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Wednesday, 16 June 2010
Page: 5594

Mr MURPHY (7:05 PM) —Mr Speaker, I would like to join with you in congratulating the members for Aston, Denison and Wannon on their contribution to the betterment of our country and I too wish them well for a happy, healthy and long retirement. Tonight I rise to speak about the Export Market Development Grants Amendment Bill 2010

The importance of trade cannot be overstated. Trade makes an invaluable, indeed a vital, contribution to Australia’s prosperity and is a great stimulus for economic growth. Trade creates jobs, improves incomes and encourages innovation within businesses. Further, we enjoy a very diverse export base including food education resources and fuel. Unfortunately, despite this, the Rudd government inherited an economy in 2007 that had suffered 72 consecutive trade deficits under the appalling management of the Howard government. I am pleased to note that the Minister for Trade, the honourable Simon Crean, has presided over eight trade surpluses in 2½ years. His efforts should be acknowledged and commended.

The importance of trade can be seen in its contribution to the workforce in Australia. Figures provided by the Department of Foreign Affairs and Trade in June 2009 contained in the Centre for International Economics report noted that the latest research showed that one in five Australians are employed because of exports and imports and that one in seven Australians were in jobs that were export related. That equates to 1.4 million jobs. This is a significant component of our workforce. Further, in 2008, the export of goods and services contributed 23.5 per cent to gross domestic product. There can be no denying the significant contribution trade makes to our economy and society.

It was a Labor government that seized the opportunity to provide government assistance to encourage exporters to promote their services and products overseas. Since its inception under a Labor government, the EMDG scheme has been a very important part of assisting businesses to become export ready and to help them access new markets. When I was Parliamentary Secretary for Trade, I travelled around Australia and indeed overseas to represent the government. I know how much the EMDG scheme was appreciated by those small exporters who had built up their businesses with the assistance of the Australian taxpayer.

Eligible exporters receive financial assistance in the form of an audited partial reimbursement based on an exporter’s marketing expenditure in the previous financial year. As mentioned earlier, the scheme assists many small- and medium-sized enterprises. In the last grant year, it provided financial assistance to more than 4,500 eligible businesses. That is quite an achievement. In my local area alone, more than 60 exporting businesses received financial assistance through the EMDG scheme. The assistance aims to help aspiring exporters to develop a business that will be self-sustaining after the assistance from the scheme ceases. An observation from David Mortimer’s review, released in 2008, noted that that the incidence of firms developing into new exporters is higher for EMDG recipients than for comparable non-recipients.

In 2008, our government moved to expand the scheme and provided an additional $50 million, in line with our pre-election commitment of a $200 million EMDG budget. The pre-election commitments for the EMDG scheme have been honoured by our government and the additional $100 million provided under the scheme in the 2008-09 and 2009-10 financial years have played an important role in helping Australian exporters deal with the very difficult global economic conditions.

However, the very substantial growth in grant demand in recent years has created a growing disparity between the provisions of the scheme and the funding provided under the scheme. In addition, the current economic climate calls for responsible fiscal decisions. As we all know, Australia has been one of the best-performing OECD nations during the worst global recession since World War II. We are number one. This was made possible in part by the strong economic fundamentals of a government committed to responsible economic management. That is a fact.

In the face of the worst global financial crisis since the Great Depression, our government has made some tough decisions that aim to provide business certainty and secure our economy. The amendments proposed in this bill will increase the minimum required level of export promotional expenditure from $10,000 to $20,000. Further, the amendments will reduce the maximum number of grants an applicant can receive from eight to seven as well as reduce the maximum grant amount from $200,000 to $150,000. The maximum amount that can be claimed for intellectual property expenses will also be capped at $50,000.

These measures will change the eligibility criteria under the EMDG scheme and are likely to affect the demand on the scheme. However, the government has committed to extend the scheme for another five years, ensuring its continuity until the 2015-16 grant year. The scheme was due to close to new applicants next year. However, our government recognises the importance of the support provided to exporters under the EMDG scheme, particularly small exporters. As I have said earlier, the government has confirmed that it will extend the scheme for another five years. The extension of the scheme despite the difficult global financial circumstances is yet another example of our government supporting Australian businesses and jobs today while maximising the opportunities for our future.

The proposed changes were developed with stakeholder consultation and are made with the intention of providing more certainty for industry, extending the program for the next five years as well as providing enhanced eligibility criteria that will reduce the demand on the scheme. The reduced demand on the scheme should provide reimbursement payments that are reliably and predictably paid, offering the confidence to exporters to invest in export marketing.

I am particularly pleased that Australia is also encouraging export and investment in clean energy. I am an advocate for clean and renewable energy. I note that in the May 2009 budget our government allocated $14.9 million to develop a strategy to help clean energy exporters and investors get better access to global markets. The green initiatives include solar and wind power, carbon capture and storage, renewable water technologies, green buildings and urban design. That is another example of the Rudd government’s commitment to tackling the challenge of climate change and become a world leader in mitigating its effects.

Austrade, otherwise known as the Australian Trade Commission, hosted a very successful clean technology roadshow last year following that funding announcement. The national seminar series aimed to link Australian clean technology companies to growing international clean energy opportunities. In a media release of 2009, Austrade’s national industry manager for clean technology, Kerry Rooney, said:

As nations implement policies to address the challenges of climate change and energy security, trade and investment in clean technologies will play an increasingly important role in building Australia’s future prosperity.

Austrade’s chief economist, Dr Tim Harcourt, concurred that ‘clean technology industries would play a significant part in Australia’s economic recovery’:

“In the post-GFC world industries will be restructured along sustainable lines and clean energy will be a key part of Australia’s competitive advantage,” Mr Harcourt said.

The overwhelming interest in the roadshow around Australia also highlights a strong desire from industry to engage in the green sector. This interest is understandable, given global investment in clean energy reached $155 billion in 2008.

Despite the claim from the Leader of the Opposition that climate change is ‘absolute crap’, our government continues to provide a whole-of-government approach to the very serious issue of climate change. This is evident again in the complementary investment to establish the Renewable Energy Future Fund, the REFF. The significant investment in the REFF in the May budget of this year of more than $650 million over four years is part of the government’s expanded $5.1 billion Clean Energy Initiative. The Clean Energy Initiative includes $2 billion for the Carbon Capture and Storage Flagships program and $1.5 million for the Solar Flagships program, also announced in the 2009 budget. The funding brings total investments in renewable and clean energy and energy efficiency measures to over $10 billion.

I have met with scientists and exporters who have so much to offer Australia in clean and renewable energy, and I know that, with the historic funding commitments our government has made in this sector, we are offering immense support and confidence to stakeholders. I personally know of one scientist who, frustrated with the Howard government’s indifference to his groundbreaking solar technology, was forced to look to overseas markets for assistance to develop and sell his product. Today he is working in California, manufacturing and exporting his product around the world. It is a sad loss for us that he could not get the support he needed and had to go to America for it. The loss of such intellectual property and export revenue as well as job opportunities must not be repeated. I am extremely pleased that our government, in stark contrast to the Howard government, is making a historic investment in this field.

Despite the appalling trade deficit record that I referred to earlier in my speech, which we inherited from the Howard government, and the very difficult global economic circumstances over the past two years, the Minister for Trade, Simon Crean, has worked relentlessly and tirelessly to improve our trade deficit; has engaged in meaningful negotiations to ensure Australia commits to beneficial bilateral and multilateral trade agreements; and, among many other achievements, has shown his ongoing support for our exporters by committing to extend the EMDG Scheme until the 2016-17 financial year.

You might recall, Mr Deputy Speaker Scott, that at a meeting of the Trade Subcommittee under the Joint Standing Committee on Foreign Affairs, Defence and Trade I mentioned the fact that, when the head of the WTO, Mr Pascal Lamy, was in Australia—although I am not sure that you were at that luncheon here in February—he gave great credit to Simon Crean, our trade minister, for the work that he had done. It is a matter of public record that he said at that luncheon that, if we had had 150 Simon Creans, we would have resolved Doha within 18 months. Now, there are 153 members of the WTO, and it is not easy, of course, to get every country to agree; but I am sure that some our more difficult neighbours in the negotiations would do well to talk to Minister Crean and his staff because clearly he has a vision for a resolution to the Doha Round. I do not think we have ever had a harder working and more effective trade minister. So full marks to Simon Crean and also David Garner, his chief of staff, and all the other staff in his office and his department, because they all do a great job in the interest of our great country.

They can be no doubt that Australia has fared well in the face of the global financial crisis, compared to every other major advanced economy. However, our government is looking to strengthen our economy and provide more opportunities for future growth. We must not rest on our laurels. We must continue to support jobs and help Australian businesses, and we must continue the recovery of our economy and maximise future opportunities. Our government has delivered a very fiscally responsible budget that, coupled with monetary policy, seeks to return our budget to surplus three years earlier than expected, before any other major advanced economy. I believe industry is mindful of the economic context in which we have emerged and the need for certainty as we move towards the future.

There is a lot of rhetoric going across this chamber and across the media, from the east coast to the west coast of Australia, about the government’s economic performance. I note that the previous speaker, the member for Wannon, in his valedictory speech talked about truth being a casualty of war. Well, I come to the defence of the government in relation to some of the claims that have been made by the opposition about our economic management. The opposition have campaigned long and hard in years gone by on the premise that the Labor Party and a Labor government cannot manage the economy; well, that myth should be dispelled once and for all.

We are the No. 1 economy of all the developed economies in the world. I am very proud to be a member of a government that can say to the people in the forthcoming election that we have been very fiscally responsible in managing the economy. When people come to make a judgment in a few months time and adjudicate on the performance of the Rudd Labor government and the management of the economy, the job that Wayne Swan, our Treasurer, has done and the minister at the table, Dr Emerson—one of the most economically literate people in this place—I think people will judge us in the coolness of election day and give us support for the job that the government have done.

The EMDG Scheme is but one part of it. We have been very responsible in managing the economy. When the truth gets out, the mining industry will start talking about the benefits to all businesses of the reduction in company tax from 30 per cent to 28 per cent. The opposition will impose a 3.7 per cent higher tax on a whole range of businesses. There is no strategy coming from the opposition in relation to how they will fund any of these infrastructure projects which are so important to contribute to our trade and economic performance. I think people will see through that. It is very easy in opposition to bag the government and to say that we have put them into debt. It is very easy to talk about this so-called ‘great big new tax’ without telling the full story of the rich benefits that will flow with that tax and will secure the future of the economy for Australia for many years to come.

In concluding, I have no doubt that the measures proposed in this bill will deliver certainty and support for export businesses as we look forward to our future. I again congratulate Mr Crean for a job well done, and the staff in his office and all those officers working throughout Australia and around the world—some of whom I have met in Austrade—for doing an excellent job. I commend the bill to the House.