Steven Ciobo (Moncrieff, Liberal Party, Minister for Trade, Tourism and Investment) Share this | Hansard source

I present a supplementary explanatory memorandum to the bill and seek leave of the House to move government amendments (1) to (3), as circulated, together.

Leave granted.

I move government amendments (1) to (3), as circulated, together:

(1) Schedule 1, item 2, page 3 (lines 12 to 14), omit the item, substitute:

2 At the end of subsection 3(3)

Add:

; or (e) the supply to persons who are not ordinarily resident in Australia of services relating to tourism; or

(f) the conduct of an online business with customers outside Australia; or

(g) the sale or licensing of intellectual property and related rights to persons outside Australia; or

(h) direct investment outside Australia where a benefit flows back to Australia (whether directly or indirectly).

(2) Schedule 1, page 4 (after line 9), after item 6, insert:

6A At the end of section 16

Add:

(3) However, EFIC must not make a guarantee or enter into a contract under this section in relation to a loan or a proposed loan that is to be used for the dominant purpose of direct investment outside Australia unless the requirement in subsection (4) is satisfied.

(4) The person who carries on the business must certify, by writing given to EFIC, that the person reasonably believes that the loan will result in a net increase in the number of people employed in Australia by the business or a related business during the term of the loan.

6B At the end of section 23

Add:

(3) However, EFIC must not lend money under this section for the purpose of financing a transaction whose dominant purpose is direct investment outside Australia unless the requirement in subsection (4) is satisfied.

(4) The person to whom the money is lent must certify, by writing given to EFIC, that the person reasonably believes that the loan will result in a net increase in the number of people employed in Australia in the business concerned or a related business during the term of the loan.

(3) Schedule 1, items 7 and 8, page 4 (lines 10 to 17), omit the items, substitute:

7 Section 84A

Repeal the section, substitute:

84A EFIC must charge for certain services

(1) EFIC must charge fees for services it provides in performing the following:

(a) EFIC's Northern Australia economic infrastructure functions;

(b) EFIC's Commonwealth entities function.

(2) The fees:

(a) must be sufficient to compensate EFIC for the services it provides in relation to those functions; but

(b) must not be such as to amount to taxation.

I rise to move three amendments to the Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2016. The government has responded to the 7 February report of the Senate Foreign Affairs, Defence and Trade Legislation Committee inquiry into the provisions of the bill. The amendments address issues raised in the report and clarify the purpose of the bill to enable Efic to support a broader range of small and medium sized enterprises, ensure Efic's support for overseas direct investment results in more Australian jobs and ensure Efic charges a fee for providing its services to Commonwealth entities and companies.

The first amendment maintains the EFIC Act's support for manufacturing and expands the definition of an eligible export transaction to include support for tourism operators, online businesses, exporters of intellectual property and other related rights, and businesses engaged in overseas direct investment. The second amendment will ensure Efic's support for businesses engaged in overseas direct investment will result in more Australian jobs. It is already Efic policy that applicants for its overseas direct investment financing product must not use it to fund the outsourcing of jobs. This amendment stipulates that businesses will have to certify in writing their reasonable belief that Efic support for overseas direct investment will result in a net increase in the number of people employed by the business concerned or related business in Australia. The third amendment will mandate that Efic charge a compulsory fee for providing services to Commonwealth entities and companies. This fee will not amount to taxation, but will ensure Efic is compensated for providing its specialist financial expertise. The amended bill will unlock Efic's potential to respond to the needs of complex government financing arrangements, subject to ministerial approval. The amendments also clearly enable Efic to support a wider range of innovative Australian small and medium sized enterprises to succeed in the global marketplace. I certainly commend these amendments to the House.

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