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Wednesday, 8 December 1965

Dr J F Cairns (YARRA, VICTORIA) .- The purpose of this Bill is to amend the Customs Tariff (Dumping and Subsidies) Act 1961 to give power to determine or define an export price where goods that are imported to Australia are, in the opinion of the Minister, subject to reasonable grounds for believing that the documentary export price or other information provided in respect of them is not adequate to determine what the price should be. When the Bill was introduced the Minister for Housing (Mr. Bury) pointed out that the level of any protection granted to an economic and efficient Australian industry should be based, or is based, on the assumption that goods imported into Australia are sold by the exporter at a fair and reasonable price not below normal value. This means that the export price should be not less than the price at which the goods are available in the domestic market of the country of export. From that concept comes the concept of dumping. If goods are exported from one country to another at a price which is significantly less than that, then the practice is called dumping.

The Minister has told us that it frequently happens that goods are sold for export at prices which, in comparison to their normal values, are not fair and reasonable and which are deliberately set at unduly low levels. There could be many purposes for exporting conduct of this kind - to capture a market in some other country then, when having captured it and perhaps eliminated producers in that country or competitors from elsewhere, to bring the price back to one which may give the exporter a greater return. It may be that a country possesses an industry which is planned to expand and, in the course of doing this, it may pay to sell the products of that industry at lower than what could be regarded as normal values. Sometimes exporting, which can be defined as dumping in the manner that the Minister has looked at the matter, may not, in fact, be an uneconomic process, it may not be a deliberate one to damage or to exclude a competitor, but it may be the result of the particular stage of development of the industry concerned.

The Minister has told us that the Government has taken the view that dumping in all its forms must be countered whenever it damages or threatens to damage an Australian industry. Until this amendment was introduced the law was that evidence was required from the importer or from other people to endeavour to ascertain what, in fact, was the normal value of the commodity concerned that might have been suspected of being dumped. For all practical purposes the Minister and the Department were limited to the evidence that was procurable. We have been told that a complete review has been made of the Act and its shortcomings in relation to the dumping practices that were impairing the protection to Australian industry. The Bill incorporates the result of this review.

One clause is of special significance and the rest are incidental. That- clause, of course, is clause 3. It vests in the Minister for Customs and Excise a power to determine the export price of goods exported to Australia where, in his opinion, there are reasonable grounds for believing that the documentary export price has been fixed with a view to avoiding dumping duty or other special duties payable in accordance with the provisions of the Act. The Minister has pointed out that this amendment has a wide effect. It introduces into the legislation an element of flexibility necessary to counter all the various practices that have arisen.

The Opposition recognises that difficulties of the kind that have been described may arise and that the Department and the Minister need power to be able to deal with them. But, of course, this is a very arbitrary power. We realise that when we give the Minister power we are really giving it to the Department. Let us be quite frank about this: The Minister will do what he is advised to do; he will not be making the investigations himself but he will rely upon and trust those who are in a position to advise him. We are giving a very arbitrary power to determine the export price of goods where the Minister is not satisfied with the evidence that becomes available to him. I emphasise to the House that this is in fact a very arbitrary power and one that could go wrong. It will have to be watched very carefully. A power of this sort can be dangerous and it should not be lightly given nor should it be lightly used.

I have seen a little of this in recent years and I know that there are interests involved that do not always lead the parties concerned to act impartially. I have seen a number of cases where Australian manufacturers have been very quick on the draw in respect of some competition from overseas. One feels, as I have felt from time to time, that the Department is a little more inclined to take notice of the manufacturers than it is to take notice of the importers - who also have a considerable amount of capital and interest involved - when it comes to a question of deciding between one and the other. 1 have noticed this recently particularly with imports from countries that may not be popular with Conservative people in Australia. I am referring to countries like China and some of the Communist countries in Europe. I know from my own experience that importers of commodities from countries like those and also from other countries in Europe - and here I refer to West Germany in particular - have outlaid a considerable amount of money on transactions which, from all the evidence I can see, were fairly normal; but then there has been a suspicion that dumping has been involved, because the process of costing may not have been quite the same as that with which we are familiar, and the importer has been caught. Although he has priced his commodities properly and in some cases has actually sold them on the Australian market at what he regarded as a genuine price, he has been told that he has to pay a dumping duty because those commodities were held to have been dumped.

I have no objection to a provision of this kind, and I have no objection to its being used, but when an importer imports goods in good faith and sells them in good faith at a price which is determined by the import price that he paid, he should not be required to pay a penalty if it is felt he has acted in good faith. In one case in respect of which I have made representations in the last few weeks I find that there is to be a dumping duty - securities have had to be taken out - and the man will have to pay up even though I think good faith was involved all the way through the transaction. Clause 9 of the Bill provides that there shall be no retrospective application in this respect. That is an excellent principle. I believe that we should protect industry against dumping but I do not think we should do it retrospectively. I approve of the provision in clause 9 but I think that where securities have been held in the past, in effect there has been retrospective operation.

Most of the clauses of the Bill are merely drafting changes embodying no variation in the interpretation or application of the provisions. Some of the amendments in clause 3 are of this nature; those in clause 4 are almost completely so; and clauses 5, 6, 7 and 8 are the same. Clause 9 provides that amendments in the Bill are not to be applied retrospectively. The Bill is not therefore one of great substance, although the powers given in clause 3 can have very wide application and could be exercised in a very arbitrary way.

I do not intend to delay the House any longer on this Bill. The Opposition does not oppose it, but we emphasise the extent to which clause 3 provides an arbitrary power which could be wrongly used. We emphasise that its application has to be watched very carefully.

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