Wednesday, 6 September 2017
Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2017; Second Reading
Let me begin by thanking the senators for their contributions to the debate on the Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Bill 2017. The Export Finance and Insurance Corporation, Efic, plays an important role in supporting the growth of Australian exporters, with a focus on small and medium-sized enterprises, SMEs. Efic delivers simple and creative finance solutions for Australian exporters. Efic provided 130 Australian SME exporters with over $150 million in support in 2016-17. This government wants to make it easier for Australian exporters to access Efic's support for jobs and growth, which hopefully will lead to higher wages as well. We need to foster an environment where Australia's exporters can grow. As it stands, the bill will look to do this by improving Efic's support for businesses who cannot obtain private sector finance to expand their reach overseas.
To address a point made by Senator Leyonhjelm: Efic are addressing a gap in the market, particularly when it comes to smaller enterprises wanting to expand overseas who may not have a great track record in the private sector here. Private banks may not be willing to finance their exports overseas, so Efic do fill a gap. Yes, they do take a risk. It's possible that some of these firms may not work out, but it is a gap in the marketplace that facilities like Efic are seeking to fill.
This bill will enable Efic to lend directly to an expanded range of Australian exporters and will ensure Efic's support for overseas direct investment results in more jobs in Australia. The evidence is very clear that Australian companies that export abroad are more productive, pay higher wages and, in that sense, make a premium contribution to the Australian economy. This bill prioritises the needs of a wider range of small and medium-sized enterprises across Australia to grow exports and jobs and expand their presence overseas, including tourism operators, online businesses and exporters of intellectual property and other related rights. In particular, we want to be able to keep the intellectual property here, but also to use it as a platform for exports.
This government responded to issues raised during the Senate committee review process by passing amendments in the House which have been noted and which legislate a net-positive jobs test for overseas direct investments and maintain local content requirements. The net-positive employment stipulation for Efic support for overseas direct investment means businesses will have to certify in writing their reasonable belief that Efic's support for overseas direct investment will result in a net increase to the number of people employed in Australia. I understand the opposition will shortly move two amendments to build upon this. One amendment will ensure Efic publicly discloses the business certification. This requirement is an extension of Efic's existing policy to publish the details of its high-level commercial transactions. We have no objection to this. The second opposition amendment will ensure large businesses with annual revenue of $150 million or more certify to Efic that they will not move all or a substantial part of their business overseas as a result of Efic's support for an overseas direct investment transaction. The idea that Australian taxpayers would be subsidising the offshoring of Australian jobs is clearly something that would not go down well with the Australian public. This requirement codifies Efic's existing policy to ensure its support for overseas direct investment will not result in plant closure or net job losses in Australia, and again we have no objections to this.
With around 100 employees today, Efic operates in the financial services sector with experience and specialist expertise regarding finance arrangements. This bill enables Efic's expertise to be made available to a wide range of commonwealth entities and companies on a fee-for-service basis beyond its current work for the Northern Australia Infrastructure Facility, subject to ministerial approval. This government responded to issues raised during the senate committee review process by passing amendments in the House to require Efic to charge fees for any services provided to Commonwealth entities and companies. In this way, additional resources will be provided to Efic so that Efic's support for SMEs remains undiminished. Australia's exporters are among the best businesses in this country. This bill will enable us to help even more of them receive the financial support they need to win business, employ more Australians, grow internationally and achieve export success. I commend the bill to the Senate.