Andrew Murray (WA, Australian Democrats) Share this | Hansard source

In speaking to the Wheat Marketing Amendment Bill 2006, I point out that when the Cole report came down I was immediately certain that the legal framework under which AWB had been operating would need to change completely. The single-desk concept does not exist if the veto is taken away from AWB. The veto gives AWB the effective monopoly, the effective sole right, to export wheat. In the year 2000 a majority of the High Court found in the NEAT Domestic Trading Pty Ltd case that:

The legislation confers upon AWB(I) a practical monopoly on the bulk export of wheat save to the extent to which the authority, which is to issue guidelines, and AWB(I), which is not bound by the guidelines but whose conduct is subject to review and report, are prepared to relax the monopoly.

Of course they have not been prepared to relax the monopoly. Nobody can export wheat from Australia without the written consent of the Australian Wheat Export Authority, which is a statutory board. However, that consent must not be given by the Australian Wheat Export Authority without the approval of AWB(I), as per section 57 of the act. I have not checked the latest statistics, but up to 10 months ago the AWEA had never given consent for anyone other than AWB(I) to export wheat although there had been 45 applications to do so, according to Leon Bradley, who is the Chairman of PGA Western Graingrowers. So the veto and AWB were inextricably bound together and that has resulted in an effective monopoly and an effective single desk.

The problem for me, as a Western Australian senator, has been that WA wheat farmers’ current crop has been under threat. This year’s wheat crop is around four million tonnes. Ninety-five per cent of the wheat produced in WA is exported. Because of the drought, WA will end up supplying almost all the export wheat from Australia this season. Western Australian growers in very large numbers—apparently about 90 per cent of them—have not been providing their crop to AWB on the principal ground of disaffection with AWB because of corruption and reputational loss, the dangers of farmers losing their crop income if AWB is put into administration or is sued or prosecuted and AWB being perceived to have a diminishing ability to trade as it is regarded as a distressed seller. So my immediate concern as a Western Australian senator was that we had to move WA’s crop.

I discussed these matters with Liberal Western Australian senators, who I know have been deeply concerned with this matter, and the Australian Greens WA senator, Senator Siewert. Following publication of the Cole report, I was convinced that politically the coalition would find it difficult to come to a rapid policy decision. There is a clear policy disagreement between large numbers of Liberal members of the coalition and large numbers of National members of the coalition. If that were the political reality, what circuit breaker could I provide?

What was needed was a short-term temporary solution for Western Australian farmers who were disenchanted with AWB and were not prepared to provide them with their crop. Three weeks ago, I thought we would need legislative change in this chamber in these last sitting weeks of the year. I discussed that fact as I saw it with ministers, and I thought that from a cash flow and revenue perspective WA wheat farmers needed an urgent resolution. The solution that I came up with and proposed to the government was that they should overturn AWB’s veto power in the short term and that they could do that in one of two ways. They could give the veto power to the Australian Wheat Export Authority—which I did not favour because I believe it has been proven to be weak and inefficient—or they could give the veto power override to a senior member of the cabinet—I was suggesting the Treasurer—and that would result in a quick political decision-making process which I thought was better in these specific circumstances.

I discussed those options with WA Liberal senators and the WA Greens senator. Once that had been done and I had advised the government and various ministers of my views, and once we had discussed it in our party room, the Democrats came to the view that this was a desirable solution to support as a whole. On 30 November, with Senator Siewert, I moved a motion. That motion read:

That the Senate—

(a)

notes that:

(i)

the Government will need time to consider possible legislative changes to the wheat export regime, following the report of the Cole Commission of Inquiry, but

(ii)

from a cash flow and revenue perspective, Western Australian wheat growers need urgent resolution in 2006 to present export impediments; and

(b)

asks the Government to consider introducing legislation into the Senate in the sitting week commencing 4 December 2006 to provide that for a period of 15 months or two seasons the final approval power for wheat export licences be transferred to the Treasurer.

The essence of my recommendation, which is a circuit-breaker, has been accepted by the government. They are providing a temporary cessation of the single desk for a period of six months. They will consult with the growers in the industry to establish how to move the next phase onwards in terms of policy, and I am hopeful that as a result of this move and this initiative the WA export crop will be able to be moved.

As the chamber knows, there is a campaign on to save AWB and to save the single desk, and there is another campaign to end the single desk—not necessarily to destroy the AWB but just to leave them as one of the export licensed bodies. Wheat farmers and their organisations are split on the issue. I take into account the various vested interests on all sides. I am particularly careful where there is a clear conflict of interest in any grower who is also a shareholder or director in AWB, which does bother me when I get those emails. Frankly, if a vote comes before the Senate next year which tries to keep the single desk, I will argue against it, but I do not have at this time a determination as to what should replace it. I am of the view that farmers are entitled, like anyone else in the community, to have choice as to who exports their crop, so I will look with great interest at what proposal is hammered out between the National Party and the Liberal Party following consultation.

In my view—and I am strongly influenced by the Cole commission of inquiry—the single desk in the hands of AWB is simply history. AWB has deceived the United Nations, it has deceived the Australian government and it has detrimentally affected the interests of the people of Australia by its conduct. There have been very serious findings by the Cole commission, and I expect there to be very serious consequences. It is too early to see the exact consequences that will ensue, but AWB’s companies, officers, advisers, management and directors are all facing the possibility of domestic legal action, both civil and criminal, and may even face international legal action, judging by media reports of those circumstances. The ATO may make claims for hundreds of millions of dollars for substantial recovery of tax concessions wrongly claimed. There may be claims for hundreds of millions of dollars compensation as a result of class actions. We cannot foresee anything else but that there will be legal action against individuals and those entities in some form. There is therefore contingent risk to the assets and viability of AWB and entities, and any wheat exporter forced to deliver their crop to AWB may be subjecting their own revenue to contingent risk. So I am not surprised that independent arrangements have been made to warehouse the wheat crop.

In these circumstances, an Australian government that continued to legally oblige wheat exporters to sell their crop through AWB, after they had been advised that the findings of the Cole commission had been made known, would, I think, expose themselves—in other words, expose taxpayers—to claims of compensation by wheat growers who did not want to give their crop over to AWB for export or who suffered detriment as a result of that circumstance. I think the government have recognised that danger and they have very wisely taken the veto away from the existing holders of that veto and given it to the cabinet.

Of course, we in the chamber should all recognise that under no circumstances will the minister who has direct responsibility through this legislation be able to take unilateral action. He will obviously, as is typical with these things, consult with his senior colleagues in the cabinet, and that is right and proper. It is in my view completely unacceptable for AWB to retain a veto power over any other body seeking a licence to export wheat. The conflict of interest is massive. The veto has to be removed, and the government are to be congratulated on removing it.

I recognise that the Democrats did support the single-desk concept. They traditionally supported it for the export of Australian wheat because it was generally thought that it was the best way to obtain the best price for wheat against big market competitors where subsidies to farmers make their wheat more competitively priced. That approach is not consistent with general Democrats policy, which is a support for more open and more competitive markets, as with most agricultural goods.

Speaking for myself, I am no longer of the view that the single desk is sustainable, but I stress that I recognise that I need to be flexible about what replaces it, and that is in view of the industry interests that are involved and in view of the transitional arrangements that need to be arrived at. But I will not support the return to the single desk in the form that it has been previously.

Whether any others simultaneously had the idea for the circuit-breaker that has come through, I do not know. I am prepared to claim credit for this initiative, because I think it is a good one. I am hopeful that, time having been bought with this particular change to the legislation, a long-term and beneficial result for wheat exporters will occur in the future.