I’m delighted to speak in support of the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, which will implement the Australian government’s commitment to free trade and, in particular, TPP-11, which I happen to believe is of similar importance to the future of Australia.
I will refer to the member for Melbourne’s remarks later in my comments, but I want to say that I think we have yet again seen another demonstration of how his party’s approach to these issues will provide a blueprint to drive Australia to become an isolated economic backwater—a ‘greenprint’ is probably a better way of describing it. I find it extraordinary that, from the representative of a party that spends much of their time arguing for greater international cooperation and regulation, we have this tirade which reflects the fact that their approach is entirely hypocritical. They want that international cooperation and regulation when it’s on issues that match their ideological mindset, but when it actually comes to economic activity and economic growth, suddenly that support for international action completely dissipates. I also have to comment that you could change some of the words of the concerns raised by the member for Melbourne, but at their heart you get the same type of fear and, frankly, paranoia you would expect from a right-wing radio host in the United States railing against the United Nations. It is the same type of scepticism, so often unfounded, that we see infecting the international debate today.
The reason I support this legislation and the TPP more broadly is that our free trade agenda is a fundamental part of our economic program to advance Australia. I want to reflect on the fact that this is a multipronged approach. It’s an approach that’s involved reform to our tax system, which we have implemented through legislation over the last two years. The tax reforms are going to deliver personal income tax cuts of a scale and significance that we haven’t seen for a generation. Those tax reforms are driving small- and medium-sized businesses by taking some of the corporate tax burden off their back.
It’s part of our agenda that involves the investment we’re making at record levels in infrastructure—in my state, there is groundbreaking infrastructure like the Western Sydney Airport—or investment in congestion busting or new roads, in public transport and rail. In Victoria, for example, there is that wonderful commitment we made to finally, at long last, after 40 or 50 years, build a railway line to Melbourne Airport.
It’s part of that plan that involves the responsible financial management that we’re providing which is giving people such great confidence in the future for the federal government’s budget settings and the Australian economy. It’s part of that plan which is supporting small business, which on this side of the House we believe is so vital to jobs creation and the economic future of the country. I refer to the corporate tax cuts that are benefiting small business, but obviously there are a range of other measures, such as the instant write-off of assets purchased under $20,000, which are really making a difference to our small- and medium-sized businesses.
Finally, it’s part of that plan which is helping deliver in an area which I think is vitally important and making sure that Australia is not just in the middle of the pack but also moving to the top half of the pack in relation to innovation and technology. If you look at where the future of Australia’s success will lie, there can be no more important area than making sure that we are part of the next wave of technological advancement, which is so important to the jobs of the future.
I want to turn particularly, in the context of the TPP, to why I believe that this multilateral free trade agreement is so important. It comes off the back of this government’s extraordinary success in advancing the free trade agenda. I’m proud of the fact that this government has been able to sign FTAs with Korea, Japan, China, Peru and, very recently, Indonesia. It is an important part of the economic mix because of both the global implications and those on our own shores. Globally, I happen to believe that free trade has been one of the most important features of our international efforts to provide economic advancement for citizens around the world. It is no coincidence that, over the last 30 or 40 years, we have seen the most dramatic alleviation of poverty around the world being driven by the opportunities that free trade is opening up.
I want to refer to one statistic, and that’s the fact that in 1981 almost 50 per cent of the world’s population lived below the poverty line—I think it was close to two billion people. Today, with a much larger global population, that number is down to one billion people, or 15 per cent of the world’s population. Clearly that remains too high, but the fact is that the opening of markets and all of the flows of investment and technology and opportunities for citizens in countries that have previously struggled have helped drive that poverty alleviation success story.
More broadly, I happen to believe that open markets and free trade have a dividend which is not just about economic relationships between countries but, frankly, about peace and security. It’s often said that no two democracies have gone to war against each other. That is by and large true, depending on how you define democracy. It is also true that free trade is driving closer relationships between nations who develop a stronger economic integration. But it is also driving a closer integration between the peoples of those nations. That’s particularly true as our free trade agreements evolve from just simply being about commodities, agriculture and resources to being about the provision of services in each other’s countries. It’s that person-to-person contact provided through our intellectual know-how and our service provisions—which is particularly relevant to Australia—which is helping bring countries together. I think that there is a real security dividend that is being driven by countries more closely cooperating on the economic field as much as anything else.
For Australia, open markets and free trade are particularly important. That reflects the fact that we are by global standards a country with a vast land mass but a small population. We don’t have the huge domestic markets of other nations. The opportunity to export our goods and services, our know-how and our skills means that we are not constrained by a domestic market of 25 million people—the world really is our oyster. But that is only achievable by having access to those markets that are important to us.
We are a nation that has for so long depended on our capacity to export. Particularly over the last 40 years as we have recognised that the protectionist policies of the past were constraining those opportunities, we have seen the reforms that have been adopted by governments of both political persuasions ensure that we have opportunities that people 100 years ago, frankly, would never have imagined and only ever dreamed of. It’s therefore no surprise that, over the last five years, a quarter of our economic growth—which has been leading the world—has been driven by our trade and our exports. That will grow in importance, and it will grow in importance because of our success in developing these free trade agreements.
This agreement is an important part of the mix. In the Trans-Pacific Partnership we have a multilateral agreement which provides us an opportunity in nations that represent a combined GDP of something like $13.8 trillion. It’s an agreement that is providing us access to markets that represent 500 million people and it is an agreement providing us access to markets in parts of the world that are closest to us, in our own region, on either side of the Pacific.
The genesis of this agreement has been a surprisingly painful one in some ways, in that all of us would have hoped that today we were talking about TPP-12, not TPP-11. But we know that, following the election of Donald Trump, the United States decided to withdraw from the TPP that had been embraced by his predecessor. For me, that was a disappointment. Many people argued that it would be the death-knell for this agreement. But through the leadership of Australia and our friends in Japan and in other nations, we have been able to prove those doubters wrong. The fact we have continued to be able to successfully negotiate this agreement stands as extraordinary testament to the commitment and work of people like our former Prime Minister Malcolm Turnbull and our last trade minister, Steve Ciobo. I pay credit to both of them in particular. But for me there is a broader importance in the fact we have been able to sign this TPP because so much of the world is becoming consumed by nationalist populism, which, in my view, drove the US administration to withdraw its support from the TPP. Never has it been more important for Australia to stand firm against many of those pressures which, in my view, do not stand to Australia’s benefit but, more importantly, will separate the world and constrain the prospects of economies around our globe. So by supporting the TPP, we are laying a marker to say that Australia, despite some of those pressures internationally and occasionally on our shores, will continue to be at the vanguard for those arguing for closer cooperation between nations, economically and more broadly.
I mentioned the fact that the TPP will open up new opportunities for Australian businesses in markets that represent some 500 million people. What is really significant about this agreement is that it will see 98 per cent of tariffs in those 11 countries removed. Many of the speakers before me have spoken about the benefits of this agreement to sectors of the economy that relate to their electorates. Not surprisingly, there’s been a focus on the extraordinary benefits this will deliver to our agriculture sector, which is having a renaissance. But, for me as the member for North Sydney, which is an electorate which is not an electorate famous for agricultural produce, what excites me about the TPP are the provisions that are included in the agreement that will support those working in our professional and service sectors. We know that, particularly with the growth of the economic opportunities in the middle-class in our region and across the Pacific, we are going to be ideally placed to provide that intellectual know-how in engineering and architecture, in law, in finances and so on, that are going to be increasingly demanded in those economies. And this agreement, as much as it focuses on the agricultural sector, also provides opportunities through the liberalisation of access to those service markets which is going to be important for so many people working in my electorate and so many businesses in my electorate, including those in the thriving innovation sector in North Sydney.
I also want to refer to one other aspect of this agreement which is important. We have signed a multitude of free trade agreements over the last five years. What this agreement delivers is not just benefits in those countries like Japan, where we already have an FTA and there are further benefits that will arise, particularly for the beef industry, for example; it means that for the first time we have effectively an FTA with those two North American markets, Canada and Mexico, that are going to be increasingly important to our future prospects, in my view. I particularly touch on Mexico. Mexico is a G20 economy. My view is that over the next few decades we will see increasing opportunities in Latin America, and this FTA with Mexico, joining as it does Peru and Chile, I think, will be very important in that regard. Overall, it’s been estimated by recent studies that, between now and 2030, the TPP stands to increase Australia’s economic opportunities by something like $15.6 billion. That is just so important, in my view, to our future prospects.
Before I conclude, I want to touch on two matters that have been raised by other speakers in this debate. The first is in relation to the ISDS provisions, which seem to rile and get excited many who come to the free trade debate. I want to stress that these are standard inclusions in FTAs that Australia has been part of for many, many years. I want to equally stress that none of the settlement provisions affect the ability of any national government to regulate in legislation in relation to the public interest or for legitimate public welfare grounds. In fact, I would challenge anyone to point to where the capacity of this parliament to legislate for the good governance of Australia has been affected by the inclusion of those provisions in any free trade agreements we’ve signed to date.
The member opposite refers to plain packaging. A challenge was mounted and it failed, which proves the fact that the protections that are involved in those agreements are working as they should. There’s nothing in our legal system that stops someone making a claim. What is important is the outcome of those claims. What is just as important is that, as a country with a strong legal system and a great sense of the importance of eliminating sovereign risk, these provisions provide Australian businesses with so much greater certainty in their relationships and dealings with countries where the legal system does not meet or have the standards that we would expect and impose upon ourselves. Therefore, the net benefit of these agreements, in my view, is overwhelming.
The other thing that I want to touch on, and the member for Melbourne referred to this, is in relation to the labour market. I want to make absolutely and abundantly clear that nothing in this agreement weakens or lessens the requirements or the skills testing involved in anyone wanting to come and work in Australia. They will apply at the national level and they will apply at the state level. I commend this bill to the House.