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Thursday, 14 March 2013
Page: 2144


Mrs PRENTICE (Ryan) (11:48): I rise to speak on the Export Market Development Grants Amendment Bill 2013. The EMDG scheme was set up to support export promotion expenses of eligible enterprises in order to boost exports of Australian produced goods and services. The scheme reimburses up to 50 per cent of eligible export promotion expenses incurred by small to medium sized enterprises. Claims are reimbursed retrospectively for expenditure incurred in the previous financial year, pro rata, up to the cap, which I understand currently sits at a maximum grant level of $200,000.

The agency which administers the EMDG scheme, Austrade, similarly provides a range of vital services to would-be exporters, such as advice on prospective markets and opportunities, on-the-ground support in target countries, trade exhibitions and assistance in finding potential investors. The EMDG scheme very ably assists their work for would-be exporters and is a crucial investment program for new and existing exporters.

Last year, as a result of Labor's mismanagement of the economy, the Treasurer decided in the Mid-Year Economic and Fiscal Outlook, MYEFO, that the EMDG scheme should have its budget cut to deliver what the Treasurer calls a 'saving' of $25 million. That is not what you would hear the Labor government admit, of course. They have tried to claim that their changes are all about shifting the aim of the program and increasing the number of grants available in East Asian and so-called frontier and emerging markets. At the same time, the government will exclude expenses relating to the promotion of sales in the stronger markets of the United States of America, Canada and the European Union in grant years 6, 7 and 8 for all applicants except approved bodies. The government have argued that in those stronger markets the Australian brand is already well known and accepted, claiming that small businesses face fewer barriers to doing business there and, therefore, they have reduced the duration of available grants from a maximum of seven years to a less commercially realistic five years.

I have serious misgivings about this approach. Firstly, as the Australian Chamber of Commerce and Industry rightly argues, there is no credible commercial analysis that shows that money spent through the EMDG scheme on established markets is any less valuable to the Australian market than that spent in emerging markets. I know that, while this government considers it to be easier for smaller operators to gain access to our traditional markets, we must not ignore the fact that this means the potential for growth can be so much higher. We need only look at the experience of the cruise ship industry, which has seen not just enormous growth in Asian markets but also unprecedented growth from areas such as the United Kingdom and Germany.

At this time, when the Australian dollar is so strong and Australian companies, unlike their international competitors, are reeling from the whole-of-economy carbon tax, the government should not be picking the winners or the regions in which we spend money but, rather, through this scheme, facilitating private companies to direct money to areas where it will be cost-effective.

It should be up to Australian businesses to apply for EMDG funds according to commercial realities, as opposed to the decision of some politician or bureaucrat in Canberra so far removed from what is actually happening on the ground. But that is exactly what the Labor government have done since 2007—they have meddled with the scheme, and frankly they have made a complete mess of it. Soon after taking office Labor expanded the scheme by lowering the eligible expenditure threshold from $15,000 to $10,000, increasing the number of grants from seven to eight and increasing the maximum grant from $150,000 to $200,000. This does not, on the face of it, sound like a bad idea. But, while the cost of these changes was estimated at $50 million a year, the Labor government only provided increased funding for the 2009-10 year. Then, in June 2010, Labor amended the scheme to essentially reverse the 2008 implementation of its election commitments. This is yet another example of the government saying one thing publicly and then deciding to break promises and election commitments. All the while, small and medium sized enterprises in this case have absolutely no idea what is going on. I have heard from the industry that, from year to year, they essentially do not know what the government are going to do with the EMDG scheme—but at least this bill finally codifies the cuts that they are making now. Exporters have the unfortunate certainty that, with this bill, yes, the Labor government are cutting funding to EMDG.

One of my primary concerns with this bill is that it removes event promoters from the EMDG scheme. This Labor proposal will have a negative impact on event promoters, including businesses such as Brisbane Marketing, which is an enormously successful company that markets Brisbane to the world. Brisbane Marketing, and many other companies like it, form part of the Australian Association of Convention Bureaux, which has approved-body status through the EMDG scheme and assists its members by applying through that scheme. As a former board member of Brisbane Marketing and event manager, I know how effective EMDG support can be to the inbound event market.

We know that tourism is one of the key export industries in this country. It is a growing one, and certainly event promotion falls under this category. Some of the very important work they do is to promote events within Australia as well as destination marketing for international tourists. I am concerned that by removing event promoters from the EMDG scheme we are removing a whole tranche of ways that the government can assist businesses to promote specific events in overseas markets. The success of the sector speaks for itself: in 2011-12 the AACB won and assisted the placement of 456 international business events in Australia, which were expected to attract some 149,470-plus delegates, for 609,385 visitor nights, with an estimated economic benefit of $385.2 million. The enormous success of event promotion in Australia and its broader importance to expanding the tourism sector cannot be underestimated. As Andrew Hiebl, the Executive Director of AACB, said, today's changes will;

… have [a] significant impact resulting in fewer international delegates for Australia and therefore reduced export revenue, and a reduction in all of the indirect benefits brought to the economy by business events. At a time when current global economic conditions and a high Australian dollar make Australia a less attractive long-haul destination, now is not the time to be reducing support for delegate boosting activities.

Clearly, it is simply not the right time to be doing this. By cutting funds available through the EMDG scheme, Labor is simply making a bad situation worse for an industry already struggling from the high Australian dollar and a whole-of-economy carbon tax.

Of course, it is clear that the government is not responsible itself for the success and growth of tourism—that has been done by hardworking tourism operators. But the EMDG scheme does form an integral part of any government's approach to supporting small and medium sized operators to get a foothold in foreign markets, whether that be Asia or our more traditional markets in the USA, Europe and Canada. What the Labor government are doing is taking a very piecemeal approach to the tourism industry. They do not have a coherent strategy, nor do they intend to devise one. This cut of $25 million is again an example of damaging tourism.

David Goodwin, the immediate past President the Chamber of Commerce and Industry Queensland and a former board member of the Australian Chamber of Commerce and Industry, believes these amendments will have dire effects on the Queensland export market. Queensland is an extremely strong exporting state, and Mr Goodwin says these changes will affect every pillar of the Queensland export market—from education and tourism through to agriculture and natural resources.

The coalition will not oppose the passage of this bill in parliament—due to fiscal constraints as a result of this Labor government's economic mismanagement we must accept reduced funding. However, I take this opportunity to reaffirm my commitment to exporters and organisations such as AACB that, if the coalition wins government, we will review this issue—and, for that matter, review any potential increases in red tape due to the changes. The coalition maintains our long-term commitment to increase general funding levels for the EMDG scheme. Tourism is a part of the coalition's strong plan for economic growth. The coalition will ensure that Australia has a vigorous five-pillar economy, including a resilient tourism services sector. Only the coalition will support the EMDG scheme, and only the coalition will take real action to support and expand Australian tourism.