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T2004/03 - AM - Tuesday, 30 March , 2004 08:28:00 - Ethanol Industry

Reporter: Alexandra Kirk
TONY EASTLEY: The Federal Government has back-flipped, with Cabinet last night deciding to overturn last year's Budget decision and extend the tax free holiday for ethanol by another three years.

To avoid it being seen as a filip for National Party MPs in marginal seats, the zero excise regime will also apply to all other alternative fuels.

Nationals Senate leader, Ron Boswell told Alexandra Kirk the excise decision will complement the Government's sugar industry assistance package.

RON BOSWELL: We want to encourage people to get into these biofuels, and particularly ethanol for the sugar industry, so we decided to listen to industry, listen to the sugar growers, and extend it out for another three years.

ALEXANDRA KIRK: And how much will this cost taxpayers?

RON BOSWELL: Well, I didn't ask that. All I asked for was we help the industry, and Mr Costello can look after the cost.

ALEXANDRA KIRK: Was he happy about it?

RON BOSWELL: You'd have to ask him about that.

ALEXANDRA KIRK: Is there any evidence that it will promote the expansion of an ethanol industry?

RON BOSWELL: Well, we can only listen to the people who want to put the plants and factories up and they have continually told us that the five years that we gave them wasn't long enough, and that they wouldn't be able to get the plants up, they couldn't bankroll it, the banks wouldn't listen to them, and they wanted another three years.

We gave it to them, it's been a fight and we've, with the support of the Liberal party, and the Nationals, we've been able to deliver.

ALEXANDRA KIRK: But is there any guarantee that one extra ethanol plant will be built as a result of extending the excise free holiday for ethanol?

RON BOSWELL: Well, there's no guarantees in this world. The only thing that's certain is death and taxes, and I can't guarantee an ethanol factory. All we can do is facilitate the needs that they put to us.

ALEXANDRA KIRK: But wouldn't you want some indication from people that this is actually going to work?

RON BOSWELL: Well, we are being told constantly if we give the extra three years, take it out to 2011, that it will work and that they will build the factories.

ALEXANDRA KIRK: And how many factories?

RON BOSWELL: Well, I'm looking forward to seeing three or four, five factories up. There's one to be built in Dolby, there's another one in Gunnedah, there's other ones in central New South Wales. And I hope that the sugar industry will take advantage of this, and put a few plants on the back of the mills.

ALEXANDRA KIRK: Does it offer any hope for struggling cane farmers, in a swag of National Party seats?

RON BOSWELL: Well I don't think it's going to be the winner, or the silver bullet for the cane industry, but I do think it will be part of a solution that, co-generation, bioplastics and biofuels. But we've got to start somewhere, and this is a starting point.

ALEXANDRA KIRK: But it's going to be years, isn't it, before ethanol plants are up and running, and can offer any hope for sugar farmers?

RON BOSWELL: Well, I think it will be three or four years and they understand that, but we've got to start somewhere, and today we've made one step forward for the industry.

TONY EASTLEY: National Party Senate leader Ron Boswell, speaking there to AM'SAlexandra Kirk, in Canberra.