Customs Amendment, New Zealand Rules of Origin Bill 2011
It is with great pleasure that I rise just weeks after this parliament was addressed by the Prime Minister of New Zealand, Prime Minister Key, to speak in favour of the Customs Amendment (New Zealand Rules of Origin) Bill 2011. The ties that bind Australia and New Zealand go back to the very origins of our two great nations. We are the closest neighbours and the very best of friends and allies, apart from on the rugby field. We share the Anzac heritage and conflicts both in our mutual past and through to today with our mutual commitment to eliminating terrorism in Afghanistan and bringing stability to that nation.
However, our ties go beyond conflict. We share a mutual culture and many Australians have fallen so in love with New Zealand that they have made it their permanent home or at least a regular tourist destination. Who has not heard it said that there are more New Zealanders living in Bondi than in Auckland? Even Prime Minister Key, who was here a few weeks ago, himself admitted that he has also lived in Australia. I think he was down in Bondi but he was in Sydney.
My sister is married to a New Zealander. They have a debate going on amongst themselves. They have two children born in Chile. I think the eldest girl is going to be an Australian and the younger boy is going to be a New Zealander, so they will have these different nationalities, which is very interesting. The ties are very thick and close.
It is because of this closeness that we have all been so deeply affected by the earthquakes in Christchurch where there is a need to demolish some 10,000 houses, where the elderly have been moved to other parts of the country and where schools are doubling up on students just to make sure that their education continues. We have heard that Christchurch's CBD has been shattered and may never recover and that so much has been destroyed and there is so much uncertainty that they are not sure whether to rebuild. I know that the spirit is very strong there and that they are keen to rebuild, but they have a big job ahead of them. I know that all the Australians are out gunning for them to succeed in that mission.
We have heard that 181 people have lost their lives and that the cost to the New Zealand economy will be huge. It is estimated that there will be a loss to the GDP of some $15 billion. This is a hit to their economy of such epic proportions it will take time to recover. This recovery will very much involve Australia. We have already provided rescue and emergency teams, but we will also provide our assistance in economic terms as well. To this end I was very interested to hear Prime Minister Key talk about exactly how much economic investment flows between Australia and New Zealand. We would all be aware that he said some $50 billion of investment in New Zealand is from Australia. I was also interested to hear that exports to New Zealand total some $8 billion.
Given our focus on China and Asia generally and the large investments made there, we at times can tend to forget the importance of New Zealand for the prosperity of our export trade. While the New Zealand trade may be small, the proximity of New Zealand, our shared culture and our trade agreements make it in many ways a more enticing offering for many businesses. Perhaps it is for this reason that Prime Minister Key noted that so many small and medium Australian businesses cut their teeth in the international market by first exporting and investing in New Zealand.
This bill has been made possible by the close trade relationships that have developed between New Zealand and Australia over time. A cornerstone of this closeness in recent history could be said to be the Closer Economic Relations Trade Agreement, signed in 1983, and known widely as the CER, a free trade agreement that is widely acknowledged as a model of the standards to which such agreements should aspire but which many, if not most, fail to achieve. This agreement is Australia's longest standing bilateral free trade agreement. It provides both Australia and New Zealand with liberal access to goods, services and investment markets. Many Australian jobs and businesses are underpinned by this agreement.
The legislation before us today seeks to amend the provision of this agreement and its subsequent act to alter the rules of origin provisions. Rules of origin are those provisions—be they legislative, regulatory, administrative rulings—that are used to determine the country of origin of a good or service or investment.
They are of importance in world trade, especially in a world that is characterised by the ever-growing globalisation of production.
These matters may appear technical or details of little interest, but the functioning of a bilateral trade agreement depends crucially on getting these details right. It is another reminder of the more workaday details that lie behind the big picture items that grab the headlines. It reminds us that the hard work of reform takes place on many levels and involves unglamorous hard work and careful attention to detail, very often performed by public servants in my own electorate who I know are here today to see their bill hopefully come to fruition. I am sure plenty of hours and midnight oil has been spent on this. I congratulate them on their work. There have been lots of public servants involved and lots of people committed to making a difference.
The current rules of origin for the free trade agreement entered into force on 1 January 2007. When negotiating these rules it was agreed by both Australia and New Zealand that there would be a review conducted after three years of the rules taking effect. This review began in 2008 by both Australian and New Zealand officials and was completed early last year. The review resulted in agreement to make amendments to the text of article 3, rules of origin, and the related product specific rules in annex G that deal with the definitions of particular industries and processes. These are the changes we make today. Specifically this bill inserts new definitions for aquaculture and amends the definitions for manufacture and produce. It also amends the provision dealing with wholly obtained goods and the provision dealing with eligibility based on the last process of manufacture. In addition, it inserts a new section to provide that goods are not treated as having originated in New Zealand merely because of certain operations being performed.
The government consulted Australian industry throughout the process of review. In addition, the Joint Standing Committee on Treaties conducted three public hearings on the treaty changes before recommending that Australia take binding treaty action. The changes to the trade agreement will reduce the administrative burden on business and will facilitate the eligibility for duty-free entry of goods into both markets. The amendments will also provide greater consistency between the rules of origin in the agreement and those in other free trade agreements entered into by Australia, which is very important. The amendments to article 3 will enter into force on the date when the Australian and New Zealand governments notify each other by an exchange of diplomatic notes that they have completed their respective domestic processes to bring the amendments into force.
The CER agreement is the standard by which bilateral free trade agreements are judged. For almost 30 years, it has played a significant part in the prosperity of Australia's export trade and our economy. The provisions before us today are good for the Australian economy, are good for the New Zealand economy and are an important part of the ongoing achievements of the government in support of the economic wellbeing of all Australians. These provisions are also good for the economic wellbeing of New Zealanders, the economic wellbeing of people who need employment and Australian exports. I therefore commend this bill to the House.