelligence around up country stocks quantity and quality. This lack of transparency severely impacts the ability of producers and traders to make informed decisions in delivery and compete in the aggregation of cargoes.

…   …   …

GrainGrowers also supported the push for greater information availability and transparency, adding that recent overseas research has found that effective dissemination of market information reduces the fluctuation and variability of prices and quantities of within markets.

…   …   …

Broadly, exporters agreed with the need for greater availability of wheat stocks information. In its submission to the committee, AGEA commented that, while deregulation has delivered positive outcomes for competition in the industry, further efficiency gains could be achieved through removing barriers to industry performance:

Transparency and access to information is important to ensuring that markets operate efficiently. Access to information regarding the available (i.e. unsold) volume of grain type by port zone and information on grain quality by type by storage location will facilitate more efficient assembly of cargos to meet customer requirements and aggregate information relating to grower‐owned stocks will significantly enhance competition for growers’ unsold grain. Currently this information is only accessible to integrated companies with port terminal operations, thus restricting access by other exporters.

The problem is that some grain is bought by the handlers when it is delivered but an increasing amount is held in warehouses, in which case the handler does not own it; he only holds it on behalf of the grower. But the government has ignored the industry's concerns. It has ignored the basic principles of competition in the same way it has refused to tackle the issue of things like supermarket power.

I guess these are complicated issues and we would not expect this government to understand the issues, be able to consult and listen, and implement policy that actually delivers the requirements. The government have been disastrous in implementing agricultural policy. Whether it is live exports or the Murray-Darling Basin Plan, they have made a meal of it. But the coalition is committed to consulting with the whole industry and actually listening to them and working with them to come up with a solution.

There are varied views on this. If the amendment is successful and we have the opportunity, I seriously encourage all, whether they be the big handlers or growers who have a particular point of view, to not leave it to chance but to have their say on it because currently only a very narrow say has been listened to.

Port access has been identified as another issue that needs to be addressed. Making sure that smaller companies are not discriminated against and have fair access to the ports will help encourage new players and give existing exporters no disadvantage to the bulk handlers that operate the ports.

Grain quality is an important issue that most of the industry believes warrants the attention of the government and should be resolved before we consider abolishing the current arrangements. There is a major concern in the industry that a few operators could ruin our reputation to provide quality wheat on the world market and that buyers will go to the USA and Canada for the premium grades, as their quality is assured through established quality assurance programs controlled by government. This is especially the case for container exports, which have grown to 12 per cent. That is a figure that has taken most of the industry by surprise; it was nowhere near that figure in 2008.

As the Senate report states:

A number of submissions also referred to the United States Federal Grain Inspection Service and the Canadian Grain Commission as examples of national grain regulatory bodies that should be emulated in Australia, and without which the Australian wheat industry would be at a competitive disadvantage internationally. For example, a submission from a consulting company stated that:

Australia’s major competitors have co-operation amongst trade and government to ensure that quality standards are maintained ensuring consistency of grade is a paramount requirement. The U.S via the Federal Grain Inspection Service (FGIS) and U.S Wheat Associates have embraced the “world” standard that was so rigorously practiced by AWB – AWB may be gone but its adherence to quality and world’s best practice will not long be forgotten.

4.74 Other submitters agreed with this view, stating that the role of WEA does not need to be as expansive as the United States or Canadian bodies, but that it should include activities such as random audits of grain to ensure that contract specifications are met.

WEA's position on this issue was examined during the Senate inquiry hearing when Mr Woods stated:

One of the things that WEA made public last December in our report for growers was that one of the board members and I were in South-East Asia visiting mills and, very clearly, they were concerned that Australian wheat was not performing and they believed that it was because of lack of varietal integrity, probably because of blending.

There is not a problem with blending; that is fine; it has always been done—

it always will be done—

But it is when blending occurs across varietal grades that there is an issue. So there needs to be perhaps something along those lines to fix that problem. Again, it is not up to WEA. All we have done is identify the situation as one of a few things that the industry need to be discussing. A lot of people were asking for views which we cannot give, but in our submission we made it very, very clear that in Canada and the US they do have ways of looking at this.

So there is another issue that can be resolved, but the Gillard government does not care to discuss this with the industry as a whole.

On the issue of a voluntary code of conduct, while many of the grain handlers and exporters in the industry believe that most outstanding issues can be resolved by a voluntary code of conduct, producer groups are concerned that voluntary codes of conduct do not work.

During the inquiry of the Senate Rural Affairs and Transport Legislation Committee into this bill, it was acknowledged that there was no precedent for an industry code of conduct for the agricultural sector. The following exchange occurred between the committee and representatives from GrainCorp:

Senator EDWARDS: So you are not working on any kind of a model of a voluntary code of conduct that has been successful in the past, whether it has been involved in the horticulture industry or any other grower industry where you are looking to rely on a voluntary code of conduct … Point me to a model that is successful in this country and which fulfils the charter in which it has been established.

Mr Trigg: The advice that we were provided with, at one of the draft code development committee meetings, from the ACCC was that there were many examples of industry codes of practice. I think there is a general insurance code of practice, for instance. There are a number of them that they—

the ACCC—

have referred to as part of their advice to that code development committee.

Senator EDWARDS: Let us talk about the ag—

agricultural—

sector, shall we, because we are not talking about the finance industry here; we are talking about commodities and production … Still no successful voluntary code of conduct in the agriculture sector that you can think of off the top of your head?

Mr Hart: No, not that we are aware of.

Evidence provided by the New South Wales Farmers Association supported this view:

Unfortunately our industry is not very good at voluntary code[s] of conduct and there are no shining lights of voluntary codes of conduct in our industry.

So the issues are clear, as clear as is the government's inability but, more to the point, their unwillingness to deal

with these issues. Oversight does not need to be onerous. In fact, the coalition will be looking for the simplest and least-cost approach to address these issues. For example, a simple solution may be that, with a new lighter touch

accreditation, a condition of export is that you are signed up to the voluntary code and you adhere to it. This

would give the code of conduct the power to ensure compliance. Of course, the coalition is committed to discussing with industry the best ways to deal with their—and I stress 'their', not the government's—outstanding issues.

Growers have emphasised the importance of ensuring that the wheat industry is not left to operate without a body to enforce a minimum standard of behaviour and have indicated a strong preference to retain the WEA until such time as it can be reformed or replaced with another body that better addresses the needs of industry—that is, quality assurance, port access for all exporters and transparency of stock information, so all grain exporters can bid for growers' grain with confidence. And, finally, should the role of a code of conduct be voluntary or mandatory? The proposed abolition of the current arrangements through the Wheat Export Marketing Amendment Bill 2012 is, in the circumstances, premature, and such a decision should be based on evidence of effective and efficient operation of the export wheat supply chain.

Once again, in the event that we have the opportunity to have a debate, I would encourage the industry—whatever side of the debate they are on—to be involved in it when it happens in the future. I respectfully ask the House to support my amendment in the best interests of the wheat industry.

Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

The position that the coalition have taken in relation to the Wheat Export Marketing Amendment Bill 2012 surprises me greatly. Firstly, the shadow minister, the member for Calare, raises the spectre of the AWB, which brings back memories of the greatest public policy failure in Australian history, a heinous period for the Australian Wheat Board—which I will come back to—but also opposes an evidence based approach to policy, given that this bill pursues recommendations of the Productivity Commission, and I will come back to the detail of that. The coalition seem to have a problem with evidence based approaches to policy. We have also seen the continuation of making misleading statements on matters before the House regarding consultation, the passage of information to the industry and the restructure of the industry in relation to reform processes that have taken place post the dismantling of the single desk.

This bill, as I mentioned, effectively implements the recommendations of the Productivity Commission, taking a phased approach, noting that obviously it is best to institute reforms in a way in which the industry can absorb them and bed them down appropriately. The Wheat Export Marketing Act 2008 establishes a system for regulating the export of bulk wheat where the exporters of bulk wheat have to be accredited under the Wheat Export Accreditation Scheme, which is administered by Wheat Exports Australia. The Productivity Commission report on its inquiry into the wheat export marketing arrangements was tabled in this House on 28 October 2010. So there has been plenty of time for the coalition to absorb those recommendations.

This bill seeks to abolish the Wheat Export Accreditation Scheme and the WEC as of 30 September this year and wind up the WEA on 31 December 2012. The requirement for providers of grain port terminal services to pass the access test as a condition for exporting bulk will be retained, however, until 30 September 2014. The access test will then be abolished, on the condition that a non-prescribed voluntary industry code of conduct covering access to grain export terminals is in place. If a code such as that is approved, the market will move to full deregulation from 1 October 2014. All aspects of the industry would then be subject to general competition law administered by the ACCC, complemented by the supporting code. If the code is not approved, the access test will continue.

The bill will bring the bulk wheat export market into line with other agricultural commodity markets and promote further competition in the wheat industry, which we know will lead to increased productivity and profitability. It will also mean that more buyers will be competing for wheat, helping growers to get prices that reflect market value, which has to be in their interests. The wheat export market will be brought into line with other agricultural commodity markets, and we know that full deregulation is always in the interests of this sector, so that we can promote our cause of deregulation globally, and freeing up international trade in this sector, which will be of great advantage to our efficient growers.

Since the reforms that we have instituted were put in place, there are 26 accredited exporters, with 19 of those being active in the last marketing year. What has been the impact of the reforms that we have engaged in so far? We know that the reforms have helped to open a new global export market for Australian producers and have fostered the productivity and profitability that we were seeking. The number of destination countries, with improved access, has been higher than in the three years prior to the new arrangements. In the 2009-10 marketing year, we had 12.1 million tonnes shipped to 35 countries, but, in the 2010-11 marketing year, 12.3 million tonnes of bulk wheat were exported to 48 countries, with an additional 1.7 million tonnes shipped in bags and containers.

The Productivity Commission found that the transition to the wheat marketing arrangements introduced in 2008 had progressed smoothly. That is an independent, objective analysis of the reforms. The Wheat Export Accreditation Scheme was effective as a transitional measure, the commission found, but the net benefits it had provided to the bulk wheat industry would cease with the end of the transitional phase, which is why further reforms are important.

Of course, these reforms were not done without significant assistance and support to the industry, and this included the Wheat Export Technical Market Support Grants Program. That program helped new and small-scale exporters to develop innovative export strategies. In 2010-11, round 2 grants were finalised, and funding of $171,733 was approved for six round 3 grants.

The delivery of the government's information support, which was neglected by the member for Calare, is also very significant. A $3.83 million program continued throughout the transitional period. The information provided by the ABS and ABARES helped the wheat market to operate efficiently and should be continued if the industry are prepared to provide some funding also, in accordance with the Productivity Commission's recommendations. But that information flow has been there and has supported the industry.

In terms of consultation, it is completely false to claim that there has not been that level of consultation. The Department of Agriculture, Fisheries and Forestry liaise regularly with industry organisations, including Wheat Exports Australia, Grain Producers Australia, National Grains Australia, Grain Growers Ltd and Grain Trade Australia. Meetings on feed grain, fodder supply and demand issues, including through the Feed Grain Partnership, are held at the request of industry. There were no such meetings in 2010-11, because they were not requested.

I will come back to one of the main reasons why this reform was introduced. Australia was suffering internationally as a consequence of the failed policies of the Howard government and the tragic experience of the Australian Wheat Board. I have some deep personal knowledge of the Australian Wheat Board and the disaster of that period from 2003 onwards. When I was deployed to Iraq, I spent the period from March 2004 deeply involved in exposing some of those issues. I worked very closely with the Volcker UN inquiry. I was very closely involved in establishing the Iraqi Board of Supreme Audit's investigations and their contractual arrangements with Ernst & Young to delve down into those issues and the eight million documents that existed in Iraq at the time revealing the extent of that huge level of international corruption. I assisted United States congressional and Department of Justice inquiries. In fact, I was so deeply involved in this that the UN Volcker inquiry actually made a request to Australia that I be assigned to head up the Volcker team in Iraq. I was also offered a very significant contract from Ernst & Young to pick up responsibility for their operations in Iraq.

Through that period of drilling down, it was very apparent—as the Volcker report found—that the Australian Wheat Board and later AWB Ltd were not the only but certainly the largest source of kickbacks to the Iraqi regime. As a result of these kickbacks from the AWB, effectively we saw about $300 million going into the war chest of Saddam Hussein. So, at the same time as we were gearing up to go to war with Saddam Hussein, sending our soldiers into battle against his forces, the Australian government was sitting back and allowing $300 million to flow into his coffers, to fight our soldiers. In addition to that, the raison d'etre for the war, the casus belli, was to support the UN sanctions regime against Saddam Hussein—and who turned out to be the biggest violators of that UN sanctions regime? It was the AWB and Australia. Minister Mark Vaile and Minister Alexander Downer failed in their duties as ministers, because they had specific responsibilities to monitor the contracts and to maintain due diligence in support of that sanctions regime, to prevent those very things from happening.

Of course, these things started to come to light, and I was certainly reporting them back to Australia. In fact, I vividly remember my report in May 2004 where I said, 'The jig is up for AWB,' and this information flowing back to the Australian government, who then subsequently denied that they had any knowledge of these things until much later. But, of course, as the inquiries and documents started to flow, we found out that lots of warnings were starting to trickle through. The evidence was becoming clear as far back as the year 2000. So for them to deny their knowledge of this really flagged two things: either they were completely incompetent and negligent in something so vital to Australia's international engagement and in relation to a matter in which we were sending our troops into action, or they were deliberately covering up what they knew about this issue. And, of course, they set up the Cole inquiry and limited its terms of reference so that it was not able to delve down into the responsibility of the government.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, I raise a point of order. I would just like to draw your attention to the bill before the House. I am not quite sure where the war in Iraq has anything to do with—

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

Is your point of order on relevance?

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Wheat Exports Australia, not the Australian Wheat Board—

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

The member will resume his seat. The parliamentary secretary will be relevant.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I thank the Deputy Speaker. It is entirely relevant because this bill is about the process of moving away from those days, and the member for Calare raised the issue of the Australian Wheat Board as an example of great practice that we should get back to. I am pointing out that those days were a terrible time for Australian wheat exporters, because, as I came back to Australia and held meetings with government officials here, I was told: 'Look, the Howard government are involved in delicate negotiations for a free trade agreement with the United States. They do not want this sort of information out there at this time.' I warned them, of course, that this was going to threaten Australia's position in relation to wheat exports to Iraq—that, if we were not to engage in due diligence in investigating the terrible situation that had existed with the AWB, we would pay for it. And we did, all because the government wanted to pursue its free trade agreement negotiations with the United States.

Certainly I would like to set one aspect of the record straight. At the time that my statements were being reported in the media, there was a misinterpretation in some of that that I was pointing the finger at one particular member of the Department of Foreign Affairs and Trade, Heidi Venamore, who worked with me in Iraq. Nothing could have been further from the truth. She was a very diligent public servant doing her best, and certainly the information was coming back to Australia. There was a misinterpretation of that situation, and certainly Heidi Venamore is an excellent servant of Australia and did a very fine job during her time in Iraq.

But the situation that pertained at that time with those limited terms of reference means that Australia really will never know the full story of the extent of the government role in covering up or being incompetent in relation to that period of time. We can never return to those days of the Australian Wheat Board.

We are progressing now to a proper, evidence based, market based approach to the management of the grains sector in this country. Why anybody on the other side of the chamber would be opposed to that defies belief and understanding. Certainly we know that it is providing the efficiency, the effectiveness, the productivity and the profitability that we sought to achieve with these reforms.

I would like to reflect finally on one last point, which I think brings us to an understanding of why the coalition probably do not accept or understand these points. I recall that Prime Minister Howard on 13 March 2003, six days before the start of the Iraq War, said that Saddam had rorted the oil for food program to buy weapons at the expense of his people.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, I raise a point of order. The parliamentary secretary is defying your ruling to be relevant to the bill before the House. He is now talking again about the Iraq War.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

The parliamentary secretary will continue talking about wheat export marketing.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Thank you, Deputy Speaker. I can understand why the coalition would be so sensitive on this issue, given that it was the greatest failing of public policy in this nation's history, where they let our troops down, let the country down and let wheat growers down. If the Prime Minister, Mr Howard, knew in March 2003 that the system was being rorted, then the question was: how could he not have foreseen that the Australian Wheat Board was deeply involved in that? I cite an article by Evan Whitton, who then summarised his interpretation of that position by saying that really, if Mr Howard had been a witness for AWB, the counsel should have said something like, 'Are you a complete fool, Mr Howard?'

Certainly I think that what we are seeing now is a coalition that cannot come to grips with a much-needed reform. As much as they were completely incompetent at that time in regulating the grains sector, we are seeing now, reflected in these suggested amendments and their lack of understanding of how an agricultural market should work and what is in the interests of our growers, that they are failing our grain growers sector.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

It is with a background in the wheat industry itself that I rise to speak on the Wheat Export Marketing Amendment Bill 2012 tonight. I have a background in growing wheat. The parliamentary secretary, I would imagine, would never in his life have even stepped onto a wheat-growing farm, yet he seems to be a self-described expert in his address—and he walks out of the chamber. I come to this with a background as a former wheat grower. I also come to it from the interest point of view of my own constituency.

One of the bodies that represent the wheat growers in my electorate is called AgForce Grains. That is the farm body that I listen to, because it has genuine concerns that if Wheat Exports Australia is totally abolished, as the government would like to do, there is nothing there to replace it with. This authority has been a regulatory body for many, many years—at a cost to growers, I might add, of 22c per tonne, which they are quite willing to continue to pay to give an assurance to the buyers in export markets of an accreditation of Australian wheat, particularly when it comes to varieties, particularly for smaller lots. It is not true that wheat is wheat is wheat; there are many different qualities in wheat. It is important that we give our customers a quality assurance of the variety of the wheat that is exported.

We are one of the largest wheat exporting countries, and we have established markets all around the world. I have visited some of those countries and spoken to the importers. One of the things they have always liked about our wheat is the quality assurance. I remember being in Kuwait at the Flour and Biscuits Co., and they said they can buy wheat cheaper and nearer to them but it does not perform like Australian wheat. The other thing they like is the quality assurance aspects when they are making the flatbreads they consume. That comes with Wheat Exports Australia giving a seal of approval, in many ways, to the wheat being exported.

We talk about deregulation. What do we have for banks in this country? We have regulations that they have to comply with, and recently there have been more regulations put on them. It is only right and proper that we do have regulation. It is a similar case with the Australian Stock Exchange. It has regulation. What about our insurance industry? It has regulation. The government would see Wheat Exports Australia working without regulation, and at the moment it has some small regulation but it is very important. This proposed regulation will be funded by the wheat growers themselves at a cost of 22c per tonne to ensure the reputation that we have built up over such a long time and that has led us to gain market share against other countries is a reputation that we can keep and that will never be diminished. Can we get that guarantee as part of a totally regulated market? In my view the answer is no.

Witness again my visit to Kuwait a number of years ago. They said one of the things they like about our wheat is that it has got that quality assurance and they know that what they prescribe and what they pay for is exactly what they get. I say it again: they can buy wheat cheaper and nearer to them, in northern and eastern European countries, but it does not perform like Australian wheat. That is one of the untold values that Wheat Exports Australia brings to Australia's wheat exports. The WEA have accredited 38 or 39 companies in Australia. These companies have to be accredited to export wheat. Last year something like 19 companies exported wheat from Australia—some 18.5 million tonnes. That is a significant proportion of our total annual production. It would be almost our total production in a bad year, but of course we have to supply our domestic market. The wheat products we have in Australia would nearly always be made from Australian wheat.

The growers want to transition to a new authority. They are not stuck with the model in place now, but they have not been consulted sufficiently. They want to put in a new body that they have had a genuine say in. The parliamentary secretary said that there had been a report from the Productivity Commission. Is that consulting the wheat growers and the wheat bodies of Australia? No. It is the Productivity Commission's view of what might suit the wheat growers of Australia.

I ask the government to support our amendment and keep this body in place until there is sufficient consultation with grower bodies and peak industry bodies, for heavens sake, like AgForce in Queensland, in my own electorate. They say they are fearful that if the current Wheat Exports Australia were wound up there would be nothing to replace it with. They are absolutely right. The government has not made the case for totally abolishing Wheat Exports Australia. The growers want to see a transition to a new body. They are happy to put in reform but they just have not been given sufficient time or opportunity to put forward models that they believe will work not only in the best interests of Australian wheat growers but also in the best interests of Australia because of the importance of this wheat trade to our export performance as a nation.

The WEA and the industry would like to develop a quality assurance scheme. That is particularly important when you are dealing with a more aggressive market internationally. As an industry and as an exporter you have to be able to differentiate your product from others. That is what the growers would like to do—to make sure that their international customers are happy with the guarantee for the product they are buying. The industry would like to protect the integrity of the wheat classification system that differentiates Australian wheat in discerning markets. It appears the government just wants to take a 'wheat is wheat is wheat' attitude, but there are different qualities of wheat and there are different market needs. The growers have known for decades that there are different market requirements and there are different buyers who have particular niches and market opportunities, and they want some quality assurance in place. The industry would like to put that in place but they need time to work with grower bodies, work with peak industry bodies and work with exporters to do that. It appears that the government is not prepared, by the look of this legislation, to allow that process to take place.

My electorate of Maranoa, the seat of Groom and the seat of Flynn have the bulk, if not all, of the wheat growers in Queensland. The wheat industry is a significant employer of local people. It is a significant earner for the regional and local economies. I know, if there is going to be a wheat harvest—and we hope it is a good harvest this year—that there will be cash in the economy before Christmas. That is what it means. Anything which would diminish the value of that product to the wheat grower, anything which would see it worth less on export markets, would definitely mean that there would be less money in the regional economy. Why would there be less money? There will be less money if you lose a single market anywhere because another exporting country has been able to supply that market, for whatever reason. It could be due to a lack of the quality assurance we have been able to give for decades or because the quality reputation we have built up over decades is no longer there. It is going to impact not only on our export performance but on our regional and local economies.

I talked about reputation but I also want to talk about relationships. Markets are not built through buyers coming in from around the world and saying, 'We want to buy a bit of wheat from you.' As with anything, you have to build up a relationship. As part of that relationship, you have to have trust in the people you are buying from. That trust also has to extend down to the quality of the product you are delivering to that importer through your exporters.

I go back to the point that the wheat growers have come to me and, through AgForce Grains in Queensland, said that what they want is some time. They are happy to reform Wheat Exports Australia. They do not see the solution in this bill before the chamber. They want to be given an opportunity to have more input into the reform process. They certainly want a body, whatever that might be at the end of the day, but they want the design of that body to come out of consultation with growers, with peak industry bodies, with exporters, with port operators and with those who control the silos and our bulk handling and storage facilities.

I say to the government: listen to the growers out there and give them the opportunity to have input into a new body—because they will not support this one. They do not support this one. It may be what the Productivity Commission has recommended but it is not what is recommended by the vast majority of Australia's wheat growers. I say to the government: just for once, take some advice from this side of the House. You have not done so on many other pieces of legislation on important national policy issues. But please take some advice from this side of the House in relation to something we know about. We know about it because of where our members come from and what they have done.

I sometimes look around and wonder whether there is a wheat grower on the other side of the House. I keep looking and looking and I do not see one. So please rely on some of the knowledge and personal experience which comes from this side of the House and on the input which is coming from the people out there—the wheat growers, the voters, the regional economies and the people who work in the industry. Listen to us for once. Through us, you are listening to the growers. All I ask—and I ask it sincerely of the government—is that you give the growers a chance to provide input to this industry's reform. This bill will not do it. This bill, in fact, is opposed by the growers and the peak industry bodies. The government should just give the growers their chance to reform an industry which is a significant export earner for Australia. We do not want to see our reputation diminished over time without the growers being able to have some oversight of what is such an important industry to Australia and to so many regional economies.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

The Wheat Export Marketing Amendment Bill 2012 will implement the Australian government's response to the Productivity Commission review of wheat export marketing arrangements. The bill will amend the Wheat Export Marketing Act 2008 to deregulate the bulk wheat export market, making it consistent with other agricultural commodity markets. These changes will promote further competition, leading to more innovation and higher productivity in the industry.

The Australian government agrees in principle with the Productivity Commission's recommendations and is implementing changes through a staged approach. This will provide a more efficient transition to full market deregulation. The response takes account of the views put forward by industry during an extensive consultation process undertaken during the commission's review, which included two rounds of written submissions and public hearings attended by farmers, grower associations, industry associations, traders, bulk handlers and members of the public.

The proposed approach is expected to deliver net benefits to the wheat industry, which plays an important role in many regional economies. The industry will benefit from the removal of the costs associated with bulk wheat export market regulation and through the increased competition, improved productivity and encouragement of innovation generated by a fully deregulated wheat market. The wheat export charge paid by Australian wheat growers will be removed, putting wheat exports on the same basis as other agricultural commodities.

The implementation of an industry code of conduct will give all wheat exporters long-term security of access to grain export terminal services, which will in turn help ensure that these facilities have the necessary throughput to attract the level of return on investment required to keep them viable while allowing competition in the export sector. It will also provide growers with certainty that, irrespective of which exporter they sell to, their product will gain access to grain port terminal services. This will in turn underpin Australia's international reputation as a reliable wheat supplier by providing overseas customers with certainty that all Australian exporters will be able to meet supply commitments.

The background to this bill is the 2005 revelations about the then single-desk operator the AWB using bribery to maintain the trade of wheat into Iraq in the worldwide scandal known as the oil-for-food scandal. It was revealed that AWB was paying bribes to Saddam Hussein's regime to ensure Australia continued to be awarded contracts under the United Nations Oil-for-Food Program. While there were other companies engaged in corrupt, sanctions-busting behaviour, the AWB bribes were far and away the largest. The Cole inquiry was established by the Howard government in November 2005 to investigate these claims.

Debate interrupted.