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Thursday, 9 February 2012
Page: 556

Senator BRANDIS (Queensland—Deputy Leader of the Opposition in the Senate) (13:11): The opposition supports the Customs Amendment (New Zealand Rules of Origin) Bill 2011. Australia's economic relationship with New Zealand is the deepest that we have with any country. Prime Minister Key, on his recent visit, made the point that more than half of direct foreign investment in New Zealand, around $50 billion, comes from Australia. Last year, Australian exports from New Zealand totalled just over $8 billion, which is not far from the $9 billion Australia exported to the United States.

The cornerstone of our trade and economic relationship is the Australia-New Zealand Closer Economic Relations Trade Agreement, which came into effect on 1 January 1983—one of the fruits of the Fraser government. The agreement is a compre­hensive and wide-ranging agreement that provides New Zealand and Australia with liberal access to each other's goods, services and investment markets. The objectives of the agreement are to strengthen the broad relationship between Australia and New Zealand, to develop closer economic rela­tions between the member states through a mutually beneficial expansion of free trade between New Zealand and Australia, to eliminate barriers to trade between Australia and New Zealand in a gradual and progress­ive manner under an agreed timetable and with a minimum of disruption, and to develop trade between Australia and New Zealand under conditions of fair competition.

On 1 January 2007 the agreement's rules of origin provision underwent significant change to allow both the change in tariff classification method and the regional value content method to be used to establish whether goods are New Zealand originating goods. As part of the 2007 amendments to the agreement, both parties also agreed to perform a review of the new rules of origin within three years of their taking effect. This review commenced in late 2008 and was completed in March 2010. It resulted in amendments to the text of article 3—that is, the article dealing with the rules of origin—and the related product-specific rules in annexure G to the agreement. The modifi­cations to the agreement will reduce the administrative burden on business and increase the eligibility for duty-free entry of goods into both markets. The amendments will also provide greater consistency between the rules of origin in the agreement and those in other free trade agreements entered into by Australia. The purpose of the bill is to amend the Customs Act 1901 to implement amendments to the rules of origin requirements under the Australia-New Zealand Closer Economic Relations Trade Agreement and amend definitions within the act. The requirements are outlined in article 3 and annex G to the agreement. The amend­ments to the Customs Act implement the amendments to article 3 of the agreement. The amendments to the Customs (New Zealand Rules of Origin) Regulations 2006 will implement the amendments to annex G of the agreement.

The bill will amend division 1E of part VIII of the Customs Act to insert a new definition of 'aquaculture'; amend the defini­tion of 'manufacture'; amend the definition of 'produce'; amend the provisions dealing with 'wholly obtained goods'; amend the provi­sions relating to eligibility based on the last process of manufacture; insert a new section to provide that goods are not New Zealand originating goods merely because of certain identified operations; and make consequen­tial amendments to the verification powers in division 4D of part VI of the Customs Act.

The relationship between Australia and New Zealand is underpinned by the free movement of people between the two countries, by regular contact at the political level, by close defence ties and by a range of economic and diplomatic agreements. I wish the Senate to acknowledge the fact that former coalition Prime Minister John Howard and foreign minister Alexander Downer were pivotal in advancing the economic and cultural relationship with New Zealand, and this legislation reflects a process which was initiated by the Howard government. The coalition supports the bill.