Nick Xenophon (SA, Independent) Share this | Hansard source

While I indicate that I will be supporting the second reading of Trade Legislation Amendment Bill (No.1) 2016, I have to express some serious concerns about one provision in particular, the $15,000 limit on the free sample expenditure category. While I acknowledge this bill must be passed in order to keep the Export Market Development Grants scheme going—and I emphasise I will not be standing in the way of the scheme continuing—capping the free sample expenditure category is a short-sighted, penny-pinching move that I think will have more serious consequences than the government appreciates. At the outset, it is important to note that a coalition MP, Craig Kelly, the member for Hughes, in his second reading contribution to this bill in the House of Representatives said:

There are a couple of changes in this legislation that I would prefer not to see there. One is the capping of the free samples provision. That is capped at $15,000. Each individual business determines whether promotion should be done through overseas representation, marketing consultants, marketing visits, trade forums, promotional literature or free samples. I understand that there have been times in the past when those free samples may have been overclaimed, but I think that should be left to each individual business rather than putting a cap on it. I would not like to see that there, but it is there.

I agree with Mr Kelly that if there are participants in the scheme who are rorting the system by inflating the actual cost of the free samples they are claiming, then those rogue operators should be identified through audits. Punishing all participants of the scheme for the actions of a few is not the way to go about controlling expenditure here.

I have been told by participants in the Export Market Development Grants scheme that free samples can be a more cost-effective way of driving more business than any other expenditure, particularly for small exporters, as they tell me there is nothing like a potential buyer holding a new product in their hand when it comes to their deciding whether or not to go ahead with the purchase. So why are we tying our exporters' hands and putting up barriers to them growing their business by removing what appears to be a sensible concession? It does not make sense to me. It is a matter that I have raised with the trade minister. I wanted to flag these concerns because there are a number of agents involved in this who say that this is going to be counterproductive. I raise that. I know that this bill will be passed, but it needs to be monitored. I will continue to make representations to the minister for trade in relation to these matters, with the anomalies and the unintended consequences that I think will arise out of this particular aspect of the bill.