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Wednesday, 23 June 2004
Page: 31314

Dr SOUTHCOTT (5:15 PM) —The agreement was reached in early February this year. The draft text has been available since March. The national interest analysis has been available since March and it shows the legislation which is required to bring the agreement into force. It is worth posing the question: how long will it take until we hear whether the Australian Labor Party will vote for this or vote it down? It is okay to say, `We need more time,' but perhaps in looking at the legislation they might have actually addressed the question of whether there is any piece of legislation which says anything different to the NIA. There is not. I doubt the Labor Party have even bothered to look.

First of all, it is a disgrace that the Shadow Treasurer, a member of the House of Representatives, which is the House where government is formed, has absolved himself of his responsibilities—washed his hands—and said it needs to be decided in the Senate. It is an absolute disgrace—an abdication of responsibility. If this legislation does not pass, the Labor Party will need to explain to beef farmers why we will not get increased access for beef to the United States, which is there in the agreement. They will need to explain to the lamb industry, the sheep industry and so on why we will have given away the increased access for sheepmeat. They will need to explain to the dairy industry—cheese makers and so on—why we will have given up the tripling of access to the United States dairy market.

They will need to explain to the automotive, metals, minerals, seafood, paper and chemicals industries why we will have given up what we have gained for these industries in this agreement. They will have to explain why Australian businesses will not be able to gain access to the $200 billion federal government procurement market in the United States. They will need to explain why Australia could be subject to a global safeguard action taken by the United States under the WTO section 201 legislation. Some of the cases that we have seen in recent times involve Howe Leather, the lamb industry and, potentially, steel. If we ratify the agreement then there is a provision whereby as long as Australia is not the cause of damage to the domestic industry in the United States the US President will have the discretion to exempt Australia from section 201. The Labor Party will need to explain to the wine industry why Australia should not get the same access that competitors of Australia like Chile and South Africa now have in the United States. There will be free trade in wine if the agreement is passed, and the United States is now Australia's biggest market. The Labor Party will need to explain why we would give up a framework to progress the issue of mutual recognition of professional services and the movement of businesspeople. There is a lot on the up side.

But if I understand the Labor Party's argument, the central proposition seems to be this: in looking at the negotiation, had Labor been negotiating it we would have got much more access and we would not have given a thing away. That is not credible. The base proposition seems to be that we should have got 100 per cent of what we wanted and given away zero. That is just not credible. It is not possible in a negotiation. I have mentioned all the areas where there is a benefit. To gain more access than that in a negotiation you have to show what we would be prepared to give up. The things that the United States negotiators were interested in included the Pharmaceutical Benefits Scheme, the local content rule in the audiovisual sector, quarantine measures and our intellectual property regime. Having looked at the agreement, taken over 200 submissions and participated in 11 days of public hearings right around the country, I am convinced that the balance here is right and that we do actually retain the integrity of the Pharmaceutical Benefits Scheme.

On the Pharmaceutical Benefits Scheme, the committee's report—and this part of the report was unanimous—says the following things. Mr Stephen Deady, the chief negotiator, said in evidence before the committee:

The fundamentals of the PBS—the pricing and listing arrangements—were something that we were not prepared to negotiate on, but there were aspects of transparency and process that we were prepared to talk about.

Dr Ruth Lopert, of the Department of Health and Ageing, pointed out that there is currently no review mechanism for the Pharmaceutical Benefits Advisory Committee. There is nothing. If an application before the PBAC is refused then you either reapply or, in extreme circumstances, you do as Pfizer once did when they took the PBAC to the Federal Court. This is a review mechanism—that is all. It is looking at the PBAC, not price. The PBAC deals with listing. The PBPA—the pricing authority—deals with pricing. This does not deal with the price of pharmaceuticals.

The report said—and again, there was no dissent from this from Labor members:

... the Committee heard no compelling evidence that would convince it of the linkage between the Agreement and any price rise.

The important thing to say about this review mechanism is that Australia will shape it. We will shape it consistent with our commitment under this agreement. There will be widespread consultation—and that consultation has already begun. Dr Ruth Lopert, from the Department of Health and Ageing, said:

... a number of stakeholders have already been consulted ... We have held stakeholder briefings in which representatives of other organisations have put forward very strong and carefully thought through views on how they see the review mechanism should be implemented and we are continuing to canvass these opinions with a view to arriving at an implementation of the review mechanism which reflects the interest of the key stakeholders.

Dr Lopert went on to say, `A paper will be developed and circulated for further comment from a broader range of interests.' In conclusion, in relation to pharmaceuticals, the committee said—and again there was no dissent from opposition members; this was drafted together:

The Committee understands that Australia will shape the review process subject to the commitments outlined in this chapter.

I want to move on to some of the other evidence we heard. The previous speaker, the member for Hotham, spoke a little bit about sugar. The evidence before the committee was that sugar was in CAFTA—that is right—and that there had been a negative reaction to that in the US Congress. The opinion of the negotiators was that they were very disappointed that we did not gain increased access in sugar. Everyone was disappointed. Ian Ballantyne, of the Australian Canegrowers Council, said before the committee:

... the exclusion of sugar should not prevent Australia from making its decision to enter the agreement ... We would not like to see a positive outcome for the country overturned because of lack of sugar.

Mr White, of Queensland Sugar, said:

Our position is exactly the same as that of the industry on that point.

Mr White went on a bit later to say:

... while the industry was disappointed, at no stage ... did we expect or anticipate that the trading arrangements that may be ratified between Australia and the United States would be overturned because of the lack of sugar's involvement.

... ... ...

Having said that, we certainly would not take the position: sugar out, all out. I wish to reiterate that point.

The free trade agreement has been out in public since February. Before that there were six rounds of negotiation. The draft text has been available since March, and the NIA has been available since March. Perhaps after all this time we could get a lead on which way the Labor Party is leaning—towards ratification or towards voting against it. Come on! We know what this is. This is an excuse. But ultimately the Labor Party will have to vote for the free trade agreement with the United States, because the weight of evidence is in favour of ratification. The Premier of Queensland, Peter Beattie, said:

I believe that the AUSFTA—

that is, the Australia-US free trade agreement—

will deliver important benefits to Queensland and Australia.

The South Australian state Labor government considers that the Australian-US free trade agreement will `provide substantial benefits to the South Australian economy and community'. On that, the groups involved in business who support ratification without delay include Alcoa, the Australian Dairy Industry Council, Medicines Australia, the Australian Information Industry Association, Meat and Livestock Australia, the Peanut Company of Australia, the Ford Motor Co. of Australia, Baxter Healthcare, the Business Council of Australia, the Australian Chamber of Commerce and Industry, the Minerals Council of Australia, the Federal Chamber of Automotive Industries, the Australian Medical Association, Holden, the Australian Wine and Brandy Corporation, the National Farmers Federation, the Winemakers Federation of Australia, Horticulture Australia, the Australian Stock Exchange, the Tuna Boat Owners Association, the Distilled Spirits Industry Council of Australia, the Australian Meat Industry Council, the AUSTA Business Group as headed by Alan Oxley, CPA Australia and the South Australian Farmers Federation.

The groups that are saying, `Do not ratify,' are well known. They include the ACTU. The ACTU came before the committee with a submission saying, `This agreement is terrible, and here are 10 or 12 reasons why.' It is just not credible to have such an unbalanced view. They had nothing good to say about it all. We heard from Doug Cameron of the AMWU. His views are well known. They could be factored in. We heard the same from Dee Margetts.

I want to touch on the issue of generics. The previous speaker, the shadow Treasurer, raised the issue of evergreening. It is a serious issue, and we would not like to see evergreening in Australia. It was raised in evidence. In paragraph 16.94, the committee concluded:

The Committee accepts however that the situation in Australia will be different due to our different legal and regulatory environment ...

We also heard from Stephen Deady, who said:

We certainly were very conscious in the IP—

that is, intellectual property—

negotiations to ensure that, regarding any commitments we entered into in the patents area in relation to the marketing approval processes for generic drugs, this would not in any way damage the generics industry in Australia and feed into delays that could impact on the Pharmaceutical Benefits Scheme.

On the list of bills that we are considering, there is no bill to implement the independent review mechanism for the PBAC. The reason is that it can be done under existing legislation. So this massive change that we have heard has the potential to undermine the PBS does not require any change in legislation. Those two points are contradictory. What it means is that this is a review mechanism. A review mechanism of itself does not lead to increased prices. It is simply something fair. In conclusion, I support the bills, I support the agreement and I hope that the Australian Labor Party will ultimately be able to vote in favour of the free trade agreement with the United States.