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Wednesday, 20 March 2013
Page: 2718

Mr KELVIN THOMSON (WillsParliamentary Secretary for Trade) (09:59): I move:

That this bill be now read a second time.

The Export Finance and Insurance Corporation Amendment (New Mandate and Other Measures) Bill 2013 implements the government's response to the 2012 Productivity Commission report on Australia's export credit arrangements.

When the government announced its formal response to the Productivity Commission's report back in January it emphasised that small and medium-sized enterprises will be the big winners following these reforms.

This bill will deliver for Australian small and medium-sized enterprises.

The response announced a number of changes to the operations of the Export Finance and Insurance Corporation (EFIC) that will help it to play an even more valuable role in the provision of export finance.

This bill will ensure that more of EFIC's resources are devoted to Australian small and medium-sized enterprises that face genuine barriers to accessing finance.

Supporting our small and medium-sized enterprises looking to expand their activities overseas will help demonstrate to the private sector that it is commercially viable to fund these exporters.

EFIC will also be given a limited expansion of its guarantee powers so that it can better support Australian businesses integrate into global value chains, particularly in the Asian region.

Increasing participation in regional value chains will result in increased specialisation and productivity as Australian businesses focus more on high-value-added activities.

The white paper on Australia in the Asian century recommended that EFIC's mandate be revised to ensure more of its resources are devoted to addressing market failures that impede Australian companies, particularly in emerging and frontier markets.

This bill helps deliver on our white paper objectives.

While the Productivity Commission report found that market failures are most likely to affect small and medium-sized enterprises with limited export experience, EFIC's new mandate will not preclude it from supporting larger firms where they too face market failures, particularly when doing business in emerging and frontier markets.

To ensure that EFIC does not have a competitive advantage over other businesses in the private sector, the government also accepted the Productivity Commission's recommendation that EFIC should be subjected to the government's competitive neutrality principles.

Consistent with the recommendations of the Productivity Commission and the 2003 Uhrig review, the bill will also remove the requirement to have a government member on EFIC's board of directors, increasing the board's independence from government.

In conclusion, the amendments in this bill will provide EFIC with a new mandate that reflects the changing international trading environment and resulting challenges for Australian exporters.

It will benefit Australian small- and medium-sized businesses in particular, recognising their increasing importance and prevalence in global and regional value chains.

Importantly, the bill will help us take a further step in delivering on our Asian century white paper objectives, improving support to Australian businesses so that they can take advantage of the changes and opportunities occurring in our region.

Debate adjourned.