Flags Amendment Bill 2014 - Second Reading


Senator IAN MACDONALD (Queensland) (11:22): It is always a pleasure to follow Senator Cameron in any debate. This one is no different. We are talking about our relationships with other countries, and I should say to the chamber that you are all lucky that Senator Cameron and I are both here today taking part in this debate after last night's Scottish dinner, which was a wonderful success. I have to say to the chamber that I wronged Senator Cameron in a speech that I made yesterday when I was praising him and his predecessor, Senator George Campbell, as being Scottish-born Australians who have graced this chamber. My further research has suggested that Senator Campbell, whilst a great senator, was not actually Scottish-born but—heaven forbid—Irish-born! With that correction on the record, I want to turn—

Senator Cameron: Of Scots' descent!

Senator IAN MACDONALD: Well, all from Gaelic origins, Senator, you are right. Talking about other countries brings me back to the subject of the debate before us this morning. I congratulate both Senator Xenophon and Senator Madigan for raising this issue. I know it is an issue they both feel very strongly about.

As well as that, I muse to myself—with no disrespect to Senator Xenophon—and understand why he does so well electorally in South Australia. This idea of having Australian flags only made in Australia is—I will not use the term 'populist', because that has connotations—one that most Australians would like to think happens. If you go around the streets and say, 'Here's an Australian flag that's made in another country. What do you think of that?' Most Australians would say, 'Isn't that awful.' I can understand that Senator Xenophon captures the spirit of what many of his electors in South Australia would say—and I think most would if that was the only question that was asked of them.

If you said to my sugarcane farmers or my cattle producers in northern Australia, 'Look, fellas, I know you sell most of your produce overseas, but the people we buy from overseas are going to put a ban on our cattle and sugar coming into their country because they want beef and sugar in their countries only to come from their own country.' Australia would lose the sugar and beef industries, if we were not able to export. So the whole issue, when you talk about trade matters, is not what Australia misses out on but what we achieve by the freest possible trade. I have even cane farmers coming to me saying, 'We should only be buying Australian tractors.' I say, 'Well, that's great, but who's going to buy your sugar? If we import our tractors from the United States, Japan, Korea or China, say, and we suddenly say to them, "Sorry, no more of your tractors, because we only want to buy Australian tractors." What are they going to say? They are going to turn around to us and say, "Well, thanks, fellas, we've enjoyed your sugar and meat, but, sorry, no longer are we going to take your sugar and meat, because we want to do what you're doing. We only want to buy things that are made in our own country."' That is a simplistic way of addressing the issue here.

We would all like to see a significant, vibrant Australian manufacturing industry, but we have to trade as a nation to exist. We will always grow more sugar and beef than we can ever consume. Unless we have the freest possible trade around the world, then our sugar and beef industries—and consequently most of northern Australia—would fold. The same applies to many of our agricultural products in Australia. We exist because we are able to trade. Unless we can trade, many of our primary industries would wither and die. That does not mean to say that we cannot have an Australian manufacturing industry that succeeds on its own merits, but the first thing we have to do to get a decent and profitable Australian manufacturing industry is to get off the Australian industry some of the imposts that Australian governments have put on our industry.

I sit here day after day in here with Senator Kim Carr, a former industry minister, complaining about industry leaving Australia. One of the greatest reasons for industry leaving Australia in the last few years is the impost put on our industries in Australia—in particular, the carbon tax, which has decimated Australian industry. The cost of power and energy—which, once upon a time, Australia had a very competitive advantage in—has been almost banned by the Labor Party and the Greens. One of the great competitive advantages Australia had was unlimited supplies of relatively cheap black coal, which gave Australia one of the cheapest forms of power and electricity in the world, and that cost of energy encouraged manufacturing in Australia. Since the Labor Party and the Greens got into the act, power has gone through the roof and Australian industries have been quite uncompetitive.

I am the first to say that we can never, or we never would want to, emulate the work practices and work relationships of a developing country like China, but, by the same token, we have to ensure that in Australia those working in manufacturing industries are productive in the purer sense of the world. Senator Abetz raised in question time yesterday some of the outrageous demands of the unions which just mean that Australia cannot compete. So let's not worry about trade barriers or protective tariffs or things like that; let's look at what is really impacting on the cost of Australian manufacture. That is what these debates really need to be about.

We should not be looking at buying flags from overseas. I know Australian manufacturers can produce a better product and, given the right economic settings, they could probably do it at a price that, taking freight into account, would be cheaper than anywhere else—but they are not given that opportunity because of the regulation that we have placed upon ourselves.

As came out in a debate I was involved in recently with the Minister for Finance, we do have high corporate rates of tax in Australia. We would all love to see corporate tax go down—you get more investment and more production that way—but we keep adding taxes to our corporate structure. We keep adding mining taxes, we keep adding carbon taxes, and it just prices Australia out of the market. Any first-year undergraduate economics student could tell you that you cannot keep imposing taxes on your own industries and expect them to compete with the world.

We have other significant exports from Australia that we need to find markets for elsewhere in the world. We are increasingly exporting medical health and technology. Indeed, we are exporting our people who work in education and health, and I am delighted to say that northern Australia is playing a big part in that. Northern Australia, as you know, is part of the tropic world—the circle around the globe between the Tropic of Cancer and the Tropic of Capricorn—which contains about 60 per cent of the world's population. We are one of the few sophisticated, developed countries in that tropic zone, and because of that we have a huge amount of expertise of the tropical world there to share with that huge mass of people in the tropic zone around the world. We also know that by 2030 there will be some three billion middle-class people living in that tropic zone. They will all want better food, better education and better health in a safe and secure environment. Of course, Australia, with expertise in that tropical living, tropical health, tropical architecture and tropical agriculture, can export our skills to the world, but to do that we have to have the freest possible trade. That is what makes Australia, and will make Australia into the future, the best place in the world for exporting the things we produce well. So we have to try and achieve the freest and fairest possible deals in trade.

I congratulate the Minister for Trade and Investment, Mr Robb, on the wonderful work he has done with the Japanese and Korean free trade agreements, and I see in the newspapers speculation that we may have a free trade agreement with China by the end of the year. I know the previous government laboured for the previous six years to try and get these agreements underway but never seemed to get anywhere. Fortunately, with the Abbott government and a minister of great capability and great energy on the job, within nine months we have achieved what had not been able to be achieved previously. I am the first to concede that we did not get absolutely everything we wanted—it was the same with the USA free trade agreement, which the Howard government negotiated. As Senator Cameron mentioned, as people from the sugar areas of the north we were not all that happy with the deal with the United States on sugar. Whilst there are some improvements with the Japanese free trade agreement on sugar, it is not anywhere near what we hoped and would have liked to expect, but I understand, when you are negotiating with another country, you can only agree on what you can get. In some other areas as well it was not as good as we would have liked, but across the board the new agreements with Japan and Korea in particular are a wonderful opportunity for Australian primary producers and manufacturers to increase their trade exposure to countries with whom we have always had very close personal relationships and good trade relationships, and the completion of those free trade agreements will mean that we now have even better trade arrangements.

As I say, it is always great to go around the country as I recall Pauline Hanson used to, saying, 'We should buy everything that is Australian made.' Yes, that is a great idea. It wins a lot of political support—until you start thinking of what the consequences of that are, until you ask what will happen to our sugar industry if imports are stopped from countries that we currently import goods from. What will those countries say when it comes to purchasing sugar?

They do not have to buy it from Australia even though, I might say, Australian sugar is the best and best presented of any in the world, and I would challenge anyone to correct me on that. We know it is the best, but it is not the only one. There are other sugars. There are many other countries around the world selling sugar. If we offend—'offend' in a trade sense—the people who are currently buying our sugar, they can easily look elsewhere.

It is similar with beef cattle, another huge industry in the north of Australia. The American free trade agreement was not all we wanted on beef cattle, but it was a start. As it goes further forward, as each year passes, it gets better. It is similar with the beef element of the trade with Japan and Korea. We did not immediately get all we would have loved to have but it is a start, and as each year goes by it will get better and better for Australia. Indeed, the arrangements we have with both of those countries in relation to the export of our beef are as good as if not better than those of any other beef supplier around the world.

So that is good news for that industry. But, as I say, you cannot expect these other countries to willingly accept our products if we are putting bans on the products that they make and want to export to us. It is a very complex argument. I have listened to the comments of both Senator Xenophon and Senator Madigan. I know their passion for this approach. I might say it is not a new approach. Both of them have been talking about these things for all of the time that they have been in the Senate. Much as I and every other Australian like the idea of what is being proposed, I think the reality of a harsh world, an unforgiving world, is such that it is mutual trade—bilateral trade, trade that has advantages to both parties involved—that we have to be seeking to achieve when we look at these issues.

I do not think I can take that much further. Much as I appreciate the sentiment behind the bill put forward, I think it is wrong. It is not one that I could support at the present time. I repeat: I do that not because I am particularly offside with the argument in relation to flags but because I understand the impact it will have on so many other Australian industries if we start curtailing trade, the way we can buy and sell different goods.

My colleagues in this debate have all gone through the issues of procurement, fairness and value for the Australian taxpayer's dollar. I would not want to repeat those arguments, which have all been put forward well already. But I think, as I say, we have to be very careful when looking at these things to make sure we do not make a tiny step forward in one area to the huge detriment of other parts of Australia that rely on the fairest and freest of trade.

The DEPUTY PRESIDENT: Senator Marshall, you have until 11.52, when the debate will be interrupted.

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