Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise just weeks after this parliament was addressed by the Prime Minister of New Zealand, Prime Minister Key, to speak in favour of the Customs Amendment (New Zealand Rules of Origin) Bill 2011. The ties that bind Australia and New Zealand go back to the very origins of our two great nations. We are the closest neighbours and the very best of friends and allies, apart from on the rugby field. We share the Anzac heritage and conflicts both in our mutual past and through to today with our mutual commitment to eliminating terrorism in Afghanistan and bringing stability to that nation.

However, our ties go beyond conflict. We share a mutual culture and many Australians have fallen so in love with New Zealand that they have made it their permanent home or at least a regular tourist destination. Who has not heard it said that there are more New Zealanders living in Bondi than in Auckland? Even Prime Minister Key, who was here a few weeks ago, himself admitted that he has also lived in Australia. I think he was down in Bondi but he was in Sydney.

My sister is married to a New Zealander. They have a debate going on amongst themselves. They have two children born in Chile. I think the eldest girl is going to be an Australian and the younger boy is going to be a New Zealander, so they will have these different nationalities, which is very interesting. The ties are very thick and close.

It is because of this closeness that we have all been so deeply affected by the earthquakes in Christchurch where there is a need to demolish some 10,000 houses, where the elderly have been moved to other parts of the country and where schools are doubling up on students just to make sure that their education continues. We have heard that Christchurch's CBD has been shattered and may never recover and that so much has been destroyed and there is so much uncertainty that they are not sure whether to rebuild. I know that the spirit is very strong there and that they are keen to rebuild, but they have a big job ahead of them. I know that all the Australians are out gunning for them to succeed in that mission.

We have heard that 181 people have lost their lives and that the cost to the New Zealand economy will be huge. It is estimated that there will be a loss to the GDP of some $15 billion. This is a hit to their economy of such epic proportions it will take time to recover. This recovery will very much involve Australia. We have already provided rescue and emergency teams, but we will also provide our assistance in economic terms as well. To this end I was very interested to hear Prime Minister Key talk about exactly how much economic investment flows between Australia and New Zealand. We would all be aware that he said some $50 billion of investment in New Zealand is from Australia. I was also interested to hear that exports to New Zealand total some $8 billion.

Given our focus on China and Asia generally and the large investments made there, we at times can tend to forget the importance of New Zealand for the prosperity of our export trade. While the New Zealand trade may be small, the proximity of New Zealand, our shared culture and our trade agreements make it in many ways a more enticing offering for many businesses. Perhaps it is for this reason that Prime Minister Key noted that so many small and medium Australian businesses cut their teeth in the international market by first exporting and investing in New Zealand.

This bill has been made possible by the close trade relationships that have developed between New Zealand and Australia over time. A cornerstone of this closeness in recent history could be said to be the Closer Economic Relations Trade Agreement, signed in 1983, and known widely as the CER, a free trade agreement that is widely acknowledged as a model of the standards to which such agreements should aspire but which many, if not most, fail to achieve. This agreement is Australia's longest standing bilateral free trade agreement. It provides both Australia and New Zealand with liberal access to goods, services and investment markets. Many Australian jobs and busin­esses are underpinned by this agreement.

The legislation before us today seeks to amend the provision of this agreement and its subsequent act to alter the rules of origin provisions. Rules of origin are those provisions—be they legislative, regulatory, administrative rulings—that are used to determine the country of origin of a good or service or investment. They are of import­ance in world trade, especially in a world that is characterised by the ever-growing globalisation of production.

These matters may appear technical or details of little interest, but the functioning of a bilateral trade agreement depends crucially on getting these details right. It is another reminder of the more workaday details that lie behind the big picture items that grab the headlines. It reminds us that the hard work of reform takes place on many levels and involves unglamorous hard work and careful attention to detail, very often performed by public servants in my own electorate who I know are here today to see their bill hopefully come to fruition. I am sure plenty of hours and midnight oil has been spent on this. I congratulate them on their work. There have been lots of public servants involved and lots of people committed to making a difference.

The current rules of origin for the free trade agreement entered into force on 1 January 2007. When negotiating these rules it was agreed by both Australia and New Zealand that there would be a review conducted after three years of the rules taking effect. This review began in 2008 by both Australian and New Zealand officials and was completed early last year. The review resulted in agreement to make amendments to the text of article 3, rules of origin, and the related product specific rules in annex G that deal with the definitions of particular industries and processes. These are the changes we make today. Specifically this bill inserts new definitions for aquaculture and amends the definitions for manufacture and produce. It also amends the provision dealing with wholly obtained goods and the provision dealing with eligibility based on the last process of manufacture. In addition, it inserts a new section to provide that goods are not treated as having originated in New Zealand merely because of certain operations being performed.

The government consulted Australian industry throughout the process of review. In addition, the Joint Standing Committee on Treaties conducted three public hearings on the treaty changes before recommending that Australia take binding treaty action. The changes to the trade agreement will reduce the administrative burden on business and will facilitate the eligibility for duty-free entry of goods into both markets. The amendments will also provide greater consistency between the rules of origin in the agreement and those in other free trade agreements entered into by Australia, which is very important. The amendments to article 3 will enter into force on the date when the Australian and New Zealand governments notify each other by an exchange of diplomatic notes that they have completed their respective domestic processes to bring the amendments into force.

The CER agreement is the standard by which bilateral free trade agreements are judged. For almost 30 years, it has played a significant part in the prosperity of Australia's export trade and our economy. The provisions before us today are good for the Australian economy, are good for the New Zealand economy and are an important part of the ongoing achievements of the government in support of the economic wellbeing of all Australians. These provisions are also good for the economic wellbeing of New Zealanders, the economic wellbeing of people who need employment and Australian exports. I therefore commend this bill to the House.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (New Zealand Rules of Origin) Bill 2011. The purpose of this bill is to amend the Customs Act 1901, a very, very old act. It is more than 100 years old. This act has been part of the laws of this nation since Federation, so today we are amending one of the original acts of parliament. The bill will amend the Customs Act 1901 to implement amendments to the rules of origin requirements under the Australia New Zealand Closer Economic Relations Trade Agreement, which is a very important trade agreement between our two nations. The Australia New Zealand Closer Economic Relations Trade Agreement came into effect on 1 January 1983 and it is fundamental to the Australia-New Zealand trade and economic relationship. According to the explanatory memorandum:

The Agreement is a comprehensive and wide-ranging agreement that provides New Zealand and Australia with liberal access to each other's goods, services and investments markets.

It is the umbrella for close collaboration across quarantine—which I want to touch on before I conclude—customs, transport, regulatory and product standards and business law issues.

The agreement reaffirms the close relationship between Australia and New Zealand. On 1 January 2007 the agreement's rules of origin provision underwent considerable change to permit both the change in tariff classification method and the regional value content method to be used to establish whether goods are of New Zealand origin. As part of the 2007 amendments to the agreement, both parties also agreed to perform a review of the new rules of origin within three years of these new rules taking effect. This review, which commenced in late 2008 and was completed in March 2010, resulted in amendments to the text of article 3, rules of origin, and the related product specific rules in annex G to the agreement. The modification to the agreement will lessen the administrative burden on business and will assist in the eligibility of duty-free entry of goods into both markets. The amendments will also provide greater consistency between the rules of origin in the agreement and those in other free trade agreements entered into by Australia.

Although the coalition does not consider this bill to be controversial, it still has significant effects on many agricultural industries within the electorate of Maranoa. I particularly want to make sure that we capitalise on our competitive edge as a nation. They may be our cousins across the Tasman, but charity begins at home. Wool production, for instance, is the second most common enterprise on Australian farms. In the eastern states most wool is grown west of the Great Dividing Range and the total wool produced in Australia amounts to some 370,610 tonnes, with Queensland contribut­ing over 10,000 tonnes of wool annually. Australia is the world's dominant producer and exporter of wool, accounting for some 67 per cent of the world's wool exports from major producing countries.

Australian wool growers have recently enjoyed an increase in demand and also, related to that, an increase in price for their product, which I can assure you is long overdue. That is due to a lower supply and much higher demand coming out of China. The late autumn wool market defied the trend of cautious international buying by jumping some 56 per cent over the past year at a time when the Australian dollar surged 20 per cent. So it is even more remarkable that we have seen this price increase and increased interest from the international sector sustained against the backdrop of a higher Australian dollar.

I want to touch on the wool industry because Australia and New Zealand are significant producers of wool and there have been some tariff issues in the past. I think we have disadvantaged ourselves a little bit to the advantage of New Zealand when it came to some of the made-up products, particularly suit products, and have given New Zealand an edge over Australia when it came to using Australian made fabrics to produce suiting and other apparel. The wool industry is important to both our nations. In the international arena, we have worked cooperatively in the past but now, through Australian Wool Innovation, we are again seeing a cooperation which had perhaps been lost for many years. And it is important we include New Zealand as part of that cooperation.

It was last year that His Royal Highness Prince Charles launched an initiative aimed at increasing demand for British wool and wool from the Commonwealth, obviously including New Zealand. The wool project will see diverse groups from across the wool sector, including textile designers and the carpet and fashion industries, work together to improve public awareness of the benefits of this very sustainable product. Prince Charles has long been concerned about the low prices farmers have been receiving for their wool, so last year his Royal Highness brought the wool industry together, including New Zealand producers, fabric makers, carpet industries and textile designers, to see how they could work together globally to put wool onto a more sustainable economic footing.

I was very pleased to see the Governor-General involved in this wool initiative, which includes not only Australian wool but New Zealand wool, through the Australian Wool Innovation launch at Admiralty House in Sydney earlier this year. This initiative will see a world wool day later this year—in the first week of October, I think. I hope that this parliament takes up that opportunity—although we are sitting not that week but the following one—to participate in world wool day because wool is one of the great products of the world. It is sustainable and it is also a product that was very much instrumental in the early development and economic growth of this wonderful nation, Australia.

So I am looking forward to seeing how these amendments enable us to work with the New Zealand wool industry. I am of course interested in cooperation with many other New Zealand industries, but I am particularly interested to see how this will play out with our cousins in the wool industry, whether in textiles, apparel, nonapparel or design. I will be interested to see how we can—not only here in the Australian and New Zealand wool industry, from the producing and processing sectors right through, but also globally—push our advantages and the uniqueness of our wool fibres into other markets. I wanted to link the issue of wool into this bill because I think it is important that we work together in this industry. In the past, we worked together through what was called the International Wool Secretariat, but now we have Prince Charles's wool initiative pushing wool, through the Commonwealth countries, around the world. I think his initiative has certainly given things a great impetus.

Recently, in New York, London and Europe, I saw the effect of this wool initiative. I saw how wool is being increas­ingly seen by consumers as a sustainable product. I think the initiative is going to continue to help our wool producers—as well as New Zealand wool producers—and that part of the wool industry which is beyond the farm gate. It will help us to promote wool from Australia and New Zealand and to promote our competitive advantages, particularly in processing. It will help us to promote that we are able to produce not just the raw product but the manufactured product and to export these products into other countries.

As I foreshadowed, I turn now to quarantine. It is important that we have this free trade between our two countries, but quarantine becomes a significant issue. The issue I refer to here is the proposal to import apples from New Zealand into Australia, although I know that a final decision is not due until next month. The only apple industry in Queensland is in my electorate of Maranoa, down on the Granite Belt in Stanthorpe. If the decision under this agreement is to allow New Zealand apples into Australia, it will be the first time in 90 years we have seen apples imported from New Zealand into Australia. The restriction which has always kept New Zealand apples out of Australia has been a quarantine restriction. That is because New Zealand has a disease in apples called fire blight while Australia does not. If, through a breakdown in quarantine, we saw apples with fire blight brought into Australia and then saw fire blight accidentally ending up in our apple and pear orchards, we would decimate our industry. There are only two ways you can control a fire blight outbreak. One way is with very heavy herbicide use. The only other way is to destroy the tree totally—in other words, cut it down.

I know that the apple growers of my electorate, and pear growers across Australia, are very concerned about the protocol under this quarantine agreement. Unless something changes and New Zealand apples are not allowed to come in as a result of the decision to be made in August, the protocol means that New Zealand apple orchardists will themselves be clearing their apples for export into our markets here in Australia. The apple growers in my electorate of Maranoa, in the Granite Belt, and pear growers across Australia are very concerned at the protocol that is in place. We believe that this is terribly important, notwith­standing this free trade agreement, and that the risk remains too great. To orchardists in the apple and pear history, fire blight would be what foot-and-mouth disease is to the beef industry. We should take it just as seriously as we take foot-in-mouth, because one of the great advantages we have, and one of the great pleasures we enjoy in this country, is the fact we have clean, green food. It is one of the things we seem to take for granted. I think consumers across Australia are so lucky to have this clean, green, high-quality food at an affordable price. If we were to find under this free trade agreement that New Zealand apples were allowed into Australia and there was an accidental—and it would be accidental—outbreak of fire blight in our apple and pear industry, it would be directly related to the protocols, which I believe are too lax and run an unnecessary risk. I say to the Prime Minister and to the government: think again about allowing apples from New Zealand into Australia. The risk is too great. Fire blight would decimate our industry and the many family farmers who produce these wonderful products for us.

They say an apple a day keeps the doctor away. I say, 'Let's make sure we keep New Zealand apples with fire blight away.' Other than that, I support this bill. But, in the next month or so, we have to make sure that we continue our campaign to ensure that the government has listened to the industry and that it understands the risk of accidental entry, under quarantine rules as they are proposed, of apples from New Zealand into Australia. This could lead, as I said, to the decimation of our industry. Once again: an apple a day will keep the doctor away. Let us make sure that we keep New Zealand apples away while ever there is a threat of fire blight being brought into Australia.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Customs Amendment (New Zealand Rules of Origin) Bill 2011. This bill contains amendments to the Customs Act 1901 to implement changes to article 3 of the Australia New Zealand Closer Economic Relations Trade Agree­ment.

The Australia New Zealand Closer Economic Relations Trade Agreement, otherwise known as ANZCERTA, is Australia's longest standing bilateral free trade agreement, having been in force since 1983. One aspect of ANZCERTA is the rules of origin, often referred to by its acronym ROO. In negotiating the current rules of origin, which came into force on 1 January 2007, it was agreed that a review should take place within three years of the rules taking effect. Australian and New Zealand officials commenced the review in late 2008 and completed it in March 2010. The amend­ments in the bill address some imperfections identified in that review. The amendments will result in a range of practical changes. For example, the changes made to ANZCERTA will reduce the administrative burden on business and will facilitate the eligibility for duty-free entry of goods into both markets. It is expected that these benefits would be passed onto consumers. The amendments will also provide greater consistency between the rules of origin in the ANZCERTA and the free trade agreements that Australia has with other countries.

The ANZCERTA amendments were tabled in parliament in June last year, and I understand that the Joint Standing Committee on Treaties inquired into those amendments. Public hearings were conduc­ted in November 2010 as well as a further two hearings in February 2011. On 11 May 2011, the Joint Standing Committee on Treaties recommended that Australia take binding treaty action. The government also consulted widely with the Australian indus­try throughout the process. Specifically, the bill will amend division 1E of part VIII of the Customs Act to (a) insert a new definition of 'aquaculture', (b) amend the definition of 'manufacture', (c) amend the definition of 'produce', (d) amend the provisions dealing with 'wholly obtained goods', (e) amend the provisions dealing with eligibility based on the last process of manufacture, (f) insert a new section to provide that goods are not New Zealand-originating goods merely because of certain operations and (g) make consequential amendments to the verification powers in division 4D of part VI of the Customs Act.

These amendments make sensible changes to definitions under the Customs Act, and I support them. They also highlight issues of concern that have arisen in recent years as a result of trade agreements between Australia and other countries, particularly with New Zealand. There is growing concern amongst Australian primary producers that Australian primary production is being increasingly placed at risk because of imported products which can either originate in a country of concern or come into Australia via a country like New Zealand, which Australia would generally feel secure in trading with.

A current example is the concern of Australian potato growers that the import­ation of New Zealand potatoes could place at risk the Australian potato-growing industry because of the zebra chip disease that has been detected in New Zealand grown potatoes. The zebra chip disease was first detected in Central America in the 1990s. It then made its way to New Zealand, where it was first detected in 2008. If the Australian potato industry were infected with the zebra chip disease, the livelihoods of over 2,000 Australian potato-growing families would be placed at risk because there is currently no known effective control procedure for this disease. I have to date presented petitions to this House signed by around 648 growers who are concerned about this matter. Their concern relates to the fact that they understand that there is a push to have potatoes imported from New Zealand.

The member for Maranoa touched on another matter that I also wish to speak on, and that is the issue of apple growers in this country and their concerns about the importation of apples from New Zealand. In particular, they are concerned that the disease fire blight has been detected in New Zealand apples and, not surprisingly, they do not want to risk that disease being brought into Australia. Australia lost its appeal to the World Trade Organisation on this matter. I must say that I commend the minister for having appealed it in the first place. But, unfortunately, we lost the appeal. I underst­and that the Minister for Agriculture, Fisheries and Forestry, Senator Ludwig, has now ordered that an import risk analysis be carried out prior to any approval of apple imports into Australia from New Zealand.

In South Australia we also have an important apple industry—particularly in the Adelaide Hills, which adjoins my electorate of Makin. I know that the apple growers there are concerned about the importation of New Zealand apples into this country. I have spoken with them on several occasions and in fact was able to organise a meeting between them and the previous agriculture minister, Tony Burke, to discuss their concerns. They have argued quite strongly that if we are going to allow in apples from New Zealand then at the very least we need to ensure we have the necessary safeguards in place and that those safeguards are well policed. They too are very concerned about the disease fire blight coming into this country, and I understand that one of the very reasons Australia is able to export much of its fruit and vegetable produce is that it is seen as a country that is relatively free of many of the diseases that other countries unfortunately have. If we were to in any way infect our own products, that would no longer be the case and I have no doubt that it would affect the export of Australian produce to overseas countries.

In that respect, I understand that over the past year Australia has imported vegetables worth $555 million which is in fact $306 million more than the export value of Australian vegetables over the same period. So we have already reached a situation where we are importing more vegetables than we are exporting. Australian growers, faced with the increased value of the Australian dollar and generally higher production overheads, are already at a disadvantage when competing with overseas growers. The one advantage that they have, and which they value, is the quality of the produce grown here. Jeopardising that quality by importing products from countries where disease has been detected is a risk that they simply do not need. Even with Aust­ralia's strict biosecurity system, prevention of disease entering Australia can never be 100 per cent guaranteed.

It is of additional concern that product originally exported to New Zealand by another country may find its way into Australia. Not all countries grow produce in accordance with Australian and New Zeal­and standards, particularly with respect to the type of chemicals used in production. They may in fact use chemicals that have been banned in Australia. The sooner we have clear country of origin labelling in place in Australia, the sooner Australian consumers will be able to make an informed choice about the products they purchase.

Australia has a very close working relationship with New Zealand. We share food standard regulations under the Food Standards Australia New Zealand process. Both countries, however, enter into their own trade agreements with other countries, which in turn may create a pathway for non-New Zealand product which Australia has conc­erns with entering Australia.

We clearly need to be vigilant in our customs and, in particular, biosecurity processes. The Australia New Zealand Closer Economic Relations Trade Agree­ment attempts to define the nature of the trade between the two countries and in turn provide certainty for producers and exporters. The amendments in this bill make clearer definitions in the agreement. I commend the bill to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

New Zealand is our close neighbour, earnest rival and great friend. The rivalry we have in cricket, rugby and netball is legendary and it is mostly friendly and conducted in a manner befitting such noble sports. But it is not just in sport that Australia has close ties with our trans-Tasman neighbour. About half a million New Zealanders live in Australia and 65,000 Australians live in New Zealand. Twenty-three per cent, or $7.2 billion worth, of New Zealand exports end up in Australia. In return, 18 per cent of New Zealand imports originate here. On top of that, there is $6 billion worth of two-way trade in services.

The population of New Zealand is around 4.4 million, or around one-fifth of Austral­ia's, which of course means that Australia's market is a much larger and more encour­aging market for New Zealand. We both have similar histories of reliance on agriculture and, even though Australia has moved further away from this agricultural economic dominance, both nations are key exporters of agricultural products, including food. In this agricultural trade our two nations could be described as natural rivals, producing many similar products. So how do we differentiate our product in Australia, not just compared to New Zealand product but compared to product from around the world? More importantly at this point, how do we ensure that New Zealand produce is exactly that and not rebadged imports?

The Customs Amendment (New Zealand Rules of Origin) Bill before the House purports to set out the rules for determining whether goods are New Zealand-originating goods and therefore eligible for a preferential rate of customs duty under the Customs Tariff Act 1995. However, in the vague laws of international trade such rules always seem open to interpretation and, in spite of the intent in this bill, indeed this seems to be the case in this bill.

There is no greater acknowledgement of the lack of equity and vagaries in trade policy than the failure of the world to deliver, particularly in agriculture, through the DOHA Round of world trade talks. We really do need to ensure that this bill and any others actually enhance real trade in an open, honest and transparent manner. The Aust­ralian community needs to be assured that goods from other countries are not entering Australia branded as a product of New Zealand thanks to a brief stopover, but the bill really does not guarantee that.

Subdivision G of the act:

… sets out when goods are New Zealand originating goods because their last process of manufacture is performed in New Zealand. It is repealed on 1 January 2012.

The bill inserts after subdivision G an extra statement, subdivision GA, which:

… provides that goods are not New Zealand originating goods under this Division merely because of certain operations.

It goes further, in identifying that goods are not New Zealand-originating goods under this division merely because of the following operations:

(a) operations to preserve goods in good condition for the purposes of transport or storage;

(b) disassembly of goods;

(c) affixing of marks, labels or other similar distinguishing signs on goods or their packaging;

(d) packaging, changes to packaging, the breaking up or assembly of packages or presenting goods for transport or sale;

(e) quality control inspections;

(f) any combination of operations referred to in paragraphs (a) to (e).

This suggests that goods that have been repackaged in New Zealand cannot simply be badged as a product of New Zealand and sent at reduced duty to Australia, but it does not really address partially manufactured or processed products made from foreign ingredients. The bill seeks to omit the statement:

Subdivision B provides that goods are New Zealand originating goods if they are wholly obtained in New Zealand or in New Zealand and Australia.

In turn it inserts:

Subdivision B provides that goods are New Zealand originating goods if they are wholly obtained or produced in New Zealand or in New Zealand and Australia.

The government and the minister need to explain the exact impact of that change. I note that when the minister introduced this bill to the parliament on 16 June he explained the process by which these changes were developed but did not explain what outcomes would come about as a result of the amendments. That is something that we as parliamentarians and growers in Australia need to be aware of. The minister's speech of about four full paragraphs did not contain that sort of detail. The minister said in that speech that changes:

… will reduce the administrative burden on businesses, facilitate the eligibility for duty free entry of goods into both markets, and provide greater consistency between the ANZCERTA Rules of Origin and those of other trade agreements negotiated by Australia.

But I ask the minister to explain how the proposed changes will prevent foreign goods entering Australia through New Zealand in that so-called 'grey marketplace'.

I know that much has been said about this grey marketplace and there is quite a bit of information out there about what has gone on. I saw a Today Tonight feature in which they investigated and tracked raw products to factories where they were processed, repackaged and exported. These products were branded with, as they said in this article, the trusty 'made in New Zealand' label. It stated that in the last year—this was 2010—officially 45 per cent was coming from New Zealand, 16 per cent from China and 12 per cent from Canada. China has more than doubled the amount of food it is sending into Australia, but that does not include food it is sending which is processed in New Zealand and then gets sent here. We hear constantly about Australian growers being unable to compete, and it comes as a result of some of this.

I need to know from the minister whether the entry of such goods will be made easier or more difficult with the proposed changes and why. We need explanations that will work in practical terms and we need to know whether any proposed reduction in administration will result in a reduction in accountability. We cannot afford to lower our standards. The other issue relating to this is food labelling. I have raised the accuracy of food labelling in this place on numerous occasions. Products coming through New Zealand to Australia must be adequately and properly labelled. As we hear frequently in this place, the quality of Australian products should not be put at risk.

There is no doubt that the clean, disease-free status of Australian food and produce is absolutely paramount. That is why so many Australians are outraged at the continual undermining of our biosecurity. The govern­ment is not acting on this. The 2009 budget slashed $35.8 million from quarantine and biosecurity and we have seen $58 million slashed from the customs budget. Fewer cargo consignments are inspected and fewer vessels boarded on arrival. In 2011 another $32 million was cut from the operation of the Department of Agriculture, Fisheries and Forestry, reducing the capacity of the department to deliver services to Australian agriculture.

The latest example, which we heard today in this chamber, is the recommendation by Biosecurity Australia to abandon adequate protocols to prevent the incursion of serious diseases like fire blight with the importation of New Zealand apples. This comes on the back of the Prime Minister visiting the New Zealand parliament and making an ann­ouncement that we would accept their apples. This was said without the completion of an import risk analysis. So Biosecurity Australia, in my view, has had to try to cut its cloth to fit the Prime Minister's statement. But this is an abandonment of the quarantine principles that have made Australia amongst the cleanest producers of high-quality food in the world. We know that the Beale quarantine and biosecurity review, commis­sioned by Labor, called for many millions more to be spent on AQIS and quarantine to provide real protection for our border. But the government has failed to act and has actually stripped funding.

In relation to the apple imports, 75 per cent of Western Australia's apples and pears are produced in my electorate. So the potential for harm to those growers and to our industry in Western Australia is signific­ant. We know that the biosecurity measures and protocols that we expect, and that are part of what we do on farm in Australia, will be less than those required in the United States. That is what will be applied to the importation of apples from New Zealand. We know that our growers are very concerned about the potential for fire blight, european canker and leaf-curling midge. It only takes that little piece of trash to come in with those apples. When we look at what is being asked of inspectors in New Zealanders, it could come down to as few as one apple in a million being inspected, and those apples could come from a diversity of properties.

We know that fire blight in New Zealand is not a declarable or reportable disease. So how are we going to know which orchards are affected and whether any of those apples will be coming into Australia? We know that the disease can manifest itself in the calyx, so the inspections are particularly important to maintaining our biosecurity. Unfortunate­ly, when you go to New Zealand and see how the industry runs you see that Australia's biosecurity will be in the hands of a backpacker having a great day, every day, picking and packing apples in New Zealand to be sent to Australia. I do not think that is an appropriate place for our biosecurity to rest. I think this is a very serious issue for us in Australia.

The other question that I would ask is: who is going to pay the compensation to a grower who has to get rid of their crop and pull out their trees to deal with fire blight? Who is going to be responsible for that when that comes as a result of fire blight introduced through the importation of New Zealand apples? You can understand the concerns of industry on this issue. We have enjoyed some of the most rigorous bio­security standards, but unfortunately we are now seeing that Biosecurity Australia is being asked—or instructed, I would think—to provide an import risk analysis that reflects the statement the Prime Minister made in the New Zealand parliament. That is simply not good enough. Australia produces some of the best quality food in the world—

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The best!

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

and we do tend to take it for granted—the member for McMillan would agree with this—that we can go and buy some of the best quality food in the world in our country. We seem to think that it will be there forever, but it will not be if our biosecurity is put at risk as it is being put at risk now. We take it for granted when we go to buy our fruit and vegetables at the local fruit and vegetable market, or wherever we go, that they are going to be of the quality and standard that we expect and demand and enjoy. I have great faith in our growers, but I am very concerned about the organic growers, because they cannot use strept­omycin. How does an organic grower deal with fire blight in that instance? This has the potential to do a lot of harm and it also affects a whole range of other genera. We know that well. It could well affect the cotoneaster group. There are a whole lot of ornamental pear trees as well, in a whole lot of gardens right around this nation, that could be affected by this.

So this is not a simple issue. Certainly Biosecurity Australia should be applying the utmost rigour to this and not be trying to make a square peg fit into a round hole. The debate on this bill covers quite a bit of ground, but it hits on the importance of biosecurity and the types of products coming to Australia, where they emanate from, how they are grown, how they are produced and whether they meet the standards that we in Australia comply with and that give us the opportunity be the producers of some of the best food in the world. This is very important in consideration of this bill, and I put those concerns on the table.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

On 16 February this year the Prime Minister addressed the New Zealand parliament and, in an act of treachery to Australian apple-growing families, agreed to give carte blanche to allow New Zealand apples into our country. This was, in every sense, a betrayal of the worst kind—an Australian Prime Minister being disloyal to Australian people. Never mind the utterings that this rollover—and that is what it is—complies with the World Trade Organisation or anything else offered as some sort of feeble excuse. It is incomprehensible that our Prime Minister, as unpopular as she is in this country, would go across the Tasman to try to win a few friends over there in this way.

It was an executive decision to do this because in December last year the Australian and New Zealand governments agreed that a review of the situation would be completed on 17 August 2011, still many weeks from now. Despite this, our Prime Minister jumped the gun by several months and, in doing so—in wrongly doing so—opened the floodgates to New Zealand apples, placing our own apple industry in harm's way, risking fire blight and a flooded market. She did the same with live cattle exports, making an executive decision to ban the whole live trade to Indonesia, despite there being abattoirs which comply with Australian killing standards. It makes you wonder what the Prime Minister has against regional Australia.

On 1 June Apple and Pear Australia Ltd, APAL, which has been fighting the good fight against this Labor government's ineptitude and this Prime Minister's arro­gance, released a summary of a Centre for International Economics report commis­sioned by Horticulture Australia Ltd. The very first paragraph of the summary spells out the trouble we now face:

The Australian apple industry is likely to endure significant structural changes resulting from the introduction of apple imports, starting January 2011, with wholesale prices expected to be about 20 per cent lower and farm income about 30 per cent lower. Imported apples will be sold in Australia as a result of changes made by Biosecurity Australia to quarantine restrictions.

The Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig, attended the announcement of the report, which was made by APAL chairman Darral Ashton, of Batlow, a town in my Riverina electorate which faces a bleak outlook thanks to our Prime Minister's sell-out. I met Mr Ashton and an APAL delegation about 20 minutes ago in my office. They are very worried about Labor's attitude towards agriculture, and they have every reason to be concerned.

I hope the minister listened on 1 June. Moreover, I hope he takes some action to do something to help save what has been and could and should continue to be a great Australian industry, a great Australian trad­ition. I hope that, unlike with the cattle trade, Senator Ludwig does not cave in to orders from above, from a Prime Minister who puts everything into the delay basket, hoping that it gets lost in the 24-hour media cycle on which her government runs, hoping the next latte-sipping, union-grovelling, leftie focus group moves on to some other issue to appease the city dwellers or the rabid Greens to whom this Labor government is so beholden.

Meanwhile, regional Australia suffers. Meanwhile, our apple growers wonder if there will be a future. Meanwhile, New Zealand apple growers prepare for an assault on Australian markets which the APAL report said will have dire consequences for our industry. The Economic impact of apple imports from China, New Zealand and the USA on the Australian apple industry report suggests:

The immediate impact of the increased import competition that will result from relaxing quarantine restrictions will be to lower the domestic price. CIE used a model developed for a HAL Future Focus project, the Hi_Link model, to estimate the various adjustments that are likely to occur in response to estimated price changes. CIE estimated that relaxing quarantine restrictions on apple imports from China, New Zealand and the United States will have the following impacts on the Australian apple industry by around 2014:

Can we afford to allow this to happen to Australian apple growers, Aussie farmers? This is the first time in 90 years that apples are being imported into Australia. It is the biggest challenge the apple industry has had to face since England joined the Common Market in 1972. Apple imports could poten­tially cripple and undermine the economic prosperity of the Batlow and Tumut districts in the Riverina.

New Zealand initially applied to export apples to Australia in December 1995. Since that time, APAL and citrus fruit growers have done their utmost to ensure that, if New Zealand apples are brought into Australia, exotic pests and diseases present in New Zealand do not also arrive on our shores and end up in our orchards and, as the member for Forrest quite rightly pointed out, in our ornamental gardens as well.

On 1 January 2007, the agreement's rules of origin provision underwent considerable change to permit both the 'change in tariff classification' method and the 'regional value content' method to be used to establish whether goods are New Zealand-originating goods.

As part of the 2007 amendments to the agreement, both parties have agreed to perform a review of the new rules of origin within three years of these new rules taking effect. However, in the same year New Zealand lodged a dispute with the World Trade Organisation on the basis that Australian measures were inconsistent with Australia's international obligations under the Agreement on the Application of Sanitary and Phytosanitary Measures. This critical step entailed the decision-making process being taken out of the hands of both countries and all power given to the WTO—an international body committed to free trade, not fair trade. In August 2010, the WTO ruled that Australia's phytosanitary measures for New Zealand apples were not justified. An appeal was lodged but lost, in November 2010, and there were no further avenues for appeal by Australia.

Yet—and this is crucial to the whole argument—the two governments agreed to complete a review of the matter, which will not be finalised until next month, six months and one day after our Prime Minister made her great backdown speech in the New Zealand parliament. At present, Biosecurity Australia relies on New Zealand's standard orchard practices as the quarantine standard sufficient to protect Australia from a number of extremely damaging pests and diseases not present in Australia.

Mr Shorten interjecting—

This is a very serious subject, but I will take that interjection from the shadow minister—sorry, not shadow. He will be a shadow in the next parliament—trust me! These practices include application of the integ­rated fruit production system, or an equivalent, to manage pests and diseases in the orchards; testing to ensure that only mature fruit is exported to Australia; maintenance of sanitary conditions in dump tank water; high-pressure water washing and brushing of fruit in the packing house; and a minimum 600-fruit sample from each lot of fruit packed be inspected and found free of quarantine pests for Australia.

However, all horticultural industries in virtually all countries have standard practices designed to minimise the risk and spread of diseases. But the efficacy of those practices depends on many factors which are not always in the control of the orchardist or industry personnel. The standard practices, like any other code of practice, are open to potential flaws such as human interpretation and application of the standard practices, which invariably differ from grower to grower and from region to region. Without a significant level of auditing, there is no way of judging compliance with the standard orchard practices and, in New Zealand, there appears to be no single organisation which manages and audits the process across all export orchards to ensure accuracy and consistency and to deal with noncompliance.

Pest pressure, both on-farm and from neighbouring properties, choice and efficacy of application of control agents, and orchard canopy and design are also standard practices which can be open to issue and noncompliance. While in New Zealand it is mandatory to comply with standard orchard practices if fruit is to be exported, it is not mandatory to have all aspects of the program conducted in the expected manner. Whilst the modifications to the agreement will lessen the administrative burden on business and will assist the eligibility for duty-free entry of goods into both markets, the amendments will also provide greater consistency between the rules of origin in the agreement and those in other free trade agreements entered into by Australia.

Certain industries will indeed suffer from a decrease in prices and the importation of pest and diseases. This is just another blow to Australian farmers, who must feel that under this government they cannot take a trick. Foreign apples should never have been allowed into our country in the first place. Our apple industry is free of fire blight and is self-sustaining. All this has done is undermine and potentially cripple what was a vibrant Australian industry, which meant so much to the economic prosperity of Batlow and Tumut and many other regional areas as well. We have already seen what pests and diseases such as the asian bee and greening disease can do to countries with horticulture such as citrus.

Today, the shadow minister for agric­ulture and food security has circulated a private member's bill to safeguard against fire blight in the face of the Gillard government issuing permits to import apples from New Zealand. Australia's robust, science based quarantine protections must not be compromised. Our pest and disease-free status has been hard won and the government's bid to rubber-stamp New Zealand apples into Australia, without the same checks and balances that are applied to other countries, sets a very dangerous precedent.

While we have Australian Quarantine and Inspection Service inspectors on the ground in China, undertaking rigorous checks, we are expected to simply accept that practices across the Tasman in New Zealand adequately manage endemic fire blight risk in that country, despite not having a single inspector to check that the right thing is being done. Apples are apples, and the same scientific standards should be applied to apples, regardless of where they are imported from.

The coalition is so worried about the lax attitude to quarantine and biosecurity in Australia that we have put forward the Quarantine Legislation Amendment (Apples) Bill 2011, a bill which makes a permit to import apples a disallowable instrument. This bill puts the government and Biosecurity Australia on notice that, if they ignore the science and put trade before quarantine, this parliament can disallow permits and direct them to ensure that adequate protections against foreign pests and diseases are in place. Biosecurity Australia needs to clearly justify the risk factors and why Australia is allowing lower standards for New Zealand than those required to import apples from China. There is a very real risk of fire blight entering Australia and, of the 49 countries which have contracted fire blight, not one has eradicated it.

Fire blight is not a notifiable disease. There has, apparently, been no serious fire blight outbreak reported in New Zealand since 1998. But how would anyone know whether one has occurred? Indeed, when Biosecurity Australia inspectors visited New Zealand in March and inspected six orchards and five packing houses they found fire blight. The reckless pursuit by the government to import New Zealand apples without adequately managing the risk of fire blight will be a death sentence for our country's apple producers. This decision to make the permit to import apples a disallowable instrument is not a decision the coalition has taken lightly, but such is the lax attitude towards biosecurity by this govern­ment that we were left with no other choice. We have a duty to proactively protect Australia's shores from pests and diseases. After all, mangoes from Queensland are placed under very strict quarantine measures by New Zealand for fear of fruit fly, yet we are not supposed to have similar tight rules to guard against fire blight from New Zealand apples. The federal government has wiped its hands of agriculture. It constantly proves this with its laxity in biosecurity laws, suspension of live exports and failure to gain an understanding of the way of rural life through listening to the people who know best. One of those people is Hannah Cathels, part of the third generation of her family to grow and sell Australian apples. She wrote to me recently, and her correspondence is worth listening to. Her uncle Ian Cathels operates three orchards in Batlow, New South Wales, and her father, Rob, operates five divisions in the Sydney markets, where she works. The futures of her siblings and cousins, also part of that third generation, will be dramatically impacted should pests and diseases from New Zealand enter their orchards. Hannah says that this business producing and selling Australian apples has allowed her grand­father, father and uncle to provide for their family for the past 60 years, and she fears that without proper protocols in place for New Zealand apple imports she, her siblings and her cousins will not be able to do the same for their families in the future.

In Batlow, her grandfather bought his first apple orchard and now has three orchards and a large packing shed, packing for over 20 local growers. Hannah wonders what will happen to those people if the New Zealand apples come in and flood our markets. They employ 250-plus staff in New South Wales. Consider the 250-plus staff and their families also without an income if the New Zealand apples bring pests and diseases, which will, as she says, 'decimate' her industry—what she really means is 'devastate'. It is not going to divide it by 10; it is going to completely cripple the industry. 'It is extremely hard for me to understand,' she writes, 'how Biosecur­ity Australia and the Australian government can expect us to believe or even accept that New Zealand apple growers will honestly attempt to control the entry of their pests and diseases into our country if there is no auditing process and when they stand to receive significant financial benefits through the import of their apples into our country.' The Prime Minister should heed the words of Hannah, wise beyond her 22 years, and do everything she can to protect and preserve Australia's apple industry—not simply sell it up the river in yet another cheap political stunt.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I too wish to stand to make a contribution to the debate on the Customs Amendment (New Zealand Rules of Origin) Bill 2011. The bill amends the Customs Act 1901, which addresses the rules of origin requirements under the Australia-New Zealand Closer Economic Relations Trade Agreement, which came into force in 1983. The requirements are outlined in article 3 and annex G to the agreement. There are a number of specific amendments to division 1E of part VIII of the Customs Act which insert new definitions of, for example, 'aquaculture', 'manufacture' and 'produce' as well as amend provisions for wholly obtained goods. Although aquacult­ure was included in the agreement from 2007, there was no specific definition of what was meant by the term. While 'manufacture' was defined, a number of exclusions, such as restoration or renovation processes, have now been included.

The bill also amends the provision dealing with eligibility based on the last process of manufacture. It is of course very important that we sort this issue out. The modifications to the agreement are expected to lessen the administrative burden on businesses and assist the eligibility for duty-free entry of goods into both markets. It is interesting, I have to say, that we very often quote that something we do is to lessen the administrative burden, but in fact each time we say that it would seem there is an incremental increase in the number of public servants we have in this country, both state and federal.

The amendments will also provide greater consistency between the rules of origin in the agreement and those in other free trade agreements entered into by Australia. A review was commenced in late 2008 and completed in March 2010, resulting in amendments to the text of article 3, on rules of origin, and the related product-specific rules in annex G to the agreement. In particular, the rules for determining whether the goods originate in New Zealand have been clarified. New Zealand-originating goods are eligible for a preferred rate of customs duty. In most cases this is a free rate. And there are now defined non-qualifying operations listed which will exclude items from the preferential treatment.

So this is a very important bill, and the coalition is supportive of making sure all of those definitions are refined and the smooth operation of the closer economic relationship occurs. But there are very serious concerns about our interactions now and the trade between the two countries, Australia and New Zealand. One of these is very close to my interests, for example the announcement the other day that the Heinz tomato sauce factory at Girgarre is closing and will go to New Zealand. It will go there and work out of a factory it already owns, but it is going to produce tomato sauce and tomato ketchup in New Zealand, despite that country not growing the tomatoes which are required for their manufacture. So it is going to be interesting to see just how the country-of-origin labelling will work. Wherever the tomato paste is imported from into New Zealand for their tomato sauce manufacture in the future—whether it comes from China, South Africa, Chile or wherever the cheapest going rate for the commodity is for the year—it will be very important that our country-of-origin information on those labels reflects absolutely and accurately all of the realities about that Big Red Tomato Sauce bottle sitting on the barbecue. Clearly, there are all sorts of interesting ways that one could understand a marketing advantage, if there is in fact a label which simply says 'Product of New Zealand'.

We also have a major concern in Australia right now about how our closer economic relationship is working and how, despite us having this extraordinarily close relationship with New Zealand, both countries still must be guardians of their quarantine status. In the case of Australia we are an island nation—as is New Zealand—but our quarantine services have managed to guard us from so many diseases which sadly, indeed tragically for New Zealand, has not been their experience. For example, New Zealand almost a century ago had the dreaded apple fire blight come into their country—probably from plant stock from the United States. The disease is one of the serious problems for pome fruit, and it also affects rosaceae species—and in Australia that includes a number of native species besides your good old-fashioned rose bush growing in your garden. Plants like cotoneaster are also vulnerable to fire blight. We had an extraordinary situation in Australia some 12 or 13 years ago, so we know what it feels like to have an incursion of fire blight, in Victoria at least. We know the costs to the industry. We know the damage it does to the reputation of apple and pear producers.

I stress the word 'pear' because unfortunately fire blight does not simply affect apples. We know that you can have an apple industry with fire blight—obviously New Zealand is an example of this. Fire blight affects the apple orchards of lots of countries around the world, and those countries continue to have a viable industry. But you do not have viable pear industries where you have fire blight. With apples, you can just keep chainsawing off the dead and dying limbs that have been affected by the bacteria, but when it comes to pears the tree is killed.

In my electorate of Murray we grow 80 per cent of Australia's pears. We also grow a substantial proportion of the apples of the nation. The pears are vital for our fruit manufacturing. They are the equivalent of the building block of much of our manufactured food product, whether it is baby foods, sauces or preserved fruits. If we have our pear trees, our pear orchards, wiped out by this disease, there are serious implications for fruit and food manufacturing in the 23 food factories in my electorate. We employ thousands of people, not just directly as they move a product from farm to factory but also in transporting that product to the markets around Australia and indeed to the rest of the world.

Pears are vital to the continuing viability of Australia's food manufacturing. Pears are killed by the apple fire blight disease. It is not just a case of getting out the chainsaw and regularly cutting your trees where the fire blight affects them. It is not a case either of saturating the trees with streptomycin sprays, which is what New Zealand does. In Australia we are very fussy about the chemicals that we put on our plants and that we might inoculate our animals with and we do not want to have to use streptomycin, currently a prohibited substance in our orchards on our food products. But that is what the New Zealanders are forced to do to try and keep their disease in check.

Also, it is not just a case of our orchards being vulnerable. We have a Mediterranean climate in northern Victoria—and in places like Harcourt, in the seat of Bendigo, where of course those apple orchardists are absolutely beside themselves about the decision of this government to allow imports of fresh apples to Australia. We also have a huge threat to crop pollination through the demise of our bee industry. The apiculture industry is at risk from fire blight. Any outbreak would potentially devastate the livelihood of the hundreds of commercial beekeepers in Australia. Worse than that, it would wipe out our capacity to naturally pollinate our commercial and non-commercial species throughout Australia.

Honey bees are the major vector for fire blight bacteria spores. Just as pollen grains adhere to the bees' bodies, so too do the fire blight bacterial spores. They are spread from flower to flower, from orchard to orchard and from bee to bee. There is a fire blight contingency plan in Australia. It was developed prior to the 1997 scare, which I have referred to. The fire blight contingency plan for Australia calls for the destruction of all beehives in a declared fire blight quarantine area.

Honey bees, as I am sure most of us in this chamber know, are the efficient pollinators of food crops for Australia. Currently there are over 40,000 managed beehives engaged in contract pollination across Victoria. That includes crops of apples, pears, almonds, cherries, kiwifruit and a whole range of small seeds and nuts. The almond industry in particular is totally dependent on bee pollination. We had a major disaster recently with beehive popul­ations being killed by the floods, and we are already suffering the consequences of that as we wait for those hives to be rebuilt. Imagine the disaster: fire blight in Australia equals the destruction of beehives in the pome fruit areas.

The apiculture industry is extraordinarily exercised and concerned about this problem. Streptomycin—which is, as I have said, an accepted form of antibiotic control for fire blight in New Zealand—also poses a major risk to the apiculture, or beekeeping, industry. This antibiotic control, if it were to be allowed into Australia, would be a major problem for the bee industry. This antibiotic has been banned in Australia for the treatment of bee diseases for many years. Streptomycin does not break down. If sprayed on fruit blossoms it would be collected by honey bees in the nectar secreted by the plant and become a chemical contaminant in the honey. In addition to the negative impact of fire blight on beekeepers' livelihoods, which is one thing, this contaminant would also damage the clean image of Australia's honey in both domestic and export markets.

Fire blight is not just a problem for the pome fruit industry of Australia, particularly pears but, of course, also apples. It is a problem because fresh fruit imports from New Zealand also carry other pest species. They were well understood and explained in the WTO investigations, plus the appeals which the Australian government brought when we lost the case initially for trying to ban fresh apple imports from New Zealand. Those other pest species, if they got out of control, would affect not just the pome fruit industry but also cereals and other horticultural crops—a serious problem for us.

We are devastated by the idea that we should have MAF, the Ministry of Agriculture and Forestry in New Zealand, in charge of the process—apparently—of oversighting merely the domestic protocols that are to be put into force in New Zealand. Whatever the orchards have to do to sell their boxes of apples from Auckland to Wellington, apparently those same rules and procedures will be okay when the product is sent across to Australia. We find this a complete abrogation of the responsibility of a country. Never before has the Australian government allowed the domestic protocols existing in a country to be used as the export protocol equivalency.

We just wonder: was it to do with that speech the Prime Minister made and got the standing ovation for in the parliament of New Zealand a few months ago? Is that why this government has capitulated and allowed the local primary producers of apples in New Zealand to simply stick the fruit in a box, with a bit of trash if it happens to be there, plonk it on a truck and then into a container to send it across the sea with the fresh apple and accompanying bacterial spores ready for release into the Australian environment? It is a shocking dilemma for Australian primary producers. I have recommendations from the Turnbull Brothers Orchards, particularly Chris Turnbull. His recommendations are about the quarantine practices that would replace the domestic protocols which this government has said it does not really care about or is not fussed about—'They will do.' He says there must be more inspections of New Zealand orchards, increasing inspect­ions from one to three between flowering and harvesting to ensure there are no outbreaks of fire blight or european canker in the months before Biosecurity Australia's proposed single inspection. Blocks where there are symptoms of fire blight or evidence of fire blight being removed should be excluded from export to Australia. Blocks where there has been an outbreak of fire blight should be excluded from the Australian market for two years. Packing lines should be fully disinfected by steam cleaning before being used to pack fruit for Australia. He recommends more rigorous inspections for potentially bacteria-carrying plant trash, an increase in the rate of inspections from 600 apples to 600 cartons, and scientific investigation to determine the actual risks of fire blight and european canker in areas of New Zealand where Biosecurity Australia currently guesses the risk.

The Turnbull Brothers have been established since 1892 with orchards in the Goulburn Valley. They know their business. They are committed to intergenerational growing of fruit which is healthy with a clean green image and where the orchard can be sustained year after year because it is healthy and does not require the use of currently condemned chemicals. So we have here Mr Chris Turnbull proposing other measures.

Today in this parliament we have had the Quarantine Legislation Amendment (Apples) Bill put forward by the shadow agriculture minister calling for a disallowable instrument in a desperate move to try and get this government to see reason, not to expose our country to a disease which is incurable, has never been cured in any country where it has taken hold. We have fresh apple imports from China. It is not the issue of fresh apple imports that is the problem; it is the importation of fruit which is a known carrier of an incurable disease and a bacteria which will feel very at home once it is able to get loose into our Australian Mediterranean climate.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I personally consider Australia and New Zealand for most purposes to effectively be one country. I think it is an aberration of history that we are in fact not. New Zealand opted not to become part of the Australian Federation prior to 1901. We all know that prior to the time when the Australian colonies became a nation, New Zealand was for a very long time part of those procedures. The then Premier of New Zealand said there were 1,200 reasons why New Zealand would not become part of the Australian Federation but that he wished the colonies that were entering Federation all the best. Those 1,200 reasons, of course, were the 1,200 miles across the Tasman—across the ditch, as people say. I think that everyone would agree, though, that continental Australia and New Zealand can boast one of the best relationships in an international sense.

I hesitate to talk about an international relationship and I very strongly support the position that was taken by the former Prime Minister, now Minister for Foreign Affairs, and by Prime Minister John Key of New Zealand, that we ought to have a common border between Australia on this side of the Tasman and New Zealand on the other. Unfortunately that has not yet been achieved, but I believe that the closer economic relationship ought to be advanced substan­tially so that we are able to attain something like a joint market across the Tasman. While I understand the concerns of the member for Murray in relation to the products from her electorate, I think it is vital to recognise that Australasia is in fact an entity and if there is a problem on one side of the Tasman then those on the other side of the Tasman should join in attempting to solve it.

In the last parliament where the Howard government was in office, I was Chairman of the House of Representatives Standing Committee on Legal and Constitutional Affairs. We had a reference from the then minister, the member for Berowra, to look at harmonisation of laws within Australia and between Australia and New Zealand. Our committee made a whole series of recomm­endations, some of which were accepted by the government and some of which were not, which could have led to levels of greater integration, from possibly becoming one country through to a confederation through to sharing a telecommunications market and maybe having a common currency through to a whole range of issues. There are many levels of integration short of New Zealand becoming part of Australia.

I support this bill. I think it is a very positive step. Australia and New Zealand share so many things, including a love of freedom and honour for our countries—a fact borne out by the Anzac legend. We exchange students, we exchange tourists, we share a love of sports like rugby union, cricket and even rugby league and we share some legal frameworks and business relations. We even joke about each other, and if there is one thing that is an indicator of friendship and respect it is being able to share a good-hearted joke at each other's expense.

I was on Q+A New Zealand about 12 months ago and at that time there was a situation where the New Zealand public in a fairly substantial number had suggested that ultimately they saw New Zealand becoming part of the Commonwealth of Australia. On that program were Don McKinnon, Phil Goff and a number of other people. There was discussion in relation to the way forward. I do not believe that New Zealand should be forced into a relationship with Australia which reduces New Zealand to a state. There are many levels of integration short of that, which I think is something we want to achieve. When one looks at what the EU has been able to attain, given the history of Europe, particularly in the 20th century, surely it should be so much easier for the Australian states and New Zealand to be able to come to some suitable accommodation. It really is not a matter at issue in this parliament that we need a closer relationship with New Zealand. This bill is a very positive step forward, though I believe it is simply an incremental step forward and that there is very much a greater distance to travel. We are similar people with similar values and we get on very well together. Put differently, we are the same people, some of whom happen to carry a New Zealand passport and others of whom carry an Australian passport. When one looks at the natural tragedies we have had on this side of the Tasman and the support we got from New Zealand, and similarly with the earthquakes in New Zealand and the support that came from this side of the Tasman, the suggestion that we are two separate count­ries, while legally accurate, is one which does not, in the mind, I think, convince many people. Most Australians would consider New Zealanders to be kith and kin, and the relationship between Australia and New Zealand is not really an international relationship; it is a domestic regional relationship and one that we ought to encourage.

This bill modifies the Customs Act 1901 to bring in changes to the rules of origin provisions, which are outlined in the key trade agreement between our two nations, the Australia-New Zealand Closer Economic Relations Trade Agreement. The changes afforded by this bill today result from a review and amendments to the trade agreement in 2007, when it was agreed that a further review would be conducted three years later, in 2010. These changes are mostly technical in nature, inserting and amending definitions and making clarific­ations. The changes will improve the efficient running of the agreement.

The need for such modifications is a positive symptom of a document that is getting good use. The agreement is nearing 30 years old and needs to be tweaked from time to time. To be honest, it is probably regrettable that Australia and New Zealand have not moved further. Thirty years ago this was a land-breaking agreement, but many other countries have been able to come to other agreements and they have bypassed us because we simply have not been prepared to grasp the nettle and move forward as we should.

The changes in this bill include inserting definitions for the terms 'aquaculture', 'manufacture' and 'produce' as well as amending the provisions dealing with 'wholly obtained goods' and also amending the provisions that deal with eligibility of the last process of manufacture. For example, the previous version of the agreement included aquaculture as an eligible activity but it did not include an actual definition of aquaculture, so that is an anomaly which the provisions of this bill will address. Further, this bill modifies the definition of 'manufacture' to also include activities that may not have previously come under the banner of manufacturing, such as restoration or renovation processes. The definition for 'produce' is modified to remove the refer­ences to 'disassemble', substituting it with the terms 'restore or renovate'. This is relevant in that, under the definition of 'produce', goods needed to be entirely produced in New Zealand from materials sourced in New Zealand or Australia. However, in previous versions of the agreement, items that were disassembled and/or reassembled in New Zealand could slip through and inadvertently be labelled as 'Made in New Zealand', which was inaccurate. This has sensibly been changed—a change that will bring integrity to the agreement with respect to making New Zealand and Australian goods.

While I support this bill, I think the necessity for this bill indicates that we still have a long way to go. The fact that we are talking about this bill indicates that, as two nations, we have failed the challenge of bringing our economies together. We have failed the challenge of putting aside the fact that there might be 1,200 miles between the former British colony in Australia and the former British colony in New Zealand. The fact that we are in a sense wasting so much bureaucratic time on talking about these matters, as though we are perpetually going to be two separate countries, I think is eminently regrettable.

It is incumbent on governments on both sides of the Tasman to accept a challenge that was made by former Prime Minister Rudd in talking about an ever-closer relationship between New Zealand and the Australian states. We share a history, we share geography, we share destiny and we share values. While this bill is worthy of support, much more has to be done.

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Home Affairs) Share this | Link to this | Hansard source

I thank the members for Fisher, Murray, Riverina, Forrest, Makin, Maranoa, Canberra and Stirling for their contributions to the debate on the Customs Amendment (New Zealand Rules of Origin) Bill 2011. I need to respond in some respects to the contributions made by members in relation to the import of apples from New Zealand. The Australian apple industry supports many regional communities and the Gillard government supports Australian apple growers and will always encourage Australians to buy Australian grown produce.

It is unfortunate that the PM's comments to the New Zealand parliament have been misquoted by those opposite. The Prime Minister said:

… Australia accepts the verdict of the global umpire and will implement the World Trade Organisation ruling on the importation of New Zealand apples into Australia. We accept the obligations of free trade, just as we embrace the possibilities of free trade.

This means that the government accepts the WTO rulings and has commenced a science based review of the import policy relating to New Zealand apples, in accordance with the WTO decision. That review is undertaken by Biosecurity Australia, oversighted by the Minister for Agriculture, Fisheries and Forestry, Senator Ludwig. A draft of the review has been made available for public comment and submissions received on the science contained in the review. Apples will not be imported into Australia from New Zealand until Australia's quarantine officials are satisfied that they can be imported whilst meeting Australia's very high quarantine standards.

I would also like to respond quickly to the matter that the member for Forrest raised about the operation of the amendments and whether they relax the rules of origin. I can assure the member for Forrest and this House that the changes implemented by this bill do not relax the rules of origin. The changes facilitate trade by providing importers and exporters of both countries with greater clarity and certainty about the rules of origin.

The Customs Amendment (New Zealand Rules of Origin) Bill 2011 implements changes to article 3 of the Australia-New Zealand Closer Economic Relations Trade Agreement, ANZCERTA. The ANZCERTA is Australia’s longest standing bilateral free trade agreement, having been in force since 1983. Article 3 of ANZCERTA deals with rules of origin, which determine the eligib­ility of goods for preferential tariff treatment under the agreement. Such rules prevent the benefits of trade agreement tariff commit­ments extending to goods produced or manufactured in countries other than those who are party to the agreement. The current ANZCERTA rules of origin entered into force on 1 January 2007. In negotiating these rules both countries agreed to include in ANZCERTA a provision requiring the review of rules of origin within three years of the new rules taking effect. Australian and New Zealand officials commenced the review in late 2008 and completed it in March 2010, resulting in agreement to make amendments to the text of ANZCERTA article 3, rules of origin, and the related product specific rules in annex G.

The changes to ANZCERTA will reduce the administrative burden on business and will facilitate the eligibility for duty-free entry of goods into both markets. The amendments will also provide greater consistency between the rules of origin in ANZCERTA and those in other free trade agreements entered into by Australia. This bill is the legislative vehicle for domestic implementation of the ANZCERTA article 3 changes.

Question agreed to.

Bill read a second time.