Free Trade Agreements

Debate resumed.

Mr KNOLL (Schubert) (12:14): I rise to support this motion from the member for Chaffey. I understand he is somebody whose electorate benefits hugely from free trade, as does mine. What I will come to give you an understanding of is how important free trade and inbound foreign direct investment is to South Australia and to the Barossa Valley in terms of the income, employment and ongoing GDP that it helps to push through our economy.

Andrew Robb is a man who came late to parliamentary life, and he is retiring at this election, having served for somewhere between 12 and 15 years. He is a man who has achieved so much over this last period in office. He was able to close three free trade agreements with China, South Korea and Japan. I will not pretend to go over them, as the member for Chaffey has already gone through that, but how important those free trade agreements are to South Australia especially cannot be overstated.

Here in South Australia, we missed the mining boom to a great degree. Whilst Queensland and Western Australia got the majority of that tick, what we got here in South Australia was the corresponding high dollar, the corresponding higher interest rates that came with that, and the corresponding wage inflation. It really has had a deleterious impact upon our economy. What these free trade agreements mean for this post-mining boom era is that South Australia should be well-placed to capture this current economic environment, this current international trading environment, because our strengths will be fuelled by the demand that exists now in some of the developing and developed world.

In particular here, I am talking about China, which is a country that has industrialised and moved somewhere between $250 million to $400 million into a middle class that is able not only to live and survive but to thrive and consume. It is that last point that I think is most important to South Australians, as those in that middle class have the money now to be able to afford the products, goods and services that South Australia can provide.

In my time this morning, I would also like to present a bit of a cautionary tale because there are those out there who would seek to undermine what has largely been a bipartisan approach to free trade in Australia and certainly in South Australia. I acknowledge the government's welcoming of the free trade agreements when they were concluded, but there are those in our community who would seek to undermine that consensus.

Indeed, there are federal candidates—and I would like to point out the ones in regional areas, namely, James Stacey in Barker and, very particularly, Rebecca Sharkey in Mayo—who are going around pushing support against this consensus around free trade. They are going around trying to scare South Australians into wanting to close off from trading with the rest of the world. Can I say to those in regional areas: be especially careful about the choices that you make on 2 July because any undermining of the consensus on free trade and the idea that it is anything but good for our economies is dangerous, and nowhere more so than in the Barossa Valley. In fact, without free trade and without foreign direct investment, the Barossa would not be a fraction of what it is today.

I look around at the foreign domestic investment in companies such as Pernod Ricard and the way they have taken over and run with Orlando and the Jacob's Creek brands. I look at a beautiful winery like Torbreck, which has some United States ownership. I look at some of the assets of others who have had Chinese investment and how that money has come into our economy. It has helped to develop and grow the tourism offer and the wine producing capacity that we have in the Barossa Valley, and that in turn has had great economic benefits for South Australia.

When it comes to tourism, I will read here from a release, dare I, from the member for Mawson who put out, on 1 June, some international figures that say that international visitors to the Barossa have contributed to a 38 per cent increase in tourism spending, lifting expenditure to a record $954 million. That is $1 billion worth of money that has come into South Australia—$1 billion.

In the 12 months to March 2016, that is 12,000 international visitors who travel to the Barossa, staying for an incredible 193,000 nights. Each visitor does not come for a day or two days; we are talking here about people staying for a couple of weeks, which is a huge amount of investment directly into the Barossa Valley. That figure, that $1 billion, is at risk from those who would seek to undermine the consensus on free trade.

The Barossa Valley, apart from being a beautiful tourist destination which I encourage everyone to come to as often as they can, is also a great wine producing district in South Australia. Directly, last year, we sold $150 million worth of Barossa-branded wine overseas. That $150 million worth of Barossa-branded wine goes together with the $200 million, $300 million, $400 million or $500 million worth of wine that was branded from other districts that the Barossa produced and then subsequently exported to the rest of the world.

That is put at risk by anybody who would seek to vote for those who undermine our consensus on free trade. We cannot afford to close ourselves off to the world. We are a population of 24 million people, but we produce enough food for somewhere between 60 to 70 million people. If we decide that we want to stop people from importing goods into Australia and South Australia, then we have to reasonably expect that we are not allowed to export our goods and services over there.

The entire international education sector, which is worth about $1 billion, can be kissed goodbye, as well as the tens of thousands of international students who create vibrancy in our city. The $1 billion worth of people who come here every year and spend their money in our economy—and we will talk about where these people come from, but China is the major place—we can kiss them goodbye as well. We can kiss goodbye the $1 billion plus worth of wine we export per year from South Australia.

So, for those who live in those areas that have wine districts—and I am talking about Barker because it includes not only the Barossa but Coonawarra, the Riverland and parts of Langhorne Creek as well—for those in Mayo, with the Adelaide Hills, with McLaren Vale and other parts of Langhorne Creek, for those who would like to see those wine regions suffer, then vote for somebody who does not believe in free trade, and watch your communities wither on the vine when people stop visiting and the international export orders for wine stop flowing through and see what that does for those local economies.

What frustrates me most is those who would play on the irrational fear, in my view, of those who worry about free trade. It has undoubtedly been a good thing for South Australia, right back to the Playford era, because certainly all those factories that Playford brought to South Australia were brought here with international foreign direct investment. We cannot, as a Liberal Party, as a Labor Party, as minor parties, undermine our consensus upon that fact, because whilst we all sit here and agree with it—and what I am saying I understand will not be news to everybody sitting in this room and potentially most people listening—it only takes one populist to scare enough of the population into getting others to follow that cause before we see an undermining of that consensus.

I would hate to see a South Australia that heads down that path because we will be poorer, more insulated, less prosperous and less satisfied, and we will also start to fall behind when it comes to technology and advances. Certainly I know from the food industry that most of the technical advantages that help us to produce the food we do and produce it more efficiently come from overseas, and we employ that technology here to help make our businesses thrive.

I put out there in supporting this motion that we all need to get together and continue to underpin and support the concept of free trade, acknowledge the great work of Andrew Robb in these three free trade agreements, look forward to the successful conclusion of the TPP, and also in the future look forward to a free trade agreement with the European Union, whether Britain is to be part of that or not. Having said that, they are basically part of our commonwealth market anyway. In this place, we cannot take that principle for granted because there are those who would seek to undermine it. I believe the more their voices are heard the more dangerous this becomes for South Australia.

Mr PEDERICK (Hammond) (12:24): I rise to support this motion brought by the member for Chaffey:

That this house—

(a) recognises the benefits of free trade agreements to South Australian businesses and the economy; and

(b) acknowledges the work of the commonwealth government to establish recent free trade agreements with Korea, Japan and China.

I acknowledge the contribution by the member for Schubert, an excellent contribution, outlining what could happen if people went the wrong way with their vote in the federal election on 2 July. The member for Schubert was exactly right because, if the people of this country want to shut the doors of this great country, they will stop our trade relations which are absolutely vital for our farmers. Whether it is it is our farmers who are growing wine or growing fruit and vegetables, whether it is our fishermen or whether it is our grain farmers, if people want to vote for these people—and they are representatives of the Nick Xenophon team—they will close the doors to our country and we will become a totally insular society.

I want to speak particularly about the grain industry in regard to this motion. We grow millions of tonnes of grain in this state and across the country worth billions of dollars in trade every year. Not every state has a drought—and we hate droughts, and we have not had a spring for two years in the grain growing areas in South Australia, Let's hope with La Niña that we do have a good spring this year. Certainly, hopefully the topping-up rain that is coming to us today hits most of the regional areas, if not all.

We absolutely rely on exporting our grain products because if all we were going to do was keep our grain to feed ourselves, the 24 million people (and I believe we would feed at least 70 million people and probably more, as the member for Schubert stated, with all our agricultural produce), this state, this country, would just collapse. It would just absolutely collapse with this insular argument that we will not have free trade, that we will just shop around amongst ourselves.

When I look at the dairy industry, for instance, it is an industry that is already suffering because eight billion litres of milk have come out of Europe all of sudden with the dropping of quotas, and that is another way that agriculture is regulated in the Northern Hemisphere. The dairy industry has crashed, so what are we going to do? Are we growing milk just for ourselves? If that is what certain political candidates and parties in this country want, it will be an absolute disaster for the dairy industry far greater than they are seeing at the minute. It will just wipe them out.

I want to reflect on the excellent work the federal trade minister, Andrew Robb, has done in setting up these free trade agreements. He has been the trade minister who has done the hard yards. He has done so much work. I happened to be in China nearly two years ago when we were meeting with different people who were connected with setting up these free trade agreements. They were so impressed with his work and the fact that he was doing so much work with our embassy in Beijing to make sure that we got up these free trade agreements. I congratulate him on his excellent work that opens the doors so that our trade and produce can enter these countries and so that we can keep that trade where we are buying their products as well.

In speaking about the dairy industry, I want to talk about the Beston Global Food Company. They are mainly in the dairy industry here in South Australia, but they also have a joint venture now buying into Ferguson Australia, another fine South Australian company. Both companies are exporters, and I congratulate Ferguson on having the initiative to get on board with Beston. What Beston is doing is world class in terms of what it is seeking to do with export work—that is, getting into the catering sector in China—that is worth tens of billions of dollars over there.

I also want to congratulate Beston for the excellent work they have done on brand security using technology. You can go to the supermarket in China, take a picture of the brand security emblem and check whether that product was actually produced in this state. This is world-leading technology, and it is so good to get around the imitations and make sure that you get the proper product and the proper recognition of the product.

Beston has come into my electorate and picked up the dairy plants at Murray Bridge and Jervois. Those plants had gone into receivership, after United Dairy Power had them, and Murray Goulburn bought the Jervois mozzarella plant. Essentially, they told me that they bought the brand, and the machinery, from my understanding, was trashed because obviously that cuts out competitors operating that equipment.

I acknowledge that Beston has been in receipt of $2.5 million of grant money from the state government, and no finer company could be in receipt of that money because they will put it to very good use. They are an excellent South Australian company, and it is just one example. We could not do without forward thinkers, people who absolutely rely on export. In my electorate alone, they are already employing around 60 people, and I know they want to double that as production moves ahead and things really get going in terms of export opportunities. Having a player of this kind in the electorate has certainly given the dairy industry hope again in this state.

Seafood is also going into China and Japan. Tuna has gone into Japan for many years, and we are looking at getting more seafood into China. The free trade agreement will also open up that trade. There are also extra opportunities that will arise in China, Korea, and Japan with these free trade agreements. As I indicated earlier, whether you are a wine grower, a fruitgrower, a vegetable grower, a grain grower, or you are operating in the dairy industry, whatever you are growing in this country you are reliant on exports.

The member for Chaffey talked about our fruit fly free status. It is absolutely essential that we make sure we keep that, that we get it right and that we make sure our biosecurity protocols are always in place to keep that status. Our free trade partners, and all our international partners, look at us and want to see that fruit fly free status stay to make sure they are getting good product into their countries. They are extremely strict, and that is a good thing to make sure they get that quality product into the market.

We do grow very fine food in South Australia. Look at the contribution agriculture makes in this state—around $20 billion a year. We have seen a downturn in the mining industry, and I hope it is not too long before that turns around and makes a far bigger contribution than it is at the minute. I know operations are still ongoing, but I am sure all the players in the mining industry would love to see a nice kick-along. For so long, agriculture has not been acknowledged in this state.

Mr Whetstone: It's renewable.

Mr PEDERICK: It is absolutely renewable, as the member for Chaffey interjects, and it goes on and on, and it will not go on and on if we do not have the opportunity to export our product into our free markets. So, I urge people to have a good think about who really does look after the country people in Australia—the Liberals. We really do. I urge you to have a positive look at how you vote going into the federal election so that we can support the initiatives of Andrew Robb and these free trade agreements into Japan, China and Korea.

Debate adjourned on motion of Ms Digance.