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Christine: What will be the impact of the South Korean free trade agreement on Australian manufacturing?

The Australian Greens Leader, Senator Christine Milne, questions the Abbott Government on the impact of the South Korean free trade agreement on the future of the car manufacturing industry in Australia.

Senator MILNE (Tasmania-Leader of the Australian Greens) (14:06): My question is to the minister representing the Prime Minister, Senator Abetz. I ask: is the minister aware that on 5 December the Prime Minister, Tony Abbott, said of the recent South Korean free trade agreement:

The benefits of the FTA start flowing immediately and will be long-lasting.

Is he also aware that yesterday, Toyota cited increased competitiveness due to current and future free trade agreements as one of the reasons it is no longer viable to continue building cars in Australia? So, I ask: given Toyota's statements, will the government now admit that it is not benefits but costs which have started to flow from the Korean free trade agreement? And will they now put their current free trade agenda on hold so as not to further harm manufacturing in Australia?

Senator ABETZ (Tasmania-Leader of the Government in the Senate, Minister Assisting the Prime Minister for the Public Service and Minister for Employment) (14:07): For Senator Milne to have read down to the very bottom of the Toyota media release, indicating that free trade agreements were an issue, means that she must have read the first two points that Toyota made: number one was the high Australian dollar and secondly, the cost of manufacturing. Cost of manufacturing? Let me think-

Senator Cormann: Carbon tax!

Senator ABETZ: Oh, carbon tax! Carbon tax, rated as the number two by Toyota and glossed over by Senator Milne in a complete and utter disregard as to what her extreme Green policies that she inflicted on the Labor Party-and they went along with-have done to the Australian workforce in the manufacturing sector.

Let there be no doubt that the carbon tax is a job destroyer, and in not so many words that is exactly what Toyota has said-

Senator Whish-Wilson: Mr President I rise on a point of order, on relevance. Senator Abetz has not even attempted to answer the question on specific comments relating to free trade and risks to free trade agreements in Toyota's media release.

The PRESIDENT: There is no point of order. Senator Abetz is addressing the question.

Senator ABETZ: What I would say to Senator Milne is: do not misquote Toyota when they have put it fair and square on the high Australian dollar-the first issue raised in their media release-and the second issue was the cost of manufacturing and, as I was able to point out in a Sydney Institute speech recently, a change to their workplace agreement which would not see one extra red cent spent by the company and the workers not taking one red cent less home-in other words, wages being maintained-where they could have put an extra 2,000 working days onto the factory floor each and every year. Now, that might have done something to the cost of manufacturing. But when that was tried, the union intervened to stop the workers having a say on whether or not they could vote for the protection of their own jobs.

Senator MILNE (Tasmania-Leader of the Australian Greens) (14:10): Mr President, I ask a supplementary question. I am not surprised that the minister could not respond to the free trade agreement, so I ask him: is he aware that under the heading of 'Sensitive sectors' the DFAT fact sheet on the Korean free trade agreement reads:

It is true that some sectors may face increased competition from imports of Korean products and services, such as motor vehicles, automotive parts, ...

Since the government knew that, why did it proceed with the Korean free trade agreement knowing that it would have an automatic and immediate adverse impact on the Australian auto sector? (Time expired)

Senator ABETZ (Tasmania-Leader of the Government in the Senate, Minister Assisting the Prime Minister for the Public Service and Minister for Employment) (14:11): Again, the Greens leader needs to read the whole document. If she would have read the Korean free trade agreement proposal, Korea currently has an eight per cent tariff on Australian automotive parts, and Korea is Australia's largest market for gearboxes and second-largest market for car engines. So removing the eight per cent tariff that Korea had on our automotive production would have actually helped because the tariff we had in Australia was not eight per cent, it was five per cent.

That shows the sorts of benefits that could have flowed, and hopefully which will flow, to the Australian manufacturing sector-besides, might I add, all the primary sectors which will do so exceptionally well by the removal, for example, of the 300 per cent tariff on potatoes. How good will that be for our state? (Time expired)

Senator MILNE (Tasmania-Leader of the Australian Greens) (14:12): Mr President, I ask a further supplementary question. Apart from misrepresenting DFAT, clearly, will Senator Abetz now say-

The PRESIDENT: Order! You can ask the question but it is not time to make a statement on the answer that has been given. That is after question time.

Senator MILNE: Does the minister stand by the Prime Minister's claim that independent modelling shows the free trade agreement with Korea would be worth $5 billion between 2015 and 2030, and boost the economy by around $650 million annually after 15 years? If so, when is the government going to release the independent modelling on which this is based, or has the Prime Minister oversold the case? (Time expired)

Senator ABETZ (Tasmania-Leader of the Government in the Senate, Minister Assisting the Prime Minister for the Public Service and Minister for Employment) (14:13): Mr President, as I understand it, only one question was asked before time ran out and the answer to that question is absolutely yes. I do stand by the Prime Minister's statement.

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