Improvements to anti-dumping legislation (15/05/2012)

10 January 2013

aluminium-coating-001.jpgMr STEPHEN JONES (Throsby) (10:37): I listened with interest to the contributions from the member for Hughes on the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2012 and the Customs Tariff (Anti-Dumping Amendment Bill (No. 1) 2012. I welcome many of the things that the honourable member had to say, particularly his observations about geographic price discrimination within the federation. I can only hope that he will have the same enthusiasm as he did in the issue of geographic price discrimination for tradeable goods when it comes to geographic price discrimination for the sale of labour around the federation. Whilst I welcome the comments he has made on the sale of goods I know that his party, at least, has been a vociferous objector to the removal of price discrimination when it comes to the sale of labour around the federation. Indeed, the Liberal Party is a great defender of the rights of the states to have price differentials and even regional differentials for the sale of labour. Maybe that is a conversation I can pursue with the honourable member at another time when a more appropriate bill comes before this House.

During the parliamentary recess I had the benefit of visiting a number of businesses and factories within my electorate, and I had a number of discussions with one local businessman by the name of Roger Farrar, who runs an aluminium powder-coating business within my electorate, based in the Southern Highlands of New South Wales, in Moss Vale. Roger Farrar operates a good private business. He is a good employer. He set the business up himself. He built the powder-coating oven himself and it is one of the most energy-efficient powder-coating ovens in New South Wales. He is a good operator, with a good business. His main markets for the extruded, powder coated aluminium are window- and door-framing businesses. They sell in turn to the commercial construction market. Often it is government organisations here in Canberra and elsewhere who are fitting out their new buildings with his products.

Roger Farrar has made the very pertinent point to me over a number of discussions that the dumping of cheap goods from Asia into the Australian market is killing jobs and killing businesses like his. He has no objection to free trade; he has no objection to fair trade. What he does have an objection to is the abuse of our open system of trading with the rest of the world, the abuse by local consumers and foreign exporters, because that is destroying certain industries within this countryparticularly small businesses like his which do not have huge stocks of capital to fall back on in tough times and use to trade their way out of economic difficulties. A small job that Mr Farrar loses because of the availability of cheap, dumped aluminium goods can mean the difference between his business's survival or otherwise.

This story can be repeated many hundreds of times around the country, and it is one of the motivating factors behind us bringing this third tranche of bills before the chamber today. Our system of anti-dumping laws operates within both national and international legal systems. That is to say that our laws themselves are open to challenge by our trading partners and members of the World Trade Organisation. The decisions that we make in the administration of those laws are also open to challenge and are reviewable in appropriate forums here in Australia and internationally. So we need to ensure that whatever we do complies with our international obligations but also enables a system of review. I make no bones about the fact that, if a bias should exist within our laws, it should be a bias which enables a complainant manufacturer here in Australia to fairly access the system of review and to be able to do that in an efficient way, because a remedy delayed is a remedy denied, and a remedy denied means the difference between life and death for many of the businesses in this trade-exposed area.

I am very pleased that this third tranche of bills goes to some of those issues. It does operate within our international obligations. It makes sure that the laws that we introduce into this parliament are impervious to international challenge but provides a freeing up, if you like, or a bias, to make it easier for our domestic manufacturers to challenge what they believe to be illegal and unfair trading advantages for our international competitors.

Nothing in this legislation should be seen by any of our international trading partners as an attack on the relationship we have with them. As speaker after speaker has said in this place, we are a trading nation and as a nation we benefit without doubt from the free exchange of goods and services and capital between this country and our trading partners. It is one of the things that lie behind our almost unique prosperity in a challenged economic world.

There are three to four issues that this current legislation addresses. First is the issue which I think the member for Hughes quite succinctly described, enabling the CEO of the customs and border protection authority or the minister to compare apples with apples. It does that by enabling them to free up the relevant matters that they must take into account when assessing whether a relevant countervailing available subsidy has been received by an alleged dumper of goods into the Australian market. That will make it easier for us to assess whether a dumping incident has occurred. It is not always straightforward, as the member for Hughes has quite rightly said and as the minister said in his second reading speech on this legislation. A person in the street can look at this, apply a common-sense approach to it and say quite simply that a subsidy or an assistance has occurred which is against the spirit of the law but might not be against the letter of the law. What that part of this legislation is attempting to do is free up those relevant considerations, again consistent with our international obligations.

The second part of the legislation goes to ensuring that we provide an expanded power to both the CEO and the minister in relation to continuation inquiries. This is achieved by enhancing the powers that the CEO and the minister have to conduct a continuation inquiry to allow similar results to those currently available in review of measures. Through this amendment, the Customs and Border Protection Service will be able to recalculate the level of duties of an antidumping measure during a continuation inquiry. It will streamline the process, meaning that there will be quicker outcomes for all interested parties.

A third, and important, measure is providing greater flexibility when assessing the normal profit or normal value of an item which is said to have been dumped on our market. If we are alleging that a good has been dumped on our markets at prices below which it would be offered in its home market or elsewhere, then it is important to have a means for assessing what the normal value, and therefore the normal profit, for producing and selling that good will be. This operates on the principle that people do not produce goods out of a desire to be engaged in a philanthropic endeavour. They produce goods to make profits, to distribute those profits amongst their shareholders and to run a functioning business here or elsewhere. So it is important to be able to assess the normal value and profit of a good in order to assess whether it has been dumped into the Australian market.

Finally, the fourth measure is providing flexible remedies to ensure that the remedy fits the crime and that the remedy will properly address the issue that is at the heart of our objective behind this legislation, which is not to provide some backdoor form of protection except and unless that protection is against unfair trade practicesprotection against dumping, protection against predatory regional pricing and protection against pricing which is simply designed to damage established businesses here in Australia.

I think they are all important measures. They rightfully deserve and, I understand, have gained the support of all members within this place, which is very pleasing indeed. The member for Hughes wonders out loud why three to four separate tranches of legislation have been introduced by the government when a singular compendium of bills could have done the job. There is a pretty simple answer to thatthat is, we wanted to act as soon as possible on this issue. I am being pressed by businesses and employee representatives, unions within my electorate, to ensure that the parliament acts as soon as possible. When we have measures that are ready to go, it is only proper that we introduce them into the parliament as soon as possible. Even if the entire package is not ready, if we have a discrete area of laws that can be introduced into the parliament which will provide some relief, then it is only proper that we introduce that legislation as soon as is practical. And that is exactly what we have done. I will finish on this point, Madam Deputy Speaker O'Neill: these are all important reforms. They build on and stand on the shoulders of the reforms that have been introduced into this parliament and passed into law. But the best laws in the world will only work if they are properly policed. I welcome the fact that the minister and the government have doubled the number of staff that are available to the Customs Service to properly police this important area of law. I would like to see us go further. I would like to see us go much further in this regard. It is not only about doubling the number of staff but ensuring that we have continuity of employment in this area so that staff can build up the requisite expertise in identifying breaches of these laws to ensure that they can be efficiently and effectively dealt with. If you have a small number of staff, or even a larger number of staff that are constantly turning over, they do not build up that expertise or the relationship or the knowledge which is necessary to effectively police these important laws.

The second point I would make in relation to this is: whatever we can do to streamline the legal processes is highly desirable. I can say with great authority that businesses do not lightly take anti-dumping action. What they are effectively doing when they are taking anti-dumping action is taking on one of their customers or prospective customers and saying that they think that those customers or prospective customers have cheated them out of a job. That has a longstanding impact on the relationship that business has with a prospective customer so they do not take that action lightly. But when they do take it, they want a quick remedy, an appropriate remedy, one that enables them to get back into that market and re-establish their relationships with their customers in an effective way and in a way that sends a pretty strong signal right around the place that you might have, as a purchaser of goods, some short-term advantage in procuring these cut-price goods and, in some instances, cut-quality goods, but in the long term you are doing the wrong thing. This is a message to businesses the country round: in the long term you are doing the wrong thing. You are removing not only the jobs and livelihoods of sustainable businesses throughout the country, but in the long term you are opening yourself up to having yourself over a barrel in the future. These businesses might be willing to dump their goods on the Australian market for whatever reason in the short term to perhaps remove domestic competition down the track, but you can be quite sure that in years to come the prices of those goods will rise and there will be no domestic competition available for those people to go to any alternative. So there is a message to business in this as well, that they have a responsibility.