SUBJECTS: Code of Conduct for the sugar industry
DAVID SPEERS: We were talking to Barnaby Joyce last hour, the Deputy PM, about the Code of Conduct that he and the Treasurer announced last night. What this Code of Conduct will do is compulsory arbitration. What does this mean? He explained:
BARNABY JOYCE, DEPUTY PRIME MINISTER, MINISTER FOR AGRICULTURE AND WATER RESOURCES: You have got to have the choice, and that is part of this Code, you have got to have choice -
SPEERS: When is? when is
JOYCE: And if it breaks down, then we have the role of arbitration
SPEERS: Which is what has happened here, so how does this all
JOYCE: The Treasurer picks the arbitrator in consultation with
SPEERS: The arbitrator then sets the price
JOYCE: Well they listen to all the facts and they deliver what they think is a fair
SPEERS: So Wilmar, and anyone else who has invested in Australia in good faith will no longer be able to set the price. It will be some arbiter that you appoint?
JOYCE: Remember Wilmar is not the only miller, everyone Speersy has agreed to this, it is only Wilmar who is out there. So we are not doing something that is so extraordinary that everybody revolted against it. They are all on board with it.
SPEERS: With me now is the Shadow Agriculture Minister, Joel Fitzgibbon for some reaction on this. Thanks for your time. Do you support a Code of Conduct or not?
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: We are happy to consider a Code of Conduct. Codes of Conduct can be a good thing for regulating behaviour in any given market. We have four Codes of Conduct in various sector now. But they are OK if they are properly considered, properly constructed, all the stakeholders are consulted and Parliament is given an opportunity to consider it. This is a completely different situation. And this will be the first time we have had a Code of Conduct, a mandatory Code of Conduct, which had -so everyone is bound, within its provisions - a compulsory arbitration process. The other precedent is that Barnaby Joyce and Scott Morrison are going to send this to Executive Council, to the Governor-General to become law before anyone else has seen it. So not just no consultation, no Member of Parliament, no MP, no Senator, no milling company, no grower, no member of the Australian community, no journalist, will see this Code before it becomes law -
SPEERS: If you had a chance to see it -
FITZGIBBON: It is extraordinary.
SPEERS: If you had a chance to see it, what would be the main thing you would want to ensure is there? Is compulsory arbitration your problem here?
FITZGIBBON: And no regulatory impact statement either which is the norm for these things. Look we are obviously very concerned about the idea that we have compulsory arbitration within a Code of Conduct. This will send a very cold - .
SPEERS: So you would say no to that?
FITZGIBBON: This will send a very cold breeze across industry right across Australia. Iin all sectors. Because what is happening is the Government of the day, in a shocking act of economic vandalism, is saying we will precipitously, without consultation, just impose on you compulsory arbitration. Now that is an extraordinary thing to do. And of course this is all about winning Pauline Hansons vote in the Senate for the tax cut the business tax cuts. And repositioning the Nationals who were under siege from One Nation -
SPEERS: The Government says it has been working on this for longer than Pauline
SPEERS: Longer than Pauline Hansons demand but if you have compulsory arbitration, just to cut to the chase on this what good is a Code of Conduct for the cane grower?
FITZGIBBON: Let me just answer the first question. This has been in the ether since 2015. There was a Senate Inquiry and the Labor Senators on the Inquiry backed a code for the sugar industry
SPEERS: They did.
FITZGIBBON: That is fine because codes are about managing behaviour in the sector. Its not about this sort of heavy handed intervention. A Government on a high saying - if you cant work this out yourself then we will enforce arbitration. Now in the Queensland dispute which has now been going on for 18 months caused by the Liberal National Party bill in the Queensland Parliament. It has been going on now for 18 months. Scott Morrison said on Monday night that he has fixed the problem and he is that close and he just has to cross the ts and dot the is. Last night in a very weird late night press conference when everyone was elsewhere, he says no, we now have to have a code of conduct. What has changed between Monday and now?
SPEERS: If you dont have compulsory arbitration what good is a code of conduct for the cane grower?
FITZGIBBON: The Trade Practices Act or as its now called the Competition Consumer Act is the act that if you like regulates behaviour, particularly market power where you might have big firms bashing up smaller firms. The hurdles, to get into the Trade Practices Act are notoriously difficult. What a code does is codifies and sort of lists the sort of behaviour youre not entitled to participate in. If you have done that you have automatically breached the code and therefore the Trade Practices Act. What it is not about is intervening in individual arrangement and disputes and having some guy Scott Morrison and Barnaby Joyce is going to appoint come in and tell you as a company or as a grower, or as a retailer, the outcome youre going to get in your contractual agreement. I can tell you David, the Australian sugar market is a relatively small one in the global supply chain. These big multinational companies that operate here are shaking their heads.
SPEERS: To Barnaby Joyces point, these are monopoly (inaudible) in those areas.
FITZGIBBON: Barnaby Joyce is either all spin or just doesnt understand the industry. Ill give him the benefit of the doubt that hes just all spin.
SPEERS: Okay but If youre a cane grower and you have the train line that takes your cane to the mill and its a Wilmar mill, thats a monopoly.
FITZGIBBON: I saw you interview and Barnaby Joyce doesnt think the dairy farmers dont need a code of conduct and they are different. Well, I mean compare the challenges they have had for the last few years. Cane growers sell their cane to the mill, it then turns it into sugar and sells it. Its a question about who markets it. They have never had a choice in marketing. The only thing that has changed here is instead of QSL marketing it, they were never happy when QSL was marketing it, but thats another question. Wilmar may be marketing it now. Because the Queensland legislation, its not just Wilmar, its seven different companies who operate in Queensland. They said look well live with the legislation, we will work with QSL on a contractual arrangement which shares the marketing if thats possible, but Barnaby Joyce is not satisfied with that. Why? Because One Nation is leading the charge up in the cane fields and Barnaby Joyce is in political trouble and he has to catch up.
SPEERS: What would be your preferred way of helping those cane growers?
FITZGIBBON: The best way to help the cane growers is to get out of the way. The dispute in Queensland is almost resolved. Scott Morrison said that himself Monday night. Surely he is not suggesting this code going to the Executive Council next week or the week after should act retrospectively interfere in this dispute.
SPEERS: Sure but you dont want this situation in the future, this drawn out stand off?
FITZGIBBON: Again a code is not designed to intervene in commercial contracts, however, we are very open, we said that in 2015, open to a code of conduct that regulates behaviour in the industry but you have to have consultation with all the stakeholders.
SPEERS: No compulsory arbitration?
FITZGIBBON: Probably not, no. I dont see any case for compulsory arbitration in a mandatory code. We have a franchising code, the oil code, hort code and one other. None of them have compulsory arbitration. This is new. This is just Barnaby Joyce trying to get ahead of one Nation in an economically reckless way.
SPEERS: Joel Fitzgibbon, Shadow Minister for Agriculture. Thank you very much.