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Tuesday, 25 June 1996
Page: 2677

Mrs DE-ANNE KELLY(6.43 p.m.) —I rise to speak on the Export Market Development Grants Amendment Bill. This is commonsense legislation to better target government assistance through the export market development grants scheme. I would like to give a brief overview of how the scheme works, the relevance of the EMDG scheme to the tourism industry—which I am proud to have a good deal of in my electorate—and, lastly, some of the amendments that are going to be made to the act through this bill.

Export market development grants encourage Australian exporters to develop overseas markets for goods, services, industrial property rights and general know-how. There is a 50 per cent reimbursement for the costs incurred in overseas marketing. I might add that, for the tourism industry at present, that reimbursement is only 25 per cent.

Prior to this legislation being enacted, the taxable grants have a maximum ceiling of $250,000. An individual or a company can have up to eight grants, with three additional grants for each new market that is opened. The definition of a `new market' is one where the export sales for the last three years are not greater than $300,000. There is also a $30,000 threshold. In other words, an individual or a company must have expenditure of $30,000 or more to be able to access the EMDG.

There are some sensible savings in better targeting this grant to assist fledgling exporters in small companies. In the mighty seat of Dawson—

Mr Vaile —Well represented.

Mrs DE-ANNE KELLY —Thank you. In the mighty seat of Dawson, where we have the Whitsundays, there is a great deal of use made of export market development grants by the tourism industry. I would like to give you one instance. We have an agricultural tour company and they assist visitors to come to Australia who are interested in our agricultural pursuits. For instance, overseas cattlemen visit Australia to have a look at the breeding herds here, to look at pasture development and so on. Next year there is to be held in Australia an international conference on beef breeding. This particular tourism company has had the foresight to distribute to 2,500 overseas beef breeders $40 packs describing the conditions in Australia, the herds, places to visit, pasture improvement and so on.

This is a considerable expenditure, I must say, and they are able to do this because of the export market development grants scheme. Those who come to Australia plainly will increase the number who visit Australia and will also extend the time that they spend here and, hopefully, will extend the amount of money that they spend here as well. There is a considerable advantage for small exporters, which this agricultural tour company is, in having access to export market development grants.

I would just like to quote Keith Neilsen, who addressed our government committee on tourism last week. He is the Executive Director of the Association of Marine Park Tourism Operators. He has said that tourism is a big industry; it earns big dollars—they are disposable dollars. But people have to be convinced to take a holiday.

Tourism has done Australia very well in international terms. A few years ago, we had only one million visitors per year. Let me say that, of those one million visitors, 350,000 were repeat visitors and 650,000 were first-time visitors. They have to be encouraged to come to Australia to spend their holiday. We are now up to the level of three million visitors per year, and what that means is that we have to attract as first-time visitors 1.7 million visitors.

It is a considerable challenge for the tourism industry here, and I must say that it is a very expensive challenge. They have to convince the wholesalers and agents in other countries that Australia is the place to visit. The tourism industry has a very proud record as one of those who access export market development grants. Austrade has recorded that in 1993 the dollar export earnings compared to the dollar cost of grants for the tourism industry are in a ratio of 25 to one. In other words, for every dollar spent on the grant, Australia benefits by $25 in income, whereas manufacturing has a ratio of only 18 to one. Tourism makes good use of the grant. They convert those grant dollars into big export dollars for this country.

But there are other difficulties for the tourism industry. For example, if you are in manufacturing, it is very easy to put a spanner or a set of drawings into a post bag and send it overseas. Unfortunately, you cannot parcel up the Whitsundays and send them overseas—thank goodness! What we need is the opportunity to bring the wholesalers and agents to this country and have that recognised as a sample. They are the ones who will promote our product to potential customers overseas and they have to have a sample of Australia. The only way to sample a tourism destination is to go there and see all of the benefits that it offers.

I believe the tourism grant should in fact be 50 per cent. Our mighty tourism industry should be recognised as the great exporter that it is. I believe it should not take second place to other exporting industries and I look forward in the budget in August to tourism being recognised as a full grant recipient of the export market development grants scheme. I certainly trust that the Prime Minister (Mr Howard) will keep to his commitment to see that tourism is recognised as a full export industry.

I now turn to some of the changes that this legislation will bring about. We will reduce the maximum grant from a quarter of a million dollars to $200,000. Only 200 claims made every year actually receive such a large grant—only five per cent of the overall claimants. These are the larger resource companies, companies that are well able to afford to promote their own activities overseas. We want to see grants directed at the small, emerging tourism and exporting sector.

Another change will ensure that those claimants for an export market development grant will not be able to add to the expenditure after the claim has been submitted. There will be an allowance of 10 per cent of the overall expenditure to cover genuine reasons why amounts which have been overlooked should be expended. This will ensure that claims are completed on time and that the accounting is done thoroughly.

We will also limit the membership of multiple joint ventures and consortia. With the present threshold of $30,000, individuals and companies can join a consortium or a joint venture to access that threshold. We will limit to three the number of joint ventures that one can be a member of, although that will be varied at the minister's discretion should the need arise. This will prevent smaller export companies from overextending themselves and ultimately, perhaps, failing in their export drive.

We will also ensure that claims will be disallowed if they are prepared by a disqualified individual. Many of the exporters use consultants. Those who have been disqualified, on good grounds, will no longer be allowed to prepare claims. But all of those small businesses and exporters who have, with the best will, gone to a consultant will have a further 90 days to put in a fresh claim.

I am particularly pleased about the amendment whereby expenditure relating to illegal activities will not attract a grant. Australians would be, frankly, offended if taxpayer moneys were expended on what they saw as illegal activities, either in this country or in another country.

We will also prevent grant eligibility for an interposed company where somebody who was ordinarily employed by that company is, in fact, receiving a grant to cover wages or salaries. This practice has been used in some cases and the grant has been paid for ordinarily employed persons.

We will also bring in a register of first-time claimants and a grants entry testing which will apply to about 1,200 new claimants every year who are trying to access the scheme. The registration will be very simple and it will look at five particular areas: importantly, whether the claimant has a product or a service for export; whether they are adequately resourced; whether they have done their market research; and whether their management has a commitment to an export drive. These are very commonsense changes that will better direct the grants to small and medium firms that are emerging as exporters.

I would now like to move on to a general discussion of the worth of savings. Certainly there are going to be savings from the amendments that are being made to the export market development grants scheme. This is most important. With the $8 billion black hole that we have, savings have to be found. It is necessary that we look at ways in which this can be done which still allow us to boost export earnings for this country, that still allow us to direct our activities towards the productive sector. It has to be done.

In view of the flak that the Treasurer (Mr Costello) is receiving as a result of the measures he is taking, I would like to make a comment now about our future Australians. During my maiden speech I mentioned that a nation is not simply those who live now; it is past Australians, it is present Australians and it is future Australians. I am very pleased to see that the government and the Treasurer are taking measures which are going to give our future Australians—our children and grandchildren—an opportunity that we in this country have enjoyed.

At the moment I believe that the previous government has mortgaged our children's future, that they have ransacked the future to pay for the present, that they have indulged in inter-generational theft. I believe it is most important that our government takes a responsible view of the future, that while we care for the vulnerable and give a stimulus to the productive sector we ensure that we do not add to what has been a disgraceful record of inter-generational debt.

I commend the Export Markets Development Grants Amendment Bill to the House. I look forward to future changes to the tourism industry which will put it on a similar footing to other export industries in this country in respect of the level of grant allowed.