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Wednesday, 23 June 2004
Page: 31374

Mr HARTSUYKER (7:10 PM) —I would have to say that it was with some surprise that I heard the member for Melbourne Ports, normally one of the more reasonable members on the benches opposite, proclaim that The Nationals are very much a protectionist party when the very minister who has negotiated so very strongly on behalf of this country in this free trade agreement we are here to discuss is in fact the Deputy Leader of The Nationals and the Minister for Trade, Mark Vaile. Also, I take some exception to any notion that we have a selective trade agreement because it is not credible to think that we are going to get everything we want in an agreement on trade. We have to come up with an arrangement that meets the needs of both sides—that meets the needs of the US and meets the needs of Australia. I think that Minister Vaile has done a sterling job in coming up with an arrangement which is going to be of great benefit to Australia. It is going to be of great benefit to the US and it is going to have a substantial impact on our future as a nation.

I think the FTA is an important milestone for Australia. It bears witness to the standing that Australia has in the international community. It bears witness to the strength of the Australia-US alliance and links in the international world. It is incredible to think that Latham Labor are potentially going to turn down a deal with one of the world's largest, most dynamic and progressive economies that offers far improved trading conditions. It is astounding! It was said that the successful conclusion of a free trade agreement with the US would alienate us from Asia. That is what the soothsayers on the opposition benches were saying. Certainly, I think that has been very much the line that has been pushed by Latham Labor and that has proven to be untrue. We have recently negotiated free trade agreements with Thailand and Singapore and we have also been able to go some way along the path to investigating the possibility of a free trade agreement with one of the world's most populous countries—that being China.

The figures show that there are some very substantial benefits that this free trade agreement will bring. The figures produced by the Centre for International Economic Studies—and many members have previously quoted those figures—show that there is some $6 billion per annum in benefit to the Australian economy within a decade, which represents some 0.7 per cent of GDP. That $6 billion a year is not just a number. What does it mean? It means more jobs, higher living standards and a better future for Australians. It is not just a number; it is a real outcome that I and this government believe will be delivered as a result of the free trade agreement.

The benefits of this free trade agreement are not merely restricted to the financial benefits that will be derived by this country. I think that the free trade agreement will provide a strengthened association and will allow companies to build long-term relationships. Even in those areas where access to a particular market is phased in or is only relatively limited in the initial stages, it will provide the opportunity for many Australian firms to create critical associations with American companies, which may lead in the long term to far greater outcomes. I think when you look at the free trade agreement, the value of this agreement is very much more than a simple arithmetic sum of its parts. The potential associations which we can build will be of great benefit to this country into the future.

There will certainly be some very great improvements in our trading conditions. Admittedly, we did not get all we wanted, but we have substantially improved our trading position. As a result of this agreement, some 97 per cent of US tariff lines on Australia's non-agricultural exports, excluding textiles and clothing, will be duty-free from day one. There will be greater benefits to the mining, metals and chemicals industries, to sectors including the motor vehicle and motor vehicle parts industry—which is of so much interest to the member for Melbourne Ports—and the seafood industry. They will all benefit under this free trade agreement. All trade in non-agricultural goods will be duty-free by 2015. It is a great outcome.

With regard to agriculture, there are also significant benefits, some of them immediate and some of them phasing in over time. Our beef producers will enjoy the immediate elimination of in-quota tariffs. Quotas will be increased over time and out-of-quota tariffs will be gradually phased out, such that free trade will be achieved by year 19, subject to some permanent safeguards. There will be improved access for dairy, wine, horticultural products, sheepmeat, cereal, seafood, wheat gluten, processed food, cottonseed and forest products. There are some fantastic opportunities for a range of our agricultural products. This agreement also preserves the single desk arrangements for the international marketing of commodities such as our sugar, wheat, rice and barley. This is a very good arrangement for Australia. The free trade agreement also retains the integrity of our important quarantine regime. Our right to protect our animal, plant and human health will be preserved by this agreement. That is very important to Australia and certainly something that was very close to the heart of the Minister for Trade when he was negotiating this arrangement.

Despite the benefits that our agricultural industries enjoy, it is regrettable however that we were not able to achieve all that we were seeking out of this agreement. I know that Minister Vaile went to great lengths to improve the position of our sugar growers. Whilst in the chair, Mr Deputy Speaker Causley, I know that you do not represent an electorate but, when out of the chair and representing your constituency as the member for Page, I know you are very concerned about the plight of the sugar growers. I know that our highly efficient growers in the Clarence Valley were disappointed that they did not secure greater market access. However, despite that disappointment, I think it is important to note that, whilst there was no increase in access for sugar into the US market, there was no loss of existing quota. I think members in the industry, certainly many of the farmers to whom I have been speaking—many of our very efficient farmers—have been quite reasonable and have said that, just because we did not get what we wanted in sugar, that was no reason to not sign the free trade agreement, which could be of so much benefit to the country. Certainly I think that it would have been irresponsible and against the national interest to not have a deal purely because we could not make headway in relation to the very important sugar industry.

I would like to point out that the government has not left the sugar industry in the lurch. The $444 million assistance package to the sugar industry will go quite some considerable way to alleviate the pressure that the sugar industry is currently under. We have a very efficient industry in the Clarence Valley and throughout Australia. Unfortunately, it is an industry that has to compete in one of the world's most corrupt markets, as you would well know, Mr Deputy Speaker Causley. Our growers, who operate efficiently on very well-run farms, have great difficulty competing not only with overseas farmers but with overseas federal treasuries as well. They have to compete with not only the farmers but the government wallets that dole out the assistance to keep many overseas farmers in business.

The agreement also provides enhanced legal protection to guarantee market access and non-discriminatory treatment for Australian service providers in the US market. Growth in the services sector means that this protection is a significant concession in what is a rapidly growing market. Growth in the services market is occurring at a phenomenal rate. The ability of firms such as consulting engineers, architects, software designers—

Mr Forrest —The engineering profession.

Mr HARTSUYKER —A very fine profession. Many of those people are servicing clients around the country and around the world through the use of the Internet. Certainly in my electorate of Cowper, many people are operating their businesses from a regional location. Being able to operate in a regional environment and not being forced to operate in a capital city environment is providing greater opportunities for employment and great lifestyle choices for professionals. The free trade agreement has great potential benefit for those people who are providing services to access overseas markets.

I think that Australia's attractiveness as a destination for US investment will be improved by the legal guarantees and other measures that are being provided under the free trade agreement. Schedule 5 of the bill provides for the screening of foreign investments over certain limits. For sensitive investment sectors such as media, telecommunications and transport, the threshold is $50 million. For other sectors, the threshold is $800 million. I think improved capital flows will be great for Australia's GDP. It will help provide benefits to the nation as a whole.

I would now like to turn my attention to the PBS. There has been a great deal of misinformation peddled by the members opposite with regard to the impact of the free trade agreement on the PBS. The PBS is very much a central pillar of our health system, one that this government is determined to protect and one that this government is determined to ensure remains sustainable into the long term. The intergenerational report raised some issues which we need to address. The growth in the PBS is a major issue of concern. But this government wants to protect our PBS. This government is going to ensure—and the government guarantees—that this free trade agreement will not be to the detriment of the PBS. In my electorate the PBS involves some $35 million a year. This government is going to protect that very important pillar of our health system. Prices for drugs will not rise as a result of the free trade agreement. Despite the scare tactics of the members opposite, prices for drugs will not rise. This government ensured that one of the things that was definitely not negotiable in the negotiations was the PBS, ensuring that affordable access to medicines was guaranteed for Australians.

There have been some minor changes with regard to a mechanism being put in place so that, where a drug has been rejected for listing, the applicant will be able to seek a review, but it is important to note that this review cannot and will not override the PBAC's authority with regard to recommending to the minister that a drug should be listed or with regard to the authority of the minister to list that drug. That is very important. Whilst under the free trade agreement there can be a review, the PBAC and the minister are the responsible authorities in this, and there is no change to that regime under the free trade agreement. It should be noted that there is no change to legislation with regard to the PBS under the free trade agreement. It is also important to note with regard to generic drugs that the free trade agreement does not require Australia to change our patent extension regime, and in his speech Minister Vaile did outline some of the changes with regard to the pharmaceutical marketing procedure.

One of the great opportunities presented under the free trade agreement lies in the area of government procurement. The US federal government's procurement market is some $200 billion—a staggering figure. We have to also consider the states. This agreement will provide access to procurement from some 27 states, and the value of these markets is also quite staggering. The Californian government procurement market is some $42.7 billion; the New York market is $37.6 billion; and the Texas market is $24.6 billion. Those are staggering amounts of money, and they are huge markets which we are gaining access to by virtue of the free trade agreement.

Also, under the FTA there will be substantial savings to Australian consumers and business by way of the tariffs which will be forgone by this government. Under the agreement, the federal government will forgo tariffs in the order of $190 million in 2004-05, rising to $450 million by 2007-08. The money that the government would be forgoing would be placed back in the hands of consumers and back in the hands of business, who would be able to produce goods more cheaply and be more competitive in the world market through those savings in tariffs.

What do the Australian people think of the free trade agreement? According to Newspoll, they are pretty happy. In fact, today's Newspoll shows 60 per cent in favour, 25 per cent against and 15 per cent undecided. I guess most of the members opposite are either in the against group or the undecided group. I am not sure, but we can only presume that, based on their rather lily-livered performance so far. Looking at the state figures, 71 per cent of Tasmanians support the free trade agreement. I see the member for Paterson is in the chamber—61 per cent of people in New South Wales support the agreement. In Western Australia—I see the member for Canning is in the chamber—they are a bit slower. Only 59 per cent of Western Australians support the free trade agreement, but I know that after the member for Canning's contribution—

Mr Forrest —And that of the minister at the table.

Mr HARTSUYKER —and that of the minister at the table, the member for Curtin—to these discussions I can see that percentage rising rapidly over time. There is great support out there in the community for the free trade agreement, but we know the ACTU does not want a free trade agreement and we know good old Dougie Cameron does not want a free trade agreement. That is probably very much at the heart of the dithering of the ALP. Their trade unions hacks and lackeys are pulling the chain and causing them to react in this way—causing them to dither and procrastinate rather than be decisive and get on with the job of getting this agreement through. There are a number of Labor politicians, though, who do support the agreement.

Mr HARTSUYKER —Yes, Member for Mallee, there are a number. I have to say that some of the more enlightened premiers support the agreement. There is Peter Beattie. What has Peter said? He has said, `It could be the most momentous boost for our primary industries in a hundred years.' What has Bob Carr—Bob the Builder—got to say? He has said, `It is in Australia's interests to link ourselves with the world's most dynamic and creative economy.' Steve Bracks says he recognises `the benefits for the Victorian economy through increased access to markets and improved investment.' Mike Rann in South Australia says, `An FTA would give us access to 280 million customers.' Of course, I should not forget the member for Corio. The member for Corio had an interesting contribution. He said:

I know there are gains. I know there are some important gains to agricultural industries. I know there are some who are not satisfied with the deal and who have preferred another outcome, but at the end of the day I take your counsel on this. I have had extensive discussions with Peter—

that is Peter Corish, I believe—

and officers, and the position that I put to my colleagues is that the FTA, the legislation that has been presented to the House, ought to be supported at this stage.

But in just a couple of hours he had backflipped. What did the member for Corio say? He made a personal explanation and said:

Today in question time, the Minister for Trade said that I had declared my support for the FTA ... in a speech to the NFF conference. I did not.

Goodness me! One thing you can say about the member for Corio is that he is decisively indecisive. It does not take him from Lateline to lunchtime to change his mind; he did it in just a couple of hours. I sit here in disbelief that the Labor Party can follow a policy of approving this free trade agreement in the House of Representatives but not approving it in the Senate. It is a staggering position. It really is a case of having two bob each way on the FTA, isn't it? They could do a bumper sticker: `Two bob each way on the FTA.' That is Labor: no leadership.

Debate interrupted.