Kay Elson (Forde, Liberal Party) Share this | Hansard source

I am very pleased to rise today in support of the Export Market Development Grants Legislation Amendment Bill 2006. This bill reflects the government’s response to the Jollie report, which resulted from the 2004-05 review of the scheme. I note the extensive community and business consultation that was carried out as part of the review, and I commend businessman Peter Jollie, who led the inquiry. Three hundred and ninety-four public submissions were considered, and there were 70 consultation meetings. The inquiry also considered the results of independent research by the Centre for International Economics.

There was a great deal of support for the continuation of the scheme, but I am not surprised by the high level of support because just about every member of this House would be aware of the many benefits that the Export Market Development Grants Scheme means for their local small to medium businesses. Essentially, the premise for the scheme is very simple. It provides grants to help businesses with the cost of some specific export promotional activities undertaken overseas. It is a program that has stood the test of time and scrutiny, with this latest review being the 17th since the program was first created, in 1974.

This bill will ensure the operations of the scheme for a further five years and provide certainty for exporters who are planning their expansion strategies for the coming years. This bill also makes a number of improvements to the scheme, in line with the review recommendations. This bill will increase the claimable overseas limit allowance to $300 a day, rather than the $200 level it has been set at for the past 15 years. This bill will also streamline the Australian contents rule to make it easier to understand. It caps claimable expenses for overseas representatives and marketing consultants, and it adjusts the scheme to better accommodate emerging export industries and practices.

This bill comes on top of the changes announced in 2003 which were aimed at ensuring the scheme was directly geared to small and medium enterprises by reducing the annual income ceiling and reducing the maximum grant. This was a move generally welcomed by the industry and business organisations because they recognise that the capping of benefits meant that more money would be available for new and smaller exporters. That is what the EMDGS is all about. It is not a subsidy, and it is not about lining the coffers of wealthy businesses. It is a kick-start; it is a helping hand, not a handout.

The very fact that the companies must pay out at least $15,000 a year before being able to claim any grant is evidence that it is about helping those who are prepared to help themselves. I understand that some submissions to the inquiry suggested lowering or removing the $15,000 threshold, but it is a good thing that this was not the final recommendation. As the Australian Chamber of Commerce and Industry said in their response to the Jollie report:

While eliminating, or even substantially reducing, the threshold may assist some potential micro-firm exporters, it would undermine the principle that claimants should demonstrate a worthwhile ... financial contribution to their own export efforts.

I agree, and I believe that one of the greatest strengths of the scheme is its very sound economic foundation, ensuring only legitimate and serious businesses actually receive the grants. There is no doubt that the scheme does exactly what it is intended to do: assist those small businesses and medium enterprises that are beginning to export. In fact, 73 per cent of the EMDGS’s claimant firms had fewer than 20 employees, with 56 per cent having fewer than 10 employees, and 77 per cent of the firms had incomes of less than $5 million per annum. It is clear that most claimants use the scheme to jump-start their export initiatives, with 70 per cent of the claimants being in the program for three years or less and only 13 per cent participating for six years.

To put the economic benefits of the scheme into context, let us look at the 2003-04 financial year. In that year, nearly 4,000 Australian companies received grants, totalling $150 million. Those companies generated exports worth $5.5 billion and employed around 122,000 Australians.

As I said earlier, I have seen first hand the benefits the program has had for many local businesses in my electorate. Over the years some innovative companies have really had a head start on the overseas market through the scheme. Recent recipients of the grants in my electorate include a food milling system manufacturer, a security door and window manufacturer, a fruit and vegetable processing company and several specialised tourism accommodation companies, as well as sporting event service companies. These are solid local companies that contribute to our local community and our local economy. They employ local residents and have great potential to achieve even more. I note that the sector that benefits most from these grants is manufacturing, which accounts for around 40 per cent of all grants. It has been said for many years that we must do more to support our manufacturing industry, and this program does exactly that.

I want to take a few moments to look at our overall export performance. There has been a great deal of negativity in the national press in recent times and many Henny Pennys have been running around, declaring that the sky is falling. The truth of the matter is that our export record has never been so strong. Exports during March this year topped $16.1 billion—the highest figure ever for the month of March—and, in this financial year, we are currently on track to reach record levels of exports. This is on top of last year’s record for Australian trade, which resulted in our highest sales ever of $176.7 billion, which is a 15 per cent increase on the 2004 figure. That does not mean that the government will rest on its laurels. We will continue to push forward with the most ambitious trade agenda in our nation’s history. I commend the trade minister for his ongoing dedication to this task; he is doing a remarkable job.

Many fear the very idea of globalisation, but the trade minister continually proves that we have nothing to fear and everything to gain from opening up to world markets. As the minister said in a recent speech:

It is true that growing economies like China and India will be strong competition for Australian firms, but they will also provide us with immense opportunities.

A combined middle class of between 400 and 800 million is predicted to emerge from China and India over the next two generations.

That is a staggering situation and one that has enormous potential for our Australian exporters—and our government is working hard to develop that potential.

We have already held four rounds of negotiations on a possible free trade agreement with China; we have recently signed a trade and economic framework with India; we are currently in the process of negotiating trade agreements with Malaysia, United Arab Emirates and ASEAN nations; and we are currently carrying out a feasibility study with Japan. The Doha Round of negotiations in the World Trade Organisation is also crucial, with the significant agreement to abolish all agricultural export subsidies by the end of 2013. Australia has been arguing for this for nearly half a century. So there is much that has been achieved and still more to be done. Once again, I congratulate the trade minister on his hard work and achievements to date. I know how committed and dedicated he is to securing the best possible climate for Australian exporters.

To support our exporting efforts, our government is doing more also at home. It is investing $12.7 billion to improve our transport links through AusLink—and I was delighted to see a further $2.3 billion investment in AusLink roads and rail infrastructure announced in the budget. Our aim is to eliminate export bottlenecks and to give our Australian exports every possible chance of advantage. Many aspects of the budget do exactly that, including lifting the diminishing rate for depreciation from 150 per cent to 200 per cent, which represents a saving to Australian businesses of $3.7 billion over the next four years, and reducing compliance costs for small business by $435 million over the next four years. The budget also provides over $150 million over the next five years for the Export Market Development Grants Scheme.

With huge boosts to apprenticeships and traineeships, the Howard government has helped to create a greater number of skilled workers; this will be boosted further through the establishment of our technical colleges. Our economic and industrial relations policies have created a climate of certainty, and exporters can plan for the future and expand with confidence. This is all in stark contrast to the record of Labor when last in office. I will not go into that in detail today, but it is worth noting that they still lack any effective policies that would demonstrate they had learned anything from their last time in office, and there is economic structure behind the few broad brush-strokes ideas that Labor have put forward so far. In fact, their main policy on industrial relations is to wind things back—and the last thing our country needs is to go backwards. Clearly, Labor is not a party fit enough to lead us through the economic challenges that the changing world presents. On the other hand, our government’s record speaks for itself: 1.7 million new jobs over the last 10 years, a 16 per cent rise in real wages, record investments, record exports, the lowest level of industrial disputation on record, record living standards—and the list goes on.

This bill is a further step in a very positive direction. I am pleased that it has extended the Export Market Development Grants Scheme for another five years. This scheme is not extravagant; it is a relatively modest investment, but it certainly produces results. It is just one small part of our trade policy but a very important one, particularly for new and emerging businesses and their future. I am pleased to support this bill and I commend it to the House.

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