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Thursday, 23 May 1996
Page: 1266

Mr STEPHEN SMITH(1.45 p.m.) —I am pleased to rise to speak on the Supply Bill (No. 1) 1996-97, which formally commences the process for the 1996-97 financial year budget to be presented on 20 August. The Supply Bill is treated formally and members tend to wax lyrical about many issues as if it were an address-in-reply. According to the forms, procedures and traditions of the parliament, the Supply Bill goes through as requested by the government.

We have had one occasion on which tradition and convention were torn up in the face of Australian democracy. That was in 1975 when a cabal of Liberal Party people such as Malcolm Fraser, John Kerr and Garfield Barwick entered into a conspiracy to deceive the Prime Minister and the government of the day and foisted upon the Australian people an undemocratic election.

The process is conducted in a much more gentle frame of mind on these subsequent occasions. The Supply Bill falls in a context of recent, constant assertions by the opposition of an $8 billion black hole in the budget accounts. This is Costello's con, of course, and it is interesting to draw the attention of the House to a newspaper clipping from the Western Australian Sunday Times that some of us kept from the early 1980s. The article is called `Howard's budget apology'. The story says:

The Fraser Government knew before the last Budget that it could create a $4200 million deficit next year, the former treasurer, Mr Howard, said today. `I knew that figure and I'm sorry I did not make it public', he said.

The story goes on to say:

Mr Howard's revelation today comes on top of a mounting political row over the silence, during the election campaign, over a predicted Budget deficit as high as $9600 million.

This is about $25 billion in today's figures. The article continues:

When Mr Howard delivered his Budget speech on August 17 he made no deficit projections based on the Budget programmes beyond the current financial year in which he predicted a deficit of $1600 million, since blown out to more than $4000 million. Today Mr Howard said that when the Budget was in its final stages he went to the Treasury and insisted, against its wishes, that it make a projection on the Budget's effects on the deficit in the 1983-84 financial year.

The story then goes on to say how Mr Howard kept that exclusively to himself. So there has been a considerable amount of disingenuous behaviour and commentary on the part of the government in respect of this matter.

As far as the Supply Bill and this year's budget are concerned, in the course of debate in this House and in the other place, the government has been asked on a number of occasions across a whole range of portfolio areas whether it is proposing to keep commitments it made in the course of the election campaign. The constant reply from those opposite, despite what they said in the election campaign and despite the impressions they conveyed to the Australian community, is that we will all have to wait until the budget on 20 August.

In my shadow portfolio area of trade, I have particular interest in a range of trade and industry assistance measures—a range of programs that help ensure that our export and trade performance is at its peak; a range of measures that help to ensure that small and medium size businesses get every opportunity and every incentive to trade, particularly in our own region. Two examples are the EMDG, the export market development grants scheme, and the DIFF scheme, the Development Import Finance Facility.

I will start with some comments on the EMDG scheme. The coalition went to the election with a trade document called Meeting the challenges: the new global economy: Liberal and National Party trade strategies for the future.

On page 3 of that document it says:

Australia's Export Market Development Grants (EMDG) Scheme has been in operation since 1975, and has been supported by Australia's export businesses. The coalition will retain the scheme.

Later in the document under the heading `Export incentives'—about page 30—there is a further commitment which, in the course of some description of export incentives, asserts:

We will maintain the Export Market Development Grants Scheme.

The now Deputy Prime Minister and Minister for Trade (Mr Fischer), when he was shadow minister for trade, went to the National Press Club in the course of the election campaign on 15 February of this year. In his speech he said:

. . . it is a privilege to present the Coalition trade policy, `Meeting the Challenges', and debate that policy.

In the course of his presentation in respect of the document I have just referred to, the now Deputy Prime Minister said:

And finally, ladies and gentlemen, we of course have as the fifth track in relation to our approach to trade, the promoting and financing of Australian exports.

Austrade stays, the EMDG scheme stays . . .

There was a clear and unequivocal commitment to the Australian people and to Australian companies and to Australian exporters that the EMDG scheme would stay.

Of course, since the election the Minister for Trade has assiduously refused in this place or elsewhere, as has the Minister for Industry, Science and Tourism (Mr Moore) in this place and elsewhere, and as has the Minister for Small Business and Consumer Affairs (Mr Prosser) in this place and elsewhere, to confirm to this House or to the Australian public that the government is prepared to meet that commitment and not break that clear and unequivocal election commitment.

It is also the case that in a related document the coalition expressly committed itself to not just maintaining the EMDG scheme but to expanding and extending it to parts of the tourism industry. However, since then we have heard nothing but deafening silence.

It appears on the part of those sitting opposite that it is all well and good and appropriate conduct for the then Leader of the Opposition and now Prime Minister to go to a primary school and give assurances to primary school children, which he has subsequently walked away from, and it is all well and good for the now Minister for Trade, the Deputy Prime Minister, to go to the National Press Club and give assurances, which are subsequently walked away from.

The EMDG scheme is not the only trade or industry development incentive program in place. The proposed abolition of a range of these incentive schemes and the adverse effects that would follow was put very well by Tim Colebatch in the course of an article in the Age recently. Mr Colebatch had this to say:

In less than 10 years, Australia's exports have more than doubled, $39 billion to $92 billion. Most of that growth was in non-traditional areas: services exports trebled to $21 billion, and manufactured exports grew fivefold to $17.5 billion.

The export boom in manufactures and services has added almost $30 billion a year to Australia's output, and perhaps 500,000 jobs.

In the course of his article he describes this export enhancement as `Labor's greatest economic achievement'. He then goes on in the course of his article to describe as `alarming' the coalition's policy and budget agenda and the lack of any strategy for ensuring the continuing of these trade and industry programs, which are currently, as he describes them, being tossed up as targets for alleged financial reasons.

In the course of the coalition's trade document there is also a commitment to ensure ongoing discussions with relevant chambers of commerce. There is a commitment that the views of relevant chambers of commerce will be taken into account by the coalition. That being so, I was interested to see recently a public comment by the Managing Director of the Australian Business Chamber, Mr Philip Holt, when he said in respect of the government's proposed abolition of the export market development grant scheme, a scheme which he described as helping small and medium business to get into export markets, that the proposed abolition was a major backward step for small and medium sized businesses. He said that it was the breaking of an election promise which would adversely affect job creation and increase the balance of payments deficit.

So there is considerable consternation in relevant groups of industry and commerce about the government's abolition of this particular program in clear breach of an express election commitment. A successful business in Western Australia, my own state, has kindly forwarded to me a copy of a letter to the Minister for Trade in respect of the abolition of the export market development grant scheme. It is from a company by the name of Dynamic Technology which is based in Osborne Park in Western Australia. The letter in part says:

Our organisation, being one of the 90% of small to medium enterprises claiming EMDG support in 1995, have committed several hundred thousand dollars to a major export initiative to promote Australian made technology and products into very competitive overseas markets.

Our commitment to allocating funds for this export initiative was based on the premise that the Export Market Development Grant Scheme would provide us with the necessary assistance to achieve our export strategy. For the Federal Government to tamper with this scheme would have a major impact on our . . . export activities and we believe, it would be a fundamental breach of the coalition's pre-election promise to maintain the scheme and support exporters like ourselves.

Mr Deputy Speaker, that refrain has been echoed far and wide by a range of companies and industry groups. I notice that my colleague the shadow minister for tourism, the member for Cunningham (Mr Martin), has just entered the chamber; so I draw to his attention a recent release by the Tourism Council of Australia, entitled `EMDG scheme must aid tourism industry', with Bruce Baird, the former New South Wales coalition minister and now managing director of the tourism body, calling upon the government to fulfil its election commitment in that particular area.

Mr Deputy Speaker, I referred to the EMDG scheme and to the DIFF program, which has now been abolished by the government. I was interested to see today a story in the Brisbane Courier-Mail, headed `Cuts to scheme "foolish"'. It read:

Moves to cut two Federal Government schemes just as a rising dollar has spooked the nation's exporters, has been slammed by peak industry body, the Metal Trades Industry Association . . .

Association chief executive Bert Evans has termed the path taken by the Government as "foolish" and "the most short-sighted thing I've seen in my career".

So here we have the chief executive officer of the Metal Trades Industry Association describing the proposed abolition by the government—in the case of EMDG in breach of its election commitment—as foolish and the most short-sighted thing that he has seen.

In respect of DIFF, we have seen the Transfield $60 million Philippines naval vessel contract put in jeopardy; we have seen the former head of Foreign Affairs, Richard Woolcott, who is now the personal emissary of the Prime Minister to Malaysia, attacking the doing-in of the DIFF scheme and saying in the last couple of weeks:

Scrapping them . . . could undermine Australia's credibility as a reliable supplier, and advantage our commercial competitors in the region, who may pick up those projects which Australian companies will not be able to proceed with.

That litany has been joined by protests from ambassadors from a range of neighbouring countries.

I was very interested today, Mr Deputy Speaker, when it was drawn to my attention that the Deputy Prime Minister and Minister for Trade had been gazumped by his portfolio boss, the Minister for Foreign Affairs (Mr Downer), who had refused to provide to the Deputy Prime Minister Department of Finance proposals for expenditure cuts to the Department of Foreign Affairs and Trade, allowing him access only to proposals for expenditure cuts to trade agencies and programs such as EMDG and DIFF. We see today in the Financial Review that, as a result, internecine warfare has broken out between the Minister for Trade and the Minister for Foreign Affairs—internecine warfare as a result of the portfolio boss of the Deputy Prime Minister and Minister for Trade doing him in. The article in the Financial Review refers to internecine warfare, to relations between officers of the Deputy Prime Minister and the Minister for Trade starting poorly and only getting worse, and describing a degeneration of relations between Mr Downer and Mr Fischer.

So what do we have here? What is the reason these trade and export enhancement programs have been done in? We now know why the Minister for Trade sits in this House in stony silence, refusing to give to this House the commitment that he gave to the National Press Club. He has been done in by his political junior—his portfolio boss, the Minister for Foreign Affairs—who, as I understand it, has refused to provide him with access to expenditure cuts proposed by the Department of Finance to the entire Department of Foreign Affairs and Trade, leaving the Minister for Trade with access only to information in respect of agencies such as Austrade. So we know why these important export assistance programs like EMDG are being done in—it is because the Minister for Trade is being done in.

Mr SPEAKER —Order! It being 2 p.m., the debate is interrupted in accordance with standing order 101A. The debate may be resumed at a later hour. The member will have leave to continue speaking when the debate is resumed.