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Wednesday, 21 October 2015
Page: 12042


Mr CONROY (Charlton) (16:16): I rise to speak on the China-Australia Free Trade Agreement enabling legislation. From the outset, I make it clear that I support freer trade and I will vote for this agreement, but I do so reluctantly and with open eyes. I do so reluctantly because the coalition government's record on negotiating trade agreements has been diabolical. Seriously, if I were the foreign negotiator and Andrew Robb came to me, I could issue him with anything and he would sign it. This guy would buy the Harbour Bridge. Nevertheless, after a concerted information campaign and strong negotiations led by Senator Penny Wong, the final agreement is sufficient and Labor will support it. I will go to some of my concerns around the FTA in a moment.

I want to inform the House of some of the previous very mixed record of those opposite on free trade agreements. The best place to start is the US free trade agreement—a trade agreement that promised so much but has delivered so little, a trade agreement where they trumpeted modelling that other reputable economic modellers said did not pass the laughter test, and a free trade agreement which has been in operation for around 10 years. Shiro Armstrong from the Crawford School at the ANU, a university and a research school profoundly in favour of trade liberalisation. A research paper by Mr Armstrong has found that not only has our trade balance with the United States not improved but two-way trade with the United States has fallen. Let me repeat that: since the free trade agreement, two-way trade with the United States has fallen. We have seen research from Dr McGovern at QUT which has found that our trade balance with the United States and Thailand has deteriorated since the FTAs were signed, and the Thai FTA is really symbolic of the coalition's very poor approach to trade agreements. They promised that this trade agreement would deliver bounties for the Australian automotive industry and it would deliver thousands and thousands of jobs. What happened is that the free trade agreement was implemented and tariffs fell, nominally allowing Australian cars to be imported into Thailand. What did the Thai government do? The same day, they whacked up duties on large cars, directly targeting the Commodore and the Ford Territory, which meant that our car industry was unable to penetrate the Thai market, and that led to not a single additional job in the automotive industry in Australia.

We had the member for North Sydney's valedictory today which capped off a 20-year contribution to politics, which I honour, but a very important point of his speech was the fact that he spoke positively about destroying the Australian car industry and thereby enabling the free trade agreements with Japan, Korea and China. That is a factual statement. Having witnessed subcommittee of cabinet discussions in the last government, one of the key stumbling blocks between signing the free trade agreements was the impact on the automotive industry in Australia. The member for North Sydney removed assistance to that industry and destroyed 250,000 direct and indirect jobs, enabling free trade agreements. Let's be frank about it: the free trade agreements we are debating now are only in place because the coalition government destroyed the Australian automotive industry. That is a factual statement that the member for North Sydney admitted to in his contribution to his valedictory today. We have a very torrid and mixed situation from the coalition government.

The original free trade agreement was a dog's breakfast. It was a dog's breakfast that led to an information campaign from the labour movement that pointed out the very significant flaws in the agreement, and they were confirmed by The Conversation and the ABC FactCheck unit. Both the FactCheck unit from The Conversation and the ABC confirmed that the claims made by the labour movement were factually correct.

Government members interjecting

Mr CONROY: I note the derision over there. Facts are the enemy of the coalition government. Facts are very inconvenient for those on the other side. Nevertheless, the Labor Party engaged productively and constructively with the coalition government and negotiated on three important areas. We identified significant flaws in the IFA process. We identified flaws in chapter 10 on the free labour movement and in the licensing of skilled trades, and we achieved significant concessions. On IFAs we achieved compulsory labour market testing, not just a mere policy that those on the other side could drop at any time I felt like it. We achieved a commitment to labour market testing, to training plans and to skills transfer, and put in place a real framework to support overseas workers. Chapter 10 was harder because the movement of free persons was embedded in the treaty of the agreement. We achieved a significant concession around all 457 visas which requires the market rate of pay to be the EBA rate of pay when it is applicable. That is an important concession. On licensing, we have achieved a concession where, for example, in skilled trades that require licensing, a 457 visa holder must notify immigration if they have not been able to satisfy the licensing provisions of the relevant state. So, important Labor safeguards have been put in place that make a substandard free trade agreement acceptable to the Australian Labor Party and, I believe, acceptable to the majority of the Australian people.

The skewed priorities of those on the other side are interesting. They were very happy to open up movement of natural persons, to allow Chinese 457 visa holders to come into this country without market testing, but at the same time they screwed down controls on the free movement of capital. They folded to the reactionary National Party, and instead of allowing the Chinese companies to purchase farmland at the same levels that the United States is allowed to under the USFTA, which is $1.1 billion, they have applied $15 million. So it shows who really runs the coalition government. It is the reactionary National Party, who allow Chinese labour to come in without labour market testing but will not allow Chinese capital to come in and invest in this country and improve the liquidity of the agricultural sector. It very clearly shows who controls those particular parties.

There is still more work to do. We have made that clear. This is not the agreement we would have negotiated. I am still very concerned about investor-state dispute settlement clauses that give foreign corporations the right to sue the Australian government for decisions we make to improve the welfare of Australians—a clause that we are seeing in operation right now, with the Hong Kong arm of Philip Morris suing the Australian government. We would not have negotiated that. The Labor Party's policy is not to include ISDS in free trade agreements, and our policy is to remove it where possible. We would not have negotiated it.

This whole tawdry episode has demonstrated the need for more reform around 457 visas to avoid exploitation. We need genuine labour market testing that demonstrates that Australian workers have been offered real opportunities to apply for the work first. We need adequate market rates of pay—not a tick and flick exercise—where there is genuine exploration as to the market rate of pay the Australian employer should pay. Also, we need genuine enforcement. There are 300 inspectors in the Fair Work inspectorate, who are tasked with overseeing the entire industrial relations system of this country, including the 457 visa system. That is simply insufficient. We need to employ more inspectors. To fund that, I would argue that we should go to a full cost-recovery for the fees that we charge 457 visa applicants, because the Australian people need to have confidence in the 457 visa system. I support the system, but it should be there to allow Australian employers to fill short-term skills gaps. It should be there to fill genuine gaps. To do that the Australian people need to have confidence, a) that Australians are not interested in the jobs, b) that market rates of pay will be paid, and, c) that there will be adequate enforcement and oversight so that we do not see the abuses that all too often come to light.

I acknowledge that the last Labor government moved on the 457 visa area. They made significant improvements, but it was not enough. So I am not saying this is a partisan issue. More needs to be done, no matter who is in power. We need to have a sophisticated trade debate. I support trade liberalisation, where there are adequate safeguards for the environment and for the labour movement. The interjections from the other side show just how incompetent they are. They fall into slogans about Paris and everything else. I support trade liberalisation, but it must be done in a way that does not impugn the sovereignty of the Australian government, does not affect labour safeguards, and does not undermine our environmental sovereignty. I will be very interested in reading the Trans-Pacific Partnership text to see what those provisions are, because I know the United States government insisted on them.

So, let's escape from these superficial slogans. Let's have a fair dinkum debate about trade. I support high-quality trade agreements that do not merely divert trade. But, unfortunately, under the coalition government we have seen too many tick and flick exercises where harbour bridges have been sold—Minister Robb. We have seen the USFTA over-promise and under-deliver and the Thai FTA over-promise and under-deliver, and I am hoping the China-Australia Free Trade Agreement does not fall into the same gap. I am not talking from a rabid lefty point of view. I am voicing the concerns of the Productivity Commission, for example, and I am voicing the concerns of the Crawford School at the ANU—so it is hardly rabid left-wingers. I will vote for the China-Australia Free Trade Agreement enabling legislation, because, as amended by Labor's negotiations, it is a satisfactory agreement that I am satisfied will have employment outcomes for Australians, but it must not be done with increasing exploitation of foreigners or by undermining Australian wages and conditions.