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

I had concluded my remarks on the CFMEU.

I come now to agriculture. For agriculture, there are some very big ticket items—in particular, for my electorate, wool is still a very important part of the economy and a new, larger quota for Australia and a duty-free quota will certainly enhance my growers' prospects. For beef, tariffs between 12 and 25 per cent will be gone in nine years. For dairy, tariffs up to 20 per cent will be eliminated in four to 11 years. The wine industry—a very important industry in South Australia—will at last have the opportunity to clear the glut. Already we are selling $242 million worth of wine per annum to China, and China has doubled its consumption of wine twice in the past five years alone. Chile and New Zealand have the jump on us because they have their free trade agreements already. We have some catching up to do. Tariffs will be eliminated on wine within four years. That is a very big-ticket item for South Australia. Almost all remaining tariffs on energy and resources will be eliminated in four years. Tariffs like three per cent on coking coal and six per cent for thermal coal may not sound like much, but it is the scale of the coal industry in this case. Millions of tonnes goes to China, and a three per cent and a six per cent tariff cut is quite substantial.

Much of the big end of this agreement flies under the radar. I have spoken about agriculture and mining products—raw products into China—but much of the really big stuff for Australia will not be fully realised until business people have a chance to get their heads around it. In particular, there is health and aged care. China has an ageing population and they have working families. In the past, they have not had the kinds of institutions that Australia has to deal with these issues. They need expert help in building capacity. We can provide it for them. There are education services. Their institutions are improving fast, but we are looking to develop wide links around the world and collaboration. China will be a very keen market for our services in this area.

There are financial services. Already, the ANZ bank has a significant footprint in China, with its back office located in the central western city of Chengdu, a place that I visited in 2012. It already employs over 300 people and the potential is enormous. The Chinese will be looking for superannuation services and services to manage family investments. They are not too bad at managing money—I will certainly grant the Chinese nation that—but it is a changing and modern world and there are a number of services that Australia is very sophisticated in and we will be able to provide them with great assistance.

There is no doubt that some in our community are suspicious of foreign investment and particularly with China. To them I say: co- and cross-investment are the keys that open the door to mutual prosperity. Having partners in each other's countries, with skin in the game, establishes access to markets that were previously virtually unknown. This deal is good for both countries. It will lead to greater prosperity for both countries. I am pleased that the Labor Party has endorsed the agreement. It underlines the fact that this government has shown that it has the propensity to get jobs done.

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

In speaking on the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 and cognate bill, I want to begin by making some observations. The first is about the process that has led us to this point. Over the last few months, there has been considerable public discussion about the China-Australia Free Trade Agreement and I detect considerable division without and throughout the community with respect to it. There has been an ongoing media campaign by a number of different parties with respect to it, some arguing for it and some arguing against it, and now we have seen an extension of the parliamentary sitting time in order to accommodate the debate. The negotiations that led to it over the last few days have also been referred to by many speakers.

In my view, it all highlights that the process with respect to the negotiation of trade agreements between Australia and other countries is flawed and needs to be reviewed. We need to come up with a process whereby the parliament is engaged at a much earlier stage in the process and we also need to do away with much of the secrecy that surrounds the drafting of these agreements. Ultimately, the agreements are about what Australia will enter into with another country. It is my view that there is very little good reason as to why the issues that have been negotiated should not form part of the public discussion well and truly before the agreement is finally agreed to. Indeed, I see it as being absolutely wrong that the parliament of Australia only gets to see the agreement after it has been finalised. I believe that is what is wrong with the current process and that is why, under the current circumstances, we have come to the point tonight of having to debate the issue at this late hour.

The second observation I want to make is that the term 'free trade agreement' is in itself a misnomer. The truth of the matter is that under free trade agreements, as they are referred to—I would much prefer them to be referred to as simply preferential or bilateral trade agreements—much greater burdens, obligations and regulations on the parties to those agreements are imposed. Indeed, the agreements in turn put pressures on other matters of government as a result of having been signed. This is not the time for me to go into what some of those concerns are, but I am well aware that many a time there have been suggestions raised by people within this place about changes to our laws and someone says, 'We cannot do that because it breaches one of the free trade agreements that we have entered into with a country somewhere' or 'It breaches our commitments to the World Trade Organisation as part of our participation in their processes.'

Today, China is a very different country to the China of 1971 when Gough Whitlam first publicly recognised the importance of China and Asia to Australia's future. The ascendancy of China over the past four decades and its strategic positioning has changed its place in the world. It is in that context that Australia's partnership with China should be structured.

With all agreements there are winners and there are losers. That certainly appears to be the case with respect to the China-Australia Free Trade Agreement. The question that therefore arises and that should be answered is whether on balance the agreement is good for Australia, bad for Australia, or perhaps neither. The truth is that that question cannot be answered up-front, and it will only be after CHAFTA has been in place for some time that we can truly assess the effects of the agreement.

We have already seen that with respect to other agreements we have signed in the past, be it with the USA, Thailand, or others. All of those agreements at the time were talked up with respect to their benefits to Australia. The truth of the matter is that there is now little or no evidence that those benefits, the expectations that were created at the time, were indeed achieved.

It would also be naive to attribute all growth in trade to free trade agreements and then ignore the advances in internet communications, better transport system, a growing Asian middle class, and, most importantly, changes in Australian currency values. All of these things have had a real impact on trade between Australia and other countries. Indeed, it would seem to me—and I have made this point previously—that the fall in the Australian dollar from over US $1 last year to somewhere around US $0.70 cents to the dollar this year well and truly overshadows any reduction or elimination of tariffs in this agreement. I also note that China, Japan and the USA, all three of whom are major trading partners with Australia, were already major trading partners with Australia before we entered into any free trade agreements with them. Indeed, I have heard members opposite come into the chamber and speak in respect of this bill about the importance of our trade with each of those countries, and in particular with China. They have quite rightly pointed out the significance of that trade. I say to those members: it occurred without a free trade agreement. So, again, let's be realistic about what we can achieve with trade agreements.

It is also the case that the benefits of this agreement have been exaggerated. Many of my colleagues on this side of the House spoke about the exaggeration of the number of people who were going to be employed as a result of this agreement. Many members opposite have put forward what I would call grossly exaggerated new employment figures that will arise from the agreement. The truth of the matter is that we do not know how many jobs will be created. I might come back to that point a bit later on, because I have made the point that there are winners and losers in every agreement, and there are losers in this agreement, and jobs will be lost in some sectors as a result of the agreement. But, of course, they might be offset by those factors that hopefully will grow.

The truth of the matter is that trade, with or without a trade agreement, is driven by demand, supply and by price, and always has been. As an example of that point, in recent times live exports to Vietnam have risen sharply without a free trade agreement. Processed beef sales to China also escalated in recent years and are currently near the quota allowed under the agreement. Again, that all occurred without a free trade agreement.

On that very point I also note that in this agreement there are quotas that apply to some products. Those quotas—at least, those that I have been able to detect—apply to beef, wool, and milk powder, which are three products that members opposite have relied upon to argue the importance of having this agreement in place. With quotas in place, it limits the amount of growth for those sectors, albeit that some of them might still be able to grow in export sales to China. With respect to beef, we are already selling over 160,000 tonnes of beef per year to China, and with a quota of 170,000 tonnes locked in for the next four years, there is little prospect for new beef sales to China on the basis of this agreement. But, nevertheless, I am just pointing that out as a matter of fact.

I am also concerned not so much with quotas as I am with what I would refer to 'behind the border barriers', which I have no doubt will be imposed by the Chinese authorities if it suits their purpose. If it does not, obviously they will not. I also note the emphasis that has been made on the growth opportunities for the services sectors in Australia under this agreement. I quote from an article written by Angus Grigg in The Australian Financial Review of 24 June 2015: 'Telecommunications concessions, which were trumpeted by the government as the most extensive commitments in any agreement to date, were two months later—that is, in January of this year—all given to firms from other countries.' Again, it is one of the concessions supposedly granted to Australia that made this agreement extra-special for us, but two months later all of those concessions were given to other countries. The story also points out that concessions handed to Australian banks around the trading of the yuan were also given to others. In addition, import duties on 14 consumer goods would be cut in half, regardless of which country they were imported from. The point I strongly make about this is that the concessions Australia believed it had won as a result of the negotiations with China over this agreement have already begun to slip through our fingers, because the Chinese are granting those same concessions to other parties and other countries of the world.

I spoke earlier about the exaggerated jobs claims. Again, I simply make this point to those members opposite who have come into the chamber and criticised some of the unions for taking a stand on behalf of jobs and job seekers in this country: the truth of the mater is that it is on those very points that the negotiations took place between the government and the Labor Party. Concession were made, and those concessions are testimony to the fact that the stance taken by the unions, the Labor Party, and others, with respect to standing up for jobs in this country, were valid concerns. I also make this point about the issue of jobs and the ability to bring foreign labour into the country as a result of the agreement.

If the provisions did not mean what we believed them to mean and if there was no risk to Australian jobs at all, why were the provisions written into the agreement in the first place? Why did they appear in this agreement when no similar provisions appeared in any other agreement? That is a question for the government to answer. But the truth of the matter is that when you read the agreement—and it has now been read by several independent experts—there was a risk of Australians losing jobs to foreigners as a result. The point about the $150 million investment project in Australia also needs to be clarified, because the Chinese investment in that program needs to be only 15 per cent—in other words, $22½ million.

I now turn to the three contentious issues that were the subject of the negotiations between the government and the Labor Party. These issues relate to the use of Chinese labour, which I just referred to a moment ago, the recognition of overseas skills and the temporary skilled migration income threshold. On all three of those matters, I believe that progress has been made. Did we go as far as I would have liked to have seen us go? The answer is no. I believe that we could have gone further. The government should have conceded more ground on those issues because there is still considerable uncertainty as a result of the agreement reached. But, nevertheless, I accept that it is progress with respect to the agreement and it does provide a better agreement than the one we were originally presented with.

I also make this point about having any kind of regulation or law entrenched in some piece of legislation. I spoke only last week about the issue of 457 visas, which come in under strict laws, supposedly. The truth of the matter is that, unless those laws are enforced and unless the authority that is tasked with enforcing those laws is adequately resourced, it really does not matter how watertight those provisions are when written into law. They can still be circumvented by shrewd and smart operators—and that is exactly what is already happening. So I simply make the point that I would like to think that, whatever agreement was reached between the government and the opposition on this matter, those provisions will be implemented and enforced and that the departments tasked with enforcing them will be properly resourced.

I close on this point. I have several acquaintances—people I have known for years—who already do business with China and, indeed, with other countries, and who have done so for years. They were never reliant on a free trade agreement. They were reliant on their entrepreneurial skills, their business skills, and on identifying opportunities and making the relevant and necessary contacts that they had to make. This agreement will be useful in assisting people who want to trade with China; but, at the end of the day, it will still be up to each individual who has a product to sell to do their own negotiations and to enter into their own buying and selling arrangements with the Chinese company or entity that they are dealing with. On that note, I conclude my remarks.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 and related bill. I found that contribution somewhat staggering in some regards. The member for Makin seems to intimate that, because you trade with someone, there is no need to look at or liberalise those trade agreements. I wonder what the member for Makin would have made of the Hawke and Keating legislation that removed tariff barriers and those sorts of issues in the 1980s in order to liberalise the trade regime. After all, we were trading with those countries before, weren't we? No need to reduce tariffs or anything else, because we were trading with them anyway! The point is that we want to increase that trade.

The member also made note of the issue of jobs in saying that the government giving ground on this issue indicated that these were valid concerns. The simple fact is that, once again, getting this agreement through the parliament was critical. A lot of jobs are highly dependent on the legislation for this deal getting through by the end of the year. Quite frankly, we were not going to be hijacked and held hostage to demands as far as all sorts of Labor amendments were concerned, but we certainly conceded on some, not necessarily because they were valid but simply because Realpolitik means that sometimes you have to cut a deal to get legislation through.

In terms of increasing trade or not with a free trade agreement, one need only look at what happened in New Zealand and the massive increase they had in their dairy penetration into the Chinese market compared with Australia to see the value of these free trade agreements. In unlocking the experiences of the past and looking to the future, one must recognise that every vote against ChAFTA is a proxy vote for protection—and that is essentially what the member for Makin is arguing. A vote for protection is, as Churchill put it, a vote to give governments the right to rob Peter to pay Paul and to charge the public a handsome commission on the job.

I wish to remind the House that, according to the Leader of the Opposition, this is the year of the big idea. In such a year, one would expect or would be forgiven for thinking that there would be hundreds of ideas. But what is the Labor reality? Five. One idea every two months—staggering! This is indicative of the Labor Party more generally. They are reactive not proactive. They are negative, small-minded and backward looking. They are a jealous, envious bunch who believe that the quickest way to the fruit at the top of the tree is to chop that tree down, not to climb the tree. Labor are leaners not lifters. This ChAFTA debate has been and is a litmus test for Labor's current leadership. It is instructive that in government Labor resisted a union campaign against the original scheme and a host of Labor elders such as Martin Ferguson, Simon Crean, Peter Beattie, John Brumby and Bob Carr, among others, as well as a raft of business leaders, have welcomed the agreement.

While Labor and the unions claim that there may be some benefits in delaying the agreement or seeking to revisit provisions relating to the labour market in a few years, there are undoubtedly huge costs, too. The National Farmers' Federation has estimated that if an agreement is not put into force by the end of 2015 it could cost the sector $300 million, mainly through having to pay additional tariffs. And Australian industries will continue to suffer as major competitors, such as New Zealand, continue to enjoy preferential treatment after having already signed agreements.

This historic agreement is a game changer in so many ways. It truly is more than the sum of its parts. For to really grasp the magnitude of the win that we have here, one really must look to the many positive spillover effects of trade. Trade is the greatest diplomatic tool we have. Trade is one of best defences, for to trade is to know. With the familiarity earned through trade there comes an understanding. The language of war should never enter the debate about trade. The transactions of trade, like the quality of mercy, are twice blessed, and confer benefits on both parties.

China is already the largest single market for Australia's service exports. To date, this has been dominated by education, travel and tourism. In 2014, education, travel and tourism exports to China constituted over 60 per cent of Australia's total services export. China is our largest source of international students—about 29 per cent of the total. And it is our largest source of tourism expenditure—18 per cent of the total. Australia's export of other services to China has been less impressive to date. However, ChAFTA lays the foundation for much faster export growth across many services.

Chinese consumers have not just burst into the middle class; they have embraced online retail more than just about any other country. Online retail accounted for around 10 per cent of overall sales at the end of 2014, with spending at almost half a trillion dollars during that year. This means that the Chinese online retail market is now larger than that of the US. It is forecast to rise to 13 to 14 per cent by the end of this year. By contrast, online retail accounts for around seven per cent of sales in Australia and around the same proportion in the United States.

Never before has it been so easy for Australian businesses of all sizes, across just about every industry, to reach new and expanding markets in China. I know that in my electorate of Tangney this historic deal with China will mean new market opportunities for the architects, software designers, teachers, accountants, financiers and universities. I know too that everyone, and not just our hardworking professionals, will benefit from lower prices resulting from the reduction or removal of many tariffs on everyday items. So this trade deal is absolutely consistent with what the coalition took to the election in 2013. It is the product of the coalition government honouring our commitment to the Australian public to deliver relief of cost-of-living pressures and to create new opportunities for economic growth.

The Labor Party would rather that we shrink the economic pie, close our doors and bury our heads to the world of the 21st century. The union campaign against the China-Australia Free Trade Agreement is a mixture of misinformation, confusion and xenophobia. But it does hide an uncomfortable truth: labour market protectionism encourages the exploitation of foreign workers. The ACTU argues that ChAFTA will 'shut out locals from jobs'. They point to three controversial provisions. The first is the elimination of labour market testing for Chinese workers in the 457 visa program. But, quite frankly, the requirement has always been a ticking-the-box waste of time. An independent review last year found that it was pointless and cumbersome. There is no evidence that unemployed Australians in any way benefit from this regulatory hurdle.

Another controversy relates to skills requirements. The unions say ChAFTA means that foreign tradies could come to Australia who do not meet Australian standards. But the skills requirements under ChAFTA are exactly the same as for most other countries we accept skilled workers from. ChAFTA just removes a discriminatory higher bar for Chinese workers. The higher bar still applies, I might add, to a small number of other developing countries.

The final controversy concerns major projects. A side memorandum to ChAFTA establishes a new type of labour agreement: 'investor facilitation agreements' that allow major infrastructure projects to bring in foreign workers. But we already have similar labour agreements. The essentials of the law have not changed. Claims that ChAFTA changes existing major project wage requirements are simply wrong. To the extent that there is exploitation in Australian immigration, it is because employers are able to use restrictive visa conditions—demanded by unions to protect Australian workers—as a stick to wield against foreign visa holders.

This is not the occasion for a history lesson, but we should never forget that the history of our two nations is long, rich and complex. We could not imagine modern Australia without China's contribution to our people, our culture, and our prosperity. And perhaps above all, in our darkest hour, when our foes were literally on our doorstep, when our cities were under direct military attack—then, at that tipping point in our history—China was our staunch, indefatigable ally.

I note that Labor will not pay heed to history but will be true to it—and theirs. For as Churchill once said:

Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

It being 10 pm, the debate is adjourned.

House adjourned at 22:00