Monday, 28 November 2016
Competition and Consumer Amendment (Country of Origin) Bill 2016; Second Reading
Before continuing on in my remarks in relation to the Competition and Consumer Amendment (Country of Origin) Bill 2016, I also pay tribute to and recognise the wonderful advocacy efforts of all of those Indigenous Australians in relation to the No More campaign.
This time 12 months ago, I was privileged to be touring through remote Aboriginal communities in the north-west of Western Australia, undertaking a fight for justice on behalf of plaintiffs, who were Aboriginal Australians who had been the victims of road trauma, often in circumstances through no fault of their own. In the course of the mediation conference tours that started as far north as Kununurra and Wyndham and Junee through the Kimberley south to Broome, I was very privileged to be invited into numerous communities along the way. I was struck by the resilience, dignity and determination of Aboriginal Australians who are fighting incredible battles that I can barely comprehend—being as close as I am to the services that I am so lucky enough to have access to.
It is an incredibly challenging environment and I would as honoured to be able to play a very small part in ensuring that Aboriginal Australians get justice in the context of compensation claims and access to the courts. I pay tribute to those families and the men and women that I represented. I understand that there are similar informal conference tours happening at the moment. To those mums and dads and kids who I was lucky enough to represent in my old life before making the transition to this place, I want to pass on the message that my transition here does not diminish my voracious appetite to make sure that the quest for a just outcome in the context of Aboriginal communities prevails.
Returning to this bill, my previous remarks went to the heart of the bill in the context of our support for the country-of-origin matters and notes that the bill also governs the use of country-of-origin marks such as the 'made in Australia' gold kangaroo in a green triangle. It defines the idea of a good being substantially transformed. It makes it clear that packaging materials are not treated as ingredients or components for goods with 'product of' or 'grown in' labels. It also mandates that water used to reconstitute dehydrated or concentrated ingredients is deemed to have the country of origin of the dehydrated ingredient irrespective of the actual origin of the water. Whilst the steps taken as reflected in this bill are not perfect, what they do do is indicate country of origin for imported ingredients, to take an example. These requirements are certainly a constructive and good step forward.
Labor supports this amendment because it provides certainly for businesses, particularly Australian food manufacturers, that the safe harbour provisions under Australia consumer law are aligned with the new country-of-origin requirements. More importantly, this new regime will make it easier for consumers when making decisions about what groceries to buy for their families to identify and then purchase locally-produced products.
I now turn to the amendment as circulated in my name in this matter. I do not believe it would be reaching too far to say that most Australians want to buy seafood that is sourced from local and sustainable fisheries. Unfortunately, recent studies have shown that almost 75 per cent of seafood consumed in Australia is imported, often unbeknowns, to those who are purchasing the seafood. Globally, we have seen a decline in fishstocks due to overfishing and the destruction of natural habitats.
But Australians currently have few options if they want to ensure they are eating local, sustainable seafood. This is not just a concern from a sustainability point of view; it is also relevant to people seeking to make healthy decisions. Some species of fish and shark carry high levels of mercury but, due to the current lack of labelling requirements, it is hard to know what you are eating. Without an effective and well-regulated seafood labelling scheme, Australians cannot have any confidence that the seafood they are eating is local or sustainable or even that it is what they paid for. It is an outcome that is suboptimal both for Australian consumers and for our local fisheries. Quite frankly, Australian consumers deserve better.
This amendment calls on the government to bring forward regulations that will apply a country-of-origin labelling regime to the sale of seafood in the food services industry—that is, at restaurants, cafes and fish-and-chip shops. And it is also consistent with Labor's platform and our dedication towards giving consumers more, rather than less, information about the products they are seeking to purchase.
A scheme for seafood country-of-origin labelling in the food services industry has been in place in the Northern Territory for many years. We know that it works. It is very successful and should serve as a model for a regime that could be rolled out all across the country. Interestingly, where the consumers of the Northern Territory are given the choice between local and imported seafood, at their local chippie for instance, they have been shown to be, by a big margin, willing to pay more for locally sourced fish. But consumers elsewhere do not have access to that information. I do not think it is unreasonable for Australian consumers to expect to know where their seafood comes from. I will move the amendment as circulated in my name and, for the sake of completeness, I will read the amendment. I move:
That all the words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House:
(a) widespread community concern around seafood labelling;
(b) that Australian consumers want to know where their food originates; and
(c) the specific circumstances of seafood as a fresh food; and
(2) calls on the Government to act to improve country of origin labelling for fresh, cooked and pre-prepared seafood sold in the food services industry".
I commend the amendment to the House.
I am pleased to rise to speak on this bill, the Competition and Consumer Amendment (Country of Origin) Bill 2016. Before I was elected to parliament, I spent a good part of two decades involved in the design, manufacture and marketing of consumer products, and I can assure you that country-of-origin representations are a most important part of that process. If we are able to label something 'Made in Australia', it carries extra weight. Consumers, I believe, are prepared to pay a higher price for goods with that 'Made in Australia' label. Conversely, with other products, especially food products, where someone sees 'Made in China' on a food product, they would be less prepared to pay a higher price. That is a competitive advantage that our nation has—and it has come at a cost. It has come at the cost of the regulations and inspection processes that we have had in place over decades. The 'Made in Australia' name and label are trusted by consumers and they will pay more for them. Conversely, in China we have seen food product scares and health risks. We saw the melamine contamination of baby powder. Because China has not had that regulation in place, it pays the price of country-of-origin representation. Therefore, it is very important that, if the market is to work as effectively as it possibly can, we ensure that we have regulations in place that guarantee those representations are correct—and for many decades we simply have not.
I can remember a few years ago, when the Labor Party were in government and we were trying to get something done on this issue, that Coles put out a product in their select range, a tin of pineapple. It carried the Coles name, which, of course, portrays an Australian company. The label on the tin was brightly coloured in green and gold, the Australian colours. It had a blonde-haired, blue-eyed girl on the front of the label saying how wonderful the pineapple product was, again giving that suggestion that it had something to do with Australia. But, when you picked up the tin, turned it around and used a magnifying glass, you found that the product was actually made in Indonesia. That was so close to the wire of being a misrepresentation, and it gave a perfect example of why the coalition government needed to act in this place. The laws have allowed that you could label a food product as 'made in Australia from local and imported ingredients'. This is a completely ambiguous term that means nothing, but, worse, it is terms like that that can hide countries of origin, the products of which consumers would pay less for.
That is why I am pleased to rise to support this bill. It amends the Australian Consumer Law—schedule 2 of the Competition and Consumer Act 2010—to alter the definition of what is called 'substantial transformation' as it applies to the safe harbours provisions of the act. The bill simplifies the tests to justify a country-of-origin claim of 'Made in' by clarifying what 'substantial transformation' means by removing the 50 per cent production cost tests. Previously, it was a simple 50 per cent production cost. So, if you added value of 50 per cent, for example by packaging or by labelling, you were able to claim the product was made in Australia without true substantial transformation of the product. That is what this bill addresses.
Another reason why this bill is so important is that we have to protect our nation's competitive advantage. It has been very hard fought for. If we are to have a prosperous society and be able to provide health and education—all those costs of government—we can only do it if our nation has competitive advantages over other nations, and of course one of those advantages is in our food-labelling area. If a product is made in Australia, that is a competitive advantage. But, so often, we have seen that speakers from the Labor Party and from the other side of parliament either are slow to protect our competitive advantage or actively undermine it. That is why I am pleased it took the coalition to fix up our labelling laws where Labor failed to do so.
Also when it comes to our competitive advantage, contrast Labor's actions in the area of the cost of energy. On this side of the parliament, the coalition have set a renewable energy target, and the Minister for the Environment and Energy has admitted today in a piece in The Australian that this will cost each household $55 extra on their electricity bill. This will put us at a slight competitive disadvantage. But, if we look at Labor's plans for a 50 per cent renewable energy target, Bloomberg New Energy Finance has run the numbers. It has put Labor's plan at $48 billion. That is $2,000 for every man, woman and child in the country and represents $8,000 extra cost for every household of four. That is putting our nation at a competitive disadvantage that undermines everything that we are trying to do to create wealth in this nation and provide the social services that we need. We have seen Queensland's 50 per cent renewable energy target and the Queensland government boasting that this would have no cost for consumers and create no competitive disadvantage. The Grattan report last week blew that out of the water. The Grattan report said it is an 'economic illusion' to pretend it would have no price impact. These are things we need to guard like treasures. Our competitive advantage is a national treasure that we should protect with everything we have, and to see members of the Labor Party undermine it time after time is a disgrace. When it comes to maintaining and sustaining a competitive advantage, it was wonderful to see, when it came to the backpacker tax, that the Labor Party were out there saying, 'Oh, we have to have our tax rates internationally competitive.' That was absolutely right.
Correct, as the member for Hume notes. If we have to have our tax rates competitive, what about our company rate of tax? How much longer can our nation continue with a rate of company tax that is internationally uncompetitive? Our rate of corporate tax at the moment is 30 per cent, in the UK it is 20, in Canada it is 26½, in Singapore it is 17 and in Hong Kong it is 15.
The US, under President-elect Trump, has made a clear statement that they will reduce their company tax to 20 per cent. We cannot continue with an uncompetitive rate of corporate tax without it adversely affecting the prosperity of this nation. This is why everything we are doing on this side of the House is to maintain and sustain our nation's competitive advantage. On the other side, it is just your politics and all about not caring about the things that make us a prosperous nation.
Getting back to the exact provisions of the bill, I will give some examples of 'substantially transformed'. For example, if apples and spices are imported into Australia to make apple pies using other Australian ingredients, such as the pastry and the sugar, the finished product becomes an apple pie. That is fundamentally different from its imported ingredients—the apples and spices—in terms of its identity and its nature. Therefore they can be described as being substantially transformed. Likewise, when grapes are imported into Australia and converted into wine using Australian production methods, as the identity, nature and essential character of the raw grapes themselves are fundamentally different from the identity, nature and essential character of the wine, those goods can be defined as substantially transformed. Other examples that the bill gives are about what can be said: you could say 'made in', 'produced in' or 'manufactured in'.
An example that would be misleading or deceptive conduct is: Australian beef is exported to Thailand, where it is combined with local ingredients to make beef stock that is put into canned beef and exported back to Australia—if that product was labelled 'product of Australia', it would not meet the safe harbours defence, because it contains significant ingredients from one country that underwent major processing in another country. A further example is: wheat that was grown, harvested, hulled and cleaned in Western Australia then exported to Italy and re-imported in the form of prepackaged frozen lasagne—if it had 'product of Australia' or 'product of Italy', it would not comply with the safe harbours defence, because it contained significant ingredients from one country that underwent major processing in another country.
A further example is: bulk chocolate that was imported into Australia from the UK and then formed into smaller blocks of chocolate and packed for retail sale in Australia—if that product was labelled 'made in Australia', it would not comply with the safe harbours defence, because the chocolate was not substantially transformed here in Australia. Forming imported chocolate into smaller blocks and packaging them does not result in a product that is fundamentally different in terms of the nature, identity or essential character. The last substantial transformation of the chocolate occurred in the United Kingdom, where the processed cocoa, butter and sugar were combined with local ingredients to make a new product which is fundamentally different from the identity and nature of the chocolate.
Many of my good friends would argue that: 'This is an overreach. It is a little bit more red tape for business, and why should the government get involved in this?' One of the few areas where I believe the government has a rightful place to get involved, as we do in our consumer and competition law, is regarding misleading and deceptive comments. One of the things about the free market is that it operates more efficiently if the purchasing decisions are better informed. That is why we have provisions in our act that misleading or deceptive conduct in trade or commerce is against our law. Misleading and deceptive conduct can also be by omission.
We want to ensure that consumers, when they go to the supermarket, can look at a product and be sure that the representation that is made on that product is accurate because it allows greater competition between brands and products, we get a more efficient market outcome and, most of all, it protects our great nation's competitive advantage. We want to ensure that, where someone uses those words 'made in Australia', 'produced in Australia' or 'manufactured in Australia', which have a good reputation of consumers paying a higher price, that is protected. That is what this bill does, and that is why I commend it to the House.
The proposals before the House will have a negligible effect except to add to the cost of products on the shelves. Unfortunately, it will be a cost taken by Australian producers, the same as foreign producers. We introduced legislation, which did not get supported by either side of the House, where we wanted a label to go on all imported products—a cost that would only be imposed upon imported products. Australian-produced items would not have to be labelled. We wanted foreign products to have a warning label, saying: 'Warning, this product is imported. It has not been grown or processed under Australian health and hygiene standards and may be injurious to your health.'
One of my Independent small-party colleagues in the Senate said, 'Well, that's really going too far! You are really posing a burden and stopping stuff from coming in.' Shock horror that I would stop product from coming in! I represent a third of Australia's sugar industry. The great free-market country of the United States allows no sugar in. The great free-market countries of Europe allow no sugar in. The new Third World Asian tiger, Thailand, allows no sugar in. The great free-trading nation of Japan allows no rice into its country. My electorate produces rice. Shock horror that I would have a position upon product coming into Australia.
I will give you the dimensions of how sick the governments of Australia are. My flower growers came to me and said, 'They're charging us $300 an hour plus downtime for an official to come up from Cairns,' up onto the Atherton Tableland where all the flowers are grown, 'and they insist upon 100 per cent inspection of our exports'. The imported flowers have a five per cent inspection regime, which is borne by the government. So we have one set of laws for exporters and a completely different set of laws for importers. They get charged something like a 200 per cent tax, whereas the importers get no charge at all upon their product. This occurs again and again to a point where the average punter out there knows that the ALP and LNP will always be on the side of the importers. And they do not think they are.
Go and tell that to the people of Orange who just had their last whitegoods factory close down and see how pleased they were with the major parties at the last election. They have had enough of your lies and kangaroo droppings. They have had enough of listening to you. Look at the polls this morning. The others are on 32 per cent now, and you people are on 36 and 38 per cent and falling through the floor. When we get another four per cent you are out. Your days of running this country will be finished. They will be taken off you.
We are different from the United States. They have locally elected representatives and local primaries. They are a constituency based society. But even they have found a way out of the brutal two-party regime that has seen all their jobs go to Asia and across the border into Mexico or, alternatively, has seen Mexicans come across the border and take their jobs off them, legally and illegally. There are dangers, and people should know when a product is imported. They should also be told that others have different hygiene regimes from Australia.
I had the very great honour of being associated with establishing the prawn and fish-farming industry in Australia. We were doing about $750 million in exports. At one stage we were down to $25 million because the government decided, in its wisdom—both the ALP and the LNP—that they would bring the prawns in from overseas with no inspections. There is supposed to be a five per cent inspection, which is a joke. There is supposed to be a five per cent inspection on everything. I doubt whether there is a 0.5 per cent, and that comes from Customs officers. They said, 'We doubt whether there would be a 0.5 per cent inspection.'
Those prawns are coming in from countries like China, where they put raw sewage into the Yangtze River. They take the water out of the river and put it into the prawn farms. It is similar for all of the south-east Asian countries, like Thailand and Vietnam. In Vietnam they take untreated sewage water and put it into fish ponds. This has two effects. One is that the prawns and fish come in covered in bacteria, and two is that they have huge antibiotics inside their bodies to fight off the germs and disease. The result is that Australians now eat disease-ridden prawns and fish.
We do not know how many diseases are coming in and being contracted by Australians. It is very hard to track down where food poisoning comes from. It is very hard to track down diseases, such as hepatitis A from berries or the disease we got from imported tuna or just what product you ate that resulted in a disease. It is very hard to establish. What is not hard to establish is some of the other diseases.
We said, 'If you bring the prawns in we will get IHHNV on the reef and it will be disastrous for the Barrier Reef.' The prawns were brought in and within three years we had IHHNV endemic on the reef. We said, 'Stop the prawns from coming in, for heaven's sake stop.' They said, 'No, you have IHHNV now on the reef so we have no argument to stop them from coming in.' So they used the argument of having brought the prawns in to say that we cannot stop them.
White spot on prawns is such a deadly disease that when they found it in Darwin they dropped 23 tonnes of poison into Darwin Harbour to destroy the white spot there. God bless them for doing it, but how much damage was done to the Australian environment with 23 tonnes of poison being dropped into the harbour, I do not know. Our banana industry, worth maybe 7,000 jobs to North Queensland—if it goes it will take down a quarter of the tourism industry, and we will lose the backpacker industry as well—is under threat from Panama disease. Panama disease was brought into Australia by imported food product and the industry is now under threat. Bananas have previously been under threat from black sigatoka from products brought into Australia.
People in this place go around talking about Australia's clean, green image. We have a clean, green image because we were a hunter-gatherer society until 200 years ago, and we are an island, so we did not have any of these diseases. We did not farm and we did not husband animals, so we did not have any of these diseases. But every two or three years now we get another big disease. If you want free trade, then forget about your clean, green image because, clearly, you will have the same disease levels as all the other countries on earth. We have a valid reason for keeping products out.
It was the National Party that let most of this stuff in. Now, the great leader of the National Party in this place, , Mr Warren Truss—no-one would remember his name, but I will remind you that that was his name—said in defence of himself for allowing the grapes in that it would only affect Queensland. Right, well, we do not have to worry about it because it will only destroy the grape industry in Queensland! Ours was—'was', past tense—one of the biggest grape-growing areas in Australia. The Kennedy electorate in North Queensland has hardly any grapes left. The month that he decided to bring the grapes in from California was the same month that the Californian industry announced that 10 per cent of their entire industry had been destroyed by the glassy-winged sharpshooter. Only the Americans could think up that sort of a name, but that was the name of the disease. Ten per cent of their industry had been wiped out by the glassy-winged sharpshooter, but Mr Truss and the National Party had no difficulty in deciding that the grapes should come in. I was still in the National Party then, and 13 of the 15 members of the official LNP government committee reviewing the proposal said, 'You've got to be joking.' He said, 'We'll be taken to WTO.' All of us said, 'Let them take it to WTO. For once, we might be able to convince our own farmers that we are fighting for them.' So 13 of the 15 people at the meeting wanted us to be taken to WTO so we could be seen to be fighting for our farmers. But that was not to be.
The oranges and orange product coming in from Brazil has streptomycin in it. We are not allowed to use streptomycin in Australia, and yet we allow our people to eat streptomycin because it is an imported product. There is one set of rules for Australians and another set of rules for the importers.
We have a certain acceptable poison level that has been decided by the health department of Australia for cadmium in potatoes. Again, the National Party, in the portfolio, decided that it was all right to let in potatoes from the other countries. They could not come in because they have higher cadmium levels. 'Oh well,' he said, 'we'll just raise the allowable cadmium level.' I quote from the minister's press release:
To allow the potatoes in from Texas in America and from China, we will vary the cadmium levels.
So Australians will now eat more cadmium poison in their potatoes to look after the farmers of China and Texas. We can die in Australia. When I say 'die', this was a decision of the health department. The health department said that a safe cadmium level is that level. He raised that level and allowed us to eat much more cadmium. Did he know more than the health officials? No, he did not. What he was saying was, 'Our free trade principles are more important than whether people die in Australia.'
We had the papaya fruit fly, which cost the industry a couple of hundred million dollars. We had the citrus canker, which cost $200 million or $300 million to the Queensland economy. We had the black sigatoka outbreak, which cost us, maybe, $200 million. We have the Panama disease race 4. Individual farmers have each had to put in a million dollars worth of installation with Panama race 4. Every single one of them was brought in from food product coming from overseas. Nobody cares.
With hepatitis A in the berries there were two deaths, and nobody cares. With imported tuna that was carrying disease there were two deaths, and nobody cares.
The best we can do is to put it on a disk, which does not discriminate between Australian product and foreign product. I am sure every housewife brings along a magnifying glass, and she is really going to worry about that disk, which she actually will not be able to interpret the meaning of—and I have had a look at the proformas; I might not be very bright, but I am sure that I stand with most Australians in saying I am a bit confused by the disk—but she will not be worried about the disk; she will be worried about the price. Of course, our product costs infinitely more because our prawn farmers have to not only take in perfect water but allow perfect water to go out. (Time expired)
Australian country-of-origin labelling has proved to be a proverbial weeping sore, eroding consumer confidence, imposing excessive compliance costs and failing to provide fair and transparent safe-harbour defences to Australian farmers and food processors for far too long. It has been one of those perennial problems that has confounded successive governments, where almost everyone agreed there was a problem and that change was overdue, but the detail of the doing proved just too elusive, too complicated and just too damn hard. So down that time honoured road yet another can was kicked, but not by this coalition government. In its first term, it navigated a solution to country of origin labelling that comes to us today in this bill, together with the information standards that came into effect from 1 July 2016. And it is a solution that includes a consistent, highly visible, easy to interpret label with a logo, bar chart and text
In other words, what we see in this bill are the quintessential hallmarks of a coalition government: a willingness to tackle problems that others have happily thrown into the too-hard basket; an ability to find a solution that is fundamentally practical, neither overcooked nor ideological but based on good old fashioned pragmatic common sense; and a capacity to build consensus among the community, consumers and industry, key stakeholders and across the political divide. And what a great solution it is.
My nearly 25 years in business has been spent predominantly overseas, mainly in the Asia Pacific and emerging markets. For the first dozen or so of those years, I was in the food game working for Australian food companies, breaking into new markets and exporting Australian product, from commodities such as rice and wheat flour to more value-added fast moving consumer goods. Having therefore been a practitioner in the field, I want to commend the architects of this bill for settling on the kangaroo logo. Even though this bill relates to food sold domestically in Australia, it is important that mandatory food labels reconcile with our image of brand Australia. And, in my experience, there is no more recognised symbol that speaks to our identity of our country than the kangaroo and its symbol of quality, cleanliness, consistency and reliability.
As you know, the seat of Fairfax lies at the heart of Queensland's Sunshine Coast where food and agriculture are sectors that help drive the local economy. In consulting on this bill, I ran half a dozen public information booths at the Yandina market and at the Maroochydore Fisherman's Rd market and also a series of roundtables with local growers and other foodies. It was at these roundtables where the most meaningful contributions were made, due to intellectual giants of the Sunshine Coast food industry such as Julie Shelton, innovators like Tania Hubbard, producers like Steven Jeffers of Jeffers Markets and leaders from various sectors like: George Walker, eggs; Matthew Trace, dairy; Blake Nicolle, salads; and Jeremy Atkins, beef.
While most people with whom I consulted were overwhelmingly supportive of the county-of-origin reforms, local strawberry growers raised a concern. Their concern was with the transition period presented in an earlier iteration of the proposal that we debate today in the bill. You may not be aware, but the greater Sunshine Coast region accounts for at least 80 per cent of Queensland's strawberry crop, which equates to approximately 50 million punnets of strawberries and is perhaps the most significant producer region in Australia, employing up to 8,000 pickers each season. It was local strawberry grower Di West who first raised a concern that the business she runs with her sister Jodi risked losing tens of thousands of dollars' worth of plastic punnets stored in their warehouse unless the proposed transition period was extended. This led to significant consultations between them, the minister, his office and me, and also other growers such as the famous Twist Brothers of Chevallum.
And how pleasing it was to see that the solution that we found for Di, Jodi, the Twists and other growers to mitigate the risk of too short a transition period now finds forms in part of the bill before the House. On a personal level and as a relatively new MP in this Chamber, seeing the input that came from the grassroots of my electorate, from roundtables in Palmwoods to market stalls in Yandina and Maroochydore lead directly to legislative outcomes inspires great confidence in me in the process of parliamentary democracy.
There is an additional point that is worth making here, which puts this bill into a broader context. Many Australian growers and food manufacturing companies have been losing business in the domestic market to cheaper overseas imports. As a nation, we need to decide how to respond to this. We have a choice to make. Either we throw in the towel as the former speaker, the member for Kennedy, suggested we do and join the populists, spruiking false hope of prosperity through turning back the clock to an era of protectionism or we embrace free trade while seeking a more level playing field, stay on the field, play hard but fair and demand those who are also on that field play by the same set of rules. It is the latter of these two options that I choose. And that is precisely the spirit in which this bill has been put today.
On one hand, this bill levels the playing field by empowering consumers, by allowing them to be more informed and, on the other hand, this bill allows local players in the food industry to accentuate that which is their greatest differentiator—the fact that they, thanks to this bill, can be recognised as Australian.
I commend the bill as it has been put by the coalition to the House.