Sydney Morning Herald
May 31, 2004

Australia would forgive Iraq a $600 million debt for wheat shipments in an extraordinary act of generosity to be announced by the federal government this week, the Sunday Telegraph said.

The paper said taxpayers would contribute about $500 million to the bailout package for the war-torn country and wheat farmers would be asked to write off $100 million in debts out of a total of $700 million that Iraq owed Australia for wheat shipments made before 1990.

It said the government would try to recoup the other $100 million over the next 15 years.

The Sunday Telegraph said the gift was part of a plan by countries in the “coalition of the willing” to get Iraq back on its feet by writing off loans.

Trade Minister Mark Vaile told the paper it was in the interests of farmers and taxpayers for most of the debt to be forgiven.

The government saw no option but to cancel the debt, The Sunday Telegraph said.

Attempts to seek repayments from Iraq under former dictator Saddam Hussein failed.