Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Hansard source

in reply—First of all I want to thank the member for Calwell, who has just concluded the debate on this bill, for her contribution in this debate. Like so many on our side of the chamber, we do understand the importance of creating the environment to grow the export sector, and I am delighted that this bill gives us the opportunity to talk about one of the ways in which that can happen. I want to thank all those who have contributed to the debate. I also want to thank the opposition for supporting this measure.

The Export Market Development Grants Amendment Bill 2008 represents an important step. It is a down payment in delivering on the Rudd government’s commitment to improve Australia’s woeful trade performance under the previous government. In their contributions to this debate yesterday, the shadow minister for trade and his colleague the Leader of the National Party and former trade minister were in denial about Australia’s lacklustre trade performance. They defended the trade policies of the former government that have now delivered 72 consecutive monthly trade deficits despite a resources boom. No government has presided over such an appalling performance in terms of trade. A major shake-up of trade policy is clearly needed to correct the failings and negligence of the Howard government.

At the outset, I would also like to say that trade does matter and, if we are going to improve our performance, change is needed. In the past 50 years, world trade has grown on average three times faster than world output. But in the last five years, as we have seen this stalling process in the Doha Round, it has grown only twice as fast. It should have grown much more strongly, had we been able to conclude a Doha Round. Each successful round of trade liberalisation has fuelled world growth in trade. In times of economic uncertainty, like those that we face now, a successful round would be a tremendous boost to the confidence of the world economy. That is why trade matters and why it is important for us to drive issues that continue to liberalise trade and improve market access. We are vigorously using all available channels to work towards a Doha outcome, including through revitalising the Cairns Group, which Australia chairs, a group created when Labor was last in office.

Yesterday the Leader of the Nationals demonstrated just how out of touch he is on trade policy by telling this chamber that we have dropped the ball on the Cairns Group and that it has not met since we came to office. I can tell the Leader of the Nationals that we did have a meeting of those Cairns Group members present at Davos in January, within weeks of us gaining office. I met all Cairns Group ambassadors in Geneva after the Davos meeting to brief them on its outcomes. I have also written to all Cairns Group ministers, noting that we will meet as soon as the ministerial process in Geneva is underway. I have been in touch with every one of my ministerial colleagues from the group by phone, in some cases several times. This government did not drop the ball with the Cairns Group. Rather, the former government allowed its influence to decline. We are about revitalising the Cairns Group and Australia’s role at the WTO, unlike the former government, which squandered the opportunity of this unique grouping to be front and centre of the talks in Geneva.

We also understand the need for an integrated approach to trade policy. That is why we have developed a twin pillars approach to trade policy. The first pillar is reform at the border, pursuing improved market access for our exporters: the multilateral round, regional initiatives and bilaterals. But there is no point seeking and obtaining improved market access if your economy is not competitive enough or productive enough to take advantage. That is why the second pillar is also so important—reform behind the border, continuing to strengthen the economy and making it more productive and competitive. Improving access is important but on its own will not guarantee an improved trade performance unless Australian companies, as I say, are productive and competitive enough to take advantage of the new opportunities.

Within this framework, export facilitation programs can play an important role in securing the future of Australian industries and Australian business through assisting them to access the global marketplace. The Hawke and Keating governments did dismantle the protective barriers but at the same time they encouraged growth through successful export facilitation programs, including the Export Market Development Grants Scheme, the International Trade Enhancement Scheme and the Innovative Agricultural Marketing Program.

During the last Labor government’s 13 years in office, net exports made a positive contribution to growth in 10 of those 13 years. Compare that with the woeful record of the Howard government where net exports only made a positive contribution to growth in two of their 11 years, despite the longest lasting resources boom in at least 50 years. The coalition government never understood the important role that export facilitation programs can play in encouraging more companies to get into the export market. They, in fact, halved the value of the Export Market Development Grants Scheme in real terms. They abolished the Innovative Agricultural Marketing Program and they abolished the International Trade Enhancement Scheme despite the fact that the study of the scheme’s success concluded that it returned $18 in exports for every dollar outlaid by the government. The previous government’s neglect of export facilitation programs is one of the reasons that they failed dismally to deliver on the lofty promises they made in 2001 and 2004 to double the number of exporters. There they were, a government that proposed to double the number of exporters, but they halved the value of the scheme that is an instrumental part of promoting that export growth.

To add insult on top of the neglect and the running down of the scheme, two years ago they changed the guidelines for the Export Market Development Grants Scheme but did not provide any additional funds to support those changes. They have got the gall in this debate, despite the fact that they are not opposing what we are doing, to question whether the funds that we have provided for the improvements to the scheme contained in the bill are adequate. What hypocrisy. Exporters who are getting considerably less in their second tranche grant payments this year, only determined after the election, when they were led to expect by the previous government’s announcements that they could access it more readily, are the people who are now complaining about the underpayment. The blame for that underpayment lies squarely at the feet of the previous government.

I have received a number of letters from businesses and members of parliament, including some of those opposite, about the EMDG funding shortfall.

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