Kelly O'Dwyer (Higgins, Liberal Party, Minister for Small Business) Share this | Hansard source

The China-Australia Free Trade Agreement, ChAFTA, is a historic agreement that will provide unprecedented opportunities for Australian households and businesses both large and small.

Not only is China Australia's largest trading partner, but Australia and China also have highly complementary economies. Australia is able to provide the natural resources needed to develop the Chinese economy, as well as food supplies and highly valued services such as education. And it is just a start. With the growing middle class in China, the demand for high-quality Australian products and services is ever-increasing.

As small business minister, I am tremendously excited about the opportunities for small business not only today but for tomorrow. The timing of this FTA is critical for Australia as there is a softening mining boom. It gives us the opportunities now to access a market of more than 1.35 billion people. As I said before, the growing middle class will provide a huge opportunity for small businesses in Australia as they will buy our clean agricultural products and our sophisticated services.

The preferential trading opportunities offered by the FTA are delivered by means of reduced tariffs and regulations for Australian goods and services entering China. Australian goods exported to China are currently subject to tariffs of up to 40 per cent. However, once ChAFTA is fully implemented, 95 per cent of goods will be duty-free. This tariff reduction can bring benefits to our most economically significant export industries. Furthermore, market access will be improved in 40 services sectors from insurance to banking. This will have significant benefits in growing diversification of our exports and broadening what we can offer other nations, thereby delivering a more stable future for all Australians.

Small businesses will also benefit substantially from reduced tariffs and regulations which offer a huge opportunity for growth and for job creation. For example, Fiona Wall Fine Foods, which employs 12 people, already ships thousands of packets of Anzac and choc chip biscuits to China. The implementation of ChAFTA will mean that the current Chinese tariffs of 15 to 20 per cent on biscuits will be eliminated within four years of the free trade agreement coming into force, meaning that Fiona's biscuits will be more competitive than ever in the Chinese market. In fact, Fiona is already looking at a deal that would give her access to another 100 stores in Shanghai.

Even before passing the necessary measures into law to activate the agreement, our increasing engagement with China has started to help small business. Ensitech, a small business which manufactures and supplies world-leading stainless steel cleaning equipment, has already seen an increase in its inquiries. These have come from larger buyers, which means that the company may be able to set up a distribution point instead of dealing with individual purchasers in the future. Once the agreement comes into full force, Ensitech will also benefit from the elimination of a 9.5 per cent tariff on their products. However, the benefits of ChAFTA do not accrue to just small businesses. More business for companies like Ensitech as a result of the FTA will ultimately lead to more local jobs for Australians.

ChAFTA will of course also bring great benefits to Australian consumers through lower prices on imported goods and services from China. This is inherently anti-inflationary and will support a better standard of living for Australians. The deal will also lead to an increase in Chinese investment in Australia, which will create local jobs on our soil, so Australia can glean benefits from both the export and the import terms of this agreement.

The measures outlined in the FTA are significant, given that for many years Australia has been at a competitive disadvantage when compared to countries like New Zealand, Chile and South Korea, and also the ASEAN group, who all have free trade agreements with China. With competitive access to the Chinese market through tariff reductions and the removal of limiting regulations, the China-Australia Free Trade Agreement dramatically boosts Australia's potential export fortunes. It will also give Australia a significant advantage over major economies with bilateral free trade agreements, including the US. In fact, the China-Australia Free Trade Agreement is the most liberalising deal that China has done with any nation to date, meaning that Australia has been afforded equivalent or superior access in trade of both goods and services to other nations already engaged in an FTA with China. Furthermore, Australia has been given most favoured nation treatment, which means that, if another country negotiates better access to the Chinese market, Australia will automatically receive that access. So we get an edge and we get to keep it. This is extraordinarily good news for Australians, it is extraordinarily good news for Australian businesses and it is reflective of the growing importance of the China-Australia relationship for both nations.

The China-Australia Free Trade Agreement, combined with the free trade agreements with Japan and Korea, will provide excellent outcomes for Australian exporters, investors and consumers, equating to around $24 billion over the next 20 years. These agreements are a major part of the coalition's economic agenda which seeks to boost economic growth and create new jobs. They are an investment in Australian jobs, our future and the region.

Mr Katter interjecting—

It will create almost 8,000 jobs next year alone. The legislation before us today is the enabling legislation for the China-Australia Free Trade Agreement. It amends the Customs Act 1901 to fulfil Australia's obligations in chapter 3 of ChAFTA, which outlines the rules of origin—

Mr Katter interjecting—

criteria for which goods will receive preferential access into Australia. This legislation is accompanied by the customs tariff amendment, which will implement Australia's tariff commitments. This is the only legislation required to bring this agreement into force.

The CFMEU and the ETU, supported by some opposite, have been peddling untruths about the China-Australia Free Trade Agreement, saying that it will foreign allow workers unfettered access to the Australian labour market. The reality is that, under this agreement, there are no changes to migration laws and there are no changes to legislated protections for Australian workers. All temporary visa holders must be paid in accordance with Australian salary and employment conditions. Furthermore, Chinese workers applying for a 457 visa will still have to pass the requisite language and skill requirements. Australia has set a very high bar for allowing temporary foreign workers to be employed here and none of this will change under the China-Australia Free Trade Agreement.

Those leading the fictitious and misleading scare campaign—

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