Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Hansard source

The Export Control Amendment (Quotas) Bill 2015 is an uncontroversial bill which simply consolidates four pieces of legislation which govern export quotas and allows for quota certification arrangements for agriculture to be carried out under one set of powers.

Australia, of course, is a great producer of food and fibre product. We are so despite the fact that we have many challenges as a food-producing nation. We are challenged by water scarcity. We have less than optimal soil quality despite public perceptions. Certainly we do have some very rich soils in certain locations but, because of our geographical history, on average, our soils are poor compared to some of our competitors. And, of course, we have vast distances between the farm gate and our markets, both our domestic markets and our export markets. Yet despite all of that, the value of our farm output for an island nation of only 23 million or 24 million people is more than $50 billion annually and our exports are more than $30 billion—in other words, we export around two-thirds of the food product we produce.

While we should always be cautious and alert to our food security issues, it is the reason that chatter about food security in this country, while certainly a global issue, is rather silly because it is not one of our challenges in food production, which is made clear by the fact that we export two-thirds of everything we produce. It is also why much of the debate around foreign ownership is so silly; rather, if we are to grow our agricultural opportunities, we will need a lot of investment in agriculture over the coming decades. With a small population and with a limited savings capacity, by necessity, much of that investment will need to come from other sources, as it always has done in all of our history as a country and, indeed, as a colony.

There are many things that will determine the extent of our success in agriculture over the coming decades. They go to the key issues that the bill today will help to govern. It is not an exhaustive list but I have just written down many of them. The first is the extent to which government is willing and able to provide leadership and strategic guidance in this increasingly globally competitive market—that will be critical. Second is the effectiveness of the management of our limited natural resources, most importantly our water and soil resources. The question in the future will be: how do we do more with ever-depleting water and soil resources? We are already the driest continent on earth. While I would be happy on another occasion to debate the reasons, it is clear that our water challenges are becoming greater. Australia is becoming a drier continent. Our droughts are becoming more protracted and we are entering into another El Nino period, which means that those challenges are going to become greater. Of course we need more focus on how we better manage our soils, including our capacity to retain water in our soils. Everything we do in agricultural planning has to take into account sustainability—how we ensure those resources are available to us for many decades to come.

The third is our performance in research and development, extension and our embrace of biotechnology, which will be critical to our future success. The fourth is our willingness to accept more consolidation and corporatisation in the sector. This is of some concern to some who are committed to concept of a family farm. Family farms will continue to play a critical role in the decades ahead. In fact, much of our innovation typically comes from the family farm but it is a reality of the sector that further consolidation will be necessary. The skills, networks and investment that further corporatisation brings will be critical. The fifth is the extent to which we are able to lift productivity and our cost competitiveness—that comment speaks for itself. The sixth is our efforts to do with our workforce challenges. We have an ageing population generally, we have an ageing workforce generally but, in particular, these are very significant challenges in Australian agriculture. As I often say, people ask me: how do we bring young people back to the farm? My simple answer is: they will come back to the farm when there is good money to be made—it is as simple as that for younger generations. The seventh is our success in securing and growing export markets, which is obvious.

The eighth is the extent to which we are successful in our attempts to move our food and fibre products up the value chain. In other words, for a country like Australia, which is a net exporter, a country with limited natural resources and limited population, our real future will not be so much in volume—as important as that will be—but in value—in other words, the margins we receive on each of our food and fibre products, the extent to which we are able to profit. We are seeing that already with, for example, dairy products into Asia, where the growing middle-classes are prepared to pay big dollars for something we make at a relatively low price. Of course it is also occurring with other major products like beef, where wagyu products, which might have marbling, or products containing a low fat content are the things that the middle-class of Asia, for example, will pay big dollars for and they are the areas in which we will get a premium. There are myriad other examples such as udon noodles out of our grains industry—again, a premium will be paid for specific varieties of our wheat. So pushing up the value chain will be absolutely critical.

That brings me back to the bill because there has been a lot of talk recently about the opportunities presented to us by various free-trade agreements, obviously the most recent ones being with South Korea, Japan and China.

These are not free-trade agreements; they are preferential trade agreements. All of us in this place, I am sure, are united in that we would like to see more multilateral agreements rather than bilateral agreements. Bilateral agreements are only a fight between nation-states about who gets access at what price. What ChAFTA and the Korean and Japanese agreements are really about is making sure that we have access on the same level playing field as our major competitors—in other words, that it does not cost us any more to get our product into China, for example, than it does our competitors in North America or South America: the quota that we have put on our product is no greater than those of our competitors. This is of critical importance.

The challenge for us does not end there. As we all know, it is not just about the tariff barriers; it is also about the non-tariff barriers and all of the technical aspects that go with our attempts to export to other markets. We have dealt with these issues for many years and hopefully we are getting better at this game. But the reality is we will not benefit from ChAFTA and those other free trade agreements until we have dealt with all of those non-tariff barriers. Everyone in this place has ownership of those agreements. The former Labor government spent six years moving toward a final outcome for each of those free trade agreements. We now need to work together to overcome the technical barriers. To simplify it, the Department of Foreign Affairs and Trade has done its work in gaining the access by getting arrangements on the quotas. But now the department of agriculture and the agriculture minister have much work to do to secure the relevant protocols that are required to overcome those non-technical barriers.

It concerns me that this work appears to be taking place very slowly. It is all right for the agriculture minister to get up during question time and claim that all of these wonderful things are happening as a result of the signing of ChAFTA and the other agreements. Some good things are happening. But many other commodities are still locked out of China, South Korea and Japan because technical barriers to export have not been overcome. I have a table with me which was produced by peak industry body AUSVEG, representing Australian vegetable growers. It shows each of our exporting nations and provides a breakdown for each of the vegetable commodities—carrots, cauliflower, broccoli, beans and so on, right through to potatoes. The alarming thing about this chart is that for the China market, for example, there are 12 commodities, but not one of those commodities is shaded green. Green indicates that effective phytosanitary protocols now exist. In other words, of 12 vegetable commodities, still not one has access to the China market. Two are shaded yellow, indicating that restrictive phytosanitary protocols exist, but the rest are shaded red. Nothing could more clearly indicate than this table that we have a long way to go yet before the full benefits can be realised from these agreements we have secured with these other nation-states. So the real tests for this minister and this government will now be the speed at which those protocols can be negotiated and the effectiveness of those protocols. The effectiveness is just as important as the lowering of the tariff barriers and indeed what the associated quotas are and can be.

The other question is the cost of doing business. The reality of exporting is that there are associated costs. There are substantial associated costs which go beyond the obvious costs like transport. In this country—and there is a good system—much of the work around things like phytosanitary protocols are done by government. The cost of doing that work is recovered from industry. That is a reasonable arrangement and a very effective arrangement. But government has to continue to strive to ensure that those costs are as low as possible. Already in this country, we have some difficulty in being cost competitive because of our geography, our population and the high standard that we rightly put on the contribution of our workforce, in terms of both remuneration and safety. I am really concerned that recently the government has decided to review some of these costs. I was astounded to learn that, post that review, some of those costs have doubled for Australian exporters. I am delighted that the minister has now recognised we have a problem here. Extraordinarily, he has now sought an independent review of the review—a process that I do not think would leave the Australian taxpayer particularly impressed. It should be a concern to all of us that the minister should allow the department to review the cost, sign off on the new cost regime and then immediately seek to contract out a review of the review. This is not something which instils confidence in those seeking new export opportunities and seeking to grow export opportunities in other markets around the world.

The role here for the government will be a very substantial one. It starts with the first point I made about what will determine the extent of our success—leadership and strategic direction from government. This is something that was lacking in the relatively recent agriculture white paper—a white paper that should have taken a big-picture approach, should have sent messages about where the government wanted to take agriculture into the future, should have sent messages about where it was prepared to provide the path of least resistance and how it would attract investment in the most relevant sectors and make sure we had an efficient allocation of our limited natural resources in this country. All these things were missing.

It is all right for the agriculture minister to stand at the dispatch box during question time and claim credit for things that happened 20 years ago—airports that were privately built and that he can claim no credit for, drought-induced cattle prices—but agriculture needs far more than that. It needs strategic guidance from government. It needs sound planning. What it does not need is a government sending a signal in a very competitive market that foreign capital is not welcome in this country. That is what it has been determined to do in recent months. It is playing to the crowd. It is playing on fear in our community that somehow Asian investment in agriculture is not good for this country.

Rather, the government should be showing leadership. It should be going out there and saying, 'We need this investment, and we're in competition with others for it.' Without that investment we cannot be internationally competitive and we will not be exporting more. We will not be pushing our agriculture products up the value curve. And do not fear, because we export two thirds of everything we grow, and they cannot pick the land up and take it with them—which is exactly the point Minister Robb made last week in response to the government's decision on the landholdings of S. Kidman and Co.

We should be working together in this place to send a very clear message to the Australian community that they should not fear foreign investment in our agricultural land or our agribusinesses in this country. Indeed, we desperately need that investment. Without it we will fall further behind. I understand Minister Robb's expression of concern about the Kidman decision, and I have said publicly that if the Kidman decision was based on concerns about national security—for example, the proximity of some of the landholdings to some of our more sensitive defence facilities—then I accept that absolutely. As a former defence minister and a member of the National Security Committee of the cabinet, I understand that better than do most in this place. But I fear that the decision was about more than that. I fear it was also about this government's determination to build its political popularity in the region by sending the message that Australian agriculture is not open for business, particularly to Asian investment. For the first time in our history, we have a discriminatory foreign investment review regime in this country—one rule for our historic Western partners and another for those investing from Asia.

I want to remind the House of one very significant point. It does not matter what the screening threshold is for the Foreign Investment Review Board; the Treasurer has the power to review any investment proposal that he cares to review. He does not need a threshold. He does not need a trigger. Indeed, he does not need the Foreign Investment Review Board. Yes, he should look to the Foreign Investment Review Board for advice, and to the experts who sit on the board—and behind it, within Treasury. But there is nothing to stop the Treasurer from reviewing or vetoing any proposal that comes before the board. The lowering of the threshold to $15 million for agricultural land will clog the system and increase costs for investors. That will cause investors to go elsewhere, where the returns are just as good but the pathway is easier because the government there is more inviting of that investment.

So, I once again appeal to this government to give up this folly, to stop seeking this political outcome, to stop playing to the crowd and to recognise, as the member for Hume did in his seminal document Greener pastures, that to meet all of our aspirations in agriculture we will need $600 billion of investment in this country by 2050. And it is not going to come from within, even if all our super funds decided tomorrow to put all their money into agriculture. By necessity, it will come from foreign sources. We are in competition with others, and we need to be inviting of it—discerning of it, absolutely, but inviting of it.

This bill represents one of the many things that will go to our attractiveness as an export destination and as an investment destination and in terms of our cost competitiveness on international markets, but it is only a very small part of it. Minister Joyce has to stop claiming credit for things he has not done. He needs to get out of the way and let Australian agriculture grow and let foreign investment play its role. The opposition supports the bill before the House.

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