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Tuesday, 12 March 2013
Page: 1703


Mr ZAPPIA (Makin) (20:33): I support the Export Market Development Grants Amendment Bill 2013. Having listened to the Deputy Leader of the Liberal Party's arguments and her reasons for putting forward her amendment, I am not at all persuaded by them nor do I believe they are worthy of the support of this House.

The Export Market Development Grants scheme is an Australian government financial assistance program which assists and encourages small- and medium-sized Australian businesses to develop export markets by reimbursing up to 50 per cent of eligible export promotion expenses above $10,000, provided that the total expenses are at least $20,000. To date, the program has provided up to seven grants to each eligible applicant. To access the scheme for the first time, businesses need to have spent $20,000 over two years on eligible export marketing expenses. To be eligible, the Australian business must have income of not more than $50 million in the grant year and must have promoted the export of goods—most services also qualify—the export of intellectual property and know-how, inbound tourism or conferences and events held in Australia.

There are eight key provisions of the Export Market Development Grants Amendment Bill 2013. The first is to increase the maximum number of grants to eight. The second is to exclude expenses relating to the promotion of sales to the markets of the USA, Canada and the European Union in grant years six, seven, and eight for all applicants except approved bodies. The third key provision is to remove the limit on administrative expenditure from the legislation and introduce a power for the minister to set the limit on administrative expenditure by determination. The fourth is to prevent further approval of joint ventures after 30 June 2013. Fifthly, the provisions of the bill remove event promoters from the EMDG scheme. Sixthly, the provisions of this amendment bill prevent the payment of grants engaging an EMDG consultant who has been assessed to be not a fit and proper person. The seventh change will enable a grant to be paid more quickly where a grant is determined before the l July following the so-called 'balance distribution date'. Lastly, the bill will require applicants to acquit claims by individually paying for claimed expenses.

The government's white paper, Australia in the Asian century, makes very clear the importance of Asia in Australia's future and the opportunities that Asia's development in the 21st century holds for Australia. In recent years the pace of growth and change in the Asian region has been nothing short of phenomenal. According to the white paper, in the past 20 years China and India have almost tripled their share of the global economy and increased their absolute economic size six times over. By 2025, the region as a whole will account for almost half of world output.

The white paper also takes a close look at what Asia's future means for Australia and at the opportunities for us in the years ahead. As an advanced economy with expertise in so many areas, including education, construction, business, entertainment, tourism, health and the environment, Australia is extremely well placed to strengthen its ties with Asia. It is in Asia and developing countries in other parts of the world that our future markets lie and that is where Australia should focus its efforts. The government recognises that and so do Australian businesses—it is an obvious reality—and that is exactly what this legislation seeks to do.

Asia has a population of around four billion and it is already a market we should be tapping into much more than we have done to date. We have good links with Asia, established as a result of not only our proximity to many Asian countries but also the links that we have formed with many Asian countries—links that will hold us in good stead when we want to do more business with them in the future. These links result in two-way trade, and they are links that the Asia white paper quite properly says our future should be based on. Our future lies in Asia and the emerging countries, because the people of those countries are wanting to bring their standard of living into line with those of advanced economies. That is where the opportunities will lie. Those countries are the ones that will be wanting to tap into the expertise that already exists in Western countries and in particular the expertise that exists in friendly Western countries like Australia.

This is well understood by business in Australia. In my own electorate, I frequently speak to business people who are already doing business in Asian markets but who are looking to expand their business. On many occasions they have come to my office to seek assistance to further their business in Asian markets and in the Asian countries we have relationships with. For many small- and medium-size businesses, who do have great ideas and who see obvious opportunities in Asia, without assistance their ideas will never be put into practice. Many of the people I speak to need assistance and they come to my office to see what assistance is available from the government. The Export Market Development Grants Scheme is an ideal way of providing that very assistance so that they can bring their initiatives to fruition.

I have no doubt at all that this legislation, and the scheme more broadly, has been welcomed by the business community. Those who say that it is wrong for us to cut back the focus on the USA, Canada and Europe are short-sighted. The reality is that business in Australia today has limited opportunities in those places, for many reasons and not the least of which is that those countries do not require the kinds of services that I alluded to earlier to the same extent as the emerging markets do—and those emerging markets are best located for us in the Asian area, as well as other places in the world where developing countries are looking to prosper.

The amendments contained in this legislation ensure that the Australian people—Australian businesses—get the best return for the public funds provided by the government under this program. The Australian people will get the best returns because the best return for their funds is gained by focusing on the emerging opportunities in the Asian market. As I said a moment ago, this focus will benefit the very businesses that are seeking to access those funds.

My understanding is that there will be a saving of about $25 million per annum as a result of these changes. Frankly, the government is responsible for the expenditure of public funds and it ought to use those funds prudently. If we can manage funds better and still support business, then quite frankly we should be doing so. Reviewing legislation such as this on a regular basis is simply part of being a prudent government. I understand that in 2012-13 over 3,000 claims have been made under this scheme, and I understand that about $125.4 million has been allocated in the current budget. Those are not insignificant amounts of money, and those funds will assist Australian businesses.

In more recent weeks I have spoken with businesses in my electorate who have brilliant ideas—in some cases they are brilliant inventions—and they are simply seeking some support and assistance to get those ideas and inventions out to the wider market. These are inventions that will be embraced and adopted particularly in those countries that we refer to as the emerging or developing countries. Yet, these businesses are quite often restrained by a lack of financial support. This program is the kind of program that provides them with the right sorts of support and certainly it is the kind of program that will enable them to send their ideas offshore. The people offshore also benefit because they are the beneficiaries of intellectual property, knowhow or whatever it is that is brought to them as a result of someone's idea here in Australia.

Lastly, the Deputy Leader of the Liberal Party in her remarks alleged that these amendments mean more red tape. As I said earlier on, it is incumbent on any government to ensure that public funds are spent wisely, it is incumbent on any government to ensure that no-one rorts the system and it is incumbent on any government to ensure that taxpayers get the best possible value for their dollars. Cutting out people like promoters—promoters of entertainment events; concerts and the like—is quite reasonable. Promoters are not, in my view, the beneficiaries for which this fund was set up. As a result of promotional activity you might get some economic benefit through the impact on tourism and the like, but, frankly, I believe there are much more worthy and much more deserving areas where these grants should be applied, and the decision by the government to tighten the rules in respect of some of those matters is quite appropriate. I commend the legislation to the House.