Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 21 October 2015
Page: 12044

Mr WILSON (O'Connor) (16:27): Today I rise today in support of the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 and its complementary Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015. I thank Minister Robb for introducing these bills to the House and for the incredible job he has done towards the enabling of this landmark free trade agreement, which, in his words is 'the highest quality and most liberalising trade deal that China, the world's second biggest economy, and our largest two-way trading partner, has done with any other developed country'.

On the passage of these bills, this agreement will provide Australia with unprecedented access to the world's second-largest economy and a market of some 1.3 billion consumers, eager for Australian products and services. China is currently Western Australia's largest export market, worth over $64 billion in 2014. My electorate stands to benefit tremendously from the timely passage of these bills, such that the agricultural, mining and tourism interests of O'Connor can reap the economic benefits of enhanced trade with China.

Immediately on the passage of this bill, 85 per cent of our exports will qualify for duty-free entry into China, rising to 93 per cent within four years, and 95 per cent on full implementation of the China-Australia Free Trade Agreement.

This agreement will give Australia a head start in many instances against competitors like the United States, Canada and the European Union. Nowhere is this better illustrated than in other countries' existing China FTAs, which have led to a fourfold increase in exports from New Zealand and a sevenfold increase in exports from Chile into China.

In 2011, Australia's agricultural exports to China were worth $5 billion, climbing to $9 billion in 2014. Prompt implementation of the ChAFTA will result in first-round tariff reductions immediately. The tariff reductions are scheduled annually, which means a second round of tariff reductions will occur on 1 January 2016. Australian beef already accounts for over half of China's beef imports, and our main competitors do not yet have FTAs. Our exports of beef to China are already on a steep trajectory, rising from 35,000 tonnes in 2012 to 128,000 tonnes, worth over $650 million, in 2014. Demand for our premium beef is tipped to grow exponentially with the expansion of China's middle class and the desire for a Western diet and high-quality protein. For the beef producers of my electorate, ChAFTA will enhance market access, with tariffs ranging from 12 to 25 per cent eliminated within nine years. Meat and Livestock Australia's Andrew McCallum spoke at a Pastoralists and Graziers Association conference I attended recently. He estimated that ChAFTA will reap annual benefits to the beef industry of $273 million per annum by 2024, to represent a total benefit of just under $3.25 billion between now and then.

China's demand for sheepmeat is also growing, with imports from Australia more than doubling between 2012 and 2014. China is Australia's second most important sheepmeat destination despite existing tariffs of 12 to 23 per cent. Although New Zealand has a longstanding FTA with China that will see its lamb enter tariff free from 2016, ChAFTA will gradually achieve the same status for Australian sheepmeat over the next eight years. Fletcher International Exports operates a sheepmeat abattoir and processing plant in Narrikup in the Great Southern region of my electorate. Fletcher reports a 30 per cent growth in exports of sheepmeat to Korea since the implementation of the Korea-Australia Free Trade Agreement. It looks forward to the implementation of ChAFTA, where sheepmeat tariffs into China of up to 23 per cent will be eliminated within eight years. Fletcher's plants in Narrikup and Dubbo together employ over 1,200 workers and have the capacity to process over 90,000 animals per week. In the last two years, they have exported over 51,000 tonnes of sheepmeat into China. Roger Fletcher, owner of Fletcher International Exports, states:

Without the China Trade deal, the Kiwi's will have the jump on us. That will mean lost jobs in regional communities.

In addition, Fletcher anticipates growth in demand for its sheepskin and lower value sheepmeat products as tariffs are reduced. The sheepskin tariff of seven per cent will be removed within four years, whilst the sheep offal tariff of 18 per cent will be removed within seven years.

According to Meat and Livestock Australia, the North Asia FTAs will reap over $20 billion in benefits over the next 20 years for Australian producers of sheepmeat, beef and their co-products.

With respect to dairy, China is now Australia's No. 1 market for dairy exports, with our industry worth $13 billion. Our dairy farmers face tough competition from New Zealand, the European Union and the United States. Currently, New Zealand dairy produce already receives considerable advantage due to its pre-existing FTA with China. Australia's dairy tariffs are currently up to 20 per cent, but ChAFTA will put our farmers on a more even playing field, with reductions to zero over four to 11 years, depending on the product. In the south-west of my electorate, this will have impact on large and expanding export operations like the Daubney family's Bannister Downs Dairy. I was speaking to Sue Daubney recently and she reiterated that this is a huge opportunity, not to be missed. Bannister Downs already has a seamless trade with Singapore, which she says is 'an open, friendly market'. Recently, there has been significant investment from big-business entities like Gina Rinehart, whose Hope Dairies is in partnership with Bannister Downs. Sue states that, although there are many barriers to trade with China, especially exporting chilled milk, they look forward to the ChAFTA helping open up this market to Australia's quality dairy produce.

O'Connor also has a significant wine-producing industry, with highly awarded premium wines coming from the Mount Barker, Porongurup, Frankland, Great Southern, Manjimup and Pemberton regions. The export of Australian wine to China was worth over $200 million last year. Australia currently competes with New Zealand and Chile, who have preferential access under their own FTAs with China. Tariffs on Australian wine exported to China currently range from 14 per cent to 20 per cent and are a significant impost on our producers, who vary from small boutique businesses to larger volume commercial propositions. On implementation of ChAFTA, this impediment to trade with China will be removed over four years. One of the big producers in our electorate is the Burch Family, who make MadFish, Howard Park and Marchand & Burch branded wines. I have had the pleasure of tasting their delicious wines at their Denmark cellar door. The Burch family have been exporting wines for over 20 years and are very Asia focused. Implementation of the Korea-Australia Free Trade Agreement has already seen an increase in their sales to Korea by 50 per cent. China is already one of Australia's largest wine export destinations, and Burch Family Wines CEO Jeff Burch is gearing up for when reductions in tariffs under the new free trade agreement with China commence. As he says, the government is creating a great opportunity with this free trade agreement, so with implementation of ChAFTA it is 'up to the business community in Australia to get off their backside, and get out there and have a go'.

As I mentioned, I am a farmer. I raise sheep for wool and meat and grow predominantly wheat, barley and canola. China makes up 75 per cent of Australia's wool market. Wool already enters China duty free but under a strict World Trade Organization quota of almost 290,000 tonnes. As part of the ChAFTA, there will be an Australia-only duty-free wool quota of 30,000 tonnes of clean wool on implementation, increasing by five per cent per annum to over 44,000 tonnes by 2024. This is in addition to continued access to the World Trade Organization quota. Good news for the grain farmers in my electorate is that tariffs on grains such as barley, oats, quinoa and millet will be immediately reduced to zero on the implementation of ChAFTA. Last year, Australia exported over $1 billion of barley alone to China, up 33 per cent since 2010. Although wheat is excluded from the current agreement, there is provision to have it reconsidered within three years. Andy Crane, Chief Executive Officer of Co-operative Bulk Handling, looks forward to the opportunities that will open up for the Australian grain industry with the implementation of ChAFTA, resulting in 'a sustainable competitive advantage to the economies and societies of both nations'.

For other agricultural produce like horticulture, aquaculture and fisheries, ChAFTA will also open up huge export opportunities. Horticulture is the predominant industry in the Manjimup area of my electorate, growing premium avocado, potatoes, apples and other vegetables. China is a growing market for Australian horticultural exports, with exports worth $56 million last year, up from $13 million in 2010. China applies some of its highest tariffs to our horticultural produce. The removal of tariffs of up to 30 per cent over the next four years will be a boon for the exporters of Manjimup. Manjimup also produces over 80 per cent of Australia's prestigious black winter truffle, which is harvested at the opposite time of the year to the French and Italian varieties. Italy currently dominates the truffle market into China. Manjimup's Truffle and Wine Company managing director Alf Salter welcomes any opportunity to contribute counter-seasonal produce to the Chinese high-end restaurant market and will ramp up his negotiations to try to secure access into China on the implementation of ChAFTA.

I have also been approached by constituents growing freshwater crustaceans, such as yabbies and marron, who are keen to capitalise on markets in North Asia. Their produce would be shipped chilled and live and so requires different consideration to chilled or frozen seafood. Australian seafood exports to China totalled $35 million last year. Our Great Southern produces world-class abalone, southern rock lobster, scallops and crab. My electorate's $10 million seafood industry stands to gain from the removal of tariffs of 14 per cent on abalone, crab and scallops and 15 per cent on southern rock lobster over the next four years.

While the agriculture, horticulture and viticulture sectors as well as fisheries and aquaculture are undoubtedly the biggest winners under ChAFTA, the resources sector, which is so important in many parts of my electorate, will also see significant benefits upon implementation of the agreement. While the gold sector is not currently subject to any tariff, the increased investment from China will see many mining operations either reopened or expanded. A great example is Hanking, operating St Barbara's Southern Cross mine, which reopened in the last 12 months with a workforce now of over 300 and is looking to expand by another 60. Norton Gold Fields owns the Paddington operation, 35 kilometres north of Kalgoorlie and one of Australia's largest domestic gold producers, with annual production of more than 178,000 ounces. The nickel industry, which is centred around Kambalda but also has significant operations at Leonora, Leinster, East Hyden and Ravensthorpe, has suffered price reductions of 30 per cent on the world market over the past 12 months. The collapse in prices has tested the viability of every nickel producer, and cost cutting has led to many job losses across the industry.

The ChAFTA does provide some relief with the immediate removal of a three per cent tariff on nickel mattes and oxide. Minerals Council of Australia Chief Executive Brendan Pearson recently summed up the benefits of ChAFTA by saying:

The trade agreement with China is an unambiguously good deal for Australia. It is a high quality agreement that will deliver stronger economic growth, more jobs and better living standards.

That quote sums up what this agreement means for my electorate: jobs, jobs and more jobs. One in five Australian jobs is linked to trade. Growing our international trade means growing Australian jobs. I thank all in the chamber today for reaching a united decision to support these bills for the good of our nation going forward. I therefore commend these bills to the House.