Christopher Back (WA, Liberal Party) Share this | Hansard source

Acting Deputy President Marshall, I pose a question to the chamber and, through you, to those in the public gallery. In a country that has the population of Greater New York but has the land mass of continental USA with the exception of Alaska, how is it that, per capita, Australia is one of the wealthiest countries in the world? Stop to reflect on the answer. It is or has been twofold. The first reason was cheap energy. Well, that is going now. The great advantage that Australia had in terms of cheap energy has now, largely, dissipated. The best example of that is in Senator Hanson-Young's home state of South Australia, where originally the Liberal Premier—Playford, many years ago—had the realisation that South Australia did not have much going for it, and that therefore he had better create cheap energy. And he did. In so doing, he attracted a car-manufacturing industry and a naval shipbuilding industry, amongst others. There are three things about South Australia today which are due to its increasing reliance on unreliable renewables. First of all, it has had blackouts, and it will have more statewide blackouts. Secondly, it has the most expensive power in Australia. And, thirdly, that power price is going up and up.

I come to the second reason why Australians have been and are so wealthy per capita in this massive landmass where we have 24 million people. The reason is and has been that we always have been an active trading nation. We are the envy of the world, and I will tell you why. In 2016-17 we have the 25th year of uninterrupted economic growth. We are the only country in the world to have had a quarter of a century of economic growth. And why has that been? Why is it now? Why must it continue into the future? It is because of our export trade activity and the activity of our trade internationally.

For example, take my own home state of Western Australia. We will harvest somewhere between 16 and 17 million tonnes of grain this year, and 1.6 million of us cannot eat 17 million tonnes of grain. We export 95-plus per cent of it, and grain is of course only one example of our exports. When you have a look at where the wealth of our exports has been, in the 1950s it was wool: Australia grew on the sheep's back. It does so no longer, but nevertheless agricultural produce is still a significant export income earner for our nation. Of course from my home state we export some 600 million tonnes of iron ore each year. That is about 1.3 million or 1.7 million tonnes a day, seven days a week. We are still the world's largest exporter of safe thermal coal—high energy and low sulphur. And, of course, we are the largest exporter of coking coal, which goes into steel manufacture. And why have we been able to do this? Because we have excellent trading relationships.

When you look at the imports and the price that we now enjoy, for example, going back, just have a look at the old video recorders. How much did we pay for them years ago ? It was $600 and $700, and of course, as a result of trading arrangements with our neighbours, including our Asian neighbours, we saw a decrease in those costs. You can think of commodities all over the place. When we stopped our horrible long tariff protection, particularly in New South Wales and Victoria, we started to see a freeing up of trade.

Mr Trump and Ms Clinton indicated that they would not be supporting the USA signing up to the Trans-Pacific Partnership, a partnership of some 12 countries that represent 40 per cent of global economic activity and a quarter of all world trade. If you are a small-population country in a big landmass and you have a stack of commodities that you want to sell, why would you not want to be part of what is 40 per cent of world trade and is in our region? But let us have a look at the countries in our own region, countries like Singapore, Malaysia, Brunei, and Vietnam. Some of these countries do not enjoy some of the standards that our country enjoys—industrial relations and occupational health and safety, for example, in their workplaces. So by joining into a TPP we have an influence on other countries of the world to actually improve their standards of occupational safety and health and welfare.

Before I go on to things other than commodities, let me speak to you for a moment about the investor-state dispute system which is so much the subject of concern. You would think from listening to conversation that this is in some way some horrific envelope that sits over the top of us. There has never been a successful case in which Australia has been the adverse subject of an ISDS claim—never, ever. But I speak also as somebody who has done business throughout Asia, India and the Middle East. ISDS, the investor-state dispute system, has protections for us. I was in business in India. We were the subject of unfair contractual obligation imposed on us by the Indian government. There being no ISDS in place, we had no capacity to be able to challenge the government of India when they imposed taxes upon us which we simply could not sustain. So, when you hear about all this ISDS et cetera, it protects Australian industry and business in the same way that it protects others. But of course you will never hear that from Senator Hanson-Young and others. In the carve-out that Mr Robb was able to negotiate, you make sure that you exclude your country from any environmental adverse impacts, for example. You make sure that you exclude your country from anything that might relate, for example, to the health space. We heard about this voracious United States pharmaceutical industry. Let me tell you what actually happened as part of the negotiations. Mr Andrew Robb successfully negotiated that there would be no adverse impact on the Australian pharmaceutical industry. It is funny how the truth hurts, isn't it?

Senator Hanson-Young interjecting—

Might I be allowed to continue without this prattling that comes from that side? I do not remember interfering in Senator Hanson-Young's contribution—unhelpful and all as it was. But I want to say to you that the Americans turned around and said to Mr Andrew Robb, 'What you have in place in Australia could be to the advantage of the American consumers.' So once again a system is in place in which, by sharing trade around the world, it advantages.

It is the case at the moment that Mr Trump has said that he is not interested in a TPP. It will be of enormous benefit to the United States, but there are other countries—Mexico, Peru and Chile—into which Australia can trade.

Let me give you a quick example. Our vehicle manufacturing industry is coming to a close, but the Mexicans produce three million cars a year, moving up to five million. When I was in Mexico in January last year, they said to me, 'We know about the excellence of your vehicle component manufacturing industry.' That led to consultations in Adelaide and Melbourne by Austrade and the Mexican Embassy. Do you know who they negotiated with? Australian vehicle component manufacturers. There are now opportunities for Australian vehicle component manufacturers to sell into Mexico. Should we negotiate free trade agreements with Mexico, that would then, of course, be tariff free.

The point that I wish to leave the chamber with is this: services contribute 70 per cent of economic activity in Australia at the moment, but we only earn 17 per cent from services exports. Imagine the benefit to this country, to students, to the economy, to families if, indeed, our services could increase from 17 per cent as a contributor to exports to say 25 or 30 per cent. The sky is the limit. We must participate in free trade and trade activities around the world. Imagine what it would be like if we do not have a TPP.