Wednesday, 12 February 2020
Export Control Bill 2019, Export Control (Consequential Amendments and Transitional Provisions) Bill 2019, Export Charges (Imposition — Customs) Amendment Bill 2019, Export Charges (Imposition — Excise) Amendment Bill 2019, Export Charges (Imposition — General) Amendment Bill 2019; Second Reading
The Export Control Bill 2019 is not a controversial bill, but it's an important bill because it goes very much to our capacity to access export markets. It's a great shame that it's taken the government about five years to get around to it—a point I might return to—but we welcome it just the same. To give members an opportunity to speak more broadly about agricultural issues, because there is lots to talk about, I take this opportunity to move the second reading amendment as circulated in my name:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House condemns the Government for its lack of a comprehensive plan for agricultural exports, including a plan for ensuring Australian agriculture will reach $100 billion in farm-gate value by 2030".
For those of us in positions of responsibility, as we all are in this place, there's a fine line between talking about the real challenges an industry faces without talking it down. It's always a very important balance. The recent bushfires provided us with a very real example of that. We don't want to be telling our markets, including our export markets, that we've lost our capacity to produce, because those markets might temporarily go elsewhere and never be secured again in the future, but it is necessary to say that the agriculture sector in Australia is in real trouble. In recent times, it's faced the worst drought in our history, and despite the very welcome recent drenching rains in many parts of our country that drought very much remains with us still.
The recent bushfires have had a devastating impact on so many on the land—our growers and producers. The bushfire season has not yet come to an end, and there is a significant risk that those events might not be over. We all hope and pray that they are, but we just don't know. Of course, there will be future bushfire seasons too, and we need to be alert to the need to better adapt to be ready for those fires. Certainly, my own electorate is an example of the impact on our growers, with vignerons having lost significant yield to smoke taint. I thank the minister at the table for engaging with me on this issue and assisting me as best he can to ensure that those vignerons are given every bit of government assistance that can be secured and that we can muster.
We're facing trade wars. We've grown the hope of our agriculture sector off the back of our export markets, and rightly so, but we're living in a very unusual—that might be a good way of putting it—world. Globally, politics have changed significantly. In fact, the shift has been tectonic, and it's going to impact on our major markets. We've seen the tensions between the United States and China on trade. I used to say that when the United States sneezes we catch a cold. I think, due now to the coronavirus, we're starting to learn just how dependent we are on the economy of China. They are changing times and they are all very challenging.
We live with ongoing biosecurity threats and, again, the coronavirus makes us more alert to that. That threat will continue to hang over the heads of our growers and producers. Volumes are down, yields are down and the national herd is at an historic low, and that will take a lengthy rebuilding phase to get us back on track. The sector is enormously challenged by a changing climate, not just drought but beyond that, and all the impacts that a changing climate is having and all the demands it will put on resource allocation.
We are the driest inhabited continent in the world, and we're becoming hotter and drier. Forget the argument about what's causing it. We have to accept that to be a fact, and we have to be ready for that and adapt to it. And our soil resources, while of high quality in expansive areas, are very limited. When you take it as a proportion of our total land mass, our natural soil resources are limited. We have to have a serious debate in this place, in the wake of recent events, about the misallocation of those resources and how we use market based mechanisms to ensure that those resources are allocated to the areas where they secure the highest value return, both for our producers and growers but also for the nation—the people who, in the end, own those natural resources.
Before all these calamities came belong, productivity had already flatlined for around a decade. Profitability has been patchy or, worse, low for a long, long time. According to the ABS, around 59 per cent of our farm entities have turnovers—not profit—of $200,000 or less. Still, 80 per cent of the production or output of our farm sector comes from 20 per cent of the firms. If that is not a sign that some significant restructuring is required in the sector, I don't know what is. Members should reflect on that: 80 per cent of the output from 20 per cent of the firms. It sounds somewhat inefficient, and it does have implications for a natural resource allocation.
Our rate of innovation is poor and has been for a long time. We can often prove ourselves to be quite good at research but we are very poor at both innovation and extension—that capacity to get innovation down onto the farm, inside the farm gate and into the production system. We desperately need to address that. We made it clear, on this side of the House, prior to the election that if we were to be elected we would be heavily revisiting the architecture around the rural RDCs, the research and development corporations. We're proud of the current architecture because it was a Labor initiative, under John Kerin, probably 30 years ago.
But that's the point; it was a long time ago. I've made the point that the world has changed significantly, the opportunities and challenges for the sector have changed significantly and so too should our approach to research and development. Research and development extension dollars are too finite, too scarce, to be wasting one dollar of any of it, and we need to make sure that that money is spent effectively and efficiently and in a way that provides outcomes for our farm sector.
We've got to start talking more about our forestry and fisheries industries. Fisheries, our seafood industry, are also impacted by drought. In the first instance, it sounds counterintuitive to people who might be listening to the debate, but drought has enormous impacts on the quality of our marine environment and our estuaries, and the flushing of the estuaries aren't present et cetera. You come to realise that the impact can be very, very significant. As I understand it, people in the fisheries sectors aren't eligible for the farm household allowance, for example.
Only wild catch. It is something I would ask the minister to reflect on. There might be some improvements capable of being made there. That reminds me that many in the fishing industry have been impacted by the fires too and some are still employed but not being paid. It's an area that the minister might want to reflect on and have a look at as well.
Obviously, the forestry industry has also been impacted by the fires in a very, very significant way. We already had a product supply problem in this country. We've all talked for too long about growing a billion trees. We now need to grow, I think, two billion if we are to make up for the shortfall due to the loss from the fires. I'm very pleased to see Premier Daniel Andrews in Victoria now reflecting on his decision to phase out the hardwood forest industry. That decision was, I thought, a poor one originally and it is a particularly poor one now in light of the resource which has been lost through the fires.
Forestry and fisheries, for some very strange reason, were left out and excluded from the government's 2015 white paper—that now discredited 2015 white paper, which I may return to. It is fair to say that, despite all the significant issues I've raised, the government, after more than six years now in office, has no overarching strategic plan for the agriculture sector. I spoke to a leader of one of the farm groups recently—I won't mention the group or the name. I challenged him to name one significant thing, one big policy area, where the government has provided some advantage for his industry, and, unsurprisingly, he could not. The white paper was much anticipated. According to the member for New England, it was going to change the very face of the agriculture sector. Expectations rose and rose and rose, because it took forever—from the 2013 election through to sometime in 2015—for the white paper to finally arrive, only to leave everyone deflated. It was not what the sector had been promised, and there was widespread disappointment within the sector.
The NFF has a thing called the 2030 Roadmap. In fact, there are two of them—I didn't realise that until today—which basically seem to say the same thing. I'll work that out some time soon. It's a fine document. It's a high-level document, stating, largely, the obvious. The NFF have rightly set themselves some aspirations out to 2030. They have an ambition to grow the industry to $100 billion in value by 2030. That's something that we've all supported. In fact, I was with the minister and made a contribution to the document, in the foreword, when it was released.
We all think it's a wonderful idea to grow the value of the industry to $100 billion. But, having signed up to the prospect, the government needs to demonstrate how it intends to get the sector there—remembering that, after all the calamities we've recently faced, we are going backwards. The starting point was, I think, $60 billion, and we're not going to $100 billion; we're going backwards. That's not all the government's fault—as I said, this was the result of recent natural disaster events—but the government does need to demonstrate that it has a strategic plan to reach $100 billion. It just can't keep saying, every time it talks about agriculture, that it's backing the National Farmers Federation plan.
That's not a policy; that's a cop-out. That's laziness. That's a government too interested in populism and grants here and there to win votes in National Party electorates but not interested in the hard work of policy—taking on the challenges in the land sector, working out what we're going to do about our changing climate, what we're going to do about natural resource allocation, how we're going to lift productivity, how we're going to lift profitability and how we're going to make sure the farm sector participates more in the carbon economy. These are the hard things that take work. How are we going to make them more resilient in the face of drought. The minister will say, 'We've got our Future Drought Fund of $100 million a year.' It won't be enough. While I have great confidence in Brent Finlay, who's giving guidance to the government on how that money might be spent, I do have concerns that in the end it will be divvied up, pretty evenly and proportionately amongst the states to keep everyone happy. That won't, in the end, keep everyone happy, because it won't deliver the outcomes the sector so desperately needs.
We do have to reflect hard on the extent to which we can continue to meet our aspirations on export markets. Both major political parties in this place can claim credit for free trade agreements. They're not full replacements for multilateral arrangements, but we find ourselves in a global environment in which they are the best we can achieve. We, on both sides of this House, have an equal commitment to making sure our growers, producers, fishers and others have fair access in some of these enormous Asian markets in particular.
From time to time we should ask ourselves whether we can just continue to increase the volumes we produce, given all the challenges I've talked about, particularly relating to climate and natural resources. We currently grow enough food to feed twice as many people as we have here in Australia; so we're exporting two-thirds of everything we produce. But how long can we keep growing that? It is alright to open the markets, which, by the way, aren't necessarily opening because of ongoing restrictions in non-tariff barriers—some of which are in part addressed in this bill today—but can we produce the goods? Can we continue to grow our product? Are we sufficiently embracing innovation to give us the capacity to grow and produce more? Are we sufficiently talking about innovation around GMOs, for example? That's an important area in which we're still having an ongoing debate in this country and where there are significant differences in this country. Without fully embracing plant breeding techniques, we will not be able to increase our volumes. We will not be able to fill those opportunities we've found for ourselves on export markets.
Again, we have to increase volumes in the face of diminishing natural resources and a more challenging climate. These are big challenges, but where is the discussion about these in the cabinet? I don't hear about them. I don't read about them in the newspaper. It's not good enough to say, 'We're backing the National Farmers Federation document,' and, 'We have secured free trade agreements.' That doesn't make for profitability in the agriculture sector. If you accept that our capacity to increase volumes is limited, then we have to make sure those natural resources are chasing value—that is, niche, premium products. These things are happening, of course, in our economy, but are not widespread, and government is not providing the sort of strategic guidance to encourage people to do so, nor is government encouraging the foreign investment we will require to build the infrastructure we need to take up these opportunities.
I have said it in here too many times before, I suppose, but the current minister for climate change was the key author in a document, backed by the ANZ Bank, which said that to grow to our aspirations by 2050 we needed something like $600 billion of capital investment. As a country of 25 million and therefore 25 million savers, axiomatically we are going to have to have, and continue to have, a heavy reliance on foreign investment. That foreign investment will need to grow, not decline.
The only way we take the Australian people with us on that question—because we all know in this place that there are sensitivities in our community about foreign investment, particularly investment coming from Asia; it seemed it was okay when it was coming from the UK, Canada, the United States and New Zealand, but people are concerned about an over-reliance on Asian foreign investment—and the only way we will be successful in reassuring people that they need not have concerns about that is if we say it together. I appeal to people in this place—and we're not all from One Nation—to stop attempting to build political capital at the expense of those in our agriculture sector who will need significant foreign investment if they are going to make their ventures as successful as they would like them to be.
Guidance is important. When you're talking about foreign investment, investors want to know that the government in the country they are considering is stable—and we haven't had much of that of late. They want to know that the government is focused on making us look like a country where sovereign risk is very low. We need a government that is not lowering thresholds as a signal to our investors that we're not open for business but indeed sending the right messages—that we are open for business, that we need their investment, that we welcome their investment and that the door is well and truly open for them.
But that's not happening. It is not happening in this parliament, it didn't happen in the last parliament and it didn't happen in the parliament before that. Indeed, for much of that time we had a minister, in the member for New England, who was far more interested in using the portfolio to further the aspirations of the National Party than he was in furthering the aspirations of the nation. The white paper I spoke about is exhibit A—a grab bag of initiatives that press every political button out there in rural Australia. But none of those buttons were effective. Most of them no longer exist, because they failed. Multi-peril crop insurance is a perfect example. Every second farmer thinks that the whole world would be just fine if he had multi-peril crop insurance or some form of risk based protection.
But it's a difficult issue. It's a complex issue. The white paper included rebates to farmers to help them secure the consultancies they needed to measure their base risk on their farms. That failed. There were grants for cooperatives. It's good to see the member for Kennedy here. He'd be a fan of cooperatives—as are we all are, as a matter of principle.
There are none left, he says. The member for New England was going to have a cooperative here, there and everywhere—remember? That was a key element in the white paper, but it didn't happen either. That's history. And the list is long—a very, very disappointing document. Then of course he was going to build dams—100 of them, I think. There was going to be dam here, a dam there, a dam everywhere. Here we are, their seventh year in office, and not a dam to be found—not one.
I'll take the interjection from the member for Capricornia, because it is so predictable. When things are going well, this government's out there taking all the glory: 'Aren't we amazing!' But when things are going bad: 'It's the states.'
Or Labor. I thank the member for Fremantle. Yes, or Labor: 'Labor, Labor, Labor' was the refrain from the member for New England. Well, I have a message for the Prime Minister and for the member for New England, the member for Riverina, and the member for Maranoa, the current Minister for Agriculture, who I have a deal of respect for. Of course, he lost his job, temporarily, but has come back now after the loss of Minister McKenzie. He lost his job because he was departing from the National Party textbook. He was thinking too much! He was talking about climate change. He was tough on the live sheep exporters. He was talking about building resilience in our farming communities. In the National Party room they said, 'What! We don't talk about that. What about our preselectors over the other side of the Great Dividing Range? What are they going to say about all that?' So, he was history. But given the dearth of talent on the other side, he is back. I actually welcome him back, because what a disaster it would have been to get the member for New England's hands all over the agriculture portfolio again—a portfolio, by the way, that lost its departmental secretary. Why? Because the member for New England doctored his Hansard, got found out. And when the secretary insisted upon his tidying it up because his professional public servants were being drawn into the mire—just because Mr Grimes stood up to the member for New England—he lost his job. An outstanding well-regarded public servant lost his job because the member for New England doctored his Hansard, wouldn't correct it, wouldn't fess up, and the rest is history. And, by the way, he doctored his Hansard because he misled the House, and he's never corrected that. The mislead on farmhouse household stands in the parliamentary Hansard. Members will recall: 'Oh, you don't have to apply for it, you just get. You just sign up and it's magically in the bank account,' which, of course, was patently untrue.
But the point I was going to was the message to the Prime Minister. The people are onto them. You can't try to take hold of an issue as the Prime Minister tried to do on drought. When he came to the position, he said farmers and the drought would be his priority. But when it got too hard, when he realised that doing something meaningful on drought took some tough decisions and some conviction and courage of leadership, he said, 'It's all a matter for the states.' Remember that back in 2002 a historic thing happened—a new intergovernmental agreement on drought began, was signed, and that was the beginning of drought reform. But when the current government came to office in 2013, the first thing the member for New England did was abolish the COAG committee charged with progressing the reform. And here we are. We still don't have a drought policy. We are still in the worst drought in history. We do not have an overarching strategic drought policy, still. We have a loan here and a loan there and a grant here and all these things, but there is no plan.
I thank the member for Kennedy for confirming my point. There is no overarching plan and there are no dams. There is not much water infrastructure at all, actually. Lots of loans—this is a government that is obsessed with loans. Concessional loans just seem to be the answer for everything. We have seen that most recently with the bushfires.
I thank the member for Paterson for reminding me that they rorted the water grants. But small businesses everywhere, including in my electorate, are telling me that more debt is not the answer to their problems. The Leader of the Opposition was down in Batemans Bay with my colleagues last week, and I could see that he came back shell-shocked by the impact on small business people who just completely lost their businesses. Their customers have just disappeared, or they have been without power for a week or two and just can't deliver for their customers. Telling them that they should go and get a loan is a slap in the face, and we have seen how good this government is at administering loans. I think the small business drought loans were announced in November and maybe opened in January—or, worse than that, it might have been late January. That's before small businesses could even make applications for the loans. And it will be interesting to see, when Senate estimates comes around, how popular they have been and how difficult people have found it to apply for them. I suspect that whatever's happened to the small business drought loans will be repeated with the small business bushfire loans. You can be pretty certain about that.
This failure to grow the agricultural sector is having impacts on our regional economies, because they are so dependent on them. Out there in the regions, two things are really important to us—lots of things are very important to us, the visitor economy amongst them, particularly in the Hunter region—the farm sector and the mining sector. I stand in this place as a proud supporter of both of them. I want both of those sectors to be very, very strong for many, many decades to come, as I know they will be, as Asia demands our food and fibre and our coal product. That will be a good thing for Australia. There doesn't have to be a clash between the two. We can have a grand compact to make sure they thrive alongside one another.
In Queensland, the gas companies have paid our farmers around $500 million in the last 10 years for the right to access their land to extract coal-seam gas. It's a good thing for the gas companies, it's a good thing for the economy, it's a good thing for consumers and it's a good thing for our farmers. So there are good things we can do together. But we need some strategic guidance from government. We need a plan from government. We need some leadership from government. We don't want a government that just constantly cites the plan of the National Farmers Federation.
This House full well knows that agriculture is a key part of the Australian economy, with around two-thirds of our agricultural produce exported each year, generating over $50 billion in revenue in 2018-19 from our trading partners. The importance of that is jobs in regional Australia and economic activity in regional Australia, including in my electorate of Groom.
Whilst the member for Hunter appeared to not really address this bill at all, he did, quite rightly, in his background note that agriculture in many parts of the country has had a significant challenge of late—drought, floods, bushfire, you name it. Discussions about climate and other sorts of issues continue, but we must remain positive about the focus and the future of agriculture. We must ensure that we remain well regarded globally for the quality and integrity of our produce, and we must ensure that we continue to grow that quality and improve our reputation for safe and high-quality food and fibre products.
The existing legislative framework for ensuring that, for inspection and certification of our export produce, was developed over 36 years ago, including 20 acts and more than 40 legislative instruments. Our government undertook a review in 2015 to ensure that farmers and exporters were supported by contemporary and efficient legislation and that our trading partners continued to have confidence in our produce, because we must be competitive. Based on broad stakeholder feedback, we decided to improve the legislative framework for better support for exporters and facilitating trade now and into the future.
No significant changes to export policy or the baseline of regulation that ensures that integrity that I referred to will be made as a result of the implementation of the new legislative framework. The bill will provide a more consistent and clear framework that is responsive to contemporary and emerging international trade issues in a very clear and modern manner, in so doing enhancing Australia's capacity to gain, maintain and grow global market access for our exports into the future.
This streamlining and consolidation will remove unfortunate duplication and inconsistency that has developed over the years, and it will make requirements for exporting easier to understand and to use for our farmers and those involved throughout the export supply chain. In doing so, the bill replaces the Export Control Act 1982 and certain parts of the Australian Meat and Live-stock Industry Act 1997. It consolidates export related provisions from a number of acts into, as I just said, a single act. It increases the flexibility to respond to changing importing-country requirements and realise opportunities in overseas markets as they arise. That ability to respond and be flexible is so important.
It promotes exports by providing a broader definition and certification of goods and improves options for demonstrating product integrity when required by importing countries. It streamlines administration and at the same time allows the department to better target sanctions and ensure more proportionate responses to noncompliance where that might be required. It includes a provision to approve alternative regulatory arrangements and therefore supports innovation along the entire export supply chain, including in some cases automated decision-making—under very strict conditions—and improved information-sharing provisions. That sharing of information is so important for our entire export supply chain to work together: farmers, shippers, researchers, wholesalers and export companies—you name it.
It's that whole export supply chain that is so critical to regional Australia, and I'm so pleased that this bill takes that approach. The grain, beef, cotton and horticulture exporters in my own electorate of Groom stress that we must continue to strive to become more competitive in international markets, in terms of both freight and regulation. Indeed, I've been one of them myself, so I know what it's like to have to compete on the world stage. I've spent time, week after week, throughout Asia—for example in Bandung, Yogyakarta and Jakarta, in Indonesia—and elsewhere around the globe in relation to the cotton industry and horticultural exports.
At the same time, we must maintain and enhance our global reputation for safe, clean and quality product. That is, of course, supported by having the sort of streamlined and sensible regulation that is proposed in this bill, but it's equally supported by our sterling R&D efforts right across the country and right across our industries, including fisheries, forestry and all of those broadacre industries—intensive agriculture and horticulture industries—that we are recognised for around the world.
At a time when many across the country and in my own electorate explain to me that the domestic freight component can be more expensive than the international sea freight, I'm pleased to see that we have a Deputy Prime Minister delivering on Inland Rail across our eastern seaboard, for example. So too do we have the government delivering on improved regulation efficiencies and the international confidence that we want to maintain and grow through this very bill.
The member for Hunter might say that we've been taking our time. I'll explain the review process over recent years. His comments draw out the need to contrast our approach to that of those opposite. In the recent election, one would have to say that Labor made a decisive shift away from the Hawke-Keating era of pro-trade support and the longstanding bipartisanship on trade support and growth. What we saw in the Australian Labor Party's last term of government, though, was that the number of Australian exporting businesses fell. For example, crucial negotiations with the Korea, Japan and China stalled, and $100 million was cut from the Export Market Development Grants program, which is so essential to supporting many small to medium-sized enterprises and agribusinesses across the country. In fact, Labor has never started and finished the same trade agreement. Whereas, since 2014 our government has brought into force free trade agreements with Korea, Japan, China, Hong Kong, Peru and the TPP-11, including Brunei, Dar es Salaam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. Of course, we do recognise the more recent work with Indonesia, marked in this very chamber earlier this week with the comments from the President of Indonesia and our Prime Minister.
We know Labor's record has been very poor in terms of trade facilitation and growth. The live cattle export trade debacle should never leave the memories of representatives of our country, particularly those of us in regional Australia. It's interesting to note that the then Leader of the Opposition, the member for Maribyrnong, totally did away with the concept of supporting the TPP-11 efforts of our government. He said it was 'the height of delusional absurdity', such is Labor's poor understanding of the importance of trade support going forward.
This bill will support the initiatives of government to modernise the systems underpinning our export industries in terms of agriculture and is therefore critical to the growth of agriculture in our country. It enables exports to be supported now and into the future. Because it's flexible it will remain contemporary.
It is important the parliament supports our agricultural industries so they can, in fact, get ahead, recover and rebuild if necessary, and continue to thrive. That is so important at this time when that is what our agricultural industries are doing, as I said, having dealt in recent years with a very significant drought circumstance and, in more recent months in some cases, bushfire across our nation and, perhaps, in many cases as we're starting to see, flood—but most importantly the flooding that we recognised in North West Queensland last year. So agriculture has had it served up to it. There's no doubt about that. As we often say, the challenges from mother nature are things that we can't manage. We can respond to, we can prepare for, we can try to prevent. And this bill is the government focused on things that we can manage: ensuring the integrity of our export reputation around the country through this bill and streamlining the processes that support our exporters: the certification and inspection of our export produce, whether that's in the beef industry, the grain industry, the horticulture industry, or the food and fibre industries in general. That's what regional Australia is asking for. They are asking for government to get out of the way, to support them to grow their businesses, to provide jobs throughout regional Queensland and regional Australia. And that's as important anywhere else as in my electorate of Groom, which as I humbly say from time to time is—I recognise it, but I think it is recognised by many others—the agribusiness capital of Australia. Thank you.
I always get the feeling that I'm in a lunatic asylum here. We have had every speaker get up and tell us how wonderful the free trade agreements have been. I'm a primitive person, as you all know. A primitive person says, 'You judge a policy by its outcomes.' Well, let's have a look at the outcomes. There is not much secondary industry left in Australia at all what your free trade agreement has destroyed secondary industry in this country. Let me be very specific. You have closed down the entire motor vehicle industry. Congratulations, Mr Free Marketeers, on both sides. You have closed down the entire petrol industry. Congratulations, Mr Free Marketeers. You have closed down almost the entire textile, footwear and clothing industry. Congratulations, Mr Free Marketeers. You've even managed—
Oh, you love it, right? He loves the closure of the motor vehicle industry. He loves the closure of the textile, footwear and clothing industries. Let's go back to your electorate. I'll make sure it gets to the papers there. You loved the closure of the whitegoods industry in Australia and you've even managed to figure out a way to export the electricity industry. That's most certainly a challenge.