Labor blasts government’s “political” sugar code

Mr Fitzgibbon joined Shadow Treasurer Chris Bowen in attacking the federal government’s announcement to bring on a new mandatory code of conduct this week through new regulations.

The code has been used as ongoing leverage by the federal government to try and break the impasse in the ongoing dispute between Queensland Sugar Limited (QSL) and Wilmar.

Mr Fitzgibbon has now challenged his counterpart and Federal Agriculture and Water Resources Minister Barnaby Joyce to produce the code for public scrutiny before it’s enacted as law.

He’s also criticised Mr Joyce for making arbitration compulsory in the code’s operations and accused the government of not conducting any proper stakeholder consultation or producing a regulatory impact statement (RIS) on it.

“They are taking a wrecking ball through this sector all for their own political purposes, and it’s going to have implications for other industries, other sectors who will be really concerned that having the government imposing a mandatory code with mandatory arbitration on one sector might come shopping in their sector as well,” he said.

“And that's going to have a big impact potentially on investment in Australia, just like their (Foreign Investment Review Board) thresholds or effects tests.

“All these in aggregate now are combining to send all the wrong messages to potential investors in Australia.”

Mr Joyce however said the sugar code of conduct negotiation involved a range of people and was ultimately finalised involving himself, the Treasurer and Prime Minister.

“It’s very important that people understand this is an issue we’ve been working on for a period of time,” he said.

“We’ve always kept it up our sleeve, because we wanted a process of leverage.

“We would have preferred QSL and Wilmar came to their own agreement.

“No one particularly likes the clumsy fingers of government in their business - but if that is what's required, that's what we'll do.”

Mr Joyce said there was “mass consultation” and the government also spoke to 1000 people in North Queensland.

“We've been in close contact with Queensland canegrowers the whole way through and Willmar, and QSL and there was a Senate Inquiry chaired by the Labor Party Senator Glenn Sterle which recommended a sugar code,” he said.

“And as recently as Monday, Joel Fitzgibbon said we needed a sugar code.

“Obviously it's important to get this sugar code out and we hope that QSL and Wilmar come to a solution, that they finalise this agreement.”

But Mr Bowen said the “mess on sugar” was one of the starkest examples of chaos in the federal government.

He said it was “policy on the run and bad government” while pointing the finger and Mr Joyce and Mr Morrison.

Mr Bowen said it was unprecedented that the code of conduct would not be released for consultation before it was promulgated into law.

The standard procedure is to consult widely, to issue drafts, get feedback, to talk to the affected people, he said.

“Scott Morrison and Barnaby Joyce are writing this on the back of a coaster, refusing to consult with the affected people in the sugar industry,” he said.

“We have also been advised there will be no regulation impact statement - that there will be an exemption sought - that is outrageous.

“This government which prides itself and lectures everybody about the need to reduce regulation is changing the law without a regulation impact statement.

“This is utterly unacceptable.

“And the Labor Party of course continues to seek assurance that this code of conduct complies with our Free Trade Agreement obligations – and we demand that assurance from the government.”

Mr Fitzgibbon said the sugar code wasn’t designed to operate in the economy, “it is a code of conduct to prop up a sinking government”.

Shadow Trade Minister Jason Clare said before the sugar industry code of conduct came into force, it needed to be known whether it breached the Singapore-Australia Free Trade Agreement and advice related to that issue should also  be released.

Mr Fitzgibbon said Labor had never opposed a code of conduct and supported those that are designed through proper consultation.

“We believe codes of conduct have a place in regulating behaviour in markets, particularly markets where people are holding significant market power,” he said.

Mr Fitzgibbon said Wilmar and other milling companies in Australia were “very restless and very concerned…but I know they have a very strong commitment to Australia”.

“They have a very strong commitment to their workforce and I have no doubt that they will continue to do their very best to work with the government through this process, but the government is making it so hard,” he said.

But Mr Morrison said the new code of practice would come into place the day after assent, by regulation and “We think this is a good outcome of everybody seeking to work together”.

He said the code of conduct was light touch “but at the same time it gets the result”.

Mr Morrison said it contained three components with the first one being the provision of compulsory pre-contract arbitration, before any agreements between the growers and the millers.

He said there was also is a mandatory pre-contract arbitration provision between the marketers and the millers and the third component was ensuring growers had choice on who markets what’s called the economic interest in their sugar cane.

“I would not call it an expansive code; I would call it a minimalist code,” he said.

“It’s not controlling prices it’s not re-regulating the industry or anything like that.

“It’s our view that these issues should be sorted out commercially but when they can’t be sorted out commercially we’re not going to allow it to turn to sea.”

CANEGROWERS welcomed the code’s announcement to prevent a repeat of the long-running marketing dispute that has left 1500 growers in limbo for the 2017 season.

CANEGROWERS CEO Dan Galligan said “This move future-proofs our members and the industry from ever again having to go through the protracted dispute and negotiations we’ve been caught up in for the past three years”.

“It is distressing for our members that this has dragged on for so long and we welcome the Commonwealth playing such a strong role in preventing it from every happening again.

“Millers in the Queensland sugar industry have a monopoly when it comes to processing the cane our members grow.

“A code will prevent them from abusing that milling monopoly power just as the Queensland legislation brings competition into the marketing environment.

“We thank the political and other supporters of our industry who have championed the cause of the farming families of the sugar industry and we look forward to putting this saga behind us and getting on with business with these supportive structures in place.”