Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the Export Control Amendment (Quotas) Bill 2015. The bill essentially consolidates four separate acts relating to tariff rate export quotas into a single act which covers all commodities. The relevant acts are the Export Control Act 1982, the Australian Meat and Live-stock Industry Act 1997, the Dairy Produce Act 1986 and the Export Charges (Collection) Act 2015. The proposed legislation also repeals the Australian Meat and Live-stock (Quotas) Act 1990.

With a population of 24 million, the domestic Australian market is relatively small in the international context. The government understands that a growth in exports is necessary to promote demand-driven economic growth in the Australian economy. This will be achieved by tapping into developing markets in emerging economies, with increasingly affluent consumers purchasing Australian made goods and services, generating export income. The projected growth in exports in the near future will have a positive impact on our national economy, which, in terms of trade, has recorded persistently large current account deficits for the past 50 years. The balance of trade for the month of September 2015 was a $2.32 billion deficit. The historical deficit in the balance of payments, to a large extent, may be attributed to Australia's narrow export base, which is heavily dependent upon commodities. There are also other factors which have contributed to the extremely high current account deficit that Australia has today, such as lagging international competitiveness in some sectors of the economy and a heavy reliance on imported capital goods from overseas. Low levels of national savings also contribute to the high current account deficits, as businesses seek funds overseas.

By the same token, when governments run constant budget deficits, monetary requirements are met by borrowing from the domestic sector. Economists refer to this as the crowding-out effect: when governments borrow from the domestic sector, they force the private sector to 'crowd out'. Since there are not enough funds available within the domestic economy, the private sector is, in turn, forced to borrow funds from overseas. Borrowing from overseas causes Australia's current account deficit to increase, leading to a major increase in debt expansion. Excessive current account deficits, combined with low investor confidence and the possibility of a currency crisis, may force the Reserve Bank to implement contractionary macroeconomic policies to restrict economic growth and curb the deficit. Australia's current account deficit requires a long-term solution in order to secure the Australian economy's prosperity—a growth in exports is an integral part of the solution.

The projected growth in international trade provides opportunities for economic development between both established and emerging economies across the globe. In 2013-14, the value of Australian exports accounted for $331 billion, while imports amounted to $338.6 billion. The emergence of free trade agreements—which are, essentially, international treaties removing barriers to trade, such as tariffs and quota restrictions—serves to facilitate stronger trade and commercial ties, contributing to increased economic integration between participating countries.

Free trade agreements will create opportunities for Australian exporters and investors to expand their businesses into key overseas markets. For instance, in my electorate of Moore, which borders established agricultural areas and coastal fisheries, the recent free trade agreements have benefitted intensive horticultural producers who export quality fruit and vegetables—such as carrots, broccoli and tomatoes—as well as the exporters of western rock lobsters and premium beef cattle, through tariff reductions, putting local producers on a level playing field with competitors from countries such as New Zealand. Access to global markets helps maintain and stimulates the competitiveness of Australian firms by increasing domestic productivity and contributing to greater GDP growth by allowing Australian businesses access to cheaper inputs, introducing new technologies and fostering competition and innovation. This directly benefits Australian consumers through access to an increased range of goods and services at more competitive prices.

We live in dynamic times which will see a raft of changes to tariffs and export quotas on an ongoing basis as the free trade agreements are implemented and begin to take effect. Currently, there are a whole range of different tariff rates imposed on Australian exports of beef, grains, fruit, vegetables, seafood and dairy products by different countries, with the rates scheduled to reduce over various intervals, in time, in accordance with respective free trade agreements coming into operation. Accordingly, these proposed legislative changes are an appropriate measure in managing this level of administrative complexity.

Essentially, the proposed legislation seeks to modernise the current system by consolidating the quota export certification arrangements for agriculture by amending the Export Control Act 1982 to provide the secretary of the department with the necessary powers to make orders in relation to the administration of tariff rate quotas. It also enables the secretary to make directions in relation to matters covered by an order, and to override the order; and it makes a series of consequential amendments.

In current practice, the department of agriculture seeks to manage export tariff rate quotas operating under trade agreements in order to provide exporters with the maximum concessions possible on agricultural products. 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 more recent free trade agreements. The department currently administers 33 quotas, which save exporters millions of dollars in tariffs each year. To cite an example, managing the eight new quotas introduced under the Japan-Australia Economic Partnership Agreement, including quotas for honey and juices, between January and May 2015, has saved exporters approximately $3 million in tariffs. Similarly, the effective management of quotas to the European Union and the United States of America saves Australian exporters between 20 and 100 per cent of the value of goods in applicable tariffs.

In administering the quotas, the department seeks to fulfil a number of broader objectives, including minimising market distortion from quota management; minimising regulatory intervention and barriers to exporting; and optimising the commercial value from use of the quota. Further, consideration is given to the commercial arrangements, and rewarding market development, whilst providing consistent, transparent and efficient administration.

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, parts or divisions of two other acts and consolidating provisions currently sitting within the Export Control Act.

Based on internal and external stakeholder input, 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. Stakeholder workshops were conducted earlier this year to develop the proposals contained in the bill, and information about the proposed changes was provided to all quota holders.

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.

The bill will also facilitate a reduction in red tape in accordance with the government's election commitments. Bringing regulation of quotas under the same legislation as other export controls of the same commodities will offer opportunities for synergies in deployment of resources. It will also enable a consistent approach to appointment of third parties as authorised officers where they are permitted by importing countries.

The bill will not have any detrimental impacts on domestic industry or on Australia's international trade relationships. Consultation with industry to date has confirmed that a comprehensive legislative quota scheme is preferred to the existing commodity-specific regimes. There are no major financial impacts associated with this bill. Ideally, the legislation should be in place to enable the next Japanese quota year, commencing on 1 April 2016, to be regulated under the new powers.

The anticipated future increase in the flow of goods and services across international borders is brought about by the emerging economies in our region, with increased international trade facilitated by free trade agreements with Japan, Korea and China. Trade is projected to continue expanding as a free trade agreement is expected to be reached with India and as Australia develops stronger economic partnerships with the 10 member countries in the Association of South East Asian Nations and beyond. Free trade agreements will also address barriers which impede the flow of goods and services between nations, will encourage investment, and will enhance international cooperation. The agreements extend to other issues, including intellectual property, competition policy and government procurement. The competitiveness of Australian exports in the partner market can be enhanced, adding to the attractiveness of Australia as an investment destination.

In summary, the proposed legislation seeks to modernise the existing system through the consolidation of the quota export certification arrangements for agriculture by replacing four separate acts relating to tariff rate export quotas with a single act which covers all commodities. Based on consultations, the Department of Agriculture and Water Resources has determined that a comprehensive quota regime, administered under one act, is preferable to and more efficient than the existing commodity-specific regimes, which are currently administered under four different acts. The bill also introduces new powers consistent with contemporary, flexible and efficient legislation, such as the use of registers and computer systems to make decisions under a system of tariff rate quotas.

I commend the bill to the House.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the Export Control Amendment (Quotas) Bill 2015. This is a sensible bill which seeks to streamline the management of our great quota system. This bill delivers a better outcome for the nation and more particularly better outcomes for my constituents—those living within the electorate of Barker, not limited to but principally focused on those primary producers who export overseas.

As it currently stands, the Department of Agriculture and Water Resources administers some 33 quotas that save exporters millions of dollars in tariffs each year. Through the use of quotas, Australian farmers are shielded from the costs imposed through that process. Whilst we currently have management frameworks which administer our quota arrangements, the current legislative schemes for quotas are specific to meat and dairy products but are insufficient to address the range of quotas arising under recent free trade agreements. It is this government's position that a comprehensive legislative quota scheme under the Export Control Act 1982 would enable a more secure and flexible legal framework for the implementation of these and any future quotas negotiated in pursuit of export opportunities under the Agricultural Competitiveness white paper.

I have the great privilege of representing an electorate which is home to extensive agricultural and primary industries and so it is comforting to see that a long-term view is being taken to quota administration. It is time that we implement a more efficient and comprehensive legislative framework in this space. Due to the trade deals that this government has secured with China, with Japan, with South Korea—not to mention the recently resolved Trans-Pacific Partnership—the number of such export tariff quotas has increased exponentially. The Japan-Australia Economic Partnership Agreement alone has delivered eight new quotas.

This government remains committed to opening up markets and giving Australians the opportunity to grow their prospects through industry and endeavour. The Australian agricultural industry provides hundreds of thousands of jobs across the nation and many thousand in my electorate. The Australian agricultural sector delivers 93 per cent of Australia's domestic food supply and exports some 60 per cent of its produce abroad. Our agricultural exports contribute a whopping $32 billion in income to the national accounts. As we face an increase in the world's population and that of our immediate region, reliance on clean, fresh and healthy Australian agricultural product can only increase. Recognising this opportunity, our government has striven to deliver better trade access and more efficient management systems to facilitate that trade.

Export opportunities for Australian agricultural enterprise continue to expand under our leadership. This government understands that, by getting out of the way of agribusinesses through simplifying compliance and trade management, Australian farmers and producers will go from strength to strength. This bill seeks to deliver a simpler system for the management of quotas and, as ever, less is more when it comes to the management of trade. More room for trade volumes and more access to markets have been achieved by this government, and this progress has delivered greater opportunity to constituents, particularly in my electorate when it comes to exporting their prime produce. Independent economic analysis shows that Australia's free trade agreements with China, Japan and Korea together will add $24.4 billion to the Australian economy over the period 2016-2035. Of all agricultural exports, China accounts for 14 per cent of our market and Japan, 13 per cent.

I welcome, as do constituents throughout Barker, the increased demand Beijing and Tokyo have for produce from the Riverland, the Barossa, the South East, the Murraylands and the Mallee—produce which I know is amongst the very best in the world. Barker produces some 50 per cent of the gross value of agricultural production in South Australia, estimated at $2.6 billion. Barker, without question, disproportionality drives the agricultural sector in South Australia; it is endowed with extensive natural resources and it is ideally suited it to the pursuit of agricultural production. Be it beef, lamb, wool, wine, dairy, grain or even wood products, producers across the electorate consistently export significant quantities of very high-quality produce.

As well as being home to a productive and vibrant agricultural industry, the South Coast is also home to a significant fisheries sector with popular wild-catch species including abalone and southern rock-lobster, which are found along the coast. That is to say nothing of the Coorong fishery, which I am sad to say is under attack from the New Zealand fur seal—the quicker we organise a sustainable harvest of that animal in that place, the better. The much sought-after seafood species are found up and down the coast and the seafood industry drives significant economic wealth and opportunity through export. Barker is squarely positioned to make the most of our newly signed free trade agreements.

Whilst the government has made excellent progress in expanding our markets, it is also important for the government now to focus on non-tariff barriers to trade. The new volume of trade with the countries in our region, as well as continued expansion of markets, necessitates the upgrade of our trade mechanisms, and this legislation is a move in that direction. This bill will ensure that Australia administers quotas in a way that: minimises market distortion from quota administration; minimises regulatory intervention and barriers to exporting; optimises the commercial value and use of the quota; ensures consistent, transparent and efficient administration; considers commercial arrangements; and rewards market development. The bill enables the creation of a register of tariff rate quota entitlements. It is intended that this should be accessible to exporters in respect of their own entitlements, much like an exporter might have access to information held in their business financial accounts. There are certain elements of the register which could be made available to all exporters, such as the entities holding quota to facilitate trading in quota entitlements. A list of quota-entitlement holders is currently published on the Department of Agriculture and Water Resources website for this purpose. Bringing regulation of quotas under the same legislation as other export controls for the same commodities will offer opportunities for synergies in the deployment of staff. It will also enable a consistent approach to the appointment of third parties as authorised officers where permitted by importing countries.

The bill will commence on royal assent except for the repeal of existing regulation of quotas. This allows for all existing quotas to run their course under the current legislative arrangements before being phased out and orders under the new powers commence. The existing legislation governing quotas will be repealed later, on 1 January 2017. The bill complements the government's strategic approach to capturing premium markets outlined in the agricultural competitiveness white paper and builds on the gains we have achieved through the outstanding efforts of Minister Robb in negotiating free trade agreements with our major trading partners. This bill is undoubtedly a good one for farmers and producers across the country but particularly for those resident in Barker. I commend the bill to the House.

Michael McCormack (Riverina, National Party, Assistant Minister to the Deputy Prime Minister) Share this | Link to this | Hansard source

We see on the front page of the current issue of The Land, dated 26 November, 'Rain revs up restockers—cattle prices back to record levels.' The article, on page 5, talks about sky-high cattle prices possibly being here to say. That is of course good news for Riverina producers and good news for cattle farmers right across Australia. The article says that the supply of both prime and store cattle has failed to keep pace with demand from lot feeders, restockers and processors, and that will enable prices to remain steady and to remain high. It says that New South Wales stock agents have suggested that if all the ducks line up, such as northern monsoons, a steady dollar at about US70c and low interest rates, by next year cattle prices could be as dear if not dearer than now. As I say, that is tremendous news that will be welcomed by cattle producers right across this wide brown land.

The Export Control Amendment (Quotas) Bill 2015 is good for agriculture and good for cattle producers. I am very pleased that this legislation has bipartisan support. I will come back to that bipartisan support in my later remarks, but initially I want to talk about Wagga Wagga and its role in agriculture and more specifically in stock. The Wagga Wagga Livestock Marketing Centre, established in 1979, is the largest of its kind in the Southern Hemisphere—4,000 cattle per week and, on average, 200,000 a year go through the facility, as well as 1.8 million sheep. Peter Adams, who has an economic development role with Wagga Wagga City Council, refers often to the $380 million worth of stock that are put through the Wagga Livestock Marketing Centre each and every year. They are impressive numbers, and they are numbers that will only go up as the years go on and the trade agreements that trade minister Andrew Robb has been able to successfully broker help our export markets. They are the sorts of numbers that farmers around the Riverina and even wider afield need to hear, because 35 to 40 per cent of those stock numbers come from outside the Riverina—stock are being brought into the Riverina to be bought and sold through the livestock marketing centre there, and many of those stock end up in neighbouring abattoirs. Certainly Teys plays a vital role in Wagga Wagga employment, and I know just how many refugees who come to Wagga Wagga to seek a better life in a better land work out there. They are willing to work, they are very hard workers, and certainly the 457 visa arrangement is made use of by Teys because unfortunately they cannot always fill the numbers that they need out at the abattoir. They have a very strict drug and alcohol policy, because it is difficult work and dangerous work if it is not done properly. Certainly they are one of the most impressive abattoirs—along with JBS at Yanco—in the Riverina, I am proud to say in my electorate.

It is important to get these logistics right, it is important to get the processing right. We know that the trade arrangements that have been brokered and bartered by the trade minister with Japan, with South Korea, with China and the Trans-Pacific Partnership Agreement that has been successfully negotiated, and indeed the talks currently progressing with India, are going to mean that we are going to have to produce even more—certainly more cattle and sheep out of the Riverina. It is important to note that this bill, as I say, has bipartisan support. That is why I was so interested to listen to the contribution of the member for Bendigo in this debate. On 26 November she said for her electorate it is important that the live cattle trade continue because Bendigo is receiving an upsurge of hay demand. The member for Bendigo, Lisa Chesters, said:

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.

I say 'Hear, hear!' She goes on:

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.

I am glad that the member for Bendigo is on board with this and I am glad that she is in agreement with the live cattle trade, because, unfortunately, in the last parliament, the government of the day, the Labor Party, were not on board with live cattle export. They closed the trade down, quite disgracefully, in June 2011 in a knee-jerk reaction to a television program and many, many people right throughout the Riverina were left out of pocket. That is not to mention the thousands of other people who were affected by this knee-jerk reaction by Labor back in the previous parliament.

This bill consolidates four acts that govern tariff rate export quotas into one act that covers all commodities. It has bipartisan support. Technically speaking, it is to help with the Japan-Australia Economic Partnership Agreement, the preferential trade agreement that we have negotiated with that vital export market. Well done to the Minister for Trade for successfully completing those talks. An all-encompassing general quota legislative regime will enable a more secure and flexible legal framework for the implementation of current and any future quotas negotiated as we pursue more export opportunities under the agricultural competitiveness white paper and free trade agreement negotiations. I have to say, when you look at the ag competitiveness white paper—as I am joined in the chamber by the Minister for Agriculture and Water Resources, the member for New England; well done to Barnaby Joyce—the very first item in that wonderful document is entitled 'Stronger farmers, stronger economy'. It says:

Agriculture has always played an important role in the success of our nation—it touches all Australians.

More is the pity that more Australians, and particularly more Australians who occupy the benches opposite, do not always appreciate that. They do not always understand that and they do not always get it.

I recently quoted in this place an Aboriginal elder, Gail Clark, from my electorate. As she pointed out, you will need a politician now and again; you will need a lawyer now and again; you will a priest, a teacher and a policeman every so often in your life; but you need a farmer three times every day—in the morning, in the middle of the day and at night—to feed you. You need a farmer to clothe you. The food and fibre that is grown in our regional electorates clothes and feeds not just our nation but also many other nations besides. To quote again from the agricultural competitiveness white paper:

The opportunities for the sector are enormous.

I quoted from The Land earlier about record cattle prices. It is no coincidence that record cattle prices and prices for wheat, barley, oats, grapes and everything else are at an increased level because we have had good seasons—I admit that—but they are also at a premium, at a peak, because of good government policies which go to the nexus of understanding what farmers need. We need to put those policy parameters in place, get out of the way and let farmers do what they have been doing for generations—producing the very finest food and the very finest fibre—and make sure that those opportunities for the sector continue to grow.

We sit on the edge of the strongest growing region in the world, we have a developed agriculture sector … we have food safety and environmental credentials that are world-class, we develop and have access to up-to-date technology, we have a strong economy … and we have a well-educated and skilled workforce.

I ask the minister: did you write that? You must have. I could not have written it any better myself. The minister is not taking credit; he is a very humble man. It is in the agricultural competitiveness white paper and I urge anybody listening to this debate, and certainly those opposite, to get a copy of it, read it and get on board—because there are some tremendous things in that document.

There are also some very good things in this bill. Exporters will gain access to quota tariff rate concessions provided under the free trade agreements through contemporary, flexible and efficient regulation. That is what we need in this country at the moment. We are eliminating red tape. It was started by the member for Kooyong, was continued under the member for Pearce and is now continuing under the member for Eden-Monaro in their various roles of cutting through legislation which is archaic, which is over burdensome and which we do not need. This bill will lower costs for small business, for farmers and for those people who we need to increase food and fibre production and get things done. As the Mayor of Tumbarumba, Councillor Ian Chaffey, often says, we need a 'ministry for getting things done' in this place—I could not agree more.

Where export tariff rate quotas are established by trade agreements, Australia seeks to manage quotas in order to offer exporters the maximum concessions possible on the products our farmers produce—agricultural products which, as I say, are the finest in the world. The Department of Agriculture and Water Resources presently administers 33 quotas, which save exporters millions of dollars in tariffs each year. That is a good thing. For example, eight new quotas have been introduced under the Japan-Australia Economic Partnership Agreement. It is predicted that these would have saved exporters about $3 million in tariffs between January and May 2015. Quotas to the European Union and the United States of America save Australian exporters between 20 and 100 per cent in applicable tariffs. You can see that is going to help exporters, help Australia and, moreover, help our balance of payments figures, because we need to get those balance of payments figures right so that we can get our budget right. Goodness knows, after six years of budget mess we need to be in the job of budget repair. This bill has bipartisan support, and that is a good thing—it needs it.

Consultation with industry to date has confirmed that a comprehensive legislative quota scheme is preferred to the existing commodity specific regimes. Consultation is important in this context, because we as a government understand that we have to get those industry stakeholders, those agriculture sectors, on board. They were not listened to, they were not even asked, by the last government or the one before it—and by that I mean the Rudd-Gillard-Rudd years. They were just steamrolled. Legislation went through this place, and live animal exports were stopped; there was no clear direction on water, save to take it all off our irrigation farmers; and there was never a clear understanding of the great role that our farmers played, are playing now and will continue to play into the future.

Stakeholder workshops were conducted on 16 April, 2 September and 26 October this year to develop the proposals contained in this particular bill, and information about the proposed changes were provided to all quota holders, which is what a good government should do. We went out and sought feedback, we listened to what was said, we acted and then we went back to them and said, 'This is what we are going to do,' and that was very much appreciated. That is not the sort of thing that went on under Labor. It is the sort of thing going on under the coalition because we understand the importance of getting people on board and taking them with us. We understand the importance of this legislation, and that is why I commend it to the House.

Barnaby Joyce (New England, National Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

To sum up the debate on the Export Control Amendment (Quotas) Bill 2015, the bill consolidates four acts that govern tariff export quotas into one act that covers all commodities. The Department of Agriculture and Water Resources currently administers 33 quotas and saves exporters millions of dollars in tariffs each year. These quotas are currently managed under four separate acts. This bill brings that regulation under a comprehensive quota regime.

The bill will amend the Export Control Act 1982 to provide the secretary with powers to make orders providing for, or in relation to, the establishment and administration of a system or systems of tariff rate quotas; enable the secretary to make directions in relation to matters covered by an order and to override the order; introduce new powers consistent with contemporary, flexible and efficient legislation; abolish one act in its entirety and parts or divisions of two other acts; and consolidate provisions currently sitting within the Export Control Act 1982.

The bill complements the government's strategic approach to capturing premium markets as outlined in the agricultural competitiveness white paper and builds on the gains from recent free trade agreements with our major trading partners. In response to the shadow minister for agriculture, I note that since the election the coalition have achieved over 50 key market access gains or restorations, as well as over 30 market access improvements.

This is basically a non-controversial bill. It has bipartisan support. I thank all those involved for their participation.

Question agreed to.

Bill read a second time.