Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I am pleased to speak on the Export Market Development Grants Amendment Bill 2014. This is a scheme that is widely supported and used by many businesses in the community that I represent in Kingsford Smith. It is a scheme that generally has good support and it is a scheme that provides opportunities in export markets, particularly for small- to medium-sized enterprises. The scheme was initiated in 1997 under the Howard government. It was supported by Labor whilst in office. In 2008, Labor introduced a number of reforms to the scheme. These have seen the reach and expanse of the scheme improved, and made it much more efficient and effective in supporting small- to medium-sized businesses in opening up new markets throughout the world.

In 2013, Labor sought again to amend the scheme. Due to the proroguing of parliament, those measures were not put before the parliament, but it is pleasing to see that some of the measures detailed in the proposals at the time have been picked up in this legislation. However, there are others which were not picked up and we would encourage the government to have a look at those measures in the future.

This scheme is administered by Austrade, a wonderful arm of government, which is doing great work internationally, supporting growth and development of export markets, particularly for Australian small- to medium-size businesses. I was recently speaking to a young entrepreneur in my community who had set up a business involved in the exchange of gold and silver. He was keen to open new endeavours in the Asian market, particularly in China, where the expanding middle-class is providing opportunities for services such as those his business is delivering. He told me that on the first occasion he went to China he basically cold-called other businesses. He went to many of the capital cities and sought to speak to the heads of various businesses to promote the work he was intending to do, but he did not get a very good reception. He had not done the necessary groundwork or made contacts to effectively convert his approaches into opportunities for his business. Before he went to China a second time, he went to Austrade. Austrade officials worked out the opportunities and assistance they could give him in Asia and, through their contacts in China, he had much greater success. As a result of Austrade's work, he converted some of those opportunities into solid business proposals and has created jobs here in Australia and in our community. That is the role Austrade should play and that is the role that export market development grants can play in assisting small- to medium-size businesses to open opportunities.

The purpose of this bill is, firstly, to amend the Export Market Development Grants Act 1997 to increase the number of grants able to be received by an applicant from seven to eight, with no change to the rules for approved bodies and for approved joint ventures. Secondly, it is to reduce the minimum expenses threshold required to be incurred by an applicant from $20,000 to $15,000. Thirdly, it is to reduce the current $5,000 deduction from the applicant's provisional grant amount to $2,500. The final two elements are to prevent the payment of grants to applicants who EMDG consultants have assessed are not a fit and proper person under the act.

The EMDG scheme has fit and proper person rules under section 87AA of the act to provide for the non-payment of a grant if the CEO of Austrade has formed an opinion that the person or an associate of the person is not fit and proper to receive a grant. This provision has been activated since 2004 and has generally worked well. However, under the current rules where an applicant engages an EMDG consultant to prepare a claim and the EMDG consultant is not a fit and proper person, the applicant is not subject to the provisions of 87AA, which obviously is an anomaly that needs to be fixed. This item extends the fit and proper person provisions of the EMDG Act to consultants who engage in false and misleading behaviour, or whose behaviour is considered to be inconsistent with accepted community standards of commercial and personal property.

The item provides the legislative framework to enable the CEO of Austrade to decide whether a person should be assessed as an excluded consultant, similar to the provisions that apply generally to applicants and their associates in respect of the fit and proper person test. The item provides that the consultant or the associates of the consultant who are not fit and proper will be subject to the rules. The rules for determining an associate of an EMDG consultant will be a legislative instrument made by the Minister for Trade and Investment, as provided for in this particular bill. The instrument will also contain assessment criteria to be used by the CEO of Austrade to determine whether or not a person or an associate of that person is fit and proper and that will be done in accordance with the guidelines.

Importantly, this part of the bill also provides for consultation and for Austrade to seek further information about the associate or about the consultant. The provisions allow for a request that a person provide Austrade with specific information—books, records, documents and/or written consent—to enable the CEO of Austrade to obtain relevant information to assist in the formation of an opinion.

The final element of this bill is to enable a grant to be paid more quickly, where a grant is determined before 1 July, following the balance distribution date. This relates to section 67 of the act where, essentially, applicants entitled to a grant of less than the initial payment ceiling amount are paid their grant at the time the claim is determined. Applicants entitled to an amount exceeding the initial payment ceiling amount are paid the initial payment ceiling amount and then, often many months later and following the settling of the balance distribution date, are paid the balance of their entitlement. This balance amount will depend on an assessed value of the applicant's entitlement and will be paid to applicants entitled to a second tranche amount on a pro rata basis. Under the two-tranche arrangement, Austrade is unable to pay the full amount of assessed grants to applicants as quickly as desirable when scheme demand is lower than expected or when additional money is appropriated for the scheme. In these circumstances, it would be preferable to bring forward the balance distribution date and this is what these provisions do. This item looks to amend section 82 of the Market Export Development Grant Act to provide that if Austrade determines the amount of a grant after the balance distribution date the grant becomes payable immediately. There is no additional cost associated with this change.

It is interesting to note that in 2011-12, the last reported figures for the uptake of the EMDG Scheme grants, 2,933 businesses throughout Australia benefited from export market development grants with a total value of $125.6 million. This scheme encourages small- to medium-sized Australian businesses to develop export markets and receive some form of reimbursement of the expenses incurred on eligible export promotion activities. It is a wonderful example of a partnership between government and small- to medium-sized businesses. It opens doors for businesses, it provides opportunities to businesses to grow their markets, and it ensures those businesses have opportunities into the future and, importantly, are employing Australians.

In 2008 the Labor government delivered in full on its commitment to better tailor the EMDG Scheme to the needs of exporting businesses. It was Labor's intention, following a period of some stagnation, to revitalise Australia's trade performance and to ensure that our trading sector once again became a positive contributor to economic growth and that the Australian economy was sustainable beyond the resources boom—that we looked to diversify our economy by providing new opportunities, beyond mining, in support of small- to medium-sized enterprises. We took a twin pillars approach to our trade policy for sustainable economic growth—trade liberalisation at the border was complemented by economic and trade reform behind the border. Labor worked through bilateral and regional agreements consistent with our multinational objectives to ensure that trade liberalisation occurred, but also that new opportunities were opened up. The Export Market Development Grants Scheme has been a key Australian government financial assistance program for aspiring and current exporters, and under Labor it was a huge success.

Companies to benefit from the scheme include Opengear, which designs, manufactures and delivers secure remote infrastructure management solutions. They have seen their sales grow 40 to 50 per cent annually for each of the past three years. Opengear has graduated from being a business supported by the Export Market Development Grants Scheme to a business with $10 million in revenues, branches located in the US and Europe, and 90 per cent export sales. Other beneficiaries of EMDG Scheme grants include Bartco Traffic Equipment, an Australian manufacturer of portable traffic management equipment—full-matrix LED displays, portable traffic signals, message signs, directional arrow boards and other road safety equipment. Bartco has seen a remarkable growth in its export sales over the past few years and there is growth in the pipeline in Eastern Europe, the UAE, South America, India, the UK, Hong Kong and the USA. There are a whole host of examples of great Australian companies—small- to medium-sized enterprises, many of them in my community—that have benefited from export market development grants.

Labor took the approach of supporting this scheme while ensuring that the operation of the act effectively and efficiently assisted Australian businesses. It is pleasing to see this bill continue that tradition of supporting Australian small- to medium-sized businesses. I am pleased to commend the bill to the House.

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