House debates

Monday, 18 June 2007

Private Members’ Business

Free Trade

1:35 pm

Photo of Michael JohnsonMichael Johnson (Ryan, Liberal Party) Share this | | Hansard source

I move:

That the House:

recognises the importance of globalisation and open markets to continuing Australia’s record of 16 years uninterrupted economic growth; and
calls on the Australian Government to continue promoting the benefits of free trade, which include alleviating global poverty, especially in developing countries.

I am pleased to speak in the parliament today on this important motion. I think it is particularly timely and relevant, given that the Minister for Trade recently launched the 2007 trade statement. The trade statement shows that Australia’s exports in 2006 were the highest on record—up 16 per cent to some $210 billion. This is more than double the 1996 export levels and a record in both value and volume terms. In fact, 19 of our top 25 exports reached record export values. In moving this motion in the House I want to draw to the attention of the people of Ryan how important international trade is to the prosperity of our society. I think that most Australians would probably not fully appreciate the profound importance of Australia’s trading relationships with all the key nations and economies of the world, and I want to play a small part in increasing that awareness.

Australia’s trade policies and trade success have an enormous capacity to alter the lives of every Australian and, in my case, to affect the economic success of Ryan businesses and the families of Ryan. One in five Australian jobs directly depends on our exports. Australia’s international trading architecture is absolutely critical to the overall economic success of our nation. In the Ryan electorate, the lives of 12,750 people are directly impacted on by the success of our trade with the world. So the lifestyle of thousands of Ryan families depends very much on the companies that they work for and the businesses they may own trading with the world and selling their expertise and their products and services to the world.

Trade has always been closely tied to Australia’s overall economic success. An interesting feature of our trading pattern is that many small and medium sized businesses are now trading with the world. Many medium sized businesses that might have started out as mum and dad businesses are now trading with the world and reaping the enormous benefits of doing so. The Australian Bureau of Statistics reflects that around 86 per cent of exporters in Australia are small and medium sized enterprises. The proportion of Australian exporting SMEs has doubled in the past two years alone. There are now approximately 3,815 Australian exporters selling to China, some 1,800 selling to India, 425 selling to Brazil and almost 300 selling their products or services to the Russian Federation.

It is critical for those of us in the parliament who believe very strongly in Australia’s export success and believe that trade has an impact on the lives of everyday Australians to get out there and promote opportunities for Australian businesses and Australian companies. I certainly value that opportunity as a member of the parliament. It is vital that we advance the cause of globalisation in the world and that we talk about the positive benefits of globalisation, while acknowledging that it can have some detrimental impacts. It is our job as governments of the day, whatever the political flavour, at the state and federal level to try to minimise the negatives that come out of globalisation. One of the difficulties we have is that there is not enough globalisation in the developing economies of the world. We must do all we can to promote access to the wealthy markets of Europe and the US for businesses and people in the poorer countries that want to trade with the world.

I will end my remarks—and allow my colleague the member for Bowman, from Queensland, to say a few words—by saying that the ideals of free trade and national sovereignty are not mutually exclusive, as some would say. Trade is vital to the prosperity of Australians. Trade is vital to the economic success of the people of Ryan. I will continue to call upon the Australian government to promote the successful conclusion of the Doha development round. This is absolutely fundamental to raising the living standards in the economies of the developing world.

Photo of Ian CausleyIan Causley (Page, Deputy-Speaker) Share this | | Hansard source

Is the motion seconded?

Photo of Andrew LamingAndrew Laming (Bowman, Liberal Party) Share this | | Hansard source

I second the motion and reserve my right to speak.

1:40 pm

Photo of Brendan O'ConnorBrendan O'Connor (Gorton, Australian Labor Party, Shadow Parliamentary Secretary for Industrial Relations) Share this | | Hansard source

I congratulate the member for Ryan on placing this motion on the Notice Paper. It is an important debate to be had. I think it is fair to say that it is unlikely that the Millennium Development Goals will be met by 2015. The types of solutions necessary to tackle poverty need to be reassessed. This is particularly the case with the so-called Geldof-Bono solutions to world poverty. Although the Geldof-Bono campaign for alleviating poverty has engendered much-needed public attention to the issue, encouraged tremendous acts of generosity from private citizens and impelled citizens of wealthy nations to apply pressure on their governments to implement more vigorous measures to address world poverty, the economic prescriptions advocated by them are not sufficiently effective.

Living standards in sub-Saharan Africa have failed to improve. Food insecurity is high, universal primary education is the exception and not the rule and health care is poor, especially for birthing mothers and young children. This parlous state is brought about not by a want of aid; rather, a large slice of the explanation lies in the poor economic performance of those countries. In the 1990s the region experienced a decline in GDP per capita of 0.6 per cent per year. It is patently obvious that, with the current economic performance of these countries, no amount of foreign aid can seriously address poverty. Improving the economies of these countries is the only sure way of raising their populations out of poverty.

There is no evidence to suggest that aid improves the economies of recipient nations, and there are several reasons for this. For example, aid can fail because of corruption, and I think people are well aware that that can be the case. Aid can also fail because it is the wrong type—for instance, of course we need emergency humanitarian aid but that will not necessarily spur economic growth. However, the Geldof-Bono argument holds that aid has failed because it has not been tried and that the reason for the failure of aid is that its magnitude has been grossly insufficient. I do not consider that argument to be entirely sustainable. As an example, Bangladesh has been a beneficiary of massive and sustained aid, yet its development has been negligible. Aid can also fail because it is fungible. That is a quaint economic term which effectively means that it is interchangeable with similar items. For example, imagine that a recipient government intends to build a school and the aid donor bears the cost of that. That frees government resources to buy, for instance, tanks and guns. So, in effect, the aid finances the purchase of the tanks and guns. More generally—and this remark applies particularly to program aid—aid might leak into tax cuts or a lower tax effort or into non-developmental programs and objectives.

The Millennium Development Goals are well intended but some are flawed. The supposition that the goal is not growth but poverty reduction is nonsense. The only way that you will get substantial numbers of people out of poverty is by growth. Many countries affected by poverty lack the domestic capital necessary to engender growth. They require foreign investment to build industries and the infrastructure necessary to exploit the natural resources of the country, and they require open markets in the developed world in which to sell their wares. As a logical corollary of this interaction, jobs and growth are generated and people can rise out of poverty.

Global trade is the obvious—and, as far as I am concerned, the only—effective method for the reduction of poverty. In view of the fact that most poverty stricken nations are predominantly agricultural, agricultural trade liberalisation should be given a priority position on the alleviation of poverty agenda. This raises the obvious question of the stubborn European and American persistence with unfair agricultural protectionism. In my view, it is this bar to world trade—more than many other things—that has kept millions in poverty. World trade, especially fair trade, is central to the alleviation of world poverty. Any remedies to poverty that ignore the importance of world trade are not serious remedies at all.

1:44 pm

Photo of Andrew LamingAndrew Laming (Bowman, Liberal Party) Share this | | Hansard source

In the short time remaining, let me say that it is important to note that we cannot have a strong trade balance without the fundamentally strong figures that were released last week showing that our GDP is up and that employment is growing strongly. These are all, as we have shown with control on wage growth, polices of the Howard government.

Photo of David HawkerDavid Hawker (Speaker) Share this | | Hansard source

Order! It being 1.45 pm, the debate is interrupted in accordance with standing order 34. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.