New desk to look just like old AWB

THE Howard Government has secured the future of AWB by maintaining a single desk for wheat exports that will almost certainly be formed, financed and staffed by the old AWB. Caroline Overington: Wheat reform, with a grain of salt Video: Downer briefs parliament Video: Foreign ministers' briefing

THE Howard Government has secured the future of AWB by maintaining a single desk for wheat exports that will almost certainly be formed, financed and staffed by the old AWB. Caroline Overington: Wheat reform, with a grain of salt Video: Downer briefs parliament Video: Foreign ministers' briefing

AWB managing director Gordon Davis, who yesterday announced a devastating 72 per cent fall in half-year profits, told analysts the company was "cautiously confident" of surviving relatively minor changes to the wheat marketing system, which will see the single desk move from AWB to a new company formed with AWB resources.

He denied being "ecstatic" about John Howard's compromise, saying "ecstasy isn't a word I would use". But he believed AWB was well-placed to capitalise on the reform.

But in a further blow to shareholders, including wheat growers, AWB has cut its interim dividend to 4c a share compared with 16c a year earlier - the lowest first-half dividend in at least five years.

Mr Davis said the board would make a decision on its dividend policy once it has "greater clarity" about future wheat marketing arrangements. "It's likely we will move to a payout ratio that is more closely aligned with earnings in future years," he said.

The decision to keep the single desk enraged some Coalition MPs and graingrowers. West Australian Liberals Judi Moylan and Wilson Tuckey clashed on the issue in parliament yesterday.

Ms Moylan, who supports the changes, rejected "any allegation I have supported corruption by AWB or any indeed any other organisation or individual".

In Senate estimates hearings, Australian Federal Police commissioner Mick Keelty said there was no indication that charges would be laid against any individuals involved in the $300million Iraq kickbacks scandal.

Estimates was told that Agriculture Minister Peter McGauran had known since October that AWB suffered massive hedging losses last year, but did not tell the Government's Wheat Export Authority.

The losses, so great they put in jeopardy $360 million that growers were owed for wheat, were revealed after documents from AWB meetings were leaked to The Australian.

WEA chairman Tim Besley said he first heard about the losses when they were reported in this newspaper.

AWB blamed the drought for its dreadful half-year performance. Net profit for the six months to March fell to $11.8million, from $41.4 million the previous year. Costs associated with the Cole inquiry into the Iraq scandal amounted to another $2.7 million. Redundancies cost $6.8 million.

Mr Davis said a "totally new" group of executives was reinforcing "desired culture". More than 260 staff had been let go, but "talented and motivated" people replaced them. "Clearly from a performance point of view the results for the half were disappointing," he said.

Under plans to reform the wheat marketing system, growers have until March to set up a new company to run the single desk, but it will need AWB staff and resources.

Opposition primary industries spokesman Kerry O'Brien said: "What that will mean, I suspect, is AWB will play a substantial role in any such organisation."

He said the new organisation would probably be no more than a front for AWB. "AWB is playing a manipulative role in the graingrower representation market," he said.

Mr Tuckey said: "If it's not a front for the corrupt company AWB, I don't know what is. I'm prepared to bet money the board of directors of the new system is going to be very much akin to the old one.

"It might be a different name, but they sleep in the same bed."