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Monday, 9 August 2004
Page: 25869


Senator HILL (Minister for Defence) (1:46 PM) —I am pleased to conclude the second reading debate and to take the opportunity to thank all honourable senators for their contributions. The debate has gone considerably longer than was expected to allow the Labor Party further drafting time for its patent amendment. I noticed that the speaking list was added to this morning to allow yet further hours. It seems astonishing to me that, if Labor were to come up with a worthwhile idea, it would take it so long to produce that idea in written form. We all know, in fact, that it has run into great difficulty in that regard.

We believe that this is a historic moment and a historic debate. It is a debate on enabling legislation that will allow this country in turn to put the US-Australia free trade agreement into operation. It is an agreement that has been negotiated between the two governments of Australia and the United States of America that gives the Australian export industry an opportunity to significantly grow its exports into the largest and most dynamic country in the world. We know that it would not have been achieved by a Labor government, because, of course, Labor do not believe in bilateral trade agreements. They believe in putting all their eggs in the multilateral basket. If that does not succeed then these opportunities simply will not come about.

By contrast, the coalition government, being much more pragmatic, took the opportunity to seize a range of different bilateral trade agreements: one with Singapore, the Thailand trade agreement and now the US one. We are making significant progress with ASEAN as well. Further down the track we will look at the sorts of opportunities that China is going to present. So, yes, we on this side of the chamber are prepared to take the benefits and opportunities that flow from multilateral trade reform, but we are not so much purists that we will forgo the opportunity to take significant advantages if they present in the bilateral form.

I have to say that there were many who believed that it would be impossible, particularly within this time frame, to negotiate such an agreement with the United States. The fact that it was successful is a great credit to Minister Vaile and to the Australian negotiators, and I am particularly pleased with the reception it received after endorsement by the administration in the United States. The reception in the Congress was overwhelming. I think somebody said that it is the best vote that a bilateral trade agreement has ever received. I think that in part reflects the very close and positive relations between the two countries, which have clearly also been enhanced by the Howard government.

So it is a very important moment. Legislatively we are looking at locking in an agreement which we believe will give a $6 billion benefit to the economy annually after year 10. That is $57.5 billion over 20 years. It can produce another 30,000 jobs for the Australian community. It reflects the approach that our government has taken to the economy: to get the fundamentals right, keep interest rates down, keep inflation down and steady, and free up the industrial relations system so that business will grow and be in a position to take new opportunities as they present. On the other side of the ledger, we look to facilitate greater opportunity in export markets, of which this bilateral agreement with the United States presents the greatest opportunity of all.

That is why this agreement and this legislation are so important to the coalition. They will give the Australian economy the opportunity for significant growth in the future and for many more thousands of Australians to obtain worthwhile employment. They will significantly build on the economic successes of the last 8½ years. It is true that we said that in this negotiation there were a number of areas that we would need to protect, areas that are vitally important to this country for a range of different reasons. Certainly we wanted the expanded economic opportunity—but not at any price. Of course, an example of that is in relation to quarantine. We were not prepared to sacrifice the Australian quarantine system and the safeguards that are so important in that regard, and we succeeded in protecting the Australian quarantine system.

Secondly, we were obviously interested in preserving what we referred to as `the cultural sector in Australia' from a much larger economy whilst recognising that we do not want to be too protective because we want our cultural industries to be able to invest in the United States. We succeeded in doing that in these negotiations and I think it was a very good outcome in that regard. Thirdly, we said that the PBS was sacrosanct and that we were not going to put in jeopardy the protection Australians have for reasonably priced medicines through the PBS. We succeeded in negotiating this agreement without putting in jeopardy that system and all of the benefits it has that we treasure.

Labor, for its purposes—and after it had been through many months of agony on this matter, agony demonstrated through the Senate committee inquiry as well as through the joint inquiry and through various public manifestations—decided that it really had no choice but to support the agreement. In fact, the Australian Labor Party would have looked ridiculous—there is no doubt about that—if, after the endorsement that the agreement received by the US Congress, it had gone out and voted down this opportunity of another 30,000 Australian jobs, apart from all of the other benefits.

Not surprisingly, Labor, wanting to salvage a few political points, picked up one recommendation of the joint committee in relation to the audiovisual sector. I have to say that I found that interesting because, during the many months of deliberation on this matter, Labor seemed to dismiss the considerations of the joint committee, which was actually set up for the specific purpose of examining prospective treaties, saying that, rather, it needed to rely upon a separate Senate committee. When it came to the crunch, it referred back to the joint committee to find a recommendation that was supported by both sides to justify an amendment to further entrench in law the audiovisual protections. We are prepared to come on board. We may not have thought that it was necessary and we may well have thought that the existing system provided the protection that was necessary, but we can accommodate that and we have put forward an amendment to do so.

As to the second area in which Labor thought that it might be able to seize a short-term political benefit, it was argued that in some way this agreement provided a disincentive for the growth of generic drugs, that that would produce a cost pressure and that therefore, by amending the Australian Patents Act to address unsatisfactory practices that occur overseas but that do not occur in Australia, the potential for growth in the generics sector would be supported. That was, of course, a nonsense as the Australian patents system works well. There is not the same opportunity for abuse as exists within the United States, Canada and some other places. Nevertheless, it was a line that could be spun, and it was spun by Mr Latham, that this would be an amendment that would in some way look to ensure lower priced drugs.

I have to say that this government, in its support for the PBS, has also strongly supported drugs at an affordable price. There is no benefit for this government in drugs that are going to become unaffordable, but you need to approach that in two ways. Firstly, you have got to provide the incentives for the pharmaceutical sector to develop new products. Secondly, you have got to ensure that those incentives are not such that they are unfair to the ultimate growth of generics and with the downward cost pressures that they can introduce into the marketplace. It has been the view of this government that that has worked well for Australia and will continue to work well for Australia, but Mr Latham said no, it could only be safeguarded by an amendment. We have waited all of last week and all of today so far for this magic amendment. As Mr Howard said, when the amendment is put on the table it will be considered. We badly want this agreement to pass, for all the benefits that I outlined in the second reading speech. We will approach the debate in the committee stage on that basis: always constructive and helpful but certainly not wanting to see the destruction of the patents system to achieve that goal. It is in that spirit that we will approach the committee debate. I thank the Senate for its patience and with that conclude my second reading presentation. I seek leave to continue my remarks later.

Leave granted; debate adjourned.