John Hogg (Queensland, Deputy-President) Share this | Hansard source

Pursuant to standing orders 38 and 166, I present documents listed on today’s Order of Business at item 12 which were presented to the President, the Deputy President and temporary chairs of committees since the Senate last sat. In accordance with the terms of the standing orders, the publication of the documents was authorised. In accordance with the usual practice, and with the concurrence of the Senate, I ask that the government response be incorporated in Hansard.

Ordered that the report of the Foreign Affairs, Defence and Trade Committee and the final report of the Community Affairs Committee be printed.

The list read as follows—

Document certified by the President

Department of Parliamentary Services—Report for 2005-06 (received 30 October 2006)

Committee reports

(1)

Foreign Affairs, Defence and Trade Committee––Report, together with the Hansard record of proceedings and documents presented to the committee––Provisions of the Defence Legislation Amendment Bill 2006 (received 27 October 2006)

(2)

Community Affairs Committee––Interim report––Legislative responses to the Lockhart review (received 27 October 2006)

(3)

Community Affairs Committee––Final report, together with the Hansard record of proceedings and documents presented to the committee––Legislative responses to the Lockhart review (received 30 October 2006)

Government response to parliamentary committee report

Foreign Affairs, Defence and Trade References Committee––Report––Australia’s relationship with China (received 2 November 2006)

Government documents

(1)

Department of Employment and Workplace Relations––Report for 2005-06 (received 20 October 2006)

(2)

Bureau of Meteorology––Report for 2005-06 (received 23 October 2006)

(3)

Department of the Environment and Heritage––Volumes 1 and 2––Report for 2005-06 (received 23 October 2006)

(4)

Department of the Treasury––Report for 2005-06 (received 23 October 2006)

(5)

Inspector-General of Taxation––Report for 2005-06 (received 23 October 2006)

(6)

Australian Institute of Aboriginal and Torres Strait Islander Studies––Report for 2005-06 (received 23 October 2006)

(7)

National Australia Day Council––Report for 2005-06 (received 23 October 2006)

(8)

Gene Technology Regulator—Quarterly report for the period 1 April to 30 June 2006 (received 24 October 2006)

(9)

Food Standards Australia New Zealand––Report for 2005-06 (received 24 October 2006)

(10)

Insolvency and Trustee Service Australia––Report for 2005-06 (received 24 October 2006)

(11)

Bankruptcy Act 1966––Inspector-General in Bankruptcy––Report for 2005-06 on the operation of the Act (received 24 October 2006)

(12)

Department of Foreign Affairs and Trade––Reports for 2005-06––

• Volume 1––Foreign Affairs and Trade
• Volume 2––Australian Agency for International Development (AusAID) (received 25 October 2006)

(13)

Supervising Scientist—Report for 2005-06 on the operation of the Environment Protection (Alligator Rivers Region) Act 1978 (received 25 October 2006)

(14)

Department of Industry, Tourism and Resources––Report for 2005-06 (received 25 October 2006)

(15)

Australian Research Council––Report for 2005-06 (received 25 October 2006)

(16)

Director of National Parks––Report for 2005-06 (received 26 October 2006)

(17)

National Transport Commission––Report for 2005-06 (received 26 October 2006)

(18)

Department of Health and Ageing––Report for 2005-06 (received 26 October 2006)

(19)

Airservices Australia––Report for 2005-06 (received 26 October 2006)

(20)

Department of Agriculture, Fisheries and Forestry––Report for 2005-06 (received 27 October 2006)

(21)

Australian Customs Service––Report for 2005-06 (received 27 October 2006)

(22)

Department of the Prime Minister and Cabinet––Report for 2005-06 (received 27 October 2006)

(23)

Medicare Australia––Report for 2005-06 (received 27 October 2006)

(24)

Sydney Harbour Federation Trust––Report for 2005-06 (received 27 October 2006)

(25)

Australian Maritime Safety Authority––Report for 2005-06 (received 27 October 2006)

(26)

Commonwealth Scientific and Industrial Research Organisation (CSIRO)—Report for 2005-06 (received 30 October 2006)

(27)

Financial Reporting Council, Australian Accounting Standards Board, Auditing and Assurance Standards Board––Reports for 2005-06 (received 30 October 2006)

(28)

Australian Institute of Marine Science––Report for 2005-06 (received 30 October 2006)

(29)

Australian Nuclear Science and Technology Organisation––Report for 2005-06 (received 30 October 2006)

(30)

Australian Hearing––Report for 2005-06 (received 30 October 2006)

(31)

Department of Industry, Tourism and Resources––Correction––Report for 2005-06 (received 30 October 2006)

(32)

Private Health Insurance Administration Council––Report for 2005-06 (received 30 October 2006)

(33)

Australian Centre for International Agricultural Research––Report for 2005-06 (received 30 October 2006)

(34)

Comcare––Report for 2005-06 (received 30 October 2006)

(35)

Safety, Rehabilitation and Compensation Commission––Report for 2005-06 (received 30 October 2006)

(36)

Seafarers Safety, Rehabilitation and Compensation Authority––Report for 2005-06 (received 30 October 2006)

(37)

Remuneration Tribunal––Report for 2005-06 (received 30 October 2006)

(38)

Australian Fair Pay Commission––Report for 2005-06 (received 30 October 2006)

(39)

Australian Fair Pay Commission Secretariat—Report for 2005-06 (received 30 October 2006)

Report of the Auditor-General

Report no. 9 of 2006-07––Performance Audit––Management of the acquisition of the Australian light armoured vehicle capability: Department of Defence and Defence Materiel Organisation (received 26 October 2006)

The government response read as follows—

Australia’s Relations with China

Government Response

The Government thanks the Senate Foreign Affairs Defence and Trade Committee for the comprehensive review of the relationship between Australia and China.

The report consists of two parts and makes thirty five recommendations regarding political, strategic, trade, economic and social issues. The Government’s response to these recommendations as at 10 October 2006 is provided below.

PART ONE—Opportunities and challenges: Australia’s relationship with China

Recommendation 1

The committee recommends that the Australian government increase its efforts through the WTO, Asia–Pacific Economic Cooperation (APEC) and bilaterally to encourage China to promulgate laws that comply with the WTO and to ensure that they are interpreted and applied consistently and without discrimination throughout the country. In particular the committee cites the contract and intellectual property laws and local government intervention as areas of most concern to Australian businesses.

Australia uses a range of multilateral and bilateral mechanisms to press China to implement WTO-consistent laws which are applied consistently and without discrimination. Under the terms of its WTO Accession Protocol, China’s implementation of its WTO commitments is subject to a Transitional Review Mechanism. This review will be conducted annually for eight years following China’s full accession (December 2001), with a final review in the tenth year after accession. The annual review of China’s implementation is undertaken in the relevant WTO councils and committees. Australia has participated in each annual review so far and will continue to use the review mechanism to monitor China’s compliance with its WTO commitments. Australia also uses the regular WTO committee processes to raise issues of compliance.

When necessary, we use the WTO’s dispute settlement mechanisms to press China to enforce fair and WTO-consistent laws. For example, Australia is currently participating as a third party in dispute settlement proceedings on Chinese measures affecting imports of automobile parts. The measures have been challenged by the European Commission, United States and Canada. Other third parties are Japan and Mexico. Australia has substantial trade interests at stake. Our bilateral trade in automobiles and automotive parts has developed considerably with China over a relatively short period. Automotive exports to China increased more than four-fold in 2005 to $284 million—$170 million in vehicles and $114 million in components. The dispute is still at the consultations stage. Initial consultations, which relate to discriminatory Chinese import tariffs and local content requirements, were held in Geneva on 11-12 May 2006.

Australia has also been working hard to ensure that the WTO Doha Round negotiations deliver commercially meaningful outcomes. A successful outcome to the Doha Round will be crucial to providing Australian exporters with improved access to international markets. Both Australia and China’s industries have much to gain from further liberalisation of goods and services.

We use APEC to reinforce these efforts in the WTO. The Australian Government is actively involved in APEC’s provision of capacity-building support which assists APEC economies, including China, to adopt and implement laws and policies that comply with the WTO. This includes institutional training, such as workshops and seminars, which help facilitate a better understanding of the WTO and the benefits it confers on its participants, for example:

• The Australian Department of Foreign Affairs and Trade (DFAT) and the Chinese Ministry of Commerce held a two-and-a-half day APEC training workshop on Negotiating Free-Trade Agreements in Beijing on 8-10 December 2004;
• In February 2005, DFAT organised an APEC workshop on preferential rules of origin in Seoul. The workshop was attended by Chinese participants;
• The Malaysian Ministry of International Trade and Industry and DFAT co-hosted a three day workshop on Negotiating Free Trade Agreements in Kuala Lumpur on 23-25 January 2006. Two Chinese delegates attended the workshop as sponsored participants; and
• DFAT is currently organising a workshop on goods trade under FTAs and a Trade Policy Dialogue to be held in Da Nang, Vietnam. It is expected that Chinese delegates will attend both events.

The Government employs various bilateral mechanisms to press China to implement WTO-consistent laws in a fair and consistent manner. A program of regular high-level visits and meetings has established a relationship based on trust in which we can raise issues with China frankly and constructively. This level of communication would not have been possible without the frequent high-level exchanges we have maintained over the past 15 years. During several recent visits, Australian ministers have urged China to implement an effective and fair commercial arbitration system, emphasising that the failure to implement arbitral and court rulings undermines the confidence of foreign companies.

Established in 1986, the Joint Ministerial Economic Commission (JMEC) has been the main institutional mechanism for advancing Australia’s economic interests with China. Chaired by the two trade ministers, JMEC allows both countries to address specific problems, including in relation to intellectual property protection and commercial law, and identify opportunities to liberalise trade in a wide range of sectors such as energy and minerals, agriculture, manufacturing and services. The Government is committed to reinvigorating JMEC, ensuring that it remains relevant to the needs of Australian business. At a JMEC intersessional senior officials meeting in Canberra in January 2006, Australia raised several issues concerning the business environment in China. The 11th ministerial meeting of JMEC was held in Sydney on 3 October 2006, marking the 20th anniversary of the foundation of the process.

In addition to re-energising JMEC, the Government has ensured that our engagement with China on economic issues is as effective as possible by establishing a new High-level Economic Cooperation Dialogue (HECD) with China’s principal economic planning and reform agency, the National Development and Reform Commission (NDRC). Chaired by the Australian Trade Minister and the NDRC Chairman, HECD complements JMEC, allowing the Government to advance core Australian economic interests in areas such as resources, investment, intellectual property and local government intervention. Australia used the first HECD meeting in Canberra on 3 April 2006 during Premier Wen Jiabao’s visit to stress, for instance, that price negotiations in the resources sector should be conducted on a commercial basis and that investment conditions in China for Australian companies should be fair and transparent.

The Government is also seeking to use the Australia-China Free Trade Agreement, currently under negotiation, to strengthen and supplement China’s existing international obligations concerning transparency and the administration of regulatory measures. In responding to industry concerns about intellectual property protection and the transparent administration of laws and regulations in China, Australia and China have been discussing disciplines on transparency during the FTA negotiations.

The Government will continue to encourage China, through bilateral and multilateral forums, to implement laws that comply with WTO rules and to ensure that they are interpreted and applied consistently and without discrimination throughout the country.

Recommendation 2

The committee recommends that the Australian government place a higher priority on developing and implementing practical measures to assist China manage its transition from a planned economy to a market economy, especially to improve its corporate governance regime. For example, by facilitating exchange programs between Chinese and Australian departments or agencies or offering special training and education programs for Chinese officials in the area of corporate governance.

The Government recognises the importance of developing and implementing practical measures to assist China to improve its corporate governance regime. The Government’s development cooperation program with China, as articulated in the China Australia Country Program Strategy 2006-2010, aims to ‘build capacity in selected sectors in China, in particular governance, environment and health’ through ‘targeted assistance in areas where Australia has relevant and valued expertise.’ The China Australia Governance Program (CAGP), which runs from 2004-2010 with a total Australian contribution of $20 million, supports China’s governance reform and development agenda. Priorities include helping China with its fiscal reforms, social security reforms, and trade-related reforms.

The CAGP is flexible program and has the capacity to address a range of issues. Areas of future work currently under consideration include:

• defining targets and strategies to improve the Chinese banking sector’s capacity for risk management;
• helping China to address the implications of economic restructuring and productivity improvement; and
• assisting China build WTO-related regulatory frameworks such as food and drugs regulation, quarantine, and banking supervision.

The Australia China Environment Development Program aims to support China’s policy of balancing sustainable economic development with the needs of the environment. Australia has responded to a request by the Chinese Government for assistance in preparing a framework for the introduction of a new regime of water entitlements and trading in China. The framework will support China’s transition from a system of planned water resource allocation to a market based approach, similar to that of Australia.

Through the aid program, the Government also provides Australian Development Scholarships for Chinese officials to undertake masters-level courses in Australia. Approximately half of these scholarships are awarded to officials who undertake governance-related courses. Twenty-four officials commenced scholarships in 2006, of whom 13 are studying courses which relate to China’s economic transition, including public policy, public administration, economics, accounting and finance.

As set out in the White Paper on the Australian Government’s overseas aid program, Australian Aid: Promoting Growth and Stability, Australia will expand its scholarships program from 1 July 2006. Chinese nationals (including those who wish to undertake governance-related studies) will be eligible to apply for scholarships under the expanded program. It will include Australian Development Scholarships; new Australian Leadership Awards, aimed at future leaders, administered by AusAID; and Endeavour Program scholarships administered by the Department of Education, Science and Training (DEST). The Endeavour Program is an Australian Government initiative designed to bring together under one umbrella all of DEST’s international scholarships.

In addition to initiatives undertaken under Australia’s aid program, Government agencies and other institutions are working under a variety of other arrangements with Chinese counterparts to train Chinese officials in areas of governance relevant to China’s reforms:

• Treasury is working with the National Development and Reform Commission (NDRC) and Ministry of Finance (MOF) to provide training courses on fiscal management, in Australia, for NDRC and MOF officials;
• the Attorney-General’s Department is working with the Chinese Ministry of Justice to develop an exchange program for Chinese lawyers;
• DFAT and Beijing University are organising two Agriculture Trade Policy Dialogues, which have brought together Australian and Chinese trade officials and specialists to help China better integrate trade policy into China’s development strategies;
• the Australian Bureau of Agriculture and Resource Economics and the Chinese Institute of Agricultural Economics are implementing an exchange project, which is assisting China to develop its agricultural trade policy analysis and modelling capacity;
• as part of the work under the Australia-China FTA negotiations, a program of capacity building workshops involving external consultants is providing Chinese officials with training in technical aspects of negotiating FTAs;
• training for Chinese officials is being considered under the new agricultural technical cooperation program in areas such as structural adjustment in the rural sector;
• Monash University is providing technical assistance to the NDRC, relating to government procurement and investment; and
• the implementation of a range of projects involving a number of Australian and Chinese organisations designed to help China reform its fiscal system and assist it to remove barriers to domestic and international trade.

The Government will continue to place a priority on developing and implementing practical measures to assist China to manage its transition to a market economy, and especially to increase its corporate governance regime.

Recommendation 3 (see also recommendation 16)

The committee recommends that Austrade establish a system for handling complaints on China’s provincial regulations. This system would:

• encourage Australian companies to register such complaints;
• record the complaints in a central register and monitor their management;
• disseminate information about these complaints among the Australian business community; and
• report the complaints to the Australian government.

The Government adopts a systematic approach to handling Australian business complaints about China’s legal system, including complaints about inconsistent or discriminatory regulations at the provincial and central government levels. The Department of Foreign Affairs and Trade (DFAT) and Austrade in particular encourage business to bring these issues to the Australian Government’s attention, both in Australia and through their offices in China. As part of its consultation process for the FTA negotiations with China, DFAT has also urged Australian businesses to raise concerns about Chinese regulations and the lack of transparency in the legal system in general. The Government also networks closely with the Australia-China Business Council to this end.

DFAT and Austrade in turn investigate and assess complaints business brings to us, bearing in mind that the Australian Government can only intervene in those cases where Chinese regulations are inconsistent with China’s international, including its WTO, obligations, or where we believe that Chinese provincial or central authorities have disregarded or violated China’s own laws, for example, by failing to enforce a judgment by a Chinese court. If a complainant has exhausted all legal avenues in China, the Australian Government then raises these issues with provincial and central Chinese authorities, including, on occasion, at ministerial level. (For example, in March this year in response to concerns by Australian iron ore suppliers, DFAT made representations to the Chinese Ministry of Commerce about regulations which imposed a price cap on imported iron ore. Chinese authorities subsequently withdrew the relevant regulations.) In addition to bilateral representations, the Australian Government also uses international forums to raise concerns about Chinese regulations which constitute trade barriers: WTO committees and the WTO Trade Policy Review provide regular opportunities to do so.

DFAT and Austrade keep systematic records of business concerns and Chinese responses through standard filing and record-keeping procedures. But, given the commercial sensitivity of the details of many complaints, it would not be appropriate to open our records to scrutiny by other businesses (or the public in general). We will continue to urge business to contact us about their experiences in dealing with China’s provincial regulations.

Recommendation 4

The committee recommends that Australia’s agricultural exporters—in cooperation with key government agencies such as the Department of Agriculture, Fisheries and Forestry (DAFF) and Austrade—put particular effort into researching the China market. There will be significant export opportunities for Australian primary producers as China’s incomes rise and the restrictions on trade are removed (see recommendation 14). For these opportunities to be recognised, it is imperative that Australian exporters have up to date information about consumer tastes and producer requirements as they vary from region to region.

The Government supports further research by Australia’s agricultural exporters into the China market.

The Government recognises that China presents important market opportunities for Australian agricultural, food, seafood and forestry products. Both the Department of Agriculture, Fisheries and Forestry (DAFF) and Austrade work closely with industry stakeholders to identify and target market access priorities across a range of agricultural markets, including identifying areas where the Government can help to remove technical and other barriers to trade with China.

A key resource developed by DAFF to help industry explore the opportunities presented by the emerging Chinese market is the recent report—Agriculture in China: Developments and significance for Australia—released by the Australian Bureau of Agriculture and Resource Economics (ABARE) in 2006. Other mechanisms for exploring market opportunities in China include the Australia-China Agricultural Cooperation Agreement (ACACA), and a range of consultative mechanisms with industry.

The ABARE report confirms that Chinese economic growth is likely to lead to significant market opportunities for Australian agricultural exporters. This publicly available report provides a comprehensive examination of agricultural supply and demand in China. It provides information that will enable primary producers to gain an understanding of the changes in China’s production and consumption patterns, which in turn will help them gain an appreciation of future market opportunities.

The ACACA is a long-standing, treaty-level bilateral agreement that provides funding through the International Agricultural Cooperation component of the Government’s Agriculture Advancing Australia program for agriculture-oriented exchange missions between Australia and China. The ACACA covers all activities relating to agriculture, fisheries and forestry, from inputs and technology through to food processing and distribution. It helps Australian industry to capitalise on China’s market expansion by facilitating the development of commercial linkages between Australian and Chinese agriculture, fisheries and forestry sectors and associated agribusiness enterprises.

Since ACACA’s inception in 1984, over 180 exchange projects have been undertaken across a range of sectors. Exchange missions focus on specific areas of agribusiness, with the overall objective of promoting bilateral cooperation in the agriculture, fisheries and forestry sectors. Farmers, small, medium or large agri-businesses, industry groups, rural and regional associations and educational and research academic institutions are encouraged to develop proposals for short-term projects in China to pursue commercial cooperation in agriculture, fisheries/aquaculture and forestry. The ACACA program facilitates trade by allowing missions to visit China to observe first-hand consumer tastes and producer requirements as they vary from region to region and by providing the opportunity to explore supply chains.

The Government recognises that China will present valuable opportunities to Australian exporters of a wide-range of agricultural products. However, establishing market access for new products continues to be a key challenge. In recognition of the importance of China as an emerging market for Australian agricultural production, DAFF, through the International Food and Agriculture Service, recently established a Counsellor (Agriculture Policy) position in Beijing in addition to the pre-existing Counsellor (Agriculture Technical) position.

To further advance Australia’s market access interests in China, DAFF has established a range of consultative mechanisms with Chinese agencies. These mechanisms, such as the Memorandum of Understanding on Cooperation in Sanitary and Phytosanitary Matters, provide an opportunity to discuss both Australia’s and China’s market access priorities.

Industry market access priorities are identified through bodies such as the Horticultural Market Access Committee (HMAC). The HMAC is an industry committee with government representation which considers, prioritises, promotes and communicates all market access issues that are of significance to the Australian horticulture industry. The committee works in consultation with DAFF, individual industry associations and their members, and the research community to advance market access priorities.

Recommendation 5

The committee recommends that as part of a national strategy to promote innovation and value-adding in manufacturing, the Australian government must develop a wider range of incentives for CSIRO, the universities, private sector research centres and manufacturing companies to collaborate and invest in research and development (R&D).

The Government recognises that innovation is a driver of productivity and economic growth. The Government’s 2001 Backing Australia’s Ability and 2004 Backing Australia’s Ability: Building Our Future through Science and Innovation packages constitute a ten-year, $8.3 billion funding commitment to science and innovation. This is in addition to ongoing support for agencies such as the Australian Research Council, the National Health and Medical Research Council and CSIRO. The Government’s support for science and innovation totalled over $5.9 billion in 2005-06 (2006-07 Science and Innovation Budget Tables).

The Backing Australia’s Ability packages have three major themes:

• strengthening Australia’s ability to generate ideas and undertake research;
• accelerating the commercialisation of ideas; and
• developing and retaining skills.

A fundamental objective of the second Backing Australia’s Ability package is to boost collaboration between business, tertiary institutions and publicly funded research agencies. There are now a variety of specific programs already in place that directly support a range of public-private sector and business-business collaboration.

Cooperative Research Centres, the Industry Cooperative Innovation Program, CSIRO’s Flagship Collaboration Fund, the Australian Research Council Linkage grants, the Biotechnology and Information and Communications Technology Centres of Excellence, and the Rural Research and Development Corporations all directly foster public-private sector and/or business-business collaboration.

The Government has also funded pilot work on collaboration—the Innovation Exchange Intermediaries network was supported through the Innovation Access Program. It is a network of intermediaries who work with companies and universities and other public sector organisations to identify and establish links and alliances for the benefit of both partners. The TechFast program was supported to pilot university- small and medium sized company collaboration over an 18 month period through the transfer of intellectual property. The program is due for evaluation in the second half of 2006.

Specific initiatives, such as the Pre-Seed Fund, are aimed at assisting the commercialisation of public sector research. This fund is designed to encourage private sector venture capitalists to take an active role in funding