House debates

Monday, 21 October 2019


Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019, Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019; Second Reading

3:14 pm

Photo of Tim WattsTim Watts (Gellibrand, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | Hansard source

I rise to speak on the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and the related bill.

Australia is a nation of 25 million people in a world of over 7½ billion. This simple statement has always underpinned the economic imperative of expanding international trade for Australian prosperity. We are a relatively small economy, with industries that rely on exports in order to thrive—primary industries like agriculture and mining but also, in recent times, service industries like education and tourism. As a result, it's no surprise that one in five Australian jobs rely on trade. Labor has always understood this. Our support of Australian jobs through trade is not a new thing. Indeed, it was a core part of what was called the positive approach—the approach of Labor leaders like John Curtin and Ben Chifley—to shaping the international arrangements that govern our future after the Second World War in the interests of working Australians.

Chifley fought for full employment in Australia, and he championed international arrangements that would help in that fight, building international trade and Labor agreements that improved the living standards of Australians and ensured we were able to provide a stronger safety net. It's why Chifley fought some on his own side in politics to champion Australia's membership of the IMF, the World Bank and GATT. It's why he fought Robert Menzies to secure Australia's ratification of the GATT agreements against the opposition of the conservatives. More than any other international agreement, it was these GATT agreements, ratified by Chifley against the opposition of Menzies, that underpinned Australia's economic prosperity in the second half of the 20th century. Chifley understood that Australian trade meant Australian jobs, and the great Labor prime ministers who followed him understood this too. That's why Whitlam unilaterally reduced tariffs and why the Hawke-Keating government led the foundation of APEC and championed Australian interests through subsequent GATT negotiations via the Cairns Group.

It's particularly important that we get this right and we understand this fundamental truth in our trade relationship with Indonesia. Our neighbour and the home of more than 250 million people, Indonesia is the world's third-largest democracy, one with which we share many strategic interests in a rapidly changing Indo-Pacific region. Economically, Indonesia is forecast to become the fourth-largest economy in the world and will have a consumer class of 135 million people by 2030. As Paul Keating once said, 'There is no country more important to Australia than Indonesia.'

Having a strong economic partnership with Indonesia is crucial to Australia's future prosperity. It's why we come here in this place. Labor has always understood the importance of Indonesia to Australia's future. In 2007, then Prime Minister Kevin Rudd initiated the joint feasibility study with Indonesia to kickstart the process of getting a free trade agreement with Indonesia. In 2013, also when Labor was in government, negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement, or IA-CEPA, began. This agreement is long overdue. The bilateral investment treaty with Indonesia was agreed back in 1993, under another Labor government. There has been a fair bit of change since then though. In the early nineties, 30 per cent of Indonesia's GDP was from agriculture. Now it's half that, at 15 per cent. Almost 70 per cent of the Indonesian population are now connected to the internet, and 71 million Indonesians enthusiastically use social media next door. Since the Asian financial crisis, Indonesia has experienced two decades of uninterrupted growth of at least five per cent per annum. It's one of the fastest-growing middle-class populations in the world.

This agreement is long overdue, because, despite Indonesia's growth over the last 20 years, the economic potential of Australia's trade and investment relationship with Indonesia has not been realised. Only two per cent of Australia's trade is with Indonesia—our northern neighbour, a future giant of the world economy—and there has been almost no growth in this figure over the last 10 years. Indeed, Indonesia is not even one of our top 10 trading partners. Incredibly, trade volumes between Australia and Indonesia are the lowest of any neighbouring states in the G20. We do more trade with New Zealand, a country of a mere four million people, than we do with our northern neighbour with a population of more than 250 million.

We should be frank that a large part of the blame for this situation lies on the Australian side. For too long we have shown too little interest in Indonesia. This is reflected in something as simple as the number of Australians studying Bahasa Indonesia, the language of our northern neighbour. While schools like Williamstown High School in my electorate have fought tooth and nail to retain their Bahasa Indonesia language programs over many years now, the sad reality is that there are fewer Australians studying Bahasa Indonesia today than when Gough Whitlam was our Prime Minister, at a time when Indonesia's primacy in both Australia's security and economic future was in greater question.

Labor supports IA-CEPA because it establishes a foundation for a bilateral partnership that forges Australia and Indonesia as an economic powerhouse in the Indo-Pacific region. This means more jobs in Australia, more opportunities for Australian businesses and more money in the Australian economy, across education, mining, steel and agriculture. This agreement is a gateway for one of Australia's largest export industries: education. The agreement guarantees that Australian suppliers of certain technical and vocational education and training can provide services through majority Australian owned businesses in Indonesia. Also, Australian universities, which already have more than 118 formal agreements with Indonesian universities, will be allowed to open campuses in Indonesia. At a time when we talk about the strategic imperative for Australian universities to diversify the sources of their export industries, this agreement is good news. Extraordinarily, in 2018 Australia received more students from Malaysia than from Indonesia, despite Indonesia's population being nearly 10 times larger. This is a real opportunity. If Australia were to receive the same proportion of students from Indonesia as Malaysia, this would add around 150,000 additional students, growing the Australian education export market, and equating approximately to an additional $11 billion in exports for the nation.

The growth of Indonesia's middle class and its increasing industrialisation also provide an opportunity for Australia's resources industry. The agreement the legislation before the House implements reduces tariffs and locks in progressive tariff quotas for major exports to Indonesia. Indonesia has not previously made commitments in a trade agreement on mining services of this kind. This is of significant importance to Australia. Under IA-CEPA, Australian companies can own up to 67 per cent of mining companies based in Indonesia—up from 49 per cent. Under this agreement, Indonesia will guarantee import permits for 250,000 tonnes of Australian steel per year, meaning more Australian jobs in the Australian steelworking industry.

The Australian grain industry is also facing tough times. It expects wheat exports to be up to 25 per cent lower this year due to drought. IA-CEPA will be crucial in making sure that the Australian grain industry is in a position to recover market share in Indonesia quickly when the industry's prospects improve.

All of that is the good news. That's the opportunity story presented by this agreement, but, as the Leader of the Opposition, the leader of the Labor Party, made clear in his speech to this chamber earlier, all of the details of this agreement are not the details that we would have included if we were the ones sitting opposite negotiating this agreement. Despite all the benefits and the opportunities that I have talked about in relation to this agreement, we need to ensure that IA-CEPA is good news for all Australians. We need to safeguard the interests of Australian workers. This is a significant issue. Since the global financial crisis, unemployment in Australia has risen from around four per cent to around 5.3 per cent. Underemployment has also increased. It went from less than six per cent before the GFC to 8.4 per cent. More than a million Australians are underemployed, wanting to work more but not able to get the opportunity. That's why Labor has demanded—and the government has agreed to it, in writing—to specific commitments on the implementation of this agreement in order to protect Australian jobs and Australian working conditions.

The first is a recommendation made by the members of the JSCOT that the government not use article 12.9 or any other provisions in IA-CEPA to propose, create or extend any additional labour testing waivers for Indonesian contractual service providers. This morning, the government agreed to Labor's request on this. It means that any future negotiations with Indonesia will not undermine Australian workplace laws and will include appropriate workplace labour market testing and actual skills assessments, both features being critical to protecting Australian jobs.

Second, under the free-movement provisions an increase in working holiday visas is provided for by this agreement, something that's quite good, I should point out. One of the disadvantages of the Australia-Indonesia relationship is the lack of that diaspora community in Australia—people with experience of living in both countries. So increasing the numbers of people, both Australians and Indonesians, who have experience living in the other country is an important priority to the Australia-Indonesia relationship. But it's important that this not be used to facilitate the exploitation of temporary foreign migrant workers. Australians are right to be worried given the endemic exploitation of people in Australia working under temporary work visas under this government in recent years. This is a legitimate concern and a real scandal in Australia in recent years.

Labor sought and the government agreed that any Indonesian nationals utilising the additional work and holiday visas in IA-CEPA are treated equally under Australian workplace laws and should be licensed and qualified for any work they undertake in our country. Not only that, but they ought to be informed of their rights under Australian workplace laws. One of the great scandals that we have seen in recent times is the securitisation of Australian immigration policy—the relentless focus only on how to keep people out of this country and inadequate attention paid to the experiences of people coming to this country to work. If we had been paying more attention to this settlement process of new arrivals in recent years, perhaps we would have caught the endemic exploitation that's been going on that all members of this House will have heard of in their electorates.

Third, IA-CEPA includes modernised an improved investor-state dispute settlement clauses and includes safeguards of public health, environment and prudential regulations, crucially replacing existing provisions providing for investor-state dispute settlement processes of this kind in the existing bilateral agreement. Under these new ISDS clauses, Phillip Morris would not have been able to sue the Australian government for its plain-packaging legislation introduced by my predecessor in this House.

, unlike the agreements with Hong Kong and Peru, the IA-CEPA did not terminate the existing bilateral investment treaty, the existing arrangement between Australia and Indonesia, despite the JSCOT recommending that Australia pursue termination of the survival clause in this agreement. Labor sought and the government has agreed in writing that it accepts the bipartisan JSCOT recommendation on termination and that the government also review the recent ISDS mechanisms across all recent agreements as part of the scheduled five-year review of IA-CEPA.

Labor sought confirmation from the government that there is no inference from IA-CEPA or any other free trade agreements that would require the privatisation of government services nor restrict any future decision to acquire public assets. To maintain public trust, it's crucial that any free trade agreements, any agreements of an international nature, impose no external obligations on privatisation of government services, subverting the democratic process in this country. That's not what's going on here, and I welcome the government's assurance on that front. It is also why the government has agreed to Labor's request to implement the JSCOT recommendation that it will consider the use of economic modelling analysis in an overall JSCOT inquiry into all aspects of Australia's treaty-making process in relation to trade. Independent modelling and analysis of proposed trade agreement should be undertaken as a matter of course for future trade and economic partnerships. And any member of this House who has served on JSCOT in the past will know that this has been a frequent and ongoing complaint from members of that committee. Improving transparency and public consultation on how the government enters into treaties with foreign countries is crucial for maintaining public trust in our democratic institutions and in free trade more generally. It's important that we make the case for these agreements to the Australian public and bring them along with us.

Labor has a long history of supporting and promoting trade between Australia and the rest of the world. Our industries benefit from trade through increased competition. Our consumers benefit through lower prices and greater choice. Our workers benefit through higher pay and more jobs. Australia benefits from trade. It has always been thus. Australian businesses that export, on average, hire 23 per cent more staff, pay 11 per cent higher wages and have labour productivity 13 per cent higher than non-exporters. Australian household incomes are estimated to be an average of around $8,500 higher as a result of opening up new markets through trade. But we do need to ensure that free trade agreements benefit all Australians and the changes to this agreement, the implementation commitments Labor has sought, deliver this.


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