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Tuesday, 16 June 2009
Page: 6225

Mr CREAN (Minister for Trade) (7:28 PM) —First of all, in relation to the decision about government procurement in New South Wales: we are very concerned about it but are checking the full details and its implications. I have read newspaper reports; I have not seen the details. If, in fact, though, it is going to be an initiative that gives a price differential to Australian product of 20 per cent, we are opposed to that because that amounts to a tariff. We do not believe that government procurement mandated or price impacted is the correct way to go, and we will strongly resist it. Not only does it run the risk of being contrary to our trade obligations; it is clearly contrary to commitments that we, amongst G20 leaders, made at the G20 summit to resist the spread of protectionism in the context of the current global financial crisis.

We should resist the spread of protectionism in any event because if any lesson was learnt from the Great Depression it was that tit-for-tat reaction and the downward spiral of protectionism costs jobs; it does not create them. I would have also thought that the 20 per cent price differential was an odd decision for the New South Wales government to be taking in the context of having to balance its budget, because clearly it is imposing an additional cost in there.

The other reason this is a flawed and misguided approach is that part of what we are trying to negotiate in our trade agreements is access to other countries’ government procurement opportunities. Too often people ignore the importance of trade being an ability to penetrate other markets and not just the export of product. We will wait and see what the full details are. I have written to the New South Wales Premier on the basis of the story yesterday expressing our very strong concerns, saying that the government is opposed to the measures as they were reported and seeking clarification that what is proposed is consistent with not only our trade obligations but also the spirit of our commitment to the G20 exercise.

The question on the EMDG, with the greatest of respect, is one of the most hypocritical I have ever heard. What we have done in this budget is fund the shortfall that we inherited for this year, because this year is a reimbursement of costs incurred based on promises the previous government had made but never funded. When we came to office—and this goes to the second part of your question about the shortfall next year that was already covered in our last budget because we allocated $50 million for next year to reimburse the costs incurred this year based on the changes we made—we funded our proposals. We should not have to fund your failure. The fact still remains that in the context of this global financial crisis, where we understand the fundamental importance of securing market share because our exports have been holding up really well, we were not going to leave our exporters in the lurch. We secured in this budget an additional $50 million to cover your shortfall. So not only is this a hypocritical question but I think it highlights the fact that you as a government paid lip service to the importance of exports but were never prepared to fund them. We will not let our exporters down; we will fund them.

As for ongoing commitments, that is a matter for next year’s budget, but we will be operating in the context of the Mortimer review and the recommendations that come from that. I have already indicated to the industry that services export markets around the country that they are also going to have to come to grips with the thrust of the recommendations contained in the Mortimer review. We are going to put it on a solid footing going forward. We are going to do what you failed so miserably to do. (Time expired)