Senator NEWMAN (Social Security) (9:36 AM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard .

Leave granted.

The speeches read as follows—

CUSTOMS LEGISLATION (ANTI-DUMPING AMENDMENTS) BILL 1998

The Government came to office with a commitment to reform the Anti-Dumping System. The coalition outlined this commitment in its Primary Industry Policy "Reviving the Heartland," in which it undertook to "improve existing countervailing and anti-dumping procedures to ensure Australian producers are not disadvantaged," and to "reduce the inquiry period for anti-dumping and countervailing cases". The policy proposed "a maximum total investigation period of 155 days."

Australia has committed itself to anti-dumping and countervailing legislation which is consistent with the obligations imposed by the relevant agreements of the World Trade Organisation (WTO). Of particular importance is the obligation that "throughout an investigation all interested parties must have a full opportunity for the defence of their interests", including the opportunity to see all relevant information, to acquaint themselves with the opposing views and to offer rebuttal arguments.

At present Australia has a two stage, two agency, investigation process involving Customs and the Anti-Dumping Authority (ADA). Customs undertakes a preliminary inquiry within a statutory period of 100 days (extendable to 120 days in certain circumstances). Where there is a positive preliminary finding of dumping causing material injury Customs can impose provisional measures (securities). Following such a finding the investigation is referred to the ADA. The ADA calls for additional submissions, gathers further information and will essentially re-do what Customs did in its preliminary investigation, although using different information. The ADA process is to be completed within a statutory maximum time frame of 120 days. The Minister then decides on appropriate measures.

This system is a legacy of Labor's period in office. It has been criticised by industry on many counts: the time to imposes provisional measures where necessary, by which time long-term damage may have been caused to the Australian industry; the time taken to reach a final finding is too long; and, the two-agency structure creates duplication, inconsistency, uncertainty and additional cost to parties.

The anti-dumping system has been reviewed five times in the last eleven years. The most recent of these reviews, the 1996 Willett Report, "Review of Australia's Anti-Dumping and Countervailing Administration", made a number of recommendations for reform of the system, including abolition of the ADA and the introduction of a single-agency system leading to shortened investigations. These recommendations reflected many of the concerns of industry expressed in earlier reviews. The changes which the Government now seeks to introduce draw heavily on Willett's conclusions, whilst recognising that not all his recommendations may be desirable or workable.

Willett recommended a two-stage, single agency process: 100 days for the investigation phase (at which time a Statement of Essential Facts would be published), followed by a review period of 55 days, conducted internally, with a final finding to go to the Minister at day 155 (but with an overall investigation period of 175 days for cases of greater complexity).

Under existing arrangements, a positive finding is referred to the ADA for a de novo investigation (often mistakenly referred to as a review). The ADA continues the investigation by seeking and verifying additional information to that which was before Customs. This adds 110 days (120 in complex cases) to the inquiry and has given rise to the criticism of duplication and delay. Willett recommended that the only way to achieve reduction in the time taken to 155 days was to substantially reduce the time available for review. He suggested this be done by eliminating the second agency, and introducing a more limited review by the first agency (ie. internal review).

At first glance, the Willett model would deliver the reform sought by industry. However, the Willett model has serious shortcomings: its compressed investigation phase would prevent thorough examination of the issues; the opportunities for interested parties to defend their interests would be inadequate; and, its proposal that Customs conduct internal reviews of its findings would call into question the credibility and impartiality of the entire process.

The Government has therefore formulated modifications to the Willett model which will overcome these deficiencies. The Government's model meets the objective of a total investigation period of 155 days but delivers to interested parties greater opportunity for a comprehensive consideration of the facts and an additional process of external administrative appeal of the merits.

Under the Government's model the ADA is to be abolished and Customs will take on the sole responsibility for the conduct of investigations. An independent body, the Trade Measures Review Office, to serve the newly created public office of Trade Measure Review Officer (TMRO), the person charged with reviewing dumping decisions, will be established within the Industry, Science and Tourism portfolio.

Provisional measures in the form of securities will be available from day 60 of an investigation onwards if Customs determines that there is sufficient evidence to warrant their imposition. This is in conformity with the requirements of the relevant WTO Agreements.

A Statement of Essential Facts will be issued by day 110, 10 days more than Willett allowed for the initial investigation phase. This additional period will address a major concern of industry, namely that information, particularly regarding exporters, only becomes available late in the initial investigation. Consequently, the local industry has a limited opportunity to raise concerns regarding this information and more importantly the investigating authority has a limited time within which to address those concerns. The additional 10 days will enhance the opportunity for all interested parties fully to defend their interests and will enable Customs to issue a comprehensive Statement of Essential Facts reflecting its reasoned conclusions on all relevant issues.

After issue of the Statement of Essential Facts, interested parties will have a 20 day period within which to lodge submissions in response. Customs will then have a further 25 days to complete the investigation, having regard to matters raised in the submissions. It should complete its investigation on or before day 155. Customs will then forward a detailed report and recommendations to the Minister. The Minister's decision in response to the Customs recommendations will constitute a final finding. The investigation will thus be completed within a 155 day time frame in conformity with the coalition's election undertaking. Only in exceptional cases will the Minister authorise an extension of the investigation period.

In formulating these reforms the Government recognised that anti-dumping and countervailing investigations and reviews can be disruptive for all interested parties. Investigations may give rise to trade chilling effects, which are to the detriment of exporters, importers and consumers alike. Australian industry views such investigations as creating uncertainty within the market place which may delay investment decisions thereby retarding their economic development and overall efficiency.

The Government accepts that it is in the interests of all parties for these investigations and reviews to be completed as soon as is practicable. It is convinced that its proposed reforms have struck a balance between, on the one hand, the desirability of speedily resolving investigations and, on the other, doing so in a manner which is not only consistent with our WTO obligation but in certain respects exceeds those obligations.

However, this balance can only be maintained if all interested parties are subject to a discipline which requires that if they wish to participate in the investigation or review process they must ensure that their submissions are lodged promptly. Therefore at various mile stones through out the investigation or review process the Government's reforms confer a power upon the relevant decision-maker to disregard any submissions which are received after specified periods, if there is insufficient time remaining for their proper consideration. Without such powers the statutory deadlines would never be met and the balance which such deadlines are designed to preserve would be undermined.

The 155 day investigation phase contains sufficient safeguards to ensure that all interested parties will have sufficient time to identify any errors or other deficiencies in Customs findings of fact and reasoning. A 155 day investigation phase will also ensure that Customs will have sufficient time to be able to respond to such concerns before forwarding a recommendation to the Minister regarding a final finding.

Nevertheless, if grounds exist, parties to the case will have the right to have the Minister's decision reviewed by the TMRO. Parties will have a maximum of 30 days following publication of the Minister's final finding within which to lodge an application for review. The application must contain particulars of the basis upon which it is alleged that the investigation was flawed. Other interested parties will then have 30 days within which to lodge responses. The TMRO will then have a maximum of 30 days to consider the matter and to make a recommendation to the Minister. If the TMRO considers that sufficient doubt attached to any aspect of the investigation such as to call into question the Customs' recommendation to the Minister, the TMRO can recommend to the Minister that that aspect of the investigation be remitted to Customs for reconsideration.

The significant feature of the appeal mechanism is that the TMRO will not undertake an investigative function. It will be limited to examining the investigation record in light of the arguments raised in the application.

This will ensure the outcome of dumping inquiries is decided as quickly as possible, providing certainty in the market place.

With the transfer to Customs of the investigative functions of the ADA in relation to applications for continuation of measures after the statutory 5 year time limit and applications for review of anti-dumping measures, it is proposed to extend the current 120 day limit the ADA has to conduct such inquiries to 155 days. This is to provide consistency across the range of investigations to be undertaken by the ACS so as to ensure that the opportunities for all interested parties to fully defend their interests are consistent.

Finally, it is proposed to confer on the TMRO the ability to review decisions made by the CEO as to whether an investigation should start, or should be terminated because there is no good reason to continue it, and as to the amount of customs duty paid on particular consignments of goods.

CUSTOMS TARIFF (ANTI-DUMPING) AMENDMENT BILL 1998

The purpose of the bill is to make consequential amendments to a taxing Act, the Customs Tariff (Anti-Dumping) Act 1975, made necessary by amendments to the Customs Act 1901 proposed in the Customs Legislation (Anti-dumping Amendments) Bill 1998.

In Item 57 to Schedule 1 to the Anti-dumping Amendments Bill referred to above, it is proposed to repeal, amongst others, subsections 269TJ (4), (5), (6), (7) and (9) of the Customs Act. These provisions currently permit Australia to take retaliatory countervailing action against another country in certain circumstances. They are inconsistent with Australia's obligations to the World Trade Organisation ("the WTO"). These obligations require that WTO dispute settlement procedures be exhausted before such action can be taken.

In that context, the Government has decided to remove from the Customs Act the provisions enabling retaliatory countervailing action to be taken.

In consequence, the capacity to impose countervailing duty pursuant to those sections should also be repealed. It is proposed to do this in this bill.

DATA-MATCHING PROGRAM (ASSISTANCE AND TAX) AMENDMENT BILL 1998

Madam President, the Data-matching Program is an important aspect of the continued efforts of this Government to ensure the integrity of Australia's social welfare system.

Over the past seven years, the Data-matching Program has been conducted under the Privacy's Commissioner's scrutiny with careful regard for individual privacy and is an important control on personal financial assistance schemes, helping to keep them free of abuse and fraud. It has been proven over the past two years that it can achieve substantial savings in public expenditure.

The Data-matching Program is also valuable in encouraging voluntary compliance with the rules in place to ensure payments are targeted to those in need. It reminds the community that it is not a case of if fraud will be detected, but when. It has now become an important feature of the review mechanisms that are helping to build the integrity of the system and the confidence of the public that the system is, in fact, secure from fraud.

There are on-going review and reporting arrangements in place to allow the Parliament to maintain its scrutiny of the Program. The present Government, when in Opposition, argued successfully for continuation of this scrutiny. The Privacy Commissioner continues to play an important role in ensuring that the Government agencies participating in the Data-matching Program abide by the strict conditions already set down in the legislation to protect the privacy of individuals. In addition to the Privacy Commissioner being able to seek information and scrutinise the activities of the Agencies involved in the Data-matching Program, there is a requirement that those Agencies report annually to the Privacy Commissioner. The Act also requires that these reports are laid before the Parliament. There is also a triennial report to the Parliament covering the three previous financial years. The first triennial report is due in the second half of this year.

Madam President, in 1996 the Australian National Audit Office conducted a follow-up of its 1993 Audit of Data-matching within the Department of Social Security. This review was in keeping with this Government's election commitment to review the Data-matching Program.

Madam President it can be noted that the ANAO's Audit opinion given in its 1996 report was as follows:

"Overall the Department has made substantial achievements through implementing legislative changes, improved reporting procedures, savings collection, better targeting and project evaluation processes. These changes have resulted in both substantial increases in savings generated by the Program and in efficiency improvements."

When the Data-matching Program (Assistance and Tax) Act 1990 was first enacted it incorporated a sunset clause to take effect in January 1993. That sunset clause has, however, been extended by the Parliament on three separate occasions. The latest occasion was in 1995 when the sunset clause was extended until 23 January 1999. In part the sunset clause was kept in place because of concerns in the Parliament that the Data-matching Program would not achieve the expected savings and in part as an attempt to allow the Parliament to maintain scrutiny of the Program.

Madam President, the Data-matching Program has now proven that very substantial savings can be achieved, and the Parliament has been regularly informed of the operation of Program in addition to its deliberations of bills previously introduced to deal with the sunset clause. The Program has become an important feature of the overall social welfare system and one that needs to be given a permanent place in the continuing efforts to maintain and improve that system. In the event that the sunset clause is allowed to come into effect, the loss of savings that could be achieved would be in the order of $560 million over the four years from 1998-99. Accordingly, this bill seeks to remove the sunset clause.

Madam President, I commend the bill to the Senate.

Ordered that further consideration of the second reading speech of the bills be adjourned until the first day of the spring sittings 1998, in accordance with standing order 111.

Ordered that the Data-matching Program (Assistance and Tax) Amendment Bill 1998 be listed on the Notice Paper as a separate order of the day.