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Wednesday, 18 June 2003
Page: 16788


Mr NEVILLE (11:06 AM) —Australia has always been a trading nation. Prior to European arrivals our nation was crisscrossed by Aboriginal trade groups—trade goes right back to those days. Later we were known as the country that rode on the sheep's back. The development of export markets has always been of great importance to our nation. The Export Market Development Grants Amendment Bill 2003 goes right to the heart of that issue. In a nutshell, this piece of legislation expands the number of small and medium sized Australian enterprises which can access funding under the Commonwealth's EMDG program, which in turn will grow Australia's export markets. It will do this with annual budgetary allocations of $150 million. It will encourage existing major grant recipients who have flourished under the program to operate independently of federal assistance delivered through the EMDG program. It was never intended that people would have to rely on this program forever and a day. Nevertheless, I see from the list that a lot of companies in my electorate have done that for five or six years, and it has been of immense help to them.

This scheme reimburses 50 per cent of the money spent by recipients on specified export promotional activities, less the first $15,000. The EMDGs are part of the government's philosophy of believing in its own people and the value of Australia's products on the international stage. That is not to say that successful export enterprises which have previously accessed EMDGs will have to function without Commonwealth assistance. Any number of services will still be available. For example, the expertise of Austrade, through the Austrade regional offices in the country, which the Commonwealth funds, and TradeStart will also be available to them.

This legislation will increase the number of small exporters receiving assistance for promotional activities targeting overseas markets. Indeed, the success of the program since its inception led to this government extending it for a further five years into the year 2001, highlighting our commitment to Australia's export sector. The EMDG Scheme is seen as one of the cogs in the wheel creating a conducive economic climate for Australian businesses, in particular for exporters. This government has delivered sustained low interest rates; continuing low inflation—we expect 2¼ per cent until mid-2004—low national unemployment rates, at present around six per cent; and strong economic growth. The budget shows that that growth will be around 3¼ per cent, one of the best in the OECD. All these factors combine to create a positive environment for Australian businesses.

The Commonwealth want to build on that success by doubling the number of Australian exporters, by 2006. Of course we do not take the pessimistic view of the opposition speaker who spoke previously, the member for Oxley. This is best done by extending exports to as many companies as possible looking to develop an international presence—hence the amendments contained in this bill. The proposed changes will take effect from 2003-04 and will apply to submissions received and grants paid from 1 July 2004 onwards. Small business is the backbone of this country and a fast-growing contributor to our export activities. An estimated 97 per cent of all Australian exporting firms are small to medium entities, and 65 per cent of companies which have received EMDG money have annual turnovers of less than $5 million.

The government intend to improve on these remarkable figures by allowing more domestic small businesses to take part in the program. To broaden the criteria for assistance, we will (1) reduce the annual turnover ceiling for applicants from $50 million to $30 million, therefore focusing on true small business; (2) lower the maximum grant amount from $200,000 to $150,000 and in turn increase the number of grants available within the program's annual budget; (3) reduce the number of grants from eight to seven, which will increase the number of companies accessing assistance during the lifetime of the EMDG Scheme; and (4) remove the $25 million export earnings ceiling, therefore lifting the restriction on program participants. The member for Oxley had a lot to say about that.


Mr Hartsuyker —A lot of waffle.


Mr NEVILLE —It was a lot of waffle. He said that this would create a gross distortion and asked what would stop the companies who had turnovers between $30 million and $50 million going into decline. One would expect that when a company got to that level—after it had had, perhaps, under its $30 million level, a number of EMDGs—it would be pretty self-sufficient. I just had a look through my own list of EMDGs. I have had a lot of them in my electorate, because I have a very diverse community with an interest in exports, and I notice that, far from anyone being disadvantaged by this $150,000 ceiling, the highest grants in any particular year in my electorate were $106,000 and $118,000. So it is certainly not going to cause any problems in my electorate. Not only that; there is a margin of about another $45,000 that could be taken up before any of the industries that I deal with—and I deal with a vast variety of industries—would get to a situation where they need more assistance.


Mr Hartsuyker —The member for Oxley is a scaremonger.


Mr NEVILLE —He is a scaremonger. He just does not understand the business—that is the problem. Moving on, these alterations have led to an average of 3,000 Australian small and medium businesses accessing the Export Market Development Grants Scheme each year. I can proudly say that the Export Market Development Grants Scheme has been particularly well received in my electorate.

From the program's inception in 1996-97 until today, 21 separate business entities in my electorate have received around $1.4 million to help promote and market their exports overseas. These products have included light aircraft and their accompanying engines and parts, innovatively produced fruit and vegetable products, seafood, soft drinks, syrups, cordials, agricultural machinery and educational services—a very wide range.

Bundaberg is becoming Australia's salad bowl, because of its superior agricultural output, and one company that has benefited tremendously from the EMDG Scheme is Austchilli, which has been very much in the news over recent days. Austchilli is a Bundaberg based firm, which processes locally grown small crops, which it sells in their whole form and also in their processed form. To date, the company has received almost $90,000 from the EMDG Scheme (Quorum formed). On top of the EMDG grant of about $90,000, which has helped the company get into that international market to which it is now exporting, only this week we have announced $546,000 of funding for it under the Sustainable Regions Program. What comes out of that is that we are not just providing grants for exporting; we are using a holistic approach to help companies develop. This will go into a new greenfield site factory, and, of course, the spin-off from that is 50 new jobs initially—and we are told by Austchilli that as the company expands that could go up to 150 or 200 jobs over the coming years.


Mr Forrest —How many jobs?


Mr NEVILLE —Up to 150 or 200 jobs. And that is a small industry that started with an EMDG grant.

I would like to take you to another interesting industry in my electorate. It is the Jabiru aircraft company: Jabiru Aircraft Pty Ltd. They have been using the EMDG program since 1996 and have received between $450,000 and $500,000—just short of half a million dollars in EMDG grants. The joint managing director of Jabiru, Phil Ainsworth, said of the EMDG Scheme:

... it is a useful tool, particularly in the early days where cash flow is critical to business.

Jabiru is probably the premier light aircraft manufacturer in Australia now. It has made 700 aircraft from a little factory in Bundaberg. Not only that but when it could not find engines overseas it developed an Australian engine. Over 2,100 of those Australian engines have gone overseas: that is three times as many engines as aircraft. So other aircraft manufacturers in Australia and around the world are using that engine. I think that is one of the great success stories of the EMDG Scheme: enabling the company to get overseas, to go to things like the Oshkosh Air Show to market the product to industry. In fact, I was recently at the Raglan Air Show in Queensland, which is one of the biggest air shows in northern Australia, and at that air show Jabiru were displaying their four-seater, and those four-seaters are now becoming enormously popular and will no doubt help the company to exceed its already bright prospects.


Mr Slipper —How much do those sell for?


Mr NEVILLE —It depends on whether they sell in kit form or assembled, but they are all under $100,000—around the $70,000 to $80,000 mark, down to $60,000, depending on whether they are in kit form or not.

The EMDG Scheme has been a very interesting one for me, and another company I would like to talk about is Bundaberg Brewed Drinks.


Mr Wakelin —Hear, hear!


Mr NEVILLE —That is not to be confused with alcoholic brewed drinks, so the member for Grey can relax a bit. But no doubt all members of the house have enjoyed the pleasures of Bundaberg Ginger Beer. It is the ginger beer that comes in the stubby type bottle. That is a great product, and it is the dominant ginger beer right across Australia—and in fact a friend of mine went to New Zealand some years ago, and he said, `I could not believe it: in every corner store in New Zealand that I went to there was Bundaberg Ginger Beer.'

So I went and saw Cliff Fleming, the managing director of the company, and I said, `What's your export profile?' He told me at that time that he was sending 14 containers a month—I think it was—to New Zealand, and I thought that was quite remarkable. Today, I got my staff to check on the current situation. Would you believe that the company now sends 330 containers of ginger beer per year to New Zealand? Let me translate that into cartons for you. That is 426,000 cartons of ginger beer. If I can translate it down yet another step, that is 10,200,000 bottles of ginger beer that go to New Zealand every year from the little factory in Bundaberg. That means that every New Zealander—man, woman and child—on average, drinks three bottles of Bundaberg Ginger Beer a year.


Mr Hartsuyker —And they're happy.


Mr NEVILLE —Of course, they are happy—and so they should be. Part of the success of the company came from the EMDG Scheme. In 1992, exports from Bundaberg Brewed Drinks represented only 20 per cent of their business but, by 2003, exports represented 30 per cent of their business. So you can see that their Australian business has grown dramatically as well, but we are not talking about that today. Cliff Fleming, to whom I have just referred, said that the scheme has given business the confidence to go overseas and look for business. He has now been exporting to New Zealand for 17 years.

They are three examples from my electorate and there are many more. Austchilli is one of the major ones, and we have talked about Jabiru Aircraft and about Bundaberg Brewed Drinks. They are all totally different products. There are others in Gladstone. One of them, for example, is Austicks. Every time you stir your coffee with a wooden spatula or have an ice cream, there is a 90 per cent certainty that the wooden spatula for the coffee or the wooden stick in the ice cream or the lollipop came from Gladstone. Austicks have a manufacturing plant there that makes between 80 and 90 per cent of Australia's stirring sticks and sticks that go, as I said, into ice creams and ice blocks.

There are other interesting industries such as Bundaberg Foundry Engineers that make a lot of agricultural equipment and sugar milling equipment, and there is Quatus Pty Ltd at Bargara that exports educational products. There are two or three firms in Bundaberg and Gladstone that export fishing products, such as Pioneer Seafoods and Reefmore Pty Ltd. So right across the spectrum this scheme has delivered. It has been rejigged under these amendments to become more user friendly, to be focused more on the small to medium and small business sector. I hope it goes on to spawn many more great companies in regional and rural Australia, particularly companies like Austchilli, Jabiru Aircraft and Bundaberg Brewed Drinks.