Jane Prentice (Ryan, Liberal Party) Share this | Hansard source

I rise today to speak on the coalition government's continued commitment to small and medium businesses in Australia, as evidenced by the intent of the Export Finance and Insurance Corporation Amendment (Direct Lending and Other Measures) Bill 2014. While this coalition government continues to make great progress in the freeing up of markets under our trade agreement framework, which has seen many new markets opened up for Australian businesses, there still needs to be more in the way of support for business to truly expand internationally.

This is the role of the Export Finance and Insurance Corporation, Efic. They have been doing a good job of helping exporters to secure finance, insurance, risk assessments and the advice that they need. However, direct lending has only been available to those exporters who compete in the capital goods markets. To understand why this is such a problem, we need to define what is a capital good. The Oxford English Dictionary defines capital goods as 'goods that are used in producing other goods, rather than being bought by consumers'. That is straightforward enough but very limiting, as Australia does not produce many capital goods. This can create some confusion. As colleagues have said before me, if a cow is exported to be a producer of milk, but not meat, it can be considered a capital good. However, cattle exported for meat are considered a consumer good. That is why the amendments proposed in this bill are so important for businesses who deal in consumer goods, those goods bought by the end consumer, not by producers.

Let us consider an example. If Poppy's Chocolate, based in the member for Forde's electorate, were to export machinery for making chocolate to Japan, they would be able to access direct funding for this venture. However, if they wanted to sell their primary product—that is, the eating chocolate—to Japan, they would not qualify for direct funding from Efic. While I am all for businesses diversifying and innovating, this should not be at the cost of their primary business. Why should we not support those businesses selling consumer goods to expand their operations to take advantage of the many new trade agreements negotiated by the coalition government? Australia produces some fine consumer goods, and the rest of the world clamours for them in certain markets. Not that many years ago, there was in fact a Vegemite shortage in Japan. Tim Tams gained a cult following in the USA following the Sydney 2000 Olympics. Asia has an insatiable appetite for ice cream that Australian producers could help fill if they could just get their goods into those markets.

On this side of the House, we understand that business occasionally needs a helping hand in order to expand. I was disappointed that the member for Rankin claimed that Labor had 'higher horizons' for Efic and wanted to help Efic, yet, when the member for Rankin was part of the then Labor Treasurer's team, they produced a shameful record with Efic. Labor gutted Efic, ripping $200 million of equity out of Efic as a one-off special dividend in the 2012 budget when they were indulging in a desperate search for their delusional surplus, scratching down the back of the couch looking for the loose change to try to prop up the surplus they claimed several times but never delivered. In its 2013 annual report, Efic noted that this caused 'material breaches' of prudential guidelines.

The coalition has reversed that raid on Efic's capital base, restoring $200 million of new equity capital to Efic in the 2014 budget. Once again, the coalition are demonstrating our genuine support for small business and small business exporters. Larger businesses mean more employees, which means fewer people out of work and a broader tax base—or, to put it simply for those opposite: less outgoings and more incomings for the government to pay for health, education, roads and infrastructure without needing to continually increase the limit on the nation's credit card.

The coalition government understand how business works. We do not see business as a milch cow, an unlimited supply of money to be taxed. We understand the drive, ambition and dedication it takes to put your house on the line to fund your dream. We appreciate that business owners are usually the last ones paid if there is anything left over after they have paid their employees and their creditors. So we are offering them a hand up, with a simple change to the goods that qualify for direct funding from Efic.

I know that Labor would prefer we did not give business a helping hand because that is not what they do. Rather than support businesses to build a stronger economy, they would tax them to the point of breaking. But the coalition is a government that fosters trade and supports local companies to take advantage of the opportunities the many new and upcoming trade agreements will bring to Australian businesses. The coalition government is here to help. With this change, thousands of small and medium enterprises will be able to take on the world. Surely, that is a goal worth pursuing.

Once again, the people of Australia are faced with a stark contrast: a coalition that fosters business and creates jobs and growth or the antithesis of our beliefs, the 'tear business down' mentality of Labor. This bill makes a small but very meaningful change to the operation of Efic, and I commend the bill to the House.

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