Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014. It was good to hear the member for Hume refer to the work of Adam Smith, probably one of the greatest intellects in the economics sphere, ever. It was in his work The Wealth of Nations, back in 1776, that he wrote:

It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. … If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.

Two hundred and forty years of economic history have shown that Smith was right. Wherever countries have engaged in free trade, it has led to greater wealth, it has led to greater opportunity, it has led to more and high-paying jobs, and it has led to a higher standard of living. That is why we should give great praise to Minister Robb for the work that he has done, not just on this free trade agreement but also on the free trade agreements struck, within the first year of this coalition government, with China, Japan and Korea. It is an absolutely remarkable achievement that will have enormous benefits for our nation for decades to come.

In relation to our current trade with Japan, we imported from Japan over $21 billion in 2013. But we actually export to Japan, currently, more than double that. We currently sell to Japan almost $50 billion worth of goods and services. This is the base that we are working off. This free trade agreement gives us the opportunity to increase that base. It gives us opportunity across our agricultural sector and our manufacturing sector. It gives opportunity especially to our services sector. All those sectors have the opportunity to create more export sales, to create greater wealth for this nation and to create greater opportunity.

There are a few reasons that this is very important. Of course there is the wealth of the country, but it is also important, I would say, for many in our agricultural sector. Because having more companies, or more markets, to sell to helps break down the current economically damaging monopsony situation that many people in our food industry find themselves in with our overly concentrated supermarket sector. If those companies have export markets to sell to, they cannot be as easily held hostage by the demands of a powerful buyer.

It is also very important because of the situation that we find ourselves in as a nation. There are many things that both sides of the House want to do. We want to provide more money for the National Disability Insurance Scheme, for instance. But the only way we can do those things is to build the wealth, increase the wealth, of the country, and the best way to do that is through further free trade agreements.

We also have the job of fixing the current budget. We often talk about deficits and surpluses. I think, rather than saying the country is currently running a deficit, we should rephrase it and say we are running a loss. For the last six years, we as a nation have been running a loss. The Commonwealth government have been spending more money than we have been raising. That means we have to borrow money, which then creates an obligation not only to pay it back sometime in the future but also to pay the ongoing interest bill. That is what we face, with $1 billion in interest payable every single month, and we know that about 75 per cent of that flows out of the country. If we are going to turn that around, we need to increase our productivity, we need to increase the wealth of this nation, and free trade is one of the best ways we can do that.

The other benefit of this trade deal, of course, is the lower prices that it will lead to for Australian consumers. There are some doubting Thomases. But I will just leave you with one example. The EPA with Japan will reduce the duty on cars imported from Japan. It will reduce the price and make them duty-free. We have reduced the duties on cars over the last couple of years. If we look at a base-model Toyota Corolla, 20 years ago that was just under $20,000. Today, the very same starter-model Toyota Corolla has not increased 1c in price; it is still under $20,000. That is despite CPI increasing, over those 20 years, by something like 66 per cent. So you are getting a car for the same value as you were 20 years ago, but you are getting a better car, with improved features, greater fuel efficiency and more safety. That is because we have lowered tariffs; that is because we have lowered duties.

The Japan-Australia EPA is one of three remarkable free trade agreements that have been struck by our trade minister. He stands congratulated, and I commend this bill to the House.

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