Andrew Laming (Bowman, Liberal Party) Share this | Hansard source

I echo the words of the previous speaker. Australia's relationship with Japan has been of enormous weight and importance to us dating right back to obviously before World War II. But, most ominously, the foresight of Robert Menzies to initiate trade agreements as early as 12 years after the end of World War II certainly stood Australia apart from the rest of the developed world in developing that relationship early; it has proven to be an important one. Over the last few decades we have seen a rise in the optimism of Australia that Japan would be a reliable, solid trading partner—culturally important as well. Linguistically, it has become a major language taught in our schools. Through the seventies, we had a proliferation of Japanese becoming available to school students—I was one who studied Japanese for five years. We were always dealing with a degree of hysteria about Asia at the same time. I can remember, in the mid seventies, proposals for the Iwasaki resort in Yeppoon, Queensland, was met by ferocious opposition. The fact that there could possibly be Japanese investment on a small patch of Queensland land would bring an end to the Australia as we knew it. How wrong we were at the time, and how far we have moved on.

Japan, despite being in the economic doldrums for the last 15 years, remains a massive trading partner—the third largest economy in the world and second-largest export market and trading partner for Australia. We were right to jump in early and become not only a source of resources, energy and manufacturing but agriculture and food. Japan respects the relationship, no more strongly exemplified than by the visit of the Japanese Prime Minister earlier this year and the close relationship that he shared with our Prime Minister, Tony Abbott.

What, of course, we need with Japan is to recognise that it is the last great advanced economy for which we did not have a high-quality trade agreement, of those nations with which we had a highly developed trade arrangement. What we are now seeing in this shift, quite rapidly, with the work of the trade minister, will be a series of trade agreements with developing economies—some of the giant economies that are in the G20 and moving up to be the economies of the future. It is a very, very subtle but important shift, moving from advanced economy FTAs like that of Japan, the US, Singapore and New Zealand through to a focus on India, China and, potentially, Indonesia. These three massive economies with very, very high populations that are looking for significant capital investments and significant energy and food security place Australia in an incredibly important place.

We are a nation that, as I have said many times before, has a small population with a high capital base. With that low labour ratio, we need all hands on deck and every Australian trained as highly as possible to do the jobs of tomorrow. We do not yet have that. We still import around 175,000 overseas nationals to do the work that we need done in this country because we are unable to train Australians to do that work. That should be a challenge for us; that is a challenge because 175,000 salaries repatriated to overseas economies is simply a missed opportunity for Australian families. On the same token, we have 133,000 people leaving school every year going straight onto Newstart who are utterly unemployable. It is this skilling mismatch which has to be the policy challenge for Australia over the next decade.

Eliminations of tariffs, as I have said, are wonderful. It is extraordinary that it was almost grinding to a halt under the previous Labor government. How could they make such little progress over six years unless there was a subtle and deliberate intention to not engage in bilateral agreements? They were not moving forward any multiparty agreements either. There was just no real respect for the fact that reducing tariffs between economies is a win-win. Much of it is this focus on who is going to do better out of a free trade agreement; will it be the large economy or will it be the small one? Let us be honest, in any free trade agreement, the absolute benefit is probably going to swing slightly towards the larger economy. But in a relative sense the benefits accrue to the smaller economy and the benefits probably accrue to an export economy. If you are a major internal consumption economy, the benefits of trade liberalisation are slightly less. But for Australia what we dig up, what we grow and what we produce is, because of our small population, mostly exported. We benefit from freer trade. These have been listed by previous speakers, and I do not need to go through them again, but I want to highlight some of the large ones. Obviously these are around resources. If we can have a situation where 99.7 per cent of all of our export products in energy, agriculture and resources become tariff free to an economy like Japan, it just creates so many more jobs.

These percentages have been rolling off the tongues of analysts over the last few weeks, but let's remind ourselves what a one per cent reduction in a tariff means. In a highly competitive, liberalised economic market, reducing tariffs by one per cent simply makes your product one per cent cheaper in the destination economy. That is enough to swing sales and that is enough to change market share. That therefore has massive volume impacts for the producer. If we can export more, this is simply a multiplier—volume and profit.

It is a wonderful opportunity for Australia that we seem to have just forsaken for six years under a Labor government. I am yet to hear an adequate explanation for why all of these free-trade agreements, which mostly started in the Howard years, stalled for six years. It is economically damaging that they did so. The fact that they could only sign one—it was effectively one that we had almost completely negotiated for them, so all they had to do was submit the paperwork—is a real blight on the record of the Labor government. I hope that is highlighted in greater detail.

I say that to the miners out there and I say that to the agricultural providers, particularly beef providers. They stand to be $5.5 billion better off because of this beef agreement. That is just one sector. Compare that with the molestation of the live-trade agreement under the previous Labor government and the sorrow, the indebtedness and the destruction that they wrought on live export by hasty decision. That has killed of not just one year but many family dynasties who were involved in live export. It was a horrible price to pay by a short-sighted government that did not respect the importance of our trade relationship with our near Asian neighbours. I pleased to say today that that era is closed.

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