A more effective anti-dumping system will support jobs in our manufacturing sector

pk_harbour.jpgMr STEPHEN JONES (Throsby) (17:48): Since the early 1980s there has been an almost bipartisan position in this parliament that Australia's best interests lay in being an open trading nation. It has been the reason that we can now purchase a TV set for less than we could 20 years ago. It is the reason that we now are able to purchase computers and all manner of other electronic goods for a fraction of what were able to 10 years ago.

It is the reason many Australian working families can afford to have multiple pairs of shoes for their children. When I was growing up if you had more than two pairs of shoes, you were considered to be a wealthy kid. The benefits of having open trade and being an open trading nation have not been without cost. It is absolutely true to say that an open and freer trading arrangement has also been a source of enormous dislocation and restructuring within our own economies, within our manufacturing industries and within our agricultural industries. It is also true to say that those changes have had greater impact on some regions than others. As a trading nation we understand that it is in the broad interest to engage with the rest of the world and enjoy the benefits of open trade.

However, as the minister said in his second reading speech, there are some things that cannot be accepted as part of an open trading scheme, and one of them is cheating—bending the rules. Dumping is cheating. It is not free trade; it is not fair trade; it is an abuse of the system. Industries, companies and workers are injured when goods from overseas are dumped into the Australian market. That is why it is important to ensure that we have a strong, fair and effective dumping regime. Manufacturing employs over one million Australians and is a key part of a broad based Australian economy, and, whilst there has been enormous restructuring in the economic base of the region that I represent, manufacturing is still an important part of the economy and certainly an important source of jobs for workers within my electorate.

A more effective anti-dumping system will support jobs in our manufacturing sector by ensuring competition happens on a level playing field. That is why I was so pleased when, on 4 December, the Gillard government announced a package of reforms to Australia's anti-dumping system to deliver stronger protection for Australian industry against unfair competition from overseas. Elements of that new package, which built upon three rafts of reforms that have already been introduced into this parliament, are already assisting Australian industry, but key parts of the new reforms include the establishment of a new anti-dumping commission to investigate complaints, and that is the subject of the bill before the House today. It will further boost funding to Customs by an additional $24.4 million over four years, so that it has the staff, resources and expertise available to deal with cases speedily and fairly. That amount will almost double the resources available in the anti-dumping area of customs. Further, it will make the anti-dumping system easier for small- and medium-sized businesses. It is a key reform for small- and medium-sized businesses—particularly in the fabrication sector in my electorate—that do not have the benefit of in-house lawyers. They are often ably represented by industry associations, but this will make it easier for them to negotiate, to make an application, to keep the doors open until that application is determined. These are key parts of the reforms. The bill will also introduce stricter remedies against overseas producers who deliberately circumvent Australia's anti-dumping rules. Those remedies include the capacity to apply for retrospective penalties from the date when an application is made.

These are important reforms. Establishing a new commission under legislation was a primary recommendation of the review into Australia's anti-dumping and countervailing system by the Hon. John Brumby, the former Victorian Premier and treasurer. The Brumby report found that in the last 12 months prevailing economic circumstances—including the strong Australian dollar, surplus product on world markets and increased competition—have led to the number of new investigations more than tripling over the past two years. Mr Brumby also found that this trend is likely to continue with the expectation that applications for anti-dumping and countervailing measures will continue to rise. The government has recognised that as global economic circumstances change—and Australia is facing intense and in some cases unfair international competition from dumped goods—more needs to be done to ensure that Australia continues to have an effective anti-dumping system.

In many respects this package of measures assists in bringing Australia's anti-dumping and countervailing provisions in line with those of our major trading partners and with the new context in international trade. The government has recognised that, as global economic circumstances change and Australia is facing intense and in some cases unfair international competition from dumped goods, more needs to be done. The new reforms will deliver stronger protection for Australian industry against unfair competition from overseas and, in addition to the significant streamlining reforms to Australia's anti-dumping system which were announced in 2011, will provide some relief, particularly in the manufacturing and agricultural sectors.

The bill represents the next step in the Gillard government's support for manufacturers where dumping is injuring local producers—the creation of an Australian anti-dumping commission. Establishing an anti-dumping commission will increase the profile, status and priority of the anti-dumping system. The commission will be principally located in Melbourne and is expected to commence in July this year. The bill also amends the Customs Act to create the role of and set out the matters in relation to the commission. The commission will be responsible for decision making and other anti-dumping related functions that currently rest with the CEO of the Customs and Border Protection agency. The establishment of this commission will ensure a high level of decision making and reflect the significance of the anti-dumping system in Australia. It will not, however, change or alter the responsibility of the minister in his determination powers in respect of anti-dumping matters.

The bill also amends the Customs Administration Act to allow the CEO of Customs to delegate to the commissioner powers to disclose certain information to the extent that those powers apply in connection to paragraph 15(2)(b) of the act and provide that the prohibition of disclosure of certain information will also apply to the commissioner.

Finally, as the commission will be established as part of the Customs and Border Protection agency, the bill amends the Criminal Code Act and Law Enforcement Integrity Commissioner Act to ensure that the commissioner is treated consistently with the CEO and Customs officers. This means that, like all Customs staff, the commissioner will be subject to a range of integrity measures, including drug and alcohol testing—although I hope that is never necessary—the mandatory requirements to report serious misconduct and termination for serious misconduct.

Importantly, Labor's tough new anti-dumping measures have been strongly welcomed by Australian manufacturers, including the largest manufacturer in my electorate—BlueScope in Port Kembla—and the Australian Steel Institute. In Australia it is not a secret that steelmakers have had to make a series of tough decisions to restructure, reduce costs and refocus on the domestic steel market. In the case of BlueScope in Port Kembla, this situation has meant large-scale redundancies and big reductions in spending, including the closure of one of its two blast furnaces at the Port Kembla plant. These changes mean that BlueScope will focus on supplying the domestic market, which is around 2.6 million tonnes per annum. To put that into perspective, China now produces something in the vicinity of four to 4.5 million tonnes per month, which is about twice Australia's annual output. They are producing more than twice as much in any one month as we produce in an entire year. This is important in a business which is all about scale.

With global growth still in the doldrums, the oversupply of steel is growing. It is growing on a monthly basis because many of these plants simply do not have the same responsiveness to market pressures as our steelmaking plants in Australia. The Chinese government, for example, have estimated that they have around 150 million tonnes of excess steelmaking capacity. Other analysts put this excess capacity somewhere in the vicinity of over 200 million tonnes. That means that a whole heap of excess steel is going to be pushed onto the international market.

We need to ensure that, when steel from other steelmakers around the globe enters international markets, it does so in accordance with the rules of fair and free trade, and that it is not dumped here. These new measures will support local steel industry jobs in the Illawarra and beyond. This new anti-dumping approach is about fairness. We do not allow unfair trade practices by our own businesses and we should not allow Australian jobs to be jeopardised by unfair trade practices from overseas.

These rules for free trade are set out in the general agreement on trade and other bilateral agreements. These rules allow signatories to impose corrective measures to respond to dumping of goods and certain subsidies, known as countervailing measures. The World Trade Organization oversees the rules, and in Australia there is also oversight by the courts. Some in debates such as this argue that the imposition of corrective measures or an effective tariff in response to dumping is a retreat to protectionism, that the efficient allocation of resources in Australia simply props up inefficient industries. Others in the debate go even further and argue that, if a company or a country is willing to subsidise Australian consumers by selling us goods which are heavily subsidised or at below cost, then we should just grab this with both hands. I argue, and the Australian government argues, that this is very short-sighted.

Importing goods at below cost might provide some short-term windfalls for some consumers but this comes at the price of long-term headwinds for open trade; what the Productivity Commission describes in its reports on our anti-dumping and countervailing measures system as 'a system preserving benefits of our anti-dumping regime'. Put simply, the factory worker who loses his job and the farmer who loses access to a local market will turn their sights on a bigger target: the whole system of open trade itself. So, without these measures, and without the capacity for us to turn to local workers, local businesses and industry as a whole and say that we have a free but fair system of trade rules, we lose confidence in the whole system of open trade.

Australian manufacturers know that competing on price alone in this global marketplace is not easy. It is harder still when companies sell their goods at below cost with the objective of injuring a domestic producer and wiping out a whole market. As a country with a strong commitment to free trade, Australia cannot be seen as a soft touch for those seeking to dump their goods into our markets. As I said at the outset, strong anti-dumping measures are about fairness and they are a buttress for a free trade system.

This government has shown a strong commitment to our manufacturing sector by these and other measures. We believe in the future of Australian manufacturing, which still employs around one million workers more than the mining and resources sector. Open trade remains a cornerstone of our economy, but to ensure the integrity of our global market in which we trade our goods, we also need to continue to ensure Australia has a tough and responsive anti-dumping system, to ensure that our policy meets its national as well as its international objectives. I commend the legislation to the House.