Katie Allen (Higgins, Liberal Party) Share this | Link to this | Hansard source

It's no surprise that the COVID-19 pandemic has affected trade worldwide. It's highlighted our need to diversify and solidify our trade portfolio. It has also shone a light on our internal strengths and limitations and, more importantly, our trading opportunities. As always, the fundamental principle should be about putting our national security first, and this remains so. I stand in order to thank the committee that I sat on, the Joint Standing Committee on Trade and Investment Growth, including the chair, the member for Dawson, George Christensen, and the member for Cooper, Ged Kearney, who is the deputy chair of this committee. The committee has released the report, Pivot: diversifying Australia's trade and investment profile. The committee had originally undertaken an inquiry into the assessment of diversification of our trading services and it became very clear during that inquiry that, in fact, we needed to look more to diversification of trading partners, and that initiated the inquiry that commenced early in COVID, in February. This inquiry become even more important and even more urgent as COVID emerged. The recommendations of this report are focused around three key themes: diversification of trade, monitoring foreign investment, and protecting our national security interests. We know that trade has long been a driver of Australia's wealth, and exports are a key pillar of that. In fact, Australia is regarded as an export nation. We have long been beneficiaries of the opportunities created by trade through growth, jobs, increased competition and improved living standards.

I have a bunch of women in my office at the moment—young women from the Australian National University who are in their first and second years and are here to talk as a female voice in the house of parliament. I have been listening to them about their excitement for their future and their excitement over their degrees. We were talking about how we want them to be job-ready for the future. It's important when they're at university that they think about what their future will be, but, as a government, it's equally important that we think about how to ensure that our economy is ready for 21st century jobs and that we improve and diversify both our trading services, to make sure the jobs are there, and our trading partners, so that we can be sure that we will continue to be a strong trading nation.

We know how important international relations are in this modern and globalised economy. Our most important trading partner, as everyone knows, has been China in recent years. It has been a productive and fruitful trading partnership that has delivered prosperity for both nations. But our trading relationship with China has recently come under the spotlight. There are tensions in our trade relating to our exports, and this has been concerning not just for Australian exporters, not just for Australian businesses, but, indeed, also for the people of Australia. I'm certainly hearing that loud and clear from my constituents in Higgins.

During the inquiry, we heard widely from experts versed in diplomacy from right across the political spectrum about our over-reliance on China as both a foreign investor and a trading partner. It was clear from many witnesses that we heard from that a prosperous relationship with China will undoubtedly and necessarily continue for decades to come. This is not about reducing that strong and prosperous trading partnership. We heard strong words of caution about being over-reliant on one single form of trading partnership, and that is what this report has been about: diversification of trading partners. What we heard from witnesses was the concept of a China-plus approach: continuing our strong trading interactions with China, but also developing alternative trading partnerships so that we have a China-plus approach to our trade and exports.

Supply chain constraints revealed by the COVID-19 pandemic have made it abundantly clear that we need to diversify our trading partners and shore up our internal manufacturing capacity. This is important, and I think Australians know this, because there have been quite significant interruptions to our supply chain, including for PPE early in the pandemic. I'd like to congratulate the Minister for Health, Greg Hunt, for the wonderful work he did in ensuring that we had enough masks and gowns to deal with a very rapidly-evolving situation, followed by ensuring that we secured our COVID tests. As we now know, we're also having to deal with a COVID vaccine supply issue. Again, because of his early work and his identification of this strategic threat, he was quick to move to have onshore manufacturing of our COVID vaccine. I'm very delighted to say that in the coming weeks the AstraZeneca vaccine will be manufactured onshore at CSL in Melbourne. That is because Australia recognises that we need to have formal and solid trade links and we need to make sure that our supply chains remain that way.

On both points, Australia needs to not put all of our eggs in one basket. We understand that overreliance on any one trading partner is just not sustainable, particularly should the trading partner no longer need or want the same level of our exported goods and services. Recommendation 1 of this report suggests maintaining our current trading relationships as well as working to expand them with other major players. This recommendation also focused on diversifying our range of exported goods and services. Recommendation 13 in this report also speaks to significantly increasing our sovereign manufacturing capability. The Minister for Industry, Science and Technology, Karen Andrews, has been driving the Modern Manufacturing Initiative to ensure that the six pillars of our modern manufacturing future are front and centre of the strategic direction of our government. They include energy, space, defence, food and ag, health, and resources and critical minerals.

This modern manufacturing capability needs to be a sovereign capability. We have already seen this play out through our demonstrating strong resilience and adaptability through the COVID pandemic, with pivoting towards the making of our own supplies of PPE and, now, as I said before, the onshore manufacturing of the COVID vaccine. This endeavour is further supported by recommendation 14 of the report, to ensure adequate domestic supplies of key resources such as fuel and medical supplies. I fought hard to make sure our supply of panadol or paracetamol from India was kept in line. We had to apply quite a lot of diplomatic pressure. I thank the Minister for Finance, who was the previous minister for trade, Simon Birmingham, for the excellent work that he did to ensure we would have critical medical supplies coming to our shores in a timely manner.

The Australian community has also raised concerns about the level of foreign investment in Australia. I have heard this firsthand from some within my community. I know this is important, because people have been concerned about our interactions with other trading partners. Lastly, and perhaps most critically, is the consideration that must be given to all matters of national security. That remains a top priority in redesigning and reinvigorating trade and investment in Australia. Australia has worked hard in building a culture and a country we can all be proud of—one that is impressively multicultural and welcoming. This must remain and continue. In fact, every MP in this House, I would argue, enjoys the citizenship ceremonies right across this country, where in a bipartisan way we celebrate the multifaith, multicultural diversity and rich tapestry that is our nation. We need to support and continue this, but we also need to make sure that we are clear-eyed and open-minded about potential risks. Recommendation 6 of this report suggests taking steps to increase industry awareness of our national security and national interest risks in relation to trade and investment.

I've also heard from my electorate that there is a growing concern about foreign influence in our world-class education institutions. That is why recommendation 9 of the report resonates. It asks the government to work with the states and territories, industry and the university sector to investigate new options to increase domestic funding for universities and university research. I'm proud of my advocacy in this capacity, having previously been a university professor and knowing that there is cross-subsidisation of universities from international student profitability into the research sector. I fought very hard to make sure that there is some funding—$800 million of funding—being put towards research to help the universities through this transition and overreliance on international students. But we also need to ensure that universities publicly disclose the receipt of funding, including for research, from foreign state linked bodies and individuals. We also need to make sure that the veto powers contained in the Australia's Foreign Relations (State and Territory Arrangements) Act 2020 allow restrictions on foreign state linked funding to Australian universities where such funding is considered not to be in the national interest.

In conclusion, I thank the committee chair, the member for Dawson, the deputy chair, the member for Cooper, and my fellow committee members and all those who made submissions on this incredibly important issue. I commend this inquiry report to the chamber.

Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I'm not a member of this committee, but I've got an interest in trade policy, and last term I did spend a couple of years on the trade and investment growth committee so I took at the report. Honestly, 12 months of work and this is what they come up with. You don't know whether to laugh or cry. It's great bag of platitudes, some motherhood recommendations but the most ridiculous thing, the astounding thing, is it reads like the Liberals haven't been in government for the last eight years. They've just discovered all these new problems and things that need to be fixed. It's astounding. It's almost like there isn't a trade crisis, like there are not still 53 ships stuck off the coast of China. The last time I spoke on trade we thought that was part of the comeback strategy—'Come back home. They don't want you!' We've stuffed up the relationship so badly they don't want the ships. They're still there.

International education is smashed. It's our fourth largest export sector, worth more than 240,000 jobs in this country. There are more jobs from international education than there are from the mining sector or the agriculture sector. What industry support has international ed had? Zero. Last week we heard $1.2 billion of cheap flights to marginal seats to support bits and pieces of the tourism industry, if they're lucky enough to be in marginal seats, but not a dollar for the international ed sector—just platitudes in this report.

Anyone speaking on this would run out of time to talk about the good bits, but let's just have look at diversification. The government have made a great new discovery. In their eighth year they've discovered that we're a bit dependent on China, our largest trading partner. The previous speakers talked about COVID—it was all revealed because of COVID. What nonsense. Since the government came to office our dependence on China for trade has increased, that's nothing to do with COVID. When this government was elected 26 per cent of our trade was with China. It's now 35 per cent. It's 35 per cent and they have discovered a new problem. Maybe the member for Dawson's strategy to deal with diversification is to do everything he can to talk down and insult our major trading partner. The report title here is: Pivot: Diversifying Australia's trade and investment profile. He's got a whole website calling it: 'the China inquiry: enough is enough'. That's his strategy for diversification, talk down our biggest trading partner and the others might look a bit even as the country gets poorer.

It is true that we're facing a serious and growing trade crisis with China but the focus on this crisis—I should say the current short-term boost in iron ore exports—obscures the reality that trade performance under the Liberals has been patchy at best and has stagnated or gone backwards on key metrics in their eighth year. Export diversification in simple terms is: don't put all your eggs in one basket. Like I said, it has become more concentrated. The latest global data—they don't like hearing about data and facts; it confuses the spin and the marketing if you talk about data and facts—the International Monetary Fund's export diversification index, showed that Australia's export diversity is now ranked at 84th globally. That's a level that was last seen in this country in the 1960s. They have been in government for eight years and they have just discovered there's a problem.

But let's have another look. This a good dot point, isn't it? Enhanced diplomatic capability to identify and secure new supply chains and markets—that's terrific, that would mean not cutting DFAT. The government cut another six diplomats this is year, including two from Papua New Guinea. I agree with the member for Dawson's dot point there. But what they have been doing in every year of government is cutting our diplomatic capability. It's like Fantasy Island. It's another universe. Enid Blyton might've been the ghost writer of this report.

Then we get to recommendation 2—the government, so the committee thinks, 'should create greater trade opportunities for Australian exporters'. Well, that sounds like a good idea doesn't it? Good on you, government. But then we get to the first dot point: we're going to deliver on our India Economic Strategy. That's a terrific idea. It cost you $1.5 million three years ago, in 2018—commissioned from Peter Varghese, the former secretary of the foreign affairs department. Guess how many recommendations the government's implemented three years on from the report? Any bets? One out of 20. The only thing they have done is open a new office in Kolkata. They have done nothing on the other 20 recommendations, the serious meaningful ones. The Prime Minister announced this with great fanfare. He loved the announcement, but he hasn't actually delivered. But it's good the member for Dawson is saying, 'We should implement a report we got three years ago.' That'll fix the problem! He also says, 'We should encourage people to make greater use of free trade agreements and eliminate non-tariff barriers.' Well, that's a good idea, isn't it? But there is no honest auditing of the outcomes of these free trade agreements. It was Andrew Robb who stated, 'We don't have an economic policy, so let's do free trade agreements everywhere we can.'

Anyone who knows about trade theory would tell you that you want global agreements, and, if you can't get global agreements, you want regional agreements. Only then—sometimes, maybe—do you go to bilateral free trade agreements. Trade economic theory shows they will actually often confuse the market and make things more complex and raise costs. But the government is scared to undertake a proper analysis of the impact of their free trade agreements. They just want to keep announcing them. They never go back and look at whether they've achieved anything or whether they have grown or harmed the economy. They just want to announce new ones. But non-tariff barriers are not a new issue. If you talk to any of the businesses in my electorate in the great Dandenong manufacturing precinct, they'll tell you, it's not free trade agreements they want. Tariffs are not the issue in the vast majority of markets; it's the non-tariff barriers, the cultural issues, the standards and the dodgy checks at the borders. This takes hard work and it takes agency capability. And yet, they keep cutting the departments that are supposed to do this work. It's just nonsense.

Then we get recommendation 4. This is terrific! It says:

… the Australian Government increase its encouragement of key Asian languages and cultures for K-12 students, to create better understanding and Asia-capability for future generations.

It's good that we understand that flying to and from Manila all the time is not actually increasing the nation's aggregate Asia capability—that's a good start. But the hypocrisy is profound. This was the government that, eight years ago, scrapped the Rudd-Gillard government's initiatives that have been doing this very work for those six years. The Rudd-Gillard government, the former Labor government, had the National Asian Languages and Studies in Schools Program and they had the Becoming Asia Literate grants to schools, which actually did this work. This is the government that scrapped it. The Prime Minister has been in the cabinet for all of those eight years, and now we've got government muppets saying, 'It's a good idea to encourage people in future generations to learn Asian languages.' It is a good idea. But there is a say-do gap. You say it's a good idea, but all you do is cut the funding and not act on the reports and the recommendations. Why should any Australian believe anything is going to be different because of these nice platitudes and words?

This recommendation is a good one too. It says we should:

We could have a raffle! We could start having fundraisers for universities! This is the government that, year after year and budget after budget, has done everything to cut and try to cut billions of dollars from university funding. Now they're saying we need to go and do more sources. I heard the previous speaker, the member for Higgins, say with a straight face, 'There's been an over-reliance on international students.' Well, that's because the Prime Minister and the Treasurer, two years ago, were out there telling the universities to go and recruit more international students as they took another $1.1 billion out of the university funding. What hypocrisy.

You cut the university funding and then you said: 'You're too reliant. Go and recruit international students.' Then you said: 'You're too reliant on international students. What have you been doing, silly universities? Go and find some other money.' We could have a cake bake for the universities! That might be what he means. Who knows what he means? Maybe he means: do the only other thing the government has done, which is jack-up student fees. This is a government under which, in four years, we've seen student debt rise per average by student by 36.7 per cent. Their only university funding policy so far has been to cut the public funding and load the debt on to students and make the next generation pay. Maybe that's what they mean?

We've got the Sovereign Manufacturing Capability—he said 'capacity' but I think he probably meant 'capability', but that's the member for Dawson. But it's not a bad idea either. He is representing an electorate where manufacturing is still the largest single biggest employment sector. But maybe they could have not chased the car industry out of Australia. That would have been a good idea. Then we would have a whole industry there with modern technology and a supply chain. But, no, they did that.

This recommendation is good too. It says:

I actually think that's a good idea. I support the video game development industry.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Is that a new industry?

Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

It's not a new industry—well you may ask, member for Solomon! Indeed, the Rudd and Gillard government had a fund, a policy and an industry support plan for the video game development industry, which could be worth a lot more to this country. It's actually a critical enabler of defence technologies, education, mining, agriculture and all sorts of things. But guess what? Tony Abbott and this Liberal government cut all that support.

Turning to the port of Darwin, and other people have spoken about the port of Darwin, what a good idea to buy back the port of Darwin! This was the government that presided over the lease! You don't know whether to laugh or cry at this government. Why should anyone believe a single word of this report when you have a look at the record of eight years of failure?

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

It's with great pleasure that I rise in the chamber to speak about diversifying Australia's trade and investment profile, because we are of course an island nation, rich in resources and ingenuity. We are a trading nation; we always have been. Since the early 1980s, those on this side of the House have been in favour of free trade. Trade is inherently political, and it's naive to pretend that it's not. We have experienced this firsthand over the past year or so, and it's taught us a painful but very important lesson: an overreliance on trade, either on the product being traded or on the end destination for our products, exposes us to political and market forces that are, obviously, often out of our control. But diversification brings us two things. It brings us greater stability in the face of these forces and it encourages innovation and growth here at home. Given how immediately important diversification is and has been for the last eight years, the report of the Joint Standing Committee on Trade and Investment Growth is late but timely still. So I welcome this report, which recognises the urgent need for Australia to begin diversifying.

Like my colleague the member for Bruce, I will remind those watching—because sometimes, with the vacuum of leadership in our nation, you forget—that those opposite have been in government for eight years. So, yes, they should begin diversifying. It's late, but it's needed. This report is a substantial piece of work towards that aim, and I do commend the committee for its efforts. The committee consulted widely, taking evidence from federal government departments and agencies, the NT government, unions, industry groups, think tanks, scholars and obviously the private sector broadly.

The 21 recommendations of this report are sensible and constructive. The first recommendation of this report calls on the government to:

… develop and release a plan for trade diversification, which includes:

More eggs, more baskets. Obviously, I completely agree with this recommendation. The government need a clear and public strategy to drive this trade diversification, but, as the member for Bruce has just finished saying, the government don't have a plan to do it. They love an announcement; they love announcing a free trade deal, but when it comes to the work, the policy work, the grunt work to actually drive that change, drive that diversification, drive more baskets and more eggs, they're a bit MIA—missing in action. Even after our economy, our producers and our businesses have been battered by a global pandemic and a trade war, there is still no plan to make us stronger and more prosperous.

Obviously, before this latest disruption began, we needed to address the diversification issue. The government with almost eight years on the Treasury benches have had time to get it right, but they haven't even taken the first step in eight years. This report is a welcome small step. The government have dropped the ball.

I want to give those listening a perspective that they may not be aware of. I had the privilege of chairing the Labor Party's Indo-Pacific trade task force, and I want to thank all the members of that trade task force once again. We reported to the Labor leader in December. In the introduction to the report, I wrote: 'Economic diversification can be more than a money maker, which is how the coalition has tended to treat trade. It was a nation builder under Labor governments, whose visionary Hawke-Keating reforms created our modern trading economy of today. Diversification is a national economic and strategic imperative on the same scale as this challenge, but it's a 50-year project under a government with a 280-character-long vision statement. Labor alone can transition our trade portfolio to build a wealthier, safer and more resilient Australia.'

Our Indo-Pacific Trade Taskforce took evidence from 88 different groups and stakeholders—among them, business, industry, scholars and government departments. We came up with 13 considered, wide-ranging and robust recommendations. I'm pleased to note that many of our recommendations are in complete agreement with those of this report by the Joint Standing Committee on Trade and Investment Growth that we are discussing today. These recommendations are underpinning the important work we're undertaking on our side to prepare for government—and we've been undertaking that work for some time. We'll be ready to act swiftly on trade diversification when we form government because we've done that hard work, and I'm proud to have played a role in that process.

Before I come to discuss a major component of the report of this joint standing committee, I will comment upon one other element that caught my attention. Recommendation 3 recognises the importance of having a full understanding of export markets to the success of any trade agenda. It states:

The Committee recommends that the Australian Government commit to building the Asia-capability of Australian exporters and investors, including:

greater development and/or utilisation of programs to boost Asia-literacy of businesses and training for jobs of the future;

… … …

Our Asia literacy is not a new topic but it's incredibly important for our nation. We cannot hope to survive and thrive in our region without being able to communicate with, and appreciate the perspectives of, our friends and neighbours in the Indo-Pacific. Australia's deficit in Asia literacy has held back many of our businesses from thriving and taking on opportunities. We can also see a distinct lack of Asia literacy in many of the decisions of this government. Successive Labor governments have funded and boosted Asia literacy—from primary schools to universities. Successive coalition governments have gutted these commitments. I have pursued the study of Bahasa Indonesian, which has given me a greater insight into the culture and philosophies of one of our most important trading partners. I wholeheartedly endorse recommendation 3 and call on the government to act on it.

The part of the report that gained the most publicity is the discussion on the leasing of the port of Darwin to the Landbridge Group in October 2015. I have spoken and written extensively on this. The facts of the matter are largely in the public domain, but I'll repeat the three key points of this fiasco. Firstly, the lease is for 99 years—just short of a century. Secondly, the deal was done by the former Country Liberal Party government of the Northern Territory, with the full support of the coalition federal government. Those opposite have been in government for eight years. A part of their record—we wouldn't call it an achievement—that will be there, in infamy, forever is that, with a conservative Northern Territory Country Liberal Party government, they were part of leasing the strategic port of Darwin to a foreign company. Landbridge Group is known to have extensive links to the People's Liberation Army and the Chinese Communist Party. This is an issue I feel strongly about. I have spoken up about it from the start. I'm glad that this report has looked into it. The port is in my electorate. Like many, I have long held those deep concerns about the deal and the possible national security implications in the uncertain times we live in. It seems that the joint standing committee shared my concerns. Recommendation 19 calls on the government to:

... provide a report on whether the 99-year lease of the Port of Darwin to a foreign company will be subject to the Australia's Foreign Relations (State and Territory Arrangements) Act 2020 ... and if so, consider taking measures to have the Port of Darwin brought back under Australian ownership if current arrangements are not deemed to be in the national interest.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Order. A division has been called in the House. The chamber will suspend until such time as the division is complete.

Proceedings suspended from 11:40 to 11:52

Debate adjourned.