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Monday, 19 September 1994
Page: 939

(Question No. 1552)

Senator Spindler asked the Minister for Trade, upon notice, on 5 July 1994:

  (1) Is the purpose of the Export Market Development Grants (EMDG) Scheme to increase Australia's export earnings and export culture by encouraging small to medium-sized Australian firms to seek out and develop overseas markets for goods, specified services, and industrial property rights and know-how which are substantially of Australian origin.

  (2) Is this done by paying cash grants to firms to facilitate decisions about expenditure on export by reducing the financial cost associated with export preparation, market entry and market expansion.

  (3) Does Austrade adopt a consistent approach to the processing of claims throughout the year.

  (4) In respect of claims processed during June 1994, have claimants been given less of an opportunity to provide substantiation of eligible expenditure than was afforded claimants in the earlier processing period from July 1993 to May 1994.

  (5) Is Austrade seeking a greater amount of substantiation of claims more recently than in previous years; if so, how has Austrade communicated this additional requirement to claimants.

  (6) Are certain senior officers of Austrade's staff paid performance bonuses on the basis of the number of claims completed by the end of the financial year; if so, did the same principle operate with regard to the 1992-93 financial year.

  (7) What was the total cost of such bonuses paid by Austrade in each State and Territory where Austrade has an office processing EMDG claims.

  (8) (a) How many appeals were lodged as a result of the determination of grants made in June 1993; (b) how many of these resulted in an increased grant being made to a claimant; (c) what was the total amount of subsequent additional grant payments; and (d) what is the estimated cost incurred by Austrade in defending these appeals.

  (9) Is Austrade aware that its current approach to performance pay is benefiting the bureaucracy at the expense of the export community.

Senator McMullan —The answer to the honourable senator's question is as follows:

  (1) Yes. The Export Market Development Grants (EMDG) Scheme is intended to encourage small- to medium-sized Australian firms to seek new export markets for goods, services, industrial property rights and know-how of Australian origin.

  (2) Yes. The cash grant is paid to encourage eligible firms to commit to market research and development in new markets and on a scale which might not otherwise be possible.

  (3) Austrade does adopt a consistent approach to the processing of claims in that a grant is paid only in respect of expenditure which has been assessed as being eligible under the terms and conditions of the Export Market Development Grants Act, 1974.

  (4) Austrade believes that the timely processing of claims is of paramount importance to companies eligible for Export Market Development Grants. Austrade sets an annual target of processing in excess of 95% of all claims in the same financial year in which they are lodged. Austrade believes that this approach returns substantial benefit to the exporting community in that funds are quickly made available to companies to enable them to continue their export market development efforts.

  Explanatory notes detailing substantiation requirements for each financial year are prepared by Austrade. These were sent to all 1992/93 claimants. When applying for a grant, it is made clear to all claimants, both on the claim application form and in contact with Austrade staff, that at the time the claim is assessed, original documentation will be required to be presented in order to substantiate claimed expenditure. Austrade also communicates its requirements regularly to consultants who prepare around half of all EMDG claims.

  Claimants whose claims are assessed in June have more time than claimants whose claims are assessed earlier in the financial year to assemble the required documentation before the claim is assessed. In some cases, in order to ensure timely processing of claims, some companies may have been given less time to provide additional documentation than if their claim had been processed earlier. Where a company believes they have been disadvantaged in this way, they have the right of appeal against the decision.

  (5) Austrade is concerned to maintain the integrity of the EMDG Scheme by continually reviewing substantiation requirements in accordance with the latest expert advice. As a result of recommendations flowing from the recent Efficiency Audit of the EMDG Scheme conducted by the Australian National Audit Office and discussions with the Australian Federal Police, Austrade will be seeking greater amounts of substantiating documentation for claims submitted in the current, and future, financial years. This is being done to increase the efficiency and effectiveness of the Scheme and to further reduce the possibility of payments being made for incorrectly claimed expenditure.

  (6) Austrade's senior staff are eligible for performance pay based on negotiated performance agreements. In offices where the primary function is the processing of EMDG claims, the number processed is one of the measures in any such agreements. While this is an important performance indicator, it is not the only factor that is taken into account in assessing an officer's achievements against their performance agreement. Performance pay is not paid on the basis of the number of claims processed alone. The same principle applied in the 1992-93 financial year.

  (7) Information on performance pay paid in 1993/94 is not yet available. In the 1992/93 financial year Austrade paid a total of $22,958 in performance pay to officers concerned with the processing of EMDG claims. This figure represents 1.2% of a total administrative expenditure of $1.836 million. Detailed breakdown of performance pay by State and Territory is as follows: NSW—$15,225; SA—$1,200; VIC—$4,433; QLD—$2,100;


  (8)(a) A total of forty-seven appeals were lodged as a result of determination of grants made in June 1993.

  (b) Three of the appeals resulted in a supplementary payment being made.

  (c) The total value of these supplementary payments was $176,583 out of total grant payments in 1992/93 of $158 million.

  (d) As all these appeals were resolved without reference to external tribunals or courts, no additional costs were incurred by Austrade.

  (9) Austrade has developed a strong performance culture throughout its global operation. Performance based payments are a logical extension of this performance culture. Such incentives have yielded positive results both in terms of performance and morale of staff, as reflected in the achievements of the organisation.