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Wednesday, 13 March 2013
Page: 2020


Mr TRUSS (Wide BayLeader of The Nationals) (10:11): I note that there were no Labor speakers fronting up to try to defend this Export Finance and Insurance Corporation Amendment (Finance) Bill 2013. Presumably, the minister may say something at the end, but no self-respecting member of parliament—

Honourable members interjecting

The DEPUTY SPEAKER: Order! The member for Wide Bay has the call.

Mr TRUSS: not even, I would have thought, from the government side—would not be embarrassed about this piece of legislation. As we have just heard from the shadow minister for foreign affairs and trade, this is simply a raid on an important financial institution that supports Australian exporters, to prop up the government's hopeless budgetary situation. At the very time our country is building bigger and bigger trade deficits and our manufacturing industry is suffering significant job losses, this government is restricting the capacity of one of the institutions designed to help Australian industries in difficult export markets to win market share, and that makes absolutely no economic sense.

The Export Finance and Insurance Corporation is Australia's export credit agency. EFIC's mandate is to support the growth of Australian business internationally particularly in the market gap where private sector capacity is insufficient or unavailable or unwilling. The Export Finance and Insurance Corporation Amendment (Finance) Bill 2013 will amend the financial arrangements for the Export Finance and Insurance Corporation to provide for the payment of special dividends and any adjustments to EFIC's callable capital that may be necessary in the future. The bill implements a 2012 budget measure and follows some of the findings from the 2012 Productivity Commission inquiry into EFIC's operations. The Productivity Commission in that report found that when EFIC retains capital above its minimum requirements any surplus capital has an opportunity cost that has to be borne by the taxpayer. It recommended that the Export Finance and Insurance Corporation be amended to allow the minister to direct EFIC to return surplus capital to the government, and so this legislation deals with that issue.

Besides allowing for the extraction of $200 million for the current financial year, these amendments provide for an ongoing ministerial direction with respect to EFIC dividends, so we can expect that in the future EFIC will be raided again and again by this government and, in the process, that will clearly limit its capacity to do its job. We need to be frank about the motives for the bill. It is about helping to shore up the government's large budget problems.

The need to reap these dividends is because the Gillard government has been an economic disaster across the board. Labor is the highest spending government in Australian history. This government has inflicted 27 new or increased taxes since coming to office and still it is out trying to find new ways to raise money. It comes in one door and is trucked out the back. The need for the new cash flows comes despite the fact that the Gillard government will reap $70 billion more in revenue this year than in the last budget of the Howard government. Clearly Labor does not have a revenue problem, it has a spending problem. And what is particularly annoying about its spending problem is that so much of it has arisen as a result of waste and mismanagement.

The amendments that are introduced in this bill highlight the government's complete mismanagement of the Australian budget. The Australian Industry Group's Australian Performance of Manufacturing Index this month shows manufacturing in decline for the 12th straight month. Around 110,000 jobs have been lost in Australian manufacturing since 2008. This was the government that talked about 'jobs, jobs, jobs'. Well, it is 'jobs lost, jobs lost, jobs lost'. That has been their mantra. They as a party talk about being supportive of the workers, but they have stood idly by while 110,000 jobs have been lost in the manufacturing sector and, of course, many others in other places.

One of the things that we need to do to help support our manufacturing industry is to give them opportunities in the export sector. This bill reduces those opportunities. The ABS Accounts of Australian Business, including entries and exits from June 2008 to June 2011, reveals that 800,000 small businesses have exited the marketplace since Labor's election. And that was only up to 2011; it is probably more than a million by now. Recent Dun and Bradstreet research shows that small business bankruptcies have jumped by 48 per cent, and small business start-ups have fallen by 95 per cent, over the last 12 months.

The mining tax is a complete flop, raising just $126 million of the promised $2 billion in revenue. But in the true Labor tradition it is actually worse than that. Once you deduct the administrative costs and the company tax offset, the mining tax raised less than $40 million. And what about the carbon tax—again, making it harder for Australian exporters. IBISWorld research says the carbon tax is costing Australian farmers alone $3.2 billion in 2012-13, and that slug will ramp up to $3.7 billion in 2014-15. So, on top of a high Aussie dollar and flat commodity prices, this is the worst possible time to be inflicting a tax of that nature on our farmers, let alone a tax that is not imposed on farmers in any other part of the earth. It is little understood that one in six Australian jobs still hinges on the farm sector, which ripples through the economy to transport, processing, packaging and all the way to the retail end. Today Australia's businesses pay a $23 per tonne penalty for carbon emissions, and that will go up to $24.15 in only a few months time on 1 July. Our businesses and our families are locked into this high carbon price for three years. There are yet more examples of the blatant revenue raising that the Labor government have put in place in order to try and cover up the fact that they cannot control Australia's budget. We have been here before. Labor's legacy has seen this kind of wreckage in state and commonwealth governments now over decades.

The reality is that we need to be doing what we can in these difficult times to try and give our industry whatever opportunities we possibly can. We need to be supporting those in manufacturing who are hanging in there in spite of the increased taxes and lack of competitiveness that have been imposed upon them by this Labor government through its taxation policies, its workplace relations policies and the inconsistency of its approach to support for industry. Under Labor, economic management has descended from sound and responsible decision-making into utter chaos. Stripping $200 million away from EFIC simply reduces its capacity to support Australian exporters at a time when they need it. I know EFIC has always had its critics. Dry-as-a-bone economists, Treasury officials and academics have opposed the very existence of an organisation like EFIC. Perhaps it is not surprising that the Productivity Commission also is a critic and has provided the fig leaf that the government is using for this legislation to strip $200 million away from EFIC's reserves.

Labor is doing this at a time when our trade balance is in crisis also—when our trade deficits continue to rise. The Australian dollar is high. Europe, the US and a range of other countries are maintaining and, in some cases, increasing the subsidies that they are offering to their exporters. Others manipulate their currencies so as to give them a trading advantage. Australian manufacturers and Australian exporters have to carry a huge burden: not only the extra costs that are associated with doing business in this country but also now a government that does not seem to be willing to support them in their efforts.

At the very time when our exporters need more help, Labor is taking money away from them. We are discussing this EFIC legislation in the Federation Chamber today, but downstairs in the other chamber Labor is also attacking the EMDG scheme and taking money away from the export market development grants. There seems to be a consistent disregard for the vital role that our exporters can play in restoring the national economy and making our country work more successfully in the future.

EFIC is a very modest export finance and insurance organisation. It helps small businesses to access markets by supporting their transactions. It is not a mainstream banker; in fact, its charter prevents it from acting in any competitive way with the banks. They take on the business that the bankers will not touch, whether that is because of higher risks or nonconventional lending requirements. The fact that this $200 million is being usurped is in some way a tribute to its success—the fact that there is actually $200 million available is a remarkable tribute to its good management. They operate in a very difficult financial environment; they are facing competition and challenges from huge organisations run competitively by other countries, and over quite a number of years they have managed to accumulate this $200 million that the government is raiding through this legislation.

The point that I just referred to is an important one. Countries like the US, European countries and China back their exporters with billions of dollars worth of export finance. Many deals are consummated between some of these major exporting countries and smaller, poorer nations on the basis of the very, very generous financial terms that are provided to those countries. We can never match the scale of those kinds of operations, but we can help. We actually can help and, unfortunately, the very organisation that has been established for that purpose—EFIC—is going to be less financially capable in the future because of the money being taken away from it in this legislation.

It is important that we do whatever we possibly can to support our exporters. I think EFIC has played a key role in enabling many small businesses and smaller exporters to find a way into an overseas market where previously that may not have been possible. I think we need to be helping and supporting organisations like EFIC to do their job. It seems that Labor does not even want to try, and instead just sees these organisations as yet another milking cow to prop up their extravagant spending.