George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

The opposition supports the Customs Amendment (New Zealand Rules of Origin) Bill 2011. Australia's economic relationship with New Zealand is the deepest that we have with any country. Prime Minister Key, on his recent visit, made the point that more than half of direct foreign investment in New Zealand, around $50 billion, comes from Australia. Last year, Australian exports from New Zealand totalled just over $8 billion, which is not far from the $9 billion Australia exported to the United States.

The cornerstone of our trade and economic relationship is the Australia-New Zealand Closer Economic Relations Trade Agreement, which came into effect on 1 January 1983—one of the fruits of the Fraser government. The agreement is a compre­hensive and wide-ranging agreement that provides New Zealand and Australia with liberal access to each other's goods, services and investment markets. The objectives of the agreement are to strengthen the broad relationship between Australia and New Zealand, to develop closer economic rela­tions between the member states through a mutually beneficial expansion of free trade between New Zealand and Australia, to eliminate barriers to trade between Australia and New Zealand in a gradual and progress­ive manner under an agreed timetable and with a minimum of disruption, and to develop trade between Australia and New Zealand under conditions of fair competition.

On 1 January 2007 the agreement's rules of origin provision underwent significant change to allow both the change in tariff classification method and the regional value content method to be used to establish whether goods are New Zealand originating goods. As part of the 2007 amendments to the agreement, both parties also agreed to perform a review of the new rules of origin within three years of their taking effect. This review commenced in late 2008 and was completed in March 2010. It resulted in amendments to the text of article 3—that is, the article dealing with the rules of origin—and the related product-specific rules in annexure G to the agreement. The modifi­cations to the agreement will reduce the administrative burden on business and increase the eligibility for duty-free entry of goods into both markets. The amendments will also provide greater consistency between the rules of origin in the agreement and those in other free trade agreements entered into by Australia. The purpose of the bill is to amend the Customs Act 1901 to implement amendments to the rules of origin requirements under the Australia-New Zealand Closer Economic Relations Trade Agreement and amend definitions within the act. The requirements are outlined in article 3 and annex G to the agreement. The amend­ments to the Customs Act implement the amendments to article 3 of the agreement. The amendments to the Customs (New Zealand Rules of Origin) Regulations 2006 will implement the amendments to annex G of the agreement.

The bill will amend division 1E of part VIII of the Customs Act to insert a new definition of 'aquaculture'; amend the defini­tion of 'manufacture'; amend the definition of 'produce'; amend the provisions dealing with 'wholly obtained goods'; amend the provi­sions relating to eligibility based on the last process of manufacture; insert a new section to provide that goods are not New Zealand originating goods merely because of certain identified operations; and make consequen­tial amendments to the verification powers in division 4D of part VI of the Customs Act.

The relationship between Australia and New Zealand is underpinned by the free movement of people between the two countries, by regular contact at the political level, by close defence ties and by a range of economic and diplomatic agreements. I wish the Senate to acknowledge the fact that former coalition Prime Minister John Howard and foreign minister Alexander Downer were pivotal in advancing the economic and cultural relationship with New Zealand, and this legislation reflects a process which was initiated by the Howard government. The coalition supports the bill.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

It is almost 30 years since Australia and New Zealand first brought together the closer economic relationship through ANZCERTA. Amongst a number of object­ives it had the admirable goal of developing trade between New Zealand and Australia, and not just developing trade but doing so under conditions of fair competition. I think Senator Brandis has fairly outlined the historical basis of that. This bill, the Customs Amendment (New Zealand Rules of Origin) Bill 2011, does make some important definitional changes. For example, it tightens the definition of manufacturing, it clarifies what it means for something to be wholly produced in New Zealand and it clarifies that something cannot be considered of New Zealand origin simply because it has been packaged or labelled in New Zealand. Also, in the field of aquaculture, it makes it very clear that, if fish comes out of New Zealand waters and is processed in New Zealand, that clearly comes within the definitional criteria for the exemption of duties. I am grateful to the minister's office and to the department for providing clarification earlier today on some concerns I had. However, it is now timely to consider the CER more broadly: how it can be made to operate more fairly and, importantly, really work for the interests of Australian consumers.

The CER is said to be one of the world's most comprehensive, effective and multilat­erally compatible free trade agreements. Its scope is huge, covering nearly all trans-Tasman trade in goods, including agricultur­al products and services. However, its scope is so huge, so broad, that it goes beyond encouraging trade and beyond encouraging a closer economic relationship; it goes to preventing Australia taking action in its own right on issues that affect ordinary Austra­lians—and I see this as a fundamental issue of sovereignty. In fact, it reduces Australia's ability to make laws on food labelling.

While the CER rightly reduces trade barriers, it creates barriers of another kind: it creates barriers to consumers getting the information they deserve. Consumers have a right to know what country their food is coming from. The CER creates a barrier to this as it restricts the ability of the Australian government to make sure that manufacturers properly label their products so that Austra­lians know where their food is coming from. This is a barrier to consumers.

Let me give an example. In 2009, Senator Bob Brown, Senator Barnaby Joyce and I introduced legislation to require truth in labelling of palm oil. Palm oil is often labelled as a 'vegetable oil' in products. I wanted to ensure that consumers had accurate information to make an informed choice about whether or not they wanted to purchase or consume a product and whether it was sustainably produced palm oil, which Malaysia, I acknowledge, is doing more and more of. However, as part of the CER, under the Australia-New Zealand food treaty Australia cannot introduce amendments to food laws without effective consultation with New Zealand. I believe that is wrong. I am all for encouraging trade between Australia and New Zealand, but I am not for trading out our national sovereignty on an issue such as food labelling. Why should Australia needs permission from New Zealand to let Australians know what is in their food and where it came from?

I believe the current food-labelling laws in this country are woefully inadequate. They are bad for consumers and bad for our primary producers. If a product is only partly Australian, or partly from New Zealand for that matter, I believe the label should say so. Every time a food product is labelled as 'made in Australia' when in fact it is made largely of foreign ingredients, that is actually costing Australian farmers their jobs and misleading consumers. I do not see why having a closer economic relationship with New Zealand should mean that Australia cannot unilaterally legislate for its food labels to be accurate. I do not see why the closer economic relationship with New Zealand should create an obstacle to Austra­lian consumers. I do not see why it should create an obstacle to Australians being fully informed about the food they consume. I do not see why it should create an obstacle to Australians making fully informed choices about the products they buy and consume.

I do not want this to be misinterpreted as being against the CER with New Zealand. I strongly support it. But I believe that in this fundamental aspect it has simply gone too far or goes beyond the original intent of the CER. I support the encouraging of trade with our closest friend and ally, New Zealand. I cannot support having unfair obstacles in front of Australian consumers. For this reason I say now is the time to revisit the CER and ensure that it truly encourages free trade and fair trade between Australia and New Zealand, but not at the expense of Australian consumers getting the truth in labelling of the food they consume.

Kate Lundy (ACT, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

I thank the two senators for their contribution to the debate on this bill and I commend it to the Senate.

Question agreed to.

Bill read a second time.