Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I rise this evening to speak about some of the opportunities that now lie within Australia's grasp. As the Prime Minister said on election night in claiming the strong mandate his government has received from the Australian people, Australia is open for business. Indeed, the first few weeks of the Abbott government have clearly demonstrated that this is the case. Yesterday, in the other place, the government introduced legislation to abolish the carbon tax and the mining tax. These two pieces of rampant economic vandalism will forever mark the grave of the Australian Labor Party's economic credibility. They will forever be reminders of a Labor Party that walked away from the Hawke and Keating legacy of reform and returned to old-guard, class-warfare style Labor. The fact that Labor is still defending these two taxes, still doing everything it can to retain them, just goes to show you that Labor has learned nothing from its defeat.

We have also seen early in the life of this government a concerted effort by the new Prime Minister to restart the free trade agenda, most particularly moving to establish free trade agreements with our key Asian trading partners in China, Japan and Korea, a process first begun under the previous coalition government of John Howard. For all the former government's talk, for all its supposed Asian expertise and for all former Prime Minister Rudd's jetsetting, this is a process that had completely stalled under the former Labor government. These moves from the new government have been welcomed in the wider community. The Australian Financial Review, in its editorial on 9 October, had this to say: 'Tony Abbott has made a very good start to cutting through the thicket of vested interests holding up trade agreements with Australia's biggest Asian export markets.'

Of course, this government will not be proceeding with the former government's fly-by-night proposals for changes to fringe benefits tax arrangements in relation to car leasing. This job-destroying policy approach, which was apparently dreamed up with very little consultation by the former Prime Minister and the former Treasurer, would have had a devastating impact on Australia's automotive industry, which all senators are aware is facing difficult times. Yet Labor—the alleged party of the workers—was perfectly happy to threaten their jobs to try and plug holes in its budget. This is after they had already increased manufacturing costs through the imposition of a carbon tax.

And, of course, the Prime Minister's first trip to Indonesia delivered a deal to assist the live cattle export trade that was so badly damaged by Labor. Thanks to the efforts of this government, now an additional 53,000 beasts have been added to the December quarter quota of 46,000. I know this is particularly welcome news for those producers in regional Western Australia—and there are many of them—who have still been suffering from Labor's hysterical, panicked decision in 2011 to suspend live exports. The incompetent way that the former government dealt with that matter has been devastating for many regional communities, and it is not surprising that the coalition received such strong support across regional areas, especially in my own state of Western Australia, on election day on 7 September.

We know that many in Australia's agricultural sector are facing challenging times, not just those involved in live exports but more broadly. Yet Australia's agricultural sector is also on the threshold of enormous opportunities, and we cannot squander these. The process of globalisation, the great opening up of the international economy to Australian markets and the phenomenal growth of Asia's middle class, which is set to continue, set to grow, is unambiguously good news for Australia's agricultural producers. Australia is presently the world's 12th largest economy, even though by population we are only the 52nd largest country in the world. In terms of size relative to economic activity, Australia is punching well above its weight. Our small population relative to our land mass means that Australia's agricultural sector is able to produce far more than we need to feed ourselves. Thanks to the diligence and ingenuity of Australian producers, our agricultural output is of an extremely high quality. This is where the opportunity lies for Australia, as the burgeoning middle class throughout Asia seeks high-quality products, in agriculture and in other areas. Yet we cannot assume that just because Australia's product is of a high quality and because of our proximity to Asia, that means the benefits will automatically flow. We have overseas competitors who have watched Australia's agricultural success carefully and have learned from it. Those lessons are now being applied, and the competitive pressures on our exporters will only increase.

To remain competitive, Australian agriculture—as with other parts of the economy—must commit to a process of continuous improvement. And, as we all know, these improvements will require an influx of capital—and, yes, some of this investment will need to come from sources outside our own country. There has been a good deal of public discussion over recent weeks about the role and nature of foreign investment in Australian agriculture. I take the firm view that foreign investment in our agricultural sector is not something to be feared. It represents an opportunity, not a threat. I accept that there are those in the community who find the notion threatening. For some, the process of change and modernisation is too difficult to adjust to. But Australia does not have the luxury of turning inwards, or standing apart from these global processes, not if we want our agricultural sector to remain viable in the long term. We cannot turn our back on progress.

I am not here this evening to offer anyone gratuitous advice but I did want to place on the record a few observations. In some respects, I come to this debate with a sense of deja vu. It is approaching 12 months since this parliament passed the Wheat Export Marketing Amendment Bill, which fully deregulated Australia's wheat export marketing arrangements. I have been interested to note that some of the same arguments that were used by those opposed to the deregulation of wheat exports a year ago are being used again in this debate. Indeed, those arguments are coming from many of the same organisations and individuals. In my view, those arguments were not supported by facts last year, and they are not supported by facts today.

The debate about foreign investment should not be used as a Trojan horse by those seeking to reverse the strong and obvious benefits that have resulted from the deregulation of wheat export marketing in our country. It was a one-time Prime Minister of Australia, 'Black Jack' McEwen, who said it was up to government 'to discover the basic facts upon which our national economy is founded.' I am all for that. So let's look at the basic facts around grain exports.

Opponents claim that this takeover should be opposed on the basis that GrainCorp has a monopoly on the east coast. This is simply wrong. Over 50 per cent of Australia's average east coast crop production bypasses GrainCorp's export supply chain altogether. Five years ago, there was just one export buyer for wheat. Today, there are over 20. Likewise with ports, there are four competing bulk terminals on the east coast, three of which are unregulated, competing with GrainCorp's seven ports, all of which are regulated by the ACCC and thus must provide open access. Indeed, only around 30 per cent of the grain passing through GrainCorps's ports is its own product. The rest is owned by other marketers. Far from a monopoly, competition is thriving.

The ACCC has itself found that this takeover would not have a negative impact on competition. In any case, talk of ADM blocking access to GrainCorp ports is counterintuitive. This feeds into another claim—that ADM will seek to close or run down GrainCorp's assets. Why on earth would ADM spend $3.4 billion, its largest overseas investment ever, to acquire GrainCorp only to see its newly purchased export infrastructure used inefficiently? Having made such a large investment, common sense tells you ADM will be working to attract more growers to the GrainCorp supply chain by improving it, not limiting access to it. ADM is committed to investing between $40 million and $60 million on infrastructure each year, improving the efficiency of grain exports from Australia. This is far larger than the investment GrainCorp is otherwise able to make on its own. A GrainCorp that lacks sufficient capital, scale and global market reach will not put Australian growers in the best position to ensure new market opportunities, low-cost infrastructure and the best prices for their products.

Then there are claims that this takeover would hand control of Australia's largest agricultural company to foreigners. In fact, ADM has committed to keeping GrainCorp's management team and CEO based in Australia and to retaining the vast majority of GrainCorp's current staff.

I close with the words of Chris Kelly, a wheat farmer from the Mallee in Victoria, who said this of ADM's move to purchase GrainCorp:

This deal, it ticks a lot of boxes for the 21st century. And we're a big exporting country and we need the absolute best infrastructure and we need the best global connectivity and we need competition - this is the absolute imperative that underscores everything.