Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

In rising to speak on the Customs Amendment (Anti-dumping Measures) Bill 2011 I indicate to the House that the coalition supports this bill.

Government Members:

Government members interjecting—

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

Do not get too excited! We do not support the government's approach or, more accurately, the lack of a detailed approach to antidumping more generally. To put it bluntly, there are a series of problems that are plaguing the current operation of antidumping arrangements in Australia. While Australian industries and Australian workers are rightly objecting to what is happening, Labor is simply not listening. If passed, the bill currently before the House will change the way in which antidumping measures are reviewed and revoked. The coalition believes that this does represent an appropriate response to the full Federal Court's decision in the Minister of State for Home Affairs v Siam Polyethylene, also called the Siam decision case.

We agree with the government that the ways in which Customs powers relating to revocation were interpreted in that case are problematic and we share its view that as a result of the Siam decision it is now significantly more likely that a finding of no dumping or no injury during a review period will lead to revocation. We are fearful about the impact that that might have on Australian industry and we are of the view that it is difficult to predict or pre-assess the likely ramifications of the removal of antidumping measures, especially the potential for the subsequent resumption of dumping causing material injury.

The idea that is at the heart of this bill, that the current revocation test should be strengthened to give Australian industry greater redress against unfair trading practices, is not contentious as far as we are concerned. Nor is the more general principal that improvements to the review process under the current system are necessary in order to strike a better balance between the interests of foreign and local companies.

We also believe that the changes that are being legislated through this bill are consistent with Australia's World Trade Organisation obligations and the current practices of the Australian Customs and Border Protection Service. But we will naturally reserve our rights to make amendments following the Senate committee's review process that is not due to be completed until later this year. We make the broader point that the introduction of this bill really represents nothing more from the government than the application of a bandaid to a gaping wound. Whilst it will legislate for an improvement to one facet of Australia's antidumping system it is a move of small consequence when set against the government's complete unwillingness to engage in the broader debate about how effectively the overall system is working or, as the case may be, is not working.

What is long overdue is far more widespread serious and lasting action. For way too long—in fact, for close to the entirety of its time in office—this government has simply sat on its hands when it comes to antidumping. Under the Howard government, changes were made to the arrangements to try and ensure that they appropriately kept pace with broader trends in the manner in which goods were being imported into Australia. We did this on the basis that it is important to keep monitoring the operation of the system on a regular basis and making changes where they are necessary.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, I seek to intervene.

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

Is the member for Indi willing to give way?

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

No. These reviews are necessary on a regular basis but the Rudd and Gillard governments have opted for quite a different approach. Minister Bowen, in his previous role and during days that were far less fraught for him, told everyone who wanted to listen after a COAG meeting in 2008 that Labor would act to amend the system. But Rip Van Winkle might as well have inherited the mantle of implementing government policy after that, because we have witnessed a trademark tale of Labor inaction when it has come to any kind of serious policy reform in this area.

Following Mr Bowen's announcement, Labor dragged its feet and shuffled the matter off to the Productivity Commission in early 2009. When the commission's report came back at the end of 2009, Labor dithered again—so badly, in fact, that it then sent the matter off for an internal review of some kind so it could postpone doing anything until after the 2010 election.

In trademark Labor tradition, the sad reality was that the government was far more interested in attempting to take the political heat out of the issue than making constructive policy changes in the national interest and in the interests of Australian industry, particularly Australian manufacturing. Inevitably, that has not done anybody any good, because the government has essentially been fiddling while Australian businesses have been suffering. All you need to do is go to any business that is affected by imported goods that are dumped and they will tell you about their frustration at a system that does not work and the impact on Australian industry, Australian manufacturing and how that is affecting investment decisions today.

In many ways, it is quite ironic that we should be having this debate so close to this year's budget. Because, even after all of this inactivity from Labor and after all the time that has passed without any decision whatsoever, it put its hand on its collective heart a few months ago, and said, 'Okay, we'll do something and we'll announce it as part of the 2011 budget'.

At least two ministers—the minister with the responsibility for Customs, and the Minister for Innovation, Industry, Science and Research—publicly stated that this would be the government's approach. There could well have been others as well, but you will have to forgive me for not exactly hanging off every worthless word of most of the senior officeholders of this government.

What have we seen? To our surprise, when looking through all the budget papers, we found nothing. Yet again, there was nothing. Again there was a shirking of the responsibility to look at this issue of antidumping.

Of course, this did not come as a particular shock or great revelation to anyone who is interested in this area of policy because, whenever anyone has tried to alert it throughout its time in government to the range of problems, to the flaws in the national anti-dumping regime, the Labor government has alternated between rolling its eyes, feigning concern, gazing uncomfortably at the ceiling or looking down at its shoes. And it has not done anything to address the very real and very serious issues involved.

Either it has not even recognised that significant problems exist in the system and that substantial remedies are needed or it has recognised them but it simply is incapable, unable, too frightened, weak or indecisive to do anything about it. I am not sure which one of those is true, but either would be equally as damning.

It is sobering to note that in his second reading speech on this bill, the Minister for Justice, responsible for Customs, said that the government was committed to an anti-dumping system that effectively addressed injury faced by Australian industry as a result of unfair trading practices.

In a panicked response to calls from the AWU and the coalition to reform the arrangements, he also admitted in mid-February that the government 'believed that there are improvements to be made.' One could say that it was nice to hear that coming from the minister, but I am afraid it has remained little more than a quick confessional and just a passing admission of failure. Ultimately, nothing more than lip service has been paid to the idea of genuine reform.

Unlike the government, we on this side of the House want real and practical reform. That is why the coalition antidumping taskforce that I lead is already working on developing an anti-dumping policy that we will be ready to implement and to act upon as soon as we are elected to government, whenever that time may be. This was foreshadowed during the last election. This was our policy. We committed to doing this and we are following through with that. We have been saying consistently for some time that some foreign goods are being sold cheaply in Australia on the back of government subsidies from their origin nation. This is unfairly distorting our domestic market, harming Australian businesses and ultimately, and gradually sometimes, costing local jobs. You do not see it immediately but you do see the impacts over several years of job losses and businesses either closing down or going offshore. Plainly Australian businesses are frustrated with an inefficient, ineffective and very expensive antidumping system. There need to be reductions in the costs, the complexities and the time that businesses confront in seeking remedies under Australia's current anti-dumping system.

In response to those problems and others like them the coalition has been on the record for some time about the need to take action to ensure that Australian manufacturers' products are not undercut by imported subsidised products. We do not believe that foreign governments should be in a position to distort our domestic market. That was our clearly stated position during the last election and we have built on that. It is essentially an important position to take at a time when Australian business and Australian manufacturing is looking for sensible, practical support from government as they confront the combined weight of factors like rising national debt and deficit, the prospect of further rate increases and the apparently inexhaustible appreciation of the Australian dollar. We understand and we appreciate that battling against unfairly priced imports is yet another pressure that they simply do not want or need or quite often can afford.

By contrast, the government has said nothing serious or of substance about this particular issues. Its policies and programs that affect Australian manufacturers consistently have the same effect. They put manufacturers under siege. They put businesses struggling on wafer-thin profit margins under even more pressure. And they reflect a desire, whether it is intentional or otherwise, to give foreign companies more power in the marketplace than Australians.

This approach infuriates manufacturers across the nation and that is why so many of them are beginning to speak out publicly. Workers across this nation are fearful about what it means for the long-term viability of their jobs and businesses, whether small, medium or large, and are absolutely volcanic with fury about the lack of vision and inaction the government is showing regarding the broad concerns of manufacturing in this country. It is why Graham Kraehe, the chair of Australia's largest manufacturer, BlueScope Steel, says that manufacturing is on the wrong side of Australia's two-speed economy and this difficult economic position is now being exacerbated by political expediency. It is why BlueScope's CEO, Paul O'Malley, says that the policy framework at the moment is wrong and that it seems to be captured by people who do not care whether there are manufacturing jobs in Australia. It is also why he speculates that there is an antimanufacturing focus in Australia at the moment. Let some be reminded that there are one million Australians employed in the manufacturing sector in Australia.

We go on to hear from OneSteel CEO, Geoff Plummer, when he said that a number of the government's projected actions make competing internationally difficult and that this company is concerned about things that either have been introduced or are speculated to be introduced which will significantly disadvantage Australian manufacturers compared to offshore manufacturers. It is why the Australian Food and Grocery Council CEO, Kate Carnell, has been moved to ask whether policymakers even want a food and grocery manufacturing industry in this country anymore. And it is why the CEO of Coca-Cola Amatil in Australia, Terry Davis, says that an urgent review of the future of manufacturing in Australia is required. It is why even trade unions are vociferously calling for more support from this government for manufacturing and less of its inactivity on subjects like antidumping. Admittedly these are only a small representative sample but these views are nearly universally shared by thousands of others. Does any manufacturer take seriously a government that spins lines about a new program in the budget called 'Buy Australian at Home and Abroad' that is supposedly meant to encourage the purchase of local products, yet at the same time plunders the manufacturing sector for all manner of other budgetary savings and is planning to impose a toxic tax that will send manufacturing offshore and export Australian jobs? Regrettably, while it ploughs most of the money into measures that, like the one mentioned, create more bureaucracy, it does absolutely nothing whatsoever to provide even the most miserable counter to the impact of punitive, job-destroying measures like the introduction of a carbon tax and cuts to the R&D tax concession. Embarrassingly, it also seems to think, if it merely slings another $10 million at a program to help business in a geographic area where another firm has already been severely affected by its inaction, that might kill two birds with one stone. It might get some positive media coverage and its difficulties from its inaction on antidumping might go away. This is breathtaking arrogance and breathtaking stupidity.

Make no mistake about it, the manufacturing industry is under serious threat in Australia, but all the government does is sit idly by. It almost always fails to consult and even on the rare occasions when it makes a half-hearted effort to do so, it inevitably breaks its commitments anyway, leaving those who have given their valuable time to this sham consultative process wondering why on earth they wasted their time in the first place. It puts in place pathetic policies that not only fail to arrest the decline of jobs and the loss of businesses offshore that have already occurred under its watch but actually accelerate these trends. You would think that members of this government, or at least some of them, would be proactive and have some empathy and some concern for what manufacturing businesses are telling them in their own electorates. You would think they would muscle up and honour all the rhetoric and promises they have made to the manufacturing sector about creating a more promising future and valuing their innovation, which has been so integral, particularly from the small- to medium-sized manufacturing sector, to the technological advances and innovation in larger companies in Australia. Even after around 90,000 manufacturing jobs have already been lost in Australia and a string of businesses in the sector have gone to the wall under this government's feeble watch, it is almost like they wear it as a badge of honour and they are resisting all calls for them to fix this mess. I am not sure how loud the calls have to be from everyday Australians, from thousands of businesses and their workers, from the coalition and from independent members of this parliament, for them to actually start listening and to start delivering on policies like antidumping that will help the nation, that will say to hardworking businesses who are not subsidised and do not have the protection of tariffs: we value what you do and we are not going to allow the distortion of the domestic market to your disadvantage and the advantage of a foreign company.

For the moment, the coalition will give its in-principle support to this bill as a means of helping the Labor Party takes its first baby steps in the long and arduous task it has created for itself if it is to sensibly enhance our antidumping system. But at the same time we also call on the government to abandon its ineptitude and inactivity as well as its general indifference to everyone who is willingly providing it with sensible suggestions and solutions. Pretending there are no problems regarding antidumping and manufacturing does not make it so. It does not matter how loudly you say it; it does not matter how often you say it. It is time to face the reality of the problems that dumping is causing in Australia and the stress under which it is putting very successful and innovative Australian businesses. It is time to actually stand up for something and it is time to actually start doing something.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

I was just amazed by the use of the slogan 'it's time'. I seem to recall that from a campaign in 1972—a great campaign. I am most pleased to speak on the Customs Amendment (Anti-dumping Measures) Bill 2011 today, which will amend certain provisions of the Customs Act 1901 concerning reviews of antidumping measures. The legislative measures to counter dumping have been in operation since early last century. The first country to introduce antidumping legislation was Canada, in 1904. Australia's legislation dates back from the Industries Preservation Act 1906.

In brief, the amendments contained in this bill will clarify the circumstances in which the minister may revoke antidumping measures. Australian antidumping laws, which broadly follow the World Trade Organisation AntiDumping Agreement, aim to prevent the dumping of imports found to cause or threaten 'material injury'. Although dumping is not specifically prohibited, competition from imports can be considered by the Commonwealth to be unfair in certain circumstances and remedial action can be taken.

Dumping occurs when an overseas company exports its goods to another country, oversupplying it at a price that is below the price it charges in its home market or is below the cost of production. Antidumping measures are imposed to prevent an importer from unfairly damaging Australian manufacturing. Australia's antidumping and countervailing system is an important facet of our trade environment and helps to protect local industry and jobs. That is why this bill is so important. The Gillard Labor government supports local industry because local industry is important for our nation. It is important for Australian families.

The bill responds to a decision from last year of the full Federal Court in the Minister of State for Home Affairs and Siam Polyethylene—the Siam decision, as it is called—which considered the review provisions and, in particular, the test for determining whether antidumping measures should be revoked. As the Hon. Brendan O'Connor, Minister for Home Affairs and Minister for Justice, outlined in his speech on this bill, the government believes the Siam decision will lead to outcomes inconsistent with the objectives of Australia's antidumping system, and it is appropriate that we seek to rectify it.

Minister O'Connor detailed how the Siam decision is problematic for two reasons. Firstly, the case highlighted a lack of clarity in the current review process, where affected parties must request one of three things: (a) a complete revocation of existing antidumping measures, (b) an adjustment to existing measures or (c) a revocation or, failing that, an adjustment based on changed circumstances. Secondly, the court in its decision formulated a new test for determining whether antidumping measures ought to be revoked. The formulation will likely lead to measures being revoked where they remain warranted.

This government believes that the court's interpretation of the test would lead to antidumping measures being revoked where Australian industry remains at risk of being damaged by dumping. That is why this bill is so important. We need antidumping laws that are consistent with world best practice and the best interests of the Australian economy. If a party wants antidumping measures to be revoked they will have to provide evidence that the measures are no longer warranted. The bill clarifies that if a party wants the minister to revoke antidumping measures it must initiate the request or apply for it within 40 days of a review commencing. This move will make the review process more open and transparent. It will also give Australian manufacturers adequate time to respond to an application for revocation.

The amendments make it clear that, if affected parties want the minister to revoke measures, they must apply for it and they must do so at the outset of a review process or within 40 days of a review commencing. The amendments cement the existing practice of Customs to treat revocation reviews as different in kind from reviews adjusting or updating the level of the measures, and will require an affected party to provide evidence that there are reasonable grounds for asserting that measures are no longer warranted. The amendments will also improve procedural fairness by giving affected parties advance knowledge of the process for seeking the revocation of measures and will ensure that investigators have time to consider the issues before reporting to the minister. Importantly, the amendments will give interested parties adequate time to defend their interests.

The proposed amendments also insert a new test, which will provide that the Customs CEO must recommend that the minister revoke the measures unless satisfied that the removal of measures would lead, or would be likely to lead, to a continuation of, or recurrence of, the dumping or subsidisation and the material injury that the antidumping measures are intended to prevent. Ultimately, it is a clear test which will avert the unnecessary revocation of effective antidumping measures.

The Australian Labor government is committed to its antidumping system. These amendments will ensure, where measures have been put in place to address injury faced by Australian industry as a result of unfair trading practices, those measures remain effective. Members of the chamber, may I say: it is vitally important that laws in this area are clear, for the good of Australian industry and for our international trade relationships. I say to those opposite in this chamber: local industry is worth defending. Australian manufacturing employs at least five times the numbers in our mines. Including agriculture, it is close to seven times that number. Most of our manufacturing sector and agriculture is almost entirely trade exposed. This industry deserves fair treatment in international rights and trade. They need to be afforded a level playing field.

As stated in the AMWU, CFMEU and AWU roundtable paper on antidumping, a better deal for consumers is an illusion. Short-term price cuts come at the expense of local jobs and increase prices over the long term, as the local competition is killed off. The manufacturing industry is an important part of our nation. In terms of employment, our manufacturing industry directly employs 1.1 million Australians, around 12 per cent of the workforce. Tasmania has a small but vibrant manufacturing sector. In my capacity as the member for Bass I will do all I can to encourage this sector and to protect jobs.

Another aspect to look at is the gross domestic product, gross value-added, in the manufacturing sector. According to Manufacturing Skills Australia, as at July 2009 manufacturing, including beverage, timber and paper products, contributed almost $107 billion, 12 per cent of the value of the Australian economy. This is certainly significant.

The Gillard Labor government want Australia to be a high-tech, high-value producer, paying good wages and offering a good standard of living. That is the future we are aiming for. It is the future that Australia deserves. That is why we are delivering the biggest infrastructure program this nation has ever seen: the National Broadband Network. This government are about protecting workers' jobs and their rights into the future. The government are about providing Australian children with the very best of education. The government are ending the blame game with the states when it comes to health, so we can deliver the best outcomes for patients. The government are about tackling climate change. We do not have our heads in the sand; we are not a complacent government. The Gillard Labor government have created more than 300,000 new jobs in the last year alone—and 98 per cent of these jobs were full time. Unemployment is below five per cent. When I studied economics, that was full employment. We have raised pensions. Age pensions are $128 a fortnight higher for singles and $116 a fortnight higher for couples since 2009. Our stimulus packages staved off the global financial crisis, helped families with the cost of living and built new infrastructure in our cities and country towns. Where the Liberal government provided flagpoles, the Labor government has provided jobs and infrastructure in education for the 21st century. Our terms of trade are the best in 140 years, with record returns for our export industries. Let us keep Australia strong. I am pleased the opposition are going to support this bill.

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

I rise to speak on the Customs Amendment (Anti-dumping Measures) Bill 2011. The bill before the House will change the way in which antidumping measures are viewed, and it is supported by the coalition. This bill has its origins in a recent High Court decision. Although the coalition does not oppose the bill, the bill shows how confused and contradictory the government's policies are.

Dumping is defined as an act by a manufacturer in one country exporting a product to another country at a price that is below what it charges in its home market. Also, dumping has to cause a material injury to the local industry. It is very important to note that the test to prove dumping is not one where the goods are sold below cost and it is not one where the purpose of the dumper is to damage or eliminate a competitor, nor is there any need to demonstrate a substantial lessening of competition, as there is in many other competition laws. The only test required to establish dumping is that the goods are sold below the price that they are sold at in the home market.

It is easy to understand the logic of antidumping legislation. If a producer is large enough that they are able to divide up markets on a geographical basis and then discriminate in price between the different markets without facing different costs of supply, such a practice results in cross-subsidisation from one market to the other. This distorts the efficient operation of markets and it is clearly an unfair trade practice, one which we rightly condemn. In reality, dumping is just another name for international geographic price discrimination.

If we are to condemn geographic price discrimination on an international basis, where it causes or threatens injury to small competitors, equally we must condemn geographic price discrimination within a nation's borders. In the home of free market capitalism, the USA, geographic price discrimination has been considered an anticompetitive evil for over 100 years. Back in 1911, the US Supreme Court broke up the Standard Oil Company into 34 independent companies, and one of the reasons the court cited was that Standard Oil had engaged in geographic price discrimination. As the court noted:

The evidence is, in fact, absolutely conclusive that the Standard Oil Company charges altogether excessive prices where it meets no competition, and particularly where there is little likelihood of competitors entering the field, and that, on the other hand, where competition is active, it frequently cuts prices to a point which leaves even the Standard little or no profit, and which more often leaves no profit to the competitor ...

In 1936, when America's anti-trust laws were strengthened, they included a specific provision against geographic price discrimination which was known as the Borah-Van Nuys amendment. It stated:

It shall be unlawful for any person engaged in commerce … to sell … goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition, or eliminating a competitor in such part of the United States ...

and that law remains part of US law today.

However, under our Australian competition laws we have no provision to deal with the problem of geographic price discrimination. With such a glaring hole in our competition laws it comes as little surprise that over recent years the Austrian supermarket duopoly has used geographic price discrimination to destroy competition. In one recent highly disturbing case exposed by the major TV networks it was shown that one member of the supermarket duopoly was engaging in a practice of charging altogether excessive prices in markets where it had little or no likelihood of competitors entering the field and that, on the other hand, in markets where competition was active they had cut prices to a point which drove a small competitor out of the market and as soon as that smaller competitor left the market prices were jacked up again. All this occurred right under the nose of the then competition minister, a stone's throw from his own electorate office.

While the practice of dumping has damaged many industries, I would like to share a classic tale of the dangers of dumping with the story of Herbert Dow, the founder of the Dow Chemical Company, and his battles with the Germans in the market for bromine. Bromine is a valuable chemical that has many commercial uses, including as a sedative, a flame retardant and a bleaching agent. It is also used to disinfect water and to make chemicals that work as pesticides and pharmaceuticals, and was also used in the making of film. However, since bromine was first mass-marketed in the mid-1800s the world production of bromine was controlled by a cartel of German firms who, with the German government's support, pursued an aggressive policy of dumping bromine to destroy competition from any foreign country that tried to set up to manufacture it itself.

Herbert Dow, born in 1866, was a technical whiz and an entrepreneur. During his senior year at school he watched the drilling of an oil well outside Cleveland and at the well site he noticed that the brine had come out to the surface and the brine was what the oilmen considered to be a nuisance. Dow took a sample back to his lab and tested it to see what it contained. He found it contained both lithium and bromine. So this set Dow to wondering whether the bromine could be extracted profitably from the abundant brine in the Cleveland area, as he knew that if he could find an economical way to separate the bromine from the brine he would be able to market the bromine throughout the world and break the German cartel. After many years of failure Dow developed a method of using electrolysis to produce bromine and sell it profitably for 36c a pound when at the time the Germans through their price-fixing cartel had established a worldwide price of 49c a pound.

With their monopoly threatened by this new source of supply, the Germans made it clear to Dow that if he tried to sell bromine anywhere in the world other than the USA they would dump unlimited quantities of cheap bromine on the American market and drive Dow out of business at whatever cost. But one of Dow's greatest strengths was that he was stubborn and he hated being dictated to by a bully. So he took on the German cartel and sold bromine back into Europe at 36c a pound, undercutting the German price which had been established at 49c. As soon as the Germans discovered what Dow was doing they dumped bromine into America at just 15c a pound, well below the previous world price of 49c and also below Dow's 36c, determined to drive Dow out of business. But rather than bowing down to the Germans and withdrawing from the world market because of this dumping practice, Dow had his agent in New York discreetly buy up hundreds of thousands of pounds of the dumped German bromine at the 15c price. He then repackaged it and sold it back to Europe, including Germany, at 27c a pound, making a tidy profit along the way. Dow then diverted all his US production to supply foreign demand throughout the world at 36c a pound, taking further market share from the Germans.

Expecting to run Dow out of business, the Germans were befuddled and Dow only became stronger. So the confused Germans kept dumping bromine into the US at lower and lower prices, first at 12c and then 10c a pound, trying to run Dow out of business. Meanwhile Dow kept buying all the bromine he could, repackaging it and selling it back into Europe for 27c a pound, pocketing an even greater profit at the expense of the Germans. Once the Germans finally discovered what was going on it was too late. The Germans had lost millions, depleting their ability to develop new products. Meanwhile Dow had more capital courtesy of the Germans' dumping. That enabled Dow to expand his business and challenge the Germans' dominance in many other chemicals. For example, Dow entered the dye industry and began producing indigo more cheaply than did the dominant German dye cartel. During World War I, when Germany quit trading with the allies, Dow was able to produce products such as aspirin, phenol for explosives and chemicals used to strengthen aeroplane wings, and he did so more efficiently and at lower cost than the previously dominant Germans had. One of the great counterfactuals of world history is what would have happened if the Germans' plan to maintain their worldwide monopoly in bromine and other chemicals had not been thwarted by Herbert Dow.

While this bill is concerned with goods being sold in Australia at prices below those at which they are sold in other countries, what Australian consumers should really be concerned about is goods being sold in Australia at prices far in excess of those available to consumers in other countries. Take the example of Coca-Cola, a commodity that is sold in supermarkets in almost every country throughout the world. One would expect that there would be only marginal differences in the prices of such a popular product in supermarkets throughout the world. In Australia, the 'everyday low price' of a two-litre bottle of Coca-Cola currently being offered by the supermarket duopoly is $3.65. Yet a quick check on the internet shows that consumers can buy the same two-litre bottle of Coca-Cola in England for the everyday low price of $2.48. In the USA they pay the equivalent of $1.83. Even in New Zealand, at Woolworths supermarkets the everyday low price is the equivalent of $2.66; in Hong Kong, just $1.65; in South Africa, $2.22; and in Singapore, $2.25—in comparison to Australia's $3.65. It not just Coca-Cola. Compared to countries elsewhere throughout the world, Australian consumers pay grossly excessive prices for many basic supermarket items. So either Australian consumers are the victims of reverse dumping or there is something fundamentally flawed in the competition in our supermarket sector.

The government has failed miserably and repeatedly to protect competition in Australian markets. Before the last election the government made a big song and dance about lack of competition, but all we have seen since it has been elected is a shameful whitewash of the grocery inquiry. Its only initiative has been the high farce of GroceryWatch, the most useless website every created. Now, to show what the government thinks of competition, instead of being a ministry competition has been downgraded to the level of a parliamentary secretary. And this is all before the introduction of a carbon tax, which will push up the price of goods for all in Australia. It is a tax that will place Australian products at a significant competitive disadvantage. The real impact of a domestic carbon tax will be that overseas goods will be shipped into Australia at lower prices than those for which similar goods can be made in Australia. It will damage Australian manufacturers 100 times more than will the problem of dumped goods.

So, while we should be rightly concerned about goods being dumped onto Australian markets below the price at which they are sold in other countries, our real concern should be the fact that Australian consumers are currently paying significantly higher prices than consumers in the rest of the world do. This problem will only be made worse by the carbon tax, irrespective of any changes to our laws on dumping.

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

The bill before us, the Customs Amendment (Anti-dumping Measures) Bill 2011, is a really important bill, because it is actually about this Labor government getting serious on dumping and it is about fixing some of the long-term problems and established mechanisms that have been part of the market for quite some time. It is also about making sure we get the balance right between our WTO and free trade obligations, supporting local industry and making sure consumers get a fair price. It is not just about a cheap price; it is about a fair price—an equivalent price.

While I appreciate the comments and the history lesson from the previous member speaking, the member for Hughes, what he said really does not put into context the issues he raised—or dumping issues or the complex and sophisticated nature of what occurs today compared with what used to happen in the 1800s. But I do appreciate what he said. I thought it was quite interesting.

This bill clarifies for the first time when the minister may revoke antidumping measures as a consequence of a particular review. It responds to a very important decision of the full bench of the Federal Court—the Minister of State for Home Affairs v Siam Polyethylene Co Ltd, referred to as the Siam decision. This is really important, because the decision set up a catch-22 mechanism, which is quite dangerous and very problematic. What it meant for the minister was that he was compelled to act in a particular way which would not be in the best interests of this country or of industry in this country. It actually would have led to more frequent revocations and an inconsistency in the way that we dealt with antidumping in this country.

It is good to acknowledge that the opposition support this amendment we are putting forward today. They could not oppose it because it is a really good amendment and it has been really good work by this government in terms of getting this right. We are proposing to insert a new test that will provide that the Customs CEO must recommend the minister revoke measures unless he is satisfied that the removal of those measures would actually lead to continued dumping, further dumping or new dumping. I think it gives the right balance, particularly with reference to dumping, the recurrence of dumping or subsidisation and whether there would be material injury, which the antidumping measures are intended to prevent.

There are a whole range of technical issues all revolving around the capacity for the minister and the CEO of Customs to get the balance right and make those decisions in the right way. For me, it is about making a better and clearer process. It is about getting it right and doing that in the best way that we can. If you have a look at the antidumping measures and the processes attached to them, they are quite involved and quite complex and people would understand why there is the necessity for change. We just need to make it a workable and practical process that recognises the difficulties that Australian industry faces when it is up against actions that are really difficult to prove or interactions at arm's length in another country that might be dumping here in Australia. This amendment will also provide fairness by giving parties advance knowledge of the process for seeking revocation. It will give investigators time to properly consider the issues before reporting back to the minister. One of the big problems has been that not everyone gets the same access to information. That actually causes a problem, particularly for those who are seeking to amend or get right the antidumping measures or countervailing measures.

These amendments are sensible and they take us forward on the really complex matters of antidumping and how Australia plays a fair and robust role in the application of these measures. It is my view, and I would say it is the view of all of us in this place, that Australia has a great track record on these matters. We play a fair game. We seek to trade freely across the globe. We seek to interact with our trading partners on that basis. But the reality is simple—that is, dumping is real and does occur. At a simplistic level, dumping occurs when a foreign company sells products in Australia below the price they sell it for in their own country. It is a bit more involved and complex than that, but as a basic approach that is what is about. Let us understand that this occurs regularly and that it has an enormous impact on our industries, on our jobs here in this country, on our capacity to manufacture, to produce and to keep prices down and on our capacity to make sure that the Australian consumer has the best possible access to good quality products that meet our requirements at good, fair and cheap prices. If we do not get that balance right, it makes it very hard for Australian companies to compete with dumped imports. I hold firmly to the view that Australian companies ought to compete. They ought to innovate and do everything they can. They should not use dumping or antidumping as a surrogate for not fulfilling their part of the bargain, which is that they have to work hard and make sure that they can compete against equal products. If they are being provided fairly and cheaply in this country then we need to be able to compete with that. But as I have said a number of times, we want free trade that is also fair. It has to be a two-way street.

This is not just an Australian problem. Dumping is bad for any nation in which it occurs. When I say it is bad, it can mean the end of an industry altogether, particularly where that industry is a 100 per cent import replacement industry. Whether such an industry survives or not hinges on getting that balance right in terms of antidumping. You cannot come back from that position. Once an industry disappears, you cannot rebuild it. The capital cost and the fear of investment and everything that is attached means that once we lose a particular industry then it is gone and it is gone forever. There is plenty of evidence of that happening in this country. In fact, the Productivity Commission report shows a really interesting graph which they say shows that there is less and less need for antidumping measures because there are fewer and fewer cases. But if you actually track that through history you find that the fewer cases represent less being manufactured in this country. There are fewer cases to compete against because we have less manufacturing. I do not want to see that graph get to a point where there are no cases of antidumping because nothing is produced or manufactured in this country any longer. I think the Productivity Commission actually got that part of it wrong when they looked at what that meant for Australian industry and for competition.

This bill is about strengthening our antidumping legislation. It is about making certain it is fair, free trade that we are dealing with. It is about making clear, for all affected parties, the process to be followed in giving all affected parties more opportunities to have their voices heard when a review does occur. Dumping is complex. It is complex in a whole range of areas. It is complex because not everyone plays by the same rules and in the way they apply those rules. For example, Australia does recognise China as a market economy, whereas the US, Canada and the EU do not. That sets up a whole range of circumstances which make it much more complex for the Australian market and manufacturing and industry in Australia.

Australia must, under the rules, use Chinese domestic prices when establishing whether dumping is occurring. All other information available to make sure that dumping does not occur does not necessarily play a role, which makes it very complex in determining whether dumping is or is not occurring and, for that matter, whether there is material injury to a particular organisation or company or the wider market. As other countries do not recognise China as a market economy they use a proxy or a surrogate price, which can often be a more representative value of the cost in-country compared to the cost in our own market. Because of this, Australia often becomes the target market for dumped products, and this has been evidenced by a whole range of recent incidents. Basically, we are seen as a soft touch in a whole range of other areas.

I know the Senate economics committee is currently considering a separate bill sponsored by Senator Xenophon, which is aimed at strengthening antidumping provisions. While there may be some debate about all of the terms and what those provisions might be, I broadly support what Senator Xenophon is trying to achieve and I appreciate the work that he has done with this bill. I look forward to reading the report by the Senate economics committee on this legislation.

The reality is that we can do more to strengthen our antidumping legislation while still meeting our WTO obligations, because of the flexibility and judgment that is allowed by the current regulations to respond to genuine cases. We need to make sure that we get that right.

I have been saying, 'Let's do the right thing by industry. Let's do the right thing in terms of consumers as well, to make sure they have access to good-quality and cheap products.' But let us not throw out the baby with the bathwater. Let us not kill our industries on the basis of inflexibility in terms of our regulations. There is plenty of evidence to support that case. As one submission to the committee points out:

The current provisions within the antidumping system, for example tariff measures, that may be applied to international companies' exports into Australia are less than those which would apply if the same anticompetitive and predatory pricing activities were undertaking in Australia between Australian domiciled companies—for example, as contained within the Trade Practices Act or the ACCC regulations.

To put it simply, we are harder on our own than we are on foreign imports.

I also want to take this opportunity to look at the real impact of dumping by bringing some other examples to the table. I want to mention the very good and serious work and the good campaign that is being carried out at the moment by the Australian Manufacturing Workers Union, the Construction, Forestry, Mining and Energy Union and the Australian Workers Union to the Senate Standing Committee on Economics. It is a really good submission, which really takes this issue seriously because it affects so many workers and so many people across industry. And it will have a long-term affect on consumers in this country when certain industries are no longer with us.

In particular I want to raise the issue of Capital Limited, which over the past 10 years has been competing against Chinese imports, particularly on subsidised aluminium extrusions, which have taken a substantial market share in Australia. Capital, like many other businesses, are competing internationally. They are competing globally. They produce a fantastic local product but find it very difficult to compete where there are cases of dumping.

The reality is that we did find dumping. As a result of that dumping occurring, action has been taken. Unfortunately, in most cases, that action took place way too slowly and way too late. The damage has already been done or the size of the antidumping measure or countervailing measure was just too small. There are also the cases of Carter Holt Harvey Woodproducts, Big River Timbers and Boral in the Australian plywood production market, which has contracted by more than half since 2000. Dumping was also identified in that market, and measures were put in place against imports from China, Malaysia, Chile and Brazil. The reason I mention this is to make the point that this is real stuff that happens every single day. We need to ensure that our antidumping measures are responsive to what actually happens in the marketplace—and that is harder to prove. I am talking about situations where countries provide free products or do not act at arm's length in their in-country transactions, and that makes it very difficult for Australia to compete.

This is not a question of protectionism versus free trade; it is much more complex than that. I think we all agree that, being a globalised country which has formed the basis of its wealth creation on trade, we believe in free trade and that we are a robust trading nation. But trade has to be fair; we cannot be the soft touch—the patsy—allowing the dumping of products in this country. There are plenty of examples of good, strong manufacturing—globally competitive manufacturing—in this country having been put out of business because of cheap imports.

I am all for consumers having access to really good, cheap products; I have spoken on this in the House before. I do not mind cheap imported cars—I do not care how cheap they get—but I think there needs to be a fairness about the way it is done. We cannot just be used as a dumping ground for other people's exports and prop up their industries while ours suffer as a consequence. I think we need to get that right.

I believe very strongly that this country and our response ought to be as courageous in supporting industry and jobs and fair trade as we are in supporting free trade globally, free trade agreements and World Trade Organisation rules. I commend the bill to the House.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

It falls to me to do a bit of filibustering, if I might use that word, until the next speaker comes before the Committee. We are dealing with a bill, the Customs Amendment (Anti-dumping Measures) Bill 2011, to introduce procedural requirements in order for the Chief Executive Officer of Customs to recommend, and for the minister to declare, that antidumping measures be revoked at the conclusion of the review and to insert a legislative test outlining when the CEO may recommend that the minister revoke antidumping measures. The position is that it is a fairly uncontroversial bill. There is no need for me to say much more, because I think have summarised it, and the next speaker has arrived.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I welcome the opportunity to debate the Customs Amendment (Anti-dumping Measures) Bill 2011. My electorate of Tangney has two strong industrial manufacturing regions: Canning Vale and Myaree. Many residents of my electorate are employed in each of these regions. As well as heavy industry and manufacturing, Canning Vale especially—but also Myaree—has small- to medium- sized enterprises and many mum-and-dad industries. Why is strengthening antidumping laws important?

Recently a number of business owners and operators have approached my office to discuss how the flood of cheap products and materials into the market is affecting the competitiveness of their businesses. These local businesspeople feel cheap imports are undermining their profitability and in some cases their very survival. Each and every individual felt they could identify a case of dumping that was directly responsible for hurting their business and few felt they would get fair judgment of their case under current antidumping laws. All agreed that stronger and more flexible antidumping laws are a welcome measure for business in Tangney.

Complaints from local businesses in my electorate demonstrate that the present system is too cumbersome and that it places the onus of proof on domestic business rather than on their competitors. Other complaints are that it applies retrospectively, often after irreversible damage has already been done, and that it is generally prohibitively expensive to access. Make no mistake: while the businesses in my electorate thrive and encourage open and free trade, a foreign manufacturer or producer exporting product into Australia below the price it charges in its home market is the unfair predatory pricing that dumping creates. As many of Tangney's businesses are trade and import exposed small- to medium- sized enterprises, I am certain many more businesses than have come to see me are directly affected by dumping, with little recourse.

Dumping is a modern form of protectionism with many international trade experts citing it as the most serious impediment to international trade. Many countries, especially in the EU, have over the past 20 to 30 years increasingly turned to dumping in order to offer protection to import-competing industries. Yet, while Australia's industrial products market is one of the most open markets in the world, the government only pursues a small number of dumping cases. Antidumping measures allow our government to apply for countervailing duties on goods that have been subsidised by the government of the country of export. Where dumping or subsidisation results in material injury to local industry, antidumping or countervailing duties can be applied. To demonstrate its seriousness, since 1980 GATT and WTO members have filed more complaints under the international anti-dumping statute than under all other trade laws combined. Further, more antidumping duties are now levied in any one year worldwide than were levied in the entire period 1947-1970.

Dumping hurts the competitiveness of businesses in my electorate and I welcome these changes. From an international law perspective we must be aware that, while the Australian antidumping system is based on agreed WTO rules and procedures, these measures only benefit a small number of import-competing firms while imposing greater costs on the rest of the economy. In short, international trade policy has little effect on antidumping legislation. Foreign industry can almost guarantee it will not be subject to antidumping tariffs if it charges high enough prices in its export markets. Domestic industry might resist lowering its prices because doing so improves its chances of winning an antidumping case. The same domestic industry might also lay off more workers than expected because doing so indicates injury. My point is, the intricacies of antidumping measures are immense and that is why the Productivity Commission was asked to investigate our current regime in 2009.

The Productivity Commission's report looked at some of the ways the current antidumping laws impact on the wider economy, with certain antidumping measures too easily becoming akin to long-term protection measures or becoming outdated in the face of changing market circumstances. The task force will examine the problems with the current regime with the aim of developing substantive policy designed to stop foreign companies dumping cheap products on Australian markets. The task force honours a coalition election commitment to ensure that Australian manufacturers' products are not undercut by imported or subsidised products or by products that do not comply with appropriate quality standards. Again, as the federal member of an electorate with a heavy import orientated sector, I am proud to say the coalition is standing up for local industry. The establishment of this task force also acknowledges the widespread call from industry groups for improved access to the current antidumping system. Worldwide dumping concerns are not new, and Australia is playing catch-up to the European Union, Japan and the United States. This coalition task force represents the most serious attempt to remedy what is a huge issue for industry in Tangney.

I noticed the budget contained no new money to combat dumping, as was pointed out by the Australian Industry Group CEO, Heather Ridout. If the Labor Party is serious about antidumping measures it should listen to AWU secretary Paul Howes, who has called on his members to write to their local member about dumping. I welcome Mr Howe's sentiment, but, given his influence in the Labor Party, I wonder why he is putting the onus on his members to force change. He also has not committed his union to the measures in this bill.

Questions I believe we need to address include whether antidumping action should be available in response to imports that only threaten to cause material injury to an industry, the period Customs have to investigate cases, and whether the minister should be expected to take action where dumping is found to exist.

Competition is good for consumers and drives business innovation. But I am not confident this bill amends all the problems with the existing scheme. Opposition leader Tony Abbott has highlighted two high-profile examples of dumping. In 2008 and last year we saw a situation where toilet paper from overseas was coming into this country at up to 45 per cent below cost. Initially, antidumping action was taken, but then the government failed to proceed with the case. Another situation saw biodiesel coming into this country at, it is believed, 40 per cent below cost. A Customs report highlighting this dumping case has been sitting on the minister's desk since late last year. I understand no action has been taken.

I do not think any Australian manufacturer objects to strong competition, but it has to be fair competition—and when you have materials coming into this country well below the cost of manufacture and transport that is dumping. Australia must make sure that our manufacturing industries and producers are not needlessly put at risk by an ineffective antidumping regime. Free trade requires a level playing field, again something I am not confident this bill provides. Local business in Tangney is not looking for a handout or a hand-up, simply the freedoms needed to compete in the local market. I do not think this bill goes far enough to address dumping, but it is a start.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker Georganas. Before I start my discussion of the Customs Amendment (Anti-dumping Measures) Bill 2011 I will just inform you that we had the Paniyiri Festival in Brisbane on the weekend and your name was mentioned, and I did mention you in my speech to the crowd—you and Maria Vamvakinou rated a mention.

I rise to speak in support of the Customs Amendment (Anti-dumping Measures) Bill 2011. As we have heard from other speakers, Australian manufacturers have been doing it tough lately. They have been copping it from all sides. We see the drop in demand for manufacturing exports as a result of the global financial crisis and flowing on from that the rising dollar making it harder for our manufacturers to compete because our wages and costs are that little bit higher. In my electorate of Moreton, manufacturers are just starting to get back on their feet after the January floods wiped out much of our industrial zones in Rocklea, Archerfield and Acacia Ridge and even in patches of my home suburb of Moorooka. Over 1,000 businesses had water over the floorboards and many of those were manufacturing businesses. Obviously it is relatively easy to move transport or even to move stock to higher parts with forklifts and the like but with some of the heavy engineering equipment it is different. There was a sad story of the business I visited with the Prime Minister and they had a $2 million piece of engineering equipment that they just could not physically move, even though they knew the waters were coming. Even with insurance paying, it takes six months or a year to bring out something like that from Germany as a replacement piece of equipment. So manufacturers in my patch and around Australia are doing it tough.

As this legislation has indicated, they are also particularly under threat from overseas firms who dump their products in the Australian market at short-term lower prices that undercut and damage Australian manufacturers. Previous speakers mentioned lots of examples but the most appropriate one when we are talking about dumping was the toilet paper that had been on the market at 40 per cent below the cost. I have spoken to unions about this, and particularly unions such as the AMWU, who say this has impacted particularly on the steel, aluminium, paper and paper products industries, and some of those are in my electorate.

By dumping products on the Australian market, overseas manufacturers are trying to gain market share and put Australian manufacturers out of business. Once they achieve this and claim the market share, they then bump the prices back up, and obviously in the long run Australian consumers lose out. Dumping presents a clear and present danger to Australian firms and Australian manufacturing employees. I would stack our Australian companies up against any manufacturer in the world. We can match them in terms of innovation and in terms of the sweat of employees. However, the reality is that dumping is an extra danger for them. The last thing our manufacturers need is to be undercut by overseas firms, especially those that have been propped up artificially by foreign government money. What we obviously need is a level playing field and that Australian can-do attitude and Australian initiative can come to the fore. It does Australia no good in the long run if our manufacturers are forced to shut down, to put their employees out of work merely to make way for cheaper overseas products in the short term, especially, as I said, if the prices go up once the Australian company is out of business. It is quite simple, really: we make it here or jobs disappear. That is why we need strong and effective antidumping measures in place. Obviously some people rather simplistically say that we can just impose duties on imports to get them back to a fair value with local products. But the Australian Labor Party see Australia as fundamentally a nation that believes in free trade, and that the tit-for-tat duties and levies help nobody in the long run. That way trading madness lies. This bill is urgently required to overcome the unintended consequences that have arisen as a result of the Federal Court decision in the Siam Polyethylene case. The court determined that, in the absence of a legislative test to determine an application to revoke dumping measures, the minister must revoke measures unless the dumping would cause material injury to the Australian industry. The problem with this ruling is that where dumping measures are in place there should be no material injury to Australian industry. Therefore, this commonsense bill before the chamber amends the Customs Act 1901 to clarify the circumstances in which the minister may revoke antidumping measures in light of a review of such measures. It introduces a new test where the Customs CEO must recommend that the minister revoke measures unless satisfied that the removal of the measures would lead, or be likely to lead, to a continuation of dumping and the material injury that the antidumping measures are intended to prevent.

As I said from the outset, Australian manufacturers and their employees face many threats. Who would have thought back in your younger days, Mr Deputy Speaker, when you might have been travelling around Europe, that we would have the dollar at $US1.05 or US$1.06. When I was backpacking in Europe in 1988 it was completely different. You used to have to work for a month just to be able to buy beer or something like that. Now the dollar has completely changed. While it is good if you are going on a holiday overseas or buying stuff from overseas on the web, it does not help our manufacturers or even our farmers or our miners in certain circumstances. Dumping is only one of the challenges that we face but it is a very significant threat to the manufacturing industry. That is the industry I am particularly keen to make sure that we look after as much as possible. There are other challenges of markets being rattled by the global financial crisis and, in my local area, the flood damaging so many businesses. Also we have got those circumstances where, since the floods and cyclones and the GFC, I think it is true that many Australians are knocking off their debt, which is a good thing; we see credit card debt coming down. But the problem for retailers, part of the chain that manufacturers supply to, is that people are not digging into their wallets and their pockets to spend money, which is a problem for many of our retailers. The amendments in this bill are separate to the government's consideration of the Productivity Commission's recommendations. That work is still ongoing but these amendments are urgently required in response to the Federal Court decision.

I have not had a tour of the factory yet but I have certainly had a meeting with one of the manufacturers in my electorate that makes doors. I cannot remember the name of the factory and I do apologise, but I have had a couple of meetings with them. Many of the doors in new estates come from this factory in Rocklea, but they were unfairly targeted, I would suggest, by something as close to dumping as you would get from the Thai industry. But for the intervention of the minister, it would have meant that this factory would have closed down and its jobs would have gone and so too the quite significant skills associated with carpenters, joiners, fitters and turners and the like to make these doors that then go out into people's homes. It is the case when something like this happens that you do not just set up a door assembly plant overnight; it is expensive equipment and costs a lot of money. If they are not able to turn over enough, Australian wages being what they are, it is hard to keep workers at a factory if they are not selling enough doors. We have already got enough problems with building downturns in Queensland at the moment and there is not a lot of money flying around. There will be some renovations that come with the flood recovery effort, but too many people in my electorate are having trouble waiting for the insurance companies to make a decision one way or the other. At least if they get a no they can then go off to the Queensland Premier's Flood Appeal and maybe get some money through there. If they get a yes then hopefully there will be more doors made from the factory in my electorate.

It has always been the way of the modern Labor Party that we need Australia to be much more than something that sells materials overseas that come back to us as manufactured products. We believe in skills, the high road. We believe in Australia being much more than just a quarry and a farm. We need to turn those things that we dig out of the ground into products that we can then send around the world, which is good for our balance of trade and is good not just in terms of skills but in terms of defence, where you need to have certain skills. I am sure that as a South Australian MP, Mr Deputy Speaker Georganas, you are aware of the important role that the car industry plays in terms of making sure there are sufficient skills that can then lead on to defence type skills. That is the smart road, the high road that the Labor Party believes Australia should go down. That is why the NBN is such a priority for us. We believe in services that can be sold around the world. I remember during the election campaign those on the opposite side laughing and asking how we could become a focus for money, banking services and the like. But now look at what we are doing in terms of the funds that have been administered and in terms of superannuation. Places like Sydney, and hopefully Brisbane as well, will have a rightful role in showing the rest of the world that we can look after and provide services to the banking industry and the like.

Before becoming a lawyer my background was in education. We have such a great story to tell in providing a great example around the world of how we educate people, not only at the school level but also at the university level and in between, in the TAFE sector. Australia has that proud role, going back to the Colombo Plan. So often we have been able to provide a great education to people who then go back around the world. We have some of the best universities in the world; certainly in my electorate of Moreton, Griffith University is well known throughout the world as a great leader in innovations in health and the environment. I commend the bill to the House.

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

I thank the member for Moreton for his assistance in this rearrangement.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I also thank you, Madam Deputy Speaker Burke, for filling in because of the rearrangements of speakers we have had up here. I rise in support of the Customs Amendment (Anti-dumping Measures) Bill 2011. Before I speak about the changes the bill will make I will make a few observations to relay to the House concerns that are repeatedly expressed in my electorate office by members of the Hindmarsh constituency and community and, of course, by the wider population. These concerns have as their route insecurity stemming from a dynamic, competitive global economy and the continual shifting we have seen in the last 20 or 30 years of global capital and manufacturing from country to country and region to region.

Just looking at the electorate of Hindmarsh I can name half a dozen businesses—manufacturing industries—that were there but are no longer there. They have disappeared over the last 20-odd years. We had a great employer, Clarks shoes, in the electorate, in the suburb of Marleston. They moved offshore about 10 years ago. Approximately 300 people worked in that particular factory. We also had Griffin Press, who used to print all the Mills and Boon novels—which is a little hidden secret in Adelaide—for the Asian market. They have now moved their printing overseas as well—another 200 jobs there.

So we have seen a huge shift of global capital and manufacturing moved from country to country and region to region over the last couple of decades. But people have an insecurity from this changing profitability of domestic and local production; the questionable sustainability of old, long-held jobs, the divergence of which industries we have and what we consider normal and good and, ultimately, insecurity breeding fear of change and loss, which is often a consequence of change.

Our community has inferred over many years what Australian industry is—what our industrial landscape should consist of and what jobs should be expected to remain open to successive generations. In South Australia, as we heard earlier, we have the car manufacturing industry, which has employed thousands of people over the years. In South Australia we saw Mitsubishi close down a few years ago with the loss of 1,000-odd jobs. If we have not imported a pest or disease with foreign apples or pears for a certain period of time, should we discard our quarantine and inspection services? Certainly not. The purpose of Australian law is not only to stop a proscribed activity already commenced but to prevent a proscribed activity, the threat of which hangs over us waiting for an opportunity.

The law we address here today is that of the Customs Act 1901, which became the unwitting victim of our legal system. The Minister for Home Affairs, the Minister for Justice, the Minister for Privacy and Freedom of Information, the Hon. Brendan O'Connor, explained in his second reading speech on the bill the unfortunate situation that arose from the judgment of the full Federal Court last year. We cannot have a situation in which a law devised for the proper implementation and enforcement of trade rules is undermined or removed from potential application simply because there has been no unlawful activity in the recent past. We have the law not only to enforce proper behaviour when a party is tempted to cross the line but to establish acceptable behaviour and to proclaim what is right and what will not be tolerated. So I would fully expect all members and senators to get behind the government on this matter and to support the community in its concern for the maintenance of fair trade and antidumping rules within our states and cities and within our wider jurisdiction.

In South Australia, an antidumping case recently took place involving one of the big toilet paper manufacturers in the south-east. The company bringing the products in was found to be dumping. That finding was appealed and the case was upheld. The problem is that we have many cases around the country similar to that one that, for whatever reason, are extremely difficult to prosecute. We need good laws for the protection of our businesses and all the manufacturers to ensure that we keep those very important jobs in our cities, in our electorates and in our wonderful country.

I could not go on without mentioning a particular manufacturer in my electorate, Rossiters Boots. They have been manufacturing boots there for over 100 years now. Through difficult circumstances and difficult times when manufacturing is becoming unprofitable, Dean Rossiter, the owner of Rossiters Boots is determinedly persisting and continues to produce boots in the suburb of Hilton in my electorate. I have had discussions with him over the years. It would be very easy for him to get up and move overseas, as other shoe companies have done in the past. But he is persisting and persevering, employing people locally and trying to do the best that he possibly can. In fact, in some cases, he has second and third generation people working in the shoe factory where their grandfathers and their parents were employed. They produce a very good shoe, a great product.

A few months ago, I was in Bali. We saw massive shoe production factories everywhere. People were working for $70 a week. You can see how difficult it is to compete with those lower wages in some of those countries, where these same products are being made. You can also see the temptation of those particular companies overseas to come into our market. They know that they can sell the product cheaper. They can also dump the product on the market, bringing the prices artificially low and therefore sending businesses out of business.

I am very pleased that this bill has been introduced. It will amend certain provisions of the Customs Act. The bill responds to, as I said, a decision last year by the full Federal Court, which considered the review provisions and, in particular, the test for determining whether antidumping measures should be revoked. The proposed amendments in this bill insert a new test which will provide that the Customs CEO must recommend that the minister revoke measures unless satisfied that the removal of the measures would lead, or be likely to lead to a continuation of, or recurrence of the dumping and the material injury that the antidumping measures are intended to prevent. It is a clear test which will avert the unnecessary revocation of effective antidumping measures.

The government is committed to its antidumping system. These amendments will ensure that where measures have been put in place to address injury faced by Australian industry as a result of unfair trading practices that those measures remain effective.

As I said earlier, I would fully expect all members in this place to get behind this bill, to support the community in its concern for the maintenance of fair trade and antidumping rules within our jurisdiction and support the government's bill. I commend the bill to the House.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

These proposed amendments to the Customs Act seek to clarify the circumstances under which dumping measures should be revoked. These amendments are sought to address the unintended consequences of a decision of the full Federal Court–the Siam decision–which formulated a test for revocation that will lead to outcomes inconsistent with the objectives of the antidumping system.

As a result of the full Federal Court's decision in Siam, it is much more likely that a finding of no dumping or no injury during a review period will lead to revocation. This outcome would be inconsistent with the objects of the antidumping system. The review provisions therefore need to be urgently amended to clarify the revocation test. These amendments would clarify that the Customs CEO may only examine whether the measures should be revoked where affected parties provide sufficient evidence in the approved form that there are reasonable grounds for asserting that the measure is no longer warranted, or where the minister requests such a review.

The amendments would also insert an express revocation test. Once the evidentiary requirements for initiating a revocation review have been met and a revocation review has been notified the CEO must recommend that the minister revoke measures unless satisfied that the removal of the measures would lead, or be likely to lead, to a continuation of, or a recurrence of, the dumping or subsidisation and the material injury that the antidumping measures are intended to prevent.

It is imperative that the legislation governing reviews of antidumping and countervailing measures is amended in order to minimise the number of existing measures that are revoked which would not otherwise be revoked under the proposed changes that clarify and restore the intended operation of the review provisions.

I believe that it is very timely that the issue of antidumping measures is before the House. I believe it is a very important and serious issue, especially at a time when Australian exporting and import-competing firms are struggling under the difficulties of the high Australian dollar. The Australian Workers Union has launched a campaign to raise worker and community awareness about the damage that illegal dumping is doing to Australia's manufacturing industry. The AWU says that there has been dumping of a wide range of finished goods competing with Australian producers. It says that products like solar panels, rail track, wind towers, mining infrastructure equipment, steel frames et cetera are being produced overseas, primarily by China, and dumped on the Australian market. The AWU has resolved to call on the federal government to establish an independent commission to investigate dumping allegations and to legislate to enable affected groups and unions to ask for investigations to be undertaken by this body.

The union has warned that the sustainability of Australia's manufacturing sector is under threat, and has also called on the Australian government to help local industry by adopting a strict rule-of-law approach to illegal trade practices consistent with our WTO entitlements. The AWU has informed a Senate enquiry that Australia's commitment to a global free-trade regime should be on the basis that all our trading partners consistently apply World Trade Organisation trade laws and regulations. As the AWU has stated, it is committed to free trade. Over the last 30 years, coinciding with the reforming Hawke-Keating governments, this union has played its part in ensuring the benefits of trade liberalisation. This is shared by AWU members—along with the nation as a whole—in increased investment, job creation and national income. The benefits of free trade are not in doubt. Reciprocity of access to foreign markets has also been a key driver to enhancing the competitiveness of many of the trade exposed industries represented by the AWU including, steel, aluminium, plastics, petrochemical, agribusiness and horticultural industries.

However, just as with other activities in the marketplace, rules about free trade should apply, and trade on any terms does not constitute free trade. Unfortunately, in Australia there is a lack of regulatory action and oversight, which means Australian companies are ripe for exploitative trade practices aimed at dominating local markets through a range of subsidies and dumping strategies.

In a submission to the same Senate inquiry, the AWU spoke of its national Don't Dump on Australia campaign, which was launched earlier this year. In the submission the AWU outlined the following priorities to address product dumping: first, a properly resourced and independent antidumping agency responding proactively to dumping and subsidy complaints; second, improving the culture of Customs and compliance with Customs decisions; third, that Chinese exports by state owned enterprises should be treated like other state owned enterprises in other developed countries, notwithstanding China's market economy status; fourth, reflecting WTO rights in full in Australia's antidumping and countervailing system as trade defences rather than industry protection; fifth, amending the Customs Act to acknowledge that unions should have the right to petition for investigations; and, finally, strong local content requirements. Stronger local content requirements would serve to limit subsidised imports taking market share from local suppliers.

I support the AWU campaign. I believe that national self-sufficiency is important and I want Australia to continue to have a vibrant manufacturing industry. It is therefore important that our 'level playing fields' are genuinely level.

The fate of Australian workers in trade exposed industries rests with the creation and enforcement in Australia of a strong antidumping regime in order that nations do not take advantage of our generosity of spirit in trade matters. Many governments and in particular the Chinese government intervene directly and extensively in their economy to benefit their own industries. According to the WTO rules, however, WTO members including China can only do this in a manner which does not cause or threaten to cause injury to foreign suppliers of like goods. Of all the WTO members, China faces the most antidumping actions because of dumping of product below what is regarded as normal value and for recourse to export subsidies. There are two main ways Australian manufacturers of like goods are injured or threatened with injury by Chinese exporters assisted through government policies: first, by dumping and, second, by industry subsidies. The AWU submission says:

There is widespread evidence that China is engaging in a range of illegal practices to stimulate and protect its domestic producers of green technology, from wind and solar energy products to advanced batteries and energy-efficient vehicles.

These practices are enabling China to emerge as a dominant supplier of certain green technologies. They also have facilitated the transfer of manufacturing and research and development investment into China, costing otherwise efficient Australian companies and workers the green profits and high-skilled jobs of the future. Many of these practices are direct violations of the obligations China undertook when it joined the World Trade organisation.

The Australian Workers Union wants the federal government to understand that manufacturing workers take the brunt of deliberate Chinese government policies are not based on supply and demand, not based on WTO rules, but rather on a model of state capitalism aimed at winning dominant market share, by subsidising below the normal costs of production and giving other assistance at the expense of international competitors.

Our manufacturers should be well placed to exploit the economic opportunities available from the growing clean energy global economy. In order for Australia to do this, though, we must ensure that we have an equal opportunity to compete where all nations observe the global free trade rules. Sadly, our manufacturers are not competing on a level playing field with Chinese competitors. Chinese competitors can offer dump prices in Australia, not because they are better at making certain products than Australia but because their state owned or state linked enterprises sell the inputs to their industries at less than the cost that it takes to produce them or their normal cost of production. China manages its exchange rate, and the yuan is undervalued by approximately 20 per cent to 40 per cent, affording yet another advantage. Many of the dumping and subsidy practices of the Chinese have been challenged by other jurisdictions, including the US, Canada and the European Union. The WTO has defended their right to take action, because these practices clearly disadvantage industries and workers.

In recent months, both the United States and Canada have begun to adopt a more aggressive position on China's disregard for WTO rules. If they can act against dumped products then Australia should be able to follow that lead. As the AWU has pointed out, we should not worry about claims that a strong antidumping regime is simply a new form of protectionism threatening free trade. Free trade is in reality being threatened by China's flouting of the WTO rules. If we do not act now then products that once were dumped in the US and Canadian markets will be redirected to naive Australia and we will suffer even more. China needs to abide by the international rules governing trade, investment and labour standards. To allow them to do otherwise would be to allow them to play us for economic mugs. As the Australian scholar Christian Jack said, accommodation of China does not necessitate abandonment of Australia's core values. Australia must enforce its right to apply effective antidumping and countervailing measures to prevent injury and loss to Australian industry and workers. I commend the bill to the House.

Debate adjourned.