Mr WILTON(8.18 p.m.) —I am pleased to rise to speak in support of the Export Market Development Grants Amendment Bill (No. 1) this evening, as it serves as a stark reminder of the many popular and highly successful programs that the previous Labor government introduced to support Australia's small and medium size businesses. It also serves as yet another example of the Howard government's duplicitous and misguided treatment of our small business sector.

This bill is substantially the same as that which was presented by the previous government in November of last year, a bill which modified arrangements for the export market development grants scheme arising from the 1995 to 1996 budget. The export market development grants scheme was introduced by the Whitlam government back in 1974 to encourage both small and medium size business to seek out new export markets for Australian goods and services.

Approximately 70,000 such grants were awarded under the scheme between 1974 and 1991, with the average value of these grant being around $65,000. In the last financial year, some 3,400 such grants were awarded, worth a total of $211 million. The scheme is expected to grow to around $292 million by the financial year ending 1998-99.

It is important to note that both small and medium size businesses are the major beneficiaries of the scheme, making up 70 per cent of grant recipients. The Keating Labor government had announced in 1994 the extension of the EMDG scheme for a further five years, as part of the Working Nation initiatives, which would result in an expected 5,000 exporters receiving assistance under the scheme each year.

I should take the time to point out that both small and medium size exporting firms in my electorate of Isaacs have received $700,000 funding through the EMDG scheme over the last two financial years, which has assisted these firms with their export efforts and has aided in the creation of badly needed jobs for the Isaacs electorate.

As the time available to me this evening is somewhat limited, and as many of my colleagues have already spoken in some detail about the benefits of this legislation, I will not take up the time of the House by going through those matters once again in detail. But I would like to point out—and you would be well aware of this, Mr Deputy Speaker—that the main point of contention regarding the EMDG scheme is not the specific amendments to the bill but rather that we on this side of the House join with both industry and financial commentators in expressing our fears for the long-term prospects of the scheme in the face of the government's often repeated intention of massive budget cuts across the entire range of government activity in the form that my colleague the member for Reid (Mr Laurie Ferguson) has just alluded to.

A submission from the MTIA, presented to the Senate committee considering the EMDG bill, said that there was a great necessity for government and government programs, such as the EMDG scheme, to pursue these schemes as a matter of course and that the implications of cutbacks in funding were too heinous and too severe to countenance. The MTIA in its submissions to that Senate committee said:

Any reduction in funding for export assistance schemes would be short-sighted in the extreme, particularly given the level of Australia's current account deficit, and would have the inevitable result of reducing the export promotion activities which industry is able to undertake.

It went on to say:

It is imperative that Australia increase both the number of exporters and the level of exports by existing exporters. While Australian industry has achieved substantial increases in exports in recent years, this growth has been from a low base. It is essential to Australia's economic future that growth in exports, particularly of high value added exports, is accelerated.

The MTIA continued:

Government assistance programs and in particular the EMDG scheme are vital to this process. Funds allocated to these programs should be seen as appropriate investment in our economic future and not as non-essential expenditure to be cut simply when budget conditions are tight.

The MTIA concluded:

It has taken Australia many long painful years to build up an export culture and improve our competitiveness on world markets. These achievements are all now at risk given the government's short-sighted decision to abolish the DIFF scheme, to increase costs through recent changes to the tariff concession arrangements simultaneously with the final tariff phase down and all combined with a substantial strengthening of the Australian dollar.

To now contemplate adding to these major imposts on ability to export through abolishing the EMDG scheme is folly in the extreme and will unquestionably result in fewer exports and heightened import penetration with a consequent adverse impact on the Australian economy.

Such were some of the sentiments in the submission provided by the MTIA to that Senate committee of inquiry.

Having as recently as last night taken part in the debate on the taxation amendment bill, where the opposition is in the unusual position of trying to keep one of the government's promises to small business regarding changes to the provisional tax uplift factor, I am not greatly surprised to find another situation where the government is trying to worm its way out of one of its election promises to its much cherished small business sector.

The coalition's often repeated position on the EMDG scheme during the last election campaign was that not only would they maintain the scheme but that they would look to expand and improve it as well. This was made perfectly clear in the coalition's trade policy document entitled `Meeting the challenge', which stated that the coalition:

. . . will look at ways of providing more effective access to export assistance schemes, including EMDG . . . and will examine how access to assistance packages can be improved.

I must add the public comment of the Deputy Prime Minister and Minister for Trade (Mr Tim Fischer) that `EMDG stays'.

That was a position that was made perfectly clear by the coalition in its election campaign. Yet since that campaign the minister has had many chances to reaffirm these commitments given during that same campaign. In response to the questions in this place from my colleague the member for Perth (Mr Stephen Smith) and the shadow minister's representative in the Senate, Senator Sherry, the minister and other members of the government have run away from their promise at a million miles an hour—perhaps, after today, the Minister for Foreign Affairs (Mr Downer) has limped away at one or two miles an hour.

Mr Martin Ferguson —Onto the backbench.

Mr WILTON —The standard government response that all will be revealed in the budget on 20 August will bring little comfort to small business operators, who have already been given plenty of grounds for thinking that they have been sold out by this government.

Condemnation of the Howard government's treatment of small business has been widespread, coming from all sides of the political and philosophical spectrum. The member for Reid (Mr Laurie Ferguson) has alluded to what some of the financial journalists have had to say—notably Alex Kennedy, who wrote in the BRW on 10 June:

The government's lack of support for the scheme since its election in March has confounded state governments and business groups because it is almost unanimously considered one of the most successful of any export-support programs.

He went on at some length in that same vein. Furthermore, aside from Treasury officials having a well-known and long held dislike of schemes such as the EMDG program, which do not fit into their dry, economic rationalist view of `leaving the market to its own devices, and hang the consequences', there is yet another agenda behind the threat to this worthwhile scheme. Michael Dwyer, writing in the Australian Financial Review on 23 May this year reported:

Internecine warfare has broken out in the Department of Foreign Affairs and Trade portfolio, as its three core agencies battle it out to protect their key programs from savage budget cuts.

Relations between the offices of the Deputy Prime Minister and Minister for Trade and the Minister for Foreign Affairs, the late and great Mr Alexander Downer—the member for Batman has just interjected that he will soon be relegated to the backbench—started poorly and have deteriorated. It appears that the Department of Foreign Affairs and Trade has been trying to quarantine itself from substantial budget cuts, and has instead been offering up sacrifice programs run by AusAID and Austrade. Michael Dwyer went on to say:

It is understood Mr Fischer has written to the Prime Minister, Mr John Howard, requesting that all expenditure review committee meetings dealing with the DFAT budget are held at times when both portfolio ministers can be present.

In light of this information, and the general knowledge that the new Deputy Prime Minister is having a tough time settling into his new job—what with his backbenchers revolting over the gun control measures and whispers of leadership challenges permeating the corridors and back rooms of parliament—I think the honourable minister has been provided with an ideal opportunity to address this and, in doing so, to restore some meaning to the National Party in a policy sense. If the Deputy Prime Minister is able to achieve this, in one fell swoop he will re-establish the philosophical differences between the National Party and the Liberal Party. As Minister for Trade, he will have restored some of the faith and trust that both small and medium sized businesses and exporters have placed in this government to do the right thing by themselves and Australia. I commend this course of action to the Deputy Prime Minister and I commend the bill, as amended, to the House.