Senate debates

Wednesday, 10 October 2012


Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011, Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2012, Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012, Customs Amendment (Anti-dumping Improvements) Bill (No. 3) 2012; Second Reading

11:45 am

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | | Hansard source

I rise to make a contribution on behalf of the opposition in relation to the Customs Amendment (Anti-dumping Improvements) Bill (No. 1) 2011, the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2012, the Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012 and the Customs Amendment (Anti-dumping Improvements) Bill (No. 3) 2012. Right at the outset we note that this is the fourth time that we have been here to look at amendments to this legislation. The government's approach to this, I have to say, has been somewhat tardy and symptomatic of their approach to the management and governance of this country over the last five years. That having been said, the opposition will be supporting this legislation. We note that it does fall within the framework of policy that we already have on the table and in that context, in my view, if the opposition can get this work done with the limited resources of opposition it is a bit difficult to understand why it has taken the government so long to get through this whole process.

These bills will actually do a number of things. The legislation will lead to: the creation of additional forms of duties that the minister can apply to goods that are considered to have been dumped in Australia; the amendment of subsidy provisions in the Customs Act to align them more closely with relevant definitions and provisions of the World Trade Organization Agreement on Subsidies and Countervailing Measures; extension of the minister's powers in seeking to continue to impose antidumping duties beyond their originally nominated termination date; and the removal of certain limitations upon the calculation of the so-called 'normal value' of the relevant goods, essentially the prices at which they are assessed to be typically sold in their home market that time at which they were exported to Australia.

The coalition has a number of concerns in relation to the government's approach to antidumping. As I have already indicated, this is the fourth time the government have brought legislation to the chamber to deal with their commitments in relation to antidumping. We do have a particular concern in relation to their commitment to implementing the measures and resourcing the application of the legislation. It is pertinent to note that the government announced they would be increasing the staffing in the relevant branch of Customs to deal with antidumping from 31 to 45, giving the impression that they were actually increasing the resources. But it has subsequently become apparent that these changes are not based on extra financial investment, as was indicated by the ministers at the time, but are just a reworking of resources within the department. So we are robbing Peter to pay Paul as part of the process of trying to meet our obligations to industry here in Australia. We are taking resources from one area of Customs, weakening that area, to strengthen another. I am sure that those who are concerned about antidumping would be happy that resources are being added in respect of their particular area of interest, but it is of significant concern more broadly that Customs is not being adequately resourced in that respect to manage the broader customs task.

The coalition has made some commitments in respect of its policy in relation to that matter and we look forward to the opportunity to implement those commitments. In our view, a genuine increase in the branches' resources would pave the way for the use of stronger interpretations there in prosecuting dumping cases and it would also provide the opportunity for us to better align our system with those in force in other countries such as the United States and a number of EU member states. We think that there is some real work to continue to do in relation to antidumping in Australia.

We already have a strong policy that was put into place after the work of a committee put together by the leader, a dedicated task force of frontbenchers led by our shadow minister, Sophie Mirabella, John Cobb, Michael Keenan and me. We worked through the process of developing that policy that has been out in the public arena for a while, and we note that the government are starting to pick up some of the particular issues that we raised. But unfortunately they are not resourcing Customs as well as they could; they are actually robbing Peter to pay Paul, but at the same time trying to give the impression to the broader community that they are actually putting more resources in. This is deceptive marketing of the way that they are governing when in fact they are starving other areas of Customs of resources at the same time.

The coalition task force consulted broadly with industry and also looked extensively at other models, particularly those of the United States and the European Union, to ensure that what we are proposing is as closely aligned as possible to those jurisdictions and to put our industries in Australia in a situation where they believe that they have some genuine protection against dumping. I have to say that I think Australia was seen as a pretty soft touch, as a country where the rules were applied lightly. It is pleasing that more resources are being applied into that particular area of Customs, but we need to have a process that is affordable for industry in Australia to access and in which industry also has some confidence that it will provide genuine protection in relation to their concerns about product being dumped into Australia. We have done a lot of work to ensure that our policy provides those alignments with our major trading partners and some of the major trading economies around the world. That is now on the public record. Even though it has been a slow and piecemeal process from the government, we are pleased that they are starting to come on board with the legislation. As I said, it must be a system that works, is effective, ensures we have adequate investigation and enforces our decisions.

One of the real issues that industry have brought before the coalition—I am sure they have discussed it with government as well—is that it is sometimes very difficult to access information in other jurisdictions, and that can be used as a way to delay the processes to the disadvantage of Australian industry. I think it is reasonable that we have in place provisions that enforce the need to provide information that is being sought by Australian companies and, more importantly, the Australian government in a timely manner so that decisions can be made that do not disadvantage Australian business. The impact can occur very quickly in some circumstances, and so the negative impact can occur in a short period of time, the investigation may take a long period of time and significant damage could be done in the interim. The additional resources are important, as I said—our system needs to be better resourced. But making sure that the system is effective, is accessible and is cost-effective for industry to access is very important.

Another issue the coalition have talked about, which was pooh-poohed by the government when we raised it, was where the antidumping decisions are actually held within the government. We have talked about taking it out of Customs and giving it to another agency. The Minister for Home Affairs said in November 2007:

Moving responsibility for anti-dumping decisions from Customs to another department is just bureaucratic reshuffling and will take away responsibility for making decisions from staff who actually monitor what is being imported into Australia.

Yet now we find the government are actively considering that themselves. When we released our policy it was a really bad idea, but now it might not be such a bad idea. Again we find the government following the coalition in the development and implementation of policy.

Given that we are supporting the legislation, I do not think I need to say too much. I have highlighted the points that I wanted to highlight about this particular piece of legislation. So again I indicate we are supporting it but reinforce the point that this is symptomatic of the ad hoc way that this government has managed its broader legislative framework. We have seen a number of pieces of legislation that have been brought before the chamber and have had to be modified over time, perhaps the best example of which is the carbon tax where the government did a deal with the Greens to implement the tax. The crazy ideas of the Greens do not work when put into practical application and we have seen the floor price removed and other changes made that the Greens did not want when they did the deal and negotiated the carbon tax. The government then had come back and fix up the mess they created. They have not done a deal with respect to this legislation but they have been very slow—as I said, this is the fourth piece of legislation they have brought forward to deal with dumping. We do not believe they have got it right yet, but this does come some of the way, so the opposition will support this legislation.

11:57 am

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party) Share this | | Hansard source

I am delighted today to rise to support the bills before us, which represent the second, third and fourth tranches of what have been significant reforms to Australia's antidumping regime. They are in fact the most comprehensive reforms to Australia's antidumping regime in over 10 years. They are the result of a comprehensive inquiry by the Productivity Commission and they take account of the views of state and territory governments and Senate committee reports. The consultation was quite lengthy and I am pleased to know that a broad range of views were sought and listened to, from key industry players affected by dumping in Australia right through to major unions. So I think we can be confident that the reforms we have before the chamber are based on the needs of all sections of the Australian economy.

As we know, the Australian economy is in a strong position under the stewardship of the Labor government, and I congratulate the Treasurer and the finance minister on this. Indeed, they have announced that the Australian economy is now the 12th largest in the world. We have leapt three places, surpassing economies as large and diverse as South Korea, Spain and Mexico. It is a testament to good financial and economic management. But, as these bills highlight, there are challenges facing our economy. As I have said before in this place, the health of our manufacturing sector is perhaps the greatest of those challenges. That is why I am pleased to be here in this chamber taking action to ensure that dumping pressures are relieved on the Australian manufacturing sector as one of the planks that help ensure we have a healthy manufacturing sector into the future.

Today we are looking at the Customs Amendment (Anti-dumping Improvements) Bill (No. 2), the Customs Tariff (Anti-Dumping) Amendment Bill (No. 1) 2012 and related bills.

I would like to begin by dismissing the idea that antidumping laws are merely a reflection of protectionist sentiments in this country. It is simply not the case. Antidumping laws are not about protectionism; they are very much about recognising the fact that overseas companies can and do engage in anticompetitive practices by dumping their products here in Australia at prices well below their actual value or cost of production.

Dumping has had serious consequences for the Australian economy and, because Australian companies cannot compete with these artificially low prices, we see the results in the cutting back of jobs and training or sometimes even the closure of shops entirely. Losing manufacturing jobs reduces the diversity and resilience of our economy and we must do everything reasonable to combat these anticompetitive practices. It is notable that the prices of the dumped goods are often artificially lower due to foreign government subsidies and ownership—precisely the type of government economic intervention that opponents of antidumping abhor. In that context, I note the significant challenges to Australian industries, such as the steel industry, while countries that we compete with—China, for example—are building massive reserves of manufactured steel. We need to be mindful that such products are not dumped here in Australia and artificially and falsely compete with Australian steel.

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

They don't have a carbon tax.

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party) Share this | | Hansard source

It does not have anything to do with the carbon price. It has to do with the artificial interference with state-owned enterprises where they will not cease production based on market forces, but for their own reasons will continue to create production. For example, they might want just to retain local employment. It does artificially impact on the price of products.

The problem with arguments advanced by opponents of antidumping provisions is that they want to have it both ways. Often we have heard them say that they oppose antidumping laws as unnecessary government intervention, without recognising the fact that such laws are necessitated by overseas government intervention and the serious consequences for Australian industries and jobs. Opponents will often tell us that the benefits to consumers of cheap, dumped products outweigh the benefit of antidumping laws. With all respect to those commentators, I disagree. It has no regard for the long-term health of Australia's manufacturing sector and, by proxy, the Australian economy. It has no regard for the damage that dumping can do to jobs and livelihoods. It does not matter how cheap products are at the supermarket when you are unemployed. It does not matter how cheap products are if we lose our manufacturing industry and its strong multiplier effect on the economy. And it does not matter how cheap those products are now; they will get more expensive once domestic competition has been driven out.

Antidumping laws make sure that the prices people pay for goods both now and in the future are fair and competitive. When we get policy settings right, antidumping laws play an important part in ensuring that we can live in an economy that is fair as well as free. The importance of antidumping laws is understood by stakeholders throughout the economy but it is particularly understood by those who are in the front line of protecting workers from job losses. As Dave Oliver, the former National Secretary of the Australian Manufacturing Workers Union, notes, the practice of illegal dumping has the potential to destroy manufacturing jobs around the country. Importantly, this is a view held not only by unions. It is understood by those businesses who work in the manufacturing sector. Manufacturing Australia, a business coalition of Australian manufacturing companies, state in their March 2012 communique, 'Australia's manufacturers cannot continue to withstand the unfair trade that leads directly to the loss of jobs, loss of Australian capability and vulnerability to price increases.'

This is why I am pleased to speak in support of these bills today. It is fundamentally about protecting the health of our economy and the jobs of Australian manufacturing workers. It is not, however, a matter of ideology. It is a matter of doing what is needed to support both workers and businesses in this country. I am very pleased to see opposition support for these reforms.

The bills make several major reforms to our existing antidumping laws, and I will comment on just a few of those. Firstly, the bills clarify the powers of the CEO of the Australian Customs and Border Protection Service and of the minister when determining whether a countervailable subsidy has been received or when determining the amount of a countervailable subsidy when the parties under investigation fail to provide information to Customs or when they significantly impede Customs' investigation. In these circumstances, the bills make it clear that the CEO of Customs and Border Protection and the minister have express power to take all facts available into account. I think it is important that the minister has these powers and retains them into the future. Given that it is in the interests of companies who engage in dumping practices to cover up the existence or extent of their unfair trading, it is sensible to make it easier for our authorities to decide whether or not dumping has occurred.

Secondly, the bills remove the need for a separate review of antidumping measures and continuation inquiries when those inquiries occur in close proximity to each other. This is an important distinction from the way the legislation has previously operated. For those unfamiliar with the Customs Act, a review of measures under division 5 of the act allows the CEO to recommend to the minister a range of options for changing antidumping measures.

These include recalculating the levels of duty where there is an application that relevant factors have changed or the measures are no longer warranted. There is a continuation of inquiry under division 6A, which is an inquiry into whether or not antidumping measures should continue beyond their expiry date. So you can see this is an important improvement on how the act has operated to date.

Currently, antidumping measures cannot be changed as part of a decision to continue those measures. Instead, a separate review has had to be conducted, and it has been quite inefficient. In considering whether to continue antidumping measures, the minister should have the flexibility to continue and change those measures. That is precisely what the bills before us provide for. With the passage of these bills, Customs will be able to recalculate the level of duties of an antidumping measure during a continuation inquiry rather than going through two separate processes. This is clearly going to streamline the process, which means quicker outcomes for all interested parties.

Third, the bills implement the recommendation of the International Trade Remedies Forum to remove the current limitation to the inclusion of profit when calculating the normal value of a good in its country of origin in certain circumstances. This, I think, is going to improve the effectiveness of the particular market situation provisions in the Customs Act by providing greater flexibility for Customs to more accurately determine the normal value of goods. Fourth, these bills allow different forms of interim duty to be applied from those currently used. Fifth, these bills insert a new division into the Customs Act that will allow Australian industry to apply for an anti-circumvention inquiry. I think the circumvention issue is important because these kinds of behaviours take a number of forms but they are always strategies used by exporters and importers to avoid paying the full payment of dumping duties. Again, strategies like this are anticompetitive and unfair. This is essentially where companies are exploiting loopholes in the existing laws to avoid having to import goods at what should be the proper market value for those goods. This new division will close loopholes, which means that Australian industry can be more confident that imported goods are subject to the same level playing field that they are. These bills make other worthwhile changes to our antidumping regime, including a new appeals process and strengthening the provisions that address noncooperation.

What I have done today is lay out just a few of the changes and how those changes are responding to particular problems within our existing antidumping regime. Indeed, they are responding to the specific concerns of the manufacturing industry. They will, I think, create a better and more effective Customs Act. What they are also about, though, is providing certainty for business. These changes have been broadly welcomed by business and unions alike. They provide certainty and better service for businesses by streamlining our antidumping processes and providing antidumping decisions more quickly, such as by allowing a variation to antidumping measures and continuation inquiries, as I have previously highlighted. They do this by providing better access to the antidumping system and by improving the quality of decision making. They also do this by making our system more consistent with those of other countries and by encouraging stronger compliance. They are sensible reforms that will modernise our antidumping laws and help to level the playing field for Australia's manufacturers.

With this in mind, I would like to briefly mention, as I have done many times in this place, the need to do more to promote the health of the manufacturing sector in our country. We have a high Australian dollar and a resources boom that has drained many of the skills out of the manufacturing sector. We must ensure that there will be an industry after the peak of the mining industry has passed. In WA, our manufacturing sector is grappling much more with a lack of supply than with dumping practices. I will continue to advocate for stronger commitments to local content in large projects because it is one of the best ways that we can ensure that the benefits of this once-in-a-lifetime mining boom continue into the future. In tandem with the plan for local content, we must have laws that ensure that local content can compete fairly with overseas content. This is what these bills do.

Finally, I want to return to my original point about antidumping laws being a necessary response to unfair international business practices. The Australian government takes open international trade very seriously. We want trade in this country to be rigorous, and we want our trading partners to trust our antidumping measures. This is why these bills have been carefully constructed. They have been carefully constructed to satisfy our obligations under the World Trade Organization obligations. Indeed, section 1 of article VI of the General Agreement on Tariffs and Trade says:

… dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry.

Section 2 of article VI specifically endorses the levying of an antidumping duty as a remedy for this unfair trading practice.

It is clear that antidumping systems are regarded as not only acceptable but necessary by the international community. Why is this so? It is so because countries around the world recognise that dumping does occur and that it has serious consequences for economies and serious consequences for free and fair trade. The government estimates in its report entitled Streamlining Australia's anti-dumping system that more than 90 countries have antidumping systems. The Productivity Commission further notes that the majority of World Trade Organization members now have a system in place. By passing these bills, we are not doing anything unusual in the global economy, except building an antidumping system that is world's best practice.

Australia is a nation of trade. For our entire history, we have relied on our exports, from high value manufacturing products through to our primary resources in agriculture and mining. It is not in our interest to encourage countries to throw up unnecessary barriers to trade, but we do want an international trade system that is fair. It is a core Labor value that distinguishes us, I think, from those on the other side of the chamber. We believe that economies should create opportunities for our citizens and for our nation's businesses, but we believe that those opportunities should be available under fair conditions. Unfortunately though, some of our competitors have come to look on Australia as an easy dumping ground and they are not playing under fair conditions.

As my briefing with the steel industry this morning highlighted, we are considered a dumping ground because we pay our bills on time. It is a desirable place to dump your goods because you know you are going to get paid for them. We have got good ports and good access to infrastructure and it is fairly easy to import things, so when you need to get rid of goods quickly and dispose of them on a market, Australia has been seen as a desirable place to do that.

In the face of unfair trading practices like these, governments, like this one, must act—and act we have done. We are acting to level the playing field for Australia's manufacturers. That is why we need robust anti-dumping laws. If the result of these laws is the protection of Australian jobs then we need make no apology for that.

I cannot see a reason other than fringe ideology as to why anyone would oppose such measures, but we do find commentators that occasionally do. Labor's reforms will make our laws some of the best in the world. They are based on broad consultations with industry and unions alike. These reforms will make our anti-dumping system more sensible, efficient and better resourced, and they will satisfy our international obligations. Labor fights for jobs. It fights for fairness. It fights for a stronger economy. I am very proud to stand with a government that is delivering on those values yet again. I commend the bills to the Senate.

12:17 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

This is a very important issue. This is an issue that affects literally hundreds of thousands of Australians whose jobs are at risk because of dumping of goods from other countries at below cost. Dumping is defined as a form of predatory pricing in international trade. It occurs when goods are exported and sold in another country at a cost below what they would sell for in their domestic market. Under WTO rules—the World Trade Organisation—dumping is not prohibited, but countries have the option of taking action where material harm has occurred to their domestic industries because of dumped imports. This action is usually in the form of antidumping duties or tariffs placed on particular goods that have been found to be dumped.

There is another aspect to this, which may be of interest to Senator Williams given the motion that he put up a number of months ago—a very good motion—in relation to EU subsidies. This relates to countervailing duties. Under WTO rules, countervailing duties can be applied to imported goods where those goods have received subsidies in their country of origin. This helps to offset the fact that these goods can therefore be produced at a lower cost to the manufacturer than would be the case in the country where the goods are exported to. A number of months ago Senator Williams moved what I thought was a very perceptive motion in relation to the whole issue of subsidies in the EU. I am not sure whether Senator Williams will be contributing to this debate in the committee stage, but that related to this very issue—to what extent are Australian manufacturers competing against subsidised farmers in other countries?

This is an issue that Senator Colbeck has expressed concerns about also, through his chairing of the very valuable food processing inquiry report. For instance, I was not aware until recently that Woolworths, in one of their private-label brands, was importing ice cream from Spain. It is a long way for that ice cream to travel and stay frozen in a container—who knows what the carbon miles would be. The issue is this: to what extent was that Spanish ice cream the subject of direct or indirect subsidies in Spain, in Europe, and to what extent did that impact on Australian dairy producers that had to compete with that product?

Under the WTO rules, article IV of the General Agreement on Tariffs and Trade relates to dumping and dumping procedures. It relates to investigations and the government's basis for objecting to the reverse onus of proof, which is a key issue in relation to this. My concern is that unless and until we have a reverse onus of proof provision in relation to our dumping laws, it will be very difficult for these particular measures to be as effective as they should be.

I do acknowledge the work that the government has done. I engaged quite comprehensively with the Hon. Brendan O'Connor, the former Minister for Home Affairs. I have not had that opportunity to engage directly with the new minister, but I am grateful to the adviser in his office who provided very useful information. I do acknowledge that. I have also engaged with Sophie Mirabella, the shadow minister for industry, in relation to this issue.

But let us put this whole issue of dumping in perspective. A very telling remark was made by Michael O'Connor, the Secretary of the CFMEU, who told me that at an international forum dealing with matters of trade—and that presumably was to do primarily with issues in respect of timber and wood products in Scandinavia—that some of the delegates there from Scandinavia laughed about Australia. He said that they said to him that Australia is regarded as the 'free trade Taliban' when it comes to their approach to WTO rules, that we take such a purist, fundamentalist view with respect to free trade and that our interpretation of the rules is so literal, so purist. He said that no other country does that, and that is to our detriment in terms of our national interest. Those remarks by Michael O'Connor have been seared into my memory and we need to bear that in mind in terms of the difficulties that Australian manufacturers are having.

I acknowledge Senator John Madigan and the work that he has done in terms of his program, the Australian Manufacturing and Farming Program, because I think that is an excellent initiative that highlights the vulnerability of Australian manufacturing but also the enormous benefit it gives us as a nation and the jobs that it creates.

So my concern is that Australia's free-for-all approach to free trade is putting our manufacturers under ever-increasing pressure as they struggle to compete with cheap imports. Some would say that this is a good deal for Australian consumers, that imports mean cheaper prices, but I also wonder what will happen when one day we turn around and discover that Australia has virtually no manufacturing ability, with no skilled workers in manufacturing and no innovation or experimentation. We will be at the mercy of our trading partners, and that concerns me.

I am not against trade. I think other speakers have made the point that we are a small, open economy and that trade is absolutely fundamental. But let us make sure that the rules are fair and that we are not competing on an unlevel playing field. We need to balance our free trade principles with the understanding that we must always be able to support ourselves and that we need to find that balance within the rules. It appears to me that the WTO rules can and should be interpreted somewhat differently, in a way that does not fall foul of the WTO but is true to our national interests.

I will be moving a number of amendments to these bills. I thank the opposition and the government for the time they have given me in discussing these amendments, as well as the Australian Greens and Senator Madigan from the DLP. These amendments are based on my private senator's bill, the Customs Amendment (Anti-Dumping) Bill 2011. The reason I got involved in this issue is that, back in 2010, I was approached by Darren O'Halloran, who was a worker at Kimberly-Clark in the south-east of South Australia. He drove about 120 kilometres to a function on the River Murray, at the mouth of the Murray, to speak to me about the struggle that Kimberly-Clark was having as a company. He wanted to tell me about the company's struggle against dumping. It started in 2008. After a long battle, the government imposed dumping duties on Chinese and Indonesian paper products. At the time, the Chinese products were retailing in Australia at between two per cent to 25 per cent below the cost in their domestic market. Indonesian toilet paper was retailing at 33 per cent to 45 per cent below value. But, in 2009, that decision was overruled by the Trade Measures Branch because no link could be made between the dumped products and so-called material injury to Kimberly-Clark. Kimberly-Clark is a significant employer in South Australia. It is a global company and Scott Wicker, the general manager of their plant, is a first-class manager who is passionate about the product, about his workforce and how highly skilled they are and about occupational health and safety. He is an exemplary employer. I think his contribution to this ought to be acknowledged.

I think it is important that the definition of 'material injury' according to WTO rules is put on the record. With regard to the antidumping regime, material injury is defined as: (1) material injury to a domestic industry; (2) a threat of material injury to a domestic industry; and, (3), material retardation of the establishment of a domestic industry. Minister Clare issued a ministerial direction earlier this year in relation to this. According to this direction, the factors to be considered in Australia include: facts and not assertions unsupported by facts; injury must not be immaterial, insubstantial or insignificant; there is no threshold amount that is capable of general application—each case must be judged on its merits; dumping or subsidisation need not be the sole cause of injury, but must be material; a range of relevant economic factors can be considered, including the kinds of goods in question, level of profits, the number of people employed, terms and conditions of employment and investment in the industry; lack of growth can also be considered as injury where the industry would otherwise be expected to grow; and whether the injury is confined to a specific region or area of Australia.

The WTO rules require that a link between dumping and material injury must be proven, and that is something that must also be looked at. What needs to be considered is that, in the way that these rules actually work, real jobs have been lost. In February 2011, Kimberly-Clark was forced to announce it was closing two of its four tissue machines and was selling its pulp mill in Millicent, in my home state of South Australia—in your home state, Mr Acting Deputy President Bernardi. Over 230 jobs were lost, not counting the flow-on effects to that community. Darren O'Halloran was one of the people who lost his job. I consider that dumping was not the only factor in this case but it was one that the authorities could have taken steps to mitigate if we had had an effective antidumping regime. It was a case of pushing that industry over the edge, to the point where it could not be economic. They produce a world-class product, have a world-class workforce and world's best practice in occupational health and safety. We will never know whether dumping duties would have saved those 200-plus jobs, but I think it would have made a real difference and would have given them a fighting chance of keeping the jobs there.

In my view, when I introduced my private senators bill in an attempt to address some of these serious concerns with respect to Australia's antidumping policy, and in the view of Australian manufacturers, the approach to antidumping has been weighted too much towards the idea of free trade at the expense of Australian industry. The bill was an attempt to improve the balance of the equation and to find a way to address our free trade responsibilities with enough flexibility to allow us to protect Australian manufacturers from dumped products.

Let us put this into perspective. Since 2008, over 200,000 jobs have been lost in manufacturing, and that is a conservative estimate. That is something that Paul Howes from the AWU, who has been outspoken on this issue, has pointed out. And if Mr Howes's views are not accepted, and I think they should be, the government's own manufacturing task force report found that 106,775 jobs have been lost since the start of the global financial crisis in 2007, with a further 85,600 jobs expected to be lost in the next five years.

Our manufacturing industries currently employ approximately 950,000 Australians. They have a huge, huge impact on our economy. That is 950,000 Australians supporting their families, paying their mortgages and being part of their communities, and that is something that cannot and must not be underestimated. Paul Howes's most recent comments relate to the BlueScope Steel case, and he criticised carmakers, saying that the antidumping rules were also there for their protection. I will speak about that if not in the context of the second reading contribution then in the context of the committee stage of the bill.

Central to the bill that I introduced and central to the amendments that I will be pushing for in the committee stage, is a principle of a reverse onus of proof.

Essentially this would mean that instead of an Australian manufacturer having to provide evidence to show that an importer is dumping products, it would be assumed that dumping is occurring and the importer would then have to show that this is not the case, if certain criteria are fulfilled.

The bill also included measures in relation to greater consultation requirements, provisions relating directly to small businesses, and the introduction of an assumed link between dumping and material harm. Many of these items are included in my current list of amendments, and I will discuss them in detail at the appropriate time in the committee stage. However, it is important to note that the intention of the WTO rules is to provide a framework to facilitate antidumping measures. They are not meant to unfairly restrict or prevent such measures or to penalise countries that undertake them. The problem I have is that we have not done what we ought to do to protect Australian industry. Not in the old-fashioned, tariff protectionist era that we saw up until the 1970s, but in a way that ensures that there is a fair and level playing field, that the true intent of the WTO rules is adhered to, that the antidumping regime and the countervailing measures regime in the WTO rules are actually interpreted in a way that is fair and balanced, because I do not think it has to date. We need to change that perception. Instead of saying, 'These are the rules we will follow, no matter what the outcome', we should be deciding on the outcomes we want in a sense within the scope of those rules and how we can work within the rules to achieve those.

A few weeks ago I visited a small South Australian company that makes solar panels. It started in 2011. Tindo is run by three dedicated South Australians and employs 10 people. The panels it produces are high quality, with a 25-year guarantee compared to just five years, for instance, with some other companies. Tindo is Australia's only 60 megawatt PV module manufacturer. While Australia used to make 20 per cent of Australian demand for solar panels, it now only produces about one per cent. That is how the shrinkage has occurred, according to the people at Tindo. Tindo is still in the ramp-up stage and at its full capacity could be employing 100 South Australians—in fact it could expand even more in other states—but it is struggling against cheap imported panels from China and it believes that those panels have been dumped from the information that it has received. So what does it do? It goes and speaks to a law firm to see how it can fight this case. It is quoted—and I am not criticising the law firm for this—$1 million to fight that case. How on earth is a small business, a business that employs just 10 people, but 10 valuable jobs, going to take that on?

I have spoken to Scott Wicker from Kimberly-Clark, part of a global company, part of a successful multinational company, which had enormous costs in fighting that dumping case against Indonesian and Chinese paper products. They did not find it easy, so how on earth will Tindo Solar, with just 10 employees, be able to fund a $1 million case. That is a key flaw in the system. It is all very well and good to say that you have rules in place to protect manufacturers against dumping, but if access to justice—and that is what it is—if access to a fair go is completely out of reach then what is the point? I think the government is moving to rectify that to an extent. That is something that ought to be explored in the committee stage and it is something that I have raised with former Premier of Victoria John Brumby, who I was fortunate enough to meet recently as part of the Brumby review. That goes to the issue of where dumping should be dealt with—whether it should be a separate agency, as I think it should be—but it does not deal with the issue of interpretation, which is outside the purview of the Brumby review.

One million dollars is money that Tindo certainly does not have. It is producing a safe, high-quality product to meet a specific and growing need in Australia. Instead of being supported and encouraged, it is under pressure from all sides. Imported panels are cheaper but they are not necessarily a better or even an equal product. Some of them use DC current, which is less effective and more dangerous. I understand that metropolitan fire services are working on a nationwide strategy to raise awareness about DC solar panel fires. But even the solar rebates and other incentives from state and federal governments to support people in in installing panels do not encourage them to use Australian products. There is little or no support to be found anywhere. I find it adds insult to injury that they do not have the resources in any reasonable way to fight a $1 million case against dumping.

The situation is not much better for larger companies. Last week the Australian Financial Review and other media ran a story about the proposed tariffs for steel imports in response to BlueScope's dumping application. Customs had released preliminary advice that a tariff of up to 15.45 per cent be placed on imported steel. Since then, Ford, Holden and Toyota have all objected on the grounds that it will make cars more expensive to produce in Australia. Holden is a great employer in my home state and they produce a great product, as do Ford and Toyota, at their Australian manufacturing plants. But it is interesting to note that General Motors Holden Managing Director, Michael Devereux, even criticised the lack of legislative exemption for certain industries, and said his company would be approaching the government to change the law. But my appeal to Mr Devereux, who I have not had the pleasure of meeting but I think is a very competent CEO of Holden, is: how would you feel if an overseas manufacture started dumping cheap cars into Australia below cost? The dumping rules should be there to act fairly. I think Paul Howes was right when he made that criticism of car makers, saying that the antidumping rules were also there for their protection. I think it is fair to say that, whatever the views may be on either side of the chamber about Mr Howes and his outspoken views, he certainly does want to keep Australian manufacturing jobs here in Australia and he wants Australian manufacturing to grow. We need to find a balance between imports and protecting Australian industry within the context of these antidumping rules.

In the committee stage I will be talking about ROH Wheels. They manufacture aftermarket alloy wheels and are a very significant South Australian firm. They are firm that has shrunk over the years and I have spent a lot of time with Bill Davidson, their managing director. I think we need to show the farce of our current antidumping regime in the context of what is occurring with respect to what they have faced recently.

I will have a lot more to say about this, but I think it is important that we get it right. Of course I will support this bill because it has a number of useful measures. But unless and until we deal with the issue of the reverse onus of proof, unless and until we provide some real support to small businesses that are struggling against dumped imports so that they can have a fair go, a chance to fight this through the system, then this group of measures will not have the desired effect in giving Australian manufacturers a fair go against dumped products. I look forward very much to the committee stages of this bill, to the amendments, and I hope at the very least, if they are not supported by the government or the opposition, they will be given due consideration. And if they are not going to support them, I ask the government and the opposition to at least tell me why and what other alternatives they have in place to support Australian manufacturing. (Time expired)

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Minister, it is up to you to close the debate.

12:37 pm

Photo of Kate LundyKate Lundy (ACT, Australian Labor Party, Minister Assisting for Industry and Innovation) Share this | | Hansard source

I suppose I could take this opportunity to address the proposed amendments but if there is a committee stage I will wait until then.

Question agreed to.

Bills read a second time.