29 March 2017
Transcript - #2017053, 2017

Joint press conference, Canberra

Joint press conference with
The Hon Barnaby Joyce MP
Deputy Prime Minister
Minister for Agriculture and Water Resources

SUBJECTS: Queensland sugar; Turnbull Government’s Enterprise Tax Plan to drive economic growth

TREASURER:

Many of you will know over the last several years there has been somewhat of an impasse in North Queensland regarding ensuring that the growers of cane, millers of cane, the marketers of cane have had a set of arrangements that provide certainty to ensure we meet our markets and we do so in the best way which supports everybody who works through that supply chain. Earlier this year the Deputy Prime Minister, the Prime Minister and I began work on a process to try and bring this issue to a resolution and our first focus was to ensure that the millers and in particular the Wilmar mill was able to come together in an agreement with Queensland Sugar Limited who are representing the marketing interests of the growers of that region to ensure the growers had a choice about how their cane was sold and they were able to get the best set of arrangements. We believe strongly in competition and to have competition there has to be some tension in the cord and the tension in the cord where if you grow your sugar and there is only one set of rail lines going to one mill which gets crushed, the way you keep tension in that cord is to ensure that those growers of that cane have the choice of where their sugar gets sold and how it gets sold. Therefore the opportunity for many sellers to be involved in marketing that sugar is very, very important. So we have had a set of arrangements over a long period of time that have provided for that.

We were very pleased earlier this year we were able to get those two parties together and I want to particularly commend Tim Nicholls who played a key role at our encouragement and particular the Prime Minister’s involvement. He sought to have changes made to the Queensland legislation which finally forced the Queensland Government to act and the two parties got in the room and were able to form an agreement. As I flagged earlier this week on Monday that draft agreement was before QSL. So that issue has been able to be resolved and was resolved by both the LNP in State Parliament in Queensland working together with the Deputy Prime Minister, the Prime Minister and myself to get that issue sorted. We are very pleased for that having been able to occur. But there remained an ongoing issue. The ongoing issue was to ensure that in the future there would be this guaranteed choice. Tim Nicholls sought to have that legislated in the Queensland Parliament and particularly to ensure there was compulsory arbitration, mandatory arbitration where the millers and the marketers were unable to agree. He moved an amendment to that legislation in Queensland but sadly Billy Gordon didn’t support it and the Labor Party voted against it and they acted against the interests of the growers in North Queensland. We used our best efforts to try and get that change through the Queensland Parliament. So when the growers again met with the Deputy Prime Minister and I and the Prime Minister here in Canberra some weeks back they said we still need this ongoing guarantee to ensure that we can have our protection of choice in the market going forward.

So for many weeks now we have been working along those lines to ensure there was a back-up code of practice that could be introduced in the event the Queensland legislation wasn’t successfully amended. In Cabinet earlier this week and last week we were progressing these issues and over the course of the last couple of days we have been able to finalise what is a code of practice that deals with these matters done under the competition laws and that will see a code of practice come into place on assent, the day after assent, by regulation and we anticipate that will happen next week. So we think this is a good outcome of everybody seeking to work together. I think it shows the real strength of the Coalition in being able to work productively on these issues and working most importantly with our LNP colleagues in Queensland who have been standing up for the rights and interests of growers particularly in Far North Queensland. I think they have done a sterling job on that and it has been a pleasure to work with Barnaby on this who has been an absolute tyro. I want to thank George Christensen as well, who you can be pretty sure…

DEPUTY PRIME MINISTER:

Also an absolute tyro.

TREASURER:

Who raised this issue with me. I think it just shows how we can apply ourselves to solving these complex problems. I think we have done that and are pleased to be in a position to announce this tonight.

DEPUTY PRIME MINISTER:

Well, thank you very much Treasurer and obviously it’s the Treasurer’s legislation for which we have an intense interest. Can I say at the outset that, whether you’re in the National Party or the Liberal Party we don’t believe in monopolies running the show. We believe in the competitive tensions of the market. To get transparency and price and make sure that farmers get the best returns through the farm gate. That’s the statement of the bleeding obvious. I know there’s going to be a lot of questions on the chronology of this so I just want to walk through that. We’ve known this has been an issue. We have done our very best, the Treasurer and myself and the Prime Minister to make sure that we try to get QSL and Wilmar to come to an agreement. To come to an agreement without, as I’ve always said, the clumsy fingers of Government involved. But, as close as we’ve got we’ve never quite got there, and then of course the State Government is the next form of legislation that you’d want. Now, there was a conjecture about the legality and the constitutionality of it. I believe on further advice it will stand. That’s what we want. We work with the state guys, Tim Nicholls and Deb Frecklington to make sure that we try and get this thing through. They were very good and got success in it. I have to admit though, Mr Pyne, who’s not Christopher Pyne, you can never confuse him with anybody. But Mr Pyne who is the Member up in Cairns, with Mr Gordon who’s up in the [inaudible], and Peter Wellington down round Bundaberg, they were recalcitrant in this process, and that’s interesting because they are all in sugar seats. I reckon the sugar growers should remember that. Just remember their names, Mr Pyne, Mr Gordon and Mr Wellington didn’t support you ok? Didn’t support you. We did. We did. LNP in Queensland did. And we’re trying to sort this thing out. Now we’ve always said, even when we’re up in North Queensland we’ve got the capacity to deal with this, the Federal Government can be involved in this, but we want you to sort it out. Now this code of conduct goes all the way back to Bruce Bilson, Bruce Bilson and I having discussions about it and George Christiansen being involved with it, and now we have something we can bring in on the Federal level. Obviously the Federal level deals with sugar across the whole nation, not just in Queensland, and that’s one of the reasons we were sort of a little bit reticent about being involved at a federal level, because it’s a Queensland issue, and now we’ve got a code that goes across the nation, but hopefully what this does is clearly show to Wilmar, QSL – ok, it’s all out there now. So, please resolve this issue. We’ve got sugar prices, we’ve turned around this show, we’ve turned around this show, we’ve got sugar prices at near record levels. It’s on the back of everything we’re doing in the agriculture with the Treasurer and myself, you want a real example of turning the nation around you’re never going to get a better example than agriculture. 23.7 per cent growth to December 2016. That’s incredible. People always say, what a difference a Government makes, that’s a pretty big difference. I tell you the last time the Labor Party was in power, -0.5, so that goes to show what a difference it makes. Because we work hard to try and make sure we get those trade agreements through, we are always on the ball, even the last couple of days another $400 million worth of chilled beef into China. This is another section of it. I can assure you, these discussions with the Prime Minister, with myself, with the Treasurer, we’ve been pursuing this issue, we’ve been trying to get these other parties along to try and land this issue, now we’ve always promised the growers we would act federally, you can go back to the file and see that, they’ve always known we’ve had a code of conduct in the top drawer and now we’re going to utilise it. I would have preferred QSL and Wilmar to have worked this out amongst themselves, we’ll be open about that. It would have been a better outcome. I would have preferred them all to abide by state legislation. I would have preferred that, I really would have. But now we have the Federal Government involved in that space and this drives these people to an agreement so that these farmers can avail themselves of the record prices and one of the reasons they’ve got record prices, we’ve got free trade agreement getting greater access to sugar into so many new markets. Better prices, and people will say oh well any country could have done that. No they couldn’t have. The Argentinians were over here the other day. They can’t do what we’re doing. We’re doing it. We’re doing it because we’re a good Government, with good outcomes, and we’ll be judged by our record.

TREASURER:

Just to summarise, the code has three components, the first one is that it provides for compulsorily pre-contract arbitration for any agreements between the suppliers and the millers so the growers and the millers, there is a mandatory pre-contract arbitration provision between the marketers and the millers and the third component is ensuring that the growers’ choice on what’s called their growers’ economic interest in their cane, they have the right to ensure there is a choice over who markets that. They’re the three provisions. I wouldn’t call it an expansive code, I would call it a minimalist code from that perspective, it’s not controlling prices, it’s not re-regulating the industry, or anything like that. As Barnaby said, 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 [inaudible]. There is a mechanism to ensure that things get sorted.

QUESTION:

Why didn’t they get called before to have this?

TREASURER:

Well, what is happening right now will continue and that is they have a draft agreement between QSL and Wilmar, it is with the QSL team at the moment and that summarises the agreement they came to a few weeks ago. So, we are confident that they will be able to just continue to produce that document and everyone gets on, the cane gets cut, it gets crushed, it gets sold. That is what will happen now and that is the road we are on. The regulation we anticipate will go for ascent next week. It will come into effect the day after and what that means is if there is any breakdown either today or in the future then these provisions will kick in. It is a safety net.

QUESTION:

Have you worked with Pauline Hanson to get this deal, to see if she approves of this deal?

TREASURER:

I haven’t had one conversation with Pauline Hanson about this issue.

QUESTION:

Can you just explain how it works in practice? So, QSL, Wilmar, sit down – is the ACCC in the room at the time?

TREASURER:

It has got nothing to do with the ACCC. What happens is it is a compulsory arbitration process. So, in the event that the negotiations or an agreement breaks down then I have the power under the Act, through this regulation, to appoint an independent arbiter after consulting with the Minister for Agriculture then the arbiter goes in and listens to the various positions of the parties and comes to a conclusion which is [inaudible] on the parties.

QUESTION:

If there was a draft agreement, why is this necessary now?

TREASURER:

Well, they will be able to comment on that. We were moving towards this. They said it was discussed two weeks ago. It has been worked on since February. Priority one was to get them into a room and to get them to an agreement. We achieved that. As the growers said to us several weeks ago, there needs to be an ongoing safety net and that is what we were working on throughout that entire time. If others came late to the party, good for them but we have always been there. Barnaby?

DEPUTY PRIME MINISTER:

Look, sometimes I hear, one of the greatest tricks in politics is saying ‘I demand the sun is going to rise tomorrow’ and you say ‘well, that is an awfully brave demand but it is going to happen in any case’ and even in the discussion they say, they demand the sun is going to rise tomorrow they say ‘well, the sun is going to rise so if you bring it up five minutes early does it matter?’

QUESTION:

Pauline Hanson said that she wanted you to act on the sugar dispute as a condition of her vote on the company tax reforms. Do you believe that this overcomes that obstacle and you now have her vote on the company tax reforms?

TREASURER:

That is a matter for One Nation how they vote on these issues. As I said standing here on Monday, we have been engaging on this issue for some time. We were pleased with the progress we were able to make and this code was already very advanced in its development. So, that is the position we have come to today and so it is a matter now for One Nation about what they chose to do.

QUESTION:

Will you be meeting with Pauline tomorrow?

TREASURER:

I have no plans to do that. The statement is pretty clear, what the Government’s policy is and as Barnaby said tomorrow the sun is going to come up and it is going to keep coming up under this Government.

QUESTION:

She is supporting the company tax rate for any business up to the $50 million threshold. Do you think that there is still any chance of getting to the $50 million threshold or is Nick Xenophon unmovable on that?

TREASRER: Well, the Parliament sits again tomorrow, the Senate sits tomorrow and all of those questions will be answered by the time the Senate rises. I have no doubt David, one way or the other…

QUESTION:

How late do you think?

TREASURER:

I am not going to take a punt on that but what I will say is that it is a great shame, it is a terribly great shame that the Government is having to negotiate giving company tax cuts which will drive investment, to support higher wages, to support jobs and that the Labor Party is opposing it. The only reason we are having to talk to get company tax cut legislation through the Parliament is because the Labor Party has done a backflip, with a pike and a triple twist. These guys wrote books about it, they lectured people about it. Bill Shorten went to ACOSS some years ago and he pleaded to them not to see this as an ‘us’ and ‘them’ thing with business and that everyone would benefit. Even welfare recipients, was the implication from what Bill Shorten told an ACOSS conference. He wasn’t exactly standing up at the Business Council convention. He was talking to a group of welfare advocates and he told them that they should support company tax cuts. Well, the Labor Party needs to take a good look in the mirror. What we know from their approach, whether it is on company tax cuts or dealing with the Budget is this; he has a sign it says stop on both sides. He seeks to undermine the economy or wreck the Budget for his own political self-interest. Now, that is his view, he can be judged on that. We will get on with the business of Government and we will work and do everything we can to ensure the passage of our legislation.

QUESTION:

Minister Joyce, back to sugar is this bitter-sweet for farmers? Is there anything for them to harvest considering the cyclone damage to Burdekin?

DEPUTY PRIME MINISTER:

Look, I was listening to Paul Schembri today, Paul is a good mate of mine. What you see is when you are getting near maturity of the cane if it hasn’t snapped then you can still harvest it. Now, it is not as good as if it’s standing but it is still harvestable and I think that will be the case in a lot of the areas. We are very lucky and blessed that we had a discussion about tomatoes and other things around [inaudible]. That is going to be a lot more indicative of the effect of the cyclone. The big cane growing areas up in the Burdekin were affected but not to the extent that they would be because the cyclone came in over Airlie Beach and just the nature of cyclones the wind that comes over the sea is the one that has the most damage. The wind that comes in over the ranges has less. There is cane on the ground but a lot of it is not snapped so we think we can retrieve a lot of it. Obviously, down to Bundaberg they weren’t affected. They might be affected by inundation with the floods coming. I am hoping that we get through this and I want these guys to get a crop in because the price is red hot. And our job, Scott and my job is to get better return to the farm gate so that these mum and dads get a good cheque in the mail and then they can go out and buy a new car like you buy a new car, they can renovate their kitchen like you renovate your kitchen and have the dignity in life as we expect them to do from their labours as part of their endeavours.

QUESTION:

What about a code of conduct for other industries such as dairy, doesn’t it set a precedent for government intervention in disputes for other industries, perhaps dairy?

DEPUTY PRIME MINISTER:

I’m just going to say this, we believe in a market economy, it’s one of the fundamental things on our side of the political fence, you know what a market economy needs? Two people competing on prices at least, two people competing on prices at least. And what we are saying here is the bleeding obvious. We don’t believe in monopsony’s, we don’t believe in monopolies unless the beneficiary of that is the owner of the product. What you’ve got here, just saying the bleeding obvious, what you’d expect someone in the Liberal or National Party to say, we believe in markets. For markets you need at least two.

QUESTION:

Could there be an intervention in other agricultural industries?

DEPUTY PRIME MINISTER:

Which one?

QUESTION:

Dairy.

DEPUTY PRIME MINISTER:

A lot of people want to buy dairy products.

QUESTION:

Mr Joyce, how do you expect the Labor Party to react on this code of conduct?

TREASURER:

This is a regulation, not legislation, so I’ll just make that point, so the regulation will be determined and then proceed we anticipate next week.

DEPUTY PRIME MINISTER:

I’m going to go way out on a limb here, way out, so focus on me, focus, the Labor Party are going to oppose this, it wouldn’t matter what we said they would oppose us. You know what the Labor Party are? Wreckers. Do you know what the Labor Party’s contribution to agriculture? 100 positive policies not one on agriculture, not one, except to increase regulation on tree clearing, that’s it. So I reckon, you must get sick of all the questions on agriculture they ask at Question Time, you must get really tired of all the times Joel goes to the dispatch box, just interrogating us, tearing us to pieces, they don’t give a stuff about agriculture, let’s be honest.

We have taken it, we – Malcolm, Scott, myself, so that there is no bigger contributor to the last section of GDP than agriculture, and you think that a change in government doesn’t make a difference, just look at the numbers.

QUESTION:

Mr Joyce what is your message to Wilmar and other foreign conglomerates entering this industry space?

DEPUTY PRIME MINISTER:

Remember, a whole heap of companies have signed up to agreements with growers, we don’t want to be in your business we really don’t but please for God’s sake sort yourself out or we will.

TREASURER:

I’ll add to that, this code provides the same protection to Wilmar as it does to the grower effectively because if they are unable to form an agreement, and there are two parties that decide they can’t form an agreement, then that arbitration can work both ways and this is why this is important from a foreign investment point of view, it provides certainty to this process, so you know what the rules are. The rules are you sit down and work out commercially to agree and there is an arrangement in place which ensures those agreements, if people can’t get to that point, will be determined. It’s light touch but at the same time it gets the result.

QUESTION:

If I may go back to the company tax cuts, in the case you don’t get enough support, will you consider splitting the measures to ensure at least some get through?

TREASURER:

All of your questions on that will be answered by the experience of the next 24 hours and I anticipate longer. The Senate is sitting tomorrow and the matter is being considered there and all of these issues will be worked out by the Senate.

QUESTION:

On sugar, Treasurer, just to clarify the process, you are now going to have this regulation in force, you can decide if and when you make that choice…

TREASURER:

Only if they are unable to reach an agreement.

QUESTION:

That’s right. So what kind of timeframe do you have in mind that you are willing to give them to reach an agreement before you might pull that trigger?

TREASURER:

I have no expectation that the process they are already engaged on will not reach a conclusion, and I have no reason to think otherwise.

QUESTION:

A week or two is enough or longer?

TREASURER:

When they came to an agreement a couple of weeks ago, the indication was it would take around four to six weeks to bring that to an agreement and I would continue to encourage both parties to honour the spirit of that and get the job done. I mean, the clock is ticking. There is a season for cutting and a season for crushing and it is fast upon us and I think that they are all very aware of that.

QUESTION:

What about more broadly in the future, as you mentioned this has been going on for years, in future disagreements how long will you give them before you step in?

TREASURER:

I wouldn’t be speculating.

QUESTION:

Not necessarily Wilmar and QSL.

TREASURER:

You are asking me to speculate on a speculative situation.

QUESTION:

I’m asking you in principle so if something drags on for a year…

TREASURER:

The question is frankly far too speculative, I mean, the matter will be considered on its merits at the time consistent with the regulation and the law.

QUESTION:

You said record low wage growth is the biggest challenge to the economy.

TREASURER:

True.

QUESTION:

Can you explain why the government in its submission to the Fair Work Commission warned against increasing the minimum wage?

TREASURER:

The way you increase wages in this country is if businesses grow and make more profits. The wage growth I want to see in this country is not some mandatory requirement, it’s the sharing of growth, that’s how you grow peoples wages. As I have said many times to you collectively, you don’t get a job in a business that is shut, and you don’t get a pay rise in a business going backwards. Where we want to see wage rises come from is the growth to our economy. That’s why we’re saying you need to reduce the taxation burden on businesses in this country to make sure they can remain competitive, to give them opportunities, and we have done, not just on company tax have we been raising this issue but specifically for small to medium businesses, raising the definition of what a small business is to give access to broader tax concessions, what we have done for venture capital, what we have done with capital gains tax for angel investors, we have been systematically as part of our national economic plan seeking to remove the things getting in the way of businesses being successful. The way you get a better deal on your wage is when your company is doing well. The businesses in my own electorate that I visit all the time, the employees getting wage increases are getting them in the businesses doing well. If the company is doing well, you’ll do well and the country does well. That’s how you get wage increases.

QUESTION:

Given the Senate sitting hours have been extended, can you give us an update on negotiations with the cross bench, where is it at, who are you talking to and what are they demanding?

TREASURER:

The outcome of all these things will be known at the conclusion of the Senate sitting tomorrow.

QUESTION:

Canecutting? The date they will have to start cutting their cane in the Burdekin?

DEPUTY PRIME MINISTER:

Cane supply contracts will need to be in place almost immediately, obviously after the cyclone people will want to be into it straight away and the rest of it is in the lap of the Gods. We are a government that just wants to make sure people make a buck, people are treated fairly and tonight is a classic example of precisely that, making sure mums and dads get a better return at the farm gate - that’s the reason we come to work here.