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Tuesday, 12 March 2013
Page: 1712

Mr CRAIG KELLY (Hughes) (21:14): I rise tonight to speak on the Export Market Development Grants Amendment Bill 2013 and also to support the amendments moved by the deputy leader and member for Curtin. Just by way of background, the export market development grants scheme is administered by Austrade and it partly supports export promotion expenses of eligible enterprises in order to boost the exports of Australian produced goods and services. It is a scheme that reimburses up to 50 per cent of eligible export promotion expenditure incurred by small- and medium-sized enterprises. Claims are reimbursed retrospectively for expenditure incurred in the previous financial years, pro rata, up to the cap. Around 5,100 firms applied for grants.

The basic provisions of this bill—and what it actually does—exclude expenses of export promotion for grant years six, seven and eight for the major markets of the USA, Canada and the European Union. It makes a tokenistic adjustment by increasing the number of grants by one year—just one year against eight—to countries of East Asia. First and foremost, this bill is simply confirmation of yet another broken promise by this Labor government. We can add this one to the long, long list of broken promises by this government. It is just another reason why the public no longer believes a word that they say and why the public has lost complete trust in anything that comes out of the mouth of any member of this government.

We will go back to 2007: this Labor government, then in opposition, promised hand on heart that they would increase—that is right: increase—funding for the export market development scheme. They told us how they understood this scheme, how it was vital for small business and how they were really going out there to help small business with their exports. In the last year of the Howard government, 2006-07, the export market development scheme was funded to the tune of $154.4 million—it was $154.4 million back in 2006-07. Come to this financial year, and we have a government that told us they would increase funding. They have not only been too lousy to maintain real expenditure, they have actually slashed the expenditure by $25 million. So this financial year, the expenditure is down to just $125 million.

This is the lowest amount of expenditure under this scheme for over two decades. It simply shows that Labor cannot be trusted with their promises, but not only that: whatever they promise, we see them doing the exact opposite. We saw them promise, 'No carbon tax.' We not only ended up with a carbon tax, but we ended up with the largest carbon tax in the world. They promised to stop the boats and we have ended up with an absolute explosion of boat arrivals. They promised to return the budget to surplus, but we just get larger and larger deficits. Here we had them promising to increase expenditure for the export market developments and what do we see? It is being slashed—slashed to the lowest levels in decades.

It is not only that, it is the hypocrisy that we have had from this government. On this bill, we have had one measly speaker from the government. I see the member for McEwan over there. Perhaps he is going to stand up and make a contribution to this bill.

Mr Mitchell: You are hopeless!

Mr CRAIG KELLY: I think he is perhaps too embarrassed to walk around the exporters in his electorate and have to tell them that his government is cutting the funding for export development grants. What we have seen is not only the hypocrisy, it is the spin. They do not come in here and just be truthful, and say: 'Look, we have stuffed things up. We have wasted billions of dollars and we have to make some cuts.' Instead of saying that, what we get is this spin with the bill being dressed up as somehow tied to promotion in the Asian Century.

As ACCI have argued, there is no credible commercial analysis that shows export development grant money spent in the USA, Canada or the EU is any less valuable than that spent in East Asia, Africa or South America. It should be up to our Australian businesses to decide where they should spend their export marketing dollar, but those decisions are now going to be distorted by this government. It is not based on good policy or sound logic, but simply on spin. I would say, however, that there is perhaps one area in the world in which we as a nation need to increase our export marketing expenditure; that is Indonesia, following the debacle of this government's cut to the live cattle exports. Overnight, without any warning at all, they simply cut off the supply of live cattle to Indonesia. That has done almost irreparable damage to our relationship with Indonesia. If we are looking to increase our export marketing expenditure, Indonesia is perhaps one of the first places where we should start.

Not only is this spin, bad policy and broken promises: it is simply bad economics. Austrade undertook a study about the benefits of such schemes. They found that firms benefiting from export market development grants spent more on export promotion than did other exporters. In fact, they estimated that the grants payment of $156 million resulted in those exporters spending an additional $147 million on marketing. What they estimated is that that extra marketing expenditure resulted in an extra $1.4 billion of export sales. For $156 million worth of expenditure under this scheme, we were able to achieve as a nation an increase in our export sales of $1.4 billion.

But it is actually better than that because, you have to remember, the grants are taxable. When you look at the net cost after the tax subsidy comes back, you are looking at a much greater multiplier. Austrade worked out that, in most industries, a mature exporter will generate in additional exports 15 to 25 times the grants paid to them. If we want to increase the revenue of this nation—if we are looking at how we are going to pay back this mob's debt, how we are going to fund the NDIS, how we are going to fund the extra expenditure for schools and how we are going to fund the extra expenditure for hospitals—we should be increasing the expenditure under this scheme, not cutting it back to record lows as this government is doing. This mob simply does not get it.

Also, we should be out there trying to create a culture of exporting and exporters. I know from my own experience. Before entering parliament, I had travelled and exhibited at trade shows in Singapore, Malaysia and Dubai. One thing I found at those trade shows was how generous other countries are, compared to Australia, and how small our scheme is. At these trade shows we were able to find out that, rather than being given 50 per cent of their expenditure by their government as Australian firms were, the companies from the UK that we were competing against were getting the whole lot subsidised by their government. So the scheme we have is very modest to start with, and this mob is just cutting it back again.

This government is also kicking exporters when they are down. Australian exporters are currently struggling with the high level of the dollar. And they were promised a tax cut by this government, funded by the mining tax. We know where that has gone.

Government members interjecting

Mr CRAIG KELLY: You have not got any money for it; that is the reason. You have not got any money to fund it; you have wasted it all. It was a concocted mining tax. You blokes were played off the break. It was a complete embarrassment to your lot. So not only were our exporters promised a company tax which has not eventuated but many of them are facing downturns in our export markets. And they are also struggling with the world's largest carbon tax. Under this Labor government, energy costs for Australian firms have risen faster than just about anywhere else in the world. This is putting Australian industry, and our exporters, at a competitive disadvantage. This is the very worst time to be cutting back their funding—and that is exactly what this government is doing.

We have to ask ourselves: why are they doing this? Why are they cutting back? Why are they slicing back money for export market development? It is because of their waste and mismanagement. This mob has run up the four largest deficits in our nation's history. To spin their way out of it they came up with the line 'returning the budget to surplus'. And one of the cuts they came up with was to cut back this very important scheme which we need to keep our economy going—a measly $25 million. It is interesting to see what industry experts say about these cuts. Warren Cross, a legal expert and director of a firm called Export Incentives, is quoted in Smart Company magazine as saying, 'It's frustrating and disappointing this scheme has been put on the chopping block again by Labor,' and he argues that the trade minister, Dr Emerson, 'does not have a clue'. I could not agree more. He also says of our trade minister: 'He has never been interested in the scheme from day one, so this isn't a surprise. They've been cutting this grant back for years.' That just about says it all.

But we should look at the important amendments moved by our deputy leader. Those amendments clearly denote the problems with this bill. We need to have another review of this scheme and, if the funding is available, we need to try and help develop our culture of exporting. The coalition in the past has funded this scheme at far greater levels than what the current government are doing. When the coalition government left office we had $150 million in the scheme. The current government are reducing that to $25 million. Again, that is the complete opposite of what they promised.

If we are going to move our country forward, if we are going to start paying the debt, a debt that we have to pay back, with interest, it is going to cost this nation $267 million a week, every week of the year, for the next 20 years. That is the funding that we have to find. We are looking at trying to find $8 billion to $10 million to fund the NDIS, which this mob on the other side loves to talk about but does not have a clue how we are going to fund. And we talk about the Gonski education reforms. To fund these things, we have to encourage exporters, we have to get our exporters out there. We make great products in Australia. That is the reason this scheme works. We want the government to encourage firms to get out there and get involved in exporting. We should not be cutting this scheme back. To cut the number of years back for the USA, for Canada and for the EU is completely the wrong direction. We should be looking at uncapping years. You cannot have just five years for marketing a product overseas. And we have to remember that these grants are not given per product, they are given per firm. (Time expired)

Debate interrupted.