Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I call the very patient member for Fisher.

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. India has a substantial and growing need for energy to sustain its development and massive population growth. Along with coal, nuclear power plays a key role in that country. As the fastest growing major economy in the world, with gross domestic product growth rates consistently above seven per cent, India is hungry for energy to sustain its development.

To put India's need for energy in perspective: energy use has almost doubled since 2000. However, energy consumption per capita is still only around one-third of the global average, and some 240 million people have absolutely no access to electricity. Three-quarters of Indian energy demand is met by fossil fuels—a share that has been rising as households gradually move away from burning wood and other biomass for cooking. Coal is the backbone of the Indian power sector, accounting for over 70 per cent of generation, and is the most plentiful domestic fossil fuel resource.

By 2050, when India's population is expected to reach 1.7 billion people, India aims to provide 25 per cent of its energy from nuclear power. Completion of the nuclear reactors already under construction will add substantially to India's existing nuclear power generation capacity, but to fuel that capacity India will need up to 2,000 tonnes of uranium each year. At this very moment Australian uranium companies are actively pursuing the new market opportunities that India presents.

In 2008 the Nuclear Suppliers Group, which is made up of almost 50 nations, recognised India's commitments to support international nonproliferation efforts, including continuing its moratorium on nuclear testing; separating its civil and military nuclear activities; and accepting International Atomic Energy Agency safeguards. I am happy to say that, to its credit, India has met these commitments.

Successive Australian governments have worked to establish arrangements enabling uranium sales to India. This has been done despite the fact that India is not a party to the Treaty on the Non-Proliferation of Nuclear Weapons, which therefore raises the possibility of a domestic legal challenge in Australia. The Australian government is satisfied that Australian uranium can be supplied to India within the current framework of our relevant treaty commitments. However, a possible Australian domestic legal challenge would be based on an assertion that Australia is not complying with its obligations under the South Pacific Nuclear Free Zone Treaty—and possibly under the Treaty on the Non-Proliferation of Nuclear Weapons—because India's safeguards agreement with the International Atomic Energy Agency does not apply to all of its nuclear activities.

Australia has developed arrangements for nuclear cooperation with India in conformity with the framework agreed to by the Nuclear Suppliers Group in 2008—a group that includes all of the major nuclear supplier countries and others that are active in nonproliferation efforts. The Nuclear Suppliers Group decision recognises that, because India is not a party to the nonproliferation treaty and because it has nuclear weapons, an India-specific model for International Atomic Energy Agency safeguards needs to apply to nuclear material and related items transferred to India. Thus, the International Atomic Energy Agency safeguards in India apply to facilities designated by India for civil purposes, as well as to any imported nuclear material or nuclear related items, including uranium sourced and provided from Australia.

Australia has a hard-won, hard-fought reputation as a safe, reliable, cost-effective supplier of energy, and one of Australia's uranium miners is close to finalising an initial contract for supply to India. At least one other is pursuing commercial negotiations with Indian buyers. In light of this, the Civil Nuclear Transfers to India Bill 2016 will provide certainty to exporters by mitigating the risks that exports of uranium to India could be hindered by a domestic legal challenge. The bill clarifies that decisions approving civil nuclear transfers to India are taken with due regard to Australia's obligations to nuclear safeguards under non-proliferation treaties if particular conditions are met. Those conditions relate to the application of nuclear safeguards under India's agreement with the International Atomic Energy Agency, as well as the requirements of the Australia-India agreement on civil nuclear cooperation.

The Intergovernmental Panel on Climate Change observed in 2014 that achieving deep cuts in greenhouse gases will require more intensive use of a range of low-carbon technologies, including nuclear energy. Nuclear power has the ability to make further significant contributions to the reduction of CO2 emissions worldwide. India aims to raise nuclear capacity from six gigawatts today to 63 gigawatts in 2032, an increase that is comparable to Australia's entire power generation capacity. As of this month, 30 countries worldwide are operating 450 nuclear reactors to generate electricity to power homes and businesses. Many of these nuclear power plants have been in operation for decades. However, the interesting statistic is that another 60 new nuclear plants are under construction in 15 countries to meet ever-increasing demand. Nuclear power plants provided 10.9 per cent of the world's electricity production in 2012. In 2015, 13 countries relied on nuclear energy to supply at least one-quarter of their total electricity.

For its part, India has 22 nuclear plants in operation and another five under construction. India's ambitious plans to expand nuclear energy generation are likely to make a valuable contribution to its pledged reductions in emissions intensity. Worldwide nuclear energy avoids, on average, the emissions of about 2½ billion metric tonnes of carbon dioxide each year. Nuclear energy facilities do not emit criteria pollutants or greenhouse gases when they generate electricity, but certain processes used to build and fuel the plants do. This is true for all energy facilities.

Independent studies have assessed nuclear energy's life cycle emissions and found them to be comparable to wind, solar, geothermal and hydroelectric generation. According to the US Department of Energy and the Energy Information Administration report, Voluntary reporting of greenhouse gases 1997, the single most effective emissions control strategy for utilities is to increase nuclear generation.

In fact, in 2015 nuclear energy accounted for 62.4 per cent of US emission-free generation, and US nuclear energy facilities avoided 564 million metric tonnes of carbon dioxide in 2015 across the US. This is nearly as much carbon dioxide as is released from nearly 128 million cars, which is more than all US passenger cars. Without the emission avoidances from nuclear generation required reductions in the US would increase by more than 50 per cent to achieve targets under the Kyoto Protocol. Nuclear energy also prevents approximately half a million tonnes of nitrogen oxide, which is equivalent to that released by 44 million cars.

I understand that the mention of nuclear energy sends shivers down some people's spines. I too grew up in a world that was living through the Cold War—that ideological game of international brinkmanship between the USA and the USSR and their surrogates. During those decades, nuclear war was a clear and present danger, existing not just in movies. The threat was real because nuclear energy seemingly meant nuclear weapons. But nuclear energy is not fundamentally objectionable. However, it must be managed carefully and with strict controls. Indeed, it has the ability to literally turn the lights on for hundreds of millions of people around the world and lead them out of poverty and into a modern, interconnected world. Nuclear power plants are the most reliable source of electricity, operating 24 hours seven days a week for 18 to 24 months before shutting down briefly to refuel.

Our uranium, used in Indian nuclear power plants, will provide reliable baseload power on demand. This bill reflects Australia's responsible decision to supply uranium to India on the basis of the Nuclear Suppliers Group decision and the safeguards that India and the International Atomic Energy Agency have put in place to implement it, as well as the conditions in the Australia-India agreement on civil nuclear cooperation. This bill will give legal and commercial certainty to uranium mining companies in Australia so that they can fulfil contracts to supply Australian uranium to India for civil use with confidence. It will ensure that newly established export streams and the jobs that they support will not be at risk from a successful Australian domestic legal challenge to a decision enabling uranium supply to India. Any future bilateral trade in other nuclear-related material, or items for civil use, will also be protected.

I am heartened by the stance of those opposite on this particular issue. It is a welcome thing to see—a more bipartisan approach, particularly on an issue like this that can significantly lead to reduced poverty in a country such as India. It is a pity that we cannot come together more often as we have on this particular bill.

Australian uranium will help to power India's growth and lift hundreds of millions of people out of poverty. I commend the foreign minister for pursuing this issue to assist the Indian people. It will also ensure Australian businesses and workers are able to benefit.

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

I thank the member. I also thank him for his patience, as was mentioned by the previous Deputy Speaker.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to follow the member for Fisher. I may have referred to him as the member for Fairfax recently in this chamber. I apologise to both the member for Fisher and the member for Fairfax—they are both here. I do not think either of them is offended, though.

Honourable Members:

Honourable members interjecting—

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

Both complimented! I agree that it is good to see bipartisanship on this bill, the Civil Nuclear Transfers to India Bill 2016. Of course, the agreement between India and Australia in relation to this particular energy source was something that was instigated by the Labor government when we were last in government. It is something that has been continued by the coalition government, and we are seeing some of the consequences of that in this bill today.

Australia greatly benefits from our relationship with India, which is the world's most populous democracy. Australia and India have a lot in common, going well beyond our love of cricket. When Prime Minister Narendra Modi addressed this chamber he talked a lot about cricket but he also talked a lot about our shared values as democracies, as people with a mutual commitment to the rule of law, freedom and openness. It was a really wonderful day for this parliament to have the benefit of hearing from the Prime Minister of India in 2014.

In my own state of Queensland we are fortunate to have a big and diverse Indian community. I am very grateful to have been welcomed to a number of events conducted by the Federation of Indian Communities Queensland, under the leadership of Mr Palani Thevar, who is very well regarded and well respected. It has been a tough time for the Indian community in Queensland recently, with the tragic murder of a bus driver of Punjab descent when he was just going about his business; he was at work in Moorooka in Queensland. It was felt very keenly by the Indian community and it was felt very keenly by the community at large. There was a great outpouring of sympathy and condolence for the family and friends of that young man. But there are a lot more happy times than there are sad times when it comes to our relationship with the Indian community in my state of Queensland—and I know that to be the case across this country. That is because of the benefits that Australia gets from our engagement with India and with the Indian peoples. It enriches us culturally and on a very human level of friendship and understanding. Of course, it is also important economically. Trade with India is very important to our economy and must continue to increase. Two-way trade in goods and services between Australia and India totalled only around $18 billion in 2014-15. We can do better through continued work to strengthen the relationship between our two countries.

It has been around two years since the Cooperation in the Peaceful Uses of Nuclear Energy Agreement between the government of Australia and the government of India. In November 2015 the Australian government issued a response to the Joint Standing Committee on Treaties report in relation to that agreement. The report had urged the Australian government to commit significant diplomatic resources to encouraging India to become a party to the Comprehensive Test Ban Treaty and to negotiate the Fissile Material Cutoff Treaty. The Australian government responded to that recommendation saying it has consistently supported diplomatic and other practical efforts to promote entry into force of the Comprehensive Nuclear Test Ban Treaty and negotiation of the Fissile Material Cutoff Treaty and will continue to do so.

I want to place on record my encouragement for both our nation and India to continue to work towards both of these aims. The world would very much welcome India becoming a signatory to the Comprehensive Nuclear Test Ban Treaty. Doing so would be a further act of leadership by India in relation to nonproliferation, building on India's existing record of leadership in relation to nonproliferation. It was the Prime Minister of India who in 1954 called for a standstill agreement on nuclear testing, and India has had its own unilateral moratorium on tests in place for almost 20 years. If India were to sign the Comprehensive Test Ban Treaty, it would be an important step towards having that treaty come into force. That would be of great benefit to the entire world.

In speaking to this bill I also want to acknowledge that the treaties committee report in relation to the agreement between Australia and India contained additional comments from Labor members. Those comments included a range of concerns. The work of the committee was very important. It was because of concerns raised both in the additional comments from Labor members and in the majority part of the report that the governments of Australia and India exchanged correspondence setting out their mutual understanding of the 'consent to enrichment' provisions of the agreement.

Another concern that Labor members raised was about tracking. The tracking arrangements are contained in the administrative arrangement to the nuclear cooperation agreement. That arrangement is said by the government to be confidential. I want to place on record the importance of the government ensuring that the tracking of nuclear materials occurs properly and reporting is rigorous. The Labor members of the committee also raised concerns about how Australia could be assured that international atomic energy safeguards would apply to nuclear material in India. This bill, if passed, will apply only where officials are satisfied that those safeguards will apply.

The explanatory memorandum to the bill notes that the preamble to the Australia-India agreement recalls commitments made by India to separate its civilian and military nuclear facilities and programs and to place its civilian programs under IAEA safeguards. It also notes that in paragraph 2 of article 7 of the agreement it is provided that IAEA safeguards shall apply to India's civilian facilities in accordance with the India IAEA agreement. I urge the Australian government to continue to ensure that those safeguards apply.

Officials engaged in the uranium trade should seek to be genuinely and properly satisfied that strong safeguards are continuously in place. Australia should continue to work within the international community and continue to press for non-proliferation and nuclear disarmament globally. I thank the many Australian officials and the many Australian members and senators from both sides of this parliament for all of their work that they have done in relation to non-proliferation and disarmament and I thank you for the opportunity to speak to this bill.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

This Civil Nuclear Transfers to India Bill 2016, which enables uranium sales by Australia to India, with very strong safeguards in relation to the use of that uranium, is the culmination of what has been a near decade-long effort and mostly bipartisan, which—to support the words of those former members speaking in this chamber—is just fantastic to see.

It is nevertheless a very challenging issue we are dealing with. It was in 2006 that the then Prime Minister, John Howard, first signalled Australia was prepared to consider uranium sales to India subject to appropriate safeguards. Before that it was the policy of the Liberal Party and the Labor Party that uranium would not be sold to any country that was not a signatory to the Nuclear Non-Proliferation Treaty, and India is among the four nuclear weapon states that are not signatories to that treaty. So the statement by the then PM represented a significant change to the joint approach that had been in place since the treaty was developed in the 1960s.

Today, notwithstanding the treaty, there are nine nuclear powers. The original five—United States, Russia, United Kingdom, France and China—plus now Israel, Pakistan, quite possibly North Korea, and India. A qualified success for the treaty, some might say, with a near doubling of the number of nuclear armed powers but the general view is that, but for the NPT, that number would be significantly higher as would be the obvious dangers of a much larger nuclear club.

What the world has been grappling with since the outbreak, apart from maintaining pressure to ensure there is no further widening of the club, is how to deal with those states that have broken away from it. Very significantly, under the terms of the treaty, none of those states can access uranium or nuclear technology from signatory states even for totally peaceful purposes unless they forsake those weapons, and of course none of them will do that, for a variety of reasons. No doubt the central reason is the one ascribed to North Korea in just the past few weeks by the outgoing United States Director of National Intelligence, James Clapper, who said of North Korea that they regarded their nuclear weapons program as 'their ticket to survival'. Not that I in any way condone their activities in North Korea. Having lived and worked in that region for many years, including spending time in both South and North Korea, you would find me one of the last people in this chamber to be making excuses for North Korea. Nevertheless, as James Clapper articulated, each state has had what were clearly irresistible forces at play in establishing their nuclear arsenals, and that would fit the Clapper description.

The history of Israel is very well known and the forces at work in other breakaway states are just as obvious. India has had border issues with China—an early nuclear power—for many, many hundreds of years, and any interest in parity with China would of course be logical. And it is no secret that India has had a particularly tense relationship with Pakistan, such that both now have nuclear arsenals. Each in large part, no doubt, was prompted by the other's access. The bottom line, however, is that these nuclear states will not forgo their nuclear status, and we have to find ways of dealing with that reality. In the case of India, to which this bill relates, there are two large, interlocked issues that have led many states, over the past decade or so, to accept that, as long as safeguards exist—outside of but linked to the nonproliferation treaty and the several regional treaties that interlock with it—and as long as they can be met, there is a pressing case to foster the peaceful use of nuclear power in that country.

India is a democracy, the largest in the world. It is the second most populous country on the planet, only marginally behind China's 1.35 billion people, with 1.25 billion people. I have worked in India. I have seen the scale of the moral challenge and the economic challenge that that country faces to bring literally hundreds of millions of people out of poverty and, in the case of many, extreme poverty. Over 300 million Indians, around a quarter of the population—almost as many people as live in the United States—have zero access to electricity. This is a situation that obviously has to improve as quickly as is humanly possible, and India has embarked on that task with such tremendous determination that it now has the fastest economic growth—consistently over seven per cent—of all major economies, and that includes, notably, China.

A major part of the plan, a fundamental part of the plan, is to expand nuclear power from 5.3 gigawatts of capacity in 2014 to between 150 and 200 gigawatts by 2050. There is no real alternative to this growth in the nuclear share of its generation—expected to be from two to 25 per cent—any more than there is an alternative to continuing strong growth in the use of coal, such is the scale of the task and the viability of various alternative generation options. The suggestion from a prominent Green in the Senate that we should reject this bill because, by selling uranium to India, we would simply be contributing to an arms race with Pakistan and that instead we should be encouraging India to concentrate on solar power is just more of the garden-pixies stuff that we usually hear from our typical source of feel-good nonsense, the Greens.

India is in fact investing mightily in solar, but it will also have to continue to invest mightily in coal and in nuclear if it is to provide the people of India with what even the Greens take for granted: the ability to turn on some lights, to protect food in the fridge, to maybe run a washing machine or turn on a TV—things that we all take for granted but that would indeed be luxuries for so many millions and millions of people in India. In terms of coal, as disconcerting as it is to the Greens, the Adani coalmine in Queensland, which has had to run the gauntlet of Green opposition, will produce enough energy to power 100 million Indian homes for 90 years. Yes, India needs solar. It needs coal energy. And India needs nuclear energy.

It was the United States that first recognised the imperative of finding a way through the impasse created by the NPT and triggering a process that would ultimately enable India to tackle this enormous developmental task, thus taking us to where Australia is today with this bill.

In 2005, then President Bush said that, subject to the appropriate safeguards being in place, the United States wanted full cooperation with India on the peaceful use of nuclear power. That was followed in 2006 by a similarly qualified statement from John Howard. The Prime Minister was even more positive in 2007 that those safeguards could indeed be developed. But then Labor won office and overturned that position, and this remained the case for almost four years. To her qualified credit, Julia Gillard, in 2011, as Prime Minister and with support from the likes of the pragmatic Martin Ferguson—one of the very few good, sensible performers through that Rudd-Gillard-Rudd debacle—took a proposal for the reversal of that position to Labor's national conference and won a victory on the floor.

In a very real sense this was a catch-up measure; hence the qualification of credit due to Julia Gillard. It was clearly a catch-up measure because, during Kevin Rudd's first stint as Prime Minister in 2008, Australia did not stand in the way of a crucial step towards the deal that was subsequently struck. That step was approval by the Nuclear Suppliers Group—the 30 countries, including Australia, that, between them, provide uranium, the fuel rods and the technical expertise that is required by the nuclear fuel cycle—of a set of principles that could clear the way for access by India, subject to India agreeing to safeguards to be overseen by the International Atomic Energy Agency.

By enabling passage of that proposal to find a way through the NPT impasse via the Nuclear Suppliers Group, Kevin Rudd was of course being what Kevin Rudd always was: a politician who played both sides of the debate. Publicly he opposed the deal, because that is what the Labor Party wanted at the time, but he did not stand in the way of the process that set it in motion, the outcome of which was ultimately endorsed by his successor in 2011. Julia Gillard set in train the detailed negotiations to consolidate the safeguards agreed by the group, and that would have to be endorsed by the International Atomic Energy Agency. Tony Abbott, the member for Warringah, when he became Prime Minister in 2013 concluded that process and signed off in 2014 on the Australia-India bilateral agreement, which came into force last November. Indeed, what we have here now is a bipartisan effort.

What the US recognised, what the Nuclear Suppliers Group recognised and what John Howard, Julia Gillard and Tony Abbott recognised was that access to uranium for the peaceful purpose of power generation was and is so important to India that refusal to find a way through would be improper on moral grounds, while also representing an unnecessary risk to wider relationships. It was such an important foundational issue for India that, if we had failed to meet their needs, we would not really expect to be regarded as true supporters and worthy partners in the massive task that they have underway in that country to bring hundreds of millions of people out of poverty. And we have found a way to do it that preserves the spirit of NPT.

India has agreed to all the constraints that were demanded in terms of accountability—especially in relation to accountability in separating their civil nuclear program from their weapons program—to enable trade to begin. Its commitment to those constraints has been accepted by our own Australian Safeguards and Non-proliferation Office in DFAT, the Department of Foreign Affairs and Trade, as well as by the United States, by all members of the Nuclear Supplier Group and, importantly, centrally, by the International Atomic Energy Agency, which will have oversight.

The benefits from the passage of this bill will be shared—it is good for both countries. India gets from Australia a reliable, secure source of uranium to help it meet its targets for a massive increase in the availability of energy for domestic and industrial wealth-generating use, and Australia gets a very significant economic and jobs boost. The Minerals Council estimates that the workforce in the uranium industry could double, from 4,000 to 8,000 people, as we provide around 30 per cent of India's growing uranium needs—with most of these jobs, it should be noted, in regional areas.

In 2013, the Australian uranium industry earnt $623 million. In 2030, it could be $750 million and even double that, around $1.5 billion, depending on India's progress in meeting its targets. What is more, this engagement will inevitably open up many more opportunities of mutual benefit—in agriculture, mining, infrastructure and the already very important education sector, and areas like water technology, health, legal services, financial services and more. India is already a top 10 market for Australia. It is our 10th largest trading partner and our fifth largest export market, led by coal and education services.

The opportunity to expand this already significant trade into a much more complex, deeper, more fruitful relationship is linked to this bill. If we do not pass it, these opportunities will be diminished. With passage of this bill, India will be convinced that we are a worthy partner in the massive job that they have underway in that great country to bring hundreds of millions of people out of poverty, and the benefits down the track could be greater than anything we now can imagine. I commend this bill to the House.

Tim Hammond (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I join the chorus of bipartisanship by rising to speak to the Civil Nuclear Transfers to India Bill 2016 and I thank all honourable members before me for their contributions to this debate. Five years ago, almost to the day, my predecessor, Stephen Smith, the former federal member for Perth, answered a question during question time in this place reflecting on the nature of Australia's relationship with the US. In the process of talking about the shift of the geostrategic centre of gravity to our region, he not only reflected on the rise of China but also emphasised the often unacknowledged rise of India. India is the world's second most populous country, its most populous democracy and is by now the third largest economy by purchasing power. A country of over one billion people has a lot of challenges, of which providing low-carbon energy is one.

The following year, Julia Gillard made a prime ministerial bilateral visit to India, as we know, and high up on the agenda was Australia's transfer of nuclear fuels to India to help them address their energy challenges. It is that context which frames this bill. Labor's platform forms the basis of our support for this bill. We recognise that India is an important strategic partner for Australia. We appreciate the great benefits to both nations that can result from strategic cooperation and we acknowledge the importance of India's application of strong safeguards regarding the safety of the trade in civil nuclear fuels consistent with international guidelines of nuclear supply.

Australia is subject to a number of international agreements regarding nuclear transfers, including the South Pacific Nuclear Free Zone Treaty and the Treaty on the Non-Proliferation of Nuclear Weapons. We are a member of the Nuclear Suppliers Group and have been a member of the board of governors of the International Atomic Energy Agency. These memberships and treaties bring with them legal obligations and make miners in our country subject to strict compliance regimes around the safety and security of nuclear fuels. In that context, this bill clarifies that decisions approving civil nuclear transfers to India are taken not to be inconsistent with Australia's international obligations around nuclear safeguards if particular conditions are met. The bill will provide legal certainty to resource companies, a matter which I will explore further in a few moments in relation to the importance of a stable and certain mining sector.

In relation to safeguards, what are the safeguards that enable Australian uranium to be exported to India? There are many, but the key principles—at least the way I see them—are as follows. Firstly, the key elements of these agreements include India's agreement to separate its civil and military nuclear programs and facilities. This is as self-explanatory as it is sensible. Secondly, India has agreed that its civil nuclear facilities will be subject to external safeguards and IAEA inspections. Thirdly, Australia and India have agreed that the uranium exported from our country will only be used for peaceful purposes consistent with the objectives of non-proliferation of nuclear weapons or for any other military purpose. These safeguards are upheld by the Nuclear Suppliers Group, NSG, and that framework, as well as the International Atomic Energy Agency, the IAEA, framework, which I have previously referred to, and the Australia-India agreement on civil nuclear cooperation, with particular reference to article 7 of that agreement.

In relation to the Australia uranium export context, Australia's uranium has been mined since 1954, and today we have three mines currently in operation. Australia's known uranium resources are the world's largest—almost one-third of the global total. In 2015-16, Australia was the world's third-ranking producer behind Kazakhstan and Canada. As we know, all production is exported.

While I acknowledge that in my home state of Western Australia the issue of uranium has at times been vexed, I am pleased to note that, at a national level, the Labor Party has taken a cautious but positive approach to uranium mining and export under very strict regulation. This is largely through the work of predecessors Martin Ferguson, who approved the Four Mile uranium mine in 2009, and the subsequent efforts of Gary Gray, the former member for Brand, during his time as Labor's resource spokesperson. Indeed, much credit must and should also be given to former Prime Minister Gillard, who overturned the ban on the sale of uranium to India and paved the way for the negotiations that have led us to this point in time and subsequently to this bill.

I would like at this point to return to the legal certainty and stability that this bill will create for the resources sector here in Australia. This bill will provide that certainty and, as a result, the strong expectation and indeed the assumed reality are that it will bring government revenue and, most importantly, it will bring jobs. We can contrast that with what is currently being discussed in the context of, again, my home state of Western Australia and what the Western Australian leader of the National Party, Mr Brendon Grylls, is doing at the moment in relation to his proposal on increasing royalty rates on the iron ore prices for two of the large mining companies in my home state—the effect of which is almost certainly going to undermine investment certainty in our resources sector.

I would just like to spend a few minutes on this issue and the importance of stability and certainty. As many in this chamber will be aware, what is being proposed by Brendon Grylls is a $5 a tonne iron ore mining tax that would, at first instance, apply to BHP Billiton and Rio Tinto, which is, according to Mr Grylls, expected to generate about $3 billion per year. Unsurprisingly, it has been condemned and criticised roundly by those two companies, Rio and BHP, who would be the first companies that would have to pay. Both would have to pay, approximately, an additional $1.5 billion a year. Both have said it will hit jobs and investment in Western Australia. However, leaving aside what is obviously the self-interest of those companies in relation to criticising that bill, if one steps back and takes an independent view as to the efficacy of this proposal, one will soon arrive at the same conclusion as BHP and Rio—and there are a few reasons for that. Firstly, the problem with the design of this tax is that it bears no relation back point to profitability. Royalties, and particularly the significant increases like the royalties that Grylls is proposing, become effectively a tax on production; not a tax on profits. What that means is that the fortunes of the companies to which the increase in tax applies is entirely at the behest and the mercy of the market—sometimes which is entirely out of their control—which then relates back to being a threatening prospect in relation to jobs. That is because, depending upon the buoyancy of the price per tonne of iron ore, the new royalty being proposed by Grylls could mean the difference in new projects not even going ahead, when they could actually be developed quite profitably under the current market conditions. This, of course, will destroy job creation and economic activity. For a state like Western Australia, where unemployment is running well above the national average, this is very much the last thing that we need.

Secondly, the problem with this tax is that the arbitrary nature of how it is being applied means that there is absolutely no comfort whatsoever for those other commodities that are the subject of state agreements. That includes other iron ore companies. It includes other commodity companies. But, if one also then extends the logic of Mr Grylls's proposal, those companies and producers that sit outside the realm of the state agreements should not find any comfort at all in relation to what is being proposed. Should this proposal gain significant or any traction, so to speak, by virtue of its implementation, what is there to stop Mr Grylls simply aiming his sights at commodities? Given that the agricultural sector often relies upon profitability in the context of prices per tonne, why would there be a ceasefire at commodities? Can you imagine just for a minute, Mr Deputy Speaker, the damage caused to our economy, particularly in Western Australia, if such an approach were applied, for instance, to tonnage rates for grain? There is really no distinction, when one thinks it through, between ore and grain in relation to what Grylls is suggesting, insofar as he is suggesting a unilateral change to a long-established way of conducting one's business.

Thirdly, if Mr Grylls is looking for meaningful ways in which to inject revenue into the Western Australian economy, this approach is looking entirely in the wrong direction. The inevitable effect of the manner in which the GST works and the redistribution as dictated by the Commonwealth Grants Commission means that the proceeds of Mr Grylls's proposal would actually be spread all over the country and not, as he is suggesting, go into the coffers of the Western Australian Treasury.

Again, I come back to the notion of bipartisanship, which has characterised the debate in relation to the passage of this bill. We can find the same sort of bipartisanship present in the approaches taken by both sides of the political divide in the assessment of the viability of this proposal. If one scouts around to look at the public comments in relation to this proposal, one can see that it has been roundly condemned by all sides of parliament, both state and federal. They are lining up a mile long to provide a view which roundly criticises this proposal. Look no further than the current Western Australian Premier, Mr Colin Barnett. Also look at this Prime Minister. Look at Senator Cormann and also our state Labor leader, Mark McGowan; the shadow Treasurer, Ben Wyatt; and a host of others. It is true that at one earlier stage the Deputy Prime Minister was cautiously backing in this proposal, but he has since retreated at a rate of knots. Perhaps that begins to tell you something as to the level of support for this proposal that actually exists.

But, pushing all of that aside, let us focus on the timing. Unlike this bill, in which the timing is very much right to provide some positive signs to an industry that has been struggling for many, many years that there is some stability and certainty insofar as the opportunities that the Civil Nuclear Transfers to India Bill presents, the opposite can be said in relation to Mr Grylls's mining tax proposal. This is the worst possible time in the industry to impose a new tax on mining production. The Western Australian economy, led by the Liberal-National Party, is basically on life support. Total private sector investment in the state has collapsed by more than 30 per cent over the last two years and state final demand is down by nine per cent in the same period.

In conclusion, the passage of this bill will have a range of flow-on effects for Australia, all of them positive. The exportation of uranium to India will create an increased export market and jobs—most importantly jobs—over the long term. The projections suggest that, by the early 2020s, India could require up to 2,000 tonnes of uranium oxide each year in order to fuel its reactors. Australian uranium suppliers are well placed to take advantage of this significant market, with large known uranium reserves. There is also strategic benefit to increased cooperation with India. This bill is needed in order to ensure that Australian export of uranium to India can proceed unhindered and in a safe manner. It will give greater certainty to exporters and create Australian jobs, and it will also, most importantly, benefit Australia-India relations.

David Gillespie (Lyne, National Party, Assistant Minister for Rural Health) Share this | Link to this | Hansard source

Trade between Australia and India has been growing rapidly for many decades, in education, tourism, service industries, minerals and, indeed, energy. Like thousands of Australians, I too have travelled to India and it is a fascinating country, rich in history, culture and achievements. India is the world's largest democracy. Everyone knows there is incredible wealth in the country of India, but there are many areas that are poor, without sufficient access to power. The Prime Minister, Narendra Modi, leads a very progressive administration and it has great plans to lift many people out of poverty. Currently, India has 22 nuclear power plants producing six gigawatts of energy. Three hundred million people, though, are without access to energy and electricity, and many of them are, as a result, living in poverty. Lifting people out of poverty requires a lot of economic development, which requires an awful lot of energy, and that is what the Indian government is attempting to achieve. It plans to raise nuclear power production to 63 gigawatts, or 25 per cent of India's total energy requirements, by 2032. It estimates it would need up to 2,000 tonnes of uranium per year from Australia to supply those needs.

The bill that we are debating here, the Civil Nuclear Transfers to India Bill 2016, clarifies that decisions made approving civil nuclear transfers are taken not to be inconsistent with Australia's obligations under several treaties, including the Treaty on the Non-Proliferation of Nuclear Weapons and also the South Pacific Nuclear Free Zone Treaty, as long as particular conditions are met. The conditions require the application of nuclear safeguards under India's agreement with the International Atomic Energy Agency. This was originally signed in 2008 and there were additional protocols added in the India-IAEA agreement in 2009. This agreement is specific to India and defines and provides safeguards India now has in place at civil facilities. It covers nuclear equipment and material it imports, including uranium from Australia. We in Australia are part of the Nuclear Suppliers Group and supported work to define a framework which allows nuclear trade with India. We have the Australia-India nuclear cooperation agreement, the negotiations of which commenced under the previous Labor government in 2013, were continued by the Abbott government and came into force under the Turnbull government in 2015. The Joint Standing Committee on Treaties agreed in 2015 to bring this treaty into force. The bill will codify what Australia's requirements are, and ensures various acts and existing treaties are met.

Indian civil and military nuclear facilities are separated, and the civil ones are placed under the IAEA India safeguards. Twenty-two civil facilities exist under this agreement. If this agreement were ever changed, there would be a requirement that the Australian minister must notify parliament.

India has a population currently of 1.3 billion people, which is 18 per cent of the world's total population. This is predicted to grow to 1.7 billion people by 2050. It is one of the fastest-growing major economies in the world. It is party to the Convention on Nuclear Safety and has been an active participant in triennial reviews since 2005. Following the Fukushima tsunami, India had two of its operating nuclear facilities reviewed again by the International Atomic Energy Agency, and again in 2015 the Integrated Regulatory Review Service noted India's strong commitment to safety. India now has agreements under the Nuclear Suppliers Group and the IAEA with Canada, Japan, the United Kingdom, Russia, France, the Czech Republic, Argentina, Kazakhstan and Namibia. All of this demonstrates that India has extensive recognition internationally as a safe place to send uranium.

Australia supplies 10 per cent of the world's uranium and has 32 per cent of known world uranium supplies. We mine it at three mines: Ranger, Olympic Dam and Beverley. Eighty per cent of that is in South Australia. Uranium demand is growing at 4.8 per cent per year. We export uranium to the United States, countries in the EU, Japan, South Korea and China, including Taiwan.

Australia's involvement in nuclear energy is long and rich. The first small reactor was constructed at Lucas Heights in the early 1950s, and I recently had the pleasure of visiting our now replacement OPAL reactor at Lucas Heights. It is a cutting-edge research multipurpose reactor that is used to produce radiopharmaceuticals and isotopes for medical diagnosis and treatment of cancers. It is not used to generate power that would drive electricity generation. But the production of nuclear medicine isotopes has grown from 550,000 doses to over 10 million doses per year, and now we, at the Lucas Heights facility, supply about 30 per cent of global demand, and this is a major export for the country.

Thousands of research hours are utilising the electrons that are produced in the reactor to solve complex problems in industry and metallurgy. Our national synchrotron in Melbourne is the other piece of nuclear technology that utilises the electrons for research—again, that being the site of thousands of hours of research work.

In conclusion, in strongly supporting this bill, I would like to briefly mention the benefits of nuclear energy. It is clear that nuclear energy is an internationally proven technology, used since the 1950s. It currently provides around 11 per cent of the world's electricity needs. It is especially suitable for large-scale continuous electricity demand which requires reliability—namely, baseload. It is a low-carbon electricity source—the only one which can provide large-scale baseload power. The life-cycle emissions from nuclear power are similar to some renewable energies but without the need for backup supply. There are 450 reactors worldwide and 60 under construction. It is growing the fastest in China, where they have completed 30 new reactors since 2002 and have a further 20 reactors currently under construction. India, with 22 nuclear reactors, has another five under construction, and there are a range of other countries, including the United Arab Emirates, Turkey, Vietnam and Argentina, that are building or planning to build nuclear reactors.

Whilst the current uranium price is low, the forecast is that it will increase in the future to meet the growing demand for nuclear power in all these countries, including in India. It is interesting to note that Australia's current uranium exports generate more electricity than all of Australia's current electricity needs. This bill will facilitate and give commercial security to Australian exporters and miners of uranium, and we need to put in place certainty for contracts and supply agreements of this size and complexity to be secure in the legislative sense. I commend this bill to the House.

Debate adjourned.