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JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE Trade Subcommittee
22/05/2009
Australia's trade and investment relations with Asia, the Pacific and Latin America

ACTING CHAIR —Welcome. I note we have some material from Exportise, which is a submission and an exhibit. We will move that the submission and exhibit from Exportise be accepted.

Mr MURPHY —I so move.

ACTING CHAIR —I declare the motion carried. Mr Rogers, the committee prefers all evidence to be given in public. If there is any matter you wish to discuss in private, please make a request at the time and the committee will consider it. We do not require evidence to be given on oath, but you should be aware that the hearings are legal proceedings of the parliament and have the same standing as proceedings that occur in the chambers. Thank you for attending this morning and thank you for your submission and exhibit, which you have provided. I invite you to make some opening comments, after which we will go to questions and discussion.

Mr Rogers —That is fine. Just as a bit of background, I have been the director of Exportise in Melbourne for longer than I care to remember. It is getting on for 25 years. Prior to that I was with Austrade within its grants division, and prior to that I was a tax investigator. I guess I have been on both sides of the fence, so to speak. I am not sure how much interest you gentlemen take in export incentives specifically but that is my area of interest.

ACTING CHAIR —I think I can safely say that we have a significant interest in that as part of the broad range of issues. We have had evidence from other witnesses, particularly in regard to the EMDG scheme and I notice that you refer to that. I am happy to hear what you have to say.

Mr Rogers —That is the scheme that I am involved in. I do not claim to be an expert in any particular industry, although we have clients that are across a broad range of export industries. The common thread is that all of our clients are exporters. I used to say to people, ‘You pick a product and I probably know somebody who is trying to export it.’ I am not sure that I could do that these days, but I could certainly give it a shot. I guess my interest is really pushing the barrow of what can produce results as far as what the government does is concerned. It just seems to me that there is a lot of talk that has gone on as far as whether the grants are worthwhile or not. It has been reviewed to death.

You are no doubt familiar with the Mortimer review that was done a year or so ago. The results that have come back from that effectively are in accordance with results that come back from previous reviews. They continue to say that export incentives work. My concern is that the result that comes back after that tends to be either negative or neutral. The current trade minister says that he is in favour of the grants. I have to say that we were the recipients of an extra $50 million in the budget, but the problem was that it was right at the last minute. Up until a week or so before the budget, we were being told that there was no way that the extra money was going to be put in.

As far as I am concerned export grants do not work unless people are aware of what they are going to get when they commit to spending their money. The whole purpose of the thing is meant to encourage exporters to do a bit more as far as their marketing is concerned. If it is going to encourage them to do that they really need to know what the net cost to them is going to be when they make that decision to do an extra trip overseas, to exhibit at a trade show, or produce some additional marketing material. It is more of a windfall gain, I guess, for exporters find out at such a late stage that they are going to get some support. The government is very good at telling exporters that they should plan ahead, but they do not do the right thing in helping them to do that.

When I first started in this business the grants scheme was a fairly open access scheme. It did not cover all types of exporters, but at the time it probably covered the majority of people who were trying to export. In the last 25 years the nature of Australia’s exporters has changed a lot. The people who try to export products—things you can put in a box or put on a ship or a plane and sent it off—has decreased, and the number of people who are trying to do something in other fields, such as services, intellectual property, know-how and things of that nature, has increased. The legislation has been amended many times to try to keep up with that, but there are still too many impediments that are built into the scheme.

The bureaucrats who run it really are not experienced in the real world. They see their role more as a risk management and fraud control type of role rather than the way I see it, which is that the scheme should be there primarily to generate the substantial net benefit that the export grants scheme says in its preamble. That is what it is meant to be there for, but unfortunately that is not the way it turns out. Most of the changes that have been made over the last 20 years in real terms have been cost-cutting exercises. If you go back to 1982-83, the budget was actually $280 million spread across two grants schemes that were both aimed at generating export earnings. The government at that time decided that it did not want to spend that much. The government cut it back. It gradually built itself up again to about $240 million and then another cost-cutting exercise capped it at $150 million in about 1995-96. It has been stuck there ever since with little bits and pieces added on.

I did the research myself to go back to that 1982 figure, then just increase that by the CPI, and you get to a figure that is over $900 million. I would say that if the research says that the grants scheme works and produces results, then why would we not be continuing to spend the extra dollars to get the results? What we really have now is a scheme that is aimed at very small operators. All the big guys have been pushed out of it. The argument is that they do not need assistance. I fronted to talk to the guys on the Mortimer review. David Mortimer was of that opinion himself; but my concern is that the companies that he runs are the billion dollar companies. There are a hell of a lot between the billion dollar companies and the very small companies that get assisted by the grants scheme now.

If you are trying to pick the winners from the current crop of people who claim export grants, it is quite difficult to do. There will be some people in there who will produce great results, but they are nowhere near as numerous as they were when I first started. When I first started, there was no turnover cap. It was a case of anybody being able to have a go. You could fairly easily pick a lot of these companies that were going to generate big results. As I have stated in my submission, it is not rocket science to look at marketing effort and say, ‘Well, if you’ve got a company that is already a successful exporter, to try to ramp him up to the next level is a lot more definite than picking the little guys.’

We had a period during the time of the last government where the target within Austrade was to double the number of exporters. Realistically, that was never going to happen. What actually happened was that you had a lot of the Austrade guys and the trade side guys running around beating the bushes and trying to find people who could generate $5,000 worth of export sales. To my way of thinking, that is just rubbish. You are not going to get any substantial export increases by looking for those sorts of guys. You will occasionally find one that will generate big results in the future, but if you accumulate all that money and you give it to some larger organisations and say, ‘Here you go, guys. This is to encourage you to jump into a new market’, you would get much better results.

Bottom line is: if you spend more money and you put everybody in there, you are not using the scheme to make it possible for one Australian company to compete against another Australian company; you are encouraging them to get out there and to generate some decent results. With the new markets these days in places like India I am sure you will get plenty of feedback as to how difficult it is. I have a brother who spent a year living in India and two years before that going backwards and forwards dealing at very high levels. In the end he said, ‘I cannot take this any more; I have had enough.’

ACTING CHAIR —That is like Keith Lynch, or the late Keith Lynch.

Mr Rogers —He is now in Abu Dhabi and I think he is working on the same sort of process there. It is not as bad as India but the bottom line is that it is hard work. My point is: if you are to make this scheme one, first, it has to be definite as to what people are going to get and, second, the targeting needs to be readjusted to pick the companies that can work. I am not saying forget about the little guys because occasionally you will get somebody in the small end of town who will turn into a great success story. If you want to get results you have to lift the bar a bit and not kick them out of the scheme when they are just getting going.

ACTING CHAIR —I wish to clarify couple of things. I pick up, first, on your earlier remarks. You said that you were with Austrade?

Mr Rogers —Yes, 25 years ago.

ACTING CHAIR —Were you here or were you overseas?

Mr Rogers —I was working in the grants division.

ACTING CHAIR —As a start-off question you mentioned the Mortimer review. A month or so ago David Mortimer appeared before the committee in Sydney at an earlier hearing. Do you have any specific comments about the recommendations in the Mortimer review?

Mr Rogers —My comment would be—

ACTING CHAIR —I understand the nature of your submission, that it should be more focused and not just on the little guys.

Mr Rogers —The only complaint I have about the recommendations is that the recommendations were to cut back to five years the number of years.

ACTING CHAIR —From eight years?

Mr Rogers —From eight, yes. Currently it is eight. The recommendation was to cut it back to five years. The only companies that would be classified as successful exporters within five years would be those that were very straightforward. For elaborate type exporters, such as high technology type things and biomedical it would take longer than that.

ACTING CHAIR —Yes. The government has not yet formally responded to the Mortimer review. We had the recent budget decision and the extra $50 million. Some of the comments that you made support other evidence that has been given to us, for example, yesterday in estimates committees and at a previous hearing. Under the current scheme you can get up to eight grants.

Mr Rogers —That is correct.

ACTING CHAIR —In theory at least should that not assist those companies that started out small and that are building their market over a period? You said that some companies should have more of a focus—I think you mentioned a figure of $5 million and said that they should try to grow that to $10 million. At the moment does the scheme not have enough flexibility over the course of eight grants to help those companies?

Mr Rogers —Not really. The problem is that this scheme goes back to 1974 and a limited number of grants were excluded from the calculation. Any grants that were less than $5,000 or $3.5 thousand before 1985 were not counted. Anything else is counted. Because of the way in which the legislation currently stands it is tight on who is considered to be running a business. If somebody within a business were making claims back in the 1970s or the 1980s and he decided that exports were too hard for him and he dropped out, there might be a change in the ownership of the business and the new owners might come in and say, ‘There is an opportunity now for our product to be exported.’ When they go back to Australia and say, ‘Are we entitled to do this?’ the authorities will look up their history and say, ‘Sorry guides, you made eight claims back in the 1980s. You are not entitled.’

ACTING CHAIR —Another thing that has happened is that they have reduced the threshold from $15,000 to $10,000. I imagine that you are not terribly supportive of that?

Mr Rogers —In theory I am supportive, but in practice because of the way in which it has been administered, they are not really even committed to that. A number of small claims were lodged last year. Austrade came along, looked at them, and said, ‘We think you guys are just operating hobbies’ and laid the claims. At the small end of trade Austrade auditors are difficult to convince that it is a genuine attempt to export.

ACTING CHAIR —One of the things about which I have a concern—I do not know what the answer to it is—is that if one accepts that the amount of money is not what it should be, given how much it was at the start and given that it has been topped up and will be cut back again, it was designed to encourage a lot more export development. In real terms a lot of applications are going into a decreasing pool with a lower threshold. The end result of that have been the complaints we have had over the last couple of years. The scheme went from being in surplus and money being handed back a few years ago to people waiting to see how much they would get, and getting a lot less in their second tranche of payments than they might otherwise have budgeted for.

Mr Rogers —In the very early days there was no cap on the payments; it was what it was. The way I understand it is that the guys in Treasury hated that with a vengeance. They wanted a definite figure to put in their accounts. You cannot do that with pension payments or with unemployment benefits, so why would we have an exception for this?

ACTING CHAIR —Three or four years ago I think they were handing money back.

Mr Rogers —They were.

ACTING CHAIR —Because it was not being allocated.

Mr Rogers —The reason for that is that the rules had been changed, once again, to restrict the payments. If you go back before the surplus you will find that in three years it was overspent. They modified the rules to push people out. That was when they cut back the turnover limit from $50 million to $30 million. They cut back the maximum grant from 200 to 250. Back in the early days there were 11 categories of expense on the application forms and category 11 was called ‘other.’ Basically, that was anything you could come up with that looked like a genuine marketing cost. You could shove it into that column. In one of the cost-cutting exercises they cut it back to eight categories and nothing called ‘other.’ It tightened up the criteria a lot. That was nice for the bureaucrats who were administering it but the question to ask is whether it was good for exporters. Clearly, the answer would be no.

ACTING CHAIR —I will go to the representative from the other place.

Mr MURPHY —Michael, I will be the devil’s advocate for a minute because I have been working in this area over the past 18 months. I will start by giving a commercial to the trade minister who fought hard in cabinet to get that $50 million back into the EMDG scheme. I take your point. For the purposes of the exporters they would have liked to have known earlier whether we were going to get that money. I think Simon Crean deserves a lot of credit for that. I know that you know your way around Austrade and that you have a lot of clients. In the time that I was parliamentary secretary to Simon Crean—and I say this with respect—one of the criticisms was that many people who were promoting this scheme, people such as you, were using it as an opportunity for improving exporters’ budget bottom line.

That was something that I heard all around Australia. I say that against the background that I, too, share your view that the EMDG scheme is a good scheme that has helped to improve our export performance. I begin by asking what feedback you have given to Leith Doodie, your Victorian manager, and to Peter O’Byrne, the chief executive officer.

Mr Rogers —I cross palms with Leith every now and then. In fact, I know him from back in the days when he worked with Elders. He was one of their senior overseas guys. Back in those days I dealt with applications that Elders were doing. I do not have a lot of day-to-day connection with him; I deal much more with the grants division. So far as Peter O’Byrne is concerned, I do not have any direct dealings with him. Our consultants association is part of the Australian Institute of Export and the senior management of the institute deal at that level. I do not have direct dealings there.

ACTING CHAIR —Which consultants association are you talking about?

Mr Rogers —It is the export consultants group.

ACTING CHAIR —That is Peter Campbell’s?

Mr Rogers —Yes. Peter Campbell was the chairman of that group and that position has currently meshed.

ACTING CHAIR —It is my understanding that he gave evidence in Sydney.

Mr Rogers —I am aware of that. I am quite happy to acknowledge that consultants have a vested interest in the scheme. Clearly, we have a vested interest. I would say that the people who like to try to poke holes in the scheme, in particular, people within Austrade, have an equal vested interest. Their administration costs are kept at 5 per cent of the grant budget and, typically, those costs are 5 per cent. They spend every cent. If they want to point at us I just point straight back at them in relation to their administration costs and everything else.

ACTING CHAIR —Do they also have a category called ‘other’?

Mr Rogers —I think they have a category called ‘five per cent’.

Mr MURPHY —Michael, I have met enough exporters around Australia to be satisfied that this is a good scheme, that it has helped individuals immeasurably, and that it has contributed significantly to our export performance. In your introductory marks you alluded to the fact that Treasury wanted to drill down and obtain a precise figure.

Mr Rogers —Yes.

Mr MURPHY —Some people in Treasury believe that the EMDG scheme should be abolished. They could quickly save that $150 million, even though we have dropped from $280 million over the past 30 odd years.

Mr Rogers —I am aware of that, yes. I agree; they would get rid of it in a heartbeat. Those guys refer to it as corporate welfare.

Mr MURPHY —Yes.

Mr Rogers —The question is whether or not it works. The Mortimer review says that it does work. Going back, Helen Hughes and Peter Jollie said that it did. Every review that has ever been done has said that it works. Why are these guys in Treasury entitled to push the view that it is welfare and it is not worth spending?

Mr MURPHY —Probably because some people like you have worked for Austrade before. They know the complexities and the opportunities that the scheme offers to make a career out of it. Fair enough—go and use that. People who have looked at what has been done most probably think that this is a nice little sinecure. Someone is making people aware that they can put a nice little injection of taxpayers’ funds into their budget bottom line to improve their balance sheet.

ACTING CHAIR —I just make a point that should not be forgotten. The scheme works on the basis that you have to expend money upfront and you get an entitlement to 50 per cent I think as a maximum.

Mr Rogers —That is correct.

ACTING CHAIR —It is not just money for nothing.

Mr Rogers —It is not just money for nothing.

Mr MURPHY —With great respect you are a terrific witness to have in relation to these issues.

ACTING CHAIR —Do you have a question?

Mr MURPHY —The previous government supported the scheme despite the $50 million shortfall.

Mr Rogers —With reservations.

Mr MURPHY —We all support it. You made this point in your submission:

We should be looking for the large increases that can be achieved by existing exporters being prepared to take risks to enter new markets and also to support all new entrants so that the occasional big success story will get their chance to make a start.

Both you and I know that we try to pick winners. I want you to tell us how. It is difficult picking winners because you identified that in your submission. Why should the government be pouring more money into people who have been successful to make them grow even larger? The people in Treasury would argue, ‘How long does the taxpayer have to hold the hand of the smaller exporters?’ They should know enough to be able to improve their own export performance without asking the taxpayer. We can give all these other people who have never had a chance something to get them started. One day they, too, might become success stories.

Mr Rogers —The applications to which I referred earlier that were disallowed this year were from a group of people who consider themselves to be inventors. They came up with some little invention and they are taking it off to America with the idea that they will licence the invention. Invent Help is the company that is driving it. When these people come in the door Invent Help says to them, ‘Your chances of success are one in 64.’ That is what they anticipate. One in 64 of those people that are taken off to a trade show in the United States of America will in fact succeed with getting it going.

That is probably as low as you can get so far as success stories are concerned. When we were running this project called the New Exporter Development Scheme we were looking to double the number of exporters. We were running around looking at very small operators who substantially did not have the capacity to generate a lot of export sales. We have done applications for artists and all sorts of people. In real terms, even if an artist is successful, his or her time is limited. That artist cannot produce enough products to ever be a multimillion dollar exporter. You will never get a lot of clout out of that.

Should the government continue to help somebody even though he or she already has $5 million worth of exports? If a company is doing $5 million worth of exports, the chances are it is $15 million to $20 million in total and it is being run by somebody your age or my age who has been quite successful, who has paid for his house, whose kids have finished at school, he has his holiday house and he is thinking, ‘Do I really want to spend a big chunk of my time on airplanes trying to break into some new market? Unless somebody is behind him pushing him, prodding him and saying, ‘Come on, you could do pretty well in India’ he will say, ‘No, I am not really interested.’

Mr MURPHY —Michael, I was astounded, astonished and amazed when I went to Coffs Harbour last year and I met a lady who received an enormous amount of help from Austrade, through the EMDG scheme, to set up psychic services all around the world. She is bringing in hundreds of thousands of dollars in export revenue to our country. We are talking about picking winners. I applauded Austrade’s—

ACTING CHAIR —She picked herself!

Mr Rogers —She predicted it.

Mr MURPHY —She was extraordinary. I agree with you; the EMDG scheme works, but I think we have to help everyone. There is an argument because I have talked to proven performers who would like more assistance to grow even larger. As a government we have to get the balance right.

ACTING CHAIR —How do you grow larger if you can predict the future? Is there a future beyond the future?

Mr MURPHY —I suggest that this committee should go and meet this lady. I would never have picked her. There were all sorts of arguments about whether we should give taxpayers’ money to someone who provides psychic services. She has a huge network all around the world working for us and working for—

ACTING CHAIR —The next thing we will be doing it for opinion polls. We need to move on.

Mr Rogers —The issue with her though is that if she is doing it on a personal basis there is a cap on how much she can do.

Mr MURPHY —That is true.

Mr Rogers —She does not have a machine where she can just keep cranking the stuff out faster. If she turns into a piece of software then there is no cap. But there is a limit as to what she can produce. Last week I had a client on the phone who is an opal exporter. He has had lots of claims in the past. He changed the nature of his company, came back and said, ‘Can I start again or can I get my eighth claim?’ He had read in the press that the number of claims had been increased from seven to eight. When I looked back at his history I found that his history showed he had had 15, so he was out.

Nevertheless, he would be capable, given some export grant support, of getting a much better result than the psychic. As to whether it is good value for money for the government, if somebody is producing good results he or she is generating more taxable income. A lot of the money is going back in tax on the performance that he or she is generating; the grant itself is taxable so the payback is quite substantial anyway. For somebody who succeeds the payback will be more than the grant payments. If you get big enough results overall it will be revenue neutral or it will even be positive.

Mr MURPHY —Mr Chairman, I wish to ask one more question.

ACTING CHAIR —We are running out of time.

Mr MURPHY —We have a very good witness here. I want you to explain this. Under the heading ‘Does the current EMDG scheme work?’ you state:

I believe that the range is somewhere between $7 and $25 of export earnings for every dollar of EMDG that is paid to exporters.

Mr Rogers —These are the figures that have been come up with by the various reviews that have been done. The research is—

Mr MURPHY —Do you accept that?

Mr Rogers —Yes, I do.

ACTING CHAIR —I think the multiplier is quite high. Maybe we should get the psychic to do the picking of the winners with great synergy. Mr Hawker?

Mr HAWKER —Thank you for your evidence, Mr Rogers; it has been very valuable. You referred earlier to the usual problem. Bureaucrats are not really experienced but I think most of the trade commissioners have had some experience, which is a slightly separate part of Austrade from what we are dealing with here, that is, the EMDG. A perennial problem for governments is that they have to be accountable for public moneys.

Mr Rogers —Yes.

Mr HAWKER —Do you have an alternative suggestion to make about how the grants could be allocated to make them more effective?

Mr Rogers —If the budget is to be fixed it probably wants to be left substantially alone. The only difference I would suggest is that the administration of the scheme needs to be given some fairly clear directives that helping exporters is a number one priority and that risk management and fraud control are secondary. It has reached the stage where Austrade has within its organisation what it calls a special investigations unit, which comprises two or three Federal police who operate within the same office as the general part of the grants area.

These guys spend a lot of time coaching the general auditors, and their coaching appears to be suggesting that the average exporter is in fact a criminal. They come out to do a grant assessment. Rather than looking to see whether they have somebody successful who should be supported they are more interested in finding fault so that the special investigations guys can meet their key performance indicators. In other words, fine people are defrauding the system. If you want a specific example, last year we had a case in which they accused one of our clients of doing something wrong.

But because of their position in the operation they do not have to tell you what it is that they have got. They just suggested that this guy was doing something untoward and they knocked his grant application out from $100,000 to $20,000 and suggested that he was spending 20 per cent of his time on a marketing product, even though he was generating $5 million to $6 million worth of exported Australian wine into Hong Kong and China. I defy anybody to do that in 20 per cent of their time.

Mr HAWKER —Thank you.

ACTING CHAIR —Yesterday we had a witness who made the same point. They would rather have somebody who was a partner than risk manage.

Mr Rogers —That is what I say to the Austrade people. I say that we should see ourselves as having the same role, that is, to assist exporters, rather than an ‘us’ and ‘them’ attitude.’

Senator O’BRIEN —I have a quick question for Mr Rogers. You gave the example of a company that is exporting $5 million worth of goods and you suggested that perhaps this scheme would be better used continuing to support them to increase their exports into a particular market. Is that the best way that we could encourage that of their other qualifying non-WTO offending assistance that we could give when someone is already in a market to encourage them to spend their money to expand?

Mr Rogers —There does not seem to be. This scheme has been reviewed to death over its 30-year lifetime. Nobody seems to have been able to come up with a better way to do it. I guess that successive governments liked the idea of something new and sexy. It is tried and true method and exporters like it. You get general consensus within the export community that this is a good way to do it. There are lots of other government schemes around that have discretionary money.

When people ask us about those my initial request to them is to find out what is the budget. If it is a small budget and it is discretionary you could spend a lot of time chasing them around trying to get some money. I know that the current minister likes the scheme that was around years ago called ITES, which effectively was a loan scheme. When a company gets a government loan a lot of work goes into administering that loan and reporting on it.

The companies that go after those loans are not necessarily the best targets because they are people who have the time to chase the money and a lot of them do not intend to repay it anyway. They want to use their efforts to work out how to get the money and then not pay it back. With the export grants you do it this way, you spend your money and after the event the government will give you some money back and that is it—no more reports; just get on with your business of exporting.

Senator O’BRIEN —I am thinking of the criticism you made about capping the number of claims you can make on the scheme. I was wondering whether, for example—and I do not know whether this is compliant—if a government were to suggest that additional earnings might be favourably tax treated, would that be a sufficient incentive for business to seek to expand existing export capacity?

Mr Rogers —I think you will find that anything that is related to the actual sales will breach the WTO rules. Another suggestion that I could throw back to you is that instead of having a number of years for which you claim grants, it would be a number of dollars. Let us say that businesses starts off slowly and claim small grants. They would not necessarily be finished after five or eight years; it would be after they had claimed grants of X amount of dollars that they would be finished. They might start slowly, hit some sort of critical mass and that is the time when they needs some assistance—when there was still something left in the tank for them.

ACTING CHAIR —Yesterday witnesses raised that issue relating to when they were able to access the money. At the one end, if you are exporting a service, as it were, as distinct from developing and exporting a product, there are different time lags.

Mr Rogers —Further changes need to be made to the legislation to account for services. Services have become more prevalent in recent years but a lot of companies that look like they will be successful in selling services offshore need to set up an entity in the country they are dealing with. If they leave their expenses sitting in that offshore entity they are not eligible to make their claim. We spend quite a bit of our time trying to manoeuvre their bookwork to make it fit the grant legislation. People who do it on their own do not see the problem until after they have lodged their application and then it is too late.

Mr MURPHY —I think that is a very good thing.

ACTING CHAIR —I refer to the consultant industry which provides services to people who seek to utilise the EMDG scheme. How many are there?

Mr Rogers —Within our—

ACTING CHAIR —I probably should have asked Mr Campbell’s organisation that question.

Mr Rogers —I am part of the same organisation. The number of members of the association is just over 100. If you look at Austrade’s database of those they consider to be consultants who have lodged claims you will find that it is a bit over 200. That will include anybody who has put his or her name on an application. Sometimes it will just be their external accountant who declares himself to be a consultant, but who only does that one application. Those consultants who do reasonable numbers comprise quite a small community—probably fewer than 50 do substantial numbers.

My company, Exportise, is in various states. Another company called Export Solutions is also in various states. Once you get past that there are a lot of small operators. Quite a few of them are former Austrade people who know the way the system works. It is very much demand driven. At times I say to clients, ‘There really should not be a need for people like us.’ But, unfortunately, even when Austrade is simplifying things it generates a lot more business for us.

ACTING CHAIR —I wish to ask you two questions about Austrade, given your experience, albeit 25 years ago. However, you obviously had a—

Mr Rogers —I am still face-to-face, yes.

ACTING CHAIR —You never forget and you still work in that area. Yesterday we had a witness who said that he sought some advice or assistance from Austrade in France. The information he was after was pretty basic stuff. He asked, ‘If I employ somebody what would be my obligations under French law’—what we would call industrial relations or human resources issues—‘for things such as health and safety, wages and all those sorts of things?’ He said that they could not help him. He was pretty disappointed and sceptical about the fact that they were unable to help him. Do you have any comment?

Let me give as a second example a case of which I am personally aware. When you talk to people you get both ends of the spectrum. Either they say, ‘Austrade has been terrific in this country’, or they say, ‘They are hopeless.’ I was given an instance many years ago in Singapore when I was there. They said, ‘One of the huge markets in Asia is in diamonds, gems, opals and all those sorts of things’—in other words, jewellery. Heaps and heaps of trade shows and fairs are on and people come along to buy expensive jewellery.

There are great opportunities for small and medium size businesses in Australia where we produce the product in an open market. Because it was not a big company this person said to me, ‘Austrade cannot help us. They are not interested.’ They believed that Australians were missing out on a lot of opportunities—people who were into cutting diamonds, making rings and all that sort of jewellery that had a big potential. Can you defend Austrade?

Mr Rogers —I would say on the whole that Austrade does a very good job in the overseas posts. But we need to keep in mind that they are a bit like me—they are trying to be everything to everybody. At least while I am doing this it comes down to a common goal of just putting the paperwork together and getting their grant application in. They have to be experts on all products in whatever market they are in. It is not possible for any one person to be an expert in everything. Typically, my advice is that if you are dealing with Austrade in an overseas post you should find out what they are interested in. If you have somebody who is a heavy engineering person he will not know too much about jewellery or fashion for that matter. If you find the right person you will get people coming back with glowing reports.

ACTING CHAIR —I suppose it comes back to having the people and the resources. But, as I said, I visited Chile where people talk favourably about the work that they have done over there.

Mr Rogers —The only real complaint I would be concerned about with Austrade posts—and even Austrade within Australia—is being careful about anything that is commercial in confidence. They collect information on a particular company’s opportunity and then they are a bit easy going about distributing that to other companies within the same industry. They might think that they are helping more companies to go into that market, but if it is a particular opportunity that a company has identified it needs to be treated as confidential.

ACTING CHAIR —Do you get a sense from your experience that they are not really interested in small to medium size exporters?

Mr Rogers —It changes from year to year as to what the target is. During the time that the target was double the number of exporters they were very interested in the small guys. They were running around and doing damage to some people’s markets where consolidation was coming through a merchant. In order to get more exporters they were backing up to the suppliers and saying, ‘You guys could export direct.’ They might end up with five exporters instead of it all being channelled through one central point. However, they would be doing damage to Australian companies along the way.

ACTING CHAIR —A comment that was made to me by the person in Singapore was that he was some sort of trade fair for jewellery. Small operators from a number of companies—the people making the watches, diamond rings, or whatever—were all there. But Australia was hardly on the map because they felt that Austrade was not interested in helping them get into that sort of market.

Mr Rogers —From my experience in that particular field I would say that Australia would be hard pressed to do very well in final product. They are doing better on gemstones but the final product is labour intensive and it is not really ideal for Australia to export. They are more likely to be taking the gemstones over there, making the final product, and then bringing it back to Australia or taking it to other parts of the world.

ACTING CHAIR —Any further questions? If not, thank you for appearing before the committee, Mr Rogers.

[11.48 am]