Michael Johnson (Ryan, Liberal Party) Share this | Hansard source

There is no government debt owed by the Commonwealth government of this country, and to continue to go into the community and try to merge the two issues is most disingenuous. I will certainly be letting the constituents of my electorate know—as I am sure my friend and colleague here the member for Canning will let his constituents know—that the federal government owes not a single dollar to any external source at all. The debt that is in this country is private sector debt generated by the private sector, and taxpayers of Australia do not owe money as taxpayers of the country. I just want to make that very clear at the outset. The shadow foreign minister talks about a half a trillion dollar debt. I did not hear him talk about the national economy of this country becoming a $1 trillion economy. You cannot have it both ways. You are talking about a half a trillion dollar debt but you do not talk about the GDP becoming a $1 trillion GDP. Let us get some facts on the table at the very outset.

As the member for Ryan—the electorate I have the great privilege to represent in my fifth year in the national parliament—I warmly support this bill. It is a bill that is important. It is a bill that could be quite easily forgotten in the hurly-burly of a very exceptional budget delivered by the Treasurer on Tuesday evening. It could easily be forgotten in the accolades and the applause that have come from almost every sector of the Australian community about the budget. That budget was one of the most significant budgets that has been delivered in this parliament—a budget, I might add, that includes fundamental reform which brings immediate tax cuts to millions of Australians across the nation. And importantly and relevantly in the context of this bill, it is a budget that does its bit to promote business, which is what this particular export market development grants bill is all about.

This bill is important because it is about economic activity. It is about jobs. It is an important bill because it is about creating wealth for this country and making the wealth pie larger and the job pie even bigger, and all that of course goes significantly to making the national economy much more prosperous. This government can be very proud of the achievements and policies that have been in place in the last decade that now see record levels of people in jobs and record levels of economic activity.

This scheme is one of the Howard government’s most successful initiatives. Since I was elected in 2001, I have had the opportunity of speaking on the Export Market Development Grants Scheme on two separate occasions, in 2003 and 2004. As my Liberal colleague the member for Forde alluded to, the growth of our export sector has been very strong in recent years. We can highlight many success stories. We should pay tribute to the entrepreneurship, innovation, skill, creativity, professionalism, adaptability, flexibility and sheer determination of Australian business operators across the country.

We can even be more encouraged that growth and involvement in the small business sector are going to increase. Small and medium sized businesses will continue to have many opportunities to grow. Small businesses in this country number some 1.2 million. They represent over 30 per cent of Australia’s GDP. I for one will continue to very strongly promote small business activity in this country. Over 96 per cent of all businesses in this country are small businesses. It is very important that members of the government continue to remind the electorate and the broader community of this very fact. Some 35 per cent of small businesses operate in regional Australia. I touch on small businesses because many small and medium sized businesses are in a position where they may be able to export to the world. The Export Market Development Grants Scheme allows them to seize the moment.

This bill is the result of a review into the scheme conducted by Austrade. The review was commissioned by the Deputy Prime Minister and Minister for Trade in 2004 as required by the sunset clause of the EMDG Act 1997. The review took into account 394 public submissions as well as meetings with business, industry associations and other relevant stakeholders. It recommended the extension of the program to the 2010-11 financial year as well as making other recommendations to improve the efficiency and effectiveness of the program. All but one of the changes contained in this amendment bill were recommendations by the Austrade review. I will come to some of the key amendments in a moment.

At the outset of my presentation, I want to stress the success stories of the export market generally and some of the success stories in the Ryan electorate specifically. The year 2005 was a bumper year for Australian exports. Australia’s 30,000 exporters across the nation achieved a record sales total of some $176.7 billion, having engaged in business in over 200 countries. This represents a 15 per cent increase on 2004 sales figures. This record growth looks set to continue, as the Deputy Prime Minister continues to set a good example to the country with the policies of the government. As he announced recently, in March 2006 exports reached their highest ever levels, topping $16.1 billion.

The reasons for the growth are quite apparent. The achievement of this sort of growth and success does not come through sheer good luck; it comes because of the economic climate and the opportunities that the economic environment provides. Of course, all that stems from the policy framework that the government of the day sets in place. This government can hold its head high and be very proud of the economic environment that it has put in place, in which Australian businesses can flourish and go about what they do best—engage in business. I want to refer to the words of a former US President in the past century who said that the business of government is to get out of the way and to let businesses engage in business. That is a very good slogan, which we on this side of the chamber subscribe to very strongly. We are not about making business; businesses are about making business.

Let me continue to talk about the scheme for a moment. The Export Market Development Grants Scheme has become one of the key drivers of export growth in the last few years. The scheme was introduced by the Howard government in 1997 and, as I have said, will go into the 2010-11 financial year. It is the principal financial assistance program for aspiring and developing exporters. Changes in 2003 saw the grants program’s focus shift to small and medium sized businesses. In the 2004-05 financial year, the scheme paid out a total of 3,277 grants—some of those coming to the great electorate of Ryan, which I represent in the parliament. Of these 3,277 grants, 77 per cent went to small businesses with annual incomes of $5 million or less. Those who continue to question the logic of the government’s emphasis on trade and on the Export Market Development Grants Scheme should perhaps reconsider their doubts, because this is a meaningful scheme. It really makes a difference.

Exports currently account for 20 per cent of the total value of the goods and services produced by Australian business. I should put on the record again that one in five Australian jobs depends on exports, and that figure rises to one in four in regional areas. Over the decade of the Howard government it is estimated that some 1.7 million new jobs have been created through increases in Australian exports. Australia’s 30,000-plus exporting firms pay their employees on average some $17,400 more than non-exporting companies. That statistic speaks for the importance of the place of exporters in the Australian economy. All Australians know and appreciate the very significant and important place of exports in our country and how they can represent new opportunities for job creation and for furthering our national economic prosperity.

We live in a globalised world. We have global companies. Our global economy and our global companies are intertwined. Our big firms must trade with the world. They must deliver services to the world. In return, the companies of other nations want to do business in our part of the world. Trade is eminently more powerful and more meaningful than short-term aid in the context of helping developing countries, and this government can also hold its head high for its part in pushing a conclusion of the Doha Round. If anybody thinks we can remain an isolated nation and an isolated economy—that we can just bury our heads in the sand, not trade with the world, not have foreigners come to this country and engage in work—they are kidding themselves in a very big way.

In my electorate recently I had the great pleasure and opportunity of assisting a local Brisbane company by the name of AHI Jensen with its successful bid in tendering for a $25 million project in the very large Chinese city of Chongqing. This company was successful against global competitors in winning this contract for $25 million to provide landscaping. It will now work in the very prestigious Nanshan botanical gardens arboretum project promoting Australian craftsmanship and ingenuity in a very practical sense to the residents of Chongqing. I had the good fortune to play a small part in promoting that business opportunity for that company located in the western suburbs of Brisbane, which is where my federal electorate is.

As the Australian economy enters its 15th straight year of economic growth, Australia’s strong and vibrant export sector is only going to increase in prominence. I am very proud that the export growth in this country continues to touch the people of the Ryan electorate. Since my election to the parliament in 2001, 129 export market development grants have been paid to Ryan based businesses. These grants total assistance of almost $4½ million. In 2005 alone export market development grants were made to businesses in Ryan that exported products and services as diverse as legal expertise, tourism activities, music, biotechnology, book publishing and horse supplements. Some of the bigger grants so far in the 2005-06 financial year have included $70,000 to a company called Blue Ribbon Seed and Pulse Exporters Pty Ltd, who export grain seed. Nanochem Pty Ltd, based at the University of Queensland in the St Lucia suburb in the Ryan electorate, received $70,000 to aid in the export of biotechnology services and technical knowledge. A company by the name of Bikestyle Pty Ltd, which conducts cycling tours, benefited to the tune of $61,248. They are some examples of success stories in the Ryan electorate.

I commend them very warmly. I commend all the other recipients of this scheme and the financial assistance that goes with it. This is a leg-up. It is a way of rewarding initiative. It is way of rewarding and acknowledging entrepreneurship. Those business constituents in the Ryan electorate are fine examples to the rest of the business community in Ryan because they are very much leading the way in providing jobs for their fellow residents in the Ryan electorate.

I will finish my presentation in the parliament today with some comments about the key points of the amendment bill. This continues the Export Market Development Grants Scheme past 2005-06 to 2010-11, with a report to the Minister for Trade by 30 June 2010. It increases the overseas visits allowance from $200 to $300 per day. Another key amendment is that it allows Austrade to deem certain applicants eligible when they do not technically meet the act’s current principal status requirements. This provides Austrade with the flexibility to give grants to companies that either are involved in emerging export sectors, even if they do not meet the act’s technical requirements, or have business structures in place for pragmatic or market reasons which previously would have excluded them, but that would otherwise comply with the general nature of the scheme.

An important amendment is that the bill modifies the scheme’s Australian origin rules so that, firstly, goods coming into their final form in Australia must be made in Australia to be eligible and, secondly, for other goods to be eligible Austrade must be satisfied that Australia will derive a significant net benefit from the sale of those goods outside Australia. The definition of ‘made in Australia’ is set out in ministerial guidelines and takes into account factors such as whether the product is mined, grown, raised or substantially transformed in Australia. The ministerial guidelines will also set out the definition of ‘significant net benefit’ and take into account issues such as job creation, the location of R&D activities, and value added and/or economic benefits to Australia. This amendment represents an effective widening of the grants eligibility criteria and also adds flexibility.

The fifth key point that I want to draw to the attention of the Ryan electorate is that the amendment bill makes applicants’ expenses eligible when they are incurred to increase the return on the disposal of intellectual property and know-how to a related company. The previous ineligibility of those expenses had effectively excluded those companies exporting intellectual property from receiving assistance under the EMDG Scheme. This removes that exclusion, in recognition of the growing market of trade in intellectual property. Some of the companies in the Ryan electorate will derive much benefit from this amendment.

The sixth point is that the bill separates claimable expense categories for overseas representatives and marketing consultants. It caps expense claims for overseas representatives at $200,000 per claim and for marketing consultants at $50,000 per claim. A final point that I want to draw to the attention of the Ryan electorate business community is that the bill removes the export performance test from the EMDG Scheme. This will mean that applicants will no longer have to show evidence of sales made to receive a third export market development grant.

I want to draw this important bill to the attention of the Ryan constituency. As I touched on earlier, this bill is about assisting business. It is about assisting the business community to tap into the opportunities that the world provides to men and women in business across this country. This is a result of good policies in this country which allow Australian businesses to position themselves financially to seize the opportunities. I commend all those in business in the Ryan electorate for their initiative. They go out of their way to seize opportunities to partner with other Australian companies and to seek partnerships internationally. They do a fine job. I am delighted to help any of them that come to my office. Many of them have been guests of the Ryan small business networking breakfasts that I hold in the Ryan electorate, where they have an opportunity to mingle, to network and to derive benefit from the experiences of other local businesses that have been very successful and very profitable in tapping into the global marketplace.

I think it is very important that we in the parliament do not forget in this week of budget success that this bill should be drawn to the attention of our business constituents. I am delighted that the opposition will support this bill—though, as I touched on earlier, it seems with much regret and little enthusiasm. But they also realise the importance of this bill. I am very pleased that they will support the bill.

This bill extends the successful scheme brought in by the government. By supporting Australia’s burgeoning exporters in this way, the Howard government will ensure that the export sector continues to grow and drive Australia’s economic prosperity, not only in the years to come but also for decades to come. I am very proud to be part of this Howard government in its 10th year in office. I am very proud of this initiative. It is a fine example of policy at work, which the opposition needs to learn a lesson from. I warmly commend the Export Market Development Grants Legislation Amendment Bill 2006 to the parliament.

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