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As we try to make sense of stories about politics and companies, it pays to keeping looking at the list Crikey published back at the beginning of the month of who is giving how much to which party. I checked this morning and it put the current Independent Commission into Corruption inquiry about goings on at the Wolloongong Council into a proper perspective.
Property developers and development companies provided $5.1 million of the $13.9 million which Australian Electoral Commission figures show was donated to the three major political parties in 2006-07. Now we know that there is no such thing as free morning coffee as well as a free lunch.
The list also would make a normal person wonder why it was that the ethanol producer Manildra Group was the biggest single donor of all. Was there something other than altruism behind Mr Dick Honan’s support for the democratic process? One of our website users suggests there just might be. In an anonymous tip the informant writes:
Dear Crikey, Please keep my details confidential. I thought you would find this information of interest.
I note that Crikey recently highlighted the massive donations given by Mr Dick Honan’s Manildra Group to the two major political parties.
I’m sure you are aware that Manildra is Australia’s near-monoploy fuel ethanol producer and receives a biofuel grant from the Federal government of just over 38 cents per litre. (Mr Howard ensured Manildra received the grant while ethanol importers would not.) Manildra will soon have the capacity to produce around 120 megalitres per year. Anyone doing the sums will quickly realise that the 2% biofuel mandate to be implemented by the NSW government, not to mention the 40 megalitre/year contract BP recently signed with Manildra, will result in Manildra collecting large sums of taxpayers’ money.
Manildra asserts that its ethanol is solely derived from waste starch (i.e. fermentation of starch and sugars in the effluent stream of their Bomaderry gluten and starch operation. The plant separates wheat flour into gluten and starch. Some starch/sugars are lost to the liquid effluent stream). This makes them look greener than green. This is not the case.
Manildra has used corn starch from China and is currently negotiating with a Thai company (The THH Group) to supply tapioca chips to produce ethanol. Also, because of the huge profit margin on fuel ethanol, Manildra has been diverting more and more food-grade and industrial-grade starch to ethanol production. It is also rumoured that they are sending sugar from their Harwood sugar refinery to Nowra for ethanol production.
The result is obvious; The price of the starch and starch-based products (glucose, fructose, maltose, etc) that Manildra sells to food and beverage companies such as Fosters, Kraft, Cadburys and Nestle, and that are sold to industrial users such as Amcor, Visy and PaperlinX, must be increased so as to meet the profit margin enjoyed on the subsidised fuel ethanol.
In other words, the government’s fuel ethanol grant is leading directly to food-price inflation which is in turn contributing to higher interest rates.
Aside from the food-fuel-inflation issue, wasn’t the biofuel producers’ grant supposed to assist LOCAL agriculture, not that of Thailand and China, which just makes our trade deficit even worse? Similarly, before handing over OUR money, why hasn’t the Fed Government, the NSW Government or BP not demanded that Manildra provide a carbon/GHG lifecycle analysis and net energy analysis of their ethanol, as is now the case with biofuel suppliers to the EU market?
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16 Comments
Rudd claims that his government has declared war on inflation, while at the same time they pay Manildra to divert foodstuff to produce fuel ethanol. Isn’t food price inflation currently one of the largest contributors to increases in CPI? Bizarre!
Cracking story. Another big one, how did an ICAC manager end up working with Scimone at Maritime Authority, the same ICAC that Mr Patrick in the SMH today suggests was ‘deaf’ to pleas to investigate their selling out of the Harbour? ICAC have skin in this
A quick google search reveals that Manildra has received numerous government hand-outs (in addition to the Producers’ Grant) over the last decade or so. Perhaps the ACCC should be investigating this ethanol monopoly.
Very interesting this. More publicity is needed on this and the fact that subsidised “green” fuel production in the US is not achieving the carbon footprint reduction claimed.
Manildra’s ethanol is yet another example of a government protected (and taxpayer funded)monopoly. I wonder how long Manildra would last if the Labour government did the right thing and allowed non-subsidised Brazillian ethanol into the country.
Giving cash away to individuals or companies on an open ended basis has always led to profiteering of one kind or another - but this is, in kind if not scale, in the order of a Halliburton or Blackwater.
The NSW Biofuel Bill 2007 Hansard states that Manildra plans to increase ethanol production from 100 megalitre to 300 ML on the back of the 2% biofuel mandate. Did any MP ask how the feedstock (‘waste product’ in the effluent) is to increase threefold?
Mr Rudd, you now have the power and mandate to undo Mr Howard’s grubby largesse, pork-barreling and assorted ‘mates rates’. If inflation is your number one priority, Mr Honan’s ethanol grants and subsidies should be investigated as a matter of urgency.
One assumes Manildra’s ethanol selling price is pegged to that of petrol. If the feedstock REALLY is ‘waste product’ (ie. negative cost), they must be making a monza on the stuff. So why does the taxpayer give them another $100 mil/y (300 ML/y @ 38c/L)?
Using imported food to make fuel ethanol?? And here I was thinking it was just the USA’s food-price-distorting biofuel policies that were dumb. Let’s hope the Biofuel Producers’ Grant is right near the top of Mr Tanner’s ‘to cut list’.
How on earth can shipping and trucking raw material thousands of kilometers from Asia for fuel-ethanol production be carbon negative or carbon neutral ?
It’s about time Tanner’s Razor Gang took a closer look at Australia’s taxpayer-funded biofuel scams.
I wonder whether the new Labor government will now use its powers to expose the details of the secret meeting John Howard had with Mr Ethanol (Dick Honan) just prior to the disgraceful Trafigura incident! Political donations can forgive a thousand ills!
Cartel King, Richard Pratt hands back his honours on the same day that Crikey reveals his company (Visy Industries) has been paying government-inflated prices for the starch it buys from Manildra. Perhaps there is justice after all!.
Is posting anonymous stories journalism? Please, anonymous writer = gutless writer.
The world is facing a major food shortage while the Australian government pays Manildra to convert food to fuel. Hmmm!
http://www.crikey.com.au/Business/20080220-Food-prices-go-through-the-roof.html
http://www.ft.com/cms/s/0/451604c4-e30b-11dc-803f-0000779fd2ac.htm
I must be missing something here. Taxpayers are paying for food materials to be imported from food-deprived developing nations, and Australians must pay higher food prices (and interest rates), so BP and NSW public servants can get subsidised fuel. Wow!