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

The Minister for Defence tells me that he has got one on its way. I will give him something of the answer now for the reasons for the reduction. The simple fact is that the previous government’s eligibility conditions, which they changed a couple of years ago, had the effect of increasing grant claims by 27 per cent this year. Here we have a scheme that had already been cut in half, so not only was there no new money—in fact there was significantly less money than we have made provision for—but they went out and announced changed guidelines to make it easier to access, or at least more attractive for a wider group of people to make claims, and indeed there was a 27 per cent increase in claims. But, in their 2007 election promises, they did not provide any additional funding to cover the impact of those eligibility changes.

Despite the billions and billions of dollars that they were throwing around in their desperation to get re-elected, they could not find money for this scheme. We heard the Treasurer in the parliament earlier today talking about the fiscal profligacy of the previous government trying to get itself re-elected, but there was no money for this scheme despite the fact that the government was leading people to believe that there would be more opportunity to access the scheme. That is deception of the worst form, but it is what the previous government practised, having over the previous 11 years cut the scheme in half.

Nor can the former government plead ignorance in this matter. The shadow minister for trade gave the game away when he told the Financial Review on 19 December last year that he and the members for Lyne and Wide Bay had fought hard to get more money for the program. The Financial Review article quotes the shadow minister for trade:

I have to be frank and say that was as a result of just keeping the budget in balance.

It was an area where Mark Vaile and I, and Warren Truss and I were in absolute agreement that we needed more money into that area.

So here are a group of ministers sitting around the cabinet table who knew the problem but could not carry the day. They could not carry the day in circumstances in which the government of the day, to get itself re-elected, was spending money like drunken sailors.

Worse, they decreased the recipients. They increased the ability to apply; they decreased the funds. So it is a bit rich for members of the opposition to criticise us for their own failure to deliver the funds that were needed to provide for a larger second tranche payment this year. Their changes to the scheme increased claims by nearly 30 per cent, but they provided no additional money.

In this debate the shadow minister for trade also said it was always their intention to put more money in—but the fact is that they tried to get more money and failed. They fought but failed. Labor have not failed, and that is why we have put this bill before the House so early in the term. Not only have we introduced important new changes to eligibility but we have significantly funded those changes with an additional $50 million in the budget to bring the total funds available in 2009-10 to $190 million to provide greater assistance to Australia’s export communities.

The changes to the scheme contained in the bill are a down payment on the overall reforms to trade policies and programs that will follow the Mortimer review. We have not just commissioned a review, as important as that is; we have made decisions in this budget. This bill will increase the maximum grant by $50,000 to $200,000 and lift the maximum turnover limit from $30 million to $50 million. It will increase the limit on the number of grants from seven to eight. It will allow expenses related to acquiring patent protection in international activities. It will allow state, territory and regional trade promotion bodies, including tourism promotion bodies, to access the scheme—and I notice the member for Leichhardt had some important things to say in this regard.

It will cut the minimum expenditure threshold by $5,000 to $10,000. It will replace the current list of eligible internal and external services with a new non-tourism services category that will provide for all services supplied to foreign residents, whether delivered inside or outside Australia, to be eligible unless specified in the EMDG regulations. It will apply a new ‘net benefit to Australia’ test to applicants claiming their third and later year grants.

Business will welcome these changes. Labor has listened. We have responded through this bill, and in the budget the funds were provided. With these changes, more small and medium-sized businesses, particularly in the services sector, will be able to access the scheme. For the first time, regional economic and tourism bodies will be eligible for grants. The new ‘net benefit to Australia’ test will restore accountability to the scheme in a way which is WTO compliant.

The funding for these measures was confirmed in the budget, but they were not the only measures in the budget that will contribute to improving Australia’s trade performance. Those years of neglect of the Howard government in the provision of essential infrastructure will be addressed through the new $20 billion Building Australia Fund, which will be used to build critical economic infrastructure such as roads, rail, ports and broadband. The infrastructure development will benefit all exporting sectors, including manufacturers, miners, farmers and the services sector, particularly in increased productivity.

The skill base of the Australian workforce will be addressed through the $11 billion Education Investment Fund, and $62.4 million over three years will be provided to give Australian students the language skills they need to engage with our Asian neighbours. A generation of students missed out on the opportunity to study Asian languages when the Howard government abolished a similar program put in place by the previous Labor government—in fact, introduced when I was the Minister for Employment, Education and Training. This is a government that understands also that responding to climate change is about more than just the environmental challenge; it represents an economic opportunity for our business community, and there are key budget measures that will help Australian business to position themselves to take advantage of these opportunities.

This government has also recognised the importance of an integrated, fully coordinated trade policy that reflects the increasing importance of international capital flows and global supply chains. That is why we have announced in the context of the budget that the Global Opportunities and Invest Australia functions will be incorporated into Austrade. The previous coalition government neglected the needs of exporters and always failed to understand the changing nature of trade. It is no longer just about exports; it is just as much about our business and exporting community.

The previous government never understood the implications of the fact that the net outward investment is now approximately equal to the net inward investment. Because under them trade policy defaulted to the National Party, they never looked significantly beyond agriculture—and broadacre agriculture at that. For many Australian companies, investment in offshore facilities and businesses is a very important part of their export strategy. Inward investment, which was the responsibility of Invest Australia, is also crucial to our trading performance, particularly in building capacity. Global Opportunities was focused on building the capacity of small and medium-sized businesses to participate in global supply chains.

All these activities are integral to Australia’s trade performance, and yet the previous government took key programs associated with investment and support for global supply chains out of the trade portfolio. They located them in the industry portfolio. No doubt the decision had more to do with the rivalry between the Liberal and National parties than to do with sensible trade policy. Only those opposite would know why that decision was made, but from the perspective of a sensible coordinated trade policy it simply does not make sense. So they have been incorporated, and that was an important part of the budget.

Finally, the Mortimer review: having announced all of these initiatives of down payments, reinforced in the budget, we are undertaking a review, to be headed by David Mortimer and John Edwards. This is going to give us the road map forward because we, as a government, are committed to lifting the nation’s export performance. We have been badly let down by the previous government.

This bill is an important start to the rebuilding process. I commend it to the House and I thank the opposition at least for their support for this very important measure.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.

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