Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Hansard source

I speak in support of the Export Market Development Grants Amendment Bill 2008 as it is amongst the first very scant evidence for exporters as to what exactly they can expect from this government. Like exporters and investors, I listened avidly to the member for Hotham’s proclamations about trade—and he does make many of them. It is not that I am thrilled by the rhetoric of the Minister for Trade; rather, it pays to scrutinise closely every comment that is made on this topic by the Rudd government, as a daily assessment seems to be the only way to detect the prevailing mood of trade policy.

Over the past six months we have seen U-turns, roundabouts and backflips with the government’s approach to trade. It seemingly changes on a whim—or according to the weather or perhaps which country they are in at the time. The latest postulations of the trade ministers relate to the Export Market Development Grants Scheme. The member for Hotham is indeed correct when he recognises the central role this program plays for Australian exporters. Of course, given the ever-growing appetite of the black hole that is Labor’s trade policy, exporters will be forgiven for wondering how committed the current government are to the changes they are proposing.

The trade minister described his government’s convoluted strategy as a ‘down payment’ on ensuring sustainability for Australia’s trade policy. But no doubt exporters will shudder at the thought that what is to come will be just more of the same, because all this government has offered them so far when it comes to trade is an inconsistent message and an uncertain footing, all contingent on an ever expanding raft of—you guessed it—more reviews. Nonetheless, the changes to the EMDG Scheme are worth supporting. In fact, they are in keeping with the example laid down by the previous coalition government. The Howard government had a strong record on trade. It provided a stable environment for traders and investors and a consistent message for global markets and was responsive to the changing needs of exporters and the EMDG Scheme.

The member for Hotham would have us believe that under the previous government trade policy came to a standstill, but that is simply an attempt by him and his government to rewrite history. A simple review of the facts shows that it is simply not the case. Let us put some truths on the record. Over the full term of the previous coalition government, the value of Australian exports more than doubled to $216 billion. Exports grew in all major categories in 2006-07. While our resources exports continued to grow in 2006, manufacturers, services and rural exports reached all-time highs. The value of Australian resources exports more than doubled in real terms since 1996 and we achieved these record exports despite the worst drought in 100 years hurting our rural exporters, along with the high value of the Australian dollar, which appreciated 45 per cent against the US dollar in the five years to 2007.

Assistance for exporters also grew steadily through Austrade. In 2006-07 alone Austrade helped achieve export deals worth more than $22 billion, and the number of businesses obtaining export success through Austrade assistance consistently grew. In 2006, around 40 per cent of Australian made passenger motor vehicles were exported compared to five per cent in the late eighties, while international education has supported more than 50,000 jobs. Services exports already account for 21 per cent of Australia’s total exports and have been growing at an annual rate of 4.5 per cent over the past five years.

During the coalition’s time in office, trade policy helped open up new opportunities for Australians and created new jobs. Over the past decade, Australia’s export industries have created more than 400,000 jobs, and real wages grew by 20 per cent, which is in stark contrast to the previous Labor government, under which real wages actually fell. Along with a rise in real wages, we saw unemployment fall to just over four per cent. Exports from regional Australia grew three times faster than exports from cities and equated to around a quarter of Australia’s regional income.

Of course, this is a fact that may have escaped the trade minister—not surprisingly, given the Labor government’s tendency so far to treat the needs of regional Australia with absolute contempt. Let me assure the trade minister that regional Australia does exist. It contributes substantially to Australia’s exports, and at least one in four jobs in regional Australia is linked to exports. Not only did the previous government appreciate this fact; it also implemented an entire suite of policies to assist Australian exporters and investors, no matter where in Australia they were based, and the EMDG Scheme is indeed one of the most important.

The previous government worked to be in tune with the needs of exporters and, instead of throwing the entire industry into confusion as this government has, it actually governed and made decisions—not reviews. In 2006-07 the EMDG Scheme provided 3,548 grants, totalling $145 million, to Australian businesses. This scheme has been particularly relevant to small and emerging exporters, with around 80 per cent of recipients reporting annual income of $5 million or less. Nearly one-quarter of all grants were awarded to recipients from rural and regional Australia. Under the coalition government, this program was adapted to ensure it remained relevant to the prevailing conditions for exporters. It encouraged them to seek new opportunities and to build on Australia’s successes abroad.

So, while I applaud the trade minister for following the lead of his coalition predecessors, the fact of the matter is that Labor’s tinkering with the EMDG Scheme simply does not go far enough. The trade minister is attempting to wash his hands of what is happening in the real world and, in putting off any real decision making to some fanciful day in the future, he is refusing to address the issues that are facing exporters right now. I have been contacted by a range of Australian exporters who stand to pay a high price because this government has refused to address the current shortfall in the EMDG Scheme, which has become oversubscribed. These are hardworking Australian businesses that built up their operations in good faith in the belief that they would be reimbursed for their efforts. They are now facing the prospect of not receiving substantial amounts of money, as the Rudd Labor government watches on in freeze-frame review mode. It is simply not good enough to pass the buck and refuse to operate in real time.

Prior to the last election, the coalition made a clear commitment to continue the EMDG Scheme. While the scheme was undersubscribed in previous years, it was always our intention to seek extra funds from cabinet should the scheme, which is demand driven, become oversubscribed. This is the cut and thrust of actually governing, as opposed to setting up committees and reviews. But the trade minister seems to forget he is now one of those responsible for government. The Labor Party have acknowledged the popularity of the program under the coalition government but have refused to allocate any additional funding for the EMDG program not only for this year, 2007-08, but—surprise, surprise!—for 2008-09. I stand to be corrected, but the minister has not shown why he has failed to deliver anything but a one-off. There will be no extra funding in 2010-11 and 2011-12. So much for his waxing lyrical and his rhetoric, as he travelled around the country, about what he was going to do. His promise to exporters that he would increase the EMDG Scheme by $50 million to $200 million is in fact a furphy. He has delivered that only in one year. On the basis of that, he misled the export industries he now represents into thinking that if Labor were elected there would be an extra $50 million in the four years of the forward estimates. That is simply not the case. It is another example of the Labor Party, in terms of what they offer, what they say they are going to do and what they actually do, failing to deliver and attempting to deceive.

It is not enough for the trade minister to throw a one-off cash injection at exporters in two years time and claim he has provided them with sound policy. Along with ignoring the day-to-day reality for exporters, the proposed changes in this bill come with a substantial caveat that everything to do with the EMDG program, as with everything else to do with trade and just about everything under this government, is—guess what?—under review. We will see uncertainty continue. Australian exporters need and deserve a government that will deliver a comprehensive and comprehensible trade policy now, not just another review. They need a government that gives proper attention to free trade agreements as a crucial component of Australia’s trade policy, not an item that is, as we have seen, supported or shunned on a whim.

The previous government was always committed to a comprehensive trade policy that offered assistance on our shores in the form of programs such as the EMDG, but it also built assuredly on Australia’s relationship with major trading partners. This comprehensive approach included both bilateral free trade agreements and multilateral negotiations such as Doha in the World Trade Organisation talks. Despite what the trade minister claims, the previous government laid extensive groundwork for the Doha Round of the WTO talks. The hard work went on behind the scenes—yet another concept perhaps foreign to this government, who seem to be obsessed with media releases and photo opportunities.

Alongside this is the coalition’s success in negotiating and completing free trade agreements and its continual search for new opportunities to serve the interests of exporters. Along with successful negotiations on the Australia-US Free Trade Agreement, which is delivering new markets, new opportunities and a real benefit to exporters, the coalition continued to move forward, laying the foundation for FTAs such as those with Korea, China and Japan. If this government does not get its act together on the Korean free trade agreement and devote some resources and commitment to that area then Australian exporters, particularly in the beef industry, will be severely disadvantaged with the coming into being of an FTA between Korea and the US. It will be our exporters and our jobs that again will be forced to pay the price for a government that seems to be unable to do anything without a review.

We will see the FTAs we concluded pursuing areas which cover more than 60 per cent of Australia’s total trade and up to seven of our top 10 markets. This was, under the previous government, a robust, pragmatic and reliable approach and it was exactly the approach that best serves Australia’s interests in terms of both exporters and investors. We need to see this trade minister and his government get out of being stalled and get on with a program which has some momentum. We have seen in recent weeks recognition of the enormous value of bilateral free trade agreements via the independent study that places a value on the Australian-South Korea FTA of almost $23 billion. It is figures like these that give us all a precise indication of what is at stake when Labor cannot decide where it stands. Under a government with no clear direction on trade, Australian exporters run the risk of being left behind, and there is no better example of that than the Korean FTA. What is more, not only is this government leaving investors and exporters out in the cold but it is also sending conflicting messages to international markets and trading partners. The Rudd government has failed miserably to construct a coherent message on trade policy.

In February the trade minister announced that bilateral agreements were a low priority. In March, he announced that they were back in the mix. In 2006 the current Prime Minister described Doha as ‘dead as a dodo’, but in Europe last month he told the world he had changed his mind and Doha was now doable and the way forward. But then he changed his tune again, just days later and on a different continent, and said his focus was back on an FTA with China and India. Labor must be honest and consistent with Australia’s exporters if it wants to be taken seriously in negotiating free trade agreements with China and India. It must approach negotiations with more than just the sharp edge of a razor to cut budgets and negotiating positions.

The biggest hurdle for the successful completion of free trade agreements is Labor’s ever changing attitude towards bilateral relationships and its increasingly mixed message on trade. In taking this erratic approach, the trade minister and his government risk undercutting the interests of Australian exporters and jeopardising access to key markets. The government has powerful tools at its disposal and need only embrace the ambitious trade agenda laid down by the Howard government to deliver maximum benefits to exporters. A valuable place to start would be to bring an end to the uncertainty that has plagued exporters and investors since this government buried their business under a cloud of reviews.

The trade minister pledges that further reforms will follow his review of trade policies and programs. This, of course, is slated to occur on some unspecified day well into the future. While the Rudd Labor government may like to ponder this hypothetical day when all problems will be magically resolved without any actual governance or the need for real decisions, looking to the future is a luxury denied to Australian traders, whose daily business and livelihoods depend on knowing what is ahead right now.

So far the signs have been less than inspiring. The trade minister talks about looking forward but in the next breath proclaims that his search has started with trade policy from the eighties and nineties. Does the trade minister really expect to find the answers for the future by mulling over trade policy that is decades old? The member for Hotham may be shocked to discover that the international market has changed since the 1980s, along with Australia’s role in it, and that exporters and investors can no longer wait for the member for Hotham to catch up.

Labor claims to be listening to what exporters want. I would like to know where the trade minister is turning his ears other than to the vacuum of Labor’s trade policy. If the trade minister were truly listening then perhaps he would hear exporters and investors saying that they want a clear and stable framework in which to operate. They do not want to put their businesses on hold while Labor waits for reports and recommends something that will remain, at the very least, three months away. By the time the Labor government receives its trade policy report, it will have been in government for almost a year. That is a year in which exporters will have had no certainty, no direction and no clear indication of what their futures will hold under this government.

The trade minister claims he is making changes to the EMDG Scheme with the objective of providing a sustainable footing for exporters, but he is also conceding that it may be swept away as the EMDG Scheme is thrown into the mix of reviews. What guarantee can the trade minister give that what he promises today will not become meaningless once he receives this report? The bottom line for exporters is that, despite what the trade minister may want them to believe, under this Rudd government nothing is certain. The government can no longer cower from its real responsibilities and flounder for policy ideas under the cover of bureaucracy and more reviews. It is time the trade minister and his government stopped offering token gestures and hollow promises. Until then, the words of this government should be taken for what they are: scant guidance for Australia’s exporters and traders, who are crying out for certainty in the wreckage of Labor’s confusing and convoluted approach to trade.

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