Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I table a revised explanatory memorandum relating to the bill. I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

I am delighted to introduce this bill, which includes two important amendments to the Export Finance and Insurance Corporation Act 1991.

The first amendment in this bill will ensure that Commonwealth entities and companies can benefit from the Export Finance and Insurance Corporation's, or Efic's, financing expertise.

Following Efic's provision of services to the Northern Australia Infrastructure Facility, we know there is latent demand within the Commonwealth Public Service to leverage Efic's specialist expertise around financing. However, in its current form, the act does not allow Efic to share its expertise within the Australian government.

This amendment unlocks the potential for Efic to provide assistance to Commonwealth entities and companies in the operation and administration of financing programs, when required. Access to Efic's expertise will be on a fee-for-service basis and will be subject to ministerial approval to ensure there are checks and balances. The fee will be compulsory, but must not be such as to amount to taxation.

The second amendment to the Efic Act will enable Efic to better support small and medium sized enterprises (SMEs). SMEs are the engine room of the Australian economy. The majority of Australian exporters are SMEs. Despite this, SMEs traditionally find it more difficult to secure export finance, especially when their target market is an emerging or frontier one.

This is where Efic plays a valuable role. Efic helps Australian SMEs bridge the finance gap when their bank is unable to assist – enabling them to tap into new overseas markets for their products and services and grow their exports. This is great news: more exports means more economic growth, more job opportunities and a better standard of living for all Australians.

This bill further strengthens Efic's focus on supporting Australian SMEs that cannot obtain private sector finance to expand their reach overseas. This focus is paying dividends. During the course of the last financial year, Efic provided 130 SME exporters with over $150 million in funding. However, Efic could do more to help Australian SMEs.

This bill responds to the new ways in which our SMEs are growing Australian exports and expanding their reach overseas. The amendment keeps references in the Efic Act to support for manufacturing and expands the definition of an "eligible export transaction" by adding references to support for tourism operators, online businesses, exporters of intellectual property and other related rights, and businesses engaged in overseas direct investment.

The changes give these businesses the ability to benefit from an Efic loan. Previously, Efic could only provide a guarantee for a loan from another bank for these types of exporters of Australian goods and services. This change will save these businesses time and money by allowing them to borrow directly from Efic.

For example, consider the case of a small charter business running whale-watching tours out of Brisbane or the Gold Coast. The business wanted to increase its capacity to meet the needs of the growing number of international visitors. With its bank unable to help, they approached Efic. However, Efic could not assist under the existing legislation. The changes in this bill will enable Efic to loan to tourism operators like this one, which provide services directly to retail customers.

The amendment does not change Efic's purpose of operating only in the market gap where banks are unable to help, and any support must still be attached to exports. For SME exporters, this proposed amendment is estimated to save up to $12,000 per application by providing Efic the ability to provide a direct loan rather than just a guarantee.

The changes also introduce a legislative stipulation to ensure there are more Australian jobs where Efic supports Australian businesses to expand overseas. I note that it is already Efic policy that applicants for its overseas direct investment financing product must not use it to fund the outsourcing of jobs. The changes will require businesses to certify in writing their reasonable belief that Efic's support for overseas direct investment will result in a net increase in the number of people employed in Australia by their business or an affiliate.

In summary, the changes contained in this bill will benefit a wider range of Australian SMEs, often family-owned, as they seek to export, innovate online, sell intellectual property, expand their reach overseas and grow jobs at home. This bill will ensure Efic remains agile to respond to their financing needs. It will also enable Commonwealth entities and companies to leverage Efic's financing expertise when required. These reforms will make it easier for Efic to support our exporters in their contribution to the growth of Australian jobs and the promotion of trade, tourism and investment.

Leave granted; debate adjourned.