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Thursday, 5 December 2013
Page: 1717

Dr STONE (Murray) (09:01): The Customs Amendment (Anti-Dumping Commission Transfer) Bill 2013 is a non-controversial bill. It provides for the Anti-Dumping Commission to be transferred from the Australian Customs and Border Protection Service to be administered instead within the Department of Industry under Minister Ian MacFarlane. This is where it more obviously belongs.

What is dumping? It occurs when an exporter sells goods to Australia at a price below the so-called normal value of the goods. The normal value will usually be the domestic price of the goods in the country of origin. The margin of dumping is usually the amount by which the normal value exceeds the export price of the goods. The Australian industry or business which brings an allegation of dumping forward for investigation must demonstrate that there is dumping or subsidisation and that the industry has suffered material injury as a result. Remedial action may then be taken where dumping and/or subsidisation causes or threatens to cause material injury to an Australian industry or business. The Australian industry usually needs to show a real reduction in selling price, profit or market share. If there are reasonable grounds for an antidumping action, duties can be imposed on the incoming dumped or subsidised products equivalent to an amount that reflects the subsidy or the difference between the normal price in the home market and the price it is sold at in Australia.

The normal value of the goods is something that has to be calculated. The problem is that it is very difficult for an Australian company to go to a managed economy—like that of China, for example—and work out what the price of the goods in that domestic market actually is. This is especially the case if an identical product—a 150-gram plastic container of preserved peaches, say—is not to be found. It is also difficult for the industry to nail what level of subsidy might be embedded in, say, a European Union marketplace or, again, in a managed economy like that of China. Perhaps that accounts for why there has been an extraordinary dropping off over the last 10 years in the number of businesses or industry sectors bringing antidumping actions.

This is a problem for Australian manufacturing, given that we are already in a difficult situation with the very high dollar. We have watched much of our food manufacturing industry leave the country. We only have one fruit manufacturer still standing—the SPCA preserved fruit and vegetable company in Shepparton. SPCA very recently brought an antidumping action against imported Italian canned tomatoes. One of the things about a dumping situation is that the material injury accumulates day after day, so the longer it takes to get antidumping duties—or countervailing measures, if it is a case of subsidisation—put in place, the more damage is done to that home industry.

The request for an antidumping investigation went forward from SPCA in April this year. The matter has still not been resolved in relation to preserved peaches imported from South Africa, but there has been a preliminary finding in relation to the Italian canned tomatoes and a provisional antidumping measure has been imposed. What the new Anti-Dumping Commissioner found was that Italian tomatoes were being imported through a dozen or more separate firms and that antidumping duties of between six per cent and nine per cent should be imposed.

You can imagine that a lot of our supermarkets are quite saddened that they will no longer have the dirt-cheap dumped product to put in their home brands. Not only have they been able to offer product, in the case of tinned tomatoes, at about half the price of the much better tasting and much safer Australian product but, even if they have chosen not to put the dumped product on their shelves, they have been able to say to a company like SPC Ardmona, 'We can bring this product in from Italy for 40c a can and you are telling us that you want to sell yours for 90c or $1.10 a can to cover your costs of production?' So the dumped product is having a dampening effect on the price the Australian producer can obtain, as well as often filling up the shelves of Coles, Woolworths, ALDI, IGA and so on. It is very sad that we now even have a very large label on these cans of imported Italian tomatoes saying 'Australian organic certified'. Clearly this is a ruse to bamboozle the shopper into thinking that if the big sign on the side of the can says 'Australian organic certified' perhaps the origin of those tomatoes is some glorious open paddock in Shepparton growing world-best tomatoes.

There is an extraordinary set of statistics demonstrating how we have pursued antidumping actions in Australia over the last 10 years. I have mentioned that it is extraordinarily costly and takes a lot of time for an industry to bring an antidumping action given that the industry has to go out there into the marketplace and find the data from some factory in Yunnan or some other part of outback China or perhaps in South Africa. They have to get data which stands up to objective and independent scrutiny. Of course the antidumping officials, who were before in Customs and who now will be in the Department of Industry, assist with that process but it is extremely difficult and it takes a lot of time to bring an action. Companies like SPCA talk about the hundreds of thousands of dollars involved. So we should not be surprised that in the 10 years up to 2008-09 Customs—then the auspicing body but under this bill it will be Industry—initiated about 12 new antidumping actions each year. By contrast, the number of cases investigated in the 1990s was about 40 a year. The amount of new WTO sanctioned antidumping measures imposed has, in parallel, dramatically fallen, from around 14 cases each year imposed in the 1990s to only about five cases each year imposed in the last 10 years. So, about half of all cases brought to the antidumping investigator succeeded in the last 10 years and about one third succeeded in the previous decade.

You might wonder whether Australian businesses have simply given up because they have felt they could survive despite the dumped product. No; companies like SPC Ardmona, with dumped product making it very difficult for them to survive, simply do not have the hundreds of thousands of dollars to pursue a case. They also know that by the time they get an outcome it may be too late. SPC Ardmona took to the Anti-Dumping Commission in April this year the allegation that peaches from South Africa were being dumped, and there still is not an outcome. That is appalling. We still have peaches coming in from South Africa. You might say that at least Coles, Woolworths and ALDI have said they will no longer put imported preserved fruit into their no-name brands—hallelujah for that—and they are responding to the Australian public's demand that Australian product only be put into their cheaper brands. The trouble is, the price pressure is still there. Coles and Woolworths are still saying to the various Australian food manufacturers that they are only going to pay them such and such an amount and that they want that product on their shelves at a particular price because they can get an import equivalent product from South Africa or Chile or Italy or China for half what Australian companies are offering their product at. I understand Coles, Woolworths and ALDI are eventually only to put Australian origin product in their no-name brands, but they are still expecting the prices paid for Australian product to be at or below the cost of production. Clearly this is not a sustainable market strategy for the long-term survival of the food manufacturing industry in Australia. I am hoping that our new voluntary code of conduct for supermarkets will do something about that unconscionable use of market power and lessen the pressure put on prices for our Australian product.

It is not just food about which dumping allegations are made. Measures have been taken against polyvinylchloride, or PVC, homopolymer resins from Japan and the USA, and these antidumping measures have been in place since 1992. Brandy from France has had antidumping measures applied to it continuously since 1995. When we do get it right, we do persist with antidumping measures and so—I hate to use the 'P' word but I will—we can protect our Australian brandy industry or our own PVC industry from unconscionable and unfair behaviour like dumping or subsidisation.

Compare the measures put forward by our Anti-Dumping Commission—it has only been in business only since July this year, but there was the Customs regime before that—when addressing antidumping allegations with what happens in New Zealand. Why is it that New Zealand has an extraordinarily different set of outcomes? They have had an antidumping action against preserved fruit from China for more than five years, and they recently reimposed that regime. They do not hesitate to carefully and properly look at an allegation and, if it is found to be upheld by the data brought forward, they will impose an antidumping, WTO-sanctioned, lawful measure against the dumped product coming into their country. They therefore have a whole range of vibrant and sustainable industries, particularly food related industries, while in Australia those industries have a real struggle. I keep thinking about the Girgarre tomato sauce factory owned by Heinz, which shut up shop about 12 months ago. Girgarre is a town of about 300 residents in my electorate and the Heinz tomato sauce factory employed about 90 people. You can imagine the impact on that small country town. Where did Heinz go to? Heinz took their tomato sauce manufacturing to New Zealand, where the government is much more flexible and dexterous when it comes to looking at subsidised or dumped product coming in which could unfairly compete. So the Heinz tomato sauce factory is now in New Zealand—where they do not even grow the varieties of tomatoes which are turned into sauce. How extraordinary!

We have another extraordinary situation in Australia. In New Zealand, if there is not an identical product produced in the home country, say South Africa—if there is not a can of peaches or a plastic container of peaches sold there identical to the one that they are selling in New Zealand; in other words, if it is purpose produced just to sell in New Zealand and is not sold in supermarkets back home in South Africa—they work out surrogate prices to establish whether this product is being dumped in New Zealand according to the costs of production and prices of like product back in South Africa. In Australia we take a weighted average, which is extraordinary. We will take two or three different South African preserved fruit products—maybe a small can, then a larger can and maybe a plastic pack—and we average the dumping or subsidy proportions in each of those prices across those three products. They call that a weighted average, and, obviously, when that averaging is undertaken as a means of working out whether or not a single product is dumped you have a much smaller chance of the dumping being proved. This is a bit of a mystery. Why do we do this in Australia? Why are we using this weighted average, rather than using the system that New Zealand uses, which is absolutely WTO consistent?

With our new Anti-Dumping Commission and our antidumping regime—which both Labor and the coalition know needs strengthening—we have got to look at just how we go about this business, because Australia does not play unfairly. We want a level playing field. Whether a product is car tyres, or steel rims for tyres, or PVC or glass, we do not think it is right that an Australian manufacturer should have to compete against product that is brought in here at a fraction of the price it is sold at back home or that is subsidised. That is not fair. Why aren't we standing up and using the measures that the World Trade Organisation allows? We are a signatory to the World Trade Organisation. Let us start to get with the strength here, rather than be naive or shy or nervous about applying measures that other countries use with a great deal more rigor. They actually—I am using the word again—protect their home industries from unfair practice, and they give them a more level playing field. I commend this bill to the House. It is an important bill. It transfers antidumping from Customs to Industry. I commend the bill. (Time expired)