Biofuel Industry

About this Item
SpeakersVeitch The Hon Michael; Kelly The Hon Tony
BusinessQuestions Without Notice

Page: 3895

The Hon. MICHAEL VEITCH: My question is addressed to the Minister for Lands, Minister for Rural Affairs, and Minister for Regional Development. Can the Minister update the House on the impact of Federal Government policies on the local biofuel industry?

The Hon. TONY KELLY: I thank the honourable member for his continued interest in the biofuel industry. This morning's Sydney Morning Herald reported that Deputy Prime Minister Mark Vaile has pledged $5 million for a campaign to promote biofuel use. That much! The Prime Minister cannot give away enough money in other areas during this Federal election campaign, but it seems that for the ethanol industry, the biofuel industry—a potential provider of jobs in the bush and crops for farmers, not to mention cleaner, greener fuel for motorists—all the Federal Government can pull together is $5 million for an advertising campaign. After 11 years in power, the Howard Government's vision for the biofuel industry amounts to a hastily pulled together $5 million advertising campaign.

It would be less insulting to rural and regional Australia if the Howard Government's refusal to introduce a biofuel mandate was not having such a destructive effect on local Australian businesses. Last month I informed the House of the decision by the biofuel company Agri Energy to pull out of plans for a number of ethanol plants, including some in country New South Wales. In the words of one company executive:
      Our knowledge is that mandating will not happen and of course they—the oil companies—do not need us and so there will be a target for biofuels—but targets have been shown in this country not to work.
Under the out-of-touch Federal Government, the story gets worse for biofuel. Last week an established biofuel company, the Australian Biodiesel Group, informed the Australian Stock Exchange that it would be downsizing operations in Australia. Did it criticise the State Government for introducing its ethanol mandate? No. Did it criticise the other States, competitors or key players in the industry? No. Did it say it was simply a case of bad luck and "thems the breaks" in business? No. The villain front and centre in this tragic tale is none other than the Howard-Vaile Government.


The Nationals do not want to hear about jobs in the country. They do not want to hear about the biofuels industry. The announcement by the Australian Biodiesel Group last week means the sale of an oil crushing mill in Moree, job losses, a company restructure, and the mothballing of all activities, including future plans, until the biofuel horizon looks much brighter. The company's press release stated:
      Effective and unstable policy settings continue to undermine the biodiesel industry.

      In the view of the Board, the (Federal) 350 million litre biofuel target policy mechanism has failed to establish market access.
There it is in black and white: The Nationals' biofuel strategy has failed. That is the view of an established Australian biodiesel company. The Nationals should hang their heads in shame. They like to talk about biofuels but when it comes to the crunch we get nothing but a plan to remove import protection after 2011 and to slash current subsidies for local producers. There is no long-term plan, no certainty, and no real comfort for local producers and potential investors. It is just a lazy repackaging of what today's Sydney Morning Herald reported "would be financed out of existing programs". In other words, it is nothing new.

No wonder the Australian Renewable Fuels Association described the Coalition policy as "weak". Indeed, its chief executive officer, John Lillywhite, said, "The biodiesel industry cannot survive if the Government continues this indifference towards it." The Howard Government's desperate election slogan is "Go for Growth". But when it comes to biofuels, the reality could not be further from the truth. [Time expired.]