Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on the Customs Amendment (Anti-Dumping Commission Transfer) Bill 2013. This bill is only the first step in the government's plan to strengthen Australia's antidumping regime. Australia's current regime for combating injurious dumping and subsidisation is transparent and complies with our international obligations under World Trade Organization agreements. There is clearly room for an improvement in the efficiency and effectiveness of the current system, and that is exactly what the coalition plans to do.

This bill contains changes to the Customs Act and other legislation needed to separate the recently formed Anti-Dumping Commission from the Australian Customs and Border Protection Service. This will allow the commission to transfer to the Department of Industry, where it is clearly better placed. It will free up the Australian Customs and Border Protection Service to enable them to concentrate on other matters of importance to this government. This will allow those that are considering requests for antidumping action to benefit from the considerable experience and knowledge held across the Industry portfolio and it will ensure that the Minister for Industry has the power to make decisions on antidumping matters.

But this is not about protectionism; this is about maintaining a level playing field for all industries and all businesses in Australia. Antidumping is not about stopping cheap imports. There are a couple of ways that goods can be defined as being dumped. The first is when they are sold below their cost of production, and this is often predatory dumping. The other is simply international, geographic price discrimination. That is when an exported product is sold at a lower price in the home market than it is in the export market. This is often referred to as selling at less than normal value.

But there are sometimes legitimate reasons why goods may be dearer or cheaper in one market than they are in the export market. I would like to give as an example Vegemite. Some people may say is actually being dumped overseas. But this is not true. I remember during the last election the then Prime Minister Rudd standing with a jar of Vegemite and claiming that, unless people voted for him, it would increase in price by 50c—one of his spurious claims that the coalition was going to increase the GST. Of course, we know that was absolute, complete nonsense. This was the same Prime Minister who had actually raised the issue of high grocery prices in Australia back in 2007 and gave a false hope that he would do something about it—the full extent of that was nothing more than Grocery Watch.

But I will get back to Vegemite and how it may appear that it is being dumped, but it is not. Here, today, our two major supermarkets sell a 150-gram jar of Vegemite for $3.25. In New Zealand, that exact same 150-gram jar of Australian-made Vegemite can be bought for the New Zealand dollar price of $3.20—less than the Australian price. When you do the calculations so that you are comparing apples with apples—the Australian currency is much stronger than the New Zealand currency and New Zealand has a 15 per cent GST on Vegemite whereas in Australia there is no GST—it works out that consumers in Australia are paying a 32 per cent higher price than consumers in New Zealand. The same applies for Vegemite sold in the UK. Here in Australia a 220-gram jar of Vegemite sells for $3.84 in our major supermarkets. In the UK the major supermarkets—Tesco, Asda, Sainsbury and a host of others—sell that same Australian-made 220-gram jar of Vegemite for 1.87 pounds. Again, making an apples for apples comparison, 1.87 pounds converts to $3.34 Australian, so here in Australia that jar of Vegemite is actually being sold for 50c more than it is in the UK.

Many would argue that this is Vegemite being dumped. However, I would disagree with that. It is clear that there are much higher costs for food producers in Australia such as Kraft, which produces Vegemite. This is detailed in a recent KPMG report The Australian Food and Grocery Council State of the Industry 2013: Essential Information Facts and Figures. That report notes that one of the major costs for Australian food producers in doing business in Australia is what they define as 'trade spend', which is the payment of rebates, promotional allowances, special discounts and special payment terms to our two major supermarkets. KPMG noted that, in the last three years, trade spend had increased from 19 per cent to 24 per cent of total sales. That is a cost that is borne by Kraft, which increases their cost of doing business and selling their goods here in Australia, and this is reflected in our higher retail price. I would say that the product is not being dumped in the UK. It would appear they have much more competition in the UK and in New Zealand than we do here in our Australian retail sector, and that trade spend that is charged to them when they sell that good in Australia is not charged when they export those goods through the major supermarkets in New Zealand and the UK.

If we are going to stand here and condemn geographic price discrimination on an international level, we will also have to do the same thing about geographic price discrimination within Australia. The reason for antidumping legislation is to prevent harm to a domestic industry where a larger competitor, often an overseas competitor, sells goods at different prices in different markets, and that is exactly what we have here. That is what many of our Australian retailers actually face when they are competing here. They may find themselves in a market where they are competing against a company that is charging different prices in different markets simply because of the lack of competition.

This was detailed in a study by the Southern Sydney Retailers Association back in 2008, where they surveyed the price of a basket of fruit and vegetables in two adjoining stores of one of our major supermarkets. They found that, for a basket of 28 everyday fruit and vegetables, the major supermarket was charging between 51 per cent and 402 per cent higher prices than they were charging for the same items at their store four kilometres away. After that sustained geographic price discrimination attack, what eventuated was that the small retailer next to that major supermarket went out of business and we saw the large supermarket then jack up their prices. So, if we are going to condemn this practice internationally, we also must condemn it locally.

Ultimately, although our antidumping regime is important to give Australian industries a level playing field and enable them to compete, as we heard the member for Makin refer to, it is not going to help our industries if they are not in themselves internationally competitive. That is why we need to make sure that, whatever we are doing in this place, whatever legislation we are passing, we are doing everything we possibly can to make our Australian industries internationally competitive. Therefore, I thought it was worth noting the comments of John Hannagan, Chairman of Rusal, one of Australia's largest aluminium manufacturers. Of course, the aluminium sector competes in an international marketplace, and we must be viable and internationally competitive for that to continue. He was concerned that the effect of the carbon tax was that it was making Australian industry uncompetitive. He wrote an article in the Financial Review only last week, and I quote directly from it. He said:

We advised the government at the time that we would have great difficulty in establishing a sound business case for investing in major capital projects designed to improve the efficiency and emissions levels of the refinery. Our position remains unchanged.

He continued:

We will not invest another cent in major capital improvements until Labor agrees to the repeal of the carbon tax—bipartisan support is essential to enable the large, long-term investments required to maintain the international competitiveness of our industry.

An antidumping regime, no matter how strong it is, will not protect our aluminium industry from competition. They must be able to compete internationally. This is why we must be very clear that we cannot continue to burden our industries with these taxes, placing them at a competitive disadvantage where they act like a reverse tariff.

As for the stupidity of putting Australian industry at a competitive disadvantage with the carbon tax, we may hear some from the opposition say, 'Of course, this is to reduce emissions of carbon dioxide.' But, perversely, it has exactly the opposite effect, because it will not mean that less aluminium is produced in the world; it will simply mean that production shifts to China. Now, in Australia a tonne of aluminium emits an average of 0.85 tonnes of CO2, while in China the average emission of CO2 from a tonne of aluminium is 1.35 tonnes. So all you are doing is knocking off Australian industry and having that production move overseas, where the emission of CO2 is greater. So the carbon tax not only places our industry at a competitive disadvantage but actually does not do the very thing it is trying to do, reduce emissions of CO2—it increases them. This is the danger and stupidity of the carbon tax legislation.

When it comes to dumping, we have seen some recent examples of investigations. SPC Ardmona recently put in a complaint, and an investigation found that Italian tinned tomatoes were being dumped in Australia, because they were being sold for less than they would fetch in Italy. They were causing unfair harm to the industry, and new tariffs were recommended. The problem with the current regime is the length of time it took to make that decision, because much of the damage to the industry would have already occurred. We need to make sure we are acting efficiently and quickly, especially when it comes to our rural industries and our food-producing industries.

That brings me to some of the great concerns that we have about making sure our small business producers, our small family farmers, can compete internationally, because we recently had the National Secretary of the Australian Workers Union say:

… the day of ma and pa farming in Australia needs to end.

This is dangerous and misguided. He continued, saying the sector needed to have 'large-scale conglomerates that can diversify'. Now, I would suggest that the secretary of the Australian Workers Union consult his history book, because we have seen this idea before—that you do not need small family farms; you need large industrial conglomerates: that is what happened in the Bolshevik revolution, where we saw the Soviet collectivisation of agriculture. This is the same policy that is being recommended by the secretary of the Australian Workers Union. This is very misguided. This is dangerous.

We need to make sure that our food-producing sector and our family farms are viable and that they can continue and compete on a level playing field. That is what this legislation is meant to do. It is a small step, it is a small start, and I commend this legislation to the House.

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