House debates

Thursday, 30 March 2006

Export Market Development Grants Legislation Amendment Bill 2006

Second Reading

9:05 am

Photo of Mark VaileMark Vaile (Lyne, National Party, Minister for Trade) Share this | | Hansard source

I move:

That this bill be now read a second time.

With the introduction of the Export Market Development Grants Legislation Amendment Bill 2006 the government is delivering on its commitment to extend the EMDG scheme for another five years and provide a number of enhancements to the scheme.

The EMDG scheme, administered by Austrade, assists small and medium Australian businesses to enter into export and grow to export sustainability by partially reimbursing their eligible export promotion expenses.

It is a popular scheme that has been regularly reviewed and has been consistently shown to benefit Australia by supporting our exporters.

Last year the EMDG scheme delivered over 3,200 grants and paid out around $124 million to small and medium exporters. These businesses generated approximately $3.1 billion in exports.

Of the grants delivered last year, 77 per cent went to small businesses with annual incomes of $5 million or less. Twenty-three per cent of grants were paid to businesses in rural and regional Australia.

Demand for grants is even stronger this year, demonstrating the continued success of the scheme.

In accordance with the EMDG Act, in 2004 I asked Austrade to review the EMDG scheme and report on whether the scheme should be extended and, if so, options for the improved performance of the scheme.

Austrade conducted a comprehensive review of the scheme, considering 394 public submissions, feedback from 70 consultation meetings and the results of independent research conducted by the Centre for International Economics.

The review found that the EMDG scheme is an effective tool for encouraging businesses to seek out and develop export markets and that it enjoys very strong support from Australian businesses across a wide range of industries.

For example, the Eaglereach Wilderness Resort, an award-winning ecotourism resort located in the Hunter region of New South Wales, told the review that ‘the scheme encourages small companies such as ours to enter into the export market’.

And GAP Agrifood Exports, a successful exporter of meat, fruit, vegetables and fish to Asia and the Pacific Islands, said in its review submission that the EMDG program ‘is essential to the new exporter’.

This positive industry feedback was supported by the independent research, which showed that the EMDG scheme induces export promotion, boosts exports, improves the sustainability of small and medium sized businesses and has a positive impact on Australia’s export culture.

In response to the review’s findings, the government decided to extend the EMDG scheme for a further five years and introduce some changes to enhance the effectiveness of the scheme.

The Export Market Development Grants Legislation Amendment Bill 2006 implements these government decisions.

The bill provides certainty for Australia’s current and future exporters by extending the EMDG scheme until 2010-11, with grants in relation to export promotion expenditure incurred in 2010-11 to be paid in 2011-12.

In addition the bill contains a number of amendments to the scheme.

The proposed amendment to increase the claimable overseas visit allowance from $200 to $300 per day will be of particular benefit to new and emerging exporters. The amendment will increase the incentive for this group to take the crucial step of visiting overseas markets to meet new customers and learn how export business is done.

The amendments to the rules of the scheme in relation to the origin of eligible products, disposal of intellectual property, principal status and export earnings will make the scheme more flexible and more relevant in terms of modern business practices and emerging export industries.

Removal of the export earnings test will also address anomalies that have resulted in some SMEs and emerging exporters being denied grants or having their grant entitlement reduced.

For example, removing the test addresses the anomaly that businesses spending on export promotion in one year but not receiving export earnings until the following year might be denied a grant, simply because there was a time lag between promoting their products and receiving export sales revenue.

The other amendments in the bill will assist in streamlining administration of the scheme and enhancing risk management.

The proposed changes are to take effect for EMDG applications from the 2006-07 grant year onwards—that is, to applications received and grants paid from 1 July 2007.

I am confident that the amendments contained in the EMDG Legislation Amendment Bill 2006 will be of considerable assistance to Australia’s small and emerging exporters and will be warmly welcomed by the business community.

In conclusion, I would like to thank the individuals, businesses and organisations that contributed to the review of the EMDG scheme. Their input has enabled the government to tailor a package of measures that will both deliver significant benefits to small and emerging exporters and further secure Australia’s exporting future. I present a copy of the explanatory memorandum.

Debate (on motion by Mr Gavan O’Connor) adjourned.