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Tuesday, 28 February 2012
Page: 2100


Mr SECKER (BarkerOpposition Whip) (18:47): I rise to speak on the Customs Amendment (Anti-Dumping Improvements) Bill (No. 2) 2011 even though it is 2012. This is the No. 2 bill of who knows how many more as this government is drip-feeding this legislation. Late last year I spoke on the first bill, which detailed four changes, and now this bill in front of the House legislates a couple more of the 29 total changes outlined in June last year. So that is six out of 29 in nearly nine months. I ask this of the responsible ministers, which could be anyone given the mess on the other side currently—but I will assume that those responsible are still home affairs minister Brendan O'Connor and trade minister Craig Emerson—when will the rest of the changes be legislated? Over six months have passed since the first bill was debated and with the two bills combined we are not even halfway through Labor's 29 changes proposed in June 2011.

Australian businesses will have to wait another two years for all the changes to be legislated. This is exactly the uncertainty that I hear businesses in my electorate talk about when they tell me their fears of this government. Back in 2008, Labor indicated that it wanted revisions to the antidumping system. It has taken far too long and we have this huge period of inaction: first the Productivity Commission review of Australia's antidumping regime in 2009 and then the 18 months that Labor took to respond. As I mentioned earlier, Labor made some changes in June last year and as we are nearly in March of the next year I believe this government lacks the determination and commitment necessary to deliver reform and to deliver it in a timely manner.

I have always believed in free trade—but it has to be fair. International dumping is the enemy of free trade as it undermines business and public support for free trade. That is why we have to have the World Trade Organisation and the rules on the basis that, where a product is proved to be dumped and harming a local industry, you can use tariffs to fight against that unfair trade. I come from a free-trade basis. In fact, it is the issue that got me really interested in politics all those years ago. But I also believe it has to be fair, and that is where we need policy that combats illegal activities of overseas businesses who seek to sell into Australia by selling below cost.

Australian businesses are generally resilient and tough, and have become so from reforms over the last 30 or so years, and I give credit to both sides of parliament for those reforms. So there is no doubt that if they are given a fair go they will withstand that pressure, innovate and produce. However, it is very difficult for Australian businesses to move forward in the current climate when they come up against forces such as a cheap product being dumped into the country on top of the looming threat of a carbon tax, the two-speed economy and the price of the Australian dollar. I believe that, with appropriate measures in place, Australian businesses would feel confident that they had the backing of a government that understands the issues they face and is willing to support them. This government is giving businesses no such feeling.

It can be a difficult decision for businesses to launch a case against dumping. The current process is too cumbersome, slow and prohibitively expensive for many businesses to actually utilise. When rulings are made, they are often too late and do nothing to address damage to a business or industry. Certainly the feedback I hear around my electorate is that the time and money invested just in putting a case together is hugely consuming. I am not saying it should be dead easy, but I think everyone recognises it is way too hard, it is way too expensive, it takes too long and by that time the industry can be in such a situation that it will not survive.

An example of this in my electorate is Kimberly-Clark, which I have spoken of often in this place. Millicent is a town with just over 5,000 people, about 700 of whom are employed in the Kimberly-Clark factory. Many more are employed in related industries. The factory uses a lot of wood products which are grown in the local area and it is a very strong part of the whole economy down there. In fact, the forest industry alone is worth more than $3 billion a year to the local economy. It is not a small industry. It is not just a very substantial part of the direct local economy around Millicent; it is also important for another 100 kilometres around the area, where there is a lot of forestry. The factory takes those wood products and makes tissues, toilet paper and those sorts of things. In fact, I believe they are the only Australian manufacturers of those things.

This government's own Productivity Commission report showed that other countries were dumping tissue and toilet paper in Australia to quite an extensive degree. They were dumping not at five or 10 per cent—in fact I think most companies in Australia can still compete with that—but at up to 60 per cent below the cost of production. Kimberly-Clark spent over $100,000 alleging that cheap toilet paper was being dumped on the Australian market, but it was unsuccessful in getting any action on dumping by this government, even though it was proven. That is not to forget that in early 2009 this government overturned a previous ruling to prevent the importation of thousands of tonnes of cheap toilet paper into Australia from China and Indonesia. The same offending paper undercut the Australian product and tens of millions of the rolls were sold. But even after Kimberly-Clark undertook a costly and consuming process it was unsuccessful. The end result was that the Kimberly-Clark mill announced a shutdown of two of its paper tissue machines at the Millicent tissue mill and lost 170 workers. The mill was supplied by the Tantanoola pulp mill which is basically next door and the mill was subsequently put up for sale, placing a further 65 jobs at risk. Kimberly-Clark said the system 'certainly hasn't worked' and:

Dumping has occurred, the (Australian) industry has suffered, and the gates are open for imported competition which is effectively unfair competition.

The high cost in having to fund an investigation means it's only open to the larger companies - smaller companies can't afford it and have to put up with the unfair competition.

The government should be well informed about this issue, considering that they commissioned the report into dumping. I was certainly floored that, even after the government's own Productivity Commission report saying that product was in fact being dumped in Australia at up to 60 per cent below the cost of production, Labor chose to take no action. Here we are, well over 12 months down the track, and this government has made some changes to their antidumping policy, but it is nowhere near enough and there is no indication of when further changes might be legislated.

In contrast, the coalition will set about ensuring a level playing field for Australian industry by repealing job-destroying taxes, providing competent government—something that this mob would not know anything about—and giving industry policy certainty. The coalition's plan will, firstly, transfer antidumping responsibilities from Customs to the department of industry. The coalition will make the department of industry responsible for Australia's antidumping regime. Antidumping is currently administered by Customs, an agency which is already under pressure dealing with large numbers of illegal boat arrivals. Those pressures have only been exacerbated due to cuts to the Customs budget. Customs also lacks the economic and industry knowledge that is often needed to successfully investigate and pursue antidumping actions. By transferring antidumping responsibilities to the department of industry, Customs can better focus on border protection, while the department of industry can bring its expertise and resources to bear to enforce a more effective antidumping regime.

Secondly, we will reverse the onus of proof in dumping investigations. Provided that the department of industry has sufficient evidence to show dumping is reasonably likely to have occurred, we will require foreign businesses subject to an antidumping action that has lasted for at least 60 days to demonstrate that they are not dumping goods in Australia. The department of industry will make preliminary affirmative determinations, where appropriate, in dumping cases that have lasted beyond 60 days. Preliminary affirmative determinations are expressly allowed under article 7 of the WTO antidumping agreement and do not breach Australia's free trade obligations. That is a very important point.

Under the current system it is incumbent upon Australian businesses to prove that rival imported products are being sent to Australia at below cost price. This disadvantages local firms by forcing them to mount often complex, onerous, expensive and time-consuming actions if they want to demonstrate that they have been adversely impacted by dumping. There is a significant imbalance in the obligations faced by local businesses. Cases can last for years and cost hundreds of thousands of dollars, and by that time it might be all too late. Our competitors have better and more effective antidumping regimes and, by reversing the onus of proof, the coalition will make Australia's antidumping regime more effective, more responsive to the interests of Australian businesses and jobs, and better aligned with antidumping systems adopted by other nations.

Thirdly, we will commit more funding to dumping investigations. The coalition will provide an additional $2½ million dollars per year to the department of industry so that more resources are available to improve the number, quality and speed of dumping investigations. Since coming to office, Labor has weakened Australia's antidumping regime by relentlessly cutting funding to Customs. For example, in the 2011-12 budget Labor axed a further 90 staff from Customs on top of the 250 that were cut in the 2010-11 budget. Fourthly, we will hire an additional 20 specialist antidumping investigators. The coalition will provide an additional 20 specialist personnel within the department of industry so that dumping investigations can be thoroughly pursued. These will be new personnel devoted to antidumping enforcement.

Fifthly, we will introduce more stringent and rigorous enforcement of deadlines for submissions. The coalition will make dumping investigations faster and more effective by mandating a 40-day limit on party submissions to the department of industry. Under the current system, submissions by all parties are due within 40 days of the start of a dumping investigation. However, Customs currently offers a wide range of potential grounds for extensions to that deadline. This means Australian businesses can face lengthy and damaging delays in resolving dumping cases. Our major competitors apply far more stringent and rigorous standards on deadlines for submissions. We will tighten submission rules and grant extensions only in those situations where there is a compelling case for them to be allowed.

Sixthly, we will crack down on those overseas producers who do not cooperate with dumping investigations. The coalition will more actively apply penalties against parties who fail or refuse to cooperate with investigations. We will also ensure that the sanctions imposed on non-cooperating parties are substantially higher than those applied to other parties. This will strengthen Australia's antidumping regime, more closely align it with those of other countries, and ensure our industries and businesses are not disadvantaged by recalcitrant foreign parties.

Seventhly, we will strengthen enforcement of the provisions of the WTO agreement on subsidies and countervailing measures. The coalition will more actively apply penalties against parties who fail or refuse to cooperate with those investigations. We will also ensure that the sanctions imposed on non-cooperating parties are substantially higher than those applied to other parties. This will strengthen Australia's antidumping regime, more closely align it with those of other countries, and ensure our industries and businesses are not disadvantaged by recalcitrant foreign parties.

Not long after we announced our policy, the former Minister for Home Affairs, Brendan O'Connor, and the former Minister for Trade, Craig Emerson, were out there spreading untruths. This government falsely claimed that our proposed use of preliminary affirmative determinations contravened WTO rules. They do not. In our antidumping policy, we stated that, where satisfactory evidence exists, we would require foreign businesses subject to an antidumping action to demonstrate that they are not dumping goods in Australia. Interestingly, not long after, Michael O'Connor, who is Brendan's brother and National Secretary of the CFMEU, publicly supported our plans to reverse the onus of proof in trade disputes. (Time expired)