Senate debates

Tuesday, 17 October 2017

Regulations and Determinations

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

5:39 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

As senators may be aware, earlier today Senator Leyonhjelm sought to postpone business of the Senate notice of motion No. 1, relating to the disallowance of the Competition and Consumer (Industry Code—Sugar) Regulations 2017. At the request of a senator, the question was put and was negatived.

5:40 pm

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

I move:

That the Competition and Consumer (Industry Code—Sugar) Regulations 2017, made under the Competition and Consumer Act 2010, be disallowed.

Tonight we're considering the unbalanced code of conduct covering the sugar industry. This unbalanced code was hastily prepared in response to One Nation saying that they would go on strike if such a code wasn't introduced. This threat not to vote on legislation was made back in March, when the government was seeking to legislate to lower the company tax rate, an issue of great significance to Australia. The code is also a response to the Nationals wanting to demonstrate that they can respond in knee-jerk fashion to short-sighted complaints as quickly as One Nation can.

Because it was hastily prepared, there was none of the usual consultation covering all the stakeholders that would be subject to the code. Because the code is so fundamental to the functioning of the industry, this is an irresponsible omission. Because the code was a response to short-sighted complaints, it is not like the codes of conduct found in other industries, which take an even-handed approach and make clear that negotiations are to be in good faith. Instead, this code tilts the scales heavily in favour of the blinkered demands of those who complain the most, to the long-term detriment of the entire sugar industry. With the Greens and some other crossbenchers willing to jump into bed with One Nation and the Nationals on this, it looks like the long-term decline in Australia's share of global sugar production is set to continue. Once again we see that the antibusiness, foreigner-fearing Greens and One Nation are more alike than either wants to admit.

This code is not a balanced code of conduct, because it allows arbitration pre contract and it is proscriptive about the arbitrator's role. The code refers to 'grower economic interest sugar', which is a concept set in Queensland legislation. The code forces the arbitrator to rule that the marketing entity for this sugar must be chosen by the canegrowers. Yet this is sugar made and owned by a miller. The decisions as to how that sugar will be sold will be taken out of the hands of the miller. Forcing a miller to negotiate with an input supplier over the sale of the miller's own products and to comply with the directives of an arbitrator should it fail to agree with those input suppliers is not a formula for business confidence.

It's a pretty safe bet that there won't be a rush of additional investment in sugar mills while this code remains. That's important because our international competitiveness is already marginal. If sugar milling becomes uncompetitive through lack of investment, canegrowers will suffer as much as anyone. What growers really need is competition for their cane. They ought to be doing everything possible to attract new entrants into milling, if not investing their own money. As it stands, the only people who say the canegrowers have a legitimate claim are those who are pandering to get their vote, plus a few who don't like foreign investment and don't understand the issues. Significantly, neither the Productivity Commission nor the Queensland Productivity Commission supported this sort of government intervention, noting that it would cost money and jobs.

It really comes down to the idea that you shouldn't control what you don't own. Once canegrowers deliver their cane to a railway siding or delivery point near their farm, it belongs to the mill, which processes it into sugar. In the past, when many sugar mills were owned by grower cooperatives, canegrowers felt they had some—albeit remote—influence over how the mill marketed its sugar. Australia has a very minor influence on world sugar prices, but growers liked the thought that they had a say. Those days are gone. Most mills now have no grower shareholders at all. However, despite having sold the cane and with no equity in either the sugar or the mill, growers are still demanding a say over who markets the sugar. Some of the owners of mills have vast access to international markets and have put real money into sugar communities. But it seems the main point people make about these owners is the complaint that they are foreigners.

This disallowance motion may well be defeated, but the real losers will be future generations of Queenslanders who will continue to see their share of the global sugar market fall to countries with a more business friendly approach. I commend the motion to the Senate.

5:46 pm

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

Senator Leyonhjelm has it very wrong here. Leaving it to the market is fine when you have a fair, competitive market. But the fact is that, when canegrowers grow their cane, they must take it as quickly as possible to the nearest processing plant—the nearest mill. They can't say, 'Oh, the price today at this mill is such and such and down the road it's a better price.' You can't take it down the road.

Early in 2014 I met with sugarcane growers at Condong, near Murwillumbah. I spoke to my colleague Queensland Nationals Senator Barry O'Sullivan—welcome to the chamber—in June, and we instigated an inquiry through the Rural and Regional Affairs and Transport References Committee in June 2014. We held hearings at Murwillumbah, Mackay and Townsville. They were attended at various times by Senator O'Sullivan, Senator Canavan, Senator Macdonald, former Senator Bullock and committee chair Senator Sterle.

Sugarcane production contributes $2.5 billion to the Australian economy each year and is largely concentrated along Australia's eastern coastline in Queensland and New South Wales. That's where the sugar's mainly grown. Queensland has the bulk of the sugar produced by the states, at 95 per cent, and only five per cent is in New South Wales. While it is vastly different, there are some issues which are of common concern to both states.

Wilmar, MSF Sugar and Tully Sugar had given notice to terminate their RSS agreements with Queensland Sugar Limited in 2017. This caused great concern in the industry. As the inquiry progressed, it became clear that grower choice in relation to grower economic interest in sugar was an issue of central importance to growers and their representative bodies. Canegrowers and the Australian Cane Farm Association suggest any real choice for canegrowers would be removed if the large milling companies were to take control of the sugar marketing sector. Growers were acutely aware that they were at a disadvantage when it came to the amount of power the milling companies held at the time. The committee was told that, in fact, both sectors of the industry had been experiencing considerable difficulties in their attempts to decide on terms and reach agreements on new contracts.

Burdekin District Cane Growers Limited also argued that the tension between growers and millers such as Wilmar had more to do with the imbalance of bargaining power between growers and Wilmar Sugar than it does with Wilmar Sugar being a foreign-owned company. The committee was told there was no statutory or mandatory dispute resolution process which would assist sugar industry stakeholders, both canegrowers and millers, to resolve commercial disputes. The committee observed the strong interrelationship and interdependence which exists between sugarcane growers and sugar milling companies. It was clear that neither would be able to survive without the other remaining profitable and sustainable. There was a lack of trust on the part of the canegrowers in relation to the large milling companies, particularly Wilmar. It was agreed that Wilmar needed to come to the table prepared to engage in positive negotiations with canegrowers and their representatives and that the canegrowers needed to show they were prepared to negotiate in a positive way.

At the same time as the Senate inquiry, a task force was involved in the development of a code of conduct for the industry and there was only one recommendation, which stated:

The committee recommends the development and implementation of a mandatory sugar industry code of conduct acknowledging that provide appropriate stake holder consultation is undertaking the work of the sugar marketing code of conduct task force may provide a foundation on which a code of conduct may be established.

The code came into force April this year. Quotes from the correspondence received in my office from CANEGROWERS Mackay, which represents 1,100 members, said:

The code came into force in April 2017. Three years into a bitter dispute triggered by several mill owners attempting to unilaterally take control of all sugar marketing in their regions. Assisting a resolution in that dispute, the code is now a point of security for you in our future negotiations. The code addresses a power imbalance between millers and growers by requiring good faith, fair and honest negotiations without intimidation.. In the case of Wilmar sugar suppliers in 2017, the code of conduct forced the miller to complete a cane supplier agreement negotiations and prevented it from continuing to hold growers to ransom head of the start of the season.

CANEGROWERS Cairns Region said in a letter to me:

The sugar industry code of conduct is point of security for our organisation in all negotiations with our only available milling company, MSF Sugar Limited.

Senator Leyonhjelm talks about the market. I will repeat what they say:

… with our only available milling company, MSF Sugar Limited. Should the code be disallowed, our sugar cane producers would be put in an extremely vulnerable position in an area where the mill owners, MSF Sugar, has a regional monopoly.

Here's the point, senators, about monopolies. Tableland Canegrowers Limited, which represents 80 growers on the Atherton Tableland, told me:

This disallowance motion disregards a 2015 Senate committee's recommendation, pre-judges the code form review in 2018 and was introduced by a senator who has not taken the time to talk to sugar canegrowers, representatives of the industry or to understand its recent history.

CANEGROWERS Proserpine, which represents 200 growers, wrote to me asking that I not support this disallowance and pointing out that it fixes the imbalance between growers and millers.

Senator Leyonhjelm doesn't seem to understand how the sugar industry works. I note that in a new article on 15 September he said:

Growers need to accept the new reality of multinational companies owning Queensland sugar mills.

The manager of Proserpine CANEGROWERS, Mike Porter, said in the same article that his growers get about 60 per cent of the estimated value of the cane delivered to the mill, and for Senator Leyonhjelm to say that they get 90 per cent is stretching it. Senator Leyonhjelm says that spending $400 million on the regulation of the sugar industry was a waste, but this was shot down by Mr Porter, who said that rationalisation has created a lot of efficiencies and that the Australian industry is one of the most efficient in the world, and probably the envy of most countries that grow sugar.

It was Minister Barnaby Joyce who said to the sugar industry, 'Come to an agreement, get your act in order, make a decision, or we will.' He said that for months before this was released. Sure, it was backed by Senator Hanson and One Nation. We launched an inquiry in 2014, Senator O'Sullivan and I. We carried out the inquiry, along with other senators here, and we saw how the market is simply unfair in the sugar industry and how the big end of town has a monopoly and can dictate the terms to the canegrowers.

Once again, the canegrower, the primary producer, is a price taker not a price maker. Not many of you in this Senate would understand what I'm talking about, but I have lived it for most of my life. Now we have the situation where we now have surety and security and everyone is happy. As I said, Minister Joyce said to them, 'If you don't come to an agreement with the growers and companies like Wilmar, we will put a mandatory code of conduct in.' And we did. Thank you for honouring your word again, Minister Joyce.

Now we have someone, in the form of Senator Leyonhjelm, trying to disallow this—I believe he is backed by the Labor Party and probably the Greens as well. This is scary. Why have you got such a set on primary producers? If the market were fair I would totally support this, but the market is not fair. A canegrower must take their cane to the nearest mill within hours of cutting it. There's none of this: 'What's the price at this mill today?' 'It's such and such.' 'I'll get a quote down the road; I'll take it to the mill down the road.' You can't do that, you have to run it to the nearest mill. There is no competition as far as the mill goes, so the market is failing. It is unfair, and that's why it needs a code of conduct to deliver fairness to the canegrowers. I urge senators to vote against this disallowance motion.

5:55 pm

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

I will only trouble the Senate for a few moments. I regret that this motion has been brought on at this time. I'd had some conversations with Senator Leyonhjelm about delaying or deferring it for the simple reason that I needed more information in order to make a decision.

I've met with some of the canegrowers and I have respect for their position, albeit that slightly nuanced positions have been put to me in some of the discussions with different interest groups. What I haven't been able to ascertain is the position of the 'alternative narrative' from the other side of the equation.

As I said, I regret that the government has brought this on. I still don't understand the particular reasoning for it but I will listen to the debate and make my decision accordingly.

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—

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

Senator O'Sullivan, it's the fifth time you've said it, so I will pull you up. It's Senator Leyonhjelm.

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

My apologies. I have trouble with long names. I like Senator Leyonhjelm and I've had cooperation with him since I have been here. But I will not tolerate any senator coming in here and attacking the agricultural base of these great families, 4,500 of them, who have provided enormous input to the economy of my state and the economy of this nation. These are decent family men and women. You go there; these are real family communities. These are places where the kids often work on the farm, or not far away, and there are four or five generations involved in the development of sugar. And I'll say to any senator that wants to attack it front on: I won't sleep until I defend these farmers at every level; and if I have to default, if someone has to be favoured, it will be the farmers.

The big boys, the Wilmars, one of the biggest processors in the world, can look after themselves. I don't want to attack Wilmar. They're a company and I'm always very cautious in this place not to do reputational damage to corporations. But one of the telling questions was that Wilmar wanted to enter the marketplace and have the right to sell the sugar of these growers—and they have been granted that right. The old single desk that was around, QSL, was expanded. So Wilmar can, if they choose, entice the growers to allow them to market their sugar, to pick up this other premium that they think is there to be had. But why don't the sugar growers use them? Because there's been a complete and absolute collapse of trust in Wilmar over the last three or four years as these dealings evolved. They don't trust them. They understand that, if they go off there for a fortnight, it's like having a new girlfriend and leaving the wife at home. If QSL is not there, at the end of the day we do have a single desk, a Wilmar desk, controlling the ports and the logistics—and that's when you know you've got trouble. That's when you've got 'farm gate'. That's when you have those little railway lines that go off to the mill and come back still full of cane.

So we will be vigilant on this while ever we're in power. I really appreciate the support of One Nation. I have to correct my colleague, Senator Williams. I think he was a bit hasty in jumping on the Greens. I don't know what the Greens will do with this vote. But there was an indication earlier today when they supported bringing this on and restoring stability into the sugar industry for sugar growers.

I want to close by saying this. My message to Wilmar is: look straight down the barrel. You're not the only one that's patient. You're not the only one that knows how to exercise power. It's a long way between now and when you cripple our sugar industry. It's a long way between now and when you get sole power over this important industry. The message to you is clear: it won't matter whether I'm here, whether Senator Hanson and her colleagues are here or whether Senator Williams is here, our side of politics will continue to protect the interests and integrity of industries that are so important to so many thousands of our families, so many hundreds of our communities, from now until the end of time. So, Wilmar, if you don't like those circumstances, pack your bags and go to Brazil or somewhere else.

6:09 pm

Photo of Janet RiceJanet Rice (Victoria, Australian Greens) Share this | | Hansard source

My grandmother would have described the situation with this sugar code as a butty mess. The whole drafting, implementation and now potential disallowance of this code has been mired in party politics. It's been the party politics of the Nationals versus One Nation versus doing deals to stop George Christensen crossing the floor in the other place. It has been a mess. But the people that have been hung out to dry during this mess are the farmers. They are the ones that have been used as political pawns in this political game playing.

As Greens, we have approached this by saying: 'Look, we don't want to get involved with the murky, messy politics of the Nationals and the Liberals and George Christensen and One Nation in Queensland. That's not what we want to be engaged with.' I understand the Labor Party have basically decided to support this disallowance because they knew that if this code was disallowed all that politics would flare up again and they would be poking the beehive and causing chaos, and that's what they wanted to do. But we decided, 'Look, let's just look at this from a very policy-focused point of view as to what is right.' We decided to go back to Greens principles. And this is a matter of fairness. It is about sugarcane growers versus the predatory behaviours of large, monopolistic corporations.

Yes, this code of conduct isn't perfect. Yes, it was developed, as I said, in that murky mire of politics. Yes, it was developed without a regulatory impact statement. It could have been done a lot better. But, ultimately, having this code with its flaws is much better than having no code at all. So the Greens will not be supporting Senator Leyonhjelm's disallowance of this code tonight, because we are standing up for farmers, against the predatory behaviours of those multinational corporations who, if this code was disallowed and no longer existed, would be able to keep on screwing down the screws and hanging cane growers out to dry.

Basically, this code is making sure that farmers have access to some protection, protection that they need in order to deal with their local monopolist. It is clear that if this disallowance got up—if we did not have a code of conduct—sugar millers would be able to further abuse their market power. They would be able to do things like pushing Australian cane growers to accept their terms on supply agreements, on marketing choice and on a host of other contractual matters. The code addresses the serious, perverse incentives that otherwise apply for millers to be able to maximise their margins at the expense of growers, which is what monopolies are able to do.

It is effectively a monopoly situation. If you're a cane grower, you don't have a choice as to who you are going to sell your sugar to. There is a massive market imbalance, and that's where you need governments to step in. You need governments to regulate, to level the playing field and give some power back to the growers who otherwise wouldn't have any. There is a very large market imbalance; without this code, sugar millers are able to continue negotiating right up to the day of harvest, knowing that unless a supply agreement is struck the cane growers are legally unable to sell their cane, because a supply agreement has to be in place for the sale to be legal. So there are very strong and necessary reasons that you have a code in place.

As I said, this code is far from perfect, but it's what we've got. It was introduced without the usual regulatory processes being followed. It was introduced without a regulatory impact statement; there was no formal industry consultation, and it was introduced with a speed that was set not by good process and good governance but by political necessity. That is not good policy practice. But it's here and it's better than nothing. So the Greens want to see this code continue to be in place. There is a review process that's going to occur over the next 12 months. We look forward to that review process and to being able to improve the code. We look forward to the consultation process that will occur as part of that review process, so that we can make sure that all sections of the industry, particularly the canegrowers, are able to get a good outcome that is in the interests of Australia overall.

6:15 pm

Photo of Carol BrownCarol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | | Hansard source

Labor is not opposed to a mandatory code, but the current code of conduct is nothing more than a political fix. It was imposed on our sugar industry against their will. There was barely any consultation or assessment of the potential impacts on investment and jobs in the industry. We need to make sure that we get the balance right, bridge the disparity between canegrowers and millers and make sure that no single stakeholder has more power than the other. Any sugar code of conduct must ensure that canegrowers are confident that their livelihoods will be supported by the industry at large, that millers and other industry stakeholders have the capacity to better promote their products, and that there is greater competition in the industry. In particular, we need to ensure that millers are also working in the interest of hardworking canegrowers—the people who actually grow the product that they refine for sale to the rest of the community.

Labor believes that there is a case for a properly and responsibly developed code of conduct which addresses any of the market power imbalances between canegrowers and millers. The re-regulation of Queensland's sugar industry in December 2015 enables sugar canegrowers to direct how millers market sugar internationally. While canegrowers in Queensland were happy to see the changes go through, it looks like further issues have arisen since the re-regulation of the industry. Re-regulation of the sugar industry has restricted competition in the industry, reduced investment in milling capacity and reduced the incentive to promote further innovation in the industry.

Australia is part of a global economy, and our canegrowers are in the situation where they have to compete with other canegrowers from around the world, most notably from Brazil. We need to ensure that our canegrowers, millers and the industry as a whole are able to compete against countries like Brazil. In order for that to happen we need to make sure that the power imbalance between our canegrowers and millers is addressed. The current code of conduct does almost nothing to address this imbalance.

Labor supports further consultation and consideration of the implications that regulation would have on the sugar industry. Until adequate consultation is had and the views of various stakeholders are heard, we believe that the current code is not good enough and should be ripped up.

6:17 pm

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

It's quite interesting to hear Labor's comments about the code of conduct—that it's not drafted very well and it's not good, so we'll allow the disallowance motion by Senator Leyonhjelm. The fact is that it was Labor's policy under Wayne Swan that allowed Wilmar, a multinational company, to buy in Australia and buy the mills in north Queensland. Because of that, at that time, a five-year agreement was drawn up where they had to deal with the canegrowers through Queensland Sugar Ltd as well. The canegrowers sell their cane to the mill—it's called a cane supply agreement—and then it is marketed. It was marketed by QSL, who had been doing it for many, many years. The canegrowers got a fair deal because it was set up by the canegrowers originally—a non-profit organisation. But, after the five years, Wilmar said, 'Hang on a minute, we want to take your cane, but we want to market it as well.' It did not give the canegrowers an option about who markets their sugar. There was no option where QSL could market it. Wilmar said, 'We're going to crush your sugar, and we want to mill it as well.' Wilmar, as I've been told, hasn't got a great reputation for selling their product to countries overseas because their quality is not up to standard. QSL has a very, very high reputation with overseas countries and buying Australian sugar.

Hence, why haven't all these sugarcane growers signed up with Wilmar? They were put on the spot. Months and months and months went by. Nothing was done about it, because they didn't trust Wilmar, until they got to the very end. They were forced, and they only had a matter of weeks to go. They had to sign the contract. Why the code of conduct? Because they had to start cutting their cane within a matter of weeks. They needed the code of conduct so then they could determine who would market their sugar.

Why did One Nation get involved? It is because they were hitting their heads up against a brick wall. The growers could not get anyone to listen to them about the situation they were in. And, because the deals were not done and they were not signed up to a cane supply agreement, the whole area lost. A matter of $150 million was taken out of that economy for those canegrowers. Why did One Nation take a stand on this? We abstained from voting on the floor of parliament until we actually got a code of conduct for the canegrowers, because they were on their knees. No-one was listening to them. Nothing was being done. And I'm pleased that we forced the issue.

I was pleased to hear Senator Barry O'Sullivan. He has been involved in this in attending meetings. I attended meetings up in North Queensland myself. I spoke to the canegrowers. I don't recall ever seeing Senator Leyonhjelm, the senator for New South Wales, at any of those meetings. I have no understanding of—I am gobsmacked to understand—why Senator Leyonhjelm is actually supporting a multinational company over the canegrowers.

I really appreciate how the Greens are viewing this and their support on this matter, because it is all about the growers. It's all about the struggling families.

When I spoke to Senator Leyonhjelm about this, I said, 'Why are you doing this to the growers?' And his response was, 'Well, they can actually go and take it to another mill.' But they can't. They have to put it on the rail lines. The rail lines are owned by Wilmar. It has to go to the mill. 'Well, they can put it on trucks and ship it somewhere else.' No, you can't do that. You see, once the cane is cut, it's 12 hours; it has to get to the mill. So there's nowhere else they can take it. So the whole fact is: 'Well, tell them to get out of it. Go and do another business. Go and get out of the cane growing.' No wonder the farmers are fed up with this attitude. Some of them are saying to the kids now: 'Get off the farm. There's no future here. We don't know what's going to happen.'

And here we have the Labor Party saying, 'Oh, well, it's drawn up in a hurry, so we need to really look at this before we do anything about it.' It's about time you started listening to the Australian people and what's happening to them. They are just about going under, losing their properties and everything because they can't get an agreement, didn't know whether they should cut their cane or what to do with it—and you're worried about whether a code of conduct is drawn up properly. Probably not. But—do you know what?—it's given them a grace period of approximately two, maybe three, years. It's not settled yet. And your Labor Party counterparts in Queensland haven't supported them either. I hope they realise that come the next election, when they won't get the votes from them. They won't be voting for the Labor Party. They haven't supported them at all. And I've got to say that the LNP in Queensland hasn't been much better either in supporting them.

Wilmar also have a 30 per cent ownership in the QSL, so I have no understanding of why they want to dictate and determine it. Talk about multinationals—and all I hear now is the Labor Party supporting multinationals. That's exactly what they're doing: supporting big business in Australia. Wilmar are a Singaporean that's come in to dictate terms. The Labor Party agreed to it, to allow them to take over a mill that controls the whole area. This is what multinationals, foreign ownership, can do in our country. We've seen it not once, not twice; we've seen it many, many times.

Jobs—yes, we've got to protect jobs in Australia. If we see the canegrowers go under, in North Queensland or throughout the state, it will also affect the mills, and then you will have more people out of work. If you haven't got cane farming, you don't need the mills. All of North Queensland relies on the money brought in by the canegrowers.

So I call on the Labor Party: please consider this. Do not allow this disallowance motion to pass in this chamber today. It will affect the canegrowers again. It is under review; let's find something better; but, for the next two to three years, let's just support the system the way it is and find a better answer. Throwing these regulations out will not help the canegrowers at all. They're depending on us to make the right decisions for them in this chamber. It's all about their future. It's all about their kids. It's all about their farming, which is so important to us. I once again say thank you very much to the Greens for looking at this rationally and not supporting the disallowance motion, and I thank the Liberal and National parties also for their support of the canegrowers.

6:26 pm

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

As a servant to the people of Queensland and Australia, I am against this disallowance. We acted. We listened. This action was initiated by the canegrowers. It was not initiated by a strike pulled by Senator Hanson. All we did was listen, and then all we did was take action. This issue at its core is about farmers, food production and not being heard; and it's about farmers, food producers, with little power.

I'm proud of the fact that, over the last 170 years, since the Industrial Revolution—actually, over the last 250 years, thanks to the revolution in Britain and governance; actually, over the last 700 years, since the Magna Carta—we have lived in the sort of country that we live in today. Those events were due to freedom. They were due to largely free markets. At my core, I am a libertarian. I believe passionately in freedom of speech and freedom of markets. But, sadly, we do not have free markets globally. We do not have free markets in this country. I have worked and lived and studied in the United States. They do not have free markets. Increasingly, government is getting involved around the world, and it is causing problems. For those who live in cities, perhaps you can identify with another problem—the problem facing taxi drivers. We know it in Brisbane, we know it in Queensland and it's the same around the country. Taxi drivers are saddled now with expensive plates because Uber has come in with none of the burdens faced by taxi drivers. The core problem there is excessive government in the first place. While government was initially protecting some rich taxi drivers, that has turned and become government now impeding all taxi drivers.

We live in the real world. I admire Senator Leyonhjelm's philosophy, his honesty and his integrity with his principles. However, we do not live in a free world. We live in a world that has been manipulated and distorted by governments for many, many decades. This building, in my honest opinion, has been very destructive in some of the policies and government interventions that have come out of here. At its core, I'll bet the roots of this issue go back to excessive government intervention in the first place. In the real world, this kind of world, we need to look after the basics—the basics like food production; the basics of making sure that farmers have free access and free support. Food is an issue for all city dwellers. We all eat, and food is an issue for all people who buy food. It is part of the process to produce, distribute, process, distribute and then eat food. In this process, the leach is the government, quite often.

But the casualties are in the communities. When I went through Home Hill and Ayr not long ago, the number of businesses boarded up with blank windows and empty buildings was staggering. That means the community is suffering. I see initiatives in the regional towns—not far to the north, in Ingham—not being supported by the government and not being supported by the LNP in Queensland, the Labor Party in Queensland or their local members. Yet these are initiatives that regional people from Queensland are initiating which could contribute to fixing health problems around our whole country. Government is not doing its job. This industry's future depends on the process of farming, which, as Senator O'Sullivan said, can take many years to plan for and harvest to then get the rewards from the crop. It can take many years.

As Chair of the Senate Select Committee on Lending to Primary Production Customers, it has become clear to me that in addition to some of the banks' behaviours, some of the receivers' behaviours and some of the other people in the chain, one other entity has been doing enormous damage, and that entity is government both state and federal. Think about this: a farmer goes and buys some land. He or she then has property rights. Those property rights are then stolen. That land is worth less as a result of government intervention—government stealing land. Today in Queensland we see farmers actually suffering a loss of property rights thanks to the current Labor government and past Labor governments. That property rights issue destroys land values, destroys farm productivity and raises costs for farmers.

Another issue that governments control is tax. Tax is crippling. We have taxes on payroll, of all things. We know that if we tax something we decrease its use. Why are we taxing payroll? We know that it's difficult in our country for farmers to get labour in towns with high unemployment, and that's why we need backpackers. Something is wrong. We saw in 2011 the live cattle trade completely shut down overnight. We saw cattle then being moved from the north of Western Australia all the way down into New South Wales to be sold, and the prices plummeted and communities were devastated. Farmers and families were devastated and people were suiciding.

And then we see government intervention in the form of water control. Some of the farmers—there are some here now—from the Burdekin have had an increase of around 300 per cent in the cost of their water in recent years. Overall, I'm told, that most farmers have faced a 50 per cent increase in their water costs. But that's not all. They say power prices have increased 110 per cent in recent years in a state where the state government wants to destroy a cheap, reliable and secure source of power and replace it with a renewable energy target of 50 per cent—and the LNP supports that by supporting the Labor budget.

These farmers, some of whom are here, are not wealthy. They work in delicatessens and they own delicatessens to make sure that they can get by. Some do earth moving on the side to keep them busy and to get by. They are stressed. It doesn't matter whether they're cotton farmers from Mondure, or cattle men or what: these days they face international markets and they have to be very much on top of the science, to be au fait with the economics and to be lawyers—because they're taken to court or they have a state government stealing property rights. So they need to be experts in everything, and that's not fair. We pay for it throughout the country. We have the best farmers in the world—from the dry south-west right through to the tropical Cape York. We have the best farmers in the world, but they're challenged by overseas subsidies paid by foreign governments. Their challenged by overseas companies coming in here. They're challenged by our own government policies and regulations destroying businesses, making it difficult even to live. There are tax, energy costs, property rights and—there it is again—government. Government needs to get out. But in this case we have an imbalance of power—a huge imbalance of power. We have a $7 million company versus a $40 billion corporation who has legal power, market power and staying power.

This is about trust, as Senator Hanson so wisely said. This is about making sure Australians have a fair go, because under tax regimes in this country foreign companies quite often don't pay any company tax. That puts them at a 30 per cent advantage straight away. This is not a simple little issue.

We are against this disallowance. Our responsibility in One Nation is to listen, to ask questions, to listen, to take action, to listen, to serve and to be accountable, and we are willing to be accountable to the canegrowers of Queensland. We're willing to check ourselves and we want to restore our Constitution. We congratulate the canefarmers and we congratulate Senator Hanson for taking her action. This is a matter of trust, and we will not be supporting this disallowance.

6:36 pm

Photo of Zed SeseljaZed Seselja (ACT, Liberal Party, Assistant Minister for Social Services and Multicultural Affairs) Share this | | Hansard source

The government opposes the disallowance motion. The coalition government delivered a mandatory sugar code of conduct to support dealing with sugar mills in time for the June 2017 crush. The coalition government introduced a code following a listening tour of growers in North Queensland to assist growers, mills and marketers dealing with disputes. The code came into immediate effect in April following months of protracted negotiations between growers, mills and sugar marketers.

Farmers have welcomed the code, which has had a positive impact on the industry, with all growers able to sign agreements prior to commencement of the 2017 crush. The new code guarantees growers choice in marketer as well as providing precontract arbitration between mill owners and marketers and between canegrowers and mill owners if an agreement cannot be reached.

Photo of Gavin MarshallGavin Marshall (Victoria, Australian Labor Party) Share this | | Hansard source

The question is that the disallowance motion moved by Senator Leyonhjelm be agreed to.

Senator Chisholm did not vote, to compensate for the vacancy caused by the resignation of Senator Ludlam.

Senator O'Neill did not vote, to compensate for the vacancy caused by the resignation of Senator Waters .