Ian Goodenough (Moore, Liberal Party) Share this | Hansard source

I rise to speak in support of the Export Control Amendment (Quotas) Bill 2015. The bill essentially consolidates four separate acts relating to tariff rate export quotas into a single act which covers all commodities. The relevant acts are the Export Control Act 1982, the Australian Meat and Live-stock Industry Act 1997, the Dairy Produce Act 1986 and the Export Charges (Collection) Act 2015. The proposed legislation also repeals the Australian Meat and Live-stock (Quotas) Act 1990.

With a population of 24 million, the domestic Australian market is relatively small in the international context. The government understands that a growth in exports is necessary to promote demand-driven economic growth in the Australian economy. This will be achieved by tapping into developing markets in emerging economies, with increasingly affluent consumers purchasing Australian made goods and services, generating export income. The projected growth in exports in the near future will have a positive impact on our national economy, which, in terms of trade, has recorded persistently large current account deficits for the past 50 years. The balance of trade for the month of September 2015 was a $2.32 billion deficit. The historical deficit in the balance of payments, to a large extent, may be attributed to Australia's narrow export base, which is heavily dependent upon commodities. There are also other factors which have contributed to the extremely high current account deficit that Australia has today, such as lagging international competitiveness in some sectors of the economy and a heavy reliance on imported capital goods from overseas. Low levels of national savings also contribute to the high current account deficits, as businesses seek funds overseas.

By the same token, when governments run constant budget deficits, monetary requirements are met by borrowing from the domestic sector. Economists refer to this as the crowding-out effect: when governments borrow from the domestic sector, they force the private sector to 'crowd out'. Since there are not enough funds available within the domestic economy, the private sector is, in turn, forced to borrow funds from overseas. Borrowing from overseas causes Australia's current account deficit to increase, leading to a major increase in debt expansion. Excessive current account deficits, combined with low investor confidence and the possibility of a currency crisis, may force the Reserve Bank to implement contractionary macroeconomic policies to restrict economic growth and curb the deficit. Australia's current account deficit requires a long-term solution in order to secure the Australian economy's prosperity—a growth in exports is an integral part of the solution.

The projected growth in international trade provides opportunities for economic development between both established and emerging economies across the globe. In 2013-14, the value of Australian exports accounted for $331 billion, while imports amounted to $338.6 billion. The emergence of free trade agreements—which are, essentially, international treaties removing barriers to trade, such as tariffs and quota restrictions—serves to facilitate stronger trade and commercial ties, contributing to increased economic integration between participating countries.

Free trade agreements will create opportunities for Australian exporters and investors to expand their businesses into key overseas markets. For instance, in my electorate of Moore, which borders established agricultural areas and coastal fisheries, the recent free trade agreements have benefitted intensive horticultural producers who export quality fruit and vegetables—such as carrots, broccoli and tomatoes—as well as the exporters of western rock lobsters and premium beef cattle, through tariff reductions, putting local producers on a level playing field with competitors from countries such as New Zealand. Access to global markets helps maintain and stimulates the competitiveness of Australian firms by increasing domestic productivity and contributing to greater GDP growth by allowing Australian businesses access to cheaper inputs, introducing new technologies and fostering competition and innovation. This directly benefits Australian consumers through access to an increased range of goods and services at more competitive prices.

We live in dynamic times which will see a raft of changes to tariffs and export quotas on an ongoing basis as the free trade agreements are implemented and begin to take effect. Currently, there are a whole range of different tariff rates imposed on Australian exports of beef, grains, fruit, vegetables, seafood and dairy products by different countries, with the rates scheduled to reduce over various intervals, in time, in accordance with respective free trade agreements coming into operation. Accordingly, these proposed legislative changes are an appropriate measure in managing this level of administrative complexity.

Essentially, the proposed legislation seeks to modernise the current system by consolidating the quota export certification arrangements for agriculture by amending the Export Control Act 1982 to provide the secretary of the department with the necessary powers to make orders in relation to the administration of tariff rate quotas. It also enables the secretary to make directions in relation to matters covered by an order, and to override the order; and it makes a series of consequential amendments.

In current practice, the department of agriculture seeks to manage export tariff rate quotas operating under trade agreements in order to provide exporters with the maximum concessions possible on agricultural products. The current legislative schemes for quotas are specific to meat and dairy products and are not sufficient to address the range of quotas arising under more recent free trade agreements. The department currently administers 33 quotas, which save exporters millions of dollars in tariffs each year. To cite an example, managing the eight new quotas introduced under the Japan-Australia Economic Partnership Agreement, including quotas for honey and juices, between January and May 2015, has saved exporters approximately $3 million in tariffs. Similarly, the effective management of quotas to the European Union and the United States of America saves Australian exporters between 20 and 100 per cent of the value of goods in applicable tariffs.

In administering the quotas, the department seeks to fulfil a number of broader objectives, including minimising market distortion from quota management; minimising regulatory intervention and barriers to exporting; and optimising the commercial value from use of the quota. Further, consideration is given to the commercial arrangements, and rewarding market development, whilst providing consistent, transparent and efficient administration.

The Export Control Act 1982 is the preferred vehicle to enable all of the department's export certification arrangements to be carried out under a common set of powers. This would be achieved by abolishing one act in its entirety, parts or divisions of two other acts and consolidating provisions currently sitting within the Export Control Act.

Based on internal and external stakeholder input, the Department of Agriculture and Water Resources has determined that a comprehensive quota regime, administered under one act, is preferable and more efficient than the existing commodity-specific regimes which are currently administered under four different acts. Stakeholder workshops were conducted earlier this year to develop the proposals contained in the bill, and information about the proposed changes was provided to all quota holders.

A comprehensive general quota legislative regime will enable a more secure and flexible legal framework for the implementation of existing and any future quotas negotiated in pursuit of export opportunities under the Agricultural competitiveness white paper and free trade agreement negotiations. Exporters will gain access to quota tariff rate concessions provided under free trade agreements through contemporary, flexible and efficient regulation. The bill complements the government's strategic approach for capturing premium markets outlined in the Agricultural competitiveness white paper and builds on the gains from recent free trade agreements with our major trading partners.

The bill will also facilitate a reduction in red tape in accordance with the government's election commitments. Bringing regulation of quotas under the same legislation as other export controls of the same commodities will offer opportunities for synergies in deployment of resources. It will also enable a consistent approach to appointment of third parties as authorised officers where they are permitted by importing countries.

The bill will not have any detrimental impacts on domestic industry or on Australia's international trade relationships. Consultation with industry to date has confirmed that a comprehensive legislative quota scheme is preferred to the existing commodity-specific regimes. There are no major financial impacts associated with this bill. Ideally, the legislation should be in place to enable the next Japanese quota year, commencing on 1 April 2016, to be regulated under the new powers.

The anticipated future increase in the flow of goods and services across international borders is brought about by the emerging economies in our region, with increased international trade facilitated by free trade agreements with Japan, Korea and China. Trade is projected to continue expanding as a free trade agreement is expected to be reached with India and as Australia develops stronger economic partnerships with the 10 member countries in the Association of South East Asian Nations and beyond. Free trade agreements will also address barriers which impede the flow of goods and services between nations, will encourage investment, and will enhance international cooperation. The agreements extend to other issues, including intellectual property, competition policy and government procurement. The competitiveness of Australian exports in the partner market can be enhanced, adding to the attractiveness of Australia as an investment destination.

In summary, the proposed legislation seeks to modernise the existing system through the consolidation of the quota export certification arrangements for agriculture by replacing four separate acts relating to tariff rate export quotas with a single act which covers all commodities. Based on consultations, the Department of Agriculture and Water Resources has determined that a comprehensive quota regime, administered under one act, is preferable to and more efficient than the existing commodity-specific regimes, which are currently administered under four different acts. The bill also introduces new powers consistent with contemporary, flexible and efficient legislation, such as the use of registers and computer systems to make decisions under a system of tariff rate quotas.

I commend the bill to the House.

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