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
The growth of our country has, for a very long time, been inextricably tied to our ability to produce a broad variety of products, to export and transport those products and to compete in the global marketplace. After all, it was once said that Australia rode on the sheep's back, in reference to our wool industry.
The government is committed to continuing to pursue our ambitious export growth agenda and to develop further export opportunities for our producers. Presently, Australian export businesses hire about 23 per cent more staff, pay 11 per cent higher wages and have 13 per cent higher labour productivity than non-exporters. These numbers are very significant for a number of reasons. Chief among them is the higher employment rate. Australians want jobs, and the export industry delivers more than any other. Australians want to earn more money, and export industry jobs deliver this. The unions should be very supportive of the industry, for their members. These numbers highlight the importance of our export industry and the way in which trade contributes to our economy: more jobs and higher-paying jobs, which in turn add to our capacity to pay for the essential services Australians rely upon.
Driving our ambitious trade agenda has already delivered results. These are tangible results that only come about from sensible and responsible fiscal management strategies. We have already seen growth to more than 53,000 businesses exporting products in 2017-18. That's 18.5 per cent more since 2013-14—not insignificant. With that growth came more jobs. In fact, one in five Australians are now employed in trade related industry. In round numbers, there have been about 240,000 trade related jobs created in the last five years. These are real jobs, permanent jobs, because developing industry develops real jobs for today and for the future. And here's the best part, the part that I really like being able to tell you: Australian household incomes are estimated to be around $8,500 higher as a result of opening new markets through trade. This is how we build prosperity. This is how we build nations. With 21 consecutive months of trade surpluses, with record levels of exports and with every month of 2019 recording a trade surplus, we know we are on track. This is what happens when you apply sensible, responsible fiscal management. This is what this government does.
But the news gets better, as those of us on this side of the chamber knew it would. Our free trade agreements also continue to help Australian businesses. Our free trade agreement partner countries have the largest average export value per merchandise exporter. Japan led the way, with $13.7 million, and China was right behind them, with $13.6 million. That's Aussie products making real impacts on world markets. Almost all our bilateral free trade agreement partners saw an increase in export.
We will continue to help our Australian exporters to become even more competitive for more international customers by working to ensure that around 90 per cent of Australia's trade is covered by free trade agreements by 2022. To do so, we will implement export agreements such as the recently signed, although yet to be ratified, deals with Indonesia, Peru and Hong Kong. We will pursue strong export agreements with the European Union and the Pacific Alliance of Mexico, Chile, Peru and Colombia. The Regional Comprehensive Economic Partnership is also in our sights and, when they are ready, we will work with the UK on similar agreements.
As part of our commitment to deliver 1.25 million jobs over the next five years, we'll be aiming to boost the number of Australians employed in trade related areas by a further 240,000. This legislation is needed in order to ratify our recently signed trade agreements with Indonesia, Peru and Hong Kong. These agreements are predicted to bring additional export opportunities for Australian businesses, farmers and investors, which will ultimately mean more jobs for Australians and a further boost to our economy.
There are a number of key market access gains under the Indonesia-Australia Comprehensive Economic Partnership Agreement that serve to illustrate what is possible under similar agreements. Frozen beef and sheepmeat exports will have their tariff halved from five per cent to 2½ per cent immediately and eliminated altogether by 2023. This should go a long way to improving our exports of these products and decreasing our reliance on live export of Australian cattle.
This will also remove all remaining tariffs on dairy exports, further strengthening Australia's dairy export markets. We've all heard recently how our dairy industry is suffering. Exports to Indonesia have the capacity to increase our production. Products such as cheese, yoghurt and cream are all increasingly desired by Indonesia's burgeoning middle-class population. In fact, Indonesia's predicted to have 141 million middle-class citizens by next year. That's a huge number of people sitting on our doorstep, desiring access to the types of products that we have. Improved market access outcomes on services and investment will also give Australian businesses increased certainty in the Indonesian market, including in vocational education and mining and related services, as well as in tourism.
The Australia-Hong Kong Free Trade Agreement delivers a different set of unique opportunities. This comprehensive and ambitious agreement provides the ability to govern the trade and investment relationship, including modern e-commerce rules governing free data-flows across borders and guaranteed access for service suppliers in key sectors, including financial services, education, transport, tourism and professional services.
Our Peru-Australia Free Trade Agreement will ultimately eliminate over 99 per cent of tariffs on Australian goods to Peru. This represents incredible opportunities for our exporters, who know Peru to be one of the fastest-growing economies in Latin America. In fact, 44 per cent of the Peruvian population are in the middle-class bracket, and this is expected to increase in coming years. The benefits of this agreement include elimination of tariffs on beef after five years. This will give us the same market access as the US currently has. There will be instant elimination of tariffs for sheepmeat and wheat, and instant duty-free access on 7,000 tonnes of dairy products—again, supporting our dairy industry—and immediate elimination of tariffs on pharmaceutical products.
The Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 will amend the Customs Act 1901 to provide key changes in support of growing Australia's export and trade capabilities. These changes will provide new rules for origin for goods imported into Australia from one of the respective parties, to determine if those goods are eligible to claim preferential treatment under the free trade agreements for Indonesia, Hong Kong and Peru. Furthermore, these changes will enable regulations to impose record-keeping requirements on Australian exporters seeking to access preferential tariff treatment when exporting to Peru, Indonesia or Hong Kong, and on people who produce such goods, where consistent with the commitments to individual agreements. Such measures are vital to ensuring confidence in our trading partners.
The Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 will amend the Customs Tariff Act 1995 to provide preferential rates of customs duty on entry into force of our free trade agreements with Peru, Indonesia and Hong Kong for all goods, excluding excise equivalent goods.
From across our trade sector come many voices speaking in support of our government pursuing our agreement for more growth in export. Recently, in October, CEO for the Australian Food and Grocery Council Tanya Barden said that food and grocery manufacturers will greatly benefit from ratification of the deal and that any opportunity to help manufacturers to export their goods to the world is a great support to Australia's biggest manufacturing sector. In fact, she said:
The food and grocery manufacturing sector provides over 324,000 jobs and nearly 40 percent of those jobs are in rural and regional Australia …
And she said:
Providing access to export markets with improved trading arrangements enables favourable conditions to expand the business, thereby giving confidence to invest domestically, leading to increased employment and economy contribution.
She said that they hoped to see 'a fast ratification in the parliament before the end of the year', and that they welcome the bipartisan support from all Australian political parties on these deals.
AUSVEG is the industry representative for Australia's vegetable and potato growers. Their CEO commented in October on the agreement with Indonesia, stating that:
The agreement to increase import quotas and decrease tariffs for carrot and potato exports—two of the Australian vegetable industry's key export crops—will lead to an immediate increase in the trade of these commodities to Indonesia and must be ratified now …
He also commented that the trade agreement 'aligns closely with our industry's increased activities in market development' and said:
… given Indonesia is predicted to have the world's fifth largest economy by 2030, it will help ensure that Australia, and its horticulture producers, will be able to benefit from the country's expected economic growth.
The CEO of the Australian Chamber of Commerce and Industry, James Pearson, also spoke in support of ratification of the free trade agreement with Indonesia. He sees this as necessary to improve market access for Australian small and medium enterprises, and it needs to be completed as soon as possible. He also notes that the Hong Kong trade deal has made real inroads for the Australian services sector to gain greater market access for insurance, banking and financial technology products, as well as reducing red tape.
The list of key supporters goes on, with the Business Council of Australia chief executive, Jennifer Westacott, stating:
Trade delivers Australians more choices and greater opportunities. Better access to markets will give Australian businesses the chance to grow, invest and create new jobs.
The Business SA chief executive predicted that South Australia's exports to Indonesia will grow towards $1 billion over the next decade, given that it is on track to be the world's fourth- or fifth-largest economy. The chair of the Red Meat Advisory Council, which includes the Australian Meat Industry Council and Meat & Livestock Australia, Don Mackay, said:
Indonesia is a vitally important trading partner for the Australian live cattle and beef industry – along with a steady requirement for sheepmeat. Combined, the existing trade was worth over … $1 billion in 2018.
A fairly significant portion of that trade comes from northern Australia and my home of the Northern Territory, where the red meat industry and live export are vital, and Indonesia is one of our most significant trading partners.
My list goes on and on, with support from the Australian Livestock Exporters Council, the National Farmers Federation, CANEGROWERS, Australian Dairy Farmers, GrainGrowers, the Group of Eight universities, Australian Grape and Wine, the Minerals Council of Australia, Rio Tinto and many more. Ratification of our free trade agreements is dependent upon this amendment being passed. Continued growth and expansion of our trade industry is also dependent upon the passing of this bill. Our farmers, producers and exporters—along with rural, regional and even urban Australians—need these agreements and this amendment, and I commend this legislation to the Senate.