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Wednesday, 16 November 1983
Page: 2761


Mr ANTHONY (Leader of the National Party of Australia)(11.17) —The Opposition supports the Export Finance and Insurance Corporation Amendment Bill, which provides for a number of what the Minister for Trade (Mr Lionel Bowen) describes as essentially technical amendments to the Act but which nevertheless are significant. We will support every appropriate effort, whether by government or the private sector, to enhance Australia's export performance because an improved export performance is absolutely vital. The former Liberal-Country Party Government established the Export Payments Insurance Corporation, and in 1974 it became the Export Finance and Insurance Corporation. EFIC's function is to assist the national export effort by providing insurance cover against many of the hazards of exporting by providing lines of credit, buyer credit guarantees, overseas investment insurance and performance guarantees. EFIC's export finance facility provides competitive finance to support exports and is funded by loans from trading banks at commercial rates supported by a government subsidy.

The Bill proposes three main changes to the legislation currently governing EFIC's activities, allowing the Corporation to provide export finance in foreign currencies-this is currently limited to Australian dollar loans-expanding the definition of 'lending' to include the provision of finance in any form and removing the restriction which generally limits EFIC's services to those not normally available from the private sector. The first two alterations can be classified as machinery measures and should help EFIC's work in assisting exporters by widening the extent of its services. The third should come under closer scrutiny. The Minister for Trade, in his second reading speech, explained :

I am concerned to ensure that EFIC does not become open to challenge if private operators were to seek to operate selectively in the less risky areas of EFIC's traditional activities.

He also said:

While the Government is anxious to preserve EFIC's traditional role it does not see the need to extend EFIC's facilities into other areas of insurance as long as the private sector is effectively meeting the needs of exporters.

Restrictions on EFIC entering into payments insurance contracts against risks normally insured by commercial insurers are to be removed as are restrictions on providing overseas investment insurance against risks normally insured by commercial insurers. The restriction on EFIC's export finance facility competing with commercial financial institutions is also to be removed by the legislation. The moves are of relatively low impact and it might well be that the latter is, in fact, unlikely to result in any conflict between commercial and government interests because the element of subsidy involved is much of the activity under the export finance facility. However, I register my concern that there should not be too much intrusion by EFIC into areas normally covered by financial or commercial institutions. This is something we must always watch with an Australian Labor Party Government in office because the Labor Party is by nature inclined to intervene in what should be private sector activities. Certainly, I hope that whenever the Government contemplates changes in these matters there will be full consultation with the private sector.

The Government has proposed the establishment of an overseas trading corporation and there again I think we ought to be concerned about the Labor Party's propensity to involve itself too deeply in areas which should be and can be quite properly handled by the private sector. Unlike the Australian Overseas Projects Corporation which was set up as a body to co-ordinate the efforts of Australian firms in overseas activities where such co-ordination was needed, the proposed trading corporation appears to be designed to go somewhat further and actually to get involved in trading itself, although on behalf of individual companies. But this is a matter for another day. This Bill is designed to make changes that will assist exporters, and therefore we support it with the reservation that I mentioned earlier.

There is a very great need for Australia to do all it can to modify the composition of its exports. Agriculture has been and remains the mainstay of our export effort and it will continue to be the mainstay. In more recent years mining has taken up an increasingly important role and there have been strong advances in manufacturing exports. However, the two major areas of exports, agriculture and mining, are areas in which the growth of world trade has been the slowest. Manufacturing, processing, high technology, capital and skill- intensive products are the areas in which growth lies and we need to increase our activities and our performance in these areas.

We have to do many other things to improve our export trading performance. As I have explained, we have to modify the composition of our exports by doing better with manufactured and processed exports. We have to do more to liberalise trade, and a lot more to restructure our industries to make them more export oriented. As a nation, as government, business and unions, we have to make much more dedicated and effective efforts to maintain our international competitiveness. The many other things we have to do can be elaborated on at some other time, but for the moment the Opposition expresses support for the Bill that is now before the House.