Katie Allen (Higgins, Liberal Party) Share this | Hansard source

I rise to support the current Export Market Development Grants Legislation Amendment Bill 2020. This longstanding reimbursement scheme provides financial assistance to Australia's small and medium enterprises, SMEs, and encourages them to create, develop and expand export markets for Australian goods, services and intellectual property. I sit on the Joint Standing Committee on Trade and Investment Growth and we've heard from a variety of exporters how important this grant is to their survival and also to their sense of innovation and how it provides them with assistance in the early stages of trying to get off the ground. We know how important being an exporting country is to our future. We understand that we need to increase diversification of our trading assets and diversification of our trading partners. That is what the two inquiries the Committee on Trade and Investment Growth has been looking at during the course of this year and the last part of last year.

This bill establishes an entitlement for eligible exporters which reimburses recipients up to 50 per cent of eligible export promotion expenses above $5,000, provided the total expenses are at least $15,000. It also provides a wide range of expenditure that is eligible under the new scheme, reflecting the different ways that different businesses approach different markets. The Committee on Trade and Investment Growth heard from a diverse group of exporters. I am a medical researcher and I know how difficult it can be to predict the future when you are trying to develop something for a commercial market. It's important that we have a flexible approach to ensure that companies can deal with developing their business in a way that suits their needs. Importantly, this bill also provides SMEs access to multi-year entitlements, reflecting the time to build a presence in the market, and it provides funding certainty and confidence. Again, I reflect on my time in medical research and how important having those multi-year agreements can be with regard to long-term certainty and planning. This funding certainty has never been more important for our SMEs who rely so heavily on this grant for the innovation, particularly in this post-COVID environment we are finding ourselves in.

I recently met with local constituents, Tom and Belinda, who together own an export business which has been growing for 13 years. Tom and Belinda took over from Tom's father three years ago and they have watched their company, Sandilands Export, go from strength to strength. They have also been pivotal in helping other Australian businesses take their products and services to the world stage. They achieve this by helping businesses obtain and maximise the export market development grants. Tom and Belinda, like many exporters, want less red tape, as additional paperwork is an added expense to their business and is far more onerous to the applicant.

Our government has conducted a review of the financial assistance to SME exporters. It was conducted by Anna Fisher of Zonte's Footstep, a wine exporter and former recipient of this funding scheme. Anna knows exactly what is required when it comes to using these sorts of reimbursements to help grow business. This review examined the effectiveness of the scheme and the efficiency model for delivering financial assistance for Australia's SME exporters, to encourage additional export development and promotional activities.

I always love a review, because it is about engaging with those people who are in the scheme rather than just applying what we think is going to work. The review involved extensive stakeholder consultation with over 5,000 participants, including peak body engagement. This provided invaluable feedback about the EMDG. The review received 158 submissions and found that, while the EMDG is valued by SME exporters, its administration was too complex and needed simplification—exactly what my constituents have been calling for. Again, I have been involved in the grants process, and you can spend a lot of time filling out paperwork when actually what you want to do is get on with the business of doing business.

The government has responded by changing the EMDG from a reimbursement scheme to an eligibility based grants program, to encourage export ready businesses, like the one in my electorate who will now be able to access new markets, increase their exports and expand. This is what we need to grow as an economy going forward in the post-COVID world.

The review also found, not surprisingly, that each SME's export journey is entirely unique, meaning that financial assistance needs to be tailored along the way to accommodate their changing needs. We know that, as businesses change, their needs change. The review recommended that the EMDG be re-targeted towards exporters with a turnover of less than $20 million at three stage of their export journey, and that the EMDG targets those exporters who are ready to take their business overseas for the first time, those that are growing and those that are undertaking a strategic shift. We know that this is so important. We don't want flatlining businesses; we want businesses that are looking for opportunity and growth. We want to take businesses from good to great, rather than just investing in businesses that are not necessarily going places.

The review presented a persuasive case for the need to better target EMDG funding towards those SMEs who can make the best use of public money. Additionally, the review also found that businesses don't always require government funding to help them through the export journey and that in fact large exporting businesses saw EMDG funding as nice to have but not essential and that it was not an incentive to invest in more export promotion activity. It was found that, for exporters with a turnover of $20 million and over, the EMDG payment was equivalent to less than 0.15 per cent of their total revenue. Hence, our recommendation is that SMEs with a turnover of under $20 million receive the assistance in order to ensure that this taxpayer funding is best targeted where it will have the greatest impact. Importantly, this will also provide industry associations the assistance they need to help support their members who haven't been export ready to become so.

The Morrison government has accepted in principle each of the review's recommendations, and this bill implements those recommendations. Under this bill, the current EMDG design features and principles have been preserved, including assistance being focused on export market development and promotion; the establishment of an entitlement for eligible exporters; providing for a wide range of expenditure to be eligible, reflecting the different ways that businesses are approaching their markets; and importantly, the multi-year entitlements. But the principle that SMEs must have skin in the game is intact and fundamental—again, we know that if you want to teach someone to fish you give them a fishing line but it's important that they also place the bait on the hook. This will help them receive their proportion of their eligible expenditure. We will also continue to subject the EMDG to continual evaluation—something I think is very, very important—so that we make sure that people are complying with the required processes.

In conclusion, the Export Market Development Grants Legislation Amendment Bill 2020 makes sure that support and assistance to SMEs is targeted and stream lined; that we cut down on red tape; and that we help these businesses which are open, flexible and, most importantly, growing in the export market. As we go forward in a post-COVID world, we want to make sure that these businesses help us to grow our economy for a better future for all Australians.

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