Farmers affected by the Federal Government’s recent decision to write-off Iraq’s $US500 million debt are unlikely to receive compensation, according to Federal Parliamentary Secretary to the Minister for Trade, De-Anne Kelly.
Farmers to miss out on Iraq debt relief
Farmers affected by the Federal Government’s recent decision to write-off Iraq’s $US500 million debt are unlikely to receive compensation, according to Federal Parliamentary Secretary to the Minister for Trade, De-Anne Kelly.
Responding to requests from Western Australian farm groups that local farmers be compensated in light of the Government’s decision, Ms Kelly said that, although it was the Prime Minister’s decision, it would be difficult to offer any form of compensation.
“I am always honest with farmers and I am being honest here, it is a hard call,” she said.
In Perth last week Ms Kelly said farmers and their lobby groups would be better to work out how their loses could be written off as a bad debt and offset against taxation.
The Government’s decision is in line with those of many other countries which collectively have decided to forgive most of Iraq’s $US150 billion debt. As a result of the decision, however, local farmers are likely to lose an average of between $15,000 and $20,000.
Iraq owes Australia about $US500 million, and while the Australian Government paid out farmers about 80 per cent ($US381 million) of Iraq’s grain debt in 1991, about $100 million remains.
Along with the recent decision to write-off the debt, Australia also committed $20 million towards a $30 million grain processing facility in Iraq.
But last week Ms Kelly’s State-based National Party colleague Brendon Grylls presented a letter to Prime Minister John Howard calling for an ex-gratia payment or tax credits for Western Australian farmers to compensate for the write-off.
Mr Grylls argues that farmers are being forced to carry a disproportionate burden.
He said that while all taxpayers met the cost of the initial write-off when the government, through the Export Finance and Insurance Corporation, paid out farmers the $381 million, farmers are being forced to forego $100 million without any compensation.
“While all Australians recognise the need to help Iraq rebuild, it is disappointing that individual growers have had the decision to waive debt made for them, without consultation,” Mr Grylls said.
Ms Kelly said that, despite her farming background, if the Government paid out wheat farmers in full it would set an unacceptable precedent.
“To say, ‘look, no matter who you trade with, under any conditions the taxpayer will underwrite the whole cost no matter what you do’, I think will create a precedent for other export industries that the taxpayer would find unacceptable,” she said.
Rather, Ms Kelly said, Iraq would return to being a rich and powerful trading nation and farmers should look to how Australia was positioning itself to take advantage of this.
“I think there are number of things that need to be done, and the Australian Government has done one – because we have been understanding and a good partner to Iraq in terms of this debt – to ensure that our future trade opportunities remain there,” she said.
Ms Kelly added that the investment in the Iraqi grain facility and by keeping Australia’s Defence Forces stationed in Iraq Australia was also cementing a future trading relationship with Iraq.
