Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

The Export Control Amendment (Quotas) Bill 2015 is an uncontroversial bill which simply consolidates four pieces of legislation which govern export quotas and allows for quota certification arrangements for agriculture to be carried out under one set of powers.

Australia, of course, is a great producer of food and fibre product. We are so despite the fact that we have many challenges as a food-producing nation. We are challenged by water scarcity. We have less than optimal soil quality despite public perceptions. Certainly we do have some very rich soils in certain locations but, because of our geographical history, on average, our soils are poor compared to some of our competitors. And, of course, we have vast distances between the farm gate and our markets, both our domestic markets and our export markets. Yet despite all of that, the value of our farm output for an island nation of only 23 million or 24 million people is more than $50 billion annually and our exports are more than $30 billion—in other words, we export around two-thirds of the food product we produce.

While we should always be cautious and alert to our food security issues, it is the reason that chatter about food security in this country, while certainly a global issue, is rather silly because it is not one of our challenges in food production, which is made clear by the fact that we export two-thirds of everything we produce. It is also why much of the debate around foreign ownership is so silly; rather, if we are to grow our agricultural opportunities, we will need a lot of investment in agriculture over the coming decades. With a small population and with a limited savings capacity, by necessity, much of that investment will need to come from other sources, as it always has done in all of our history as a country and, indeed, as a colony.

There are many things that will determine the extent of our success in agriculture over the coming decades. They go to the key issues that the bill today will help to govern. It is not an exhaustive list but I have just written down many of them. The first is the extent to which government is willing and able to provide leadership and strategic guidance in this increasingly globally competitive market—that will be critical. Second is the effectiveness of the management of our limited natural resources, most importantly our water and soil resources. The question in the future will be: how do we do more with ever-depleting water and soil resources? We are already the driest continent on earth. While I would be happy on another occasion to debate the reasons, it is clear that our water challenges are becoming greater. Australia is becoming a drier continent. Our droughts are becoming more protracted and we are entering into another El Nino period, which means that those challenges are going to become greater. Of course we need more focus on how we better manage our soils, including our capacity to retain water in our soils. Everything we do in agricultural planning has to take into account sustainability—how we ensure those resources are available to us for many decades to come.

The third is our performance in research and development, extension and our embrace of biotechnology, which will be critical to our future success. The fourth is our willingness to accept more consolidation and corporatisation in the sector. This is of some concern to some who are committed to concept of a family farm. Family farms will continue to play a critical role in the decades ahead. In fact, much of our innovation typically comes from the family farm but it is a reality of the sector that further consolidation will be necessary. The skills, networks and investment that further corporatisation brings will be critical. The fifth is the extent to which we are able to lift productivity and our cost competitiveness—that comment speaks for itself. The sixth is our efforts to do with our workforce challenges. We have an ageing population generally, we have an ageing workforce generally but, in particular, these are very significant challenges in Australian agriculture. As I often say, people ask me: how do we bring young people back to the farm? My simple answer is: they will come back to the farm when there is good money to be made—it is as simple as that for younger generations. The seventh is our success in securing and growing export markets, which is obvious.

The eighth is the extent to which we are successful in our attempts to move our food and fibre products up the value chain. In other words, for a country like Australia, which is a net exporter, a country with limited natural resources and limited population, our real future will not be so much in volume—as important as that will be—but in value—in other words, the margins we receive on each of our food and fibre products, the extent to which we are able to profit. We are seeing that already with, for example, dairy products into Asia, where the growing middle-classes are prepared to pay big dollars for something we make at a relatively low price. Of course it is also occurring with other major products like beef, where wagyu products, which might have marbling, or products containing a low fat content are the things that the middle-class of Asia, for example, will pay big dollars for and they are the areas in which we will get a premium. There are myriad other examples such as udon noodles out of our grains industry—again, a premium will be paid for specific varieties of our wheat. So pushing up the value chain will be absolutely critical.

That brings me back to the bill because there has been a lot of talk recently about the opportunities presented to us by various free-trade agreements, obviously the most recent ones being with South Korea, Japan and China.

These are not free-trade agreements; they are preferential trade agreements. All of us in this place, I am sure, are united in that we would like to see more multilateral agreements rather than bilateral agreements. Bilateral agreements are only a fight between nation-states about who gets access at what price. What ChAFTA and the Korean and Japanese agreements are really about is making sure that we have access on the same level playing field as our major competitors—in other words, that it does not cost us any more to get our product into China, for example, than it does our competitors in North America or South America: the quota that we have put on our product is no greater than those of our competitors. This is of critical importance.

The challenge for us does not end there. As we all know, it is not just about the tariff barriers; it is also about the non-tariff barriers and all of the technical aspects that go with our attempts to export to other markets. We have dealt with these issues for many years and hopefully we are getting better at this game. But the reality is we will not benefit from ChAFTA and those other free trade agreements until we have dealt with all of those non-tariff barriers. Everyone in this place has ownership of those agreements. The former Labor government spent six years moving toward a final outcome for each of those free trade agreements. We now need to work together to overcome the technical barriers. To simplify it, the Department of Foreign Affairs and Trade has done its work in gaining the access by getting arrangements on the quotas. But now the department of agriculture and the agriculture minister have much work to do to secure the relevant protocols that are required to overcome those non-technical barriers.

It concerns me that this work appears to be taking place very slowly. It is all right for the agriculture minister to get up during question time and claim that all of these wonderful things are happening as a result of the signing of ChAFTA and the other agreements. Some good things are happening. But many other commodities are still locked out of China, South Korea and Japan because technical barriers to export have not been overcome. I have a table with me which was produced by peak industry body AUSVEG, representing Australian vegetable growers. It shows each of our exporting nations and provides a breakdown for each of the vegetable commodities—carrots, cauliflower, broccoli, beans and so on, right through to potatoes. The alarming thing about this chart is that for the China market, for example, there are 12 commodities, but not one of those commodities is shaded green. Green indicates that effective phytosanitary protocols now exist. In other words, of 12 vegetable commodities, still not one has access to the China market. Two are shaded yellow, indicating that restrictive phytosanitary protocols exist, but the rest are shaded red. Nothing could more clearly indicate than this table that we have a long way to go yet before the full benefits can be realised from these agreements we have secured with these other nation-states. So the real tests for this minister and this government will now be the speed at which those protocols can be negotiated and the effectiveness of those protocols. The effectiveness is just as important as the lowering of the tariff barriers and indeed what the associated quotas are and can be.

The other question is the cost of doing business. The reality of exporting is that there are associated costs. There are substantial associated costs which go beyond the obvious costs like transport. In this country—and there is a good system—much of the work around things like phytosanitary protocols are done by government. The cost of doing that work is recovered from industry. That is a reasonable arrangement and a very effective arrangement. But government has to continue to strive to ensure that those costs are as low as possible. Already in this country, we have some difficulty in being cost competitive because of our geography, our population and the high standard that we rightly put on the contribution of our workforce, in terms of both remuneration and safety. I am really concerned that recently the government has decided to review some of these costs. I was astounded to learn that, post that review, some of those costs have doubled for Australian exporters. I am delighted that the minister has now recognised we have a problem here. Extraordinarily, he has now sought an independent review of the review—a process that I do not think would leave the Australian taxpayer particularly impressed. It should be a concern to all of us that the minister should allow the department to review the cost, sign off on the new cost regime and then immediately seek to contract out a review of the review. This is not something which instils confidence in those seeking new export opportunities and seeking to grow export opportunities in other markets around the world.

The role here for the government will be a very substantial one. It starts with the first point I made about what will determine the extent of our success—leadership and strategic direction from government. This is something that was lacking in the relatively recent agriculture white paper—a white paper that should have taken a big-picture approach, should have sent messages about where the government wanted to take agriculture into the future, should have sent messages about where it was prepared to provide the path of least resistance and how it would attract investment in the most relevant sectors and make sure we had an efficient allocation of our limited natural resources in this country. All these things were missing.

It is all right for the agriculture minister to stand at the dispatch box during question time and claim credit for things that happened 20 years ago—airports that were privately built and that he can claim no credit for, drought-induced cattle prices—but agriculture needs far more than that. It needs strategic guidance from government. It needs sound planning. What it does not need is a government sending a signal in a very competitive market that foreign capital is not welcome in this country. That is what it has been determined to do in recent months. It is playing to the crowd. It is playing on fear in our community that somehow Asian investment in agriculture is not good for this country.

Rather, the government should be showing leadership. It should be going out there and saying, 'We need this investment, and we're in competition with others for it.' Without that investment we cannot be internationally competitive and we will not be exporting more. We will not be pushing our agriculture products up the value curve. And do not fear, because we export two thirds of everything we grow, and they cannot pick the land up and take it with them—which is exactly the point Minister Robb made last week in response to the government's decision on the landholdings of S. Kidman and Co.

We should be working together in this place to send a very clear message to the Australian community that they should not fear foreign investment in our agricultural land or our agribusinesses in this country. Indeed, we desperately need that investment. Without it we will fall further behind. I understand Minister Robb's expression of concern about the Kidman decision, and I have said publicly that if the Kidman decision was based on concerns about national security—for example, the proximity of some of the landholdings to some of our more sensitive defence facilities—then I accept that absolutely. As a former defence minister and a member of the National Security Committee of the cabinet, I understand that better than do most in this place. But I fear that the decision was about more than that. I fear it was also about this government's determination to build its political popularity in the region by sending the message that Australian agriculture is not open for business, particularly to Asian investment. For the first time in our history, we have a discriminatory foreign investment review regime in this country—one rule for our historic Western partners and another for those investing from Asia.

I want to remind the House of one very significant point. It does not matter what the screening threshold is for the Foreign Investment Review Board; the Treasurer has the power to review any investment proposal that he cares to review. He does not need a threshold. He does not need a trigger. Indeed, he does not need the Foreign Investment Review Board. Yes, he should look to the Foreign Investment Review Board for advice, and to the experts who sit on the board—and behind it, within Treasury. But there is nothing to stop the Treasurer from reviewing or vetoing any proposal that comes before the board. The lowering of the threshold to $15 million for agricultural land will clog the system and increase costs for investors. That will cause investors to go elsewhere, where the returns are just as good but the pathway is easier because the government there is more inviting of that investment.

So, I once again appeal to this government to give up this folly, to stop seeking this political outcome, to stop playing to the crowd and to recognise, as the member for Hume did in his seminal document Greener pastures, that to meet all of our aspirations in agriculture we will need $600 billion of investment in this country by 2050. And it is not going to come from within, even if all our super funds decided tomorrow to put all their money into agriculture. By necessity, it will come from foreign sources. We are in competition with others, and we need to be inviting of it—discerning of it, absolutely, but inviting of it.

This bill represents one of the many things that will go to our attractiveness as an export destination and as an investment destination and in terms of our cost competitiveness on international markets, but it is only a very small part of it. Minister Joyce has to stop claiming credit for things he has not done. He needs to get out of the way and let Australian agriculture grow and let foreign investment play its role. The opposition supports the bill before the House.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to follow the shadow minister for agriculture after his considered contribution to this debate on the Export Control Amendment (Quotas) Bill 2015 in the year of big ideas. It is wonderful to see another policy statement tabled here this morning on Labor's position to abolish the agri threshold as we go to the next election. I think that is a fundamentally flawed position. Nevertheless, that is the policy you will take to the election. It is completely within the rights of those who sit on the other side of the House in the year of the big ideas.

I do accept that this is not a controversial bill, and my intention is to give a brief outline of the intent of the bill and then address how it flows into our red-tape reduction overview and the policy we took to the last election. I want to touch on how this bill affects growers, processors, farmers and those who have capacity to reach out to those newer markets in the export sector. And I want to acknowledge the contribution of the Minister for Agriculture and Water Resources, who by all accounts has done an outstanding job in pulling these efficiencies together, along with the Minister for Trade and Investment, helping to secure these free trade agreements that will unleash a world of new opportunities in beef, horticulture, investment services et cetera in my electorate.

The Export Control Amendment (Quotas) Bill 2015 consolidates four acts that govern tariff rates. When we enter trade negotiations with countries, we will say, 'Allow us to send 1,000 widgets to your country.' But once we hit that quota and go over that 1,000 widgets, a tariff may be introduced. The intent of the bill is to introduce a schedule. The act currently has four different parts to it: dairy, beef et cetera. This amending legislation seeks to consolidate those into one act that is more user-friendly. From a compliance perspective, it makes us nimbler, and nimbleness from the department creates efficiencies. Earlier, we spoke about a value figure that we can attribute to that. That value figure potentially gets passed down to our growers and makes us more competitive globally. The import countries usually manage the quotas, but, by simplifying and making our system nimbler, we are flagging that we would like to manage the quotas by centralising them. The savings that will come by our managing the quotas give us the capacity to be more acutely aware of what our trade relationships are and where we are with particular volumes on line items. Where export tariff rate quotas are established by trade agreements, Australia seeks to manage the quotas in order to offer exporters the maximum concession possible on agriculture.

The Department of Agriculture and Water Resources currently administers up to 33 quotas that save exporters millions of dollars of tariffs in each year. It will continue to do that and look for new markets. For example, there are eight new quotas which have been introduced under the Japan-Australia Economic Partnership Agreement, saving exporters approximately $3 million in tariffs between January and May 2015 alone. Quotas to the EU and the United States have saved Australian exporters between 20 and 100 per cent in applicable tariffs, which is a considerable amount. Based on the consultations by the department, both internally and externally, with stakeholders, there has been an overwhelming push by the industries involved to reduce the burden of red tape.

This is completely in line with the government's position to reduce the burden of red tape and green tape on our small business sector and on large businesses in Australia. These are the issues that we took to the last federal campaign and said that we would fight on. I can inform the House that, to date, this coalition government has reduced regulation by no fewer than 50,000 pages. We have dedicated a day to red-tape reduction in the parliament once a year. We have set a target of approximately $1 billion in savings each and every year that we are in government. By all accounts, we are exceeding those expectations.

The real benefits of reducing red tape in this particular bill will flow on to businesses. It allows them to spend less time sitting out the back of their shops or in their offices and, instead, spend more time at the front line with their customers or, in this case, with their animals or with their product in the paddock. They can make sure that they get the best possible outcome for their product and the best possible value for their product. We fundamentally believe in less government. We fundamentally believe in fewer taxes. This bill demonstrates, along with many of the others that we have introduced, that government needs to get out of the way of business and, instead, support and partner with business to provide a framework of administration that allows them to maximise their profits.

The current legislation schemes for quotas are specifically for meat and dairy products and are not sufficient to address the range of quotas arising under the recent free trade agreements. For example, the Japan-Australia Economic Partnership Agreement introduced quotas for honey and juices. What that predominantly speaks to is that honey and juices were in one of the acts that have been consolidated. Dairy and beef were in other acts that have been consolidated under this amending legislation. It is quite a simple process. As I said in my opening comments, it is not a contentious issue. I have spoken at some considerable length about the overwhelming intention of the peak bodies to embrace the ideology of this bill.

The benefits of a comprehensive general quota legislative regime are that they will enable a more secure and flexible legal framework for the implementation of existing and further quotas negotiated in pursuit of export opportunities under the Agricultural competitiveness white paper and free trade agreements. In addition, in my electorate there are an enormous number of people such as growers, beef producers, saleyard operators and the value-added chain—Dinmore meatworks, operated by Swift just on my electorate's northern boundary, and the Teys meatworks on my electorate's north-east boundary at Beenleigh—who have made contributions to the benefits of reducing red tape in this sector.

Deloitte in Brisbane have recently announced that they have a very bullish outlook for the agricultural sector over the next 10 years in the forward outlook. Their bullish outlook for the agricultural sector is predominantly based on the emerging middle-class in China and their demand for protein. Even with the softening growth rates in China, the amount of growth based just on population has secured our partnership with that country for many years into the future. But we should not think that China is the be-all and end-all. There are other emerging markets that we are now shifting our attention to. I mentioned that the minister is spending energy looking at opportunities in India as they look to shift into an emerging middle-class economy

After that, we have Africa, which will keep us busy as a nation in the way of food production for many, many years to come.

When Deloitte stand on the global stage and say that they have a very bullish outlook for the Australian agricultural sector, it is not hard to understand why international companies who are looking to invest in long-term gains in and around the agricultural sector have expressed such an interest. We heard the previous speaker, the shadow minister for agriculture, speak about foreign investment and its importance here in Australia—and I agree. Since the First Fleet arrived here in Australia, we have traditionally been an importer of net capital in this country. In order for us to reach our absolute maximum output, we rely heavily on foreign capital. Having said that, I think from a government perspective we need to have a conversation domestically about why we have foreign investment companies lining up from here to the War Memorial, looking to invest in our companies, yet we have $2 trillion of our own superannuation money. We do not see Australia in the same light as other countries who are falling over themselves to get here do.

I welcome foreign investment. We cannot be our best without partnering with foreign investors. But I do struggle with some of the limitations in the make-up of the boards of the superannuation firms. We need a more entrepreneurial, more independent look at the way that we invest in our own future. Why is it that we have international companies who want to make that journey but we struggle to make that transition with the superannuation money of our own mums and dads? These projects will benefit our nation. They are nation-building projects in which the world sees benefit.

Closer to my electorate, Peter Hayes from the Silverdale Saleyards, Roy Bartholomew, who has the Beaudesert and the Moreton saleyards, as well as Neil Goetsch, from Goetsch & Sons, Kalbar saleyards, have seen an enormous increase in beef prices more recently. We have seen prices increase over the last 12 to 18 months to two years. They are prices that I have never seen before in my lifetime. There are a number of factors involved when we talk about this bill and quotas internationally as to why we have seen upward pressures in our cattle markets. Obviously, we should never forget the horrific effects of the drought that has grasped many of our cousins in country Australia. I was reminded only last night of this by a friend of mine, Boyd Curran, who has got country in Longreach, Queensland. He has totally destocked. Unfortunately, the future for some of those operations is very bleak. Whilst we talk about the bullishness of the industry, we must remember that there are parts of our economy that are struggling as a result of the drought. The drought is having an enormous effect on lowering herd numbers and is factoring into that basic demand and supply push for cattle.

One of the other factors as to why our cattle prices are firming and holding is without a doubt our ability each to increase our export volumes of cattle internationally. No-one will ever forget what was probably the single, most damaging policy decision in the cattle sector when Labor were in office. Overnight, they shut down the live cattle trade into Indonesia. The ramifications of that single policy decision rippled through the economy of North Queensland and in my electorate, as cattle numbers got pushed back down into the southern markets. Hopefully, it is something that we will never again see as a result of a knee-jerk decision.

I mentioned that in my final comments I would pay tribute to the Minister for Agriculture for taking over the portfolio. He was starting from a very low base. He has done an excellent job in rebuilding the relationships with those economies. Each year since that live cattle debacle policy decision, we have as a nation continued to find new markets and increase our live cattle export numbers around the world. There are currently challenges for us around the globe with low cattle numbers. America's herd numbers are down. Brazil's herd numbers are down. India's herd numbers are down. We are looking at least 18 months to two years before those herd numbers recover. Challenges lie ahead of us. The Minister for Agriculture has done an outstanding job in partnering with the Minister for Trade and Investment in brokering these efficiencies and in bringing to completion the free trade agreements, and they should be commended for it.

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

This bill, as the previous speakers have outlined, is about exports. In regional areas, the conversation about exports is one that we have quite frequently. Being able to export produce is one of the major economic drivers, particularly in central Victoria. We on this side of the House have said that we will be supporting the Export Control Amendment (Quotas) Bill 2015 as it will bring regulation of all commodity quotas under the same legislation. So this is not one of those red tape repeal days that we have seen from the government. This is smart, sensible policy that will help our government and our exporters by having a simpler system in place, with the regulation of all commodity quotas under the same legislation. So it is a bit of tidy-up work, but it will help our exporters.

This bill will enable all quota export certification arrangements for agriculture to be carried out under a common set of powers. This is important when you are dealing with agricultural industries, because quite often producers have multiple agricultural products and when they are under separate regimes it can get quite complicated. Red tape, bureaucracy, is something that comes up more often than you would expect when you are talking to the agricultural industries, farmers and producers. So, being able to have a situation where there is a common set of powers is a smart move and one that we support.

The government has assured us that stakeholders have been consulted to ensure that these quotas meet with their expectations. Stakeholders that have been consulted include many that have produce that is produced in my region. What is it that we export from my part of the world, from the area of Greater Bendigo? When you say 'Bendigo', many think about the township and do not realise that we have quite a large agricultural area and farming in the Greater Bendigo area and the Bendigo electorate. Since 2008-09, there has been an almost 16 per cent increase in our exports internationally. There has been growth in a number of areas. Believe it or not, mining is back on the agenda in Bendigo. We have started mining again and that is where one of the big increases has been. Manufacturing continues to be a big source of our exports, particularly heavy-metal manufacturing. Food processing and food manufacturing is an area that is on the increase. That was before we locked in the free trade agreements. There is food manufacturing and slaughter houses. We heard from previous speakers about meat processing. We have meat processing in the Bendigo electorate, in Kyneton and in parts of Castlemaine, and further north there is food manufacturing. As I said, it accounts for a significant proportion of income that is generated locally. In other parts of our area we export our stone fruit and our apples. Increasingly, though, our apples are being turned into cider. Wine industries is an area that is growing and winemakers are keen to get their product, their boutique wine, into industries overseas.

I want to focus on a couple of our export success stories. We have Hardwicks in Kyneton. It traditionally started out as a domestic business, but now they maintain a tier 1 export licence and have been exporting chilled lamb and frozen lamb produce and chilled beef and frozen beef produce all over the world. When I last caught up with them, about 30 per cent of what they produce goes from the farms that we have in the north to Kyneton and then overseas. For people who do not know, Kyneton is a township of about 6,000. Hardwicks is one of the major employers in the town—in fact, it is one of the largest private employers that we have in the town. They employ just over 300 people locally. It is a 24-hour operation that they have through their processing. They have workforce issues, and I will come back to those in a moment.

I will give an example of how relevant exports are export industries are to Central Victoria. What we also know through previous speakers is that our farmers tend to diversify. They have multiple production and cropping going on to ensure that they are getting best value and best bang for their land. We have had tough times in Central Victoria this season, not as tough as the Mallee and not as tough as parts of the Murray, but we have had a number of crops fail this year because they did not get rain at the right time. It is a good start to the season, but they did not get the right rain, so we are not going to see growth in those export markets next year, which is why they are hoping to do well in other crops in the future. Hay, believe it or not, is a new crop that more and more of the farmers in our part of the world are transitioning to, because, as the live cattle export trade grows, they need to take with them Australian hay for the Australian cattle to eat whilst they are in transit. In the north of the Bendigo region, around Goornong, more and more of our farmers are switching to hay so that can be transported and exported with our live cattle trade. Ensuring that we have a robust and rigid export system is critical.

Just to support the comments made by the member for Hunter, what the farmers and the producers in my area are now saying is: 'Great. Done. Tick. Free trade agreements are in, but what about the nontariff barriers? What about how I get my product into the port?' The shadow minister for agriculture is absolutely right that only part of the job has been done by this government. It is good that we have now secured these free trade agreements for the agricultural sector. It has come at the expense of other jobs in our economy and, without the safeguards that were put in place, it was going to come at the expense of a significant number of local jobs in trades. But, now that those safeguards have been adopted, we hope that we will not see the high levels of exploitation in the China free trade agreement that could have happened, with a local workforce.

What needs to now happen to ensure we can maximise the potential of the trade agreements is an effort by this government to deal with the nontariff barriers. I mentioned wine industries. We have more wineries in the Bendigo electorate than we have schools. We have a brilliant network of winemakers that produce beautiful boutique wine, but they sometimes struggle to get their product off the port. In a place like China, every region has a different set of rules. If your wine is going into the Guandao province, there is a different set of rules to wine going into Shanghai. I will quite often get calls from really stressed out local winemakers saying, 'What can you do to help me? My wine is stuck in the port' or 'My wine is stuck here in China, overseas.' Unlike Japan, where we have a well-established, centralised and mature trading relationship, a lot of our Chinese relationships have blossomed overnight. We need to start focusing on how we can help these businesses with the nontariff barriers that currently exist.

This is an issue that is being faced not just by winemakers in Bendigo but by a lot of groups, and they are starting to get very vocal about it. Agricultural exporters say that non-tariff barriers to trade remain a problem, despite recent free trade agreements. They have welcomed the government announcing five agricultural counsellors for overseas ports and they hope that will help fix the problem, but it is not enough if you think about the size to which we want to grow our export industry. This is supposed to be how we get our country growing again. Everyone keeps saying ag is the new black. It has the potential to be the major employer of our economy. If we are serious about that then we need to be able to complete the process and deal with these non-tariff barriers.

There is a strong sense of urgency when it comes to some of our commodities, such as stone fruit and mangoes. Horticultural Exporters' Association executive director Michelle Cristoe said there is an urgent need to address market access. She said they have had market failure this season and therefore will not achieve market access in regions that can make a significant difference. It is so much harder with mangoes. If you have a problem with mangoes getting stuck in a port or trying to get them into one market, it is not like wine, which can sit around for a couple of weeks, even though that hurts the cash flow. Mangoes go off. So there is a need for us to start tackling these non-tariff barriers as soon as possible.

We also heard the Cattle Council's chief executive officer saying that:

… free trade agreements, while welcome, did not address technical issues.

"We've done some research through Meat and Livestock Australia which has identified that as being significant. We've been working with the government to try and address those issues," he said.

This is another example of how this government needs to start getting on with the work. You cannot just do one part; you have to address all the issues.

There have been problems with China, which suspended all Australian chilled beef imports in 2013 after reviewing its health protocols. There have been problems identified with America to do with certain labelling requirements. These are some of the challenges that we have in front of us. We need to address the non-tariff barriers to investment and government-to-government relationships. We need to help not only our producers; we need to develop a mature trading relationship so that we can resolve issues when they arise.

I also want to touch very quickly on the fact that, if we are serious about building on the potential of the export industry, we need to be developing a skilled workforce locally. We have heard lots of rhetoric from the government and its ministers about how great these free trade agreements will be for local jobs. But without significant safeguards in place to ensure that people working in those industries are not exploited they will not generate the many jobs the government have talked about. In fact, the minister herself has been caught out misleading the Senate on how many jobs these free trade agreements will create. In the space of 10 years the evidence in the modelling shows that about 14,000 jobs will be created as a result of these free trade agreements. If you put that into context, this government has sacked over 16,000 public servants since coming to office. So it is not going to be the great job generator that the government is claiming it will be.

Also we know the ag industry is heavily reliant upon overseas temporary workers. Weekly, if not daily, there is a media report about the exploitation of temporary workers. People who come here as a guest worker, whether they be an international student, a young person here on a working holiday or someone here on a 457 visa, should be paid the same wages under the same conditions as Australian workers. In our ag industry, we have had some of the most grievous and shameful examples of exploitation—such as people being paid as little as $8 an hour or, in some cases, $4 an hour and people who have had their passports confiscated from them by the agency they are working for. The farmers say they want to help clean it up. We need the government to step in and stop ignoring this problem and help clean it up.

If we are serious about exploring and celebrating the potential of exports, if we are serious about being a country that makes things and exports things, if we are serious about having ag be one of our growth industries for good jobs and profits in this country, we need to tackle the things that are not in this bill. We need to tackle the non-tariff barriers through good relationships with countries overseas and we need to tackle the workforce pressures that we currently have.

Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

I rise today in support of the Export Control Amendment (Quotas) Bill 2015. This bill seeks to replaces multiple acts that govern tariff rate export quotas with one act that covers all commodities. This will decrease red tape and clarify a complicated legislative scheme, making it clearer and readily understood.

The current legislative schemes for quotas are specific to meat and dairy products and are not sufficient to address the range of quotas arising under recent free trade agreements. For example, the Japan-Australia Economic Partnership Agreement introduced quotas for honey and juices. A comprehensive legislative quota scheme under the Export Control Act 1982 would enable a more secure and flexible legal framework for implementation of these and any future quotas negotiated in pursuit of export opportunities under the agricultural competitiveness white paper.

Where export tariff rate quotas are established by trade agreements Australia seeks to manage the quotas in order to offer exporters the maximum concessions possible on agricultural products. For example, eight new quotas introduced under the Japan-Australia Economic Partnership Agreement saved exporters approximately $3 million in tariffs in the period January to May 2015.

Based on consultations internally and externally, the Department of Agriculture and Water Resources has determined that a comprehensive quota regime administered under one act is preferable and more efficient than the existing commodity-specific regimes which are currently administered under four different acts. The Export Control Act 1982 is the preferred vehicle to enable all of the department's export certification arrangements to be carried out under a common set of powers. This would be achieved by abolishing one act in its entirety and parts or divisions of two other acts and consolidating provisions currently sitting within the Export Control Act. The bill consolidates four acts that govern tariff rate export quotas into one act that covers all commodities.

The bill enables the secretary to make orders providing for or in relation to the establishment and administration of a system or systems of tariff rate quotas for the export of goods. Orders may be made to cover goods currently subject to quota regulation but could cover any other goods that quotas may apply to in the future. The bill provides the secretary with the ability to make directions in relation to matters covered by an order. Directions provide flexibility to deal with complex situations relating to an individual exporter in a fair and transparent manner. The amendments enable the directions to override an order. This is consistent with section 17(4) of the Australian Meat and Live-stock Industry Act 1997, which provides that, if a direction given by the secretary is inconsistent with an order, the direction prevails.

A comprehensive general quota legislative regime will enable a more secure and flexible legal framework for the implementation of existing and any future quotas negotiated in pursuit of export opportunities under the Agricultural competitiveness white paper and free trade agreement negotiations. Exporters will gain access to quota tariff rate concessions provided under free trade agreements through contemporary, flexible and efficient regulation. The bill complements the government's strategic approach for capturing premium markets outlined in the Agricultural competitiveness white paper and builds on the gains from recent free trade agreements with our major trading partners.

This bill will facilitate red tape reduction, bringing regulation of quotas under the same legislation as other export controls of the same commodities and offer opportunities for synergies in deployment of resources. It will also enable a consistent approach to the appointment of third parties as authorised officers, where they are permitted by importing countries.

Since 1974, Mundijong, in the electorate of Canning, has been home to Mundella Foods, Western Australia's premier dairy company. Since 1974, when local farmers Peter and Anne Hector founded Mundella, the local farmers have supplied the milk to Mundella that has resulted in numerous awards for their high-quality products. A company that was founded to capitalise on a surplus of milk has now grown into a thriving enterprise. In the early days the company focused on condensed milk but, over time, expanded into cheese and yoghurt. The expansion of the dairy range by Mundella increased the demand from the local dairy farmers and created jobs in the local community. It is success stories like Mundella's—of a small business growing from hard work and determination—that strengthen the local community of Canning. Mundella's operational ethos is to become the leading producer of premium yoghurts in Australia without compromising the quality of the Mundella brand.

The Export Control Amendment (Quotas) Bill 2015 will assist companies like Mundella in expanding their operation beyond the domestic market with clearer and less encumbering regulations. With countries such as China having an ever-increasing demand for dairy products, companies like Mundella are well placed to help bridge that gap. For what started as a small Western Australian farming operation, clear and unambiguous regulations on export tariffs are critical to allowing easy entry into the export market.

Also in the electorate of Canning is Margaret River Premium Meat Exports, a vertically integrated Wagyu beef business run by Pinjarra local Mr John McLeod. Producing premium-branded Margaret River Wagyu beef, Mundella also export to many countries. Commencing business at Cowaramup in 2003, the company now owns the largest herd of purebred Wagyu in Western Australia and employs a network of farmers throughout the South West who manage the breeding, backgrounding and feeding of the Wagyu cattle. Reducing these tariffs means better business for Canning.

The reduction of red tape to allow greater business efficiency and operating protocols has always been a key focus of the Liberal team. The Export Control Amendment (Quotas) Bill 2015 not only eases red tape burdens; it creates a more workable legislative framework for Canning. For this reason I commend this bill to the House.

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

I too rise to speak on the Export Control Amendment (Quotas) Bill 2015. This bill consolidates four acts that govern the tariff rate export quotas into one act—the Export Control Act—which will cover all commodities.

We have recently been celebrating new free trade agreements with China, Japan and Korea, we have had a CER—closer economic relationship—with New Zealand that dates way back and we are busily working on new FTAs with India and maybe Hong Kong. We have the Trans-Pacific Partnership too. I would like to think that we will continue on this marvellous rollout of FTAs, which will mean that more food, in particular, and fibre exports will make their way out of the dependence on the big duopoly concentration of retail ownership of the grocery business that we have in Australia and give our growers, particularly of our fine foods and beverages, an opportunity to get better prices in the export market.

In my electorate of Murray, we have a very critical issue in relation to the FTAs—that is, to get all of the protocols in place as soon as possible so that exporters can undertake the necessary changes to their product or processes so that they can produce, export and take full advantage of the new market opportunities. It is not simply a case of ticking off the FTA and then the gates are opened; it is a case of developing the appropriate protocols between the two countries to make sure that the biosecurity arrangements remain safe and that both countries are more than happy with the way that things will be as the products move in whatever direction. Without protocols in place, exporters cannot get their product into new markets. Exporters are responsible for ensuring that the conditions associated with the export of goods and the relevant importing country requirements for the goods are met for them to be exported from Australia. This legislation is designed to provide exporters of agricultural product with a more efficient and flexible approach to exporting in the future.

I have large exporters of meat, fruit and vegetables in my electorate of Murray. Of course, we have been one of the biggest producers of export dairy product for decades. I think it is still the case that the biggest exporting commodity out of the ports of Melbourne and Geelong are milk powders, most of them coming from my electorate. Some of my producers have been exporting from Murray for more than 80 years. In speaking with meat processors and fruit growers who export from my electorate, the No. 1 issue is to remove the burden of red tape. Anything that makes the administrative processes easier is welcomed by agricultural products exporters—whether it is legislation, computerised systems in this new paperless world, or more streamlined processes. It is about reducing the costs of the processes that are required without in any way changing the quality of the outcome of those processes.

We do not want to see things change just for the sake of change. We understand the critical importance of crossing all the t's and dotting all the i's as far as food safety goes, because we in Australia are proud of our reputation for clean, green produce. It gives us a premium in markets—in particular for products like infant milk formula—and there is no way that we will ever compromise the safety of our product by some less adequate procedure or regulation being applied. On the other hand, we cannot be burdened with unnecessary or complicated processes or processes which claim to be full cost recovery but where within that full cost recovery there are costs which are not fair or reasonable to impose on the primary producer or the manufacturer.

As well as the removal of red tape, there is concern over cost recovery by the Department of Agriculture and Water Resources. Our fruit and vegetable exporters have high input costs compared with some of the countries that they are competing with, such as South Africa or Brazil. Given the cost recovery required by the Department of Agriculture and Water Resources, as it discharges its responsibilities under this bill for processing export certification, it is critical that those costs do not increase the costs of our produce, making it less competitive when it comes into those new markets. The department must conscientiously deliver efficient and cost-effective services, and we want to see these benchmarked against other countries with similar wage structures, so that we are always competitive and always innovating to make sure that the system works for all parties.

We have a premium product that we export from Australia—whether it is a fresh cherry, infant formula, prime beef or a beautifully produced bottle of olive oil. We acknowledge that we are also competing against other premium products, often with much lower costs of production coming from other parts of the globe. Interpreting protocols for different countries is a big enough minefield. Anything that our government agencies can do to support and assist our exporters is most welcome. I was very pleased in a briefing we had with officials from the Department of Agriculture and Water Resources to see that the clear intention of those officials was to be seen as part of the team of 'Export Australia' and to be in good communication with the primary producers, with the manufacturers and with the bodies that represent them collectively. I was very pleased to hear about how closely they had communicated and consulted with our primary producers in the development of this bill and in streamlining it. We have to make sure that those close communications continue and persist. One of the concerns expressed in relation to protocols is that sometimes a negotiating party does not fully understand the ramifications of what is being processed and the full stops that it will put into the arrangements that have to be undertaken in future. With that close communication between officials, the primary producers, the abattoirs, the dairy factories and the piggeries, we are going to be able to have everyone on the same page.

The implementation of comprehensive legislative quota scheme under the Export Control Act 1982 will enable a more secure and flexible legal framework for the implementation of any quotas negotiated in pursuit of export opportunities under the coalition government. With our consultation with officials from the Department of Agriculture and Water Resources earlier this week, the members of the coalition from rural and regional areas were also very pleased to have a better understanding of how these quotas are determined—how the product opportunities for exports are distributed between competing suppliers in Australia. We listened carefully to how they make sure that they do not simply choose to allocate quota to those who have a history of supply into that market; they also try and make sure that there is a proportion of the quota in some instances for those who are new to the market and just beginning to export. I think that those sorts of considerations are extremely important. We also have to make sure that when we have inspections of our products in preparation for them being exported that that is a cost-recovery process but without any extra overheads for administration which are not sheeted home typically to the primary producer in other countries.

This legislation puts in place regulation of exports, guarantees product integrity and ensures the safety and hygienic preparation of agricultural products for export. Over time, the legislation has expanded to include other elements to increase trade opportunities, including: product descriptions; volume limitations, which also can be called quotas; and industry requirements. The Export Control Act is the legal basis for the regulation of exports and sets the conditions that must be met to export certain goods from Australia.

I strongly commend this bill to the House. It is of enormous importance to the food producers of the great Goulburn-Murray Irrigation District and the non-irrigated parts of the Murray electorate. We have a great strength in food production in Australia, and we have to maximise opportunities by the most appropriate legislation. In that way, we will maximise the benefits of all of these new free trade agreements.

Bruce Scott (Maranoa, Deputy-Speaker) 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.