Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I think it is consistent with the general approach taken in recent days to this important and profound trade agreement that there was much in what the member for Hume had to say a moment ago that I agree with—not all, of course, as we will never agree on everything on both sides of the House. But I do think he speaks with some authority on trade matters, particularly when it comes to the services sector and also to my area of interest, which is financial services. I wanted to mark that at the outset.

I am very pleased to rise today to reinforce Labor's support of the China-Australia Free Trade Agreement, and I am absolutely delighted to see the parliament come together and agree on the complementary safeguards Labor has proposed to protect the interests of Australian workers in particular. All along, we have wanted to see this agreement implemented, but we have also wanted to see that some of the legitimate concerns we had about the labour market were addressed. So I am very pleased to see the trade minister and the shadow trade minister come together and come to an arrangement that I think advances the national interest.

Our relationship with China is among the most important factors that will determine whether we succeed or fail as an economy and as a nation. Honourable members are already aware that China is our number one trading partner, with $160 billion of exports and imports, making up over a quarter of our total trade. The China-Australia Free Trade Agreement offers a significant opportunity to eliminate barriers on around 95 per cent of goods we export into China.

In the face of China's absolutely exploding middle-class, expanding our economic relationship with China will be crucial and central to our ability to grow. Growth means jobs and jobs mean opportunities for Australians. We are pleased to be supporting the enabling legislation, the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015, alongside the labour safeguards we have negotiated. I think it is also true that the China-Australia Free Trade Agreement is an important part of our relationship with that country, but not all of it. There is still more work we need to do to properly and fully leverage the benefits of the agreement.

To give a bit of history, Labor is the party of engagement with China, and has been ever since Gough Whitlam first visited Beijing, in 1971. Before most of the world even knew China existed or saw its potential, Labor has anticipated the importance that China would play in our future. Since then, I think any objective observer would agree that Labor governments have led the way on engagement with that country.

After Whitlam opened up diplomatic relations with China and cut Australia's tariffs to encourage trade in our region, we then had Hawke and Keating open up the economy to the world, dismantling our oldest protectionist instincts, and they hosted the first ever visit of a Chinese premier to Australia. Rudd, who was probably the most China-literature Prime Minister in the country's history, and Gillard developed our strategy for engagement with China. I played a small part in working with them on the Australia in the Asian century white paper. They also secured—which I think is underappreciated—a strategic economic dialogue with China for the very first time in Australia's history. That was an enormous achievement that is not talked about enough.

The Rudd and Gillard governments also made progress on the China-Australia Free Trade Agreement, and we would not be here in the parliament today without the efforts of the trade minister's predecessors like Simon Crean, Craig Emerson and Richard Marles. Through Whitlam, Hawke, Keating, Rudd, Gillard and now today, we have been the party of engagement with China. Today we will vote to ensure that our history and our inheritance of engagement with China will also be our future.

As Labor people, we know that freer trade with China is critical for the ongoing prosperity of Australia and our people. We know, in the face of all the challenges of technological, industrial, regional and demographic change before us, that we need to reach out to Asia, not turn our back on it. We know what China can offer Middle Australia in terms of lower prices and wider choices and how it can drive strong and diverse economic growth, which creates more jobs. Already trade accounts for $4 in every $10 of national GDP, and approximately every seventh job depends on exports—more than a million jobs in total. Deeper and greater trade with China must be a part of our country's economic strategy in the years ahead as well. Our overriding objective should be to get for the people that we represent a slice of the action in Asia so that we are creating the jobs of the future—new and lasting jobs that replace the ones that we lose over time.

Already, as honourable members know, there is an incredible transition underway in both economies. In our own economy, we are seeing a big shift towards the services sector, which accounts for 80 per cent of Australian jobs and growing. I have done some work with my friend the member for Hotham on the services sector. There are no bigger supporters of the services sector in this country than the member for Hotham and me. We know from research and policy work that services jobs are higher skilled jobs, higher wage jobs and jobs that create better living conditions for Australians. We know that our fastest growing skilled jobs are in the services economy. Every single one of the 10 fastest growing skilled jobs in this country is in services. That is nothing to be afraid of. It is not just about accepting this transition in our economy; we need to embrace the fact that services are the future of our economy.

The ChAFTA has the potential to grow the services economy in Australia. It opens up the Chinese health and aged-care system to Australian providers, for the first time ever. It allows new commercial opportunities in China for Australian banks, insurers and security firms and it allows Australian insurers the first ever opportunity to compete in the huge compulsory third-party motor vehicle market in China. It improves access for Australian private higher education providers, opening up a market of around 237 million young people. Huge opportunities for Australian services providers come out of the China-Australia Free Trade Agreement. I thank the various companies and peak groups that have met with me to discuss the services opportunities in the ChAFTA over the last weeks and months.

There have been some important achievements in the more traditional goods sectors as well—hard commodities and other traded goods. China will immediately remove tariffs on 85 per cent of Australian exports, by value, when the agreement comes to force. It will end up being something like 95 per cent when the ChAFTA is fully implemented. China will remove or significantly reduce tariffs on Australian beef, sheepmeat, dairy products, horticultural products, wine, barley, seafood and processed foods—sectors which employ more than 200,000 workers. The National Farmers' Federation and the Minister for Agriculture and Water Resources, who is at the table, have said the agreement could see a tripling in agricultural exports to China over the next decade, and we should celebrate that fact.

ChAFTA also removes tariffs on Australian resources and energy commodities, transformed resources products, pharmaceuticals and other manufactured products. That will obviously facilitate greater trade between the two nations. But even the prosperity associated with the goods sector depends on our services economy. In the hard commodities area of traded goods, something like a quarter of the value of the exports comes from the services embedded in the exporting of a traditional hard commodity or good. Even the advances made in those areas will be good for services.

The ChAFTA can help us transition to a stronger services based economy, but only if we get the surrounding policy environment right. It is not enough on its own; we need a strategy to capitalise on the agreement. We need to see this agreement as the beginning of something, not the end of something. We need to understand that, now that we will pass the agreement through this place, we need to put lots of effort into ensuring that we leverage the maximum benefit for our people.

The success of the Australian services sector depends on us having the skilled labour force to work in it, the innovation to grow it and the culture to support it. Today, Australia as a country is not prepared enough to take full advantage of our relationship with China. Only nine per cent of Australian businesses are currently operating in Asia. Fewer than six per cent of our graduating high school students are studying an Asian language, and even those are mostly native speakers. Many people in the business community but also in this place are questioning whether we have people with the science, technology, engineering and maths skills in Australia to sustain the growing number of jobs that depend on those skills.

Our strategy for engagement with Asia, which I mentioned earlier—the Australia in the Asian century white paper—was deleted from government websites and unfortunately also removed from their thinking, their strategy. If we want to take full advantage of the ChAFTA, we are going to need to get the policy settings right in Australia to continue the process of modernising our economy, in the interests of all our people.

One example, which I touched on earlier, is the motor vehicle compulsory third-party insurance sector, which achieved some substantial breakthroughs in the ChAFTA. Wholly-owned Australian insurers will be able to offer motor vehicle insurance to Chinese car owners for the first time in history, as a result of this deal. I am especially excited about these gains for Australia's financial services sector in light of recently being given the opportunity to be Labor's shadow minister in these areas. I know from that work that the Chinese motor insurance market was worth around $111 billion in 2013 and has grown, on average, something like 21 per cent since 2005. That is an extraordinarily large market growing at an extraordinarily fast rate. But China's car density remains only 72 cars per 1,000 people—well below Australia's—and so there is huge potential for growth in the industry as more and more people enter the middle class and the ranks of car owners in China. China's insurance industry is also highly concentrated, with 68 per cent market share for the top three insurers and only two per cent of the business currently going to foreign insurers. We need to do what we can to change that. These statistics indicate how huge the opportunity could be for our insurance providers but, to take full advantage of this opportunity, we must ensure that our financial services sector in Australia is ready.

Success in the insurance industry depends on innovation and on a competitive edge, and part of this will be ensuring that we have got the workforce we need. Many in the industry are worried about our STEM capacity in that place, and that is why Labor's STEM education policies are so important. We need to support more STEM training. That is just one of the challenges. Other challenges include cultural barriers and the need to come to grips with a very different regulatory system, on top of all the usual challenges of global business. The government does have an important role to play to get the domestic policy environment right to support the growth and capacity of the financial services sector, the broader services sector and, indeed, all of our businesses in this country.

The House is aware that Labor has agreed with the government on a comprehensive set of safeguards for Australian jobs. This will help ensure that we are maximising Australian jobs and minimising the risk of exploitation in the Australian labour market. We are very pleased that the government have agreed to these changes. There are three of them: one around labour market testing, one around market salaries and one around the relevant occupational licences—making sure that people who come here to work have the appropriate skills and registrations to conduct their work safely in this country.

The new obligations will be written into the Migration Regulations, ensuring that they are legally binding. They also mean, importantly, that we do not have to go back to the Chinese and try to renegotiate aspects of the deal. Also—and I think this is a very important point—the changes that we have agreed with the government do not discriminate against Chinese workers or companies; they are broad arrangements across the labour market and across the world. Our package will improve protections for all 457 workers in Australia, and that will ensure that the arrangements are better than originally proposed by the government.

The deal is not perfect. Even for a supporter of free trade like me, I concede that these deals are never, ever perfect. No deals which require compromises across borders and across countries are. Despite some issues we have with some elements of the agreements, we believe that trade agreements are on balance calls. We need to weigh up good and the bad and determine what is good for Australia. In this case, ChAFTA delivers us significant opportunities in the world's largest country, soon to be world's largest consumer economy by value as well.

With our proud and substantial legacy of Asian engagement on this side of the House, we are once again supporting further and deeper engagement with China. We are proud to support the agreement, particularly given that it has now been improved substantially by the safeguards that we have announced and that we have fought for all along. There is still more work for us to do to become the high-skill services economy we need to be to compete in our region in the future. Labor's place in this process is guaranteed; it is assured. We are on the side of deeper engagement, a more skilled and flexible work force and sustained economic growth for the benefit of more Australians.

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