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Friday, 2 March 1984
Page: 305

Senator WATSON(10.44) —The Senate is currently at the second reading stage of two Bills which are aimed at preventing dumping of goods on the Australian market at artificially low prices. Those two Bills are the Customs Tariff (Anti-Dumping) Amendment Bill (No. 2) and the Customs Tariff (Anti- Dumping) Miscellaneous Amendments Bill. The Liberal Party has foreshadowed through its shadow Minister, Senator Rae, a significant amendment which refers to a need to protect civil liberties by virtue of requiring a warrant. Necessary preliminary, initial investigations must take place before that warrant can be issued. We believe that the passage of an amendment of this kind is necessary for the protection of civil liberties within this country. We abhor actions taken by this Government which pretends to be the champion of civil liberties. We deplore, therefore, the inclusion of provisions that take away people's civil liberties. Therefore, I hope that the Senate will agree to the amendment that has been proposed by Senator Peter Rae.

The two Bills reflect a review of Australia's anti-dumping and countervailing legislation. All parties basically agree with the tenor of each of the Bills. We believe that in relation to this major element, a warrant should be required before officers can inspect books and records. A significant feature of the Customs Tariff (Anti-Dumping) Miscellaneous Amendments Bill is Part III, which requires:

. . . that inquiries conducted by the Industries Assistance Commission in relation to dumping or countervailing issues, are to be conducted without reference to the policy guidelines in the Industries Assistance Commission Act. Such inquiries will thus only relate to the question of the existence of facts relating to dumping or countervailing issues.

We basically support this legislation. There is a need, therefore, to have a definition of normal price and normal transactions to prevent prices being artificially lowered or lowered on account of subsidy. It is therefore necessary to place a levy on the price to bring it to a normal price. Basically, Australia follows not only the spirit but also the letter of the General Agreement on Tariffs and Trade. Because of our honesty and integrity in following international agreements-whether a Labor government is in office, as is the case today, or a Liberal government as has been the case in the past-there is a genuine acknowledgment of the need to follow the GATT arrangements. One of the problems of the world today is that far too many representatives of countries pay lip service to the GATT provisions but then go back to their countries and develop a wide range of artificial barriers to trade, actions which cause tremendous problems in the world today, particularly for the developing countries.

Under the proposed legislation all parties are given a reasonable time to provide information. This is accepted. The Department of Industry and Commerce must arrive at preliminary findings within 45 days. This provision is welcome. Suppliers of goods have 30 days to reply and after preliminary findings, if a case is proved, the Department must complete its action within 120 days. Some people would like that time interval to be somewhat shorter. I understand there are practical considerations for the length of that time interval. However, many industries in Australia believe that we should be looking to other mechanisms because, despite all the good intentions of past legislation-even this legislation-goods are still arriving in this country and selling at artificially low prices because the time interval for findings is still too great. Industries are required to prove damage. However, in some cases the local industries can loose a contract. Because it is known that goods will enter the country in two or three months time, there is immediate damage to the productive flow of Australian manufacturing enterprises even before the arrival of overseas goods.

The legislation does not cover situations where a local Australian manufacturer is aware of the loss of his contract, the goods have yet to arrive in the country, but it is known that they will arrive in several weeks or several months time. The cutback in manufacturing can therefore occur in advance, the lay offs may have already taken place. Governments will have to exercise their minds to overcome these sorts of situations. It is not very satisfactory to the men who have been dismissed, to the owners who have lost their profits, when their business is facing bankruptcy, to get a judgment at the end of the day, stating, in effect: 'After all, we did think you were right'. Governments must exercise their minds to overcome these sorts of disruptions that can occur that are not covered by present legislation.

Senator Peter Rae spoke very eloquently of the problems in relation to clause 4 , which deals with the export price involving parties which are not normally associates, which could be interfering with trade. Another aspect to which I draw the attention of the Government is the penalties in the Act. The Act contains a number of penalties. I wonder whether, in relation to the profits that can be made as a result of such activity, fines of $1,000 are adequate. It is true that in relation to a small business $1,000 might be seen to be an excessive penalty. But in relation to transnational companies, one might ask whether the $1,000 penalty is adequate. I wonder whether we should be looking at a sliding scale relative to the benefit or the profit that could be gained as a result of dumping if the company fails to follow the legislation as is required.

Senator Peter Rae —If somebody is going to make a million he is not going to worry about a thousand.

Senator WATSON —Yes. Senator Peter Rae has quite appropriately interjected that if a company makes $1m on the transaction-certainly if it is a once-off transaction, and we will never see that particular company trading in Australia again-the $1,000 woul be petty cash in relation to that transaction. Another feature is that the disruption to international trade and to manufacturing in Australia is not necessarily coming in on a consistent basis from one particular sphere. Because of the international recession, some overseas companies see Australia as a convenient dumping ground for one-off transactions. The tragedy is that they move in, and take their profit. They may take a few consequences as a result of it, but using a marginal costing basis, they can make a fortune by temporarily pushing the goods into Australia rather than elsewhere in the world. As world trade picks up they move back to their more traditional markets. Other companies which lack conscience consistently are picking off countries such as Australia, and particularly the under-developed world. It is for that reason that the United Nations Conference on Trade and Development has held successive meetings around the world to try to overcome the situation and to try to get some balance of sanity and establish, where possible, a new international economic order.

Australia is in a difficult position in relation to trade. It finds its primary industries continously locked out of export markets by various artificial protective devices. On the other hand our own manufacturing industries are suffering assaults on domestic trade as a result of the dumping of goods on the Australian market at lower than normal prices or at subsidised prices. Sometimes it is the national governments outside Australia which are at fault, where they subsidise in a gross and manifest way the exports of their countries' products to places such as Australia.

All nations are really part of an international family-a global community. With the growing sophistication of trade there is an interdependence of one economy on another. There are complex linkages amongst different sectors of the world economy. Therefore, a breaking down of trade barriers is needed. While in one sense it is unfortunate that we have to introduce this sort of legislation against dumping there is unanimous agreement around the world that anti-dumping legislation is not really a protective device in the normal sense of raising protective barriers. On the other hand we must not create an environment whereby we set up artificial devices which restrict world trade and closet our economy in such a way that it becomes uncompetitive.

I believe we must look for practical measures which will remove obstacles to the development of world trade and thereby try to set up mechanisms that will usher in effective international economic co-operation and which will find fair solutions to the serious problems affecting not only the developed countries of the world but also the developing countries of the world. The serious economic crisis the world is facing today can be overcome only by mutual co-operation between all governments; between those of the North and South and between those of East and West. A serious economic rift is developing which is accentuating the disparities between rich countries on the one hand and developing countries on the other. Even within the rich countries, there is an increasing disparity between the rich and poor.

It is an unfortunate feature of Australian life in 1984 that we are witnessing a growing gulf between the rich and poor and between the 'haves' and 'have nots' in our society. This is unfortunate. However, magnified on a world basis it leads to greater difficulties. If we are not careful economic wars can lead to hot wars, hot wars can lead to holocausts which would be beyond people's comprehension in relation to wars of the past.

We have to overcome some of the disparities which include the rapid increase in debt of the Third World countries. As a result of the increase in debt of Third World countries which include countries of South America, Africa and now, increasingly, countries of the Pacific Basin, the Philippines and Indonesia, international indebtedness unfortunately is not improving. Borrowers in developed countries are having to pay an increased price for their money, a higher rate of interest, to offset the loss incurred by the developing world because a significant number of countries fail to meet interest commitments and loan repayments.

The last few years have witnessed a fall in commodity prices, a deterioration in the terms of trade and growing protectionist measures. Both within this domestic parliament and when our Ministers go overseas all must espouse the principles of an open world economy. Let us not forget that 85 per cent of our export income principally comes from the mining and primary sectors of the Australian economy. Those sectors are largely unprotected by barriers. Those are areas which feel adversely every pinch and every wage increase particularly in an environment where commodity prices are dropping or where they are depressed. Therefore the people in this sector are not in a good position to suffer any increase in the cost of living. I can see a lot of problems facing Australia when, as a result of the spiral of wages and prices, each chases the other to the point where we have a high inflation rate, while our competitors lower their interest rates to more moderate levels. The action taken by New Zealand which resulted in its inflation rate dropping from 17 per cent to around 4 per cent was significant.

I think it is necessary for us to recognise the importance of manufacturing industry in Australia. Appropriate and adequate measures need to be taken by this Parliament to ensure that goods are not dumped in this country at artificially low prices which will affect employment and the stability of Australian industries. I acknowledge that all parties regard dumping as quite abhorrent. Australian manufacturing industry is a major generator of wealth in this country. It produces 23 per cent of gross domestic product. Manufacturing is a significant employer of labour. We cannot stand by and allow such an industry to decline further. By research measures and by encouraging technology and competition we have to make Australian industry very much more competitive and raise the Australian standard of living.

I think it is regrettable that we now find only 18 per cent of Australians employed in manufacturing industry. It was not all that many years ago when the figure was about 30 per cent. We wonder why we have an employment crisis in this country. We wonder why the young women of Australia are finding it difficult to get jobs. I think of all those people, who used to be employed in textile industries, now out of work. The bureaucrats say that those people can be redeployed and the industries restructured. If we go to the outer suburbs of Melbourne and Sydney and to all those small non-metropolitan towns in Australia that support perhaps one mill, we see the tragedy occurring. We see not only an economic tragedy but also a social tragedy affecting the framework of our society. It is a social tragedy because not only does a person lose a certain amount of self-esteem when he is displaced or put on the dole but also in some cases the health of that individual is affected quite markedly.

I think we have to look at the question of unemployment very seriously not only in a local context but as a global problem because we are all part of a great family of nations. If we are to improve our standard of living, if we are to lessen this widening gap between the rich and the poor, we must recognise that a decision taken in one country can have widespread implications throughout the rest of the world. I support the measures and the amendment which will be moved by Senator Rae in the interests of civil liberties in Australia.