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Wednesday, 21 October 2015
Page: 12058


Ms O'NEIL (Hotham) (17:21): I am really pleased to contribute to the debate this afternoon, and there are three big points I want to make in the time allotted to me. The first is that the labour market issues and other concerns that Labor had about this agreement were very real but, in large part, they have been resolved. I will take some time to go through some of the issues that we identified and how they did, ultimately, get resolved. The second point agrees with some of the comments made by the member for Longman—there is significant opportunity in this agreement and significant opportunity in China. The third point is the barriers that we face to embracing those opportunities. One of our very intelligent caucus members said today, 'On the other side, they see a trade agreement as the end of the discussion; we see a trade agreement as the beginning of the discussion.' I want to talk about some of the policies that Labor want to implement to ensure that we do not just have a great looking piece of paper but that we have lots of people who are benefiting from the agreement right across the Australian economy.

I think that we can all say in full frankness that the China-Australia Free Trade Agreement contained some provisions that Labor would not have signed up to. There are real issues with the way that this agreement was negotiated in terms of the ability that it gave Chinese business owners in Australia to bring Chinese labour into the country and to do what we saw as threaten some Australian jobs. Some of the things that were allowed under the agreement meant that companies that were undertaking projects worth more than $150 million—which, in infrastructure terms, is actually not such a large number—would be able to use Chinese labour on those projects. One of the other issues was around skills assessment. The agreement specifically laid out a set of skills for which a visa could be granted without the applicant having to demonstrate the ability. These were amongst a range of issues that Labor saw in the agreement. We went out and talked to Australians, and they talked to us about worries that they had and how this would affect them. That is the basis on which we have negotiated with the government.

I want to pay tribute to the shadow minister Senator Wong, in the other place, who has done something really quite extraordinary and made bigger changes to this agreement than have been made to any other agreement that Australia is a signatory to. I will turn to some of the things that have been achieved through the negotiations of Senator Wong and the Labor team working with our leader Bill Shorten. On labour market testing, the fundamental issue has been resolved, so labour market testing will now be written into all work agreements for all different types of jobs in Australia. An Australian jobs test, again, will now be written into department guidelines. Training plans were important for Labor, and again those have been written into departmental guidelines. Skills transfer requirements have been implemented. Overseas worker support plans have been implemented. Something quite important is that, because of Labor's changes, the ChAFTA plus, the minister will now have an ability to include conditions such as ceilings on 457 workers. Something else that has been very important to Labor is transparency. We want to understand the labour market impacts of this agreement over time. Labor have been able to negotiate for the immigration department to report annually on the impact of the agreement on Australian workers. That gives a little bit of a flavour to how wide, varied and significant the changes that Labor have been able to negotiate are. I think this is quite consistent with Labor's philosophy and approach to trade—that is, we really are the party of free trade. We have done so much on this side of the House to open up Australia's economy to the world to help our exporters access overseas markets. But we are not going to do it in a way that means that ordinary Australians do not benefit. That is not what the Australian government is there for.

I am very proud of the changes that have been made. They now allow us, as a parliament, to turn our minds more to the opportunities and benefits of this agreement and what it is that we need to do as Australians to embrace them. I say that with full acknowledgement that there are some significant wins in the China-Australia Free Trade Agreement. We hear a lot about the opening up of markets for goods exporters—so tariff reductions for wine, manufacturing goods, resources and commodities. Dairy has also been a significant winner under the agreement. Those things all very exciting, but we should not ignore the extraordinary difference that this will make to the services industry and its ability to export to China. Financial services, education services, mining services—and we have some of the best firms in the world in that regard—telecommunications services, legal services, construction services, and architectural services will now be able to realistically export to China.

I have not seen what I believe to be good estimates of the jobs figures, but I think that, when we want to understand the potential impact of this agreement, we need go no further than look at the quantum of the market size in China versus Australia. I will share a few figures with House. If we are looking at education, the number of young people in Australia between the ages of five and 20 is just over four million; in China, it is 236 million. In relation to motor insurance, there are 18 million cars on the road in Australia at the moment; in China, there are 154 million cars on the road. One of the provisions in this agreement allows motor insurers to export their products to China, and that is the market size that they will be looking at. In financial services, there are 236 people living in Australia right now who have more than $100 million in private wealth; in China, that number is almost a million, and it is growing. So you can see that there is an enormous opportunity to be captured here, and a free trade agreement gets us at least to that first step.

The benefits that we see are significant. With goods, we will see some jobs growth in Australia and some revenue and profits realised in Australia. With services—both those delivered here in Australia and offshore in China—we hope to see some jobs results there as well. We talk down a little bit the services economy in Australia, but, when you look at the data, there is a lot of reason to celebrate what we see as a thriving services industry in our country. The reality is that the vast majority of Australia's GDP is generated through services; the vast majority of Australians work in services. That is something that we should be celebrating. The reason is that, when we look at economies around the world, it is quite clear that, as economies develop, services over time take up a larger share of the economy. That is what we have seen happen to Australia.

The agreement is important for another broader reason, which I have not really touched on. It will allow Australia to export more. Again, when we look at the data, we can see that there is significant opportunity for us to grow faster if we are able to export more. There is a simple fact in all this, and it is that if we look to 2020 Australia's economy is projected to grow at just under three per cent—but we have quite a large growing population, so it is actually not such a large figure—but the Chinese economy is projected to grow more than six per cent. So if we can tap into that growth then we are going to grow faster. It is simple maths.

We also see it when we look at the share of our GDP that our exports make up. For a country like Australia, exports are actually quite a small share of our GDP. That is something that this agreement will have some capacity, at least, to change. When we look at the ratio of exports to imports, in 2012 we see that Australia exported about 21 per cent. But a nation like Korea exported 57 per cent. So we can see that there is significant growth potential there.

One other point that I want to mention before I move on to some of the barriers in the path of accessing the benefits of the agreement is to note that, on the Labor side, we talk a lot about the jobs of the future. When we look at the 10 fastest growing, high-skill jobs, we see they are all jobs in services. In fact, when we look at the 10 fastest growing, low-skill jobs, I think nine out of 10 of those are in services. This is just the reality and the quicker that we understand how to promote and build a strong, thriving and high-skill services economy then the quicker we will take up these opportunities.

One critical difference between those on this side of the House and those on the other side of the House is that we regard this agreement as the beginning of the discussion about Chinese engagement, not the end of it. We see that there is real discussion in the Australian community about this, the tone of which suggests that this is a fait accompli, that Asian engagement, our connection to China and the growth that will be built on this opportunity is just going to happen without us really trying. When we look at the figures, there is lots of evidence to suggest that that is absolutely and completely incorrect. There is a lot more thinking that we need to do as a country both within government and within the private sector about how we engage with Asia and how we can improve that engagement because, today, we are quite behind where we need to be.

A great microcosm of the deficiencies in this area is the treatment of the Australia in the Asian century white paper. The former Labor government worked incredibly hard, negotiated and consulted widely, and put together an excellent document that would chart Australia's increased engagement with Asia over what will be the Asian century. That document was brimming with policy ideas, but it has been taken down from all the government websites and thrown in the bin and locked in all the cupboards. It is as if the document did not exist. I hope that with the new Prime Minister there is an opportunity for him to say that this is good policy, that it is a good document, that it is a set of initiatives that are urgently needed to resolve this problem of Asian engagement.

It is particularly critical because the services exports that we have been talking about so excitedly in the chamber are going to require a much deeper level of engagement than we would usually regard as essential for goods exporting. If I could provide a quick example. What we might see for an exporter of wine, for example, is that they need one really good quality relationship to make an export opportunity work in China, because they can transport the ownership of wine on the dock to an importer in China and the legwork can be done at the other end. It is not how all the export arrangements work, but it is how some of them work.

We see there is an opportunity in aged care, for example, where an Australian businessperson is going to be expected to find partners in Asia, buy property, understand the complex regulatory environment for assisting the aged, understand cultural things about how to care for people when they are sick and understand extensive human resources and staff management issues. These are very delicate matters that are going to be hard to do if interpreters are going to be required at every step of the way. Things like Asian languages, spending time overseas studying in Asia—all of these things will be critical.

I will conclude my comments because I know we are trying to move through this debate quickly. I reiterate that I am really proud of the way that Labor have handled this agreement. We have been able to step back from what has been a fiery public debate and accept that there are benefits on the table here but also acknowledge that we need to conduct our free trade negotiations in a way that ensures free trade benefits for ordinary Australians. That is what we have been able to do. I am proud to support this on behalf of the people of Hotham. Thank you.