Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Hansard source

This is a really interesting area—and one particularly interesting for me, because I worked in an area, for many years, in the commercial sector where work just flowed freely across international borders. I remember giving a lecture to a forum about 30 years ago, talking about the ultimate effect of globalisation as not about imports and exports of total goods but the complete fracturing of the way things move across borders, including labour. As early as the late nineties, in the music sector, in which I worked, we already had firms in Australia providing the soundtracks for American daily programs overnight, using the difference in the time zone to effectively work a 24-hour shift, and that was back before the GST, because, when the GST came in, I remember thinking, 'I'm not quite sure we're in the right decade here—it is the wrong time for this.' So this is an area that I have watched for a long time.

In my community, where we have a lot of people who were born overseas who have expertise and knowledge of overseas markets, we have a lot of entrepreneurs who develop something in Australia and manufacture it in their country of birth. We have a Kenyan fashion designer who uses Kenyan fabrics and Kenyan manufacturers. We have a couple of Nepalese boys who do the same. We have a Fijian-Indian Australian, who recently got her citizenship just in time, who heads off to Kenya and works with the Masai women on her beaded designs which are kind of half Indian and half Kenyan. So we have these phenomenal young entrepreneurs in modern Australia who think in a profoundly different way. The world is actually theirs. They are connected in ways that Australia was not. When I talk to these young people, I quite often say to them, 'Look, if you're going to train those Kenyan women in how to make that for a Western body, you should invest in the factory—you should actually own part of it, so that you can sell those skills to other people around the world.' If you are working with women in remote villages, as one of my Indian designers does, there are ways to make sure that your work returns to you in ways other than just the manufacture of the product.

This is a great thing—this changing nature of Australia and the way that our population is so woven into the world. This is actually a good thing. As great as that activity is, the question is: to what extent should the taxpayer pay for it? That is the issue. To what extent should the taxpayer subsidise or assist that kind of activity? What are the rules, if you like, for what the Australian taxpayer does or does not pay for?

The Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2016 extends what the Export Finance and Insurance Corporation Amendment can do in terms of its support of Australian companies. It has two purposes, the first being to allow Commonwealth entities and companies to access the loan expertise of Efic for a fee, with the approval of the Minister for Trade, Tourism and Investment. That currently occurs with the Northern Australia Infrastructure Facility. It is non-controversial. Both sides of the House see benefit in that. I will state, though, that this is about Efic managing loans for other departments. It is a very effective way of using the expertise of one government entity and expanding it across a broader range of activities. It is a very good thing. The second purpose of the bill is to allow Efic to provide loans to Australian companies for overseas investments, and this is where it gets slightly more controversial—there is more to consider in this one.

On this side of the House, our concerns are the effect that this change will have on Australian jobs. We are concerned that we will see Australian jobs shifting offshore. We have heard the stories, as many have, following an article in The Guardian which claimed Efic was preparing to loan funds to a company listed on the Australian Stock Exchange to establish a mine in South Africa. Efic did confirm in the Senate estimates last month that they are no longer considering the loan at this stage as no formal proposal has been submitted, but it is still listed on their website as being considered, and Efic confirmed that the original application was consistent with the Efic Act.

We have, already, an interesting situation with Efic, and this bill extends that slightly. We had enough concern to refer this to a committee. The evidence given to that committee is worth sharing in this House. The Australian Fair Trade and Investment Network said:

It is a reasonable and in fact modest requirement that firms receiving support from Efic actually produce goods and/or services in Australia and employ Australians. It provides ample flexibility for firms to have offshore operations where required.

In the absence of such a requirement, there would be no incentive for firms receiving Efic loans to have any Australian content. This would lead to the perverse situation of an Australian government institution being able to provide support for firms providing no employment in Australia.

The Australia Institute said:

This has the potential to not only deprive finance to companies that produce in Australia but also to give advantage to their competition in other countries.

The ACTU said:

It is in the national interest that companies which receive government loans are required to use that money in a way which benefits Australian employment. The removal of these provisions will be yet another blow to the Australian manufacturing and services sectors.

There are a range of voices out there that express what is quite a reasonable concern.

Of course, much of the way this works will take place through regulation, so the detail is still largely unknown, but, when money is limited and it goes to offshore activity rather than onshore, it does actually pull money out of onshore activity. I will be quite honest about this: it is such a complex issue when you live in an electorate like mine, with such incredible diversity, where the world is their market. I am looking forward to the process that we go through as these regulations are developed. I will be watching the government very closely to ensure that, where possible, they put a priority on the funding of projects which provide a tangible benefit in terms of jobs in Australia. I understand all of the reasons why a government would seek to expand the criteria in this way. There would be many in my community that would be very much in favour of this.

Again, I think it is a complex area that needs considerable consideration and a lot of consultation with the sector as we move forward. We on this side will not oppose it. I look forward to, I hope, a close working relationship with the government as the regulation unfolds so that we can all make sure that this serves the best interests of Australian industry going forward.

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