Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

The Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017 and the Customs Tariff Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017 update the Singapore-Australia Free Trade Agreement. Labor supports the bills because they support the agreement. The updates will actually improve the operations of that agreement.

Together, the bills will introduce new rules of origin for goods imported from Singapore; they will introduce a new procedure to claim preferential tariff treatment for goods that originate in Singapore; they will extend record-keeping obligations; and they will provide for excise equivalent rates of duty on some alcohol, tobacco, fuel and petroleum products.

The updated agreement also restricts the applications of the investor-state dispute settlement and litigation. The ISDS provisions will no longer apply to regulations protecting public welfare—including health and the environment; Australia's Pharmaceutical Benefits Scheme; the Medicare Benefits Schedule; the Therapeutic Goods Administration; and the Office of the Gene Technology Regulator—or to measures affecting creative arts and cultural heritage, including Indigenous cultural expression. It also includes Australian foreign investment policy, including decisions of the Foreign Investment Review Board.

All of these are changes that are definite improvements. However, I want to make it clear that Labor remains fundamentally opposed to ISDS provisions in trade agreements. We support the bill now before the Senate because the ISDS provisions were already part of the free trade agreement with Singapore, and the legislation winds back those provisions. Labor would have preferred that these provisions be removed in their entirety. They should not be included in any trade agreements that Australia negotiates in the future. Investor-state dispute settlement is an infringement of our national sovereignty. Sovereign governments should be able to legislate in the national interest; their ability to do so should not be constrained by litigious companies or groups.

There are well-known examples of how ISDS provisions are being used for pernicious reasons by commercial interests. We could take the examples of Philip Morris, the global tobacco company, taking action against Australia over the plain-packaging laws; the Swiss pharmaceutical company Novartis suing the Colombian government because it plans to reduce the price of leukaemia treatment; Lone Pine, the US mining company, suing the Canadian government over the environmental regulation of gas mining; or Veolia, the French utilities company, suing the Egyptian government over a contract that grants workers a pay rise. All of these are examples of what has, I think legitimately, been described as globalisation gone mad.

The aim of ISDS litigation is to make public policy makers defer to the interests of corporations that seek profit over public interest. That is why, at the last election, Labor declared that, in government, we would not sign agreements that included ISDS provisions and we would seek to remove those provisions from existing trade agreements.

There is another part of the updating of the agreement that Labor also opposes which is not in the bill before us. This government has removed the labour market testing for suppliers for contractual services. It has also removed the requirement from the free trade agreements in regard to China, South Korea and Japan. My colleague the member for Blaxland said during the debate on these bills in the other place:

This is the sort of stuff that makes Australians angry—

and legitimately so. Why should a company that wants to bring an electrician or a mechanic from overseas not have to check whether or not there is an Australian who can actually do that job? What's wrong with having to undertake that test? It is a simple proposition.

The Prime Minister has failed to live up to his rhetoric on this issue, and earlier this year he said:

… if a job is able to be done by an Australian it should be done by an Australian.

The Prime Minister also said:

… every nation is entitled to take that point of view and we certainly do.

Now, at a time when unemployment is higher than 10 per cent in some parts of the country and when youth unemployment is twice that, we have to make sure that local workers get the first chance to obtain a job. The government indicated that it would do this when it stated that labour market testing would be mandatory for all temporary skill shortage visa applications. But apparently it doesn't apply this principle when we're dealing with free trade agreements. We regard that as a sellout of Australian workers' interests.

Finally, Labor also notes with concern that there has been no independent economic modelling of this updated agreement. Australia's trade agreements should be transparent in their operations. The benefits claimed for them should be testable, and, again, that doesn't seem to have worried the government in its presentation of this update. And that's certainly not the way in which a Shorten Labor government would handle these matters. Subject to these reservations about aspects of this agreement, Labor will support these bills.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I rise to speak to this piece of legislation as well. To be very clear and on the record: the Greens do not support this trade amendment legislation. We are concerned that the inclusion of things like ISDS clauses only serve to weaken Australia's ability to ensure that we—our nation; our parliament—can set rules for ourselves and for the people that we represent. We need to be able to do that without fear of being sued by foreign companies. These clauses, of course, have been effectively copied, slab by slab, from the clauses in the TPP, and, even though that trade arrangement has been put in the dustbin after the election of Donald Trump in the US, the fact that many of those clauses have simply been carbon-copied into other trade arrangements is very, very concerning. It sets a dangerous precedent for how we negotiate trade agreements going forward and what type of bar Australia is willing to set when we negotiate what we should be trading off in these negotiations.

Of course, Australia is a trading country. We always have been and always will be. The debate needs to be about whether it's good trade or not. We always hear that it's about free trade. Well, it's not that free when you start signing your government up to clauses which stop us from being able to implement laws and make changes because we're worried that a foreign company might have the right to sue. Countries right around the world are becoming more and more suss in relation to the ISDS clauses that are creeping into trade arrangements, and Australia should be learning from those concerns and from those mistakes. We should stop signing up to agreements that effectively gag democracy in this country and that stop the Australian people from being able to demand action from government and changes to laws which foreign companies can then argue are retrospective changes that might impact on their profit margins. If Australia is going to enter into negotiations, we also need to be able to have the right to implement our own laws and changes as called upon by the Australian community, the people that in this place we are meant to be representing and acting in the best interests of.

Of course, again we have seen a trade arrangement with these amendments negotiated in secret away from elements of transparency. As Senator Carr has pointed out, there hasn't been any independent economic modelling, so we are asked to simply trust that the government has got this right. I for one have very little faith that this government has considered the economic impact on everyday Australians, and future Australians, from these deals. If there isn't anything to hide, why not do it in the open, with full transparency, and allow the Australian people and businesses to see exactly what has been negotiated and what has been traded off? The lack of transparency in these trade negotiations continues to be a huge concern for the Australian Greens and many, many other Australians. We are asked just to give blind trust. Under this government—indeed, under any government, but under this government in particular—blind trust is not a smart or a wise thing to give.

We know, of course, that in this arrangement and the amendments put into the Singapore-Australia Free Trade Agreement is a trading off of the rights of local workers. The weakening of protection for local market testing is a huge concern, and we've heard from Senator Carr in relation to this already this morning. I am disappointed that Labor are prepared to stand here and list all these things that they're not happy about in relation to this trade agreement but then they're going to sit here and flick it through. They pay lip service to this issue time and time again.

Australia has to be engaged with the rest of the world. We, of course, are going to continue to be a trading nation. Let's do it properly. Let's do it right. Let's make sure it's good trade, not bad trade. Let's make sure we have full transparency and the faith of the Australian community and the international community as we go forward with this. Giving more power to corporations through ISDS clauses that allow them to sue Australia and other countries because they don't like decisions that democratic governments make is a bad idea. That isn't free trade; that's bad trade. We're simply signing ourselves up to a list of obligations and clauses that gag democracy into the future. It's a silly and tricky way of arguing that you've done something right for the economic prosperity of the nation, when actually you've just signed a blank cheque. We will always stand in opposition to trade agreements that include these insidious, undemocratic and dangerous ISDS clauses. We believe that, at a time when we know there is a problem of exploitation of vulnerable foreign workers in Australia—we've seen it in the mining industry; we've seen it in other industries—we shouldn't be weakening the protection for foreign workers in Australia, and we shouldn't be weakening the elements of local labour testing either.

These are regressive amendments in this bill. They're not going to help Australia strengthen our position. Of course trade agreements are going to have to be updated and amended from time to time. The Singapore-Australia agreement entered into force in 2003—of course it's time to update it, but let's make sure it gets better, not worse. This amendment weakens Australia's position. It lowers the bar which we are prepared to accept in future negotiations with other countries and other trading partners and sets a very dangerous precedent for insidious, undemocratic clauses, like ISDSs, that will be used as the way forward for future arrangements.

The Greens will be voting against this. We're very disappointed that the Labor Party have again fallen foul and are simply rolling over with the government on this. They say they've got concerns, but, when it comes to crunch time, they fail to stand up.

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I have the good fortune to be a member of the Joint Standing Committee on Treaties and, like the other treaties which come before this chamber, this treaty was referred to that committee. I want to speak a little bit about some of the issues that opposition members of that committee encountered in examining the treaty as brought to it by the government. Before I do that, I make this observation: treaty making is the prerogative of the executive. The parliament has an incredibly important role in scrutinising that process and in providing feedback to the government about how it ought to proceed in relation to that process, but, fundamentally, the decision to interact with our international partners does lie with the government. I listened to Senator Hanson-Young and her remarks about Labor's approach, but, if we are concerned about the contents of the bills before us, the Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017 and the Customs Tariff Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017, and about the nature of the treaty that has been concluded, we need to be very clear who is responsible for this. It is the government of the day.

The Labor Party have been very clear over many years that we are deeply opposed to the investor-state dispute settlement process that, unfortunately, has become a feature of many of the treaties concluded by this government. I reiterate the observation that's been made in this chamber on many occasions by many different Labor senators: when John Howard was Prime Minister, Prime Minister Howard elected not to include such a mechanism in the treaty that he concluded with the United States. This man, whom conservatives point to always as the gold standard and the guiding light for their politics, concluded a treaty with the United States and sought to more closely link the economy of the United States with our own, but he didn't think that an investor-state dispute settlement mechanism was necessary.

We object to these mechanisms for a range of reasons, including the lack of transparency associated with the processes of dispute management, the role of arbitration and the conflicted nature of many of the arbitrators.

We also fundamentally object to the imposition of sovereignty. For people who may not be deeply familiar with this somewhat intricate aspect of international treaty making, what an investor-state dispute settlement process does is allocate decision-making powers in relation to national policy on economic questions to a third party—not a third party associated with us, not a third party under the control of the Australian government and not even a third party able to be influenced by the Australian government. The very great risk, when you do that, is that you lose control of the ability to make sensible decisions that are in the economic interests of Australia.

Once again, in the additional comments that we issued in this report that was presented by JSCOT, we said that we remained concerned that, in this instance, the ISDS provisions within this trade agreement leave Australia vulnerable to lengthy disputes with foreign-owned corporations. Our concern is that that situation could have a chilling effect on governments who seek to pursue legitimate public policy goals like our decision—our world-leading decision—to insist upon plain packaging for cigarettes, a decision that was challenged under a trade agreement. We remain concerned that the ability of investors, big businesses and multinational corporations to take their concerns out of the political domain in Australia and into a private, closed arbitration session presents very great risks to our national sovereignty.

This was perhaps the most significant concern expressed in the submissions received by the committee, and there's a very strong feeling out there in the community about it. The community doesn't accept that we ought to abrogate our responsibilities in relation to public policy and hand them off to private arbitrators. The community doesn't accept that at all. When we are in government, should we have the privilege of forming a government, we will not be signing treaties and coming to arrangements that include investor-state dispute settlement mechanisms.

The committee also expressed concerns—and Labor committee members in particular were concerned—about the lack of transparency and independent analysis of this treaty. The Department of Foreign Affairs and Trade have confirmed that trade agreements are only modelled by the department if they're instructed to do so by the government of the day. Fair enough; that's their job—to serve the government of the day. But, in this treaty, like so many, they were not required to actually model the economic benefits of the treaty. The economic benefits of this agreement have not been assessed. There is no information available to us.

This isn't a new criticism. Like many of the things I've mentioned so far, this is something parliamentarians have been saying for some time. Many parliamentary inquiries have recommended that trade agreements require independent economic analysis. I'll take back you to JSCOT, back in November last year, when the full committee recommended:

… that the Australian Government consider implementing a process through which independent modelling and analysis of a proposed trade agreement is undertaken by the Productivity Commission, or equivalent organisation, and provided to the Committee alongside the National Interest Assessment (NIA) to improve assessment of the agreement.

It's a pretty sensible recommendation. We have a committee that's been established to examine trade agreements and treaties more generally. Shouldn't that parliamentary committee, which comprises members of the House of Representatives and senators, have some ability to examine the actual economic benefits of these agreements? I make this point: when we do get an analysis, very frequently the benefits that are claimed are minuscule, and they are benefits that are, arguably, lost in the noise of the general fluctuations in the Australian economy. When a result comes back that says we're going to give up a great deal and experience great disruption in the Australian economy for very small benefits overall, it's reasonable to ask questions. Have we got the best deal? Should we be locking ourselves into it? But we're not able to do that—not in any meaningful way—because, in this instance, like so many others, information about the economic impacts was not provided to the inquiry.

I also want to speak about the removal of labour market testing. People will recall that, when we considered the China-Australia Free Trade Agreement, the Labor Party was attacked viciously by the government for our insistence that labour market testing be a continuing feature of the way we approach these agreements. In fact, our approach is broader than that: we generally don't believe that free trade agreements ought to encroach upon areas of immigration. Questions of immigration and questions of immigration for the purposes of bolstering our labour market aren't questions to be dealt with through trade agreements. Population policy is significantly broader than that. It impacts on Australia in a range of ways and it ought to be considered in a holistic way, not just traded off in a free trade process. In this specific example, we are deeply puzzled by the government's decision to proceed in this way, given its own acknowledgement that the 457 visa system needs reform. So this particular update, in fact, actively undermines Australia's migrant visa program by failing to apply labour market testing for contractual service suppliers. In practical terms, what that means is that jobs in Australia will be able to be filled by workers from Singapore without being offered to Australians first.

Let's think about the context for that. We know that the official unemployment figures are running okay, but underemployment in Australia is at a record high. Underemployment means that there are many Australians who are working a little bit and don't count as unemployed in the labour market statistics, but they're not working enough. They want more hours, and almost certainly they'd like those hours to be more secure. There are plenty of Australians looking for more hours, but we are presented with a treaty that says that if you wish to bring in contractual service suppliers from Singapore then you don't need to undertake any assessment whatsoever of whether there are Australians who could undertake that work.

I completely recognise that foreign workers are vital to the success of our economy. We benefit a great deal, in many instances, from foreign workers who are able to migrate here, particularly permanently, to bolster the skills and the talents in our economy. Australia's migration program is, in fact, something we all ought to be enormously proud of. We're a proud multicultural society, and my objections in this regard ought not be mischaracterised. But we actually need to make sure that, if we are allowing migration specifically for the purposes of filling a gap in the labour market, we ought to be genuinely certain that that gap exists. It's not enough to simply assert that there's a gap in the labour market. There ought to be some independent assessment of whether or not there are Australians ready and waiting who could fill the vacancies. This agreement explicitly waives such an obligation. What's puzzling about that, as I alluded to earlier, is that the government has recently announced that they are actually going to require mandatory labour market testing for all applicants unless there is some international obligation. And what are we doing today? We're being asked to create a new international obligation which will prevent the application of mandatory labour market testing for contractual service workers from Singapore.

This undermines the effect of the government's policy change. They speak with a forked tongue. They say that they're concerned about it. They announce a policy change intending to address genuine concerns that Australians have about the way that the migration system is working, and yet today they present legislation to the house which asks us to accept the waiving of labour market testing in this instance. It all speaks to a lack of coherence from the government in how they are approaching migration and approaching the economy.

We know that the long-term future of Australia is dependent on having a labour force that is skilled and that is capable of participating in innovative reform of the economy to improve productivity and to allow us to return to levels of economic growth that Australians have come to expect. Migration is part of that story. And it's also true that there are plenty of occasions when we will need skilled migrants to fill very particular gaps in the labour market. But there seems to be no coherence in the way that the government approaches that particular problem, and it's not matched with any serious approach to improving skills and capability in the domestic market. We've seen attack after attack on training institutions and a complete failure to properly address the problems that emerged in the VET sector, and, unfortunately, what you get in the end is a kind of ad hoc set of responses, where we are simply bringing in short-term labour to fill gaps instead of having a serious structural response to the development of the labour market.

It has broader social implications as well. I think we ought to be very cautious about creating a society where we have one group of people who are permanent residents or citizens participating in the long-term project of building Australia and building the Australian economy and then a subset of workers who move in temporarily, are not afforded the rights or required to have the obligations of that first group and who exist effectively as second-class people within our labour market and within our society. And I really do ask how this has come about.

In part, I think it goes back to the conflicts that have been such a feature of the government over the last four years and that seem to be set to continue into its fifth year of office. We've had two treasurers, and I will say that this second Treasurer doesn't impress me a great deal. Mr Morrison, before he came into parliament, worked perhaps in the tourism and transport sector? Was that his background? But it never seems clear to me that Mr Morrison, who built his career through being an attack dog, a great retail politician, is really suited to the complex policy questions that are facing us now. We're undergoing arguably an unprecedented transformation of the Australian economy, and I think that it's a very great shame that we're presented time and time again with piecemeal responses to that transformation without any serious economic program that credibly addresses the challenges of the day. I'll leave my remarks there, but I thank the Senate for allowing me the opportunity to contribute.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

Let me begin by thanking senators, especially Senator McAllister, for that sterling work there while we worked out a few speed bumps. But I thank all senators for their contributions to the debate on the Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017 and the Customs Tariff Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017. I commend the bills to the Senate.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

The question is that the bills be now read a second time.