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

It gives me great pleasure tonight to speak on the Aviation Transport Security Amendment (Cargo) Bill 2015. Before I was elected to parliament, one of my jobs when I was working for my small family business was organising the airfreight exports. At that time we were exporting quite a lot to the Middle East, America and South-East Asia, and the reason we had to use airfreight rather than sea freight was that, in the market we were working in, our customers often needed the goods immediately, or we needed to get samples to one of our sales representatives working over in the Middle East as quickly as possible. In all competitive markets, time is money. That is why the airfreight services that we have throughout the nation and the associated infrastructure we have set up to work as efficiently as possible are important to all exporters.

I remember there was always a rush to get goods over to the Middle East, to Dubai and Abu Dhabi, to catch our agent over there, and the Emirates flight at the time used to depart out of Sydney at eight or nine o'clock. So it was always a race in the factory to get the goods off the production lines, get them into the packing department, get them finished and then get them to the airport and on the Emirates flight out that night. A couple of times I had to jump in the truck, or one of the vehicles or wagons, and take the goods down myself. The process was that you would take them firstly to the airfreight forwarder that was handling the consignment and you would organise all the documentation there, they would put all their stickers on, and then either their truck would run them around to the airport at Kingsford Smith or you would take them round yourself. That is something I did several times.

I remember, back then—this was before the attack on the Twin Towers—having some concerns about the security arrangements. Here I was, taking dozens and dozens of boxes directly to the airport. I knew what was inside them, but I thought: how much security did they go through; should our security processes be a bit more stringent? Ultimately, it is a balance between the need for speed, for exporters to get their goods onto those planes as quickly as possible, and the need to have appropriate security checks in place.

That was another age. Today we live in an age of international terrorism where, in almost every Western country in the world, there are people that wish to engage in terrorism and cause us harm. It was just over a fortnight ago that a Russian plane leaving Sharm el-Sheikh in Egypt—the coastal resort there—full of holiday-makers and tourists heading back to Russia, came down. It looks like something was possibly smuggled onto that plane in the luggage. These threats are real.

The security arrangements for our airfreight are very important, because something that is not widely known is that most of the airfreight that leaves Australia does not go in the large cargo planes; it actually goes in the belly of passenger aircraft. So airlines flying passengers overseas use the bellies of their 747s and their wide-body jets to carry a lot of freight.

That is why we should continue to have as many open-skies policies as we can, with as many countries as we can. If we can get more people, more tourists, flying between countries and have arrangements with more nations for their airlines to fly into Australia and give us reciprocal rights, then there will be more airlines in the air. The more airlines there are in the air, the more room there is for cargo; the more room there is for cargo, the lower the price is. The freight price comes down. That is essential to many of our exporters, especially in the area of fresh produce, where freight costs become a major component of the price. The more we have open skies, the more planes we have in the air, the more tourists we have coming in and out of the country, the greater our capacity to have airfreight going in and out, the greater the opportunities for exporters, the greater the job opportunities and the greater the prosperity in this nation.

At that time, I was also exporting to the USA. I remember that the USA changed some of their regulations after the terrorist attack on the Twin Towers. The USA, rightly, for the air cargo going into their nation, have the right to set special arrangements and special requirements, and that is what this bill actually addresses.

The bill amends the Aviation Transport Security Act 2004 to strengthen air-cargo security arrangements to ensure continued access to the US market for Australia's exports. This will be done by establishing a known consignor program, streamlining air cargo clearance and enhancing air cargo examinations. These amendments are required for Australia to meet what are called the peace-level screening requirements of the US Transportation Security Administration, known as the TSA, for Australia's air cargo exports to the USA, which were worth $4.8 billion per annum in 2014. In 2014, $4.8 billion worth of Australian goods were just air freight exports to the USA. I saw one study that said that 25 per cent of all Australian exporters have airfreighted goods to the USA.

The US has confirmed a known consignor scheme involving examination and screening of the cargo at source and an enhanced air cargo examination by technology will be required in the short term—to be operational within two years—to maintain market access to the USA. This bill is required to implement these changes quickly and to give industry time to adjust to the new arrangements. The bill will introduce the concepts of a 'known consignor' and a 'regulated agent' under the act, clarify clearance criteria for cargo and provide an authority for authorised businesses to open and examine air cargo, when required, to prevent unlawful interference to aviation.

There will be some costs to industry for this. It will add a little bit more red tape and more bureaucratic regulations, but, in the environment that we are operating in today, unfortunately these are necessary arrangements. Our air cargo security framework is compliant with the current obligations set by the International Civil Aviation Organization. The framework is commensurate with our risk profile. All outbound air cargo must be examined and handled securely before it can be uplifted onto an aircraft. The requirements of the USA's Transport Security Administration go above and beyond the requirements of the International Civil Aviation Organization. The government is now working to address the US requirements without imposing a regulatory burden on other export destinations. We can expect other countries to begin moving in the same direction over time. Unfortunately, it is a fact that the US have had to put these regulations in. We would like to think that, sometime in the future, they could reduce them. But the reality is that these regulations are going to be in for quite a long time, and it is more likely that other nations will require very similar regulations to be imposed on airfreight imports into their countries.

The US TSA approved Australia's air cargo security arrangements in 2012. At the time, there was no indication that Australia's current export air cargo security arrangements were considered unacceptable to the TSA. This was the case until the results of their re-evaluation were received in December 2014. This government has responded quickly to the TSA requirements and has successfully negotiated a two-year extension, ensuring that industry has the time to adapt to these new arrangements. The department has already facilitated enhanced air cargo examination by technology at major freight-forwarding facilities, ensuring a percentage of cargo has been examined at a piece level. Furthermore, the department is engaging in the known consignor trials to prepare targeted exporters for transition to the new framework. By focusing on the new proposal on US-bound cargo, the government is limiting the impact of the new security measures on industry. The department is also working with the Department of Agriculture and Water Resources and the Department of Immigration and Border Protection to harmonise regulatory requirements and leverage existing practices to lower the likely impact.

The previous government's securing of the air cargo supply chain framework required 100 per cent piece-level examination for export cargo, regardless of destination. Piece-level examination means that, where an exporter has a palette of goods and the goods are packed up on the palette—and, depending on the size of the carton, there could be up to 20, 30, 40, 50 or even more cartons on that one particular palette—that palette actually has to be broken down, with every single one of those individual cartons put through a scanning process. This is very costly. It is highly labour intensive. Unfortunately, it is a method that will be required in some cases if we are to keep our air cargo flying to the USA.

In 2014, after a review of the current risk environment for all export air cargo determined the risk to be low to very low, the department developed a lower regulatory and cost model based on enhancing the existing regime. The current proposal to require a 100 per cent piece-level examination for all US bound cargo will not require a wholesale change to the exporter sector. It is a targeted policy setting which will address the TSA requirements to minimise regulatory cost while maintaining important access to the market.

This piece of legislation is important to keep that supply chain operational and functional while also having the security there. The airfreight export industry is one of our most important industries. We need that working efficiently and effectively. If we look to the future, with the three free trade agreements that this government has struck with Korea, Japan and China, the future for goods being exported into those nations is virtually unlimited. This morning, we were at a breakfast with the company Blackmores—the vitamin manufacturer in Australia. They basically said that they can sell as much as they can produce. Their biggest problem at the moment is trying to meet the growing demand from Asia. These are the opportunities that we have for Australian businesses. If businesses are going to make every post a winner with these opportunities, we need an efficient sea freight export system and an efficient airfreight export system. This is exactly what this bill will do.

Over the time I have spent working with many of the freight forwarders involved in the airfreight industry, I have thought what a wonderful job they do and how efficient they are. It is a highly competitive industry and, generally speaking, I would say they give excellent service to this country's manufacturers and exporters. Yes, there is a little more red tape. Yes, there is a little more cost involved for exporters. However, we do have to get that balance right. We need to balance the need for speed—for exporters to get those goods as quickly as they possibly can to their customers and markets—with the risk of security. I wish legislation like this were not necessary; but, unfortunately, in the world that we live in today, it is just one of the things that we have to put up with. I commend this bill to the House.

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