Pat Conroy (Shortland, Australian Labor Party) Share this | Hansard source

Unlike the previous speaker, the member for Hughes, I will actually talk about the bill we are debating in this place rather than delivering the fifth repeat of the speech he has given on five bills in the last few days. I think I could do a good impersonation of it; I have heard it enough. Unfortunately, the facts still do not support the member for Hughes's case—but I digress. It is my genuine pleasure to come to that dispatch box and talk about the Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2016. This legislation has two separate amendments that go to two separate issues. The first one is around empowering the Export Finance and Insurance Corporation, Efic, to provide its expertise to other organisations. It already provides its expertise to NAIF, and NAIF well and truly needs its expertise given the conflict of interest many of its directors have already. It will allow NAIF to provide that expertise to other agencies, and that is a good thing. Labor supports that, and I applaud the government for bringing the amendment to the parliament.

The second amendment is trickier. The second amendment allows Efic to provide loans to Australian companies to set up or expand operations overseas. Before I go into that specific debate I want to take a step back and talk about the noble work of the Export Finance and Insurance Corporation. It does good work in providing guarantees to Australian companies and providing loans, often concessional loans, to Australian companies that are trying to export overseas. When it was originally set up it was mainly aimed at manufacturers, and that is where it is currently predominantly being used. It has done some great work under governments of both persuasions.

I had a close connection with Efic when the last Labor government used an Efic facility to drive Australian content into the joint strike fighter, one of the largest procurements in the defence arena, not just in Australia but across the entire world. The Labor government established an Efic facility to drive Australians into the supply chain of the joint strike fighter through the primes, such as Lockheed Martin, BAE and Northrop Grumman. That is great. That is a classic example of how Efic works.

This amendment effectively allows Efic to provide loans to Australian companies to set up or expand operations overseas that do not lead to any local content in Australia. The minister used the examples of an Australian company setting up a call centre in the Philippines and an Australian fashion designer setting up a manufacturing facility in China. Both of those examples are two-edged swords to some extent. On the one hand, it may increase the viability of that business and mean that the fashion designer can keep producing great designs in Australia and add to the sustainability of their product and, in the call centre example, it may mean that that Australian company provides greater customer service and can expand in this country, but the concern of the Labor Party is, and has to be if we are going to honour the noble cause of the Labor Party, the impact of this amendment on Australian jobs.

I join the shadow minister for trade in his belief that the government does not intend for this to be the outcome. I could be generous in that assumption, but I do not think that it intends to have this loan facility enable Australian jobs to be offshored. But there is a danger in that because the only test that will be applied, in terms of the economic impact on Australia, is no net job losses. That sounds fine and dandy and that sounds like it means that there will not be job losses, but let me give you a scenario of where a truck could be driven through that hole.

If a company, Bank X, has two separate expansion plans and they access an Efic loan to set up a call centre in the Philippines, which is actually transferring a call centre that currently exists in Australia, they could satisfy the no net job losses by having another economic activity being established at that time or expanded at that time that produces roughly a similar amount of jobs. They could get an Efic loan to offshore Australian jobs as long as they were starting or expanding another economic activity at the same time. They would potentially satisfy that test, but we would have Australian taxpayer resources being used to offshore Australian jobs.

That is why the Australian Labor Party, the opposition, has a concern about the potential unintended consequences of the second amendment, especially when you look at the definition of 'Australian export trade'. 'Australian export trade', to qualify for the soft loan in these purposes, is defined as 'any transaction involving a benefit flowing directly or indirectly from overseas to a person carrying on a business or other activities in Australia'. So something as obscure as an indirect benefit to an Australian entity is enough to qualify for a loan. That is, I would submit, quite wishy-washy, and that is why the opposition is proposing three direct amendments that improve the bill, which on the whole is trying to add to the operational effectiveness of Efic.

The first one is around an Australian jobs test. The Australian jobs test that we would submit—and we will move an amendment along these lines in the Senate—is that the investment must lead to jobs growth in Australia. It cannot just result in no job losses; it must actually increase the number of jobs in this country. That is incredibly important. When I go back to my electorate of Shortland in the Lake Macquarie region on the Central Coast and I talk to people on low incomes who pay tax, they say to me that they do not mind paying tax as long as the money is used appropriately and effectively to advance our national interest.

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