Louise Markus (Macquarie, Liberal Party) Share this | Link to this | Hansard source

This free trade agreement with our biggest trading partner and the second largest economy in the world, China, with total trade worth almost $160 billion in 2013-14 and a growing source of investment, was signed on 17 June 2015 by the Minister for Trade and Investment, Andrew Robb, and the Chinese Minister of Commerce, Gao Hucheng. The agreement secures better market access for Australia to the world's second largest economy, improves our competitive position in a rapidly growing market, promotes increased two-way investment and reduces import costs. It is a win for Australia.

Most importantly, the China free trade agreement abolishes taxes on Australian exports. The only way we can remove taxes that are applied by other countries to our produce is to enter into free trade agreements. China now applies a 20 per cent tax to Australian dairy produce, a 25 per cent tax to our beef exports, a 23 per cent tax to our lamb exports and a 20 per cent tax to our wine exports. All will be gone under this trade agreement with China.

In the electorate of Macquarie, there are many significant industries—in particular, agriculture and tourism. Today, I would like to speak on the benefits of the China free trade agreement, particularly to the tourism industry, but first I would like to speak about the myths, scaremongering and, most concerning, untruths about ChAFTA. The very well respected Kate Carnell, CEO of the Australian Chamber of Commerce and Industry, has said:

ChAFTA is the culmination of diplomatic efforts to create a strong relationship with China that commenced with the Whitlam Government in 1972. Since then China has become our largest trading partner and a major investor in Australia. It has underpinned the development of our economy and contributed to our current strength.

Kate goes on to dispel the myths of the unions:

Firstly, nothing in ChAFTA or any associated instrument allows hordes of cheap Chinese workers to come to Australia. The obligations of the 457 visa program will still apply.

This includes the requirements that workers shall be paid market wage rates, the same paid to Australians, and that employers must abide by Australian workplace laws.

Secondly, the exemption from labour market testing (LMT) is no cause for concern. LMT is ineffective in protecting local jobs because no regulation, even one that forces an employer to advertise a vacancy, can force an employer to recruit one worker over another.

Other obligations in the 457 program are better suited to protect local jobs and will apply under ChAFTA. Sponsors must:

So the exemption for LMT does not allow for any use of cheap Chinese workers. Kate Carnell goes on to say:

Thirdly, concerns around the Investment Facilitation Arrangement (IFA) proposed by the memorandum of understanding with China are also unfounded. This IFA for infrastructure projects greater than $150 million allows investors to enter into a labour agreement under the 457 program. This avenue (also open to Australian employers) is more stringent than LMT as it requires employers to provide evidence that:

She goes on to say:

Labour agreements allow concessions such as those mentioned in the ChAFTA MOU, but no concessions are available on the need to pay market wage rates and comply with all workplace laws. Again, there is no avenue through the IFA for "cheap Chinese workers".

Back to ChAFTA and the benefits to the tourism industry: last year 100 million Chinese went on an international holiday. The Chinese have advised Minister Andrew Robb that by 2020 this number is set to double to some 200 million. For the year ending 2015, there were some 3.3 million international visitors to New South Wales alone. Of those, 526,000 were from China, representing expenditure in New South Wales of just under $2 billion.

The latest international visitor survey for Australia, announced on 2 September, showed international visitor spend grew by 10 per cent, to a record $33.4 billion, or $3.2 billion more than in the previous year, the strongest yearly growth since 2001, which was the period of the Sydney Olympic Games. The survey showed China remained the dominant source of growth, with a 22 per cent increase in visitor numbers, to 864,000, and a 32 per cent increase in expenditure. Chinese tourists are now worth some $7 billion to the Australian economy.

The survey demonstrates that tourism is one of our greatest strengths and can be our fastest growing sector this decade if we continue to leverage our clean, green and safe brand to position ourselves as the No. 1 long-haul destination in Asia. ChAFTA will maximise these tourism opportunities by strengthening the tourism sector in this nation. ChAFTA will support increased Chinese investment in the Australian tourism industry through the higher screening thresholds for private Chinese investments. Innovative new investment facilitation agreements will also encourage investment in tourism infrastructure. This will help meet the demands of the 1.5 million Chinese who are expected to visit Australia by 2022-23, who are projected to spend more than $10.5 billion in our economy. As ChAFTA deepens business and education links with China, business and study related travel is also set to grow strongly.

Investment will not be just one way. ChAFTA will deliver certainty for Australian tourism providers in China, and we will receive guaranteed access to the growing tourism market within China under ChAFTA. For the first time, the door will be open for Australian businesses to build—100 per cent—and operate restaurants and hotels in China. You could open one or 100. China has guaranteed that Australian service suppliers will be able to construct, renovate and operate wholly Australian-owned hotels and restaurants in China. It has also guaranteed that Australian travel agencies and our tour operators will be able to establish subsidiaries and provide travel services, tours and hotel accommodation directly to domestic and foreign travellers in China.

With China now accounting for one in every five dollars spent by international visitors, it is clear that China is vital to the sustained growth of our tourism sector. For the electorate of Macquarie, this is good news, as we have some 250 accommodation establishments in the Blue Mountains and some 85 in the Hawkesbury. Michael Sperling, the immediate former executive officer of Blue Mountains, Lithgow and Oberon Tourism, said, 'Tourism operators are in the business of tourism and therefore a free trade agreement with China is of course a very positive step forward for the industry.'

Of course, there are hundreds of service industries also attached to tourism: cafes, restaurants, wineries and great visitor activities such as Scenic World in Katoomba. Anthea and David Hammon are the owners of Scenic World, a private, family owned business soon to celebrate its 70th birthday in October this year. It operates, amongst many things, a cableway which is the steepest and largest aerial cable car in the Southern Hemisphere. Anthea has advised me that overall Scenic World visitation has increased by 5.8 per cent over the past two financial years. In the financial year 2013-14 Scenic World had 818,413 visitors. Chinese visitation to Scenic World increased by a whopping 36 per cent. In the financial year 2013-14 Scenic World had 113,485 Chinese visitors, and in the financial year 2014-15 this increased to 154,395 visitors, giving a total increase of 40,910 in Chinese visitors to Scenic World being. This is only going to increase under ChAFTA.

The Escarpment Group plays a crucial role in accommodation in the Blue Mountains and represents four major hotels. Ms Huong Nguyen, Director of the Escarpment Group, said, 'The China free trade agreement is critical to the Blue Mountains for service industries being tourism and education.' She goes on to say, 'The China free trade agreement will inevitably mean more trade and investment in the tourism and training sector for the Blue Mountains and this will lead to further jobs growth for the region.'

In a joint media release recently by a united group representing tourism businesses across Australia, the union campaign against ChAFTA was condemned and the united group stated that the union campaign 'threatens the future success of our promising export industry'. They went on to say:

Our industry is very concerned about the short sighted focus of the union’s campaign which fails to recognise the importance of the ChAFTA to a broad range of export industries and the flow on benefits it will bring to the broader economy including jobs throughout the country.

I congratulate Andrew Robb, Minister for Trade and Investment, for signing this landmark agreement with the second largest economy in the world.