Fed: Sugar farmers being misled by govt over ethanol

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Fed: Sugar farmers being misled by govt over ethanol

CANBERRA, Aug 5 AAP - Australian sugar cane farmers were being misled by the federalgovernment's special assistance for ethanol, Opposition Leader Simon Crean said today.

Mr Crean said the government was promising to help the sugar industry by boosting theproduction of ethanol, yet most of the fuel additive came from wheat.

Labor has accused Mr Howard of misleading parliament over answers he gave about a meetinghe had with Dick Honan, the head of Australia's largest ethanol producer.

Mr Honan, who runs the Manildra Group, discussed the ethanol issue with Mr Howard ata meeting on August 1 last year.

A month later, the government placed a 38 cents-a-litre excise on ethanol, but offereda subsidy for domestically produced ethanol.

Over three days of questioning, Mr Howard denied having talked to Mr Honan.

Mr Crean said today that Mr Howard had been deceitful about his meeting with Mr Honan.

He said the prime minister had also been deceitful about the benefits of increasedethanol production, painting it as major boost to the sugar industry even though mostof the additive would come from wheat.

"The government argued that the support for the ethanol industry was to support thesugar industry," Mr Crean told Queensland radio 4AUR.

"Yet the person who is getting the biggest break out of it is producing ethanol notout of cane, but out of wheat.

"I mean, this is the continuing deceit that this government goes on with."

Mr Crean said the opposition was maintaining its attack on the government over theethanol issue because motorists needed to be protected.

" ... lots of reports out said that too much ethanol could harm the engines and voidthe warranties. The government was dismissive of that," he said.

"But, it was dismissive of doing something for consumers but was prepared to do a deal- which it wouldn't own up to even meeting on - for one of its mates."

The Manildra Group is a significant contributor to the federal coalition.

AAP sw/sb/was/jlw

KEYWORD: MANILDRA