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Wednesday, 21 October 2015
Page: 12105


Dr STONE (Murray) (20:46): I rise to very strongly support this Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015. I only wish we could have celebrated this event some five or even seven years ago. As the National Farmers' Federation said in their submission to the Joint Standing Committee on Treaties inquiry into the trade agreement between Australia and China—and I belong to that committee:

There are approximately 115,000 farm businesses in Australia, 99 percent of which are family owned and operated.

Each Australian farmer produces enough food each year to feed 600 people, 150 at home and 450 overseas. Australian farms produce around 93 percent of the total volume of food consumed in Australia.

At the same time, we import over 37 per cent of our manufactured food product, in particular frozen vegetables and manufactured vegetables, and we need to really think hard about that. The agricultural sector contributes some 2.4 per cent of Australia's total GDP at the farm gate, and the gross value of Australian farm production in 2013 and 2014 was $51 billion, which was a six per cent increase from the previous year. The good news is that during that year, while we had horrendous drought, there was a drop in the Australian dollar and some recovery from the millennium drought, Australia's longest and worst drought on record.

However, when you add in the value of the vital value-adding processes that food and fibre goes through after it leaves the farm, along with all of the value of all economic activities supporting farm production through such things as the farm inputs, then agriculture's contribution to our GDP averages out at around 12 per cent, or $155 billion.

All of that is a rosy picture, as presented by the NFF, but the fact is that without international market access Australian agribusiness cannot thrive or continue to grow. My electorate of Murray depends on the further development and growth of export market access for the food and fibre that we produce. For example, if all farms were wholly dependent on domestic food sales in Australia, whether for selling their fresh or their processed product, they would be at the mercy of a grocery retail sector which has the most concentrated buyer power in the world. Coles and Woolworths own more than 80 per cent of the retailing action for food and beverages in the country. They can and do exercise that market power mercilessly. The ACCC has only recently begun to put some brake on the impacts of this exploitation and market domination. There have been fines, warnings and efforts to get compliance with voluntary codes of conduct, particularly in the grocery sector, with particular focus on Coles and Woolworths.

When a food grower or manufacturer can export their fine foods and beverages, thereby stepping out of the clutches of the big duopoly, then they have a better chance to maximise the value of their research and development investment in innovative new product and in their brands. In Australia they face the tyranny of the big two's drive towards replacing manufacturers' sometimes historic and certainly iconic brands with 80 per cent generic labels or home brands at down, down, down, and everyday low prices. The big two in Australia seem to think that all the customer ever wants is cheaper and cheaper food. They imagine a dollar a litre for milk is a dream come true for the average householder in Australia.

China is Australia's largest export market for agricultural products. These exports are worth some $10 billion to the economy, but we are less competitive than our neighbour New Zealand when it comes to beef, wheat, sugar, dairy, wine, horticulture and seafood exports because of the high tariffs we now experience when Australia sells to China. We need this agreement to eliminate this range of punitive tariffs, and we needed this agreement yesterday.

The New Zealand free trade agreement was signed on 7 April 2008 and came into force in October that year. The Chinese consumer has had seven years to become familiar with the New Zealand dairy products, in particular their infant formula and their cheeses. They have come to believe in the value of their wines, their beef and their fruits. It took New Zealand only three years and 15 rounds to negotiate their agreement with China. It took us ten years and 21 rounds before our agreement was completed in November 2014—and if the Australian unions could get their way, we would still be stalling this agreement with concocted fears of a flood of cheap, unskilled Chinese labour turning up on work sites across our wide brown land.

I have to laugh because, of course, within my electorate I have some very old goldmining towns like Rushworth, and not far away are Bendigo, Maryborough and Castlemaine. I have in my house a piece of furniture from the 1800s with a stamp on the back that says, 'Guaranteed European labour only. Made in Australia.' This was the fear at the time—that Chinese labour would be outcompeting the good old Aussie, who of course at the time was probably born in Germany, the UK, Ireland, Scotland or the US. The fear was that these Chinese labourers off the goldfields would destroy the working man's wages and conditions if they were allowed to ride roughshod over other competing labour in the workplace.

And, you know, that fear is with us still. In a press release sent today by the Australian Unions team, they say, 'Come to our town hall meetings, where we can talk about how to stop any of these agreements in the future.' 'Shock, horror, fear and loathing,' I say to myself. What a terrible shame and what an indictment of all Australians, when there is this pretendy fear, which is still with us and which must have been really quite concerning for some of our Chinese agents and traders who have been working with Australia for a very long time and who perhaps had not experienced that xenophobia before. But it is alive and well, of course, in the Australian Unions team, as they call themselves.

New Zealand has already reached zero tariffs on apples and on seafood. We have great apples and pears and seafood too in Australia. In fact, the vast majority of apples and pears are grown in my electorate. Some 80 per cent of Australia's pears are grown in my electorate. But it will still take us another four years to reach that zero tariff equivalent with New Zealand for apples, pears and seafood after the China free trade agreement with Australia comes into play and when we have got those protocols developed and completed for each of those products. Hopefully all of that will happen sometime very soon, and I am so pleased that the opposition has finally come to its senses.

All the New Zealand tariffs on butter, liquid milk and cheese will be phased out by 2017, not very long away, while Australia's dairy products will still not see an elimination of tariffs for between four and 11 years. That is because we are starting so late. We need this free trade agreement with China, as I say, not in a year's time, not in five years time, not 'never, ever', as the unions would have it; we actually needed it yesterday, not stalled indefinitely by the out-of-touch union movement struggling to have some airplay or some relevance in the 21st century. New Zealand will have some 96 per cent of all of their China tariffs for their agricultural products phased out by 1 January 2019. Australia will have those tariffs removed some seven years later. We are beginning some seven years behind.

As China's population increases and their middle classes expand, as their arable lands, once used for agriculture and their own food sufficiency, are diminished by industrial contamination or urbanisation and as their rural workforce ages and concern about their own food safety grows, Australia stands poised to fill the gaps. We can provide their infant formulas, their children's foods, foods for their middle classes, their boutique products, their wines, their confectionery. We can also of course supply marvellous services—things that we excel in like aged-care and health services, which they are increasingly understanding they will need as their population ages.

My electorate of Murray is a pre-eminent high-quality food production region. Pactum Dairy in Shepparton, for example, provides milk to China's Bright Dairy right now, for 250-millilitre protein drinks. Bega in Tatura is manufacturing and exporting fabulous infant formula. More unusually perhaps, more than 10,000 live young heifers have been sent to build the dairy herds of China. Recently a Shepparton vet was recruited to manage some of these dairy herds for Fonterra in China. It will be ironic, in that many of the cows he will be dealing with will either have been born and bred in the Goulburn Valley or will be descendants of those heifers, many of them sent during the worst drought on record, the Millennium Drought, in an effort to save the remaining herds in the Goulburn Valley.

We now have some Chinese ownership of dairy farms in the Goulburn and Murray valleys, and we welcome that, as we welcomed the New Zealand dairy farm owners a generation before. As I mentioned, there are also Australian education and health services which are being welcomed in China. They are appreciated as their population ages. Our aged-care innovations and agencies are being sought out to add real value and innovation in China.

But there are also some unique Australian products in demand in China, despite the 14 per cent tariff now in place. I am referring to kangaroo leathers manufactured by Packer Leather of Queensland. They gave evidence to our Treaties Committee as part of the ChAFTA inquiry. They employ over 116 staff, both casual and permanent. China is their third-largest market, and in all they export to 19 countries. They aim to have their product used in the highest-quality men's shoes, particularly sports shoes, in China. In this case, there is no doubt that this free trade agreement will address the HS code classification for kangaroo skins, because, at the moment, the same HS code is used for goat and kid skins, swine and reptiles. Clearly kangaroo is in a little bit of a class of its own when you compare it with those other products.

This will be part of the efforts which will continue once this free trade agreement is finally through this parliament. There will be so much more work to do with developing the protocols and looking at the HS codes which are used. I too would like to commend all of those who over the years have slaved away to try and bring about this agreement. I am sorry that it has taken so long. I am sorry that it has been stalled, or that attempts have been made by the Australian trade union movement to stop it in its tracks. I think that is a disgrace. Clearly they are totally out of touch and have no interest in the jobs of Australians and in greater opportunities for agribusiness in this country. I strongly commend this China-Australia Free Trade Agreement to the House and to the nation.