Monday, 21 October 2019
Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019, Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019; Second Reading
Before the debate is resumed on this bill I remind the House that it's been agreed that a general debate be allowed covering this bill and the Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019. I also inform the House that the original question was that this bill be read a second time. To this the member for Brand has moved as an amendment that all words after that be omitted with a view to substituting other words. The question before the House is that the amendment be agreed to.
I rise to speak on the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and the related bill.
Australia is a nation of 25 million people in a world of over 7½ billion. This simple statement has always underpinned the economic imperative of expanding international trade for Australian prosperity. We are a relatively small economy, with industries that rely on exports in order to thrive—primary industries like agriculture and mining but also, in recent times, service industries like education and tourism. As a result, it's no surprise that one in five Australian jobs rely on trade. Labor has always understood this. Our support of Australian jobs through trade is not a new thing. Indeed, it was a core part of what was called the positive approach—the approach of Labor leaders like John Curtin and Ben Chifley—to shaping the international arrangements that govern our future after the Second World War in the interests of working Australians.
Chifley fought for full employment in Australia, and he championed international arrangements that would help in that fight, building international trade and Labor agreements that improved the living standards of Australians and ensured we were able to provide a stronger safety net. It's why Chifley fought some on his own side in politics to champion Australia's membership of the IMF, the World Bank and GATT. It's why he fought Robert Menzies to secure Australia's ratification of the GATT agreements against the opposition of the conservatives. More than any other international agreement, it was these GATT agreements, ratified by Chifley against the opposition of Menzies, that underpinned Australia's economic prosperity in the second half of the 20th century. Chifley understood that Australian trade meant Australian jobs, and the great Labor prime ministers who followed him understood this too. That's why Whitlam unilaterally reduced tariffs and why the Hawke-Keating government led the foundation of APEC and championed Australian interests through subsequent GATT negotiations via the Cairns Group.
It's particularly important that we get this right and we understand this fundamental truth in our trade relationship with Indonesia. Our neighbour and the home of more than 250 million people, Indonesia is the world's third-largest democracy, one with which we share many strategic interests in a rapidly changing Indo-Pacific region. Economically, Indonesia is forecast to become the fourth-largest economy in the world and will have a consumer class of 135 million people by 2030. As Paul Keating once said, 'There is no country more important to Australia than Indonesia.'
Having a strong economic partnership with Indonesia is crucial to Australia's future prosperity. It's why we come here in this place. Labor has always understood the importance of Indonesia to Australia's future. In 2007, then Prime Minister Kevin Rudd initiated the joint feasibility study with Indonesia to kickstart the process of getting a free trade agreement with Indonesia. In 2013, also when Labor was in government, negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement, or IA-CEPA, began. This agreement is long overdue. The bilateral investment treaty with Indonesia was agreed back in 1993, under another Labor government. There has been a fair bit of change since then though. In the early nineties, 30 per cent of Indonesia's GDP was from agriculture. Now it's half that, at 15 per cent. Almost 70 per cent of the Indonesian population are now connected to the internet, and 71 million Indonesians enthusiastically use social media next door. Since the Asian financial crisis, Indonesia has experienced two decades of uninterrupted growth of at least five per cent per annum. It's one of the fastest-growing middle-class populations in the world.
This agreement is long overdue, because, despite Indonesia's growth over the last 20 years, the economic potential of Australia's trade and investment relationship with Indonesia has not been realised. Only two per cent of Australia's trade is with Indonesia—our northern neighbour, a future giant of the world economy—and there has been almost no growth in this figure over the last 10 years. Indeed, Indonesia is not even one of our top 10 trading partners. Incredibly, trade volumes between Australia and Indonesia are the lowest of any neighbouring states in the G20. We do more trade with New Zealand, a country of a mere four million people, than we do with our northern neighbour with a population of more than 250 million.
We should be frank that a large part of the blame for this situation lies on the Australian side. For too long we have shown too little interest in Indonesia. This is reflected in something as simple as the number of Australians studying Bahasa Indonesia, the language of our northern neighbour. While schools like Williamstown High School in my electorate have fought tooth and nail to retain their Bahasa Indonesia language programs over many years now, the sad reality is that there are fewer Australians studying Bahasa Indonesia today than when Gough Whitlam was our Prime Minister, at a time when Indonesia's primacy in both Australia's security and economic future was in greater question.
Labor supports IA-CEPA because it establishes a foundation for a bilateral partnership that forges Australia and Indonesia as an economic powerhouse in the Indo-Pacific region. This means more jobs in Australia, more opportunities for Australian businesses and more money in the Australian economy, across education, mining, steel and agriculture. This agreement is a gateway for one of Australia's largest export industries: education. The agreement guarantees that Australian suppliers of certain technical and vocational education and training can provide services through majority Australian owned businesses in Indonesia. Also, Australian universities, which already have more than 118 formal agreements with Indonesian universities, will be allowed to open campuses in Indonesia. At a time when we talk about the strategic imperative for Australian universities to diversify the sources of their export industries, this agreement is good news. Extraordinarily, in 2018 Australia received more students from Malaysia than from Indonesia, despite Indonesia's population being nearly 10 times larger. This is a real opportunity. If Australia were to receive the same proportion of students from Indonesia as Malaysia, this would add around 150,000 additional students, growing the Australian education export market, and equating approximately to an additional $11 billion in exports for the nation.
The growth of Indonesia's middle class and its increasing industrialisation also provide an opportunity for Australia's resources industry. The agreement the legislation before the House implements reduces tariffs and locks in progressive tariff quotas for major exports to Indonesia. Indonesia has not previously made commitments in a trade agreement on mining services of this kind. This is of significant importance to Australia. Under IA-CEPA, Australian companies can own up to 67 per cent of mining companies based in Indonesia—up from 49 per cent. Under this agreement, Indonesia will guarantee import permits for 250,000 tonnes of Australian steel per year, meaning more Australian jobs in the Australian steelworking industry.
The Australian grain industry is also facing tough times. It expects wheat exports to be up to 25 per cent lower this year due to drought. IA-CEPA will be crucial in making sure that the Australian grain industry is in a position to recover market share in Indonesia quickly when the industry's prospects improve.
All of that is the good news. That's the opportunity story presented by this agreement, but, as the Leader of the Opposition, the leader of the Labor Party, made clear in his speech to this chamber earlier, all of the details of this agreement are not the details that we would have included if we were the ones sitting opposite negotiating this agreement. Despite all the benefits and the opportunities that I have talked about in relation to this agreement, we need to ensure that IA-CEPA is good news for all Australians. We need to safeguard the interests of Australian workers. This is a significant issue. Since the global financial crisis, unemployment in Australia has risen from around four per cent to around 5.3 per cent. Underemployment has also increased. It went from less than six per cent before the GFC to 8.4 per cent. More than a million Australians are underemployed, wanting to work more but not able to get the opportunity. That's why Labor has demanded—and the government has agreed to it, in writing—to specific commitments on the implementation of this agreement in order to protect Australian jobs and Australian working conditions.
The first is a recommendation made by the members of the JSCOT that the government not use article 12.9 or any other provisions in IA-CEPA to propose, create or extend any additional labour testing waivers for Indonesian contractual service providers. This morning, the government agreed to Labor's request on this. It means that any future negotiations with Indonesia will not undermine Australian workplace laws and will include appropriate workplace labour market testing and actual skills assessments, both features being critical to protecting Australian jobs.
Second, under the free-movement provisions an increase in working holiday visas is provided for by this agreement, something that's quite good, I should point out. One of the disadvantages of the Australia-Indonesia relationship is the lack of that diaspora community in Australia—people with experience of living in both countries. So increasing the numbers of people, both Australians and Indonesians, who have experience living in the other country is an important priority to the Australia-Indonesia relationship. But it's important that this not be used to facilitate the exploitation of temporary foreign migrant workers. Australians are right to be worried given the endemic exploitation of people in Australia working under temporary work visas under this government in recent years. This is a legitimate concern and a real scandal in Australia in recent years.
Labor sought and the government agreed that any Indonesian nationals utilising the additional work and holiday visas in IA-CEPA are treated equally under Australian workplace laws and should be licensed and qualified for any work they undertake in our country. Not only that, but they ought to be informed of their rights under Australian workplace laws. One of the great scandals that we have seen in recent times is the securitisation of Australian immigration policy—the relentless focus only on how to keep people out of this country and inadequate attention paid to the experiences of people coming to this country to work. If we had been paying more attention to this settlement process of new arrivals in recent years, perhaps we would have caught the endemic exploitation that's been going on that all members of this House will have heard of in their electorates.
Third, IA-CEPA includes modernised an improved investor-state dispute settlement clauses and includes safeguards of public health, environment and prudential regulations, crucially replacing existing provisions providing for investor-state dispute settlement processes of this kind in the existing bilateral agreement. Under these new ISDS clauses, Phillip Morris would not have been able to sue the Australian government for its plain-packaging legislation introduced by my predecessor in this House.
, unlike the agreements with Hong Kong and Peru, the IA-CEPA did not terminate the existing bilateral investment treaty, the existing arrangement between Australia and Indonesia, despite the JSCOT recommending that Australia pursue termination of the survival clause in this agreement. Labor sought and the government has agreed in writing that it accepts the bipartisan JSCOT recommendation on termination and that the government also review the recent ISDS mechanisms across all recent agreements as part of the scheduled five-year review of IA-CEPA.
Labor sought confirmation from the government that there is no inference from IA-CEPA or any other free trade agreements that would require the privatisation of government services nor restrict any future decision to acquire public assets. To maintain public trust, it's crucial that any free trade agreements, any agreements of an international nature, impose no external obligations on privatisation of government services, subverting the democratic process in this country. That's not what's going on here, and I welcome the government's assurance on that front. It is also why the government has agreed to Labor's request to implement the JSCOT recommendation that it will consider the use of economic modelling analysis in an overall JSCOT inquiry into all aspects of Australia's treaty-making process in relation to trade. Independent modelling and analysis of proposed trade agreement should be undertaken as a matter of course for future trade and economic partnerships. And any member of this House who has served on JSCOT in the past will know that this has been a frequent and ongoing complaint from members of that committee. Improving transparency and public consultation on how the government enters into treaties with foreign countries is crucial for maintaining public trust in our democratic institutions and in free trade more generally. It's important that we make the case for these agreements to the Australian public and bring them along with us.
Labor has a long history of supporting and promoting trade between Australia and the rest of the world. Our industries benefit from trade through increased competition. Our consumers benefit through lower prices and greater choice. Our workers benefit through higher pay and more jobs. Australia benefits from trade. It has always been thus. Australian businesses that export, on average, hire 23 per cent more staff, pay 11 per cent higher wages and have labour productivity 13 per cent higher than non-exporters. Australian household incomes are estimated to be an average of around $8,500 higher as a result of opening up new markets through trade. But we do need to ensure that free trade agreements benefit all Australians and the changes to this agreement, the implementation commitments Labor has sought, deliver this.
I take this opportunity to follow members on this side of the House in support of the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and related bill and the amendment moved by the member for Brand. This is a really important time for the House to consider new trade deals with Indonesia, with Hong Kong and with Peru. Nobody in here needs reminding about the very serious challenges in the global economy, particularly as they relate to trade, with trade tensions between the Chinese and the Americans and trade tensions between the Japanese and the South Koreans. Of course, there's also Brexit, and a fairly robust debate going on about the relevance and the rules of the World Trade Organization.
Ideally, the region and the world could get together and make high-quality multilateral agreements, to the ultimate benefit of all the economies of the world. Ideally, we could seek common ground for the common good when it comes to trade arrangements, and those arrangements would have as many nations involved as possible. Unfortunately, progress on the multilateral front has been slow in recent times; so we are left with bilateral deals, like the ones we are debating in the parliament today. They are, frankly, better than nothing when it comes to finding new ways and new markets for our goods, and new jobs and opportunities for our people. When economic growth is not exactly thick on the ground in Australia at the moment, we look for and we take the growth where we can get it—because growth means jobs, which means opportunities for people. These agreements, though imperfect—they always are—do give Australia and Australians an opportunity to reach out to some important neighbours, especially Indonesia, to ensure that we are trading more and that we can become mutually more prosperous.
As the House is aware, the bills implement the tariff cuts agreed to by the government as part of the Hong Kong agreement, the Indonesia agreement and the Peru agreement. All we in this House are being asked to do is vote on the tariff arrangements rather than the full deals struck between governments. As the Leader of the Opposition outlined in his contribution, we don't debate the deal in this place; we debate and vote on the accompanying tariff reductions—and that is what we are doing.
From our point of view, the most strategically and economically important one of the three agreements—not to diminish the others—is obviously the Indonesia-Australia Comprehensive Economic Partnership Agreement. It has five core areas: goods, electronic commerce, skills development, investment and services. If you are looking for a summary of the nature of the change to the Indonesian trading arrangements it is that over 99 per cent of Australian goods exports to Indonesia will enter duty free or under significantly improved or preferential arrangements. In particular, the components of the Indonesian agreement around steel, agriculture and technical and vocational education really stand out as the big opportunities for Australia.
It is worth acknowledging that, when it comes to agreements like these, they are always on-balance calls. There is always an obligation for us on this side of the House to weigh up all of the pros and cons and come to an on-balance call. After lots of consultation and lots of discussion, we decided to support these deals for four reasons that I want to run through this afternoon.
Firstly, we support these deals because bigger markets mean more jobs for our people. We back our workers to do well out of the new opportunities created by the changing nature of these markets and these agreements. We want bigger markets because we want more and better jobs. In a nutshell, that's one of the reasons that we are supporting these deals. There are also big benefits for agriculture, mining and education. As other members have pointed out, a very interesting stat is that, on average, Australian businesses that export hire 23 per cent more staff and pay 11 per cent higher wages, with their labour productivity 13 per cent higher than non-exporters. I think that says something about the businesses which can grasp these opportunities afforded by new deals.
One in five Australians is employed in trade related employment. Australian household incomes are something like $8,500 higher, on average, as a result of opening up new markets through trade. Again, as other members on this side have pointed out in their contributions today, Labor is the party of trade. Labor is the party of seeking out and benefiting from new markets. I was very pleased to hear the member for Gellibrand talk about Ben Chifley's contribution in the postwar years—such an important role for an Australian at the time, in being part of the discussions that led to the general agreement, as part of his engagement, really, right across the board when it came to the new postwar institutions of international engagement. We on this side do have a lot to be proud of when it comes to trade.
I also wanted to touch on what these bills don't do. I think it's easy to make assumptions about debates and agreements like this. It's important to very clearly understand that none of these agreements include provisions that require the privatisation of any public services. None of them include provisions that undermine the PBS. All of them preserve our WTO antidumping rights. None of them include provisions that will limit the right of the Commonwealth to regulate in the interests of public welfare or safe products. The agreements don't require any legislative change with respect to our procurement arrangements. None of them explicitly exempt any category of people from Australian laws and regulations. They do not lower Australia's standards to facilitate the entry of foreign workers. And—I think very importantly for our considerations—all three agreements improve on the level of investment protections and public interest safeguards, when you compare them to the older arrangements that they replace. I think those are very important things for the House to remember.
We support the agreements because bigger markets mean more and better jobs. Secondly, we support them because we want to deepen our relationship with Indonesia—our closest neighbour, a massive country, with massive economic potential, which is set to move from the 16th-biggest economy now to the fourth-biggest in 2050, with about US$1 trillion in GDP, growing at a rate of over five per cent, with 135 million people in the consumer class, the largest growth in customers outside of China and India—and the list goes on and on. The opportunities for us in the Indonesian market are absolutely extraordinary. The obvious conclusion is that we are not serious about engaging with Asia unless we are serious about engaging with Indonesia.
It is not acceptable for Indonesia—such a big country, so close to us—to represent only two per cent of Australia's trade. As the member for Grayndler, the Leader of the Opposition, pointed out in his contribution, no pair of contiguous countries in the G20 have lower trade volumes than us and Indonesia. That is clearly not acceptable. That is something that was recognised by the Rudd and Gillard governments, which started down this path of the Indonesian agreement. There have been missteps since then, but it is now on track and ready to be supported by this place.
The third reason we support these agreements before us in the House is because we did recognise that there were some shortcomings and we've gone to the government and negotiated some good improvements in the deals and the way that they've been struck. I think it's important to acknowledge and recognise that without some of the, frankly, robust engagement with stakeholders, including the labour movement, we wouldn't have had as well informed a view about what to push for when it came to negotiations with the trade minister, Simon Birmingham. He has come back and agreed to the proposals that we have put forward. I think that's a very good thing. There have been changes made when it comes to replacing the older, bilateral investment treaties: issues around the ISDS clauses, issues around labour market testing, issues around privatisation—all of these things that we have raised in good faith have been addressed by the response from the trade minister, and I wanted to acknowledge that. But I also wanted to acknowledge the many conversations that we have had with the labour movement and with other important groups around Australia to make sure that we have come to the best possible decision that we could when it came to these bills before us today.
The fourth reason why it's important that the House support these bills—I alluded to this at the very beginning—is that these are uncertain times and we do have weak economic growth in this country. When times are uncertain, when Australian economic growth is well below what we expect of it, we need more engagement with the world and with Asia, not less. We want to see more engagement, not less, with our neighbours and with the countries beyond, because in uncertain times, when we need the economy to grow faster, trade negotiations and agreements do give us the potential to address both of those shortcomings.
I think it's important to acknowledge, or at least to not let pass, some of the language of negative globalism from the Prime Minister in recent weeks. We had the member for Mackellar, I think, try to pretend that the IMF was some far-Left organisation. All of these sorts of things damage our ability to engage with the world. These bills are about engagement with the world, for good economic and strategic reasons. At the same time, we have these dangerous messages from the Prime Minister and down on that side of the House, which compromises our ability to deal with the world on good terms. When the Prime Minister gets up at the Lowy Institute speech, as he did in the last fortnight, and talks about negative globalism and runs down the global institutions which Australia has done so well from, recognising that it is in our national interest to have a voice and to have a say in the conduct of the world's affairs—to have a Prime Minister try and diminish that is troubling, I think. It's concerning. It's damaging. We need a Prime Minister who is not just chasing headlines; we need a Prime Minister who is chasing good outcomes for Australia. Good outcomes for Australia means engaging, seeking common ground, seeking common good, looking for ways to advance our national interest in the way that these bills do, frankly. He shouldn't be engaging with this far-Right, crazy language about global institutions. Global institutions do serve Australia well, and we should continue to engage with them, as we should continue to engage with the nations of our neighbourhood and beyond.
It's true, I think, that weakening global cooperation is now one of the big economic risks that we face as a country and as a region. It's true that Asia's growth and potential is making up a bigger proportion of the global economy. But it's also true that when cooperation falls down and the impact of that is felt disproportionately, Asia—and Australia within Asia—has a great deal to lose across trade, investment, finance, immigration and regional cooperation. Growth in Asia is very interconnected. When cooperation fails or when countries put up walls, it is susceptible to a lot of damage when that path is followed. That clearly has implications for Australia and for our economy.
Finishing up, I would summarise by saying that these deals may not be exactly as we would have struck them had we concluded these deals. We do not necessarily think every sentence in the deals is perfect. But, on balance, I think they are worth supporting. They are good for Australian workers. They are good for our relationship with Indonesia. We have been able to secure key improvements to the text of the agreements. In that light and for those reasons, I support these new agreements and I urge the House to do so as well.
Selamat sore to those listening to this debate on the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019. When I was anak kecil I lived in Indonesia for three years. My father, Michael Leigh, was at Syiah Kuala University in Banda Aceh, funded by the Australian government to work in a special training program designed to improve social science research capability throughout Indonesian universities and Islamic institutes. My mother, Barbara, was mostly looking after my brother, Tim, and me, but also began the research into the Indonesian education system that became her PhD thesis and wrote a book on traditional Acehnese textiles, Tangan-Tangan Trampil, or The Hands of Time.
Living in Aceh was a pretty extraordinary experience for an Australian boy to have. I attended the local school, where lessons were conducted in Indonesian and, where, in the face of a burgeoning Acehnese independence movement, we spent a large portion of the day singing nationalist songs to remind us all that we were Indonesian first and Acehnese second. The Suharto government was keen on that. We then played in the muddy playground—as the only white kid in the class, I was the only one whose white shirt had turned completely brown by the end of the day. My friend Niko Fahrizal and I would explore the local neighbourhood, playing by the river, watching the bigger kids at the volleyball nets, watching Scooby Doo at Niko's place. Niko is now an officer in the Indonesian military. When my mother, Barbara, visits, he calls her tante—auntie—Barbara.
We were following the many Australians who engaged with Indonesia in the immediate decades after independence. They were an extraordinary group of people. Herb Feith, who created Australian Volunteers Abroad, believed that volunteering was 'symbolic of human equality'. I still remember Herb's enthusiasm for Indonesia—the way he would energetically share his ideas with everyone, from President Sukarno down to a little child like me. Herb's subsequent PhD thesis was dedicated to his friend Djaelani, a Jakarta servant who lived in one of the city's many slums. When I speak to young Australians looking to volunteer in South-East Asia, I encourage them to read Jemma Purdey's biography of Herb Feith before they go.
But those Indonesia experts didn't believe in just helping our large neighbour after independence. They also believed Australia had to get out our policies right. Jamie Mackie helped draft Control or Colour Bar? and organised street protests against the White Australia policy. My father was among those who marched from Melbourne university, between tight rows of police officers, to campaign to scrap that policy. In the 1980s, thanks in part to the repeal of that policy, Chusnul Mariyah came to live with our family for several years while she wrote her PhD thesis—on the topic of Australian local government corruption, as it happens. My brother, Tim, and I still refer to Chusnul as our Indonesian big sister.
The arc that the Indonesian economy has taken over the past two generations is superbly traced out in a recent article by the Australian National University's Hal Hill. He noted that, while growth rates have moderated in the post-Suharto era, Indonesia has benefited from sound macroeconomic management, economic openness, inclusive social progress and institutional development. Indonesia still faces significant challenges; my own economics research with Pierre van der Eng on Indonesian inequality shows just one of those challenges. But, for all the challenges it faces, Professor Hill’s major conclusion is one of development success, broadly defined.
Yet, when it comes to Australia and Indonesia, we've too often neglected our relationship with what Hal Hill calls 'Asia's third giant'. Indonesia is a G20 nation with 10 times Australia's population and enormous diversity. It is the largest Muslim nation in the world. Indonesia and Australia have worked together in countless international forums to secure a more prosperous and peaceful region. But, between our two countries, we've got too little economic activity: just two per cent of Australia's exports go to Indonesia. There are too few interpersonal connections. We need a relationship based on more than batik, Bali and Bintang.
This free trade agreement with Indonesia has been a long time coming. Negotiations began under the Gillard government in 2010, restarted in 2016 and concluded in 2018. The signing process was then derailed for a time, when Prime Minister Morrison suggested that Australia might join Guatemala and the United States as the only two countries in the world placing their embassies in Israel in Jerusalem. We did eventually get there, and it's a good thing that we did.
This is a bilateral agreement, a preferential trade agreement, and therefore not the best way of achieving trade liberalisation. Multilateral agreements are preferable; next after that, large plurilateral agreements; and then bilateral agreements. Businesses recognise this. According to the latest Australia's International Business Survey, just seven per cent of businesses identified such agreements as a key reason for choosing their first overseas market.
The strength of the relationship is certainly there on the Indonesian side. You only have to go through some of the stars of Indonesian politics who have spent substantial periods in Australia: Chatib Basri, known as Dede, Indonesia's former finance minister; Mari Pangestu, the former trade minister; former Vice-President Boediono; and Marty Natalegawa, the former foreign minister. The first cabinet of President Widodo included Pratikno, who is the Minister of State Secretariat, and Airlangga Hartarto, the Minister of Industry, both of whom had studied in Australia, at Flinders University, Monash University and Melbourne Business School.
On the Australian side, too few Australians have a deep understanding of Indonesia. When I was born in 1972 there were more Australian school students studying Bahasa Indonesia than there are today, despite the fact that Australia is much bigger than it was. That costs us in multiple ways. Language isn't just a communication tool; it is also a window into the culture. While I've forgotten much of the Bahasa I knew as a child, it is something I will use with my three little boys. When we're out at a restaurant and someone says their food is too hot, we'll have a conversation about whether they mean 'panas', meaning boiling, or 'pedas', meaning spicy. Sometimes English lacks the right adjective, and Indonesian can step in to fill the void.
As Santo Darmosumarto, director of the East Asia and Pacific division of Indonesia's foreign ministry, said:
For a long time we have looked north; to Japan, Korea and China, and so has Australia, but in both looking north we have missed each other.
The recent Asialink report, Match fit: shaping Asia capable leaders, found that at least eight out of 10 large Australian firms are inadequately equipped to do business in Asia. What is vital for Australia is to plug into those services supply chains in Asia where there are significant benefits of this free trade agreement on the goods side. Australian farmers will be able to export half a million tonnes of grain a year into Indonesia tariff-free, which especially matters given that Indonesia is Australia's largest wheat export market. The tariff on cattle will be eliminated. The tariff on steel will be reduced from 15 per cent to zero.
The real long-term importance will be in assisting Australia's businesses to plug into the services supply chains in Asia. Australia's vocational education and training providers will be able to establish ventures in Indonesia with up to 67 per cent Australian ownership. That's vital, given that Indonesia's industrial sector will need around 600,000 new skilled workers every year. Australian VET providers will be able to step up to the provision of high-quality in-country programs, including train-the-trainer teaching models and models that combine online education and in-person education. If it's to achieve the population-to-care ratios recommended by the World Health Organization, Indonesia needs to train around a million new nurses over coming years. Australian education and healthcare providers could work with Indonesia on that important services export. There are important opportunities in allied health care, social services companies and professional services firms in areas like waste, water and infrastructure.
We also know that Indonesia is targeting 23 per cent renewable energy by 2025, up from just 12 per cent currently. Indonesia is working on ensuring greater reliability while moving towards cleaner power supply to reduce both carbon pollution and the direct impacts of poor air quality. In this vein, an ANU Grand Challenges project funded last year, Zero-Carbon Energy for the Asia-Pacific, is going to be an important piece of Australia's energy engagement with Indonesia. Among the academics involved in that project are Ken Baldwin and Emma Aisbett, as the joint leads; Chief Operating Officer Karen Warnes; Dr Matthew Stocks; Dr Fiona Beck; Associate Professor Paul Burke; Dr John Pye; and Associate Professor Janet Hunt. They are working on proposals, such as exploring why Indonesia needs climate finance for its energy transition and new opportunities to grow Indonesia's solar sector. The engagement with Indonesia on the services trade front will only grow in coming years.
In supporting this trade agreement, I am following in a long and distinguished line of Labor members of parliament who have argued the case for Labor as the party of trade liberalisation. Open markets are simply an extension of comparative advantage. Just as most of us don't fix our own cars, cut our own hair or make our own clothes, so too it makes sense for Australia to specialise in what we do best. As a country that constitutes just 0.3 per cent of the world's population, it naturally makes sense for us to focus on our comparative advantages. And in so doing we don't get beaten by the rest of the world. Trade isn't a zero-sum game, like the Olympics or the Eurovision Song Contest. Trade is an opportunity for us to get the gains from comparative advantage and from specialisation.
Within the Labor legacy this was first and most strongly recognised by the Whitlam government, with its 25 per cent tariff cut in 1973. It was then recognised by the Hawke and Keating governments, which significantly reduced Australia's tariff levels. Those tariff cuts, brought about through the 1980s and 1990s, delivered almost $4,000 a year into the pockets of the typical Australian household. This meant, in practical terms, that high tariffs, which had been over 100 per cent in the 1970s and which were still around 40 per cent in the early 1990s, were brought down on products such as cars, clothing and shoes.
When I wrote a book called Choosing Openness, I calculated the cost of a pair of children's shoes in 1987 and again in 2017. I found that children's running shoes had gone from $10 in 1987 to $9 in 2017 and that men's workboots went from $28 to $34. Given that wages had tripled over that period, that meant the amount of time that a typical worker needed to work to buy a pair of children's shoes had gone from 44 minutes to 13 minutes. And when I looked at cars, I found that the price of a base model Corolla had gone from $12,000 to $20,000 over that 30-year period. That meant that the amount of work required to buy a Corolla had fallen from six months work to three months work.
Those changes were progressive; the cuts in tariffs delivered more in proportional terms to low-income households than to high-income households. That's why, when Australians were asked by the Lowy Institute poll this year whether they believed that free trade is good or bad for their own standard of living, 75 per cent said it was good. It is why there is such a risk to Australia if we follow down the road that too many countries are on towards narrow, tribal nationalism. Labor's commitment to free trade has not been an ideological one; it has been a practical commitment, recognising that the benefits of trade flow most strongly to the most vulnerable.
I want to commend the shadow minister for trade for the vital work that she has done in ensuring that this agreement backs Australian jobs and that significant concessions were achieved from the government to ensure that this agreement, like past free trade agreements that Australia has supported, is in the interests of the Australian economy, Australian households and Australian jobs.
Labor supports the Customs Amendment (Growing Australia Export Opportunities Across the Asia-Pacific) Bill 2019 and the related bill to enable the government to enter into the free trade agreements with Indonesia, Hong Kong and Peru. We've heard from many previous speakers that if Labor were in government of course we would have negotiated agreements with these countries that were somewhat different. But, nonetheless, we have tried, valiantly, to work through the processes available to us to try and ensure that a number of Labor principles on free trade are reflected in the agreements going forward and in future negotiations for free-trade agreements. Part of that has been obviously the work done by the shadow minister and the minister for trade as well as by the Leader of the Opposition in negotiations with the government to try and reflect some of these important principles.
The other part of it of course has been the work of the Joint Standing Committee on Treaties, of which I'm deputy chair. As Deputy Speaker Karen Andrews would know, the important although understated work that committees do in this place are very, very important in making sure that some of our legislation is better than it is in the initial stages of drafting. It is a part of the important process to improve legislation in the national interest. The committee work is actually vitally important. I had that unique perspective of working on the JSCOT, as it's called, in the last couple of months on these free-trade agreements. Obviously, the public hearings and the submissions that were put to the committee by a whole range of stakeholders and organisations were very important.
In summary, I want to acknowledge the chair of the JSCOT, the member for Wentworth, Dave Sharma, for his work and also the secretariat, who did a lot of great work in the last couple of months, in what was a very tight time frame around these free-trade agreements given the government's timetable and schedule in wanting to ratify at a certain point in time. The Labor members on the JSCOT, from our perspective, worked very hard to try and ensure that some of those principles, 186, that I will come to were reflected in the report that was produced by the JSCOT.
Starting really with one of the main issues that has exercised not just the Labor Party but the labour movement more generally is the issue around labour market testing. The wording in this report reflects the importance of any agreement that Australia enters into with Indonesia at any time in the future be one made at a treaty level—not a sub treaty level—agreement and that it does not waive labour testing with respect to contractual service suppliers. I note the Leader of the Opposition's announcement earlier today—that he had negotiated this with the government—was welcome news. That's very, very important because what it does is give preference to Australian jobs. It makes sure the skills testing and the labour market testing are there to make sure that any temporary foreign workers meet the same standards as Australian workers. That is of critical importance for Australians and for Australian jobs.
The other important recommendation I highlight out of the report was recommendation 4, in which the Australian government would pursue the termination of the survival clause in the old bilateral investment treaty between Australia and Indonesia, which effectively means terminating the old ISDS provisions that existed under that agreement signed back in 1992 obviously in favour of far more improved and better ISDS provisions in the current agreement that's been signed. This really goes to reducing Australia's potential exposure to claims under the superseded agreement and is very much in line with ensuring that there are safeguards, carve-outs around public policy that will make a huge difference to investors going into Indonesia and also into Australia.
It should be noted, too, the achievement of this agreement with one of our largest and closest neighbours is of utmost importance, in my view, given this time of global trade uncertainty. It is important to note, too, that the Labor Party has always been a party of trade on fair terms. We're hopeful that the agreement will lead to a greater number of exports and a closer trading relationship with what is such an important neighbour in Indonesia and an economy that is growing at such a rapid pace.
The other important recommendation to note in the report is the recommendation that the Australian government give due consideration to implementing independent economic modelling around these agreements, particularly with respect to having that occur through the Productivity Commission, or an equivalent organisation, and providing that to the JSCOT committee in future, alongside what is given to the committee with respect to these agreements, and that is the national interest analysis. That is something that has been called for over many parliaments, with respect to ensuring that the trade deals we enter into actually work for Australians, with some evidence based independent economic modelling that can give us some certainty around the benefits and the opportunities that flow out of these agreements.
Regarding the point that was raised this morning about the importance of consultation with civil society, particularly the union movement, a number of submissions that came to our committee made the argument that much of civil society, and the union movement in particular, felt that they were shut out of the negotiations with DFAT officials during the course of the preparation of the agreement and the negotiations around elements of the agreement. They made the argument that many other stakeholders, such as business, were given much more time in that process. We had some language in the report that went to resolving that there be further consideration around consultation mechanisms in the context of trade treaties during this 46th Parliament. This actually means much more than that. It means having the committee look at the whole treaty-making process in the 46th Parliament—how we can improve it in order to ensure that we get better results. Part of that is the inclusion of civil society stakeholders, such as the union movement, within the consultation process, just like any other stakeholder. That's been an important element in the committee's work over the last couple of months. It's important that we are able to conduct hearings on this in the 46th Parliament in order to see how we can improve those processes.
I want to make a point about the Hong Kong free-trade agreement. We had much discussion and debate about the language on the unique status of Hong Kong that goes into this report. We have signed an agreement with an autonomous entity within what everyone knows is the one country, two systems framework. I note the arguments made by the chair of the JSCOT, the member for Wentworth, and the government's broader argument that the characteristics that make Hong Kong unique under this system are being recognised by the very active signing of a separate agreement with the territory. These, obviously, are the rule of law, freedom of expression and some of the democratic rights that are afforded or have been afforded to residents of Hong Kong under the basic law. There is certainly a strong argument that if we are signing this type of agreement with Hong Kong we are further emphasising and supporting the unique autonomous status that exists. I have made the point though—and I've made this public—that if the ongoing civil disturbance and political instability in Hong Kong leads to a diminution of those rights, those very unique elements that make Hong Kong the special autonomous territory that it is, then real consideration should be given by government to the ratification timeline, because the very act of ratifying the agreement may, in those circumstances, actually lead to the diminution of those rights. That's why it's so important that the government and the opposition, through the committee as well, have noted the importance of continuing to monitor the situation on the ground in Hong Kong with respect to those unique elements of the autonomous territory, in order to ensure that that can be resolved as peacefully as possible. That is a slight difference in positioning, I guess, between myself and the member for Wentworth, but I think it's important to note that for the record.
With respect to Indonesia, we've heard many speakers raise what I think are extremely important points. One is the fact that the Indonesian economy is on track to being the fourth-largest economy in the world by 2050, with a consumer class of around 135 million people by 2030—providing a great opportunity for Australia's exports into that country. We've heard time and time again that this trading relationship with one of our closest neighbours, our northern neighbour, right on our doorstep, has been woefully underdone. Currently, Indonesia accounts for only around two per cent of our exports. That is a remarkable statistic given the size of the country that's just to our north. It's currently our 14th-largest trading partner—again, a remarkable statistic given the fact that there are over 240 million Indonesians just to our north.
In many respects, this agreement fits into the broader objective that I think we should all share, and that is to improve our relationship with Indonesia. It's certainly a bipartisan objective in the general sense. It has been a relationship which I think has been woefully underdone. Many Australian businesses have kind of leapfrogged Indonesia to go to other parts of Asia. There are different reasons for that. At the public hearings and in submissions there were points raised about how difficult it is to do business in Indonesia—and there were valid reasons given for that. We realised that we had to do much better in enhancing our relationship with Indonesia in order to give Australian businesses and Indonesian businesses a better opportunity for the economic relationship to flourish. This is one step towards that and one that we should all support.
Another point to make is that Australia needs to look at diversifying its trade—not have a trading relationship that is limited or narrowly focused on one or two countries but really trying to diversify our economic and commercial trading relationships right across the Asia-Pacific. This free trade agreement with Indonesia is also a step in that diversification objective. This agreement will allow our relationship with Indonesia, an important regional partner, to grow. I support the agreement on that basis, as much as for any of the other reasons that have been enunciated today.
As I've mentioned, the Australian Labor Party believes that our trade agreement processes should be more open and consultative. This is a really important point. I welcome some of the improvements that have been agreed to with respect to the process and, as deputy chair of the JSCOT, I look forward to working on these. The JSCOT is one of the few avenues that allows business, civil society, the union movement, other stakeholders and ordinary people—citizens—to provide input and feedback on Australia's treaty-making process. Reviewing and improving this process is of utmost importance, and I welcome the step that we're taking.
The bills before us, the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and the Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019, give effect to the Peru-Australia free-trade agreement, the free-trade agreement between Australia, Hong Kong and China, and the Indonesia-Australia Comprehensive Economic Partnership Agreement. There are three agreements but, in my comments in the contribution that I will make to this debate, I want to focus my comments on the Indonesia-Australia Comprehensive Economic Partnership Agreement. I want to express my strong support for the agreement and to set out the reasons why.
When I first came to this parliament I was concerned that I personally and Australians in general lacked a deep knowledge and understanding of Indonesia—our nearest neighbour and a significant partner in the region. I set out on my own personal journey to try to close that gap not only by learning the Indonesian language and by working on person-to-person ties but also by looking for opportunities, in my role as a parliamentarian, to establish links and relationships with parliamentarians from Indonesia. My job has been imperfect, but I think standing here and strongly advocating for this agreement is another step in the right direction. Indonesia, as has been said by others in this debate, is Australia's largest near-neighbour. It's the seventh-largest economy in the world and has a population of more than 260 million people. Almost by dint of that population—but also because of some proactive decisions being made by the Indonesian government—it will move from the 11th largest economy in the world to the fourth largest economy in the world by 2050.
As Paul Keating set out when he was Prime Minister, the relationship between Australia and Indonesia is absolutely critical to both of our nations' futures. Defence ties are very, very good. There is regular contact, regular exchange, regular cooperation between the Australian and the Indonesian defence forces, as there is with the other security agencies of both of our countries. From time to time there are bumps in the political relationship, but overall I would rate it as very, very good indeed.
One of the areas where we are significantly underdone is in our people-to-people relationship and in our economic relationship. In terms of our bilateral trade relations, our relationship with Indonesia sits at No. 13 in the ranking of trading partners, at around $16.8 billion. If you drill down into that, you can see where the gaps really are. The level of mutual direct foreign investment between the two countries sits just under $22 billion, which sounds like a lot of money but, when you look at the direct foreign investment that we have with other near-neighbours, whether that be New Zealand, Thailand, Malaysia or Singapore, we're way off the pace when you look at the importance and the size of our respective economies. We have more bilateral trade with New Zealand, a country of 4.8 million people, and Singapore, a country of 5.6 million people, than we do with the seventh-largest economy in the world. I'm not being critical of the fact that we have excellent trading relationships with these countries. They are important. But I am critical—and I think we have a collective responsibility of doing something about this—of the fact that for far too long Australians and Australian businesses have flown over Jakarta to do business in Singapore and in Hong Kong and to do business more latterly in Shanghai and southern China. We have been flying over the opportunities to do business and to strengthen those person-to-person and business-to-business relationships with Indonesia. The direct effect of trade agreements can be overdone, but I think it is true to say that they are a part of a number of steps that governments can take to improve those relationships.
Talking about comparisons of our trade relationships, we export more goods and services at the moment to the United Kingdom. If you stand on the tip of Cape York—avoid the crocodiles!—and I've done this, you can almost, on a good day, see the territories of Indonesia, which are less than 200 kilometres away, yet we export more goods and services to the United Kingdom, which is more than 15,000 kilometres away, than we do to our largest near-neighbour. Much more can and should be done. There are opportunities, and this partnership agreement spells out a pathway to developing those opportunities. Indonesia, for its part, has an ambitious infrastructure investment agenda which will drive demand for steel and other Australian exports, including the construction of an entirely new capital for their country. What an exciting opportunity it is for the Indonesians on the island of Borneo in the province of East Kalimantan to be building a new capital from scratch.
Indonesia's economy is growing at more than five per cent per year. Indonesia imports, at the moment, enormous quantities of wheat, sugar and cotton from Australia, and we'd like the opportunity to be able to expand the exportation in these product lines, but we can do more as well. It's interesting to note that Indonesia imports nearly $3 billion worth of wheat every year but only one-third of that wheat comes from one of the biggest wheat producers in the world, and that is Australia. So much of that is grown in Western Australia, which is so very, very close to the markets of Java and beyond. Demand in Indonesia for Australian services is strong and could be stronger—services such as education, health care and tourism; of course, there wouldn't be many Australians of my age who haven't been Bali several times—but we need to extend it beyond that. Our engineering services sector is just one area of services where we could be expanding our trade opportunities. It's already one of the largest markets for our significant mining technology equipment as well. Again, more can be done in that area.
I want to say something about trade agreements at large. It has been the instinctive response of many within the centre left of politics in this country to have an opposition to free trade agreements. I understand fully the history to that: protection of jobs in industries that have grown up around tariff protection; provision of good jobs, good incomes, and good security for the workers and their families. That cannot be dismissed lightly. While the benefits of trade and free trade are distributed thinly but widely throughout the country, the impact of reducing tariff protection is felt very deeply and is concentrated in those communities which have been home to manufacturing and manufacturing production. So I do understand the concerns.
But the majority of the work, if you like—the majority of reform—occurred in the 1990s. When your level of general tariff is at two per cent and you just consider the weekly and monthly fluctuation of the Australian dollar, you've virtually got no tariff barrier at two per cent. Any trade agreement that Australia has will have much more to do with facilitating access to a market with greater trade barriers than Australia has. We're not giving up very much at all, because we're virtually at zero tariffs at the moment. In just about any trade agreement that Australia has at the moment, there is almost more to be gained than there is to be lost. There are some exceptions to that. Before people grab their keyboards and start sending emails, yes, of course there are exceptions to that, but the point remains: when your general tariff is at two per cent and a lot of the other trading partners have tariffs in the eight, nine and 10 per cent ranges, any market access that you can get that enables them to reduce their background tariffs is an advantage to Australians—to Australian producers and to workers in the businesses that are exporting to Indonesia. That is particularly the case for businesses within my electorate. I argue that this is good for the economy and good for the country as a whole. It is strategically important, but it's actually economically important for the people that I represent. I want to pick a few sectors. One of Australia's most significant steel manufacturers, BlueScope, is centred in Port Kembla and employs approximately 3½ thousand direct employees and an additional 4½ thousand to 5,000 employees indirectly. Most of them live in either my electorate or the electorate of the member for Cunningham. It's incredibly important. They represent approximately 10 per cent of all jobs throughout the Illawarra region and 11 per cent of gross regional product. Twenty-four per cent of the region's total output comes through those factory gates.
On this basis, exporting around 700,000 tonnes of steel every year is incredibly important for the Port Kembla steelworks, because when you're making steel, particularly from the blast furnace method, it's all about volume. You've got to pump as much steel through that blast furnace and through the slab caster as you can every day—producing the slabs, rolling it into hot rolled coil and getting it out of the gates to the markets of Australia and the world. More markets mean more throughput, which means you can improve the profitability of that plant and the returns to the profitability of the plant, securing the jobs of the workers.
BlueScope also has a fabricating and a processing plant in Indonesia. Hopefully, it will benefit from the massive infrastructure build that's underway there. This agreement will improve the ability of BlueScope to export hot rolled and cold rolled coil into Indonesia. It will be a significant boost to that factory and to the workers within that factory. So it is in the interests of steelworkers and those who represent them in the Illawarra.
It's not just Port Kembla, although, as a town that's built around a port—as is the electorate—our livelihoods are built on the back of selling things to other countries and bringing things in and out of that port. We get the importance of trade. The agreement is also important in the area of education services. When I was growing up, the steelworks was the most important institution. I think it now shares that prize with the University of Wollongong. It's a world-class university, one of the best in Australia for its teaching quality, and it will substantially benefit from this agreement—because one of the areas where, again, we're underdone economically, is in direct student exchange and in the university area. So there is great potential there as well.
I've got about a minute and a half left in this debate and I wanted to say one final thing on this. When Paul Keating said that we needed to do more as a nation to strengthen our relationship with Indonesia, one of the things he said was that it's got to start in the classroom. We've got to have students learning the Indonesian language and learning about Indonesian culture. It is a matter of great shame that there were more students learning Indonesian in the 1990s than there are today. If you look at the percentages for all year 12 students who are enrolled in a tertiary recognised language in Australia, there are 20 per cent doing Japanese, another 21 per cent doing French, seven per cent doing German, 19 per cent doing Chinese and nine per cent doing Italian. Do you know what percentage are doing Indonesian? Four per cent. Four per cent. We've actually gone backwards. So, if we're going to the something about the business relationships and something about the people-to-people-relationships, we need more people studying the language of Indonesia, Bahasa Indonesia, and it has to start in the classroom.
I commend the bill to the House.
These agreements give more rights to big corporations than to governments and to workers, and they should be opposed. These agreements are being negotiated by big corporations and their shills in the Liberal government, and it is appalling that now, when this wasn't even on the Notice Paper for today, Labor and the Liberals have done a dirty deal to rush this legislation through the parliament, over the very strong and legitimate objections of working people and non-government organisations right across Australia.
These deals are not simply about trade. If they were simply about trade, they'd probably be unobjectionable. And there's nothing wrong with having an agreement with Indonesia or Peru or Hong Kong—although I'll come back to Hong Kong in a moment—or any other country in principle. It's not about saying you can't strike a deal. The question is: what's in it? The question is: is the government, at the behest of big corporations, signing away rights that most people in Australia think are part and parcel of a democracy? When you look at this deal, the answer is yes.
It is no answer for Labor to come in here and say, 'We just negotiated a side deal with the government.' This is the very same government they've told us the last few weeks we can't trust because they're loose with the truth. Now apparently we have to just accept that it's all going to be okay because there is a side letter from the minister that promises to fix the problems. Well, no. What this dodgy side letter from the minister boils down to is that all the existing loopholes will continue to apply. The big win that has been negotiated out of this is that the existing loopholes won't be expanded. Well, whoop-de-doo. At the moment, the problem is that there are holes in these agreements that are big enough to fly plane loads of exploited overseas workers through. That is bad for the overseas workers because they end up here being exploited, working with the threat of expulsion from the country always over their head, and that allows them to be put through conditions most of us would find objectionable. It's also bad because it means local wages and conditions get pushed down. That is why unions who have looked at this deal have said, 'Hang on, there's something wrong here.'
The problem with the way these agreements are negotiated is that you don't get to see the text before it's put on the table and you have to either take it or leave it. The problem with these agreements is that even when the text is put on the table there's no independent analysis done. Alarm bells should be ringing for the government when the Productivity Commission and the Greens start agreeing about the need for cost-benefit analysis, but that is where we are at with these agreements because the government's come in here with all sorts of promises about how great these agreements are and the Productivity Commission is the first in line to stand up and say, 'Well, actually, if that's right, then test it.' Do some analysis and test it. Put forward a case to parliament before each of us is asked to vote on it, as Labor and Liberal are asking us to do in this rush deal here today. Put up some economic analysis that shows that there might be some benefit—but there's none.
We saw this with the ChAFTA agreement, when the minister at the time told us: 'It's all right. It's all going to be fine because there will be hundreds of jobs—600 or 700 jobs in the dairy industry in the first year alone.' That's what the minister said about ChAFTA. Well, no. Jobs in that industry have gone backwards. Even the spurious claims they make about previous agreements show you can't believe the spin. That's why they're not prepared to front up here with some kind of independent analysis about how great these deals are meant to be. The fact that they can't come in here with any analysis tells you everything you need to know. If you don't believe the Greens, listen to the Productivity Commission about it.
The Liberals come in here and say: 'We've got this great deal that we've negotiated on behalf of our corporate masters, and I'm sorry it is going to mean a few diminutions of your labour standards, workers; you'll just have to cop that. Sorry there are no enforceable labour chapters or environment chapters in this; you're just going to have to cop that.' You expect that from the Liberals. I say to Labor: stop caving in to the government. Let's stand up to this government and the dodgy deals that it does. The sooner we do that, and the sooner an alternative is presented, the sooner they'll be out of office. At the moment they've only got a one-seat majority in this place. Who knows what's going to happen and how many by-elections there will be; there are always by-elections during the course of a parliament. We could have this government out soon. But if you keep agreeing with them and giving them everything they want, then they'll just get emboldened.
To go to some of the specifics about this, there's the local advertising of jobs. One would think it's an unobjectionable principle to say that where there are jobs going here in Australia, we will advertise locally first. If we can't find someone locally then of course we can look overseas, because there's nothing in principle wrong with saying there might be skills gaps in Australia or that we want to have greater international cooperation, so we'll have a system that says people can come from other countries and work here. But the question is: what is in the agreement? You would think there would be something that says that you have to advertise locally first, but we know there's not, because we know there are whole carve-outs in this that say there can be new categories of people who don't have to go through that process.
When we look at the text with respect to other labour matters, there are some real questions about qualifications and standards. For example, most people would think, if you have Australian rules and restrictions around someone who is an electrician, that anyone who is going to work in this country has been through an actual testing process to know they can comply with those standards. What happens under these agreements, though, is that someone from another country—a sponsor; a big corporation—puts in application and says, 'It's okay; I vouch that so-and-so has the appropriate standards.' Do they have to go through a separate testing process? No. Does it have to be checked? Do they get assessed that they know how Australian electrical standards work? No. Someone sitting behind a desk does a paper check and, bang, they can come through.
We have heard interjections that this is rubbish. Obviously no-one has sat down and actually looked at some of the cases of systematic exploitation that have been unearthed by the use of contractual service suppliers or people on section 400 agreements. We see, time and again, people being put in the most exploitative conditions to build our buildings, service our industries and do work under these agreements, because, once someone comes here, they are under the thumb of the employer who says, 'If you don't accept these lower wages and conditions, I'll revoke your permission on the visa and you are on the next plane back.' That is what allows for exploitation, which has been uncovered time and again.
We also have clauses in here that allow corporations to sue governments if those governments dare to do something in the interests of their own people which somehow impinges on the profitability of those corporations. Peru is one of the countries being talked about. A company took Peru to court—it is not even a court; they are these secret tribunals where you don't have to have judicial qualifications. It is why the former Chief Justice of the High Court of Australia has said, 'Hey, watch out; Australia is trading away its judicial sovereignty to these secret tribunals as part of these so-called ISDS clauses.' You allow two or three people sitting in a room, secret panel, to decide whether or not a corporation can sue the Australian government. When I say 'sue', it's not just for money; they can actually require that we change the laws. Peru got sued through one of these tribunals, because it deigned to pass laws that benefited its Indigenous population. A French company sued the Egyptian government because that government passed laws with respect to lifting the minimum wage. That is why people do not like these.
Let's get to the specifics of some of these. We know there is a problem, because the Labor Party has identified that there is a problem, but they've wriggled out of it and said, 'It's okay; we'll sign up to the one the Liberals have negotiated.' As I read the agreements, to give an example of this, previously governments have been taken to court when they tried to restrict tobacco by plain-packaging laws. In the Hong Kong agreement, as I understand it, there is mention of tobacco; in the Peru agreement there is mention of tobacco—but not in the Indonesian agreement. Why is there no mention of tobacco in the Indonesian agreement? I'd be happily told that I'm wrong. Why are there specific mentions in the other agreements and not the Indonesian one? Is it just coincidence that that happens to be a country where the tobacco industry has a significant stake? Are we opening the door to more litigation against Australia on the tobacco front? You can sure as hell bet we are on the aged-care front and in a bunch of other service industries. Where we in this parliament think we are democratically elected to pass laws, we will find we no longer have the capacity to legislate, because someone will come along and say, 'Hang on, you can't pass that, because that might affect the profitability of corporation X over here; we're going to wind it back.'
The situation in Hong Kong is especially concerning if you are concerned about democracy. What we have seen recently in Hong Kong is continued brutal repression of democracy activists and leaders. One of the things that those democracy leaders have asked us is to defer any agreements that apply to Hong Kong until the situation there is resolved. We have had members of the Liberal Party, of the government in this place, get themselves photographed with the Hong Kong demonstrators to say, 'Yes, we stand with you in support of democracy.' Well, those very same activists are saying, 'Please do not give legitimacy to the other side by proceeding with a deal at a very time when we are being attacked and our lives are under threat.' That is a very sensible call that no-one should be able to refuse. So when we come to the consideration in detail stage we will be moving an amendment to delay, should, as I expect, Labor go over and sit with the government to support something their corporate masters have negotiated.
If the bills are going to go ahead, then, at the least, we should do three things. First, we should not proceed with the agreement with Hong Kong until the situation there is resolved; we are proposing at least a year's breathing space. Second, we should not allow this legislation that is being debated here to give corporations the right to sue our government and get us to change our laws just because our government does something that is for the benefit of the Australian people. We have the capacity to pass amendments to say, 'No, these deals don't come into effect until you go back and negotiate something better.'
As I said before, we are presented with a 'take it or leave it', which means we can't get into the specifics of any individual agreement and take this bit out or that bit out. In that context, that's why we are going to oppose them. But if the parliament is going to approve them, then enough of this, 'Oh, we'll do something different if we are in government' from the opposition. No; we've got the capacity to put changes through now and to say to the government: 'If you are so desperate to pass this deal, go back and negotiate something that the parliament wants. If this deal has to be done, if it's really that desperate, go back and negotiate something that takes out those provisions that allow corporations to sue government and to get us to change our laws. Also, go and do something else.' Again, we don't need to have, 'If only we'd had a change of government at the election'; we can fix this here and now. We can say, 'Go back and renegotiate the agreements to make it explicit that you advertise locally first.'
To all those people who are loudly yapping away from the government backbenches, who have never even read the text of the agreement, saying, 'It's okay, it's all rubbish; you can be assured of our protections': if we can be assured of the protections, then you won't have any problem with supporting an amendment that says that we are going to renegotiate some side deals that make it crystal clear that you will advertise locally first. What would be the objection to that?
An honourable member interjecting—
It would take too much time, they say. There you hear it. The corporate masters have said, 'Get this legislation through now, even if workers have to go hang,' and Labor and the Liberals are shamefully agreeing to it. (Time expired)
I'm very pleased to rise in support of the amendment and to make a contribution to this debate this evening on the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and the conjoined bill, the Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019. Importantly, these bills give effect to the government's proposed trade agreements with Indonesia, Hong Kong and Peru. In principle, Labor supports free trade. Indeed, we have a long history of doing so.
For a cautionary tale of how important free trade is, you need only look at the chaos and upheaval we've seen in recent months as a result of the current US-China trade wars. Reducing trade barriers opens up new markets, creates more competitive industries and delivers lower prices and greater choice for Australian consumers, but this should never come at the expense of protecting local jobs and the working conditions of Australian men and women—working conditions that have been hard-fought for and long secured in this nation by the collective actions of our union movement.
When we first saw what was being proposed by the government, Labor had a number of serious concerns. Firstly, we were profoundly worried that there was the potential for labour market testing to be waived for contract service suppliers in the future. Labour market testing is an absolutely fundamental protection for local workers. It ensures that, wherever possible, Australian jobs go to Australians. Of course, we have always understood that, where there are genuine skill shortages and a genuine incapacity to fill those positions with Australian workers, then opportunities and pathways are opened up to suitably trained and qualified people migrating to Australia or coming in on a number of visas to undertake that work. That has never been an issue. The point for Australian Labor members has been whether or not genuine market testing has been taking place in this country beforehand. We have seen numerous examples where that has been treated without the due respect that it should be given, by corporations and some businesses in Australia. As I said, labour market testing remains a fundamental protection for local workers and one that the Australian Labor Party is especially focused on.
But we were also worried that, unless the existing bilateral treaty with Indonesia was terminated, we would be left with antiquated ISDS provisions—that those antiquated provisions would have remained in force. And that was not in anyone's interest. Those sorts of outdated investor-state dispute settlement mechanisms are a direct attack on our national sovereignty. They provide a framework for multinational corporations to sue countries for implementing legislation that affects their profits. Let's not forget the attack that Philip Morris made on the Australian parliament and the Australian government for having the audacity to put the health of our citizens at the top of our priorities and to push for what were world-leading, ground-breaking laws at the time, that demanded plain packaging of tobacco products in Australia. So there are very good reasons for Australia to be concerned about outdated ISDS mechanisms.
Indeed, it must be said that, if Labor were in government, these are not the agreements that we would have been negotiating, but this is the reality that we are dealing with. We have bills before us—and, as I said, Labor has raised a number of concerns, many of which the government has made agreements on, and I will come to that in a moment. But it is clearly unconscionable to have those outdated ISDS mechanisms remain in situ, in any agreement, because of the implications that they have for our national sovereignty.
Labor wanted to ensure that it was clear that the new trade agreement with Indonesia would include modern safeguards, as well as a review of these ISDS operations after a five-year period. In order to address these matters, Labor's shadow minister for trade, the member for Brand, Madeleine King, wrote to the trade minister, outlining Labor's concerns. These include the issues I've just outlined, as well as protections for working holiday-makers and confirmation that nothing in the agreements would require the privatisation of government services, among other things. I'm very pleased that the government has agreed to all of these requests and I would like to congratulate the shadow minister for standing strong and achieving such a great outcome.
Importantly, the government has also agreed to an inquiry into the treaty-making process, to look at how we can improve transparency and increase consultation for further agreements. This is a critical issue for the Australian people. We need to lift any veil of secrecy of arrangements being made behind closed doors so that there is confidence always in the processes of government. Anything we can do to improve transparency and increase consultation for further agreements is absolutely worth prosecuting, and I'm glad that the government has agreed to at least having an inquiry into the mechanisms and pathways that we could make in order for this to improve, as I said, the transparency and the consultation process of future trade agreements.
I would like to thank the trade minister for working collaboratively with Labor to achieve a better outcome and a better deal, importantly, for Australian workers. That being said, there are still fundamental issues that we have with the way in which these agreements are negotiated. Given the far-reaching impacts that they have across our economy and, indeed, our workforce, the impacts of a bad deal are very dire indeed. I have met with many of my workers in Newcastle and their representative unions over the last few weeks and months and, indeed, last Friday back in Newcastle. They've expressed their serious concerns because there is a lack of trust in whether the government is going to put the working rights and conditions of Australian men and women at the forefront of their thoughts and there is a long history there to suggest that the rights of working men and women in Australia haven't always been front and centre of conservative governments' minds.
It must be said that, for a lot of Australians, their experience of a free trade agreement hasn't always been positive. I think we need to recognise that. We know that the benefits of these agreements have not been equally distributed throughout the community. And, again, there needs to be mindful attention paid by the government, irrespective of who's in power, as to how you remedy those kinds of inequities that can occur as a result of free trade agreements. I think, to this end, it is very disappointing that the government continues to reject Labor's request that mandatory independent economic modelling be done for these and future trade agreements because, without this, how can we possibly know whether these deals are good for our country and for our communities? There is little data, certainly little independent economic data, which we can turn to that would give greater confidence to Australian working men and women and their families that these agreements will, in fact, deliver some benefit to them and to their neighbouring communities. Labor will continue to prosecute the case for greater transparency, for greater analysis and oversight of all trade agreements to make sure that they are always in Australia's best interests and in the interests of business, workers and consumers alike.
I would like to end with a very serious issue that was raised with me by the ETU on Friday with regards to the increased prevalence of unlicensed electricians working in projects across multiple jurisdictions, across varying states and territories in Australia. This is not an issue that is directly relevant to the free trade agreements before us, except to say that there is a significant level of anxiety about the apparent incapacity for state and territory governments to enforce existing state and territory laws that would ensure that all workers, whether they be Australian workers, migrant workers or holidaymakers, are suitably trained and qualified to conduct work in Australia according to Australian standards and laws. As I said, this is an especially critical issue for electrical workers in Australia.
This is certainly an issue that Labor will continue to prosecute, because Australians everywhere have every right to expect that the people wiring our schools, our homes and our developments, for example, would be fully trained and qualified electricians in Australia. If that is not the case, it is a shameful state of affairs. But, let's be clear: that is not the result of free trade agreements; it is the result of the current incapacity of state and territory governments to enforce the existing laws that we have.
We should all be shouting very loudly at every opportunity to insist that these laws be enforced, that there are adequate provisions and—to borrow an expression from the government that is often used—there is an adequate 'cop on the beat' of our Australian workplace sites to ensure that Australian standards are being complied with. It is all very well for government members to be 'outraged' by union activity on worksites, but why don't we insist on inspecting the quality of work being done on these sites and ensure that workers have been adequately trained and supported on site and that there is no lessening of standards at any point, especially in such a critical area as electricity.
Labor will always stand up for the rights and protections of Australian working men and women. We will continue to hold the government to account for the concessions that the government has given on these free trade agreements. I note that the member for Brand, the shadow minister, has been in the chamber throughout this debate, and I welcome her presence and her earlier contribution. As I said before, Labor is absolutely adamant that Australian workers receive the due respect and protection that they should have; that we should have a stronger focus on the labour-market testing laws in Australia and ensure that they are the most rigorous they can be; and that Australian men and women are always given the priority they deserve in the workforce.
I thank the member for Newcastle for her contribution. Before I call the next speaker, I remind all members present that it is not permitted to make phone calls on mobile phones in the chamber. I call the member for Kennedy.
I take your point about the telephone. Immediately when it rang I told them not to ring me.
The previous speaker in this debate on the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and related bill is from Newcastle. I find the level of ignorance of members of parliament here absolutely extraordinary. She represents a coalmining area, arguably the biggest coalmining area in Australia—and where in the world is the biggest coalmining area going to be? In Indonesia.
Ms Claydon interjecting—
She is ignoring what I am saying—and I would be ignoring it too if I were her—but I am going to say this. It is going to go on the public record and I am going to send it to the Newcastle newspapers. She's saying that our jobs and working conditions will be protected. We are now directly competing against Indonesia, who is potentially the biggest coalmining country in the world. Our workers are going to be working and competing against them for wage structures, and she is saying, 'Oh, we're going to protect the wages.' How are you going to protect the wages? You just agreed to a free trade agreement. No wonder the unions are walking away from the ALP. No wonder there is now open warfare in my state. The government in Queensland wants the coal and sugarcane industries closed down. Well, we only have two industries in Queensland: the sugar industry and the coal industry. I would hate to think what's going to happen to the ALP at the state elections next year.
You have to be judged upon your outcomes. You don't come here with highflying motives and highflying principles but don't back it up with hard reality. I'll give you the hard reality. A person who used to walk around this place—who has since passed on, so I can't condemn him—said that we were going to be the food bowl of Asia. What we'll be is the begging bowl of Asia. I have the figures for fruit and vegetables. We import $2,403 million and we export $1,059 million. So much for being the food bowl of Asia! This country is importing twice as much fruit and vegetables as it exports. We import more pork than we export. We import more fish and fish products then we export. What the hell do we actually export positively? The first industry to be deregulated was the wool industry.
Mr Coulton interjecting—
Ms Kearney interjecting—
Dr Leigh interjecting—
I draw attention to the three people on the front bench, who think this is funny. I would ask them to shut up and listen to the person speaking or leave the chamber. I don't think that's unreasonable. I want to put on record the three members on the front bench who are laughing at me giving the figures for the wool industry.
I would ask them not to talk, because my mummy told me when I was a little boy that it was very rude to speak when other people were speaking. I got a spanking for it. I think, Madam Deputy Speaker, you should give them a spanking for it.
I withdraw. I don't want to take up any more time. I want to move on. I'd take up as much time as possible, if I were them. They started off the first industry to be deregulated. The first industry to be deregulated was the wool industry. The wool industry was bigger than coal. It was $6,000 million, and coal is about $5,800 million. Keating comprehensively destroyed the wool industry by deregulation. Our forefathers fought—and every time I leave this parliamentary chamber, you'll watch me hold up my fist in salute to the first member for Kennedy, the Labor member who held the seat for 25 years. He fought like a tiger to secure arbitration—decent pay and conditions for us. The farmers deserve decent pay and conditions as well. The Country Party, God bless them, got arbitration for the farmers. So every single farming industry, with the exception of cattle, had arbitration, for the sake of a better word.
Mr Keating, coming from the party that fathered arbitration in this place, came in here, and the first thing he did was deregulate the greatest source of income that this nation has had in its entire history. Every single year for over 100 years, the economy of Australia depended upon the wool industry, and he destroyed it. Within three years the wool industry was one-third the income it was before that man deregulated and destroyed it. He took on the farmers first, but, believe me, if he'd stayed around, he'd have taken on the workers too, because this man was driven by ideology. We have a saying in the bush: when your neighbour starts preaching religion, reach for your branding iron. I find it to be very true. When we talk about ideology, I start getting twitchy.
I've referred to the figures for wool—62 per cent of the sheep herd has gone, never to return. It was destroyed by deregulation. I've referred to fruit and vegetables—we're importing more than twice as much fruit and vegetables into Australia as we are exporting. I have referred to the pork industry. I have referred to the fishing industry. But exactly what food products do we export positively? Cattle is the only thing left, and—heaven only knows—the Labor government did a fair job of destroying the cattle industry with their ban on live cattle exports. Cattle is down from 32 million to 23 million. Dairy production is down 19 per cent. Sugar is down from 5.4 million tonnes to 4.7 million tonnes. And sheep is down 62 per cent.
Let's turn to manufacturing. The motor vehicle industry has gone completely. The petrol industry has gone completely—or near enough to completely. The whitegoods industry has gone almost completely. The textile, footwear and clothing industry has been decimated. This country is not a mining country. Everyone says, 'All we've got left is mining.' No, you don't have mining; you have quarrying. Mining is when you dig it out of the ground and sell a metal. We don't dig it out of the ground and sell a metal; we dig it out of the ground and sell the ground. That's called quarrying—that's iron ore and coal. More than half of this nation's income now comes from two quarries—the iron ore and the coal quarry. There are a lot of people in this place who believe the coal industry should be closed down. That's a good idea! We'd have no income at all.
We've still got a few to go. We gave the gas industry away. The brilliant leadership in this place sold all of our gas for 6c a unit. For those of you in the Labor Party, I got that by going to the convention of the ACTU. They had it up, covering the whole front of the dais. We sold the gas for 6c. Then, Labor governments were up to their eyeballs in it, and the ACTU is pulling no punches on it. We sold it for 6c. We now buy it back for $16. How can we stay internationally competitive in areas like fertiliser—I represent the biggest fertiliser plant in Australia, bringing in $2,000 million a year to the Australian economy—when we're paying $16 a unit for gas and our competitors are paying between $6 and $7 a unit for gas?
The steel industry has said, 'If you keep going with your present free-market electricity, there'll be no steel industry in Australia.' Half of it has already gone. There's been absolutely no effort made to stop the super-cheap steel coming in from China. Aluminium is concealed electricity, and since Australia has the highest electricity charges in the world—there's an advertisement on the television every night stating that, and, from the figures I've seen, that's most certainly correct.
Let me turn to agriculture. I got vilified by the rural action council of Mareeba, maybe the best fighting group this nation has ever seen in the area of agriculture, because John Anderson, the leader of the National Party, of which I was a member at the time, had said, 'We don't need 240,000 farmers.' He was being criticised because people were exiting the industry all the time. He said: 'We don't need 240,000 farmers. We only need 120,000.' And I'll quote the boys at the rural action council up there in Far North Queensland—in, I might add, the electorate of Ted Theodore, the greatest man that ever walked into this place, with the possible exception of Jack McEwen; Red Ted Theodore was Clyde Packer's closest personal friend, I might add, as well as the leader of the Labor Party in Australia—who said, 'If we don't need 240,000, what's he advocating? That we lose 120,000 farmers?' Well, we have! When he made that statement, we had 240,000 farmers. Now we've got 120,000. And it's thanks to his free trade policies.
Today we have listened to a member from Newcastle talking about making sure our wages are protected. We are going one-on-one against the biggest, or soon-to-be the biggest, coal producing nation on earth, Indonesia—we are going one-on-one against it. And we're going to pay the same wages, are we? We were enjoying $200,000 a year for our miners. Heaven only knows, they're in industries that are extremely dangerous. They work in extremely adverse conditions. And, thanks to the weak-kneed Labor governments of Queensland and Western Australia that allowed fly-ins, they don't see their families and they've got to live away from home for most of their lives, thanks to the weak-kneed Labor governments in Western Australia and in Queensland. The Liberal Party of Western Australia banned fly-ins. Under my own party, under the much-maligned Bjelke-Petersen, fly-ins were banned.
I like that word 'corrupt'! There have been only two people in parliament in Australian history since the war who refused to take their superannuation, and, in the case of Bjelke-Petersen, he walked away technically bankrupt. So take that! And consider it, my friend. We were the only government in Australia that had the guts to take on police corruption. Have they taken it on in your state? No! Have you ever had an inquiry into police corruption in your state? Well, we did—and it cost us dearly. But we weeded it out. So we can stand in the history books and say, 'We, as one government, weeded out the corruption in the police force in Queensland.' And there was no-one ever found guilty of government corruption in Queensland, so you want to be careful what you say outside this place. You might cop a big defamation action for telling lies, because your ignorance of the facts is towering. I don't listen to you anymore. You don't deserve to be listened to.
Your governments allowed fly-in mining, which took us from $200,000 a year down to $100,000 a year in mining, and those unions have just about had a gutful of the Labor Party. There is no secret as to the divisions in Queensland, and they're going to widen and widen because you people represent the lily-pad left, not the hard left—the men fighting for decent wages and conditions. Under free trade agreements, you put us in there competing against countries that have no arbitration system at all—countries like China. I mean, people work there for nothing, and we've got to compete against them. So our workers have to increasingly work for nothing.
Worse still, the Labor Party was responsible for bringing 640,000 people who were eligible for work into this country every year, in an economy with only 200,000 jobs. So hang your heads in shame! Why were they bringing them in? I'll tell you the effect it has had: it undermines our pay and conditions and takes our jobs off us. The current head of the ACTU said: 'One out of every two jobs created from 2013 has gone to a temporary worker.' That's a good situation, isn't it!
God bless the unions that are standing up and fighting for their people, and God bless those people in farming areas that are standing up and fighting for their people—
The Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 amends the Customs Act 1901 to implement Australia's obligations under the trade agreements with Indonesia, Peru and Hong Kong. The Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 amends the Customs Tariff Act 1995 to implement Australia's obligations relating to goods under the same three free trade agreements. These agreements will contribute to Australia's prosperity, create jobs and boost Australia's investment and exports across the Asia-Pacific. This legislation is necessary for Australia to ratified the Indonesia, Peru and the Hong Kong free-trade agreements. Under IA-CEPA, over 99 per cent of Australian goods exports will enter duty-free, or under improved arrangements, building upon the 85 per cent in the ASEAN-Australia-New Zealand Free Trade Agreement, and Indonesia will guarantee automatic issuance of import permits for key products.
Over 99 per cent of all of Peru's tariffs will ultimately be eliminated under the Peru-Australia Free Trade Agreement. The Australia-Hong Kong Free Trade Agreement ensures that Australia's existing duty-free access is guaranteed.
I urge the parliament to pass these bills without any further delay so that Australian businesses, exporters, workers, investors and farmers can benefit from these three agreements. What business wants and what these agreements deliver is certainty. Business, farmers and peak bodies from across the Australian economy have called on their parliamentarians to get together and get this done. The government wishes to thank the Labor Party for supporting these important bills, which will help grow Australia's export opportunities across the Asia-Pacific. The passage of these bills is an important step in implementing the trade agreements with Indonesia, Peru and Hong Kong. At a time of global uncertainty and trade tensions this shows that the Morrison Liberal and Nationals government is creating more opportunities and better market access for Australian farmers, workers, exporters, investors and businesses. As a nation that has long depended on trade and investment, these agreements will open a new chapter in Australia's trading relationships across the Asia-Pacific. I commend the bills to the House.
The original question was that this bill be now read a second time. To this the honourable member for Brand has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question before the House is that the amendment be agreed to.
The question now is that this bill be read a second time.
A division having been called and the bells having been rung—
As there are fewer than five members on this side for the noes in this division, I declare the question resolved in the affirmative. In accordance with standing order 127, the names of those members who are in the minority will be recorded in the Votes and Proceedings.
Question agreed to, Mr Bandt, Mr Katter and Mr Wilkie voting no.
Bill read a second time.