Thursday, 14 March 2013
Export Market Development Grants Amendment Bill 2013; Second Reading
The Export Market Development Grants Amendment Bill 2013 reflects the careful consideration of both government and Austrade as to how to contribute to Australia's successful engagement with the world through exporting the remarkable skills, innovation and goods of its hardworking men and women. It is an important issue. It is important to get the EMDG scheme right and, in the balance represented in the bill, we feel we have achieved that.
I thank all the members who have contributed to this debate, but I do need to respond to some of the more remarkable claims that were made during the debate. Few things better illustrate the opposition's failure to sincerely engage in the discussion about Australia's economic future than the amendment proposed by the Deputy Leader of the Opposition. To read it returns one to the playgrounds of our primary school days, where nonsense and abuse are paraded as debate. On the one hand, the opposition condemn this government for spending too much, and in the next sentence they condemn the prudent savings in the bill. If that is not sufficiently dishonest and sneaky, in paragraph 4 the opposition imply that if they formed government they would increase spending, but they do not commit to it. They commit to a review.
We all know about coalition reviews. People lose jobs. Funds are cut. That is in the opposition's DNA. That is what has happened in Queensland, what has happened in New South Wales and what has happened in my home state of Victoria. Let me quote the shadow Treasurer on this matter. To a London audience on 17 April last year, Mr Hockey said:
The age of unlimited and unfunded entitlement to government services and income support is over.
The next day he boasted on Lateline:
… we need to keep our pencil sharpened when it comes to entitlements.
So just where do the opposition stand on helping Australian business succeed overseas? The truth is that they are addicted to cutting, and their complaints about prudent measures taken by this government are hypocritical and not to be believed. They had every opportunity during this debate to commit to increasing funding for the EMDG scheme. They did not. And, make no mistake, if they were to get elected in September, they would not.
They had the nerve to criticise our economic and fiscal strategy. Australia is the second fastest growing developed economy in the world. We have a triple-A credit rating from the three main rating agencies. We have low unemployment. We have modest inflation in the middle of the RBA's target band and low interest rates. Our public finances are in good order, enabling the RBA to reduce interest rates.
This government has been able to cut taxes, reform business taxation and assist small business with increased tax deductions. At the same time, we are making strategic investments that will secure Australia's prosperity for generations to come, with the National Broadband Network, the Gonski reforms, the National Disability Insurance Scheme, the New Car Plan and renewable energy. In a telling vote of confidence in Australia, business has invested over $1 trillion in Australia since Labor came to power in 2007. If that is mismanagement, the rest of the world would surely wish to be equally mismanaged. Australia's outstanding economic performance is built on the strategic direction provided by this government and the sometimes difficult decisions it has taken. But, on the Australian economy, we have come to expect the opposition trying to have their cake and eat it too.
Less understandable, however, is the opposition's attack, during this debate, on Australia's relations with Indonesia. It has long been a bipartisan view that our important relationship with Indonesia should not suffer from cheap partisan politics. Our relations with Indonesia are in very good shape. In 2012, two-way trade between Australia and Indonesia was valued at $13 billion, making Indonesia our 12th largest trading partner. Currently there are approximately 17,000 Indonesian students enrolled with Australian education institutions. The ASEAN-Australia-New Zealand Free Trade Agreement, now ratified by Indonesia, dramatically reduces tariffs on two-way trade and creates greater certainty across the board for Australian exporters and investors in Indonesia.
The recent ratification of the ASEAN-Australia-New Zealand Free Trade Agreement paves the way for the commencement of negotiations on an Indonesia-Australia Comprehensive Economic Partnership Agreement, as jointly announced by both leaders in 2010. This agreement will focus on the following priority sectors: agribusiness, so food security; infrastructure and resources; value-added and high-level services; and alternative energy and environment. Far from the dire picture painted by the opposition, our relations with Indonesia are excellent and are set to grow and deepen further. That is important for Australia's future prosperity at home and for a peaceful and prosperous region.
All of this raises the question of how Australia would fare with a coalition government filled with Asia sceptics. They are the regional equivalent of climate change sceptics. I note with deep concern the Deputy Leader of the Opposition's criticism of this government's focus on Asia. Her call for a focus on a global century is quite worrying. We all know that, when you make everything a priority, nothing is a priority. This unthinking focus on everything would see valuable resources poorly directed, would give no direction at all to business and community leaders about where efforts can be most productively made and would confuse our neighbours and our major trading partners about where Australia thinks it is actually located and who we think the majority of our trade is with.
The facts of Asia's rise are undeniable. By the end of this decade, Asia will overtake the economic output of Europe and the US combined. By early next decade, the combined output of China and India will exceed that of the whole Group of Seven major economies, and average GDP per person in Asia is set to almost double by 2025. In recent years, we have seen a sharp shift in our pattern of trade. A decade ago, Australia's most important trading partners were largely in the developed world. Today, China, Japan, the Republic of Korea, India and our ASEAN neighbours absorb around three-quarters of our exports and supply half of our imports. China alone absorbs one-quarter of our exports and supplies one-fifth of our merchandise imports. Is the opposition the one remaining group in Australia that does not understand that the world is changing and that Asia is growing dramatically in economic importance?
The Asian century will present both opportunities and challenges. It will be accompanied by a need for responsible stewardship of resources and the way government works with industry. As my colleague the member for Makin eloquently stated in this debate on 12 March, it is the responsibility of government to use resources prudently and to regularly review programs to ensure they accurately respond to the needs of the industry and to those of the country as a whole. This is the serious business of government, as distinct from the shrill and opportunistic chatter of the opposition.
This bill is an expression of this government's commitment to support the efforts of small- and medium-sized exporters, develop new international markets and generate jobs and prosperity for Australians. The changes proposed in this bill will help ensure that support to Australian small- and medium-sized enterprises is well targeted and that grants go to those businesses which can benefit most from that support. The proposed changes focus the scheme on where Australia's largest opportunities lie by encouraging small- and medium-sized businesses to take advantage of the emerging opportunities in our region.
The changes in this bill will better help Australian exporters maximise the potential of the Asian century by increasing the number of grants available to businesses exporting to East Asian and emerging and frontier markets from seven to eight. This offers Australian small- and medium-sized exporters a slightly longer and more commercially realistic period to become established in those markets. 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—where the Australian brand is already well known and well accepted and where small businesses typically face fewer barriers—will be reduced from seven to five.
The increased focus of the EMDG scheme on emerging and frontier markets brings EMDG into closer alignment with Austrade's broader trade priorities following its review in 2011 and the government's Asian century policy agenda. These changes also deliver on the Mid-Year Economic and Fiscal Outlook decision on the EMDG scheme and will generate annual savings of $25 million, commencing this year. As I announced on 12 March, businesses that put in an EMDG claim in 2012-13 will likely receive their full EMDG entitlement. This is great news for EMDG claimants and means that any small business that applied for a grant will receive a reimbursement of up to $150,000 this financial year.
In summary, the bill contains the following changes: an increase in the maximum of number grants to eight; the exclusion of approved bodies and joint ventures; the exclusion of expenses relating to the promotion of sales to the markets of the USA, Canada and the European Union in grants years 6, 7 and 8 for all applicants except approved bodies; the removal of the limit on administrative expenditure from the legislation and the introduction of a power for the minister to set the limit on administrative expenditure by determination; the prevention of further approval of joint ventures after 30 June 2013; the removal of event promoters from the EMDG scheme; the prevention of payment of grants to applications engaging an EMDG consultant assessed to be not a fit and proper person; the enabling of a grant to be paid more quickly where a grant is determined before the 1 July following the balance distribution date; and a requirement for applicants to acquit claims by individually paying for claimed expenses.
The government is seeking to pass this bill now to avoid creating considerable uncertainty for small businesses as they adjust to the new arrangements, which become operational on 1 July this year. I commend the bill to the House.