House of Representatives
17 June 2015
Mr FITZGIBBON (Hunter) (11:21): The House will be taking these four bills—the Export Charges (Imposition—General) Bill 2015, the Export Charges (Imposition—Customs) Bill 2015, the Export Charges (Imposition—Excise) Bill 2015 and the Export Charges (Collection) Bill 2015—together. I will speak to them generally but I first of all indicate that the opposition will be supporting the package of bills. Australia's agriculture sector, of course, is a vital part of the Australian economy. The export of agricultural goods is forecast to be worth $40 billion this financial year. The Department of Agriculture plays a significant role in supporting farmers and exporters and in maintaining international market access.
Access for Australian agricultural exports relies on the department's certification, inspection and auditing activities that provide assurance to other countries that their import requirements are met. Last year alone, the department issued around 300,000 export certificates covering meat, grain, horticulture and fibre products. It also provided inspection and certification for the export of over 3.1 million live animals.
It is not my intention to go through the detail of each of the bills. The minister has done so in his second reading contribution. But to put it in more simple terms for those who might be listening to the debate, the bills that will follow this package of bills will do something very similar except that they will deal with the importation of goods rather than the exportation. Of course, the department on both import and export does certify products. For example, when we are exporting meat to China, the Chinese authorities want to know that it meets the standards they require. Therefore, it is for the Department of Agriculture to provide those certifications. And of course there are significant costs involved in the process. Rather than those costs being met by the Australian taxpayer, we have a system whereby we recover those costs from the exporting company. Basically, that is what this bill is about, and later the same applies to the importation of goods.
Australians expect the Department of Agriculture to ensure that the goods being imported are of a certain standard and of course that the health needs of Australians are being protected. Again, there is a cost in that process and that certification, and those costs are recovered from the importing company. These bills deal with those issues of tidying up and the regulations allowing charges to be set. The opposition will be supporting the bills. We do so with enthusiasm. It is a step in the right direction and it is something we would expect of the government of the day.
I want to talk about agriculture more generally because, as insignificant as these bills might seem at first glance, they are very important and are part of the very many building blocks which form part of a successful agricultural sector in this country—as I said earlier, a very important sector. In fact, it is now becoming almost part of the Australian vernacular to talk about the dining boom. As we see the mining boom tapering off, our hopes are on experiencing something very significant with the growing demand for food around the globe, particularly in Asia and amongst the growing middle-classes of Asia. So we are moving from the mining boom, I hope, to the dining boom.
I take this opportunity to say I would also like to think that we are moving to the fibre boom: the opportunities that will be presented to us for forest based product demand in Asia in particular, as we see research and development creating new opportunities from wood—wood to plastics, wood to biofuels et cetera. With the right strategic plans and leadership from government, there will be significant opportunities for Australia in that space as well.
I have often said that the dining boom will not come to us; it will be up to us to go to it—in other words, it is a very competitive market, despite the huge demand before us. But what is important for Australia of course is price value, not so much volume. Minister Joyce and I agree on one thing absolutely—that is, Australia will never be the food bowl of Asia because food bowl implies that we will be a very substantial provider of food. It has often been noted that even if we tripled our food output tomorrow, we would not even feed Indonesia and Australia let alone the rest of Asia. Volume will not be our business, although increasing volume will be important. Our real business will be value: securing higher returns at the higher end of the market, capitalising on our reputation as a clean, green, safe producer and provider of food. I note that my friends on the other side of the House are nodding in agreement on that point, and I am glad that is the case.
Minister Joyce and I have said on many occasions that the more bipartisanship we can have in agriculture the better because it is a sector which we cannot afford to have locked up in the three-year political cycle. It is a sector that requires long-term investment and planning, and the right strategic guidance from government. If we can strike bipartisan approaches to these things, agriculture will have continuity in that long-term strategic planning and that will be all important.
I talked about these bills as a building block to agriculture's future success, but it is one of many. I would like to make five points: (1) financial capital to fully realise our dreams—that is, the money that will be required to build the infrastructure to have the required investment and output, and the supply chains et cetera; (2) human capital—that is, the people and the skills of people on the land and along the supply chain, ensuring that we do have the skills, and that goes back to education, including tertiary education; (3) natural resources capital—that is, the land, the soils, the water and the natural elements that we rely upon in the farm sector; (4) infrastructure capital—I have mentioned it already through financing, but obviously we cannot be competitive in the global market without efficient supply chains and the infrastructure which is critical to that which are the roads, the rail, the ports, the dams et cetera; and (5) research capital—maybe the most critically important component as to how we innovate, how we get ahead of the game, how we ensure we are at the high-value end of the curve not the low-value end of the curve, and how we produce more food with the same limited natural resources, in fact with depleting natural resources.
These five points are so important to our future success.
If I can just depart from bipartisanship for a moment, I remind the House that we have been for almost two years now under this government without an agriculture policy. Two years without an agriculture policy! If the minister were at the dispatch box opposite, he would say, 'Oh, we've got three free trade agreements.' I acknowledge that. We have got three free trade agreements. Negotiations were commenced by the former Labor government. This government completed them. There were good reasons why Labor was hastening slowly, and some of those reasons will be teased out, I suspect, over the coming months as we talk about investor-state dispute resolution mechanisms and about labour market agreements and how they might impact on this country. But Labor welcome the signing of the agreements, and we are pleased that they are complete. We would like to see them, by the way. That would be helpful. If we had that opportunity, we might give them even stronger endorsement. But I do accept in any case that this government has now signed off on those three agreements.
Minister Joyce can and will continue to claim that, but it is not his portfolio; it is Minister Robb's portfolio. I go back to his own achievements: nothing—although I do acknowledge some depreciation schedule changes in the budget which are welcome. But, in terms of strategic guidance and overarching agriculture policy, there is nothing—two years without an agriculture policy. While we fiddle as a country in agriculture policy, our competitors, South Americans in particular, are on the march. They are not waiting for their white paper; they are on the march right now. They are on the march while we fiddle. For our counterparts across the ditch in New Zealand it is the same. They have real goals and objectives and strategic plans to capitalise on the opportunities in Asia. They are way ahead of the game, way beyond where we are in this game, particularly in dairy, as people well know. So two years without a policy are a problem, and it is a disappointment. It is a great disappointment to everyone out there in the agriculture sector and indeed the agrifood sector, who had high hopes of this government, having been promised so much prior to the election, and who remain now bitterly disappointed.
I want to make a couple of points on some of those foundations I laid down. Australia is a large island continent with a very small population, around 23 million people. Therefore we have a very limited savings capacity. For that reason, as a nation, for all of our lives—indeed, since the First Fleet arrived—we have relied heavily on the capital of those in other countries. Traditionally, it came mainly or largely from our Western friends in the UK, the US and Canada. Over the years, that has changed, but they—and even New Zealand—still predominantly are our providers of foreign capital. But of course, as Asia and the Indo-Pacific generally continue to emerge, some of that capital is coming from other nations—China, for example. That is a good thing for Australia. It is good news for Australia—very good news for Australia.
It is well known in this place that the member for Hume was one of the primary authors of a great ANZ and Port Jackson Partners report on 'feeding our future'. I do not know how robust his numbers are, as I have never had the chance to get behind his methodology, but it is suggested in that report that, to fully capitalise on the dining boom, Australia will need $600 billion—that is billion with a B—worth of investment in infrastructure. I am glad that the shadow minister for infrastructure is with us, because he understands this very well. That is if we are to fully capitalise on the dining boom. Let us just assume that the member for Hume is only half right and it is only $300 billion. That is still a very, very significant amount of money, and it is axiomatic that it is not going to come from Australian savings. Yes, we need to do more to get the super funds more engaged and involved in agriculture, and we should all be working towards that objective, but it is never going to be enough. We will be very heavily dependent on foreign capital.
We should not be concerning ourselves about where the capital comes from. Chinese money is as good as US money or money coming from Canada. It is all important to us. I am really concerned that this government, for the first time, is implementing in this country a discriminatory foreign investment approach. We now have different rules for different countries. Coincidentally, maybe, we have different rules for Asia than we do for the American continent, for example. We have different rules for Asia than for the Americans and the Canadians and indeed the New Zealanders. In fact, now, under the current government's arrangements, if you want to buy some agricultural land, if you are Asian you will go to the Foreign Investment Review Board if the value of the land is more than $15 million. If you are an American or a Canadian or a Kiwi, you go if it is more than a billion dollars.
This does not make any sense, but it certainly sends the wrong signals to potential investors in Australian agriculture in a global market where competition is intense. A lot of money is flowing into South America. People are sitting back and saying, 'Well, I can invest in Australian agriculture, or I can invest in South America, for example,' and they will take the path of least resistance. Of course they will. Not only that, but the government is now planning to raise hundreds of millions of dollars from fees—big fees—drawn from applicants who want to invest in this country.
In fact, I was talking to the principal of Wellards, the live export company, a very successful company run by an Italian who lives in Australia but not as an Australian citizen. He lives in Australia; he has his home in Australia; his kids go to school in Australia; and he employs hundreds of people in Australia because his business goes right through to feedlots and of course abattoirs.
This gentleman faces a real problem now. He currently needs to buy a piece of land as an easement; it costs $6,000. His objective is to square off the block, and I think there are some water issues he needs to deal with around one of his abattoirs. Because Minister Joyce's, or the Treasurer's, new rules are cumulative, he needs to go to the Foreign Investment Review Board—this is for a $6,000 bit of dirt—because he is already through the $15 million threshold and he is not an Australian. I wonder how much the member for Calare or the member for Hinkler thinks the application fee would be? On a $6,000 block of land, would it be $100? Would it be $1,000? It costs $15,000 for an application fee to the Foreign Investment Review Board, and this is to buy a block of dirt for $6,000.
But it gets worse than that, because, as everyone in this place knows, when someone goes to an auction and makes a bid they have to be in a position to close the deal. It cannot be conditional. You cannot visit an auction and then ring up later and say: 'I can't buy it now, because I couldn't borrow the money,' or 'because my wife said I wasn't allowed to,' or 'because my husband said I wasn't allowed to'—to be politically correct. Gentlemen like the one I mention in my example cannot do that. He cannot go and bid at auction for his $6,000 block of land. Why? I am sure the member for Hinkler knows the answer to that question. The answer is: because he does not have Foreign Investment Review Board approval yet. And he cannot do it. The timing is all wrong.
So these are the simple but important things this government has not thought of. They have not thought these issues through. What they have thought through is populism. We all know that there are people out there who are concerned about Asian investment in agricultural land. But—instead of showing leadership and reminding people that investment by, for example, Chinese in agriculture is very small, in fact minute, in the total scheme of things; instead of showing leadership by reassuring people that they have nothing to fear and that in fact Chinese investment in our agricultural sector is a good thing, is good for Australia, is good for jobs, is good for export earnings; instead of explaining that they cannot pick up the land and take it with them; instead of explaining to them that a sovereign country maintains the right to export, for example, and maintains rights over what leaves this country; instead of doing all of that—they are playing the game and they are sending the signal out, 'Don't worry, we won't let those Chinese come and get your farm land'. Show some leadership. I challenge the member for Hinkler and the member for Calare to stand up to Minister Joyce in their party room and, in doing so, show some leadership.
Minister Joyce is very interesting, because he went to the New South Wales Nationals conference on the weekend. I am sure the member for Calare was there in the beautiful Hunter Valley. No doubt they enjoyed some excellent Hunter wine while they were there. And Minister Joyce declared at the conference, in a moment of mad populism, that he is not going to let any government-owned foreign companies buy any agricultural land in this country.
If you have a look at Sue Neale's article today, you will see there are many good examples of government pension funds, for example. Imagine locking out the Norwegian pension fund from Australian agriculture. Can you imagine that? Can you imagine if we told the Norwegians—with their billions of dollars from their oil funds—that we were not going to let them buy anything in Australian agriculture, that we were going to deny ourselves that opportunity? But of course he did not have the Norwegians in mind, did he? Is that right, Colleagues? You did not have the Norwegians in mind. He was not thinking about the Norwegians, was he? Of course he was not. I will let others come to their own conclusions about that.
This week, back here in the parliament, after his Prime Minister found out about this idea at the New South Wales Nationals conference, Minister Joyce changed his view. He still believes that—he told The Australian, or a spokesman told The Australian. He still believes it but he is not going to legislate it. He believes in it but he is not going to do it, which is a fairly novel approach to one's ministerial portfolio, I would have thought.
He believes this is what should happen, but he is not going to do anything about it. The Prime Minister needs to haul him into line and have him come in here and make a statement about his intentions; because, unsurprisingly, there are lot of investors out there—governments and their pension funds, for example—who do not know what the rules are going to be in a year's time or in two years' time, because Minister Joyce has made his views very clear to them. He sent the signal that if he had the opportunity he would be locking them out of an opportunity to invest in Australia. So what are they to believe? They do not know. They are sitting in Beijing or in Oslo or in London. They do not know what the rules are going to be tomorrow.
They will just go elsewhere. They will go to South America or elsewhere. Australia is getting too hard. Why would they line up in a queue for the Foreign Investment Review Board in Australia behind God-knows-how-many applications? And, by the way, the government has given no indication whatsoever of any intention to more fully resource Treasury to handle this additional workload. They have taken something like $750 million additional—I think, over four years, as demonstrated in the Treasurer's budget papers—from Foreign Investment Review Board applications, but they have not said one word about returning any of that to Treasury to handle the extra workload involved.
They look at Australia and see they are in a big queue—God knows how many applications we will now have. If my friend at Wellard has to put in an application for a $6,000 block of dirt, I suggest to colleagues that the queue is going to be pretty long. Then they look at the fees: up to $100,000 or more, depending on the value of the land they are looking at. An application fee of $100,000 at the Foreign Investment Review Board! This is just a black hole. Now they have the minister saying, basically, 'First chance I get, you won't be allowed in here at all'.
So, if someone is looking at an enterprise they want to be ultimately successful, and they need additional land to meet those objectives, they do not know whether they are going to be able to buy that in two years' time.
They do not know whether they are going to be able to buy that in two years' time. So they look at Australia and they just do not bother—that is what is going to happen.
I say to the minister: put the populism aside, please. Show some leadership, get out there and explain to people that they need not fear foreign investment in agricultural land. At the same time, send a signal to potential investors around the world that Australia is open for business. Isn't that what they told us before the last election? That Australia was going to be open for business? Here is the opportunity to do so.
I am getting a lot of pressure from my colleagues and so I will try to wind up! As I said, Australia has no agriculture policy. We were promised an agriculture white paper. If the minister were here he would say—or, I would like to think he might say—'Yeah, you're right. We don't have any agricultural policy. But don't worry—the white paper is coming!' Well, I do not know whether the white paper is going to be a document of quality or not. I am feeling very pessimistic, I might say, that it will be because, as one of Minister Joyce's colleagues somewhat infamously told a journalist, 'It's full of every crackpot idea of the last 20 years.'
My fear is that the more it bounces from Minister Joyce's office to the Treasurer's office, to the Prime Minister's office and back again—and around and around again a few times—it will ultimately be a document not of quality but of compromise. I fear that this means it will be a bit of a wish list and a promise on infrastructure projects which could never be completed or even started prior to an election—in a years' time, let's say. Therefore, it would be useless—not a strategic, overarching document that provides guidance to the agriculture sector and its investors but basically a pre-election policy document.
Now, to the delight of my friends I will sit down! I restate Labor's and the opposition's commitment to the bills. We will be supporting the bills and on that basis I commend them to the House. I look forward to the member for Calare responding to some of those Foreign Investment Review Board issues that I raised.