Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes with concern the importation to Australia of goods that:

(a) breach Australia's anti-dumping regime; and

(b) do not comply with Australian standards;

(2) further notes the:

(a) injurious effect that the importation of such products has on Australian businesses and Australian jobs;

(b) risk to consumers of using substandard products and goods; and

(c) lack of inspection and compliance enforcement of imported products; and

(3) calls on the Government to:

(a) continue to monitor the anti-dumping regime and effectiveness of recent changes;

(b) strengthen the inspection and compliance enforcement regime for imported goods;

(c) review penalties for importers who breach their Australian legal obligations and if necessary increase the penalties where they are found to be insufficient, to act as a deterrent; and

(d) hold an urgent meeting of the International Trade Remedies Forum to address these and related issues.

For those with regional electorates that still have strong manufacturing in their areas, this motion and what is contained in this motion will not come as any surprise. The motion that is before the House that we are debating talks about the need for a strong anti-dumping regime in this country. It talks about the need to ensure that imports coming into this country comply with Australian standards. It talks about how, by doing this, we will ensure that we are protecting Australian jobs, that we are protecting Australian industry and also ensuring that consumers do not become at risk of what could happen when, for example, substandard building products are used in construction.

When I am out talking to manufacturers of building products in my electorate of Bendigo, when I ask the question, 'What do you most fear, what puts your business, your industry and the jobs of many local people at risk?' without a doubt, the first thing that always comes up is the fear of cheap imports undercutting their quality product. But what they fear most is not just the cheap imports undercutting their product, but that these imports do not meet Australian standards. Their concern is real. Increasingly, we are seeing reports in our media of inferior products not meeting Australian standards entering our market, particularly in the building area. If I can just take a moment to cite a few examples that have appeared recently in the media: last week the Australian Competition and Consumer Commission launched an awareness campaign over the recall of Chinese-made electrical cable that was below standard. They believe it has been installed in an estimated 40,000 homes nationally. Whilst the recall happened last year, it was decided a campaign was necessary due to the low rate of action on the problem—forty thousand homes at risk because of product that had been brought into this country that did not meet Australian standards.

Another example has received lots of media, particularly in Melbourne and Victoria, because of the fact that it affected over 170 high-rise buildings in the Melbourne Docklands area. In this particular situation, aluminium cladding with a plastic core was used in the construction of many buildings. It is on the outside. There was a fire last year that the MFB themselves said they were scared and worried to go into because of the nature in which the fire took hold. The MFB, through their investigations, found that the fire spread quickly at this establishment, Lacrosse Docklands in La Trobe Street, from floor to floor because of the aluminium cladding and the plastic cladding that was on the outside of these buildings. So we now have a situation where we are not only putting consumers at risk because of the potential fire hazard of these buildings, through the use of this inferior product that is coming into our country, but also we are hearing concerns from the MFB who have to go to these fires when they occur.

In moving this motion, I call on the government to not only continue to monitor this to ensure that we have a strong anti-dumping regime that will help secure and protect the jobs that we have in our manufacturing industries, particularly in our building industries, as I have sought to highlight today, but also strengthen the inspection, compliance and enforcement of the regime for imported goods.

Now is the time for the government to make sure that it gets this regime right, that we have strong compliance with Australian standards and that product from overseas is not being dumped on our markets. If the government is genuine about creating job opportunities under the China free trade agreement or the Korea free trade agreement, we need to ensure that we have our systems in place so that the current situation where we are seeing cheap product being brought in is not exacerbated. We need to ensure that any product coming in is safe and meets Australian standards.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Laurie Ferguson (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Bendigo for her motion. Some of the issues she raises are real issues and we should all listen to them, but there are a few things I will point out. I want to spend most of my time talking about anti-dumping as averse to inferior product. I do not think the two should be confused. We have anti-dumping legislation. Anti-dumping legislation is to stop subsidised product coming into Australia and being sold below the cost of production from where it is sourced. It is not necessarily inferior product at all. The issue of inferior product is another one. Of course, there are laws in place and bodies in place to deal with it now because it is illegal in Australia for retailers to sell products that are not to standard.

If consumers have problems they should be going back to the places where they bought the product and taking them to the line, because that is the quickest way to stop it. If people are hit with the appropriate lawful action then they will cease to supply inferior goods and make sure they get up to scratch. The last thing Australia needs is some kind of wide team of inspectors all around Australia trying to judge the quality of things when they open up the box and putting a rubber stamp on it. That is the kind of red tape that the economy cannot stand. In fact, if you were going to do it for imported products, you may as well do it for locally produced products as well. We need people to produce the quality product to the demand.

When it comes to anti-dumping, Australia has thrived, not in spite of trade but because of it. Often people say to me that we do not make anything anymore in Australia. What are our children going to? But the lesson of history is that, as economies mature, a lower proportion of the GDP is used in providing essential services—that is, food, shelter and clothing. For subsistence, we do not need much more. As we become wealthier, we like better food and we have nicer houses and more clothes.

Then as we become wealthier again we spend money on entertainment, leisure, pets, cars, restaurants and labour-saving gadgets. More people are doing less productive things, inasmuch as they are providing the services and the luxuries in our life by recycling the primary income that is sourced to the nation by our very successful export industries—to the point where we have fitness classes, we have grooming for our dogs and we pay cafes $4 a cup for coffee when we could well be drinking water. There is nothing wrong with any of these things, and it does not really matter as long as some sectors of the economy are earning enough export income to recirculate through the system that keeps everything else afloat. In Australia's case that means allowing our most efficient industries to get on with the job.

It should be government's role to reduce the impediments, to cut red tape. This government has already reduced red tape in Australia by $2 billion. We will keep working on about $1 billion a year, which is our target, so that businesses can flourish and provide the export income Australia needs to underwrite our lifestyle so that our luxury industries—and I do not mean that in any derogatory sense, as I said earlier—can prosper and provide jobs and we can all live well. Australia excels in a wide range of areas: obviously the resources industry, agriculture, education, tourism and services generally. However, there is still a substantial manufacturing industry in Australia and increasingly it will focus on high-end manufacturing, the things we do very well: high technology and innovation. It is an area where Australia can compete well. In fact in my electorate—at Booleroo Centre, let it be said—I think I have the biggest exporter of Australian farm machinery in Kelly Engineering. Jo and Shane Kelly run a fabulous business. They have exported over 1,000 tillage units to the US and their business is running strongly. It just shows what can be done with a good business plan and a good workforce.

Our industries have demonstrated time and time again that they can compete if they are given a chance and if they have the opportunity to compete on a level playing field. But they will not compete successfully against unfair practices. I was privileged as the chair of the Standing Committee on Agriculture and Industry to recently table a report on the circumvention of anti-dumping rules, Circumvention: closing the loopholes. While there are not a great many significant recommendations in that report it is because things have changed so much in the last little time. I congratulate the previous government for appointing a dedicated Anti-Dumping Commissioner. The Anti-Dumping Commissioner has shown an appetite for reform, and the number of rulings that has come down in recent times is really encouraging our industry.

Laurie Ferguson (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I congratulate the member for Bendigo on raising this, not just as a nicety but because this is the kind of measure that she is always very active on. I want to speak firstly about my experience with Viridian, a plate glass manufacturer which no longer exists. It was part of CSR. I am not saying for a moment that its collapse was in any manner crucially related to anti-dumping. But its experience with the system in this country drives home that it is certainly not world's best practice. After it was found to have suffered from dumping but not as a material cause of the price situation it faced, the company said that the investigation was 'based on judgements rather than sound analysis and conclusion'. It went on to say that any appeal would suffer from the fact that it would be an admission of failure on its part. That inquiry was initiated by the company in February 2010. It was only on 25 November that year that the call for submissions closed.

In the quicklime industry in May this year there were comments that the inquiry had taken three years without a decision. I do not want to say that this is a problem that just emerged with the current government. It has been there for quite a while. The previous government put $27 million into this sector. But we have a situation where Australian companies are required to spent thousands of dollars of their own money to establish a case. They have to go and pretend that they are an Australian buyer, get the responses from Chinese companies as to what they are selling for and then go through the paperwork—hours and hours of work—and basically wait for many months for a decision. As I indicated, in that case in one sense the decision was that there was dumping. Material injury was found. But the authorities concluded that dumping was not the cause of significant material injury. Whilst dumping is not illegal, GATT article VI does give governments the power to act in this sector to overcome it. I do not think this is a matter of red tape; it is a matter of protecting Australian industry.

I want to talk briefly about the attempt earlier this year by the government to abolish the International Trade Remedies Forum. Those who said it should continue were not only the CFMEU but included the Australian Industry Group—not renowned for protectionism, the Food and Beverage Importers Association, the Australian Forest Products Association, the Australian Steel Association; the National Farmers' Federation et cetera. As I understand it, this forum had not been convened for a year and a half. Those on the forum are industry experts. They are people who do the job for nothing. There is industry consultation. In the end, abolition of the forum was not pursued. But I would note that, even at a public hearing of a Senate committee in Canberra, the Anti-Dumping Commission itself said that the work of the International Trade Remedies Forum was 'absolutely relevant to the work of the antidumping system'. This was a very unfortunate attempt, under the guise of red tape, needless meetings et cetera, to abolish a forum that Australian industry saw as being necessary.

It is all right to boast that trade agreements are going to allow this government to undercut Australian conditions, that we will facilitate the entry of people with lower standards into the labour market and that we will not have testing of Australian industry about the availability of Australian workers. There is much boasting about that, but there is very little action in this sphere. If it takes three years to get the issues of quicklime on the agenda, quicklime being crucial to a large number of industries, it is deeply disturbing. We know that China uses prison labour in some employment sectors. It is not only a question of undercutting through a very low wage market; it is also a situation where enforced labour is utilised to undermine Australian conditions.

I believe there is a need for a very vigorous antidumping system. Dumping undermines Australian industry. It is very real and it is of deep concern to Australian industry.

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

It is a great pleasure to speak on the motion moved by the member for Bendigo. I note that the motion calls for more inspection and more compliance. I know the member for Bendigo was not a member of the previous Labor government. I think it is worthwhile pointing out from the outset that, under the previous Labor government, our Customs service was gutted, with 750 jobs scrapped and $64 million stripped from their budget.

Dumping is not about selling cheap goods into the country. Dumping applies to goods that are sold below the cost of production and—which is mainly the case—to goods that are sold at a lower price in the export market than they are in the home market. It is effectively a form of international geographic price discrimination, where a higher price in the local market subsides the export market. That presents many difficulties in comparing costs. You are not actually comparing apples with apples. The product many companies sell in their domestic market is completely different from the product they sell in the international market. That means that there are many practical difficulties in comparing apples with apples.

The biggest problem I see for Australia with international geographic price discrimination is not that goods are being dumped on the Australian market at a lower price that that for which they are sold in the home market; it is the complete opposite. Time after time, we see examples of goods being sold in Australia at a much higher price than they are sold in any other market in the world. That is perhaps even a greater problem than dumping.

The other point that needs to be made is that, no matter how rigorous an antidumping regime we have, it is no substitute for Australian companies being cost competitive. When the carbon tax was put in place, the carbon tax would be paid by an Australian company producing a good, but that very same good, if produced overseas, would escape the carbon tax. That simply placed Australian companies at an international competitive disadvantage. This is why I am sure everyone that manufactures in Australia must be very concerned about the policies being proposed by the Labor Party, because they want to bring back the carbon tax in some form. They may give it another name—they may call it an ETS or whatever—but they want to bring that back, and that burden will be borne by Australian companies, whereas the overseas companies will not have to pay it.

The other point is that we need to be very careful about overreach on dumping. We have seen any examples overseas where countervailing duties have been placed on products with the idea that they would protect jobs, and what has been found is that that has actually cost jobs. I notice the member for Werriwa brought the example of Viridian glass. Before I came to this place, one of the things that I did was source float glass table tops. We were manufacturing local product, but we needed to get a glass table top. The glass table tops that we could buy with locally made glass were three or four times the price for which they could get the glass table top from overseas. Yes, buying the local glass may have been protecting jobs there, but it would have cost jobs down the supply chain. So it is important sometimes to recognise that many of the imported parts that come into the country are used in the supply chain, and cutting those off with dumping duties will not actually save jobs; it will actually cost jobs. Therefore, we need to make sure that these antidumping regimes are not used as protectionist measures.

Another point relates to the free trade agreements out of China. I often hear people saying: 'China are taking over. Everything in our shops is from China.' If you look at some of the numbers, clothing imports from China are worth $5.1 billion; in telecommunications, we import $4.9 billion worth; in computers, $4.8 billion; in furniture and mattresses, $2.2 billion; in toys, games and supporting goods, $1.8 billion. Just those categories alone add up to $19 billion worth of product that we import from China. But in reverse, in 2013-14, in iron ore alone we exported $57 billion worth to China, plus another $9 billion worth of coal, another $8 billion worth of gold and another $2 billion worth of copper. We are actually exporting to China twice as much as we are importing. That is why free trade is good for this nation, and we commend the free trade agreements put together by this government.

Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

In recent months we have seen the free market zealotry of the Abbott government take on another manifestation. I too, like the previous speaker, believe in free trade, but I think it can only be accepted as being so if you have a very effective antidumping regime. Indeed, if you are a true believer in trade, you would be arguing for a very robust antidumping regime, because that is the only way you will get the support of the public for what is essentially wealth creation in the interests of all Australians.

Of course, the attempts by the government earlier this year to abolish measures which provide for a robust antidumping regime are entirely regrettable—their attempt, for example, to abolish the International Trade Remedies Forum, as was said earlier. This forum had the support not only of trade unions but of the entirety of the manufacturing sector, and in the face of this there was a misguided attempt to get rid of it. Of course, the current government has also sought to charge Australian producers a fee for bringing cases to the Anti-Dumping Review Panel.

I do not think anybody can say that having an antidumping regime that has integrity and is robust is a bad thing for Australia, and it was good that, through the Senate inquiry and amendments which were put forward by both Labor and others, the worst of the government's legislation was not proceeded with and, in particular, that we kept the Trade Remedies Forum, because dumping is neither fair market nor free market. The practice does not simply dump Australia with goods; it dumps Australia with higher unemployment. In addition, dumping imposes predatory pricing strategies on Australian consumers and it often exposes Australians to substandard, or even dangerous, products.

A typical dumping strategy unfolds in two phases. In the short term, when importers are allowed to price goods well below their nominal value, dumping eviscerates the jobs and industries of Australian workers making similar products. In the long term, dumping also short-changes Australian consumers. Once local manufacturers have been driven out of business by predatory prices, foreign producers often raise their prices to cement their new-found market power. Dumping therefore inflicts a material injury on local producers. It also injures not only Australian workers but also Australian consumers. If Australian workers become unemployed as a result of dumping activities of foreign businesses, it simply will not matter how cheap the dumped goods might be.

I do remain sceptical about the motives of the government, as I watched it drive the auto industry out of Australia over the last couple of years and it is now attempting to wipe out other large sections of the manufacturing sector when it comes to the building of our next generation of submarines. When Labor was in government, we enlisted the Productivity Commission to strengthen and streamline Australia's anti-dumping system. Following the commission's expert guidance, Labor established the International Trade Remedies Forum, which I was talking about before and which, as I remarked before, the government has attempted to abolish—and fortunately that has not occurred. Labor also established a new appeals process for Australian businesses which allowed a three-member panel—independent of the government—to review more complex anti-dumping decisions made by the CEO of Customs. At their core, Labor's reforms recognised the vital contribution that trade makes to the Australian economy. The reforms also recognised that in trade we must obey international rules as laid down by supernational bodies, such as the World Trade Organization.

It might be argued that strong anti-dumping systems simply induce protectionism by another name. From my perspective, nothing could be further from the truth. Anti-dumping legislation in fact embraces free trade so long as it is conducted fairly. Unfortunately the Abbott government's vision of free markets sees Australian manufacturers and workers as mere grist for the mill. We have already seen this government influence and push out manufacturing businesses, particularly, as I said before, in the auto industry—and with no seeming knowledge of what they hope for the future of Australian manufacturing elsewhere across our economy, particularly at a time when the headwinds of a higher currency have been removed and are likely to be removed for a long time to come. This government has no vision about what replaces what it has smashed. I stand here arguing for free and fair trade and a strong anti-dumping system.

Debate adjourned.