OPINION: Why I voted against sugar bill
QUEENSLAND Treasurer Curtis Pitt said he was not against cane growers, but he said he voted against the bill because it would chase away investment.
In his own words on why he voted against the bill:
You can't drive more than 20 minutes north or south of Mackay without passing a cane field.
Sugar is part of our heritage, our economy, our identity and our appeal.
The sugar industry isn't just critically important to the far north, it's a mainstay of the Australian economy.
Sugar exports generate around $1.5 billion each year, with 95% of that produce coming from Queensland.
So as both Queensland's Treasurer and an MP from a sugar seat, I have examined the Sugar Industry Amendment Bill and what it proposed closely.
Putting politics to one side, there's a very simple fact that the Bill failed to consider - without growers there can be no mills and without mills there's nowhere to crush cane.
This is a sensitive symbiotic relationship and re-regulation of this industry is sending a dangerous message to potential investors at a time when the Palaszczuk Government is looking for more investment into our agricultural and industrial sectors.
As soon as the LNP-backed Bill passed through Parliament there were immediate consequences, with MSF Sugar warning it would cancel all non-essential capital investment including for a new Australian "cogeneration" plant, where the cane waste is used for power generation.
This terrible news has now been confirmed, which will almost certainly mean reduced funding and fewer jobs in South Johnstone, Gordonvale and the Tablelands where their mills operate.
For the past three years MSF has invested $80 million per annum on new projects, that figure doesn't include their massive budget for operational funding or maintenance expenditure to run the mills.
Investment in mills and associated milling infrastructure brings in much needed employment and opportunity to our area through skills development, training and value-adding infrastructure.
Deregulation has resulted in billions of dollars of investment into an industry that was previously struggling.
Reversing all of this because of a breakdown in commercial negotiations, which is what prompted the Katter Party's reaction, is the equivalent of throwing the baby out with the bathwater.
The sugar industry employs more than 15,000 people across Queensland, including cane farms and mills, so any industry shakeup has to be carefully considered before being implemented.
The fact is that the Katter's Australian Party Bill, supported by the LNP, was not carefully considered and its enactment has potentially put at risk billions of dollars' worth of investment. I certainly acknowledge the outcomes that growers are trying to achieve, but this Bill was not the answer.
It's a heavy-handed approach that has more potential drawbacks than benefits.
Since the last phase of the sugar industry deregulation that occurred in 2006, billions of dollars of investment have flowed into the industry under the current legislative framework.
It is arguable that much of this investment may not have occurred over the last decade were it envisaged that this Bill would re-regulate the industry in 2015. That is not to say that we should not always be looking to see if regulation can be improved, but the approach taken by this Bill is a sledgehammer, when only minor tinkering is what might've been needed.
The LNP has absolutely lost its way in jumping on board this sledgehammer approach. I requested that the Queensland Productivity Commission undertake a regulatory impact assessment of the Bill in-line with the recommendation of parliament's Agriculture and Environment Committee, its decision was released on 26 November 2015.
It concluded that retaining the existing regulatory framework with no additional regulation would provide the greatest net benefit to Queensland. This is based on the QPC's assessment that there is no evidence to support a case for market failure in the Queensland sugar industry that would indicate the need for additional government intervention at this time.
Clearly the purported benefits of additional regulation in this Bill do not outweigh the costs. It is worth pointing out that the QPC is not specifically making comment on the intention behind the Bill, but on the practicalities of what the Bill is seeking to achieve.
While some may not be happy with the conclusions of the QPC, it is difficult to fault their methodology and conclusions. Re-regulation of the sugar industry will be counterproductive for growers, as this will potentially tie the industry up in legal challenges for the foreseeable future.
This Bill has introduced sovereign risk into the sugar sector, which is already negatively impacting on investment in rural and regional communities like ours. Whilst there may be an argument that the existing regulatory environment may need some tinkering, it should not be turned on its head.
I voted against this Bill, not because I'm anti-grower, but because I was seeking the best long-term outcome for the sugar industry: For growers, for farm workers, for millers and for mill workers alike.