Julian Hill (Bruce, Australian Labor Party) Share this | Hansard source

When working well, of course, Efic can play an important role in filling market gaps, which is a contested term, nevertheless, in facilitating jobs and growth. Jobs and growth—actually, I remember that. We lived through the never-ending election campaign when we heard a lot about jobs and growth. Here was I at the start of the campaign thinking it was in fact policy but, as the rest of Australia figured out, it turned out to be a website and a slogan—it was blue and yellow, with a banner and a lovely logo, but not a policy. In fact, since the budget the government has gone rather quiet on jobs and growth because, in fact, the budget cut the jobs forecast by 92,000 jobs and cut the growth forecast. So we have not heard so much about that. Any proposals to facilitate economic growth—more investment, more trade, more jobs—are welcome. We all in this parliament should approach it constructively to get the best possible outcome for Australian jobs and businesses.

As has been said, the Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2016 does two things. I will just make a couple of brief remarks on the first aspect which has been largely glossed over because it does have support. There are few issues here, as the Bills Digest touched on. The first objective is to expand Efic's function so it can provide specialist finance advice to Commonwealth entities and companies. Currently, it is only permitted to provide that to the NAIF—and isn't the NAIF a funny thing. All it has actually spent money on is its board and consultants; it has not actually spent any money developing northern Australia—but, you know, northern Australia lives in hope.

We support the amendment which will, hopefully, lower government service delivery costs as other Commonwealth entities can then access Efic's expertise. This touches on a couple of important issues from the point of public administration. Consultant and contractor spend by the Commonwealth for many years—and this is actually not particular to this government—has been a significant item; well over half a billion dollars on consultants alone across the Commonwealth Public Service in 2015-16, the most recent full year figures. Of course, there are legitimate circumstances where it is absolutely necessary for departments and agencies to procure in specialist expertise. Indeed, commercial advice and financial expertise is probably up the top of that list, where it is not reasonable to expect the plethora of agencies across the Commonwealth public sector to have that advice in-house. It is quite natural and, indeed, critical that they turn externally to procure advice, but it is not cheap advice. It makes eminent sense then to draw on existing expertise, such as that that resides in Efic to assist other agencies. It could lower costs.

The Bills Digest raises a few issues and a note of caution. The government has provided no indication or assessment that we can see of the likely frequency of this advice. This provides the potential for a very substantial draw on resources should this take off, and no additional funding is flagged. I would urge the government to make sure that in managing this new function there is a great degree of consciousness about the potential for displacement of resources because no-one would want to see resources in Efic diverted, if you like, to become an in-house consulting house to government and away from its core business, which is the provision of export credit to increase jobs growth and exports.

That leads then to the main concerns with this badly thought-through bill—it is a good objective but we do have a number of serious concerns about the drafting. The second aspect is to allow Efic to provide loans to Australian companies to expand or set up overseas operations. To give the government the benefit of the doubt, there are unintended negative consequences. But we have tried to be helpful as an opposition and we have put forward a number of sensible, proposed amendments which we would urge the Senate take up. The major concern is the potential impact on Australian jobs. The bill, as drafted, could allow loans to offshore manufacturing. The submissions to the Senate inquiry made that clear and 'the potential to reduce jobs that produce goods and services in Australia'.

I cannot imagine any member of this House would think it a good use of Commonwealth taxpayer funds to give loans or loan guarantees to a company that then takes jobs offshore. There was a comment in the Bills Digest that I do not think anyone would want to see a circumstance where the main criteria was the flow-back of profits onshore if we actually had job losses. That is perverse. As legislators I think it is incumbent on us to be careful and cautious and to examine the detail. Indeed, the Senate committee has done some of that already.

I will just summarise the three amendments without going into detail. First, the Australian jobs test, which is designed to make sure that before making a loan or guarantee spent overseas that Efic must be satisfied that a supported investment would lead to jobs and growth in Australia. It is not controversial—or it should not be—that we satisfy ourselves that this will actually grow domestic jobs and that the sole criterion should not be the earnings flow offshore under this new arrangement. Second is the amendment to prevent business using Efic loans or guarantees to offshore jobs. The third, as has been touched on by a number of members, is to make sure that disturbing reports we read in The Guardian of loans being given to finance coalmines in South Africa, which would hurt the Australian coal industry, on the way through with taxpayer money could not proceed and were clearly ruled out.

So in the spirit of bipartisanship we lend our support to this bill but will urge and encourage the government to take up our sensible proposals for amendments in the Senate.

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