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Wednesday, 24 August 1994
Page: 217

Senator CHRIS EVANS —My question is directed to the Minister for Trade. Last month, the minister released an evaluation of the export market development grants scheme and the international trade enhancement scheme, both administered by Austrade. That evaluation concluded that these schemes made a significant contribution to our export performance. In the light of the continuing criticism of the schemes by some commentators, does the minister stand by his evaluation of their effectiveness?

Senator McMULLAN —Most senators—certainly Senator Chris Evans and government senators—would know that EMDG and ITES are central components of government-funded assistance measures targeted at the business sector and, with regard to EMDG, most particularly to the small to medium sized business sector. They have been reviewed consistently, and consistently been found to be efficient and effective. Each time they are reviewed there are suggestions about how the administration might be tidied up in minor ways and those things are done, as they will be again as a result of this review, but overall they continue to say that the schemes are worthy of continuation and support.

  The most recent evaluation was an independent evaluation conducted by, amongst others, Price Waterhouse with the assistance of Professor Bulley, econometrician and head of the Department of Economics at the University of New South Wales. They concluded that the schemes are effective in assisting Australian businesses—and, in the case of EMDG, as I said, particularly small to medium businesses—to export. That is important for those businesses. It is important for jobs that are created in those businesses and for the flow-on effect to our balance of payments and to other employment.

  In the case of EMDG, over 70 per cent of the 3,000-plus claimants in 1993-94 were small to medium businesses. The report assessed that, of those claimants, those who are mature exporters generate 15 to 25 times the grants paid in export income as a result of the grant. That is certainly good news in terms of the balance of payments and, most importantly, jobs. In relation to those claimants, on the basis of this assessment it can be established that exporting activity accounts for 50 per cent of their jobs and 50 per cent of their investment. It seems on that basis to be a niche that needs to be filled and a role that deserves to be played.

  With regard to the review of ITES, which is a newer scheme and directed more to larger companies, providing them with medium-term low cost finance, the evaluation assessed that every ITES dollar spent to date has produced an additional $18 in net exports. Therefore, on the basis of those reports, the government decided in the white paper to extend both EMDG and ITES because of their export significance and, therefore, because of their employment significance—the core of the government's white paper intention and initiative.

  It is frustrating to find that schemes which are continuously reviewed in the parliament and publicly continue to be criticised by people from a distance, carping away with criticisms that may have been valid years ago. I am not sure they were—they may once have been—but they are certainly far removed from the current scheme that is being conducted. We continue to get criticism that the schemes are not generating real exports and jobs.

  When the cabinet visited Perth, I went to see members of a company of interest to Senator Evans—Bates Saddlery in Newcastle Street, Perth. They spoke of the tremendous benefits they have received over the years from EMDG and, most recently, from ITES, funding them to launch a new range of saddles which is expected to generate about $19 million in additional sales over the next five years, allowing them to increase their employment by 25 per cent over the same period. Already over the past year export success on the basis of their assistance has led to 20 new jobs, plus all the indirect employment that their success creates. It is important for those individuals and for the thousands of other similar small businesses and it is a symbol of a change going on in the economy. (Time expired)