House debates

Wednesday, 22 August 2018


Customs Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018, Customs Tariff Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018; Second Reading

4:23 pm

Photo of Josh WilsonJosh Wilson (Fremantle, Australian Labor Party) Share this | | Hansard source

As I was saying earlier, it's important to see these bills in the context of the trade agreement that they enable, the PACER Plus agreement. As we do that, it's worth asking, particularly when you consider the relationship between Australia and New Zealand, and the Pacific Island nations that form this agreement with us, exactly what the benefit to the Pacific Island nations will be. And I would begin on that point by noting that Papua New Guinea and Fiji chose to stay out of PACER Plus. Together, those countries represent 80 per cent of the combined GDP of Pacific Island nations. To give you a sense of that disparity or the proportion of trade that PNG and Fiji represent, Australian exports to Papua New Guinea and Fiji are $2.8 billion. Our exports to other Pacific nations, as I understand it, are only $84 million. There was evidence before the Joint Standing Committee on Treaties when it looked at the PACER agreement, which is the foundation of the bills we are discussing here, that Papua New Guinea and Fiji chose not to be part of PACER Plus because, in their analysis and from their judgement, it was heavily skewed towards Australia and New Zealand. So as we discuss these bills it's important that we consider some of those related issues.

As I've already said, there is a fundamental imbalance between Australia and New Zealand and the Pacific island nations, and it appears that that imbalance did shape this agreement. I think that is a matter of some concern. I want to look at some particular aspects of PACER Plus that I think are concerning and where those concerns haven't really been resolved by the material that's been available, either in relation to these bills or in relation to the agreement as a whole. Concerns were raised in a number of areas through the JSCOT process that I referred to, and I'll mention three of them. Firstly, there was the reduction in tariff revenue for Pacific island nations; secondly, there were the health impacts of the agreement; and, finally, there was the particular impact on women.

As I said when I began my contribution to this debate, this doesn't remove tariffs that affect goods coming into Australia, it affects exports from Australia. Effectively, it removes tariffs that exist in Pacific island nations on goods that we export. So it costs them tariff revenue, effectively. The analysis that was provided in the consideration of PACER Plus showed that it would cost the larger nations in the Pacific at least $10 million annually, and in relation to the smaller nations it would cost as much as 10 per cent of their government revenue as a whole, which is really quite considerable.

Understandably, if you want to talk about health impacts, when you see that kind of reduction in revenue and that kind of reduction in government capacity you'll see a corresponding reduction in the ability to invest in health services and health infrastructure. The second health impact, which the Public Health Association of Australia highlighted, was in relation to the kinds of products that are likely to flow into the Pacific as a result of tariff reductions. The PHAA was particularly concerned about the increased availability of and lower prices for unhealthy products such as ultraprocessed food, alcohol and tobacco. I will just quote from the material that they provided as part of their submission to the JSCOT:

There is a substantial body of evidence indicating that reduction of tariffs and other 'barriers to trade' in food products can lead to increased availability and lower prices of unhealthy foods, and can affect household food security … The PACER Plus tariff schedules indicate that some Pacific island countries have made commitments to reduce or eliminate tariffs on tobacco products, alcoholic beverages and a variety of processed foods.

So that is one of the possible deleterious impacts of the PACER Plus agreement.

Finally, there was evidence that pointed to the impact of these agreements on women in the Pacific. Again, if you reduce government revenue and the capacity to deliver social services, that does tend to affect women and children disproportionately. And if you have the health impacts that I've just mentioned, they also affect women and children disproportionately. But there are some specific impacts on women that have been identified, particularly by ActionAid Australia, who make the point that women who do paid work in the Pacific islands are concentrated in industries that are likely to be impacted by PACER Plus. Those include agricultural production, clothing, manufacturing and retail. In their submission, they made the following point:

ActionAid is concerned that in its current form, the PACER plus agreement poses a significant risk to women's rights and economic empowerment in the Pacific, and as such is inconsistent with the Australian Government's commitment to gender equality. In particular, PACER plus is anticipated to lead to an erosion of public services, loss of sustainable livelihoods, and adverse health impacts in Pacific Island countries, all of which will disproportionately affect women, and their social and economic empowerment.

What the Pacific islands were particularly interested in when PACER was being considered were the provisions that went to the question of labour mobility. Pacific island nations would obviously like to have the opportunity for their citizens to find work in the region, including in Australia. Remittances from that work is an important source of revenue for Pacific island nations. Unfortunately, the labour mobility piece, if you like, is not included in PACER Plus as a whole but is consigned to a less-than-treaty-status agreement. There were concerns expressed that those kinds of provisions and commitments were far less certain and far less valuable than the tariff reductions and other things that were made plain in PACER Plus.

There's no doubt that, while we make the changes that these two bills, the customs amendment bills, put in place, they are relatively minor in their impact. They really just take care of some sort of technical customs niceties from our side of the arrangement. The PACER Plus agreement as a whole is a relatively significant agreement. The tariffs phase in over a relatively long time. That's probably something to be grateful for. It does leave open, though, the question of just how genuinely beneficial PACER will be to our Pacific islands brothers and sisters. I note that we have allocated official development assistance funds, foreign aid effectively, to help Pacific island nations implement PACER Plus. That puts this agreement squarely in the aid-for-trade—or vice versa—frame, if you like, and I think there are question marks over that approach. There is some irony in providing aid funding to countries to implement trade agreements where the vast proportion of the benefits of those agreements come to the donor country.

The reason it's hard to be sure about PACER Plus is that Australia didn't commission a thorough and independent economic impact analysis. The shadow minister spoke earlier about that failing and our current approach to trade agreements generally. There have been numerous committee reports over the last five years—more than the last five years, actually—during the course of this government and the previous government that have recommended that all trade agreements be accompanied by an independent economic analysis. That has been recommended twice in the course of this parliament in the majority reports of the Joint Standing Committee on Treaties; yet we go without the benefit of that kind of analysis.

It was interesting to hear in the JSCOT hearings on the PACER Plus agreement that departmental staff advised that funding had been provided to Pacific island nations for the purpose of undertaking their own economic analysis but that the results of that analysis were not required to be provided to Australia. So one can only assume that the analysis that Fiji and Papua New Guinea undertook showed them that there wasn't any great benefit in PACER Plus and that that informed their decision to not be part of it.

As I said earlier, the interest the Pacific island nations had was overwhelmingly in relation to labour mobility. On that point I will just point out that Matthew Dornan, the deputy director of the Development Policy Centre at the Australian National University noted that the Pacific island countries were unhappy with the outcome in PACER Plus because the agreement didn't include a binding commitment in relation to labour mobility.

I'll finish by saying, in general terms, that these kinds of agreements do need to be looked at carefully. They need to be looked at through the lens of our broad responsibility to our Pacific island neighbours. We don't stand on an equal footing when we negotiate these kinds of agreements. There is a vast disparity in economic power and capacity between Australia and New Zealand on the one hand and Pacific island nations on the other. I think there are elements of PACER Plus that give great cause for concern because of the fact that they essentially bring tariff benefits to Australian companies but there are no corresponding benefits for Pacific island nations. It's clear that they will receive less tariff revenue as a result and it's also likely that they will see impacts in terms of health and on women and children.

4:35 pm

Photo of Richard MarlesRichard Marles (Corio, Australian Labor Party, Shadow Minister for Defence) Share this | | Hansard source

I rise to speak in favour of the Customs Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018 and the Customs Tariff Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018. In speaking on both bills, I do so as they are a step—it is probably fair enough to say a relatively small step but a step nevertheless—in a process of putting in place in this country and within the region the PACER Plus agreements, which have traversed the efforts of a number of governments in this country. We already have a largely open economy, but this is an important step forward.

The PACER Plus agreement is a trade agreement. It is therefore reciprocal in nature. It's a multilateral agreement which seeks to create a free trading zone within the Pacific. In that sense, what is happening now is not complete, because, as the member for Fremantle noted, it is not an agreement which covers, at this stage, Papua New Guinea and Fiji, which would be the two largest economies within the Pacific other than, of course, New Zealand and Australia. It is not principally an agreement which is about the Australian economy. No government has engaged in the PACER Plus negotiations as an exercise in trying to fundamentally expand Australian markets.

To put that into context, what free trade agreements we seek to negotiate as a country occur within a context of priorities around our own economic development, which is why you see trade agreements done with either large countries, large economies or countries where there is the opportunity for significant trade growth in respect of Australian exports. You would never say that in respect of the Pacific, because that's not really been the motivation for governments of either persuasion to pursue PACER Plus. Indeed, if this were only seen through the light of what it could do for the Australian economy, it would never meet the priorities test in the list of countries or regions that we would seek to do a free trade agreement with.

PACER Plus is an exercise of regional leadership in respect of regional development. Ultimately, PACER Plus is about playing a part in the development of the Pacific, and that is evidenced by the 'plus' component of PACER Plus, which is a reference to significant development assistance funds which go hand in hand with the trade agreement and which allow Pacific island countries to engage not only in the PACER Plus agreement itself but also in the regional and, ultimately, the global economy. And that is an important form of assistance for Pacific island countries.

This particular bill provides for the tariff reduction components of the PACER Plus agreement. It's in that context that I would argue that these are significant bills to pass this parliament. There is a lot of work still to be done. The member for Fremantle is absolutely right that this doesn't deal with greater access to the Australian labour market, and there is no doubt that that is a key desire of the countries of the Pacific. There is a sense of it being incomplete so long as Papua New Guinea and Fiji are not part of the PACER Plus arrangements. But it is a step in the right direction in a context where any step in the right direction in terms of the development of the Pacific needs to be celebrated.

The fundamental challenge of a small island state is how to bring to bear a viable economy when ultimately you're talking about small populations in very geographically remote parts of the world. That is the challenge of small island states in the Pacific—it is, in fact, the challenge of small island states globally. How to solve the problem of creating a viable economy in that context is actually far from obvious. In many respects it's a much harder problem to solve than having a viable economy in a country of 25 million people like ourselves, being on a continent. If you are a population of 100,000 people on an island in the middle of the Pacific, how you come up with a solution as to what represents a viable economy is a much harder nut to crack. In that context, Australia's place within the Pacific, by contrast, is as a country having a very large economy and, indeed, a very large labour market in comparison to the countries of the Pacific. We are relatively proximate, obviously, to the countries of the Pacific.

Development assistance aid is fundamentally important in the work that we as a nation do in helping the development of the countries of the Pacific. There is no question about that. We have voiced our concern about the cuts to aid that we've seen from the coalition government. A future Labor government would seek to increase the way in which we provide aid in the Pacific. It is profoundly important. But, in the same breath, I also make the point that, given the particular difficulty of trying to establish viable economies for small island states in the Pacific, and given our relatively large economy, being geographically proximate to the Pacific, access to the Australian economy and to the Australian labour market is profoundly important and actually in a different order of magnitude to development assistance in terms of what it can do for the development of the countries of the Pacific. If we as a nation are serious about the exercise of leadership within the Pacific and seeing the development of the roughly 10 million people who live in the Pacific then we have to be about trying to open up the Australian economy and the Australian labour market more to the benefit of the peoples and the economies of the Pacific. That is the single most significant thing we can do, in an economic sense, in driving economic development within the Pacific. It really deeply matters.

I think the labour market component of that, which the member for Fremantle referred to, is probably the most important side of that equation, particularly now. The Seasonal Worker Program is a really successful example of how providing access to a relatively small number of people from the Pacific to our economy is making such a dramatic economic difference to the countries of the Pacific. We have the privilege of seeing that in operation here in terms of companies in Australia which employ people through the seasonal worker scheme. I note the member for Kingsford Smith is here, and he has seen this as well. Also, going to the Pacific, by seeing how the money earnt in Australia is put to beneficial use in villages throughout the Pacific, you realise the economic power and the developmental power that comes from that.

Opening up the Australian economy to be able to freely trade with it is also important. These bills and the PACER Plus are about that. That's principally what they're about. It is not really about trying to create and open up new markets for Australia, albeit that that occurs. The principal function, as I said at the outset, of the PACER Plus and why it has been pursued by governments of both persuasions is an attempt to provide a building block in that architecture that I've described of opening up the Australian economy and the Australian labour market to the countries of the Pacific, which is so deeply important for them. To do that in a meaningful way does require providing development assistance so that companies in the Pacific may be able to export into Australia—and, again, the member for Kingsford Smith and I have both seen firsthand many companies in the Pacific which have an ability to sell into Australia and indeed New Zealand. This makes a difference for them. It's actually them that ultimately this agreement is about and these bills are about.

We would all want bigger steps in this direction, but it is a nevertheless significant small step in this direction. I have done some work in the Pacific, as the member or Kingsford Smith has done as well. Any step in the right direction in respect of the development of the Pacific needs to be celebrated.

I have on many occasions been generally critical, I guess, about our nation's focus and intent—and perhaps our lack of intent—in terms of the way in which we engage with the Pacific. We're a country which has significant presence in the Pacific, to be sure—our diplomatic presence, our defence cooperation programs with the nations of the Pacific and our patrol boat program, and you could name a whole lot of other efforts that have been quite significant in terms of their presence within the Pacific—but our intent in terms of demonstrating an Australian leadership within the Pacific needs to be much greater than it is. It needs to be transformationally greater than it is.

To this point: it is the case that, when we speak about foreign policy and strategic policy, far too often we talk about countries other than those countries within the region where we have the greatest impact. There are 10 countries in the world which would see their primary partner on the planet as not America and not China but Australia, and yet we could walk around this building and challenge members of this House to name who those 10 countries are. That says something about the fact that we do not pay enough attention to the Pacific.

If you look at the most important bilateral relationship that we have in the world today, our alliance relationship with the United States—which obviously is largely characterised by the United States leading, given their size and their being a superpower—there is one area across a very broad relationship with the United States where the United States actually come to Australia and say: 'We'll do what you say. We'll follow you. We want to understand what Australian leadership is.' That space is in respect of the Pacific. In relation to our most important bilateral relationship, the Pacific is the place where we demonstrate to the United States what Australia looks like as a leader. And you can run that analysis in respect of Europe and in a different context in respect of China and indeed the world.

The way in which we behave in the Pacific is the single most important demonstration of Australian leadership in the world today. That's why we need to take this really seriously. The basis on which we need to take this is not seeking to have an influence over that part of the world because we can or seeking the strategic denial of others. Actually, the focus of why we need to engage in the Pacific is the 10 million inhabitants of the Pacific themselves. We need to be focused on their development, and there is significant development to be done.

The Pacific is that part of the world which performed the worst in respect of the Millennium Development Goals. It's a relative measure, but it means that development in the Pacific is going at a slower rate than in almost any other part of the world. On that measure, by a point in the 2020s, probably the late 2020s, the Pacific may become the least developed part of the world. That is relevant to Australia. That has something to do with us and who we are.

We need to change our focus so that we are absolutely focused on the development, the welfare and the prosperity of those 10 million people, because that is about how Australia looks as a leader in the world. What we have today is a small step but a step nevertheless in the right direction in respect of demonstrating that leadership, and it's because of that that I support these bills today.

4:50 pm

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | | Hansard source

It's a pleasure to follow my friend the member for Corio, who, I think, is widely respected as one of the best parliamentary secretaries and ministers for the Pacific and who really did a lot for development and aid within the Pacific. I'm reminded of programs such as Pacific Women Shaping Pacific Development, the climate change adaptation program and all of the health, education, infrastructure and welfare programs that were put in place under the stewardship of the member for Corio when he held this ministry. He's very well respected within the Pacific and someone who I see as an expert on these matters. All of the points that he raised in his speech were spot on.

The Pacific is our neighbourhood. They are our greatest friends and, in many respects, we can be doing more to assist this region within our neighbourhood to ensure that we lift development and that we lift living standards. Given the wealth that Australia has, the relatively high living standards that we have and the absolute poverty and low living standards that most people in the Pacific enjoy, we do have an obligation to do our best to ensure that we're working with the nations of the Pacific to boost their development.

That's why Labor does support these bills that establish, finally, the PACER Plus trade agreement. In this respect, these bills give life to the changes to tariffs and to excise duties that provide that favourable nation status to those Pacific nations that are signed up to this agreement. PACER, of course, means the Pacific Agreement on Closer Economic Relations. It's been in negotiation for many years. When I was the Parliamentary Secretary for Pacific Island Affairs, this agreement was being negotiated back in 2012. It's an agreement that is good for our region and will support our neighbours. It helps the Pacific island countries become more active partners in, and benefit from, the regional and global trading system.

PACER Plus also includes an aid component to help with the development of the region. Australia's Pacific aid for trade supports helping to increase economic growth, generate jobs and boost living standards. But it was Labor that really committed to establishing this as a foundation for our relationship with the Pacific, and it's Labor that's truly committed to rebuilding Australia's international development assistance levels to beyond what they are at the moment, particularly within our neighbourhood in the Asia-Pacific. A Shorten Labor government will commit to redeveloping Australia's international development assistance program, including in our neighbouring region in the Pacific, and increasing our aid investment to that area.

As our friends in the region know all too well, the Abbott and Turnbull government have slashed aid. That's resulted in approximately $12 billion being slashed from the international aid assistance budget over the course of this government. These cuts are a source of some international embarrassment for Australia, particularly within our region, given the relatively high living standards that we have compared to our Pacific neighbours. There's a clear expectation of many of those in the Pacific that Australia will take a lead in this region on supporting our neighbour's development, and our behaviour and our relationship with our Pacific neighbours is quite important to Australia's international reputation. As the member for Corio mentioned, when it comes to the Pacific, the United States, our very important defence ally, will often come to Australia and ask us our views on particular issues because they see us as the experts. It's within our region. We have traditionally played a very important partnership role with Pacific nations. In some respects, we have assisted with their defence. The pacific patrol boat scheme comes to mind. And many in the region face a range of development challenges, including small domestic markets, narrow production bases, a weak regulatory and private sector capacity, low savings and investment rates as well as high trade and business costs. They also have young fast-growing populations that need growth and jobs.

The Pacific, unfortunately, has performed the worst of any region when it comes to global development goals. Many of the nations in our backyard don't meet the individual goals within the global development goals, related to things like child mortality rates, levels of primary education and preventable diseases. Tuberculosis is one of the diseases that, unfortunately, is rampant throughout the Pacific. Many people die needlessly each year from a disease that should be preventable within our region. On current measures of relative development, it's possible it won't be too long before Africa overtakes the Pacific on progress towards achieving those development goals. That would mean the Pacific would be the least developed region in the world. That is why Australia has an obligation to do more to support its neighbours within the region.

When Labor were in government we introduced a number of programs aimed specifically at doing just that. One of the big problems within the Pacific is the shockingly high rate of domestic violence and lack of opportunities for participation of women within the economy, within society and within government. That is why Labor instituted the Pacific Women Shaping Pacific Development partnership program. It aimed at ensuring we worked with those nations to reduce levels of domestic violence but also to encourage women's participation in society.

I can recall visiting a domestic violence centre in the Solomon Islands. We saw it first hand and spoke to victims of domestic violence about the assistance they were getting from a community centre specifically established to help people deal with domestic violence and to take them and their children out of abusive relationships. It was Australian aid at work, making a difference to the lives of people within our region.

We all know that climate change is a huge problem for nations within the Pacific. Whenever I would meet with Pacific leaders I would ask them what their challenges and issues were. Climate change would always be the No. 1 issue, particularly for nations like Kiribati and Tuvalu where climate change is threatening their very existence, on islands they've inhabited for thousands of years. Wells are becoming salinised. Crops can no longer be grown in traditional areas. Sea levels are rising out of control and extreme weather events, such as cyclones, are becoming all the more frequent. Access to fresh water is becoming an issue for these nations because of climate change.

In Australia when we speak of climate change we see it as something that will affect us in a generation's time—something we don't have to worry about for years to come. But, if you talk to someone in the Pacific, it is affecting them now. It is an immediate threat. Unfortunately, Australia hasn't been doing enough on climate change adaptation. We certainly haven't been doing our fair share when it comes to reducing emissions within our economy and transitioning to cleaner renewable energy, to try and do our bit to reduce the impact of warming and climate change.

Australia should be a natural partner of choice in assisting its close neighbours in their development needs. But, unfortunately, under the Abbott and Turnbull governments—and, let's face it, whoever else is Prime Minister at the end of this week—our leadership role has been eroded in the Pacific. Labor's been warning for some time now that, under the Abbott and Turnbull governments, Australia has dropped the ball and damaged its reputation within the Pacific. Those $12 billion of cuts to the international aid budget that I mentioned earlier are part of the reason for that.

Earlier this year we saw New Zealand commit to a 30 per cent increase in foreign aid over four years, with the money earmarked primarily for the Pacific region. Their foreign affairs minister, Winston Peters, who is visiting Australia today and did a joint media conference with our Foreign Minister, said that the new commitment reflected New Zealand's identity as being anchored in the Pacific. He said: 'What is good for them is good for us. We all know that, if we look after each other, we're all better off, more prosperous and, therefore, more secure.' He went on to say: 'Prevention saves money. Prevention health strategies save far more taxpayer dollars downstream by tackling health problems early.'

Likewise, Australia has a deep interest in contributing to global poverty alleviation, and our international development program supports security and stability in our region. One obvious need in the region is greater infrastructure investment. Labor has repeatedly stated that infrastructure projects should be transparent, conform to environmental and social safeguards and not place unsustainable debt burdens on regional countries. Australia has an interest and responsibility to assist our smaller regional neighbours with projects that best meet their development needs and provide them with the maximum benefit. This is not about any other country; it is about the role Australia wants to have in our region.

That is why we welcome last month's announcement by Australia, the United States and Japan of a trilateral partnership to invest in infrastructure projects in the Indo-Pacific region. We do need to be much more active when it comes to infrastructure and development within our region. This economic agreement has been years in the making and is signed by most of the nations of the Pacific. It is a shame that Papua New Guinea and Fiji, two of the biggest nations of the Pacific, aren't partners to this agreement. But there is always the opportunity for them to join at a later stage. The focus of Australia, through this agreement, is on building the economic and social capacity of our dear friends in the Pacific to grow their economies, to provide great opportunities for investment in business and greater economic mobility, and ensure that we ultimately improve and boost the living standards of our nearest and dearest neighbours, our friends in the Pacific.

5:02 pm

Photo of Jason ClareJason Clare (Blaxland, Australian Labor Party, Shadow Minister for Resources and Northern Australia) Share this | | Hansard source

The Customs Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018 and the Customs Tariff Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018 implement Australia's obligations under the Pacific Agreement on Closer Economic Relations Plus, otherwise known as PACER Plus. I note that the minister in the chair was responsible for signing the agreement. It is good to have him here as part of this debate. Australia's relationship with the Pacific island nations is a very important one. The nations of the Pacific are our neighbours and also our friends. This agreement helps to build on this, helping to tie our economies closer together. There are currently 11 signatories to this agreement: Australia, the Cook Islands, Kiribati, Nauru, New Zealand, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. As the member for Kingsford Smith just said, hopefully more countries will join this agreement in years ahead—in particular, Papua New Guinea and Fiji.

This agreement will mean tariffs will be cut on 88.5 per cent of Australian exports to signatory countries, apart from New Zealand, and it will also mean that there will be no tariffs on goods imported to Australia from countries that have signed this agreement, apart from New Zealand. These bills implement that commitment. Under the agreement, we will also provide $4 million to assist Pacific island countries to prepare to ratify this agreement and $19 million to update their customs processes. I should note, though, that this doesn't make up for the more than $11 billion that this government has cut from the aid budget. As the Lowy Institute Pacific Aid Map that was released earlier this month shows, aid to Pacific island nations has been cut by a number of countries over the last four years, and other countries and organisations like the Asian Development Bank and the World Bank are moving to fill that gap.

It's also worthy of note that the Joint Standing Committee on Treaties gave a report to the House on this agreement. In recommending support for it, they also recommended that this agreement include—or that future trade agreements include—independent economic analysis of the merits of these agreements. This is the third time that the Joint Standing Committee on Treaties have recommended that the government conduct independent economic modelling for trade agreements. I note they did that again for a fourth time today. The committee reported today on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and recommendation 3 of their report is identical to the recommendation they gave in relevance to PACER Plus. I can read that for the House:

The Committee recommends that the Australian Government consider implementing a process through which independent modelling and analysis of a proposed trade agreement is undertaken by the Productivity Commission, or equivalent organisation, and provided to the Committee alongside the National Interest Assessment (NIA) to improve assessment of the agreement.

That was a unanimous recommendation of the committee, led by the Hon. Stuart Robert, who I know the minister holds in high regard. His recommendation, and the recommendation of all of the members of that committee, is worthy of serious consideration by this parliament and by this government.

It has also been recommended by other parliamentary committees. It has been recommended by the Harper review, by the Productivity Commission and by the Australian Chamber of Commerce and Industry. However, unfortunately, so far it has fallen on deaf ears. I think that is a mistake, because this sort of independent analysis helps to respond to community concerns about agreements like this and whether they are in the national interest. At the moment, what the parliament relies upon and what the Joint Standing Committee on Treaties relies upon is that national interest analysis, a report done by DFAT, a report done by serious and capable professionals, but by individuals who are responsible for negotiating the deal, saying that it's a good deal. I think it would be a worthy addition to public debate and consideration of these agreements for the parliament to have available to it an independent economic analysis of that agreement struck by the government. That's why, if we win the next election, I and other members of the Labor Party team have said we'll fix that and ensure that all future trade agreements are subject to independent economic analysis. With that, I commend the bill to the House.

5:08 pm

Photo of Steven CioboSteven Ciobo (Moncrieff, Liberal Party, Minister for Trade, Tourism and Investment) Share this | | Hansard source

I thank the speakers for their contribution to the Customs Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018 and the Customs Tariff Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018. I note the comments that have been made by a number of people who have participated in this discussion, including the member for Blair, the member for Fremantle, the member for Corio and the member for Kingsford Smith, as well as the shadow minister. At the outset let me say that I find it interesting when I hear the Labor Party talk about reductions in Australia's foreign aid budget. I find it interesting for two reasons. The first is that one of the key initiatives of the Turnbull coalition government has been to refocus our aid assistance—or what we call ODA—towards the Pacific. So we took what was effectively a shotgun approach that previously existed in the sector and targeted it and directed it specifically to—although not exclusively to—Pacific island countries in our region. It's our neighbour and this government feels we should be doing the heaviest lifting. That's precisely what we're doing.

I also find it interesting because, of course, the Labor Party stand up and wring their hands about how there should be more foreign aid money, but they do two things. The first thing they do is never acknowledge they are not committing to replace that money. They just complain about it and make absolutely no commitment whatsoever, which makes, of course, their words exceptionally hollow. The second observation is that the very reason we've had to reduce Australia's foreign aid budget by such a significant amount is the massive structural deficit that the Australian Labor Party put in place. There's a reason why as a country now we are over half a trillion dollars in debt, and that is called the Australian Labor Party.

The structural deficit that the Australian Labor Party left includes, for example, the fact that Labor put in place an unfunded NDIS and committed to a range of spending that they did not have funding for. That is precisely the reason why this country is faced now with these very difficult challenges. But we've been making slow and steady progress. We're exceptionally close now to going back into surplus, and that's been through prudent economic management. I note, as I said, the complete hollowness of the Australian Labor Party's position when they whinge and complain about the reductions in foreign aid, even though (1) they're responsible for it, and (2) they make zero commitments about actually putting in a single extra dollar.

With respect to broader comments about the contributions that members have made in this debate, including, for example, concerns I heard that were put forward by both the member for Blair and also the shadow minister about how they would like to see, and that there should be, economic modelling on trade agreements: for starters, when Labor were in power they didn't start and conclude a single free trade agreement. But they were able to conclude a couple, and guess what—there was no economic modelling from the Australian Labor Party when they were in government. It's just another example of the Australian Labor Party coming in here and bleating on about how they want the government to act in one way when they themselves didn't do it. It just reinforces, once again, the sheer hypocrisy of the Australian Labor Party.

But let's talk specifically about this actual agreement, PACER Plus. As the person who has engaged continuously with the economies across the Pacific, both in my previous role as Minister for International Development in the Pacific and also now as Minister for Trade, Tourism and Investment, what I am most excited about is the numerous conversations that I've had with key government figures, the private sector and others in the Pacific who are energised and excited about the opportunities that this PACER Plus agreement will provide. It is, in many respects, in equal parts both a trade agreement and a development agreement.

This will be a game changer when it comes into force, not only for Australia's relationship with the Pacific but also in terms of the way in which we will, in a sustainable way, help to build economic resilience and long-term sustainability of Pacific island country economies. Ultimately, it is always going to be far more profitable, in a social sense, for Pacific island countries to build long-term sustainable industries across the Pacific, and we should help provide integration with the Australian economy and the New Zealand economy for those countries.

I note some comments that have come from the Labor Party as well about wanting PNG and Fiji to be part of this agreement. Well, of course we do—of course we do. We have engaged in a very constructive way with both Papua New Guinea and Fiji to try to secure that outcome. We remain very open and willing to engage in very constructive discussions with both of those countries, and we will work to deliver a whole-of-region PACER Plus that includes those two major economies as well.

As I've said on numerous occasions, this coalition government has the most ambitious trade agenda in Australia's history. PACER Plus will create closer economic integration of Australia and the Pacific island countries. It will drive economic prosperity, raise living standards in the region and complement our trade agreements that are already in force, which are delivering record growth in exports and creating more jobs here in Australia.

PACER Plus is a regional-development-centred trade agreement. To date, PACER Plus has been signed by 11 members of the Pacific Islands Forum, namely, Australia, the Cook Islands, Kiribati, Nauru, New Zealand, Niue, Samoa, the Solomon Islands, Tonga, Tuvalu and Vanuatu. PACER Plus will provide commercial opportunities for Australian exporters and investors in a range of sectors. These opportunities will increase over time as the provisions of the agreement lead to more open and transparent policies, and as wider relationships are built regionally and beyond.

The agreement reflects Australia, New Zealand and the Pacific island countries' commitment to the principles of free and open trade, and the underlying impetus for negotiating PACER Plus and its goal of regional economic integration is the formation of an interconnected Pacific market, including Australia and New Zealand, enabling the Pacific islands to access a larger market for their consumers and producers. While PACER Plus provides the framework for this integration, dedicated assistance is critical to addressing barriers in Pacific island signatories and to unlocking the benefits. PACER Plus provides this assistance.

The PACER Plus bills represent the key legislative changes required to give effect to the new rules of origin required to implement PACER Plus. The Customs Act 1901 is being amended to include new rules-of-origin requirements and, also, to enable a full set of related product-specific rules that remain in keeping with modern FTAs. The amendments contained in this bill will enable eligible goods that satisfy the PACER Plus rules of origin to be entered into Australia at preferential rates of customs duty. The Customs Tariff Act 1995 is being amended to set out the preferential rate of customs duty for goods that satisfy the new rules-of-origin requirements. These new rules are consistent with existing arrangements for duties imposed on excise-equivalent goods. Without these amendments, Australia would not be able to complete its domestic arrangements and the agreement would not be able to enter into force. This would prevent Australian businesses from receiving the various benefits that will flow from the agreement.

It's important that Australia be among the first eight countries to ratify, as early ratification would signal Australia's commitment to both PACER Plus and the rules based trade in the Indo-Pacific. PACER Plus will enter into force 60 days after the eighth signatory notifies, and I note that Tonga, as the depository, has ratified the agreement. Closer economic integration with the Pacific region and with larger economies such as Australia and New Zealand is essential for sustainable economic growth in the Pacific. In addition to implementing PACER Plus, Australia will continue to work to increase Pacific-wide trade, tourism and investment.

Question agreed to.

Bill read a second time.