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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Free Trade Agreements

Mr BASHAM (Finniss) (11:38): I move:

That this house—

(a) notes the enormous benefits of liberalised global trade to the Australian and South Australian economies;

(b) commends the Australian government for concluding free trade agreements over the past five years which have substantially contributed to record economic growth, job creation and exports while continuing to pursue an ambitious trade agenda;

(c) commends the Marshall government for implementing its agenda to increase South Australian exports; and

(d) notes in particular the efforts of South Australia's farmers and agriculture, food and wine sector to make the most of export opportunities offered by free trade agreements for the benefit of rural communities and the state's economy.

Australia has been a strong trading nation for a very long time. For thousands of years before British settlement, Indigenous Australians have traded goods across the Torres Strait, with their neighbours, to the north of the continent. Indigenous trade across the Torres Strait continues today.

Liberalised trade is essential for the future of this state and the future of our nation. The almost universal outcome for countries which open their economies to global trade is increased economic growth. Australia exemplifies this fact. We have one of the most open economies in the world and have enjoyed 27 years of uninterrupted growth in times when many other Western economies have not. This growth is forecast to exceed the OECD average in the key indicators for the next three years.

Since the 1980s, trade liberalisation has lifted Australia's GDP by 5.4 per cent and increased the average real income of Australian households by more than $8,400 per year. One in every five Australian jobs involve trade-related activities. Recent national figures are that Australia's two-way trade in goods and services expanded by 8.4 per cent to reach $798.6 billion in 2017-18. Australian exports in 2017-18 were valued at $403.2 billion, up almost 8 per cent from the previous year.

Australia's top four trading partners in 2017-18 were China, Japan, the United States and South Korea. They account for almost half of Australia's total two-way trade. It is no coincidence that we have free trade agreements (FTAs) with each of them. Free trade arrangements have been an essential element in Australia's economic success over the years. There is a school of thought in Australia that multilateral agreements are preferable; however, multilateral negotiations in the World Trade Organisation are excruciatingly slow. Free trade agreements with fewer participants offer the best and most expedient means to improve Australia's competitiveness and open up new commercial opportunities.

We have no choice but to commend the Australian government for negotiating these arrangements. Since the Coalition was elected in 2013, the government has successfully pursued an ambitious trade agenda, with free trade agreements as the cornerstone. The FTAs that have been successfully concluded are with China and Japan, and South Korea was soon after.

Australia now has 11 regional and bilateral free trade agreements in force. Another four have been completed but are not yet in force. They are the Indonesia-Australia Comprehensive Economic Partnership Agreement, the Peru-Australia Free Trade Agreement, the Australia-Hong Kong Free Trade Agreement, and the Pacific Agreement on Closer Economic Relations. Another seven agreements are currently under negotiation, including with India and the EU.

There is also a strong prospect that we will negotiate a free trade agreement with the United Kingdom. By next year, Australia's free trade agreements may account for up to 80 per cent of our trade. Our own state has benefitted enormously from the Australian government's success in concluding and implementing free trade agreements. Exports create substantial jobs in our economy—greater than 10 per cent of South Australian employment, according to departmental estimates.

For South Australia, based on the $15.5 billion of merchandise and service exports recorded in 2017, this equated to nearly 80,000 South Australian jobs. Australia's free trade agreements in force cover eight of South Australia's top 10 merchandise export countries for 2018-19 and all top five countries—China, Malaysia, the United States, Japan and Thailand.

The benefits of the free trade agreements for our state's leading agriculture, food and wine sector are impressive. A great example is wine exports to China. Under the China free trade agreement, the tariff for bottled wine steadily reduced to a zero tariff at the beginning of this year. Compare this with major competitors in the EU, South Africa and Argentina, who still face a 14 per cent bottled wine tariff in accessing the Chinese market, and the United States, which, following recent trade tensions, now has a tariff approaching 100 per cent.

South Australia's wine exports to China in 2018-19 were worth approximately $800 million, up from approximately $150 million in 2014-15 before any reductions in tariffs flowed from the agreement with China. As a producer of premium wine, South Australia has also increased its national share of wine exports to China from less than 60 per cent in 2014-15 to around 75 per cent in 2018-19.

However, it not just China and wine. One of the key things we have seen since the establishment of the free trade agreement between New Zealand and China back in 2008 is the significant growth of New Zealand's dairy industry in relation to Australia's dairy industry. The New Zealand industry basically doubled in size, while the Australian industry declined slightly. That competitive advantage they had in going to China was significant; however, with the free trade agreement between China and Australia, that is now starting to reverse and balance up the access.

It is important to note that while free trade agreements have created these opportunities, South Australian farmers and businesses have seized them. To do so requires research, cost, effort, time and considerable risk, in addition to reduced tariffs and better access provided by free trade agreements. The rewards can be great for businesses and farmers, but the benefits flow further to entire communities, regional areas and the state's economy. The Marshall government must be commended for its efforts to boost South Australian exports.

Complementing national activity, the Marshall government is directly supporting local businesses to increase their exports and utilise free trade agreements to their full advantage, with measures including TradeStart advisers educating existing and prospective exporters; overseas representatives in key target markets that have close alignment with markets in Australia, with which Australia has free trade agreements; more targeted inbound and outbound business missions to drive investment opportunities, promote the state's capabilities and facilitate market access; funding the delivery of export capability training to local businesses, such as Business SA's Export Ready Program; and a strengthened South Australia Export Accelerator grant, providing financial assistance for local business growth into international markets.

At a broader level, the government's response to the Joyce review is firmly focused on the role that the nine priority export sectors can play in growing the state's prosperity and exports, because they primarily operate in external-facing markets and there is global growth demand. This also makes these sectors attractive destinations for further investment. This includes a major export sector, food, wine and agribusinesses, energy and mining, international education and tourism. All have significant opportunities to grow further.

There are also emerging sectors based on international technology trends and Australian government commitments to South Australia. These include defence, space, health and medical, and creative and high-tech industries. Lead government agencies are working with each target export sector on sector strategies that have ambitious but achievable growth objectives. The first of the industry strategies was released on 6 August 2019, when the Minister for Trade, Tourism and Investment and other industry leaders released the South Australian Visitor Economy Sector Plan 2030, which sets an ambitious and bold agenda for tourism. The industry-led and endorsed plan aims to grow the state's visitor economy to $12.8 billion by 2030 and generate an additional 16,000 jobs.

On 19 August, the Minister for Trade, Tourism and Investment and industry leaders also announced the International Education 2030 strategy, which sets an ambitious target of achieving a $3 billion industry and employing 23,500 South Australians by 2030. This strategy was developed with industry and included extensive consultation with international education stakeholders and the Ministerial Advisory Committee for International Education.

Other key exports are working to develop growth targets and will be releasing their strategies over the next 12 months. In coming months, the South Australian government will detail its response to supporting industries to achieve increasing exports as a vital part of the broader goal of achieving 3 per cent average annual growth in gross state product.

The benefits of liberalised trade and, in particular, Australia's free trade agreements are undeniable. The facts speak for themselves: we are much better off with them than without them, yet there is still resistance in the community and among certain commentators. It is a result of the ideological fearmongering, sometimes bordering on outright xenophobia, of many of our political opponents who find it preferable to scare up a few votes rather than support liberalised trade, which not only benefits our nation but lifts countless billions of people across the world out of poverty.

Our population cannot sustain a closed economy as it is simply much too small. In fact, we have the smallest national population of any of the world's top 15 economies. Our prosperity relies on liberalised trade and I am proud to be a member of the Marshall government, which understands this.

The Hon. Z.L. BETTISON (Ramsay) (11:51): I move to amend the motion as follows:

Delete paragraphs (b) and (c) and substitute in lieu the following:

(b) commends successive Australian governments for initiating and concluding free trade agreements, which have substantially contributed to record economic growth, job creation and exports, while continuing to pursue an ambitious trade agenda;

(c) condemns the Marshall Liberal government for its savage cuts to the Department for Trade, Tourism and Investment at a time when South Australia's share of national merchandise exports are at 30-year lows; and

While I welcome the thrust of this motion and congratulate the member for Finniss on bringing it here, I think it is disingenuous to think that the negotiation and ratification of free trade agreements could only extend to the previous five years. This nation and this state have a proud tradition of having strong global trading links.

Clearly, an increase in exports leads to a more prosperous economy. However, our national share of merchandise exports, a measure that this government used when it was in opposition, has collapsed under the Marshall Liberal government. South Australia's international trade has plummeted by 20 per cent on the previous month, with our share of national exports now standing at an abysmal 2.58 per cent.

Let's review the last 18 months. In October and November 2018 and January, May, July and August 2019, South Australia had less than 3 per cent of national exports. Let's compare this with the average between 2014 and 2018, which was 4.4 per cent. It is just not good enough. Fewer exports mean fewer jobs here in South Australia, and we already lead the nation in unemployment.

Over the past 18 months, the Marshall Liberal government's approach to the state's trade policy has simply been to constantly review and cut the trade department. We have had 18 months of delay. We have had two machinery of government changes and, while we might have had a substantial review through Joyce, it has delayed our focus. We have had 18 months of delay to get on with it, and now we know the department is cut, cut, cut: $26.8 million. Staff have been very concerned about their jobs; many have lost their jobs, and these are people with great skills and expertise, and they have gone.

These are real and tangible cuts to initiatives that are designed to help South Australian businesses expand their presence around the world. These cuts are making an impact. These cuts stop us exporting to the world. Labor backed our producers of premium food and wine with a range of measures, including Adelaide's membership of the Great Wine Capitals Global Network; the introduction of the annual $1.8 million South Australian Wine Industry Development Scheme; annualising the Tasting Australia festival; funding a range of development and export grants, and export grants that were consistent; the development of export training; and not just a commitment to year-on-year funding but a commitment to people that we know that export education is important, to support people who are looking to export and to support people who are already exporting to look at new markets.

I call upon this government to continue its focus on export education and to give commitment not just to year-on-year funding but to multiple year funding for this to continue. It was under Labor that South Australian wine export earnings increased to $1.56 billion in 2017, the best global market result in 10 years. Labor undertook considerable investment toward developing new technologies for the food industry, but it is also important to remember that our service exports play a valuable role in South Australia's trade performance.

Tourism and international education are two of the biggest exporters that our state has. Unfortunately, tourism is another portfolio that has received significant cuts, with the Marshall Liberal government planning to cut $23 million from the SATC budget over five years. In the first budget, there was an $11 million cut. They hoped no-one would see that, but we are seeing the impacts of that now. In the second budget, they said, 'Just find $12 million in efficiency savings. That won't have an impact,' but it has—a $23 million cut over five years.

Our tourism marketing budget is now at a five-year low, and we are seeing the impacts of that tourism budget. While we know that tourism and international education are two of our biggest service exporters, we know that Tourism Research Australia says that next financial year there will be zero per cent growth in visitor nights—zero per cent. When we look at international tourists coming here, we find that they are taking shorter trips and spending less money. We have seen an 11 per cent decline in international visitor nights and a 5 per cent decline in spend. When you make cuts like this, they have an impact. This is why we must continually raise this issue here, to say that $23 million out of tourism is cutting and biting South Australians.

We also know that there is estimated to be a decline of 1.6 per cent in international tourism visitor nights in the next financial year. I stand here today to talk to this amended motion because it is clear that, when it comes to boosting South Australian exports, the Marshall Liberal government's strategy is to cut.

The Hon. T.J. WHETSTONE (Chaffey—Minister for Primary Industries and Regional Development) (11:59): I rise to support the original motion presented by the member for Finniss, and it is a good motion. The export globalisation, or the liberalisation of exports, is of paramount importance to the state's economy and to the national economy.

We have seen this over a long period of time. History has shown us that we have had over 27 years of uninterrupted growth within the export sector. It also tells us how important it is that one in five Australian jobs is represented within the export area. What we have seen in recent years is the opening up, the globalising, of our export industries, and playing on a world market has been more important not only to the nation's economy but particularly to South Australia's economy. That has been supported by the primary sector, and it has seen a huge windfall—a huge boon—for the South Australian primary sector's economy.

I want to commend a couple of commonwealth government ministers who have performed admirably over a short period of time with the introduction of our free trade agreements. I think the Hon. Andrew Robb has done an outstanding job with his contribution to the Coalition government. The work that he did, particularly with the ChAFTA, with Japan and with the Korean free trade agreements, has seen a huge windfall for our primary producers. The reduction of tariffs, and the continual reduction of tariffs, has created huge opportunity—massive opportunity—for the primary sector.

Steve Ciobo carried on that good work and backed up minister Robb's initiatives, particularly with China. We now see the growing reliability with China. Not only its two-way trade, but the outbound-inbound trade that comes into Australia and, more importantly, that goes out of South Australia, is of paramount importance. We know that that great work continues to be bolstered by the Hon. Simon Birmingham, the current trade minister, with the work he is doing in developing the agreements with Indonesia and with some of the South American countries. And, of course, the Pacific agreement will again continue to bolster what we in South Australia are becoming very much more reliant on.

The agreements are still being negotiated. We know that we are looking to form stronger ties with India. We are looking also to utilise an opportunity with the European Union, as to how we can better use some of the political uncertainty on a global stage at the moment. How does South Australia, how does the nation capitalise on that uncertainty? It is about making sure that we remain a global trader and that we remain globally competitive. That is where governments come into play. That is where this government, the Marshall Liberal government, will continue to work with industry, with our exporters and with those enablers, particularly in opening up our trade offices.

I note that the shadow spokesperson was talking about the terrible trade statistics. It just goes to show you the lack of knowledge and understanding of what South Australia is so reliant on, and that is the primary sector. Over the last three years, we have seen an acute downturn in the grains industry, one of the largest export commodities in South Australia. We have been through drought, so we have seen a considerably reduced grain harvest. Those grain crops are then reflected in the bottom line of our trade. We look at our red meat sector. Again, we are seeing a downturn in the growth of our red meat sector, and our wool sector, due to the drought. That is playing out in the bottom line of our trade stats.

I just want to put that into perspective. If we look across the board, one example is our growing opportunities in the wine industry into China, particularly with the free trade agreements with ChAFTA. Four years ago, the wine industry was travelling along pretty well—there was a $150 million outbound wine trade into China—but last year, we saw $800 million of wine headed to China from South Australia alone. That shows that the free trade agreements are working. The opportunities there, particularly in the red meat sector, continue to grow. They continue to look at our product as a premium, safe, blue-sky product that they are prepared to pay premium money for.

If we look at trade stats, we have to put into balance why our trade stats have slipped away, and that is because we are reliant on the primary sector. We are dealing with drought and issues of water management here in South Australia. We are looking for a continual level of opportunity, optimism and confidence so that people will continue to invest and grow, but the impacts of weather and seasonal challenges continue to get in the way of what we do so well here in South Australia.

Other opportunities into China have been in the horticulture sector. We have seen significant growth out of citrus and almonds, in particular. We rely on those markets that are now paying a premium. They have doubled some of the returns to our primary producers. The doubling of a return to a farmer means that they can invest. They can employ more people, and then they can produce some of the more modern styles and varieties of fruits that the world is calling out for.

Gone are the days when we produced a commodity and hoped that we would get a return for it and that those international markets would buy it. We are now finely tuned, growing, producing, packing and presenting some of the world's best citrus and some of the world's most premium produce, by and large in the nut industry and stone fruit industry. Large sectors in our primary industries are now shining.

If we look right across the board, we have seen a reduction in our grain industry. It was down to about $1.7 billion in the 2017-18 year, which is reflective of the drought. We are now seeing value-adding within our grain industry. Rather than filling up ships' hulls with a primary product of grain, mostly cereal and some pulses, we are now putting them into packages. We are now value-adding them.

R&D programs have developed some of the world's great malting barley varieties, which are now going to the great brewers all over the world. I note that Southern Cross is a great name in malting barley that has now increased the shelf life of beer from 14 days to 50 days. We know that everyone will drink beer after it has been sitting in a fridge for 50 days, but it does lose its shelf life after only 14 days. That is one of the great attributes of the barley industry here in South Australia.

I want to touch on the red meat sector again. It is about a $4.3 billion industry. The livestock sector is not only red meat but dairy, hides and wool; they all come under that banner. We continue to ride on the backs of sheep, with wool prices as buoyant as they are. I have spoken about the $2.15 billion wine industry out of South Australia. Not only do we export 80 per cent of the country's premium wine but we are also the engine room. Particularly in the Riverland, we very proudly produce almost 60 per cent of the state's wine and nearly 30 per cent of the nation's wine.

Going down the list, there is half a billion dollars in the seafood sector and tuna industry. We know that Port Lincoln is the seafood capital of the nation. Wild catch, aquaculture and particularly ranching are some of the great success stories within the sector. I have spoken about the half a billion dollars in dairy, and there is $1.6 billion in horticulture. Forestry, of course, is one of the great industries in South Australia, with $2.6 billion in exporting log, making sure we have local supply and making sure we continue to export our paper products. Exports are one of the state's great shining lights. The primary sector is the great supplier of our exporters, and it gives me great pleasure to support this motion.

Mr TRELOAR (Flinders) (12:09): I rise to support the original motion put to this house by the member for Finniss:

That this house—

(a) notes the enormous benefits of liberalised global trade to the Australian and South Australian economies;

(b) commends the Australian government for concluding free trade agreements over the past five years which have substantially contributed to record economic growth, job creation and exports while continuing to pursue an ambitious trade agenda;

(c) commends the Marshall government for implementing its agenda to increase South Australian exports; and

(d) notes in particular the efforts of South Australia’s farmers and agriculture, food and wine sector to make the most of export opportunities offered by free trade agreements for the benefit of rural communities and the state’s economy.

As the member for Finniss quite rightly pointed out, Australia has been a strong trading nation for a very long time, and he touched on the fact that our Indigenous peoples traded for tens of thousands of years across the length and breadth of this country. Liberalised trade is essential to the future of this state and the future of our nation. The almost universal outcome for countries that open their economies to global trade is increased economic growth. Australia exemplifies this fact. We export and we import. It is imperative that we pursue free trade agreements and also free and fair trade.

I sense that across the world, amongst some of the major economies, there is a shift away from this, but in a smaller economy such as ours that relies so heavily on trade it is imperative that we pursue, as I said, free and fair trade. We have one of the most open economies in the world and have enjoyed 27 years of uninterrupted growth in times when many other Western economies have not. Many of those economies, including the United States of America, operate in a protected environment. This growth is forecast to exceed the OECD average in key indicators for the next three years.

Since 1986, trade liberalisation has lifted Australia's GDP by 5.4 per cent, and the benefit to ordinary Australians is an increase in average real income. Australia's top four trading partners in 2017-18 were China, Japan, the United States and South Korea, extraordinarily large economies with which it is important we have good trading relations. They accounted for almost half of Australia's total two-way trade, and it is no coincidence that we have free trade agreements with each of those four countries. Free trade agreements have been an essential element in Australia's economic success over the years.

Since the Coalition was elected in 2013, the federal government has successfully pursued an ambitious trade agenda with free trade agreements as their cornerstones. Free trade agreements were successfully concluded with China, Japan and South Korea soon after and we now have, as a nation, 11 regional and bilateral FTAs in force. Another four have been concluded but not yet enforced, and those are with Indonesia, Peru, Hong Kong and a Pacific agreement on closer economic ties with the nations in the South Pacific. Another seven agreements are currently under negotiation, including with India and the European Union.

There is also a strong prospect that we will negotiate an FTA with the United Kingdom. Of course, there is a bit of water to go under the bridge before that happens, given what is going on in Westminster at the moment. We will have to wait and see the outcome of Brexit, whether they get a deal or no-deal exit, or perhaps even whether they remain. I do not think that that is the intention. Either way, I think there will be trade opportunities for Australia into the UK.

By next year, Australia's free trade agreements may account for up to 80 per cent of our trade and our own state has benefited enormously from the Australian government's efforts in concluding free trade agreements. The benefits for our state include for the agricultural and food and wine sectors and that is impressive. A great example of this is wine exports into China. Under the China-Australia Free Trade Agreement, the tariff for bottled wine is steadily reduced to a zero tariff, so that tariff, that protection, has been removed and it allows us free and open access into the Chinese market.

It is not just about wine, of course; it is about agricultural products in general, it is about mining products, it is about minerals and, as the minister for agriculture said, it is about seafood, which is key in the electorate of Flinders. I know that difficulties have been experienced by some seafood industries gaining access particularly into some Asian markets, but certainly tuna fishing and tuna ranching have been real success stories and the major market by far is China.

It is important to note that, while free trade agreements (FTA) have created these opportunities, it is our farmers, producers, South Australian businesses and miners who have seized on them and the rewards can be great for these businesses and farmers, but the benefits flow further to entire communities in regional areas and to the state's economy as a whole. This state government must be commended for its efforts to boost South Australian exports and we will be the winners for it.

All these sectors still have significant opportunities to grow, including emerging sectors based on international technologies, trends and Australian government commitments to South Australia, as well as defence, space, health, and medical, creative and high-tech industries. They are the potential future exports. As I said, it is not just about agriculture and mining.

We have been exporting and importing from the early decades of this nation. We learnt very early that the real strength of this country is its agricultural exports and within decades of the founding settlers in this country we were exporting what became premium merino wool to the textile mills of the UK, particularly, and Europe, so setting the scene for our agricultural exports and our trading partnerships around the globe.

Soon after that, there was the discovery of gold, first in Victoria and then in New South Wales—but it might have been the other way round. Who am I to know? I am a South Australian—and we discovered copper here as well. In a way, that set the scene for our mining industry. The wealth of Melbourne and Victoria was really built on the back of a gold rush, and in many ways the wealth of this state in the early days was built not on agriculture but rather on copper. Those mining ventures tend to wax and wane. What has sustained the economy through all those decades is the agricultural industry and the mining industry with new discoveries.

As I have spoken about before in parliament, it is really important that we, as a government and as a state, are conscious of the cost of doing business. We need to ensure that if we expect our producers and our exporters to operate in a world market, a global market—a global market of free and fair trade without tariffs—then it is really important that we minimise the cost of doing business here at home because we cannot expect our producers to compete against low-cost producers and low-cost exporters from other nations if our costs are high.

It is really important that we concentrate on the cost of water, the cost of utilities, the cost of power, the cost of finance, the cost of registration of vehicles, the cost of transport, myriad things that go into the cost of doing business—all those things we must feed in and ensure that we create an environment where business can be efficient and done in a way that allows us to be competitive on the world market. I commend the original motion to the house.

Mr PEDERICK (Hammond) (12:18): I rise to commend the original motion by the member for Finniss:

That this house—

(a) notes the enormous benefits of liberalised global trade to the Australian and South Australian economies;

(b) commends the Australian government for concluding free trade agreements over the past five years which have substantially contributed to record economic growth, job creation and exports while continuing to pursue an ambitious trade agenda;

(c) commends the Marshall government for implementing its agenda to increase South Australian exports; and

(d) notes in particular the efforts of South Australia's farmers and agriculture, food and wine sector to make the most of export opportunities offered by free trade agreements for the benefit of rural communities and the state's economy.

Agriculture is absolutely the engine room of our economy but, as has been mentioned previously by other speakers, it does sit alongside other productive sectors like the minerals sector. Certainly, from day one, when people landed not just in Australia but also in South Australia, farming, growing crops and raising stock, was taken up dramatically, but a vibrant mining sector also got going. I note that the copper mines around Yorke Peninsula, around Burra—

The Hon. Z.L. Bettison: Don't forget Kapunda.

Mr PEDERICK: —and Kapunda, as I am reminded, not only kept this state's economy going but, back in the 19th century, kept Australia going with those copper exports. Not so much in those regions, but when you travel further afield and go to places like Arkaroola and see where copper was also mined in those days, you really have to commend the resilience of people, not just the miners but also the pastoralists, the initial station operators who went bush in those early years. They not only survived but thrived in that area. It was a great effort from all.

I know people have been reflecting on growing food, and I will talk more about the wine industry and exports in a moment. We do such a great job of it, and so much of our food and wine is exported. Probably well over 80 per cent of what we produce is exported because we have become so efficient. We have had to be efficient in this great state and country, as we come up against countries that heavily subsidise food production, whether in Europe or the United States.

While I am talking about food production, I want to reflect on something that we are taking action on, and that is trying to gain the ability to grow genetically modified crops here in South Australia. It is a real handbrake not just on our economy but on choice for our producers that we cannot, initially, produce genetically modified canola. I reflect on that because it is a real handbrake on our economy, and the majority of people by far—in the production sector, the innovation sector and certainly the research and development sector in this state—really want to progress and just get on with it.

We hear ridiculous comments that it will upset our clean, green image and that kind of thing. People think if we start producing genetically modified food in this state that basically the sky will fall in, but nothing could be further from the truth. You only have to go to a shopping centre and grocery store to find many, many products that have been produced from genetically modified food. I will pick on soy as an example. It is virtually guaranteed that 99 per cent of soy production is genetically modified. Anyone who wears cotton clothes is wearing genetically modified cotton. Actually, Bt cotton has been such a boost to the environment and the production sector, with farmers and producers not having to use maybe nine, 10 or a dozen lots of insecticide.

I have used a bit of insecticide in my day, and it is pretty strong stuff. Because you are killing little bugs, it is obviously quite toxic, so the less insecticide used the better. I can remember back to the days when we used to spot for the plane spraying DDT. You would have to hold the flags, and occasionally they would switch the tap off a bit late and you would get a little dose of DDT. Anyway, it did not stunt my growth, so I suppose that is something.

Innovation in production does help trade and creates opportunity, but we have been stymied by the previous lack of action, at the government level, so that farmers can have the choice. There is so much more that we can do in looking at ways to produce more varieties that are more drought tolerant. We have seen such dry and droughted years, especially in the last couple of years. We also really need to look at salt tolerant species in cropping and horticultural products to make sure that we can get the most yield out of our country.

It is interesting that people say, 'You can't get any more.' People might have said that 100 years ago about a paddock where they had grown two bags of wheat per acre and been happy. You are probably growing 22 or 32 bags per acre on the same paddock now just with better nutrition, better management and the need to produce more with less. There is so much more we can do. Certainly, the livestock sector is going pretty well at the minute. Wool has been a bit up and down, and I am not sure where it is sitting at the minute. Is it coming back?

An honourable member: About average.

Mr PEDERICK: It is about average at the moment, but it did have a real boom not that many weeks and months ago. I think wool took its place where it should be all the time to make it so much more viable to grow. Stock numbers are down because of dry conditions.

If we look at the lamb trade, those prices are good. If we look at the beef trade as well, things are looking pretty good and prices are really good. We need to have those prices, especially in these times when things are tough in various places. Obviously, not all the state is suffering as badly as some areas at the moment with the dry and drought conditions. It is the same in the country, but in the main there are a lot of dry areas that are really struggling, but as long as people can produce there is real opportunity.

Reflecting on what is happening with wine exports and the free trade agreements, as has been mentioned, so much work has been done with the ChAFTA and other agreements, whether they be with Korea or Japan and other countries, in getting that wine out to the world. The bonus is that we have managed to get tariffs screwed down to zero in China so that we can get more wine into that market.

I want to commend government staff who work in these trade offices and associated entities right across the world. When I went to China several years ago, they looked after us so well. I was an opposition member then, but I must commend the staff who introduced us to people, introduced us to opportunities and showed us what opportunities were taken up with international export.

It is absolutely vital with all our industries and especially our grains, which are mainly export driven, but in the last year or so we have seen a lot of domestic use taken up by more feedlot use, chicken farms, piggeries, etc. Hopefully, this year we will have a bit more grain to go offshore and contribute to this state's economy, because there are plenty of countries out there looking for our great South Australian produce.

There is so much opportunity as we bounce back into the future with stock numbers, whether that be sheep or beef and also the burgeoning goat trade. With those few words, I commend the original motion by the member for Finniss.

Mr BASHAM (Finniss) (12:28): I would like to thank all those who have spoken to this motion: the member for Ramsay, the Minister for Agriculture and the members for Flinders and Hammond. I think it is very important to recognise how important the last five years have been in the free trade agreement space and how important the Coalition government federally have been in this space. There are currently 11 agreements operating in Australia with other groups. Of those, four have been concluded in the last six years and another four have been concluded but not implemented at this point in time, as they have not gone through the final approval processes of the Australian government or the foreign governments themselves.

We are looking at bringing it up to a total of 15 agreements in place, and more than half of them have happened in the last five years. I think it is really important to recognise the effort of our Australian government in that period of time. Also, interestingly, when looking back at all those 11 agreements currently in place, eight have been put in place during Coalition governments. Significantly, an important part of the Coalition's philosophy in getting trade access is the free trade agreement process.

When I worked with the dairy industry, I saw great development from within the industry sector. I saw how involved industry gets when free trade agreements are negotiated. There is very much an industry-government relationship that operates when they are developing these arrangements, making sure the government is actually achieving what the industry needs. I really commend the way governments work to make sure the interests of the industry here in Australia are looked after as they go through these free trade agreements.

It is important that we continue down this path and that, as a South Australian government, we allow our agriculture sector and other sectors to take advantage of the free trade agreements that are put in place. I thank all members who have made comments in relation to today's motion. I do not support the amendment to the motion, and I am very delighted to have brought this motion to the house.

Amendment negatived; motion carried.

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