Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

Australia is undoubtedly open for business. We are open for free and fair trade, but we are not open for unfair trade. That is why we have laws against the dumping of products into our Australian market. I am currently the chair of the House of Representatives Standing Committee on Agriculture and Industry, and at the current time we are involved with an inquiry into the circumvention of Australia's anti-dumping laws and regulations. From about August and September last year, in my position as chair of the committee, I received repeated contacts from our manufacturing industries—the steel industry, the aluminium industry, the food industry and forestry, just to name some of the respondents. I give some credit to the previous government—and the member for Gorton has just been on his feet—who had a go in this area and tried to make some difference. I think their legislation has made some difference, but I do not think we have wrapped it all up yet. I think there is a way to go.

I must say that since the previous government's legislation was implemented in the middle of last year, I have been somewhat surprised that only one company—up until a few days ago, at least—had lodged a complaint under the new legislation. That was Capral. The recent ruling by the Anti-Dumping Commissioner, not only imposing a duty on the offending aluminium products but backdating the penalty to the time the application was lodged, has given Australian industry some heart. However, anti-dumping rulings, and the effective circumvention of them, is a slippery beast indeed—a little like taxation law. We often make alterations to laws surrounding tax in Australia, and as soon as the smartest brains in parliament come up with some new laws to stop taxation evasion, then the smartest brains in corporate law and accounting work out ways to get around them. It seems to be the same with anti-dumping rulings.

My committee has been listening to witnesses in the last few weeks, and in fact Capral Limited was in to speak to us back on 26 February. Referring to the Anti-Dumping Commissioner's decision to impose a penalty—and a back penalty retrospectively—on the importer, Mr Phil Jobe said:

One of the aspects of this decision we were not pleased with was the retrospectivity back to April. We were very pleased that the principle was achieved, but in this case the importers set up a $2 company just after the inquiry was announced and starting buying, we understand, the bulk of the metal through that company, which was not listed in the original application, and by that very simple act they appear, at this point anyway, to have avoided something like $8 million to $8½ million worth of—

Unfortunately, the chair on that day—which happened to be me—cut the gentleman off. I said to him:

This would be what you refer to as a phoenix company?

Mr Jobe said, 'Yes.'

At this stage, we only have Capral's assertions on this issue, but I have no particular reason to doubt what they say. It clearly demonstrates just how difficult this area is, and how quick the actions are of those intent on avoiding our legitimate tariffs—tariffs that are put in place to level the playing field against those who either subsidise their production or practise predatory pricing policy against Australia. Certainly affected industries are very pleased with the appointment of the Anti-Dumping Commissioner and his different view on like goods. They are also very pleased that the government is taking this situation seriously, and today's legislation is the first in what is likely to be a number of amendments to this system.

Already I have had a steep learning curve as to what constitutes circumvention. Antidumping rulings are put in place when the commission finds that goods that are being imported into Australia are subsidised and/or sold at a lower price than the one at which they are sold in their home market. This can make it very difficult for the commission to gather sufficient evidence to prove either case, particularly when they may be dealing with a closed economy and/or questionable accounting practices. One of the tools the commissioner has been afforded is the ability to look at like economies to estimate what a fair price is for a good. Further, they can now, following the Capral decision and its backdating of penalties, put much more pressure on importers and their sources to provide information.

I might take the time to point out some of the methods that have been pointed out in my committee already that constitute circumvention—for instance, slight alteration of the product. In the steel industry, manufacturers have been adding boron to their steel mix. For all intents and purposes, boron does not improve the steel, and neither does it do any harm to the steel. But, in a strictly technical sense, it turns the steel into an alloy. Thus it avoids the original antidumping action. With aluminium, we find that the aluminium manufacturers are altering the extrusions. They might be making them slightly over specification by a millimetre, or under specification by a millimetre. They might be drilling holes at certain places in the extrusion. So, they say that that is not the same product as the one that has been named in the antidumping action.

And then there are foodstuffs. I was listening to my friend the member for Murray, who knows much about the cases around SPC. For tomato mixes, it is so simple if you have a pasta sauce or a chutney to change the variable rates of the spices that might be added to the product and say, 'This isn't the same product as the one that has been named in the antidumping action; this is a completely new sauce'—or a completely new chutney. That is another way that our antidumping rulings have been circumvented. Another way that companies might seek to go around Australia's regulation is to move their products through a third country. They might even rebrand the product while it passes through this country. So, a country that might have an antidumping ruling against it may move it to a second country and rebrand—or not even rebrand but just say that it is sourced from a different country and bring it into Australia that way. Another method is to, instead of importing the entire product into Australia, perhaps bring in a number of parts and assemble here, and maybe source some of the parts from different parts of the world. And of course, as Mr Phil Jobe pointed out, there is the incidence now of phoenix companies, whereby once an action has been started against an importer then they could close that company up today and then bring in that product through another company.

One of the things our Anti-Dumping Commissioner needs is the power of legislation and the flexibility to deal with these issues on basically a daily basis so that when it is clear that the object of the change is to circumvent our rulings then we can act in an appropriate manner—which of course brings us to today's legislation. One of the things this legislation will do is tighten the time lines for response. Admittedly it is only from 40 days to 37 days, but there is a limit to how low we can go, and we think this is as feasibly low as possible. We will be increasing the pressure on foreign exporters to provide transparent access to their businesses for our investigators, and this is a very important point. We have to be able to see the books of the companies that are exporting into Australia so that we can understand exactly what that product is worth in their market and whether there has been a significant input of subsidies or other things that might be going on in their economies that are holding their prices up but depressing them when they send it into our country. If they do not cooperate, then we will take the opportunity to inflict penalties earlier in the process. We will take a stronger line in international negotiations surrounding the WTO. We are tightening the merits review function, and this will more fully deal with the issues of circumvention.

The whole process can be daunting for businesses actually bringing the information to the Anti-Dumping Commissioner. It takes quite a bit of effort. So, very importantly, I think, we are introducing a range of measures to assist our businesses in formulating their cases. It always comes back to self-interest—well, maybe not always, but I think one of the great adages in Australia is, 'Always back self-interest, because at least you know it's trying.' And in my particular case, Whyalla has one of only two blast furnaces operating in Australia. The OneSteel Arrium steelmaking works in Whyalla employs over 1,600 people directly, and it is the heart and the soul of the city. Three or four years ago that steelmaking plant was losing a lot of money, and Arrium quickly expanded its mining and direct export process to a point where it was exporting 13 million tonnes a year. They had opened up a new iron ore mine in the north of the state—which, paradoxically, is called Southern Iron, but it just depends where you are standing on the map when you are looking at it, I guess. Unfortunately, Arrium has announced the closure of this mine, the mothballing of it. It will cost them in excess of $70 million; 600 workers are losing their jobs. The flipside of that is that they are increasing production out of the Middleback Ranges somewhat, but it will not cover all the losses and it will not cover all the jobs.

In that time frame, the steel industry has got back into the black. It is not making a lot of money, but it is performing better than it was some years ago. Anything that is threatening that recovery, and it can be dumped goods, is of great personal interest to me and the city of Whyalla. So I am very pleased to be in the position I am at the moment as chair of the committee that is looking into this circumvention issue. As I said, back self-interest and at least you know they are trying. So those people will know I am trying, that I am trying to find the truth and trying to find the right answers for the government so we can deal with this on an ongoing basis—because, as I said, it is like taxation law: once you change the law then the smartest brains in the business are out there trying to find a way around it again.

OneSteel, Arrium, are confident they can compete in an even market, but not if others are cheating on us. As I said, Australia is open for business. Australia welcomes free and fair trade but it must be fair trade, and that is the underlying issue. There are another couple of points that are concerning me around Arrium and OneSteel at the moment. They are not directly connected to this bill, but I would like to lay them on the table very briefly at the end of this speech.

I have been making some noise recently about our Coastal Shipping Act. It has a very strong effect on my GRA gypsum mine, which is out west of Ceduna, producing up to 90 per cent of Australia's gyprock, and the steel makers in Whyalla who use coastal shipping both to bring coal to Whyalla from around Australia and to ship steel. Recently, Arrium have been trying to bid for a steel contract in Queensland—I will not go any further than say that they are bidding for a major steel contract in Queensland—only to find, though, that their competitors can now bring steel into Australia freight-wise cheaper from Korea, China or Japan than they can shipping it from Whyalla around the coast under our Coastal Shipping Act.

The Deputy Prime Minister has put out a discussion paper and has spoken to the Australian public and said that he needs to make reforms in this area. I strongly support that position. At the end of the day, if we just protect those jobs that are associated with the Australian shipping lines and put our major businesses out of work, like the steel works and gypsum works, then there will be no jobs for anyone to fight over. There will be no loads on the ships, so they will not have to worry about their jobs, and there will be no-one working at the steel works and no-one working out a Phnong. Let's hope it does not come to that and that there is some sense here. This is at the margins, but it is a very important margin. I thank you for your forbearance there, Madam Deputy Speaker, because I know that was a little off the subject, but I thought I would get it on the plate anyway.

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