Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

At the outset, I must say that the coalition has grave reservations about the Export Market Development Grants Amendment Bill 2013, but, due to the disastrous budget mismanagement of this government, we do not believe that we can oppose this bill, which is principally designed to cut the level of funding for the Export Market Development Grants Scheme, because this is a savings measure. However, we do condemn the government for this outcome, and I will be moving a second reading amendment which notes that the coalition, should we be elected to government, commits to reviewing the changes in this bill to establish their true budgetary and administrative impact on business, especially small and medium enterprises, who need the support of this scheme in order to grow their export oriented businesses.

The changes proposed in the bill are to implement the recent Mid-Year Economic and Fiscal Outlook decision to deliver annual savings of $25 million. That is how dire the budget situation has become. This government, which has run up over $260 billion in gross debt, now has to look for savings in the order of $25 million a year out of this scheme. The EMDG Scheme, administered by Austrade, partly supports the export promotion expenses of eligible enterprises in order to boost exports, to grow our economy in Australian produced goods and services. Claims are reimbursed retrospectively for expenditure incurred in the previous financial year pro rata up to the cap. My understanding is that about 5,100 enterprises per year apply for grants. Prior to now, the scheme has been capped for many years at $150 million per annum, except in 2008-09 and 2009-10, when a $200 million cap applied.

According to the government, the changes in this bill will better help Australian exporters maximise the potential of the Asian century by increasing the number of grants available in East Asian and frontier and emerging markets from seven years worth to eight years. The government believes that this offers Australian small- and medium-sized exporters a slightly longer and more commercially realistic period to become established in these markets. However, to offset the additional grant expenditure associated with an increased number of grants to East Asian and emerging and frontier markets, the number of grants to the United States, Canada, the United Kingdom and the European Union is to be reduced. I believe that the 21st century should be known as 'the global century' and that Australia, as a global nation with global interests, should not only be looking to East Asia but also be continuing to pursue opportunities for our exporters in established markets. The government argues that in those markets the Australian brand is already well known and accepted and small businesses would typically face fewer barriers to doing business.

The bill provides for the reduction in the number of grants for these markets from a maximum of seven years of annual grants to only five years. So, in effect, the Minister for Trade and Competitiveness is telling Australian exporters that he knows how to run their businesses better than they do. He knows through who knows what business experience that the US market is bad but the Asian market is good. The fact is that the minister for trade does not have a clue. If the minister for trade thought the Asian market was so vital, why did he do virtually nothing to stop the government's disgraceful ban on live cattle exports to Indonesia? The government claims that it is seeking to introduce this bill now to avoid creating considerable uncertainty for small businesses as they adjust to the new arrangements which become operational on 1 July 2013.

The coalition has consulted key stakeholder groups, including the Australian Chamber of Commerce and Industry and the Export Council of Australia—both oppose the expenditure cut and have asked that the coalition oppose the bill. We have agonised over this decision because we agree with them that the EMDG scheme under a competent government is a fine scheme and it has helped Australian exporters over many decades, and we believe it should not be cut in this way. However, recognising the dire state of this government's upcoming budget, recognising the dire state of the debt situation that this government has plunged Australia into and in the interests of our wider budget management policy, it is felt that we cannot oppose the expenditure cuts. But we note that this is yet another blow to business caused by the budget mismanagement and fiscal recklessness of the Gillard government.

When in doubt a Labor government will default to kicking the business community. The former trade union bosses and their lawyers who form the Labor Party just do not get business, especially small business. Labor cries crocodile tears about job security, but does not acknowledge or appreciate that it is the business community that is the engine room for job security—the businesses that take the risks to find new markets to grow their businesses. It is business that employs workers and creates and provides jobs. So, this blow to the EMDG scheme is just another example of Labor not understanding business and its needs. It is fair to say that since 2007 Labor has made a complete mess of the EMDG scheme. Soon after taking office Labor expanded the scheme by lowering the eligible expenditure threshold from $15,000 to $10,000, increasing the number of grants from seven to eight and increasing the maximum grant from $150,000 to $200,000—all well and good, if you can believe them. The cost of these changes was estimated at $50 million a year, but then—and this is the key—Labor increased funding only for the year 2009-10. So, in June 2010 Labor then amended the scheme to essentially reverse the 2008 implementation of its election commitments. Why should we have been surprised?

In the past the coalition has made commitments to increase the funding levels of the EMDG scheme. We believe it is a good scheme. While this remains a long-term goal, we believe the export sector would benefit more from a coalition government making its first priority the abolition of the carbon tax, then the mining tax, the reduction in Labor's debt and the reversal of Labor's fiscal mismanagement. In terms of the detail of the legislation, I am advised that industry representatives have various concerns about the potential exclusion of some types of activities—for example, the promotion of musical concerts. While these are a matter for debate, the bottom line is that many of these exclusions would appear to have been made because of cost cutting. The principal change that has attracted most attention is the cutting of grants available to established markets like the United States, the United Kingdom, European Union and Canada with some of the savings used to fund increased grants, principally in the East Asian region. The rest of the savings go to consolidated revenue, although we do not have a breakdown on the composition of that—so, again, another warning sign.

The Australian Chamber of Commerce and Industry argues that there is no credible commercial analysis provided that shows that the EMDG money spent on established markets is any less valuable than that spent in emerging markets. I agree and the coalition agrees that it should be up to Australian business to exploit markets according to commercial realities, rather than bureaucratic whim. The minister who introduced this bill, the Minister for Trade and Competitiveness, has one of the worst track records of any trade minister in modern history in terms of achieving for exporters. There has barely been any progress at all in trade negotiations by this minister. He has cut the vitally important EMDG scheme. He stood by idly when the Gillard government trashed our trade relations with Indonesia over the live cattle export fiasco and trashed our reputation as a trusted and reliable trading partner. The Australia-China Free Trade Agreement has barely moved from the starting point of negotiations that occurred under the Howard government in 2005. New Zealand also started negotiations with China in the same year and concluded their free trade agreement by 2008. In particular there has been stalled progress with respect to the free trade agreement with South Korea. Again, where is the practical concern with boosting our trade with Asia, when the government cannot finalise an agreement with one of our friendliest trading partners?

The National Farmers Federation has been particularly vocal about this export issue. Last week, along with representatives of the Cattle Council of Australia, the Australian Meat Industry Council and the Australian Lot Feeders Association, the President of the National Farmers, Mr Jock Laurie, said:

Australian beef producers stand to miss out on $1.4 billion in exports to Korea because of our stalled free trade agreement.

He went on to say:

… the threat to other agriculture exports like wheat (around $350 million) and dairy (over $100 million) was also pronounced.

Further he stated that:

Total losses to Australian agriculture could run into the multi billions of dollars. Australian farmers are losing out in a major way while ever we don’t have an FTA with Korea and our major competitors like the USA do.

The beef industry provides a classic example. The National Farmers Federation notes that:

Under the current arrangements, Australia’s $645 million annual beef trade with Korea is subject to a 40 per cent tariff.

However, after signing a Korea-US FTA, United States beef is subject to only a 34.6 per cent tariff, 5.3 per cent less than Australian beef. But the differential will become massive as time goes by since US beef exports to Korea will be completely tariff free by 2026.

This government has publicly admitted that a key sticking point is its unilateral veto of what are called investor-state dispute settlement clauses. The Howard government used the potential inclusion of an investor-state dispute settlement clause as a negotiating position for bilateral agreements and so such clauses were included in some of Australia's FTAs concluded under the Howard government, as well as in the one with ASEAN and in the free trade agreements with Chile, Singapore and Thailand. But they were not included in others—for example, the FTAs with the United States and New Zealand. Inclusion of such clauses should be considered on a case-by-case basis.

It is true to say that the Australian business community does not have a united view on the matter. However, in 2011 the Gillard government stated that they were opposed to investor-state dispute settlement clauses, despite the previous inclusion of such clauses in the Chile and ASEAN agreements finalised since 2007. In contrast, the coalition remains open, as a negotiating position, to including ISDS clauses. The fact is that the EMDG cut is just another blow in the general mismanagement of our export trade.

We are also concerned by the extra regulatory burden which will be placed on exporters by the changes to the EMDG scheme. Should we be elected to government, we are determined to cut red tape and overregulation. This bill is just another example of this government making changes which will lead to additional red tape and regulation.

In conclusion, therefore, I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House:

(1) condemns the Government for breaking its 2007 election promise to increase spending on the Export Market Development Grant (EMDG) scheme and instead cutting the program over the course of the last 5 years;

(2) notes that the cuts to the EMDG scheme:

(a) are directly due to the budget mismanagement of the Government and its wasteful expenditure policies; and

(b) represent further evidence of the Government’s inability to understand the plight of Australian exporters as they meet huge challenges in the quest to build their international markets;

(3) expresses concern that the Government has introduced increased red tape in the administration of the EMDG scheme when what is required across the Government is a reduction in red tape; and

(4) recognises that the Coalition, when in government, commits to reviewing the changes in the bill to establish their true budgetary and administrative impact on business, especially small and medium enterprises.”

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Is the amendment seconded?

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

I second the amendment.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I support the Export Market Development Grants Amendment Bill 2013. Having listened to the Deputy Leader of the Liberal Party's arguments and her reasons for putting forward her amendment, I am not at all persuaded by them nor do I believe they are worthy of the support of this House.

The Export Market Development Grants scheme is an Australian government financial assistance program which assists and encourages small- and medium-sized Australian businesses to develop export markets by reimbursing up to 50 per cent of eligible export promotion expenses above $10,000, provided that the total expenses are at least $20,000. To date, the program has provided up to seven grants to each eligible applicant. To access the scheme for the first time, businesses need to have spent $20,000 over two years on eligible export marketing expenses. To be eligible, the Australian business must have income of not more than $50 million in the grant year and must have promoted the export of goods—most services also qualify—the export of intellectual property and know-how, inbound tourism or conferences and events held in Australia.

There are eight key provisions of the Export Market Development Grants Amendment Bill 2013. The first is to increase the maximum number of grants to eight. The second is to exclude expenses relating to the promotion of sales to the markets of the USA, Canada and the European Union in grant years six, seven, and eight for all applicants except approved bodies. The third key provision is to remove the limit on administrative expenditure from the legislation and introduce a power for the minister to set the limit on administrative expenditure by determination. The fourth is to prevent further approval of joint ventures after 30 June 2013. Fifthly, the provisions of the bill remove event promoters from the EMDG scheme. Sixthly, the provisions of this amendment bill prevent the payment of grants engaging an EMDG consultant who has been assessed to be not a fit and proper person. The seventh change will enable a grant to be paid more quickly where a grant is determined before the l July following the so-called 'balance distribution date'. Lastly, the bill will require applicants to acquit claims by individually paying for claimed expenses.

The government's white paper, Australia in the Asian century, makes very clear the importance of Asia in Australia's future and the opportunities that Asia's development in the 21st century holds for Australia. In recent years the pace of growth and change in the Asian region has been nothing short of phenomenal. According to the white paper, in the past 20 years China and India have almost tripled their share of the global economy and increased their absolute economic size six times over. By 2025, the region as a whole will account for almost half of world output.

The white paper also takes a close look at what Asia's future means for Australia and at the opportunities for us in the years ahead. As an advanced economy with expertise in so many areas, including education, construction, business, entertainment, tourism, health and the environment, Australia is extremely well placed to strengthen its ties with Asia. It is in Asia and developing countries in other parts of the world that our future markets lie and that is where Australia should focus its efforts. The government recognises that and so do Australian businesses—it is an obvious reality—and that is exactly what this legislation seeks to do.

Asia has a population of around four billion and it is already a market we should be tapping into much more than we have done to date. We have good links with Asia, established as a result of not only our proximity to many Asian countries but also the links that we have formed with many Asian countries—links that will hold us in good stead when we want to do more business with them in the future. These links result in two-way trade, and they are links that the Asia white paper quite properly says our future should be based on. Our future lies in Asia and the emerging countries, because the people of those countries are wanting to bring their standard of living into line with those of advanced economies. That is where the opportunities will lie. Those countries are the ones that will be wanting to tap into the expertise that already exists in Western countries and in particular the expertise that exists in friendly Western countries like Australia.

This is well understood by business in Australia. In my own electorate, I frequently speak to business people who are already doing business in Asian markets but who are looking to expand their business. On many occasions they have come to my office to seek assistance to further their business in Asian markets and in the Asian countries we have relationships with. For many small- and medium-size businesses, who do have great ideas and who see obvious opportunities in Asia, without assistance their ideas will never be put into practice. Many of the people I speak to need assistance and they come to my office to see what assistance is available from the government. The Export Market Development Grants Scheme is an ideal way of providing that very assistance so that they can bring their initiatives to fruition.

I have no doubt at all that this legislation, and the scheme more broadly, has been welcomed by the business community. Those who say that it is wrong for us to cut back the focus on the USA, Canada and Europe are short-sighted. The reality is that business in Australia today has limited opportunities in those places, for many reasons and not the least of which is that those countries do not require the kinds of services that I alluded to earlier to the same extent as the emerging markets do—and those emerging markets are best located for us in the Asian area, as well as other places in the world where developing countries are looking to prosper.

The amendments contained in this legislation ensure that the Australian people—Australian businesses—get the best return for the public funds provided by the government under this program. The Australian people will get the best returns because the best return for their funds is gained by focusing on the emerging opportunities in the Asian market. As I said a moment ago, this focus will benefit the very businesses that are seeking to access those funds.

My understanding is that there will be a saving of about $25 million per annum as a result of these changes. Frankly, the government is responsible for the expenditure of public funds and it ought to use those funds prudently. If we can manage funds better and still support business, then quite frankly we should be doing so. Reviewing legislation such as this on a regular basis is simply part of being a prudent government. I understand that in 2012-13 over 3,000 claims have been made under this scheme, and I understand that about $125.4 million has been allocated in the current budget. Those are not insignificant amounts of money, and those funds will assist Australian businesses.

In more recent weeks I have spoken with businesses in my electorate who have brilliant ideas—in some cases they are brilliant inventions—and they are simply seeking some support and assistance to get those ideas and inventions out to the wider market. These are inventions that will be embraced and adopted particularly in those countries that we refer to as the emerging or developing countries. Yet, these businesses are quite often restrained by a lack of financial support. This program is the kind of program that provides them with the right sorts of support and certainly it is the kind of program that will enable them to send their ideas offshore. The people offshore also benefit because they are the beneficiaries of intellectual property, knowhow or whatever it is that is brought to them as a result of someone's idea here in Australia.

Lastly, the Deputy Leader of the Liberal Party in her remarks alleged that these amendments mean more red tape. As I said earlier on, it is incumbent on any government to ensure that public funds are spent wisely, it is incumbent on any government to ensure that no-one rorts the system and it is incumbent on any government to ensure that taxpayers get the best possible value for their dollars. Cutting out people like promoters—promoters of entertainment events; concerts and the like—is quite reasonable. Promoters are not, in my view, the beneficiaries for which this fund was set up. As a result of promotional activity you might get some economic benefit through the impact on tourism and the like, but, frankly, I believe there are much more worthy and much more deserving areas where these grants should be applied, and the decision by the government to tighten the rules in respect of some of those matters is quite appropriate. I commend the legislation to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to support the amendment moved by the shadow minister for trade, the member for Curtin, to the Export Market Development Grants Amendment Bill 2013. It has long been said that Australia is an exporting nation, and this has never been more obvious than in Western Australia. According to state government figures, Western Australia contributed $122 billion of Australia's merchandise exports in 2011-12, a rise of five per cent on the previous year. This equates to 46 per cent of this nation's exports, which exceeds the combined contribution of New South Wales, Victoria and Queensland. So it is a significant export effort. Trade accounts for 53 per cent of Western Australian's gross state product, with the great majority, over 90 per cent, coming from the mining sector. However, the state is also a major agricultural exporter. In 2010-11, Western Australia produced over $6 billion of agricultural, fisheries and forestry merchandise, and, of this, $5 billion worth was exported. The vast majority of these products are going to Asia, due to Western Australia's natural geographical competitive advantage—its proximity to those Asian markets. With these key figures in mind, it must be obvious even to the most parochial eastern state members in this House that Western Australia is in fact an export powerhouse.

It is for this reason also that export assistance needs to have a Western Australian focus and create further opportunities. It is easy to be fooled into thinking that the west has only large multinational mining companies which are readily able to do their own marketing. Indeed, it might seem that our mining companies actually sell themselves—I know that some on the other side think this. There are, however, many smaller players, in a range of industries, that certainly deserve the support of the government.

The south-west of Western Australia, in particular, is an area of innovation and industry. Whilst we have a number of those same large exporters, such as Worsley Alumina, we also have a broad range and a large number of small suppliers exporting a wide variety of products. As I know well, the south-west, with a $16.8 billion regional economy of its own, is an economic engine room for the whole nation. The region derives most of its wealth from the mining and manufacturing sectors, which, latest figures show, produce $1.6 billion and $2.7 billion respectively. It is also a major exporter of agricultural products, as I said, from beef and dairy—some of the best dairy products in the world—to the finest of Margaret River and Geographe region wines. Some of these have found niche markets for their high-quality products, and it is this group that needs and deserves support. They are out there doing the hard yards. They are small businesses, frequently.

I note that the explanatory memorandum to this bill tells us in the outline that the bill 'helps achieve savings of $25 million per year'. However, the explanatory memorandum also notes, under 'Financial Impact':

Expenditure under the Act is set through annual Appropriation acts. A capping mechanism ensures that expenditure under the scheme is limited to the amount appropriated.

They are conflicting statements. That really tells us, the readers, that the government has once again engaged in what you could only call a surreptitious slashing of funds—and this time it is actually of industry support to those same small businesses that are seeking an export opportunity.

As was acknowledged at Senate estimates, this is another attempt by the Gillard government to hide the real budget position it will face in May. It is duplicitous of the government to attempt to hide this slashing of funding and to sanitise the explanatory memorandum. This bill is not about enhancing exports. It is not. It is about saving the government dollars at the expense of those same very innovative and keen Australian exporters that just need a bit of a hand along the way. This is at a time when the world remains almost on the edge of an economic precipice and when the value of the Australian dollar is crucifying Australian exporters. It is tough out there, and I do not know what the Australian government expects. If you are an exporter, it is a tough market. If you are an agricultural exporter, it is an even tougher market.

I saw some recent forecasts about the future of agriculture and agricultural exports, and they predicted even tougher times than we have now. I am concerned, as you would be, Mr Deputy Speaker Scott, for the future of a lot of those exporters and the growers that supply them. I also noticed last week the economic forecasting by the Australian Bureau of Agricultural and Resource Economics and Sciences that indicated the Australian dollar is expected to stay at current levels—a particularly high level of at least US104c—and not return to parity until 2018. If that is not a great example of the pressure that Australian agricultural exporters are under, I do not know what is. Everyone in this House needs to think again, including the government, because, if this scenario proves to be accurate, the export sector in Australia is in for very rough times until 2018. The ability of both Europe and the US to survive their respective impending debt disasters will also have long-term impacts on the value of the exchange rate.

Now, there are optimistic economists demonstrating perhaps a bit of hubris at the moderate improvement in budget deficits in both of those areas, but the realist economists still recognise that those budgets are not actually in surplus but just a little bit less in deficit. This is the reality, and that tells us that the Australian dollar is not likely to weaken anytime soon. It is also a reality that this global generation generally continues to almost binge on debt. Those on the other side do the same thing. We heard today, in the debate on the MPI, about the government's $300 billion debt—the debt ceiling. Let us wait and see what is in the next budget. Government spending is increasing the burden on the next generation—spending today is taxing tomorrow. This government is leaving debt and deficit for the next generation. The next generation in Europe and the US will have to pay off the debts of their parents or simply pass them on with their own added debt to some future generation to take care of. In this parliament there has also been a passing on of intergenerational debt, perhaps for the first time in this nation's history. That is an indictment of this government.

Australian exporters may recover if the US dollar improves, but there is another element of the export debate that needs to be addressed here in the House today. It is the failure of the government, through Austrade, to adequately enhance the export capacity and opportunity of Australian manufacturers and producers. It should be core business for Austrade to help our small businesses into the markets. Austrade has a number of workers both domestically and overseas who are struggling with poor resourcing—and poor leadership, in some senses. The bill before the House does not improve this situation; it makes it worse. Another $25 million cut from services currently provided is part of the government's death by 1,000 cuts of export innovation, and it is death particularly to small exporters. I—like, I would bet, just about every member in this House—have had such exporters at my door saying: 'All we need is a hand. We need to get into these markets, but we are a relatively small business and we are doing it tough on the ground.' I think it entirely escapes this government how tough it is on the ground, particularly for food manufacturers and exporters and even more particularly for those in the agricultural sector.

Austrade appears to be too bogged down covering for the government's incompetence to do its own job properly. It might surprise the Prime Minister and the trade minister to learn that the role of Austrade is to promote Australian exports, not to promote the Prime Minister and the minister for trade. Austrade needs to promote small to medium enterprises—and even some of the bigger enterprises—not only in my electorate but also around Australia. Such businesses are investing their own money and their own expertise, and they are working overtime not just for themselves but also for their communities, for the regions and for our economy. They are alive and well in our part of the world but are doing it exceptionally tough, and often all they need is a small hand up.

A refocusing of Austrade is really urgent and essential so that our own exporters, rather than this government, can become the main agenda again. Austrade should be focused on our small to medium exporters who are out there wanting to get into the markets and provide some fabulous niche products. This refocusing is so urgent and essential because of the difficult economic times in which Austrade is operating. Austrade's job has got far harder since 2008. Things are also harder for our exporters, and we should all acknowledge how much harder they have got. The difficult economic times make it all the more important for our businesses to work smarter and to invest more wisely, and to do so some of them need assistance. Now is not the time to hang our exporters out to dry. Look at the terms of trade, look at what is happening on the ground, look how hard exporters are working and look how hard it is now that we do not have the numbers of tourists that we used to have coming to our part of the world. That is why it is important for Australian businesses to have access to export markets.

But the government is hanging exporters out to dry. It will probably take the election of a coalition government to end the rot and develop a focus on exports to assist small to medium enterprises and some of the bigger businesses. A coalition government will seek to look after the interests of exporters and innovators. We need to celebrate and support what they are doing, not celebrate and support the failing government we have here. The coalition will work for enhanced access for Australian businesses to world markets. We in the coalition understand very directly the importance of doing this work. If we are elected, we will do this work in conjunction with the private sector, and the private sector will also focus, I have no doubt, on marketing and market access.

In some sectors, both sides of the public-private partnership have abandoned the field. Both need to re-engage, and we in this place need to be part of the re-engagement. Nowhere will re-engagement be more important than in the agricultural sector. When you get out into the wheat belt in Western Australia, you see how tough farmers are doing it. There are the same challenges in my electorate. Right across Australia I see the same challenges. Farmers are finding it extremely difficult to remain viable. It is a huge challenge, as is the challenge of keeping enough young farmers coming through who have the knowledge, expertise and passion to continue doing what our farmers do so well.

We need to know what the Asian market is looking for. We know that we can produce the best quality food products in the world—we are good at it—but we also need to make sure that we have the capacity to deliver what established and emerging Asian markets are looking for. A coalition government would make sure that it sufficiently developed and supported access to these markets for Australian exporters.

This government has repeatedly failed farmers in Australia. This fact is as tangible as it could be. One of the main examples of the government's failure would have to be its actions on the live export trade. The impacts of the government's actions are being felt all up and down the chain in each state—and certainly in my electorate in south-west Western Australia. The impacts of the government's actions are major, even though the government chooses to ignore them. If you want to talk about impacts on exports, just look at the live cattle export debacle. It is just one example of how this government has failed farmers in Australia. It has also failed our food producers and food manufacturers. Australian farmers are certainly capable of delivering the products that the market not only demands but also deserves. Now is not the time to abandon Australian farmers.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Mr Deputy Speaker Scott, you come from Maranoa and know how important the Export Market Development Grants Amendment Bill 2013 is to you. I am interested that the Parliamentary Secretary for Agriculture, Fisheries and Forestry is at the table, along with the former Speaker, the member for Scullin. I also note that the member for McEwen, who is another regional member, is sitting in the chamber, listening intently to my words. I also acknowledge the member for Wright, as well as the shadow parliamentary secretary for regional health, who is also sitting at the table. He was in Wagga Wagga just last week and would have no doubt heard many farmers complaining about how difficult the terms of trade are for them at the moment. It is always wonderful to follow the member for Forrest, Nola Marino, because she is so passionate and feisty about all of these important issues, which are central to trade. I know that the members in the House at the moment all appreciate just how important trade, agriculture and Australia's future food security are.

I note how few Labor speakers are on the speakers list. That is a shame, because perhaps if we were talking about unions or public servants at risk of losing their jobs—one of those sorts of issues—the speakers list would be full. It is just a shame that the speakers list is not full with government members talking about this very important issue, because we have just heard the member for Forrest talking about just how hard and how tough our agriculture producers are doing it at the moment. The shadow minister for agriculture, the member for Calare, told us yesterday in our party room that producers are doing it tougher in some circumstances than they were at the height of the drought—and that is a problem. And it is not just a problem for them; it is a problem for the regional communities that their hard work underpins. It is a problem for our nation because we cannot sell the amount of food that we rely on to help our balance of payments figures, our balance of trade.

We cannot continue to operate this way. Those farmers, let us face it, were once the backbone of this economy, and they still keep it going. Agriculture is still such an important component. Mining may well be one of the big dollar earners, but agriculture helps our balance of payments no end, and we all like to eat food. Only last week I spoke to representatives from the Leeton citrus growers. This organisation has been going since 1942. They are doing it really tough at the moment. They have lost 150 growers in less than a decade. That is the loss of 300 wages. Their costs are now going through the roof. Their power costs are exorbitant and are not helped by the carbon tax. Their wages have not become any cheaper. The high Australian dollar is really killing them, as well as so many other agriculture producers. Bad water policy is just another thing which they are trying to contend with.

I note that the member for Wills is now the Parliamentary Secretary for Trade and has been since 4 February 2013. It is an interesting position which the member for Wills finds himself in, given the fact that he was so stridently opposed to the live cattle export trade to Indonesia when that particular issue blew up after a Four Corners program. It was policy from this government based on a television program. It was a very savage knee-jerk reaction to a television program that saw the live cattle trade stop forthwith—bang—just like that, with no thought given to the cattle producers of Australia's west or north. Indeed, as the member for Forrest just indicated, the shock waves reverberated right throughout the cattle-producing industry and even beyond it. The markets in Wagga Wagga and elsewhere in the Riverina were affected because of it. There was a fear that they would not be able to export a lot of their cattle overseas and they would see them brought south. The people who built stock crates were also affected because orders were stopped.

I am pleased to say that the shadow minister for agriculture visited Indonesia last October, along with the opposition leader and the shadow foreign affairs minister, Julie Bishop, who has an intense interest in trade and certainly in helping our trading neighbours. The highlights of that trip were the sheer untapped potential, the member for Calare said, for our farm exports—and not just those of Northern Australia. The coalition took the extraordinary step of sending a delegation of senior shadow ministers to Indonesia because of the importance that this side of politics places on our northern neighbour as a valued trading partner—not somebody to whom we can just say, 'No more cattle.' They are not somebody whom we can just bring the gate down upon with our live exports but rather somebody whom we need to be friends with, somebody who is important to us, somebody whom we need to treat like a friend. You do not treat friends in the way that the Prime Minister did when she stopped the live cattle trade.

Indonesia has been vastly undervalued as a trading partner. While every nation across the globe is trying to capitalise on the Asian boom, there are a number of obvious reasons why Australia should be trying to make the most of the opportunities that exist within the Indonesian economy. Indonesia is not in great need of our coal because it has large deposits of its own, and some people foolishly dismiss Indonesia as a trading opportunity because of this. Australia has a unique opportunity to bolster our farm sector with Indonesia. It has 237 million people literally on our doorstep. It has a booming middle class of around 50 million strong and a high propensity for consumer spending. In short, it is an ideal destination for our farm produce. Our farm produce, as you know, Mr Deputy Speaker, as the member for Maranoa, is the best in the world bar none. I do not mind saying that. I am sure the parliamentary secretary for agriculture, who is sitting at the table, would agree with me.

Sid Sidebottom (Braddon, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Hear, hear.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

'Hear, hear,' he says. Certainly that is the case. We have the best in the world and we need to protect and preserve it.

The changes proposed in the Export Market Development Grants Amendment Bill 2013 are to deliver on the recent Mid-Year Economic and Fiscal Outlook decision to concentrate the Export Market Development Grants Scheme more on small businesses exporting to East Asian and frontier and emerging markets. The MYEFO decision and associated policy changes in this proposal will deliver annual savings of $25 million.

Labor calls them savings. They really are cuts and taxes. Failed policy is what it really is, and it is having an effect in this particular instance on our trading relations. This is not the first time I have spoken today; I have spoken a number of times, and a number of times I have spoken about particular bills as being cost savings—as in the baby bonus, on which I spoke earlier this evening. Again, these are to try to help the Treasurer, our failed Treasurer, to try to balance his books. And it is not working. The Australian public are not fools; they are not buying it. The fact is that this government cannot properly fiscally manage our economy. And so many people I speak to cannot wait for the next election.

The EMDG Scheme, administered by Austrade, partially supports export promotion expenses of eligible enterprises in order to boost exports of Australian-produced goods and services, which are, as I say, so important for our balance-of-trade figures. The EMDG Scheme reimburses up to half of eligible export promotion expenses incurred by small- to medium-sized enterprises, and then the claims are reimbursed retrospectively for expenditure incurred in the previous financial year pro rata up to the particular cap. Around 5,100 enterprises per year apply for these grants. Prior to now, the scheme has been capped at $150 million per year since 1997, except in 2008-09 and 2009-10, when a $200 million cap applied.

The MYEFO decision late last year and associated policy changes in this bill are designed to deliver annual savings—again, that word 'savings'—of $25 million. According to Labor, the changes will better help Australian exporters maximise the potential of the Asian century by increasing the number of grants available in East Asian and frontier and emerging markets from seven years' worth to eight years. We all know that this is not right; this is just typical Labor spin—typical Labor claptrap. This is more policy on the run. We cannot afford, as the member for Forrest indicated, to hurt our exporters—particularly at this time, when our balance-of-trade figures are not that good, and particularly at a time when our budget is so much in the red.

To offset the additional grant expenditure associated with an enlarged number of grants to East Asian and frontier and emerging markets, the number of grants to the United States, Canada, the United Kingdom and the European Union are to be reduced. The government argues that in those markets the Australian brand is already well known and accepted, and small businesses typically face fewer barriers to doing business—and that may be so. But, even though the Australian brand may well be known, why not promote it even more? Why is it necessary to keep cutting, to keep cost-shifting, to try to balance the Treasurer's failed books? And why is it that all the time the ones who are getting hit in the neck the most are Australian farmers, Australian exporters—the people who put food on our plates and on the plates of so many foreigners as well?

The government argues that the increased focus of the EMDG Scheme on emerging and frontier markets brings the EMDGS into closer alignment with Austrade's broader trade priorities following its review in 2011 and the government's Asian century policy agenda. I will just repeat that: 'Australia's broader trade priorities'.

As to what our trade priorities are or should be: the Prime Minister only last year, in quite a groundbreaking speech, actually, in Melbourne, talked about promoting and strengthening irrigation so that we could grow more food to tap into those Asian markets, but every single policy initiative by her side of government, the government that she leads, does just the opposite. I cannot understand it, nor can the citrus growers and cattle producers, nor can those wonderful lamb producers in the Riverina, who grow the best lamb in the entire nation. They cannot understand it.

They simply cannot understand why this government is doing everything in its power to just stymie them whenever they try to develop export markets, to stymie them whenever they try to have the ability to grow more food to feed our nation and others. It is hurting our balance-of-trade figures. It is hurting our ability to do business in export markets such as Indonesia. And it is hurting our farmers' and agricultural producers' ability to make a profit.

And, when the farming sector is doing it tough, regional towns are doing it tough. You do not have to go too far into my electorate to see how tough they are doing it. Farmers are having to work at two jobs—they are having to source off-farm incomes—simply because there has been bad water policy enacted by this parliament. This government is just so bogged down in green tape. I know there has been a divorce between Labor and the Greens, but still they seem to be in cahoots with one another when it comes to policy, because so much of the policy that we see from that side of government is bogged down in green tape and so often we hear the Greens leader, Senator Milne, make the catchcry and Labor just follow suit. Their policies just follow suit, and it has to stop.

It has to stop because our farmers are the world's best. Our farmers are not asking for a handout; they are just asking for a hand up, a bit of assistance, a bit of an even go, a bit of a level playing field—something that I am sure that the parliamentary secretary for agriculture knows also. I know he has offered to come to my electorate, and I will welcome him soon to come and see for himself and to talk to the sorts of people whom I talk to, because I know he would be interested. I serve on the Standing Committee on Regional Australia, and I know the good work that he did there as the deputy chair. I know he certainly has his heart in the right place. I would certainly welcome him to come to the Riverina to hear firsthand from people. This piece of legislation is not good, and it will hurt our exporters. They are extremely valuable people. I will certainly welcome the member for Braddon to come to my part of the world, hear the sorts of complaints people have and hear of the sorts of ways forward they believe we should be adopting and the sorts of policy initiatives that his government could also be implementing to help them to make ends meet and to help them not just to survive but indeed to thrive as they should. Thank you for allowing me to make those comments, Mr Deputy Speaker.

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

I rise tonight to speak on the Export Market Development Grants Amendment Bill 2013 and also to support the amendments moved by the deputy leader and member for Curtin. Just by way of background, the export market development grants scheme is administered by Austrade and it partly supports export promotion expenses of eligible enterprises in order to boost the exports of Australian produced goods and services. It is a scheme that reimburses up to 50 per cent of eligible export promotion expenditure incurred by small- and medium-sized enterprises. Claims are reimbursed retrospectively for expenditure incurred in the previous financial years, pro rata, up to the cap. Around 5,100 firms applied for grants.

The basic provisions of this bill—and what it actually does—exclude expenses of export promotion for grant years six, seven and eight for the major markets of the USA, Canada and the European Union. It makes a tokenistic adjustment by increasing the number of grants by one year—just one year against eight—to countries of East Asia. First and foremost, this bill is simply confirmation of yet another broken promise by this Labor government. We can add this one to the long, long list of broken promises by this government. It is just another reason why the public no longer believes a word that they say and why the public has lost complete trust in anything that comes out of the mouth of any member of this government.

We will go back to 2007: this Labor government, then in opposition, promised hand on heart that they would increase—that is right: increase—funding for the export market development scheme. They told us how they understood this scheme, how it was vital for small business and how they were really going out there to help small business with their exports. In the last year of the Howard government, 2006-07, the export market development scheme was funded to the tune of $154.4 million—it was $154.4 million back in 2006-07. Come to this financial year, and we have a government that told us they would increase funding. They have not only been too lousy to maintain real expenditure, they have actually slashed the expenditure by $25 million. So this financial year, the expenditure is down to just $125 million.

This is the lowest amount of expenditure under this scheme for over two decades. It simply shows that Labor cannot be trusted with their promises, but not only that: whatever they promise, we see them doing the exact opposite. We saw them promise, 'No carbon tax.' We not only ended up with a carbon tax, but we ended up with the largest carbon tax in the world. They promised to stop the boats and we have ended up with an absolute explosion of boat arrivals. They promised to return the budget to surplus, but we just get larger and larger deficits. Here we had them promising to increase expenditure for the export market developments and what do we see? It is being slashed—slashed to the lowest levels in decades.

It is not only that, it is the hypocrisy that we have had from this government. On this bill, we have had one measly speaker from the government. I see the member for McEwan over there. Perhaps he is going to stand up and make a contribution to this bill.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

You are hopeless!

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

I think he is perhaps too embarrassed to walk around the exporters in his electorate and have to tell them that his government is cutting the funding for export development grants. What we have seen is not only the hypocrisy, it is the spin. They do not come in here and just be truthful, and say: 'Look, we have stuffed things up. We have wasted billions of dollars and we have to make some cuts.' Instead of saying that, what we get is this spin with the bill being dressed up as somehow tied to promotion in the Asian Century.

As ACCI have argued, there is no credible commercial analysis that shows export development grant money spent in the USA, Canada or the EU is any less valuable than that spent in East Asia, Africa or South America. It should be up to our Australian businesses to decide where they should spend their export marketing dollar, but those decisions are now going to be distorted by this government. It is not based on good policy or sound logic, but simply on spin. I would say, however, that there is perhaps one area in the world in which we as a nation need to increase our export marketing expenditure; that is Indonesia, following the debacle of this government's cut to the live cattle exports. Overnight, without any warning at all, they simply cut off the supply of live cattle to Indonesia. That has done almost irreparable damage to our relationship with Indonesia. If we are looking to increase our export marketing expenditure, Indonesia is perhaps one of the first places where we should start.

Not only is this spin, bad policy and broken promises: it is simply bad economics. Austrade undertook a study about the benefits of such schemes. They found that firms benefiting from export market development grants spent more on export promotion than did other exporters. In fact, they estimated that the grants payment of $156 million resulted in those exporters spending an additional $147 million on marketing. What they estimated is that that extra marketing expenditure resulted in an extra $1.4 billion of export sales. For $156 million worth of expenditure under this scheme, we were able to achieve as a nation an increase in our export sales of $1.4 billion.

But it is actually better than that because, you have to remember, the grants are taxable. When you look at the net cost after the tax subsidy comes back, you are looking at a much greater multiplier. Austrade worked out that, in most industries, a mature exporter will generate in additional exports 15 to 25 times the grants paid to them. If we want to increase the revenue of this nation—if we are looking at how we are going to pay back this mob's debt, how we are going to fund the NDIS, how we are going to fund the extra expenditure for schools and how we are going to fund the extra expenditure for hospitals—we should be increasing the expenditure under this scheme, not cutting it back to record lows as this government is doing. This mob simply does not get it.

Also, we should be out there trying to create a culture of exporting and exporters. I know from my own experience. Before entering parliament, I had travelled and exhibited at trade shows in Singapore, Malaysia and Dubai. One thing I found at those trade shows was how generous other countries are, compared to Australia, and how small our scheme is. At these trade shows we were able to find out that, rather than being given 50 per cent of their expenditure by their government as Australian firms were, the companies from the UK that we were competing against were getting the whole lot subsidised by their government. So the scheme we have is very modest to start with, and this mob is just cutting it back again.

This government is also kicking exporters when they are down. Australian exporters are currently struggling with the high level of the dollar. And they were promised a tax cut by this government, funded by the mining tax. We know where that has gone.

Government members interjecting—

You have not got any money for it; that is the reason. You have not got any money to fund it; you have wasted it all. It was a concocted mining tax. You blokes were played off the break. It was a complete embarrassment to your lot. So not only were our exporters promised a company tax which has not eventuated but many of them are facing downturns in our export markets. And they are also struggling with the world's largest carbon tax. Under this Labor government, energy costs for Australian firms have risen faster than just about anywhere else in the world. This is putting Australian industry, and our exporters, at a competitive disadvantage. This is the very worst time to be cutting back their funding—and that is exactly what this government is doing.

We have to ask ourselves: why are they doing this? Why are they cutting back? Why are they slicing back money for export market development? It is because of their waste and mismanagement. This mob has run up the four largest deficits in our nation's history. To spin their way out of it they came up with the line 'returning the budget to surplus'. And one of the cuts they came up with was to cut back this very important scheme which we need to keep our economy going—a measly $25 million. It is interesting to see what industry experts say about these cuts. Warren Cross, a legal expert and director of a firm called Export Incentives, is quoted in Smart Company magazine as saying, 'It's frustrating and disappointing this scheme has been put on the chopping block again by Labor,' and he argues that the trade minister, Dr Emerson, 'does not have a clue'. I could not agree more. He also says of our trade minister: 'He has never been interested in the scheme from day one, so this isn't a surprise. They've been cutting this grant back for years.' That just about says it all.

But we should look at the important amendments moved by our deputy leader. Those amendments clearly denote the problems with this bill. We need to have another review of this scheme and, if the funding is available, we need to try and help develop our culture of exporting. The coalition in the past has funded this scheme at far greater levels than what the current government are doing. When the coalition government left office we had $150 million in the scheme. The current government are reducing that to $25 million. Again, that is the complete opposite of what they promised.

If we are going to move our country forward, if we are going to start paying the debt, a debt that we have to pay back, with interest, it is going to cost this nation $267 million a week, every week of the year, for the next 20 years. That is the funding that we have to find. We are looking at trying to find $8 billion to $10 million to fund the NDIS, which this mob on the other side loves to talk about but does not have a clue how we are going to fund. And we talk about the Gonski education reforms. To fund these things, we have to encourage exporters, we have to get our exporters out there. We make great products in Australia. That is the reason this scheme works. We want the government to encourage firms to get out there and get involved in exporting. We should not be cutting this scheme back. To cut the number of years back for the USA, for Canada and for the EU is completely the wrong direction. We should be looking at uncapping years. You cannot have just five years for marketing a product overseas. And we have to remember that these grants are not given per product, they are given per firm. (Time expired)

Debate interrupted.