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Tuesday, 3 August 2004
Page: 25339


Senator CONROY (1:32 PM) —We are debating today the legislation implementing the Australia-US free trade agreement negotiated by the government, the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004. When the government first indicated its interest in pursuing an FTA with the USA it made many promises to the Australian public. The government said that it would pursue a deal in the national interest—Australia's national interest, that is—in the interests of all Australians: families, workers, farmers, business and the community at large. Great claims were made about how much this deal would deliver to Australia, particularly how much it would deliver to Australian farmers—Australian farmers confronted by a distorted and corrupt international trading system, Australian farmers that asked for no more than a level playing field. Farmers are not after financial assistance or subsidies, just the opportunity to compete on equal terms in the international market. Minister Vaile promised so much in terms of improved access to the US market. On 23 January this year Mr Vaile said:

We've sought to do a comprehensive deal across all sectors, including agriculture, including sugar, and we've said that sugar must be part of the deal and we're not conceding that.

The Deputy Prime Minister, John Anderson, said it would be un-Australian not to include sugar in the FTA. As we know, that is exactly what happened. Despite the great claims, despite the boasts, this package did not deliver in so many of the respects we were promised. There is no improved access for sugar in the package. Beef gets an increase in its export quota to the US of 70,000 tonnes but it takes 18 years to get there. Dairy gets a tripling of its quota to the US but Australian exports will continue to be constrained by tariff rate quotas.

Reflecting concerns about the FTA, Labor established a Senate committee to examine this deal in great detail. With over 500 submissions and many expert witnesses, the Senate inquiry enabled many issues of concern to be thoroughly examined and in many cases allayed. Yesterday, Labor senators on the committee reported their recommendations on what they believed should be in the agreement. But I want to come to some of the criticisms that John Howard and the parrots on the other side have been making day in and day out for the last few months: Mark Latham should show some leadership; he should stop dithering; he should make a decision; he should have made it five months ago.


Senator Kemp —Yes, that's right.


Senator CONROY —The peanut gallery is still with us. I am glad to report, Senator Kemp, that the natural order has been restored. Collingwood is above Carlton on the AFL ladder. I would have thought it is unparliamentary to interject from the advisers box, where you are sitting, so I will not respond to your remarks anymore, Senator Kemp.

The Prime Minister has continually tried to play politics with this issue. George Bush, the President of the United States, has not signed the deal yet. That may come as a surprise to everyone in Australia because, from the way John Howard is pretending, it is a signed, sealed and delivered deal over in the US. George Bush, the President of the United States, has yet to sign this deal. The US Congress voted on this only three to four weeks ago. The implementation date is 1 January next year. Expert evidence from the departmental officials who negotiated this deal—some of them are in the chamber today—was quite clear: there was absolutely no imperative for this to be signed or rushed. We could wait until 31 December to vote this bill into legislation and make a decision to support it.

That was the evidence of the experts from the department, yet we have had the Prime Minister parroting on saying that this is a farce, this is stupid and the Senate inquiry is a waste of time. I am here to tell those on the other side of the chamber that that is dead wrong. The Senate inquiry process has been invaluable in getting to the heart of the facts ahead of the myths. Strip away the government's hype and examine the facts—and that is what we did. We have all heard about the $7 billion claim. Remember that it started off at $4 billion, then the author of the $4 billion claim said: `Once the deal is signed, you can't take any notice of the $4 billion claim. I didn't model the agreement; I just modelled free trade.' He modelled free trade the first time and got $4 billion. Then he got a paid contract from the government, went away and modelled the deal—which did not deliver free trade—and got $7 billion. It is truly remarkable. Not even Treasury officials were prepared to argue in support of the heroic assumptions the government's modeller made to generate the $7 billion. So we have to strip away the hype.

We are indebted to Ross Garnaut, who, in the Senate inquiry—he is one of the country's leading trade economists and is internationally recognised as one of the world's leading trade economists—said, `This government study fails the laugh test.' We are indebted to him. The government's dodgy claim of how many benefits there were has failed the laugh test and it has now moved into the political lexicon. What did the Senate inquiry do? The Senate Select Committee on the Free Trade Agreement between Australia and the United States of America commissioned its own report, its own economic study. It commissioned it using one of Australia's premier modellers of trade agreements, someone with eminent qualifications, who has worked at the Productivity Commission—the body that should have been empowered to examine this deal—and who currently works at the ANU. Her name is Philippa Dee. She made some far more realistic assessments of what was in this deal. She came up with a figure that showed a small, modest net benefit. When we stripped away the hype, stripped away the `once in a lifetime opportunity'—which is an absolute load of rubbish—we got a sensible view that allowed the members of the Senate committee to make a sensible, informed decision about this agreement, with none of the government's hype. The government's own Treasury officials were too embarrassed to support Andy Stoeckel's assumptions.

This argument about dithering should be seen for what it is—it is politicking by the Prime Minister to put his political interests ahead of Australia's national interests. If Mark Latham is a ditherer, George Bush must be a hell of a ditherer, because he has not signed the agreement yet. So let us put that matter to bed. The President of the United States is a massive ditherer.

What did Labor senators recommend should be included in the report and what do the Labor caucus endorse today? We have had two areas of concern. One we described as a deal breaker in the past: the PBS. The other concern has always been high on our list: local content. We want to address these issues in the Senate. We are offering an opportunity for this government to get its FTA up. It can probably have its FTA inside one week from today, depending on how long the debate takes. It can certainly have it before the end of next week. John Howard can get the FTA through. All he has to do is support Labor's two amendments.

These two amendments are to the TGA and the broadcasting act. They go to the heart of Labor's concerns. Labor's concerns are about ensuring that the PBS is not undermined by the free trade agreement. The amendment is designed to ensure that Australian voices and Australian faces will continue to be seen and heard on future media platforms, free-to-air and pay TV and whatever evolves in the future. Labor are addressing those concerns through these amendments. Let us make this clear now: these amendments are consistent with the spirit and the intent of the free trade deal. They do not contravene the free trade agreement: you can have these amendments and you can have the FTA. That is what is on offer today. Mark Latham has put that offer on the table to John Howard. He said, `Mr Howard, if you're truly concerned and you truly want this FTA, here are a couple of amendments that you can have and you'll get your FTA by the end of the week.' These amendments are consistent with the FTA text and will ensure that the PBS and local content are protected.

Labor will also introduce a comprehensive package to address many of the other concerns raised about the FTA. Labor assess that the deal is in the national interest, but we believe we can improve the quality of the implementing legislation. That goes to the heart of our desire to improve, enhance and protect the PBS and Australian voices through local content. The comprehensive package has to address other concerns. I want to go through our two amendments in detail so that the chamber, Senator Kemp and the government are fully aware of the opportunity that is on offer today. Our amendments are to protect the PBS by preventing and penalising drug companies that try to stop cheaper generic drugs coming onto the market by lodging dodgy patent claims. The validity of these claims would be determined by a court, not by the TGA or the government.

What we have seen in the US is pharmaceutical companies setting out to frustrate the flow of generic drugs. Once a patent runs out, a generic drug replaces it. In the US—and this will sound quite incredible if you have been unaware of these things—the day before a patent is due to run out the patent holder, the drug company, will apply for a new patent on the basis that they want to change the marketing package. They might change it from a red pill to a blue pill and they will say, `We want a new patent for 20-odd years for the blue pill instead of the red pill.' Because of the processes in the US particularly, the generic drug companies are forced to take these hugely wealthy drug companies to court. Ultimately, the court rules in favour of the generic company and says, `This is a spurious claim. This is a claim that is not fair dinkum. It is the same chemical compound in the drug even though it is in a different coloured capsule,' or it may be a dissolvable tablet rather than a `take with water' hard pill. Those are the sorts of games played in the US.

The government has said that it does not want evergreening, which is its colloquial name, to take place. It does not believe there is anything in the FTA that will increase the possibility of evergreening taking place. So the Labor Party say to the government: join with us. Let us make sure that those incredibly wealthy American drug companies, which champion George Bush's position, do not engage in that practice in this country. Let us move an amendment to the enabling legislation, similar to the amendment that this government is proposing to put in place, that says that, if a generic drug company files an incorrect or dodgy application and gets it wrong, the TGA are entitled to fine that generic drug company for putting in a wrong application. Labor say that we should add to this protection because it is important that patents are protected. This is not a debate about trying to undermine a patent; it is important that patents are protected. But if it is okay to fine a generic company for filing a false document let us make it that we can fine a drug company that puts in a bodgie patent claim that is not about the science or the chemical product but about its commercial interests. It is about wanting to play the system. It is about wanting to use the courts to drag things out for a year or a year and a half to slow down the introduction of a generic drug.

Why is that important? There are five major drugs currently listed on the PBS that are due to expire next year. If those drug companies were able to delay that expiry by even 18 months by fooling around with evergreening, it could see a $1.2 billion increase in the cost of the PBS to Australian taxpayers. That is why a couple of hundred thousand dollars in legal costs is worth while and that is why these companies play these games in the US. I genuinely do not believe the government want this to happen. Here is an opportunity for them to say, `We don't want it to happen and we're going to work with Labor in Australians' national interest to protect the PBS and to protect Australian taxpayers so that this bodgie practice can't commence in Australia.' This is not in breach of the FTA deal. This is complementary and worth while. I invite Senator Kemp to take it to the Prime Minister. Say that you have listened to Senator Conroy and you think he has some worthwhile ideas—I have got you on the record on that one, Senator Kemp. Tell him, `Here is another worthwhile idea from Senator Conroy.' The good news, Senator Kemp, is that I have two good ideas today.


Senator Kemp —A Labor record!


Senator CONROY —I have to confess that I was not alone in thinking up this next idea. Surprisingly enough, I had a few parliamentary colleagues who supported me on this next idea, which deals with local content. The issue here is whether we want Australian voices on television. This is a government that successfully fought the ambition of the US to try to reduce our local content. The government said, `No, we're going to keep the 55 per cent.' They did agree to something known as the ratchet clause—in other words, if our local content ever falls below 55 per cent, we are never allowed to put it up again. I genuinely do not believe the government would ever want that to be the case, so Labor are saying, `Why are we leaving the decision about local content in the hands of the Australian Broadcasting Authority?' They can just make an edict and we will have a new level of content, and if they ever decide to lower it we can never put it back up. I do not believe the government want this.

Labor's suggested amendment is that we should take the opportunity with this enabling legislation to put in place a strong guarantee of future local content. Let us amend the broadcasting act. Let us take the ABA out of the equation in the determination of local content and let us make it a vote of the parliament. Let us pass some legislation that will say that local content will remain at 55 per cent and that if any government in the future wants to reduce the number of Australian voices on television or wants to reduce Australian content it will have to be brought to the House of Representatives and it will be have to be brought to the Senate. That is the second amendment, consistent with the FTA, protecting Australia's interests and ensuring there are Australian voices long term on free-to-air television.

But, as I said, I cannot claim complete credit for that idea, because I had the support of other parliamentary colleagues. Some of those parliamentary colleagues are from the other side of the chamber. The Joint Standing Committee on Treaties, which examined this issue, unanimously supported this idea. That is right: half-a-dozen government members and senators agreed to and supported this provision being put in place. I cannot claim all the credit, because half-a-dozen members of the government believed in this amendment and thought it was a good idea too. I say again, Senator Kemp, that you can go to the Prime Minister and say, `It's not just Senator Conroy's good idea. This includes some of our own backbenchers. Andrew Southcott and other members of JSCOT signed off on this.' I think Senator Marshall might have been on that committee. Senator Marshall and half-a-dozen members of the government on that committee signed off on this idea. It is consistent. Nobody said it was inconsistent two months ago when JSCOT produced its report. No-one said that this would destroy or undermine the FTA or that you could not have the FTA. There they are: two amendments consistent with support for the FTA but protecting and enhancing Australian local content and protecting and enhancing Australia's PBS. Senator Kemp, that is the offer today to the Prime Minister of Australia: you can have the FTA inside seven days and probably by the end of next week—maybe earlier if the Senate gets through its business. Two sensible, reasonable, commonsense amendments, and the FTA is through.