Another day, another scandal. “The Howard Government has
known for years that Australia’s wheat exporter, AWB, was ordered by the UN to
reduce the inflated prices on its wheat contracts by 10 per cent,” The Australian
reports today.
“The UN
told AWB to cut $28 million from two contracts worth $300 million in July 2003
because it correctly assumed the extra money was a kickback for the benefit of Saddam Hussein’s regime…”

But more than politics is involved here. This mess seems to have
been created because of the importance of wheat to Australia’s economy. Malcolm Farr gets it spot on in
today’s Telegraph:

At the core of the Cole inquiry’s findings on
AWB and subsequent analysis will be the future of a $3.5 billion export
industry and its management…

Global wheat production has been
cut by a number of factors, including harsh weather in Australia and the US – meaning that if
you’ve got grain, you can name your price.

It’s these dimensions that make the arguments being put by Bill Heffernan and others so
dangerous.

Barnaby Joyce has run a notably
disingenuous line this morning, inviting Labor to spend as much time as it likes attacking the
Government over AWB payments in Iraq on ABC Radio this morning. Barnyard claims anyone from a backpacker to an exporter trying to
sell into the Iraqi regime understood that the system was inherently corrupt.

This represents a spectacular muddying of the waters – let alone a
curiously rustic sense of morality.

The Australian‘s editorialists laid out the issue the Government
faces very succinctly on Saturday:

John Howard says he did not know
AWB was paying bribes to secure sales of wheat to Iraq. He says his
ministers did not know either. And the same goes for officers of the Department
of Foreign Affairs and Trade. If it is established “in a proper legal
sense” that AWB did pay bribes, Mr Howard says he will be very
angry because “we frankly believed all along AWB was an organisation of
complete integrity”. So that’s all right then. AWB was off on a frolic of
its own, and the Government was gulled. No, it’s not. The more AWB officers
admit to Terence Cole’s inquiry into the
food-for-oil scandal, the more reason there is to wonder if the Government is
gullible, duplicitous or worse.

Brian Toohey spelt out the details of those
circumstance in the Financial Review on Saturday:

In contrast, the
kickbacks from AWB did exist, as demonstrated in the current enquiry by Terry
Cole QC. And what has been the reaction of the government? Has anyone been
sacked in the intelligence agencies or DFAT? The answer is no. Instead, the
Office of National Assessments has been rewarded with a doubling of its staff
under a director general who publicly insisted it did a good job on WMD.

Obviously, no heads
should roll in DFAT until the Cole enquiry has to
opportunity to establish who knew what and when. To date, Cole has focused on the “culture”
of corruption within AWB. But what about the level of gullibility, or the
extent of any cover-up, within DFAT? Alternatively, have ministers quietly let
it be known there are some things they don’t want to be told about?

These are the real issues. And the economic damage that may
be caused to the nation is a consequences of these issues. Rather than providing an excuse for the Government, it
should damn them for the negligence even further.

Peter Fray

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