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Tuesday, 25 June 1996
Page: 2707


Mr SERCOMBE(9.14 p.m.) —It was a depressing spectacle to yesterday witness the Deputy Prime Minister and Minister for Trade (Mr Tim Fischer) give his second reading speech on the Export Market Development Grants Amendment Bill (No. 1) 1996. It is sad to see a leader of a political party being undermined by his own colleagues and shot to ribbons in terms of his support base. It was also depressing, in terms of the interests of the nation, to watch the Deputy Prime Minister give such cursory attention to such an important piece of legislation. The second reading speech was one of the shortest second reading speeches I can remember. I think that is disgraceful.

It was certainly depressing that such cursory attention should be given by the Deputy Prime Minister to this bill. He had the opportunity to put to rest once and for all the very damaging speculation that has been allowed to run for too long about the future of this scheme. He added to that speculation by saying:

. . . I would like to make it very clear that this step does not provide any indication about what may or may not be the subject of ongoing budget discussions.

Mr Fischer in fact continued to fuel the speculation about the fate of this particular scheme in the government's deliberations. Of course, that is immensely destabilising to businesses that need to make decisions for the future. Businesses have lead times in terms of their financial planning and other aspects of their activities and they need some certainty about the continuation of this scheme. The failure of the Deputy Prime Minister to add to that certainty is, I think, depressing.

It is depressing because this scheme is an important part of Australia's export position. It is important, as we all know as members of parliament, to address in whatever ways are possible problems that Australia has on the current account, with the balance of payments and in relation to continuing to diversify our trade. Failure to take opportunities is something we all ought to condemn.

The media speculation about this program has been allowed to run for a long time. Back in April the Financial Review was carrying stories that the Department of Finance was gunning for the export market development grants scheme. On the same date, 19 April, the Financial Review indicated:

The Federal Government is turning its guns on exporters, with a plan to abolish the $237 million Export Market Development Grants scheme . . .

That speculation continued to run in the Financial Review into May where there was a story—with a particularly unflattering cartoon of both the Minister for Foreign Affairs (Mr Downer) and the Minister for Trade—on Austrade and AusAID's campaigns within the realms of bureaucratic politics to save both DIFF and the export market development grants scheme.

The Financial Review also carried stories at the end of May about the departure of the managing director of Austrade. Mr Evans said, perhaps a tad tongue in cheek, that the assault on the programs of his organisation had not been part of his decision to depart. But the article makes it quite clear that the export market development grants scheme continues to be under sustained attack from areas of the bureaucracy that are inhabited by the economic fundamentalists of Canberra, the economic fundamentalists of Treasury and Finance.

Finally in terms of media coverage on these matters, we have Mr Fischer in the Australian reported whilst in Japan as fuelling speculation about the future of the scheme. When asked about it he said:

Of course, that creates its own pressure on exporters. It can wipe out the assistance given to any particular scheme overnight.

There is quite a concerted campaign in the media to undermine this scheme as part of the process of leading up to this budget. The government has been prepared on other important issues of public policy to clarify its position before the budget. The failure to do it on this is not acceptable. I have already referred to the importance for business—for their own planning and their own activities—of getting some early advice in relation to this matter. Of course, the government's own election commitments have been referred to elsewhere.

If we were speaking about a program that did not have a high recognition rate, a high credibility rate, one could perhaps be a little less concerned. But the facts are that this program has been reviewed on a number of occasions. For example, the 1994 review undertaken by the Department of Finance and by consultants Price Waterhouse, amongst others, found that the scheme was achieving its objectives of assisting Australian businesses, especially small and medium sized firms, to seek out and develop new export markets. It said:

.   revenues from taxes on grant receipts and profits on additional exports were estimated to return 42% of the cost of the scheme to the Commonwealth.

.   most of the growth in the EMDG scheme has come from the services sector

. . . . . . . . .

.   the minimum level of qualifying expenditure . . . number of grants performance test are largely appropriate

And the positive findings go on. The scheme has a multiplier effect on average of $9 for every dollar granted. Anecdotal evidence puts the multiplier effect as high as 30:1 in some cases. We are not talking here about a scheme that has not been thoroughly and appropriately evaluated in terms of the contribution it makes to the economic wellbeing of Australia and Australia's economic strength, particularly against the background of some of the fundamental problems of our economy in relation to our external performance. To attack this is, frankly, crazy.

I did take a bit of note of the speeches of the member for La Trobe (Mr Charles) and the member for Aston (Mr Nugent). Both were supportive of this scheme in relation to the contribution it makes. So one has to speculate, I suppose, on where the pressure comes from for this scheme to continue to be under some sort of a cloud.

I would suggest that that relates to those economic fundamentalists I referred to before. The member for La Trobe referred in his speech to a number of other industry schemes. He referred to the 150 per cent tax benefit for research and development, the computer bounty, the factor F pharmaceutical scheme and the industry plans in the automotive industry and TCF areas, as well as the export market development grants scheme.

All those interventionist activities in support of manufacturing industry in this country are very much at risk if the sort of view that prevails in some sections of the government about the nature of the government's relationship to the management of the economy and intervention in the economy were to prevail in this particular matter. I suggest to the member for La Trobe and others that some of those schemes which, by and large, have been successful in positioning Australia's successful economic performance in the international community are similarly at risk if this particular issue is not fought.

That is not to say that, ultimately, there are not more fundamental initiatives that need to continue to be taken to address our current account problems. We would all agree that the issue of savings and the rate of national savings is clearly the most fundamental of those factors. This is not the time for that debate. Even in that area, this government is already showing some alarming signs of backsliding on some of the areas of achievement of the former government.

I suggest that it is vitally important for members, particularly those on the government side—members such as the members for La Trobe and Aston, who have come into this House and defended the scheme—to have the courage of their convictions within their party room, to take the fight up in defence of this scheme within their own frameworks and within their own structures and to ensure that this important scheme in terms of Australia's economic wellbeing is protected from the sort of vandalism that is quite clearly being proposed for it.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.