Mark Vaile (Lyne, National Party, Minister for Trade) Share this | Hansard source

For the information of the previous speaker, the member for Rankin, I was the minister who took the submission to cabinet on this. I will just make a couple of points before I talk about the substance of the Australian Trade Commission Legislation Amendment Bill 2006. We are talking about the Australian Trade Commission Act, the amendments that we are making to that act and the work that Austrade does. Of course, Austrade spends a significant amount of taxpayers’ funds supporting and promoting Australian exports across the world. There are some very telling statistics that I know members of the Labor Party like to ignore when attacking the government over trade policy and the status of the economy. The one most telling figure is the significant increase in the total value of exports between 1996 and 2005. In 1996 total Australian exports were worth $99 billion. In 2005 total Australian exports were worth $176.7 billion. So over that almost 10-year period they went from $99 billion to $176 billion.

The member for Rankin, as is his wont and that of a number of his colleagues, often likes to talk about the manufacturing sector and what has happened to it, particularly when you break that into the subsets of simply transformed manufactures and elaborately transformed manufactures. In 2005 the total manufactured goods exported out of Australia grew by nine per cent from the 2004 figure so that in 2005 there were $37 billion worth of manufactured goods exported out of Australia. Interestingly, a lot of those were fully built motor cars, but there were probably between $2½ billion and $3 billion worth of automotive parts coming out of all parts of Australia. Seeing as the member for Macarthur is here, and he has been referred to quite a bit, we will continue on that. A lot of those components are manufactured in his electorate. But there are automotive component manufacturers exporting to the rest of the world and adding to that total figure in 2005 of $37 billion. If you break that down into, firstly, the simply transformed manufactures, those exports grew by eight per cent up to $11 billion in 2005. Secondly, exports of elaborately transformed manufactures grew by nine per cent up to $26 billion in that same year. So there are improvements and increases in those critical areas where there is value adding taking place and a higher skill set being deployed in those industries.

The member for Rankin gave us a little lesson about the history of trade policy, the GATT, the changes that took place under the GATT and then its evolution into the World Trade Organisation and the core principle of multilateral trade negotiations—that principle being the MFN, the most-favoured-nation status—that is, a benefit you agree on with one country is delivered to every other member of the WTO system. Surprising as it may seem, we agree. That is our policy. Our primary policy in trade is to achieve much more in the multilateral system, because that is where you deliver the most benefit to the most countries, opening up markets across the world.

That has been very hard to achieve since the conclusion of the Uruguay Round. The major industrialised countries of the world have really been dragging their feet in liberalising their markets, particularly to the developing countries in the world, and it has been a hard task. I have obviously been pursuing that since 1999 in this position as Australia’s Minister for Trade, and we are getting much closer. I reiterate: this is in pursuit of that principle of most-favoured-nation status as far as liberalisation is concerned.

But we as a government also took the view a few years ago—as did many like-minded governments across the world—to try and energise this system and move it forward. To try and push some of the major players forward in efforts to liberalise their markets, we needed to deploy another economic principle called competitive liberalisation. This might mean that when you negotiate an FTA—it is a preferential agreement—you are providing preferential access to your market and receiving it in return, with one country bilaterally or in a group of countries. It is not done on a multilateral basis, but these agreements are done in an attempt to continue to feed the growth of market access that is required for an economy like Australia’s. If we cannot get it in a timely way out of the multilateral system, we need to continue to improve opportunities for Australia’s exporters. So, yes, we do negotiate bilateral free trade agreements. We do it with the objective of providing greater opportunities for Australia’s exporters, but we also do it with the objective of providing competitive liberalisation and injecting that into the multilateral system. And it is working.

Since this started, more countries have been engaged in bilateral negotiations. Since the failure of the Seattle WTO meeting in 1999 we have seen movement. We are at a stage this year where we are on the verge of being able to put a deal together if a number of the key players can agree on compromises in the key areas of agricultural market access and non-agricultural market access or access for industrial goods. That is a prospect in the coming months. It has taken years of work since 1999 to get to that point. But that is the very reason why we need to continue to pursue new opportunities in other areas—so that our industries can grow, so we can see exports of STMs grow and so we can see exports of ETMs grow. Our pursuits and our trade policy are not just about the resources boom.

That is the rationale, very simply put, behind our trade policy. We believe it is working and opening up markets. It is also working to consolidate our position in our major markets, like the United States, South-East Asia and Singapore. That is why we are negotiating with China—to capitalise on our market presence that is already there so that we can continue to occupy that space ahead of our competitor nations trying to get into that market, plus the markets of the large emerging developing economies like Brazil and India. So we are pursuing a very clear objective. Make no mistake about the commitment and determination of our government to achieve the desired outcome in the multilateral trading system. I hope and pray that will happen this year, not just for Australia’s sake and not just because our exporters need new market access and the commercial gains that can be accrued that generate new jobs and help underscore and develop our skills base in Australia. We need this round to succeed so that there more opportunities for the developing countries, particularly the least developed countries, of the world so that they can lift themselves up the now much maligned ‘ladder of opportunity’ in a global trading sense, help themselves get off the drip feed of aid and debt forgiveness and start trading to become stronger economies. That is probably the most important reason we have got to achieve a successful outcome in this round that we are negotiating at the moment.

The bill amends the Australian Trade Commission Act 1985. We all know that Austrade has done a fantastic job and will continue to do so, but we do not operate in a static environment. As the global circumstances are not static, we need to continue to reform and change things to make sure that Austrade is focused on the best way of delivering its services in the most efficient and economic way to Australia’s exporters. This bill amends the act by establishing an executive management structure with a CEO directly accountable to the Minister for Trade and by bringing the agency under coverage of the Financial Management and Accountability Act and the Public Service Act. The changes introduced in this bill stem from my assessment of Austrade against the principles and recommendations of the review of corporate governance of statutory authorities and office holders. The government’s response to this review will ensure that we have the most effective accountability and governance structures across the whole of government.

On 2 May, the Senate Foreign Affairs, Defence and Trade Legislation Committee, having considered the bill, recommended that the bill be passed. The committee also recommended a statement of reasons be provided explaining why the board was being abolished, taking note of the opinion in 1985 when the board was formed that it would provide a valuable advisory mechanism to government. The recommendation focuses on the question of what has changed over the last 21 years, and that means the private sector input provided by the board is no longer valuable. Let me be clear: the government’s commitment to seeking industry advice and input on trade issues continues unchanged. This government has always welcomed the advice of the private sector in promoting and developing export markets for Australian business, and we will continue to do so.

The bill before the parliament does not deal with nor change industry consultation mechanisms. It is focused squarely on the appropriate governance arrangements for Austrade. What has changed since 1985 is the awareness that a board that has not been delegated full power to act is not the most effective governance structure. The government’s commitment to improving the governance framework of statutory authorities means that, to establish a sound governance base in legislation, Austrade should move to an executive management structure.

A governing board is not the only means of seeking the views of the private sector. This is demonstrated by the government’s ongoing commitment to non-legislated consultation mechanisms on trade promotion, including the Trade Policy Advisory Council, the national trade consultation process and the Free Trade Agreement Export Advisory Panel. In fact, the flexibility allowed by non-legislated mechanisms empowers the government to seek input on key issues as they evolve. The formation of the Free Trade Agreement Export Advisory Panel in 2005 is an example of the government’s proactive engagement with business to help inform our efforts to promote and develop export markets.

This bill will establish a sound governance framework for Austrade. It does not affect the ability of the government to expand and modify new and existing non-legislated consultation mechanisms to seek the views of business in a manner best suited to the needs of the day. These changes do not have an impact on the role or function of Austrade. It will be business as usual for Austrade in dealing with their clients and the Australian community during and after the transition, meaning that we can continue to look forward to more great results from Austrade, which last year assisted over 4,000 clients to secure export deals worth in excess of $18 billion. I commend the bill to the House.

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