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Thursday, 14 March 2013
Page: 1717


Senator FEENEY (VictoriaParliamentary Secretary for Defence) (12:35): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Export Finance and Insurance Corporation Amendment (Finance) Bill 2013 will amend the financial arrangements of the Export Finance and Insurance Corporation (EFIC) to provide for the payment of special dividends and any adjustments to EFIC’s callable capital that may be necessary in the future.

The bill will implement a 2012 Budget Measure and follows recommendations and findings of the 2012 Productivity Commission Inquiry Report into EFIC’s operations. The Productivity Commission found that where EFIC retains capital above its minimum requirements this surplus capital has an opportunity cost that is borne by the taxpayer. It recommended that the Export Finance and Insurance Corporation Act 1991 be amended to allow the Minister to direct EFIC to return surplus capital to the Government.

The bill also provides a mechanism to adjust EFIC’s callable capital through a legislative instrument should the Minister, in consultation with the Prime Minister, Treasurer and Finance Minister, consider this necessary in order for EFIC to meet its future prudential requirements.

The Government’s broader response to the Productivity Commission’s report was announced in late January and further legislation will be introduced to give effect to EFIC’s new mandate later this year. EFIC’s new mandate will greatly benefit Australia’s small and medium sized businesses, ensuring they get the support they need to compete in this the Asian Century.

In conclusion, this bill will provide greater flexibility in EFIC’s financial arrangements and will help support EFIC’s continued sound operation.

Ordered that further consideration of the second reading of this bill be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.