Mr ENTSCH (10:30 AM) —First of all, I would like to thank both honourable members for their contribution to this debate on the Export Finance and Insurance Corporation Amendment Bill 1999 . I will cover some of the issues raised by the honourable member for Fraser. I will start with his comments suggesting that the government was keeping EFIC purely as a cash cow for the government. I would suggest to the honourable member that EFIC does not need to achieve significant profits each year as would a private company and therefore additional costs on EFIC will not necessarily feed back through to higher charges for exporters.

The government made the decision in 1997 to keep EFIC in public ownership. This was to ensure that exporters would continue to be supplied with an efficient support body in EFIC. There would certainly be no point in this if EFIC was hamstrung in its efforts to assist exporters by offering higher charges. The government will certainly be mindful of the international competitive situation in setting the charges which EFIC will have to pay to the government.

The member for Fraser also asked, `Why do you impose higher charges on EFIC at a time when there is a record trade deficit?' I would suggest to the honourable member that there is really no good time to impose these sorts of measures. There is, however, a developing private market for insurance and the measure is designed to ensure that EFIC does not unfairly compete. What the government wants to achieve here is an efficient EFIC, working in tandem with efficient private markets.

In regard to the contribution from the honourable member for Cook, he supported the measures in the bill and the concept of competitive neutrality. He mentioned the government's achievements in supporting the industry and exporters, including in the important taxation reform area. As he mentioned in relation to EFIC, it certainly has had a long history of support for exporters—over some 43 years—but a level playing field concept is important. The private sector certainly must be encouraged to continue to develop. It is particularly important in the short-term insurance area. He also mentioned that the government has announced its dual aim of having an efficient and effective public and private sector in the export insurance area. This is very important. I thank both members for their contribution.

As Mr Anthony mentioned in the second reading speech, the government had concluded that the interests of exporters are best served by maintaining EFIC in government ownership. The benefits of this decision were seen in EFIC's ability to respond quickly and to provide invaluable support to Australian exporters during the South-East Asian economic crisis. The merits of this decision will be further demonstrated as EFIC provides cover for exporters for risk extending past 1 January 2000. At the same time, however, the government believes that, where the private sector is willing to support exports, it should be encouraged to do so.

This bill seeks to ensure that EFIC enjoys no net benefits from its government ownership and will therefore assist in developing a strong private sector that will provide competitive benefits to our exporters. I commend the bill to the House.

Question resolved in the affirmative.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.