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

The Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 and the Customs Tariff (Anti-Dumping) Amendment Bill 2015 make several relatively minor amendments to Australia's antidumping laws. The explanatory memorandum of the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 states that the following changes will occur and that those changes will:

…simplify and modernise publication provisions for anti-dumping notices, consolidate lodgement provisions for anti dumping applications and submissions, clarify the length of the investigation period in anti-dumping matters, clarify the cumulative assessment of injury, clarify normal value provisions, clarify the calculation of the dumping margin, clarify material injury determinations, clarify effective notice periods, clarify the definition of a subsidy, amend provisions dealing with new exporters, clarify provisions regarding consideration of the lesser duty rule, streamline the processes and implement a higher procedural and legal threshold for review to be undertaken by the Anti-Dumping Review Panel and allow the Government to replace the statutory International Trade Remedies Forum with administrative business consultative arrangements.

The bill also changes the act to allow the introduction of fees for reviews by the Anti-Dumping Review Panel.

The Customs Tariff (Anti-Dumping) Amendment Bill 2015 makes consequential changes from the first bill relating to, firstly, the publication of notices on the commission and review panel's websites instead of the Gazette or newspapers; and, secondly, clarification of the lesser duty rule, which I have already referred to. It also clarifies the minister's power to exempt goods from dumping duty with limited retrospective effect. The exemption can only take effect from a date that is no earlier than the date the exemption application was made.

Dumping occurs when goods exported to Australia are priced lower than their normal value, which is usually the comparable price in the ordinary course of trade in the exporter's domestic market. Where the price in the ordinary course of trade is unsuitable, normal value may also be determined using comparable prices of exports to a third country or the cost of production plus selling, general and administrative expenses and profit. Dumping is not a prohibited practice under the World Trade Organisation agreements. Rather, the WTO agreements permit antidumping duties to be imposed when dumping causes or threatens to cause material injury to an Australian industry.

Australia's antidumping legislation is based upon the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and the WTO Agreement on Subsidies and Countervailing Measures. Where material injury has been caused by the dumping of a product onto the Australian market, antidumping action can then be taken. The same action can also be taken where a government subsidy has been provided for an imported product. It appears that the number of cases of product dumping have increased in recent years, and I suspect that was aided by the global economic downturn, where in some cases there would have been a glut of products for which there was no market. The strength of the Australian economy, combined with the high Australian dollar in recent years, made Australia an ideal country in which to dump products. I will refer to a comment made by the director of Capral Limited, Mr Phil Jobe, on 26 February, in giving evidence to the Standing Committee on Agriculture and Industry in its inquiry into this very issue. He said:

In recent times in our industry, over 500 direct jobs and almost 2,000 in total, which is about one-third of the workforce, have been lost in Australia. We put this down mainly to unfair dumping of extrusions. This has not been helped by the high exchange rate, which is now coming back to a more reasonable level.

In government, Labor on several occasions amended Australia's anti-dumping laws to make them more effective. Labor also established the Anti-Dumping Commission and the International Trade Remedies Forum. It is evident that importers use very clever techniques to circumvent Australian laws or frustrate the existing process. Circumvention is a practice used by exporters and importers of certain products to avoid the full payment of dumping and countervailing duties. I note that circumvention is currently the subject of an inquiry by the Standing Committee on Agriculture and Industry, and I referred to that just a moment ago. Circumvention activities include assembly of parts in Australia, assembly of parts in a third country, export of goods through one or more third countries, arrangements between exporters, and, I understand, in recent times, the use of phoenix companies—and there may be other ways that people find to circumvent the current process. It seems that, wherever there is a will to rort the system, there is a way.

The use of clever techniques highlights why Australia's anti-dumping regime needs to be continuously reviewed. This legislation makes changes to Australia's anti-dumping laws that Labor believes are steps in the right direction and, collectively, should improve the current process. In what Labor believes is a retrograde step, however, the legislation also abolishes the International Trade Remedies Forum. We also have concerns about the fees for appeals to the Anti-Dumping Review Panel. Labor does not support abolishing the ITRF and I will be moving an amendment to retain the forum at the conclusion of my remarks. I also note that the appeals fees will be set by regulation. We do not know what the fees will be and, whilst the minister states that lower fees will apply to small and medium-sized businesses, the lower fees are not written into the legislation, providing no guarantee that the lower fees will apply into the future.

For the benefit of anyone who is following this debate, I will briefly comment on some key provisions in the amendments as I understand them. If my understanding is incorrect, perhaps the minister in summing up the debate can clarify the matter for us. Firstly, I will deal with the submission deadlines. This bill introduces more stringent deadlines for the submission of information to dumping and subsidisation investigations. The period in which submissions should be lodged in response to the initiation of an investigation, review of measures, continuation inquiry or anti-circumvention inquiry would be reduced from 40 to 37 days. This would align with the minimum time frames established under the relevant WTO agreements. It would also allow information to be considered earlier by the anti-dumping commissioner when deciding whether a preliminary affirmative determination can be made. The reduction from 40 to 37 days does not seem significant, but it is worth doing. Every day matters and every day that a dumping matter continues can cost local industry tens of thousands of dollars. With respect to lodgement and publication requirements, notices related to anti-dumping processes and decisions will be published electronically on the Anti-Dumping Commission and the review panel's website instead of in the Gazette or in newspapers.

The length of an investigation period has frequently also been raised as a matter of concern by parties involved in anti-dumping cases. The bill inserts a new subsection which intends that the commissioner cannot vary the length of the time for the investigation period once the investigation period has been specified by a notice issued by the commissioner. Again, I think that that is a good thing. In time, we will see how well it works. When considering the termination of an investigation, in certain circumstances the cumulative injurious effect of exportations of goods to Australia from multiple countries can also be considered.

The bill also provides clarification that there is no hierarchy for the methods available to determine a normal value. To clarify the calculation of dumping margins, the investigation period of a dumping investigation considered for the purpose of working out whether dumping has occurred and the levels of dumping is not less than one month. The amendment clarifies that, in calculating a single dumping margin for the good over the entire investigation period, the normal values and export prices of different models or types of that good can be compared over separate one-month periods prior to aggregation.

The definition of a subsidy for the purpose of Australia's anti-dumping system is amended to better align the definition with that of the WTO Agreement on Subsidies and Countervailing Measures. The amendment provides that the receipt of a financial contribution by a government does not, in and of itself, confer a benefit but that it must be determined whether that contribution provides a benefit. The bill amends the definition of 'new exporter', narrowing the period used in the definition. This potentially enables more exporters to access accelerated review. The minister's ability to declare that a dumping duty notice not apply to the applicant will also be removed. Instead, when considering an accelerated review, the minister can only leave the duty unaltered or change the variable rates.

The Customs Act would also be amended to require that, where an undertaking converts to a duty, the duty expires five years after the undertaking was accepted, unless terminated earlier. I also note that, although periods prior to the investigation period can be examined for the purpose of determining whether material injury has been caused, a determination that dumping has occurred prior to the investigation period is not permitted. Provisions of the Customs Act would be amended to require that the minister is not required to have regard to the lesser duty rule where a country has not submitted a notification of its subsidies, as mentioned in paragraph 1 of article 25 of the WTO Agreement on Subsidies and Countervailing Measures, at least once in the compliance period.

I now turn to the conduct of the review by the review panel. The bill would also increase the procedural and legal thresholds for applying for review by introducing requirements that an application must, firstly, set out the grounds for a review; secondly, set out the decision the applicant considered should have been made; and, thirdly, set out how the grounds support the making of the applicant's proposed decision. There will be a requirement that the Anti-Dumping Review Panel can only conduct reviews on reasonable grounds. The bill will also empower the review panel to hold a conference for the purpose of obtaining further information. This includes the ability to hold a conference prior to commencing a review in order to obtain further information from the applicant and the commission. This seems to be a sensible measure and I will be interested to see if, over time, it makes a worthwhile difference. The bill also amends the Customs Act to allow applicants for review to withdraw their application. Withdrawals will be required to be written and given in the same manner as applies to applications. Importantly, parties continue to be able to apply for judicial review of anti-dumping decisions to the Federal Court in order to resolve issues with certainty, consistent with Australia's obligations under the relevant WTO agreements.

I now turn to some of the savings and non-legislative measures within these bills and within the changes in policy. Labor supports the government's intention to use the savings generated from the measures in these bills to offset the costs of implementing some non-legislative measures of the reforms package: specifically, firstly, the establishment of an anti-dumping information service; secondly, the expansion of the International Trade Remedies Advisory Service; and thirdly, a hotline as a central point of contact for inquiries about Australia's anti-dumping system. We also welcome the establishment of a market research function to enhance the capability of the anti-dumping investigators as part of the anti-dumping information service. That will provide targeted economic analysis of trends and trading behaviours across markets to provide better information earlier in the investigation process. The intention for the minister to direct the Anti-Dumping Commissioner that, wherever possible, provisional measures be imposed at day 60 of an investigation is also a positive move.

Finally, I come to the two matters about which Labor has concerns. The first matter I refer to is the fee for review by the review panel, which I alluded to earlier. The bill will allow the government to introduce a fee for applying to the review panel, as I pointed out earlier in my contribution. There will be, I understand, different fees for different kinds of applicants. The introduction of fees will likely lead to fewer applications for review. Whilst this may benefit the Australian producer when the original decision was to impose duties, it also makes it more expensive for Australian producers to review decisions which did not impose duties. In other words, if you lose the appeal and there is no finding of dumping, and you want to appeal, and you are an Australian business, then obviously it puts another cost in front of you. I note that the government has stated that the intention is for there to be reduced fees for small and medium-sized businesses.

I made the point earlier on that, as the fees are not in legislation, but are instead established under an instrument made by the minister, we have no guarantee that those fees will apply into the future, or that that principle and the intent of it, will be continued into the future. So, we will reserve our final position in respect of the fees until we have at least seen the schedule of fees proposed. I also note that the coalition's election policy document in respect of the Australian manufacturing sector stated:

The current anti-dumping laws are cumbersome, slow and prohibitively expensive for many Australian businesses to utilise.

I would be interested to hear the minister's explanation of how a fee for review by the Anti-Dumping Review Panel is consistent with this statement, in particular with the term 'prohibitively expensive'.

A further concern which I bring to the minister's attention is that exporters may channel their requests for review through the importer, which is likely to be a significantly smaller business than the exporter, in order to unfairly access the reduced fee structure for small and medium-sized businesses. The point we strongly make is that we would want to be assured that the system of having different fee scales is not going to also be abused or rorted in any way.

Finally, I come to the International Trade Remedies Forum. Labor initially established the ITRF in August 2011 following the announcement of the Streamlining Australia's anti-dumping systems policy. The legislation to formally establish the ITRF came into effect on 10 June 2013. The forum is a stakeholder body comprised of representatives from manufacturers, producers and importers, as well as industry associations, trade unions and relevant government agencies. The forum provides advice and feedback to the government on, firstly, the operation of the anti-dumping system; secondly, the implementation and monitoring of government reforms to the anti-dumping system; and, thirdly, other information which may lead to the further improvement of the anti-dumping system. It provides a good sounding-board for the government when it is considering matters that arise in respect of dumping legislation.

Prior to the announcement of the reforms in June 2011 there was no stakeholder body to provide feedback to government on the operation of the anti-dumping system. The forum was established specifically to do just that.

The former, Labor government committed to establishing the International Trade Remedies Forum to provide strategic advice and feedback to the government on the implementation and monitoring of the proposed reforms. The ITRF was established in legislation to ensure that this valuable dialogue with industry continued into the future. At the time that the legislation was debated in this place, the coalition did not oppose the ITRF, and in fact they supported it. At the time their spokesperson said:

… 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 … 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.

Those were the words of the former member for Indi who was, at the time, the opposition shadow spokesperson on this matter.

The ITRF has made a positive contribution through the work it has undertaken, which included determination of normal value when a particular market situation is found. Indeed, the Customs Amendment (Anti-dumping Improvements) Bill (No.2) 2012 implemented its recommendation to remove the limitation to the inclusion of profit when calculating the normal value of a good in its country of origin in certain circumstances.

I note that it appears as though the forum has not met since March 2013, despite being required by the Customs Act to meet at least twice each year.

Labor believes that the ITRF was a constructive body that did good work and that the government should utilise the ITRF legislation that is currently in place and the forum itself. It seems that it has, indeed, done the opposite. We have seen no justification for abolishing the forum and I do not accept, as the minister said in his second reading speech on this matter, that the ITRF is red tape or that it is a 'rigid and restricted method' for consultation. I therefore move the following amendment. I move:

That all words after “That” be omitted with a view to substituting the following words:

“the House is of the opinion that the bill should be amended to delete the section of the bill which abolishes the International Trade Remedies Forum.”

With those comments, and having moved the amendment, I commend the amendment to the House.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

It is.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Makin has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

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

I rise to speak to the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 and cognate bill. This bill introduces a range of reforms designed to strengthen Australia's anti-dumping system.

In December last year this government released a blueprint to strengthen our anti-dumping regime—the first of two tranches of planned improvements to Australia's anti-dumping system.

When the Minister for Industry, Ian Macfarlane, and I, as his then parliamentary secretary, began looking further into industry's claims that we had fallen behind world's best practice, we acted quickly. We began looking at how the rest of the world was tackling dumping and addressing countervailing and subsidisation practices.

I am happy to say that nearly 90 per cent of Australia's approach was world's best practice. In fact, we soon found out that our investigations were amongst those who took the shortest time to complete in the world—with the US taking nearly double the time to finalise their investigations—and yet we were getting comparable results.

What we did find, though, is that we could further strengthen the anti-dumping regime. For example, under WTO laws, Australia could apply stronger penalties to exporters who were found guilty of dumping or to governments who were found guilty of countervailing or subsidisation practices. So that is what we did.

In December last year, Minister Macfarlane and I outlined how we would strengthen our antidumping regime. This included: implementing the outstanding four election commitments and I will talk further about these shortly; abolishing or reforming less useful and underperforming features of the anti-dumping system, including improving the merits review process; improving support services in order to provide better advice, assistance and information to Australian businesses engaging in the anti-dumping system; and seeing a range of other technical amendments made to the system that would simplify and clarify various aspects of antidumping investigative processes.

I would like to focus, just for a minute, on one of the coalition's promises to reverse the onus of proof. We soon discovered in coming to government that reversing the onus of proof was illegal under our WTO obligations and that no other jurisdiction in the world did this, so we were not going to entertain that idea any further.

However, we discovered that the policy intent of this commitment could be achieved by placing a greater onus on exporters to cooperate with the antidumping investigations, something that other international jurisdictions do.

I am proud to say that the policy change has already been implemented and it is working as intended. A good example of an outcome we have already received is that a number of canned tomato exporters from Italy, who were uncooperative with our investigators last year and who were later found guilty of illegal dumping, were slapped with a 26 per cent duty, instead of an eight per cent duty. That duty will last for five years.

To further show the teeth in this new policy, even when the eight per cent duty was reviewed and downgraded to five per cent earlier this year, the uncooperative exporters were not given any reduction and are still paying 26 per cent. We have also seen exporters of wind towers, canned pineapples and various steel products face the same fate for being uncooperative with investigators.

This policy change is doing what it intended: providing an incentive for exporters to cooperate with investigators and for dumpers to stop targeting our Australian industry. I believe this government is also sending a strong message to dumpers that we will not tolerate this practice in Australia.

Another change we took to cabinet was creating a cost-recovery mechanism surrounding the review of a dumping decision. When we looked at who was seeking reviews of decisions and how often, about two-thirds accessing this information were exporters from overseas and more than three-quarters of the reviews backed the Anti-Dumping Commission's original decision. Exporters were essentially getting a free kick at taxpayers' expense and chewing up another 90 days before duties could actually be imposed.

We also made it tougher to access a review by demanding the ADC and exporters attend a mediation session and, in tightening the grounds for an appeal, we now expect more solid grounds for a review to take place. The coalition government will also introduce a range of measures to assist Australian manufacturers and businesses.

One thing that Minster Macfarlane and I quickly realised was that applicants were unsure which type of investigation they wanted to undertake. They were unsure whether they required a dumping, countervailing or subsidisation investigation. I understood how this was happening, because trade law is extremely complex and most companies do not have antidumping experts working with them. To address this, a new unit of dumping experts will be formed in the future. The information service will have three key functions. Firstly, to provide general information and guidance to applicants. Secondly, to undertake a market analysis project, which will help identify dumping trends so we can attack dumping on the front foot. Thirdly, to collate data that we can share with industry to help applicants determine whether they have a genuine case.

The steel and aluminium industry is the one we found that was being most targeted by dumpers. In fact, close to 80 per cent of all cases last year were applications from this industry. So we took it upon ourselves to try and understand why so many applicants were coming from this industry. That was when we were educated about a devious practice taking place called circumvention. For all of those who do not know what circumvention is, it occurs when a foreign business changes their products, often only very slightly, to avoid duties. One case we later nicknamed 'pixie dust' showed just how devious exporters were getting. The steel industry alleged an exporter was avoiding duties by adding, for example, five per cent boron to its steel product. They then claimed it was another product, so duties did not apply. Yet it was still used for the exact same purpose.

Under the current system, we realised they had found a legal loophole. This government has now closed this loophole with a policy change and a test that helps identify these situations and takes action much more quickly. But to ensure we kept a level playing field, we have also provided avenues for Australian importers who feel they have been unfairly caught up in circumvention decisions. They can ask for a duty assessment, a review of the duties or an exemption, which ensures natural justice is adhered to. Australian industry voiced their concerns about circumvention to us and we acted. But there is much more to do in terms of tackling circumvention. In fact, at a meeting last year of the world's dumping experts, they found that circumvention, subsidisation and countervailing were growing trends around the world.

While the Australian government was addressing the 'pixie dust' issue, we asked for a bipartisan committee from the House of Representatives to look further into circumvention, subsidisation and countervailing more broadly. We are expect their findings to be delivered later this year, and it will help us further strengthen tranche 2 of our reforms when we expect to deliver it at the end of this year. When I was first tasked with looking at the antidumping regime back in December 2013, industry was extremely vocal. We also had a number of highly publicised cases, including SPC Ardmona's canned tomatoes case, local wind tower manufacturers were unhappy and the phone was just ringing off the hook from steel and aluminium manufacturers wanting to meet. Instead of hiding, we went proactively on the front foot. We engaged with and worked closely with the Australian manufacturers and importers and industry as a whole. We found a common ground. We all wanted a fair and level playing field within Australia to operate within. This was then used as the basis to investigate whether the regime could be strengthened.

A bit over one year later and I can say our work has paid off. Their collaborative approach led us to announcing the first tranche of reforms in December last year. I could tell you how closely we listened to worked with the stakeholders, but I would rather you read what they said about the first tranche of reforms. Innes Willox, the Chief Executive of the Australian Industry Group said:

The comprehensive package of reforms, which honours remaining pre-election commitments, includes reversing the onus of proof in line with practices in other international jurisdictions. This will ensure that Australia meets WTO rules placing greater emphasis on overseas producers to cooperate with anti-dumping investigations.

The decision to abolish less useful and underperforming features of the anti-dumping system, including through improving the merits review process, makes considerable sense.

You may remember SPC Ardmona's canned tomatoes case and the problems that they faced. The member for Murray made constant and solid representations on their behalf to bring about change that supported Australian industry and, in particular, addressed issues that SPC were having. Peter Kelly, the Managing Director of SPC, came out 12 months later and said he was happy with the progress of this government had made to improve the antidumping regime. He said:

These reforms to our anti-dumping system are a significant step forward for Australian manufacturers and producers …

  …   …   …

As an Australian food producer this gives SPC a tremendous level of confidence to invest in our future as a proud Australian Company…

I previously said that about 80 per cent of antidumping applicants came from the steel and aluminium industry. So it was heartening to me to see the support through Don McDonald, the Chief Executive of the Australian Steel Institute. He said:

… the reform package will improve support for a fairer trade regime by providing enhanced remedies for upstream and downstream Australian steel manufacturing companies.

  …   …   …

These reforms will assist in leveling the playing field through a tougher approach to timeframes and remedies, and they will improve the process for Australian steel manufacturers through expanded information and support services …

This bill and the reforms have always had bipartisan interests. When in government, the member for Blair spoke to the Brisbane Times about the importance of improving our antidumping system and ensuring a level playing field for local manufacturers. He did this because Capral, one of Australia's largest aluminium extrusion companies, sits within his electorate and claimed at the time that dumped aluminium extrusions from China had seized about 40 per cent of the Australian market and had put the domestic extrusion industry under severe stress. Capral spoke about the circumvention issues, and I am glad to say that their allegations were recently proven. An overseas exporter's aluminium product has now had dumping duties placed on them.

My neighbour, the member for Hunter, also experienced the effect of dumping and circumvention. Hundreds of jobs within his electorate were lost when Arrium downsized last year. Arrium cited pressure placed on them due to subsidisation and circumvention practices as the reasons for the job losses. I am glad that the member for Hunter is a part of the House of Representatives Standing Committee on Agriculture and Industry, chaired by the member for Grey, which looking into these circumvention practices, because he also knows firsthand the effect of dumping at an electorate level.

I ask colleagues on both sides of the House to support this amendment bill as it goes through this House, and ask you to encourage your Senate colleagues to support the bill in their chamber. I am confident this bill will get through the House and Senate because there is no reason for delay. The reason is that this bill is in Australia's interest. It is in both our trade interest and Australian jobs interest. It takes Australia's antidumping measures to the very WTO limit, without crossing the line and, therefore, endangering Australia's reputation as a fair and free trader. At the same time it sends a very strong message to those who seek to dump, circumvent or countervail through subsidies into our market that Australia is the wrong place to do so and we will take every action and apply every penalty in our power under WTO rules to stop you.

Finally, I would like to thank the industry minister, Ian Macfarlane, for giving me the opportunity to drive these reforms as his parliamentary secretary. I thank Stephanie McKew from Minister Macfarlane's office and my staff member Aaron Parnell for their hard work. I thank ADC Commissioner Dale Seymour and the department for helping to shape a policy that is so right on so many fronts. I commend this bill to the House.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak on the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015. I thank the parliamentary secretary, the member for Paterson, for the implicit praise for the Labor Party policy in our last government. I embrace the bipartisan approach to this policy area because this is an important issue for my electorate, where Arrium—OneSteel—is located, for Victoria's manufacturing base and for Australia.

Last week I had an interesting meeting with Brendan O'Brien, the director of O'Brien Boilers Services, a local boy whose company is situated in Sunshine in the electorate neighbouring mine. He is a proud business owner and director in our area who is innovating and developing some outstanding solutions to energy production across Australia. This business prides itself on quality and, having tried cheaper imported products—in particular, steel—finds the short-term benefit of a cheaper price is a false economy as the quality does not stand up over time; the long-term maintenance costs cancel out the short-term gain in production. In the west of Melbourne, an area proudly represented by many on this side of the House, anti-dumping laws are vital to ensure our local industries are competing on a level field. But while some businesses have the capacity to make that judgement call, many competing on tight margins do not feel that they can. This can have very detrimental impacts on business and, as we have seen in recent reports, on consumers.

A recent example—and one I am sure we will hear a little about tonight—is in the electrical space and it demonstrates the danger of product dumping in Australia. It is the story of cheap imported electrical cabling. This cheap Chinese cabling, imported to Australia and sold in most of our major hardware stores, has been used by electricians in the domestic building market—a small price gain for electricians competing for business that is usually awarded on cost. The problem is that this cabling has been recalled due to its inferior quality; the product becomes brittle and thus has the potential to start house fires. But how do you go about recalling electrical cabling? Most home owners would not know what brand of cable was used when their house was being built so they are unlikely to make a claim.And then there is the question: at whose cost will the replacement be done? Surely not the poor electrician? The hardware retailer that supplied the substandard product? The Chinese manufacturer? This probably explains why only 15.5 kilometres of the 4,000 kilometres of defective electrical cabling known to have been used has been withdrawn—that is, less than 0.5 per cent of this dodgy product has been recalled.

These examples show why Labor in government had a strong record of protecting industry from dumping. Sure, it is important for our manufacturing industries—as we have already heard and will no doubt continue to hear—but it is also important for the average Australian consumer and the average Australian job. Labor established the Anti-Dumping Commission in 2013, after implementing anti-dumping legislation, and on several occasions amended the anti-dumping legislation to ensure it was focused and effective.

A recent example of the good work of the commission is the case involving Capral Aluminium, as we have just heard. Capral was significantly impacted by the rise of cheap Chinese aluminium being dumped into Australia for several years—and the company could probably be partly credited with the former government's decision to establish the Anti-Dumping Commission. Capral is a quality business with start-of-the-art facilities and a strong, well trained workforce. It was heavily impacted when cheap Chinese aluminium imports incurred only a seven per cent import duty when other countries were routinely charging 30 to 60 per cent. Capral brought this case to the Anti-Dumping Commission. The company recently received welcome news when Commissioner Dale Seymour found that the biggest Chinese exporter, PanAsia Aluminium, had indeed circumvented anti-dumping measures. As a result the Minister for Industry, Ian Macfarlane, approved a steep rise in duties. This is an example of the anti-dumping system working well and in Australia's interest.

This case also shows that our free trade agreements allow for anti-dumping duties to be imposed when dumping threatens to cause 'material injury to an Australian industry'. Apparently the US aluminium extrusion industry is enjoying a resurgence thanks to duties on Chinese product averaging 33 per cent but ranging as high as 400 per cent. China managed to capture 20 per cent of the US market by late 2009 but duties imposed since 2010 have crunched that to less than one per cent. Let's hope we have a similar outcome in Australia. Markets are tough places and Australia must play hard and fair. Our anti-dumping legislation means that we will be playing hard and fair—and 'fair' means not allowing countries to dump product and flood our markets the short-term with a view to killing off our industries in the long term, particularly where our product is superior and necessary for safety.

This legislation, which works to build on Labor's proud record, is a step in the right direction. We also welcome some new initiatives proposed to be introduced through regulation: the establishment of an anti-dumping information service; the expansion of the International Trade Remedies Advisory Service; the establishment of a market research function to enhance anti-dumping investigator capabilities; and the establishment of a central hotline for inquiries about Australia's anti-dumping systems. We welcome these measures because, as we have heard before, these are complex areas of law. Labor welcomes these as sensible measures. They will assist Australian industries to get information and start proceedings where dumping threatens material injury to an Australian company.

There are, however, some aspects of the legislation that Labor does not support. We do not support the abolition of the International Trade Remedies Forum. This forum brings together representatives from manufacturers, producers and importers as well as industry associations, trade unions and some government agencies. The forum was established in 2011 and formalised in June 2013 and was designed to provide strategic advice and feedback to the government during the implementation of proposed reforms. It was the stakeholder body that gave good feedback to government throughout those reforms. Its existence ensures continued engagement across the sectors. It ensures that all voices are heard and that the processes and penalties are constantly reviewed.

It is an important forum. It is an important piece of the puzzle to ensure that those conversations continue. It is a feedback and ideas mechanism—something governments should value, particularly in the protection of our industries. Its continuation would ensure that valuable dialogue between industries continues in the future. Given the current government's support, when in opposition, for the establishment of the forum, and given there was never a discussion about its abolition during the election campaign, Labor is not sure why the abolition of the forum is now proposed. This body was constructive, had bipartisan support and did good work. I know Labor will suggest amendments in the Senate that will ensure its ongoing capacity. The so-called increase in flexibility for stakeholder engagement, which the government seeks, could easily be accommodated by the forum's current structures.

We also have reservations about the introduction of fees. This second aspect of the legislation is the ability to charge a fee for review when making an application for the review of an anti-dumping practice. Whilst there is some justification for a fee for service, the introduction of fees may have a negative impact—particularly for small businesses wanting to bring forward a case. This introduction of fees also goes against the coalition's election policy. The coalition's Policy to boost the competitiveness of Australian manufacturing states:

The current anti-dumping laws are cumbersome, slow and prohibitively expensive for many Australian businesses to utilise.

The introduction of a fee, therefore, seems to be counterproductive to that idea. And given that later this week the government plans to introduce a further round of red tape repeal, why is this hindrance on business being introduced? Despite arguments that they are mostly triggered by importers, fees could still be a barrier for local business.

I want the businesses in my area to be growing and innovating, and many already do this. The dumping of cheap imports in Australia, in my view, achieves so little—a cheap, short-term gain that has been shown to be negated by long-term quality issues. We need to have a strong anti-dumping legislative framework to assist our local businesses to compete on a level playing field, and, mostly, from my perspective, to ensure hard-won jobs are secure into the future, because in the west of Melbourne these are good and important jobs that we need to ensure continue.

I therefore support the legislation but question the two pieces that might make the laws and the commission less effective. We have already seen, even where successful claims have been made and prosecuted, that local jobs have been lost. We should be keeping measures in the legislation that will ensure that there are continued conversations that includes all the important stakeholders. And when I say 'all the important stakeholders', I include the unions. I include the unions because of my very local experience where the unions, particularly in steel and aluminium, are working productively and collaboratively with business to protect the industry and to protect their jobs. A fee for review might discourage business, particularly small business, from prosecuting a case. So I have concerns there.

The abolition of the International Trade Remedies Forum could potentially hinder the responsiveness of government. Ensuring regular contact and dialogue with all stakeholders, including the unions, is critical to ensuring government remains responsive to this very live and shifting issue. As we have heard earlier, this is a very complex area of law, and so it remains live and there will be more loopholes found, I am sure.

I welcome the government's continuation of Labor's hard work on policy and legislation in this area—as do businesses, industries and unions in my electorate. In fact, this area of anti-dumping sees intense collaboration between business and unions. They are all working hard to stay competitive and working together to ensure the viability of the businesses and the jobs they have created. I commend the bill to the House, but suggest the amendments to two areas.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

Before the member for Lalor leaves, I note her comments. It surprised me a little bit that there are not more people speaking on this bill, because it really is an important bill. For anybody that cares about jobs in Australia—certainly in terms of steel and aluminium—the bill is absolutely critical, and I think we have all heard stories about issues where the quality of imported products is not exactly what it should be.

But I suppose when it comes to her point about electrical cables there are other processes, aside from the things that this bill addresses, by which quality and standards are considered—such as Standards Australia. I stand here as somebody who has, in my electorate, a very important business that has taken a case to the Anti-Dumping Commission. I will talk a little bit more about that later. Let it not be said that I am somebody that is not in favour of fair and, particularly, free trade.

I have been a very strong advocate for the work Minister Robb has done in terms of South Korea and Japan and, more recently, China in expanding the opportunities for exporters in our country to take advantage of those large markets to our north. But at all times there should be an element of fairness in that. I note the comments from the member for Lalor about the fundamental support for this legislation. It goes to what I think every Australian would expect of their legislators, and that is to the very edge of the obligations that we have under World Trade Organisation regulations. I do not think that is overreach, I do not think that is unreasonable, because I think they do want governments. I note what the previous administration did in this area, and acknowledge that, but they do not want business that will sacrifice local businesses at any cost. Yes, it is a competitive market, and yes, anybody in business understands that competition is a critical and vital part of delivering better prices and ultimately better products to consumers, and that is something we should all support.

So, there are a number of elements to the bill before us here, and, as I said, I will touch on one specific business in my electorate that has been impacted by that. I look forward also to the contribution by the member for Murray, because I know that she has been as passionate as anybody could be about her manufacturer, SPC, and issues they had regarding tomatoes. So, I will not go into details there, but I will look forward to her contribution. The bill does a number of things, not least of which are in terms of a number of commitments we made before the last election. One was to move the Anti-Dumping Commission's responsibilities from Customs into the Department of Industry, because, at the end of the day, it is industry that is impacted by that. Notwithstanding obligations that Australia rightly has under WTO guidelines, this policy has allowed the reforms to go to what is quite within the guidelines but to the edge of the World Trade Organisation guidelines. They will put a much heavier onus on foreign exporters to cooperate with investigations if and when they are brought forward. And indeed, if they do not cooperate, they will reserve the right to impose those duties sooner.

And I think 'sooner' is the critical thing here, based on the experience I have had with Norske Skog in my electorate. This is a big business. This is a multinational business. But from their point of view, once they have put a case forward to the Anti-Dumping Commission and are ultimately given a preliminary adverse determination then the timing of that process is problematic for many businesses. I do appreciate the efforts and the intent that is within this bill to send those clear signals that are designed to send and change the behaviours of those exporters that are dealing in this space to react in a time frame that is more appropriate to the fact that we want to see that determination made in a way that allows the business to get on with business or at least limit the damage that is incurred.

The member for Lalor—and I will not dwell on this—made some points around the International Trade Remedies Forum. I am not an expert in this area, I must say, but in terms of stakeholders in issues like this we want efficient mechanisms, we want flexible mechanisms, and these are not the sorts of things you need to bring people kicking and screaming to, I do not suppose. Where there are stakeholders engaged in a process there, where there are concerns, where there are potential cases in this instance of dumping in this market, it is not going to be hard to engage with stakeholders. So, on a case-by-case and in a specific sense, the government's intention is to be able to bring together working groups, and no doubt those working groups would include the different representation that the member for Lalor suggested.

Again, I cannot understand why more people are not on the list to speak to this bill, because it really is important. Small businesses are the engine room here. The difficulty with the whole notion of the process to bring a case of anti-dumping is that it is indeed problematic for those small and medium enterprises. It is less problematic for a business like Norske Skog, whose case I will touch on in a minute. But I am particularly pleased to see that the initiatives within this are all designed to support small and medium enterprises that believe they have a case to make to the commission. And I think that is pretty consistent in terms of what this government is trying to do across a range of areas, not least of which started up with the Minister for Small Business, who is doing a wonderful job to support small business, including the grocery code he initiated in recent weeks. I think this is further evidence of the importance—in terms of procurement but also in this case antidumping—that this government places on small businesses. And many of these businesses are often family businesses, and the timing issue I touched on before is very problematic for some of these businesses.

As I mentioned, Norske Skog is located at Boyer, just near the town of New Norfolk in my electorate. They recently brought a case before the Anti-Dumping Commission in relation to newsprint, and, as I mentioned, they had a preliminary adverse determination. As much as anything else, it is about confidence for that business to know that there is a process there that is supporting local manufacturers. If you take that notion of confidence and that notion of support for local businesses—in this case, manufacturing businesses—it leads on to how you might muse about or what you might consider to be a disincentive to invest in the future.

Norske have traditionally been involved in the production of newsprint. You do not have to be a rocket scientist to understand that consumption of newsprint around the world is declining for reasons that we are all well aware—we read our newspapers on iPads and a whole range of other things. This innovative business have branched out into the production of lightweight coated catalogue grade paper and they are the only manufacturer in Australia of that product. I am not privy to the process they went through to consider whether or not the substantial investment. A loan from the state government at the time in Tasmania was provided to assist them and there was also a grant from the federal government, as it was at the time, to assist them in the substantial investment—$80 million from memory—required for the establishment of a new line there.

I have seen that line first hand and the very high technical nature of that paper manufacturing process. If you pick up a newspaper and it has a catalogue in it, more often than not, that is where it has come from in Australia. There is a market for around 300-odd thousand tonnes—out of the 400-odd thousand tonnes of paper—of lightweight coated paper in Australia. At the moment, the Norske Skog mill at Boyer is supplying about 120,000 tonnes and we hope in time they will be supplying a little bit more than that into the Australian market. Obviously, they have got advantages in terms of their ability to supply on a just-in-time basis whereas a product coming from overseas takes a little bit longer.

But I come back to my fundamental point, which is that if we want businesses to invest they should have the confidence that there are appropriate mechanisms and a timely process in place—a process that is not so cost prohibitive that it is impossible, particularly for those small and medium enterprises, to bring forward cases initially seeking preliminary adverse determinations that would then be able to incur tariffs if it were deemed to be appropriate.

As I mentioned before, a number of other cases have been brought before the Anti-Dumping Commission recently. I will not go into the details of the member for Murray's contribution. I know she is very passionate about this. We have had cases of cheap timber. As a fellow Tasmanian, I cannot understand why on earth a country like Australia would need to bring cheap timber into this country. It is quite beyond us but that is another conversation. The member for Lalor touched on steel and quality issues that are sometimes there, but arguably that is the decision for customers. That is not an issue for this bill. Where there is product meeting a certain standard being brought in and it is being sold at a price less than what it might be in their domestic market, that is where the Anti-Dumping Commission's role comes in.

After talking to about this with the Rod Bender, the managing director at Norske Skog, I can say that the difficult thing for local companies trying to fight this is that it is difficult to prove in the required time the financial hardship experienced from the dumping. This is an important and relevant bill. I note the member for Lalor's concerns, but we do want efficient and flexible mechanisms that are much less formal, because the stakeholders involved will bring themselves to the table and, on an as-needs basis, we can bring together on specific issues working groups that will no doubt include representation from a broad range of stakeholders. I commend the bill to the House.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in favour of the amendment moved by the member for Makin to the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015. In the beginning of my contribution, I want to briefly touch on a comment that we hear from parliamentarians, including the PM, quite often: 'We want to be a country that makes things.' It is a catchphrase that is just thrown out there. I will say that it is a seven-word slogan. So it is a step up from a three-word slogan. With 'We want to be a country that makes things', we are up to seven words. But, as a government and as a country, we need to be doing more than just mouthing more slogans when it comes to manufacturing. We need to ensure that we have strong manufacturing and that we are in fact a country that makes things.

There are three things I believe that, as a country, we should do to support our manufacturers, to support those businesses, and to support the people they employ in those businesses. Yes, we have got an antidumping bill before us, and that is one thing that government can do. A very simple thing that government can do is buy the things we make. What I would like to see from this government are government procurement policies that are being put forward where the government takes a proactive step to buy the things that we make. If we want to be a country that makes things, then let's show leadership and buy the things we make. I speak specifically about everything from defence manufacturing to the toilet paper that we have here at Parliament House. There is such a wide variety of things that we manufacture in this country, and we need to show leadership in our domestic market by buying the things we make.

I have just returned from a political-exchange delegation to Japan, where I had the great honour of talking to the Vice Minister of Defense about the fantastic Bushmaster, which is manufactured in Bendigo. I talked to the Japanese government about why they should buy the Australian Bushmasters; we as a government and country have purchased 1,000 Bushmasters. This demonstrates how good we are and how good this vehicle is. I did not know how many toilet papers we have bought but, if I had known, I would have been able to speak about those.

One of the things we can do to support manufacturing is to buy the things we make. Another thing government should start looking at, apart from antidumping, is in terms of government procurement when we put out to tender big chunks of money for capital works projects. The Prime Minister has said he wants to be the Prime Minister for infrastructure. There are a lot of dollars on the table for construction. There are a lot of materials and labour required, so let's see some leadership and have local content in those contracts. Talk to the states; talk to local government about how they can help secure local manufacturing jobs by putting local content in government procurement documents. This is another way the government can help support local manufacturing businesses and local manufacturing jobs.

The third way the government can help local manufacturers and those they employ is to have a strong antidumping regime., making sure we have a robust system so that our manufacturers and the people they employ are competing on an even playing field. This is what the antidumping legislation should be focused on. Dumping occurs when goods imported to Australia are priced lower than their normal value, which is usually the comparable price, in the ordinary course of trade, in the exporter's domestic market. Where the price in the ordinary course of trade is unsuitable, the normal value may be determined by using comparable prices from exports to a third country or the cost of production plus selling the general administrative expenses and profits.

There are already established terms about what dumping is, and previous speakers have spoken on those. Previous speakers have also mentioned that dumping is not a prohibited practice, under the WTO agreements. The WTO agreements say, however, that countries which believe they are subject to antidumping can introduce bills, like this one, to introduce schemes, like those of the former Labor government, to ensure there is an even playing field. The current Australian antidumping legislation is based on the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994,and the WTO Agreement on Subsidies and Countervailing Measures.

This WTO agreement seeks to bring together nations that have similar costs—for example, Canada, the US and the EU. It allows those countries to establish a system of ensuring that cheaper product from overseas is not dumped unfairly on their markets. This is an urgent matter. We need to make sure that we are not sitting idly by and watching otherwise competitive, profitable local industries—providing sustainable jobs in our local communities—succumb to rampant trade malpractice employed by other nations and other companies in those nations. The consequences of inaction to adequately address dumping will be the loss of not only those businesses but also those workers, their families and their communities who are too often subject to loss of employment.

What we have seen, so far, is a lot of people speaking from the outer suburbs and regional areas. They know the impact that cheap product dumped on the domestic market can have on jobs in their local areas. My electorate is no different. We have a large pine plantation at Woodend. Some of that has started to be harvested and over the next five years it will continue to be harvested. One of the concerns of local workers in that industry is the cheap imports that are being dumped on the market and what they will do to value price—and the pressure it will put on the company to process its timber into the wood we need for our frames.

To give a scale of the difference between product dumped on our market and what we are able to produce locally, we are not just talking about wages cost: we are talking about product that is so cheap that even in the country of origin—China or parts of America—it is less than the cost of production. It is very hard for our domestic manufacturers to compete with product so cheap that it is being produced at a loss in the country of origin. It is not about us having high wages in this country or a high Australian dollar, it is about a coordinated effort by some companies and countries to dump cheap product on our market.

The sustainability of Australian manufacturing is under threat because of this cheap product being dumped. It is vital that government adopt a strict rule-of-law approach to illegal practices that is consistent with our World Trade Organization entitlements. It is important for us to defend our local industries; it is in the national interest. Local industry is worth defending. Australian manufacturing employs five times as many people as mining—five times as many! When you include agriculture, which is another area where product is quite often dumped on our market, it means that seven times as many people are employed in agriculture and manufacturing as they are in our mines. So we are talking about a significant chunk of Australian workers whose jobs are at risk if we do not get the antidumping scheme right.

One of the arguments that is being put forward is that it is okay to have these cheap products come onto the market because they provide a better deal for consumers. This is simply an illusion, because the short-term prices remove local jobs and local industries. Prices will increase as local competition is killed off. Dumping cheap products is a deliberate strategy. Once the local competitors are gone, the price of that product will increase—and that is just the way the market works. This is why it is so important that we follow the lead of other countries around the world when it comes to antidumping. They make sure that their local industries and their local jobs are protected.

I want to acknowledge the work that some of the industry leaders have played in this debate. They have been very vocal in this area for quite some time. I know that many in the government like to criticise the role of unions, particularly the AMWU, the AWU and the CFMEU. They have formed, in partnership with employers and industries, a joint initiative, a round table, to put on the record the need for very strong antidumping legislation rules to make sure that we are doing our bit to protect jobs. In many ways, this joint round table is doing the work of government. It is put putting out there why Australia should be exercising its rights under the WTO to standing up and protect our manufacturing. The round table is in response to an urgent concern of members who work in these industries about their local jobs and local products being undercut by cheap imports.

There are two ways that other countries and their companies are undermining our locally produced products: one is through the cheaper product coming in; the other thing is by having a number of subsidies, which in many ways support what is going on. A note to the people who are drafting the text of the free trade agreements would be: perhaps when it comes to the steel, forestry and other industries, there should be some discussion about the subsidies that some countries have for their steel and forestry industries. Their subsidies prop up these manufacturers, who then go on to dump their cheap products onto our market.

This bill is complex and involves a number of technical changes. Two parts outlined in the bill are controversial, and this is why I am speaking today to the amendments. The first is the abolition of the International Trade Remedies Forum. This forum was initiated to keep the conversation going. The forum is a stakeholder body comprised of representatives such as manufacturers, producers, importers, industry associations, trade unions and government agencies. Perhaps it is because the forum involves trade unions that the government wants to abolish it. As I have demonstrated, our trade unions have taken a leading role in standing up and saying that we need to do more as a country. We want to see our government do more to protect and support local manufacturing and to create that equal playing field. The forum provides advice and feedback to the government on the operation of the antidumping scheme, the implementation and monitoring of the government's reforms on antidumping and other information which may lead to further improvements in an antidumping system. Because we are dealing with overseas companies, because we are dealing with an international market, it is important to have a body or a forum like this to continually review whether the rules we have in place are doing enough.

All the speakers that I can see on the list for this debate have local examples which they will be speaking about. What is really important is that we keep the conversation going about how we can continue to ensure that we have the best antidumping regime for our country so that we can support local manufacturing jobs. If we want to be a country that makes things it is important that we not only buy the things we make, that we not only ensure we as taxpayers get the best value for our dollar about securing local content but that we also have the strongest antidumping scheme possible to create a fair playing field. This is important not just for the manufacturers and the companies but also for the people who work for them. There are five times as many people working in manufacturing than in our mines and almost seven times as many people working in agriculture and manufacturing— (Time expired)

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

I have great pleasure in rising tonight to speak on the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 and the Customs Tariff (Anti-Dumping) Amendment Bill 2015. I would like to make a few initial comments about dumping because you can hear from the member for Bendigo's contribution there is much confusion about this issue in many people's minds. Provisions against dumping are not about stopping so-called cheap imports. Provisions about dumping are simply about allowing a country to take action against another country whose goods are being imported at a lower cost than what they are being sold at in the home market. It is not about predatory pricing systems, selling below cost or cheapness; it is about where country A sells something for one price in their home market but when they go out into the international playing field, the export market, they sell it at a lower price. Under the World Trade Organization provisions that in itself is what is considered dumping.

Ultimately, it is simply a form of geographic price discrimination. We could call it 'international geographic price discrimination'. One thing that has always surprised me—in fact, I find it quite hypocritical—is that, if we say that geographic price discrimination is bad when we do it across international borders, how then is it an acceptable practice if it is done across interstate borders or locally within regions?

In our Trade Practices Act, we have no provisions whatsoever, unlike many other countries, to enact or have prohibitions on localised or internal geographic price discrimination. The World Trade Organization says that, if that happens internationally, it is actually bad because it can harm businesses.

It is also very difficult to prove a case of dumping. How can you compare the price in the home market with the price in the export market? You are not making an apples-for-apples comparison. How do you determine the normal price in a home market and compare the two? We know prices in today's global markets change quickly. They respond to demand. Just look at how quickly the prices of some of our commodities from iron ore to coal and oil change and in such a short period of time.

How do you make allowances for different quantity purchases? If the quantities sold in the local home market are a thousand units but 500 units for the export market, how do you make comparisons between the two? There are also credit risks. Are there greater credit risks in the home or export market? What about statutory warranties? A supplier in Australia often has to cover a lot of statutory warranties, which adds costs to selling in Australia; but those costs may not exist in foreign countries. This makes it very difficult for Customs officials to make an apples-for-apples comparison to determine if there has been a case of dumping. That is probably why it has been such a difficult area in the past.

We also need to admit that this is important legislation. It is very important that in Australia we get the legislation right—the balance right—and that it is not simply a panacea for competition in Australia to stop cheap imports.

I know the member for Bendigo was very quick to say that she wants us to be a country that manufactures goods. I think everyone in this parliament would say that but, if we are going to be a country that manufactures goods, we need to get our costs locally under control. We need to make sure that the cost of doing business here in Australia is not putting us at a competitive disadvantage. Of course we saw that under the last Labor government. They decided that Australian industry should be burdened with a carbon tax. So if I was manufacturing a product here in Australia, I would have the burden of a carbon tax; but if I was manufacturing that exact same product overseas, I would not pay a carbon tax. Misguided, confused policies like that simply put Australian industry at a competitive disadvantage and make it harder and harder for people to manufacture products in Australia.

We have got rid of the carbon tax and we have seen the biggest fall in electricity prices on record. That has helped make Australian companies more competitive, but there is still a lot more to do. We have seen the renewable energy target. If you mandate or force onto the market a higher cost and inefficient production, you simply force the price up. The renewable energy target simply forces up the price of electricity. The higher the percentage and the more gigawatts we have under the renewable energy target, the higher the cost of electricity. It is as simple as that.

We also have the threat of an ETS. We know that the current policy of the opposition, should they ever come to government, is to implement an ETS upon Australian industry. Again, many of our overseas competitors would not actually have to pay that. It would be another burden on Australian industry, which is the reason why our costs are higher.

I come to the importance of lowering electricity costs. We have seen the most disgraceful and shameful scare campaign in New South Wales on the privatisation of electricity costs. We have New South Wales members of parliament and their union mates running a terrible, disgraceful scare campaign, claiming that privatisation would lead to an increase in electricity prices.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Terrible!

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

I note the member for Chifley is sitting at the table. I hope he will show some leadership and condemn his fellow New South Wales state parliamentarians, and say what a disgraceful scare campaign it is. I hope the member for Chifley will show some leadership in that respect and not join the throng of those who are carrying on with this nonsense—this misleading scare campaign.

We then heard from Rod Sims, Chairman of the ACCC, that if the privatisation goes ahead, electricity prices will be lower. We have had Bob Carr, the former New South Wales state Premier—and very highly distinguished foreign minister well known for his requirements of fine-quality pyjamas on first-class flights—also agreeing that electricity needs to be privatised.

We have had the former New South Wales Treasurer come out and say that costs will be lower. We have had ex-Labor Party member after ex-Labor Party member come out and say: 'Costs will be lower, if we privatise electricity.' Perhaps the member for Chifley sitting there at the table could come and add his voice to his former colleagues like the former resources minister, Mr Martin Ferguson, who came out today and said he was ashamed of the Labor Party for not doing the right thing and standing up for the privatisation of electricity. I see the member for Chifley has let this opportunity go. I cannot say that I have not given him the opportunity.

In lowering our costs, we need to look at our tax rates. We currently have a corporate tax rate of 30 per cent, which puts us out of step with our near neighbours. If we look at countries like Hong Kong, it is 16.5; Taiwan, 17; and Singapore, 17. At 30 per cent, we are simply out of step, and again that puts more pressure and makes our industry less competitive.

I know some on the other side would like to raise company tax because they think it would raise more revenue. I suppose if you sit down and think of it on a very basic level, which I know many members of the opposition do, you could come up with that. They think that if we raise the rate of tax we will get more money in and that will give us more money to spend. But our history has shown the exact opposite. Over the last 50 years, every single time that we have lowered the rate of company tax, do you know what has happened? We have not got less revenue; we have got more revenue. We have got more revenue not only in gross terms but also—the most important measure—as a percentage of GDP. Every time our corporate tax rate has been lowered the Treasury has received more revenue as a percentage of GDP. So, even if you like the idea of big government and plenty of money to spend, the best way you can get that is by lowering the corporate rate of tax, because that will also assist in making our Australian industries more competitive.

This bill works to get the balance right. If your antidumping provisions are too generous, too easy to bring claims under, you have some of the situations which we have seen in America. Many American companies in the furniture and bedding industry brought claims against Chinese manufacturers and very punitive dumping duties were placed on those manufacturers. But that did not actually do anything to protect or save American jobs. It did not do anything to reduce the flow of imports of Chinese furniture into the United States. It simply worked as an anticompetitive tool. That is why I support the bill—because it works on getting the balance right. That is what we need to do—get the balance right in this dumping area.

There are a couple of things that the bill does. It establishes the Anti-Dumping Information Service and increases the number of international trade remedy advisers to better support business engaging with the system. It directs an Anti-Dumping Commissioner to impose provisional duties at day 60 of an investigation where relevant conditions are met. That is most important, because where there are cases of dumping it is very important that the legislation and the system we have in place work quickly. There is no point in bringing in countervailing duties or taking action months and months after the action has occurred, because by then the horse has bolted and the damage has been done. So reducing that to 60 days is a very important provision. The bill also provides less tolerance for uncooperative exporters. If companies do not respond to requests for information, the Anti-Dumping Commission will proceed with their investigations on the basis of information which could be from an application brought forward by Australian industry. Again, this is an important provision.

In the final minutes left I would like to quickly say that I do not support the amendment proposed by the opposition. The amendment involves the International Trade Remedies Forum, which was set up by the previous Labor government. For all intents and purposes that forum is redundant. We know that it is stacked. By its regulations, it is compulsory that it has a discriminatory provision where four members must be union members. I know that the opposition likes to have these things to give jobs to their union mates. This is an unnecessary, redundant provision, and I oppose the amendment. All up, I commend this bill to the House. It is a good piece of legislation. It works on getting that balance right, without going too far as we have seen in countries like the United States, to make sure that we give Australian industry the ability to bring claims and to act quickly where a dumping case comes up.

As I have said, ultimately, we need to make sure that in government we work to get the costs off Australian industry. We cannot save Australian industry through antidumping legislation. The only way we can save Australian industry is to get their costs down—to get their electricity costs down, to get the taxes down, to get the red tape off their back, to let them get out there and compete on an international playing field. I know from my own personal experience before coming to this place that our Australian companies are good enough to go out and compete internationally and win export orders. That is what we can do, and that is what we want to encourage them to do. We want to encourage our businesses in Australia to get out there and fight on that international playing field, to take the risk and to use their innovation. We have done that with the trifecta of free trade agreements with South Korea, Japan and China. That is what we want to do: incentivise our industry, incentivise our exporters and incentivise our entrepreneurs to get out there. We want to make sure that if they set up a business in Australia—and that is what this bill does, too—they will have effective provisions against dumping and there will be a quick remedy. I commend this bill to the House.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I strongly support the amendment that has been moved by my colleague. I support the underlying thrust of the legislation but I certainly object to the removal of the industry forum, and I will go through each of these separately. I think it is really important for us to understand that we need antidumping laws because markets are not as perfect as people like to imagine. We know that an industry can be under attack from overseas competitors who flood a market with a product at below the cost it takes to develop that product. Of course, one of the advantages of doing that, particularly if you have small market like Australia, is that, for a relatively incidental cost for the company doing that, they can ensure that in that process they can eliminate some of their competition. So smaller countries like Australia, in particular, have to be very, very vigilant about this to ensure that our markets are not improperly and unfairly overrun. We do understand and support the fundamental notion that we are in a globalised economy, but, just as we have within our own country internal laws to prevent unfair competition and certain commercial practices which actually are anything other than equitable and fair, where people can use their position in the market to unfairly disadvantage their competition, likewise we need to do this in an international forum. It is a very real problem for us in Australia.

In Western Australia, one of the areas where there is strong concern about improper pricing of steel is in the lintel industry. Our standard technique of construction in Western Australia is somewhat different to the sticks that you hammer together in the eastern states. Our standard form of construction is double brick, and so we have a much higher strength lintel. Our manufacturers are very concerned that this galvanised product is coming in from China at about one-third of the price that it can be produced in Western Australia. There is concern that this is a galvanised product. Galvanisation is a risky process, where there needs to be a great deal of care, otherwise people can be injured. There is certainly a level of disbelief that that product is indeed being produced in China for that price. Unfortunately for many manufacturers, particularly the smaller outfits that we tend to have in Western Australia, the delays and the complexity involved in taking an anti-dumping case really militate against it being an effective remedy. The Steel Institute's James England, based in WA, said: 'The delays are the most costly part of the whole exercise. It is assumed the imposition of a tariff against dumped goods will stop the goods damaging our firms, but it is too late to act after the damaged good has been sold.' He went on to talk about how that underpriced good goes right through the supply chain, making it more and more difficult to take action against complex transformed products.

We support and welcome the government continuing the work that Labor has done. This is one of these areas where we have seen governments each building upon the initiatives of previous governments to strengthen these positions. In particular, some of the provisions in relation to making it easier to establish that there has been a breach and ensuring that remedy is available earlier are really important, because delay, as I said, is one of the great impediments to taking an action, as is the complexity. But these things will be totally ineffective if we are not properly resourcing the Australian Anti-Dumping Commission. I note with some concern that Australia's only solar panel manufacturer, Tindo Solar, are seeking to bring an action against the importation of certain crystalline silicon solar panels, which they believe—and they seem to have some evidence—are well below production cost and that many companies have collapsed or been absorbed in recent years as the global supply wreaked havoc through the solar manufacturing industry. So we have a situation where there is possibly a problem in China itself leading to our markets being flooded and our capacity for any local manufacturing of solar panels has arguably been compromised, but, for the second time, the Australian Anti-Dumping Commission has put off the investigation of this matter because it claims it simply does not have the resources given the heavy workload that it has. It is all very well to come in here and talk about a new legislative framework that is going to make it easier, but, if, as with the case of Tindo Solar, you cannot get any action taken because the entity does not have sufficient funds, it is all for naught. So I think that we are going to have to be very vigilant in ensuring that this legislation is something other than a hollow gesture and that the ADC is in a position to take the action that we are here empowering it to do.

I want to talk a bit about the other aspect of this, which is the abolition of the tripartite consultation body. This is a very, very disappointing example of a tendency that we have seen with this government—the extreme anti-union attitude that it has, which ultimately is in fact very destructive to our economy. When we established the International Trade Remedies Forum, it was a body that represented business and the unions. Indeed, one might argue that it had a singularity of interest here in ensuring that Australian manufacturing and agriculture in particular were being given a level playing field on which to compete. I know that, as has been said here previously, since the Abbott government has come to power the forum has not been active, and this has, I think, been to the detriment of business. When representatives came to Perth in the first half of 2013, after the body was formed, it was very useful for manufacturers to come to this forum to get a clearer understanding of what was going on and to know that their concerns as stakeholders were being taken into the heart of government.

I think that it is really interesting to compare this ideological, anti-union position that we have here in Australia with what we see in Germany. It is interesting to look at an article that was written last year entitled 'From sick man of Europe to economic superstar', which talks about Germany's resurgent economy, and how they have managed to survive. They have had their difficulties, but when you consider what else the rest of the Western world has been through, they have managed to, in some very trying circumstances, keep their economy afloat while bailing out and underwriting the economies of southern Europe.

The article talks about the distinctive characteristic of the labour market institutions—those employee associations, trade unions and work councils that have been established and which have underpinned German economic success. It really allowed Germany to react with much greater flexibility than we saw in other jurisdictions during the GFC. This is because they have a system that has buy-in from across the society. They have a system of wage floors which are negotiated periodically between trade unions and employer associations, typically at an industry or regional level. This really has been the corner-stone of furthering the common interests in improving productivity. They have, in these agreements, created a flexibility within the wage system to increase or decrease the hours of work, which really has been a major contributor to Germany being able to keep the unemployment rate low during the GFC. We can see that even under conservative administrations like Angela Merkel's there is an acceptance of the usefulness of having these tripartite arrangements—the usefulness of having every quotient in the industrial equation engaged in trying to solve these problems and trying to solve these issues.

Unfortunately, what we have here, is the reverting-to-type Abbott, primitive, conservative, old-school response to the fact of unions and their involvement. That is not a creative way to take our economy forward. I think that this is indicative of what we see the government doing. I understand there are a great number of tripartite bodies that this government are either dismantling or taking the union membership from. I think that will make government the poorer. Certainly, it will not boost our productivity or our effectiveness.

These anti-dumping laws are very important. We must make sure that we ensure—in our relatively small economy, operating in a global environment—that our manufacturers, agricultural producers, and service providers have a fair and proper basis for competing in that international community. I will make the comment: it amounts to nothing if we are not going to provide adequate resources to the ADC to implement the changes that we are going to be making here today.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I, too, rise to support the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015. I have spoken often in this place about Australia's anti-dumping regime. In the past I have been condemning it in saying how poorly it has served the Australian nation, particularly our small, medium and larger sized enterprises. But tonight I can stand here proudly and say that this coalition government has brought to an end the travesty of justice that too often was the experience of Australian manufacturers or suppliers of goods when it came to trying to have an anti-dumping regime delivered to stop dumped imports.

It is a fact that, for years, Australia's anti-dumping regime was considered virtually non-enforceable. We had company after company finding that it took forever to bring a case; that costs were prohibitive; that they were buried in red-tape. The government officials themselves did not seem to be interested. In fact, they seemed to take delight in finding no case to answer. I wonder if that was perhaps because, if there were a case brought against a decision in the WTO—a decision challenging Australia's decision to bring on an anti-dumping set of duties—that the government department would have to pay the cost of that particular challenge.

All of that is behind us I am very pleased and proud to say. I am also pleased and proud to say that a lot of the changes were brought through the experience and tenacity of the CEO of SPC Ardmona, Mr Peter Kelly. He had the most extraordinary experience at the height of the problems that surrounded the survival of the last Australian fruit processing company. He was trying to maintain exports, and at the time when the dollar was a little lower, the Australian canned fruits and preserved fruits were some 30 per cent of SPC Ardmona's earnings in the export markets. When the dollar went beyond parity with the US currency, those markets were lost and we saw a flood of imported, cheap and, too frequently, dumped product—tomatoes from Italy; peaches from South Africa; peaches from China—flooding into the Australian market. They were snapped up by supermarkets and the hospitality industry, who loved the big three-kilo cans of tomatoes, for example, which sold on average for $8 or $9 compared to $13 or $14 for the same sized can of Australian product.

The difference of course is that the Chinese imported cans of, say, peaches have been tested and have been found to contain levels of lead which are way above human tolerance and are very dangerous to health, particularly of the elderly, the young and those with compromised immunity systems. But the public was not to know that, given that all they saw was this product on our shelves. No antidumping actions were taken against them and hence the incredibly cheap prices that were simply added to the profit margins of, in particular, the two big supermarkets, Coles and Woolworths.

With this new regime that the coalition has ushered in, we are going to reduce the time for deadlines for submissions from 40 days to 37 days. Three days difference might not seem much, but this is the minimum time allowed under the WTO. Every day that you have dumped product accumulating in the big supermarket warehouses that will then be sold in competition against your Australian product, you can cut out from those transactions. It will serve the interests of your Australian industry.

The government are also going to crack down when overseas producers refuse to cooperate with antidumping investigations. It has been a bit of a joke in the past where you simply refuse to give information or you claim that the product that you were having investigated was different—for example, that it was organic tomatoes not non-organic tomatoes—and therefore should not be treated as like product. This was of course absurd and a nonsense, even when Coles stamped their cans of imported dumped tomatoes as 'Certified Australian Organic Consistent.' Indeed, there were no agreed organic guidelines at the time but Coles were very happy to put that label on the side of the product. It often confused the customer, who saw the word 'Australian,' picked up the can and imagined they were in fact consuming an Australian tomato product.

Also, if you have not given adequate information and have not responded to the request for data, we will proceed with the investigation based on the best information already supplied. That might be the information supplied by the Australian industry bringing the case. To me, that seems only fair. For too long it has been all the other way.

We will strengthen enforcement of the provisions of the WTO agreement on subsidies and countervailing measures. This will be implemented by the Department of Foreign Affairs and Trade, which represents Australia at the WTO and other international forums. This will give us a stronger stance internationally and more transparency on foreign subsidies, including those identified during antidumping investigations. Let me say that when the antidumping case was brought against Italian canned tomatoes by SPC Ardmona, of the some 90 separate importers investigated, about 88 or so of those were found to be dumping the product—in other words, selling it below the normal price that was charged in the home country. But two of the companies got away with it. They were found to have dumped but below two per cent, so they did not have the dumping duties applied to their product. It just so happened that those two exporting brands constituted more than half the market in Australia.

One argument used at the time by SPC Ardmona was that the antidumping agency had not taken into consideration the subsidies that were embedded in the low prices that the Italian tomato manufacturers could pay to their growers. Under the EU agricultural reform policies they were receiving subsidies, which could then be passed on to the manufacturer in the form of very cheap raw material for canning. The SPC Ardmona case has now been brought back against the remaining two large Italian exporters of tinned tomatoes. This time the subsidies embedded in the products will be given proper examination. So there we see how the antidumping regime has evolved in Australia to be fairer, more transparent and will now more closely conform to WTO guidelines and benchmarks.

The government will also provide better advice to Australian businesses with a hotline. We will enhance the support services with the International Trade Remedies Adviser, in particular, by increasing the number of advisers. We will establish an antidumping information service, to provide new information about products including market analysis. All of this is very important because too often in Australia, as I said before, we have seen poor representation of Australia's interests by the antidumping agency, until these amendments came into being.

With the previous regime, we also had a culture of not appearing to care. I have a lot of faith in the new director in particular. I think he has national interests at heart. But I am also pleased to see that we will no longer always take the side of the imported product, because let me give you one short story. At the height of the dumping activity in Australia, when the dollar was so high, when we were in the middle of the worst drought on record, there was a huge volume of imported peaches from South Africa. They came into the country and ended up on our supermarket shelves. Both Australia and New Zealand at the same time were requested to consider bringing in antidumping duties by their respective industries. In the case of New Zealand that antidumping regime immediately found on behalf of the New Zealand fruit growers that this South African peach product was dumped. They immediately reimposed antidumping duties that had in fact been in place before.

At the same time, the Australian antidumping regime, looking at the same product and the same complaints, ruled that there was some antidumping action but that the Australian company simply had to get over it. They were not going to have the support and the fairness of imposing antidumping duties against the South African tinned peach product and it could continue to flood into the Australian market. And it did.

Very recently there was an extraordinary news item out of South Africa, which trumpeted the fact that the South African consumer protection and competition agency itself was fining these companies that Australia had let off the hook for anticompetitive behaviour in export markets. Here was South Africa saying their own companies had not done right by their behaviour in export markets, and they, therefore, fined them. Yet Australia's own antidumping regime had let these same companies off the hook, while New Zealand had set antidumping duties to protect its own industry. That is a classic case of how poor Australia's antidumping regime has been in the past.

Under the previous government, they did not seem to care. They just simply had the attitude that anything that gives cheap product to the Australian consumer will do. They seemed to share the same notion as Coles and Woolworths that down down, everyday, low prices best serve the Australian grocery buyer. Unfortunately, we have seen in very recent days that that cheap, down down, everyday, low price can sometimes lead to very serious problems with food safety when a company disguises the true country of origin of that food, made from local and imported ingredients, by poor labelling.

We have had the hepatitis A outbreak in imported frozen berries from China. I mentioned the lead in the tinned peaches, and they were assessed and found to be contaminated over 12 months ago. There has been more recent testing of tinned peaches from China where arsenic and lead are under very close scrutiny. I am very fearful because, in particular, the big hospitality size cans of this product, typically, are served to people in institutions like hospitals, prisons, the armed forces, Defence forces, school canteens and other types of public institutions, and those products are fed to people without them being able to check a label and see what its country of origin is. I have said that we have real contamination issues with heavy metals. But there are also other problems like biological contaminations, such as with Escherichia coli, which is an indicator of faecal contamination, and hepatitis A.

So we have had a whole raft of problems affecting the Australian food manufacturers when they have had to compete against cheap, dumped, imported product with few fair and reasonable results being delivered by the previous antidumping regime. They have had to deal with complex, confusing and probably deliberately non-transparent labelling laws, which allowed a lot of the imported, dumped, cheap product to compete with Australian product without its actual origins being well known and well understood by the buyer. We have also had a problem of poor food security checking at our border. We have product coming into the country now which has serious food safety issues associated with it.

This recent scare of hepatitis A in frozen berries, accompanied by the arsenic and lead contamination in more imported canned fruit products, combined with this new and improved antidumping regime, spells a new potential capacity to compete for our Australian manufacturers. Whether they are in the business of making aluminium, car parts or clothing, we have to have fair play. The World Trade Organization understands this and they have had rules in place for a very long time. Australia has been gutless in the past. We are courageous on the battlefields. We are courageous on the sporting grounds. When it has come to sticking up for Australian enterprise, we have run away. We have hidden our heads for reasons that are quite beyond me. I commend this Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 to the House. I hope that we will never again see the cowardly behaviour of an agency like we had for too long in the form of the Australian antidumping regime.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I am very happy to rise and contribute to this debate and, indeed, support the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015, however modest it is. It is an improvement to the current arrangements and it may provide some further support to local industry that has been confronted with serious challenges by antidumping and by certain companies who have sought to breach WTO provisions. For that reason, whilst there might be some amendments foreshadowed by the opposition to strengthen the bill, I think it does assist with efforts by government to ensure that our local manufacturers are not unfairly affected by improper, unlawful conduct by those companies seeking to take some of the market share.

But, to place it into some context, I think it is important to reflect upon some of the very significant measures that were outlined and implemented by the previous Labor government in relation to dumping. As Minister for Home Affairs, I had responsibility for this area of public policy in 2010, 2011 and 2012. As a result, I met with many of the significant manufacturers who were dealing with a number of challenges, some of which were beyond the control of government but, nonetheless, were ones that were causing them great difficulty, namely and in particular, the exchange rate.

These manufacturers, like the tourist industry, were dealing with a very high and persistent dollar, which, as you know, can be helpful to Australians who, for example, want to travel overseas. It is a wonderful thing to have such purchasing power to travel to New York and have a dollar that has more value than the American greenback, and it is good for importers to purchase goods. That can, indeed, be a benefit to importers or consumers who are purchasing imported goods. But it may not be for those manufacturers exporting and for the tourist industry relying upon incoming tourists—and, of course, the value of their currency has a great sway on whether they choose Australia as a destination or choose another destination—and upon the local tourist, who sought to go overseas because of that advantage. For manufacturers exporting there were great challenges in that period.

As a result, we looked at our anti-dumping mechanism through the prism of whether it was of any use to our manufacturing sector and concluded that significant reforms were required to protect the interests of our sector, to ensure that jobs were not unduly lost and to ensure that sectors of our economy such as manufacturing and tourism thrived, not just survived. For that reason, as minister at the time, I introduced a whole range of anti-dumping measures which, if I may say so, were the most significant reforms that had been undertaken in this area of public policy for at least 20 years. It was really responding to the needs of manufacturers. I have recently spoken to OneSteel, BlueScope and other significant employers in this country. They tell me that those reforms, in combination with the further reforms by Minister Combet and further work done by Minister Clare in the portfolio that I held a little earlier, have led to very significant benefits for our manufacturers. These reforms were all in keeping with our WTO obligations but, in combination, sent a very strong message to those who wanted to take a market share of our economy that they would have to do so within the rules.

What I found when I examined comparable anti-dumping regimes around the world was that our regime was probably the least effective. The Productivity Commission, in many cases, does good work but, despite what I found, the PC's review of anti-dumping sought to weaken the regime, to weaken the support for local industry and to introduce measures that would have acted contrary to the interests of manufacturers. So I was not in an easy position in having to receive a report that I supported in part but not substantively. From that point, we as a government introduced new reforms which were welcomed by industry and by unions. And there were further reforms undertaken by the then ministers Combet and Clare. So there was a suite of reforms throughout that entire period because it was so obvious that the acute impact of the exchange rate on our manufacturing sector was such that, if we could not provide ways to mitigate it—and one of them was to use the quite reasonable approach of approving our anti-dumping regime—there would have been more job losses and more company failures. It would have been a terrible thing.

This bill is more modest in its reach but consistent with the approach taken by the previous government. While I applaud the government for its introduction, I would refer to the fact that an amendment has been moved to retain the International Trade Remedies Forum. The government wants to abolish that forum. I think that is the wrong move and it is critical that the forum be maintained. It is of great use. If you speak to manufacturers around the country who rely upon government support and this particular regime, you would find almost universal support for that forum. Therefore, it would be a mistake for the government to abolish such a forum—and that is why Labor has moved an amendment to that effect.

The one thing this government seems to have failed to do in areas of public policy is to maintain stakeholders in the process. We accept there are times when you can remove obsolete bodies that are not being effective. But there are many bodies where you have wonderful people from industry and other walks of life providing really good advice to government, and the idea of just sacking all those people under the heading of getting rid of red tape or getting rid of bureaucrats—they are not bureaucrats, they are not public servants; they are industry people—is a big mistake. In relation to this area, whether it is the International Trade Remedies Forum or other areas of public policy, the government would do well to think about the use of mechanisms that provide a platform for industry or others to inform government.

We therefore seek some amendments. But it is good to see that the coalition, whilst failing to do anything when they were in government during the Howard years, have ensured that there is maintenance of the reforms that we implemented. Specifically, on 2 March 2011 we moved to make changes to laws governing the process for reviewing anti-dumping measures. Dumping is when an overseas country exports its goods to another country at a price that is below the price it charges in its home market or below the cost of production. That is the essence of dumping. We sought to respond to that because it was unduly prevalent in some sectors of our economy. What we did was put in place a bunch of reforms. The legislation, for example, outlined a specific procedure for applying for revocation separate to the existing review process. The bill clarified that, if a party wants the minister to revoke anti-dumping measures, it must initiate the request or apply within a certain time. This move, we argued then, would make the review process more open and transparent, giving Australian manufacturers adequate time to respond to an application for revocation.

There were many impediments—and I just point to that example—to enabling manufacturers, particularly smaller manufacturers, to be involved in reviewing a decision as to whether or not a good had been dumped in our economy. Removing those impediments and providing support for industry has led to a much better result. For example, I have been advised by local companies that they have won cases on review that they believe they would never have won without the reforms that were undertaken in the period when Labor was last in office. Therefore, it is good to see that in this anti-dumping measure—other than the wrongful step of looking to repeal a forum that I think is of use to government—there is no effort to turn back those reforms that were so important to local industry.

Local manufacturers like BlueScope Steel and OneSteel—those very innovative and remarkably good companies—were confronted by the higher Australian dollar and overcame that challenge. Then, assisted by good government, they overcame some improper conduct by some exporters to Australia, which were in breach of anti-dumping rules. As a response to those things those companies have come through very well. If you look, for example, at the profit margins of some of those companies, you will find that they are now in the black—and they were in the black in recent times. That was not the case five years ago. That was not even the case four years ago.

We—employers, unions and government—should collectively be very proud of the fact that what we did back then was the right thing to do. It has been affirmed to me as recently as last Tuesday, when I was meeting with the very senior managers of these companies, who informed me that those reforms made the difference between whether they found themselves running at a profit or a loss. That is how significant it was. I pay credit to this government for not seeking to change those, but instead to add to some measures. I would only like to suggest—I do so by way of finishing—that we do not proceed with removing the forum that is referred to within the regime. This particular forum, the International Trade Remedies Forum, is very important. It should not be abolished. If the government accepts the amendment I think it would mean that there would be a unanimous position—it would certainly be a position of the two major parties, if not of all parties—that this bill should be accepted in its entirety.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

Australia is undoubtedly open for business. We are open for free and fair trade, but we are not open for unfair trade. That is why we have laws against the dumping of products into our Australian market. I am currently the chair of the House of Representatives Standing Committee on Agriculture and Industry, and at the current time we are involved with an inquiry into the circumvention of Australia's anti-dumping laws and regulations. From about August and September last year, in my position as chair of the committee, I received repeated contacts from our manufacturing industries—the steel industry, the aluminium industry, the food industry and forestry, just to name some of the respondents. I give some credit to the previous government—and the member for Gorton has just been on his feet—who had a go in this area and tried to make some difference. I think their legislation has made some difference, but I do not think we have wrapped it all up yet. I think there is a way to go.

I must say that since the previous government's legislation was implemented in the middle of last year, I have been somewhat surprised that only one company—up until a few days ago, at least—had lodged a complaint under the new legislation. That was Capral. The recent ruling by the Anti-Dumping Commissioner, not only imposing a duty on the offending aluminium products but backdating the penalty to the time the application was lodged, has given Australian industry some heart. However, anti-dumping rulings, and the effective circumvention of them, is a slippery beast indeed—a little like taxation law. We often make alterations to laws surrounding tax in Australia, and as soon as the smartest brains in parliament come up with some new laws to stop taxation evasion, then the smartest brains in corporate law and accounting work out ways to get around them. It seems to be the same with anti-dumping rulings.

My committee has been listening to witnesses in the last few weeks, and in fact Capral Limited was in to speak to us back on 26 February. Referring to the Anti-Dumping Commissioner's decision to impose a penalty—and a back penalty retrospectively—on the importer, Mr Phil Jobe said:

One of the aspects of this decision we were not pleased with was the retrospectivity back to April. We were very pleased that the principle was achieved, but in this case the importers set up a $2 company just after the inquiry was announced and starting buying, we understand, the bulk of the metal through that company, which was not listed in the original application, and by that very simple act they appear, at this point anyway, to have avoided something like $8 million to $8½ million worth of—

Unfortunately, the chair on that day—which happened to be me—cut the gentleman off. I said to him:

This would be what you refer to as a phoenix company?

Mr Jobe said, 'Yes.'

At this stage, we only have Capral's assertions on this issue, but I have no particular reason to doubt what they say. It clearly demonstrates just how difficult this area is, and how quick the actions are of those intent on avoiding our legitimate tariffs—tariffs that are put in place to level the playing field against those who either subsidise their production or practise predatory pricing policy against Australia. Certainly affected industries are very pleased with the appointment of the Anti-Dumping Commissioner and his different view on like goods. They are also very pleased that the government is taking this situation seriously, and today's legislation is the first in what is likely to be a number of amendments to this system.

Already I have had a steep learning curve as to what constitutes circumvention. Antidumping rulings are put in place when the commission finds that goods that are being imported into Australia are subsidised and/or sold at a lower price than the one at which they are sold in their home market. This can make it very difficult for the commission to gather sufficient evidence to prove either case, particularly when they may be dealing with a closed economy and/or questionable accounting practices. One of the tools the commissioner has been afforded is the ability to look at like economies to estimate what a fair price is for a good. Further, they can now, following the Capral decision and its backdating of penalties, put much more pressure on importers and their sources to provide information.

I might take the time to point out some of the methods that have been pointed out in my committee already that constitute circumvention—for instance, slight alteration of the product. In the steel industry, manufacturers have been adding boron to their steel mix. For all intents and purposes, boron does not improve the steel, and neither does it do any harm to the steel. But, in a strictly technical sense, it turns the steel into an alloy. Thus it avoids the original antidumping action. With aluminium, we find that the aluminium manufacturers are altering the extrusions. They might be making them slightly over specification by a millimetre, or under specification by a millimetre. They might be drilling holes at certain places in the extrusion. So, they say that that is not the same product as the one that has been named in the antidumping action.

And then there are foodstuffs. I was listening to my friend the member for Murray, who knows much about the cases around SPC. For tomato mixes, it is so simple if you have a pasta sauce or a chutney to change the variable rates of the spices that might be added to the product and say, 'This isn't the same product as the one that has been named in the antidumping action; this is a completely new sauce'—or a completely new chutney. That is another way that our antidumping rulings have been circumvented. Another way that companies might seek to go around Australia's regulation is to move their products through a third country. They might even rebrand the product while it passes through this country. So, a country that might have an antidumping ruling against it may move it to a second country and rebrand—or not even rebrand but just say that it is sourced from a different country and bring it into Australia that way. Another method is to, instead of importing the entire product into Australia, perhaps bring in a number of parts and assemble here, and maybe source some of the parts from different parts of the world. And of course, as Mr Phil Jobe pointed out, there is the incidence now of phoenix companies, whereby once an action has been started against an importer then they could close that company up today and then bring in that product through another company.

One of the things our Anti-Dumping Commissioner needs is the power of legislation and the flexibility to deal with these issues on basically a daily basis so that when it is clear that the object of the change is to circumvent our rulings then we can act in an appropriate manner—which of course brings us to today's legislation. One of the things this legislation will do is tighten the time lines for response. Admittedly it is only from 40 days to 37 days, but there is a limit to how low we can go, and we think this is as feasibly low as possible. We will be increasing the pressure on foreign exporters to provide transparent access to their businesses for our investigators, and this is a very important point. We have to be able to see the books of the companies that are exporting into Australia so that we can understand exactly what that product is worth in their market and whether there has been a significant input of subsidies or other things that might be going on in their economies that are holding their prices up but depressing them when they send it into our country. If they do not cooperate, then we will take the opportunity to inflict penalties earlier in the process. We will take a stronger line in international negotiations surrounding the WTO. We are tightening the merits review function, and this will more fully deal with the issues of circumvention.

The whole process can be daunting for businesses actually bringing the information to the Anti-Dumping Commissioner. It takes quite a bit of effort. So, very importantly, I think, we are introducing a range of measures to assist our businesses in formulating their cases. It always comes back to self-interest—well, maybe not always, but I think one of the great adages in Australia is, 'Always back self-interest, because at least you know it's trying.' And in my particular case, Whyalla has one of only two blast furnaces operating in Australia. The OneSteel Arrium steelmaking works in Whyalla employs over 1,600 people directly, and it is the heart and the soul of the city. Three or four years ago that steelmaking plant was losing a lot of money, and Arrium quickly expanded its mining and direct export process to a point where it was exporting 13 million tonnes a year. They had opened up a new iron ore mine in the north of the state—which, paradoxically, is called Southern Iron, but it just depends where you are standing on the map when you are looking at it, I guess. Unfortunately, Arrium has announced the closure of this mine, the mothballing of it. It will cost them in excess of $70 million; 600 workers are losing their jobs. The flipside of that is that they are increasing production out of the Middleback Ranges somewhat, but it will not cover all the losses and it will not cover all the jobs.

In that time frame, the steel industry has got back into the black. It is not making a lot of money, but it is performing better than it was some years ago. Anything that is threatening that recovery, and it can be dumped goods, is of great personal interest to me and the city of Whyalla. So I am very pleased to be in the position I am at the moment as chair of the committee that is looking into this circumvention issue. As I said, back self-interest and at least you know they are trying. So those people will know I am trying, that I am trying to find the truth and trying to find the right answers for the government so we can deal with this on an ongoing basis—because, as I said, it is like taxation law: once you change the law then the smartest brains in the business are out there trying to find a way around it again.

OneSteel, Arrium, are confident they can compete in an even market, but not if others are cheating on us. As I said, Australia is open for business. Australia welcomes free and fair trade but it must be fair trade, and that is the underlying issue. There are another couple of points that are concerning me around Arrium and OneSteel at the moment. They are not directly connected to this bill, but I would like to lay them on the table very briefly at the end of this speech.

I have been making some noise recently about our Coastal Shipping Act. It has a very strong effect on my GRA gypsum mine, which is out west of Ceduna, producing up to 90 per cent of Australia's gyprock, and the steel makers in Whyalla who use coastal shipping both to bring coal to Whyalla from around Australia and to ship steel. Recently, Arrium have been trying to bid for a steel contract in Queensland—I will not go any further than say that they are bidding for a major steel contract in Queensland—only to find, though, that their competitors can now bring steel into Australia freight-wise cheaper from Korea, China or Japan than they can shipping it from Whyalla around the coast under our Coastal Shipping Act.

The Deputy Prime Minister has put out a discussion paper and has spoken to the Australian public and said that he needs to make reforms in this area. I strongly support that position. At the end of the day, if we just protect those jobs that are associated with the Australian shipping lines and put our major businesses out of work, like the steel works and gypsum works, then there will be no jobs for anyone to fight over. There will be no loads on the ships, so they will not have to worry about their jobs, and there will be no-one working at the steel works and no-one working out a Phnong. Let's hope it does not come to that and that there is some sense here. This is at the margins, but it is a very important margin. I thank you for your forbearance there, Madam Deputy Speaker, because I know that was a little off the subject, but I thought I would get it on the plate anyway.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I too rise to speak on the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 in the debate on the second reading and on the amendment moved by the member for Makin. I see the member for Gorton is here. He grew up in Victoria, like I did—in a manufacturing state. Now I live in Western Australia, which is a state that is a net exporter of goods. To manufacturing states, this is a bill that will be highly important to them. The member for Gorton mentioned the previous work done by the Labor government and also congratulated the current government for the work they are continuing to do.

We do not have a lot of manufacturing in the electorate of Swan, but we do have a freight rail and head that is very important to the north-west and the export of iron ore which is then turned into finished goods overseas. What I would like to do is go slowly through the bill for the benefit of members and the people of Western Australia—which is not as strong a manufacturing state as Victoria and all the other states. The antidumping reforms will implement the outstanding four election commitments. The bill will also abolish and reform less useful and underperforming features of the antidumping system, including fixing the merits review process. It will improve support services to provide better advice, assistance and information to Australian businesses engaging with the antidumping system. It will also see a range of other technical amendments made to the antidumping system that will simplify and clarify aspects of the antidumping investigation processes.

Also for the people in Western Australia who do not know what dumping is: dumping is the sale of goods by overseas exporters into our market at a price lower than the normal value, which is generally the price payable for those goods in the exporter's domestic market. Australia can apply antidumping duties up to the difference between the export price and the normal value where dumped goods cause or threaten material injury to the Australian industry producing like goods.

I am sure the member for Gorton has travelled overseas, like I have. I travelled extensively when I was working for a manufacturing base for a commercial industrial air-conditioning manufacturing company in Victoria that originated in South Melbourne and then moved out to Cheltenham. We not only produced our own goods but also relied on importing products from other manufacturers from overseas. This bill not only affects Australian manufacturers but also affects manufacturers in other countries who export to Australia and play by the rules. It is not only the Australian manufacturing companies that are affected by dumping; companies that play by the rules, meet the Australian standards, meet the antidumping laws and produce goods within the restrictions of the anti-dumping laws are also affected.

To give an example, the company I worked for was an importer of Sanyo air-conditioning equipment. On many projects that we supplied to around Australia, they would always make sure that they did not discount the pricing. They had to maintain their factory, the quality and standards for their workers and their profits. During the 20 years that I worked for their company while I distributed Sanyo products in Australia, the Japanese never discounted or dumped into Australia. One of the side effects of that was that they eventually closed down their operations in Australia, because their sales had reduced due to other companies that probably were not playing by the rules and were dumping products based purely on price for sale and not on quality or anything like that. That is another example of how it affects the manufacturers of Australia and the manufacturers of other countries who meet our standards.

The company I worked for—for nearly 50 years—had to cease production because it could not compete with overseas products. Whether there was any hint of dumping into Australia was very hard to prove in those days, back in the eighties. When I finished working for that company there was a potential for not only the loss of manufacturing but also the loss of jobs and all the workers who went with it. There was the engineering department, the guys who unloaded the stock that came in for the manufacturing component and the loss of goods being supplied to the company by metal manufacturers. There was no work for the trucking companies anymore either. These types of things can affect everyone across the manufacturing industry. So it is important that we have these new anti-dumping reforms put through.

When the government investigated this issue, on coming into government, it was clear that no jurisdiction had reversed the onus of proof, in the legal sense, as this would have been a breach of the WTO guidelines. However, the policy intent of this bill was to increase the onus on exporters to cooperate with anti-dumping investigations. This is certainly being implemented. Our reforms place a significantly heavy onus on foreign exporters to cooperate with anti-dumping investigations. If they do not cooperate then we reserve the right to impose antidumping duties sooner in the investigation process and impose heavier trade remedies.

The member for Gorton would have travelled to manufacturing plants, as I did quite often, throughout Asia. We had a manufacturing facility in Singapore and relationships with Chinese companies. He would have seen, as I did, when we went to those particular places that their factories were always full of stock. To clear that stock, particularly the companies that had products which were not well-known brands, they would reduce the price—with the sweep of a pen—by up to 25 per cent.

Any company that can afford to do that is either rorting the system already or they need to turn that stock over as quickly as possible. They need to keep manufacturing. They build in their manufacturing programs for the year, they forecast and they pre-buy their components 12 months out. If that stock is not cleared off the floor, it means they will have to pay extra money to house the stock that is still being manufactured.

The anti-dumping laws hopefully will prevent those types of companies from slashing their prices purely to clear the stock off the floor. More often than not, there is a quality relationship with some of the stock that goes, because it is not always designed for Australia. That is not the issue here today, but sometimes we see products come to Australia that do not meet the standards of the anti-dumping laws. Why should we not just take advantage of those low prices offered by cheap imports? The anti-dumping and countervailing duties cannot be applied just because imports are cheap. Such duties can only be applied where dumped or subsidised imports cause or threaten material injury to Australian industry producing like goods. Countries that have low barriers to trade, like Australia, need to have recourse to effective anti-dumping action. This is to prevent damage to our local industries by overseas producers who use profits generated by subsidies and protected domestic markets to persistently sell cheap goods into our markets.

What is expected to be achieved by introducing more stringent deadlines? It is important to industries injured by dumped and subsidised goods that they have access to the quickest relief possible. More stringent deadlines will mean the Anti-Dumping Commission gets access to information quicker, allowing the commission to resolve matters sooner. What is expected to be achieved by modernising publication provisions? Removing the requirement to publish notices in the newspaper and the gazette represents savings for the government. These savings will fund better access to the system for potentially injured businesses, particularly for small and medium businesses. Stakeholders will have increased certainty that all anti-dumping notices will be found on the Anti-Dumping Commission's or the Anti-Dumping Review Panel's website.

How much will business have to pay to seek a review on this decision? I am sure many businesses would like to know that. Applications to the Anti-Dumping Review Panel will be subject to a $10,000 fee. Small- to medium-sized businesses will be eligible for a reduced fee of $1,000. Applicants who withdraw their applications will be eligible for a partial refund. The fee reflects that providing merits review of anti-dumping decisions comes at significant cost to the government and can destabilise confidence in anti-dumping decisions. The fees will be prescribed by a legislative instrument.

What is expected to be achieved by removing the legislative requirements for the International Trade Remedies Forum? The forum is a rigid and inflexible method of consulting a narrow range of stakeholders. Removing the legislation establishing the forum will allow the government to adopt more flexible administrative arrangements for consulting anti-dumping stakeholders. The legislation that establishes the forum is unnecessary. Stakeholder consultation can operate under administrative arrangements.

We have heard from the member for Gorton, the member for Grey and the member for Makin, and I see the parliamentary secretary is here. He is keen to get on his feet to talk to this bill before we—

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I'm enjoying listening to you!

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

He's learning something.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

You are enjoying it? That is great! I will keep going. I will tell you about the current anti-dumping landscape. In the last three years—January 2012 to December 2014—33 investigations were conducted by the Anti-Dumping Commission, the ADC, which resulted in the imposition or extension of anti-dumping duties. Over the same period, a similar number of investigations were performed in Canada, the United States, the EU, China and Argentina. New Zealand carried out far fewer investigations, only five cases, and Brazil performed far more—132 cases.

In the last three years in Australia, January 2012 to December 2014, the largest portion of the investigation was made with respect to steel products. Some mates of mine worked in the steel industry in Victoria. The killer of the Australian steel industry was imported products, particularly from Asian countries. These countries are processing Australian products for Australian exported iron ore and bringing in steel at a far lower and cheaper price than the Australian manufacturers could do.

In the last three years, January 2012 to December 2014, a large majority of the measures either introduced or extended in Australia were applied to the metals sector, particularly steel products. A substantial number of measures were also applied to the electronic goods and the processed food and beverages sectors. In the last three years, the largest amount of antidumping measures either introduced or extended in Australia were applied in descending order to the products being imported from China, South Korea and Taiwan. We have a lot of stakeholder endorsements for these reforms—and you can understand why. Australia manufacturers—and I am sure there are many of them—would want to make sure that everything is about a level playing field. If these reforms can introduce and then make sure that there is a better and stronger level playing field than has previously been the case then they can only assist Australian manufacturers.

I can talk about other manufacturers in Western Australia. There was another airconditioning company out at the old Telstra building. They were an opponent of ours—they employed about 500 people at one time—but they, too, eventually had to close up shop. It was not because they were not good manufacturers, and it was not because the unions gave them a hard time. It was purely because they could not compete with the imported products. You could not establish whether those imported products were dumped because at that particular time the legislation—which is what these reforms will bring in—to find out whether those issues had an effect on those manufacturers was not in place. As I said, we have many stakeholder endorsements. SPC Ardmona CEO Peter Kelly said:

These reforms to our anti-dumping system are a significant step forward for Australian manufacturers and producers.

The Australian Steel Institute said:

These reforms will assist in leveling the playing field through a tougher approach to timeframes and remedies, and they will improve the process for Australian steel manufacturers through expanded information and support services.

The Australian Forest Products Association said:

We welcome the proposed changes to place a significant onus on foreign exporters to cooperate in anti-dumping investigations. The imposition of higher dumping duties and interim measures as soon as possible for those companies that do not comply with the Anti-Dumping Commission (ADC) is a particularly welcome reform.

As you see, industry is right behind these reforms. I refer again to my experience in manufacturing, because we also had another business—and it is a nice little story which I might finish off with—which manufactured a product that was Australian designed, Australian manufactured and Australian tested. It was a multi-packed style chiller, and we manufactured it in Bays Water in Victoria. One of my clients came to me one day and said, 'I just saw one of your chillers down on the port at Fremantle and it is marked to Carrier Inc. in Taiwan. I said: 'That's interesting. We don't send anything overseas via Carrier to Taiwan.' They were our opposition. I contacted my uncle, Bobby Dix, who was then the secretary of the painters and dockers union, and within 15 minutes I had Kim Beazley on the phone saying, 'How can I help?' Kim Beazley was very willing to assist. We eventually got that a guarantee from Carrier to say they would not copy it—they would not manufacture it—because Kim Beazley threatened to withdraw the Sikorsky helicopter contract. That is going back to the eighties, but it is nice little way to finish the story. I commend the bill to the House.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I want to take parliament back just for a short moment to the 19th century. On the Griffith University's website, I read a very interesting online article by Cameron Muir about Australia and its agriculture in 1800s. He writes:

Governments needed to redeem the settler project, and agriculture based on scientific principles emerged as an unexpected solution. The idea that agriculture could play a significant role in the development of the colonies had been largely abandoned as settlers focused on mining and pastoral pursuits. Few people thought agriculture could pay in such a dry climate, with such a small population and long carting distances.

This has lot to do with the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 and related bill before the House, because it talks about the importance of agriculture. It talks about the fact that agriculture then, as now, has such an important role to play. Mr Muir goes on to write:

In 1892, William Wilkins, the Under Secretary for Public Instruction, wrote a fifty-page treatise on agriculture in New South Wales, which began, ‘It was a maxim of ancient statecraft that the food supply of the people should be raised within its own boundaries.' … Wilkins went on to comment, however, that imperial relationships and international trade had rendered this obsolete. New South Wales, following Britain, could import its food. Although Wilkins was an advocate of agriculture in Australia, he cautioned that the necessary economic conditions must exist before agriculture could succeed.

It rings so true today.

I note that the member for Makin is in the chamber. I also note that the member for Makin has put some amendments to this antidumping bill. I further note that the member for Makin, who travelled right throughout the Murray-Darling Basin with the Standing Committee on Regional Australia, came to Griffith in my electorate of Riverina. There he saw how important growing food is not just for our country but for other countries as well.

I recall in my maiden speech in 2010 that I spoke of the fact that each and every Griffith farmer—and the member for Ballarat who is in the chamber will be interested in this—grows food to feed 150 Australians each year but also 450 people from overseas. Griffith farmers feed a significant number of people. Antidumping legislation is very important to Griffith people. It is very important to the people I represent, because they want to be sure that when they grow their food they are competing on as level a playing field as they possibly can.

I am really pleased that this legislation is being put before the parliament, because, in the words of the Minister for Industry, the member for Groom, and his parliamentary secretary, the member for Paterson, in their joint media release of 15 December 2014: it is going to bolster Australia's antidumping system with a range of welcome reforms. It is going to strengthen what we have got now as far as this legislation or policy is concerned, while complying with the international trade rules. We have got a good record on trade on this side of House. We have just signed preferential trade agreements with Korea, Japan and China, and we are working hard to get one with India. The minister went on to say:

Australia supports free trade, but free trade should also be fair trade.

He is so right. He continues:

The dumping of goods from overseas is harmful to Australian businesses and action can be taken to prevent this behaviour under World Trade Organization rules. Where local companies are being injured by dumping practices they are able to seek trade remedies.

Of course he is right. What we also need to protect is our Australian growers—our fine Australian producers—because the very best farmers in the world are those from Australia. I would almost dare say that the very best farmers in Australia are those from the Riverina. Of course you would expect me to say that—but they are! And the Riverina is indeed the food bowl of this nation. This legislation is going to help protect and preserve that great food bowl. I seek leave to continue my remarks.

Leave granted; debate interrupted.