Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (Anti-Dumping Commission Transfer) Bill 2013. The purpose of this bill is to amend the Customs Act 1901 to separate the Anti-Dumping Commission from the Australian Customs and Border Protection Service and transfer it to the Department of Industry. The commission would continue to exercise the relevant antidumping powers and functions contained in parts XVB and XVC of the Customs Act 1901. This would include the receipt and screening of applications for antidumping measures and the conduct of investigations and inquiries relating to those applications. I note that the bill would also transfer to the commissioner any antidumping powers and functions currently retained by the Chief Executive Officer of the Australian Customs and Border Protection Service under the Customs ACT 1901.

We on this side of the House do not oppose this bill, but we note that it builds on reforms introduced by Labor in our February 2013 Industry and Innovation Statement. The initiatives in that package are still at risk of cuts. What is the government's position on those initiatives? The government needs to speak up soon and decisively to support Australian industry.

Industries, companies and workers are injured when goods from overseas are dumped into the Australian market. That is why it is important that we have a fair and effective antidumping regime. In government, Labor strengthened Australia's antidumping and countervailing system to provide stronger protection from unfair competition for Australian firms. We implemented the most significant reforms to Australia's antidumping regime in more than a decade. In 2011, we announced comprehensive, WTO-consistent improvements to Australia's antidumping system, as detailed in the policy statement Streamlining Australia's anti-dumping system. We also established the International Trade Remedies Forum to provide advice on antidumping matters, with members from industry, unions and government.

In December 2012, we announced a package of reforms to Australia's antidumping system to deliver stronger protection for Australian industry against unfair competition from overseas. We recognised that, as global economic circumstances change and Australia is facing intense, and in some cases unfair, international competition from dumped goods, more needs to be done to ensure that Australia continues to have an effective antidumping system. Our reforms delivered stronger protection for Australian industry against unfair competition from overseas. These reforms were enshrined in Labor's Industry and Innovation Statement in February 2013, which included $27.7 million in further reforms to Australia's antidumping system. These reforms were, firstly, establishing a new antidumping commission to investigate dumping complaints; secondly, making it easier for SMEs to access and use the system; thirdly, investing $24.4 million to increase the investigative capability of the Customs and Border Protection Service, almost doubling the number of investigators; and, fourthly, strengthening remedies against overseas producers that injure Australian businesses by dumping and that attempt to circumvent Australia's antidumping rules.

The central objective of Labor's Industry and Innovation Statement was to build an economy which prospers in the 21st century and to create and support jobs. Our reforms to Australia's antidumping system were designed to support local businesses by ensuring a level playing field. In particular, the establishment of the Anti-Dumping Commission will deliver targeted resources to investigate dumping complaints and apply remedies where dumping is damaging local producers.

In government, Labor committed $1 billion in measures to support and create Australian jobs through the Industry and Innovation Statement. This included a series of measures to help Australian businesses gain access to major domestic projects, through changes to Australian industry participation plans. Labor's reform of Australian industry participation plans meant that domestic projects worth $500 million or more must demonstrate how they will provide more opportunities to Australian business. We set up a new Australian Industry Participation Authority to oversee these changes. We invested more than $500 million to establish industry innovation partnerships across the country including two in food and manufacturing, which are already up and running.

We provided $350 million as part of the Venture Australia initiative for a new round of the Industry Innovation Fund to attract private investment in the high-risk venture capital market. We continued to invest in the Buy Australian at Home and Abroad initiative, which included the appointment of supplier advocates, and the Supplier Access to Major Projects program and we continued to administer Australian industry participation plans requirements for government procurements and grants. We established the Manufacturing Leaders Group, a high-profile group of industry leaders, to provide advice to government across priority areas. We provided the Manufacturing Leaders Group with $5.6 million to 2016-17 to progress projects that will help improve productivity growth and ensure that Australian manufacturing is able to take advantage of opportunities in Asia and other markets. We invested $9.9 million in clinical trial reform to improve the conduct of clinical trials in Australia and support the pharmaceutical and medical research sectors.

All of these measures—Labor's $1 billion jobs package—are at risk of cuts by the coalition. While we do not oppose the Customs Amendment (Anti-Dumping) Bill 2013, we note that it does not provide the surety that Australian industry needs. The Abbott government is cutting the clean technology programs; it will not commit to programs under the jobs package; and it is turning its back on the automotive industry. It is time the coalition stopped turning its back on Australian industry and manufacturing and started helping businesses fund improvements and create jobs.

Dumping of overseas products onto the Australian market is becoming a matter of increasing concern for Australian manufacturers, food processors and food producers. In fact, it is putting many businesses under financial pressure, closing others and, with that, costing Australian jobs. I make two observations about why dumping is becoming a major issue of concern for Australia. Firstly, global multinationals deliberately sell products at below cost so that they can force competitors out of the market. When they have control of the global markets, they can then set their own prices. This is how large corporations operate and how they manipulate and monopolise world markets. There are many who will say that that is the way of the free market, that is the way it has always been and that consumers benefit as a result.

My view is that consumer gains are only short term and, ultimately, consumers pay more when the competition is eliminated. I note that many other countries have had antidumping legislation in place for some time. I also note from some statistics that many other countries use that legislation and whatever powers are available to them to counter antidumping measures on a much more regular basis than Australia does. Other countries use tariffs, import restrictions, quotas and a host of other trade barriers to protect their industries, whereas Australia complies with WTO principles and encourages free and fair trade. So Australia is considered an easy target. I hope that the free trade agreements that the government is currently negotiating with Japan, China, Korea, Indonesia and India, as well as the Trans-Pacific Partnership agreement, do not further disadvantage Australia.

The second observation I make is that the global financial crisis has caused a glut of products in world markets. These products, which cannot be sold, are filling up warehouses across the world and, in turn, are tying up funds and causing liquidity problems for those who own those stocks. The Australian economy, by contrast, is doing comparatively well. By international standards, I think it would be fair to say, we still have a very strong and robust economy—thanks to the Labor government's management of the Australian economy over those difficult years. So Australia is indeed a logical place to try to dump products, and that is exactly what has been occurring.

The Australian dollar is high, the economy is strong and so is consumption within Australia. Australia becomes an obvious place for those who cannot get rid of their product or who have a surplus of it to dump it. In fact, there have been reports in recent times of wind turbine towers being dumped in Australia. There have also been reports of a whole range of paper products, copier paper in particular, tomatoes, pork, biodiesel and canned fruit—to name just some of the products that are making their way into Australia as a result of the dumping that is occurring right here and now.

One example of dumping that I wish to point to is occurring right now in my own electorate of Makin. Tindo Solar, a new manufacturer of new technology solar panels, is competing against solar panels that are being imported from China. The fact is that Tindo panels are manufactured at a cost that is competitive with the true manufacturing costs of those same panels in China. But, because the Chinese have a glut of solar panels—I understand that there are warehouses full of them—they are dumping them wherever they can at below-cost prices, making Tindo's operations much more difficult. Tindo is a new company, with a new plant. It is capable of competing at true cost with any other manufacturer in the world but it is being undercut because of the dumping that is taking place. I brought this matter to the attention of the House on a previous occasion, and I do so again because I believe it relates very specifically and directly to the legislation that we are dealing with.

The last matter I raise is that of the Commission for Law Enforcement Integrity. It currently has jurisdiction with respect to matters that come under the Customs and Border Protection Service. I note that, as a result of the legislation transferring functions to the department of industry and trade, that particular jurisdiction of the law enforcement commissioner will be lost, because the commissioner does not have jurisdiction over the department of industry and trade. Given that we are dealing with a matter that can very easily involve substantial amounts of money, I think it is very easy to see how improper behaviour might arise as a result of a process that deals with substantial values.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

Do you understand what you are talking about?

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

Yes, I do. I bring this matter to the minister's attention because this is one of the changes in the legislation which the commissioner for law enforcement integrity currently has some interest in but will no longer have when the responsibility is transferred to the department of industry and trade. It is also a matter that the Joint Committee on the Australian Commission for Law Enforcement Integrity may wish to have a look at.

I reiterate what I said earlier: we do not oppose this legislation and we certainly support any measures that ensure that there is a proper counter-system to the dumping of products in this country. We also support any measures that ensure that we do not lose any more jobs here in Australia.

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

I rise to speak on the Customs Amendment (Anti-Dumping Commission Transfer) Bill 2013. This bill is only the first step in the government's plan to strengthen Australia's antidumping regime. Australia's current regime for combating injurious dumping and subsidisation is transparent and complies with our international obligations under World Trade Organization agreements. There is clearly room for an improvement in the efficiency and effectiveness of the current system, and that is exactly what the coalition plans to do.

This bill contains changes to the Customs Act and other legislation needed to separate the recently formed Anti-Dumping Commission from the Australian Customs and Border Protection Service. This will allow the commission to transfer to the Department of Industry, where it is clearly better placed. It will free up the Australian Customs and Border Protection Service to enable them to concentrate on other matters of importance to this government. This will allow those that are considering requests for antidumping action to benefit from the considerable experience and knowledge held across the Industry portfolio and it will ensure that the Minister for Industry has the power to make decisions on antidumping matters.

But this is not about protectionism; this is about maintaining a level playing field for all industries and all businesses in Australia. Antidumping is not about stopping cheap imports. There are a couple of ways that goods can be defined as being dumped. The first is when they are sold below their cost of production, and this is often predatory dumping. The other is simply international, geographic price discrimination. That is when an exported product is sold at a lower price in the home market than it is in the export market. This is often referred to as selling at less than normal value.

But there are sometimes legitimate reasons why goods may be dearer or cheaper in one market than they are in the export market. I would like to give as an example Vegemite. Some people may say is actually being dumped overseas. But this is not true. I remember during the last election the then Prime Minister Rudd standing with a jar of Vegemite and claiming that, unless people voted for him, it would increase in price by 50c—one of his spurious claims that the coalition was going to increase the GST. Of course, we know that was absolute, complete nonsense. This was the same Prime Minister who had actually raised the issue of high grocery prices in Australia back in 2007 and gave a false hope that he would do something about it—the full extent of that was nothing more than Grocery Watch.

But I will get back to Vegemite and how it may appear that it is being dumped, but it is not. Here, today, our two major supermarkets sell a 150-gram jar of Vegemite for $3.25. In New Zealand, that exact same 150-gram jar of Australian-made Vegemite can be bought for the New Zealand dollar price of $3.20—less than the Australian price. When you do the calculations so that you are comparing apples with apples—the Australian currency is much stronger than the New Zealand currency and New Zealand has a 15 per cent GST on Vegemite whereas in Australia there is no GST—it works out that consumers in Australia are paying a 32 per cent higher price than consumers in New Zealand. The same applies for Vegemite sold in the UK. Here in Australia a 220-gram jar of Vegemite sells for $3.84 in our major supermarkets. In the UK the major supermarkets—Tesco, Asda, Sainsbury and a host of others—sell that same Australian-made 220-gram jar of Vegemite for 1.87 pounds. Again, making an apples for apples comparison, 1.87 pounds converts to $3.34 Australian, so here in Australia that jar of Vegemite is actually being sold for 50c more than it is in the UK.

Many would argue that this is Vegemite being dumped. However, I would disagree with that. It is clear that there are much higher costs for food producers in Australia such as Kraft, which produces Vegemite. This is detailed in a recent KPMG report The Australian Food and Grocery Council State of the Industry 2013: Essential Information Facts and Figures. That report notes that one of the major costs for Australian food producers in doing business in Australia is what they define as 'trade spend', which is the payment of rebates, promotional allowances, special discounts and special payment terms to our two major supermarkets. KPMG noted that, in the last three years, trade spend had increased from 19 per cent to 24 per cent of total sales. That is a cost that is borne by Kraft, which increases their cost of doing business and selling their goods here in Australia, and this is reflected in our higher retail price. I would say that the product is not being dumped in the UK. It would appear they have much more competition in the UK and in New Zealand than we do here in our Australian retail sector, and that trade spend that is charged to them when they sell that good in Australia is not charged when they export those goods through the major supermarkets in New Zealand and the UK.

If we are going to stand here and condemn geographic price discrimination on an international level, we will also have to do the same thing about geographic price discrimination within Australia. The reason for antidumping legislation is to prevent harm to a domestic industry where a larger competitor, often an overseas competitor, sells goods at different prices in different markets, and that is exactly what we have here. That is what many of our Australian retailers actually face when they are competing here. They may find themselves in a market where they are competing against a company that is charging different prices in different markets simply because of the lack of competition.

This was detailed in a study by the Southern Sydney Retailers Association back in 2008, where they surveyed the price of a basket of fruit and vegetables in two adjoining stores of one of our major supermarkets. They found that, for a basket of 28 everyday fruit and vegetables, the major supermarket was charging between 51 per cent and 402 per cent higher prices than they were charging for the same items at their store four kilometres away. After that sustained geographic price discrimination attack, what eventuated was that the small retailer next to that major supermarket went out of business and we saw the large supermarket then jack up their prices. So, if we are going to condemn this practice internationally, we also must condemn it locally.

Ultimately, although our antidumping regime is important to give Australian industries a level playing field and enable them to compete, as we heard the member for Makin refer to, it is not going to help our industries if they are not in themselves internationally competitive. That is why we need to make sure that, whatever we are doing in this place, whatever legislation we are passing, we are doing everything we possibly can to make our Australian industries internationally competitive. Therefore, I thought it was worth noting the comments of John Hannagan, Chairman of Rusal, one of Australia's largest aluminium manufacturers. Of course, the aluminium sector competes in an international marketplace, and we must be viable and internationally competitive for that to continue. He was concerned that the effect of the carbon tax was that it was making Australian industry uncompetitive. He wrote an article in the Financial Review only last week, and I quote directly from it. He said:

We advised the government at the time that we would have great difficulty in establishing a sound business case for investing in major capital projects designed to improve the efficiency and emissions levels of the refinery. Our position remains unchanged.

He continued:

We will not invest another cent in major capital improvements until Labor agrees to the repeal of the carbon tax—bipartisan support is essential to enable the large, long-term investments required to maintain the international competitiveness of our industry.

An antidumping regime, no matter how strong it is, will not protect our aluminium industry from competition. They must be able to compete internationally. This is why we must be very clear that we cannot continue to burden our industries with these taxes, placing them at a competitive disadvantage where they act like a reverse tariff.

As for the stupidity of putting Australian industry at a competitive disadvantage with the carbon tax, we may hear some from the opposition say, 'Of course, this is to reduce emissions of carbon dioxide.' But, perversely, it has exactly the opposite effect, because it will not mean that less aluminium is produced in the world; it will simply mean that production shifts to China. Now, in Australia a tonne of aluminium emits an average of 0.85 tonnes of CO2, while in China the average emission of CO2 from a tonne of aluminium is 1.35 tonnes. So all you are doing is knocking off Australian industry and having that production move overseas, where the emission of CO2 is greater. So the carbon tax not only places our industry at a competitive disadvantage but actually does not do the very thing it is trying to do, reduce emissions of CO2—it increases them. This is the danger and stupidity of the carbon tax legislation.

When it comes to dumping, we have seen some recent examples of investigations. SPC Ardmona recently put in a complaint, and an investigation found that Italian tinned tomatoes were being dumped in Australia, because they were being sold for less than they would fetch in Italy. They were causing unfair harm to the industry, and new tariffs were recommended. The problem with the current regime is the length of time it took to make that decision, because much of the damage to the industry would have already occurred. We need to make sure we are acting efficiently and quickly, especially when it comes to our rural industries and our food-producing industries.

That brings me to some of the great concerns that we have about making sure our small business producers, our small family farmers, can compete internationally, because we recently had the National Secretary of the Australian Workers Union say:

… the day of ma and pa farming in Australia needs to end.

This is dangerous and misguided. He continued, saying the sector needed to have 'large-scale conglomerates that can diversify'. Now, I would suggest that the secretary of the Australian Workers Union consult his history book, because we have seen this idea before—that you do not need small family farms; you need large industrial conglomerates: that is what happened in the Bolshevik revolution, where we saw the Soviet collectivisation of agriculture. This is the same policy that is being recommended by the secretary of the Australian Workers Union. This is very misguided. This is dangerous.

We need to make sure that our food-producing sector and our family farms are viable and that they can continue and compete on a level playing field. That is what this legislation is meant to do. It is a small step, it is a small start, and I commend this legislation to the House.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the legislation before the House. It concerns dumping, but it also fits within the context of Australia as a free-trading nation, and I would like to make some observations about this before dealing with the details of the bill. Australia has been a leading advocate of free trade for more than two decades. While we have seen enormous benefits, such as greater market access for our exports and cheaper imports of everything from TVs, PCs and the shoes and clothes that we wear, it has not been without cost—massive restructuring of the economy and even greater exposure to the vicissitudes of international markets.

Governments simply must win support for open trade. The best way to do that is to show that there are benefits for Australians—as consumers, as businesses and as workers. It is not always easy, particularly when governments make populist decisions and give a nod to economic xenophobia. It is one thing to argue that the roll-back of protection has led to more efficient local industry, to cheaper cars and to electrical goods, but this is cold comfort to those who have lost their job, had to close their business or to send offshore some or all of their production.

Put simply , if we can not demonstrate that open trade exists within a set of rules, that these rules are fair and that everyone must stick to them , then we lose the argument. Moreover, we must be able to show that when someone breaks the rules there are consequences. The rules are contained in the General Agreement on Tariffs and Trade and in other bilateral agreements. They allow signatories to impose corrective measures to respond to dumping of goods and certain subsidies known as countervailing measures . The W orld Trade Organisation oversees the rules. In Australia the rules are also overseen by the courts.

Some argue that the imposition of a tariff in response to dumping or for any other purpose is a retreat to protectionism that distorts the efficient allocation of resources in Australia and props up inefficient industries. Others go further and argue that if a company or a country is willing to subsidise Australian consumers by selling us goods which are heavily subsidised or at below cost , we should grab it with both hands. I argue that t his is short-sighted. Importing goods at below cost may provide some short-term windfalls for some con sumers but at the price of long- term headwinds for open trade—the factory worker who loses his job, the farmer who loses access to a local market who will turn their sights on a bigger target , to the whole system of open trade itself. A point was made by the Productivity Commission, albeit half- heartedly , when it accepted in its 2009 r eview of Australia's antidumping laws that o ur antidumping framework was about ' system preservation ' .

While these political economy arguments stack up , there are commercial realities as well. Many ask—with some force , I say —about the impact on our domestic industry which is struggling to deal with the high Australian dollar while recovering from the GFC and dumped goods can be the straw that breaks the camel ' s back.

In my own electorate, s teel is a good example. In Australia , steelmakers have had to make a series of very tough decisions —to restructure , to reduce costs and to focus on the domestic steel market. In the case of BlueScope it has mean t large-scale redundancies and big reductions in spending, including the closure of one of its two blast furnaces. These changes have been designed to allow it to focus on the domestic market , which is worth around 2.5 million tonnes per annum . To put that into perspective , China now produces about the same amount of steel within a month. Competing is not easy in these circumstances. It is h arder still when companies , including Chinese companies, sell goods at or below cost with the objective of injuring a domestic producer.

In g overnment, Labor strengthened Australia's antidumping and countervailing system to provide stronger protection for Australian firms from unfair competition. We implemented the most significant reforms to Australia's antidumping regime in more than a decade. The bill before the House is a logical extension of those changes.

In 2011, we announced comprehensive, WTO-consistent improvements to Australia's antidumping system, as detailed in the Streamlining Australia's A nti-dumping S ystem policy statement. We also established the International Trade Remedies Foru m, ITRF , to provide advice on antidumping matters, with members from industry, unions and government.

In December 2012, we announced a package of reforms to Australia's antidumping system to deliver stronger protection for Australian industry against unfair competition from overseas. We recognised that as global economic circumstances change and Australia is facing intense and in some cases unfair or illegal competition from dumped goods , more needs to be done to ensure that Australia continues to have an effective antidumping system. We were not acting alone. Other jurisdictions around the world, through legislative and administrative action, imposed new standards as well. Our reforms deliver stronger protection for Australian industry against u nfair competition from overseas.

These reforms were enshrined in L abor's Industry and Innovation Statement in February 2013 and in a $27.7 million package of further reforms to Australia's antidumping system including establishing a new Anti-Dumping Commission er to investigate dumping complaints ; putting in resources to make it easier for small- and medium-sized enterprises to access and use the system ; and, we i nvest ed more than $24.4 million to increase the Custom s and Border Protect ion Service's investigative capability to ensure that they had the staff to do the investigations and to put in place the administrative arrangements to follow up complaints.

Strengthening remedies against overseas producers that injure Australian businesses by dumping and that attempt to circumvent Australia's antidumping rules were at the heart of these reforms. We also commissioned the former Premier of Victoria, Mr John Brumby, to conduct a review about the administrative arrangements, about whether it would be better for the new body to continue to exist with the Customs and Border Protection Service or move to the industry department. In his review of that report, he found that most submitters were neutral on the point. However, he left it open for further changes and administrative arrangements to be put in place if it suited the government of the day. So this legislation follows on from the track record of Labor in government taking this issue seriously.

The measures are welcomed by Australian manufacturers, including the largest manufacturer in the Illawarra, BlueScope in Port Kembla, and industry organisations including the Australian Industry Group and the Australian Steel Institute.

Manufacturing still employs over one million Australians and the agricultural sector is also a beneficiary of these changes with many thousands of Australians as well . So it is an important source of employment and business. Our commitment to open trade means we are able to buy more with our pay packet than we could 10 years ago , but to ensure that we continue to maintain faith in our system we need to be able to show that Australia is not a soft touch for those who break the rules. We need to have the administrative arrangements in place to ensure that where rules exist they are enforced. That i s why the legislation before the House is a logical extension of the reforms put in place by the former Labor government, enjoying support from all sides of the House.

I commend the bill to the House.

Debate interrupted.