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Thursday, 16 May 2013
Page: 3595


Ms JULIE BISHOP (CurtinDeputy Leader of the Opposition) (10:55): I rise to speak on Export Finance and Insurance Corporation Amendment (New Mandate and Other Measures) Bill 2013. This is the second bill dealing with the Export Finance and Insurance Corporation, EFIC, that has come before parliament this year. As I noted in my speech regarding the previous bill, according to its official website, EFIC provides finance and insurance solutions to help Australian exporters overcome the financial barriers they face when growing their businesses overseas. It is the Australian government's export credit agency and assists export trade or overseas investments where the private market is unable to do so. Specifically, EFIC works directly with exporters or with their banks to provide loans, guarantees, bonds and insurance products not otherwise able to be provided by the private sector.

The previous bill sought to amend the financial arrangements of EFIC to provide for the payment of a special dividend of $200 million and any adjustments to EFIC's callable capital that may be necessary in future. The coalition did not oppose the bill at that time because we knew that this was just another aspect to Labor's failings when it comes to the management of its budget. It was part of the government's raid for every dollar of cash it could raise, and in fact it was surprising that EFIC had been untouched up until that time. This $200 million raid on EFIC came about because the government's finances are in a mess, and on Tuesday night we saw one of the most dishonest budgets presented since Federation. Labor's budget surplus promise is farcical, no-one believes it—I do not why they even bother to say it. The budget has plans for more and new taxes.

The DEPUTY SPEAKER ( Ms K Livermore ): I think that this can be dealt with in the reply from the opposition leader tonight and I will draw the deputy opposition leader back to the bill.

Ms JULIE BISHOP: I am explaining why EFIC is now $200 million shorter than it had been. And this budget exposes the budget crisis that has engulfed Labor and has caused them to make this call on EFIC's reserves. This government stands for higher debt and more deficits and more taxes, and if the Treasurer had a shred of integrity, he would have stood aside as he is unable to manage the nation's finances. He said he was going to take his medicine, and if he wants to take his medicine—

Honourable members interjecting

The DEPUTY SPEAKER: Order! There will be no interjections and the Deputy Leader of the Opposition will not invite interjections. Please return to the bill.

Ms JULIE BISHOP: If the Treasurer says that he wants to take his medicine he should be held accountable for the mess that the government's finances are in.

On this present bill, we will not oppose it. Like the previous bill, it follows recommendations and findings of the 2012 Productivity Commission inquiry report into Australia's export credit arrangements. It will principally permit the provision of increased services to small and medium-sized businesses and will permit more of EFIC's resources—reduced resources because of the $200 million raid on its callable reserves—to be directed to Australian small and medium-sized enterprises that face genuine barriers to accessing finance for export operations.

EFIC will also be given a limited expansion of its guarantee powers so that it can better support Australian businesses and their integration into the global value chains. The bill also seeks to ensure that EFIC does not have a competitive advantage over other businesses in the private sector. In summary, the bill implements the Productivity Commission's recommendations that EFIC should be subjected to the government's competitive neutrality principles. Consistent with the recommendations of the Productivity Commission and the 2003 Uhrig review, the bill will also remove the requirement to have a government member on EFIC's board of directors, and we welcome that, because this will increase the board's independence from government. It is expected that the market-failure test and the requirement to focus on small and medium-sized enterprises will reorient EFIC's operations on its commercial account towards supporting commercially viable—and I stress they must be commercially viable—export focused small and medium enterprises seeking to access export finance.

The government notes that the bill is required to ensure EFIC's support in domestic supply chains can only be provided when it involves a contract that is integral to final exports of capital and non-capital goods and services. The government also states that the bill is required to broaden EFIC's guarantee powers to enable EFIC to guarantee loans of foreign based subsidiaries of Australian based small and medium enterprises, where the purpose of the guarantee is to support 'Australian export trade' and where the SME certifies that the guarantee will not result in a net reduction in the number of its employees in Australia during the term of EFIC's guarantee. This will require a new definition of 'Australian export trade' in the bill to ensure that EFIC support is linked to benefits to Australia including through increased exports, access to new markets or increased dividend flows to Australia.

The coalition does not see any particular alarm bells ringing with these changes, and we will always support changes that will enhance EFIC's services to small and medium sized businesses. But I take the opportunity of noting that, like virtually everything this government does, there is always an alternative backstory. In the last EFIC bill, as I pointed out, Labor raided the coffers of EFIC, stripping $200 million out of the agency. Even with this raid the budget figures show that the government will breach the $300 billion debt ceiling limit it proposed by legislation during the forward estimates period. Small businesses have every reason to be disgusted with the way they have been abandoned by this government, as evidenced in Tuesday night's budget.

Labor is at war with small business and it is obvious that Labor never seems to appreciate the fact that small business employs around half of all employees in Australia today. The Treasurer might talk about his budget being about jobs and growth, but he forecast a rise in unemployment and a fall in the rate of economic growth, and small business bears the brunt of that. It will take a change of government for small business to have a government on its side. However, the small changes in this bill may provide some support for small and medium-sized enterprises that are seeking to enter export markets. The coalition will not oppose the bill.