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 Tariff (Anti-Dumping) Amendment Bill (No.1) 2012 and the Customs Amendment (Anti-dumping Improvements) Bill (No.2) 2012. I note that these bills represent the third tranche of changes introduced by the government to give effect to the antidumping announcements it made in the middle of last year. So, appreciating that it may drag out this debate for far longer than is necessary, I do not intend to restate many of the points and arguments that I have made on each of the recent previous occasions that antidumping has been the subject of debate in the House and the Federation Chamber.

Suffice it to say that the coalition does, again, intend to give its support to the government on each of these two bills. In fact, we have been pushing for revisions to the antidumping regime since before the 2010 election—in other words, from long before the government finally announced its own changes. We have consistently said that we support changes to the current antidumping regime wherever those changes are sensible and practical. And we are happy to accept that this tranche of legislation meets those tests.

We are glad, in particular, to support the changes that give the minister a wider ambit and range of options in applying duties to goods that are considered to have been dumped in Australia. If the removal of limitations upon the calculation of the so-called 'normal value' of the relevant good or goods works as I think the government intends, that is also a positive step. We also have no problem with altering the minister's powers in such a way as to provide more scope and flexibility for antidumping duties to be extended beyond their originally nominated termination date. That said, we need to be very careful that that particular amendment is not ultimately used as an excuse for procrastinating and delay, because it is critically important for all of us to recognise that some of the current processes are simply too slow and cumbersome and undermine the very purpose of an antidumping regime in the first place. Anything that potentially adds to that problem of the slow and cumbersome culture is obviously a step backwards. On that note and at the risk of repeating myself again from earlier debates, I also want to make the point that the coalition believes it is critical that those administering Australia's antidumping dumping system be provided with new resources, not money shifted into the branch from other areas of Customs and especially not at a time when large cuts have already been made to other areas of the agency, including some of the deepest cuts in its history in last night's budget.

The important thing that a government can do in the first instance in the area of effective antidumping policy is provide an appropriate level of administrative support because it is that step more than any other which will help to bring cases to a speedy resolution, including by increasing the opportunity to use preliminary affirmative determinations. Just in passing, I also want to quickly note that clause 9 of the explanatory memorandum for the Customs Tariff (Anti-Dumping) Amendment Bill says:

The purpose of this Bill is to amend the Dumping Duty Act to make it easier to understand and less complex.

With that in mind, I would suggest in good faith to the government and to the relevant officers from Customs that they may want to have a look at the wording of some of the clauses and references in the explanatory memorandum—in particular, I think they may want to revisit clause 7.1 of the explanatory memorandum for the Customs Amendment (Anti-dumping Improvements) Bill No. 2. I may well have overlooked or misunderstood or misinterpreted something but, on the face of it, I think some words may be missing from that sentence or, at the very least, some words may need to be changed in order to clarify the precise meaning of that clause for most people who come to read and try and understand what it means. As it stands, at least to my eyes, the first part of the sentence does not make sense and that is in addition to a small problem with pluralisation in the last part of the sentence as well.

On the first page of that same explanatory memorandum there is also a reference to where the regulation impact statement for the bill can supposedly be found. But if I am reading that wording exactly, it says that statement can be found in the explanatory memorandum for yet another bill. And then to complicate matters it gives what I think is the wrong title of that other bill. On top of that, the explanatory memorandum for the bill to which, I can only presume, it is referring does not seem to contain a regulation impact statement anyway. So when we are dealing with quite complex legislation and when one of the clearly stated aims of these changes is to make things easier to understand, confused drafting like this does not help.

Not delving all that far back into history, there were many examples of poor drafting and poorly chosen wording in explanatory memoranda. For example, the infamous recent bills in the innovation portfolio that the government used to erroneously change the R&D tax concession into a R&D tax credit. Given the horrible confusion and severely botched processes to which all of that has ultimately contributed—and I might add to which there is still no clarity in many areas—I would urge the minister and Customs in the strongest possible terms to steer violently away from that type of drafting.

I would like to restate the coalition support for each of these bills and to say that we will happily stand ready to continue to make a range of very practical, very sensible improvements to Australia's antidumping arrangements to ensure that they are accessible and that they are effective in preventing goods being dumped in Australia. That is the very least that industry expects—just a system that actually works and that is not too expensive or too complicated to access. Indeed, if we are privileged enough to be elected to government at the next election we look forward very much to the potential opportunity as a coalition to implement the antidumping policy we announced publicly in November of last year, which has received widespread industry acclaim.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012 and the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2012. On 20 April 2012, Capral CEO Phil Jobe met with the federal Minister for Home Affairs, Jason Clare, and me. Bundamba aluminium business Capral is quoted in the Queensland Times calling on us to bring forward this legislation. Mr Jobe said:

Chinese manufacturers are currently exploiting and circumventing existing legislation … The anti-dumping laws haven't been updated in over a decade, so it's good to see that under this government they are being brought up to date.

A key weakness in Australia's approach to dumping is the abject failure of the previous Howard coalition government and its unmitigated disaster in the recognition of China as a market economy as a precondition of FTA negotiations. That has restricted the ability of local authorities to apply subrogated or proxy pricing in cases where normal values cannot be easily assessed. China, for example, makes it very difficult in this regard. Customs has not been adequately funded or resourced in the past and is really fighting this issue—as are stakeholders like the AWU, Capral and other organisations—with one hand tied behind its back because of the complete and utter disaster of the Howard coalition government in the recognition of China as a market economy. This has resulted in a limited and partial application of relatively small dumping duties in some cases, compared to Canada and the United States, which adopt a very different approach to that of Australia in this regard.

In this country we need a properly resourced and independent antidumping agency responding to dumping and to complaints of stakeholders like the AWU, Capral and others. The Australian Customs and Border Protection Service is the only agency responsible for antidumping and countervailing investigations in Australia. The Trade Measures Review Officer provides an independent administrative appeal mechanism in relation to these matters. This is probably amongst the most complicated laws you could possibly imagine. For example, Capral itself has been involved in litigation in this regard and has had to spend considerable money on the services of a very eminent QC on numerous occasions to give advice and to represent them in these types of matters.

Paul Howes, the national secretary of the AWU, has said the oversight by Customs historically in this regard has been manifestly inadequate. This is primarily the fault of a failure in the past to address and resource problems of jurisdiction within Customs. Paul Howes says there is insufficient legislative coverage and weak governance in the department. As I said, the United States and Canada have adopted a quasi-judicial approach to the application of this type of legislation in the assessment of any injury, material or otherwise, to domestic industry. We have not adopted that approach. It all comes back to the ground rules and the establishment by the Howard coalition government in relation to the FTA and recognition of China as a market based economy.

In the past, the trade measures branch of Customs has been a little akin to the Swansea licensing bureau in Yes Ministera poor cousin to colleagues focusing on border protection activities. The consequences are dramatic. We have seen importation of Chinese aluminium extrusion products dramatically impact upon Australian industry. Capral at Bundamba in Ipswich has 300 workers but, sadly, the plant utilisation is about 60 per cent. It is the result of experiencing unfair competition from Chinese imports. There has been a loss of well over $250 million of revenue in this sector. There has been the elimination of production activities and, as I say, suboptimisation of utilisation of plant in Australian facilities—for example, at Capral at Bremer Park in Bundamba, Ipswich. The Chinese have further expanded downstream their fabrication products. Our antidumping decisions in the past have actually buoyed the Chinese exporters. As Phil Jobe said to me in numerous meetings, they cannot believe their luck. We have seen a rising Australian dollar, and this has threatened the Australian industry. The consequences are that Chinese extrusion companies are supplying primary aluminium at rates that are about 20 per cent lower than prevailing world rates. They are simply setting artificially the yuan rate, which a lot of commentators say is 20 to 30 per cent lower than it should be. In addition to that they are subsidising their industries dramatically, dumping lower-than-cost products into Australia. It is unfair for our workers, it is unfair for our employers and it is unfair for our industry. We have seen Chinese aluminium exporters aggressively capture well above 35 per cent of the Australian market in recent years. On a per capita basis, according to the evidence I have obtained, Chinese extrusion exports to Australia are more than five times higher than to any other country, and that is a direct result of failures in the past.

So we need to believe in fair trade as well as free trade. This is not about protectionism. This is about creating the opportunities for our very skilled workers and our very skilled operators, like those at Capral, to make sure we have a level playing field so that we can compete competitively. It is not about breaching our obligations under the WTO rules. It is about making sure that countries comply with those rules and that they do not unfairly dump products into our country in breach of those rules. We are rolling out some of the most effective improvements to Australia's antidumping regime in more than a decade to improve its effectiveness. At the same time, we are reaffirming our commitment to the world trading rules.

We believe in free trade in this country, but we believe that trade should be fair. We do not believe it is fair to Australian workers and Australian manufacturers that China—or any other country—exports its goods to Australia at prices below the price it charges in its home market or below cost. That materially injures Australian businesses and puts Australian jobs at risk. So we have announced a number of reforms, and the legislation before us today is the third tranche of those reforms. I am quite committed as a local federal member in my area to making sure we protect Australian jobs. By that I mean making it fair so that employees, whether union members or non-union members, of companies like G James Glass & Aluminium, Capral and others in the Ipswich area and the western corridor are given a fair shake with respect to the operation of businesses.

I am pleased that Minister Clare has met with Phil Jobe and stakeholders to make sure we can do everything we can in the legislation to protect Australian jobs and give Australian manufacturers a fair go. Specifically, the legislation before the House today gives the CEO of the Australian Customs and Border Protection Service—the minister—the power to act on the basis of all facts available in determining whether a countervailable subsidy has been received and the amount of the countervailing subsidy if adequate information has not been provided to Customs by the country of origin or the company being investigated. A lot of these companies are Chinese state-run companies. The legislation also removes the limitation to the exclusion of profit when considering a normal value of a good and removes the need for a separate review of antidumping measures and a continuation inquiry when they occur in close proximity to one another. That is one of the biggest problems in this area: there is inquiry after inquiry after inquiry—one after another—which comes at a cost to the stakeholders.

One of the great reforms we put in place earlier was to empower organisations like the AWU and Capral to have standing—locus standi, to use the legal expression—to take countervailing measures and to use litigation. In the past, they often did not have the standing they needed. So we are going to do a number of things. We are allowing the minister to use additional forms of interim dumping duty beyond the single duty that is currently provided for. The new forms of duty to be outlined in the regulations are ad valorem duty, a fixed amount of duty or a floor price mechanism. These are part of the announcements that we made in the middle of June 2010 when we described it as streamlining the antidumping system. There are a number of improvements. I think the increase of 45 per cent in Customs staff working on antidumping issues is welcome. I think that has been important in the past. They have not been funded properly with adequate resources. The 30-day time limit which we have imposed for ministerial decisions on antidumping cases is very important. In the past it took ages and ages for decisions to be made and this puts a limit so that the minister can actually make decisions in that regard.

There are a lot of things that we have done. There is stronger compliance. That is one of the things that these bills do. I met with Phil Jobe recently and we talked about the measures at the ports and the waterfront and how they get around our duties and customs. I know that Phil has met with the minister to talk about what we can do in a practical way, a non-legislative way to actually stop Chinese and other companies from getting around our border protection mechanisms.

I think it is important that industry and trade experts have the power, the resources, the expertise, the knowledge and the muscle legislatively and financially to be able to get behind and investigate these complaints. I think there needs to be greater flexibility. I practised as a lawyer for more than 20 years and I am telling you that, when I read the legislation here, I read the litigation, I read the decision making and I read the QC's advice, this is about one of the most complex areas of law. It really is extraordinarily complex. We need a more rigorous appeals process. We need to be supported by more resources and I am glad we are doing that. I am glad we are taking a more flexible approach in terms of the standing of people to do it.

We are making big efforts. There is a lot more to be done. We need fair trade as well as free trade. We need to make sure that workers in the western corridor and across my electorate of Oxley get a fair go in this regard. I am pleased that Minister Clare has come to the plant in Ipswich. He said that Capral's plight was indicative of the manufacturers across the country. In the Queensland Times of 20 April this year he said:

Australian manufacturers are under a lot of pressure. Some of that is due to the high Aussie dollar, and illegal dumping adds extra burdens and extra pressure to these businesses.

I know that, the workers know it, the government knows it and we are acting through this legislation.

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

  I rise to speak on the Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012 and the Customs Amendment (Anti-Dumping Improvements) Bill (No. 2) 2012. Firstly, the coalition supports these bills. They are measures making sensible and practical changes which will help in a small way to address the inherent weakness of Australia's antidumping laws. Our support for this legislation exposes another myth that is perpetuated by this Labor government that we in the coalition oppose everything. Where we see legislation that has merit, such as that in these bills, we will support it but, where we see legislation proposed that has been poorly thought through or is nothing other than a political fix and is not in the best interests of Australia, the coalition will make no apology for vigorously opposing such legislation.

These bills are the third tranche of legislative changes to Australia's existing antidumping regime that Labor has made during this term of parliament and I understand that there are at least one or two additional bills to be introduced later this year. Why has it been necessary for these changes in our antidumping laws to be made in four or more separates tranches spread over 12 months? This remains a mystery that perhaps only the government can answer. It would have been far more efficient for all, especially Australian industry, if these changes to our antidumping regime had been made in one block of legislation, but unfortunately efficiency and this Labor government are not words that are often found in the same sentence. Going to the specifics of the bills, they firstly amend the dumping duty act in order to allow the minister to use different forms of interim dumping duties from those currently used. This change is consistent with the World Trade Organisation's antidumping agreement, which currently does not mandate the method for calculating the level of duty where an interim dumping duty is imposed. These amendments will enable the minister to impose either an ad valorem duty or a fixed amount of duty, a combination of the two or a floor price. Currently, the minister can only use a combination form of interim dumping duty, which is a fixed component or a variable component. This legislation simply gives the minister greater ability to impose the penalty duty required.

The bills also add new provisions to the act which will implement proposals to amend the subsidies provision in the Customs Act to better reflect the definitions and the operative provision of the World Trade Organisation Agreement on Subsidies and Countervailing Measures. In addition these bills amend division 6A, the 'Continuation of anti-dumping measures', of the act, which will enable measures to be amended, including by altering the level of applicable duty, if the minister decides to continue them. Currently, the only means of amending measures that are to be continued is the conduct of a separate review of the measures in close proximity to the continuation inquiry. Again, this gives greater flexibility in dealing with the problem of dumping. In addition, the bills repeal section 269TAC(13) of the Customs Act to remove the current limitations on determining profit when constructing the normal value of the relevant goods alleged to have been dumped in a foreign country. This deletion implements the government's response to recommendation 3.4 of the International Trade Remedies Forum report on the effectiveness of market situation provisions in the Customs Act.

Despite these changes, there are still many practical difficulties in determining when goods are actually dumped. For example, how do you calculate the normal price of a good? In markets where prices change frequently, responding to market conditions, is it the price last week? Is it the price last month? Is it the price last year? For commodities, is it what the price will be in the future? What about exchange rates? How do you calculate how a firm has actually calculated the exchange rate? A company may use an internal hedge, especially in the current market, where we have seen such extreme volatility in exchange rates. Further, how do you calculate the price in the domestic market, where different costs may result in the same goods being sold at different prices in different regional markets within one country?

Then there are the terms of sale. Price differentials, which often may seem to be price discrimination, may be explained by a difference in trading terms. If goods are purchased under a letter of credit this obviously has a different price, as if they were sold on trading terms with 30- or 60-day open terms. There are also credit risks and statutory warranties. All these factors need to be considered in the pricing of goods. Further, how do you actually apply a quantity discount? This is another calculation that Customs must make in determining whether goods have been sold below cost. This makes it very difficult, if not impossible, for an Australian Customs official to determine whether a good has been exported into Australia at a price that is different or lower than the exporter's home market.

When determining whether goods are being sold at higher prices in the Australian market, we need to make an apples-with-apples comparison. But this is very difficult because often the goods and products exported to Australia are simply not the same as those being sold in the home market. So where an apples-with-apples comparison cannot be made, although Customs officials can look to the price charged by an exporter in another country and make the calculation based on a combination of the exporter's production costs, other expenses and normal profit margins, it is simply impossible for Australian Customs officials to accurately determine what the price would be if the goods were theoretically only available in a foreign market. Thus, any estimation of prices by Customs is purely an arbitrary figure. These are just a few examples of the difficulties that our Customs officials face when implementing this legislation. A recent example of the problems in determining this arose in the electorate I represent where a dumping investigation was undertaken by the Australian Customs and Border Protection Service upon an application lodged by Advance Cables, Olex Cables and Prysmian Power Cables and Systems Australia on behalf of Australian industry producing like goods into an alleged dumping concerning electrical cables exported to Australia from the People's Republic of China. I am sure these firms felt that the goods were being dumped into the Australian market at below the cost of what they were made for in China. However, as a result of Customs and Border Protection's investigations, Customs determined that the electric cables exported from China to Australia had not been dumped and therefore terminated the investigation.

We must also recognise that an effective and workable dumping regime treads a very fine line. An antidumping regime that is too harsh and is too complex can easily be used as a protectionist measure, which harms Australian industry and harms Australian jobs. For example, many Australian manufacturers rely on imported components to manufacture goods in Australia. However, an antidumping regime that is too complex can result in these manufacturers being tied up in red tape, defending dumping claims for a vital business input which they need in their processes here in Australia.

We also need to be aware that this could also work against us in Australia. When most Australian exporters go overseas and try to sell their goods on overseas markets they do their pricing with a sharper pencil and that would be against World Trade Organisation rules. However, these modest amendments to Australia's antidumping laws are not a cure against the many factors that are causing the declining competitiveness of Australian industry. The facts are that while many Australian companies may consider that goods are being dumped into Australia because they seem cheap, the reality is that as a nation we are giving away many of our competitive advantages.

In business, you can only succeed if you have a competitive advantage and you safeguard it, for your competitive advantage is your lifeblood. A company may be able to survive for a while if it has competitive parity but if this turns into a competitive disadvantage, extinction is just around the corner. In Australia, our labour costs are traditionally a competitive disadvantage. We will never be able to compete—nor do we want to—with China and India on labour costs. But one of our greatest competitive advantage is our low-cost electricity supplies. Abundant supplies of high-quality black coal, generating low-cost electricity, is one of the few competitive advantages we have here in Australia. But this government, in an act of economic treason, has surrendered this national competitive advantage. A recent report released by the Energy Users Association of Australia shows average electricity prices in Australia are now amongst the highest in the world and, once the world's biggest carbon tax takes effect, Australian industry will be paying the world's highest electricity prices. Interestingly, South Australia, which boasts about having more wind turbines than anywhere else in Australia, can now also boast that they not only have the highest electricity prices in Australia but have the highest electricity prices in the world.

It is important to note that, under the World Trade Organisation's definition, 'dumping' is not just selling goods below cost for an anticompetitive purpose. The WTO's definition of dumping also includes merely selling a good for a lower price in a foreign market than is charged for the same good in the exporter's domestic market. Effectively, antidumping legislation attempts to ensure that a firm makes the same level of profits in an export market as it does on a domestic market for the sale of the same good.

Under World Trade Organisation agreements, dumping is rightfully condemned if it causes or merely threatens to cause material injury to a domestic Australian industry. Essentially, when it all boils down, dumping is merely geographic price discrimination on an international basis—the selling of the same goods at different prices in different markets where the markets are able to be segmented by international borders. If we are to stand here in this parliament, with speaker after speaker condemning dumping—geographic price discrimination—across international markets because it causes or threatens to cause material injury to an Australian business, we must also condemn geographic price discrimination when it occurs internally within our borders, especially where it causes or threatens to cause material injury to an Australian business. Otherwise, if we fail to do so, we are nothing more than hypocrites. While it is important that we have effective laws to deal with geographic price discrimination when it occurs across political boundaries and internationally, I say it is equally important that we also have strong laws when it occurs internally in Australia. Yet, unlike other countries, Australia has no provisions in our competition laws to deal with anticompetitive geographic price discrimination when it occurs across different markets within Australia. In the home of free market capitalism, the USA, the Robinson-Patman Act has a specific provision against geographic price discrimination. This act provides, in part:

It shall be unlawful for any person engaged in commerce, in the course of such commerce … to sell, or contract 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 …

These laws simply do not exist in Australia's competition laws.

We should never forget that under these laws it was the notorious Standard Oil company, that was broken up into 34 separate companies, all competing against each other, found to engage in the practice of geographic price discrimination. The strategy used by Standard Oil was to sell oil below cost in one domestic market to drive the competitor's profits down and force them to exit the market, while in another area, where other independent businesses had already been driven out of the market, they raised prices. This would be unlawful across international borders. In America where it is done internally within their borders it is also unlawful. Unfortunately, here in Australia we have nothing to prevent it under our competition laws.

Further, while these bills seek to address goods being sold into Australia at lower prices than their cost in the home market it would appear the real problem we have in Australia is not with goods being sold at lower prices but with goods being sold at higher prices—virtually a reverse dumping. It is clear now that Australian consumers pay some of the highest prices in the world for goods. Take as one example Coca-Cola, which is a syrup manufactured in the USA and shipped to licensed bottlers in over 200 countries worldwide. Yet here in Australia the everyday price of Coke in our supermarkets is 50 to 100 per cent higher. Again, it appears that Australian consumers are paying higher prices for goods exported from overseas countries, not the opposite. So if we need to have this legislation in place to deal with antidumping we also need to investigate why Australian consumers are paying higher prices, because that also places us at a competitive disadvantage.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I listened with interest to the contributions from the member for Hughes on the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2012 and the Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012. I welcome many of the things that the honourable member had to say, particularly his observations about geographic price discrimination within the federation. I can only hope that he will have the same enthusiasm as he did in the issue of geographic price discrimination for tradeable goods when it comes to geographic price discrimination for the sale of labour around the federation. Whilst I welcome the comments he has made on the sale of goods I know that his party, at least, has been a vociferous objector to the removal of price discrimination when it comes to the sale of labour around the federation. Indeed, the Liberal Party is a great defender of the rights of the states to have price differentials and even regional differentials for the sale of labour. Maybe that is a conversation I can pursue with the honourable member at another time when a more appropriate bill comes before this House.

During the parliamentary recess I had the benefit of visiting a number of businesses and factories within my electorate, and I had a number of discussions with one local businessman by the name of Roger Farrar, who runs an aluminium powder-coating business within my electorate, based in the Southern Highlands of New South Wales, in Moss Vale. Roger Farrar operates a good private business. He is a good employer. He set the business up himself. He built the powder-coating oven himself and it is one of the most energy-efficient powder-coating ovens in New South Wales. He is a good operator, with a good business. His main markets for the extruded, powder coated aluminium are window- and door-framing businesses. They sell in turn to the commercial construction market. Often it is government organisations here in Canberra and elsewhere who are fitting out their new buildings with his products.

Roger Farrar has made the very pertinent point to me over a number of discussions that the dumping of cheap goods from Asia into the Australian market is killing jobs and killing businesses like his. He has no objection to free trade; he has no objection to fair trade. What he does have an objection to is the abuse of our open system of trading with the rest of the world, the abuse by local consumers and foreign exporters, because that is destroying certain industries within this country—particularly small businesses like his which do not have huge stocks of capital to fall back on in tough times and use to trade their way out of economic difficulties. A small job that Mr Farrar loses because of the availability of cheap, dumped aluminium goods can mean the difference between his business's survival or otherwise.

This story can be repeated many hundreds of times around the country, and it is one of the motivating factors behind us bringing this third tranche of bills before the chamber today. Our system of anti-dumping laws operates within both national and international legal systems. That is to say that our laws themselves are open to challenge by our trading partners and members of the World Trade Organisation. The decisions that we make in the administration of those laws are also open to challenge and are reviewable in appropriate forums here in Australia and internationally. So we need to ensure that whatever we do complies with our international obligations but also enables a system of review. I make no bones about the fact that, if a bias should exist within our laws, it should be a bias which enables a complainant manufacturer here in Australia to fairly access the system of review and to be able to do that in an efficient way, because a remedy delayed is a remedy denied, and a remedy denied means the difference between life and death for many of the businesses in this trade-exposed area.

I am very pleased that this third tranche of bills goes to some of those issues. It does operate within our international obligations. It makes sure that the laws that we introduce into this parliament are impervious to international challenge but provides a freeing up, if you like, or a bias, to make it easier for our domestic manufacturers to challenge what they believe to be illegal and unfair trading advantages for our international competitors.

Nothing in this legislation should be seen by any of our international trading partners as an attack on the relationship we have with them. As speaker after speaker has said in this place, we are a trading nation and as a nation we benefit without doubt from the free exchange of goods and services and capital between this country and our trading partners. It is one of the things that lie behind our almost unique prosperity in a challenged economic world.

There are three to four issues that this current legislation addresses. First is the issue which I think the member for Hughes quite succinctly described, enabling the CEO of the customs and border protection authority or the minister to compare apples with apples. It does that by enabling them to free up the relevant matters that they must take into account when assessing whether a relevant countervailing available subsidy has been received by an alleged dumper of goods into the Australian market. That will make it easier for us to assess whether a dumping incident has occurred. It is not always straightforward, as the member for Hughes has quite rightly said and as the minister said in his second reading speech on this legislation. A person in the street can look at this, apply a common-sense approach to it and say quite simply that a subsidy or an assistance has occurred which is against the spirit of the law but might not be against the letter of the law. What that part of this legislation is attempting to do is free up those relevant considerations, again consistent with our international obligations.

The second part of the legislation goes to ensuring that we provide an expanded power to both the CEO and the minister in relation to continuation inquiries. This is achieved by enhancing the powers that the CEO and the minister have to conduct a continuation inquiry to allow similar results to those currently available in review of measures. Through this amendment, the Customs and Border Protection Service will be able to recalculate the level of duties of an antidumping measure during a continuation inquiry. It will streamline the process, meaning that there will be quicker outcomes for all interested parties.

A third, and important, measure is providing greater flexibility when assessing the normal profit or normal value of an item which is said to have been dumped on our market. If we are alleging that a good has been dumped on our markets at prices below which it would be offered in its home market or elsewhere, then it is important to have a means for assessing what the normal value, and therefore the normal profit, for producing and selling that good will be. This operates on the principle that people do not produce goods out of a desire to be engaged in a philanthropic endeavour. They produce goods to make profits, to distribute those profits amongst their shareholders and to run a functioning business here or elsewhere. So it is important to be able to assess the normal value and profit of a good in order to assess whether it has been dumped into the Australian market.

Finally, the fourth measure is providing flexible remedies to ensure that the remedy fits the crime and that the remedy will properly address the issue that is at the heart of our objective behind this legislation, which is not to provide some backdoor form of protection except and unless that protection is against unfair trade practices—protection against dumping, protection against predatory regional pricing and protection against pricing which is simply designed to damage established businesses here in Australia.

I think they are all important measures. They rightfully deserve and, I understand, have gained the support of all members within this place, which is very pleasing indeed. The member for Hughes wonders out loud why three to four separate tranches of legislation have been introduced by the government when a singular compendium of bills could have done the job. There is a pretty simple answer to that—that is, we wanted to act as soon as possible on this issue. I am being pressed by businesses and employee representatives, unions within my electorate, to ensure that the parliament acts as soon as possible. When we have measures that are ready to go, it is only proper that we introduce them into the parliament as soon as possible. Even if the entire package is not ready, if we have a discrete area of laws that can be introduced into the parliament which will provide some relief, then it is only proper that we introduce that legislation as soon as is practical. And that is exactly what we have done. I will finish on this point, Madam Deputy Speaker O'Neill: these are all important reforms. They build on and stand on the shoulders of the reforms that have been introduced into this parliament and passed into law. But the best laws in the world will only work if they are properly policed. I welcome the fact that the minister and the government have doubled the number of staff that are available to the Customs Service to properly police this important area of law. I would like to see us go further. I would like to see us go much further in this regard. It is not only about doubling the number of staff but ensuring that we have continuity of employment in this area so that staff can build up the requisite expertise in identifying breaches of these laws to ensure that they can be efficiently and effectively dealt with. If you have a small number of staff, or even a larger number of staff that are constantly turning over, they do not build up that expertise or the relationship or the knowledge which is necessary to effectively police these important laws.

The second point I would make in relation to this is: whatever we can do to streamline the legal processes is highly desirable. I can say with great authority that businesses do not lightly take anti-dumping action. What they are effectively doing when they are taking anti-dumping action is taking on one of their customers or prospective customers and saying that they think that those customers or prospective customers have cheated them out of a job. That has a longstanding impact on the relationship that business has with a prospective customer so they do not take that action lightly. But when they do take it, they want a quick remedy, an appropriate remedy, one that enables them to get back into that market and re-establish their relationships with their customers in an effective way and in a way that sends a pretty strong signal right around the place that you might have, as a purchaser of goods, some short-term advantage in procuring these cut-price goods and, in some instances, cut-quality goods, but in the long term you are doing the wrong thing. This is a message to businesses the country round: in the long term you are doing the wrong thing. You are removing not only the jobs and livelihoods of sustainable businesses throughout the country, but in the long term you are opening yourself up to having yourself over a barrel in the future. These businesses might be willing to dump their goods on the Australian market for whatever reason in the short term to perhaps remove domestic competition down the track, but you can be quite sure that in years to come the prices of those goods will rise and there will be no domestic competition available for those people to go to any alternative. So there is a message to business in this as well, that they have a responsibility.

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

I rise to voice my support for these two bills, the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2012 and the Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012. I particularly thank the member for Throsby for his contribution. I suppose it will be interesting to see how the member for Hughes's contribution is taken in the light of his attempt, as I understand him, to rewrite the rules of Federation, which is quite a brave thing to do. He made no mention of a referendum, but it was an interesting exploration of law and how the states interact. I think he might find some value in having a reread of his Constitution.

The bills before the chamber are part of the Gillard government's multifaceted approach to improving Australia's antidumping system. These are some of the most important improvements to Australia's antidumping regime in more than a decade. Industries, companies and workers suffer when goods from overseas are dumped into the Australian market, companies such as the ones I see when I drive through Moreton, especially in Rocklea, Archerfield, Salisbury and Acacia Ridge. It only hurts Australia in the long run if our manufacturers are forced to shut down so that competition is removed and they put their employees out of work to make way for cheaper overseas products. As the member for Throsby touched on, normally if an Australian business is closed down, and there is no competition, prices rise and all consumers suffer. So it is vital that we have a fair and effective antidumping regime. This is about protecting jobs across Australia and especially, I would say, in my own manufacturing area of Moreton. Already, manufacturers face challenges such as the high dollar—although I see it has come off the boil a little bit lately—and this incredible patchwork economy where we see those businesses in my electorate that service the mining industry booming. The only builders who are working are doing renovations for people who work in the mining industry. Others are doing it tough. So I have some great businesses that are booming and others who are really doing it hard. Obviously, if we look around the world we see slowing global demand as a result of the global financial crisis. There are a few green shoots there but also a few troubling signs as well if we look at perhaps France and Greece and some of the political decisions that might be made over there.

In Moreton, many of my manufacturers are still feeling the impacts of the 2011 floods that devastated their industrial zone in Rocklea in particular but also in Archerfield and some sections of Acacia Ridge and Yeronga. Recently I had a chamber of industry event—the Southside chamber and the Archerfield chamber combined—with the Minister for Small Business, Brendan O'Connor. Many of the business people there talked about how they were coping with recuperating from the floods. They also pointed out the people who were not there who did not recover and had closed down because of the damage from the floods. Internationally known companies like Steve Parish, the photography and printing business, are now out of business because of the effect of the floods—and the high dollar and the tourism downturn.

I am proud to be part of the Gillard government that is focused on supporting small business with investments and job creation. This antidumping legislation is only part of the story. We see that the proceeds of the mining tax have enabled the government to give small business the ability to write off any new business asset worth up to $6,500. This will be worth more than $1 billion across the sector and I am sure many of my businesses will appreciate that. They will be able to write off the first $5,000 used in the purchase of a motor vehicle thereby freeing up cash flow and giving them room to invest. That is also good news for the Moorooka Magic Mile of Motors, which is in my electorate.

We are also giving the Small Business Advisory Service program an extra $27.5 million over four years to continue supporting small businesses with vital advice and assistance. Since it was introduced, this program has provided over 354,000 separate advisory services to more than 187,000 small businesses around the country. As we know, small businesses are the employers and the engine room of the economy. More than 90 per cent of the users of this service, when surveyed, said that they would recommend the service to other small businesses.

We are establishing a key point of contact for small businesses in their liaison with government in the form of a Small Business Commissioner, as announced by Minister O'Connor. Small business owners will be able to get the information and advice they need thanks to the national information and referral service. It will also give them access to other services including help to resolve disputes. Obviously, having a minister in cabinet looking after this small business portfolio is also a good thing. We have moved to establish a $29.8 million manufacturing technology innovation centre to create networks with small businesses, industry bodies, major manufacturers and research organisations. These measures demonstrate the government's commitment to helping the many businesses currently under pressure. We will continue to work closely with these industries to help them overcome the many current challenges.

The reforms in these particular antidumping bills are based on feedback from businesses, unions and workers who interact with Australia's antidumping system. Their focus is to make sure our antidumping system is better aligned with the laws and practices of other countries, particularly those that play fairly, and to help provide certainty and confidence for businesses and local jobs.

Australia is a nation of trade. We benefit from access to overseas markets for our export goods and services—mining and agriculture are just some of them. We welcome the imports that flow through to Australian businesses. Therefore, we cannot just throw up trade barriers. That is the old way, the way of Australia before Federation, although some of the comments from the member for Hughes suggest he wants to go back to a time before 1 January 1901. This short-term populism of throwing up trade barriers would only deliver long-term pain. Every sensible economist knows that, although we do have a few people opposite who do talk about raising trade barriers quite regularly.

The Gillard government wants to uphold confidence in international trade and that means having confidence in the rules. These bills make clear that the CEO of Customs and Border Protection and the minister have the express power to take all facts available into account when determining whether a countervailable subsidy has been received or in determining the amount of a countervailing subsidy when the parties being investigated by Customs fail to provide relevant information within a reasonable period or significantly impede the investigation of an inquiry. This is a common-sense approach to the needs of business. This reform ensures that our antidumping system better reflects the World Trade Organisation agreement on subsidies and countervailing measures.

Secondly, these bills remove the need for a separate review of antidumping measures and continuation inquiries occurring in close proximity to each other. This reform will streamline the process, meaning quicker outcomes for all interested parties, particularly the workers of Australia. These bills also put into practice the recommendation of the International Trade Remedies Forum to take away the current limitation to the inclusion of profit when calculating the normal value of a good in its country of origin in certain circumstances. This allows greater flexibility for Customs to more accurately determine the normal value of goods.

Finally, these bills allow different forms of interim duty to be applied from those currently used. The types of interim dumping duty which could be used will include an ad valorem duty, a fixed amount of duty, a combination duty or a floor price mechanism.

In conclusion, better support can be given to our employers and employees with an up-to-date, rigorous and better resourced antidumping system and, at the same time, we can reiterate Australia's commitment to play according to the world trading rules. Unfortunately, not all of our competitor trading nations play fair, and that is why we have this legislation. These reforms will provide better access to the antidumping system, faster remedies and faster decisions, improved quality of decision making, greater consistency with other countries and stronger compliance with antidumping measures. For this reason I commend the minister for introducing the bills to the House.

Jason Clare (Blaxland, Australian Labor Party, Minister for Home Affairs ) Share this | Link to this | Hansard source

I thank members who participated in this cognate debate on two bills—the Customs Amendment Anti-Dumping Improvements Bill (No. 2) 2012 and the Customs Tariff Anti-Dumping Amendments Bill (No. 1) 2012. As members have said, they represent the third tranche of legislation that implements the government's reforms to Australia's antidumping system that were announced by my predecessor in June of last year. These reforms are designed to provide better access to the antidumping system for the Australian industry and to ensure any applicable remedies are available as quickly as possible.

As I said when I introduced these bills, the fourth and the final tranche of legislation to implement the antidumping reforms that were announced last year will be introduced in this session of parliament. The fourth tranche will contain reforms in three broad areas. It will further amend the subsidies provisions of the Customs Act to ensure they better reflect the WTO agreement on subsidies and countervailing measures. They will establish an ant circumvention framework in Australia and they will also strengthen the provisions that deal with non-cooperation.

In putting together this legislation, we are working closely with industry through the International Trade Remedies Forum. This group met here, in Parliament House, last week. I told them amongst other things that the reform does not end with the implementation of the fourth tranche of legislation, and I will be working with them on more reforms to improve our antidumping system.

I thank opposition members for their support for these bills and I commend them to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.