Senate debates

Tuesday, 17 October 2017

Regulations and Determinations

Competition and Consumer (Industry Code — Sugar) Regulations 2017; Disallowance

5:56 pm

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | Hansard source

I can clear up a couple of things for Senator Bernardi.

Senator Bernardi interjecting—

Just for a moment, Senator Bernardi—I'd appreciate that. This matter has now been lingering around this place for multiple weeks. Without directing my attention to Senator Bernardi, I think there's been adequate time for any senator to explore all sides of this equation in order to make their mind up about whether they should or shouldn't support this disallowance motion. Indeed, reference to the report that Senator Williams has spoken about would have articulated it clearly. That was a massive inquiry. Senator Macdonald, who is the father of the Senate, told me he'd never been at a Senate hearing with as many stakeholders present. In Townsville there were over 350 in a massive hall. They just attended to observe the conduct of the inquiry. All the millers were there and all the growers were there. So that would have aided it.

But can I say, Senator Bernardi, that the reason this motion was brought on today is that this has been continuing to cause great angst back in this industry. It has had nearly three years where people weren't able to plan. Planning around sugar is a big deal; you've got to make a decision now about a five-year business plan. So, the investment that you make this season will have impacts on your business operations for five years. After three years of uncertainty, which was stabilised with the application of the code, there was a massive sigh of relief across the canegrowers in my home state of Queensland, which is largely where the production in this country is. I know that Senator Williams has cane production in the northern part of New South Wales, but Australia's cane production is largely in the state of Queensland. There was a huge sigh of relief—and I mean from people in their thousands. I've been here nearly four years now, and I've never had so much correspondence and traffic—phone calls and contact events—made over an issue as I did over sugar. There are, on average, 4,500 families and something like 67 small communities involved, and if the sugar industry is disrupted it will disrupt their economies and their social circumstances right across my home state. They are small communities, some of them with only a couple of hundred residents. You could probably argue that this instability ran from somewhere north of the Tweed and up through Childers with a break and then through to production areas around Serena and Mackay and all the way up the coast almost all the way to Cairns. There is not one of those small coastal communities on the eastern side of the Great Divide that would not be affected by this continued instability in the sugar industry.

We don't even need to return to our contemporary inquiry to understand why this became necessary. There was a royal commission in this country in 1932, I think it was, into the sugar industry because the sugar industry was not developing. That was because of the concern about the power imbalance of millers with respect to this particular commodity.

I just want to pick up and elaborate further on a couple of points made by Senator Williams. This commodity has to be harvested in a very short period of time. It's measured in weeks. It's not as if you can just throw the crop in and say, 'I'll come back from holidays in January, and I'll take the crop off, or, if that doesn't suit me, I'll wait until Easter,' or use any of the other rotations that can occur with other commodities. Once it's harvested, its life, its productivity, is measured in hours, not even days. What happens to it is that it goes onto a little, flimsy carriage on a little, flimsy rail line, and it can only go to one place. That's the mill. It can't be stored. It's not efficient to transport it by any other method to another mill—and, even if you could, you are likely, in my home state of Queensland, to arrive at another mill owned by the same miller you were trying to avoid 60 kilometres down the road.

I had some colleagues who wanted to talk to me about the free market. Well, I'm a free marketeer to a certain extent. I'm not going to make out that I'm a total free marketeer; I don't mind protected markets. But the thing you need, to be able to make decisions around a free market, is a free market, and there is no free market with respect to this sugar.

What the royal commission almost a hundred years ago, 70-something years ago, decided was the principle of economic interest—so the relationship between the miller and the grower. It didn't matter that the mills were sometimes cooperatively owned by the growers. This principle of economic interest was the safeguard.

Now, when this mob came along, of course, they made undertakings when they came through the Foreign Investment Review Board that they weren't going to disturb these marketing conditions that had prevailed and operated successfully in this space for all of this period of time. One thing I can tell you about the corporation Wilmar is that they are very persistent, and they are very patient. This won't end here today. With this episode today with Senator Leyonhjelm, I've got to imagine that they have persuaded him or convinced him of the merits of his activities here today. There can be no other reason. Senator Leyonhjelm didn't wake up one day in his apartment in Sydney and say, 'Golly gee, by the end of the day I'd better fix this business around sugarcane marketing in a state that I rarely visit.' And, of course, he won't be able to visit it any longer. He won't be able to go to any beach community between Noosa and Cairns unless he's got a wig and a moustache on.

I wasn't even going to speak today, but I was persuaded. I listened to this in my office. He started to make allegations in here that were not accurate. One was that the National Party somehow had some knee-jerk reaction with the code of conduct. Well, I've got to tell you: it's a pretty slowly operating knee, because it started in 2014 and it didn't come into play until any number of years later. And, on the suggestion that somehow a government in which I'm involved has done some dirty deal with any crossbenchers, such as One Nation, I know that One Nation genuinely support agriculture, growers and small farmers in my home state. You couldn't put a Tally-Ho paper between One Nation and the National Party in their attitude to small communities, agriculture and supporting these industries and these particular economies. It wouldn't matter what the circumstances were. It was of no surprise that One Nation themselves turned their attention to this particular issue with the sugar industry and joined us, in effect.

I'm happy to say we were there because our circumstances allowed. We were there well before it. We had spent, in my case, hundreds and hundreds of hours travelling in these inquiries, poring over reports, making adjustments and changes. I must have attended 25 or 30 meetings. When Senator Leyonhjelm says there was no consultation, I've got to tell you that I couldn't even go into my bathroom; representatives of Wilmar and other mills were sitting on the bench there waiting for me in my suite. So any suggestion that we didn't talk to, listen to, debate and argue with every element within industry—and I'm not just talking about canegrowers and cane processors.

I travelled that country up there as many do and my colleagues here do. I've travelled it dozens of times. And this was a topic of conversation with local government, with local business associations, with everybody. So every stakeholder was consulted, and we arrived, at the end of the day, with the decision around the mandatory code. The mandatory code was mandatory as opposed to voluntary because Wilmar indicated that they wouldn't comply with a voluntary code. So it had to be made mandatory for it to have any sort of effect. I like Senator Leyonhjelm and I've got on well with him while I have been here. But—


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