CHAIR (Senator Ronaldson)—I call this meeting of the Senate Standing Committee on Economics to order. I welcome Senator Minchin, the Minister representing the Minister for Industry, Tourism and Resources and officers of the Department of Industry, Tourism and Resources. Mr Paterson, do you wish to make an opening statement?

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Mr Paterson—No.

Senator JOYCE—My questions are regarding resources and coal exports. There has been a lot of speculation lately about coal exports. Can you give me your view of how much of our export income comes from farm, non-farm, tourism and manufacturing as a percentage of our exports?

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Mr Paterson—Could you just clarify the question?

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Senator JOYCE—Can you tell me how much of Australia’s export income, if you have it available there, comes from farm, non-farm—which is obviously mining—tourism and manufacturing?

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Mr Paterson—Do you want farm and non-farm?

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Senator JOYCE—Non-farm resources. I will make it easier: farm, mining, tourism and manufacturing?

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Mr Paterson—We can provide a table to you that shows the export performance from pre June 1980 to date and then the projections going forward for mining exports, agricultural exports, manufacturing exports and service exports, if that would be of assistance.

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Senator JOYCE—How much comes from mining as a percentage?

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Mr Paterson—As a percentage of exports, mining is currently 31.8 per cent for 2005-06, manufacturing is 41.5 per cent, agriculture is 5.6 per cent and the whole of the services sector exports is 21.1 per cent, but you asked explicitly in relation to tourism, so we would need to go and break that up.

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Senator JOYCE—No, that does not matter. So 31.8 per cent comes from mining?

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Mr Paterson—That is correct.

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Senator JOYCE—How much of those mining exports are coal? Do you have that there?

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Mr Paterson—No, I do not have the proportion of it in relation to coal. If you looked at the total numbers, coal, oil and gas is $35.735 billion of a total of $57.567 billion.

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Senator JOYCE—What was the amount?

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Mr Paterson—$35.735 billion, but that is coal, oil and gas.

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Senator Minchin—Coal is $24 billion a year in export.

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Senator JOYCE—I think it is $25.5 billion. It is basically two-thirds of our mining exports. Who are our major markets for coal?

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Mr Paterson—Our resources and energy people were here last night. They were excused from appearance today, having concluded the questions last night, so I do not have those people here.

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Senator JOYCE—Did they give any inference last night about what the effects of signing the Kyoto protocol would be on our major export markets for coal?

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Mr Paterson—Those questions were not put to us.

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Senator JOYCE—Can I put them on notice.

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Mr Paterson—You can.

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Senator JOYCE—In terms of development of the nation—the resources portfolio, tourism and so on—does your department take into account any policies that are currently available for any incentives to get people to move out? We have a problem at the moment obviously in getting people to move out to mining areas. Does your department take into account any government policies or give any advice on any government policies that may be an incentive to encourage people into the more remote corners of our nation?

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CHAIR—It has been brought to my attention by the senators that these are really more relevant questions for the resources sector, which we finished last night. I am reluctant to intervene, but we are pushed for time today and we have finished on resources.

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Senator JOYCE—Are we just on tourism?

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CHAIR—Tourism is coming up after industry.

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Senator JOYCE—Are we on industry?

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CHAIR—We finished resources last night. This is—

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Senator JOYCE—We are on industry now?

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CHAIR—We are on industry at the moment.

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Senator JOYCE—I will go on with my industry questions. In terms of our industry overheads, what was the effect of the previous oil hike?

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Mr Paterson—I do not know the context in which you want us to respond to that question. It is too complex a question to give an off-the-cuff response to.

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Senator JOYCE—Do we have a risk matrix for oil price economic shock movements? Oil being a major industry overhead, have we a form of price matrix or risk matrix that gives us some sort of modelling for what the effect on industry will be of an escalation of oil prices?

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Mr Paterson—No.

Senator JOYCE—Which department does deal with the cost risk of the oil overhead?

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Mr Paterson—I am not saying that any particular department does precisely what you are asking. The modelling of macro effects on the Australian economy is undertaken within the Treasury portfolio.

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Senator JOYCE—Do you touch on the free trade agreement with China at all?

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Mr Paterson—We are involved in the negotiations.

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Senator JOYCE—What are the key areas of benefit to Australia from the current free trade agreement with China negotiations?

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Mr Paterson—You are asking for a benefit from something that is not concluded. We are in the middle of negotiations. We are part of the way down a path. It would be premature and risky in the extreme to assess what the outcome might be.

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Senator JOYCE—I am not for one moment making an assertion that there are not benefits. I imagine there are. I am just trying to put some flesh on the bones. How long have these negotiations been in place for now?

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Mr Paterson—Off the top of my head, the negotiations have been in the ballpark of going for about 12 months and it is anticipated that they will go for some time to come. There are many issues—both tariff barriers and behind the border issues—in relation to China that are of particular relevance to Australia.

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Senator JOYCE—I will try to be more specific. What impediments are currently in place for Australian agricultural products going to China?

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Mr Paterson—Agriculture is not something that we provide policy advice on.

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Senator JOYCE—What impediments are in place for any manufacturing goods going to China?

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Mr Paterson—That is a very broad question. I am happy to take it on notice. There are both tariff barriers in relation to some goods classes and there are some behind the border issues in relation to investment and intellectual property, which are all matters that are being considered as part of those negotiations. To ask what are the barriers is a very broad question