Senator IAN CAMPBELL (9:45 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 (ANTI-DUMPING AMENDMENTS) BILL 1998

The substantive amendments proposed in this bill were introduced into Parliament in June 1997 as the Customs Legislation (Anti-Dumping) Amendment Bill 1997.

The purpose of this bill is to amend the Customs Act 1901:

(i) to provide a special approach for determining normal values of allegedly dumped goods from countries that are in the process of transition to a market economy when it is established that the domestic selling price of those goods is subject to government price control as announced by the Government on 12 March 1997;

(ii) to provide a new methodology for determining the normal value of allegedly dumped goods where the goods are exported from a country in the process of transition to a market economy and a raw material input into the goods which accounts for more than 10 per cent of the costs of producing or manufacturing the goods is supplied by a State owned;

(iii) to clarify provisions of these acts which relate to the manner in which interim dumping and countervailing duties are collected; and

(iv) to replace the terms "preliminary finding" and "Anti-Dumping Act" with the terms "preliminary affirmative determination" and "Dumping Duty Act" (respectively) to ensure consistency with the amendments to the Customs Act 1901 implemented by the Customs Legislation (Anti-dumping Amendments) Act 1998.

The first three items were the subject of the Customs Legislation (Anti-Dumping) Amendment Bill 1997 which lapsed when parliament was prorogued on 31 August 1998. The last is necessary because of the abolition of the Anti-Dumping Authority by the Customs Legislation (Anti-dumping Amendments) Act 1998.

The amendments to the normal value provisions in section 269TAC of the Customs Act 1901 ("the Customs Act") provide for a case by case approach to be taken by the Minister in inquiries into the alleged dumping of products from countries that are in the process of transition to a market economy. Under the proposed amendments, if the Minister is satisfied that the exporter's domestic selling prices of the product under investigation are subject to government control or substantial government control, normal values may be ascertained by reference to other relevant information, which may include the selling prices of like goods in a "surrogate" country.

Section 269TAC of the Customs Act provides for the assessment of the `normal value' of imported goods, for the purpose of determining whether the goods have been exported to Australia at less than that value (thereby dumped). The structure of the section has been described as establishing a hierarchy of methodologies by which normal values are determined. Investigating authorities must progressively work through each of the prescribed methodologies until a point is reached at which a normal value can be determined.

Until the latter part of last year subsection 269TAC(4) was utilised by investigating authorities to ascertain normal values for goods exported from command economies by reference to information obtained in a "surrogate" country. In November of last year legal advice was obtained as to the scope of subsection 269TAC(4). That advice confirmed that the section was severely limited in its application. Its stringent tests require that the Government of the country of export has at least a substantial monopoly of all of the trade of the country—not just in terms of the goods under investigation, AND must also substantially influence the domestic price of all goods in that country.

Although the governments of economies which are in a state of transition from a command economy to a market economy may still maintain controls over the domestic selling prices of a significant number of sensitive products, it cannot be said that the extent of the control falls within the ambit of subsection 269TAC(4). Clearly, in such economies the government has moved from a position in which it maintained a substantial monopoly over all of the trade of the country.

As subsection 269TAC(4) can have no further application to economies which are considered to be in transition from a command economy to a market economy, the determination of the normal values for exports from such economies, as a matter of law, must be made in accordance with the remaining provisions of section 269TAC. These provisions do not distinguish between "market economies" and those which are considered to be "in transition". Therefore, normal values for exports from economies which are considered to be in transition from a command economy to a market economy must be ascertained by the application of the same methodologies that are required to be applied in the ascertainment of normal values for exports from countries such as the United States of America and Germany. That is, there is presently no flexibility available for investigating authorities to treat exports from economies which are in transition differently from exports from other countries.

Investigating authorities require the flexibility to proceed to a methodology similar to that provided in s. 269TAC(6) (ie have regard to all relevant information) as soon as they are satisfied that the domestic selling prices of the goods under consideration are subject to government control. The proposed amendments therefore aim to confer such flexibility upon Customs.

The provisions contained within the bill will operate in the following manner. If it is identified that the domestic selling price of the goods under consideration is subject to a price control situation the normal value of the goods exported to Australia is to be determined having regard to all relevant information which may include information obtained from a surrogate country.

Absent any such price control situation, the proposed amendments will allow the Minister to proceed to examine the cost of production of the goods exported to Australia. If the Minister is satisfied that a raw material accounts for more than 10 per cent of the costs of producing or manufacturing the exported goods (and is thereby considered to be significant) and that the raw material is supplied by an enterprise which is wholly owned by a government of the exporting country the cost of the particular item could be ignored and, for normal value purposes, its cost could be estimated by the Minister by reference to other relevant information which could, but need not necessarily, include the cost of that item in a surrogate country.

To ensure that Australia is not in breach of its obligations as a member of the World Trade Organization (WTO), the amendment provides for regulations to be made which will provide that the new methodology for calculating normal values will not apply in respect of specified countries.

The bill also contains amendments which, in combination with those in the Customs Tariff (Anti-Dumping) Amendment Bill (No. 2) 1998, clarify the operation of the provisions of the Customs Act and the Customs Tariff (Anti-Dumping) Amendment Act 1975 which relate to the manner in which interim dumping and countervailing duties are collected. The amendments make it clear that such interim duties can be imposed, pending final assessment of any dumping or countervailing duties, notwithstanding that the actual export price and normal value, or the fact that a countervailable subsidy has been received, have not yet been ascertained.

Although these amendments are to be taken to have commenced on 1 January 1993, the date on which the interim dumping and countervailing duties were introduced, they will not require importers to pay an amount of dumping duty beyond that which has previously been demanded. The amendments merely seek to ensure that approximately $12 million in interim duties collected since 1 January 1993 is not subject to legal challenge.

This bill also contains amendments which will replace the terms "preliminary finding" and "Anti-Dumping Act" with the terms "preliminary affirmative determination" and "Dumping Duty Act" (respectively). These amendments will ensure consistency with the amendments to the Customs Act implemented by the Customs Legislation (Anti-dumping Amendments) Act 1998.

CUSTOMS TARIFF (ANTI-DUMPING) AMENDMENT BILL (No. 2) 1998

This bill amends the Customs Tariff (Anti-Dumping) Act 1975 to clarify, in combination with the amendments to the Customs Act 1901 proposed in the Customs (Anti-dumping Amendments) Bill 1998, provisions of these acts which relate to the manner in which interim dumping and countervailing duties are collected.

The amendments make it clear that such interim duties can be imposed pending final assessment of any dumping or countervailing duties, notwithstanding that the actual export price and normal value, or the fact that a countervailable subsidy has been received, have not yet been ascertained.

These amendments have a retrospective commencement of 1 January 1993, the date on which interim dumping and countervailing duties were introduced, to ensure that approximately $12 million collected in interim duties since 1 January 1993 is not subject to legal challenge.

APPROPRIATION (PARLIAMENTARY DEPARTMENTS) BILL (No. 2) 1998-99

In Appropriation (Parliamentary Departments) Bill (No. 2) 1998-99, appropriations totalling $1,129,000 additional to those made in the Appropriation (Parliamentary Departments) Act 1998-99 are sought for recurrent and capital expenditures of the Parliamentary Departments. This amount is partly offset by savings of $570,000 in the appropriations for the running costs of the Parliamentary Library and the Joint House Department made by Appropriation (Parliamentary Departments) Act 1998-99.

The increases sought relate to primarily to increases in the running costs for the Departments of the Senate, the House of Representatives and the Parliamentary Reporting Staff of $90,000, $539,00 and $341,000 respectively. These increases in running costs are largely as a result of a higher carryover of unspent funds from 1997-98 than anticipated at the time of the Budget.

APPROPRIATION BILL (No. 3) 1998-99

This is a historic occasion for the Parliament. It is the last time on which cash based annual appropriations will be presented for the Parliament's consideration.

The next Budget that is to be brought down in May 1999 will be prepared on an accrual basis consistent with the recommendation of the National Committee of Audit. Under that framework, the focus in the Appropriation Bills will be on

. achieving agency outcomes, rather than the current input focus; and

. funding for the full price of agency outputs or expenses estimated to be incurred, rather than merely estimates of cash payments to be made.

Taken together, these changes will disclose to the Parliament the full costs of the Government's activities and allow a greater focus by the Parliament on performance of agencies.

Appropriation Bill (No. 3) 1998-99, together with Appropriation Bill (No. 4) and the Appropriation (Parliamentary Departments) Bill (No. 2), which I shall introduce shortly, comprise the Additional Estimates for 1998-99.

In the bills, the Parliament is asked to appropriate moneys to meet essential and unavoidable expenditures additional to the appropriations made for 1998-99 under Appropriation Acts (Nos. 1 and 2) and the Appropriation (Parliamentary Departments) Act.

The additional appropriations in these three bills total some $1,638 million; $1,382 million is sought in Appropriation Bill (No. 3), $255 million in Appropriation Bill (No. 4) and about a million dollars in the Appropriation (Parliamentary Departments) Bill (No. 2).

These amounts are partly offset by savings in the appropriations made by Appropriation Acts (Nos. 1 and 2) and the Appropriation (Parliamentary Departments) Act 1998-99. Reflecting the Government's determination to improve the efficiency of continuing programs, these savings, amounting to some $379 million in gross terms, are detailed under the relevant appropriation headings in the document "Statement of Savings Expected in Annual Appropriations", which has been distributed to honourable senators.

After allowing for prospective savings, the total appropriations sought represent a net increase of $1,260 million in appropriations for 1998-99, an increase of about three and a half per cent on the amounts made available through the annual appropriations at the time of the 1998-99 Budget.

Honourable senators should note, however, that this increase does not translate to a similar increase in estimated outlays as:

(a) the appropriations include amounts which are functionally classified as net advances or financing transactions; and

(b) the figures relate only to expenditures financed by annual appropriations, which comprise about 25 per cent of Budget headline outlays. The figures do not include variations to estimates of expenditures from special appropriations, transactions of the Reserved Money, Commercial Activities or Loan Funds; nor do they incorporate any revisions to receipt items which are offset within outlays.

I turn now to the main areas for which the Government seeks additional provisions in the Appropriation Bill (No. 3) 1998-99 to meet payments for the ordinary annual services of the Government.

Running costs appropriations provide for the recurrent and minor capital costs of agencies in providing Government services. The total gross supplementation for running costs for all departments and of $609 million. After allowing for estimated savings in running cost appropriations of $16 million, the net increase in the provision for running costs of $593 million represents an increase of about five per cent on the funding for running costs included in Appropriation Act (No. 1).

Principal factors contributing to this increase are:

. higher than anticipated carryovers of unspent moneys from 1997-98 of some $136 million;

. borrowings against the forward estimates of $152 million; and

. for the Department of Defence, a $119 million reallocation, within the Defence global budget, from programme appropriations to running costs to meet changing priorities.

In gross terms, some $209 million additional estimates are sought for the Defence Portfolio in Appropriation Bill (No. 3). In addition to the supplementation of Defence running costs I have already mentioned, this figure includes:

. $22 million for compensation and legal expenses in respect of the Military Compensation Scheme;

. $8 million for defence production for new capability and production payments for High Explosives facilities at the Mulwala site; and

. $58 million for defence housing to allow the Defence Housing Authority to reposition itself in the market.

The gross supplementation for Defence have been partly offset by reductions of $148 million in other Defence annual appropriations, giving a net increase in funding from that source of some $61 million.

In addition, Appropriation Bill (No. 3) includes provision for:

. $83 million for labour market training and assistance largely attributable to carryovers of funds from 1997-98 and supplementary funding for enhancement of Job Network Services announced in August 1998;

. $65 million for payment to the Commonwealth Services Delivery Agency (Centrelink) for the delivery of income support services reflecting changes to welfare payment cycle, supplementation for IT leasing and additional funding for medical assessments to determine eligibility for the disability support pension;

. $32 million for child care assistance reflecting a reduction in expected savings due to a delay in the implementation of the childcare smartcard and therefore a change in the timing of childcare payments to families from two weeks in advance to fortnightly in arrears;

. $10 million to the Australian Electoral Commission for the costs of conducting elections, referendums and industrial ballots, largely attributable to the Commission's costs associated with the recent Federal election and the delayed election in Newcastle following the death of one of the candidates;

. $39 million for contestable hearing services through a voucher system as a result of higher than expected demand for voucher services and increases in services and device fees negotiated for new contract arrangements with service providers and manufacturers on 1 November 1998;

. $47 million for capital assistance for residential care facilities for older people largely reflecting commitments for additional funding the Government made during the last Parliament together with a rollover from 1997-98 of capital funding for industry restructure;

. $19 million for bounty payments under the Bounty (Computers) Act 1984 to cover an anticipated backlog of outstanding claims as manufacturers lodge claims prior to the expiry of this assistance programme in 1998; and

. $248 million for the servicing the debt of the Australian National Railways Commission principally as a result of the decision that, consequent upon the sale of ANR, the Commonwealth would assume future responsibility for its debt.

The balance of some $140 million in the amount included in Appropriation Bill (No. 3) is made up of minor variations across a range of programs in most departments and agencies.

APPROPRIATION BILL (No. 4) 1998-99

In Appropriation Bill (No. 4) 1998-99, appropriations totalling $255 million—additional to those made by Appropriation Act (No. 2) 1998-99—are sought for capital works and services; payments to or for the States, the Northern Territory and the Australian Capital Territory; advances and loans; and for other services. The proposed appropriations are required to meet essential and unavoidable expenditures for which provision was not made in the Budget appropriation measures.

The additions are necessitated by certain cost and price increases that have occurred since the Budget, together with other commitments that have been made by the Government. Areas where significant increases are sought over amounts provided in Appropriation Act (No. 2) 1998-99 includes:

. $16 million for rural adjustment largely as a result of a carryover of unspent funds from 1997-98 to 1998-99 and the declaration of exceptional circumstances in Duaringa, Cobar, Monaro C, Wilcannia and Wentworth;

. $3 million for assistance to the sugar industry with funding allocated over four years for research into increasing the sugar content levels of sugar cane and related research;

. $6 million for assistance to specialist pigmeat processors in the pork industry through the pigmeat processing grants programme;

. $15 million for computer equipment for the Department of Family and Community Services;

. $100 million to assist people and small businesses who were adversely affected by the interruption to the Victorian gas supply;

. $11 million for a grant and $4 million for a loan to IIF Investments Pty Ltd for the Innovative Investment Fund program;

. $20 million for payment to South Australia for the runway extension at Adelaide Airport reflecting a carryover of unspent funds from 1997-98;

. $10 million for payment to the Northern Territory for continuation of the Northern Territory Health Indigenous Infrastructure Programme to improve living conditions and health standards for indigenous people; and

. $19 million for a community education and information programme on reform to the Australian tax system.

The remaining $51 million included in Appropriation Bill (No. 4) comprises minor increases in a number of programs across a range of portfolios.

Debate (on motion by Senator O'Brien) adjourned.

Ordered that the Customs (Anti-dumping Amendments) Bill 1998 and Customs Tariff (Anti-Dumping) Amendment Bill (No. 2) 1998 be listed together on the Notice Paper as a separate order of the day.