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Tuesday, 16 June 2009
Page: 6224

Mr TRUSS (Leader of the Nationals) (7:23 PM) —I would like to ask some questions about the progress on a number of trade agreements, but there is a matter that has arisen in the last couple of days that I think deserves the first priority. That is the decision by the New South Wales government in its budget to give preference to Australian made goods, for purchases at the state level. An article by Rowan Callick in today’s Australian states:

… the NSW government’s plan to prefer Australian-made goods amounted to a suicide attack on the nation’s biggest source of imports, China.

The article also refers to the potential impact of this decision by New South Wales on our trade agreements with the United States, New Zealand and Thailand—and, I would add, with Chile, Singapore, and ASEAN. This is clearly a trade restriction and is one that is going to have potential impacts on countries that would like to supply services to the New South Wales government.

I note that a spokesman for the Chinese embassy in Canberra is quoted as saying:

We are opposed to trade protectionism. History shows it hurts not only the targeted countries, but also those seeking to protect themselves.

That is a welcome statement of principle from China that I hope will be translated into their own economy. Alan Oxley, a respected former trade negotiator, asked:

Why is Australia’s least competitive, lowest-growth state doing this?

Even before the downturn, NSW was our weakest performing economy. It is the state that can least afford to implement even worse policies.

So, clearly, there are a number of concerns about the decision by the New South Wales government, and I ask the minister: what is the government’s position in relation to the New South Wales government’s announcement? Will the federal government follow a similar path in relation to purchases? What plans does the government have to deal with New South Wales on this issue—or, for that matter, any other state that introduces these kinds of preference clauses? And do you have plans to defend any actions that might be taken in the World Trade Organisation or, for that matter, by our partners to these various trade agreements? I think those are some key questions.

While I am on my feet, and rather than use up all the time, can I refer the minister also to a question which was asked during the previous estimates but which the parliamentary secretary naturally was not able to answer because it was within your portfolio. The shadow minister for foreign affairs asked about the decision to reduce promotional activities by the Australian Trade Commission. You will be aware that there is a budget reduction of $1.2 million. She asked why that had been reduced and which programs were likely to be cut.

While I am on those sorts of issues, can I also refer to the Export Market Development Grants scheme and note that in this year’s budget the government has provided an additional $50 million for claims in 2008-09. I understand that the government is of the view that that will be sufficient to pay all the claims in full. The government had previously provided an extra $50 million for claims lodged in 2009-10 and, at additional estimates, the department advised that this was the amount the government estimated was needed to cover the changes which the government had made to the scheme for the grant year 2008-09. I guess this means that there will therefore be another $50 million shortfall for the payments made in 2009-10, assuming that there is the same level of activity in the grants scheme as has occurred in the past. So I ask: does the government propose to provide another backdated payment in the next budget to give the assurance to exporters that they will have their claims paid in full, and what will be the situation in the out years?