Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) 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. Labor have always been a supporter of the China-Australia Free Trade Agreement. We worked hard to progress it while we were in government and we are pleased to see it come to fruition now. The Leader of the Opposition spoke about the relationship with China that our Prime Minister Gough Whitlam first established when he established diplomatic relations between Australia and China and became the first Prime Minister to visit China in 1973. When our relationship with China began to do develop, the Chinese economy was smaller than that of the Netherlands. Today, China's GDP approaches and is likely to outstrip that of the United States. On some measures of economic size, China is already the largest economy in the world.

China's economic growth brings tremendous opportunities to Australia. We have seen those opportunities bring enormous economic benefits in our resources sector but they are not limited to our resources sector. This is why, when Labor was last in government, we produced the Australia in the Asian Century white paper. We made sure that the changing dynamics and the emerging opportunities of the region were included in every area of government decision making. We understood that, as China's economy grows, our returns will not depend as much on the resources sector but will be dependent on areas like services as well.

In recent years, China has lifted 600 million of its own citizens out of poverty. And President Xi Jinping has spoken at some length of the China dream—his view that living standards for all Chinese should increase over the coming years. This obviously brings new opportunities for Australia. There will be opportunities to produce new goods, new services and opportunities to export those to an increasingly prosperous China. There will be opportunities as well to provide the services that will be in demand in China. Whether in education, financial services, hospitality and tourism, legal services or in aged care, as the Chinese population ages, the China-Australia Free Trade Agreement will open up new opportunities for Australians.

Of course we are happy to support the China-Australia Free Trade Agreement but I have to say that this is not exactly the agreement that we would have signed had we been in government. The Leader of the Opposition has covered in some detail some of the shortcomings and limitations that we see in this agreement. I want to focus on one in particular. I want to focus on the inclusion of an investor-state dispute settlement clause, which is something that we would not have agreed to had we been the negotiators of this agreement. As the Leader of the Opposition has said, we have adopted a policy of not signing trade agreements with investor state dispute settlement clauses. We adopted that policy in government and we would have continued it had we still been in government. We oppose them now because we believe that they are not in Australia's best interests and we will seek to review investor state dispute settlement mechanisms that exist when we return to government.

ISDS clauses have been the subject of some concern in our community and for a range of experts right across the political spectrum. Whatever the argument in favour of ISDS clauses when they were first conceived, I think it is incontrovertible to say that they are now open to abuse and have been abused. I was the Minister for Health when the claim was brought against Australia by Philip Morris, the tobacco company. I think that this particular claim is a great demonstration of the perniciousness of these investor state dispute settlement clauses. I was the first minister to have to find millions of dollars, in fact tens of millions of dollars, to mount a legal defence against what we believed when were in government—what I am still convinced of—to be an excellent public health measure in tobacco plain packaging that has successfully resulted in fewer Australian smoking and, in the future, fewer Australian dying from tobacco related courses. This claim was a cynical attempt by big tobacco to overturn our cigarette plain packaging laws. Those laws were properly considered by this parliament, they were debated extensively in the Australian community and they were introduced to protect the health of Australians.

These laws for plain packaging are now under attack by a Hong Kong subsidiary of Philip Morris. Its claim, of course, is that plain packaging laws breach the investment protections in the Australia-Hong Kong Bilateral Investment Treaty. Of course Philip Morris is not based in Hong Kong. It is a company that was founded in the United States and is now headquartered in Switzerland. Its use of the Australia-Hong Kong Bilateral Investment Treaty is global forum shopping at its very lowest. In fact, Philip Morris changed is corporate arrangements deliberately to exploit the ISDS provisions in the Hong Kong agreement and to sue Australia. This is a completely unprincipled attack on the Australian parliament's power and duty to make laws to protect the health and safety of its citizens. This company, as all tobacco companies do, makes its packaging attractive, particularly attractive to teenagers and to children, in an effort to get more people smoking because many of its existing customers keep dying. No matter how baseless such a legal action might be—and of course Australia is very confident that we will be successful in this legal action—it still ties up thousands of hours of departmental time for our public servants. It forces the government to pay for a legal team, in this case a pretty expensive legal team, to prepare a defence. Tens of millions of dollars get sucked out of our national budget because of the exploitation of big tobacco of this ISDS clause.

Sadly, of course this legal matter does not just have a chilling impact on Australia; it means that smaller countries that want to introduce similar provisions to plain packaging are worried about being dragged into similar court processes and are prevented from doing it. I cannot tell you how many conversations I had with health ministers from other countries saying, 'Well, we're just kind of hanging back to see how the investor-state dispute settlement business goes in Hong Kong before we do what we know is in the interests of our citizens.'

So, as I say, we were disappointed to see an ISDS clause in this agreement. However, as we have always said, we completely recognise the importance of trade to Australia's economy, and we recognise that greater trade with one of the fastest growing economies in our region is going to be good for Australia. In the aspect of the investor-state dispute settlement clause, we would not have signed up with it. We also—as the Leader of the Opposition said, in much greater detail than I will—do have some concerns about some of the labour market provisions in this agreement.

I will leave you with just a very quick precis of those concerns. They are concerns that are not just concerns of the Australian Labor Party. They are concerns widely shared across the community. And I have to say it is no wonder that there is some scepticism and some feeling of disquiet amongst Australians when they look at the job destruction in the car industry under this government and the thousands of jobs lost, when they look at the government reopening loopholes in the 457 visa regime that Labor had closed, and when they look at employers bringing in more overseas workers on 457 visas than they told the government they wanted to employ in the first instance. Again, in my own area of health, we saw a lot of excellent, caring, wonderful nurses coming into Australia on temporary visas, when we graduate thousands of nursing students in Australia every year. But the state governments do not want to invest in their training years in public hospitals.

So it is no wonder that there are concerns in the Australian community about some of these labour market provisions, and our concerns were, I think fairly, grouped in three main areas. We wanted to see labour market testing for work agreements, including investment facilitation arrangements; we wanted to see—and this is very important, Mr Deputy Speaker Broadbent, and I know you know it is, as a member very much in touch with his electorate—safeguards to stop Australian wages being undercut and to stop overseas workers being exploited; and, thirdly, we wanted to see the strengthening of visa conditions for overseas workers in licenced occupations, to make sure that the quality of work continues to be high.

As the Leader of the Opposition has detailed, the safeguards that the government has agreed to address these concerns. I am delighted to say that the government has been willing to work with the Leader of the Opposition and with our shadow trade minister, Senator Wong, on addressing some of our concerns.

The outcome is that this agreement will provide greater opportunities for Australians without undermining their employment, their wages or their safety. We are pleased that the government has been reasonable on negotiating on the areas of our greatest concern. With these safeguards, we believe that this free trade agreement will be in the interests of Australia and Australians. These sensible protections for Australian jobs and for overseas workers who are brought to Australia, and in the area of workplace safety, owe a great deal to a wonderful trade union campaign which drew attention to the flaws in the agreement as it was initially proposed. They also owe a great deal to the leadership of the Leader of the Opposition and to the patience and determination of our shadow minister for trade and investment, Senator Penny Wong.

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

Twenty-five years ago I was a young student about to head off to Oxford to do a postgraduate degree in economics, and I had to think about what I was going to write for my thesis. It was to be a 10,000-word thesis, and it needed to be something substantial. My father, who, at the time, was president of the New South Wales Farmers and vice-president of the National Farmers' Federation, said to me: 'You should come and speak with our chief economist. He's an interesting guy—a bit quirky, but an interesting guy—called Gus Hooke, and he has some views about how the world will change in the coming decades that I think you should listen to and perhaps you could write your thesis about.' So I went off and originally I was going to spend half an hour with Gus, but I ended up spending a good couple of hours with him, and what he wanted to talk about was the rise of China and India in the coming decades and what it would mean for Australia and Australian agriculture. This was 25 years ago. I promptly ignored all of this advice and wrote a thesis on the brewing industry in the UK, which, at the time, seemed far more relevant to me, given my focus as a young student. But the truth was that Gus Hooke had seen where the world was going back in 1990. As I look at this free trade agreement and the other free trade agreements we are entering and, I am confident, that we will enter in the coming years, I think history will see, in 20 years time, that these are the most profound changes of this era of Australian history, because trade integration is the beginning of a much deeper integration with countries that will shape the world in the coming years, and we absolutely must be part of it.

I hear from many people that these free trade agreements do not have the impact that they are promised to have. Indeed, we had the Productivity Commission only a few years ago saying, 'These multilateral free trade agreements are wonderful, but bilaterals—we are just not so sure.' But I say to those sceptics: look at New Zealand. Look at the South Island of New Zealand, and you will see there an industry that is selling five times more of its product than it was only a few short years ago. Despite the tragic earthquake we saw in Christchurch only a few short years ago, we have seen a transformation of the economy of the South Island of New Zealand, and of New Zealand more generally, which they are enjoying—and, indeed, which means that, here and now, the New Zealanders are getting well ahead of us. Right at the heart of that was a free trade agreement with China and at the heart of that was an agreement on free trade of dairy products into China, which, as I said, has been absolutely transformative for the New Zealand economy and for New Zealand's future.

The truth is that, as a result of this, we are getting behind. To understand the full potential of it, it is important to understand what is happening in China. We heard, only a few short moments ago, the Prime Minister describing the transformation in China, which we all pay lip service to, but I want to dwell on it for a moment. Exactly what is happening there is not well understood or not as well understood as it should be. We are seeing growth in income, growth in the middle class, urbanisation, industrialisation—all those buzzwords—but underneath that is a deeper transformation which the Chinese have learnt from hundreds of years of Western history. It is a transformation in their economy built on three fundamental platforms: infrastructure, institutional change and innovation. Of course, the first part that we have seen so clearly as Australians is the infrastructure investment—the massive investments in roads, bridges, airports and high-speed trains. That requires iron ore and metallurgical coal. We are seeing a shift from that to copper, which, again, is a fundamental input in that industrialisation and that infrastructure, but we have also seen a shift to thermal coal. Despite what some say in this House, the truth of the matter is that China's consumption of thermal coal has been growing at a dramatic pace and Australia has been a beneficiary of that.

The next stage of development is equally important. As those new institutions come into play—institutions which will inevitably decentralise power in China—we will see rising incomes flowing into, not just agriculture, but, as we have heard, services and other consumer goods. That decentralisation of power, which I think is an inevitable part of the development of a service economy, will be good for China and good for us. It will lead to massive increases in imports, not just of our products, but of our expertise, of our services, of our capabilities, of our knowledge, and that is a great opportunity for us.

I was privileged only a few years ago to do a piece of work sponsored by the ANZ bank looking at how financial services would be transformed by the growth of the Chinese economy. One of the absolutely stunning numbers, which was incontrovertible when you worked it through, was that Chinese capital markets have to increase something like 10 fold in the coming decades to meet the change in the financial flows. That is an absolutely inevitable part of the next stage of their development. They need to develop sophisticated equity capital markets and sophisticated debt markets, and all of the expertise necessary to do that is right here in this country. We can be a fundamental part of that. Australians are all over Asia now in financial services—in Singapore, in Hong Kong and in China—and I have no doubt that Australians will be absolutely fundamental in providing the capabilities and expertise necessary for that sector to develop in China.

Within that context we have this free trade agreement. We export $107 billion of product from Australia, much of which is taxed, and we import $52 billion, again much of which is taxed. Those exports have been growing at 19 per cent a year. That is an absolutely astronomical number. Any delay to this agreement, as we know, would have been very expensive for those exporters. We are behind Chile and New Zealand and we will fall behind the USA, Canada and the EU as the Chinese move from small-country free trade agreements to larger country free trade agreements. We are in the right place at the right time to get on with this.

The breadth and depth of this agreement is really striking. On entry into force, 85 per cent of our exports will be tariff-free and, once fully implemented, 95 per cent of our exports will be tariff-free. Of great interest to me, of course, is agriculture. There are $9 billion of exports. The beef industry will gain $270 million within a decade. We are already seeing massive growth in meat exports in China. Almonds and macadamia nuts will see the elimination of 24 per cent tariff. We are already seeing 14,000 new hectares of almonds in place. Dairy, which I mentioned earlier, will see great benefits. The Lion cheese factory in Burnie invested $150 million in preparation for Asian markets. I see one of my colleagues here from Tasmania. What a wonderful thing: we are seeing jobs and investment already in anticipation of the growth of those markets.

Central to this free trade agreement is our ability to better control and market our product. At the moment, much of our product is going to China—let's face it, through grey markets, through Hong Kong and other countries—but we cannot control where that product goes, we cannot control how it is branded and we cannot control how it is marketed, and there will be great benefits flowing from that. In resources, in energy and in services, I have already talked about seeing extraordinary benefits. I am very confident that, if we do the hard work necessary to knock down not just the trade barriers, the tariff barriers, but the nontariff barriers, those benefits will flow thick and fast. The relationship will deepen and, in 20 years, when Paul Kelly or George Megalogenis are writing about how Philip Ruddock is staying for just one more term, they will be writing about the pivotal change that happened in Australia in 2015 when both sides of the House agreed to enter this free trade agreement.

Before I finish, I want to make a comment about one of the more difficult parts of this agreement that has caused some controversy and of course has been subject to a very aggressive campaign from some of the unions. The truth of the matter is that no-one in this place, as far as I know, is disputing a very simple principle: when it comes to jobs Australians come first, and when foreign workers come here they must have the skills to do the job. No-one is disputing that. Both sides of the House are in absolutely furious agreement on that. We must prioritise Australians above foreign workers and we must satisfy ourselves that, when we are short of a skill set, those coming in have the necessary skills to do the job.

The debate here is about the method: what safeguards work and what do not. The truth is that many of the safeguards that are being debated at the moment are ineffective. I will take labour market testing as an example. Let us be clear that labour market testing is a term of art. It describes putting an ad in the paper to see if anyone responds. But any employer in this modern era knows that that is one of the least effective ways of finding employees. In fact, regardless of the China-Australia Free Trade Agreement, under the Migration Act it is required that if an employer wants to bring someone in under a 457 visa they or others must have previously demonstrated that there is a skills shortage and the only way we can meet that skills shortage is to bring in workers from offshore. There is labour market testing, in the broadest sense of the term. Whether or not an ad in the newspaper is a necessary way of showing this is a matter that is subject to dispute. In fact, only last year we heard from an independent review by John Azarias and others that they felt very strongly that labour market testing, as defined in the 457 legislation and as I have described it, is not effective as a way of ensuring that we are putting Australians first. I welcome the fact that those opposite are working with us on this agreement, and I welcome the fact that we can have an open and sensible debate with them about what safeguards are necessary, but as part of that debate I do think it is very important to look at the facts on what the current safeguards do and do not do.

The other part of this that has caused some controversy—and we heard this from the previous speaker—is the ISDS system. Let us be clear that the investor-state dispute mechanism in this agreement has many carve-outs. It has carve-outs for environmental regulation, public welfare, health, culture and foreign investment screening. The Philip Morris case, which we just heard about, would not have been possible under this agreement. On top of that, in order for the investor-state dispute mechanism to come into effect under this agreement, it must be discriminatory. So the carve-outs are significant, they are far-reaching and they will all be reviewed in three years' time, with a view to establishing a more-modern ISDS system. This is a pretty primitive one. It is one that frankly gives little power and influence to anyone who may be concerned about the actions of the Australian government.

This is a profound agreement. I am very confident that in 20 years' time we will be looking back at 2015 and this time in government and we will be remembering the member for North Sydney's speech on the age of entitlement. But most of all we will remember the profound impact of the China-Australia Free Trade Agreement, the Korea-Australia Free Trade Agreement and the Japan-Australia Free Trade Agreement and, hopefully, the TPP, an Indian free trade agreement and many others. I commend the bill to the House.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I think it is consistent with the general approach taken in recent days to this important and profound trade agreement that there was much in what the member for Hume had to say a moment ago that I agree with—not all, of course, as we will never agree on everything on both sides of the House. But I do think he speaks with some authority on trade matters, particularly when it comes to the services sector and also to my area of interest, which is financial services. I wanted to mark that at the outset.

I am very pleased to rise today to reinforce Labor's support of the China-Australia Free Trade Agreement, and I am absolutely delighted to see the parliament come together and agree on the complementary safeguards Labor has proposed to protect the interests of Australian workers in particular. All along, we have wanted to see this agreement implemented, but we have also wanted to see that some of the legitimate concerns we had about the labour market were addressed. So I am very pleased to see the trade minister and the shadow trade minister come together and come to an arrangement that I think advances the national interest.

Our relationship with China is among the most important factors that will determine whether we succeed or fail as an economy and as a nation. Honourable members are already aware that China is our number one trading partner, with $160 billion of exports and imports, making up over a quarter of our total trade. The China-Australia Free Trade Agreement offers a significant opportunity to eliminate barriers on around 95 per cent of goods we export into China.

In the face of China's absolutely exploding middle-class, expanding our economic relationship with China will be crucial and central to our ability to grow. Growth means jobs and jobs mean opportunities for Australians. We are pleased to be supporting the enabling legislation, the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015, alongside the labour safeguards we have negotiated. I think it is also true that the China-Australia Free Trade Agreement is an important part of our relationship with that country, but not all of it. There is still more work we need to do to properly and fully leverage the benefits of the agreement.

To give a bit of history, Labor is the party of engagement with China, and has been ever since Gough Whitlam first visited Beijing, in 1971. Before most of the world even knew China existed or saw its potential, Labor has anticipated the importance that China would play in our future. Since then, I think any objective observer would agree that Labor governments have led the way on engagement with that country.

After Whitlam opened up diplomatic relations with China and cut Australia's tariffs to encourage trade in our region, we then had Hawke and Keating open up the economy to the world, dismantling our oldest protectionist instincts, and they hosted the first ever visit of a Chinese premier to Australia. Rudd, who was probably the most China-literature Prime Minister in the country's history, and Gillard developed our strategy for engagement with China. I played a small part in working with them on the Australia in the Asian century white paper. They also secured—which I think is underappreciated—a strategic economic dialogue with China for the very first time in Australia's history. That was an enormous achievement that is not talked about enough.

The Rudd and Gillard governments also made progress on the China-Australia Free Trade Agreement, and we would not be here in the parliament today without the efforts of the trade minister's predecessors like Simon Crean, Craig Emerson and Richard Marles. Through Whitlam, Hawke, Keating, Rudd, Gillard and now today, we have been the party of engagement with China. Today we will vote to ensure that our history and our inheritance of engagement with China will also be our future.

As Labor people, we know that freer trade with China is critical for the ongoing prosperity of Australia and our people. We know, in the face of all the challenges of technological, industrial, regional and demographic change before us, that we need to reach out to Asia, not turn our back on it. We know what China can offer Middle Australia in terms of lower prices and wider choices and how it can drive strong and diverse economic growth, which creates more jobs. Already trade accounts for $4 in every $10 of national GDP, and approximately every seventh job depends on exports—more than a million jobs in total. Deeper and greater trade with China must be a part of our country's economic strategy in the years ahead as well. Our overriding objective should be to get for the people that we represent a slice of the action in Asia so that we are creating the jobs of the future—new and lasting jobs that replace the ones that we lose over time.

Already, as honourable members know, there is an incredible transition underway in both economies. In our own economy, we are seeing a big shift towards the services sector, which accounts for 80 per cent of Australian jobs and growing. I have done some work with my friend the member for Hotham on the services sector. There are no bigger supporters of the services sector in this country than the member for Hotham and me. We know from research and policy work that services jobs are higher skilled jobs, higher wage jobs and jobs that create better living conditions for Australians. We know that our fastest growing skilled jobs are in the services economy. Every single one of the 10 fastest growing skilled jobs in this country is in services. That is nothing to be afraid of. It is not just about accepting this transition in our economy; we need to embrace the fact that services are the future of our economy.

The ChAFTA has the potential to grow the services economy in Australia. It opens up the Chinese health and aged-care system to Australian providers, for the first time ever. It allows new commercial opportunities in China for Australian banks, insurers and security firms and it allows Australian insurers the first ever opportunity to compete in the huge compulsory third-party motor vehicle market in China. It improves access for Australian private higher education providers, opening up a market of around 237 million young people. Huge opportunities for Australian services providers come out of the China-Australia Free Trade Agreement. I thank the various companies and peak groups that have met with me to discuss the services opportunities in the ChAFTA over the last weeks and months.

There have been some important achievements in the more traditional goods sectors as well—hard commodities and other traded goods. China will immediately remove tariffs on 85 per cent of Australian exports, by value, when the agreement comes to force. It will end up being something like 95 per cent when the ChAFTA is fully implemented. China will remove or significantly reduce tariffs on Australian beef, sheepmeat, dairy products, horticultural products, wine, barley, seafood and processed foods—sectors which employ more than 200,000 workers. The National Farmers' Federation and the Minister for Agriculture and Water Resources, who is at the table, have said the agreement could see a tripling in agricultural exports to China over the next decade, and we should celebrate that fact.

ChAFTA also removes tariffs on Australian resources and energy commodities, transformed resources products, pharmaceuticals and other manufactured products. That will obviously facilitate greater trade between the two nations. But even the prosperity associated with the goods sector depends on our services economy. In the hard commodities area of traded goods, something like a quarter of the value of the exports comes from the services embedded in the exporting of a traditional hard commodity or good. Even the advances made in those areas will be good for services.

The ChAFTA can help us transition to a stronger services based economy, but only if we get the surrounding policy environment right. It is not enough on its own; we need a strategy to capitalise on the agreement. We need to see this agreement as the beginning of something, not the end of something. We need to understand that, now that we will pass the agreement through this place, we need to put lots of effort into ensuring that we leverage the maximum benefit for our people.

The success of the Australian services sector depends on us having the skilled labour force to work in it, the innovation to grow it and the culture to support it. Today, Australia as a country is not prepared enough to take full advantage of our relationship with China. Only nine per cent of Australian businesses are currently operating in Asia. Fewer than six per cent of our graduating high school students are studying an Asian language, and even those are mostly native speakers. Many people in the business community but also in this place are questioning whether we have people with the science, technology, engineering and maths skills in Australia to sustain the growing number of jobs that depend on those skills.

Our strategy for engagement with Asia, which I mentioned earlier—the Australia in the Asian century white paper—was deleted from government websites and unfortunately also removed from their thinking, their strategy. If we want to take full advantage of the ChAFTA, we are going to need to get the policy settings right in Australia to continue the process of modernising our economy, in the interests of all our people.

One example, which I touched on earlier, is the motor vehicle compulsory third-party insurance sector, which achieved some substantial breakthroughs in the ChAFTA. Wholly-owned Australian insurers will be able to offer motor vehicle insurance to Chinese car owners for the first time in history, as a result of this deal. I am especially excited about these gains for Australia's financial services sector in light of recently being given the opportunity to be Labor's shadow minister in these areas. I know from that work that the Chinese motor insurance market was worth around $111 billion in 2013 and has grown, on average, something like 21 per cent since 2005. That is an extraordinarily large market growing at an extraordinarily fast rate. But China's car density remains only 72 cars per 1,000 people—well below Australia's—and so there is huge potential for growth in the industry as more and more people enter the middle class and the ranks of car owners in China. China's insurance industry is also highly concentrated, with 68 per cent market share for the top three insurers and only two per cent of the business currently going to foreign insurers. We need to do what we can to change that. These statistics indicate how huge the opportunity could be for our insurance providers but, to take full advantage of this opportunity, we must ensure that our financial services sector in Australia is ready.

Success in the insurance industry depends on innovation and on a competitive edge, and part of this will be ensuring that we have got the workforce we need. Many in the industry are worried about our STEM capacity in that place, and that is why Labor's STEM education policies are so important. We need to support more STEM training. That is just one of the challenges. Other challenges include cultural barriers and the need to come to grips with a very different regulatory system, on top of all the usual challenges of global business. The government does have an important role to play to get the domestic policy environment right to support the growth and capacity of the financial services sector, the broader services sector and, indeed, all of our businesses in this country.

The House is aware that Labor has agreed with the government on a comprehensive set of safeguards for Australian jobs. This will help ensure that we are maximising Australian jobs and minimising the risk of exploitation in the Australian labour market. We are very pleased that the government have agreed to these changes. There are three of them: one around labour market testing, one around market salaries and one around the relevant occupational licences—making sure that people who come here to work have the appropriate skills and registrations to conduct their work safely in this country.

The new obligations will be written into the Migration Regulations, ensuring that they are legally binding. They also mean, importantly, that we do not have to go back to the Chinese and try to renegotiate aspects of the deal. Also—and I think this is a very important point—the changes that we have agreed with the government do not discriminate against Chinese workers or companies; they are broad arrangements across the labour market and across the world. Our package will improve protections for all 457 workers in Australia, and that will ensure that the arrangements are better than originally proposed by the government.

The deal is not perfect. Even for a supporter of free trade like me, I concede that these deals are never, ever perfect. No deals which require compromises across borders and across countries are. Despite some issues we have with some elements of the agreements, we believe that trade agreements are on balance calls. We need to weigh up good and the bad and determine what is good for Australia. In this case, ChAFTA delivers us significant opportunities in the world's largest country, soon to be world's largest consumer economy by value as well.

With our proud and substantial legacy of Asian engagement on this side of the House, we are once again supporting further and deeper engagement with China. We are proud to support the agreement, particularly given that it has now been improved substantially by the safeguards that we have announced and that we have fought for all along. There is still more work for us to do to become the high-skill services economy we need to be to compete in our region in the future. Labor's place in this process is guaranteed; it is assured. We are on the side of deeper engagement, a more skilled and flexible work force and sustained economic growth for the benefit of more Australians.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

I welcome the remarks by the member for Rankin in support of this bill and also for acknowledging that 'perfect' can often be the enemy of the possible. I also welcome the opportunity to make a contribution, and I acknowledge in the gallery my beautiful wife, Christine, who is here with us today.

The measures in this bill are modest, but the benefits of more trade between Australia and China are so important for our future prosperity. This enabling legislation ensures growing trade with our biggest trading partner and the world's second biggest economy. Tapping into growing middle-class markets from India to Asia will be a vital enabler of growth and new jobs beyond the mining boom. Those middle-class markets are projected to grow from 500 million people today to 1.7 billion people in the next 15 years. That is why free trade deals with South Korea, Japan, China, and the Trans-Pacific Partnership countries are a key component of our microeconomic reform agenda and efforts to diversify Australia's economy.

Just as the Howard government left a strong legacy of no debt and money in the bank, which enhanced our economic freedom of action, these free trade deals put us in the best possible position to take advantage of looming opportunities. But it is equally apparent that few if any other nations have afforded Australia economic opportunities like those provided by China. After all, it was trade demand from China, both before and during the global financial crisis, which helped support our economic stability—allowing us to remain in the relatively tranquil eye of the economic storm during this unprecedented economic event. In short, Australia weathered this storm because of economic prudence and the deliberate building up of a surplus in good times—a bounty which was buttressed by the sale of our natural resources to China. But this new agreement with China goes further still. It signals a maturing of the valued relationship that exists between Australia and China.

This trade agreement will prove to be a significant business multiplier—not only growing existing business links but also spawning new shoots of commercial activity. There can be only one outcome from such growth, and that is buoyant and far-reaching business confidence. I call it the 'Pacific ripple effect': the unfolding of a growing trade tsunami between Australia and China which will, over time, advantage every part of the Australian economy.

The story can be told much more compellingly in numbers rather than in words. Preferred access status to a market of 1.5 billion people is, for a nation like Australia with approximately 24 million people, an opportunity that is all but unheard of, especially in modern times. Indeed, 85 per cent of our goods entering China will do so tariff-free, and at full implementation 95 per cent of our goods will enter China tariff free. Especially for our farmers, this will be like manna from heaven. Consider Reid Fruits in Tasmania as a compelling example. Their cherry exports have risen from five tonnes in 2014 to 185 tonnes in 2015, thanks to our free trade export agreements.

I note particularly that tariffs will be abolished for Australia's $13 billion dairy industry—great news for Tasmania, where dairy production is increasing, but also for beef and sheep exporters, who will gain from the abolition of tariffs in the order of 12 to 25 per cent. Additionally, 30 per cent tariffs on Australian horticulture will be entirely eliminated. And the future anticipated gains to sectors like resources and energy, and manufactured exports, are anticipated to be of similar magnitudes over time. This opportunity beckons now and deserves to be more widely acknowledged and celebrated in every part of Australia, if only because the bountiful returns of Minister Robb's efforts will fall so uniformly across our nation. For my home state of Tasmania, which has an enviable and growing reputation for clean, green, fresh, quality produce, these trade deals will be most beneficial. All of these statistics reinforce my view that we should really be seeing the 21st century not just as the Asian century but as the Asia engagement century. The House will no doubt be familiar with the Chinese proverb 'let a thousand flowers bloom' and, while I do not wish to overblow the simile, there is a compelling parallel to be drawn with respect to the flourishing of new business opportunities in our region.

I have acknowledged the brilliant work of Trade Minister Andrew Robb, in securing this high water mark trade agreement on behalf of all Australians. But I also take the opportunity to recognise the dedicated work undertaken by so many officials—Australian and Chinese alike—to realise this opportunity. Their efforts have helped Minister Robb bring off the largest deal of its type that China has undertaken with any developed nation. It will support innumerable economic, social and cultural benefits for both countries. Foremost among these will be its anticipated critical contribution to regional strategic security. Free trade is one of the strongest contributors to regional and global peace and stability; indeed, reciprocal barter, exchange and interaction all work as constructive agents to dissolve and dispel fear, misunderstanding and xenophobia, which are the basis of much international armed conflict and aggression.

I would hazard saying that Australians and Chinese want essentially the same things in, and from, life—a better and brighter future for current and future generations. This agreement reflects and reinforces that laudable objective. Regrettably, the other side of the House have been overly cautious about seizing this rare gift. They have been afflicted by a combination of myopia, as well as a desire to strive for the perfect outcome. As the member for Rankin quite appropriately illuminated, the perfect can often be the enemy of the possible. But what is worse is the appalling campaign against the China free trade deal by some militant unions like the CFMEU and the ETU. The fact is that the deal secured by Minister Robb is as good as it gets for both sides—China and Australia. This is a reality that has been publicly recognised by Labor luminaries of substance and foresight. The list includes former Labor prime ministers, some current and former and senior federal ministers and state premiers. I note the announcement earlier today that Labor has now decided to support this free trade deal. That is a welcome outbreak of common sense and I congratulate members opposite on ensuring that the collective wisdom of their caucus has landed where it has.

The bottom line is surely this: trade deals of this type and constructive interdependence do not get any better, and their coaxing to fruition occurs perhaps only once in a generation. This is particularly the case with a potential trade partner like China, which has shown itself over millennia to be a shy and reticent giant. Yes, it can be coaxed from its natural introspection and caution, but this is not easily done and perhaps is more easily undone. I welcome Labor getting on board so that the train of international trade opportunity can depart the station—with the clear destination being a better and brighter future for all of us and future generations.

I acknowledge the wisdom of the member for Rankin and his knowledge of history in saying that Australia's engagement with Australia's engagement with China commenced with the Whitlam government, and it did, with the establishment of formal diplomatic relations in late 1973. Now, just over four decades on, this trade agreement significantly reinforces our existing ties and optimises our relationship. In the process, it establishes the conditions for greater mutual wealth and enhanced understanding between us. The latter—understanding—is the true basis of reciprocal respect between our great nations, and will be the principal commodity, as opposed to what we grow or mine, which will sustain and nurture our joint trade partnership.

I will not use all of my time; I know an extraordinary number of my colleagues want to make a contribution. Let me conclude on this: this trade agreement is good for all Australians on three counts. It will improve Australia economically, it will act to support regional stability and security and it provides a firm basis for even greater renewal of our existing links and engagement with a true global giant. I commend the bill to the House.

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

I rise to support the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015, and I do so for two reasons. One reason is that the amendments to the China-Australia Free Trade Agreement sought by the opposition and conceded by the government have made this a better arrangement—not a perfect one by any means; there are still many deficiencies. But I support it because the government made concessions on some very significant issues that protect the interests of workers in this country—safeguards for employment conditions and security of employment—and that is something that would not have happened without Labor standing up in defence of Australian workers. That is one of the reasons I support the bill.

The other reason I support this bill is that the Leader of the Opposition has foreshadowed attending to other matters that are not specifically related to the China free trade agreement but incidental to it, in so far as they go to the exploitation of workers, both foreign and domestic, in our labour market. The fact is that we have seen some awful, scandalous forms of exploitation in this country that we need to address, with the growing number of temporary visas being issued by the government. Some argue that there are 800,000; others would say there are actually a million temporary workers in this country. It is absolutely vital that sufficient powers and resources are deployed to respond to this existing problem. If elected, Labor will attend to those matters, because we know the government's heart is not in dealing with such regulations.

I think it is always important to remember history, in life as in politics, particularly recent history, because the trade minister, in defence of this agreement when it came to labour mobility, invoked the safeguards in the 457 visa legislation—the labour market testing that is currently in place. I draw the attention of the House to the contributions by the former shadow immigration minister and current Treasurer to the debate in June 2013 in relation to introducing labour market testing in this country. Let us be very, very clear here about the government's views on labour market testing, because they are on the record and they have never been repudiated by this government.

During the last term of the previous Labor government, in the last week of the parliament, in the last piece of legislation in fact enacted by the parliament, we sought to bring in some safeguards for workers in this country and we were attacked by the then opposition—by the then shadow minister for immigration and indeed every member of the then opposition that now sits on the government benches—because we introduced legislation that went to labour market testing. Indeed, it is that same piece of legislation that the minister for trade has been using as a defence for the safeguards that are in place now. Why should we not question the sincerity of the government when they relentlessly attacked Labor's intentions to bring in safeguards for the Australian workforce and for those overseas workers who are exploited.

So I do not believe the Australian government's heart has ever been in defending Australian working conditions, in ensuring quality jobs or in defending exploited overseas workers. And you see it today. In fact, they have watered down the regulations of that legislation in relation to the indexing of wages under the 457 visa, something they refused to accede to in the negotiations that occurred between the trade minister and the shadow minister for trade.

Of course it is good that concessions have been made by the government, and they were concessions that should have been made. But they were not made out of the kindness of the government's heart or because the government wanted to accede to the matters put to it by the opposition. I think it is because the government understood that they dropped the ball on this issue. They turned their backs on this matter, or they had little regard or inclination to deal with these matters, when negotiating with the Chinese government, so we had to improve this agreement. And it has been improved as a result, but there is more to be done and, if elected, we will do it.

We will ensure there are greater safeguards for Australian workers in relation to the way in which temporary visas are used. Whether they are 400, 417 or 457 visas, greater attention needs to be paid to the enforceability of the provisions that are in place. There need to be better resources for regulators, including for the Fair Work Ombudsman, which needs to have sufficient capabilities and powers to deploy in a way that prevents unnecessary exploitation in this country. We will attend to those things.

Whilst a great deal of bonhomie has broken out today and everyone is gushing with mutual praise, it is important that exaggerated claims are not made. The Minister for Employment, Senator Cash, is guilty of that. She has claimed that the three free trade agreements—not just this one but also the free trade agreements with Japan and Korea—will create 178,000 jobs by 2035. That figure has been utterly discredited by independent economists, and she has had to retract those assertions she made in the other place, and I would counsel her not to repeat them. That is not to say that there are not benefits; there are. But you should not pretend that something will happen when it may not. You should not unfairly exaggerate or distort the outcomes of signing such an agreement.

The government seems to believe somehow that secret negotiation with another nation, ultimately disclosed to the public over time—including the text, which took six months to write—should have just been waved through by the opposition. Somehow, we were just supposed to sit here and let Andrew Robb negotiate everything in secret, with the text coming out four or five months later, some of which is very ambiguous. We were supposed to just say, 'Magnificent work. It's fantastic for everybody. Everyone's a winner. We'll sign up to this agreement.' The opposition refused to do that. We refused to do that because we wanted to look after the constituency that was neglected in those negotiations, namely 11 million Australian workers who are concerned about their jobs, concerned about security of employment and concerned about where the jobs of the future are going to be.

Whilst we accept absolutely that there are jobs now and jobs in the future to be created as a result of our ongoing relationship with China, it is not fair to say that proper attention had been paid to these matters. They had not been properly attended to and we have had to insist that they were attended to, and in some part they have been. But just be very careful of the imaginary job figure that the Minister for Employment, Senator Cash, continues to cite, because it is contrary to all independent advice. This agreement is better as a result of the opposition's intervention and the acceding by the government to those provisions. But it is important that when we sign up to bilateral agreements or, for that matter, multilateral agreements with other countries, we do not take at face value the government's assertions—and that is whether it is a Labor government or a conservative government—that it is a good agreement.

It is absolutely proper that the parliament examine the benefits or otherwise of such agreements. That is why we have a standing committee that is supposed to report to the parliament on such agreements. We almost had a situation this week where this debate was going to start before the Joint Standing Committee on Treaties was to report on the agreement—which would have been unconventional, to say the very least. The supremacy of this parliament must remain when we are dealing with such matters. The parliament has every right to examine these agreements and, to that extent, it is another achievement of the outcome from today. The parliament has had an involvement in this agreement, and I would have to say that it is better than agreements in the past. This is because of the leadership shown by Labor, the Leader of the Opposition, the advocacy of the shadow minister for trade, Senator Wong and, indeed, the Labor team in standing up for workers in this country.

We support this bill. We have always believed in the benefits from the relationship between the two countries—China and Australia. We have never needed to be given any lectures by those opposite on the importance of China. As the Leader of the Opposition has said, it was a Labor leader in opposition and, ultimately, in government that recognised modern China. We started diplomatic ties with that country. All the work undertaken during the Hawke-Keating and Rudd-Gillard years shows our complete focus on the need to engage fully with our own region and on the benefits from it culturally and economically and, of course, in other ways. I think that can happen. But it was absolutely right and vital that we stood our ground and advocated for many people who I do not believe were to be winners of this agreement if it had been passed without amendment. I think the concessions made by government are indeed improvements. But there is another issue beyond the trade agreement, and I think that it is incidental insofar as public policy goes, and that is dealing with job security and with the abuse, the exploitation, that does occur to overseas workers and domestic workers and the need to make sure that we have proper capacity as a federal government to deploy powers and resources in order to prevent such exploitation from occurring in the future. We make no apology for standing up for Australian workers. That is what the Labor Party always does and always will do. As a result of that, we have a better agreement, and I support the bill.

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

I rise today to support the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 and related bill. I do acknowledge those opposite for working with the government in supporting the legislative framework of this agreement. This bill mends the Customs Act 1901 to implement new rules for imports into Australia from China. These imports must comply with the rules of origin guidelines set out in the agreement, and, where they do comply, preferential rates of customs duty will be applied.

I also acknowledge the outstanding work undertaken by the Minister for Trade and Investment, the Hon. Andrew Robb. Last June, Minister Robb announced this agreement, following lengthy negotiations with Chinese government officials. Minister Robb is to be commended on his achievements. The minister has not only opened the door for Australian businesses to enter the Chinese market but also opened unprecedented employment opportunities across Australia in those businesses which take advantage of the agreement. As businesses experience an increase in activity, the need for more employees will eventuate. In my electorate of Dobell, there are a number of businesses ready to take advantage of this agreement. With over 4,000 registered unemployed people as of June this year, I look forward to the employment opportunities eventuating.

In a historic day for Australia, the China-Australia Free Trade Agreement was signed on 17 June 2015. This free trade agreement enables Australian access to the world's fastest growing economy. More than simply being able to enter this economy, Australian business through the work of this agreement will hold preferential access. The Chinese economy is transitioning from a dependence on spending on infrastructure and exports to a service based economy. For Australian firms to be given preferential access into this economy is an achievement that cannot be understated. This agreement will bring enormous economic opportunity to our country and to each and every community. On this side of the House, we take seriously the need to grow our economy and provide jobs for all Australians.

As the member for Dobell, I am familiar with union campaigns. Whilst Dobell residents are familiar with the HSU and the misappropriation of members' fees, it appears the ACTU did not learn from this and embarked on a $30 million campaign funded by hardworking union members to spread lies and scaremongering. If the ACTU were genuinely concerned about job creation and opportunities for workers, wouldn't the $30 million have been better spent on employment and job creation programs?

In regard to ChAFTA, the truth is that this free trade agreement will create tens of thousands of jobs for Australians, add billions to our economy and improve our living standards.

Mr Conroy interjecting—

Sadly, none of this really matters to the unions, and none of this really matters to the member for Charlton either. This campaign has placed the entire China-Australia Free Trade Agreement at risk. The ACTU and, in particular, the CFMEU have deliberately embarked on deceptive behaviour for their own political benefit. In doing so, they have risked damaging Australia's relationship with our largest trading partner. To emphasise this: the two-way trade between Australia and China is valued at $150 billion annually. The economic benefits of this agreement do not appear to be the focus of the unions' campaign. Rather, they purport false claims of weakening skilled migration conditions.

The fact is that no legislative measure other than the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill of 2015 is required. In discussion with those opposite, the confusion around the 457 visa program will be clarified with the requirement that companies now seeking to sponsor skilled workers on 457 visas under work agreements demonstrate their recent and genuine efforts to recruit local Australian workers first. In continuing to ensure that this agreement is in the best interests of Australia, those holding 457 visas who wish to work in certain sectors will need to obtain licences, registrations or memberships required under state, territory or Commonwealth law.

The dishonest scare campaign run by the unions comes unstuck and is proven to be purely political when we examine the difference between this free trade agreement and previous agreements. The labour market testing regime which was introduced by the previous Labor government already exempts a number of categories. The Department of Immigration and Border Protection guidelines ensure labour market testing for those categories which are not exempt. Safeguards in the labour market testing outline that employers must demonstrate Australians have been afforded first priority for jobs.

As I have mentioned, the free trade agreement between China and Australia is about creating new jobs for Australians and stimulating economic growth. Let us look at New Zealand's success with their FTA with China. New Zealand Prime Minister Key said:

I'm a massive proponent of free trade, and the benefits of our FTA have been 11 times greater than the most optimistic estimates.

He went on to say:

The numbers speak for themselves. Having negotiated an agreement that is high quality, you'd like to grab it with both hands. New Zealand will be quite happy if you don't.

International envy from New Zealand, which has enjoyed great economic success following its free trade agreement with China, is an excellent tick of approval to Minister Robb and a sign of the benefits to come. The benefits of this and other free trade agreement reach right across Australia. Naturally, the state and territory governments have been consulted in the discussions.

The Chinese market of more than 1.35 billion customers, with an increasing middle class, will be opened to Australian businesses. The Asian region—our direct neighbours—is full of opportunities for Australian business. This agreement will work in conjunction with free trade agreements already in place with Japan and Korea to ensure Australian goods and services are available to an expanding Asian market. The good economic news continues with the realisation that, if this agreement is up and running by the end of this year, a great number of sectors will benefit from a double whammy of tariff cuts—one in this year and again in January 2016.

In stark contrast, failing to ratify this agreement would deliver a heavy blow to the Australian economy. The National Farmers' Federation indicate that delaying this agreement would cost the Australian agricultural sector $300 million in 2016, with any number of negative flow-on effects to rural and regional communities. There would also be costs of $100 million to the red meat industry, up to $60 million to the dairy industry, $50 million to the wine industry and more than $43 million to the grain industry. The Financial Services Council has indicated that, if this free trade agreement were not to proceed, that would cost our economy more than $4 billion and almost 10,000 jobs in financial services alone by 2030.

As I reflected earlier, this campaign of dishonesty orchestrated by the unions, unfortunately, is in line with their usual practice of misinformation. An example of their latest antics is their campaign inviting government member to attend union prearranged ChAFTA debates. Like many members on this side, I relish the opportunity to correct the union lies being thrown around in my community. However, when the union invite me to an event, distribute brochures with my face and name all over it, and do not check my availability, seriously, how is that a fair and open debate and opportunity to refute their lies? This campaign against government members will now be somewhat redundant, given Labor's announcement in support of ChAFTA. How hypocritical: the unions want to debate their lies in an electorate scarred by the misuse of HSU members' money! Perhaps members would be better served through the organisers debating the proper use of union credit cards. If they are so concerned about overseas labour, then perhaps they should bring themselves up to speed on the recent activities of the previous member for Dobell in regard to 457 visas.

We all know too well how the union movement love to spread lies and disregard facts. We have all heard the lies regarding this free trade agreement—lies of scaremongering, particularly targeting our outstanding tradies. The most pathetic lie that I have heard to date from the unions would have to be that the China FTA will be bad for local jobs. To all the tradies who have been misinformed by the ACTU and their Central Coast union affiliates: tradies will not be replaced by Chinese labour. In fact, jobs will be created for Australian tradies. For Dobell businesses looking at expansion and growth into the Chinese market, such as SpotGo at Jilliby: growth leads to new jobs being created. In fact, it is anticipated that ChAFTA will result in tens of thousands of new jobs being created right across Australia. This free trade agreement does not change the required skill levels for Chinese visa applicants. It will not impact on workplace safety.

That it is bad for local communities is another claim made by the ACTU. This trade deal will create tens of thousands of jobs, add billions of dollars to our economy and improve living standards. The ACTU also claim this trade deal will undercut local rates of pay. Australian workers will continue to be given first opportunity for new jobs. As is currently the case, employers will not be allowed to bring in foreign workers unless clear evidence of need is established. The duplicitous campaign waged against this agreement is emphasised in the ACTU claim that this free trade agreement will exploit overseas workers. There will be no change to the Migration Act, and this free trade agreement will not allow Australian employment laws or conditions to be undermined. I do welcome those opposite working with the government in strengthening safeguards in regard to ChAFTA and working together towards ratification of this agreement. I commend this bill to the House.

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

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.