Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Primary Industries, Fisheries and Forestry) Share this | Link to this | Hansard source

I move:

That the Wheat Marketing Amendment Bill 2007 be referred to the Rural and Regional Affairs and Transport Committee for inquiry and report by 7 August 2007.

This legislation was introduced into the House of Representatives in another form last Thursday and was passed by the House of Representatives earlier today. That is the period of time it has been before the parliament. I think it is important to note that on 22 May the Prime Minister announced the government’s plan for the future of wheat export marketing. The Wheat Marketing Amendment Bill 2007 incorporates those changes and was introduced into the House of Representatives last Thursday, 14 June without consultation with growers or traders as to its form.

The Prime Minister’s announcement imposes an ultimatum on growers: you either get your act together and form a new entity without our help or we will impose complete deregulation on the industry. That is how it appeared to many in the industry. The effect of that threat is to further polarise an already divided industry, impose an incredible burden on the industry at a time it is busy planting the next crop and, if not facing the worst drought in history, trying to recover from the worst drought in history. All of this is in an election year and will make it even more difficult for industry to achieve what the government could not achieve, and that is unity.

I want to endorse the comments of my colleagues in the House of Representatives last night, Mr Crean and Mr Gavan O’Connor, who pointed out what this is: an appalling failure of leadership on the part of this government. Mr O’Connor described it as ‘the ultimate buckpass’. There are around 30,000 wheat farmers across Australia, and not one of them was given a chance to have a look at this legislation as far as we are aware—certainly none of them have come forward and said to us, ‘Well, we saw it.’ Nor have they had an opportunity to have a say on what they think is fair and reasonable. The fact is—and the Prime Minister has admitted as much—that this issue has divided the coalition party room. What they have concocted is not a plan for the future of the wheat industry; it is frankly a plan simply to get the government through to the next election. The fact is that in this regard growers have been denied natural justice in this process.

The government claims it has widely consulted growers through the Wheat Export Marketing Consultative Committee—or the Ralph committee process. This morning in the House of Representatives, Minister McGauran criticised Labor for not responding to the Ralph report. Frankly, what a stupid statement—the government has not released the Ralph report! Despite the fact that we called for its release some time ago, this minister declined to publicly released this report—not just to the opposition but to the public. Then the minister makes a goose of himself by suggesting that somehow the opposition is at fault for not responding to a report that it has not seen. Nobody has seen it, not even the growers who at least were part of that consultation. I called on the government to release the Ralph report back on 13 March. At that time I said growers had a right to know the basis upon which the government would be be making its decisions.

The government keeps referring to this mysterious Ralph report, claiming that more than 70 per cent of growers support what the government is proposing. Why doesn’t the government release the report? It is relying on a secret document. The committee reported to the government on the results of the consultation in late March. I note that on the department’s website it states:

...whether the Committee’s report will be made publicly available is a matter for the government to determine.

We know now that the government determined not to release it. Why? What has the government got to hide? Before I finish with the secretive Ralph report, I want to make a very important point: the Ralph committee only consulted less than 10 per cent of growers. Labor knows—because we are listening—that there are many more growers out there who do not support what the government is proposing. Apart from that, even assuming that the government is accurately quoting from the mysterious Ralph report, the government has not even done what the majority of growers have said they want done—that is assuming you believe the government when it allegedly quotes from the mysterious Ralph report. On 22 May, the Prime Minister told the parliament:

Very strong majority support was expressed during the consultations led by the respected businessman Mr Ralph with Australian wheat growers that they favoured the retention of the single desk. A figure was cited by him of 70 per cent of the people he spoke to, although only a small minority of that 70 per cent favoured the single desk remaining in the hands of AWB. That is a conclusion that the government completely shares and endorses.

However, despite this, the government introduced into the House last week a piece of legislation which in its current form will allow AWB to retain the single desk. I will say again: it will allow AWB to retain the single desk. Frankly, Minister McGauran tried to sneak this provision through. The legislation in its original form would have allowed AWB to be reappointed to run the single desk, including with the veto power.

According to the Prime Minister, this is in direct conflict with what the majority of growers want. Minister McGauran was rolled by Mr Tuckey and others, but the amendment they moved this week, which has been passed in the House of Representatives, will still allow AWB to run the single desk, albeit without the veto power. How could this happen? My understanding of this legislation is that, if the minister makes no decision to appoint a designated company, then after 30 June 2008, the single desk will revert to AWB, which is nominated company B only without the veto. That is how it works, that is how the legislation is structured at the moment, as it has been introduced into this place.

The minister knows full well that the single desk is defined by section 57(1A) of the act in combination with the constitution of AWB Ltd. Section 57(1A) of the act exempts nominated company B from applying to the Wheat Export Authority for a licence to export wheat. It is this exemption which bestows privileges upon AWB Ltd which are not conferred upon other wheat traders, and the minister has not proposed in this bill to amend this section of the act and has therefore somehow managed to hoodwink the entire government into believing that they have somehow removed the single desk from AWB. The fact is this legislation allows AWB to continue as a single desk holder—this is in the Prime Minister’s own words—contrary to what the majority of growers have told the government, through the Ralph committee, that they want. There can be no more damning evidence than this that the government has stopped listening to the farming community and has lost touch with them.

As I said earlier, up until last Thursday when the legislation was introduced, grower groups had not seen the detailed legislation and as such have not been provided an opportunity to consider the detailed nature of the changes. On Thursday, 14 June the government passed a motion to exempt the bill from the cut off in this place, which means it can be dealt with in this session—and that is the government’s intention. When the cut-off motion was introduced the bill had not been introduced. Since then, the government has moved significant amendments to the legislation, which I suggest means that the legislation was flawed upon its introduction and has been hastily amended. I suggest this indicates that the legislation is probably fatally flawed because, despite the fact that it has recently been passed by the House, the coalition, as I understand it, remains bitterly divided over what has been able to be agreed upon and what should be in it.

Why would the government deny growers a chance to have a say over this legislation? Why would the government deny the parliament an opportunity to have a say over this legislation through a committee inquiry? There is only one reason: the issue is still splitting the coalition party room and the government wants to get it out of the way. Now that is not fair to growers, it is not fair to the Australian people and it is not fair to the parliament. What guarantee can the government provide that the legislation as it currently stands is not still riddled with errors or tricks by Minister McGauran? I wonder if Senator Judith Adams is happy with this legislation, which she is apparently about to vote in favour of, paving the way for AWB to be reappointed to run the single desk.

My office has been in discussions with major growers and trading groups. We have done the best we can with the disgracefully short notice we have been given by the government in relation to this legislation. But what I can say is this: we have received many submissions, both in writing and verbally, which highlight concerns and, in some cases, serious flaws with the legislation. The number and nature of submissions my office has received demonstrates that the government has not adequately consulted the industry about its plans.

Last week, in response to these concerns, Labor announced its plan to move to split the bill to allow a bill extending the minister’s power of veto to be passed this week and incorporate other non-urgent aspects of the legislation into a separate bill that can be referred to the Senate rural and regional affairs committee for inquiry, and that is the purpose of this process. We did this so that the parliament and growers and the public could have a say over the legislation.

Our call to refer the legislation to the Senate committee was widely supported by grower groups. The Grains Council said in their media release on 14 June:

“We note that the Opposition is seeking to refer the amended Act to the Senate’s Rural and Regional Affairs and Transport Standing Committee, for examination of the detail of the legislation and its impact on the industry. We support this move. The Committee is respected across the industry and has a depth of knowledge of the wheat export system”, Mr Jones said.

The Pastoralist and Graziers Association said:

Western Australian wheat growers are challenging agriculture minister Peter McGauran’s defence of the wheat marketing amendment bill and are urging Western Australian Liberal senators to back opposition agriculture spokesman Kerry O’Brien’s motion to split the bill.

And later:

We call upon Liberal senators to put the interests of wheat growers first with a close review of the legislation proposed by Minister McGauran.

And there are others. Labor also received support from other senators—from the Greens and the Democrats. There is obviously a need for more scrutiny, because the government itself found the original bill unacceptable and has amended it. But these amendments do not go far enough. Apart from the obvious flaw that the amended bill will allow the single desk to return to AWB, there is a range of other problems that we are aware of, and probably more that would come to light through the committee process.

In considering this legislation Labor has sought advice from the Grains Council of Australia, the National Agricultural Commodities Marketing Association Ltd, Australian Crop Forecasters, Grain Growers Association, Pastoralists and Graziers Association of Western Australia, the New South Wales Farmers Association, AWB Ltd, Graincorp Ltd, South Australian Farmers Federation’s grains division, Western Australian Farmers Federation’s grains division, Western Australian Grain Group, the Australian Grain Exporters Association, and the Rural Marketing and Supply Association representing the box and container sector.

Some of the problems we have become aware of—that is, the types of concerns that have been raised with us—include: first, there was not any consultation about the legislation; second, there was an inadequate time frame for these organisations to consider the legislation; third, there was no opportunity to provide input into the draft legislation; fourth, widespread concern existed at the failure to limit how the minister plans to use his temporary veto power; fifth, there was a failure to provide for the assessment of export wheat applications ‘on merit’ as the Prime Minister announced to the House of Representatives on 22 May; sixth, there is no mention of the so-called ‘exceptional circumstances’ that the Prime Minister referred to in his announcement to the House; seventh, there is no threshold test to determine whether the new entity will be capable of managing the single desk after 1 March 2008—if it eventuates; eighth, some groups have grave concerns that the legislation does not provide adequate safeguards to ensure that the designated company does not simply start to behave as the corrupt AWB did; ninth, the government claims the new regulator powers have been strengthened, but there is a widespread view that they have been widened only to capture companies other than the current single desk operator; 10th, some groups are concerned that the bill does not provide further contestability; 11th, there is also concern that the bill removes the current prudential check applied to box and bag exporters, and therefore increases financial risks to growers; 12th, there is no additional power to allow the regulator to apply real-time monitoring and measuring to AWB or the designated company, which in the view of some means that the designated company could simply continue to indulge in speculative trading, just as AWB has done, and, in the process, lose hundreds of millions of growers’ dollars; and, last, the Grains Council is concerned that the bill repeals sections 14 and 15 of division 5 of the act, which are the functions relating to reporting to the industry. I am advised that the government did not even consult with the industry about this aspect at any stage—not during Ralph, nor at any time during the past 18 months—so this proposal has come out of the blue. How could the government possibly know whether this move had the support of the industry when it had not consulted them about it?

Labor acknowledges that there is widespread support for extending the minister’s so-called veto power. The basis for this support is that growers do not want the veto of the single desk conferred back upon AWB. It is now apparent that this legislation will ultimately allow the single desk to be run by AWB in certain circumstances.

Something else we need to focus on is the power for the minister to change the single desk arrangement from 1 March 2008. We note that this schedule was the subject of further amendments in the House only this week. The effect of these further amendments is to put a sunset clause around the time for which the minister can exercise this power. This means that the minister has to exercise the power at some stage between 1 March 2008 and 30 June 2008. I want to make the following point very clear to my fellow senators, especially those from Western Australia. I draw their attention to page 9 of the third reading of the Wheat Marketing Amendment Bill under schedule 3, clause 3AA, subclause 12. Subclause 12 means that, should the minister decide not to use his power to appoint a designated company, AWB will continue to run the single desk. I remind the Senate of the words of the Prime Minister on 22 May. He said:

… it remains my very strong view, that a retention of the status quo with AWB, given the circumstances revealed in the Cole inquiry, would not have been acceptable to the government, would not have been acceptable to me and would not have been acceptable to the Deputy Prime Minister and Leader of the National Party.

He also said:

… only a small minority of that 70 per cent favoured the single desk remaining in the hands of AWB. That is a conclusion that the government completely shares and endorses.

Only two weeks ago the Prime Minister made it very clear in the House of Representatives that the regulator’s powers would be significantly increased, and the debate about WEA powers has been going on—and I have been conducting it—since 2000. The government ignored the recommendations of the National Competition Policy Review in 2000, the Senate committee report in 2003, several reports from WEA itself and ultimately the Cole commission. It simply ignored the Cole commission recommendation to review the Wheat Export Authority’s powers. From what we have seen, this legislation expands the reach of the regulator to companies other than ‘nominated company B’ but does not provide significant new powers to the regulator. The Labor Party finds this totally unacceptable. Also, how will the new Export Wheat Commission pay for the new responsibilities? There is no detail or financial impact statement. Will growers be forced to wear the cost? There is no new money for the Wheat Export Authority or the Export Wheat Commission in the budget.

Labor notes the amendment to put a 60-day limit on the time in which the minister must exercise his proclamation for bagged and boxed wheat deregulation, but some sections of industry have expressed concern about the proposal for quality assurance of bags and containers, with some groups claiming it is an unnecessary bureaucratic hurdle designed to put a false barrier in the way of trade. It is certainly arguable that there is no strong case for a quality assurance scheme. The market is more than capable of effectively dealing with these issues.

There are many other issues I could deal with, including the inadequacy of the Uhrig changes which this legislation contains. In relation to that proposition, we think the only way to deal adequately with this matter is to support Labor’s proposition, which will indeed allow for the urgent matters in the legislation to be dealt with while the rest of the bill is referred to the Senate Standing Committee on Rural and Regional Affairs and Transport, a committee which has the respect of the industry.

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

The problem with debating notice of motion No. 2 is that the motion does not effectively do what the shadow minister is suggesting it should—namely, allow for the immediate passage of the veto provision and separate consideration of the other provisions. We are sympathetic to that. We are encouraged by the fact that the original bill has been amended. Frankly, it was extremely flawed and, whilst I have not had the chance to study the amendments in detail, I am advised that they certainly are an improvement on what was originally proposed. The problem for the Senate is that this remains an extremely contentious issue. It is a public policy issue, not just an industry issue. It is one of whether choice and flexibility should be provided to the farming community rather than what has become an authoritarian and monopolistic practice. The public policy issues do deserve to be considered by the parliament in trying to address this bill and the future of wheat marketing.

As we all know, there is a great deal of support amongst many members of the coalition for a partially deregulated system with greater choice and, frankly, the interim provision of giving the veto power to the minister effectively means that for this period, as it was for the last period, the single desk is dead, because more than one exporter has been licensed in the recent past and I expect more than one exporter will be licensed in the future. If that is the reality—and so it should be the reality; quite frankly, the east coast National Party should be defeated in this matter—then that would be a good thing. We would look forward to a situation where our Western Australian export farmers will have a choice of who they can export their product through. Of course they should be licensed, but that is the direction in which we should go. But in the meantime, to confirm that should be the choice, we need an inquiry. This is why the Democrats have been interested in the shadow minister’s reference and his proposal. My difficulty with the reference as it is put together is that events are overtaking us. It will be a while until we come back and the legislation is upon us. I would prefer it if the shadow minister would consider a differently phrased motion to be put to the bill tomorrow, to examine the public policy issues surrounding the provisions of the bill in a more general inquiry rather than on the specific bill itself. The bill, as I read the forward program, is bound to be passed tomorrow, so therefore the reference would be difficult to manage.

I would urge the Senate to consider that option favourably, despite the opposition of my good friends in the National Party to the idea of modern market economic mechanisms being introduced to the export of wheat. I know some of the Queenslanders have struggled to catch up to that, but I am sure they can be brought along.

Debate (on motion by Senator Abetz) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.