No east-west wheat split, says Coalition

08 Sep, 2014 02:00 AM
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Because one person has expressed such a view does not mean that it is government policy

THE Coalition has rejected accusations of disunity over wheat export regulations, as the deadline for implementing a mandatory code of conduct on grain port access looms.

Reports this week suggested WA Liberals were engaged in a bitter dispute with their east coast Coalition colleagues over wheat deregulation.

That prompted WA Labor Senator Glenn Sterle to probe the Coalition during Senate question time on the traditionally vexed issue, given the September 30 expiry of the two-year agreement governing port access for bulk wheat exports.

The previous parliament agreed to implement a mandatory code of conduct for port access by the end of this month, to help pass legislation that removed Wheat Exports Australia (WEA) and unwound outdated regulations underpinning the former AWB wheat exports monopoly.

In late 2012, the Greens moved amendments in the Senate which established a seven member wheat export industry taskforce charged with developing the port access code by examining supply chain arrangements.

That debate sparked traditional disagreement between the Liberals and Nationals over bulk wheat export regulations but the latest debate has failed to invoke the same level of veracity.

This week, Senator Sterle referred to recent comments by WA Liberal Senator Dean Smith suggesting full deregulation of Australia's wheat export arrangements was “perfectly aligned” with the government's deregulation and red-tape reduction agenda.

He asked if full deregulation was government policy, which was downplayed in a response from government Senate leader Eric Abetz.

Senator Abetz said the government would seek to achieve “proper balance between competing interests”, including for wheat producers, on concerns raised via the port access issue.

But Senator Sterle also referred to recent comments by Liberal MP Angus Taylor who stated, “We need appropriate regulation of monopoly or near-monopoly uncompetitive port zones as we currently have in NSW”.

Senator Abetz said the Hume Liberal MP had expressed a particular point of view which Coalition members were entitled to do.

“Because one person has expressed such a view does not mean that it is government policy,” he said.

But Senator Sterle continued his attack asking when the government would “resolve the brawl inside its party room and provide policy certainty for the wheat industry” which was also scotched by Senator Abetz.

“I was wondering where this silly line of questioning was going to end,” Senator Abetz said.

“It really did reach a crescendo of silliness with the Senator's assertion that there is any disunity in the Coalition party room on these matters.

“So it is my melancholy duty to advise the Senator that there is no such disunity.”

In early June, Federal Agriculture Minister Barnaby Joyce released a regulatory impact statement offering four key options on a potential code.

Option one was to maintain the status quo; the second was introducing a mandatory code of conduct with a ‘one size fits all’ approach, the third was a mandatory code that can adjust to competition levels and vertical integration; and the fourth was to fully repeal the Wheat Export Marketing Act by September 30.

As the September 30 deadline looms, growers in Western Australia have pushed for less regulation citing option four as their key preference but a compromise is likely to settle on option three.

In contrast, east coast growers remain concerned about limited supply chain competition restricting fair port access for grain traders and have pushed for legislative protections as they did when the issue flared up in 2012.

Last week, Minister Joyce said he was in discussions on the code with Prime Minister Tony Abbott and Small Business Minister Bruce Billson who has responsibility for the ACCC - but the legislation hasn’t been tabled in parliament.

Mr Joyce said co-ops could potentially be exempt from the final code, given profits are returned to farmers.

WA Liberal Senator Dean Smith said the ultimate preference for WA Liberal backbench MPs and Senators was to repeal the Act 2008.

But if that can’t occur, “then at the very least we must ensure any port access regime properly reflects the WA wheat market and does not add to the regulatory and cost burden on WA wheat growers”.

“The ideal outcome would be to let the market operate consistent with competition law – that’s the gold star,” he said.

Mr Taylor said he’s been pushing to ensure graingrowers had “a seat at the table” in a “sensible” code that addressed east coast growers’ concerns about diminished supply chain competition.

He says growers need “a seat at the table” to guard against higher fees that have traditionally been charged by port operators and passed onto grain traders and then growers, without fair scrutiny.

WA Greens Senator Rachel Siewert said she was not surprised that eastern states growers had a different view than western growers.

“I’m aware that some growers in the east are concerned that competition has not developed enough to justify going to full deregulation,” she said.

“I have sympathy for the argument about exempting co-ops from a mandatory code, however I think the impact of such an exemption needs to be carefully assessed.”

NSW Liberal Democratic Party Senator David Leyonhjelm said he agreed with Senator Smith that full deregulation was the best option for managing port access.

“The market for grain handling has become competitive now and there’s no case for the government to go stomping around in there regulating it,” he said.

“I’m convinced GrainCorp is nothing like the monopoly it’s painted to be; I don’t think it’s even vaguely a monopoly.

“CBH is closer to being a monopoly in the West but as the Bunbury port expands and other options become available CBH is less and less of a monopoly.

“So the idea that government needs to regulate port access only diminishes as monopoly power declines.

“I’m pretty much with Dean Smith – there’s less and less case for regulating ports.”

Queensland LNP Senator Matthew Canavan said remarks this week suggesting proposed regulation for grain export terminals was a rollback of deregulation are mistaken.

He said proposed regulations on grain terminals are about access to infrastructure not the growing or marketing of grain,

"In Australia, where there is an infrastructure bottleneck, we have regulations to ensure that the bottleneck does not become a monopoly,” he said.

"We have industry-specific regulations for telecommunications, gas, electricity, the postal system, the payments system and rail and ports in many States.

“Those that talk of 'de-regulation' must take their argument to its logical conclusion and argue against all of these infrastructure regulatory regimes as well.

“In Queensland, grain growers have very few choices but to export grain through port terminals owned by one company.

“That company accounts for around 80 to 90 per cent of the throughput of ports on the eastern coast.

“There is a clear case for regulation given this concentration and that is why the mandatory code of conduct has been proposed."

FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

Deregul8
8/09/2014 6:08:04 AM

More red tape and regulation simply leads to reduced farmer returns. There are laws in place to govern how corporations can and cant behave. Pretty soon the only jobs going in Australia will be as a bureacrat to underwrite the something for nothing society socialism will undeniably usher in.
Jock Munro
8/09/2014 9:25:16 AM

I don't know Dereg! -We made a pretty 'good fist' of marketing our wheat when we had legislation.(regulation). Your merchants friends have made a fair mess of our quality and price relativity since Labor and Liberal gifted them our wheat crop.
seethelight
8/09/2014 9:48:06 AM

The Nats in the east have rolled the weak Liberals .If their is no division between the East and W.A. Liberals ,then it means that the WA Liberals have betrayed their constituents once again.Even St Peter only got three chances.The compromise of giving CBH an exemption from the law that every other participant is bound by, is the solution from hell.CBH really does have a close to a monopoly position in W.A.. Even after Bunge establishes its position CBH will still control 95% of the exports.CBH lost a 3 year case(April2013 ) before the Competition Tribunal for anticompetitive conduct.
GFA
8/09/2014 10:05:05 AM

Matt Canavan and Angus Taylor are the only MP's talking any sense in this article. Matt Canavan makes the vital point about those talking deregulation, in saying, "deregulators must take their argument to its logical conclusion and argue against all regulatory regimes". The most damaging regulatory burden in Australia ( Unionised, Industrial Awards), is overlooked by Smith, Tuckey, Leyonhjelm, et al. If we had totally deregulated inputs, supply chain and sales market, our farmers and Australia would be way in front. Deregulating income but not our costs is fatal. Its got to be all or none.
Dalby
8/09/2014 10:21:46 AM

Seems too many are missing the wood for the trees. Farming success = income - costs. Our biggest income is produce sales. Our biggest costs are inputs and getting our produce to the end user. Inputs and supply chain costs are impacted most by our highly inflated and regulated labour awards at every turn. EG - transport, power, fuel, insurance, fertiliser, machinery, chemicals, finance, etc. Add to that import restrictions excises and tariffs. Why are we distracted by the minor stuff? Why do we give away strengths like united selling and put us at the mercy of mega corporates? MP's wake up.

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