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Thursday, 27 May 2004
Page: 29424


Mr COX (9:57 AM) —I rise to speak on the Export Market Development Grants Amendment Bill 2004. The Export Market Development Grants Scheme came into operation in 1974. Obviously, it was an initiative of the Whitlam Labor government. The purpose of the scheme is to bring benefits to Australia by encouraging the creation, development and expansion of foreign markets for Australian goods, services, intellectual property and know-how. The EMDG Scheme has played an integral role in encouraging Australian companies to broaden their horizons and expand their customer base overseas via the development of new export markets.

The pursuit of new export markets and engagement in international trade has been central to Australia's economic development. Sustainable growth in exports means more and quite often higher paying jobs for Australians, and it enables Australia to pay for imported products demanded by Australian industry and consumers. Unfortunately, the government has allowed the EMDG Scheme to run down markedly since 1996-97, when a funding cap of $150 million was imposed on the scheme until 2005-06. According to the Australian Chamber of Commerce and Industry, the real value of the program has now fallen by nearly 20 per cent since the cap was imposed and it is likely to fall by around 27 per cent by 2005-06.

This decline in the real value of the EMDG Scheme creates considerable uncertainty for exporters as it impacts on the amount that they are able to access from the scheme at the end of each financial year. Last year 25 per cent of Australian exporters who had provisional grant entitlements above $60,000 received only 32.84c in the dollar for their second tranche entitlement. Many exporters would have undertaken major marketing exercises and extensive travel to potential new markets overseas on the basis of receiving a larger payout in the second tranche. Last year's payout of 33c in the dollar for the second tranche short-changed many exporters and may well have a detrimental impact on their plans to continue to pursue new markets overseas.

The government's rundown of the EMDG Scheme completely cuts across another arm of its trade policy to double the number of exporters. The government has set an ambitious target to double the number of exporters by 2006-07. Using a base figure of 25,000 exporters in 2000-01, the government has set itself the task of achieving 50,000 exporters by 2006-07. So far things are not looking so good. According to ABS statistics, the number of exporters increased from 25,000 in 2001-02 to 31,450 in 2001-02—a big jump of over 6,000 exporters. But this was largely attributable to a reclassification exercise. The number of exporters has since fallen to 31,174 in 2002-03. So the government has quite a bit of ground to make up if it is to double the number of exporters by 2006. This is not going to be helped by the continuing decline in the real value of the EMDG Scheme.

The amendments put forward in this bill are to introduce a not fit and proper person test to be applied by Austrade when assessing entitlement to payment of an EMDG grant. This bill responds to very valid community concerns about the payment of an EMDG grant of $90,000 to a company associated with a former codirector of the collapsed Pyramid Building Society in Victoria. It is completely inappropriate that a former director of the Pyramid Building Society was able to access taxpayers' funds from this government for his continuing business activities, particularly when Victorian taxpayers have already paid a petrol levy to bail out deposit holders in Pyramid. It is incumbent upon the government to ensure that EMDG funds are allocated only to recipients who are deemed appropriate and worthy by community standards. This does not include former directors of bankrupt financial institutions.

It is in Australia's interests and the interests of taxpayers that EMDG recipients meet the high standards required to represent Australia professionally overseas and to conduct their international business on a sound basis. Notwithstanding Labor's concerns about the government's negligence in allowing the EMDG Scheme to run down and the uncertainty this creates for exporters, Labor supports the amendments in this bill. These amendments are necessary to assure the community that EMDG funds are being used to good effect and that the recipients of such funding are fit and proper persons in accordance with community standards.