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Thursday, 19 October 2017
Page: 8054

Senator McALLISTER (New South WalesDeputy Opposition Whip in the Senate) (13:26): I have the good fortune to be a member of the Joint Standing Committee on Treaties and, like the other treaties which come before this chamber, this treaty was referred to that committee. I want to speak a little bit about some of the issues that opposition members of that committee encountered in examining the treaty as brought to it by the government. Before I do that, I make this observation: treaty making is the prerogative of the executive. The parliament has an incredibly important role in scrutinising that process and in providing feedback to the government about how it ought to proceed in relation to that process, but, fundamentally, the decision to interact with our international partners does lie with the government. I listened to Senator Hanson-Young and her remarks about Labor's approach, but, if we are concerned about the contents of the bills before us, the Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017 and the Customs Tariff Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017, and about the nature of the treaty that has been concluded, we need to be very clear who is responsible for this. It is the government of the day.

The Labor Party have been very clear over many years that we are deeply opposed to the investor-state dispute settlement process that, unfortunately, has become a feature of many of the treaties concluded by this government. I reiterate the observation that's been made in this chamber on many occasions by many different Labor senators: when John Howard was Prime Minister, Prime Minister Howard elected not to include such a mechanism in the treaty that he concluded with the United States. This man, whom conservatives point to always as the gold standard and the guiding light for their politics, concluded a treaty with the United States and sought to more closely link the economy of the United States with our own, but he didn't think that an investor-state dispute settlement mechanism was necessary.

We object to these mechanisms for a range of reasons, including the lack of transparency associated with the processes of dispute management, the role of arbitration and the conflicted nature of many of the arbitrators.

We also fundamentally object to the imposition of sovereignty. For people who may not be deeply familiar with this somewhat intricate aspect of international treaty making, what an investor-state dispute settlement process does is allocate decision-making powers in relation to national policy on economic questions to a third party—not a third party associated with us, not a third party under the control of the Australian government and not even a third party able to be influenced by the Australian government. The very great risk, when you do that, is that you lose control of the ability to make sensible decisions that are in the economic interests of Australia.

Once again, in the additional comments that we issued in this report that was presented by JSCOT, we said that we remained concerned that, in this instance, the ISDS provisions within this trade agreement leave Australia vulnerable to lengthy disputes with foreign-owned corporations. Our concern is that that situation could have a chilling effect on governments who seek to pursue legitimate public policy goals like our decision—our world-leading decision—to insist upon plain packaging for cigarettes, a decision that was challenged under a trade agreement. We remain concerned that the ability of investors, big businesses and multinational corporations to take their concerns out of the political domain in Australia and into a private, closed arbitration session presents very great risks to our national sovereignty.

This was perhaps the most significant concern expressed in the submissions received by the committee, and there's a very strong feeling out there in the community about it. The community doesn't accept that we ought to abrogate our responsibilities in relation to public policy and hand them off to private arbitrators. The community doesn't accept that at all. When we are in government, should we have the privilege of forming a government, we will not be signing treaties and coming to arrangements that include investor-state dispute settlement mechanisms.

The committee also expressed concerns—and Labor committee members in particular were concerned—about the lack of transparency and independent analysis of this treaty. The Department of Foreign Affairs and Trade have confirmed that trade agreements are only modelled by the department if they're instructed to do so by the government of the day. Fair enough; that's their job—to serve the government of the day. But, in this treaty, like so many, they were not required to actually model the economic benefits of the treaty. The economic benefits of this agreement have not been assessed. There is no information available to us.

This isn't a new criticism. Like many of the things I've mentioned so far, this is something parliamentarians have been saying for some time. Many parliamentary inquiries have recommended that trade agreements require independent economic analysis. I'll take back you to JSCOT, back in November last year, when the full committee recommended:

… that the Australian Government consider implementing a process through which independent modelling and analysis of a proposed trade agreement is undertaken by the Productivity Commission, or equivalent organisation, and provided to the Committee alongside the National Interest Assessment (NIA) to improve assessment of the agreement.

It's a pretty sensible recommendation. We have a committee that's been established to examine trade agreements and treaties more generally. Shouldn't that parliamentary committee, which comprises members of the House of Representatives and senators, have some ability to examine the actual economic benefits of these agreements? I make this point: when we do get an analysis, very frequently the benefits that are claimed are minuscule, and they are benefits that are, arguably, lost in the noise of the general fluctuations in the Australian economy. When a result comes back that says we're going to give up a great deal and experience great disruption in the Australian economy for very small benefits overall, it's reasonable to ask questions. Have we got the best deal? Should we be locking ourselves into it? But we're not able to do that—not in any meaningful way—because, in this instance, like so many others, information about the economic impacts was not provided to the inquiry.

I also want to speak about the removal of labour market testing. People will recall that, when we considered the China-Australia Free Trade Agreement, the Labor Party was attacked viciously by the government for our insistence that labour market testing be a continuing feature of the way we approach these agreements. In fact, our approach is broader than that: we generally don't believe that free trade agreements ought to encroach upon areas of immigration. Questions of immigration and questions of immigration for the purposes of bolstering our labour market aren't questions to be dealt with through trade agreements. Population policy is significantly broader than that. It impacts on Australia in a range of ways and it ought to be considered in a holistic way, not just traded off in a free trade process. In this specific example, we are deeply puzzled by the government's decision to proceed in this way, given its own acknowledgement that the 457 visa system needs reform. So this particular update, in fact, actively undermines Australia's migrant visa program by failing to apply labour market testing for contractual service suppliers. In practical terms, what that means is that jobs in Australia will be able to be filled by workers from Singapore without being offered to Australians first.

Let's think about the context for that. We know that the official unemployment figures are running okay, but underemployment in Australia is at a record high. Underemployment means that there are many Australians who are working a little bit and don't count as unemployed in the labour market statistics, but they're not working enough. They want more hours, and almost certainly they'd like those hours to be more secure. There are plenty of Australians looking for more hours, but we are presented with a treaty that says that if you wish to bring in contractual service suppliers from Singapore then you don't need to undertake any assessment whatsoever of whether there are Australians who could undertake that work.

I completely recognise that foreign workers are vital to the success of our economy. We benefit a great deal, in many instances, from foreign workers who are able to migrate here, particularly permanently, to bolster the skills and the talents in our economy. Australia's migration program is, in fact, something we all ought to be enormously proud of. We're a proud multicultural society, and my objections in this regard ought not be mischaracterised. But we actually need to make sure that, if we are allowing migration specifically for the purposes of filling a gap in the labour market, we ought to be genuinely certain that that gap exists. It's not enough to simply assert that there's a gap in the labour market. There ought to be some independent assessment of whether or not there are Australians ready and waiting who could fill the vacancies. This agreement explicitly waives such an obligation. What's puzzling about that, as I alluded to earlier, is that the government has recently announced that they are actually going to require mandatory labour market testing for all applicants unless there is some international obligation. And what are we doing today? We're being asked to create a new international obligation which will prevent the application of mandatory labour market testing for contractual service workers from Singapore.

This undermines the effect of the government's policy change. They speak with a forked tongue. They say that they're concerned about it. They announce a policy change intending to address genuine concerns that Australians have about the way that the migration system is working, and yet today they present legislation to the house which asks us to accept the waiving of labour market testing in this instance. It all speaks to a lack of coherence from the government in how they are approaching migration and approaching the economy.

We know that the long-term future of Australia is dependent on having a labour force that is skilled and that is capable of participating in innovative reform of the economy to improve productivity and to allow us to return to levels of economic growth that Australians have come to expect. Migration is part of that story. And it's also true that there are plenty of occasions when we will need skilled migrants to fill very particular gaps in the labour market. But there seems to be no coherence in the way that the government approaches that particular problem, and it's not matched with any serious approach to improving skills and capability in the domestic market. We've seen attack after attack on training institutions and a complete failure to properly address the problems that emerged in the VET sector, and, unfortunately, what you get in the end is a kind of ad hoc set of responses, where we are simply bringing in short-term labour to fill gaps instead of having a serious structural response to the development of the labour market.

It has broader social implications as well. I think we ought to be very cautious about creating a society where we have one group of people who are permanent residents or citizens participating in the long-term project of building Australia and building the Australian economy and then a subset of workers who move in temporarily, are not afforded the rights or required to have the obligations of that first group and who exist effectively as second-class people within our labour market and within our society. And I really do ask how this has come about.

In part, I think it goes back to the conflicts that have been such a feature of the government over the last four years and that seem to be set to continue into its fifth year of office. We've had two treasurers, and I will say that this second Treasurer doesn't impress me a great deal. Mr Morrison, before he came into parliament, worked perhaps in the tourism and transport sector? Was that his background? But it never seems clear to me that Mr Morrison, who built his career through being an attack dog, a great retail politician, is really suited to the complex policy questions that are facing us now. We're undergoing arguably an unprecedented transformation of the Australian economy, and I think that it's a very great shame that we're presented time and time again with piecemeal responses to that transformation without any serious economic program that credibly addresses the challenges of the day. I'll leave my remarks there, but I thank the Senate for allowing me the opportunity to contribute.