Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on the Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2016. This bill deals Efic, the Export Finance and Insurance Corporation. I can personally attest to the very good work that Efic do and the very important role that they play in our economy for small business. Before I came to this parliament, I worked as an export manager for my family's firm. My job was to travel overseas and put together bids for tenders for contracts. We were a small Australian company located in Chipping Norton, and we were competing against very large companies in the USA, Europe and the UK that were backed by public company finance. Often, putting together a specific package to supply goods or services—it was goods in our case—into a foreign market requires substantial finance.

Many small exporters face exactly the same circumstance we did back then. Having Efic in the marketplace enables a company to go to Efic and say: 'Hey, guess what: I have this export contract here to supply overseas. If I'm able to supply it I can create jobs in Australia. I can create real wealth for the country. The employees I employ will pay taxes. The money they will spend will help the local community. But I need some assistance to finance it to get the materials I need to produce those goods in my factory.' There are many circumstances where a bank would say they need extra equity, extra finance or extra security to be able to loan that money. But having Efic in the marketplace basically gives an option of lenders of last resort, for want of better words. Deputy Speaker, the mere fact that you are able to go to Efic because Efic exists enables your bank to give greater consideration to your application for that loan. In the past, the way it was structured was that Efic would provide a guarantee to your bank, and your bank would then be able to loan you the funds for you to get the materials you needed and to incur all the expenses you needed to fulfil that export contract. What we are now changing with this bill enables Efic to actually loan directly to that small business.

The other thing the Export Finance and Insurance Corporation does is enable you to insure the risk of non-payment. That is a real risk. My company was supplying places in Lebanon, Kuwait, Saudi Arabia and Jordan. Of course, the preference would always be to get a letter of credit, but a letter of credit is only as good as the bank that would issue it. In the Middle East there was always the risk on non-payment. But, Deputy Speaker, having Efic there gives you the ability to say: 'I'm prepared to take that contract, though there is a certain risk that I might not get paid.' Then you would price that risk into your pricing structure, quotation or tender and you were able to insure against this risk. This is a very important facility. It was important in the past and it will be even more important in the years to come.

If our country is to progress and if we are to continue—when I say 'we' I talk about the private sector economy—to create jobs, we must always remember that it is not government that creates jobs but the private sector. Those jobs come about by the production of goods and those companies having greater demand for their goods. If we are to continue to grow the economy like we need to, we need to get Australian businesses to be thinking about export markets as much as we possibly can. More than 98 per cent of the world's economy lies beyond our shores. It is important for the future prosperity of this nation that we have businesses considering what they can do to export their goods and services and have an important facility like Efic to back them up.

To do that, we must make sure we give Australian businesses at least a level playing field to compete on. If we expect Australian businesses to go and fight in international marketplaces and to win contracts, the very least we can do is give them some type of competitive level playing field. Some of the great risks we face are the policies we see from the other side of the chamber—from the Labor Party—that are simply putting Australian businesses at a competitive disadvantage and tilting the playing field in favour of foreign companies. Here are a few example: firstly, the rate of corporate tax Australian businesses must pay. We have seen over the years Paul Keating, very wisely, reduce the rate of company tax.

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