Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education and Training) Share this | Hansard source

I rise to speak on the Export Market Development Grants Legislation Amendment Bill 2020 and, in doing so, I say upfront that Labor supports this bill. Labor supports the Export Market Development Grants because of the enormous benefit they've brought to Australian small and medium enterprises over many years. In fact, it was the Whitlam Labor government that introduced the Export Market Development Grants Act in 1974, only 46 years ago. The objective was for Australian businesses to seek out new export markets for Australian goods and services. This isn't a case of governments picking winners but a case of an astute government recognising the institutional disadvantage that can come with geography and other world factors. The scheme has received bipartisan support since 1974, albeit with different funding commitments from successive governments, and we heard from the member for Bruce about the lack of commitment from those opposite.

Over 50,000 small and medium enterprises have been supported under this scheme. The EMDG Act established a grant program administered by Austrade. The grants provide Australian small and medium enterprises with reimbursements of up to 50 per cent of their export related marketing expenses. Currently, the level of reimbursement to an SME is uncertain and can vary from year to year, depending on the demand for the scheme and the size of the appropriation. Sadly, there can be delays of up to two years for SMEs to receive reimbursement, and the level of reimbursement is unknown until after promotional activities have been completed. As anyone who has spoken to SMEs knows, this can be when money is most crucial.

The government commissioned an independent review into the administration of the Export Market Development Grants scheme in October last year, the Fisher review. It recommended that government continue to provide financial assistance to SMEs to encourage them enter and grow export markets. The Fisher review was made public in September this year and made 10 recommendations to simplify and streamline the scheme to deliver financial assistance to SME exporters in the most effective and efficient way. This bill implements those recommendations.

In essence, the EMDGs will change from a reimbursement scheme to an upfront grants program, to provide certainty to exporters. The Export Council of Australia told the Senate committee that conducted the inquiry:

This will be particularly helpful under current global trading conditions. SME exporters will not have to wait for as long as two years under present arrangements, especially for activities that go for multiple years. This will provide some element of certainty in SME exporters' planning in the future.

The Fisher review recommended that grant recipients be export ready. The bill removes the export performance test and the requirement that recipients have a prospect of success, replacing them with the requirement that recipients either are ready to export or have already exported their products.

The Fisher review also recognised that SME exporters have changing needs that reflect their export journey. The report said:

There are stages in an SME’s export journey where financial assistance is most likely to encourage additional export promotion activity. At other times, SMEs benefit more from information and education or tailored support, equity funding or export loans.

Encouraging diversity in trade relations has never been more important than it is right now, with our No. 1 trading partner effectively putting the Australian government in the freezer.

The year 2020 has thrown us many curve balls—COVID-19 being the most obvious—but adapting to our new reality has required some creativity. Austrade told the Senate inquiry:

COVID-19 has fundamentally changed the global business operating environment and made life very challenging for Australian exporters of goods and services. The COVID-19 pandemic has continued to cause major economic disruption and uncertainty worldwide, which is likely to remain for some time.

Austrade will continue to support exporters through these disruptions. A modern, streamlined EMDG program providing upfront funding certainty, allowing businesses to plan with confidence, is key to assisting SME exporters to recover from the effects of COVID-19 – and grow the number of SME exporters.

International travel restrictions have impacted on many SMEs and it may be some time before the world is free from these restrictions. For the tourism sector, ensuring that the scheme is flexible and that the detail of the scheme is developed through the rules and administrative guidance will be crucial. We know that this is an industry that has been hammered particularly hard.

Planning for anything in 2020 has been challenging for exporters; planning a marketing program a couple of years in advance is almost impossible in the current circumstances. It is a weird world where, as we've heard from other speakers, the trusted has become the estranged and where FTAs trumpeted only a decade ago, such as the China free trade agreement, are now, some might say, not worth the paper they're written on. It is proposed that exporters will identify their broad plans. Details will only be relevant for milestone payments rather than the initial grant application.

Technology startups are obviously already operating in a very fast-moving world. One of the submitters to the Senate inquiry pointed out that some SMEs who work in the online world are born global right from the word go and that for them new markets is a very old concept. Austrade clarified in the Senate inquiry that, for born globals, the parameters of an export-ready business will be applied flexibly. They said:

Establishing export-readiness will not preclude 'born global' businesses from being eligible for the EMDG program. Export-readiness does not mean that applicants will need to have established customers in Australia.

That's good news for a lot of those tech startups, particularly in the valley and around Brisbane. We need to encourage SMEs to create, develop and expand export markets for Australian goods, particularly coming from agriculture and mining. But could I stress that even in agriculture and mining we should value-add to the goods. I'm the son of a butcher. I'd much rather export processed meat than live cattle. My fundamental position is that we should always be value-adding and creating jobs in Australia. We should value-add to the services of the future, the intellectual property, the know-how and all of those things much more carefully.

Obviously exports are important for Australia. In 2018-19, exports represented 22 per cent of Australia's GDP, contributing $419 billion of Australia's nearly $2 trillion economy. Exports have grown over the past five years at 5.4 per cent per annum. That's double the rate of the Australian economy. Companies that export, by their very nature, are competing with companies around the world. They need to use the most modern technology and the best business practices. Exporters are 40 per cent more productive than non-internationalised businesses, according to international studies. The Department of Industry, Innovation and Science said that on average Australian exporters employ more staff, pay higher wages and achieve higher labour productivity compared to non-exporters—three things to take note of. Whether an SME makes a conscious decision to export or is an accidental exporter, there are benefits for the SME, benefits for the workers and benefits for Australia.

I particularly want to make this point in praise of the member for Fairfax. I worked with Ted O'Brien on the report From little things big things grow: supporting Australian SMEs go global, a report handed down in February 2019. We toured all around the country talking to SMEs about the opportunities to export more. It certainly came up for me that one of the greatest assets Australia has is the fact that we are the most multicultural country on earth. We came to my electorate of Moreton and had part of the hearing in my electorate office at Sunnybank. Recommendation 10 in this report says:

The Committee recommends that the Australian Government commissions an audit into the untapped human capacity of Australian nationals living and working overseas and Australia's multi-ethnic diasporas living and working in Australia and their related chambers and associations with a view to formulating a strategy to unlock that capacity to advance Australia's interests, including opportunities for Australian small and medium enterprises.

I segue from that to the fact that Chinese people have been arriving in Australia for 202 years. We have almost a million people in the Chinese diaspora, some with connections going back a couple of fortnights; some with connections going back 202 years. There are all sorts of people with connections to Australia, who love Australia, who have roots that extend back to the Middle Kingdom. For the government to make this trading situation worse is something that is hard to forgive. Before coming up to speak, I saw that the ABC is reporting that honey producers, fruit producers, vitamin producers and dairy producers are on high alert in terms of being put in the freezer with China. We know that we need to get this relationship right. The reality is that the Liberal-National coalition are in their eighth year in government. They've been dealing with one Chinese leader, President Xi, for that entire time. They've seen our trade connections become much stronger but also much more dependent on China.

This government needs to make sure we have the best possible settings. We know that they should be calm and strategic and focus on our national interests. Part of that is surely jobs. We know that our wine makers, our barley farmers, our crayfishers, our coalminers—the Australian coal sitting in the 80-odd ships off the ports of China—our meatworkers and all the people who work hard for the good of this country, who create jobs and create wealth for this nation by sending products overseas, deserve the government to be calm and strategic.

We've seen too much focus on announcements rather than on what's best for this nation. I know that the government think that they have our national interests at heart at all times—and we obviously are proud Australians—but we need to be strategic. I hope that the Prime Minister is getting the best possible advice, rather than just going for a quick photo opportunity, a quick presser, a quick grab, a quick headline, and that he's taking a longer-term view of dealing with the Chinese. There's a saying that politics is 'the slow boring of hard boards', and good diplomacy makes that possible. It means that we listen to our diplomats around the world. They make sure that they understand the longer game and the more complicated aspects of our relations.

China understands this. China knows how to play a long game. It's been playing a political game for 5,000 years or so. We need to make sure that we put our trade relationships and our relationship with China on the best possible footing. I know that that can be difficult. It was 49½ years ago that the then Leader of the Opposition, Gough Whitlam, went off to China on a Labor Party delegation with Tom Burns, the president of the party, and Mick Young. It wasn't a trade delegation because they weren't a part of government. They went off to make a connection with Beijing. That was risky, and they were pilloried and attacked by the government of the day for doing that. But from those connections we set up a great trading relationship that has flowed for 49½ years—all because of the adventurous task that was undertaken by the Labor leader at the time, Gough Whitlam.

I was at events on the weekend with the Chinese diaspora. I assured them that calmer heads would prevail. There is much trepidation. A lot of people from that diaspora have had their businesses hammered—people dealing with international students, trading businesses. They are worried, and I assured them that calmer heads would prevail. I hope that this is a time when the government will step up and, rather than go for that quick presser, will press on with what is in the nation's interests.

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