International Tax Agreements Amendment Bill (No. 1) 2008: Second Reading

This bill is one of many steps this government is taking to ensure that. It is Australia’s second comprehensive tax treaty with Japan. It will modernise the tax relationship between the two countries and will serve to facilitate trade and investment between Australia and Japan. The relationship between Australia and Japan is forged on many levels. Firstly, the two nations share many similarities. We share common values. We are both great democracies. We both share very similar values also on the direction that East Asia should take, having agreed to work together to strengthen various regional forums, including the Asia-Pacific Economic Cooperation, or APEC; the ASEAN Regional Forum, or ARF; and the East Asia Summit, or EAS. We share the common goal of promoting peace, security, prosperity, development and sustainability in the Asia-Pacific region.

Perhaps the strongest relationship we enjoy is through economic ties. We are lucky in Australia, as we have one of the most resource rich continents, from the iron ore mines in the Pilbara to the cattle stations in Rockhampton. This has formed the basis of the strong economic bond between Australia and Japan. Japan is our biggest export market and has been for the last 40 years, with $32.7 billion worth of goods last year. We are the third biggest importer of Japanese goods-$17.4 billion worth. Overall, there is a two-way trade of $54.5 billion.

Japan is Australia’s largest export market for energy and the second largest export market for beef. We supply 87 per cent of Japan’s beef. The chances are that, if you are eating a steak in Japan, it will have come from one of our cattle farms in Rockhampton or in the Kimberley. This enduring economic cooperation was solidified over 50 years ago when the Commerce Treaty was signed in 1957. Since then, our economic ties have continued to strengthen, and this bill is evidence of that.

This new tax treaty with Japan enhances the existing bilateral tax arrangements between Australia and Japan, creating incentives for increasing trade and investment between our two countries. Already, Japan is Australia’s third largest investor, with an investment stock of $51 billion as at the end of 2006. This bill serves to further increase that investment. I congratulate the Minister for Foreign Affairs for signing the treaty in February this year, and I congratulate the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs for introducing this bill into the parliament.

Australia and Japan have stood side by side on two major challenges that the international community faces. Australia and Japan have fervently supported efforts to eliminate nuclear weapons. There is a great onus on both countries to be champions of the Nuclear Non-Proliferation Treaty, the cornerstone of global nuclear disarmament. Japan carries the burden of being the only state to have experienced the consequences of nuclear weapons. Australia carries the responsibility of being the country with the largest known uranium reserves. We both have a unique perspective on nuclear disarmament and we share a common view on the importance of the Nuclear Non-Proliferation Treaty. Australia and Japan have stood solidly side by side on this issue.

The new global challenge of the 21st century is climate change. Climate change is the greatest moral, economic and environmental challenge of this century and, again, it is an area where Japan and Australia share many common views. The international community met over a decade ago in Kyoto with the objective of reducing greenhouse gases. It was an important first step towards a global emissions reduction regime. Like the Australian government, the government of Japan has acted decisively on climate change. In an address to the Japan National Press Club in June this year, former Prime Minister Fukuda said:

We must squarely face the current state of the global environment and, instead of repeating empty calls, step up real action that will actually reduce greenhouse gas emissions.

Japan has already provided real action on this issue. It ratified the Kyoto protocol in June 2002. There is a history of our two countries working together on climate change. Australia is Japan’s main source of coal and provides Japan with a quarter of its energy needs. We have also have been working together on clean coal technology.

The government has been working closely with Japanese car maker Toyota to start building hybrid versions of its Camry model at its factory in Victoria. In June this year, when the Prime Minister visited Japan, he announced a $35 million subsidy to Toyota. However, the partnership between Australia and Japan is not limited to economic, security and strategic ties. There are also very strong personal ties. In a speech the Prime Minister gave at Kyoto University on a recent visit to Japan, he said:

Our relationship is strong and our friendship is enduring.

Already, under this government, seven cabinet ministers have visited Japan this year. The Prime Minister has visited on two occasions. Australians and Japanese share equally strong ties. There are currently 64,000 Japanese residents in Australia, the fifth largest Japanese community outside Japan. In 2007, 570,000 Japanese visited Australia and 220,000 Australians returned the favour. Tourism is an area that continues to bind our two countries. In fact, it was through tourism that Australia gained arguably one of Japan’s greatest exports, Tetsuya Wakuda, the head chef at one of the top 10 restaurants in the world. Tetsuya grew up in Japan until the age of 22. Armed with his only piece of information about Australia-that there were lots of koalas and kangaroos around-and having only limited English he decided to travel to Australia, where he has stayed ever since. It is Japan’s great loss, but we have gained one of the world’s great chefs-and, I must admit, I am a big fan of Tetsuya’s restaurant.

Sister city relationships also increase our cultural bonds. Japan and Australia share 102 sister cities. One of those sister city relationships exists in my electorate. The Japanese city of Suita is the sister city of Bankstown. As part of this arrangement youth exchanges take place between the two cities, promoting cultural understanding and friendship between our next generations. I look forward to meeting the 20 local students who will be travelling to Suita on 4 October.

I also share a strong affinity with Japan. I am the chair of the Australia-Japan Parliamentary Friendship Group and I had the privilege of meeting the Japanese Ambassador to Australia, Takaaki Kojima, at the Japanese embassy earlier this year. It was an honour to meet him. In the short time he has been the Japanese Ambassador to Australia, just 10 months, he has done a fantastic job of strengthening the close ties between our two countries. In my role as the chair of the friendship group, I look forward to working closely with the ambassador and his team to continue to build on this strong and enduring relationship. As part of that, I will be visiting Japan in early October as a guest of the Japanese government. I thank the ambassador for his kind invitation. This visit will provide a great opportunity for me to gain a greater understanding of the importance of this significant relationship. I look forward to gaining a greater insight into the political, economic, strategic, security and cultural aspects of Japan.

This morning as I was driving to work, I saw what I think is the most visually symbolic example of the enduring friendship between our two countries. While driving along State Circle, here in the nation’s capital, I noticed that one side of the road was lined with cherry blossoms, the national flower of Japan. The other side of the road was lined with the golden wattle, Australia’s national flower. It is a symbol of the strength and closeness we share. This bill further embeds the bond our two countries share, and I commend the bill to the House.’