John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Minister for Trade) Share this | Link to this | Hansard source

Though the substance of the National Measurement Amendment Bill 2008 may appear dry and difficult to digest, it deals with significant reforms that are, without question, in the public interest. Trade measurement involves the exchange of goods at a price determined by volume, weight or some other type of measurement. Australia’s trade measurement system, which this bill seeks to reform, has been described comprehensively by Robert McEntyre in a speech entitled ‘Australia’s technical infrastructure: its value and importance to trade’ as:

… the collection of activities, rules, principles and concepts that establishes, maintains and gives authority, traceability and confidence to the measurements, quantities … and qualities … of a nations products.

In simple terms, a robust trade measurement system is needed to ensure instruments that are used to measure the weight, quantity or quality of traded goods are accurate enough to give fair results to buyers and sellers. If left to their own devices, it would not come as any surprise if a seller’s definition of a kilogram was somewhat lighter than a buyer’s definition of a kilogram. We often take for granted the accuracy of measurements coming from scales in supermarkets, pumps at petrol stations or indeed liquor dispensers at the local pub or club. Yet customers need to be assured that, when packaging states that its contents are a specific weight, volume or quality, it is an accurate statement of the actual contents. We accept that 30 litres of petrol actually is 30 litres of petrol because of our trust in Australia’s system of measurements.

There can be no doubt that, while legal metrology and Australia’s trade measurement system may not always be known or understood by the population at large, they impact on all Australians in their day-to-day lives. With Australia’s trade measurement system underpinning much of the production and provision of commercial goods and services, to the tune of more than $400 billion a year, there is an ongoing need to ensure our systems are uniform, simple and relevant. Australia’s trade measurement system has undergone some significant changes in the past 20 years. Our three former legal metrology organisations—the National Measurement Laboratory, the National Standards Commission and the Australian Government Analytical Laboratories—have all come together to form a single national metrology body known as the National Measurement Institute.

In 1990, most states and territories agreed to enact and maintain separate but uniform trade measurement systems according to the legislative model set out in the uniform trade measurement legislation. Among other measures, the uniform legislation controls the approval and use of measuring instruments in trade, the packaging and marking of prepackaged articles, the licensing of measuring instrument servicing persons, and the powers of inspectors and sanctions.

Despite these changes and the outward appearance of standardisation, there has been waning regulatory oversight over the consistency of processes involved in Australia’s trade measurement system. As far back as 1995, the Kean inquiry into Australia’s standards and conformance infrastructure noted a decline in the trade measurement system and the lack of uniform implementation of trade measurement legislation. These problems were compounded over the course of the next 13 years in light of inconsistent changes to legislation at different times in different jurisdictions. The resulting divergence in fees, licensing schemes and legislative interpretation across jurisdictions has clearly impeded economic activity and created inefficiencies. One need only think about the impact on retailers’ selling methods when they operate in different states with different packaging requirements or the impact on the 800 firms that repair and verify measuring instruments who have to deal with differing licensing criteria, fees and reporting requirements.

It should not take seven or eight regimes to ensure a level playing field for transactions based on measurement. That nothing much has changed for the past decade has only served to undermine the very transparency and confidence trade measurement systems are designed to promote. It is absurd that companies operating nationally in a country like ours, with a population of 21 million, should face more regulatory obstacles in trade measurement than those in the United States, with its population of 300 million. Replacing eight state and territory based systems with one national system is the logical approach. It is an approach that has long been logical to the industry also. That much was confirmed by the ‘Review of the national trade measurement system: discussion paper’, released in June 2006. It found, inter alia:

… industry’s choice of options are national legislation; consistent interpretation and application of legislation; and a single licensing system for servicing licensees.

It is an approach which the review team itself concluded was logical. Yet it is an approach that should have been met with more vigour by the Howard government.

The National Measurement Amendment Bill 2008 introduces a new national trade measurement system for Australia by replacing the current fragmented situation across each state and territory. The bill inserts general trade measurement provisions into the act, including (1) provisions dealing with the accuracy and reliability of trade measuring instruments, (2) provisions to ensure prepackaged articles contain the stated quantities, (3) the appointment of inspectors and details of their powers and (4) licensing requirements for those involved in verifying and repairing measuring instruments.

A trade measurement system administered by the Commonwealth will also be better placed to deal swiftly with the many challenges presented by new measurement technologies. Technology has been advancing rapidly in many areas, including automation, software and measurement instrumentation. Measuring instruments are also changing in this new age of technology with, for example, smart electricity meters being rolled out in many countries. I have no doubt there will be future changes and corresponding regulatory impacts in physical, chemical and biological measurements.

The benefits of the eradication of unnecessary costs are clear for businesses that operate across borders. The Productivity Commission has estimated the cost of complying with Australia’s disparate business regulations, such as trade measurement systems, to be in the order of $40 billion. It further estimates that reforming business regulation could add up to $16 billion a year to our gross domestic product. So there can be no doubt that the crippling regulatory burden faced by many Australian businesses is a dead weight on our economy.

It should come as no surprise that the Council of Australian Governments, COAG, has on more than one occasion sought to harmonise business laws across each state or create a single layer of Commonwealth regulation. Yet regulatory reform through COAG under the previous government was sporadic at best. On countless occasions we read of reforms being talked about, but nothing happened. We read of reforms stalling or being delayed. Countless concerns were raised during the Howard government’s tenure that there was a gap between reform rhetoric and reform implementation in the context of regulatory hot spots.

Trade measurement was identified in 2006 by COAG as one of the regulatory hot spots in need of urgent regulatory reform. The reformist zeal of the pre-2008 COAG is perhaps best described by Mike Steketee in an article published in the Australian on 28 October 2006 when he said:

… the co-operation that is supposed to be the hallmark of COAG is looking more and more like coagulation.

In stark contrast, the Rudd government has rolled up its sleeves on this and has already achieved real outcomes on cooperative federalism. Take, for example, the Council of Australian Governments’ meeting communique dated 26 March 2008, which finally delivered the breakthrough on trade measurement—of which this bill is a direct product. That same communique stated:

The COAG reform agenda is underpinned by a common commitment to clear goals, genuine partnership and the governance and funding arrangements needed to deliver real reform. A fresh spirit of goodwill has delivered breakthrough agreements in areas unresolved by COAG for too long.

Rather than turbocharging the COAG process to turn reform rhetoric into outcomes, the Howard government became complacent and chose to rely on the commodities boom to steer it through trouble while playing the blame game with the states.

This bill is a step in the right direction not only for national economic growth but for the creation of a seamless economy in which companies can operate across jurisdictions without facing inconsistent laws and regulations. The more we do to create a seamless economy, the more it will help our companies compete domestically and internationally. An efficient trade measurement system is also essential for the international competitiveness of our exporters. Accurate, reliable and consistent measurements can boost international consumer confidence in our goods and, in turn, international trade and commerce. A national system may, for example, make it easier for Australia to enter into mutual recognition arrangements with other nations on trade measurement matters. These arrangements allow Australian exporters to have their products tested, measured or certified in Australia for compliance with the requirements of importing countries. Such arrangements are effective in reducing the time and cost involved in getting goods to international markets.

The importance of legal metrology to exporters cannot be overstated. I again quote from Robert McEntyre’s address to the Queensland Studies Authority Asia Pacific Forum. He stated:

Desired outcomes of an effective Australian technical infrastructure include:

…            …            …

• Increased competitiveness, market share, innovation and lower operating costs for Australian industries and companies, through optimising trading environments as a result of removing technical barriers to trade.

An example is the food sector, where the measurement of pesticide residues and chemical and microbiological contaminants can be technical barriers to trade. Ongoing progress in implementing efficient measurement systems will only assist the Australian food export industry. The importance of quality measurements in trade can also be evident in assessments of the protein content of grain or the sugar content of cane sugar.

As we work towards reducing global tariffs and opening international markets, ongoing reforms to technical measures and procedures will assume even greater importance. Market access is simply not enough. Our exporters must be afforded every opportunity to export their products quickly and cost-effectively. At the heart of this bill lies another significant change which will ensure this is the case. The bill introduces an option for manufacturers to use, voluntarily, an average quantity system rather than the current minimum quantity system. Under the minimum quantity system, an offence is committed where a tested product shows a shortfall of the product in the package. With most filling and packaging processes automated, it is almost impossible to meet this standard in a production run—forcing packers to overfill packages to avoid an offence. The average quantity system allows packers to use a statistical measure that a batch of goods would be, on average, within statistical normal distribution. This measure increases the efficiency of production while protecting consumers.

It is important to note, for the sake of our exporters, that the average quantity system has been adopted by our major trading partners, including Canada, China, the European Union, Japan, the United States and New Zealand. I also note that the International Organisation of Legal Metrology—an intergovernmental treaty organisation established to promote the global harmonisation of legal metrology—has recommended the adoption of the average quantity system for international trade in prepacked goods. Given prepacked goods form the bulk of international trade and the importance of the International Organisation of Legal Metrology’s recommendations to underpinning international trade, the amendments in this bill are both prudent and timely. The adoption of the average quantity system will enable our exporters to compete on a more equitable basis with international traders now and in the future.

I note that in his contribution to this debate the member for Groom, who is the shadow minister for industry and resources and also has an abiding interest in trade matters, raised concerns that it is still not clear that the national trade measurement system will have a significant net positive value. It is prudent for me to quote a section of the final report into the review of national arrangements for administering trade measurement in Australia which deals adequately with such concerns as raised by my friend the member for Groom. It states:

Direct financial benefits to industry have proved difficult to quantify, but productivity benefits have been clearly identified and would justify the additional investment on the part of the Australian Government … The cost of implementing national legislation and administration of the trade measurement system is insignificant in comparison with its importance to the Australian economy.

I conclude on that salient point and commend this bill to the House.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to speak on the National Measurement Amendment Bill 2008. From time to time in this House, bills come before us that are truly of national significance—bills that are truly important, bills that truly make monumental changes to the way that we deal with life, business and a whole range of other areas, and bills that people line up to speak on. Some people would say that this is not one of them. I would say that they are wrong. This is actually a very important bill.

John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Minister for Trade) Share this | Link to this | Hansard source

Hear, hear!

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Absolutely—hear, hear! The member for Lowe, who just spoke on this bill, agrees with me. This is an important bill because it makes some very important changes in some very important areas of trade law and practice. I have to say that, while a number of Labor members have been very keen to not only speak on this but also be active and participate in this regulatory area, we have not seen that enthusiasm from members of the opposition. I think that is a sad reflection of their view, not just on what this bill is about—trade measurement and measurement in Australia—but on the more global impact on our national economy, the way we do business, business practices in Australia, consumer affairs, the confidence that people have in our systems in Australia—

John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Minister for Trade) Share this | Link to this | Hansard source

Trade.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

and of course trade. There is no way that we can have an effective trade regime in this country without an effective and efficient trade measurement system, and that is at the core of what this bill is about. Like on many bills that I have spoken about in this House over a long period of time, but particularly in the last 11½ months or so, I am very proud to speak on this issue. The Rudd Labor government is picking up on the leftover issues, the unfinished business, of the previous government. This area is important, as people will understand once they hear from the speakers about what it involves and how it can impact on their daily lives, their hip pocket and their family budgets—all the things that matter on a daily basis.

We need to start by at least getting one thing right: what is trade measurement? On first inspection, a lot of people might consider this bill to just be about how long a piece of string is or how much something weighs. It is much more than that. In fact, I have often been asked that very question: how long is a piece of string? I have an answer for that: it is twice as long as it is from the middle to the end. Perhaps that should be contained somewhere as well! Trade measurement is a term that refers to the use of measurement as the basis for price in a transaction. It is very important in business. For example, there is the volume of petrol when you go to the petrol station and fill up at the bowser. We have heard that example; it is a very important one. When you put in, say, 50 litres, you know that you are getting 50 litres of fuel. You are not getting 45 litres and, more than likely, you would not be getting 55 litres. The idea is that you get what you pay for, and that is the essence of it. After a cursory examination, people might think that is important in terms of the consumer aspect, but it actually goes much further; it is important to our national economy, the efficiency of our economy, our productivity and our trade with trading partners.

However, while we have some very good standards in Australia, there has been over several decades a desirability right across the board to have some uniformity—a bit of harmonisation and a bit of national consistency in the way we apply rules, the way we license and the way we approach these things. That is a hallmark of the Rudd Labor government. We are determined that in Australia there is a better way to do a whole range of things. We believe that you can have productivity growth and efficiency gains in a whole range of areas. Trade measurement in itself can become more efficient and can help with productivity. You can apply the same principles—national consistency, licensing, efficiency and productivity—across a whole range of sectors. We have seen that in the way we have approached the issue of health provision in Australia—that we need to have a more consistent approach. National consistency is important in removing regulatory burdens and unproductive red tape across the board. That goes not just to health but also to education. We see that in the areas in which Labor have pursued an agenda. It is not just about saying, ‘We will put more money on the table,’ because we are doing that—we have made that financial commitment—but we are saying that we need to look for efficiencies and productivity gains. We do that across a whole range of areas, and education is one area.

In the area of business—and this pertains more closely to trade, but when you dig deeper it pertains to the little things in all of our lives every day and it reflects the confidence that we all have as consumers in the systems that we have in place—it is exceptionally important that we get this right across all jurisdictions in Australia and, in the end, across one jurisdiction: the national economy of the Commonwealth. That is where we need to get this right. That is not a statement critical of the way that the states have operated, because it is certainly true that over a number of years the states and territories have put in place a number of consistent regimes across the board. In fact, in 1983 the Scott review recommended a national approach to the administration of trade measurement. They did that for good reason. The recommendation resulted in the drafting of uniform trade measurement legislation. Unfortunately for all of us, it took more than 20 years for all jurisdictions to enact that legislation. That is lost time, lost productivity gains and lost efficiency. We cannot regain that, but we can move forward.

So, despite the fact that we had uniform format legislation, practical problems persisted. That was largely because all states and territory regulations were not implemented at the same time, causing difficulties in timing issues, with different jurisdictions across different states. There were also differences in the way the regulations were applied, administered and interpreted, with varying nuances between jurisdictions. That led, very importantly in the progress of getting this right at a national level, to the Business Regulation and Competition Working Group of COAG being directed to deliver some early action on regulatory reform, in particular in relation to some hot spots. It was identified that there were a number of areas, called hot spots, where this was actually having an efficiency impact, a productivity impact. COAG identified that back in 2006 and again in 2007. The area of trade measurement had become one of the top 10 identified regulatory hot spots for COAG. So this is an important issue. This is in that basket of goods which, on the surface, some might think is inconsequential—an inconsequential bill and inconsequential changes—but in effect it has some real impact.

Following on from that, the Ministerial Council on Consumer Affairs also commissioned a review of trade measurement arrangements. They identified a number of problems and costs associated with businesses that operate across borders, that have different cost-recovery procedures in different jurisdictions, different processes for licensing, different costs involved in what those licences are, inconsistent advice and basically the mishmash that you typically end up with in a system such as ours, where you have a federation of states, which in principle works well but has areas of difficulty, inefficiency and bureaucracy—layer upon layer of ineffectiveness. This is just another tranche for us, the Rudd government, where, as a new government coming in, we can start paring away at the red tape burdens and inefficiencies and start stripping back the bureaucracy that prevents national efficiency, that prevents us being competitive not only on a national platform but also on a global platform. This review concluded that the adoption of a national trade measurement system would deliver a net economic benefit to Australian industry, to business, to government and to consumers alike. In April 2007 COAG accepted this recommendation. The National Measurement Amendment Bill, which is now before us, will give effect to that COAG decision.

As I said at the outset, I am very pleased to be able to speak on this legislation. I think it is an important part of our national trade system. Just as importantly to me, it is about consumer confidence and consumer affairs. This has certainly been an issue for a lot of constituents of mine. I know that right across Australia there are from time to time circumstances that arise where people’s confidence in measurement is undermined. It quickly becomes apparent to members of parliament that it is one of those areas where consumers can really be dealt a harsh blow.

There is an expectation from the Australian consumer that, when they go to a trader and buy an article that says ‘100 grams’, that is what they will be purchasing—100 grams of whatever that article is; that if they go to a service station and buy 50 litres of fuel, it will be 50 litres of fuel; and that, if they buy something by length, they know exactly that that is the length that they are receiving. It is a base standard and an expectation that we have in this country that we can have confidence in our systems, and largely speaking we do have that. From time to time there are issues and problems about packet weights. We have already passed legislation in this place to make sure there is some clarity not only in the way items are measured and recorded but in the way they are promoted so that people can have confidence in that and there is no trickery involved—by duping or conning people into buying something they thought was something else. We have seen examples of that over the years. It is important to note how that system works and why it is so important: to make sure that we give confidence to buyers and sellers in the marketplace, to make sure that we have accuracy and to reduce the transaction costs of each trade.

As we heard from the previous speaker, this is not a small area of concern. Trade measurement and trade based on measurement is worth something in the order of around $400 billion per year, so it is a significant amount. If we were to allow that system to deteriorate that could jeopardise not only consumer confidence but trade confidence. It could also jeopardise the confidence that our trading partners have in us—that what we do is of the highest standard, that when we say something is of a particular measurement that is actually the case. Again I acknowledge the presence at the table of the member for Lowe, who is the Parliamentary Secretary to the Minister for Trade; he would understand very well just how important it is in our global relationship with our trading partners that they have confidence in our system, not just that we have confidence in it.

Unfortunately, while Australia’s current trade measurement infrastructure is good and is sound, it is not as efficient and certainly not as effective as it could be. That is just one more reason why this change is so necessary and why we have this measurement legislation—to remove some of the confusion. Significantly, every state and territory will be brought into line by agreement and through partnership so that we have a nationally consistent, efficient and effective trade measurement system. COAG has identified this as a major area of reform and we are following through on the commitment that we have made in that area.

The Rudd Labor government made some big commitments pre the election that we want to see through—commitments in the area of supporting business, small business, contractors and trade, making sure that we remove for them the impediments to business and to trade. In our view, government should be there to assist their business, not hamper it. The role of government should be to provide an effective system of standards, licensing and regulations to ensure that the most efficient and effective trading platforms are in place. That is not the case yet; that is not the case today. The system we have inherited from the previous government is overly burdened by red tape and regulatory regimes, and represents inaction and lost opportunities in what could have been done in those 12 years.

The Howard government did not really pay attention—which is probably the kindest way I can put it—to what they claimed was one of their core constituencies, and that is the small business sector. Apart from perhaps dealing with a couple of the more populist issues within the business sector, the real issues of efficiency, red tape and other burdens—real, practical, everyday cost burdens—on small business were not addressed. What we saw was a growing mountain of red tape, a growing mountain of regulation, a growing mountain of requirements placed on small business and other businesses to comply with the ever more complicated systems and regimes put in place by the previous government—let alone the system of taxation in this country. It is so complicated, so complex, so inefficient that we have been placed in a position today where we need to look at how we measure all of that. If you brought our tax system in here and measured it from the floor, it would be the height of a tall child. The reality is that there is a lot of work to be done.

This is one more step in that process that we have put in place to harmonise regulation across this country, to bring into line the ability of the states and territories of the Commonwealth to work together at all tiers of government, truly, I would say, for the first time in Australian history. That is the great opportunity that is provided by this bill before us. At its core are productivity gains by reducing red tape and reducing the costs and burdens for small business. We as a government are committed to that sector through this bill but we also believe that it will flow on to other areas of the economy. In effect, that will give us greater quality and a greater capacity to grow and better link with our trading partners.

I want to mention briefly the global systems of trade measurement and how important it is for us to be on the same platform as our trading partners. Currently, ours is a minimum quantity system, which means that you are basically guaranteed that within a particular measurement you will get a minimum amount. While on the surface that seems like quite a reasonable approach to take, what it means is that business tend to overfill or give a little bit extra just to be certain they do not breach any regulation or more. The bigger picture is that it means massive inefficiency for business. There are good data and statistics and evidence to show that moving to an average quantity system will mean that you get roughly 98 per cent accuracy on average weight, on average length, on average quantity, and that is a satisfactory amount in terms of tolerances that are acceptable not only to consumers but also by regulations, law and government. I think that by moving across to that system and joining with our major trading partners which have the same systems in place—countries such as Canada, China, those in the European Union, Japan, the United States and New Zealand—we will ensure that we maintain a competitive advantage not just in the quality of our trade and all that is associated with that but also in the quantity of it. We will maintain the confidence that people have in our systems and that competitive advantage that we always need to ensure that we have.

The bill before us contains an array of systems that will give us a range of things. The bill will ensure the accuracy and reliability of our trade measuring instruments, such as scales, fuel dispensers and weighbridges. It will also mean that prepacked articles contain the stated quantities. It means the appointment of trade measurement inspectors and proper licensing provisions for the verifiers of measuring instruments. It means that private sector firms or individuals will be licensed to verify trade measuring instruments, while transitional provisions will ensure a seamless transfer from the states and territories to a national system. This is good public policy, this is in the national interest, this is a very important bill, and I commend it to the House. (Time expired)

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the National Measurement Amendment Bill 2008 and I would like to commend the two previous speakers, the member for Lowe and the member for Oxley, for their contributions. The importance of this national measurement system is due to the fact that it concerns industry, small business and, generally, our total economy, which is very dependent on having a surety of certain standards. In discussing this bill, I would like to give an understanding of some of the history that has brought us to this point. People often take it for granted that our measurements are just there. We quote capacity and length and we have a whole range of different understandings by measurement. But there have been thousands of years of history in the development of measurements to get to the point where we can say that standards can be put in place and confirmed—certainly in this country of Australia, a federation of states. On this side of the House we have spoken many times about the notion of cooperative federalism, and, certainly, red tape reduction is a major part of ensuring that we can provide to industry some definitive measurements.

I will take you back to the era of the ancient Greeks and Romans. History shows they were great builders of cities. Because the Romans advanced through so many countries—and the wars and battles involved in taking on these great lands—there are significant remnants and remains of them. Their legacy is essentially in the built environment. You can see all the ruins if you travel to some of those countries. Rome is a very good example of the input that the Romans have had in that area in the built environment. It comes back to an understanding of measurement and the standards that were established many thousands of years ago.

Today the symmetry of this chamber is very much based on an understanding of those early measurements. If you pick up a piece of paper, for instance, and look at the symmetry of that piece of paper and consider the fact that most pieces of paper are rectangular in shape, you will see it is no accident. This comes back to some determination many thousands of years ago about what the perfect rectangle might be. If this decision had not been made some thousands of years ago, we might be writing on square pieces of paper and the symmetry might be quite different. Again, on the notion of construction, if you look at the building of a house or a large facade or at some of those ancient Roman buildings, you will see they were not just put together based on the available material or the masonry that they had available to them; the symmetry had some significance in the way that they were built. That was highly dependent on a standard of measurement.

If you look at the so-called perfect rectangle—otherwise known as the ‘golden rectangle’—or any rectangular shape or one that is most pleasing to the eye, you will see it is based on ratios. It is taking a square measure and then applying a ratio of one to one to two. Again, if you look at a humble sheet of paper, that is representative of that golden rectangle. If you look at the way they designed the ancient Greek and Roman buildings, you immediately see what I am suggesting. That comes down to the proscenium arches that we have in our theatres. Even the way that we have determined that we need to watch TV on the flat screens that have been developed has a bearing on some very basic measurements.

The reason I am raising this is to point to the significance of this bill and the need to standardise our measurements. The subtleties of this understanding have huge ramifications and, as I mentioned earlier, we could well be writing on square pieces of paper rather than rectangular pieces had decisions not been made about standardisation. I can probably give a better demonstration of that if we look at the introduction of the metric system into my state of Queensland back in 1974. The metric system goes back a long time. There have been variations of it and different languages explain the notion of the base of 10. Square roots and a whole range of tables that were developed probably 500 or 600 years ago all were based on the notion of the decimal or the point of 10. If you look as far back as 1586, the interesting thing is that the English—in consideration with the French and with the emerging Americas through the War of Independence—had a large role to play in the determination of weights, measures and those very things that I am talking about. The irony is that today the US still has major confusion over the way that they deal with their weights and measures. In Australia there is not so much confusion anymore because the introduction of the metric system into this country helped a lot of that; but, if anyone has ever been confronted with the notion of using foolscap or quarto paper against an A4 or, dare I say, an A3 sheet, they all have relevance in the need for standardisation.

Only a few years ago you could quite easily accidentally purchase a writing pad that might not actually fit a certain folder or fit into a particular printer simply because the standards of measurement were not determined very well. The US, as an early industrial nation, played a major part in developing the whole notion of print, and these ratios and measurements were somewhat ad hoc. The irony is that decimal currency entered the US just after the time of the American War of Independence simply because there was a need to have a standardisation of their currency and the introduction of paper currency. Yet even at that stage it was probably too difficult for the Americans to introduce the notion of a metric system or a standardisation of a system of measurement.

Back in 1974 in the state of Queensland it was certainly a mandate and a dictate. I was, at that stage, in grade 9. I had spent all my earlier years learning the notion of feet, inches, yards, fathoms—what we call imperial measurements. I will not say it was belted into us, because that is not what happened, but we felt under a lot of pressure to be able to roll off those tables of measurement.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

1,760 yards to a mile.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

That is right, Member for Rankin. There are 1,760 yards in a mile, 5,280 feet—and it goes on and on.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Dr Emerson interjecting

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

That is right, and it had relevance to the length of a cricket pitch.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! I know the minister is erudite but he need not demonstrate it so obviously.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

The member for Rankin understands where I am coming from. The reality is that those measurements did not work together, and I should give an understanding of why we adopted them under the British system. Even with those earlier influences of the British, with the French King Louis XV and as part of the War of Independence, there were a number of stand-offs. Measurement became very much a part of the deliberations about war and about a range of standards. I can probably suggest that, politically, there were reasons why the Americans, once they gained independence, took on decimal currency but decided the overall decimal system was not going to suit.

In talking about the imperial system, the terminology itself has some bearing on the whole notion of the system. The imperial system brings up the notion of royalty. This is probably well depicted in the Vitruvian Man that Leonardo da Vinci drew, and many people will know that figure with the symmetry of the human body. It has a major role to play in the notion of measurements. Imperial measurement was very much the introduction of a system usually by the principality, by the leader at the time or by the royal family if it was a monarchy. If we look at the Vitruvian Man, it explains the fact that a foot had a particular measure—it was the size of the ruler’s foot. That was fine if there was an average and it was a dynasty of leaders who may have had similar features, but you can immediately see that, if there were a child king, the whole system of measurement would be turned on its head. The Vitruvian Man is a way of looking at the standard of feet, but it was clear that having a system that would change every time a ruler changed would be a concern. I should mention the term ‘ruler’. We understood at school when we had 12 inches, which is a measurement that was related to the thumb, that 12 inches would make a foot, and that was on a ruler denoting the ruler at the time, or the king or the leader. So it was very much based on some sort of ad hoc approach to measurement.

So standards were established. The Romans had their own system of measurement but it was very much based on ratios.

The development of the decimal system was a major step forward for this country. We had decimal currency introduced in 1966, followed within eight years by the introduction of the metric system generally. I remember asking a group of young people many years ago whether they understood where the metre actually came from. It was an established measurement but over time there have been changes to the way it is determined. Essentially, it was decided in the mid-1700s that there should be a way of establishing a standard—something that will not change. We understand today that we keep the standard in a different way—usually in a beam of light or through some atomic measurement, certainly in the case of weight, length, volume et cetera—but back in the mid-1700s there was a major step forward in astronomy in terms of understanding the global theory rather than the flat-earth theories that existed before those early explorers. I wonder whether anyone in the House knows where the metre comes from?

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Sir! Sir!

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

It is a question and answer session. Member for Rankin: do you know where it comes from?

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! Through the chair is where remarks should be directed. The minister does not need to assist the honourable member, who is doing quite well on his own.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker, for your indulgence. I will tell you where that measurement comes from: it is actually one ten-millionth of the distance between the North Pole and the equator. That was a standard that was established at that particular time. That standard has changed because there are now more reliable ways of standardising the measurement. If you have ever wondered where we came up with this notion of the metre, it is very closely related to the yard—three feet—which goes back to the Vitruvian Man.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Dr Emerson interjecting

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

That is right. There are 39.37 inches in a metre, in fact. The reality of establishing a standard that was based on a notion of 10 meant that you could divide the standard of a metre. I will use the linear measurement to start with, although measurements of volume and mass come into it too. The metre’s divisibility by 10 was a very important part of what the establishment of that measure was about.

I relate to my earlier statements about industry the development of the printing industry. Certainly Gutenberg did not have a lot to do with the notion of a standard paper size. He essentially cobbled together whatever he could in terms of rags and other things to print on. But with the industrial revolution and the Americas moving ahead—particularly what became the US—there was the creation of the printing industry as we understand it today. The standard of paper was something that people worked very closely on. All of us who read newspapers in the days when we travelled by train would remember having large newspapers that we would have to fold and twist. The development of the metric system allowed the introduction of the tabloid paper. The tabloid is essentially an A3 sheet of paper. Even though there are variations of that now that are called tabloids, usually a tabloid is something smaller than the old, large newspapers.

The difficulty for industry in this country before we established the metric system was the inconsistency between the US and us. We had always had that inconsistency, even when we had the imperial system in this country. We had the pint and the gallon, but the US gallon happened to be a lesser amount than the Australian gallon. Those inconsistencies have, to some degree, moved on because of our adoption of the metric system and because other countries, when making international trading arrangements, talk in terms of metrics.

But in the printing industry and the metal industry, when measurements were still in the old imperial system—feet and inches—square measures were certainly worked out in that way. I will use the example of the printing industry because it comes down to the notion of a sheet of paper. I talked about the golden rectangle and why we have rectangular sheets of paper—because they are in the shape of the perfect rectangle. People may understand that the notion of A3 and A4 sheets of paper—I have an A4 sheet here in front of me—is based on the standard of a square metre. You start with the calculation of an A0. An A0 sheet is one square metre of paper, but in the golden rectangle ratio of one to one to two. It is from cutting up that A0 sheet of paper that we get the other sizes of paper. The most common size of paper used is A4. Essentially that is an A0 sheet of paper halved to make A1, A2, A3 and then A4. It goes on to A5, A6, A7, A8 and A9, which is the size of a business card. They are all related to each other. Those sizes also had some bearing on the way that paper could be folded.

Coming back to these measurements you can see the need for standards. We have established quite well in our country our understanding and use of the metric system. This legislation will ensure that, right across the board—right across the federation of our states—we will have consistency.

Many members in this House would have lots to do with printers and people providing printed material. It is always interesting to look at the calculation of folding. Again, it comes down to a standard. If you take a piece of paper—it does not matter what size it is—you can fold it in half only seven times. You cannot fold a sheet of paper more than seven times. People might want to challenge that but the reality is that you cannot physically fold—

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Did Pythagoras come up with that?

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

Pythagoras did not, but it is a simple rule of physics. I will get back to the notion of the A0 and the standard square metre. If you look at a ream of paper—500 sheets in the metric system—it will often have a GSM measure on it. It may be 80 GSM, 120 GSM or 200 GSM. Essentially that means, for example, that the paper is 80 grams per square metre. That means that every A0 sheet in the shape of the golden rectangle is that weight. From that you can then calculate the weight of a printed item. It certainly adds to our efficiency in transport when we have standards of measurement.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Dr Emerson interjecting

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

That is right: you cannot fold your sheet of paper any more than seven times. If you had the right sort of device—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I think Mr Speaker has ruled that props in the chamber are not appropriate.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

However, it does prove my point. The serious side of this, of course, is that we have established in certain industries over time the real need to have standards. These days we do not get foiled by the notion of having foolscap or quarto paper. Essentially, it is all based on the metric system of paper. In fact if you go further into that, there is every size of paper for every particular need and you can go from an A size to a B size to a C size. It has all sorts of connotations but the reality is that it is built on a standard. The metric system is very important. It flows through everything that we do in this country. The reality of this legislation is that we are going to be able to tidy up those last remaining pieces to have consistency across all of our systems of measurement.

You need only look to history to understand that there have been thousands of years of development to get to this point. This country has taken 107 years to get to a point where we can standardise most of our measurements. We have tried at different times—certainly in 1960, with a major event for this country; in 1966, with decimal currency; and in 1974, certainly in Queensland and related to the rest of the country. The system of measurement is very, very important for the efficiencies of what we do in industry every day. Those examples I have given from the printing industry are typical. You will find those same systems used in the metal industry and in the service industries for understanding and determining weight and measurement.

The ISO standards were established at an international level in an attempt to maintain some consistency. But, as a global community, we have a long way to go with standardisation. The US are way behind us. The inefficiencies in lots of their systems come down to the fact that they have not at earlier times taken on the need to do what this country is doing right now. I certainly commend this bill to the House.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I thank the honourable member for his interesting contribution. Maybe he has missed his true vocation.

Chris Trevor (Flynn, Australian Labor Party) Share this | Link to this | Hansard source

I commend to the House the member for Forde’s contribution to this debate. I rise to speak on the National Measurement Amendment Bill 2008 and hope to deliver a brief and well-measured speech. I am sure all would appreciate that. The National Measurement Amendment Bill 2008 amends the National Measurement Act 1960 to introduce an Australia-wide system of trade measurement based on the current measurement systems found in each state and territory. This bill will introduce a national system. I commend my government’s approach on this matter. It is long overdue. This amendment bill is in response to trade measurement being one of the 10 regulatory issues identified by COAG in 2006 and 2007. Australia currently has eight different jurisdictions, one in each state and territory. This has created increases in compliance costs for those businesses operating across state boundaries—in effect, a red tape nightmare.

The bill inserts general trade measurement provisions into the act which will provide the legislative framework for the national trade measurement system. These include provisions to ensure the accuracy and reliability of trade measuring instruments, provisions to ensure pre-packed articles contain the stated quantities, the appointment of trade measurement inspectors and their powers, licensing provisions for the verifiers of measuring instruments and the operation of public weighbridges, provision for private sector firms or individuals to be licensed to verify trade measuring instruments, and transitional provisions to ensure a seamless transfer from the states and territories to a national system.

A trade measurement framework provides confidence to buyers and sellers that measurements which support our trading system are consistent and accurate anywhere in Australia. The bill will create the legislative framework for a national system of trade measurement. Currently, trade measurement is regulated by the states and territories, but they each regulate trade measurement slightly differently. This bill will address the issues surrounding businesses operating across state and territory boundaries, which will be welcome news.

As mentioned earlier, creating a national trade measurement system was identified by COAG in 2006 as a regulatory reform hot spot, an area where overlapping and inconsistent regulatory regimes were impeding economic activity. The bill gives effect to the COAG decision. A national trade measurement system will reduce the regulatory burden for business, particularly for those firms that currently have to comply with different requirements when operating across state and territory borders. The new system will be administered by the Commonwealth from 1 July 2010.

The bill has provisions which will ensure the accuracy and reliability of trade measuring instruments like scales, fuel dispensers and weighbridges; ensure pre-packaged articles contain the stated quantities; allow private sector firms or individuals to be licensed to verify trade measuring instruments; create powers for the Commonwealth to appoint trade measurement inspectors; create all the necessary elements of a national trade measurement system with the technical and administrative detail to be specified in regulations; and provide traditional arrangements to ensure a smooth transfer from the operation of state and territory legislation to a national system.

The bill also introduces the voluntary option of using the average quantity system, AQS. AQS is an internationally recognised system for sampling and testing groups of packages to determine whether, on average, they contain the quantities with which they are marked. The offence provision in the bill will apply to a wide range of companies, from large to small, in a wide variety of circumstances. This makes it desirable to have a range of enforcement options appropriate to the different circumstances to which the bill might apply. Consequently, the bill provides for different categories of offences in relation to particular conduct for a range of responses depending on the circumstances of a particular suspected offence and for a variety of penalties. The availability of AQS will meet longstanding requests from major packers and wine producers and will improve their international competitiveness.

The system also provides flexibility to introduce new technologies or approaches. For example, the protein content of grain now determines the price paid to growers, rather than weight. The new national system will have the flexibility to take up these new ways of doing business. This is groundbreaking legislation. This is fantastic legislation for Australia. I commend the member for Rankin and I commend this bill to the House and congratulate the Rudd Labor government for its outstanding leadership on this issue.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

in reply—I believe that the speakers list on the debate on the second reading of the National Measurement Amendment Bill 2008 is now exhausted. I have a copy of it here in my hand, after having attempted to fold the piece of paper seven times. I got it to six and that is small enough. I think it is time to bring this debate to a close. I was fascinated with the contributions of our various speakers, including the member for Forde, who gave us a very good exposition of some of the benefits of the bill. He mentioned such weights and measures as kilograms. I had the honour, recently, of going to the National Measurement Institute to witness the handing over of what we call the perfect kilogram. It was grown from a single silicon crystal into a perfect spherical object weighing exactly one kilogram. It was important that this was done because the measure of the kilogram is in France and it has degraded. It is a piece of metal and it has degraded slightly over time. I suppose that does not matter too much when it comes to how many cornflakes you have in a packet but it does in matters such as space travel. Similarly, they are very important for caesium clocks and so on. A small error can have a spacecraft missing a planet or a solar system by a very large amount. So this is actually all very important, not only to the past but to the present and to the future.

I want to thank a gazillion—which is a very large number of millions—people: everyone who has spoken on this. The National Measurement Institute, which will have responsibility for administering the new system of trade measurement, has pointed out to me that the desire for an orderly system of trade measurement reaches back to very early times. I am sure that the member for Forde would be fascinated to know that this was all anticipated in the Bible, where Leviticus, chapter 19, commands: ‘You shall not pervert justice in measurement of weight, length or quantity. You shall have true scales, true weights, true measures; dry and liquid’. So, there you go, a command from on high that we have the National Trade Measurement Amendment Bill! I will now move to another religion. The Koran actually warns: ‘Woe to those who stint the measure’—so get your measures right because the Koran says that is a very good idea. Fast-forward now to the Magna Carta, which set out that there would be one weight and one measure in the realm. These are the sorts of measures that the member for Forde was talking about.

Indeed, I remember from primary school—and the member for Forde said that it was not belted into him, but it was close to belted into me—that there are 12 inches in one foot, three feet in one yard, 1,760 yards in a mile, 5,280 feet in a mile, 100 links in one chain, and 80 chain to one mile but also that one chain is a cricket pitch. I do not know if the chain came from cricket or that cricket got it from the chain, but if ever a fast bowler is wondering exactly why the length of the pitch is as it is and is thinking maybe it should be a bit shorter or a bit longer, the answer is that it is exactly one chain. And, of course, there are 16 ounces in a pound and, I think, 2,240 pounds in a ton?

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

That’s right.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Yes, 2,240 pounds in a ton—and that is about as much as I know about that, so I should move on. The National Measurement Amendment Bill 2008 will set the framework for a national system of trade measurement. It will replace all of the current state and territory based systems. In a seamless national economy it makes no sense at all for our trade measurement system, a system which underpins commercial transactions across Australia and into our export markets, to be regulated by nine different jurisdictions. Yet that is the situation that has applied up until this point. It is what I call rail gauge economics, reflecting on the different rail gauges that were in the Federation of Australia that took a very, very long time to remedy. Former Prime Minister Andrew Fisher lamented in 1916 that in order to travel from Perth to the east coast you had to change trains many times. He thought that was absurd in 1916. Finally it was fixed up, and there is a celebration today.

We have these sorts of absurdities still in so many areas of regulation—27 areas of regulation—that we are pursuing through the Council of Australian Governments to put an end to rail gauge economics. This measure today, pardon the pun, is designed to do that in relation to trade measurement. It is what we have been working so hard to change through the business regulation and competition working group, which I have the privilege of co-chairing with the Minister for Finance and Deregulation. The system that we have been debating today and yesterday builds on the experience of state and territory administrations. They themselves have reasonably good systems in place. There is no doubt about that. But the advantage of this, like fixing up the rail gauge problem, is that it will remove current inconsistencies and, importantly, help reduce business costs. It will allow Australia to adopt new technologies and processes, which will help our industries compete better internationally. A number of our speakers have made that point. The member for Lowe and other speakers pointed to those sorts of benefits.

The National Measurement Institute will be responsible for administering the new national trade measurement system and will offer employment to inspectors and others who are currently working in trade measurement in the states and territories. This bill is the product of a decision of the Council of Australian Governments in February 2006. COAG identified trade measurement as a priority hot spot reform area, where overlapping and inconsistent regulatory regimes were impeding economic activity. I acknowledge here the contribution of the member for Groom, who at that time was the Minister for Industry, Tourism and Resources and is now the shadow minister for energy and resources. He did initiate good work on this. He spoke on the importance of this bill and he was involved at the ground floor. I pay tribute to the work that he did and we are very pleased to have been able to bring this forward into the parliament. The bill has been developed through industry consultation and supported by a legislative working group with state and territory officials convened by the National Measurement Institute.

The member for Paterson raised one issue that I want to comment on regarding the role of the National Measurement Institute in administering the national trade measurement system. The National Measurement Institute will be responsible for policy and standards as well as enforcement. It is true that policy development and enforcement activities are often given to separate organisations to avoid undue influence on policy development by the enforcement activity. However, in the case of trade measurement, the policy is very straightforward; it is simply to ensure confidence in measurement through the use of verified measuring instruments. There are no Commonwealth agencies with the necessary expertise in this area other than the National Measurement Institute. Separating these functions would also create unnecessary complexity and add to costs, which we do not want to do, and that is obviously another area of concern that has been raised by opposition members in this debate. So we really do not want to go to a more costly exercise just for the sake of separation in this case. Because of these factors the decision was taken that the National Measurement Institute would undertake both of those roles.

In closing the debate I want to share with the House the reaction from industry to the bill following its introduction into parliament. The Winemakers Federation of Australia welcomed the introduction of the bill, with its chief executive stating:

This is a very important measure and one which will save the Australian wine industry approximately $19 million per year …

The Australian wine sector relies heavily on its export industry with 60% of its product being exported overseas.  This measure will put Australia in line with other countries and increase our international competitiveness.

This is something that the wine industry has been advocating for some time and we applaud the Minister for Small Business, Independent Contractors and the Service Economy … for taking this important step.

I reiterate, therefore, my thanks to the former minister for industry for the work he has done. In a statement issued by Accord Australasia, the peak industry group for the consumer, cosmetic and hygiene products sector, Executive Director Bronwyn Capanna welcomed the bill. She stated:

Industry greatly welcomes this new legislation.

It addresses the long standing problem business has faced with having to deal with separate and often inconsistent requirements of state and territory legislation.

                  …              …              …

By introducing an Average Quantity System the new legislation will bring Australia’s trade measurement regulations into line with our major trading partners …

…            …            …

Australian export firms will benefit from greater harmonisation with the rules of their export markets.

It is pleasing to see the government meeting its commitments to introducing reforms of COAG regulatory ‘hot spots’ like trade measurement.

Indeed, it was one of the 10 regulatory hot spots identified by the Council of Australian Governments. The National Measurement Amendment Bill 2008 lays the basis for the new national system of trade measurement, which will provide a level playing field across Australia for all transactions which are based on measurement. I commend the bill to the House.

Question agreed to.

Bill read a second time.