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Tuesday, 28 February 2012
Page: 2104

Mrs GRIGGS (Solomon) (19:02): I rise to speak on the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011. As my colleague and friend the member for Barker said, the coalition supports the amendments as a measure towards improving a system that at present is too slow, too cumbersome and prohibitively expensive for many Australian businesses to use.

Australian industries and business, particularly in the manufacturing sector, have been disadvantaged by a flawed antidumping regime—a regime where rulings are often made too late or provide no leverage to address damage caused to a business or industry. In July 2008 at the 22nd COAG meeting, a commitment was made by all Australian governments to continue with national competition reforms consistent with the economy-wide reform agenda. At the same time a review of the effectiveness of Australia's antidumping system was referred to the Productivity Commission, which finalised a report at the end of 2009 with a public release in May 2010.

It took the government 18 months to respond with some changes introduced in June 2011, even though the Labor government indicated in 2008 its intent to revise the antidumping system. In the period from July 2008 to the report completion in late 2009, one company in particular felt the impacts of a cumbersome antidumping system. In December 2008 the then Minister for Home Affairs, Bob Debus, as the result of an investigation conducted by the Australian Customs Service, imposed dumping duties on Indonesian and Chinese tissue products. It had been found that Chinese imported tissue products undercut the Australian market by between two and 25 per cent, while Indonesian tissue products undercut the local products by some 33 to 45 per cent. Unfortunately, in 2009 the decision was reversed and the dumping duties relating to the imported Chinese and Indonesian products were removed.

Kimberly-Clark unsuccessfully pursued the dumping of this cheap imported tissue product through all channels, including advising state and federal government representatives about the potential damage to the local industry. In early 2011 Kimberly-Clark shut down two paper tissue machines at the company's Millicent Tissue Mill in South Australia, with the loss of 170 jobs. As reported by the ABC at the time, a company spokesman stated:

Dumping has occurred, the (Australian) industry has suffered, and the gates are open for imported competition which is effectively unfair competition.

They further stated:

The high cost in having to fund an investigation means it's only open to the larger companies - smaller companies can't afford it and have to put up with the unfair competition.

It is quite clear from this case study that the current antidumping system failed and resulted in 170 manufacturing sector employees losing their jobs.

It should be noted that the decision to reverse the dumping duties in 2009 came as a result of a review by Customs, which reported 'material injuries to the Australian Industry by the goods exported to Australia from China and Indonesia is not foreseeable and imminent'. However, from my perspective, the loss of 170 jobs, indeed the loss of any job, is material and damaging to this particular Australian industry. The loss of any Australian job is of great concern to us on this side of the House. The manufacturing industries in my own electorate of Solomon cover all sectors of this space—from small business operators to large multinational companies. While the market is small in national terms, it is fair to say that any impact felt is nonetheless real and tangible. Remoteness does have its disadvantages. Freight costs, travel times and a high cost of living, including rents, impact significantly on business and industry across the board. Although our market is small, the dumping of product exported from overseas localities has the potential to find its way into local economies around the country. Going back to the Kimberly-Clark example, tissue products in this instance could well have made it into the local Darwin market.

In circumstances where, for example, goods might be supplied by the multinational food companies, local small businesses struggle at best. But when dumping of products occurs, this further undercuts already extremely tight margins. As I have said in this place before, you only have to look around the Darwin CBD to see the number of small businesses closing down. While this is not a direct result of any product dumping, it is a clear sign of a highly volatile business sector running on extremely tight margins. My point is that small markets are a barometer of how an economy is situated.

The potential impacts of dumping of exported goods into the Australian marketplace extend to a ripple effect impacting more broadly than on just one specific market. Referring back to the Kimberly-Clark case, if a national company such as Kimberly-Clark states that the costs associated with an investigation are high and prohibitive to small businesses, it could be said that the present cumbersome antidumping system is not accessible to smaller business and industry and therefore is not supportive of all Australian businesses and industry sectors.

Furthermore, the current system makes it incumbent on Australian businesses to prove that the products exported from outside Australia are being sold at below cost. This is an onerous responsibility requiring at all times a complex and expensive investigation. An investigation conducted by Customs currently requires all parties to provide submissions within 40 days. However, an array of options exists by which Customs can extend this date, leaving Australian businesses to face often lengthy and damaging delays. At present, the role of undertaking investigations and providing advice to government is administered by the Australian Customs and Border Protection Service.

Customs is already under pressure arising from border protection issues and the enormity of the issues regarding illegal boat arrivals. It is also worth considering what impact cuts to the Customs budget are having on the delivery of its core business and whether antidumping should be the responsibility of Customs. Over the course of the budgets for 2010-11 and 2011-12, a total of 340 jobs have been axed by this Labor government, while at the same time it has reduced the overall Customs budget. The government has stated it will increase staffing to the relevant Customs branch by 31 to 45 positions. However, this was not based on the provision of additional funding but on redeployment of existing resources from other areas within Customs, further adding pressure to border protection capability.

It is the coalition's assertion that this function should be moved to the Department of Innovation, Industry, Science and Research—a portfolio which has the necessary industry acumen to pursue antidumping actions. The coalition will provide an extra $2.5 million per year to the Department of Innovation, Industry, Science and Research with the addition of 20 specialist personnel to pursue dumping investigations with increased speed and vigour.

Additionally, the coalition will introduce a more stringent and rigorous enforcement deadline, including a mandatory 40-day limit on party submissions to the department relating to investigations. In addition, the coalition will apply more penalties, including sanctions against parties that fail or refuse to cooperate with investigations. The onus of proof for such investigations will be reversed. These measures, in part, are designed to move Australia's antidumping regime more in line with other systems in place across the globe.

In nations such as the USA and a number of EU member states, it is not uncommon for relevant authorities to introduce countervailing measures at the point that they are able to argue that any subsidised import threatened harm to local industries. Using Canada as an example, the system in place has a greater national public interest focus or test which is applied prior to the consideration of any action. This public interest test is bounded, in that a presumption in favour of measures exists if dumping and material injury is determined.

Australia, as an active member of the World Trade Organisation and a signatory to relevant agreements, automatically accedes to the Anti-Dumping Agreement, or ADA, as annexed to the final act embodying the results of the Uruguay round multilateral trade negotiations of 1994. In 1995 the government of the day enacted changes to antidumping legislation to conform to the ADA. It is noted that the relevant minister at the time advised the House that Australia's implementation of the ADA did not alter the antidumping legislation in any fundamental sense.

Successive governments over the years have inserted new amendments in line with ADA as required. The coalition will strengthen the enforcement provisions of the World Trade Organisation agreement on subsidies and countervailing measures, thus strengthening Australia's antidumping regime and aligning it more closely with other signatory nations.

The amendments offered in the Customs Amendment (Anti-dumping Improvements) Bill (No.2) are broadly supported by the coalition. However, it is evident from my input and the input of other coalition members to this debate that we on this side of the House are willing to show the political will necessary to deliver meaningful reforms. Australia has a global responsibility for fair trade but also, and more importantly, we have a responsibility to our own business and industry sectors. We on this side of the House offer Australians hope, reward and opportunity. We must ensure that, when the dumping of products from offshore exports occurs, companies, businesses and industries have the knowledge and faith that a strong, fair and competent antidumping regime exists—one that is timely and decisive.