Eric Hutchinson (Lyons, Liberal Party) Share this | Hansard source

I join the member for Rankin and in acknowledging that I too enjoyed the member for Canberra's contribution to this debate on the Export Finance and Insurance Corporation Amendment (Direct Lending and Other Measures) Bill 2014 and her experience that she has had in this area of trade and, indeed, in small businesses. To be brutally honest, to look at the track record of the previous government in terms of small business, it is rather disingenuous when you consider that during six years they had five ministers for small business, start-ups of small businesses in Australia fell through the floor and small business failures under the previous administration increased enormously. Why? Because the burden and the costs on small businesses were going up. The regulatory burden was going up. Taxes were going up. The things that we said when we came to government were indeed about trying to reduce that regulatory burden, trying to reduce the cost of particularly taxes. We have removed the carbon tax, which, most small business in this country were simply unable to pass on. They were not considered as export exposed industries and this hurt enormously.

I note the comments in respect of this Export Finance and Insurance Corporation Amendment (Direct Lending and Other Measures) Bill 2014 before the House, particularly around the notion of competitive neutrality. It is indeed important because this is a government participating in a space where there is other competition. But it has been acknowledged on both sides that it is very worthwhile work that work Efic does. I have had experience of this myself. It is important that that competitive neutrality is indeed adhered to. I acknowledge that part of the changes that are being moved.

Australia is indeed an exporting nation and $300 billion worth of goods were exported out of this country. We should be doing as a government everything we can to help businesses to help themselves. That is indeed what these amendments are intended to do. They are designed to suit support small businesses, medium enterprises and larger businesses as well to do what they do best—that is, get on with business, create markets, explore markets and open markets. Sometimes they need some assistance in funding those opportunities or, as has been mentioned, getting insurance with certain customers, which of course comes at a cost.

I think of my experiences in a previous life within the wool textile industry. I worked for an exporting business in Melbourne. Efic enabled businesses. We had internal provisions around who and who we could not deal with. Without being able to access Efic insurance cover, we would not have been able to do business with many of the customers that were indeed good customers. That was a cost of doing business. It was the cost of risk. But once that Efic insurance cover is approved and once that Efic finance facility is in place it is, indeed, bankable. It is something that you can take to your bank and use as collateral, which then allows you to expand your business. Certainly within the wool-exporting business in this country, access to capital is indeed an enormous challenge from time to time. As has been mentioned, it just simply did not make sense that in this country the five per cent of goods that were eligible for finance under the Efic scheme were capital goods and 95 per cent were something other than capital goods.

The changes made within this bill to reflect the reality of the situation will benefit us enormously. As the member for Canberra mentioned, we could previously get cover for cows but not milk. It does not make any sense at all. These are practical changes that we have seen within this bill. I think of some of the exporters in my home state and indeed in my electorate, meat exporters in the form of JBS Australia, which are based in Longford. I think of the 2013 Regional Exporter of the Year, Tasmanian Quality Meats, which are based in Cressy, also within my electorate. They are currently growing that business enormously. As I said, they were the Australian Regional Exporter of the Year. They particularly have a focus at the moment on the Middle East but I know they have plans, particularly off the back of some of the free trade agreements that we have been able to secure as government since coming to power in 2013. There are opportunities that exist for their business to grow, with the appropriate accreditation and the like, but to grow the opportunities that present in places such as China are, indeed, enormous.

I think also of the seafood exporters, the well-known salmon producers that, as I say, are very much part of the Tasmanian brand. Huon Aquaculture; Tassal and Petuna Seafoods all have operations of some kind or another within my electorate. I think of some of the more innovative seafood businesses, such as Seafoods Tasmania, in dealing with what is a consequence of international trade in terms of sea urchins that are now, unfortunately, very prevalent off the east coast of Tasmania. There have been numerous efforts to find ways of dealing with this invasive species, all of which have failed. It has now turned into a commercial opportunity. The work that Seafoods Tasmania do at Goshen, a small town just north of St Helens in my electorate, involves harvesting those sea urchins. Those of you who enjoy sushi will know this as izumi if you are in Japan. The work that they are doing there to turn that into an export product, both into China, Hong Kong, Singapore and also Japan is tremendous.

Last year one of the recipients of support from Efic was a Tasmania-based shipbuilding company, Incat. They make outstanding catamarans that sail all around the world. They receive some Efic support to fund a liquid natural gas powered ferry, the first in the world. This is outstanding work. Another business in the north-west of the state, Specialised Vehicle Solutions, have also received support from Efic in the past 12 months.

Exporting is not an easy business. I go back to my former life within the wool industry. Many of the retail businesses around get paid in cash and that is wonderful. But very rarely in the business I was involved in did you ever see cash. It was done on terms; it would be for 30 days if you were really, really lucky. More often than not, it was done on 90 day terms. I remember back in the late eighties, and some might say the heady days of the wool industry, it was a common practice to have terms when doing business in the Soviet Union—as it was at the time—of 180 days, and in some cases 360 days. The notion of cash and therefore the capacity to be able to fund exports and business, is indeed a challenge—particularly, for smaller businesses that are growing and finding their way. There is no question that this is a real challenge for many of them.

These are businesses indeed. I note the member for Hughes's contribution in this debate. These people are indeed the wealth creators of our nation, and we should be doing everything we can to support them. It is through the work that they do, the people they employ and the taxes they ultimately pay that allows this nation is able to—if we manage the books properly—pay for the services that the people of Australia rightly expect their government to provide. It is not a magic pudding though and therefore governments should—like households and small businesses—learn to live within their means.

This is unfortunately and tragically the great failure of the six years that we had under the previous Labor government. They simply could not live within their means. This is the legacy that we have inherited; this is the challenge that we are dealing with. Yes, some of the decisions that we have been asked to make have been difficult decisions—nobody disputes that for one second—but they are challenges that we are up for. They are challenges that the people of Australia truly expect us to get on with. This is our lot in life.

I welcome these changes. An additional $200 million of capital is, indeed, timely. Taking a look at the role of Efic, I remind all who may take an interest in this space, it is competing in an area where there are other providers of these services; we should always remember that. The competitive neutrality is acknowledged within the changes in this bill. We should always be mindful—and that process should be reviewed from time to time—that we are not getting into a space where the private sector and others can provide these services appropriately. But, as it stands at the moment, we fully support the work that Efic does and the roles that they play to support, capitalise, fund and provide opportunities for small, medium and large businesses in this country selling Australian produce around the world.

The changes around increasing this to include non-capital goods is common sense. Our job is to also communicate that to businesses that are looking to expand their operations. Part of the role that we play as parliamentarians is to make sure that businesses that are looking to grow their business, create more jobs and export products out of this country are aware of the opportunities that they have under the Efic Corporation. Thank you very much for the opportunity to participate in this debate.

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