Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

Would the Parliamentary Secretary for International Development Assistance outline the current diplomatic situation between the Solomon Islands and Australia.

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I thank the member. Let me respond specifically to his point and also more generally. Although the date is not officially set, one of the critical things—and it is a plus for the democratic development of the Solomon Islands—is that the election is imminent. The general expectation is that it will be held in the first week of August, although it is for the Governor-General to announce the date. Nobody would welcome me announcing it for him, but that is probably the general expectation. Of course, it is not for us to involve ourselves in who is elected to the government of the Solomon Islands; it is our job to deal with whoever is elected. But we have had a very good and a greatly enhanced relationship with the current government in the last year or two. It has been a feature of the Rudd government that we have entered into the partnership for development.

The new elements of the relationship that have strengthened and improved are the partnership for development and the high level of cooperation and agreement between our two governments. A continuing feature of the strength that goes back beyond the Rudd government is RAMSI, the Regional Assistance Mission to Solomon Islands. The RAMSI initiative remains, according to the public opinion surveys, very popular with the people of the Solomon Islands. It is not only an Australian initiative but an initiative of all the countries of the region. For that reason, we continue to enjoy the leadership role in it. I congratulate the Special Coordinator of RAMSI and all those who have been engaged in the discussion in and around the initiative and done an enormous amount of valuable work—personnel from the Department of Foreign Affairs and Trade, all the other departments, the Army and the police who have participated in RAMSI. I think our relations with the Solomon Islands are at as high a point as they have been.

One of the critical issues for the Solomon Islands going forward—and I was discussing this with the planning minister last Friday—is the imminent end of logging exports, which is a critical part of export income and government revenue for the Solomon Islands. But the logging has been excessive, and everybody knows that by 2012 there will basically be no logging exports or revenue other than from some of the sustainable plantations. So the Gold Ridge gold mine is critical in filling that gap, and the Australian government have sought to be as helpful as we can in facilitating the reopening of that mine. I and the trade minister have been involved in some discussions, and we are very positive about it.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I take the member for Fraser to the DFAT portfolio budget statements where, on page 24, under annual departmental expenses there is an item entitled ‘Foreign Affairs and Trade Operations.’ The parliamentary secretary will note that there is a reduction in expenses, from $562,818 in the 2009-10 budget to $499,183 in the 2010-11 budget, which will go down to $491,363 in the 2011-12 budget. Could the member explain which areas will be affected by this budget cut over the next three years, which programs are likely to be cut and what analysis has been undertaken on the impact of such budget cuts on the operation of the Department of Foreign Affairs and Trade?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

My understanding, which has been confirmed, is that the change in budget numbers simply reflects changes in foreign exchange—that is, the same level of international activity is reflected in the expenditure of a different number of Australian dollars because of exchange rate movements.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I take the parliamentary secretary to the Department of Foreign Affairs and Trade’s portfolio budget statements, at page 36, program 2.1 Consular services. I point to the fact that the annual departmental expenses for consular services have been reduced by $7.83 million from $83,220,000 this year and by a cut of $2.46 million next year. Is the parliamentary secretary able to explain those cuts in consular services? Is that also due to foreign exchange movements or is it indeed a cut in the activities of consular services?

I point out that the 2008-09 Department of Foreign Affairs and Trade annual report stated that there would be strong and growing demand for consular services, with almost 195,000 services having been provided in 2008-09, up from 185,000 a year earlier and that the department has said that it expects there will be growth in demand for consular services in coming years. One cited example of the growth in demand for consular services was that support was provided to 638 Australians who were hospitalised overseas in 2004-05 and that that had grown to 1,480 people hospitalised overseas in 2008-09. Given that the department says that it expects there will be a growth in demand for consular services in coming years, I ask the parliamentary secretary to explain this item on consular services.

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I understand exactly why the shadow foreign minister would be concerned. It is a reasonable question to ask, but once again my advice is that, although the documents show small decreases in funding for consular services over the next two years, there is no funding cut. It is just the standard adjustment for exchange rate movements given the strengthening of the dollar. There would be some continuing impact of the efficiency dividend, but there is no one-off cut; there are no special measures to cut consular services.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I refer again to the DFAT annual report, which stated that there would be strong and growing demand for consular services. The honourable member’s answer indicates that there is in fact no increase—the honourable member is suggesting that there is no decrease; this is due to currency exchanges—to meet the growing demand for consular services. I gave the example of the number of Australians hospitalised overseas and the department’s statement that it expects there will be growth and demand for consular services. Will the honourable member confirm that there has been no increase in funding for consular services in line with the department’s expectation of a growth in demand?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

The average staffing level for DFAT is projected to increase during the course of 2010-11—an increase of 1.6 per cent or 59. Some of that, but less than half, is specifically relating to things like passports and special one-offs with regard to Afghanistan and Baghdad—measures that are announced in the budget—but there is also a staff increase. There is no special increase in funding for consular, no special reduction. We expect to continue to provide the high-quality service to Australians that we have.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I take the honourable parliamentary secretary to page 38, program 2.2, Passport Services. Again, I note that in the annual departmental expenses, Passport Services, $203.821 million indicates a fall of $13.9 million for the 2010-2011 budget year. Will the honourable parliamentary secretary also explain what appears to be an apparent reduction in the levels of services available for those applying for passports?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

Just to put it in context, of course the shadow minister would know that in the budget there is actually $101 million over the next six years, $73 million over the next four years, to enhance the passport system. That is a budget measure explicitly announced and funded and that reflects some of the increased staffing that I mentioned in response to the previous question. But beyond that the change in funding with regard to passports is exactly the same as regards to consular: it is simply the standard formula that is applied with regard to the impact of foreign exchange movements and any small impact from the efficiency dividend.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

In relation to the passport deliverables under program 2.2, there is reference to the high-quality passports service, including detecting passport fraud. Will the honourable parliamentary secretary inform the House whether the most current passports available to Australian travellers are capable of being forged; or have technological advances reached a point where Australian passports cannot be forged?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I do not want to pretend that I have a level of expertise I do not have, but it would be a brave person who said that anything is totally unforgeable. The technology of miscreants improves as rapidly as the technology of those trying to do the right thing. We are very proud and confident of the quality of our current passports, and we are investing $100 million over the next six years to improve them even further. We think the current passports are of a very high quality and most people agree with that, and internationally they are regarded as such. But we are not going to rest on our laurels. We are investing the money to deliver a new passport-issuing system that will enhance both the security and the efficiency of our expanding passport operations. We think they are very high-quality passports, probably as high quality as any in the world. It would just be beyond my level of confidence to say that nobody is going to be clever enough to work out a way to forge anything. Unfortunately the history of passports, the history of currencies and the history of other valuable documents suggest that it would be a brave person to say that forgery could never happen. But we do not think there are any passports better than the ones we are putting out.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I ask the honourable parliamentary secretary: is it the case that the biosecurity measures currently contained in Australian passports cannot be detected or used to verify those passports in a number of countries? In other words, it is not about the quality of the technology contained within the Australian passport; there are countries, including in the Middle East, where the detection facilities available at airports are not able to use the benefits contained in Australian passports for the purposes of verifying the passport and the passport holder.

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I do not have any direct evidence of that, but I cannot say it is not true. I assume you are not saying that therefore the passports are not valid in those countries; it is simply that those facilities operate manually rather than electronically. I would not be surprised if that were the case because not all countries have sophisticated technology to handle Australia’s high-quality, sophisticated passports. I assume you are not saying they are not recognised; it is just that they operate manually in those places rather than electronically. Thinking of some of the airports I have been through—and I am sure you have been through them too—I am sure that is almost certainly true. I do not have any direct evidence to say, ‘Yes, I know in country X this is the case.’

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

In the past, the Department of Foreign Affairs and Trade have been asked to provide the number of passports currently unaccounted for—that is, passports that are lost or in the mail, or otherwise unaccounted for. Would the parliamentary secretary provide the current number of Australian passports unaccounted for?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I do not have that detail at my fingertips. Let me take it on notice.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I ask the honourable parliamentary secretary: is it the protocol adopted by this government to reveal the identity of secret service agents in the embassies of other nations—that is, to reveal the name and capacity in which that person is stationed in Australia? Is it also the protocol of this government to reveal visits to other countries by the heads of Australian security and intelligence agencies?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

There are two separate questions there. With regard to the first, the answer is no. We do not indicate identities of diplomats and their particular functions in the normal course, other than the obvious information such as who is the charge d’affaires and whatever. If I understand the implication of the question, the answer is no, we do not do that. As to the second question, it is not routinely made public when our heads of agencies travel overseas, but occasionally it is. Occasionally the people themselves say so—for example, they may be before the Senate estimates or whatever. But it is not something that would routinely be announced and I do not think anybody would expect it to be.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I refer the honourable parliamentary secretary to the front page of yesterday’s Canberra Times, which revealed the name and the occupation of an alleged Mossad agent who had been stationed in Canberra. The name and the position were made public, I understand, as a result of information from the government. This is the diplomat that was expelled by the Australian government over the forged passports affair. Will the honourable parliamentary secretary comment on that report and, as well, indicate whether it is usual practice or the protocol of this government to name and expel a diplomat and make that announcement prior to the diplomat being given an opportunity to leave the country, for security purposes?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I am, of course, aware of the newspaper article—the Canberra Times is my local newspaper. Unlike most people in the parliament, I actually read it every day. So, yes, I am aware of it. I happen also to know the journalist, Philip Dorling, very well. But those two things do not change the fact that the story is not right. The government did not announce the name of the person who had been expelled. Diplomats arrive and depart in Canberra on a regular basis. The government does not discuss individual departures and it did not. Obviously, we can discuss further the decision about whether the person should leave or not—that is a separate question. I am aware that the journalist believes that he may have deduced who the person is by looking at the diplomatic list and saying, ‘Oh, there’s a name that isn’t on there that was there before,’ but people come and go, often, and the diplomatic list is revised regularly. Nobody should automatically assume that the change they see reflected in that list is a product of the previous decision by the government. We have not identified the person who is expelled and we will not.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I take the honourable parliamentary secretary to the statement by the Minister for Foreign Affairs to the House on Monday, a couple of weeks back, in relation to the expulsion of the Israeli diplomat. I am sure the parliamentary secretary is aware of that statement. In that statement, the foreign minister named David Irvine as having visited Mossad, in Israel, in April. That would appear to go against the protocol that the parliamentary secretary just referred to. I also refer, in that statement, to the foreign minister’s statement that an Israeli diplomat was expelled in 2005 and to the indication that the reasons for the expulsion were linked to a previous occasion when Israel was alleged to have forged passports. Will the parliamentary secretary indicate why the foreign minister named David Irvine and stated that his visit was to Mossad in Israel, and will he provide the Committee with the specific reasons for the expulsion of the Israeli diplomat in 2005, as identified by the foreign minister? Will he also provide specific details of the agreement that the foreign minister said exists between Israel and Australia over the use of passports? And I ask the parliamentary secretary: has there been any impact on the sharing of intelligence from the Israeli intelligence forces with Australia in recent weeks?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

With regard to the naming of Mr Irvine, as I said earlier, we do not as a matter of course announce when the heads of security agencies are visiting elsewhere. Some are less likely to be named than others. The name of the person who is the head of that agency is not exactly a secret. We live in a democracy and we like to make available as much as possible. I was not aware of any reason that that should not have been available and as far as I know the officer concerned had no concerns about it.

I can only give some of the information in response to the two other questions and if the minister has something further to add I will refer it to him. What the minister said was that the things that took place in 2005 were the responsibility of the previous government and there is only so far he should go in revealing the discussions that they had. He simply alluded to a previous incident and what had taken place. What he was responding to in that statement did not reflect the character of the agreement that came out on that occasion.

I do not think he would wish to, or would wish me to, go beyond that. I do not think it is appropriate for him to start making announcements about decisions of the previous government or discussions and agreements that they entered into. But I will refer the two points raised by the shadow minister to the minister and see if he has got something to add.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I thank the parliamentary secretary for taking those questions on notice. Perhaps if I can put it this way: will the parliamentary secretary confirm that the previous occasion when an Israeli diplomat was asked to leave was not to do with forging, falsification or anything else connected with Australian passports? In fact, it was not a policy or political matter. Rather than identifying the specific reasons, if he could confirm that it was not about a passport matter, I would appreciate that.

On a matter of AusAID, will the parliamentary secretary provide an answer—and, if not, take it on notice—about the number of cases of fraud that AusAID is currently investigating. I also seek answers to a number of questions about the management of AusAID’s contracts. There is evidence to suggest that a number of AusAID contracts are being awarded to ex-AusAID staff. An example is an ex-AusAID officer, Peter Kelly, being paid $433,000 tax-free a year to supervise road maintenance in Vanuatu. Would the parliamentary secretary advise how many contracts are currently in place with ex-AusAID staff, what processes are being followed in the awarding of contracts to ensure that there is equal opportunity given to other bids or tenders for the work, and what safeguards are in place to ensure that there is nothing untoward in a governance, transparency and accountability sense in awarding AusAID contracts?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I cannot immediately give you an answer about the number of fraud investigations. I will check whether there are any and, if so, how many and let you know. With regard to the general question about the contracts and the particular example, I just want to say something in advance before I deal with the questions that have been raised. The government of Vanuatu yesterday and today made it clear to me, through one of their ministers who is here in Australia, the extent to which they value and appreciate the quality of the work provided by the adviser in question and by Australian advisers in general.

On one other general question, we inherited a system that was excessively dependent on technical assistance and advisers. We have been reducing the proportion of the aid program going through technical assistance and advisers since we came to office. It has declined quite significantly, but I think that we still use more than we should and that we sometimes respond too positively to requests for advisers. Obviously, the shadow minister would know that there are no advisers working who have not been asked for by a government with which we are working. But I think we have not responded as rigorously as we might have, so that is why the foreign minister has initiated a review.

As I say, we have been putting downward pressure on the proportion of the aid budget going through technical assistance and advisers. It has been reduced since we came to office but it is, arguably, still too high. With regard to ex-AusAID staff there is not an AusAID-specific policy about that. There is a Commonwealth-wide policy with regard to that, which is the Commonwealth procurement policy. AusAID applies that policy appropriately, as does every other agency. With regard to Mr Kelly, I am advised it was a public tender process; it was not a privately entered into arrangement. Tenders were called and a successful contractor won in accordance with the normal Commonwealth procurement guidelines.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I refer the parliamentary secretary to a report of the Australian National Audit Office of last year which was critical of Australia’s overreliance on what it termed ‘highly paid consultants’ to deliver AusAID programs overseas. It also made the comment that Australia uses double the average aid budget of comparable OECD countries. In particular, I refer the parliamentary secretary to the highest paid full-time consultants who have received funding from AusAID. We have mentioned Peter Kelly in Vanuatu. There was also Mr Sikosana in Papua New Guinea, a health adviser, on a salary of $371,350; Mr Desai, in Vanuatu, an energy adviser, on $344,000; Hugh Brown, an infrastructure adviser to the Indonesian tsunami reconstruction program, on $342,800; and Graham Applegate, in Indonesia, a senior technical forest and climate specialist, on $342,000.

I also refer to the highest paid part-time consultants: Victor Canales in PNG was a census planning and budgeting assistant for two months and was paid $146,444. Mr Canales, again in PNG, gave assistance with data entry for a household survey for two months and was paid $115,868. Dr Hong Tan did a mid-term review of private sector development specialists for four months, for $114,000. Michael Carter, a strategic evaluation leader for five months, was paid $131,000. And Jessica Kenway worked on a review of the Australian partnerships for African communities for five months at a cost of $104,869.

Will the parliamentary secretary advise what analysis is carried out in relation to the value for money provided by those advisers? What assessment is done of the outcomes and the results achieved by those full-time consultants and part-time consultants? Will the parliamentary secretary advise whether a process is undertaken to engage people who are actually living and working in those countries—for example, NGOs or people in the private sector—who could provide better value for money so that the aid dollars are spent on actual results and outcomes rather than on processes, strategies, reviews and the like?

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

Let me start by saying that we inherited an appalling system from your government. The government which you ran ran an appalling system.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Not you, Deputy Speaker.

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

No, you. I understand the procedural point you are making.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I know. So do I.

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

I am just saying who I think is responsible, and it is the previous government. We found that there was no system for doing any of those things which you just raised. We put in place a system that will put downward pressure on the use of technical advisers and what they are paid. We found there was no standardised remuneration framework when we came to office. We are now in the process of establishing a set of scales that will bring downward pressure on fees and allowances. You had none. We found that there was no system for checking the value for money question that you very appropriately ask, and we are instituting one.

It is true we inherited an appalling system, and we are in the process of fixing it. The percentage of Australian aid that was going in technical assistance for the period 1996 to 2007 was nearly 42 per cent. Since we came to office we have reduced it to 35. I do not think 35 is satisfactory, and I want it to be lower, but I do not really appreciate being criticised by someone who presided over it being much worse—20 per cent worse—without any system for coping with it, without any system of framework for remuneration, without any process for review of value for money and without any process of setting in place a proper review. We have fixed it a bit. We have reduced it from 42 per cent to 35 per cent, but that is not enough and that is why the foreign minister announced the review. We will review it contract by contract, country by country. We are starting with PNG and then the Solomons. By the end we will have a vigorous and robust system.

It is not fair to say that all these advisers do not do good work. Overwhelmingly they do. Overwhelmingly they did when you were the government. Overwhelmingly they do now. We think there is too much emphasis on it. I think it is at least 50 per cent a demand-side problem: that is, governments in the developing countries—and I have spoken to each of the ones with whom we are conducting reviews at the moment—too easily ask, and it is the first thing they ask, ‘Can you send an adviser to assist with this?’ and we too easily agree. I think there is a demand-side problem and a supply-side problem. It will not be fixed simply by a supply-side solution, so we are talking to the countries about how we manage the demand as well. It is a system that was hopeless that we are fixing. It will take a bit longer to fix it, but it is in the process of being repaired.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

In the time available, I want to ask questions on three separate topics. I appreciate that the parliamentary secretary may not have time to answer them now, but could he take these questions on notice. The first topic is the government’s decision to institute legal proceedings against Japan over the whaling issue. What effort was made by the government to obtain the support of the United States and New Zealand prior to the government’s announcement of its decision to institute legal proceedings ahead of the IWC meeting next week? So what effort was made to obtain the support of the US and New Zealand? Also on that issue, what advice has the government received on the likelihood of success of its legal action and the consequences of failure?

The second topic is the Asia-Pacific community, this proposal that was floated by the Prime Minister a couple of years ago. Will the parliamentary secretary advise which nations have indicated their support for the Prime Minister’s proposal of an Asia-Pacific community and what is the nature of that support? In other words: what statements have been made in relation to it? Can the parliamentary secretary advise which nations will be included in the Prime Minister’s proposal of an Asia-Pacific community and which nations will not? And will he also provide the cost of lobbying countries in the Asia-Pacific region to support the Prime Minister’s proposal to this point?

The third topic is the government’s bid for a United Nations Security Council seat. How many countries, and which countries, have committed to support Australia’s bid and what is the nature of that support? Are there written or public statements of support, and from which particular regions? Will the parliamentary secretary indicate whether there is a connection between the increases in aid to particular regions and the government’s lobbying for support for the seat on the Security Council? The parliamentary secretary would be aware of statements made by countries in the region in relation to aid and the bid for the Security Council. I also refer to the increase in the number of state visits from countries, particularly from Africa and Latin America. Can the parliamentary secretary advise the cost to the Australian taxpayer of those state visits? I appreciate that there are a significant number of questions there, but could the parliamentary secretary answer any he is able to at present and then take the rest on notice.

Bob McMullan (Fraser, Australian Labor Party, Parliamentary Secretary for International Development Assistance) Share this | Link to this | Hansard source

Okay, let me deal with some of them. Questions on the Asia-Pacific community I will put on notice. Questions about state visits I will put on notice. I do not deal with either of those and I do not have anything immediately to hand.

With regard to the whaling case, because we want to maximise our chances of bringing Japanese whaling to a permanent end the case has been developed carefully. The government has confidence in the court. However, as with any legal action, it does not come with guarantees. We are not going to comment publicly on the details of our case or our strategy because that could prejudice our case, but it has been developed fully and we think that the case will maximise our chances of bringing Japanese whaling to a permanent end and therefore we think it is the appropriate course of action to take.

Obviously I am not going to say anything about who is committed to the UN Security Council bid. The only people who would benefit from that would be the people who are running against us, so I have absolutely no intention of doing that. I am sure those other countries will not tell us who has committed to vote for them, and we will not tell them who has committed to vote for us. I can say that we have not made decisions with regard to the regional or other allocation of the aid budget around the UN Security Council bid. I have seen those allegations. They are entirely without foundation, and that is something I can say with confidence. I will refer the questions about the APC and the state visits for an answer.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

It being 10.45 am, the committee will now consider the trade segment of the portfolio in accordance with the agreed order of consideration. I thank the previous speakers for their contribution.

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

I would like to take the opportunity to ask a question of the Minister for Trade, since he is here. He has previously announced the creation of a national brand for Australia to enhance our international reputation as a nation of substance. That we are, and we are certainly held up that way in the world. I understand that the recent announcement with regard to the brand concept has been very successful. I would like to ask the minister to explain to the committee how this decision was reached and how the brand will be used to build a reputation as a great place to do business.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

The brand Australia Unlimited is a very exciting concept. It comes from two issues that have been the counterpoints that I have struck in all the trade negotiations that I have been having—that is, the more you go to countries and understand the sorts of issues and opportunities within those countries the more you realise the diversity that Australia has to offer in being able to respond positively to those proposals and opportunities, but on the other hand there is a great lack of understanding within those countries of the diversity that Australia has to offer.

We promote ourselves for tourism purposes. It is about time we promoted ourselves other than as a tourist destination, because whilst Australia is a great place to have a holiday it is also a great place to do business and to make investments. We know it because of everything we do. With their strength and creativity our scientists and entrepreneurs do more than just punch above their weight; everything they do has a quality outcome. But we cannot just sit back and hope that people will come to understand this; we have to be more effective at marketing. That is in essence what Brand Australia is.

We tested the concept that is out there, which is called Australia Unlimited. It was market tested involving 15,000 people in research groups, including 14 overseas countries as well as Australia. Due to the results of that research, together with a panel of leading businesspeople that I established to help us assess the outcomes of the research and the creative concepts that were coming forward, the Australia Unlimited concept won. We launched it successfully at the Sydney Opera House earlier last month and then internationally at the Shanghai expo.

Shanghai expo has really been exceeding all expectations as well. The Australian pavilion has now passed, I think, its two millionth visitor. Recently it had its highest intake: 51,000 people went through on one particular Saturday. This was before the school holidays. When you think of the fact that there are expected to be something upward of 80 million people going through the expo and that the Australian pavilion is one of the most visited, this is a huge opportunity for us in what is the fastest growing market in the world. There are plenty of other market opportunities for us, but the branding and promotion of Australia under Australia Unlimited will give us a much greater edge in promoting the diversity of our potential for goods and services and investment.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

I take the opportunity, with some regret at this estimates process, to lament the loss of ambition and progress in Australia’s trade negotiations. I do not say that to be particularly critical of the Minister for Trade; I am mindful of the tough job that he has. I think that if he were to look back at some of the rhetoric that he used, when he was shadow minister, in the years leading up to his becoming trade minister he would probably be a little embarrassed about some of the promises and commitments he made at that time and would realise that this is a hard slog and that it is not easy to make progress.

What I find disappointing is not only have we not made much progress but also that our ambition seems to have faded—the desire to have only high-quality trade agreements and the desire to ensure that we actually make progress with each of these agreements, that they are all fair deals for Australia and that we do not just give things away in order to get a signature on a bottom line but actually achieve benefits for our own country as well. In particular, we need to focus on the Doha Round. The now Prime Minister, Kevin Rudd, said in July 2006 that Doha was ‘as dead as a dodo’. I do not think that approach was endorsed by the shadow trade minister at the time, but nonetheless that is what the leader said. I know the shadow trade minister has reason to object to the way in which the Prime Minister has behaved while he has been in prime ministerial office, but this is another example of how his rhetoric changed after he was elected.

In reality, the Doha Round is sliding away. The statements being made after each meeting are less encouraging than the ones made previously. In July 2008 the trade minister said that the negotiations were going well and that 80 per cent of all the issues were resolved—although, frankly, I think most of those were resolved because countries like Australia backed down and backed away from their ambition. In 2009 there was discussion about ‘important progress’ and ‘injection of momentum’. He said that the chief negotiators would ‘intensify their efforts next week in Geneva’ and then went on to say that everyone now recognises we are in the ‘end game’ of the Doha Round. That was in 2009, and now we are in 2010, and if there was to be a statement now it would be even less encouraging, because, frankly, none of those optimistic and glowing comments have been a reflection of the reality.

That is very disappointing. The progress that has been made has been made because we back away from important principles. I am very concerned that the ambition that surrounded the launch of the Doha Round during Mark Vaile’s long and successful term as trade minister seems to have been watered down and that there is now a desperation about getting an agreement no matter how little benefit there is in it. Frankly, a bad agreement is not better than no agreement at all. I thought it was interesting that an article in the Australian Farm Institute’s Farm Policy Journal a few months ago made the comment that what was accepted for agriculture by this government through Doha—what is on the table at the present time—could be worse than having no deal at all.

I suggest that deals need to deliver real benefits. The Doha Round, unfortunately, is slipping away. It is slipping away not just because of the inability of Australia to pursue its agenda but also because the US has clearly lost interest and Europe and other countries are not giving it the momentum it needs. Especially, if the US is not prepared to meaningfully engage, then all these discussions will have serious problems. In particular, the new US administration seems to be focused much more on a fortress America policy and to be unwilling to make the kinds of concessions that will be necessary to get this sort of thing across the line. I believe it is important for the government to maintain the momentum, the spirit and the ambition of achieving worthwhile trade agreements and not just participate in a rush to the bottom to try to get signatures on comparatively worthless agreements just so that it can be said that a deal has been done. (Time expired)

John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

I must come to the defence of the Minister for Trade. I am sure that the member for Wide Bay was not reflecting on the personal efforts of the Minister for Trade.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

I said that right at the beginning.

John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

I can certainly go to a higher authority. I am not sure whether the member for Wide Bay was at a luncheon in February, to which we were all invited in this place, when the head of the WTO, Mr Pascal Lamy, gave a very erudite presentation on the history of the Doha Round. I thought it very significant, and I am glad the minister is here, when he said that if he had had 153 Simon Creans, referring to the 153 member countries of the WTO, the Doha Round would have been concluded within 18 months. Well done, Minister.

We are all interested in the successful conclusion of the Doha Round and we all know what a significant benefit it will be to the global economy. On this very important topic I would like to take the opportunity to ask the minister how the resources of the trade portfolio are helping with the progress of Doha and the successful conclusion of those negotiations through the WTO.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I thank the member for Wide Bay and the member for Lowe for coming in from two different perspectives, I suspect, of Doha, which I will come to in a minute. I say at the outset that I do agree with the member for Wide Bay that we should share ambition in the results of our trade negotiations but I disagree fundamentally with him on his analysis. I will come to Doha in a minute. Let us just remind ourselves of the so-called quality agreements that he says were the hallmark of the previous government. First of all, we have the US-Australia Free Trade Agreement, in which the Liberal Party sold out the National Party, even though the Leader of the National Party was the chief negotiator. They sold them out because they excluded sugar completely; it was a complete carve-out. Do not tell me that was a quality approach to an agreement. This was an agreement at any cost because the Prime Minister of the day wanted a political trophy; he did not care about its contents.

Let us go to the China FTA. I quote the words of the member for Wide Bay, who said, ‘We shouldn’t just give things away.’ What did the previous government do in terms of the China free trade agreement? It gave away the recognition of market economy status and got nothing in return. We inherited the circumstances of having to pick up the pieces with China in which China had gained what it fundamentally wanted. We believe we have injected new political momentum into the negotiations on the FTA, because we are focused on the importance of investment as a two-way exercise, not a one-way exercise. We are focused on the importance of energy security. We have widened the FTA beyond just the agriculture issues to understand the fundamental importance of services in terms of economic development. We have broadened the quality of the approach and the direction of the negotiations.

Just to cap off our so-called failures, what about the conclusion of the free trade agreement with the ASEAN group of countries? This is a group of 10 countries with a combined total of 600 million people and a combined GDP at the moment in excess of US$3½ trillion. Collectively, these 10 countries are Australia’s biggest two-way trading partners. Collectively, they are bigger than China, Japan and the US. This is the most comprehensive FTA that ASEAN has ever entered into. It covers goods, services and investment and it has been referred to by the ASEAN nations, Singapore in particular, as a gold quality FTA. So much for the fact that we are not pursuing ambition! So much for the fact that we inherited a great legacy from the previous government!

Let me go to Doha, because I think it is true that Australia has helped inject new momentum into this round. I am not starry eyed about the simplicity of this. This is a very complex set of negotiations—as the member for Lowe indicated, 153 countries—on which all have to agree. Of necessity there are going to be compromises. But what we got—and within six months of the government coming to office—was almost a concluded round. That was more than had been achieved in the previous eight years by the so-called leadership under Mark Vaile that the member for Wide Bay refers to.

What we did was to bring this to the point of conclusion. The fact that we have not reached that conclusion is disappointing, but do not let it be suggested that we have lost ambition in relation to it. This is too important to lose ambition on, and Australia has been at the leading edge of suggesting creative ways forward in how we break the impasse. We are the ones who have opened up the services opportunities. We are the ones who have talked to Brazil, and they are the ones who have suggested subsectorals as an approach to resolving the remaining difficulties in NAMA. We have actively promoted trade in environmental goods and services as a way through. Most importantly, we have been at the forefront of running the agendas through the Cairns Group, through the Delhi process, through the horizontal process that enables cross-referencing of the outstanding issues.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Obviously, I must respond to some of the jibes coming from the minister. He has frequently been a critic of the fact that there were no satisfactory arrangements for sugar included in the Australia-US Free Trade Agreement. He said that sort of thing would never happen under him and then he signed up to the ASEAN-Australia-New Zealand Free Trade Agreement, which delivered nothing for sugar. So I think the rhetoric there is very empty. He criticised us for giving China market economy status. The current government has done it for Vietnam, if you please. So the pot is very much calling the kettle black.

I also remind the Committee that this government sacrificed the wheat single desk on the grounds that it was somehow or other going to lead to better international trade agreements. Australian wheat growers are already paying a very heavy price for the abolition of the Australian organised wheat marketing arrangements. It is already costing this country hundreds of millions of dollars and we have had absolutely nothing in return. There have been no concessions whatsoever from any other country in response to the so-called free trade advantages that there would be as a result of getting rid of the organised marketing arrangements for wheat. What we do know is that Australian growers have lost heavily; the reputation of Australian wheat is in decline; many of our major markets have been lost to countries like Canada, which still have organised marketing arrangements; and in reality the future for the Australian grain-growing industry is quite perilous at present.

I note that the government has at long last resumed discussions in relation to the Australia-China free trade agreement, after 14 months when not even a single meeting was held. There certainly has been very little progress there. The last meeting on the Australia-Japan free trade agreement was in April this year. Those negotiations were progressing very well but seem to have slowed. I acknowledge that part of the reason for that will be changes of government in Japan, but it is disappointing that that agreement, which was progressing so well, seems also to have slowed.

Indeed, I note that the government is now turning its attention to a new free trade agreement involving a whole range of countries which we already have agreements with. The proposed new trans-pacific partnership agreement, involving Brunei, Dar es Salaam, Chile, New Zealand and Singapore, is already in place between those countries. Australia, of course, already has FTAs with Chile, New Zealand and Singapore. We do not have all that much trade with Brunei, and I am not sure that signing this agreement will make all that much difference. The other countries that are involved in negotiations include the United States, where we have an FTA; Peru, where one is likely to be achieved quite quickly if that is our objective; and Vietnam, where there are negotiations going on as well.

It seems to me that it is very difficult to find any economic benefit for Australia in this arrangement. It would be far better for us to get an FTA with China or a modernised one with Japan than to have a new deal which gives us access into the markets of Brunei but probably nowhere else that is outside the existing agreement—especially if these agreements simply restate concessions that have already been given in bilateral or other multilateral agreements. This should be about quality and not quantity. I am not necessarily criticising this as an objective that may be around, but let me say that it would be far better for Australia to conclude a constructive, first-class, quality agreement with China—or, for that matter, Vietnam, or, for that matter, Peru—than to be involved in a multilateral agreement of this nature which will undoubtedly take resources away from higher priority agreements.

Trade is important and I think that some of the rhetoric and the criticism of the minister is a little unfair and unjust, and it sounds particularly hollow because he criticised the previous government for what he has done himself again and again and again. In reality the major agreement concluded in his time—the ASEAN FTA—has certainly led to little benefit for Australian producers but open markets for those countries into Australia.

Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

Not important enough, however, to warrant a question in the House of Representatives during question time. However, my question to the minister is: I am particularly interested in the Export Market Development Grants scheme. I know that it has assisted many small and medium businesses to make the transition from local producers into companies that export their products to the world. I am pleased to say that there are a number of small and medium-sized enterprises in my own electorate who have received funding over the last couple of years. They are incredibly diverse enterprises—from software publishing through to heavy machinery and equipment and everything in between, including pharmaceuticals and toiletry goods. I am particularly interested to find out what else the government is doing in the trade portfolio to support small business. In closing my question, I was fortunate enough to attend a seminar conducted by Austrade in Western Australia that particularly targeted women in small and medium businesses. I have to say, Minister, that it was extremely successful and I was very impressed with the running of the seminar and the information that was available to assist those women in business on industry and export assistance.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I thank the member for Hasluck in relation to her comments about Austrade and support for small business. Let me just say that the EMDG is one of the most important schemes that can be used to help small business. We inherited a very difficult aspect of this scheme. The previous government relaxed the eligibility criteria but did not fund it. In the last two budgets, we funded an additional $50 million a year, which has enabled, in the main, our commitments and the eligibility entitlements under that scheme to be met. But that is not sustainable going forward, and that is why there is legislation currently before the House, with the agreement of the industry, to bring the eligibility criteria back into sync. There is still a deficiency in the funding and that is something that we have to address in an ongoing way, but I am absolutely committed to building security into this scheme for the future. Not only is it important to exporters but it has recognised, positive effects. It has a multiplier effect in terms of the dollars spent and the dollars returned.

As for small business more generally, the package that the government recently announced and the proceeds of the resource super profits tax will significantly go to assist small business. A reduction in the corporate tax rate from 30 per cent to 28 per cent will be a huge advantage for them, and there is the up-front $5,000 deduction. We are in the process of rethinking the whole TradeStart mechanism on the ground. The targeted mechanisms that you have talked about in terms of women are all part of where I am trying to get Austrade focused in a more strategic outward looking way. It is the reason we have developed Brand Australia, and under the new CEO I have been talking to successful businesses about getting more interaction in a strategic way—and I had that opportunity at an export awards last night. Through the ASEAN free trade agreement that I talked of before, for example, we can open a whole matrix of opportunities for trade liberalisation country by country and target strategic approaches into those countries by Australian exporters, who have the quality good or the quality service they want to get into those markets.

Can I turn to comments that the member for Wide Bay made in relation to some of these FTAs. Firstly, China is difficult because agriculture like in all of these agreements remains a problem. We have demonstrated through the ASEAN free trade agreement the ability to deal with the sensitivities of agriculture and still conclude an agreement. Despite the difficulties in China, we just have not focused attention on advancing the trade links through the FTA. We have developed what I have referred to as the second-track approach—going out and visiting the regions, concluding MOUs with regional authorities, whether it is the city government or the provincial government. We have signed four of these MOUs in exciting areas such as urban development, logistics, agribusiness and even automobiles. We are not standing still or being constrained by having to conclude the framework agreement, as important as that will be in defining the future direction.

Secondly, the new government of Japan is very committed to concluding an FTA with Australia. I was recently in Japan and the foreign minister said that the cabinet’s position, including the new Prime Minister’s, is that one of their key priorities is to conclude an FTA with Australia. On the TPP, I think the member for Wide Bay should really understand what the Trans-Pacific Partnership Agreement is about. It is a building block to the free trade area for the Asia-Pacific. It is the getting together of eight like-minded countries that have FTAs but are quality FTAs to lay the foundation upon which we say, ‘If anyone else in the APEC region wants to join, they have to join on those terms.’ Already, we have had significant interest by other countries. So the member for Wide Bay needs to understand not the simplicity of his interpretation but the potential that this new mechanism has. Our officials are in the middle of discussions about it this week in San Francisco. I think this can be a very significant advancement in the APEC region.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Will the minister give the Committee a list of the TradeStart offices that will be closing as a result of the cutbacks in the budget?

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

This has already been answered in the Senate estimates. These have been put out to tender, so there is no decision about any closures at this point in time. I know those on the other side want to point out any negatives they can find concerning resource allocation. We want to get a more efficient allocation. We want to develop more effective partnerships and we want those partnerships to properly reflect the servicing of the particular regions in question. We know that there are opportunities out there. We know people need assistance. We are committed to giving them that assistance and we will let the member know in due course what the outcome of that rearrangement is.

Proposed expenditure agreed to.