Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes:

(a) the record monthly trade surplus in May 2019; and

(b) that the five largest monthly trade surpluses have all been this year;

(2) acknowledges that trade supports one in five jobs in Australia; and

(3) calls on Members to vote in support of important trade agreements with Indonesia, Peru and Hong Kong when they come before the House, thereby providing further export opportunities for our farmers and small and family businesses.

Well, we're back in surplus. We've maintained our AAA credit rating. We are growing faster than any country in the OECD bar, of course, the United States. We have 27 years of continuous economic growth, a $100 billion infrastructure plan, record spending on health and education and the single largest recapitalisation program in the history of the Australian Defence Force. The stats just keep on going, but the question has to be asked: how are we doing this? How are we continuing to outpace others internationally, and how do we continue to fund record spends on vital public services, infrastructure and defence? The answer obviously lies in a strong economy, which, of course, is the means by which we deliver these things and not the endgame itself.

One of the key points of our strong economy is the fact that we are an open liberal democracy, highly integrated with the international global marketplace—a bold country that is prepared to trade with and invest in our neighbours. In recent years, as most people know, we have concluded free trade agreements with some of the biggest players in our region: China, Japan and Korea. Of course, Australia was also instrumental in ensuring that the TPP-11 deal was concluded. As it stands, about 70 per cent of our trade now is with countries with whom we have a free trade agreement, and this is wonderful news.

But the reason I stand today, as reflected in the terms of this motion, is to celebrate the fact that in May this year we had the greatest results in our history when it came to our monthly trade surplus, at $5.7 billion. What's more—what members of the chamber here might be interested in—is that the highest performing five months of trade surpluses were all in this year. In 2018, we had record exports of $438 billion. So trade has contributed around a quarter of Australia's economic growth over the past five years. These are all very big statistics and big figures, but it translates into opportunities for businesses and jobs. Fifty-three thousand businesses in Australia—small, medium and large—export to the world. With that, of course, come countless jobs and opportunities, and that is why this record result with our trade surplus is so vitally important.

Behind that, of course, lie human stories. I know this from personal experience. My first job internationally was as a teenager working in greater China, selling Australian wheat flour. I knew that every bag of wheat flour I would sell would actually be transacted through someone in an office in Wooloowin, in Brisbane. The wheat flour would be customised to that marketplace by people at Acacia Ridge, and it would come out of a mill in Albion. It would be good, hardworking Australians and their families who would win every single time I'd sell a bag of wheat flour.

This is what it's all about. We have thousands of Australians exporting our products and generating jobs because Australians, in our DNA, know that we have something unique. It is why we punch above our weight. It is why we are the most innovative free market economy in the world despite our relatively small size. It's also why, as much as I'm proud of those big free trade agreements—particularly with Japan, China and Korea—I encourage members of this chamber to support other free trade agreements as they come before the House, including, of course, with Peru, Indonesia and Hong Kong, which are on their way, and as we continue to prosecute the case of Latin American FTAs and FTAs with Europe.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Is there a seconder for the motion?

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

The motion is seconded, and I reserve my right to speak.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Labor supports this motion by the member for Fairfax. Australia is one of the world's great trading nations, and the fact that Australia has been recording trade surpluses is, of course, pleasing. It is a good thing, but I would caution those opposite about too much self-congratulation. These trade surpluses are, as most know, due to the near doubling of the world iron ore price from US$69 a tonne to the current US$121 a tonne in the last six months. This price rise is due to a number of factors, including Beijing's economic stimulus program and a dam bursting in Brazil, neither of which have anything at all to do with those opposite.

Up in the Northern Territory, we pay attention to trade because we are closer, both physically and psychologically, to those growing Asian markets than perhaps the rest of Australia. These markets are vital for the economic development of northern Australia and, in particular, Darwin, the place that I represent, which has long been regarded as Australia's gateway to Asia. I was honoured that the leader of the Labor Party, Anthony Albanese, appointed me to head a task force on northern Australia and increasing trade with our near region in South East Asia and the Asia-Pacific. I will be working closely with the shadow minister for trade, Madeleine King, and the shadow minister for northern Australia, Senator Murray Watt, as we try to convince those opposite in the Morrison government of the merits of developing the north from a strategic and economic point of view. There has been so little done by those opposite in developing the north since a white paper was released some five years ago that we've started a Senate inquiry into just what has been achieved in five years of the 'developing the north' rhetoric from those opposite.

Labor went to the last election with a coherent and costed policy for Darwin and the Northern Territory. The election results for me and the member for Lingiari are proof that the people of Darwin and Palmerston could see the merit in our proposals. A specific proposal, of building a ship lift for both defence and civilian use, was high on the agenda. This important part of strategic infrastructure would result in ships, whether they be from our region or Australian vessels, undergoing routine maintenance and refits in Darwin rather than sailing away to Cairns or Singapore. This would mean a significant improvement in our defence infrastructure and capability in northern Australia and also jobs for Territorians. I call on the government to take up this proposal and build the ship lift in Darwin.

Meanwhile, the Northern Territory government is pursuing an ambitious international engagement, trade and investment strategy. The Territory's annual exports to Japan are worth $2.6 billion, to China, $1.4 billion, and to Indonesia, $320 million. We have huge trade opportunities in defence, space, agribusiness, energy, international education, rare earth minerals and tourism, to name just a few. We also have huge competitive advantages: proximity to Asia, land, water and mineral resources, local expertise, people-to-people relations and a young and culturally diverse population. Darwin truly is the gateway to Asia. I encourage all members to join us on 9 September for Facing North here in Parliament House—put a note in your diary—and learn some more about northern Australia's strategic and trading capital of Darwin.

We do celebrate trade and we welcome this motion. We do have a proud record in trade, and I think both sides can point to the past where we have had great trading agreements reached. What I would caution those opposite on doing, though, is pursuing trade agreements for the sake of it, for the sake of a news grab, because, at the end of the day, trade deals should be more about the national interest than just getting a news grab. I commend the member's motion.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I will start by congratulating the member for Solomon for being appointed to his new role, to encourage trade from the Northern Territory. He must, however, promise this chamber that he will not wear his safari suit north of Darwin—and, for God's sake, don't get stuck in a karaoke bar singing. The damage you could do to our trading relationships with so many people is untold.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I will not make promises I can't keep!

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Well, we have been warned, but I do thank the member for Solomon for his very worthy contribution to this debate.

In about 1800 a gentleman by the name of David Ricardo came up with the idea of comparative and absolute advantage when it came to trade. He realised that trade was not only beneficial to nations just because you were able to produce goods or services—mostly goods at that time—more efficiently than your trading partner and, therefore, trade with them; he realised that, even when you do it less efficiently than your trading partners, it is still beneficial to both countries to trade. The benefits of trade are enormous. We only talk about the economic benefits in this place, unfortunately. When they were talking about the Corn Laws in the United Kingdom between 1810 and 1850, Malthus was saying that we should drive up the price of food so that people on lower incomes—or, as he called them then, poor people—would not be able to afford as much food because, as he said, we were reproducing human beings at a much faster rate than our capacity to grow food. So he was very much in favour of the Corn Laws. However, Ricardo was able to show that this was short-term thinking. But the primary reason was not economic; the primary reason was actually peace. Ricardo, William Wilburforce and people like Pitt the Younger always felt that, if England could trade with France, the likelihood of them continuing to fight wars would decrease.

After the end of World War II, the architects of modern Europe and what became known as the EU were not primarily after economic benefits; they were after peace dividends. They realised that, if Germany and France's economies could be drawn closer together, the incentives for there being war would massively decrease. In our lifetime, it is inconceivable that Germany and France would go to war, though anything is possible. We may send the member for Solomon to sing in a Berlin bar at some point wearing a safari suit—and that could set off God knows what chain reactions. But, in the unlikelihood that that would ever happen, it is inconceivable that those two countries would ever go to war. That has primarily been because of trade.

When we talk about trade in the Western world or in the developed world, we think about how that has sometimes impacted the real wages of people who were in semi-skilled or low-skilled labour. Indeed, in the United States, real wages for people in the bottom 60 per cent of the income curve have not seen a material wage increase since the mid-eighties. That was primarily because, at the end of the eighties, we opened the world, through the World Trade Organization, to countries like China and a billion low-skilled workers became part of the international labour market.

We think about it in terms of the impact and the cost to people in places like the United States and Western Europe but what we don't think about is the poverty we ended in so many places around the world. In my lifetime, since 1990, we have lifted nearly 2½ billion people out of poverty—and not the sort of poverty where you can't afford the latest iPhone; the sort of poverty where mothers would have to choose between feeding themselves and feeding their children. Free trade has lifted more than two billion people globally out of backbreaking poverty. We have done more in shifting people out of poverty over the last 30 years than all the United Nations programs tried and failed to do from the 1950s onwards. It is a modern miracle and one we do not spend enough time talking about. When we come into this place and talk about our trade surpluses, our free trade agreements and how well the Australian economy is doing, it is right and proper we do so, but I don't want us to ignore the fact that free trade in so many other places in the world has been the difference between life and death and war and peace.

Josh Wilson (Fremantle, Australian Labor Party, Shadow Assistant Minister for the Environment) Share this | Link to this | Hansard source

I am glad for the opportunity to speak on the motion and I thank the member for Fairfax for bringing it. There is no dispute that trade is vital to Australia; we're a trading nation and it is core to our economic wellbeing. It plays an important role in our global and regional engagement. Fair and free trade is in our national interest, is consistent with our values and, done well, should be a tide that lifts all boats. It's widely acknowledged that trade has a key role to play in the achievement of the Sustainable Development Goals. That's why Australian Labor has always favoured the pursuit of multilateral arrangements rather than being content with the endless 'Ring a Ring o' Rosie' of bilateral preferential trade agreements.

In any case, members should not approach the shaping of Australia's trade future by declaring some kind of blanket support in advance of any particular agreement. That would be a failure of our responsibility as parliamentarians. The last thing we need is mindless cheerleading in relation to matters that are as important and complicated as trade. It was a privilege to be a member of the Joint Standing Committee on Treaties in the 45th Parliament and to consider trade deals like the Trans-Pacific Partnership, PACER Plus and the Peru-Australia Free Trade Agreement. In the course of those inquiries the JSCOT heard from business, industry, agricultural and civil society stakeholders who called for closer involvement in trade negotiations, as happens in other countries. They called for better information about the opportunities provided by new trade arrangements, especially for small and medium-sized businesses, with more resources to facilitate their participation in trade.

There was also a strong consensus from trade experts in favour of independent analysis and modelling of trade agreements, their impacts and their benefits. Indeed, three separate reports from the JSCOT recommended that government adopt the practice of commissioning such independent analysis. So far the government keeps refusing to do so. On all these matters there is room for Australia to do trade agreements much better. On that basis I call on members to support these kinds of improvements so that we get higher quality trade agreements and are better placed to assess them, which is our job.

When it comes to specific trade agreements I hope it's not deeply shocking to observe that some are not as good as they could be. All of them include provisions that might have been stronger. Many of them nowadays include provisions that probably shouldn't be there at all. That's not least because these days such agreements are not just about trade but also about investment rules, intellectual property and even labour market access arrangements. Not all countries take that approach. The United States, for example, does not make foreign labour access concessions through trade agreements. These other matters have nothing to do with tariffs and quotas and do raise legitimate issues of concern. Under the original TPP, Australia had agreed to provide an effective extension of the monopoly rights for biologic medicines from five to eight years. That could have cost the Pharmaceutical Benefits Scheme hundreds of millions of dollars.

There is also broad concern in the Australian community about investor-state dispute settlement, or ISDS, provisions—clauses that give foreign companies the right to take action against governments through international tribunals of dubious integrity. Tobacco company Philip Morris used an ISDS in an investment treaty between Australia and Hong Kong to sue our government over plain-packaging reforms. That legal action cost Australian taxpayers tens of millions of dollars and only failed because of a jurisdictional issue. If not for that technicality, Philip Morris may well have interfered with one of the most important public health reforms of recent times. As it was, New Zealand didn't proceed with their own plain-packaging laws for three years while awaiting the outcome of the Philip Morris case.

In other countries there have been successful challenges against environmental and workplace laws. ISDS has become a mechanism by which multinationals protect their profits by interfering in the sovereign capacity to govern and make policy for the public good. That's why Labor doesn't support the inclusion of ISDS in trade agreements. This government shouldn't either.

The motion does refer to jobs. Trade agreements don't automatically produce jobs. In a relatively high-wage, developed economy like ours, trade can deliver economic growth while still causing jobs to shift elsewhere. Members might reflect on the analysis commissioned by the World Bank on the original TPP, which estimated Australia would lose 38,000 full-time jobs. They should also remember that this government's been using trade agreements to weaken our temporary foreign labour arrangements, allowing contractual service providers to bypass labour market testing provisions. No-one in this place should rush to become a cheerleader in advance of trade agreements. Members would do well to consider the non-trade aspects of recent agreements and ask themselves whether they're really in the national interest. (Time expired)

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

As the member for Goldstein, it's a great pleasure to get up and endorse the words and the vision of the member for Fairfax in supporting this motion. Can I start by recalling my incredible disappointment in the previous speaker and his speech. I fully understand that Labor MPs struggle with understanding the common benefit to the entire Australian community from freer and more open markets and trade agreements. The last time they were in government, they were led by a trade minister—the most failed trade minister in Australian history, I personally think, in Craig Emerson—who failed throughout his entire tenure. He spent all his time waxing lyrical and distancing himself off to Geneva under multilateralism, with a lack of understanding of the benefits of what can be done in compounding the benefits of bilateral agreements towards multilateral agreements. We heard this all the time. It was insufferable for somebody as passionate about free and open markets as myself to see the failure of the Labor governments and what they delivered for the Australian community versus the actions and outcomes of the coalition government.

That is what has transcended since there was a change of government from Labor to the coalition—not just that but the ambition that we now share for what we can do for our country. Yes, we've had 27 years of uninterrupted economic growth. Last year we had $48.3 billion in surplus and $5.7 billion in May alone—a record. But it's not just dollars and cents that bring about the benefits of freer trade. Of course there is the export of goods, but, increasingly, the opportunity that we can secure for our free trade agreements is greater market access for investment and for our service exports.

This is a trend since the beginning of Federation: the vast majority of Australians are employed in service based industries. To realise the potential of that human capital and what we can take to the world, and to build their skills and opportunity, whether it's engineers to build new buildings or architects or legal services or financial services—a sector that was nothing but in the crosshairs of the Labor opposition at the last election—we are backing these industries to grow and achieve market access. They are not just building the economic capacity of the country; they are building the skills, the knowledge, the experience and the exposure for us to be globally competitive in our goods and services, least of all because one of the great unsung benefits of freer trade is the potential for the transfer of technology. And Australia has largely been a technology taker—not always, but often. So our capacity to integrate newer technology into our businesses and our systems to make us more competitive is a critical part of the national conversation. That's why this government is so aggressive in continuing to pursue FTAs and bilateral agreements—and now, increasingly, regional agreements not just through the TPP but across many of our neighbour partners. And the Prime Minister has a big focus on what we can do to reform the World Trade Organization so that it meets the ambition and capacity of the 21st century. Of course, the WTO was set up as a successor to the GATT on the basis of much of the politics of the 1990s. And we know, through the leadership of countries like Australia since then, that the discussion has shifted and that the rules need to shift in part with it to make it relevant for our times. We shouldn't discount its potential and its contribution, particularly against the backdrop of what it can be for dispute resolution. To be fair to the Labor members sitting on the other side, they did that in the late eighties and early nineties, through the late, great Bob Hawke. I call upon them to relive that spirit and see the potential of what we can do through FTAs and multilateral instruments, and to build the economy that Australia needs for the future.

So now is not a time not for remorse or simply raising our concerns about why things cannot be done; it is a time for looking at why things can be done. We have secured trade deals with so many of our trading partners in the region. We are now looking further afield—in particular, across the Pacific to South America—and there is so much further to go. (Time expired)

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education and Training) Share this | Link to this | Hansard source

I rise to speak on the motion put forward by the member for Fairfax. I note that he and I worked together on the report From little things big things grow: supporting Australian SMEs go global. It was great to work with him on that report, and I will return to that directly.

It is not surprising that the member for Fairfax has brought this motion today spruiking the trade surplus that Australia is currently enjoying. Although they are about to start their seventh year in office next month, good economic news has been very scarce under this coalition government ever since they took office. Their self-promotion material claims they are 'outstanding economic managers', yet there has been little evidence to back this up. It is therefore unsurprising that the member for Fairfax has grabbed some good figures with both hands.

It is true that Australia has recorded record trade surpluses this year, but we need to look a bit closer to understand why we are seeing these record trade surpluses. As the member for Goldstein pointed out, most Australians work in the service industries. So are skilled manufacturing exports or education booming? I ask that question rhetorically to the member for Goldstein. No.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

Why?

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education and Training) Share this | Link to this | Hansard source

The member for Goldstein knows that what is driving these figures are the depleted stockpiles of iron ore in China and the fallout from the Brazil mine disaster, so it is incredibly disingenuous for the coalition government to claim credit for these trade surplus figures. The mine disaster in Brazil was a terrible tragedy that claimed the lives of almost 300 people when a tailings dam collapsed in January. Vale, the Brazilian mining company responsible, has just agreed to large compensation payments to the families of those killed. The Vale mine is currently out of production. It typically produces about 93 million tonnes of iron ore per year, or about six per cent of the seaborne iron ore market. In simple economics, as any Western Australian member would know, the decreasing supply of iron ore held at Chinese ports has also contributed to the lift in the price of Australian iron ore. There has been an increase of around 46 per cent in the benchmark price for a tonne of iron ore since the Brazilian disaster. So I would remind the member for Fairfax of that line from Donald Horne's book The Lucky Country: 'Australia is a lucky country run mainly by second-rate people who share its luck.' And I'm sure those close to the member for Fairfax personify that line.

Obviously, trade is critical to Australia's prosperity. As an island continent, we have enormous opportunities because we are located on the edge of the fastest-growing region of the world in human history. When it comes to trade agreements with Indonesia, Peru and Hong Kong, Labor will examine each of these trade deals before offering comment. Labor believes in trade, so we will look at these agreements through that prism. I note the comments of the member for Fremantle, in his speech earlier, about the benefits that trade produces for this nation. It is always important to protect our national interest, including when it comes to employment issues, obviously. The devil is always in the detail with any agreement, and trade agreements should be looked at very carefully. The member for Fairfax and I have looked at that, in terms of a longer term look by the parliament at such agreements. Hopefully that will come to fruition in this parliament as well. It is always important that we look at the agreement as a whole and look with a view to protecting Australia's interests. Labor has had some issues with the government's proposed free trade agreements in the past. Labor believes in trade, but having a commitment to being a trading nation does not mean you give away your sovereignty or that you don't examine each issue, particularly with regard to jobs being created here in Australia.

In the last parliament I was the Deputy Chair of the Trade Subcommittee of the Joint Standing Committee Foreign Affairs, Defence and Trade, which was chaired by the member for Fairfax. We conducted an inquiry into access to free trade agreements. The report, From little things big things grow: supporting Australian SMEsgo global, was tabled back in February. It contained 10 recommendations to the government, including a recommendation 'that the Australian government makes its free trade agreements more user-friendly for Australian small and medium enterprises'. This is an important recommendation for Australian businesses, including some businesses in my electorate of Moreton who attended a committee roundtable and gave evidence to that inquiry. Thus far there has been no indication of a response from the Morrison-Frydenberg government to that report.

It is good news that we are seeing record trade surpluses, but the government can hardly claim that it is because of their economic management. Rather than trying to claim credit where it is not due, the government should actually concentrate on managing the economy. Let's have a look at the fact that engineering construction is down; new car sales are down; retail sales are down; wages are flatlining, and the coalition seem to have lost the defibrillators; productivity growth is mediocre, according to the actual Productivity Commission; and unemployment is a full percentage point higher than in Britain, the US and New Zealand. (Time expired)

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for the debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.