Mark Coulton (Parkes, Deputy-Speaker) Share this | Hansard source

I move:

That this House:

(1) acknowledges the important contribution that the Export Finance and Insurance Corporation (Efic) makes to supporting Australian exporters;

(2) notes the recent passage of the Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2016 through the Parliament with bipartisan support, helping Efic keep pace with Australia’s changing exports; and

(3) commends the Government for issuing a new Statement of Expectations for Efic, re-enabling it to support onshore resource projects, and related infrastructure.

Efic is focused on the export finance needs of Australian exporters, especially the needs of small and medium-size exporters. This focus is paying dividends. Efic has provided around 260 small to medium enterprises with over $350 million of financial support in the last three years. Total exports supported from these projects had a value exceeding $1.8 billion. Efic's mandate is to operate in the market gap when the private sector is either unwilling or unable to finance otherwise commercially viable export transactions, and it is quite often the newer, emerging businesses that struggle to find that finance when they need it.

We all know this happens a lot in the small to medium enterprise sector. But SMEs are not the only group that sometimes suffers from a market gap in the availability of finance. In September 2017, Minister Ciobo announced changes to the mandate of the Export Finance and Insurance Corporation, Efic, to permit Efic, Australia's official export credit agency, to support a wider range of Australian exporters. Now, subject to careful consideration, Efic is able to once again support onshore resource projects and related infrastructure where there is a demonstrated market gap in the availability of private sector finance. This is a reversal of a ban applied in the previous statement of expectations issued in 2014, which prevented Efic from funding onshore resource projects. Back then the decision was to rule out resource-related onshore lending by Efic, a decision which was taken in the context of the time, when bank lending for resources was strong. There was a risk of Efic competing with and crowding out private sector banks in projects that the market would fund anyway.

But times have changed, and there is an increasing number of resource projects in some market segments facing difficulties obtaining private market finance for otherwise viable projects. Quite often, when thought goes to what sorts of projects, the Carmichael coal mine in Central Queensland is the one that comes to the fore, largely due to the promotion of the issue by the extremist groups and others. But I would like to draw the House's attention to a project in my electorate at Dubbo, which is the Alkane Resources project. It's a rare earth project that will provide products that are very, very useful in modern industries—in renewable energy, IT and defence. The project is around the minerals zirconium, hafnium, niobium and other rare earths. This project, which has a 70-year life span, will have between 300 and 400 jobs in construction for 18 to 24 months. It creates 250 permanent jobs, most of them locally sourced. That is approximately $50 million per annum in salaries and wages. There will be royalties to the state of $9.5 million per annum plus a payroll to the state of $34 million per annum and corporate tax to the Commonwealth of $70 million per annum, as well as local council rates and community payments of around $2 million per annum. There is a lot of flow-on to other industries as well. The changes to the guidelines for Efic will mean that projects like the Alkane Resources Toongi project near Dubbo and others will be able to get that funding to get them up off the ground and, ultimately, lead to quite significant contributions to our economy. (Time expired)

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