Monday, 25 November 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
I rise to speak on both the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and the accompanying Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019. This legislation gives effect to a number of free trade agreements, including the Peru-Australia Free Trade Agreement, the Indonesia-Australia Comprehensive Economic Partnership Agreement and the Free Trade Agreement between Australia and Hong Kong, China. Specifically, the bills amend the Customs Act 1901 to introduce new rules of origin to determine preferential rates of duty for certain goods originating from Peru, Indonesia and Hong Kong in accordance with the applicable agreement.
From the outset, I want to say that free trade should be fair trade. The Labor Party always has been and always will be the party that is about secure jobs, good wages and a fair opportunity for Australians. The reduction of barriers to trade, such as preferential tariff rates, will level the playing field for Australian businesses, enabling Australian exporters to compete on an equal level with exporters from other countries. Given global instability in the international trading system, it is in Australia's best interest to seek to diversify the access it has to markets around the world. By implementing trade agreements, Australia can generate jobs, boost economic growth and improve living standards both at home and in our region. Ensuring the economic productivity and social progress of the Asia-Pacific region is good for Australia's economic interests and our national security.
One in five Australians have a job in trade related employment. As such, the livelihoods of 2.5 million Australian workers depend on open trade. They are our farmers, our miners and our small business owners. Australian businesses that export their goods on average hire 23 per cent more staff, pay 11 per cent higher wages and have 13 per cent higher labour productivity than non-exporters. These advantages are beneficial to families across Australia and our broader economy. Household incomes are around $8,500 higher as a result of opening up new markets through trade reform, much of it thanks to the legacy of the Hawke and Keating governments.
We should always remember the positives that trade provides for the wider Australian population. But these benefits do not give the government of the day a blank cheque when signing free trade agreements. At every turn, this parliament should be working in Australia's best interests when it comes to free trade agreements. Only the executive of government can enter into or alter the terms of an international treaty. As such, this legislation before the Senate has no impact on the terms of the treaties already signed by the government.
Each of the agreements that this enabling legislation implements has already been scrutinised by the Joint Standing Committee on Treaties, also known as JSCOT, which recommended that the government ratify all three agreements. I will, however, make clear that these agreements are not the deals Labor would have done if we were in government. JSCOT also raised a number of concerns with these agreements and proposed a series of recommendations to improve them. I will shortly address Labor's concerns and the steps that we have taken through negotiation with the Minister for Trade, Tourism and Investment to ensure these deals can and do protect Australian jobs.
I'll begin with the Indonesia-Australia Comprehensive Economic Partnership Agreement. For one of our closest neighbours, and a country with a population of 260 million people, Indonesia only accounts for around two per cent of Australia's exports. To put it frankly, Australia's economic relationship with Indonesia is underdone. By 2030, Indonesia will move from being the 16th-largest economy in the world into the top 10. Seventy per cent of the population will be working age and there will be a consuming class of around 135 million people. By 2050, Indonesia will be the fourth-largest economy in the world. Based on these statistics alone, this is an opportunity for growth with an economic giant in our region, and one we must capitalise upon. The economic partnership agreement between Australia and Indonesia will help us do this. This is why the former Labor government began negotiations in 2013, following a joint feasibility study with Indonesia in 2007. Some six years later, following long negotiations, coupled with stalling by the Abbott-Turnbull-Morrison government, the treaty action was signed in Jakarta on 4 March 2019.
This agreement builds on Australia and Indonesia's pre-existing shared interests, which include safeguarding our open sea lanes; cooperating to fight terrorism and deter transnational crime, particularly when it comes to people smuggling; and deep cultural ties between the two countries including growing tourism. This relationship is set to be strengthened with this trade agreement. Under this agreement, international education opportunities between the two countries will be expanded. It guarantees that Australian suppliers of certain technical and vocational education and training can provide services through majority-Australian-owned businesses in Indonesia. Under the agreement, Australian companies will now be able to own up to 67 per cent of mining services companies based in Indonesia, up from 49 per cent. Indonesia has agreed to reduce its existing tariff for Australian steel of 15 per cent to zero. I should note this will be a great benefit to steelworkers in my state of New South Wales. Indonesia will also guarantee import permits for 250,000 tonnes of Australian steel per year. That is the equivalent of five Sydney Harbour Bridges. This will begin to balance the scales between our two countries when it comes to this essential metal used in roads, railways and other nation-building infrastructure.
Australian farmers are also set to benefit from the agreement. Indonesia has no other bilateral agreement with a major agricultural exporter capable of supplying the same quantities as Australia. However, with the devastating drought throughout New South Wales, Queensland and the rest of the country, Australian grain prices have become uncompetitive for Indonesia to import. This agreement will ensure that Australian farmers will be in a position to export to Indonesia competitively, once Australia's grain stocks improve. I stress that these are just the beginnings of the benefits when it comes to Australia's agreement with Indonesia. As Indonesia grows over the next 10, 20 and 30 years, the benefits of this agreement will continue to drive our own economic development in a wide range of sectors and industries.
I now turn to Hong Kong. You only have to look to Hong Kong to see how Australia's relationships in our region can develop rapidly over short periods of time. It was a little over 22 years ago that the handover of Hong Kong occurred, on 1 July 1997, and since then Hong Kong has become Australia's leading business base in Asia. It is a gateway to Asia and, indeed, the world. Our involvement in Hong Kong is a showcase for the very best that Australian businesses and exports can offer. Hong Kong is Australia's fifth-largest source of inward investment, totalling close to $120 billion. In 2017-18, our total of goods and services exported to Hong Kong was $14.5 billion, close to 3.6 per cent of Australia's total goods and services exports. The agreement with Hong Kong will ensure that Australian exporters will continue to receive zero-tariff treatment for their goods, ensuring our country's competitiveness in Hong Kong in its own right, as well as its role as a gateway for mainland China.
Now to Peru: across the Pacific, the Peru-Australia Free Trade Agreement will allow for better relationships with one of the fastest-growing economies in Latin America. A number of our competitors, including the United States, Canada, the European Union and Singapore, already have free trade agreements with Peru. Any additional barriers, including tariffs and restrictions on the sale of Australian goods and services, is a significant disadvantage to us, and this agreement will bring us into line with our competitors. Currently our trade with Peru is valued at $640 million annually, and it has the potential to grow, delivering for Australian workers, families and businesses. The measures being implemented by this agreement include: the elimination of tariffs on beef within five years; increased sugar market access; immediate duty-free access for Australian exports such as wine, sheepmeat, horticultural products and wheat; and the immediate elimination of tariffs on base metals, including iron ore, copper and nickel, mineral fuels and oils.
As I said earlier, the benefits of these agreements should not come without scrutiny, and that's where the Labor opposition has played an integral role. The Morrison government likes to talk in binary terms when it comes to free trade agreements. You're either for trade or you're against trade. It's black and white. It's yes or no. Just like the Prime Minister's inability to answer simple questions, dismissing them as gossip or 'in the Canberra bubble', this third-term Liberal-National government avoids scrutiny at every turn, and this is simply not the case for free trade agreements or for any legislation. We, here in the Senate, and particularly in the opposition and on the crossbench, serve this specific purpose in this place: to scrutinise government legislation. And the Prime Minister and the executive are foolish to think that they can sign agreements and the parliament will just wave them through without any oversight.
I want to thank the Joint Standing Committee on Treaties, particularly its Labor members, for their work in applying appropriate scrutiny to these three agreements. The committee recommended that the government:
… pursue the termination of the Agreement between the Government of Australia and the Government of the Republic of Indonesia concerning the Promotion and Protection of Investments, and seeks to terminate the 'survival clause' in this agreement.
This is essential because, without termination, two sets of investment or ISDS provisions would be in force.
As the party of working people, Labor understands the concerns raised by the trade union movement, and, as the shadow minister for home affairs, I understand these concerns are inherently tied to Australia's visa system. It is a system which, under this Liberal-National government, is under significant pressure primarily because of maladministration and mismanagement by the Minister for Home Affairs. Previous agreements signed by the government have raised concerns about waiving labour market testing when employers bring temporary skilled migrants to Australia. Labour market testing ensures there are no qualified local workers who could benefit from this employment first. There are no new labour market testing waivers in any of these three agreements that go beyond the commitments Australia has already made to those countries.
There have been concerns raised about the increase in the number of working holiday-maker visas, or backpacker visas, under the agreements with Indonesia and Peru. The agreement with Indonesia will increase the number of visas available annually from 1,000 to 4,100 in the first year, and this will eventually grow to 5,000 annually over six years. It is worth noting that, if all 5,000 working holiday-maker visas are taken up by Indonesians, that will only equate to 2.3 per cent of all backpacker visas. Meanwhile, the number of backpacker visas available for Peru will increase from 100 annually to 1,500 annually. These visas are short-stay visas for one year and allow people aged 18 to 30 to have a cultural experience in Australia while having the option of working. While I can understand some of the concerns about the increase in the number of visas available, I note these new numbers are a cap and not a target. By comparison as well, as of 31 December 2018 there were 25,000 people from the United Kingdom on backpacker visas in Australia.
My most significant concern about backpacker visas isn't about the numbers; it's about the third-term Liberal-National government's attitude toward backpacker visas and the potential for exploitation. The Morrison government is trying to claim that backpacker visas are a solution to the horticultural labour shortage that our farmers and fruit growers are facing across Australia. These are shortages that the member for Mallee, Dr Anne Webster, has described as a crisis. Backpacker visas are effectively meant to be extended tourist visas with the option of working in Australia. By comparison, the government are now relying on these visas to ensure fruit across Australia is being picked and farms are being tended to.
As recently as August, when asked about the expansion of backpacker visas broadly, Victorian Farmers Federation vice-president Emma Germano said:
... there's been problems with the ... visas in the past so the definition of insanity is doing the same thing over and over and expecting a different result, and yet here we are again.
Ms Germano also said that the horticultural sector needs something more sustainable than backpacker visas, and I agree with her. It is one of the key concerns that I, along with Senators Ciccone and Sheldon, have heard at the roundtables we've held which were aimed at addressing these concerns as well as the record-breaking number of people arriving by aeroplane and seeking asylum on the Minister for Home Affairs' watch. And let's be clear: there has been a rapid increase in the number of people arriving by plane from Malaysia and from China seeking asylum. It is being used as a way to access the Australian labour market. It is unmanaged temporary migration for employment.
Both people arriving by aeroplane and people on backpacker visas are at risk of serious exploitation in the labour market in Australia. The stories of people on backpacker visas being exploited in various ways—from underpayment to sexual servitude—are abhorrent. The exploitation of migrant workers is bad for all Australian workers. This is one of the reasons why the shadow minister for trade, Madeleine King, wrote to the trade minister, Senator Birmingham, seeking firm commitments from the government to ensure measures are implemented to stamp out any exploitation of foreign workers.
Senator Birmingham made firm commitments on behalf of the government that they would ensure that working holiday-makers are not exploited, by implementing the government's response to the recommendations of the Migrant Workers' Taskforce. These recommendations must be implemented sooner rather than later to stop exploitation before it can occur. Senator Birmingham has also committed to seek the termination of the existing bilateral investment treaty with Indonesia, addressing the recommendation by JSCOT that I cited earlier. The government also committed to review older style investor dispute settlement systems to ensure they contain modern safeguards; to not use provisions in the Indonesia agreement to extend any labour market testing waivers in the future; and to an inquiry by the parliament's Joint Standing Committee on Treaties into Australia's treaty-making process, which will aim to improve transparency and consultation. I thank the Minister for Trade, Tourism and Investment, Senator Birmingham, for his commitment to negotiating with Labor and our shadow minister for trade in the other place.
In conclusion, in the spirit of Hawke and Keating, I say again that free trade should be fair trade.