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

I rise to speak on the Customs Amendment (Anti-dumping Improvements) Bill (No.2) 2011. I would like to begin by indicating that the opposition will be giving its support to the government on this legislation. For the record I would like to quickly restate some of what I said in my second reading speech from August 2011 on a forerunner version of this bill. The coalition is pleased to see the government accepting the need for change to Australia's antidumping system, for which key stakeholders have been calling for some time. It is good that something is finally being done about such problems. We are glad that the government has eventually responded to combined pressure from the coalition, Senator Xenophon, industry groups, individual businesses and trade unions to make changes such as those in this bill, including the introduction of a new appeals process to replace the existing appeals mechanism, establishment of the International Trade Remedies Forum and the creation of new guidelines for extensions to be allowed in certain circumstances. In principle these are all sensible and practical changes.

That said, I am unsure of exactly how long the process of delivering all of the government's 20-odd mooted changes is going to take, especially given that in the course of more than six months this is now the second tranche of legislation containing a combined total of seven of the changes. As a side note and in perfectly good faith I would like to ask those opposite if they could indicate in one of their contributions in this debate exactly how many further tranches they expect there to be regarding the foreshadowed changes to the antidumping regime and also by what date they expect the last of the various bills into which they have codified the changes of June last year to come before the parliament. It is not just the opposition that needs to know these matters; industry needs to know the time frame as well. At this point in time the answers to those questions are unclear and I assume they are unclear to everyone following this debate. At the very least, those of us on this side of the House would be grateful for clarification of whether the government still envisages that all of its measures will be implemented before the end of the financial year.

As for the specific changes that are being legislated through this bill, we support the establishment of the International Trade Remedies Forum. Indeed, the coalition has said for a long time that industry must be given a much greater voice in articulating improvements to the system and, more to the point, that its voice should be far more clearly heard. I am going to reserve my full judgment on the success of the practical operation of the forum until we are bit further down the track. If we take the government at face value on this and accept that its genuine intention is to bring together representatives from local industries, importers and unions and give them a better say in identifying problems and suggesting future improvements to our national antidumping system, then it is certainly a step in the right direction. However, I would like to add that it is not exactly ideal that the government convened the opening meetings of the forum, got the administrative niceties out of the way and began the discussions only to then uproot the process with a ministerial reshuffle that transferred the relevant frontbenchers to a different part of the ministry and effectively forced everyone to start the process all over again. As I understand from a few quarters, that is what seems to have happened, not to mention that the Labor Party has obviously been plagued by even more intense internecine warfare since then, one of the results of which will be that everyone now has to endure yet another ministerial reshuffle. As well, we approve the amendments being made to the rules and the guidelines surrounding extensions to investigation time lines. I want to add, though, that it is vital that the government devotes great care to how and how frequently these extensions are granted. Many parties in antidumping cases over the years have been intensely frustrated at the sheer amount of time it takes to resolve some cases, all the while incurring substantial financial costs—which is to say nothing of the damage in that relevant market. If the extensions allow for better and more accurate decision making then that is obviously a good thing. But if a large number and a wider range of extensions are in and of themselves potentially going to lead to unnecessary blow-outs in the time frames of investigations and/or be used as a cover to avoid expediting decisions where they should be made more quickly then that would represent seriously undesirable development.

I also want to stress much the same point in relation to the changes being introduced through this bill to the appeals process. In a general sense, we are supportive of the changes the government have outlined. I recognise and appreciate that one of the things that the government are trying to do here is raise the threshold for appeals to be instigated in the first place. In expanding the scope of the appeal hearings and increasing the number of people responsible for overseeing them, I want to sound a cautionary note again that the government will need to maintain a close watching brief to ensure this does not have the opposite effect to the one intended.

There is wide recognition that there are a number of flaws in Australia's current antidumping regime and that, unlike the systems in force in many other countries, it often works to the disadvantage of local industries and business. On the basis that the intent of this bill is to make some sensible administrative changes and on the assumption that the government will implement them effectively—a big assumption considering governance in the last couple of years—then the coalition is happy to support its passage.

But—and this is a significant 'but'—I really cannot let this occasion pass without expressing my disdain at the actions of the government in relentlessly using the issue of antidumping as the pretext for another unsavoury and desperate set of attacks on the Leader of the Opposition and the opposition generally during recent months, especially after the public release of our antidumping policy in November last year. Like everyone else, I recognise why the government think launching crazed attacks on the opposition might be its best form of defence at the moment, because the last thing they want is to be reminded of their own atrocious failings and dysfunction.

In the area of industry policy more specifically, they are desperate to make their absolutely miserable record and appalling disregard for Australian manufacturing vanish from view as swiftly as possible. It is obvious that there is significant internal division within the government on the subject of manufacturing. It is no surprise in the circumstances to see backbenchers in manufacturing seats like Wakefield and Corangamite backing the member for Griffith as a better choice of leader than the member for Lalor. It is also no surprise in the circumstances to see policymaking increasingly more about shrill statements than sensible manufacturing policy. It is why we have seen the ludicrous political rhetoric lately from the Labor Party on the subject of the car industry and the serial hypocrisy and arrogance of people like the Prime Minister, Senator Carr and the member for Corangamite, Mr Cheeseman, who prey on the fears and anxieties of car workers in Geelong before elections by spreading all manner of misinformation about the coalition's policies and then break billions of dollars worth of promises after those elections. That hypocrisy is breathtaking.

I still have a couple of copies of the edition of the Geelong Advertiser from mid-2010 that had Senator Carr and the member for Corangamite shamefully telling the community there how the coalition was supposedly going to cripple Ford and cripple Geelong with the proposed cut to the Green Car Innovation Fund. What happened? Overall, the Labor Party cut more than three times the amount of the saving that we suggested. Our suggest cut was $217 million. Labor ended up cutting the scheme by $885 million. There has still been no apology, no contrition and no fessing up to the squalid deception and dirty tricks.

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. The member for Indi should address her remarks to something that is remotely relevant to the bill before the House.

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

The parliamentary secretary has a point. I invite the member for Indi to return her remarks to the Customs Amendment (Anti-Dumping Improvements) Bill.

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

Antidumping is critical to the manufacturing sector that is facing all sorts of challenges, including that of sovereign risk due to broken promises. In that environment, it is important to canvass the issue of broken promises and how that impacts on the future viability of the manufacturing sector, and what role antidumping can play. We have seen 130,000 workers in Australian manufacturing lose their jobs since mid-2008. There are other industries in manufacturing—many SMEs in food processing, steel, glass, plastics and chemicals—who are already surviving on wafer-thin margins even before the government clubs them with ridiculous measures like the carbon tax. They are very concerned about antidumping. We have had extensive discussions with them and they are very keen to see the government's policy rolled out before they pass final judgment. The government have an obligation to explain their policies and explain how and why, if policies are so good for manufacturing, they have presided over such a sustained burning of jobs in the manufacturing sector. In the area of antidumping specifically, I have not yet seen the latest iteration of Labor's talking points, but no doubt the member for Fraser will help us out and fulfil his trademark role in his party by parroting them dutifully, word for word, a bit later in this debate. The latest lot included things along the lines that, apparently, the coalition's position was in 'fundamental breach of WTO obligations'. I think we were probably responsible for all manner of other things.

Insofar as I can make any sense of this ranting and raving, most of Labor's criticism has been directed at us because what we said in our policy was that we were determined, where possible, to make better use of preliminary affirmative determinations—and, where appropriate, we would be active in applying them from the 60-day stage of investigations. This was enough for Ministers O'Connor and Emerson to foam at the mouth about how allegedly irresponsible we were and how none of this was allowed under the WTO. In reality, what they were angry about was not that anything we were suggesting was not compliant with WTO rules; what bothered them, what really got under their skin, was that the changes we had proposed would go a long way towards creating a fundamental shift in thinking and emphasis in the way that Australia administers its national antidumping arrangements—real reform, not tinkering around the edges. I am afraid that the government have been humiliated by their own words because, as it turns out, in their own policy document, printed in June 2011, they said the following:

By day 60 (the earliest WTO consistent date a PAD can be considered) the Branch will usually have verified the domestic industry’s data, and will have received data from the exporters.

It goes on to say:

If the data submitted by the exporters shows evidence of dumping or subsidisation, this may be sufficient evidence on which to base a PAD prior to verification.

Ironically enough, that material has also been subsequently reprinted in the explanatory memorandum for this bill. So, at the same time the Labor Party is admitting to the parliament that preliminary affirmative determinations are expressly allowed at the 60-day stage and beyond, it is trying to hoodwink the public about the coalition's policy and pretending otherwise.

Of course, these kinds of double standards have been witnessed over and over again from this government—and it will no doubt continue to happen over and over again, particularly now that the member for Lalor has survived today as the leader of the Labor Party. I am hopeful that, with a new Minister for Home Affairs, we will see a far more constructive and reasonable approach, in the area of antidumping at the very least. I do not have high expectations—I am just choosing this one area of policy to see whether perhaps we could get some greater consistency and honesty in the area of policymaking. But, for goodness sake, the rest of the members on the other side are meant to be part of a government—and it is long past time the Labor Party stopped making up nonsense, breaking promises, breaking faith with the Australian people and trying to blame the opposition for its own internal dysfunctional and disgraceful failings.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

The previous speaker got a lot of things wrong, including issues relating to the car industry. I do not think she has a clue about the industry policy of this country, let alone what antidumping means and what the Customs Amendment (Anti-Dumping Improvements) Bill (No. 2) 2011 is trying to achieve.

I want to deal with dumping: where a company exports its goods to Australia at a price below that which it charges in its own market or which is below the cost of producing them. That is what we are talking about. We have to deal with that and we have to protect the standards in our own country, and that is what antidumping is about—it is not about stopping competition. This great country of Australia is a great trading nation, and we always have to protect trade as a major factor in our economy, but we do not have to accept our industries being dumped on by people who produce things and export them to our country below the price they cost to make.

Where dumping materially injures an Australian business producing similar goods, additional Customs duties can be applied as a remedy to that problem. Australia's economy is strong, but some industries are very vulnerable to dumping and we always have to be aware of that, and this bill is endeavouring to find ways to help those industries.

The World Trade Organisation recognises the damage that unfair trading practices can cause and has established a system in which countries can respond to and remedy such practices. Australian manufacturers and primary producers, especially small businesses, are finding that the expense and complexities of taking antidumping action can be prohibitive. I have spoken to many over the time I have been in this House, and they say that getting a law firm to do the work is expensive—I am not saying our law firms overcharge, but there is a lot of work involved in building the arguments. You can also get a consultant to do it, and they can charge a fair bit as well, but building the case, building the evidence to be able to stimulate a case, is a most prohibitive process for our small businesses.

This suite of improvements will help keep our economy strong and provide greater certainty for manufacturers and primary producers, and of course their workers and families and the communities in which they live and work. This bill also provides a legislative basis for the International Trade Remedies Forum, which I think will meet for the first time in August this year. So that is an international forum that has been established. Better support can be provided to our industries and workforce with a modern, rigorous and better resourced anti-dumping regime. I think there are many areas of Australia calling for this. We have had a number of examples in the past where dumping has occurred in Australia to the detriment of our industries. If there is a more rigorous appeals process, it will mean that we can make the playing field a little more even for some of those industries which are under pressure.

Australia has had an anti-dumping system in one form or another, I understand, for over 100 years. So we have certainly been aware of the problem and we have had systems to try to counter it. The anti-dumping system in its current form is governed by two key World Trade Organisation agreements: the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, also known as the anti-dumping agreement; and the Agreement on Subsidies and Countervailing Measures, also known as the countervailing measures agreement. The WTO agreements do not prohibit dumping or all forms of subsidies. Instead, the agreements govern the use of trade remedies where dumped and/or subsidised goods cause or threaten to cause injury to domestic producers—and fair enough.

The objective of the anti-dumping and countervailing system is to address the negative impact of unfair trading and activities by overseas companies on Australian industries. However, there is a tension between preventing unfair trade on the one hand and encouraging the benefits of effective competition on the other, as there always is. This is about endeavouring to get that process right. Of course, as this bill is trying to meet, there are always changing circumstances, especially when you are dealing with world trade circumstances. Australian manufacturers and producers operate in a global economy and benefit from international supply chains and access to foreign markets. Where would we as a nation be if we did not trade? We would be one-fifth of the size we are today. The benefits of such competition may be felt by consumers and purchasers of inputs, which benefit from cheaper prices and greater choice. That can translate into improved profits and profitability. We must always remember that we are a trading nation.

However, Australians can also be negatively impacted by international competition. In some cases this will be the result of fair competition from a more effective producer, somebody who has an advantage over us and the way we produce. It will be up to marketing and processes how you deal with that as an Australian company. But at other times it will come from unfair competition resulting from dumping or subsidisation. Sometimes this unfair competition can have a material impact on the industry's performance and may threaten its long-term viability. Resulting problems include reduced competition in the market and reduced choice for consumers and purchasers. So there are a lot of things around dumping and anti-dumping that always needs to be looked at and watched.

On a domestic level, this behaviour is addressed through competition regulation, including the misuse of market power provisions in the Competition and Consumer Act 2010. Such provisions aim to address the misuse of market power by looking for evidence of abuse of market power and the intent to eliminate, damage, prevent or deter competitors. The formulation applied in the current anti-dumping law looks at damage caused to the complainant. While the test does not explicitly take into account the wider economic impacts of measures, the minister has the discretion to take these impacts into account. The main challenge for anti-dumping regulation is the distinction between unfair trade and normal competitive activity. That is always the test in making sure we get the balance right.

In its recent review of the current system, the Productivity Commission concluded that Australia should retain an anti-dumping and countervailing system. However, it considered greater checks and balances needed to be included in the form of a bounded public interest test to ensure that competitive conduct was not captured by the system. In the administrative processes in this country people seem to be well aware of what we have to try to do with anti-dumping. The commission also suggested a number of administrative changes to balance cost, administrative ease, timing and transparency. For example, it noted that, under current arrangements, reviews have the same time frames as investigations when they could be completed within a shorter time frame. They also observed that reviews are undertaken infrequently. The commission also noted that the current duty collection scheme could be considered all over the place, inefficient and potentially inflexible, as duties are collected even if goods are exported above the floor price. Finally, the commission was concerned that duty assessments did not reset the level of measures applying to future imports.

TEMCO in Tasmania are having some difficulties with the price of the Australian dollar. They are a major manufacturer in Tasmania on the mouth of the Tamar River, and a considerable proportion of their workforce live within the electorate of Lyons. With its cement and ferroalloys, that comes to my mind as a company that could be impacted by dumping because global conditions such as the high dollar and cheaper labour elsewhere allows industries to consider shifting to other parts of the world where they sometimes have less stringent environmental conditions and fewer safety standards to comply with. We should always discourage these things. They do not necessarily lead to dumping, but we have noticed that they do not allow our industries to compete equally. We should be wary of this possibility with companies that go offshore and we should always have a look at what they want to put back into our country. This legislation is important for our industries and for the manufacturing base of Australia. I commend the bill to the House

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011. This bill introduces three sets of changes to Australia's anti-dumping system and attempts to address some of the numerous concerns among stakeholders with regard to the current generally unworkable anti-dumping arrangements.

Essentially, the purpose of an anti-dumping system is to allow countries to take action against foreign businesses that seek to export their product into a market at a price lower than that charged in their home market or lower than the price of production. Dumping is little more than a clinical and calculated attempt to exploit Australia's commitment to free trade by artificially distorting the domestic market. It is therefore only right and proper that we have in place measures to stamp it out. However, there are a number of technical impediments to assessing Australia's anti-dumping system, as well as difficulties with the administration of the system. In recent times there has been a great deal of frustration about the tardiness of investigations and the significant cost imposed on businesses who wish to raise cases for consideration. Bizarrely, the current system frequently imposes a greater burden of proof on local industries than on foreign competitors. As it currently stands, the system is too expensive, particularly for small and medium-sized businesses, too slow and too lopsided. Some anti-dumping cases can drag on for years, at the end of which time the damage may already have been done. When rulings are made they frequently occur too late to reverse the harm that has been caused, not only to the firms that have been directly affected, but also to the wider parts of their supply chain.

The legislation under discussion today contains provisions for several things: a new appeals process, the establishment of a trades remedy forum comprising government, local industry, importers and unions, and new guidelines to allow investigations to be extended under certain circumstances. By and large, we believe that these changes will help address some of the faults in the system. However, given that one of the main problems with the current arrangements relates to the time lines of investigations, care will need to be taken to ensure that new provisions for extensions do not result in unnecessary delays in decision making.

The coalition is also concerned about Labor's reluctance to provide more resources to Customs. Initially, the government said it would increase staff in the relevant sections of Customs, from 31 to 45. However, we have subsequently discovered that these additional staff are not based on new investment—quite the opposite. Once again, we see the government saying one thing and then doing another. The Achilles heel of the government at the moment is: 'there will be no carbon tax under a government I lead'. These additional staff will be moved, through a redeployment of resources, from other areas of Customs. This is an extraordinary decision that will no doubt put additional pressure on the Customs service, which already has plenty on its plate due to the government's ongoing ineptitude in the area of border protection.

We have seen similar situations in ASIO, with staff being dragged away from their core duties to conduct background checks on the never-ending parade of illegal arrivals. Some of you blokes opposite need to remember that you can only cut the pie into a certain number of pieces before it turns into crumbs. The coalition's preference, and indeed our policy, is for a genuine increase in the branch's resources. We believe that it would allow for stronger interpretations of evidence and prosecutions of anti-dumping cases. It would also bring our system into line with those operating in the USA and a number of EU states.

The government speaks about the protection of jobs in manufacturing. I suggest that this bill goes to protecting some of those Australian jobs from anti-dumping. The coalition's anti-dumping policy, released in November last year, is based on increasing the quality of investigations, lowering the cost to participants and providing more scope for penalties to apply to parties who refuse to cooperate with the authorities.

I mentioned earlier the perverse situation we have where the burden of proof rests more heavily on local businesses than on foreign competitors. The coalition's policy would address this by providing the authorities with the opportunity to make use of the preliminary affirmative determinations. For two months into an investigation preliminary affirmative determinations create a shift in the burden of proof, requiring the foreign producer rather than the Australian company that believes it is being damaged by dumping to prove its conduct has not hurt the Australian industry.

One industry that comes to mind with regard to anti-dumping is the steel industry. A good colleague of mine, who is one of Australia's largest privately owned steel merchants, got caught up with 18 million tonnes of steel being dropped on the docks from a Chinese manufacturer. Thank heavens that the provisions were in place whereby BlueScope was able to put an interim action on that dumping action. It stopped the stock getting to the marketplace and destroying the steel industry overnight. Interims are provisions in the act that provide for product on the dock to be quarantined and an evaluation to be made of the difference between the price it has landed for and the so-called production price. Where an Australian company believes that there is a case for anti-dumping in its sector, that money can be quarantined until a determination can be made by the relevant authorities.

Under the coalition's plan, greater financial resources and specialist anti-dumping investigators would ensure decisions are made in a timely fashion, providing greater certainty to all involved. Not surprisingly, Labor jumped on our proposal and accused us of being in breach of WTO agreements. It should come as no surprise that these allegations were completely false. Not only were the preliminary affirmative decisions consistent with the WTO's provisions, they are consistent with what Labor was actually advocating just a few months before. I imagine that must have been quite embarrassing.

Debate interrupted.